Document:

ex101to8k06937_07122010.htm

Exhibit 10.1

 

 

[COMPANY LETTERHEAD]

 

July 12, 2010

 

To the Consenting Lenders Identified on the Signature Pages Hereof:

 

This restructuring and lock-up letter agreement (this “Agreement”) sets forth the terms on which each of the undersigned Persons (each a “Consenting Lender”) and Riviera Holdings Corporation (“Riviera Holdings”), Riviera Operating Corporation and Riviera Black Hawk, Inc. (collectively, the “Company” or the “Debtors”) agrees, among other things, to support a restructuring (the “Restructuring”) with respect to the capital structure of the Company, including, without limitation, the Company’s outstanding obligations under that certain Credit Agreement dated as of June 8, 2007 (the “Senior Secured Credit Agreement”) by and among Riviera Holdings, as borrower, certain of its affiliates, as guarantors, various financial institutions, as lenders (“Lenders”), and Cantor Fitzgerald Securities, as administrative agent (together with any successor administrative agent, the “Agent”) and (ii) the Company agrees to implement such Restructuring, in each case, in accordance with the proposed Joint Plan of Reorganization of Riviera Holdings Corporation, et al. (the “Plan”) attached hereto as Exhibit A, as it may be amended or modified in accordance with the terms herein.  Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Plan.

 

For purposes of this Agreement, “Parties” means the parties to this Agreement.

 

RECITALS

 

WHEREAS, the Company shall commence voluntary reorganization cases (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”), in the United States Bankruptcy Court for the District of Nevada (the “Bankruptcy Court”) to effect the Restructuring through a prearranged plan of reorganization that implements and is otherwise materially consistent with the Plan and this Agreement;

 

WHEREAS, each of the Company and the Consenting Lenders has reviewed, or has had the opportunity to review, the Plan, including this Agreement with the assistance of professional legal and financial advisors of its own choosing; and

 

WHEREAS, each Consenting Lender desires to support and vote to implement the Restructuring, and the Company desires to obtain the commitment of the Consenting Lenders to support and vote to accept the Restructuring, in each case, subject to the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the covenants and agreements contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Party, intending to be legally bound hereby, agrees as follows:

 

  

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AGREEMENT

 

Section 1.   Agreement Effective Date.  This Agreement shall become effective and binding upon each of the Parties at 12:01 a.m., prevailing Eastern Time, on the first date immediately following the day on which:

 

(a)    (i) the Company shall have executed and delivered counterpart signature pages of this Agreement to counsel to the Designated Consenting Lenders (as defined below); (ii) Lenders (and, if applicable, any swap counterparty) holding at least two-thirds in aggregate amount of the First Priority Senior Secured Claims and Senior Secured Claims shall have executed and delivered counterpart signature pages of this Agreement to counsel to the Company; and (iii) the Company shall have paid any and all reasonable accrued and unpaid expenses incurred by the Agent and Designated Consenting Lenders (as defined below) as of Agreement Effective Date (including, without limitation, all reasonable fees and expenses of the Designated Consenting Lenders’ and Agent’s legal and financial advisors); and

 

(b)     the Company has given notice to the Agent and Designated Consenting Lenders in accordance with Section 8.10 hereof that the conditions in Section 1(a) have been satisfied and this Agreement is effective (the “Agreement Effective Date”).

 

Section 2.  Plan.  The Plan is expressly incorporated herein and is made part of this Agreement.  The Plan is supplemented by the terms and conditions of this Agreement.  In the event of any inconsistency between the Plan and this Agreement, this Agreement shall control.

 

Section 3.  Commitments Regarding the Restructuring.

 

3.01.          Agreement to Vote.

 

(a)     As long as this Agreement has not terminated in accordance with the terms hereof, each Consenting Lender agrees that it shall, subject to (i) the receipt by such Consenting Lender of a disclosure statement and other solicitation materials in respect of the Plan, which disclosure statement and solicitation materials reflect the agreement set forth in the Plan, have been approved by the Bankruptcy Court pursuant to section 1125 of the Bankruptcy Code and are in all material respects reasonably satisfactory to the Consenting Lenders (collectively, the “Solicitation Materials”), (ii) receipt by such Consenting Lender of the Plan Supplement not later than five Business Days prior to the Voting Deadline which shall in all respects be reasonably satisfactory to the Requisite Consenting Lenders (as defined below) and (iii) the Consenting Lender being entitled under such Plan to vote to accept or reject the Plan:

 

	
  

	
(A)

	
in connection with the Chapter 11 Cases, timely vote its First Priority Senior Secured Claims and Senior Secured Claims to accept the Plan; and

 

	
  

	
(B)

	
not change or withdraw (or cause to be changed or withdrawn) such vote.

 

“Requisite Consenting Lenders” means Designated Consenting Lenders holding no less than two-thirds in aggregate amount of the First Priority Senior Secured Claims and Senior Secured Claims held by all Designated Consenting Lenders.

 

  

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(b)     For the avoidance of doubt, unless this Agreement is terminated in accordance with the terms hereof, each Consenting Lender also agrees that it will not, and will not direct the Agent to, (i) take any action that would reasonably be likely to result in any material delay or postponement of the confirmation or consummation of the Plan and implementation of the Restructuring; (ii) oppose the Debtors’ request for the entry of customary “first day” orders that are (A) not inconsistent with the Plan and this Agreement and (B) substantially similar in all respects to the draft “first day” orders reviewed by the Designated Consenting Lenders prior to the Agreement Effective Date, including the draft motion (“Cash Collateral Motion”) and stipulation (the “Cash Collateral Stipulation” and together with the Cash Collateral Motion, the “Cash Collateral Pleadings”) for use of cash collateral (as that term is defined in the Bankruptcy Code) reviewed and approved by the Agent and Designated Consenting Lenders prior to the Agreement Effective Date and attached hereto as Exhibit B; or (iii) withdraw or revoke any properly solicited vote to accept the Plan unless  the Plan is modified in any respect in a manner inconsistent with this Agreement or that has not been approved by the Requisite Consenting Lenders; provided, however, that the foregoing prohibitions will not (1) prohibit any Consenting Lender from taking, or directing the Agent to take, any action relating to the maintenance, protection and preservation of the Collateral (as defined in the Cash Collateral Pleadings); (2) prohibit any Consenting Lender from objecting, or directing the Agent to object, to any motion or pleading filed with the Bankruptcy Court seeking approval to use cash collateral (as defined in the Bankruptcy Code) other than pursuant to the Cash Collateral Pleadings or to obtain debtor-in-possession financing; or (3) limit any Consenting Lender’s rights under the Senior Secured Credit Agreement, any other loan document and/or applicable law to: (a) terminate or close out any swap agreement, repurchase agreement or similar transaction with the Company to the extent the underlying agreement permits such termination or close out or (b) appear and participate as a party in interest in any matter to be adjudicated in any case under the Bankruptcy Code concerning the Company, so long as such appearance and the positions advocated in connection therewith are not materially inconsistent with this Agreement and the Plan and do not materially hinder, delay or prevent consummation of the Restructuring.

 

3.02.           Commitment of Company.  The Company shall (a) support and complete the Restructuring embodied in the Plan; (b) do all things necessary and appropriate in furtherance of the Restructuring embodied in the Plan, including, without limitation, (i) commencing the Chapter 11 Cases  following the Agreement Effective Date but no later than July 12, 2010 (the “Outside Petition Date,” and the actual commencement date, the “Petition Date”) and (ii) taking all steps necessary and desirable to obtain an order of the Bankruptcy Court, reasonably acceptable in all material respects to the Consenting Lenders, confirming the Plan within the timeframes contemplated by this Agreement; (c) cooperate with the Consenting Lenders in obtaining any and all required regulatory and/or third-party approvals for the Restructuring embodied in the Plan; and (d) not take any action that is inconsistent with, or is intended or could reasonably be expected to interfere with consummation of, the Restructuring embodied in the Plan.  Regardless of whether the Restructuring is consummated, after the Agreement Effective Date, and subject to and upon Bankruptcy Court approvals and any required noticing after the Petition Date and consistent with the Cash Collateral Pleadings, the Company shall pay promptly in cash any and all reasonable accrued and unpaid expenses incurred by the Designated Consenting Lenders and Agent (including, without limitation, all reasonable fees and expenses of the Designated Consenting Lenders’ and Agent’s legal and financial advisors) in connection with the negotiation, documentation and consummation of this Agreement, the Plan, the Solicitation Materials and all other documents related to the Plan and the Restructuring until the occurrence of a Termination Event and termination of the use by the Company of  Cash Collateral as provided for in the Cash Collateral Pleadings.

 

  

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“Designated Consenting Lenders” means each of SCH/VIII Bonds, L.L.C., SCH/VIII Bonds II, L.L.C., SCH/VIII Bonds III, L.L.C., SCH/VIII Bonds IV, L.L.C., Strategic Value Special Situations Master Fund, L.P., Cerberus Series Four Holdings, LLC or its designated affiliates, and Desert Rock Enterprises LLC, excluding each of their respective non-Affiliate transferees, but including each of their respective Affiliate transferees, successors, assigns, heirs, executors, administrators and representatives.

3.03.           Transfer of Interests and Securities.  Except as expressly provided herein, this Agreement shall not in any way restrict the right or ability of any Consenting Lender to sell, use, assign, transfer or otherwise dispose of (“Transfer”) any of its First Priority Senior Secured Claims or Senior Secured Claims; provided, however, that during the period commencing as of the Agreement Effective Date until termination of this Agreement pursuant to the terms hereof (such period, the “Restricted Period”), no Consenting Lender shall Transfer any First Priority Senior Secured Claims or Senior Secured Claim, and any purported Transfer thereof shall be void and without effect, unless (a) the transferee is a Consenting Lender or (b) if the transferee is not a Consenting Lender prior to the Transfer, such transferee delivers to the Company, at or before the time of the proposed Transfer, an executed copy of Exhibit C attached hereto (a “Provision for Transfer Agreement”).  This Agreement shall in no way be construed to preclude the Consenting Lenders from acquiring additional First Priority Senior Secured Claims or Senior Secured Claims (subject, if applicable, to the securities law restrictions described below in this Section); provided, however, that such additional First Priority Senior Secured Claims or Senior Secured Claims shall automatically and immediately upon acquisition by a Consenting Lender be deemed subject to all of the terms of this Agreement whether or not notice of such acquisition is given to the Company.

 

3.04.           Representation of Consenting Lenders.  Each of the Consenting Lenders, severally and not jointly, represents and warrants that, as of the Agreement Effective Date:

 

(a)      it is the beneficial owner of and/or the duly authorized investment adviser or manager with respect to the face amount of the First Priority Senior Secured Claims and Senior Secured Claims held by it as of the Agreement Effective Date;

 

(b)      other than pursuant to this Agreement, such First Priority Senior Secured Claims and Senior Secured Claims are free and clear of any pledge, lien, security interest, charge, claim, equity, option, proxy, voting restriction, right of first refusal or other limitation on disposition, or encumbrances of any kind, that would materially adversely affect in any way such Consenting Lender’s performance of its obligations contained in this Agreement at the time such obligations are required to be performed;

 

(c)      (i) it is either (A) a qualified institutional buyer as defined in Rule 144A under the Securities Act of 1933 (the “Securities Act”) or (B) an institutional accredited investor as defined in Rule 501(a)(1), (2), (3), or (7) under the Securities Act, and (ii) any securities acquired by the Consenting Lender in connection with the transactions described herein will not have been acquired with a view towards distribution; and

 

  

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(d)      it has no actual knowledge of any event or circumstance that, due to any fiduciary or similar duty to any other person, would prevent it from taking or materially interfering with its ability to take any action required of it under this Agreement.

 

3.05.           Representation of Designated Consenting Lenders.  The Designated Consenting Lenders represent and warrant that, as of the Agreement Effective Date, they hold in aggregate at least two-thirds in amount of the aggregate First Priority Senior Secured Claims and Senior Secured Claims.

 

Section 4.  Certain Additional Chapter 11 Matters.  The Company shall provide draft copies of all “first day” motions or applications and all other documents and pleadings the Company intends to file with the Bankruptcy Court to counsel for the Agent and Designated Consenting Lenders at least 5 Business Days before the date the Company intends to file such documents, and shall consult in good faith with such counsel regarding the form and substance of any such proposed filing with the Bankruptcy Court.  The Company agrees that all such motions, applications, other documents and pleadings shall be reasonably calculated to implement and advance the Restructuring embodied in the Plan.  Prior to the Petition Date all such “first day” motions and applications shall have been agreed upon and approved by the Company, Agent and  Designated Consenting Lenders in each of their sole and absolute discretion.

 

Section 5.  Mutual Representations, Warranties and Covenants.  Each of the Parties, severally and not jointly, represents, warrants and covenants to each other Party, as of the Agreement Effective Date, as follows (each of which is a continuing representation, warranty and covenant):

 

5.01.           Enforceability.  It is validly existing and in good standing under the laws of the state of its organization, and this Agreement is a legal, valid and binding obligation of such Party, enforceable against it in accordance with its terms, except as enforcement may be limited by applicable laws relating to or limiting debtors’ rights and obligations under the Bankruptcy Code or creditors’ rights generally or by equitable principles relating to enforceability.

 

5.02.           No Consent or Approval.  Except as expressly provided in this Agreement or the Bankruptcy Code, as applicable, no consent or approval is required by any other person or entity in order for such Party to carry out the Restructuring contemplated by, and perform its respective obligations under, this Agreement except for Gaming Authority approvals.

 

5.03.           Power and Authority.  Except as expressly provided in this Agreement or the Bankruptcy Code, it has all requisite power and authority to enter into this Agreement and to carry out the Restructuring contemplated by, and perform its respective obligations under, this Agreement.

 

5.04.           Authorization.  The execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary action on its part.

 

  

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5.05.           Governmental Consents.  The execution, delivery and performance by it of this Agreement does not and shall not require any registration or filing with, consent or approval of, or notice to, or other action to, with or by, any federal, state or other governmental authority or regulatory body, except for, solely with respect to performance of this Agreement by the Company, (i) such Gaming Authority approvals as are required to effectuate the Restructuring and (ii) the Company’s reporting and filing obligations under federal securities laws.

 

5.06.           No Conflicts.  Subject to obtaining such requisite Gaming Authority approvals, the execution, delivery and performance of this Agreement does not and shall not:  (i) violate any provision of law, rules or regulations applicable to it or any of its affiliates; (ii) violate its certificate of incorporation, bylaws or other organizational documents or those of any of its subsidiaries; or (iii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it or any of its subsidiaries is a party.

 

Section 6.  Termination Events.

 

6.01.           Consenting Lender Termination Events.  This Agreement shall terminate automatically without any further required action or notice upon the occurrence of any of the following events (each a “Consenting Lenders Termination Event”) unless the occurrence of such Consenting Lenders Termination Event is waived in writing by the Requisite Consenting Lenders:

 

(a)      failure of the Debtors to (A) commence the Chapter 11 Cases and (B) file the Plan and Solicitation Materials with the Bankruptcy Court, in each case, on or before the Outside Petition Date;

 

(b)     the Bankruptcy Court’s order approving the Solicitation Materials and setting a hearing to confirm the Plan shall not have been entered by the Bankruptcy Court within 75 days after the Petition Date; provided, further that notwithstanding this clause (b) the Company shall use reasonable best efforts to obtain entry of such order within 45 days after the Petition Date;

 

(c)      the Bankruptcy Court’s order confirming the Plan (the “Confirmation Order”) shall not have been entered by the Bankruptcy Court within 60 days after the date that the Solicitation Materials are approved;  it being understood that notwithstanding this clause (c) the Company shall use reasonable best efforts to obtain entry of such order within 45 days after the date the order approving the Solicitation Materials is entered;

 

(d)     the effective date of the Plan shall not have occurred on the first business day to occur 14 days after the date that the Confirmation Order is entered;

 

(e)     the Substantial Consummation Date (as described in the Plan) shall not have occurred;

 

(f)      the breach in any material respect by the Company of any of the obligations, representations, warranties or covenants of the Company set forth in this Agreement;

 

  

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(g)     the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any injunction, judgment, decree, charge, ruling or order preventing consummation of the Restructuring (collectively, a “Governmental Stay”); provided, however, that the Company shall have 10 Business Days after receiving notice of the imposition of such Governmental Stay from such governmental authority to cause such Governmental Stay to be lifted, irrespective of whether such Governmental Stay may reasonably be expected to be lifted within such ten-day period;

 

(h)      the conversion of one or more of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code or the dismissal of any of the Chapter 11 Cases, unless such conversion or dismissal, as applicable, is made with the prior written consent of the Requisite Consenting Lenders;

 

(i)      the appointment of an interim or permanent trustee, receiver, chief restructuring officer or examiner with expanded powers to operate or manage the financial affairs, business or reorganization of any Debtor in one or more of the Chapter 11 Cases, unless such appointment is made with the prior written consent of the Requisite Consenting Lenders;

 

(j)      the amendment or modification of, or filing of a pleading by the Company seeking to amend or modify, the Plan, Solicitation Materials or any documents related to the foregoing, including motions, notices, exhibits, appendices and orders, in a manner not reasonably acceptable to the Requisite Consenting Lenders;

 

(k)     the Debtors file any motion or pleading with the Bankruptcy Court seeking approval to use cash collateral (as defined in the Bankruptcy Code) other than on the terms and conditions reflected in the Cash Collateral Stipulation attached hereto as Exhibit B;

 

(l)      the Debtors file any motion or pleading with the Bankruptcy Court or take any other action, including, without limitation, withdrawing the Plan or publicly announcing their intention not to support the Restructuring or Plan, that is not consistent in any material respect with this Agreement, the Restructuring, the Plan or any documents related to the foregoing;

 

(m)    to the extent Debtors and certain Consenting Lenders enter into a debtor-in-possession financing arrangement, Debtors fail to obtain final Bankruptcy Court approval of such debtor-in-possession financing arrangement within 45 days of entering into such financing arrangement; or

 

(n)     the failure of the Company to have filed within 30 days of the Petition Date a motion seeking Bankruptcy Court approval of the Backstop Commitment Agreement.

 

Notwithstanding any provision in this Agreement to the contrary, upon the written consent of the Requisite Consenting Lenders, the dates set forth in this Section 6.01 may be extended before or upon each such date, and such later dates agreed to in lieu thereof shall be of the same force and effect as the dates provided herein.

 

6.02.           Company Termination Events.  The Company may terminate this Agreement as to all Parties upon five Business Days’ prior written notice, delivered in accordance with Section 8.10 hereof, upon the occurrence of any of the following events (each a "Company Terminating Event):  (a) the breach by any of the Consenting Lenders of any of the representations, warranties or covenants of such Consenting Lenders set forth in this Agreement that would have a material adverse impact on the Company, or the consummation of the Restructuring, that remains uncured for a period of five Business Days after the receipt by the Consenting Lenders of notice of such breach or (b) the occurrence of the event provided for in Section 6.01(e) above; or (c) the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any injunction, judgment, decree, charge, ruling or order preventing consummation of a material portion of the Restructuring.

 

  

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6.03.           Mutual Termination.  This Agreement, and the obligations of all Parties hereunder, may be terminated by mutual agreement among (a) the Company and (b) the Requisite Consenting Lenders (the “Mutual Termination Event” and together with the Consenting Lender Termination Events and Company Termination Events, the “Termination Events”).

 

6.04.           Effect of Termination. 

 

(a)      Upon termination of this Agreement under Section 6.01, 6.02 or 6.03, this Agreement (including, without limitation, any Provision for Transfer Agreement executed prior to such termination) shall be of no further force and effect and each Party hereto shall be released from its commitments, undertakings and agreements under or related to this Agreement (including, without limitation, any Provision for Transfer Agreement executed prior to such termination) and shall have the rights and remedies that it would have had had it not entered into this Agreement, and shall be entitled to take all actions, whether with respect to the Restructuring or otherwise, that it would have been entitled to take had it not entered into this Agreement.  Upon the occurrence of any such termination of this Agreement, any and all consents tendered by the Consenting Lenders before such termination shall be deemed, for all purposes, to be null and void from the first instance and shall not be considered or otherwise used in any manner by the Parties in connection with the Restructuring and this Agreement or otherwise.

 

(b)      Notwithstanding clause (a) of this Section 6.04, the Company agrees that its obligations pursuant to the final sentence of Section 3.02 shall survive any termination of this Agreement and shall at all times continue to be enforceable against the Company until the occurrence of a Termination Event and termination of the use by the Company of the Cash Collateral as provided for in the Cash Collateral Pleadings.

 

(c)      No Party shall terminate this Agreement if such Party is in material breach of any provision hereof.

 

6.05.           Termination Upon Substantial Consummation Date.  This Agreement shall terminate automatically without any further required action or notice on the Substantial Consummation Date.

 

Section 7.  Effectiveness; Amendments.  This Agreement may not be modified, amended or supplemented (except as expressly provided herein) except in writing signed by the Company and the Designated Consenting Lenders.

 

  

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Section 8.  Miscellaneous.

 

8.01.           Further Assurances and Notification. 

 

(a)     Subject to the other terms of this Agreement, the Parties agree to execute and deliver such other instruments and perform such other acts, in addition to the matters herein specified, as may be commercially reasonably appropriate or necessary, from time to time, to effectuate the Restructuring, as applicable.

 

(b)     The Company will promptly notify the Agent and Designated Consenting Lenders upon the receipt of any written solicitation or proposal relating to any other plan, sale, proposal or offer of dissolution, winding up, liquidation, reorganization, merger or restructuring of the Company (other than as provided in or contemplated by the Plan), including potential sales of some or all of the casino assets of any of the Subsidiaries.

 

8.02.           Complete Agreement.  This Agreement is the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements, oral or written, between the Parties with respect thereto.  No claim of waiver, modification, consent or acquiescence with respect to any provision of this Agreement shall be made against any Party, except on the basis of a written instrument executed by or on behalf of such Party.

 

8.03.           Parties.  This Agreement shall be binding upon, and inure to the benefit of, the Parties.  No rights or obligations of any Party under this Agreement may be assigned or transferred to any other person or entity except as provided in Section 3.03 hereof.

 

8.04.           Headings.  The headings of all sections of this Agreement are inserted solely for the convenience of reference and are not a part of and are not intended to govern, limit or aid in the construction or interpretation of any term or provision hereof.

 

8.05.           GOVERNING LAW; SUBMISSION TO JURISDICTION; SELECTION OF FORUM; WAIVER OF TRIAL BY JURY.  THIS AGREEMENT IS TO BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.  Each Party agrees that it shall bring any action or proceeding in respect of any claim arising out of or related to this Agreement, to the extent possible, in either the United States District Court for the District of Nevada, Southern Division or any Nevada State court located in Las Vegas, Nevada (the “Chosen Courts”), and solely in connection with claims arising under this Agreement:  (a) irrevocably submits to the exclusive jurisdiction of the Chosen Courts; (b) waives any objection to laying venue in any such action or proceeding in the Chosen Courts; and (c) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any Party.  Each Party irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.  Notwithstanding anything contained herein or otherwise, upon the commencement of the Chapter 11 Cases, the Bankruptcy Court shall have exclusive jurisdiction over all proceedings involving this Agreement or claims arising under this Agreement.

 

  

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8.06.           Execution of Agreement.  This Agreement may be executed and delivered (by facsimile, electronic mail or otherwise) in any number of counterparts, each of which, when executed and delivered, shall be deemed an original, and all of which together shall constitute the same agreement.  Except as expressly provided in this Agreement, each individual executing this Agreement on behalf of a Party has been duly authorized and empowered to execute and deliver this Agreement on behalf of said Party.

 

8.07.           Interpretation.  This Agreement is the product of negotiations between the Company and the Consenting Lenders, and in the enforcement or interpretation hereof, is to be interpreted in a neutral manner, and any presumption with regard to interpretation for or against any Party by reason of that Party having drafted or caused to be drafted this Agreement, or any portion hereof, shall not be effective in regard to the interpretation hereof.  Each Consenting Lender enters into this Agreement solely in its capacity as a Lender and solely with respect to its claims as a Lender.

 

8.08.           Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of the Parties and their respective successors, assigns, heirs, executors, administrators and representatives, other than a trustee or similar representative appointed in a bankruptcy case.

 

8.09.           Relationship Among Parties.  It is understood and agreed that no Consenting Lender owes any fiduciary duty or other duty of trust or confidence in any form to any other Consenting Lender or the Company, and, except as provided in this Agreement, there are no commitments among or between them.  No prior history, pattern or practice of sharing confidences among or between the Consenting Lenders or a Consenting Lender and the Company shall in any way affect or negate this understanding and agreement.

 

8.10.           Notices.  All notices hereunder shall be deemed given if in writing and delivered, if sent by telecopy, electronic mail, courier or registered or certified mail (return receipt requested) to the following addresses and facsimile numbers (or at such other addresses or facsimile numbers as shall be specified by like notice):

 

(a)      if to the Company, to:

 

Riviera Holdings Corporation

2901 Las Vegas Blvd. South

Las Vegas, Nevada 89109

Facsimile:  (702) 794-9560

Attention:  Tullio Marchionne, Esq.

E-mail address:  

with copies (which shall not constitute notice) to:

 

Gordon Silver

3960 Howard Hughes Pkwy., Ninth Floor

Las Vegas, Nevada 89169

Facsimile:  (702) 369-2666

Attention:  Gerald M. Gordon, Esq. and Thomas H. Fell, Esq.

E-mail addresses: 

 

  

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(b)      if to a Consenting Lender or a transferee thereof, to the addresses or facsimile numbers set forth below following the Consenting Lender’s signature (or as directed by any transferee thereof), as the case may be, with copies, with respect to any notice to the Designated Consenting Lenders (which shall not constitute notice), to:

 

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Facsimile:  (212) 403-2158

Attention:  Scott K. Charles, Esq. and Michael S. Benn, Esq.

E-mail addresses:  

(c) if to the Agent, to:

Cantor Fitzgerald Securities

110 East 59th Street

New York, New York 10022

Facsimile:  (917) 677-8224

Attention:  Stephen Ewald

And

Cantor Fitzgerald Securities

900 West Trade Street, Suite 725

Charlotte, North Carolina 28202

Facsimile:  (646) 556-2653

Attention:  Bobbie Young

With a copy (which shall not constitute notice) to:

 

Cadwalader, Wickersham & Taft LLP

227 West Trade Street, Suite 2400

Charlotte, North Carolina 28202

Facsimile:  (704) 348-5100

Attention:  Christopher M. McDermott, Esq. and Alexander T. Lin, Esq.

Any notice given by delivery, mail or courier shall be effective when received.  Any notice given by facsimile shall be effective upon oral or machine confirmation of transmission.

 

8.11.           Waiver.  Except as expressly provided in this Agreement, nothing herein is intended to, or does, or shall be deemed in any manner to waive, limit, impair or restrict any right or the ability of any Consenting Lender to protect and preserve its rights, remedies and interests, including, without limitation, its claims against the Company.  Without limiting the foregoing sentence in any way, if the Restructuring is not consummated, or if this Agreement is terminated for any reason (other than under Section 6.05 hereof), the Parties each fully reserve any and all of their rights and remedies.

 

  

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8.12.           Specific Performance.  It is understood and agreed by the Parties that money damages would be an insufficient remedy for any breach of this Agreement by any Party and each non-breaching Party shall be entitled to specific performance and injunctive or other equitable relief as a remedy of any such breach, including, without limitation, an order of the Bankruptcy Court or other court of competent jurisdiction requiring any Party to comply promptly with any of its obligations hereunder.

 

8.13.           Several, Not Joint, Obligations.  The agreements, representations and obligations of the Parties under this Agreement are, in all respects, several and not joint.

 

8.14.           Remedies Cumulative.  All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise of any right, power or remedy thereof by any Party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such Party.

 

8.15.           No Third-Party Beneficiaries.  This Agreement shall be solely for the benefit of the Parties, and no other person or entity shall be a third-party beneficiary hereof.

 

Section 9.  Disclosure.

 

9.01.           Bankruptcy Court Disclosure. The Company shall publicly disclose (a) the existence of this Agreement in a filing with the Bankruptcy Court on the Petition Date (the “Initial Disclosure”) and (b) to the extent directed by the Requisite Consenting Lenders, any material amendment to this Agreement in a filing with the Bankruptcy Court within five Business Days following the effective date of such amendment (the “Amendment Disclosure”), each in form and substance reasonably acceptable to the Requisite Consenting Lenders.  To the extent that the Company fails to make the Initial Disclosure or the Amendment Disclosure by the time specified above in this Section 9.01, the exclusive remedy of any or all of the Consenting Lenders shall be to disclose publicly the terms of the Agreement or the amendment, as the case may be.

 

9.02.          Coordination. To the extent reasonably practicable, the Company will submit to counsel for the Designated Consenting Lenders all press releases and public filings to be made  by the Company relating to this Agreement, the Plan or the Restructuring contemplated hereby and thereby and any amendments thereof.  To the extent reasonably practicable, any Consenting Lenders that will make any public filings or press releases relating to this Agreement, the Plan or the Restructuring contemplated hereby and thereby and any amendments thereof will submit such public filings or press releases to counsel for the Company.  The Company shall not use the name of any Consenting Lender in any press release without such Consenting Lender’s prior written consent.

 

9.03.           No Effect On Securities Law Obligations.  The provisions of Sections 9.01 and 9.02 are separate and apart from the respective obligations of the Company under applicable securities laws, which obligations shall not be affected by Sections 9.01 and 9.02 or by any other provisions of this Agreement.

 

  

12

  

 

 IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and year first above written.

 

[signature pages follow]

 

  

13

  

 

Signature Page to the Restructuring and Lock-Up Agreement

 

	
RIVIERA HOLDINGS CORPORATION

RIVIERA OPERATING CORPORATION

RIVIERA BLACK HAWK, INC.

	  
	  
	  
	
By:

	/s/ Tullio J. Marchionne
	
Name:

	Tullio J. Marchionne  
	
Title:

	Secretary  

 

  

  

  

 

Signature Page to the Restructuring and Lock-Up Agreement

	  
	  
	
Name of Entity:

	 SCH/VIII BONDS, L.L.C.
	  

	
By:

	/s/ Marcos Alvarado

	Name:  	
Marcos Alvarado

	Title:   	
Vice President

	  
	
Address:

	  
	  	  
	  	  
	
Attention:

	  
	
Telephone:

	  
	
Facsimile:

	  
	  

 

 

  

  

  

 

Signature Page to the Restructuring and Lock-Up Agreement

	  
	  
	
Name of Entity:

	 SCH/VIII BONDS II, L.L.C.
	  

	
By:

	/s/ Marcos Alvarado

	Name:  	
Marcos Alvarado

	Title:   	
Vice President

	  
	
Address:

	  
	  	  
	  	  
	
Attention:

	  
	
Telephone:

	  
	
Facsimile:

	  
	  

 

 

  

  

  

 

Signature Page to the Restructuring and Lock-Up Agreement

	  
	  
	
Name of Entity:

	 SCH/VIII BONDS III, L.L.C.
	  

	
By:

	/s/ Marcos Alvarado

	Name:  	
Marcos Alvarado

	Title:   	
Vice President

	  
	
Address:

	  
	  	  
	  	  
	
Attention:

	  
	
Telephone:

	  
	
Facsimile:

	  
	  

 

 

  

  

  

 

Signature Page to the Restructuring and Lock-Up Agreement

	  
	  
	
Name of Entity:

	 SCH/VIII BONDS IV, L.L.C.
	  

	
By:

	/s/ Marcos Alvarado

	Name:  	
Marcos Alvarado

	Title:   	
Vice President

	  
	
Address:

	  
	  	  
	  	  
	
Attention:

	  
	
Telephone:

	  
	
Facsimile:

	  
	  

 

 

  

  

  

 

Signature Page to the Restructuring and Lock-Up Agreement

	  
	  
	
Name of Entity:

	Strategic Value Special Situations Master Fund L.P., 

by its investment manager, SVP Special Situations LLC
	  

	
By:

	/s/ Lewis Schwartz

	Name:  	
Lewis Schwartz

	Title:   	
Chief Financial Officer

	  
	
Address:

	Strategic Value Special Situations Master Fund, L.P.

c/o Ogier Fiduciary Services (Cayman) Limited

Queensgate Building, 3rd floor

113 South Church Street

Georgetown, Cayman Islands
	
Attention:

	 
	
Telephone:

	(203) 618-3530  
	
Facsimile:

for notices

	 (203 618-3501
	  

 

 

 

 

 

Signature Page to the Restructuring and Lock-Up Agreement

	  
	  
	
Name of Entity:

	Cerberus Series Four Holdings, LLC

By: Cerberus Institutionsl Partners, L.P. - Series Four, its Managing Member

By: Cerberus Institutional Associates, L.L.C., its General Partner
	  

	
By:

	/s/ Seth Plattus

	Name:  	
Seth Plattus

	Title:   	
Senior Managing Director

	  
	
Address:

	 
	
Attention:

	 
	
Telephone:

	 
	
Facsimile:

	 
	  

 

 

 

 

 

Signature Page to the Restructuring and Lock-Up Agreement

	  
	  
	
Name of Entity:

	Desert Rock Enterprises
	  

	
By:

	/s/ Daniel Morrell

	Name:  	
Daniel Morrell

	Title:   	
Chief Financial Officer

	  
	
Address:

	
One Fremont Street

Las Vegas, NV 89101

 

	
Attention:

	Daniel Morrell
	
Telephone:

	586 497 7000
	
Facsimile:

	586 497 7090
	  

 

 

 

 

 

EXHIBIT A

 

PLAN

 

  

  

  

 

EXHIBIT B

CASH COLLATERAL PLEADINGS

 

  

  

  

 

EXHIBIT C

PROVISION FOR TRANSFER AGREEMENT

 

The undersigned (“Transferee”) hereby acknowledges that it has read and understands the restructuring and lock-up letter agreement (the “Agreement”), dated as of July ___, 2010, by and among the Company, and certain lenders, including the transferor to the Transferee of the Senior Secured Claims or First Priority Senior Secured Claims (as applicable) listed below (the “Transferor”).  Capitalized terms not used but not otherwise defined herein shall have the meanings ascribed to such terms in the Agreement.

 

The Transferee hereby agrees to be bound by the terms and conditions of the Agreement to the extent Transferor was thereby bound, it being understood that the Transferee shall hereafter be deemed a Consenting Lender thereunder.

 

The Transferee specifically agrees to be bound by (i) the terms and conditions of the Senior Secured Credit Agreement and (ii) the vote of the Transferor in respect of the Plan if cast before the effectiveness of the transfer of the First Priority Senior Secured Claims and/or Senior Secured Claims (as applicable).

 

 

	
Date Executed:  ____ ___, 2010

	  
	  	
Print name of Transferee

	  	
By:

	  
	  	
Name:

	  	
Title:

	  	  
	  	
Address:

	  
	  	  	  
	  	  	  
	  	
Attention:

	  
	  	
Telephone:

	  
	  	
Facsimile:ex102to8k06937_07122010.htm

Exhibit 10.2

 

July 12, 2010

 

Riviera Holdings Corporation

2901 Las Vegas Blvd., South

Las Vegas, NV 89109

Attention:

Re:           Backstop Commitment Agreement

Ladies and Gentlemen:

	
  

	
1.

	
Reference is made to the chapter 11 bankruptcy cases (the “Chapter 11 Cases”) that will be filed in the United States Bankruptcy Court for the District of Nevada (the “Bankruptcy Court”), in which Riviera Holdings Corporation (“RHC”) and certain of its affiliates will be debtors and debtors in possession (collectively, the “Debtors”).  Reference is further made to: (i) the lock-up letter agreement dated July 12, 2010 (the "Lockup Agreement")  between the Debtors and Consenting Lenders (as defined therein); (ii) that chapter 11 plan of reorganization attached to the Lockup Agreement as Exhibit 1 that will be filed by the Debtors with the Bankruptcy Court on July 12, 2010  (the “Petition Date”) (as such plan of reorganization may be modified or amended from time to time in accordance with the terms thereof, the “Plan”), (iii) the disclosure statement that will accompany the Plan (as it may be modified or amended from time to time, the “Disclosure Statement”) and (iv) the cash collateral stipulation attached to the Lockup Agreement  as Exhibit 2 (the “Cash Collateral Stipulation”).  Capitalized terms used in this letter agreement (the “Backstop Commitment Agreement”) and not otherwise defined herein shall have the meanings provided in the Plan.

	
  

	
2.

	
The Plan provides for  implementation of one of two financing alternatives:  (a) the Total New Money Investment Alternative on the terms as provided for in the Plan or (b) the Partial New Money  Investment Alternative on the terms as provided for in the Plan.  Pursuant to the Total New Money Investment Alternative, certain Senior Secured Lenders will provide the Reorganized Debtors (i) on the Substantial Consummation Date with $10.0 million pursuant to a committed revolving credit facility (the “Working Capital Facility”) and (ii) on the Designated New Money Election Date with additional liquidity in the amount of $20.0 million (the “Designated New Money Investment”).  Pursuant to the Partial New Money Investment Alternative, certain Senior Secured Lenders will provide  the Working Capital Facility to the Reorganized Debtors on the Substantial Consummation Date.  As used herein, “New Money Investment” refers to (x) if the Total New Money Investment Alternative is effectuated under the Plan, consummation of the Designated New Money Investment and Working Capital Facility and (y) if the Partial New Money Investment Alternative is effectuated under the Plan, consummation of the Working Capital Facility.

	
  

	
3.

	
In the event the Designated Consenting Lenders and Debtors have unanimously agreed upon the terms of the  Series B Term  Loan Budget on or before the date that is 30 days after the entry of the order approving the adequacy of the Solicitation Materials by the Bankruptcy Court (the “Budget Contingency”) and the Designated New Money Election is made, the Total New Money Investment Alternative shall be effectuated under the Plan.  If, however, the Designated Consenting Lenders and Debtors are unable to satisfy the Budget Contingency or are able to satisfy the Budget Contingency but the Designated New Money Election is not made, the Partial New Money Investment Alternative shall be effectuated under the Plan instead of the Total New Money Investment Alternative.

 

  

  

  

 

	
  

	
4.

	
To the extent the Total New Money Investment Alternative is effectuated under the Plan, each Senior Secured Lender (including each Backstop Lender) shall have the right  (a) to participate in the New Money Investment based on its Pro Rata Share and (b) to receive on account, and to the extent, of its participation therein its Pro Rata Share of (i) notes evidencing the Series B Term  Loan, (ii) notes evidencing revolving credit loans outstanding at any time under the Working Capital Facility, (iii) 15.0% of the Class B Shares (subject to dilution only under those certain conditions specified in the Plan), and (iv) penny warrants to purchase up to 10.0% of the Class B Shares (it being understood that the exercise of such penny warrants shall result in dilution of the amount of Class B Shares received by all Senior Secured Lenders under the Plan and otherwise received by those certain Senior Secured Lender as partial consideration for participating in the New Money Investment) (clauses (b)(i) through (b)(iv), collectively, the “Total New Money Investment Alternative Consideration”).

	
  

	
5.

	
To the extent the Partial New Money Investment Alternative is effectuated under the Plan, each Senior Secured Lender (including each Backstop Lender) shall have the right (a) to participate in the  New Money Investment based on its Pro Rata Share and (b) to receive on account, and to the extent, of its participation therein its Pro Rata Share of  (i) notes evidencing revolving credit loans outstanding at any time under the Working Capital Facility  and (ii) 7.0% of the Class B Shares (subject to dilution only under those certain conditions specified in the Plan) (clauses (b)(i) and (b)(ii), collectively, the “Partial New Money Investment Alternative Consideration” and together with the Total New Money Investment Alternative Consideration, the "New Money Investment Consideration").

	
  

	
6.

	
Each Senior Secured Lender shall be required to accept such offer to participate in the Total New Money Investment Alternative  or the Partial New Money Investment Alternative, as the case may be,  in a writing to be delivered to the Agent no later than  the earlier of the date that is (a) fourteen (14) days after the date the Debtors file their 5-year projections and (b) three (3) days after the entry of the order approving the adequacy of the Solicitation Materials by the Bankruptcy Court.

	
  

	
7.

	
“Pro Rata Share” means with respect to each Senior Secured Lender (x) the total amount of First Priority Senior Secured Claims and/or Senior Secured Claims held by such Senior Secured Lender as of the Petition Date divided by (y) the aggregate amount of all First Priority Senior Secured Claims and Senior Secured Claims as of the Petition Date.

 

  

2

  

 

	
  

	
8.

	
To provide assurance that the Designated New Money Investment (solely to the extent the Total New Money Investment Alternative is effectuated)  shall be fully funded in the aggregate amount of $20.0 million and the Working Capital Facility (irrespective of whether the Total New Money Investment Alternative or Partial New Money Investment Alternative is effectuated) shall be fully committed  in the aggregate principal amount of $10.0 million, each of the undersigned (collectively, the “Backstop Lenders”) hereby commits, severally and not jointly, (a) to fund its Pro Rata Share of the Designated New Money Investment and commit to fund its Pro Rata Share of the Working Capital Facility (collectively, the “Backstop Lender Pro Rata Share”) and (b) to backstop an amount equal to the Pro Rata Share of all Senior Secured Lenders (other than the Backstop Lenders) of the Designated New Money Investment and Working Capital Facility by providing commitments to make Series B Term  Loans under the Second Lien Credit Agreement and Revolving Loans under the First Lien Credit Agreement  in accordance with the percentages set forth on Schedule 1 attached hereto (each such percentage, the “Backstop Commitment Percentage”), in each case, on the terms described herein and in the Plan (such commitments, collectively, the “Backstop Commitments”).  To the extent that any Senior Secured Lender (other than a Backstop Lender) (i) elects not to participate in or (ii) elects not to participate according to its full Pro Rata Share of, as applicable, the Designated New Money Investment (such aggregate amount, the “Unsubscribed Loans”) and the Working Capital Facility (such aggregate amount, the “Unsubscribed Commitment” and together with the Unsubscribed Loans, the “Unsubscribed Amount”), each Backstop Lender shall fund its Backstop Commitment Percentage of the Unsubscribed Loans and commit to fund its Backstop Commitment Percentage of the Unsubscribed Commitment on the Substantial Consummation Date.  Notwithstanding anything herein or otherwise, in no event shall any Backstop Lender be required to fund in excess of its Backstop Lender Pro Rata Share and its Backstop Commitment Percentage of the Unsubscribed Amount.

	
  

	
9.

	
In addition to receiving its Pro Rata Share of the Total New Money Investment Alternative Consideration or Partial New Money Investment Alternative Consideration, as applicable, each Backstop Lender shall have the right to receive on account, and to the extent, of its participation in the New Money Investment its Backstop Commitment Percentage of the portion of such Total New Money Investment Alternative Consideration or Partial New Money Investment Alternative Consideration, as applicable, that otherwise would have been distributable to those Senior Secured Lenders electing not to participate in or not to participate according to their full Pro Rata Share of, as applicable, the New Money Investment.

	
  

	
10.

	
The Debtors hereby agree to pay, and the Backstop Order shall authorize the payment of, the following commitment fees (the "Commitment Fees") to the Backstop Lenders (which, for the avoidance of doubt, shall be in addition to that portion of the New Money Investment Consideration received by the Backstop Lender on account of their participation in the New Money Investment in its capacity as a Senior Secured Lender):  (a)(i) if the Budget Contingency is satisfied, (ii) the Total New Money Investment Alternative is effectuated under the Plan, (iii) the Substantial Consummation Date occurs; and (iv)  the Series B Term Loan is fully funded and the entire Working Capital Facility is made available as provided for in the Plan, 5.0% of the Class B Shares (subject to dilution only under those certain conditions specified in the Plan) shall be fully earned,  payable and non-refundable to the Backstop Lenders, (b) if the Budget Contingency is satisfied, but either this Backstop Commitment Agreement is terminated pursuant to its terms  or the Substantial Consummation Date does not occur, $1,000,000 in cash shall be fully earned, payable and  non-refundable  upon such  date to the Backstop Lenders; provided, however, that to the extent (i)  this Backstop Commitment Agreement is materially breached by any Backstop Lender (ii) this Backstop Commitment Agreement is terminated in connection with the Lockup Agreement having been terminated solely as a result of a breach thereof by any Backstop Lender in its capacity as a Designated Consenting Lender, or (iii) the Substantial Consummation Date does not occur other than as a result of the actions and/or inactions of the Debtors that are in breach of the Lockup Agreement,  the Debtors shall not be required to pay the Backstop Lenders the $1,000,000 cash fee described in this clause (b), and (c)(i) if either the Budget Contingency is not satisfied or the Budget Contingency is satisfied but the Designated New Money Election is not made, (ii) the Partial New Money Investment Alternative is effectuated under the Plan, (iii) the Substantial Consummation Date occurs and (iv) the entire Working Capital Facility is made available as provided for in the Plan, $300,000 in cash shall be fully earned, non-refundable and payable to the Backstop Lenders.  For the avoidance of doubt, any amounts paid to the Backstop Lenders pursuant to this paragraph shall be paid to the Backstop Lenders on a pro rata basis based on the Backstop Commitments Percentages set forth on Schedule 1 attached hereto.  In addition, the Backstop Order shall provide the Backstop Lenders with an administrative expense claim pursuant to Section 503(b)(1) of the Bankruptcy Code on account of the Debtors’ obligation hereunder, including the obligations to pay the fees and expenses as provided for herein.

 

  

3

  

 

	
  

	
11.

	
The agreement of the Backstop Lenders and the Debtors hereunder is expressly conditioned upon, and subject to, (a) satisfaction of each of the conditions set forth in the Plan, (b) no Consenting Lender Termination Event (as defined in the Lockup Agreement) having occurred under the Lockup Agreement (unless the occurrence of such Consenting Lender Termination Event shall have been waived in writing by the Requisite Consenting Lenders), (c) the Backstop Order (which shall be in form acceptable in all respects to the Backstop Lenders) having been entered by the Bankruptcy Court and continuing to be in full force and effective, or alternatively, the Plan, as amended, providing for the approval of this Backstop Commitment Agreement, and (d) the Bankruptcy Court’s entry of a Final Order approving the Cash Collateral Stipulation (which shall be in form and substance reasonably acceptable in all respects to the Designated Consenting Lenders) and the Debtors’ compliance with, and the continued effectiveness of, the Cash Collateral Stipulation as approved by the Final Order (collectively, “Backstop Commitment Agreement Conditions”).  Upon the failure of a Backstop Commitment Agreement Conditions to be satisfied at any time during the period from the date hereof through the Substantial Consummation Date, the Majority Backstop Lenders (as defined below) shall have the right (in their sole and absolute discretion) immediately to terminate the Backstop Commitment Agreement.

 

	
  

	
12.

	
For purposes of this Backstop Commitment Agreement, (i) “Majority Backstop Lenders” means the Backstop Lenders that collectively hold two-thirds of the aggregate Backstop Commitment Percentage set forth on Schedule 1 attached hereto.

 

  

4

  

 

	
  

	
13.

	
Notwithstanding any other provisions herein, the Debtors shall not pay any fee or  expense hereunder to any Backstop Lender that is in material breach of its obligations hereunder (each such Backstop Lender, a “Defaulting Backstop Lender”).  The Backstop Lenders hereby agree and acknowledge that, to the extent (a) one or more of the Backstop Lenders is a Defaulting Backstop Lender and (b) one or more of the Backstop Lenders that is not a Defaulting Backstop Lender (each such Backstop Lender, a “Performing Backstop Lender”) agrees, in its sole and absolute discretion, to fund and commit to fund, as applicable, its Ratable Share of such Defaulting Backstop Lender’s Backstop Lender Pro Rata Share and Backstop Commitment Percentage of the Unsubscribed Amount, then each Performing Backstop Lender shall be entitled to receive (and the Debtors shall be obligated to pay) its Ratable Share of any fee that would have been payable to such Defaulting Backstop Lender but for such Defaulting Backstop Lender’s breach of this Backstop Commitment Agreement and 35% of any distribution such Defaulting Backstop Lender is entitled to receive under the Plan on account of its Allowed First Priority Senior Secured Claims and Senior Secured Claims thereunder.  In the event that any Defaulting Backstop Lender fails to meet its obligations under this Backstop Commitment Agreement, each Performing Backstop Lenders shall have the right, but not the obligation, to assume such obligations.  “Ratable Share” means with respect to each Performing Backstop Lender (x) the total amount of First Priority Senior Secured Claims and/or Senior Secured Claims held by such Performing Backstop Secured Lender as of the Petition Date divided by (y) the aggregate amount of all First Lien Senior Secured Claims and Senior Secured Claims held by all Performing Backstop Lenders as of the Petition Date.

 

	
  

	
14.

	
Whether or not the transactions contemplated hereby are consummated, and provided there has not been a material breach hereunder by a Backstop Lender, the Debtors agree to: (x) pay within ten (10) days of demand the reasonable and documented fees and expenses  of the Backstop Lenders incurred previously or in the future  relating to the preparation, negotiation and approval of  the Backstop Commitments, Backstop Commitment Agreement, and order approving the Backstop Commitment Agreement, but with regard to attorneys fees and expenses, reimbursement is limited to  the reasonable fees and expenses of the collective counsel, and not individual counsel, for the Backstop Lenders and (y) indemnify and hold harmless the Backstop Lenders and their respective general partners, members, managers and equity holders, and the respective officers, employees, affiliates, advisors, agents, attorneys and accountants of each such entity, and to hold the Backstop Lenders and such other persons and entities (each an “Indemnified Person”) harmless from and against any and all losses, claims, damages, liabilities and expenses, joint or several, which any such person or entity may incur, have asserted against it or be involved in as a result of or arising out of or in any way related to this letter, the proposed Backstop Commitments contemplated hereby, the use of proceeds thereunder or any  transaction or any claim, litigation or investigation or proceeding relating to any of the foregoing, regardless of whether any of such Indemnified Persons is a party thereto, and to reimburse each of such Indemnified Persons upon ten (10) days demand for any reasonable legal or other expenses incurred in connection with any of the foregoing; provided, however, that the foregoing indemnity shall not, as to any Indemnified Person, apply to losses, claims, damages, liabilities or related expenses to the extent they have resulted from the willful misconduct or gross negligence of such Indemnified Person.  No Indemnified Person shall be liable for any special, indirect, consequential or punitive damages in connection with its activities related to the Backstop Commitments except to the extent they have resulted from the willful misconduct or gross negligence of such Indemnified Person.  The terms set forth in this paragraph and paragraph 10 above shall survive termination of this Backstop Commitment Agreement and shall remain in full force and effect regardless of whether the documentation for the New Money Investment is executed and delivered, provided there has not been a material breach hereunder by any Backstop Lender.

 

  

5

  

 

	
  

	
15.

	
It is understood and agreed by the Debtors and Backstop Lenders that money damages would be an insufficient remedy for any breach of this Agreement by either of them and each non-breaching party shall be entitled to specific performance and injunctive or other equitable relief as a remedy of any such breach, including, without limitation, an order of the Bankruptcy Court or other court of competent jurisdiction requiring any party to comply promptly with any of its obligations hereunder.

 

	
  

	
16.

	
This Backstop Commitment Agreement (a) is not assignable by the Debtors without the prior written consent of the Majority Backstop Lenders (and any purported assignment without such consent shall be null and void), and (b) is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto.  Notwithstanding the foregoing, the Backstop Lenders may assign all or any portion of their rights and obligations hereunder to one or more financial institutions reasonably acceptable to RHC; provided, that RHC’s consent shall not be required for (x) any such assignment to another Backstop Lender or (y) an assignment by any Backstop Lender of its rights, but not its obligations, hereunder to an affiliate of such Backstop Lender.  Upon any such assignment, the obligations of the Backstop Lenders in respect of the portion of their obligations so assigned shall terminate.  The obligations of the Backstop Lenders under this Backstop Agreement are several, and not joint and several.

 

	
  

	
17.

	
This Backstop Commitment Agreement sets forth the agreement of the Backstop Lenders to fund and commit to fund, as applicable, the Unsubscribed Amount on the terms described herein and shall be considered withdrawn and the obligations on the part of the Backstop Lenders and the Debtors as provided for herein shall be of no force and effect if (a) the Backstop Lenders have not received from the Debtors fully executed counterparts to this Backstop Commitment Agreement on or before July 12, 2010, unless such deadline is extended by the mutual agreement of the Majority Backstop Lenders and the Debtors and (b) the Agreement Effective Date (as defined in the Lockup Agreement) does not occur.

 

	
  

	
18.

	
The obligations of the Backstop Lenders hereunder shall terminate and all of the obligations of the Debtors (other than the obligations of the Debtors to (i) pay the reimbursable fees and expenses, (ii) satisfy their indemnification obligations and (iii) pay fees, if any, earned under paragraph 10 of this Backstop Commitment Agreement) shall be of no further force or effect, upon termination of this Backstop Commitment Agreement in accordance with paragraph 11 above.

 

  

6

  

 

	
  

	
19.

	
THIS BACKSTOP COMMITMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

	
  

	
20.

	
This Backstop Commitment Agreement may not be amended or waived except in writing signed by the Debtors and each Backstop Lender, and approved by the Bankruptcy Court after the Petition Date.  This Backstop Commitment Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken together, shall constitute one agreement.  Delivery of an executed counterpart of this Backstop Commitment Agreement by facsimile or portable document format (PDF) shall be effective as delivery of a manually executed counterpart of this Backstop Commitment Agreement.

 

	
  

	
21.

	
Nothing herein shall be deemed an admission of any kind.  Pursuant to Federal Rule of Evidence 408 and any applicable state rules of evidence, this Backstop Commitment Agreement and all negotiations relating thereto shall not be admissible into evidence in any proceeding other than a proceeding  before the Bankruptcy Court to approve the Backstop Commitment Agreement or enforce the terms of this Backstop Commitment Agreement.

 

	
  

	
22.

	
Notwithstanding anything contained herein, each Backstop Lender acknowledges that its decision to enter into this Backstop Commitment Agreement has been made by such Backstop Lender independently of any other Backstop Lender.

 

	
  

	
23.

	
This Backstop Commitment Agreement is the product of extensive discussions and negotiations between and among the Debtors and the Backstop Lenders.  Each of the foregoing was represented by counsel of its choice who either (i) participated in the formulation and documentation of this Backstop Commitment Agreement or (ii) was afforded the opportunity to review and provide comments thereon.  Accordingly, the general rule of contract construction known as “contra proferentem” shall not apply to the construction or interpretation of any provision of this Backstop Commitment Agreement.

 

	
  

	
24.

	
This Backstop Commitment Agreement constitutes the entire understanding among the parties hereto with respect to the subject matter hereof and replaces and supersedes all prior agreements and understandings, both written and oral, between the parties hereto with respect to the subject matter hereof and shall become effective and binding upon the mutual exchange of fully executed counterparts.

 

	
  

	
25.

	
The undersigned represent that they have the authority to execute and deliver this Backstop Commitment Agreement.

 

 

[SIGNATURE PAGES FOLLOW]

 

  

7

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Backstop Commitment Agreement to be duly executed as of the day and year first written above.

 

	  	
RIVIERA HOLDINGS CORPORATION

	  	
By:

	/s/ Tullio J. Marchionne
	  	
Name:  Tullio J. Marchionne

	  	
Title:  Secretary

	  	  
	  	
RIVIERA OPERATING CORPORATION

	  	
By:

	/s/ Tullio J. Marchionne
	  	
Name:  Tullio J. Marchionne

	  	
Title:  Secretary

	  	  
	  	
RIVIERA BLACK HAWK, INC.

	  	
By:

	/s/ Tullio J. Marchionne
	  	
Name:  Tullio J. Marchionne

	  	
Title:  Secretary

 

 

  

8

  

 

 

	  	
SCH/VIII BONDS, LLC

	  	  
	  	
By:

	

/s/ Marcos Alvarado

	  	
Name:  Marcos Alvarado

	  	
Title:  Vice President

	  	  
	  	  
	  	
SCH/VIII BONDS II, L.L.C.

	  	  
	  	  
	  	  
	  	
By:

	

/s/ Marcos Alvarado

	  	
Name: Marcos Alvarado

	  	
Title:  Vice President

	  	  
	  	  
	  	
SCH/VIII BONDS III, L.L.C.

	  	  
	  	  
	  	  
	  	
By:

	

/s/ Marcos Alvarado

	  	
Name:  Marcos Alvarado

	  	
Title:  Vice President

	  	  
	  	  
	  	
SCH/VII BONDS IV, L.L.C.

	  	  
	  	  
	  	  
	  	
By:

	

/s/ Marcos Alvarado

	  	
Name:  Marcos Alvarado

	  	
Title: Vice President

	  	  
	  	  
	  	
STRATEGIC VALUE SPECIAL SITUATIONS MASTER FUND L.P., 

by its investment manager,

SVP SPECIAL SITUATIONS LLC

	  	  
	  	
By:

	

/s/ Lewis Schwartz

	  	
Name:  Lewis Schwartz

	  	
Title:  Chief Financial Officer

 

  

9

  

 

	  	
CERBERUS SERIES FOUR HOLDINGS, LLC

By: Cerberus Institutional Partners, L.P. - Series Four, its Managing Member

By: Cerberus Institutional Associates, L.L.C., its General Partner

	  	  
	  	
By:

	

/s/ Seth Plattus

	  	
Name:  Seth Plattus

	  	
Title:  Senior Managing Director

	  	  
	  	  
	  	
DESERT ROCK ENTERPRISES LLC

	  	  
	  	
By:

	

/s/ Daniel Morrell

	  	
Name:  Daniel Morrell

	  	
Title:  Chief Financial Officer

 

 

 

[Signature Page to Backstop Commitment Agreement]

  

  

  

 

EXHIBIT A

PLAN

 

  

  

  

 

EXHIBIT B

 

CASH COLLATERAL STIPULATION

 

  

  

  

 

SCHEDULE 1

BACKSTOP COMMITMENT PERCENTAGES

	
Backstop Lender

	
Backstop Commitment Percentage

	
SOF-VIII U.S. Hotel Holdings Holdco, L.L.C

	
55.375%

	
Strategic Value Partners, LLC

	
16.613%

	
Cerberus Capital Management, L.P.

	
14.263%

	
Desert Rock Enterprises LLC

	
13.749%

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}]]