FIRST AMENDMENT TO REVOLVING LINE OF CREDIT LOAN AGREEMENT (this
"Amendment"), dated as of August 12, 1997, is entered into between RIVIERA
HOLDINGS CORPORATION, a Nevada corporation, and RIVIERA OPERATING CORPORATION, a
Nevada corporation (collectively with Riviera Holdings Corporation, "Borrower")
and U.S. BANK (formerly known as U.S. BANK OF NEVADA, a Nevada state-chartered
commercial bank) (the "Lender").
WHEREAS, Borrower and the Lender are parties to the Revolving Line of
Credit Loan Agreement, dated as of February 28, 1997 (the "Loan Agreement");
WHEREAS, Borrower has requested that the Lender make certain changes to
the Loan Agreement and terminate the Security Agreement, dated February 28, 1997
(the "Security Agreement"), between Borrower and the Lender;
WHEREAS, the Lender is willing, on the terms set forth herein, to agree
to such changes and termination.
NOW, THEREFORE, the parties hereto agree, for good and valuable
consideration, receipt of which is hereby acknowledged, as follows:
1. Effective on and as of the Effective Date, the Lender agrees to
terminate the security interest in favor of the lender which was created under
the Security Agreement and Borrower and the Lender agree to terminate the
Security Agreement. The Lender agrees to deliver to Borrower, on or prior to the
Effective Date, all such financing statements and other executed documents
evidencing the termination of such security interest as are requested by
Borrower.
2. Effective on and as of the Effective Date, the Loan Agreement shall
be amended as follows:
(a) The "WHEREAS" clause in the preamble to the Loan Agreement shall
be revised by inserting a period after "(the `Maximum Loan
Amount')" and deleting the remainder of such clause thereafter.
(b) The "NOW, THEREFORE" clause in the preamble to the Loan Agreement
shall be amended by deleting (i) the phrase beginning with "and be
secured by" and ending with "(the `Collateral')", and (ii) the
phrase "or secure payment of" in the ninth line thereof, and
placing a period after "herewith" in the fifth line thereof.
(c) All references in the Loan Agreement to the Security Agreement
shall be deleted.
(d) Section A.3 shall be amended by deleting: (a) "the lesser of (a)"
in the second line thereof and (b) the text of such Section
beginning with the semi-colon in the third line thereof through
and including "(100%)" in the last line of the last paragraph
thereof.
(e) Section A.4 shall be amended by (a) inserting a period after
"party" on the first line of page 3 and deleting the remainder of
such Section; and (b) adding the following as new paragraphs
thereto:
"Lender shall be under no obligation to make any disbursement
under the Loan unless Borrower is, as of the date of such Loan, in
compliance with the following:
(a) Borrower shall maintain a Maximum Leverage Ratio (defined
as [average funded debt as of the last day of each month for the
quarter then ended] /[earnings before interest, taxes,
depreciation and amortization ("EBITDA"), calculated on a rolling
four (4) quarter average]) of not greater than 4.75 to 1.00 tested
for compliance as of the last day of the most recently ended
fiscal quarter of Borrower. The term "funded debt" means, as of
any date of determination, without duplication, the sum of (i) all
principal indebtedness of Borrower for borrowed money (including
debt securities issued by Borrower) on that date, plus (ii) the
aggregate amount of the net present value of principal payable by
Borrower in respect of capital leases on that date, each as
determined in accordance with generally accepted accounting
principles; and
(b) Borrower shall maintain a Minimum Times Fixed Charge
Coverage Ratio (defined as [EBITDA, calculated on a rolling four
(4) quarter basis] / [the prior year's current portion of long
term debt, plus the prior year's current portion of capital lease
obligations, plus interest expense calculated on a rolling four
(4) quarter basis, including capitalized interest and excluding
interest on intercompany debt, plus short-term loans (with
maturities of twelve (12) months or less]) of not less than 1.50
to 1.00 tested for compliance as of the last day of the most
recently ended fiscal quarter of Borrower."
(f) Clause (v) of Section C.3 shall be deleted and clause (vi) shall
be renumbered as clause (v).
(g) Paragraphs (a) and (b) of Section C.5 shall be deleted.
(h) Paragraph (c) of Section C.5 shall be amended by: (a) re-lettering
it as paragraph (a), (b) deleting "or additional liens or
encumbrances
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on Borrower's real or personal property," in the first and second
line thereof and (c) inserting the words "for each of Riviera
Holdings Corporation and Riviera Operating Corporation" after
"$10,000,000" in the second line thereof, and (d) inserting, after
"Indenture Agreement" in the third line thereof, the phrase dated
as of August 13,1997, between the Borrower and Norwest Bank
Minnesota, N.A., as trustee, as the same may be extended,
refinanced, renewed, replaced, defeased or refunded (collectively,
the `Indenture Agreement') and except for indebtedness permitted
to be incurred pursuant to the terms of the Indenture Agreement".
(i) Paragraph (d) of Section C.5 shall be amended by (a) re-lettering
it as paragraph (b) and (b) inserting the following after the word
"entity" on the second line thereof: "or mergers which are
otherwise permitted pursuant to the Indenture Agreement".
(j) The final paragraph of Section C.5 shall be amended by deleting ",
or which are secured by any of the other Loan Documents,".
(k) The following new Section C.7 shall be added to the Loan
Agreement:
"C.7 Repayment of Loans. If, as of the last day of any fiscal
quarterof the Borrower during which any Loans are outstanding
under this Agreement, the Borrower is not in compliance with the
ratio described in paragraph (a) of Section A.4 of this Agreement
(the "Leverage Ratio"), the Borrower shall, within five (5)
business days following written demand by Lender, make a principal
reduction payment under the Loan in the amount reasonably
determined by the Lender to be necessary to place the Borrower in
compliance with the Leverage Ratio (the "Compliance Amount"). In
the event that Borrower cannot, as the result of making such
principal reduction payment, return to compliance with the
Leverage Ratio, of if the Compliance Amount exceeds the then
outstanding principal amount of the Loan, together with accrued
interest thereon, the Borrower shall, within five (5) business
days following written demand by Lender, repay the then
outstanding principal amount of the Loan, together with accrued
interest thereon. In no event shall any repayment required in this
Section reduce the Maximum Loan Amount under this Agreement."
(l) The text of Section E.3 shall be deleted and replaced by
"[Reserved]."
3. This Amendment shall become effective on the date on which Riviera
Holdings Corporation issues its 10% First Mortgage Notes due 2004 pursuant to
the Indenture Agreement.
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4. Except as amended hereby, the Loan Agreement shall continue in full
force and effect in accordance with its terms.
5. This Amendment shall be governed by and construed in accordance with
the laws of Nevada.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the day and year first above written.
RIVIERA HOLDINGS CORPORATION
By: _______________________________
XXXXXX OPERATING CORPORATION
By: _______________________________
U.S. BANK
By: _______________________________
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