AGREEMENT
Exhibit
10.2
AGREEMENT
THIS
AGREEMENT (the “Agreement”) is made as of the 19th day of November, 2008 (the
“Effective Date”) by and between Riviera Holdings Corporation, a Nevada
corporation (the “Company”), and the investor set forth on the signature page
affixed hereto (the “Investor”).
WHEREAS,
the Investor wishes to purchase from time to time (collectively, the
“Acquisition”) from the Company or a seller or sellers other than the Company
such number of shares of the Company’s common stock, par value $.001 per share
(the “Common Stock”), that would increase the Investor’s total holdings of
Common Stock up to an amount that equals, but does not exceed, fifteen percent
(15%) of the Company’s Outstanding Voting Securities;
WHEREAS,
the Company wishes to grant certain waivers to the Investor in order to permit
the Acquisition pursuant to the terms and conditions set forth in this
Agreement; and
WHEREAS,
as consideration for the granting of certain waivers to the Investor to permit
the Acquisition, the Investor agrees to certain limitations on its ownership of
Common Stock, as provided herein.
NOW, THEREFORE, in consideration of the
mutual promises made herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Board
Approvals. The board of directors of the Company (the “Board”)
has, in connection with the Acquisition, (a) waived, in accordance with
subsection 7(g) of Article III of the Company’s Articles of Incorporation (the
“Articles”), and by the requisite majority as provided therein, the voting
limitation set forth in subsection 7(b) of Article III of the Articles with
respect to the Investor Group, and (b) approved the Acquisition in accordance
with the provisions of subsection 78.438(1) of Title 7 of the Nevada Revised
Statutes.
2.
Ownership
Limitation. The Investor hereby agrees not to, and that no
member of the Investor Group will, and each will cause its Affiliates not to,
directly or indirectly, acquire (other than Equity Securities distributed or
issued, directly or indirectly, with respect to Equity Securities then held by
the Investor Group, or the exercise or conversion of any Equity Securities
described in this parenthetical) any Equity Securities, or otherwise become part
of a group (that would be deemed to be a “person” by Section 13(d)(3) of the
1934 Act, as in effect on the date hereof, with respect to securities of the
Company), if immediately after giving effect to such acquisition or group
formation, the Investor Group, or any group of which it is a part, would have
beneficial ownership (as defined in Rule 13d-3 of the Securities Exchange Act of
1934, as amended (the “1934 Act”), as in effect on the date hereof) of Voting
Securities in excess of fifteen percent (15%) (the “Maximum Limit”) of the
Outstanding Voting Securities, unless specifically approved in writing by the
Board; provided, however, that the
Investor Group will not be in violation of this provision by virtue of (x) the
expiration, termination or cancellation of (i) Convertible Securities or (ii)
Rights to Purchase Voting Securities; (y) a share repurchase or other action
taken by the Company to reduce, or which has the effect of reducing, the number
of shares of Outstanding Voting Securities or votes per share of
then-Outstanding Voting Securities; or (z) the acquisition of any Voting
Securities so long as such acquisition would not trigger the voting limitations
set forth in subsection 7 of Article III of the Articles (as such Articles are
amended, amended and restated or otherwise modified from time to time) assuming,
for the purpose of this clause (z), that the Investor Group had not obtained the
waiver granted to it in Section 1(a) hereof.
3. Standstill. During
the Standstill Period, the Investor hereby agrees not to, and that no member of
the Investor Group will, and each will cause its Affiliates not to, directly or
indirectly:
(a) solicit
proxies or become a participant in a proxy solicitation with respect to any
securities of the Company; or
(b) submit
a proposal for, or offer in respect of (with or without conditions) any merger,
consolidation, business combination, tender or exchange offer, restructuring,
liquidation, recapitalization, dissolution or similar transactions or other
extraordinary transaction of or involving the Company or any of its subsidiaries
or its Equity Securities or assets (or make any public announcement with respect
to the foregoing) unless such action (i) is specifically requested in writing by
the Board prior to the making of such announcement, proposal or offer or (ii) is
made to the Board on a confidential basis and provides that (A) it may not be
consummated unless it is (1) approved by a majority of Outstanding Voting
Securities not beneficially owned by the Investor Group and (2) determined by
the independent directors of the Board to be fair to the shareholders of the
Company and (B) unless the transaction is a tender offer for all shares of
Common Stock or an offer for the entire Company, it is accompanied by an
undertaking that, if the conditions in clause (A) are satisfied, such person
will offer to acquire all shares of Common Stock still outstanding after
completion of a transaction, if any, at the same price per share paid in such
transaction.
4. Voting Limitation.
The Investor hereby
agrees at any meeting of the stockholders of the Company (or any action by prior
written consent) after the date hereof and at which any member of the Investor
Group is entitled to vote, no member of the Investor Group shall, as of any
record date for the determination of stockholders of the Company entitled to
vote on such matter, have the right to vote, vote or cause the voting of shares
of Voting Securities, in person or by proxy or through any voting agreement,
plan or other arrangement, representing in the aggregate more than the maximum
number of Voting Securities permitted to be acquired by the Investor Group under
Section 2 hereof.
5. Gaming
Approvals.
(a) Investor
shall apply for, obtain and maintain all regulatory approvals required as a
result of the transactions anticipated by this Agreement including, but not
limited to, any approvals that may be required from the Nevada and Colorado
gaming authorities. Should Investor not so apply, obtain or maintain any such
required approvals, or should the Investor be found unsuitable by any such
regulating body to obtain and/or hold the Common Stock, Investor shall promptly
divest itself of its holdings of Common Stock acquired in the Acquisition and
the Maximum Limit shall be deemed to be 10%, or to such lower level of ownership
otherwise mandated or recommended by any applicable gaming
authorities. Notwithstanding the foregoing, so long as Investor is
diligently pursuing such approvals in good faith, and has not been found
“unsuitable” or other similar designation or finding by any gaming regulatory
body, then, except as required by applicable law, the limitations contained in
this Section 5 shall not be effective.
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(b) The
Investor hereby represents and warrants that neither it nor any member of the
Investor Group has ever been found “unsuitable” or other similar designation or
finding by any gaming regulatory body.
6. Enforcement.
(a) Each
party hereto acknowledges that the other party hereto would not have an adequate
remedy at law for money damages in the event that any of the covenants or
agreements of any of the other party in this Agreement were not performed in
accordance with its terms, and it is therefore agreed that each party hereto, in
addition to and without limiting any other remedy or right it may have, will
have the right to an injunction or other equitable relief in any court of
competent jurisdiction, enjoining any such actual or potential breach and
enforcing specifically the terms and provisions hereof, and each of the Company
and each party hereto hereby waives (i) any and all defenses they may have on
the ground of lack of jurisdiction or competence of the court to grant such an
injunction or other equitable relief and (ii) the need to post any bond that may
be required in connection with the granting of such an injunction or other
equitable relief.
(b) All
rights, powers and remedies provided under this Agreement or otherwise available
in respect hereof at law or in equity shall be cumulative, including without
limitation, the provisions contained in Section 4 hereof, and not alternative,
and the exercise or beginning of the exercise of any thereof by any party hereto
shall not preclude the simultaneous or later exercise of any other such right,
power or remedy by such party. For purposes of clarity, the
provisions of Section 2 hereof shall be separately enforceable by the Company
irrespective of the provisions of Section 4 hereof.
7. Successors and
Assigns. This Agreement may not be assigned without the prior
written consent of the Company and the Investor. The provisions of
this Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties hereto. Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
8. Counterparts;
Faxes. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement
may also be executed via facsimile, which shall be deemed an
original.
9. Titles and
Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
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10. Notices. Unless
otherwise provided, any notice required or permitted under this Agreement shall
be given in writing and shall be deemed effectively given as hereinafter
described (i) if given by personal delivery, then such notice shall be deemed
given upon such delivery, (ii) if given by telex or telecopier, then such notice
shall be deemed given upon receipt of confirmation of complete transmittal,
(iii) if given by mail, then such notice shall be deemed given upon the earlier
of (A) receipt of such notice by the recipient or (B) five days after such
notice is deposited in first class mail, postage prepaid, and (iv) if given by
an internationally recognized overnight air courier, then such notice shall be
deemed given one business day after delivery to such carrier. All
notices shall be addressed to the party to be notified at the address as
follows, or at such other address as such party may designate by ten days’
advance written notice to the other party:
If to the Company:
Riviera
Holdings Corporation
0000 Xxx
Xxxxx Xxxxxxxxx Xxxxx
Xxx
Xxxxx, Xxxxxx 00000
Attention: Secretary
and General Counsel
Fax: (000)
000-0000
With a copy to:
Xxxxxx
Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
Park
Avenue Tower, 00 Xxxx 00xx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention: Xxxx
X. Xxxxxxxx, Esq.
Fax: (000)
000-0000
If to the Investor:
Desert Rock Enterprises
LLC
0000
Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxx
Xxxxx, XX 00000
Attention: Xxxxx
Xxxxxxx
Fax:
(000) 000-0000
With a
copy to:
Xxxxx
& Xxxxxx L.L.P.
0000
Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 0000
Xxx
Xxxxx, XX 00000
Attention:
P. Xxxxxxx Xxxxxxxx
Fax:
(000) 000-0000
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11. Amendments and
Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the Company and the Investor. Any amendment or
waiver effected in accordance with this Section 11 shall be binding upon the
Company and the Investor.
12. Severability. Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof but shall be interpreted as if it were written so as to be
enforceable to the maximum extent permitted by applicable law, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the
extent permitted by applicable law, the parties hereto hereby waive any
provision of law which renders any provision hereof prohibited or unenforceable
in any respect.
13. Governing Law; Consent to
Jurisdiction; Waiver of Jury Trial. This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of
Nevada without regard to the choice of law principles thereof. Each
of the parties hereto irrevocably submits to the exclusive jurisdiction of the
courts of the State of Nevada and any federal court sitting in the State of
Nevada for the purpose of any suit, action, proceeding or judgment relating to
or arising out of this Agreement and the transactions contemplated
hereby. Service of process in connection with any such suit, action
or proceeding may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under this
Agreement. Each of the parties hereto irrevocably consents to the
jurisdiction of any such court in any such suit, action or proceeding and to the
laying of venue in such court. Each party hereto irrevocably waives
any objection to the laying of venue of any such suit, action or proceeding
brought in such courts and irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.
14. Definitions. For
purposes of this Agreement, the following terms have the following
meanings:
“Affiliate” has the meaning assigned in
Rule 405 under the Securities Act of 1933, as amended (the “1933 Act”), as in
effect on the date hereof.
“Control” has the meaning given to that
term under Rule 405 under the 1933 Act, as in effect on the date hereof (and
“Controlled” and “Controlling” shall have correlative meanings); provided, however, that no
Person shall be deemed to Control another Person solely by his or her status as
a director of such other Person.
“Convertible Securities” means
securities of the Company that are convertible or exchangeable (whether
presently convertible or exchangeable or not) into Voting
Securities.
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“Equity Securities” means Voting
Securities, Convertible Securities and Rights to Purchase Voting
Securities.
“Investor Group” means (i) the
Investor, (ii) any Affiliate of the Investor and (iii) any group (that would be
deemed to be a “person” by Section 13(d)(3) of the 1934 Act, as in effect on the
date hereof, with respect to securities of the Company) of which the Investor or
any Person directly or indirectly Controlling or Controlled by the Investor is a
member. Without limiting the generality of the foregoing, Affiliate
of the Investor shall include any fund or holding company that may be formed for
investment purposes that is managed pursuant to a contractual arrangement to
offer advice by Desert Rock Enterprises LLC (“Desert Rock”) or any separate
account managed by Desert Rock.
“Outstanding Voting Securities” means
at any time the then-issued and outstanding Voting Securities based on the
latest information reported by the Company in its filings with the Securities
and Exchange Commission.
“Person”
means any individual, corporation, partnership, trust or other entity or group
(within the meaning of Section 13(d)(3) of the 1934 Act, as in effect on the
date hereof).
“Rights
to Purchase Voting Securities” means options, warrants and rights issued by the
Company (whether presently exercisable or not) to purchase Voting Securities or
Convertible Securities.
“Standstill
Period” means the period beginning on the Effective Date and ending on the first
date to occur of: (i) the day following the completion of the Company’s 2010
regular Annual Meeting of Stockholders, (ii) September 1, 2010 and (iii) the
ending of any period during which any other investor is subject to a similar
standstill as set forth in Section 3 hereof.
“Voting
Securities” means the Common Stock and any other securities of the Company of
any kind or class having power generally to vote for the election of
directors.
[Signature
page follows]
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IN WITNESS WHEREOF, the
parties hereto have executed this Agreement or caused their duly authorized
officers to execute this Agreement as of the date first above
written.
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RIVIERA
HOLDINGS CORPORATION
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DESERT
ROCK ENTERPRISES LLC
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By:
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/s/
Xxxxxxx Xxxxxx
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By:
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Name:
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Xxxxxxx
Xxxxxx
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Name:
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Xxxxx
Xxxxxxx
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Title:
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CFO
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Title:
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Chief
Executive Officer
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