COLLATERAL ASSIGNMENT
THIS COLLATERAL ASSIGNMENT (as amended, supplemented or otherwise modified
from time to time, this "Assignment") is made as of June 3, 1999, by and between
RIVIERA BLACK HAWK, INC., a Colorado corporation, (the "Company"), in favor of
IBJ WHITEHALL BANK & TRUST COMPANY, a New York banking association, having an
office at Xxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as trustee (in
such capacity, together with its successors and assigns, the "Trustee") for the
benefit of itself and the holders of the Notes (as defined below).
Recitals
A. Notes. Pursuant to that certain Indenture dated as of even date herewith
(as amended, supplemented or otherwise modified from time to time, the
"Indenture"), by and between the Company and the Trustee, the Company shall
issue its 13% First Mortgage Notes due 2005 With Contingent Interest (the
"Original Notes," and together with any notes issued in replacement thereof or
exchange therefor, the "Notes"), in the original aggregate principal amount of
$45,000,000. Capitalized terms used and not otherwise defined herein shall have
the meanings given in the Indenture.
B. Purpose. In order to induce the holders of the Notes to enter into the
transactions contemplated by the Indenture, the parties have entered into this
Assignment to evidence the Company's collateral assignment for security of
certain contracts and documents related to the design, construction and
operation of the Riviera Black Hawk.
Agreement
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and in order to induce the holders of the Notes to purchase the
Notes, the Company agrees as follows:
1. Assignment. As security for the due and punctual payment and performance
of all indebtedness and obligations of the Company, now or hereafter due under
the Indenture, the Notes, the Collateral Documents and all other documents,
agreements and instruments (in each case, as amended, supplemented or otherwise
modified from time to time) now or hereafter executed and delivered in
connection with the Indenture, collectively, the "Transaction Documents"),
whether or not arising after the commencement of a proceeding under Bankruptcy
Law (including post-petition interest) and whether or not recovery of any such
obligation or liability may be barred by a statute of limitations or
prescriptive period or such obligation or liability may otherwise be
unenforceable (collectively, the "Obligations"), the Company hereby assigns and
transfers to the Trustee, and hereby grants to the Trustee a security interest
in, all of the Company's right, title and interest, to the extent assignable and
transferable, whether now existing or hereafter arising and whether now owned or
hereafter acquired, wherever located, in, to and under the following
(collectively, the "Assigned Collateral"):
(a) all contracts (including without limitation construction contracts
and architectural design, engineering and development contracts and
agreements, subcontracts, service agreements, supply agreements and other
such contracts and agreements) between the Company and other persons, and
all amendments, modifications, additions and changes thereto, in each case
relating to the Riviera Black Hawk;
(b) all plans, specifications, engineering reports, soil and
environmental reports, site plans, surveys, working drawings, shop
drawings, other reports, drawings and plans and other such documents, and
all amendments, modifications, supplements, general conditions, addenda,
additions and changes thereto, in each case relating to the Riviera Black
Hawk;
(c) all other contracts, agreements, documents and instruments now
existing or hereafter arising relating to the Riviera Black Hawk, including
without limitation any and all construction, architectural and engineering
contracts, plans and specifications, drawings, and surveys, bonds, permits,
licenses and other governmental approvals and all other Plans (all of the
foregoing in subsections (a) - (c), collectively, the "Contracts and
Documents"); and
(d) all proceeds of the foregoing, including without limitation (i)
whatever is now or hereafter receivable or received upon the sale,
exchange, collection or other disposition of any of the Contracts and
Documents, whether voluntary or involuntary, (ii) any such items which are
now or hereafter acquired with any proceeds of Contracts and Documents, and
(iii) any insurance or payments under any indemnity, warranty or guaranty
now or hereafter payable by reason of loss or damage or otherwise with
respect to any Contracts and Documents or any proceeds thereof.
Notwithstanding the foregoing, the Assigned Collateral shall not include
any of the following (collectively, the "Excluded Assets"): (A) Gaming Licenses
and Liquor Licenses, any other license, permit or other approval of or by any
Governmental Authority to the extent that, under the terms and conditions of
such approval or under applicable law, it cannot be subjected to a Lien in favor
of the Trustee without the approval of the relevant Governmental Authority, but
only to the extent that such approval has not been obtained, (B) any Contract or
Document that is exclusively subject to an agreement with a third party that,
pursuant to its terms, cannot be pledged as security; provided that the Company
shall use its best efforts to obtain such third party's consent to assignment of
all such material agreements; and (C) any Contract or Document exclusively
relating to (including the respective FF&E Financing documentation) FF&E to the
extent financed or refinanced by, or the proceeds of, an FF&E Financing to the
extent that (i) the purchase or lease of such FF&E was not financed with the
proceeds of the Notes but with the proceeds of an FF&E Financing in place at the
time of such purchase and (ii) the Company is permitted to enter into such FF&E
Financing for such FF&E under the Indenture; provided further that (x) any such
Excluded Asset now or hereafter acquired by the Company shall automatically
become part of the Assigned Collateral when and to the extent it may
subsequently be made subject to such a lien and/or such approval has been
obtained and/or such FF&E has been repaid, satisfied or terminated (as
applicable), and (y) all proceeds of any Excluded Assets shall nevertheless be
subject to the assignment hereunder. The Assigned Collateral includes,
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without limitation, those certain contracts and agreements described in Exhibit
"A" attached hereto and made a part hereof.
2. Rights of the Company. This Assignment is an assignment for security
purposes only. Accordingly, notwithstanding anything to the contrary set forth
herein, the Company shall retain all rights with respect to the Contracts and
Documents, including without limitation the right to enforce all rights of such
Company thereunder, except during a period when an "Event of Default" (as such
term is defined in the Indenture) has occurred and is continuing.
3. Representations and Warranties of the Company. The Company represents
and warrants to the Trustee as of the date hereof that (a) none of the Contracts
and Documents has been amended or modified except as set forth herein or as
previously disclosed in writing to the Trustee, (b) the Company has not assigned
or granted a security interest in any of the Contracts and Documents or the
proceeds thereof to anyone other than the Trustee, and (c) the Company is not in
material default, and no event has occurred that with notice or lapse of time or
both would constitute a material default by the Company, or, to its knowledge
any other party, under any of the Contracts and Documents.
4. Covenants of the Company. The Company covenants and agrees in favor of
the Trustee that (a) the Company will not further assign, encumber or suffer the
assignment or encumbrance of any of the Contracts and Documents or the proceeds
thereof without the prior written consent of the Trustee pursuant to or as
expressly permitted under the Indenture; (b) the Company will perform and
discharge each material obligation, covenant and agreement to be performed by
the Company under each Contract and Document, at no cost or expense to the
Trustee; (c) the Company will use its commercially reasonable best efforts to
enforce or secure the performance of each material obligation, covenant or
agreement of the counterparty to each Contract and Document; and (d) the Company
will not modify, amend, supplement or in any way join in the release of any
rights of the Company under any of the Contracts and Documents or modify, amend,
supplement or in any way join in the discharge of any obligations of any
counterparty under any Contract or Document, that is in any material way adverse
to the holders of the Notes, except with the Trustee's written consent.
5. Limitation of Trustee's Obligations. Nothing in this Assignment shall
constitute an assumption of any obligation by the Trustee under the Contracts
and Documents. The Company shall continue to be liable for all obligations
thereunder and hereby agrees to perform all such obligations, to comply with all
terms and conditions of the Contracts and Documents, and to take such steps as
may be necessary or appropriate to secure performance by all other parties
thereto. The Company shall defend, indemnify and hold the Trustee harmless from
and against all losses, costs, liabilities and expenses, including attorneys'
fees, arising from or related to any failure by the Company to perform any
obligation of the Company under any of the Contracts and Documents, such
indemnity and hold harmless agreement to survive the payment and performance of
the Obligations.
6. Cure by Trustee. At any time upon and during the continuation of an
Event of Default, the Trustee shall have the right, but shall have no
obligation, to take all actions that the Trustee may determine to be necessary
or appropriate to cure any default under any of the
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Contracts and Documents and to protect the rights of the Company or the Trustee
thereunder, and may do so in the Trustee's name, in the name of the Company or
otherwise. If any such action taken by the Trustee shall prove to be inadequate
or invalid in whole or in part, the Trustee shall not incur any liability on
account thereof, and the Company hereby agrees to defend, indemnify and hold the
Trustee harmless from and against all losses, costs, liabilities and expenses,
including reasonable attorneys' fees, which the Trustee may incur or to which it
may become subject in exercising any of its rights under this Assignment, except
for those arising from the gross negligence or willful misconduct of the
Trustee, such indemnity and hold harmless agreement to survive the payment and
performance of the Obligations.
7. Rights and Remedies. Upon the occurrence of an Event of Default under
the Indenture, irrespective of whether a notice of default has been given with
respect to such Event of Default (unless required by the Indenture), and with or
without bringing any action or proceeding, the Trustee may, at its option,
succeed to and proceed to enforce all of the rights, interests and remedies of
the Company under the Contracts and Documents, amend, modify, cancel, terminate
or replace the same, reassign the Company's right, title and interest therein to
any other person, and exercise any and all other rights of the Company under the
Contracts and Documents, either in person or through an agent, receiver or
keeper, without further notice to or consent by the Company, and without regard
to the adequacy of security for the Obligations or the availability of any other
remedies. The exercise of any of the foregoing rights or remedies shall not cure
or waive any Default under the Indenture or any other Transaction Document, or
waive, modify or affect any notice of default thereunder, or invalidate any act
done pursuant to any such notice. In addition to the rights and remedies of the
Trustee as set forth in this Assignment, the Trustee shall be entitled to the
benefit of all other rights and remedies set forth in the Indenture and the
other Transaction Documents, at law or in equity. Without limiting the
foregoing, the Company hereby irrevocably constitutes and appoints the Trustee,
upon the occurrence and during the continuance of an Event of Default, as its
attorney-in-fact to demand, receive and enforce the Company's rights with
respect to the Contracts and Documents, to give appropriate receipts, releases
and satisfactions for and on behalf of the Company, and to do any and all acts
in the name of the Company with the same force and effect as the Company could
do if this Assignment had not been made. Such appointment is irrevocable and
coupled with an interest until payment in full and complete performance of all
the Obligations. The Trustee may appoint a substitute attorney-in-fact. The
Company ratifies all actions taken by the attorney-in-fact but, nevertheless, if
the Trustee requests, the Company will specifically ratify any action taken by
the attorney-in-fact by executing and delivering to the attorney-in-fact or to
any entity designated by the attorney-in-fact all documents necessary to effect
such ratification.
8. Additional Instruments. With respect to both existing and future
Contracts and Documents, the Company hereby agrees to execute and deliver, at
its sole cost and expense, such additional assignments and other documents as
the Trustee may reasonably request in order to implement the provisions of this
Assignment.
9. Miscellaneous; Governing Law. This Assignment shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs, legal
representatives, successors and assigns. In any action or proceeding arising
from or related to this Assignment, the prevailing party shall be entitled to
recover its reasonable costs and attorneys' fees. The reference to
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"attorneys' fees" in this Assignment shall include, without limitation, such
reasonable amounts as may then be charged by the Trustee for legal services
furnished by in-house attorneys in the employ of the Trustee, at rates not
exceeding such reasonable rates that would be charged by outside attorneys for
comparable services. This Assignment shall be governed by the internal laws of
the State of New York, except to the extent that perfection and enforcement of
the security interests and assignment hereunder are governed by the laws of
another jurisdiction.
10. Gaming Laws and Regulations. The Company acknowledges that, to the
extent required under applicable law, the consummation of the transactions
contemplated hereby and the exercise of remedies hereunder may be subject to the
Colorado Limited Gaming Act and the regulations promulgated pursuant to each
such law, all as amended from time to time. The parties hereto further
acknowledge that the Gaming License held by the Company is not part of the
collateral of this Assignment and that, under the above described legislation
and rules promulgated thereunder, the Trustee may be precluded from or otherwise
limited in taking possession of or in selling the collateral of this Assignment
under the rights and remedies provisions of this Assignment and the other
Transaction Documents. The parties hereto also acknowledge that due to various
legal restrictions, including without limitation licensing of operators of
gaming facilities and prior approval of the sale or disposition of assets of a
licensed gaming operation, the sale of collateral may be denied by Gaming
Authorities or delayed pending approval of Gaming Authorities.
11. Severability. If any provision or obligation of this Assignment should
be found to be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions and
obligations or any other agreement executed in connection herewith, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby and shall nonetheless remain in full force and
effect to the maximum extent permitted by law.
12. Conflicts with Indenture. Notwithstanding any other provision of this
Assignment, the terms and provisions of this Assignment shall be subject and
subordinate to the terms of the Indenture. To the extent that the Indenture
provides the Company with a particular cure or notice period, or establishes any
limitations or conditions on the Trustee's actions with regard to a particular
set of facts, the Company shall be entitled to the same cure periods and notice
periods, and the Trustee shall be subject to the same limitations and conditions
in place of the cure periods, notice periods, limitations and conditions
provided for under the Indenture; provided, however, that such cure periods,
notice periods, limitations and conditions shall not be cumulative as between
the Indenture and this Assignment. In the event of any conflict between the
provisions of this Assignment and those of the Indenture, including without
limitation any conflicts or inconsistencies in any definitions herein or
therein, the applicable provisions or definitions of the Indenture shall govern.
13. Counterparts. This Assignment may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company has executed this Collateral Assignment as
of the date first above written.
RIVIERA BLACK HAWK, INC.,
a Colorado corporation
By:
--------------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED
IBJ WHITEHALL BANK & TRUST COMPANY,
a New York banking association,
By:
--------------------------------------
Name:
Title:
[Signature Page to Collateral Assignment]
COLLATERAL ASSIGNMENT
EXHIBIT "A"
CONTRACTS AND DOCUMENTS
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1. Trademark License Agreement, dated June 3, 1999, between Riviera Operating
Corporation and the Company.
2. Subdivision Agreement, dated February 20, 1998 (as amended), entered into
between the City of Black Hawk and the Company.
3. Standard Form of Agreement Between Owner and Contractor, dated December 29,
1997 (as amended), between The Xxxxx Company, Inc., and the Company.
4. Performance Bond No. 19-30-19, dated December 24, 1997, among American Home
Assurance Company, The Xxxxx Company, Inc., and the Company.
5. Management Agreement, dated June 3, 1999, between Riviera Gaming Management
of Colorado, Inc., and the Company.
6. Standard Form of Agreement Between Owner and Architect, dated July 29,
1998, between Xxxxxx Associates, Inc., and the Company.
7. The Completion Capital Commitment, dated June 3, 1999, between Riviera
Holdings Corporation and the Company.
8. The Keep-Well Agreement, dated June 3, 1999, between Riviera Holdings
Corporation and the Company.
A-1
