EXHIBIT 10.9
OPTION AND VOTING AGREEMENT
OPTION AND VOTING AGREEMENT (this "Agreement"), dated as of August
3, 2006, by and among Rivacq LLC, a Delaware limited liability company
("Rivacq"), SOF U.S. Hotel Co Invest Holdings, L.L.C., a Delaware limited
liability company ("SOF"), Arrow Partners LP, a Delaware limited partnership
("Arrow"), and Arrow Capital Management LLC, a Delaware limited liability
company ("Newco").
WHEREAS, Riv Acquisition Holdings, Inc., a Delaware corporation
("Riv Acquisition Holdings"), Riv Acquisition Inc., a Delaware corporation and a
wholly owned subsidiary of Riv Acquisition Holdings, and Riviera Holdings
Corporation, a Nevada corporation ("Riviera"), have entered into an Agreement
and Plan of Merger, dated as of April 5, 2006 (as may be amended from time to
time, the "Merger Agreement");
WHEREAS, capitalized terms used but not defined herein shall have
the meanings ascribed thereto in the Merger Agreement;
WHEREAS, Rivacq owns 300 shares of common stock, par value $0.01 per
share, of Riv Acquisition Holdings, representing 30% of the issued and
outstanding capital stock of Riv Acquisition Holdings;
WHEREAS, SOF owns a 100% interest in Rivacq;
WHEREAS, Rivacq owns 300,000 shares of common stock, par value
$0.001 per share, of Riviera ("Shares") and Arrow owns 373,100 Shares (the
"Arrow Shares");
WHEREAS, SOF wishes that Arrow vote the Arrow Shares in favor of the
Merger, and Arrow wishes to so vote the Arrow Shares, upon the terms and subject
to the conditions set forth herein; and
WHEREAS, SOF wishes to grant to Newco, and Newco wishes to receive
from SOF, an option to acquire an interest in Rivacq, upon the terms and subject
to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, and intending to be legally
bound hereby, SOF, Rivacq, Arrow and Newco hereby agree as follows:
ARTICLE I
OPTION
Section 1.01 Grant of Option. SOF hereby grants to Newco an
irrevocable option (the "Option") to purchase a 49% interest (calculated as of
the date on which the Option is exercised) in Rivacq (the "Minority Rivacq
Interest").
Section 1.02 Option Purchase Price.(b) The purchase price for the
Minority Rivacq Interest (the "Option Purchase Price") shall be equal to 49% of
the aggregate value of Rivacq's direct and indirect interest in Riviera, valued
as follows:
(a) in the event that the Option is exercised prior to the Effective
Time, each Share held directly by Rivacq shall be valued at the purchase price
paid by Rivacq for such Share (as adjusted for stock splits, reverse stock
splits, and similar transactions); and
(b) in the event that the Option is exercised concurrently with or
after the Effective Time, Rivacq's interest in Riviera shall be valued at an
amount equal to (i) the product obtained by multiplying (A) Rivacq's percentage
interest in Riv Acquisition Holdings by (B) the sum of the aggregate Merger
Consideration and the aggregate amount payable to satisfy the Indenture
Obligation pursuant to Section 7.16 of the Merger Agreement minus (ii) the
excess of the aggregate Merger Consideration received by Rivacq pursuant to the
Merger Agreement over the aggregate purchase price paid by Rivacq for any Shares
cancelled in the consummation of the Merger pursuant to the Merger Agreement.
Section 1.03 Option Term. Subject to Section 1.06, the Option will
expire thirty (30) days after the Closing (the "Option Term"), unless the Option
Notice is delivered in accordance with Section 1.04 prior to such expiration.
Newco may, by notice in writing to SOF and Rivacq prior to such expiration date,
extend the Option Term by an additional thirty (30) days.
Section 1.04 Exercise of Option.(b) In the event that Newco wishes
to exercise the Option, it shall give written notice (an "Option Notice") to SOF
and Rivacq (the date of delivery of such notice being the "Notice Date")
specifying a date, which shall be not later than ten business days and not
earlier than five business days following the Notice Date, for the closing of
the purchase and sale of the Minority Rivacq Interest (the "Option Closing").
The Option Closing shall be held at the offices of Cadwalader, Xxxxxxxxxx & Xxxx
LLP, One World Financial Center, New York, New York, or such other location
mutually agreeable to the parties hereto.
Section 1.05 Option Closing Deliveries. At the Option Closing, (i)
Newco shall deliver to SOF the Option Purchase Price, plus 49% of all out of
pocket and documented expenses incurred by Rivacq to the date of the Option
Closing in connection with the Merger, by wire transfer of immediately available
funds to such bank account as SOF shall designate by notice in writing to Newco
prior to the Option Closing, (ii) Rivacq shall issue the Minority Rivacq
Interest to Newco, free and clear of all Encumbrances (as defined below), (iii)
Rivacq and SOF shall jointly and severally remake, as of the Option Closing, the
representations and warranties set forth in Article II, and (iv) Newco, SOF and
Rivacq shall enter into an Amended and Restated Limited Liability Company
Agreement of Rivacq in the form attached as Exhibit A hereto (the "Amended
Rivacq LLC Agreement").
Section 1.06 Unwind of Option. Prior to exercise of the Option,
Rivacq may, upon written notice to Newco, terminate or suspend the Option, or,
after the exercise of the Option, Rivacq may require Newco to convey, assign and
deliver to Rivacq the Minority Rivacq Interest against payment to Newco of any
amounts previously paid by Newco to Rivacq pursuant
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to Sections 1.05 and 4.05, if, in each case, as reasonably determined by Rivacq,
(i) the existence or exercise of the Option could impair, delay or result in the
imposition of burdensome terms in connection with the issuance or maintenance of
a liquor license or gaming license necessary for the operation of the business
of Riviera in the State of Nevada or the State of Colorado, (ii) the gaming
authorities of the State of Nevada or the State of Colorado at any time
determine that Newco, or any of its Affiliates, is unsuitable to be an optionee
of Rivacq or to hold an indirect economic interest in Riv Acquisition Holdings
or Riviera or (iii) the existence or exercise of the Option could materially
impair or delay the Closing of the Merger or could dilute or otherwise impair
the direct or indirect voting rights of Rivacq in Riviera pursuant to Section
78.3790 of the Nevada Revised Statutes; provided, however, that Newco shall have
30 days following receipt of such written notice to cure the conditions or
circumstances giving rise to Rivacq's right under this Section 1.06 to terminate
or suspend the Option or to require Newco to convey, assign and deliver to
Rivacq the Minority Rivacq Interest, as the case may be.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF SOF AND RIVACQ
As an inducement to Arrow and Newco to enter into this Agreement,
SOF and Rivacq hereby represent and warrant, jointly and severally, to Arrow and
Newco as of the date hereof as follows:
Section 2.01 Formation and Authorization; Enforceability. Each of
SOF and Rivacq is a limited liability company duly formed and validly existing
under the laws of the State of Delaware and has all necessary power and
authority to enter into this Agreement and the Amended Rivacq LLC Agreement, to
carry out its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by each
of SOF and Rivacq of this Agreement and the Amended Rivacq LLC Agreement, the
performance by each of SOF and Rivacq of its obligations hereunder and
thereunder and the consummation by each of SOF and Rivacq of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
action on the part of SOF and Rivacq. This Agreement has been, and at the Option
Closing the Amended Rivacq LLC Agreement will be, duly executed and delivered by
each of SOF and Rivacq and (assuming due authorization, execution and delivery
by Newco) constitutes, or will constitute, the legal, valid and binding
obligation of each of SOF and Rivacq, enforceable against each of SOF and Rivacq
in accordance with its terms.
Section 2.02 Ownership of Rivacq. (a) SOF is the sole record and
beneficial owner of 100% of the issued and outstanding interests in Rivacq, free
and clear of any security interest, pledge, lien, charge, encumbrance or other
restriction on the use, voting, transfer, receipt of income or other exercise of
any attribute of ownership (each, an "Encumbrance").
(b) Upon consummation of the Option Closing and the execution and
delivery of the Amended Rivacq LLC Agreement by Newco, SOF and Rivacq, the
Minority Rivacq interest will be duly and validly issued, fully paid, and
non-assessable, and free and clear of all Encumbrances other than as may have
been created by or are attributable to Newco. Except for this Agreement, there
are no options, voting trusts, stockholder agreements, proxies or other
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agreements or understandings in effect with respect to the voting, issuance, or
transfer of any of any of the interests in Rivacq.
Section 2.03 No Conflict. The execution, delivery and performance of
this Agreement and the Amended Rivacq LLC Agreement by each of SOF and Rivacq do
not and will not (i) violate, conflict with or result in the breach of any
provision of the certificate of formation or the limited liability company
agreements (or similar organizational documents) of SOF and Rivacq, or (ii)
conflict with or violate any statute, law, ordinance, regulation, rule, code,
order, requirement or rule of law (each, a "Law") or order, writ, judgment,
injunction, decree, stipulation, determination or award (each, an "Order")
applicable to SOF or Rivacq or any of their respective assets, properties or
businesses or (iii) conflict with, result in any breach of, constitute a default
(or event which with the giving of notice or lapse of time or both, would become
a default) under, require any consent under, or give to others any rights of
termination, amendment, acceleration, suspension, revocation or cancellation of,
or result in the creation of any Encumbrance on their respective assets or the
Minority Rivacq Interest pursuant to, any note, bond, mortgage or indenture,
contract, agreement, lease, sublease, license, permit, franchise or other
instrument to which SOF or Rivacq is a party or by which any of their respective
assets or the Minority Rivacq Interest is bound or affected.
Section 2.04 Litigation. As of the date hereof, there are no
actions, proceedings, claims, suits, inquiries or investigations ("Actions") by
or against SOF or Rivacq pending before any government, regulatory or
administrative authority, agency, commission, court or tribunal (each, a
"Governmental Authority"), or, to the knowledge of SOF and Rivacq, threatened to
be brought by or before any Governmental Authority, which could affect the
legality, validity or enforceability of this Agreement or the Amended Rivacq LLC
Agreement, or the consummation of the transactions contemplated hereby or
thereby, or which reasonably could be expected to have a material adverse effect
on Rivacq.
Section 2.05 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement or the Amended Rivacq LLC
Agreement, based upon arrangements made by or on behalf of SOF or Rivacq.
Section 2.06 Purpose; Material Assets and Liabilities. Rivacq was
formed, and since its formation has been operated, for the sole purpose of
holding the Shares and the shares of common stock of Riv Acquisition Holdings
(the "Riv Acquisition Holdings Shares"). Other than the Shares and the Riv
Acquisition Holdings Shares, Rivacq does not own, hold, or control any other
material asset. In addition, Rivacq does not currently have any material
liabilities.
Section 2.07 Title to Assets. The Shares and the Riv Acquisition
Holdings Shares are owned beneficially and of record by Rivacq, and Rivacq owns
all right, title, and interest in and to the Shares and the Riv Acquisition
Holdings Shares, free and clear of any and all Encumbrances.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF ARROW AND NEWCO
As an inducement to SOF and Rivacq to enter into this Agreement,
Arrow and Newco each severally make to SOF and Rivacq the respective
representations and warranties applicable to it as follows:
Section 3.01 Formation and Authorization; Enforceability. Arrow is a
limited partnership duly formed and validly existing under the laws of the State
of Delaware and has all necessary power and authority to enter into this
Agreement, to carry out its obligations hereunder and to consummate the
transactions contemplated hereby. Newco is a limited liability company duly
formed and validly existing under the laws of the State of Delaware and has all
necessary power and authority to enter into this Agreement and the Amended
Rivacq LLC Agreement, to carry out its obligations hereunder and thereunder, and
to consummate the transactions contemplated hereby and thereby. The execution
and delivery by Arrow of this Agreement, the performance by Arrow of its
obligations hereunder and the consummation by Arrow of the transactions
contemplated hereby have been duly authorized by all requisite action on the
part of Arrow. The execution and delivery by Newco of this Agreement and the
Amended Rivacq LLC Agreement, the performance by Newco of its obligations
hereunder and thereunder, and the consummation by Newco of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
action on the part of Newco. This Agreement has been duly executed and delivered
by Arrow and Newco, and (assuming due authorization, execution and delivery by
SOF and Rivacq) this Agreement constitutes the legal, valid and binding
obligation of Arrow and Newco, enforceable against Arrow and Newco in accordance
with its terms. At the Option Closing, the Amended Rivacq LLC Agreement will be
duly executed and delivered by Newco, and (assuming due authorization, execution
and delivery by SOF and Rivacq) will constitute the legal, valid and binding
obligation of Newco, enforceable against Newco in accordance with its terms.
Section 3.02 Ownership of Arrow. (a) Arrow is the sole record and
beneficial owner of the Arrow Shares, free and clear of any Encumbrance. Arrow
has the sole power to vote and the full right, power and authority to sell,
transfer and deliver the Arrow Shares.
Section 3.03 No Conflict. The execution, delivery and performance of
this Agreement by Arrow do not and will not (i) violate, conflict with or result
in the breach of any provision of Arrow's limited partnership agreement (or
similar organizational documents) or (ii) conflict with or violate any Law or
Order applicable to Arrow or any of its respective assets, properties or
businesses, or (iii) conflict with, result in any breach of, constitute a
default (or event which with the giving of notice or lapse of time or both,
would become a default) under, require any consent under, or give to others any
rights of termination, amendment, acceleration, suspension, revocation or
cancellation of, or result in the creation of any Encumbrance on any of the
Arrow Shares pursuant to, any note, bond, mortgage or indenture, contract,
agreement, lease, sublease, license, permit, franchise or other instrument to
which Arrow is a party or by which any of the Arrow Shares is bound or affected.
The execution, delivery and performance of this Agreement and the Amended Rivacq
LLC Agreement by Newco do not and will not (i) violate,
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conflict with or result in the breach of any provision of Newco's limited
liability company agreement (or similar organizational documents) or (ii)
conflict with or violate any Law or Order applicable to Newco or any of its
respective assets, properties or businesses, or (iii) conflict with, result in
any breach of, constitute a default (or event which with the giving of notice or
lapse of time or both, would become a default) under, require any consent under,
or give to others any rights of termination, amendment, acceleration,
suspension, revocation or cancellation of, any note, bond, mortgage or
indenture, contract, agreement, lease, sublease, license, permit, franchise or
other instrument to which Newco is a party.
Section 3.04 Litigation. As of the date hereof, there are no Actions
by or against Arrow or Newco pending before any Governmental Authority, or, to
the best knowledge of Arrow and Newco, respectively, threatened to be brought by
or before any Governmental Authority, which could affect the legality, validity
or enforceability of this Agreement or the consummation of the transactions
contemplated hereby.
Section 3.05 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Arrow or Newco.
ARTICLE IV
ADDITIONAL AGREEMENTS
Section 4.01 Grant of Proxy. (a) Effective upon execution of this
Agreement, Arrow, by this Agreement, with respect to 190,316 Arrow Shares (the
"Lock-up Arrow Shares"), hereby (i) subject to the issuance of the 10% Nevada
Gaming Approval (as defined below), grants an irrevocable proxy to Rivacq (and
agrees to execute such documents or certificates evidencing such proxy as Rivacq
may reasonably request) to vote at any meeting of the stockholders of Riviera,
and in any action by written consent of the stockholders of Riviera, the Lock-up
Arrow Shares (A) in favor of the approval of the Merger Agreement, as it may be
amended from time to time, and the approval of all other transactions
contemplated thereby, (B) against any action, agreement or transaction (other
than the Merger Agreement or the transactions contemplated thereby) or proposal
that would result in a breach of any covenant, representation or warranty or any
other obligation or agreement of Riviera under the Merger Agreement or that
could reasonably be expected to result in any of the conditions to Riviera's
obligations thereunder not being fulfilled and (C) in favor of any other matter
necessary to consummate the Merger Agreement and considered and voted upon by
the stockholders of Riviera, and (ii) agrees to cause Lock-up Arrow Shares to be
voted in accordance with the foregoing. THIS PROXY IS IRREVOCABLE AND COUPLED
WITH AN INTEREST.
(b) This Section 4.01, and any proxy granted pursuant to this
Section 4.01, will terminate upon the Closing of the Merger or the termination
of Merger Agreement.
(c) "10% Nevada Gaming Approval" means the approval by the Nevada
Gaming Authorities (as defined below) of the voting agreement and proxy granted
by Arrow to Rivacq pursuant to Section 4.01(a), or the receipt by Rivacq of such
other assurances from the
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Nevada Gaming Authorities as it may deem necessary or desirable in connection
with such voting agreement and proxy.
(d) "Nevada Gaming Authorities" means the Nevada State Gaming
Control Board, the Nevada Gaming Commission, the Xxxxx County Liquor and Gaming
Licensing Board and the City of Las Vegas and any other licensing authority or
governmental authority having authority over casino and gaming activities and
operations in the State of Nevada.
Section 4.02 Restrictions on Transfer. (a) Arrow agrees that it
shall not, directly or indirectly, without the prior written consent of Rivacq
or as may be required to permit Arrow to exercise its right to cure under
Section 1.06, (i) sell, assign, transfer, or dispose of any of the Lock-up Arrow
Shares, (ii) deposit any of the Lock-up Arrow Shares into a voting trust or
enter into a voting agreement or arrangement or grant any proxy or power of
attorney with respect thereto that is inconsistent with this Agreement or (iii)
enter into any contract, option or other arrangement or undertaking with respect
to the direct or indirect acquisition or sale, assignment, transfer or other
disposition of any of the Lock-up Arrow Shares. Notwithstanding the foregoing,
Arrow may dispose of the Lock-up Arrow Shares in connection with the
consummation of the Merger or a Takeover Proposal.
(b) Each of Rivacq and SOF agrees that it shall not, except as
consistent with this Agreement, directly or indirectly, without the prior
written consent of Arrow, (i) sell, assign, transfer, xxxxx x xxxx upon, pledge,
dispose of or otherwise encumber the Minority Rivacq Interest or otherwise agree
to do any of the foregoing, or (ii) enter into any contract, option or other
arrangement or undertaking with respect to the direct or indirect acquisition or
sale, assignment, transfer or other disposition of the Minority Rivacq Interest.
(c) Rivacq agrees that it shall not, directly or indirectly, without
the prior written consent of Arrow and Newco, (i) sell, assign, transfer, xxxxx
x xxxx upon, pledge, dispose of or otherwise encumber any of the Riv Acquisition
Holdings Shares, (ii) deposit any of the Riv Acquisition Holdings Shares into a
voting trust or enter into a voting agreement or arrangement or grant any proxy
or power of attorney with respect thereto that is inconsistent with this
Agreement or (iii) enter into any contract, option or other arrangement or
undertaking with respect to the direct or indirect acquisition or sale,
assignment, transfer or other disposition of any of the Riv Acquisition Holdings
Shares.
Section 4.03 Restriction on Additional Rivacq Interests; Protective
Provisions. Until the expiration of the Option, Rivacq agrees that it shall not,
without the prior written consent of Arrow and Newco, authorize or issue
additional interests or any securities convertible into or exchangeable for
interests in Rivacq. In addition, prior to the first to occur of (a) the
expiration of the Option Term or (b) the exercise of the Option, (1) Rivacq
shall not sell, transfer, hypothecate, pledge or otherwise dispose of the Riv
Acquisition Holdings Shares, (2) SOF shall not sell, transfer, hypothecate,
pledge or otherwise dispose of its interest in Rivacq, and (3) neither Rivacq
nor SOF shall take or omit from taking any action that would cause Rivacq to be
dissolved or wound up.
Section 4.04 Participation in Termination Fee and Topping Fee. (a)
In the event that a portion of the Topping Fee is paid to Rivacq, and prior
thereto or at any time thereafter Newco has exercised the Option, Rivacq will
pay Newco 49% of the portion of the Topping Fee
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received by Rivacq minus the product of (i) $124,959 and (ii) the excess of (A)
the consideration paid per Share pursuant to the Takeover Proposal in respect of
which the Topping Fee was paid over (B) the Merger Consideration as set forth in
the Merger Agreement immediately prior to the termination thereof.
(b) In the event that a portion of the Termination Fee is paid to
Rivacq, and prior thereto or at any time thereafter Newco has exercised the
Option, Newco shall be entitled to be paid 49% of the portion of the Topping Fee
received by Rivacq.
Section 4.05 Expenses of Rivacq. Following the Option Closing, Newco
shall bear 49% of all expenses incurred by Rivacq as of and from the date of the
Option Closing in connection with the Merger.
Section 4.06 Further Action. (a) Each of the parties hereto shall
use all reasonable efforts to take, or cause to be taken, all appropriate
action, do or cause to be done all things necessary, proper or advisable under
applicable law, and to execute and deliver such documents and other papers, as
may reasonably be required to carry out the provisions of this Agreement and
consummate and make effective the transactions contemplated hereby.
ARTICLE V
INDEMNIFICATION
Section 5.01 Survival of Representations and Warranties. The
representations and warranties of the parties contained in this Agreement shall
survive the Option Closing indefinitely.
Section 5.02 Indemnification by SOF and Rivacq. SOF and Rivacq
shall, jointly but not severally, indemnify and hold harmless Arrow, Newco and
their respective Affiliates, officers, directors, employees, agents, successors
and assigns (each, an "Arrow Indemnified Party") for and against any and all
liabilities, losses, damages, claims, costs and expenses, interest, awards,
judgments and penalties (including attorneys' and consultants' fees and
expenses), but excluding any diminution in value in or related to the Shares
that is not caused by the act or omission of SOF or Rivacq (e.g., the creation
of an Encumbrance), actually suffered or incurred by them (including any action
brought or otherwise initiated by any of them) (hereinafter a "Loss"), arising
out of or resulting from the breach of any representation, warranty, covenant or
agreement made by SOF or Rivacq contained in this Agreement. To the extent that
SOF or Rivacq's undertakings set forth in this Section 5.02 may be
unenforceable, SOF and Rivacq shall contribute the maximum amount that they are
permitted to contribute under applicable Law to the payment and satisfaction of
the Losses incurred by the Arrow Indemnified Parties.
Section 5.03 Indemnification by Arrow and Newco. (a) Arrow shall
indemnify and hold harmless SOF and its Affiliates, officers, directors,
employees, agents, successors and assigns and Rivacq and its Affiliates,
officers, directors, employees, agents, successors and assigns (each, a "SOF
Indemnified Party") for and against any Loss, arising out of or resulting from
the breach of any representation, warranty, covenant or agreement made by Arrow
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contained in this Agreement. To the extent that Arrow's undertakings set forth
in this Section 5.03 may be unenforceable, Arrow shall contribute the maximum
amount that it is permitted to contribute under applicable Law to the payment
and satisfaction of the Losses incurred by the SOF Indemnified Parties. (b)
Newco shall indemnify and hold harmless each SOF Indemnified Party for and
against any Loss, arising out of or resulting from the breach of any
representation, warranty, covenant or agreement made by Newco contained in this
Agreement. To the extent that Newco's undertakings set forth in this Section
5.03 may be unenforceable, Newco shall contribute the maximum amount that it is
permitted to contribute under applicable Law to the payment and satisfaction of
the Losses incurred by the SOF Indemnified Parties.
Section 5.04 Notice of Loss; Third Party Claims. (b) A party
entitled to indemnification under this Article V (an "Indemnified Party") shall
give each party against whom it wishes to seek indemnification under this
Article V (an "Indemnifying Party") notice of any matter that an Indemnified
Party has determined has given or could give rise to a right of indemnification
under this Agreement, within 20 days of the event giving rise to such potential
indemnity, stating the amount of the Loss, if known, and method of computation
thereof, and containing a reference to the provisions of this Agreement in
respect of which such right of indemnification is claimed or arises; provided,
however, that the failure to provide such notice shall not release the
Indemnifying Party from any of its obligations under this Article V except to
the extent that the Indemnifying Party is materially prejudiced by such failure
and shall not relieve the Indemnifying Party from any other obligation or
liability that it may have to any Indemnified Party otherwise than under this
Article V.
(c) If an Indemnified Party shall receive notice of any Action,
audit, demand or assessment (each, a "Third Party Claim") against it or which
may give rise to a claim for a Loss under this Article V, within 30 days of the
receipt of such notice, the Indemnified Party shall give the Indemnifying Party
notice of such Third Party Claim; provided, however, that the failure to provide
such notice shall not release the Indemnifying Party from any of its obligations
under this Article V except to the extent that the Indemnifying Party is
materially prejudiced by such failure and shall not relieve the Indemnifying
Party from any other obligation or liability that it may have to any Indemnified
Party otherwise than under this Article V. If the Indemnifying Party
acknowledges in writing its obligation to indemnify the Indemnified Party
hereunder against any Losses that may result from such Third Party Claim, then
the Indemnifying Party shall be entitled to assume and control the defense of
such Third Party Claim at its expense and through counsel of its choice if it
gives notice of its intention to do so to the Indemnified Party within five days
of the receipt of notice from the Indemnified Party of such Third Party Claim;
provided, however, that if there exists or is reasonably likely to exist a
conflict of interest that would make it inappropriate in the judgment of the
Indemnified Party in its sole and absolute discretion for the same counsel to
represent both the Indemnified Party and the Indemnifying Party, then the
Indemnified Party shall be entitled to retain its own counsel in each
jurisdiction for which the Indemnified Party determines counsel is required, at
the expense of the Indemnifying Party. In the event that the Indemnifying Party
exercises the right to undertake any such defense against any such Third Party
Claim as provided above, the Indemnified Party shall cooperate with the
Indemnifying Party in such defense and make available to the Indemnifying Party,
at the Indemnifying Party's expense, all witnesses, pertinent records, materials
and information in the Indemnified Party's possession or under the
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Indemnified Party's control relating thereto as is reasonably required by the
Indemnifying Party. Similarly, in the event the Indemnified Party is, directly
or indirectly, conducting the defense against any such Third Party Claim, the
Indemnifying Party shall cooperate with the Indemnified Party in such defense
and make available to the Indemnified Party, at the Indemnifying Party's
expense, all such witnesses, records, materials and information in the
Indemnifying Party's possession or under the Indemnifying Party's control
relating thereto as is reasonably required by the Indemnified Party. No such
Third Party Claim may be settled by the Indemnifying Party without the prior
written consent of the Indemnified Party.
ARTICLE VI
TERMINATION
Section 6.01 Termination. This Agreement shall terminate:
(a) upon written notice by SOF or Rivacq to Arrow and Newco, if (i)
any representations and warranties of Arrow or Newco contained in this Agreement
shall not have been true and correct when made, (ii) Arrow or Newco shall not
have complied in all material respects with the covenants and agreements
contained in this Agreement to be complied with by it, or (iii) Arrow or Newco
shall make a general assignment for the benefit of creditors, or any proceeding
shall be instituted against Arrow or Newco seeking to adjudicate Arrow or Newco
as bankrupt or insolvent; provided, that in the case of clause (a)(i) and
(a)(ii), Arrow and Newco shall have 30 days to cure such inaccurate
representation or warranty or breached covenant or agreement and, in the event
it does so within such time period, neither SOF or Rivacq shall not be entitled
to terminate this Agreement pursuant to this Section 6.01(a) with respect to the
matter that has been so cured;
(b) upon written notice by Arrow or Newco to SOF and Rivacq, if (i)
any representations and warranties of SOF contained in this Agreement shall not
have been true and correct when made or (ii) SOF or Rivacq shall not have
complied in all material respects with the covenants and agreements contained in
this Agreement to be complied with by them, or (iii) SOF or Rivacq shall make a
general assignment for the benefit of creditors, or any proceeding shall be
instituted against SOF or Rivacq seeking to adjudicate SOF or Rivacq as bankrupt
or insolvent; provided, that in the case of clause (b)(i) and (b)(ii), SOF or
Rivacq, as applicable, shall have 30 days to cure such inaccurate representation
or warranty or breached covenant or agreement and, in the event it does so
within such time period, Arrow and Newco shall not be entitled to terminate this
Agreement pursuant to this Section 6.01(b) with respect to the matter that has
been so cured;
(c) upon notice by Arrow or Newco to SOF and Rivacq or by SOF or
Rivacq to Arrow and Newco, in the event that any Governmental Authority shall
have issued an Order or taken any other action restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement and such
Order or other action shall have become final and nonappealable;
(d) by the mutual written consent of SOF, Rivacq, Arrow and Newco;
or
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(e) upon 90 days' written notice by SOF or Rivacq to Arrow and
Newco, in the event that Riviera shall have failed to obtain the affirmative
vote of the holders of 60% of the outstanding shares of Riviera's common stock
to approve the Merger Agreement, the Merger and the other transactions
contemplated by the Merger Agreement at a meeting of Riviera's stockholders
convened therefor or at any reconvening thereof.
Section 6.02 Effect of Termination. In the event of termination of
this Agreement as provided in Section 6.01, this Agreement shall forthwith
become void and there shall be no liability on the part of any party hereto
except (a) as set forth in Sections 7.01 and 7.03, (b) that nothing shall
relieve any party hereto from liability for any breach of this Agreement and (c)
the provisions of Article V shall indefinitely survive any termination of this
Agreement. For the avoidance of doubt, the proxy granted pursuant to Section
4.01 shall expire upon any termination of this Agreement.
ARTICLE VII
GENERAL PROVISIONS
Section 7.01 Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including fees and disbursements of counsel,
financial advisors and accountants, incurred in connection with this Agreement
and the transactions contemplated by this Agreement shall be paid by the party
incurring such costs and expenses; provided, that any and all costs and expenses
of Newco and its affiliates that are reasonably required in order for them to
obtain applicable licenses, in any jurisdiction, necessary to be obtained in
connection with the transactions contemplated hereby shall be deemed costs and
expenses of Rivacq.
Section 7.02 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in person, by an internationally recognized overnight courier service, by
facsimile or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties hereto at the following addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 7.02):
(a) if to Arrow or Newco:
000 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxx Xxxxxx
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with a copy to:
Eisner & Xxxxx
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
(b) if to SOF or Rivacq:
SOF U.S. Hotel Co Invest Holdings, L.L.C.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxx
with a copy to:
Cadwalader, Xxxxxxxxxx & Xxxx LLP
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
Section 7.03 Public Announcements. Neither SOF or Rivacq, on the one
hand, nor Arrow or Newco, on the other hand, shall make, or cause to be made,
any press release or public announcement in respect of this Agreement or the
transactions contemplated hereby or otherwise communicate with any news media
without the prior written consent of the other party unless otherwise required
by law or applicable stock exchange regulation, and the parties shall cooperate
as to the timing and contents of any such press release, public announcement or
communication.
Section 7.04 Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, among
the parties hereto with respect to the subject matter hereof.
Section 7.05 Headings. The headings in this Agreement are for
reference purposes only and do not affect in any way the meaning or
interpretation of this Agreement.
Section 7.06 Assignment. This Agreement may not be assigned by
operation of law or otherwise (a) by Arrow or Newco without the express written
consent of Rivacq and SOF (which consent may be granted or withheld in the sole
discretion of Rivacq and SOF) or (b) by SOF or Rivacq without the express
written consent of Arrow and Newco (which consent may be
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granted or withheld in the sole discretion of Arrow or Newco); provided,
however, that SOF may assign this Agreement to an Affiliate of SOF without
Arrow's and Newco's consent (but with prior written notice) in connection with
the transfer of all of SOF's interest in Rivacq to such Affiliate; provided
further, however, that Newco may assign this Agreement to an Affiliate of Newco
without SOF's and Rivacq's consent (but with prior written notice).
Section 7.07 Amendment. This Agreement may not be amended or
modified except (a) by an instrument in writing signed by, or on behalf of, SOF,
Rivacq, Newco, and Arrow or (b) by a written waiver executed by Arrow and Newco,
on the one hand, or by SOF and Rivacq, on the other hand.
Section 7.08 No Third Party Beneficiaries. Except for the provisions
of Article VIII relating to indemnified parties, this Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their respective
successors and permitted assigns and nothing herein, express or implied, is
intended to or shall confer upon any other person any legal or equitable right,
benefit or remedy of any nature whatsoever.
Section 7.09 Specific Performance. Arrow acknowledges and agrees
that SOF and Rivacq would be irreparably damaged if the provisions of Sections
1.06 and 4.01 of this Agreement are not performed in accordance with their
specific terms and that any such breach could not be adequately compensated in
all cases by monetary damages alone. Accordingly, in addition to any other right
or remedy to which SOF and Rivacq may be entitled, at law or in equity, it shall
be entitled to enforce any provision of this Agreement by a decree of specific
performance and to temporary, preliminary and permanent injunctive relief to
prevent breaches or threatened breaches of any of the provisions of this
Agreement.
Section 7.10 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the Laws of the State of New York applicable to
contracts executed in and to be performed in that state and without regard to
any applicable conflicts of law principles. All Actions arising out of or
relating to this Agreement shall be heard and determined exclusively in any New
York federal court sitting in the Borough of Manhattan of The City of New York,
provided, however, that if such federal court does not have jurisdiction over
such Action, such Action shall be heard and determined exclusively in any New
York state court sitting in the Borough of Manhattan of The City of New York.
Consistent with the preceding sentence, the parties hereto hereby (a) submit to
the exclusive jurisdiction of any federal or state court sitting in the Borough
of Manhattan of The City of New York for the purpose of any Action arising out
of or relating to this Agreement brought by any party hereto and (b) irrevocably
waive, and agree not to assert by way of motion, defense, or otherwise, in any
such Action, any claim that it is not subject personally to the jurisdiction of
the above-named courts, that its property is exempt or immune from attachment or
execution, that the Action is brought in an inconvenient forum, that the venue
of the Action is improper, or that this Agreement or the transactions
contemplated by this Agreement may not be enforced in or by any of the
above-named courts.
Section 7.11 Waiver of Jury Trial. Each of the parties hereto hereby
waives to the fullest extent permitted by applicable Law any right it may have
to a trial by jury with respect to any litigation directly or indirectly arising
out of, under, or in connection with this Agreement
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or the transactions contemplated hereby. Each of the parties hereto hereby (a)
certifies that no representative, agent or attorney of the other party has
represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver and (b) acknowledges
that it has been induced to enter into this Agreement and the transactions
contemplated by this Agreement, as applicable, by, among other things, the
mutual waivers and certifications in this Section 7.11.
Section 7.12 Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement.
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IN WITNESS WHEREOF, SOF, Rivacq, Newco and Arrow have caused this
Agreement to be executed as of the date first written above.
SOF U.S. HOTEL CO-INVEST HOLDINGS, L.L.C.
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: Executive Vice President
RIVACQ LLC
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: Executive Vice President
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ARROW CAPITAL MANAGEMENT LLC
By: /s/ Xxx Xxxxxx
-----------------------------
Name: Xxx Xxxxxx
Title: Managing Member
ARROW PARTNERS LP
By: /s/ Xxx Xxxxxx
-----------------------------
Name: Xxx Xxxxxx
Title: General Partner
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