AGREEMENT
Exhibit 1
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; and
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;
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.
(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.
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:
00 Xxxxxxxx
Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx
00000
Attention: Xxxxxx X.
Xxxxxxx
Fax: (000)
000-0000
With a copy
to:
Xxxxx, Schiller & Flexner
LLP
000 Xxxxxxxxx
Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx
00000
Attention: Xxxxxxx X. Xxxxx,
Esq.
Fax: (000)
000-0000
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.
“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 formed for investment purposes that is managed or advised by Plainfield
Asset Management LLC (“Plainfield”) or any separate account managed by
Plainfield.
“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]
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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PLAINFIELD SPECIAL SITUATIONS
MASTER FUND LIMITED |
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By:
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/s/Xxxx
Xxxxxx
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By:
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/s/Xxxxxx X.
Xxxxxxx
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Name: Xxxx Xxxxxx
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Name: Xxxxxx X.
Xxxxxxx
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Title: CFO
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Title:
Authorized Individual
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