Subordination Agreement
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Creditor(s): Borrower(s):
1. RIVIERA HOLDINGS CORPORATION; a. RIVIERA HOLDINGS CORPORATION;
2. RIVIERA OPERATING CORPORATION; b. RIVIERA OPERATING CORPORATION;
3. RIVIERA GAMING MANAGEMENT, INC.; c. RIVIERA BLACK HAWK, INC.;
4. RIVIERA GAMING MANAGEMENT OF COLORADO, and
INC.; d. any other entity hereafter
5. RIVIERA BLACK HAWK, INC.; made a "Borrower" under the
and below-defined Loan Agreement in
6. any other entity that is hereafter the manner set forth in Section
made a "Borrower or a "Guarantor" under 6.19 thereof
the below-defined Loan Agreement in the
manner set forth in Section 6.19 thereof,
and executes and delivers this Subordination
Agreement or a joinder hereto as an additional
Creditor hereunder
Address:
c/o RIVIERA HOLDINGS CORPORATION
0000 Xxx Xxxxx Xxxx. Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: Executive Vice President of Finance
Fax No. 000.000.0000
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Guarantor(s):
a. each of the Borrowers;
b. RIVIERA GAMING MANAGEMENT, INC.;
c. RIVIERA GAMING MANAGEMENT OF COLORADO,
INC.:
and
d. any other entity that is hereafter
made a "Borrower" or a "Guarantor" under
the below-defined Loan Agreement in the
manner set forth in Section 6.19 thereof
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Dated as of July __, 2002
This Subordination Agreement is executed and delivered by the creditor(s) named
above (individually and collectively, and jointly and severally, the
"Creditor"), as of the above date, in favor of FOOTHILL CAPITAL CORPORATION
("Foothill"), whose address is 0000 Xxxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxxxxxx
00000, in Foothill's capacity as the Agent under the below-defined Loan
Agreement for the benefit of the below-defined Lender Group. As used herein, the
term "Loan Agreement" means that certain Loan and Security Agreement, dated as
of substantially even date herewith (as the same may be amended, restated,
supplemented, or otherwise modified from time to time, the "Loan Agreement"), by
and among the above-named borrower(s) (individually and collectively, and
jointly and severally, the "Borrower"), the above-named guarantor(s)
(individually and collectively, and jointly and severally, the "Guarantor"), the
lenders identified in the Loan Agreement as the "Lenders", and Foothill Capital
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Corporation, as the "Agent" under the Loan Agreement (the Lenders and the Agent
are referred to herein, individually and collectively, as the "Lender Group").
1. Subordination. To induce the Lender Group in its discretion to extend
credit to the Borrower in accordance with the terms and conditions of the Loan
Agreement, which credit is guarantied by the Guarantor (the Borrower and the
Guarantor are referred to herein, individually and collectively, as the
"Obligor"), the Creditor hereby agrees to subordinate and does hereby
subordinate payment by the Obligor of any and all indebtedness of the Obligor,
now or hereafter incurred, created or evidenced, to the Creditor, however such
indebtedness may be hereafter extended, renewed or evidenced (together with all
collateral, security and guarantees, if any, for the payment of any such
indebtedness) (collectively, the "Junior Debt"), to the payment in full in cash
to the Lender Group of any and all present and future indebtedness, liabilities,
guarantees and other obligations, of every kind and description (including
without limitation any interest, charges and other sums accruing after the
filing of a petition by or against Obligor under the U.S. Bankruptcy Code), of
the Obligor to the Lender Group under or in connection with the Loan Agreement
or any other Loan Document (as such term is defined in the Loan Agreement)
(collectively, the "Senior Debt"), and the Creditor agrees not to ask for,
demand, xxx for, take or receive any payments with respect to all or any part of
the Junior Debt or any security therefor, unless and until all of the Senior
Debt have been paid and performed in full, except that if no default or event of
default and no event which, with notice or passage of time or both, would
constitute a default or event of default, has occurred under any documents or
instruments evidencing or relating to the Senior Debt, both before and after
giving effect to the following payments, then intercompany trading obligations
and other regularly scheduled payments with respect to the Junior Debt may be
made in the ordinary course of business; provided, further, that non-cash
accruals in respect of the Junior Debt may be reflected in the respective books
and records of Obligor and Creditor irrespective of the existence of any such
default or event of default.
The word "indebtedness" is used herein in its most comprehensive sense and
includes without limitation any and all present and future loans, advances,
credit, debts, obligations, liabilities, representations, warranties, and
guarantees, of any kind and nature, absolute or contingent, liquidated or
unliquidated, and individual or joint. Creditor represents and warrants to the
Lender Group that the Obligor is now indebted to the Creditor in the amounts set
forth on Schedule 1 attached hereto and under the notes and/or documents (if
any) described on Schedule 1 attached hereto and that the same is all
outstanding indebtedness owing from the Obligor to the Creditor (but the
subordination set forth herein shall not be affected by any lack of any such
Schedule 1).
2. Distribution of Assets. The Creditor further agrees that upon any
distribution of the assets or readjustment of the indebtedness of the Obligor
whether by reason of liquidation, composition, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors or any other action or
proceeding involving the readjustment of all or any of the Junior Debt, or the
application of the assets of the Obligor to the payment or liquidation thereof,
the Lender Group shall be entitled to receive payment in full in cash of all of
the Senior Debt prior to the payment of all or any part of the Junior Debt, and
in order to enable the Lender Group to enforce its rights hereunder in any such
action or proceeding, Agent (for the benefit of the Lender Group) is hereby
irrevocably authorized and empowered in its discretion (but without any
obligation on Agent's part) to make and present for and on behalf of the
Creditor such proofs of claim against the Obligor on account of the Junior Debt
as Agent (for the benefit of the Lender Group) may deem expedient or proper and
to vote such proofs of claim in any such proceeding and to receive and collect
any and all dividends or other payments or disbursements made thereon in
whatever form the same may be paid or issued and to apply same on account of the
Senior Debt. The Creditor further agrees to execute and deliver to Agent (for
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the benefit of the Lender Group) such assignments or other instruments as may be
required by the Lender Group in order to enable the Lender Group to enforce any
and all such claims and to collect any and all dividends or other payments or
disbursements which may be made at any time on account of all and any of the
Junior Debt.
3. Transfer of Subordinated Debt. The Creditor shall not sell, pledge,
assign or otherwise transfer, at any time while this Agreement remains in
effect, any rights, claim or interest of any kind in or to any of the Junior
Debt, either principal or interest, without first notifying Agent (for the
benefit of the Lender Group) and making such transfer expressly subject to this
Subordination Agreement in form and substance satisfactory to Agent. The
Creditor represents and warrants to the Lender Group that the Creditor has not
sold, pledged, assigned or otherwise transferred any of the Junior Debt, or any
interest therein or collateral or security therefor to any other person. The
Creditor will concurrently endorse all notes and other written evidence of the
Junior Debt with a statement that they are subordinated to the Senior Debt
pursuant to the terms of this Agreement, in such form as Agent shall require,
and the Creditor will exhibit the originals of such notes and other written
evidence of the Junior Debt to Agent (for the benefit of the Lender Group) so
that Agent can confirm that such endorsement has been made (but no failure to do
any of the foregoing shall affect the subordination of the Junior Debt provided
for herein, which shall be fully effective upon execution of this Agreement).
4. The Lender Group's Rights. This is a continuing agreement of
subordination and the Lender Group may continue, without notice to the Creditor,
to extend credit or other accommodation or benefit and loan monies to or for the
account of the Obligor in reliance hereon. The Lender Group may at any time, in
its discretion, renew or extend the time of payment of all or any Senior Debt,
modify the Senior Debt and any terms or provisions thereof or of any agreement
relating thereto, waive or release any collateral which may be held therefor at
any time, and make and enter into any such agreement or agreements as the Lender
Group may deem proper or desirable relating to the Senior Debt, without notice
to or further consent from the Creditor and without any manner impairing or
affecting this Agreement or any of the Lender Group's rights hereunder. The
Creditor waives notice of acceptance hereof, notice of the creation of any
Senior Debt, the giving or extension of any credit by the Lender Group to the
Obligor, or the taking, waiving or releasing of any security therefor, or the
making of any modifications, and the Creditor waives presentment, demand,
protest, notice of protest, notice of default, and all other notices to which
the Creditor might otherwise be entitled. This Section 4 applies to each
Creditor in its capacity as a creditor of the Obligor, and not in such
Creditor's direct capacity as an Obligor.
5. Revivor. If, after payment of the Senior Debt, the Obligor thereafter
becomes liable to the Lender Group on account of the Senior Debt, or any payment
made on the Senior Debt shall for any reason be returned by the Lender Group,
this Agreement shall thereupon in all respects become effective with respect to
such subsequent or reinstated Senior Debt, without the necessity of any further
act or agreement between the Lender Group and the Creditor.
6. Notices. Any notice which a party shall be required or shall desire
to give to the other hereunder shall be given in the manner, to the address,
and with the deemed effectiveness, as set forth in Section 12 of the Loan
Agreement.
7. General. This Agreement sets forth in full all of the representations
and agreements of the parties with respect to the subject matter hereof and
supersedes all prior discussions, representations, agreements and understandings
between the parties. This Agreement may not be modified or amended, nor may any
rights hereunder be waived, except in a writing signed by the parties hereto. In
the event of any litigation between the parties based upon, arising out of, or
in any way relating to this Agreement, the prevailing party shall be entitled to
recover all of his costs and expenses (including without limitation attorneys'
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fees) from the non-prevailing party. The parties agree to cooperate fully with
each other and take all further actions and execute all further documents from
time to time as may be reasonably necessary to carry out the purposes of this
Agreement. At the Lender Group's option, all actions and proceedings based upon,
arising out of or relating in any way directly or indirectly to, this Agreement
shall be litigated exclusively in courts located within Los Angeles County,
California, and Creditor consents to the jurisdiction of any such court and
consents to the service of process in any such action or proceeding by personal
delivery, first-class mail, or any other method permitted by law, and waives any
and all rights to transfer or change the venue of any such action or proceeding
to any court located outside Los Angeles County, California. This Agreement is
being entered into, and shall be governed by the laws of the State of
California. This Agreement shall be binding upon the Creditor and its successors
and assigns and shall inure to the benefit of the Lender Group and the Lender
Group's successors and assigns.
8. Mutual Waiver of Jury Trial. the Lender Group and Creditor each hereby
waive the right to trial by jury in any action or proceeding based upon, arising
out of, or in any way relating to: (i) this Agreement; or (ii) any other present
or future instrument or agreement between the Lender Group and Creditor; or
(iii) any conduct, acts or omissions of the Lender Group or Creditor or any of
their directors, officers, employees, agents, attorneys or any other persons
affiliated with the Lender Group or Creditor; in each of the foregoing cases,
whether sounding in contract or tort or otherwise.
[remainder of page intentionally left blank; signature page immediately follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.
Creditor:
RIVIERA GAMING MANAGEMENT, INC., RIVIERA GAMING MANAGEMENT OF COLORADO,
a Nevada corporation. INC.; a Colorado corporation
By_______________________________ By_______________________________
Name:____________________________ Name:____________________________
Title: _____________________________ Title: _____________________________
RIVIERA HOLDINGS CORPORATION, a Nevada RIVIERA BLACK HAWK, INC., a Colorado
corporation corporation
By_______________________________ By_______________________________
Name:____________________________ Name:____________________________
Title: _____________________________ Title: _____________________________
RIVIERA OPERATING CORPORATION, a Nevada
corporation
By_______________________________
Name:____________________________
Title: _____________________________
Accepted:
FOOTHILL CAPITAL CORPORATION, a California corporation,
as Agent for the benefit of the Lender Group
By_______________________________
Name:____________________________
Title: _____________________________
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Obligor's Agreement
The undersigned Obligor hereby acknowledges receipt of a copy of the
foregoing Subordination Agreement and agrees not to pay any Junior Debt, except
as provided therein. In the event Obligor breaches this Agreement or any of the
provisions of the foregoing Subordination Agreement, Obligor agrees that, in
addition to all other rights and remedies the Lender Group has, all of the
Senior Debt shall, at the Lender Group's option and without notice or demand,
become immediately due and payable, unless the Lender Group expressly agrees in
writing to waive such breach. No waiver by the Lender Group of any breach shall
be effective unless in writing signed by the respective authorized officers of
the requisite members of the Lender Group, and no such waiver shall be deemed to
extend to or waive any other or subsequent breach. Obligor further agrees that,
at any time and from time to time, the foregoing Subordination Agreement may be
altered, modified or amended by the Lender Group and the Creditor without notice
to Obligor and without further consent by Obligor.
Obligor:
RIVIERA GAMING MANAGEMENT, INC., RIVIERA GAMING MANAGEMENT OF
a Nevada corporation. Colorado, INC.; a Colorado
corporation
By_______________________________ By_______________________________
Name:____________________________ Name:____________________________
Title: _____________________________ Title: __________________________
RIVIERA HOLDINGS CORPORATION, RIVIERA BLACK HAWK, INC., a
a Nevada corporation Colorado corporation
By_______________________________ By_______________________________
Name:____________________________ Name:____________________________
Title: _____________________________ Title: __________________________
RIVIERA OPERATING CORPORATION, a Nevada corporation
By_______________________________
Name:____________________________
Title: _____________________________
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SCHEDULE 1
[see attached]
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