EXHIBIT 10.2
JOINT BIDDING AGREEMENT
JOINT BIDDING AGREEMENT (this "Agreement"), dated as of December 22,
2005, among Flag Luxury Riv, LLC, a Delaware limited liability company ("Flag"),
Rivacq LLC, a Delaware limited liability company ("Rivacq"), and High Desert
Gaming LLC, a Delaware limited liability company ("High Desert"), and together
with Flag and Rivacq, the "Bidders").
WHEREAS, each of the Bidders is currently the owner of shares of
common stock, par value $.001 per share ("Shares"), of Riviera Holdings
Corporation (the "Company");
WHEREAS, the Bidders wish to act jointly in connection with a
potential acquisition of the Company (the "Acquisition"), which the Bidders
currently contemplate would be effected by a merger of a wholly-owned subsidiary
of the Bidders ("Merger Sub") with and into the Company;
WHEREAS, prior to the Acquisition, the Bidders may wish to acquire
additional blocks of Shares; and
WHEREAS, the Bidders wish to delineate their respective rights and
obligations with respect to, among other things, the Shares they currently hold
or may hereafter acquire, their joint efforts in connection with the
Acquisition, and the sharing of expenses they may incur in connection with the
foregoing;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, and intending to be legally
bound, the parties hereto hereby agree as follows:
ARTICLE I
AGREEMENTS REGARDING THE ACQUISITION
Section 1.01 Joint Efforts. (a) The Bidders agree to act jointly and
to cooperate with each other in connection with the Acquisition and all other
transactions related thereto, including, without limitation, using their
reasonable best efforts to (i) negotiate with the Company the various terms and
conditions of a definitive agreement with respect to the Acquisition (the
"Acquisition Agreement") and any related voting agreements with the Company's
stockholders in good faith with a view toward entering into such agreements on
mutually acceptable terms and conditions, (ii) obtain, and when obtained, to
cause to be available, at or prior to the consummation of the Acquisition,
financing necessary to fund the amounts necessary to consummate the Acquisition
and (iii) take all actions necessary or
advisable to cause the conditions to the Acquisition set forth in the
Acquisition Agreement to be satisfied and to cause the Acquisition to be
consummated.
(b) All actions taken directly or indirectly by any of the Bidders
in connection with, or in furtherance of, the Acquisition shall require the
unanimous consent of all the Bidders.
Section 1.02 Formation of Merger Sub. (a) Prior to the execution and
delivery of the Acquisition Agreement, the Bidders shall form Merger Sub. It is
currently contemplated that Merger Sub will be a Delaware corporation.
(b) The shares, membership interests or other equity interests of
Merger Sub shall be respectively owned by the Bidders in accordance with the
following percentages:
-----------------------------------------------------------------------------
Flag 40%
-----------------------------------------------------------------------------
Rivacq 30%
-----------------------------------------------------------------------------
High Desert 30%
-----------------------------------------------------------------------------
In the event that the Bidders determine that they shall contribute equity
financing to Merger Sub for the Acquisition, such equity financing shall be
contributed in the foregoing proportions.
(c) Following the formation of Merger Sub but prior to the
consummation of the Acquisition, in the event that any of the Bidders provides
to the other Bidders a notice of termination pursuant to Section 6.02, the
shares, membership interests or other equity interests in Merger Sub of such
terminating Bidder shall be divided between the two remaining Bidders in
proportion to their respective equity interests in Merger Sub.
(d) In the event that the Bidders determine to acquire additional
blocks of Shares prior to the consummation of the Acquisition, including
pursuant to the option (the "Option") granted to the Bidders pursuant to the
Stock Purchase Agreement to be entered into among the Bidders, Xxxxxxx X.
Xxxxxxxxx and The Xxxxxxx X. Xxxxxxxxx 2004 Revocable Family Trust (the
"Xxxxxxxxx Purchase Agreement"), the Bidders shall coordinate such acquisitions
with the result that each of the Bidders and its Affiliates (as defined below)
shall hold the percentage set forth opposite such Bidder's name in subsection
1.02(b) of the aggregate number of Shares held by the Bidders and their
Affiliates collectively (excluding for purposes of such calculation any Shares
currently held by any of the Bidders). None of the Bidders shall exercise the
Option without the consent of the other Bidders.
(e) "Affiliate" means, with respect to any specified person, any
other person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
person.
(e) "control", with respect to the relationship between or among two
or more persons, means the possession, directly or indirectly or as trustee,
personal representative or executor, of the power to direct or cause the
direction of the affairs or management of a person, whether through the
ownership of voting securities, as trustee, personal representative or executor,
by contract, credit arrangement or otherwise.
-2-
Section 1.03 No Outside Efforts. (a) Each of the Bidders agrees that
it will not (and will not permit its directors, officers, employees, advisors or
representatives to) discuss, solicit or negotiate any acquisition, merger,
business combination or similar transaction involving, or a sale of all or
substantially all the assets of, the Company (or any Affiliate thereof), other
than the Acquisition contemplated hereby, without the prior written consent of
the other Bidders.
(b) Each of the Bidders shall comply with its obligations under the
Acquisition Agreement and shall cause Merger Sub to comply with its obligations
under the Acquisition Agreement.
(c) With respect to any provisions of the Acquisition Agreement that
grant rights or impose obligations on Merger Sub, such rights shall be exercised
and such obligations shall be discharged by Merger Sub acting by unanimous
consent of the Bidders.
Section 1.04 Board Nominee. If, prior to the consummation of the
Acquisition, the Company should invite the Bidders to submit the name of a
nominee for appointment to the Board of Directors of the Company, the Bidders
shall unanimously agree upon the identity of such nominee prior to submitting
his or her name to the Company.
ARTICLE II
EXPENSES
Section 2.01 Expense Sharing. All costs and expenses, including,
without limitation, fees and disbursements of counsel retained by the Bidders
collectively, financial advisors and accountants, incurred in connection with
this Agreement and the transactions contemplated hereby shall be shared among
the Bidders in the proportions set forth in Section 1.02(b), whether or not the
Acquisition shall have occurred; provided, however, that if a Bidder provides a
notice of termination to the other two Bidders in accordance with Section 6.02,
such Bidder shall only be responsible for such costs and expenses up to and
including the date of delivery of such notice, except as provided in Section
2.02 with respect to costs and expenses incurred with respect to consultants.
Section 2.02 Consultants Deposit. The Bidders shall enter into an
escrow agreement with Cadwalader, Xxxxxxxxxx & Xxxx LLP ("CWT") substantially in
the form attached as Schedule 2.02 hereto, pursuant to which the Bidders shall
deposit with CWT, in the respective proportions set forth in Section 1.02(b),
the aggregate amount of $350,000 (the "Consultants Deposit"), which shall be
disbursed by CWT to compensate the consultants engaged by CWT in connection with
the Acquisition, as instructed by the Bidders and in accordance with a budget
approved by the Bidders. If a Bidder provides a notice of termination to the
other two Bidders in accordance with Section 6.02, such Bidder shall not be
entitled to a return of its pro rata amount of the Consultants Deposit;
provided, however, that if the Consultants Deposit is not depleted in its
entirety upon the consummation of the Acquisition (or if there are no further
amounts then due to consultants), each Bidder shall be entitled to receive its
pro rata share of the remaining amount of the Consultants Deposit, if any.
-3-
Section 2.03 Termination Fee and Expense Reimbursement. In the event
any termination fee or expense reimbursement becomes payable by the Company to
Merger Sub under the Acquisition Agreement, such fee or reimbursement shall be
allocated to the Bidders that at such time continue to hold equity interests in
Merger Sub pro rata in accordance with such equity interests.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE BIDDERS
As an inducement to the other Bidders to enter into this Agreement,
each of the Bidders hereby represents and warrants, severally and not jointly,
to the other Bidders as follows:
Section 3.01 Organization and Authority. Such Bidder is a limited
liability company duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation 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. The execution
and delivery by such Bidder of this Agreement, the performance by such Bidder of
its obligations hereunder and the consummation by such Bidder of the
transactions contemplated hereby have been duly authorized by all requisite
action (corporate or otherwise) on the part of such Bidder. This Agreement has
been duly executed and delivered by such Bidder, and (assuming due
authorization, execution and delivery by the other Bidders) this Agreement
constitutes the legal, valid and binding obligation of such Bidder, enforceable
against such Bidder in accordance with its terms.
Section 3.02 No Conflict. The execution, delivery and performance of
this Agreement by such Bidder do not and will not (i) violate, conflict with or
result in the breach of any provision of the organizational documents of such
Bidder, (ii) conflict with or violate any law, rule or regulation or any order,
writ, judgment, injunction or decree of any government, regulatory or
administrative authority, agency, commission, court or tribunal (each, a
"Governmental Authority") applicable to such Bidder or any of its 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 or
arrangement to which such Bidder is a party, which would have a material adverse
effect on the ability of such Bidder to carry out its obligations under, and to
consummate the transactions contemplated by, this Agreement.
Section 3.03 Litigation. There are no actions, proceedings, claims,
suits, inquiries or investigations by or against such Bidder pending before any
Governmental Authority (or, to the best knowledge of such Bidder, 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.
-4-
Section 3.04 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 such Bidder.
ARTICLE IV
ADDITIONAL AGREEMENTS
Section 4.01 Confidentiality. (a) Except as required by any law,
rule or regulation or judicial process or to obtain any regulatory approval, or
as provided in clause (b) of this Section 4.01, each Bidder acknowledges and
agrees that the terms of this Agreement, the transactions contemplated hereby,
and all non-public information regarding the other parties hereto (learned in
connection with this Agreement or the transactions contemplated hereby) are
confidential and are not to be disclosed to any person without the prior written
consent of the other Bidders, provided that each Bidder may disclose such
information to those of its legal and financial advisors who have a need to know
such information in connection with their evaluation of this Agreement and the
transactions contemplated hereby, and provided further that each Bidder shall
inform such advisors of the confidential nature of such information and that
such advisors shall be bound by this Section 4.01 with respect to such
information.
(b) Except as may be required by the federal securities laws or the
rules of any listing agreement with a national securities exchange, no party to
this Agreement shall make, or cause or permit to be made, any press release or
public announcement or make any other disclosure in respect of this Agreement or
the transactions contemplated hereby or otherwise communicate with any news
media or other third party without the prior consent of the other parties
hereto, and the parties shall cooperate as to the timing and contents of any
such press release, public announcement or other disclosure.
Section 4.02 Indemnification. Each of the Bidders hereby agrees to
indemnify and hold harmless the other Bidders and their respective Affiliates,
officers, directors, employees, agents, successors and assigns from and against
any and all liabilities, losses, damages, claims, costs and expenses ("Losses")
actually suffered by them arising out of, relating to or resulting from the
breach of any representation or warranty or covenant or agreement made by such
Bidder in this Agreement, the Acquisition Agreement or any other agreement
entered into by such Bidder in connection with the Acquisition or any of the
transactions contemplated hereby.
Section 4.03 Joint Filing Agreement. In accordance with the
requirements of Rule 13d-1(k) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and subject to the limitations set forth therein,
the Bidders agree to jointly file the Schedule 13D to which this Agreement is
attached and that such Schedule 13D is filed on behalf of each of the Bidders.
For the avoidance of doubt, this Agreement constitutes the joint filing
agreement contemplated by Rule 13d-1(i) under the Exchange Act.
Section 4.04 Further Action. Each of the Bidders shall use its
reasonable best 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
-5-
and other papers, as may be required to carry out the provisions of this
Agreement and consummate and make effective the transactions contemplated
hereby.
ARTICLE V
RESTRICTIONS ON TRANSFER
Section 5.01 Right of First Offer. (a) If at any time a Bidder (a
"Seller") desires to effect a transfer of all or any portion of the Shares it
holds (other than any Shares currently held by such Bidder) to any person other
than Merger Sub or an Affiliate of the Seller, the Seller shall deliver to each
of the other Bidders (the "Eligible Bidders") a notice (an "Offer Notice")
setting forth all of the material terms and conditions upon which the Seller
desires to transfer such Shares, including, without limitation, the number of
Shares to be so transferred (the "Offered Shares") and the purchase price per
Offered Share (which shall be payable solely in cash in one lump sum payment)
(the "Offer Price"), which Offer Notice shall constitute an offer to such
Eligible Bidders to sell such Offered Shares upon the terms and conditions
specified in such Offer Notice.
(b) Upon receipt of an Offer Notice, each Eligible Bidder shall be
entitled to purchase from the Seller, upon the terms specified in the Offer
Notice, a number of Offered Shares equal to the sum of (i) (A) 50% of the
Offered Shares if there are two Eligible Bidders or (B) all of the Offered
Shares in the event there is one Eligible Bidder and (ii) if there are two
Eligible Bidders, the Offered Shares offered to the other Eligible Bidder in the
event that such other Eligible Bidder does not elect to purchase such Offered
Shares in accordance with this subsection 5.01(b). Each Eligible Bidder wishing
to purchase Offered Shares shall provide a notice (an "Acceptance Notice") to
the Seller and to the other Eligible Bidder, if applicable, not later than 15
days following receipt by such Eligible Bidder of an Offer Notice (such 15-day
period being the "Offer Period"), specifying the number of Offered Shares it
wishes to purchase (including, if applicable, the Offered Shares offered to the
other Eligible Bidder in the event that such other Eligible Bidder does not
elect to purchase such Offered Shares).
(c) If one or two Eligible Bidders have accepted to purchase all of
the Offered Shares in accordance with subsection 5.01(b), then the Seller shall,
not later than 10 days following the expiration of the Offer Period, transfer,
assign and convey, free and clear of all liens and encumbrances, to (i) if one
Eligible Bidder has accepted to purchase all of the Offered Shares, all of the
Offered Shares to such Eligible Bidder, and such Eligible Bidder shall promptly
remit to the Seller by wire transfer in accordance with the Seller's
instructions, immediately available funds in an amount equal to the Offer Price
multiplied by the number of Offered Shares so transferred, assigned and conveyed
to such Eligible Bidder or (ii) if two Eligible Bidders have accepted to
purchase all of the Offered Shares, 50% of the Offered Shares to each Eligible
Bidder, and each such Eligible Bidder shall promptly remit to the Seller by wire
transfer in accordance with the Seller's instructions, immediately available
funds in an amount equal to the Offer Price multiplied by the number of Offered
Shares so transferred, assigned and conveyed to such Eligible Bidder.
(d) In the event that the Eligible Bidders have not accepted to
purchase all of the Offered Shares in accordance with subsection 5.01(b), then
all (but not less than all) of the
-6-
Offered Shares may be sold to a third party upon the terms and conditions
specified in the Offer Notice relating to such Offered Shares, provided that
such sale shall be consummated not later than 30 days following delivery of such
Offer Notice to the Eligible Bidders.
ARTICLE VI
GENERAL PROVISIONS
Section 6.01 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 6.01):
(a) if to Flag:
Flag Luxury Riv, LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxx
(b) if to Rivacq:
Rivacq LLC
c/o Cadwalader, Xxxxxxxxxx & Xxxx LLP
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
(c) if to High Desert:
High Desert Gaming, LLC
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxx
-7-
in each case, 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 6.02 Termination. Each of the Bidders may, upon 15 days'
prior notice to each of the other Bidders, terminate this Agreement as to such
Bidder; provided, however, that the provisions of subsection 1.02(c), Sections
2.01, 2.02, 4.01, 4.02 and 5.01, Article III and this Article VI shall survive
any such termination. For the avoidance of doubt, no termination of this
Agreement by any Bidder shall affect the obligations of such Bidder under the
Xxxxxxxxx Purchase Agreement.
Section 6.03 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect for so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to either party hereto. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in an
acceptable manner in order that the transactions contemplated hereby are
consummated as originally contemplated to the greatest extent possible.
Section 6.04 Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
thereof and supersedes all prior agreements and undertakings, both written and
oral, among the parties hereto and their Affiliates with respect to the subject
matter hereof.
Section 6.05 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 6.06 Assignment. This Agreement may not be assigned by any
Bidder by operation of law or otherwise without the express written consent of
the other Bidders and any such assignment or attempted assignment without such
consent shall be void; provided, however, that any Bidder may, in connection
with a transfer to its Affiliate of all of the Shares held by such Bidder,
assign this Agreement to such Affiliate; provided further, however, that a
Bidder's permitted assignee of this Agreement shall execute and deliver to the
other Bidders a written agreement to be bound by the provisions of this
Agreement.
Section 6.07 Amendment and Waiver. This Agreement may not be amended
or modified except by an instrument in writing signed by, or on behalf of, the
parties hereto. Each Bidder may (i) extend the time for the performance of any
obligation or other act of the other Bidders, (ii) waive any inaccuracy in the
representations and warranties of the other Bidders contained herein and (iii)
waive compliance with any agreement of the other Bidders or any
-8-
condition contained herein. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party or each of the parties to
be bound thereby.
Section 6.08 No Third Party Beneficiaries. Except for the provisions
of Section 4.02 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 6.09 Specific Performance. Each Bidder acknowledges and
agrees that the other Bidders would be irreparably damaged if any of the
provisions of this Agreement are not performed in accordance with their specific
terms and that any breach of this Agreement by a Bidder could not be adequately
compensated in all cases by monetary damages alone. Accordingly, in addition to
any other right or remedy to which the Bidders may be entitled, at law or in
equity, they 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, without posting any bond or other undertaking.
Section 6.10 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York. 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. The parties hereto hereby (i) 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 (ii) 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 such action is brought in an inconvenient forum, that the venue
of such 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 6.11 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 or the transactions
contemplated hereby. Each of the parties hereto hereby (i) 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 (ii) 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 6.11.
Section 6.12 Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties
-9-
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.
[Remainder of page intentionally left blank.]
-10-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above.
FLAG LUXURY RIV, LLC
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxx
Title: President
RIVACQ LLC
By: /s/ Xxxx Xxx
--------------------------------------
Name: Xxxx Xxx
Title: Member
HIGH DESERT GAMING LLC
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Title: Manager
Schedule 2.02
Escrow Agreement
