EXHIBIT 10.12
This agreement is made this 21st day of March, 2007, between Riv Acquisition
Holdings, Inc. ("RAH") of the first part, and Triple Five Investco LLC ("Triple
Five") and Dominion Financial LLC (collectively, jointly and severally "T5") of
the second part.
WHEREAS, T5 owns One Million One Hundred Forty Seven Thousand Five Hundred and
Fifty (1,147,550) shares of common stock ("Shares", each a "Share") of Riviera
Holdings Corporation ("Riv"), and
WHEREAS, subject to and effective solely upon issuance of the Approvals (as
defined below), RAH desires to acquire an option to purchase the Shares from T5.
NOW THEREFORE, in consideration of the sum of Two Million Three Hundred Thousand
Dollars ($2,300,000) (non-refundable, subject only to the last sentence of
Section 2 below and Section 7 below) paid herewith by RAH to T5, the receipt of
which is hereby acknowledged by T5, the parties hereto agree as follows:
1. Subject to and effective solely upon issuance of the Approvals (as
defined below), which RAH agrees to immediately pursue aggressively
to obtain, T5 does hereby grant to RAH an option ("Option") to
acquire all of the Shares at a purchase price ("Price") of
Twenty-Three Dollars ($23.00) per Share in cash. For purposes of
this agreement, the "Approvals" shall mean (i) a waiver by Riv's
Board of Directors (the "Board"), in accordance with subsection 7(g)
of Article III of Riv's Articles of Incorporation (the "Articles")
and by the requisite majority as provided therein, of the voting
limitation set forth in subsection 7(b) of Article III of the
Articles with respect to RAH and its affiliates, T5, the Option and
any exercise thereof (ii) approval by the Board in accordance with
the provisions of subsection 78.438(1) of Title 7 of the Nevada
Revised Statutes of the Option and any exercise thereof and (iii)
amendment of Riv's Articles and by-laws to provide that subsections
78.378 to 78.3793 of Title 7 of the Nevada Revised Statutes do not
apply to the Option or any exercise thereof. All the conditions in
this agreement relate only to the exercise of the Option and not to
its grant and not the validity of the Option itself. In other words,
if the Approvals are not achieved, RAH will not exercise the Option,
the Option Term will immediately expire, but, at the same time the
Option consideration will be earned by T5 as of its receipt of same
and be non-refundable.
2. The initial term ("Term") of the Option shall be ninety (90) days
from the date hereof. RAH may extend the Term at its option for
additional periods of thirty (30) days each (each a "Period") up to
a collective three (3) months from the ninetieth (90th) day from the
date hereof for additional consideration payable in advance to T5 at
the beginning of each Period equal to an annualized interest rate of
Eight percent (8.0%) of the aggregate Price accruing upon such
additional periods, calculated daily. Notwithstanding anything to
the contrary, RAH will forfeit its right to exercise the Option and
the Option will be nullified, if RAH does not exercise the Option
immediately upon the earlier of (i) the issuance of the Approvals,
or (ii) the closing of any tender offer for Riv shares by RAH or,
(iii) upon acquisition by RAH, or any entity or body related to it,
of any shares of Riv where such acquisition would result in RAH and
any entity or body related to it collectively holding 20.0% or more
of the issued and outstanding shares of Riv. For purposes of this
agreement, at any time, "related" means any entity or body whose
beneficial owners are any of the members of RAH's group on the most
recent Form 13D that has been filed with the SEC at such time. In
the event that any of the Shares are acquired by RAH in a tender
offer involving a purchase price per Share in excess of $23.00,
there shall be credited against the purchase price per Share payable
by RAH to T5 upon the closing of such tender offer an amount equal
to the excess of such purchase price over $23.00 per Share, with the
understanding being that in addition to the $2,300,000 Option
consideration, T5 will receive $23.00 per Share (plus all interest
accrued or paid on such $23.00 pursuant to the Periods) net of all
credits.
3. Subject to and effective solely upon issuance of the Approvals, the
Option may be exercised by notice of RAH to T5 at any time within
the Term or any extension thereof. The closing ("Closing") of the
purchase and sale of the Shares (the "Transaction") shall take place
no later than three (3) business days following the exercise of the
Option.
4. Upon Closing, T5 shall deliver the Shares, free and clear, to RAH,
subject of course to any regulatory, governmental or Board imposed
restrictions or charges, and simultaneously RAH shall pay the Price,
in cash, to T5.
5. T5 does hereby agree to cooperate with RAH and reasonably perform
whatever is required (to the extent not at T5's material cost) to
insure that the Transaction closes, including voting the Shares
against any action, agreement, transaction or proposal that would
result in any acquisition by any party other than RAH or its
affiliates, whether by merger or otherwise, of control of Riv unless
of course RAH, or any entity or body related to it, does otherwise
itself with respect to any of its shareholdings of Riv.
6. T5 agrees not to sell, tender, transfer or assign any of the Shares
during the Term or any extension thereof. T5 represents and warrants
that it now owns the Shares free and clear of any liens or
encumbrances. This agreement may not be assigned by T5 to any other
party (unless T5 does so in order to avoid appearing before the
Gaming Control Board or any other licensing body or agency for a
finding of suitability or otherwise, in which case the assignee will
be bound by all obligations of T5 herein) but may be assigned by RAH
without T5's consent, in which case the assignee and any entity or
body related to it shall be bound by all obligations of RAH herein.
Notwithstanding any other provision of this agreement, in the event
that this agreement is assigned by RAH, the Approvals shall be
limited to those actions of the Board required to prevent the
application to RAH's assignee of the provisions of the Articles and
the Nevada Revised Statutes referenced in the definition of
"Approvals" upon exercise of the Option. This agreement shall be
governed according to the laws of Delaware. The communication and
execution of this agreement by facsimile or digital/email transfer
shall be enforceable, valid and binding. Further documentation
("Detailed Documentation") may be required to include standard
"Boiler Plate" clauses normally found in documentations of
transactions similar to this Transaction, and the parties hereto
shall immediately hereafter instruct their respective attorneys to
mutually, diligently and expeditiously prepare, and agree on, same
and provide it to the parties hereto for execution, which Detailed
Documentation the parties hereto hereby agree to execute upon its
receipt by them. The failure of the parties hereto to agree on the
terms of the Detailed Documentation shall not be grounds for
termination of this agreement, but rather, shall be resolved
pursuant to item 7. below. All of T5's and RAH's obligations herein
(other than the $2,300,000 Option consideration payment, which
shall, subject only to the last sentence of Section 2 above and
Section 7 below, be non-refundable and kept by T5) are subject to no
part of this agreement being directly or indirectly objected to or
disapproved by any governmental body or agency or the Board (this
condition is for the sole benefit of each party and may be waived by
such party at anytime).
7. Notwithstanding anything to the contrary, if T5 is at anytime
required to go through the process of a finding of suitability or
otherwise before the State of Nevada Gaming Control Board or any
other licensing body or agency with regards to the Shares, then T5
shall have the right within thirty (30) days thereafter to either
terminate this agreement and refund the $2,300,000 Option
consideration (together with all interest paid thereon pursuant to
this agreement or otherwise) back to RAH or T5 may waive this
condition, but until such time that it is so waived such $2,300,000
Option consideration (together with all such interest) shall be held
in escrow by the law firm of Xxxxxx Xxxxxx & Xxxxxxx care of
attorney Xx. Xxxx Xxxxxxxxxxx, who shall treat same pursuant to this
clause.
8. All disputes, impasses, conflicts, disagreements, ambiguities, of
any sort, arising from the contents herein or in the preparation of
the Detailed Documentation shall all be submitted to the exclusive
jurisdiction of the Delaware Court of Chancery.
The parties hereto concur, accept and agree to all of the above by signing in
their respective designated areas below. T5is signing this agreement on this
21st day of March, 2007, at 7:55 pm, N.Y. time, as it is only available for
RAH's acceptance by no later than 12:01 am, N.Y. time, on March 22nd, 2007,
evidenced by a signed copy being faxed/emailed before that time to T5 by return.
Triple Five Investco LLC Riv Acquisition Holdings, Inc.
/s/ Xxx Xxxxxxxxxx /s/ Xxxx Xxxxxxx
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Per: Xxx Xxxxxxxxxx, Manager Per: Xxxx Xxxxxxx
Dominion Financial LLC
/s/ Xxx Xxxxxxxxxx
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Per: Xxx Xxxxxxxxxx, Manager
