INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of July ___, 2002 (this
"Agreement"), is made by and between The Bank of New York, in its capacity as
trustee under the Indenture (as defined below) for the holders from time to time
(the "Holders") of the Notes (as defined below) (together with its successors in
such capacities, the "Trustee"), and Foothill Capital Corporation, as Agent
under the below-defined Credit Agreement ("Agent") for the benefit of the
below-defined Lender Group ("Credit Facility Secured Party").
RECITALS
WHEREAS, Riviera Holdings Corporation, a Nevada corporation
("RHC"), shall issue its 11% Senior Secured Notes due 2010 (together with any
amendments, supplements, modifications, renewals or extensions thereof and any
notes issued in replacement thereof or exchange therefore from time to time, the
"Notes") pursuant to that certain Indenture, dated as of June 26, 2002 (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the "Indenture"), by and among RHC, the Subsidiary Guarantors (as defined
below) and the Trustee.
WHEREAS, the Indenture and the Notes are secured by security
interests in and liens on substantially all of the assets presently existing and
hereafter acquired from time to time of RHC and its Restricted Subsidiaries
other than certain furnishings, fixture and equipment (collectively, the
"Collateral"), and guaranteed, on a senior secured basis, by each of Company's
existing and future Restricted Subsidiaries (the "Subsidiary Guarantors").
WHEREAS, as of July ___, 2002, RHC and its Restricted
Subsidiaries, on the one hand, and the Credit Facility Secured Party (consisting
of the lenders identified in the below-defined Agreement as the "Lenders" and
Foothill Capital Corporation as the "Agent" under such Credit Agreement
(individually and collectively, the "Lender Group")), on the other hand, entered
into that certain Loan and Security Agreement, dated as of July ____, 2002 (as
the same may be amended, modified, restated, extended, renewed, replaced or
refinanced, the "Credit Agreement"), whereby the Credit Facility Secured Party
(as herein defined) agreed, upon the terms and conditions stated therein, to
make loans and advances to, or to issue letters of credit (or guaranties in
respect thereof) for the account of RHC and those Restricted Subsidiaries of RHC
that constitute "Borrower" (as such term is defined in the Credit Agreement) in
an aggregate principal and undrawn amount not to exceed the Maximum Amount (as
defined below), the repayment of which is secured by security interests in and
liens on the Collateral in accordance with the Credit Agreement and the
collateral security documents, including deeds of trust, instruments and
guaranties executed and delivered in connection therewith by RHC and any
Subsidiary Guarantor, and such other agreements, instruments and certificates
entered into in connection with the Credit Agreement (the "Loan Documents").
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WHEREAS, one of the conditions of the Credit Agreement is that
the priority of the security interests and liens on the Collateral under the
Credit Facility Loan Documents be senior to the security interests in and liens
on the Collateral under the Indenture in the manner and to the extent provided
for in this Agreement.
WHEREAS, the Trustee and the Credit Facility Secured Party
desire to enter into this Agreement concerning their respective rights with
respect to the priority of their respective security interests in and liens on
the Collateral.
WHEREAS, the terms of the Indenture permit RHC and its
Restricted Subsidiaries to enter into the Credit Agreement, and in connection
therewith, authorize and direct the Trustee to enter into an intercreditor
agreement in the form of this Agreement.
NOW, THEREFORE, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following terms
shall have the respective meanings set forth below:
"Agreement" means this Intercreditor Agreement.
"Collateral" has the meaning set forth in the recitals.
"Credit Agreement" has the meaning set forth in the recitals.
"Credit Facility Indebtedness" means all present and future
obligations, contingent or otherwise, of RHC and the Subsidiary Guarantors to
the Credit Facility Secured Party arising under or pursuant to the Credit
Facility Loan Documents, including, in each case, interest, fees, and expenses
accruing after the initiation of any Insolvency Proceeding (irrespective of
whether allowed as a claim in such proceeding), and including the secured claims
of the Credit Facility Secured Party in respect of the Collateral in any
Insolvency Proceeding.
"Credit Facility Loan Documents" means the Credit Agreement
and the Loan Documents as the same may be amended, modified, restated, extended,
renewed, replaced or refinanced.
"Credit Facility Secured Party" means the Lender Group
(including each Person now or hereafter owning all or part of the Credit
Facility Indebtedness) as well as the Agent for the benefit of the Lender Group.
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"Enforcement Action" means, with respect to any Party, (a)
commencement of any action, whether judicial or otherwise, for the enforcement
of such Party's rights and remedies as a secured creditor with respect to the
Collateral, including commencement of any receivership or foreclosure
proceedings against, or any other sale of, collection on, or disposition of, any
Collateral, or any exercise of remedies with respect to the Collateral under the
Indenture Documents or the Credit Facility Loan Documents, or (b) notifying any
third-party account debtors of RHC or any of their subsidiaries to make payment
directly to such Party or to any of its agents or other Persons acting on its
behalf.
"Enforcement Event" means the occurrence and continuance of an
Event of Default under any of the Indenture Documents or the Credit Facility
Loan Documents.
"Enforcement Event Notice" has the meaning set forth in
Section 3.2.
"Entitled Party" has the meaning set forth in Section 4.1(a).
"Event of Default" has the meaning set forth in the Financing
Documents.
"Expiry Date" has the meaning set forth in Section 3.2(b)(i).
"Financing Documents" means the Indenture Documents and the
Credit Facility Loan Documents.
"Foreclosure Action" means any action to foreclose upon or
enforce a Lien against any of the Collateral, including (a) commencing judicial
or non-judicial foreclosure proceedings, (b) exercising any rights afforded to
secured creditors in a case under the Bankruptcy Code with respect to the
Collateral, or (c) taking any action under the Bankruptcy Code that directly
relates to or directly affects any such Collateral, other than any such action
that relates to or affects all or substantially all of the property of the
bankruptcy estate.
"Fully Paid" means the payment in cash or cash equivalents in
full of all obligations (other than indemnity obligations that survive payment
in full) under the Credit Facility Loan Documents or the Indenture Documents, as
the case may be, and in the case of the Credit Facility Loan Documents, at such
time when there shall no longer be any obligation to make loans or advances or
issue letters of credit (or guaranties in respect thereof) thereunder and there
shall no longer be any letter of credit (or guaranty in respect thereof)
outstanding thereunder or such letter of credit (or guaranty in respect thereof)
shall have been fully cash collateralized (in accordance with the provisions of
the Credit Facility Loan Documents).
"Holders" has the meaning set forth in the preamble.
"Indenture" has the meaning set forth in the recitals.
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"Indenture Documents" means the Indenture, the Notes and the
Collateral Documents, and such other agreements, instruments and certificates
executed and delivered (or issued) by RHC or the Subsidiary Guarantors pursuant
to the Indenture, as any or all of the same may be amended, restated,
supplemented or otherwise modified from time to time.
"Insolvency Proceeding" means any proceeding for the purposes
of dissolution, winding up, liquidation, arrangement or reorganization of either
RHC, any Subsidiary Guarantor, or any other subsidiary of RHC, or their
respective successors or assigns, whether in bankruptcy, insolvency,
arrangement, reorganization or receivership proceedings, or upon an assignment
for the benefit of creditors or any other marshaling of the assets and
liabilities of either RHC, any Subsidiary Guarantor, or any other subsidiary of
RHC, or their respective successors or assigns.
"Lien Priority" means, with respect to any Lien in and to the
Collateral, the order of priority of such Lien as specified in Sections 2.1 and
2.2.
"Loan Documents" has the meaning set forth in the recitals.
"Maximum Amount" has the meaning set forth in Section 2.1.
"Notes" has the meaning set forth in the recitals.
"Party" means any signatory to this Agreement.
"RHC" has the meaning set forth in the recitals.
"Secured Liability" means the Subordinated Lien Indebtedness
and the Credit Facility Indebtedness.
"Subordinated Lien Indebtedness" means all present and future
obligations, contingent or otherwise, of RHC and the Subsidiary Guarantors to
the Trustee or Holders arising under or pursuant to the Indenture Documents,
including, in each case, interest, fees and expenses accruing after the
initiation of any Insolvency Proceeding (irrespective of whether allowed as a
claim in such proceeding), and including the secured claims of the Trustee or
the Holders in respect of the Collateral in any Insolvency Proceeding.
"Subsidiary Guarantors" has the meaning set forth in the
recitals.
"Trigger Date" means the earlier of (i) the date on which an
event contemplated by clause (b) or (c) of the definition of Trigger Event
occurs, (ii) the date on which an Enforcement Event Notice is delivered, and
(iii) the final maturity date of the Credit Facility Indebtedness (after giving
effect to any extensions granted thereunder).
"Trigger Event" means:
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(a) the occurrence of an Event of Default,
(b) the acceleration of the maturity of the Credit Facility Indebtedness by
the Credit Facility Secured Party pursuant to the Credit Agreement, or
(c) the commencement of any action or proceeding by the Credit Facility Secured
Party, whether judicial or otherwise (but excluding demands for payment or
notices of default or the imposition of default rates of interest or default
letter of credit related fees), for the enforcement of the Credit Facility
Secured Party's rights and remedies under any of the Credit Facility Loan
Documents, including: (i) commencement of any receivership or Foreclosure Action
against or any other sale of, collection on or disposition of any Collateral,
including any notification to third parties to make payment directly to the
Credit Facility Secured Party; (ii) exercise of any right of set-off; (iii)
commencement of any Insolvency Proceeding; and (iv) commencement of any judicial
action or proceeding against either RHC or any Subsidiary Guarantor to recover
all or any part of the Credit Facility Indebtedness.
"Trustee" has the meanings set forth in the preamble.
Section 1.2 Indenture Definitions. All other capitalized terms that are used but
not defined herein have the respective meanings ascribed to such terms in the
Indenture. Any modifications to such definitions which adversely affect the
Credit Facility Secured Party under the Indenture after the date hereof shall
not be effective under this Agreement without the consent of the Credit Facility
Secured Party.
Section 1.3 Miscellaneous. All definitions herein (whether set forth herein
directly or by reference to definitions in other documents) shall be equally
applicable to both the singular and the plural forms of the terms defined. The
words "hereof," "herein" or "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. Article and section references are to
articles and sections of this Agreement unless otherwise specified. The term
"including" means "including without limitation."
ARTICLE II
LIEN PRIORITY
Section 2.1 Agreement to Subordinate Liens. The Trustee hereby agrees that the
Liens of the Trustee for the benefit of itself and the Holders in and to the
Collateral are and shall be subordinate in priority to the Liens of the Credit
Facility Secured Party in and to the Collateral securing the Credit Facility
Indebtedness up to, but not in excess of the Maximum Amount (as such term is
defined below) of the Credit Facility Indebtedness; provided that the rights of
the Credit Facility Secured Party under this Agreement shall be void and of no
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further force and effect if, and only to the extent that, the Liens of the
Credit Facility Secured Party in and to the Collateral are avoided, disallowed,
set aside or otherwise invalidated in any action or proceeding by a court,
tribunal or administrative agency of competent jurisdiction. The subordination
of the Liens of the Trustee for the benefit of itself and the Holders in and to
the Collateral in favor of the Credit Facility Secured Party provided for herein
shall not be deemed to (a) subordinate the Liens of the Trustee to the Liens of
any other Person, or (b) subordinate the Subordinated Lien Indebtedness to any
Indebtedness of RHC or any of the Subsidiary Guarantors, including the Credit
Facility Indebtedness. As used herein, the term "Maximum Amount" of the Credit
Facility Indebtedness means the sum of (a) principal of Credit Facility
Indebtedness up to, but not in excess of $30,000,000 (the "Maximum Principal
Amount"), plus (b) all interest accrued on the outstanding principal amount (up
to the Maximum Principal Amount), plus (c) all fees, costs and expenses
constituting Credit Facility Indebtedness.
Section 2.2 No Contest; Excluded Assets. Each Party agrees that it will not
attack or contest the validity, perfection, priority or enforceability of the
Liens of the other Party or finance or urge any other Person to do so; provided
that either Party may enforce its rights and privileges hereunder without being
deemed to have violated this provision. Any provision contained in this
Agreement to the contrary notwithstanding, the terms and conditions of this
Agreement shall not apply to any property or assets (including property or
assets that do not constitute Collateral) that one Party has a Lien on and the
other Party does not.
Section 2.3 Limitation on Pursuit of Remedies.
(a) Until the earlier of (i) the date on which all Credit Facility Indebtedness
is Fully Paid, and (ii) the first date following the date on which the Maximum
Amount of Credit Facility Indebtedness is Fully Paid, the Trustee will not,
without the prior written consent of the Credit Facility Secured Party, pursue
any remedies with respect to the Collateral that it may have at law or in equity
or in connection with any Insolvency Proceeding; provided that the exercise of
any such remedies shall be (y) subject to the Lien Priority and the application
of proceeds of Collateral under Section 3.4, and (z) subject to the provisions
of Sections 3.1 and 3.2.
(b) Notwithstanding any other provision hereof, the Trustee may make such
demands or file such claims as may be necessary to prevent the waiver or bar of
such claims under applicable statutes of limitations or other statutes, court
orders or rules of procedure.
Section 2.4 Priority of Liens. Irrespective of (a) the order of recording of
mortgages, financing statements, security agreements or other instruments, (b)
the method of perfection of the Liens, (c) any amendments to the liens,
mortgages, pledges or security interest established, altered or specified
herein, provided that such amendment does not alter the aggregate principal
amount of the indebtedness secured by such lien, mortgage, pledge or security
interest, (d) the time or order of foreclosure, taking of possession or the
exercise of any remedy and (e) the descriptions of Collateral contained in the
Financing Documents, including any financing statements, the Parties agree among
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themselves that their respective Liens in the Collateral shall be governed by
the Lien Priority, which shall be controlling in the event of any conflict
between this Agreement and any of the Financing Documents, provided, however,
that the priorities of any liens, mortgages, pledges or security interests which
are not established, altered or specified herein shall be unaffected and shall
exist and continue in accordance with applicable law. The agreements in this
Section 2.4 are solely for the purpose of establishing the relative priorities
of the interests of the Parties hereto and shall not inure to the benefit of any
other Person.
ARTICLE III
ACTIONS OF THE PARTIES
Section 3.1 Limitation on Certain Actions. Subject to Section 3.2, until the
earlier of (a) the date on which all Credit Facility Indebtedness is Fully Paid,
and (b) the first date following the date on which the Maximum Amount of Credit
Facility Indebtedness is Fully Paid, the Trustee will not, without the prior
written consent of the Credit Facility Secured Party, take any Enforcement
Action.
Section 3.2 Standstill Period.
(a) If an Enforcement Event has occurred and is continuing, the Trustee, on
behalf of the Holders, may (but shall not be obligated to) give the Credit
Facility Secured Party written notice thereof (an "Enforcement Event Notice");
provided, however, that the Trustee may not take any Enforcement Action except
in accordance with Section 3.2(b) after such Enforcement Event Notice has been
delivered to the Credit Facility Secured Party.
(b) The Trustee may, subject to the Lien Priority and the application of all
proceeds of the Collateral in accordance with Section 3.4, take one or more
Enforcement Actions so long as:
(i) (A) more than 180 consecutive days has lapsed after the delivery of an
Enforcement Event Notice (the "Expiry Date"); (B) the Credit Facility
Secured Party has not, on or before the Expiry Date, commenced one or
more Enforcement Actions, and (C) RHC or the Subsidiary Guarantor
against which the Trustee's proposed Enforcement Action is to be taken
is not the subject of an Insolvency Proceeding; or
(ii) (A) the Credit Facility Secured Party has commenced any Enforcement
Action on or prior to the Expiry Date and, at any time after the Expiry
Date, is no longer actively pursuing any Enforcement Actions, (B) no
Insolvency Proceeding is pending against RHC or the Subsidiary
Guarantor against which the Trustee's proposed Enforcement Action is to
be taken, and (C) the Enforcement Event that was the subject of, or
existing on the date of, the Enforcement Event Notice is then
continuing.
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(c) Except as expressly provided for in this Agreement, nothing in this
Agreement shall prevent the Parties hereto from exercising any other remedy, or
taking any other action, under any of the Financing Documents.
Section 3.3 Foreclosure. Any Party taking a permitted Foreclosure Action may
enforce its Financing Documents independently as to RHC and each Subsidiary
Guarantor and independently of any other remedy or security such Party at any
time may have or hold in connection with its Secured Liabilities, and it shall
not be necessary for such Party to marshal assets in favor of the other Party or
any other Person or to proceed upon or against or exhaust any other security or
remedy before proceeding to enforce the Financing Documents. Each of the Trustee
(for so long as the Credit Facility Indebtedness is not Fully Paid) and the
Credit Facility Secured Party (for so long as the Trustee and the Holders are
owed any Subordinated Lien Indebtedness) expressly waives any right to require
the other Party to marshal assets in its favor or to proceed against any
Collateral provided by either RHC or any Subsidiary Guarantor, or any other
property, assets, or collateral provided by either RHC, any Subsidiary
Guarantor, or any other Person, and agrees that the Party taking such permitted
Foreclosure Action may proceed against either RHC, any Subsidiary Guarantor, any
Collateral or other property, assets, or other collateral provided by any of
them or by any other Person, in such order as it shall determine in its sole and
absolute discretion. The foregoing notwithstanding: (a) with respect to the sale
or other disposition of any Collateral governed by Article 9 of the Uniform
Commercial Code, the Party conducting such sale or other disposition agrees in
favor of the other Party that every aspect of such sale or other disposition,
including the method, manner, time, place, and terms, must be commercially
reasonable; (b) with respect to the sale or other disposition of any real
property Collateral, the Party conducting such sale or other disposition agrees
in favor of the other Party that such sale or other disposition shall be
conducted according to the normal practices of commercial real property secured
lenders generally; (c) with respect to the sale or other disposition of any
Collateral by either Party, such Party agrees to provide the other Party with
such written notice as it is required by applicable law (including, if
applicable, the Uniform Commercial Code) to provide to RHC or the applicable
Subsidiary Guarantors (without regard to whether RHC or the Subsidiary
Guarantors have waived their entitlement to receive such notice); and (d) the
Credit Facility Secured Party agrees that at such time as all Credit Facility
Indebtedness is Fully Paid, the Credit Facility Secured Party thereupon promptly
shall cease all further Foreclosure Actions.
Section 3.4 Distribution. Each Party agrees that, upon any distribution as a
result of a Foreclosure Action, or the receipt of any other payment or
distribution with respect to the Collateral, the proceeds thereof shall be
distributed in the order of, and in accordance with, the following priorities:
(a) FIRST:
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(i) if the Foreclosure Action is taken by the Credit Facility Secured
Party, to the payment of all reasonable costs and expenses, commissions
and taxes of the Credit Facility Secured Party incurred in connection
with taking any such Foreclosure Action or other realization, including
all reasonable expenses (including reasonable attorneys' fees and
expenses), liabilities and advances made or incurred by the Credit
Facility Secured Party in connection therewith;
(ii) if the Foreclosure Action is taken and entitled to be taken hereunder
by the Trustee, to the payment of all reasonable costs and expenses,
commissions and taxes of the Trustee incurred in connection with taking
any such Foreclosure Action or other realization, including all
reasonable expenses (including reasonable attorneys' fees and
expenses), liabilities and advances made or incurred by the Trustee in
connection therewith;
(b) SECOND, to the Credit Facility Secured Party, until the earlier of (i) the
Credit Facility Indebtedness being Fully Paid, and (ii) the first time following
the date at which the Maximum Amount of Credit Facility Indebtedness is Fully
Paid;
(c) THIRD, to the Trustee, until all Subordinated Lien Indebtedness is Fully
Paid; and
(d) FOURTH, to the Credit Facility Secured Party, until all Credit Facility
Indebtedness in excess of the Maximum Amount (if any) is Fully Paid.
Section 3.5 Notice of Certain Events. Each Party agrees that it will provide the
other Party written notice at least 15 days prior to exercising any remedies
with respect to any portion of the Collateral (and, in the case of the Trustee,
only after the applicable standstill period set forth in Section 3.2 has
commenced and is no longer in effect). Notwithstanding the foregoing, (a) a
Party shall not be obligated to provide such prior written notice if exigent
circumstances require that such Party act immediately in order to preserve,
protect, or obtain possession or control over the Collateral or any portion
thereof or such notice is not reasonably practicable in the circumstances;
provided that if a Party does not provide any advance written notice prior to
exercising any remedies with respect to any portion of the Collateral, such
Party agrees to provide the other Party with written notice as soon as
practicable following such Party first exercising any of its secured creditor
remedies with respect to the Collateral.
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ARTICLE IV
ENFORCEMENT OF PRIORITIES
Section 4.1 In Furtherance of Lien Priorities. Each Party agrees as follows:
(a) All payments or distributions of or with respect to the Collateral that are
received by any Party contrary to the provisions of this Agreement shall be
segregated from other funds and property held by such Party and shall be held in
trust for the Party entitled thereto (the "Entitled Party") in accordance with
the provisions of Section 3.4 and such Party shall forthwith pay over such
remaining proceeds to the Entitled Party in the same form as so received (with
any necessary endorsement) to be applied (in the case of cash) or held as
Collateral (in the case of non-cash property or securities) in accordance with
the provisions hereof and the provisions of the applicable Financing Documents.
(b) After the earlier of (i) the date on which all Credit Facility Indebtedness
is Fully Paid, and (ii) the first date following the Trigger Date on which the
Maximum Amount of Credit Facility Indebtedness is Fully Paid, the Credit
Facility Secured Party will promptly execute and deliver all further instruments
and documents, and take all further acts that may be necessary, or that the
Trustee may reasonably request, to permit the Trustee to evidence the
termination of the Lien Priority hereunder (or, in the event there exists Credit
Facility Indebtedness in excess of the Maximum Amount, to evidence or effect the
distribution order set forth in clauses "THIRD" and "FOURTH" of Section 3.4 in
lieu of such termination), or in furtherance thereof; provided that the Credit
Facility Secured Party shall not be required to pay over any payment or
distribution, execute any instruments or documents, or take any other action
referred to in this Section 4.1(b) to the extent that such action would
contravene any law, order or other legal requirement, and in the event of a
controversy or dispute, the Credit Facility Secured Party may interplead any
payment or distribution in any court of competent jurisdiction.
(c) Each Party is hereby authorized to demand specific performance of this
Agreement, whether or not RHC or any Subsidiary Guarantor shall have complied
with any of the provisions hereof applicable to it, at any time when either
Party shall have failed to comply with the provisions of this Agreement
applicable to it; provided that the remedy of specific performance shall not be
available, and the asserting Party shall be free to assert any and all legal
defenses it may possess, if such remedy would result in, or otherwise
constitute, a violation of the Employee Retirement Income Security Act of 1974,
as amended. Each Party hereby irrevocably waives any defense based on the
adequacy of a remedy at law, which might be asserted as a bar to such remedy of
specific performance.
(d) This Agreement shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Secured Liabilities is, other
than as a result of any intentional fraud or gross negligence of the applicable
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Party, rescinded or must otherwise be returned by the applicable Party upon the
insolvency, bankruptcy or reorganization of either RHC or any Subsidiary
Guarantor or otherwise, all as though such payment had not been made.
Section 4.2 Perfection of Possessory Security Interests. For the limited purpose
of perfecting the security interests of the Parties in those types or items of
Collateral in which a security interest only may be perfected by possession or
control, each Party hereby appoints the other as its representative for the
limited purpose of possessing on its behalf any such Collateral that may come
into the possession or control of such other Party from time to time, and each
Party agrees to act as the other's representative for such limited purpose of
perfecting the other's security interest by possession or control through a
representative, provided that neither Party shall incur any liability to the
other by virtue of acting as the other's representative hereunder beyond that
which is contemplated by this Agreement. In this regard, any Party that is in
possession or control of any such item of Collateral agrees that if it elects to
relinquish possession or control of such item of Collateral, it shall deliver
possession or control thereof to the other Party; provided that no Party shall
be required to deliver any such item of Collateral or take any other action
referred to in this Section 4.2 to the extent that such action would contravene
any law, order or other legal requirements, and in the event of a controversy or
dispute, such Party may interplead any item of Collateral in any court of
competent jurisdiction.
Section 4.3 Control of Dispositions of Collateral and Effect thereof on Junior
Liens.
(a) Subject to the terms, conditions and restrictions set forth solely in
Sections 3.10 (Offer to Purchase by Application of Excess Proceeds), 4.10 (Asset
Sales), 4.18 (Designation of Restricted and Unrestricted Subsidiaries), 5.01
(Merger, Consolidation or Sale of Assets), 10.03 (Release of Collateral), 10.04
(Certificates of the Company) and 10.08 (Termination of Security Interest) of
the Indenture, each Party hereby agrees that, if the Credit Facility Secured
Party shall have agreed with RHC or any Subsidiary Guarantor (as applicable)
that RHC or any Subsidiary Guarantor (as applicable) may sell or otherwise
dispose of any item of Collateral for monetary consideration constituting net
cash proceeds, then the Lien of the Trustee in such item of Collateral shall be
released by the Trustee concurrently with such sale or other disposition and the
net cash proceeds therefrom may, at the sole election of the Credit Facility
Secured Party, be applied to the claims of the Parties in the manner provided
for herein, or be used by RHC or any Subsidiary Guarantor (as applicable) for
its lawful general corporate purposes.
(b) Each Party hereby agrees that any collection, sale, or other disposition of
Collateral (whether under the applicable Uniform Commercial Code or otherwise)
by the Credit Facility Secured Party shall be free and clear of any Lien of the
Trustee in such Collateral; provided that the Trustee shall retain a Lien
(having the same priority as the Lien it previously had on the item of
Collateral that was collected, sold or otherwise disposed of) on the proceeds of
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such collection, sale, or other disposition (except to the extent such proceeds
are applied to the Credit Facility Indebtedness in accordance with Section 3.4).
(c) To the extent reasonably requested by the Credit Facility Secured Party, the
Trustee will cooperate in executing and delivering any necessary or appropriate
releases to permit a collection, sale, or other disposition of Collateral, as
provided in Section 4.3(a) or Section 4.3(b), free and clear of the Trustee's
junior Lien, provided that the Trustee shall not be required to prepare any such
releases.
ARTICLE V
MISCELLANEOUS
Section 5.1 Rights of Subrogation. The Trustee agrees that no payment or
distribution to the Credit Facility Secured Party pursuant to the provisions of
this Agreement shall entitle the Trustee to exercise any rights of subrogation
in respect thereof until the earlier of (a) the date on which all Credit
Facility Indebtedness is Fully Paid and (b) the Maximum Amount of Credit
Facility Indebtedness shall have been Fully Paid.
Section 5.2 Further Assurances. The Parties will, at the expense of RHC and at
any time and from time to time, promptly execute and deliver all further
instruments and documents, and take all further reasonable action (including the
recordation of a subordination agreement in the appropriate recorder's office),
that may be necessary or desirable, or that either Party may reasonably request,
in order to protect any right or interest granted or purported to be granted
hereby or to enable such Party to exercise and enforce its rights and remedies
hereunder; provided that no Party shall be required to pay over any payment or
distribution, execute any instruments or documents, or take any other action
referred to in this Section 5.2 to the extent that such action would contravene
any law, order or other legal requirement binding upon such Party, and in the
event of a controversy or dispute, any Party may interplead any payment or
distribution in any court of competent jurisdiction, without further
responsibility in respect of such payment or distribution under this Section
5.2.
Section 5.3 Defenses Similar to Suretyship Defenses. All rights, interests,
agreements and obligations of each of the Parties under this Agreement shall
remain in full force and effect irrespective of:
(a) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Secured Liabilities, or any other amendment or waiver of
or any consent to departure from the Financing Documents; provided that this
Section 5.3(a) shall not apply to, and the Trustee's Liens on the Collateral
shall not be subordinated in priority by virtue of this Agreement to, the Credit
Facility Secured Party's Liens thereon if and to the extent that the Credit
Facility Indebtedness is increased, without the express written consent of the
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Trustee, to an amount in excess of the Maximum Amount;
(b) any exchange, release, non-enforcement or non-perfection of any Party's
Liens with respect to any Collateral, or any release, amendment or waiver of or
consent to departure from any guaranty, for all or any of the Secured
Liabilities; or
(c) any failure by any Party to marshal assets in favor of any other Party or
any other Person or to proceed upon or against or exhaust any security or remedy
before proceeding to enforce the Financing Documents.
Section 5.4 Amendments, Etc. No amendment or waiver of any provision of this
Agreement and no consent to any departure by any Party shall be effective unless
the same is in writing and signed by each Party, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
Section 5.5 Addresses for Notices. All demands, notices and other communications
provided for hereunder shall be in writing, and if to the Trustee, mailed, sent
by facsimile or delivered to it at the following address:
The Bank of New York
Corporate Trust Administration
000 Xxxxxxx Xxxxxx, Xxxxx 0X
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xxxxxxx
And if to the Credit Facility Secured Party, mailed, sent by facsimile or
delivered to the Agent for the benefit of the Lender Group at the following
address:
Foothill Capital Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Telecopier No.: 310.453.7442
Attention: Structured Finance Group Manager
with a copy to RHC (for the benefit of itself and all Subsidiary Guarantors),
mailed, sent by facsimile or delivered to RHC at the following address:
Riviera Holdings Corporation
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: President
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or as to any Party at such other address designated by such Party in a written
notice to the other Party complying as to delivery with the terms of this
Section 5.5. All such demands, notices and other communications shall be
effective: (a) if mailed, postage prepaid, first class, registered or certified,
when received; (b) if sent by facsimile, when receipt is acknowledged by the
receiving facsimile equipment (or at the opening of the next business day if
receipt is after normal business hours); or (c) if by personal delivery or by
courier service, when delivered.
Section 5.6 No Waiver of Remedies. No failure on the part of any Party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 5.7 Termination of Agreement. This Agreement shall (a) be binding upon
the Parties and their successors and assigns (including, without limitation, all
parties that become lenders or participants under the Revolving Credit Facility
and any one or more co-trustees or separate trustees appointed by the Trustee
pursuant to Section 7.12 of the Indenture); (b) inure to the benefit of and be
enforceable by the Parties and their respective successors, transferees and
assigns; and (c) terminate upon the Credit Facility Indebtedness or the
Subordinated Lien Indebtedness being Fully Paid; provided that the obligations
of the Parties under Sections 4.1 and 5.2 shall survive this Agreement.
Section 5.8 Governing Law; Entire Agreement. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts made and to be performed in New York, including Sections
5-1401 and 5-1402 of the New York General Obligations Law. This Agreement
constitutes the entire agreement and understanding among the Parties with
respect to the subject matter hereof and supersedes any prior agreements,
written or oral, with respect thereto.
Section 5.9 Counterparts. This Agreement may be executed in any number of
counterparts, and it is not necessary that the signatures of all Parties be
contained on any one counterpart hereof, each counterpart will be deemed to be
an original, and all together shall constitute one and the same document.
Section 5.10 No Third Party Beneficiary. This Agreement is solely for the
benefit of the Parties (and their successors and assigns) and the holders of the
Secured Liabilities (including the Credit Facility Secured Party and the
Holders). No other Person (including either RHC, any Subsidiary Guarantor or any
subsidiary or affiliate of RHC) shall be deemed to be a third party beneficiary
of this Agreement or shall have any rights to enforce any provisions hereof.
Section 5.11 Headings. The headings of the articles and sections of this
Agreement are inserted for purposes of convenience only and shall not be
construed to affect the meaning or construction of any of the provisions hereof.
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Section 5.12 Severability. If any of the provisions in this Agreement shall, for
any reason, be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement and shall not invalidate the Lien Priority or any other
priority set forth in this Agreement.
Section 5.13 Trustee Status. Notwithstanding any term herein to the contrary, it
is hereby expressly agreed and acknowledged that the subordination and related
agreements set forth herein by the Trustee are made solely in its capacity as
trustee and secured party under the Indenture Documents and with respect to the
Notes (and not in its individual commercial capacity, except to the extent that
it is or becomes a Holder). The Trustee shall not have any duties, obligations,
or responsibilities to the Credit Facility Secured Party under this Agreement
except as expressly set forth herein. Nothing in this Agreement shall be
construed to operate as a waiver by the Trustee, with respect to RHC or any
holder of any Subordinated Lien Indebtedness, of the benefit of any exculpatory
provisions, presumptions, indemnities, protections, benefits, immunities or
reliance rights contained in the Indenture, and, by their acknowledgment hereof,
RHC expressly agrees that as between it and the Trustee, the Trustee shall have
such benefit with respect to all actions or omissions by the Trustee pursuant to
this Agreement. For all purposes of this Agreement, the Trustee may: (a) rely in
good faith, as to matters of fact, on any representation of fact believed by
Trustee to be true (without any duty of investigation) and that is contained in
a written certificate of any authorized representative of RHC or of the Credit
Facility Secured Party; (b) rely in good faith, as to matters of law, on any
advice received from its legal counsel or an opinion of its counsel, counsel to
RHC or counsel to the Credit Facility Secured Party, and shall have no liability
for any action or omission taken in reliance thereon; and (c) assume in good
faith (without any duty of investigation), and rely upon, the genuineness, due
authority, validity, and accuracy of any certificate, instrument, notice, or
other document believed by it in good faith to be genuine and presented by the
proper person.
Section 5.14 Other Matters Regarding the Trustee and the Credit Facility Secured
Party.
(a) In no event shall the Trustee or the Credit Facility Secured Party be liable
for special, punitive, indirect or consequential loss or damage of any kind
whatsoever (including, but not limited to, lost profit) even if the Trustee or
the Credit Facility Secured Party, respectively, have been advised of the
likelihood of such loss or damage and regardless of the form of action.
(b)The Trustee and the Credit Facility Secured Party shall not be responsible or
liable for any failure or delay in the performance of their respective
obligations under this Agreement arising out of or caused, directly or
indirectly, by circumstances beyond their reasonable control, including without
limitation: acts of God; earthquakes; fires; floods; wars; civil or military
disturbances; sabotage; epidemics; riots; terrorist acts; interruptions, loss or
malfunctions of utilities, computer (hardware or software) or communications
service; accidents; labor disputes; and acts of civil or military authority or
governmental actions.
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(c) The Trustee and the Credit Facility Secured Party may conclusively rely upon
any document believed by them, respectively, to be genuine and to have been
signed or presented by the proper Person. The Trustee and the Credit Facility
Secured Party need not investigate any fact or matter stated in the document.
(d) The Trustee and the Credit Facility Secured Party may act through their
respective attorneys and agents and shall not be responsible for the misconduct
or negligence of any agent appointed with due care.
Section 5.15 Gaming Laws and Liquor Laws.
(a) The Trustee and the Credit Facility Secured Party acknowledge, understand
and agree that the Gaming Laws and Liquor Laws may impose certain licensing or
transaction approval requirements prior to the exercise of the rights and
remedies granted to them under this Agreement with respect to the Collateral
subject to the Gaming Laws and Liquor Laws.
(b) If any consent under the Gaming Laws or Liquor Laws is required in
connection with the taking of any of the actions which may be taken by either
the Trustee or the Credit Facility Secured party in the exercise of their rights
hereunder, then each agrees, at the expense of RHC, to cooperate with the other
Party in obtaining any such consent. Upon the occurrence and during the
continuation of any Event of Default, each Party shall promptly execute and/or
cause the execution of all applications, certificates, instruments, and other
documents and papers that the Trustee or the Credit Facility Secured Party may
be required to file in order to obtain any necessary approvals under the Gaming
Laws and Liquor Laws, provided that the Trustee shall not be required to prepare
any such applications, certificates, instruments and other documents and papers.
Section 5.16 Waiver of Jury Trial. To the fullest extent permitted by law, the
Trustee and the Credit Facility Secured party each waive any right to have a
jury participate in resolving any dispute whether sounding in contract, tort or
otherwise arising out of, connected with, related to or incidental to the
relationship established between them in connection with this Agreement. Any
such disputes shall be resolved in a bench trial without a jury. THE TRUSTEE AND
THE CREDIT FACILITY SECURED PARTY EACH REPRESENT THAT IT HAS REVIEWED THIS
WAIVER AND THAT IT HEREBY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A BENCH TRIAL WITHOUT A
JURY.
[remainder of page intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, each Party has caused this Agreement to be
duty executed and delivered as of the date first above written.
Credit Facility Secured Party:
FOOTHILL CAPITAL CORPORATION, as Agent for the Lender Group
By: --------------------
Name:
Title:
Trustee:
THE BANK OF NEW YORK, as Trustee
By: --------------------
Name:
Title:
Signature Page
ACKNOWLEDGMENT
Each of the undersigned hereby acknowledges that (a) it has
received a copy of the foregoing Intercreditor Agreement and consents thereto,
and agrees to recognize all rights granted hereby to the parties thereto, and
will not do any act or perform any obligation which is not in accordance with
the agreements set forth in such Intercreditor Agreement, and (b) it is not an
intended beneficiary or third-party beneficiary under the Intercreditor
Agreement.
Dated as of July ____, 2002.
RHC:
RIVIERA HOLDINGS CORPORATION, a Nevada corporation
By_______________________________
Name:____________________________
Title: _____________________________
RESTRICTED SUBSIDIARIES/SUBSIDIARY GUARANTORS:
RIVIERA OPERATING CORPORATION, RIVIERA BLACK HAWK, INC., a Colorado
a Nevada Corporation corporation
By_______________________________ By_______________________________
Name:____________________________ Name:____________________________
Title: _____________________________ Title: _____________________________
RIVIERA GAMING MANAGEMENT, INC., RIVIERA GAMING MANAGEMENT OF COLORADO,
a Nevada corporation. INC.; a Colorado corporation
By_______________________________ By_______________________________
Name:____________________________ Name:____________________________
Title: _____________________________ Title: _____________________________
Acknowledgement
