Exhibit 10.2
KEEP-WELL AGREEMENT
Keep-Well Agreement (this "Agreement") dated as of June 3,
1999, between Riviera Holdings Corporation, a Nevada corporation ("Riviera
Holdings"), and RIVIERA BLACK HAWK, INC., a Colorado corporation (the
"Company").
R E C I T A L S
A. First Mortgage Notes. The Company has issued $45,000,000
aggregate principal amount of 13% First Mortgage Notes due 2005 With Contingent
Interest (together with all notes issued in exchange or replacement therefor,
the "Notes") pursuant to an Indenture (as amended, supplemented or otherwise
modified from time to time, the "Indenture") dated as of the date hereof between
the Company and IBJ Whitehall Bank & Trust Company, a New York banking
association, as trustee (the "Trustee"), for the benefit of the holders from
time to time (the "Holders") of the Notes.
B. Proceeds of the Notes. The Company will use the proceeds of
the Notes for the development, construction, equipping and operation of the
Riviera Black Hawk (as defined in the Indenture) upon certain real property
located in Black Hawk, Colorado (the "Property") and for certain other purposes
described in the Indenture.
C. Riviera Holdings' Benefit. The Company is a wholly-owned
subsidiary of Riviera Holdings and, as a result, Riviera Holdings will
significantly benefit from the construction and operation of the Riviera Black
Hawk.
D. Material Inducement. It is a condition precedent and
material inducement to the purchase of the Notes that (1) Riviera Holdings and
the Company shall have executed and delivered this Agreement whereby Riviera
Holdings has agreed that it will commit, subject to the limitations set forth
herein, for the benefit of the Company and the Holders, to make capital
contributions to the Company upon the terms, conditions and limitations provided
herein, (2) the Company shall have executed the Collateral Assignment assigning
this Agreement, among other things, to the Trustee, and (3) Riviera Holdings
shall have executed and delivered the Consent to Collateral Assignment of
Keep-Well Agreement pursuant to which, among other things, Riviera Holdings
consents to the Company's assignment of this Agreement to the Trustee.
E. Definitions. Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed thereto in the Indenture.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing recitals,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Riviera Holdings and the Company hereby agree as
follows:
1. Definitions.
"Contribution Limitation" means the product of (i) $1.25
million and (ii) the number of fiscal quarters of Riviera Holdings contained in
the relevant Operating Period.
"First Operating Period" means the period beginning on the
first day of Riviera Holdings' first full fiscal quarter after the Riviera Black
Hawk becomes Operating through and including the last day of the fiscal year of
which such fiscal quarter is a part.
"Fourth Operating Period" means the period beginning
immediately following the end of the Third Operating Period through and
including the last day of the full fiscal quarter of Riviera Holdings ending
after the third anniversary of the date on which the Riviera Black Hawk became
Operating.
"Funding Amounts" means the Interest Contribution Amount (as
defined below) and the Cash Flow Contribution Amount (as defined below).
"Operating Period" means any of the First Operating Period,
Second Operating Period, Third Operating Period or Fourth Operating Period.
"Second Operating Period" means the first fiscal year of
Riviera Holdings after the First Operating Period.
"Target Consolidated Cash Flow" means, for any Operating
Period, the product of (i) $2.25 million and (ii) the number of fiscal quarters
of Riviera Holdings contained in such Operating Period.
"Third Operating Period" means the first fiscal year of
Riviera Holdings after the Second Operating Period.
2. Riviera Holdings' Commitments.
2.1. Fixed Interest Contribution Commitment. Subject to
Section 2.3 below, at least ten days prior to each date on which the
Company is required to pay the fixed interest payable on the Notes (the
"Fixed Interest Payment") which occurs before the end of the Fourth
Operating Period (each an "Fixed Interest Payment Date"), if the
Company does not have sufficient funds to make the required Fixed
Interest Payment on the Notes, the Company shall deliver to Riviera
Holdings (with a copy to the Trustee) a certificate stating:
(i) the amount of the Fixed Interest Payment
required to be made;
(ii) the amount of funds the Company has available to
make the Fixed Interest Payment (after taking into account
amounts on deposit in the Interest Reserve Account); and
(iii) the amount of additional cash that is needed in
order for the Company to make the Fixed Interest Payment (the
"Fixed Interest Contribution Amount").
Subject to Section 2.3 below, Riviera Holdings hereby unconditionally
and irrevocably agrees that, at least one business day prior to the
relevant Fixed Interest Payment Date, Riviera Holdings will make a
capital contribution in cash to the Company in an amount equal to any
Fixed Interest Contribution Amount.
2.2. Cash Flow Commitment. Subject to Section 2.3 below,
within 30 days after the end of each Operating Period, the Company
shall deliver to Riviera Holdings (with a copy to the Trustee) a
certificate stating:
(i) the amount of the Target Consolidated Cash
Flow for such Operating Period;
(ii) the Company's estimate, through its regular
internal accounting procedures, of its Consolidated Cash Flow
for such Operating Period (the "Applicable Consolidated Cash
Flow"); and
(iii) the amount of the Target Consolidated Cash Flow
for such Operating Period less the Applicable Consolidated
Cash Flow for such period determined as set forth in clause
(ii) above (the "Cash Flow Contribution Amount").
Subject to Section 2.3 below, Riviera Holdings hereby unconditionally
and irrevocably agrees that, within 45 days of the end of each
Operating Period, if the Cash Flow Contribution Amount for such
Operating Period is a positive number, Riviera Holdings will make a
capital contribution in cash to the Company in an amount equal to such
Cash Flow Contribution Amount, less any amounts previously contributed
by Riviera Holdings to the Company during such Operating Period
pursuant to Section 2.1 hereof.
2.3. Contribution Limitations. Notwithstanding any other terms
of this Agreement to the contrary, (i) the aggregate amount that
Riviera Holdings shall be required to contribute to the Company in any
Operating Period pursuant to Section 2.1 hereof and with respect to any
such Operating Period pursuant to Section 2.2 hereof will not exceed
the applicable Contribution Limitation for such Operating Period and
(ii) the aggregate amount that Riviera Holdings shall be required to
contribute to the Company in and with respect to all Operating Periods
pursuant to Sections 2.1 and 2.2 hereof will not exceed $10.0 million.
3. Cooperation. In connection with this Agreement, Riviera Holdings
agrees, at its sole cost and expense, to fully cooperate with the Company and to
timely provide such documents, agreements and information as may be required in
connection herewith.
4. Ability to Comply With This Agreement. Riviera Holdings shall, at
all times prior to the fulfillment of all of its obligations under this
Agreement, ensure that it has the ability to fulfill all of such obligations
under all other agreements to which it is a party, including the Indenture dated
as of August 13, 1997, among Riviera Holdings, the subsidiary guarantors
identified therein and Norwest Bank Minnesota, National Association, as trustee,
relating to the issuance of $175,000,000 principal amount of 10% First Mortgage
Notes due 2004 of Riviera Holdings.
In addition, Riviera Holdings shall not, at any time prior to
the fulfillment of all of its obligations under this Agreement, permit any other
agreement to which it is a party to in any way prohibit or interfere with its
ability to fulfill its obligations under this Agreement.
5. Alteration of Obligations. Riviera Holdings acknowledges and agrees
that none of the following shall release, impair, reduce, diminish or otherwise
affect Riviera Holdings' obligations under this Agreement: (i) any alteration,
compromise, acceleration or extension of, or any change to, (a) the Company's
obligations to complete the development, construction and equipping of the
Riviera Black Hawk and to commence operation thereof or (b) the payment or
performance by the Company or any guarantor under any debt instrument or other
financing for the development, construction, equipping or operation of the
Riviera Black Hawk (the foregoing, collectively, the "Obligations"), in each
case in such manner, upon such terms and at such times as any Person (including,
without limitation, the Trustee or any Holder) (each such Person, an "Obligee")
deems best, and without notice to Riviera Holdings; (ii) the release of the
Company or any guarantor from any or all of the Obligations by acceptance of a
deed in lieu of foreclosure or otherwise, as to all or any portion of the
Obligations; (iii) the release, substitution or addition of any one or more
guarantors or endorsers of the Funding Amounts or the Obligations; (iv) the
acceptance of additional or substitute security for the Funding Amounts or the
Obligations; or (v) the release or subordination of any security for the Funding
Amounts or the Obligations. No exercise (including, without limitation,
foreclosure of the Property) or non-exercise of any right under any document
relating to the Obligations (collectively, the "Obligation Documents") by an
Obligee, no dealing by an Obligee hereunder or under any Obligation Document or
any other document with Riviera Holdings, the Company or any other guarantors or
any other Person, and no change, impairment or release of all or any portion of
the Funding Amounts or the Obligations or suspension of any right or remedy of
an Obligee against any other Person, including, without limitation, the Company
or any other such guarantor, endorser or other Person, shall in any way affect
any of the obligations of Riviera Holdings hereunder or any security furnished
by Riviera Holdings or give Riviera Holdings any recourse against an Obligee
(including, without limitation, the Trustee). If an Obligee has exculpated or
hereafter exculpates the Company from liability in whole or in part, or has
agreed or hereafter agrees to look solely to the Property or any other property
for the satisfaction of the Company's Obligations (including, without limitation
the Company's obligations under the Indenture, the Notes or any Collateral
Document), such exculpation and agreement shall not affect the obligations of
Riviera Holdings hereunder. Riviera Holdings further acknowledges that any such
exculpation or agreement that has been given or that is hereafter given to the
Company with respect to the Notes, the Indenture or any Collateral Document has
been given or is given in reliance upon the covenants of Riviera Holdings
contained herein.
6. Obligations Absolute; Waiver. The obligations of Riviera Holdings
hereunder shall be unconditional (in accordance with the terms hereof), absolute
and continuing and, without limiting the generality of the foregoing, shall not
be released, discharged or otherwise affected by, and shall survive, and Riviera
Holdings hereby waives and relinquishes all rights and remedies accorded by
applicable law to sureties or guarantors and agrees not to assert or take
advantage of any such rights or remedies, including, without limitation, (a) any
right to require any holder or recipient of the benefit of any of the
Obligations (including, without limitation, the Trustee or the Holders) (each a
"Benefited Party") to proceed against the Company or any other Person or entity
or to proceed against or exhaust any security held by a Benefited Party at any
time or to pursue any other remedy in the power of a Benefited Party before
proceeding against Riviera Holdings; (b) the defense of the statute of
limitations in any action hereunder or in any action for the collection or
performance of the Funding Amounts or the Obligations; (c) any defense that may
arise by reason of the incapacity, lack of authority, death or disability of any
other Person or the failure of a Benefited Party to file or enforce a claim
against the estate (in administration, bankruptcy or any other proceeding) of
any other Person; (d) appraisal, valuation, stay, extension, marshaling of
assets, redemption, exemption, diligence, demand, presentment, protest and
notice of any kind, including, without limitation, notice of the existence,
creation or incurring of any new or additional indebtedness or obligation or of
any action, non-action, performance or failure to perform on the part of a
Benefited Party, the Company, any endorser or creditor of the Company or Riviera
Holdings or on the part of any other Person under this or any other instrument
in connection with any obligation or evidence of indebtedness held by a
Benefited Party as collateral or in connection with the Funding Amounts or the
Obligations; (e) any defense based upon any exercise of remedies, including,
without limitation, foreclosure of the Property, or upon an election of remedies
by a Benefited Party, including, without limitation, an election to proceed by
non-judicial rather than judicial foreclosure, which destroys or otherwise
impairs the subrogation rights of Riviera Holdings, the right of Riviera
Holdings to proceed against the Company or any other person for reimbursement,
or both; (f) any defense based upon any statute or rule of law which provides
that the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal; (g) any duty on the part of
a Benefited Party to disclose to Riviera Holdings any facts a Benefited Party
may now or hereafter know about the Company or any other Person, regardless of
whether a Benefited Party has reason to believe that any such facts materially
increase the risk beyond that which Riviera Holdings intends to assume, or has
reason to believe that such facts are unknown to Riviera Holdings, or has a
reasonable opportunity to communicate such facts to Riviera Holdings, since
Riviera Holdings acknowledges that Riviera Holdings is fully responsible for
being and keeping informed of the financial condition of the Company or any
other Person and of all circumstances bearing on the risk of non-payment of any
Funding Amounts; (h) any defense arising because of the election of a Benefited
Party, in any proceeding instituted under the Federal Bankruptcy Code, of the
application of Section 1111(b)(2) of the Federal Bankruptcy Code; (i) any
defense based upon any borrowing or grant of a security interest under Section
364 of the Federal Bankruptcy Code; (j) any claim or other rights which it may
now or hereafter acquire against the Company or any other Person that arises
from the existence or performance of Riviera Holdings' obligations under this
Agreement or any other Obligation Document, including, without limitation, any
right of subrogation, reimbursement, exoneration, contribution, indemnification,
any right to participate in any claim or remedy by a Benefited Party against the
Company or any collateral which a Benefited Party now has or hereafter acquires,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, by any payment made hereunder or otherwise, including,
without limitation, the right to take or receive from the Company or any other
Person or entity, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security on account of such claim or
other rights; (k) any rights which it may acquire by way of contribution under
this Agreement or any Obligation Document, by any payment made hereunder or
otherwise, including, without limitation, the right to take or receive from any
other Person, directly or indirectly, in cash or other property or by set-off or
in any other manner, payment or security on account of such contribution rights;
(l) any defense based on one-action laws and any other anti-deficiency
protections granted to guarantors by applicable law; (m) any merger or
consolidation of the Company into or with any other Person, or any sale, lease
or transfer of any or all of the assets of the Company to any other Person; (n)
any circumstance which might constitute a defense available to, or a discharge
of, the Company, Riviera Holdings or a surety; (o) any lack of genuiness,
validity, regularity, enforceability or value of any Funding Amounts, this
Agreement or any Obligation Document; and (p) any other fact or circumstance,
including, without limitation, any fact or circumstance having an impact on the
cash flow of or the availability of funds to the Company. Any proceeds of a
foreclosure or similar sale may be applied first to any obligations of the
Company that do not also constitute Funding Amounts or Obligations.
Notwithstanding the foregoing, nothing in this Section 6 shall be deemed to
impair or modify the rights or obligations otherwise expressly given to or
agreed to by Riviera Holdings in any of the Loan Documents. Riviera Holdings
acknowledges and agrees that any nonrecourse or exculpation provided for in any
Obligation Document, or any other provision of an Obligation Document limiting
each respective Benefited Party's recourse to specific collateral or limiting
such Benefited Party's right to enforce a deficiency judgment against the
Company, shall have absolutely no application to Riviera Holdings's liability
under this Agreement. To the extent that any Benefited Party (including, without
limitation, the Trustee) collects or receives any sums or payments from the
Company or from any guarantor, endorser or other Person under any Obligation
Document or realized from any security, such Benefited Party shall have the
right, but not the obligation, to apply such amounts first to that portion of
the Company's indebtedness and obligations, if any, to such Benefited Party that
is not covered by this Agreement, regardless of the manner in which any such
payments or amounts are characterized by the Person making payment.
7. Bankruptcy and Related Proceedings. The obligations of Riviera
Holdings under this Agreement shall not be altered, limited or affected by or as
a result of any action taken by the Company in any proceeding, voluntary or
involuntary, involving the bankruptcy, reorganization, insolvency, receivership,
or liquidation of the Company, or by any defense which the Company may have by
reason of any order, decree or decision of any court or administrative body
resulting from any such proceeding.
8. Interest. If Riviera Holdings fails to pay all or any portion of the
Funding Amounts in accordance with the provisions hereof, the amount of such
Funding Amounts and all other sums payable by Riviera Holdings hereunder shall
bear interest from the date of demand at the highest rate applicable to the
principal balance of the Notes or, if the Notes have been fully repaid, at the
highest rate that would be applicable if the Notes had not been fully repaid.
9. Independent Obligations. The obligations of Riviera Holdings
hereunder are independent of the obligations of the Company or any other Person
and, in the event of any default hereunder, a separate action or actions may be
brought and prosecuted against Riviera Holdings, whether or not the Company or
such other Person is joined therein or a separate action or actions are brought
against the Company.
10. Notices. Whenever Riviera Holdings or the Company shall desire to
give or serve any notice, demand, request or other communication with respect to
this Agreement, each such notice shall be in writing and shall be effective only
if the same is delivered by hand-delivery, first-class mail (registered or
certified, return receipt requested), telecopier or air courier guaranteeing
overnight delivery, addressed as follows:
To Riviera Holdings:
Riviera Holdings Corporation
0000 Xxx Xxxxx Xxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Executive Vice President of Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Company:
Riviera Black Hawk, Inc.
000 Xxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxx 00000
Attention: Executive Vice President of Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and, in either case, with a copy to the Trustee at:
IBJ Whitehall Bank & Trust Company
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any such notice delivered personally shall be deemed to have been received upon
delivery. Any such notice sent by telegram shall be presumed to have been
received by the addressee one business day after its acceptance for sending by
an authorized carrier thereof. Any such notice sent by mail shall be presumed to
have been received by the addressee three business days after posting in the
United States mail. Riviera Holdings or the Company may change its address by
giving the other and the Trustee a written notice of the new address as herein
provided.
11. Successors and Assigns. This Agreement shall inure to the benefit
of the Company, its successors and assigns, and shall bind the successors and
assigns of Riviera Holdings.
12. No Guarantee. Nothing contained in this Agreement shall be deemed
to be a guarantee by Riviera Holdings of any obligations of the Company under
the Notes.
13. Miscellaneous Provisions.
13.1. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Riviera Holdings
hereby consents to the jurisdiction of the courts of the State of New
York and consents to service of process by any means authorized by New
York law in any action brought under or arising from this Agreement.
13.2. Riviera Holdings acknowledges that it is aware of the
Indenture entered into by the Company and the Trustee, the Notes issues
thereunder and the Collateral Documents executed in connection
therewith and is generally familiar with the terms and provisions
thereof.
13.3. This Agreement shall constitute the entire agreement of
Riviera Holdings with the Company with respect to the subject matter
hereof, and no representation, understanding, promise or condition
concerning the subject matter hereof shall be binding upon the Company
unless expressed herein.
13.4. Should any term, covenant, condition or provision of
this Agreement be determined to be illegal or unenforceable, all other
terms, covenants, conditions and provisions hereof shall nevertheless
remain in full force and effect.
13.5. When the context and construction so require, all words
used in the singular herein shall be deemed to include the plural, the
masculine shall include the feminine and neuter, and vice versa.
13.6. No provision of this Agreement or right granted to the
Company hereunder can be waived in whole or in part, nor can Riviera
Holdings be released from its obligations hereunder, except by a
writing duly executed by an authorized officer of the Company.
13.7. The headings of this Agreement are inserted for
convenience only and shall have no effect upon the construction or
interpretation hereof.
(Signature Page Follows)
[Signature Page to Keep-Well Agreement]
LA_DOCS\356151.4
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
RIVIERA HOLDINGS CORPORATION,
a Nevada corporation
By:
Name:
Title:
RIVIERA BLACK HAWK, INC.,
a Colorado corporation
By:
Name:
Title:
