RESTRICTED ACCOUNT AGREEMENT
This RESTRICTED ACCOUNT AGREEMENT ("Agreement"), dated as of August 13,
1997, is made by and among RIVIERA HOLDINGS CORPORATION, a Nevada corporation
(the "Company"), NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as trustee and
collateral agent under the Indenture (as defined below) ("Secured Party"), and
U.S. BANK OF NEVADA (the "Bank").
R E C I T A L S
A. The Company is the issuer of those certain $175,000,000 10% First
Mortgage Notes due 2004 (the "Notes") pursuant to that certain Indenture dated
as of August 13, 1997 (the "Indenture") by and among the Secured Party, the
Company, and Riviera Operating Company, Riviera Gaming Management, Inc., Riviera
Gaming Management of Colorado, Inc., and Riviera Gaming Management-Elsinore,
Inc., as guarantors. Any capitalized term used in this Agreement without
definition, but defined in the Indenture, shall have the same meaning here as in
the Indenture.
B. It is a condition precedent to the issuance of the Notes that the
Company and the Secured Party shall have entered into an agreement with a
financial institution selected by the Company and acceptable to the Secured
Party for the creation of a restricted account (the "Account") at such
institution for the deposit of the proceeds from the sale of the Notes.
C. The Company has selected and the Secured Party has approved the
selection of the Bank for the establishment and maintenance of the Account. The
Bank has established Account No. 8470105316 as the Account and is willing to
maintain the Account, all pursuant to and in accordance with the terms and
conditions of this Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing and other good and
adequate consideration, the receipt of which is hereby acknowledged, the
Company, the Secured Party and the Bank agree as follows:
ARTICLE I
SECTION I.1. The Company and the Bank acknowledge and confirm that the
Secured Party holds a security interest in the Account and in all funds now or
at any time hereafter deposited to the Account and all of the Company's rights
with respect to the Account and such funds and that the same constitute part of
the Collateral granted to the Secured Party to secure performance and repayment
of the Obligations. After a notice is given pursuant to Section 1.4 below, the
Company hereby irrevocably authorizes the Bank to comply with any requests of
the Secured Party with regard to deposits in and withdrawals from the Account.
SECTION I.2. Such funds shall not be subject to banker's lien, setoff,
deductions or any other right in favor of any person (including the Bank) other
than the Secured Party, except as expressly provided for herein with respect to
the Bank.
SECTION I.3. All expenses for the maintenance of the Account are the
responsibility of the Company and are not to be deducted from funds in the
Account or remittances to the Secured Party.
SECTION I.4. The Secured Party hereby directs and the Bank agrees (and
the Company hereby irrevocably authorizes and instructs the Bank) that upon
receipt of a notice in the form of Exhibit A certifying that an event of default
under the Indenture has occurred, the Bank shall take the actions set forth in
such notice. These actions may include, at the sole discretion of the Secured
Party, any or all of the following:
(a) Cease honoring all drafts, demands, withdrawal,
remittance or other requests and instructions by the Company, whether
made before or after the demand, unless consented to in writing by the
Secured Party.
(b) Hold solely for the account of the Secured Party all
funds which may be on deposit in the Account at the time of and after
the notice.
(c) Remit all such funds directly to the Secured Party, as
soon as collected, by electronic transfer to such accounts as the
Secured Party may instruct in writing in such notice or at any time
thereafter.
SECTION I.5. The Company hereby agrees to indemnify and save the Bank
harmless from and against any and all liabilities, losses, costs or expenses
(including reasonable attorneys' fees) which it suffers or incurs in connection
with this Agreement (except those arising out of the Bank's gross negligence or
willful misconduct), including claims that the Bank was not properly authorized
to turn over funds on deposit in the Account to the Secured Party.
SECTION I.6. After a notice is given pursuant to Section 1.4 above, the
Bank shall send to the Secured Party, at its address shown below, a copy of each
periodic statement produced for the Account, as and when such statement is sent
to the Company, at its address shown below.
SECTION I.7. Unless and until an event of default under the Indenture
shall occur, the Company shall be entitled to withdraw funds from the Account
and take any actions with respect to the Account as it sees fit. The Bank is
hereby authorized, until any such event of default shall occur, to follow all
instructions with respect to the Account as shall be given by the Company, and
to follow all standard banking procedures which govern the Account.
SECTION I.8. This Agreement shall continue in full force and effect
until the earlier of (a) withdrawal of all funds in the Account and (b)
termination by the Bank on thirty (30) days' prior written notice to all other
parties. The Secured Party may terminate this Agreement at any time which
termination shall be effective on receipt of written notice by the Bank. The
Company shall have no right to unilaterally terminate this Agreement.
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SECTION I.9. This Agreement is binding upon the Bank and the Company
and their respective successors and assigns and is enforceable by the Secured
Party and its successors and assigns. It supersedes any and all prior agreements
relating to the Account other than the agreement between the Bank and the
Company pertaining to the Account ("Account Agreement"). If there are any
inconsistencies between this Agreement and the Account Agreement, this Agreement
shall control. Neither this Agreement nor any other agreement relating to the
Account may be altered, amended or otherwise modified without the prior written
consent of the Secured Party. This Agreement may be executed in one or more
counterparts, each of which shall be an original but all of which, taken
together, shall constitute one and the same instruments.
SECTION I.10. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEVADA
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
RIVIERA HOLDINGS CORPORATION
By: _________________________________________
Name: ______________________________________
Title: ______________________________________
Address: 0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Chief Executive Officer
Telecopy: (000) 000-0000
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
By: _________________________________________
Name: ______________________________________
Title: ______________________________________
Address: Corporate Trust Department
6th and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxxxxx
Telecopy: (000) 000-0000
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U.S. BANK OF NEVADA
By: _________________________________________
Name: ______________________________________
Title: ______________________________________
Address: U.S. Bank of Nevada
__________________________________
__________________________________
Attention: ______________________
Telecopy: ______________________
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EXHIBIT A
[Letterhead of Secured Party]
----------------, ------
U.S. Bank of Nevada
[Address of Bank]
Attn: _________________________
Re: Account No. 8470105316 (the "Account") in the name of Riviera
Holdings Corporation
Ladies and Gentlemen:
Reference is made to that certain Restricted Account Agreement dated as
of August 13, 1997 (the "Agreement") among you, us and Riviera Holdings
Corporation (the "Company"), pursuant to which we, for the benefit of the
holders of those certain $175,000,000 10% First Mortgage Notes due 2004 issued
by the Company, were given a security interest in the Account. This notice is
given in accordance with the terms of the Agreement. We hereby notify you that
an event of default has occurred under that certain Indenture dated as of August
13, 1997 (the "Indenture") by and among the Company, us and Riviera Operating
Company, Riviera Gaming Management, Inc., Riviera Gaming Management of Colorado,
Inc., and Riviera Gaming Management-Elsinore, Inc., as guarantors.
Accordingly, effective immediately and continuing until we shall
authorize you in writing to do otherwise, the Account is now subject to the
additional restrictions set forth in Sections 1.4 and 1.5 of the Agreement, and
the Bank is directed, pursuant to Section 1.4 of the Agreement, to take the
following actions:
(a) Cease honoring all drafts, demands, withdrawal, remittance
or other requests and instructions by the Company, whether made before
or after the demand, unless consented to in writing by the Secured
Party.
(b) Hold solely for the account of the Secured Party all funds
which may be on deposit in the Account at the time of and after the
notice.
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[(c) Remit all such funds directly to the Secured Party, as
soon as collected, by electronic transfer to such accounts as the
Secured Party may instruct in writing in such notice or at any time
thereafter.]
Very truly yours,
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
By:______________________________________
Its:_____________________________________
cc: Riviera Holdings Corporation
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