EXHIBIT 10.5
AMENDED AND RESTATED JOINT BIDDING AGREEMENT
AMENDED AND RESTATED JOINT BIDDING AGREEMENT (this "Agreement"),
dated as of April 5, 2006, among Flag Luxury Riv, LLC, a Delaware limited
liability company ("Flag"), Rivacq LLC, a Delaware limited liability company
("Rivacq"), High Desert Gaming LLC, a Delaware limited liability company ("High
Desert"), and RH1, LLC, a Nevada limited liability company ("RH1", and together
with Flag, Rivacq and High Desert, 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");
WHEREAS, for purposes of consummating the Acquisition, the Bidders
have formed Riv Acquisition Holdings Inc. ("Holdco"), a Delaware corporation,
and Riv Acquisition Inc. ("Merger Sub"), a Nevada corporation and a wholly-owned
subsidiary of Holdco;
WHEREAS, the Bidders currently contemplate that the Acquisition
would be effected by a merger of Merger Sub with and into the Company;
WHEREAS, prior to the Acquisition, the Bidders may wish to acquire
additional blocks of Shares;
WHEREAS, in order 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, Flag, Rivacq and High Desert have entered into a Joint Bidding
Agreement, dated as of December 22, 2005 (the "Original Agreement");
WHEREAS, RH1 wishes to become a party to the Original Agreement;
WHEREAS, the Bidders wish to amend and restate the Original
Agreement in its entirety, upon the terms and subject to the conditions set
forth below; and
WHEREAS, capitalized terms used but not otherwise defined herein
shall have the respective meanings ascribed thereto in the Agreement and Plan of
Merger, dated as of the date hereof, 2006, among Holdco, Merger Sub and the
Company (the "Acquisition Agreement").
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
AMENDMENT AND RESTATEMENT OF ORIGINAL AGREEMENT
Section 1.01 Amendment and Restatement of Original Agreements. The
Original Agreement is hereby amended and restated upon the terms set forth in
this Agreement, and the Original Agreement is hereby terminated and is of no
further force and effect.
ARTICLE II
AGREEMENTS REGARDING THE ACQUISITION
Section 2.01 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) 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, (ii) vote
(cause to be voted), at any meeting of stockholders of the Company, all of the
Shares held by them and their respective Affiliates in favor of the approval of
the Acquisition, the Acquisition Agreement and all other transactions
contemplated by the foregoing and (iii) take all other 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) Subject to Section 2.02(g), 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 2.02 Ownership of Holdco. (a) The shares, membership
interests or other equity interests of Holdco shall be respectively owned by the
Bidders in accordance with the following percentages:
-----------------------------------------------------------------------------
Flag 20%
-----------------------------------------------------------------------------
Rivacq 30%
-----------------------------------------------------------------------------
High Desert 30%
-----------------------------------------------------------------------------
RH1 20%
-----------------------------------------------------------------------------
In the event that the Bidders determine that they shall contribute equity
financing to Holdco for the Acquisition, such equity financing shall be
contributed in the foregoing proportions. In addition, any deposit payable by
Holdco under the Acquisition Agreement, including any increase in the amount of
such deposit, shall be funded by the Bidders in the foregoing proportions.
(b) In the event that a Gaming Problem (as defined below) occurs
with respect to any Bidder (such Bidder being an "Exiting Bidder") and remains
uncured for 30 days
-2-
following such occurrence, the shares, membership interests or other equity
interests in Holdco of such Exiting Bidder shall be divided between the
remaining Bidders in proportion to their respective equity interests in
Holdcoand the percentages set forth in Section 2.02(a) shall be revised
accordingly. If, after the date hereof but prior to the consummation of the
Acquisition, Holdco acquires any Shares, each remaining Bidder shall promptly
pay to the Exiting Bidder consideration for the equity interest in Holdco
transferred to such remaining Bidder in an amount equal to the product of (i)
the product of (A) the number of Shares held by Holdco multiplied by (B) $15.00
per Share plus interest thereon at the Interest Rate (as defined below)
multiplied by (ii) the percentage of such remaining Bidder's equity interest in
Holdco. The Exiting Bidder shall also promptly transfer (or cause to be
transferred) to Holdco all of the Shares held by such Exiting Bidder and its
Affiliates (excluding Holdco and excluding any Shares held by such Exiting
Bidder or its Affiliates as of December 22, 2005) at a purchase price of $15.00
per Share plus interest thereon at Interest Rate. Such purchase price shall be
funded by the remaining Bidders in proportion to their respective equity
interests in Holdco. The Exiting Bidder shall also promptly assign all of its
rights and obligations under the ▇▇▇▇▇▇▇▇▇ Stock Purchase Agreement to Holdco.
An Exiting Bidder shall be deemed to have provided a notice of termination to
the other Bidders pursuant to Section 7.02.
(c) 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, the Bidders shall coordinate such
acquisitions with the result that each of the Bidders and its Affiliates shall
hold the percentage set forth opposite such Bidder's name in subsection 2.02(a)
(as such percentage may be revised pursuant to Section 2.02(b) or 7.02) 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.
(d) "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.
(f) "Gaming License" means any license or other authorization or
permit necessary to own or operate the Company or any Company Subsidiary or any
of their respective assets or properties or to consummate the Acquisition.
(g) "Gaming Problem" means (i) a determination by any Gaming
Authority that any Bidder or any Key Person does not satisfy any suitability,
eligibility or other qualification criteria pursuant to any applicable Gaming
Laws with respect to a Gaming License, including any character or suitability
criteria thereunder, (ii) a determination by any Gaming Authority that a Bidder
or a Key Person must divest itself of any direct or indirect interest in, or
-3-
disassociate itself from, Holdco, any Bidder or its Affiliates, or (iii)
circumstances such that any Bidder or Bidders (or one or more of its Key
Persons) would be likely, based on verifiable information received from any
Gaming Authority or otherwise with respect to such Bidder or Bidders or Key
Person or Key Persons, in the reasonable discretion of all other Bidders, to
preclude or materially delay, impede or impair the ability of Holdco, any Bidder
or any Key Person of the foregoing to obtain, retain or renew a Gaming License,
or such as may result in the imposition of materially burdensome terms and
conditions on, or the revocation or suspension of, such a Gaming License. For
the avoidance of doubt, the imposition of monetary fines by a Gaming Authority
will not generally constitute a "Gaming Problem" unless accompanied by one of
the three factors set forth in the preceding sentence.
(h) "Interest Rate" means an interest rate equal to the U.S. High
Yield Index published by ▇▇▇▇▇▇ Brothers, calculated daily, commencing on
January 6, 2006 and ending (A) in the case of any Shares acquired from an
Exiting Bidder, the date upon which such Exiting Bidder became an Exiting Bidder
or (B) in the case of any Shares acquired from a Seller, the date of delivery of
the applicable Offer Notice to the Eligible Bidders pursuant to Section 6.01(a).
(i) "Key Person" means any person or other entity holding a direct
or indirect equity interest in any Bidder, or any director, officer, partner,
member or manager of such person or other entity.
Section 2.03 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 Holdco and Merger Sub to comply with their
obligations under the Acquisition Agreement.
(c) With respect to any provisions of the Acquisition Agreement that
grant rights or impose obligations on Holdco or Merger Sub, such rights shall be
exercised and such obligations shall be discharged by Holdco or Merger Sub, as
the case may be, acting by unanimous consent of the Bidders.
Section 2.04 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.
-4-
ARTICLE III
EXPENSES
Section 3.01 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 2.02(a), whether or not the Acquisition shall
have occurred; provided, however, that if a Bidder provides a notice of
termination to the other Bidders in accordance with Section 7.02, (i) 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 3.02 with
respect to costs and expenses incurred with respect to consultants, (ii) in the
event the Acquisition is consummated, the remaining Bidders shall, promptly
following such consummation, reimburse such Bidder, in proportion to their
respective equity interests in Holdco, for such Bidder's contribution to any
deposit paid by Holdco to the Company in connection with the Acquisition
(excluding any interest or other return on such deposit) and (iii) in the event
that any such deposit is returned to Holdco by the Company, Holdco shall return
to such Bidder the portion of such deposit that was funded by such Bidder
(excluding any interest or other return on such deposit).
Section 3.02 Consultants Deposit. The Bidders shall enter into an
escrow agreement with Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ 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 2.02(a),
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 7.02, 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 (including, for the purpose of
this Section 3.02, an Exiting Bidder) shall be entitled to receive its share of
the remaining amount of the Consultants Deposit in the proportions set forth in
Section 2.02(a) (without giving effect to any revision of such proportions
pursuant to Section 2.02(b)).
Section 3.03 Termination Fee and Expense Reimbursement. In the event
any termination fee or expense reimbursement becomes payable by the Company to
Holdco under the Acquisition Agreement, such fee or reimbursement shall be
allocated to the Bidders that at such time continue to hold equity interests in
Holdco pro rata in accordance with such equity interests.
-5-
ARTICLE IV
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 4.01 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 4.02 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 4.03 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.
Section 4.04 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.
-6-
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.01 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 5.01, 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 5.01 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 5.02 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 5.03 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 5.04 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 and other papers, as
may be required to carry out the provisions of this Agreement and consummate and
make effective the transactions contemplated hereby.
-7-
ARTICLE VI
RESTRICTIONS ON TRANSFER
Section 6.01 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 held by such Bidder as of December 22, 2005) to any
person other than Holdco or an Affiliate of the Seller, the Seller shall deliver
to each of the other Bidders (the "Eligible Bidders") a notice (an "Offer
Notice") stating that the Seller desires to transfer such Shares and the number
of Shares to be so transferred (the "Offered Shares"), which Offer Notice shall
constitute an offer to such Eligible Bidders to sell such Offered Shares at a
price of $15.00 per Share together with interest thereon at the Interest Rate
(the "Offer Price").
(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) its Percentage
(as defined below) of the Offered Shares if there are two or more Eligible
Bidders or (B) all of the Offered Shares in the event there is one Eligible
Bidder and (ii) if there are two or more Eligible Bidders, the Offered Shares
offered to the other Eligible Bidders in the event that such other Eligible
Bidder does not elect to purchase such Offered Shares in accordance with this
subsection 6.01(b). Each Eligible Bidder wishing to purchase Offered Shares
shall provide a notice (an "Acceptance Notice") to the Seller and to the other
Eligible Bidders, 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 each other Eligible
Bidder in the event that one or more of such other Eligible Bidders do not elect
to purchase such Offered Shares). For purposes of this Section 6.01, any
Eligible Bidder's "Percentage" means the fraction obtained by dividing the
number of equity interests in Holdco held by such Eligible Bidder by the number
of equity interests in Holdco held by all of the Eligible Bidders.
(c) If any Eligible Bidders have accepted to purchase all of the
Offered Shares in accordance with subsection 6.01(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 each
Eligible Bidder that has accepted to purchase Offered Shares, all of the Offered
Shares that such Eligible Bidder has accepted to purchase, 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
(d) In the event that the Eligible Bidders have not accepted to
purchase all of the Offered Shares in accordance with subsection 6.01(b), then
all (but not less than all) of the Offered Shares not accepted for purchase by
Eligible Bidders may be sold to a third party; provided that (i) such sale shall
be consummated not later than 30 days following delivery of such Offer Notice to
the Eligible Bidders and (ii) if such sale occurs prior to the Company
Stockholders Meeting, such third party shall have delivered to Holdco (A) its
written agreement to vote (or cause to be voted), at any meeting of stockholders
of the Company, all of such Offered Shares in favor of the approval of the
Acquisition, the Acquisition Agreement and all
-8-
other transactions contemplated by the foregoing and (B) an irrevocable proxy in
favor of Holdco to vote such Offered Shares at the Company Stockholders Meeting,
in form and substance reasonably acceptable to the Eligible Bidders.
ARTICLE VII
GENERAL PROVISIONS
Section 7.01 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 7.01):
(a) if to Flag:
Flag Luxury Riv, LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
(b) if to Rivacq:
Rivacq LLC
c/o Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(c) if to High Desert:
High Desert Gaming, LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
(d) if to RH1:
RH1, LLC
Torino Companies
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-9-
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ Torino
in each case, with a copy to:
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Section 7.02 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 Sections 1.01, 2.01(a)(ii),
2.01(a)(iii), 2.02(b), 2.03(a), 5.01 and 5.02 and Articles VI and VII shall
survive any such termination. Any Bidder providing a notice of termination to
the other Bidders under this Section 7.02 shall promptly assign all of its
rights and obligations under the ▇▇▇▇▇▇▇▇▇ Stock Purchase Agreement to Holdco.
Immediately following delivery of such notice of termination, the shares,
membership interests or other equity interests in Holdco of such Bidder shall be
divided among the remaining Bidders in proportion to their respective equity
interests in Holdco and the percentages set forth in Section 2.02(a) shall be
revised accordingly. In the event that after the date hereof but prior to the
consummation of the Acquisition, Holdco acquires any Shares, each remaining
Bidder shall promptly pay to the Bidder who provided a notice of termination
under this Section 7.02 consideration for the equity interests in Holdco, which
shall be calculated in accordance with the second sentence of Section 2.02(b).
Section 7.03 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 7.04 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 7.05 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 7.06 Assign ment. 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
-10-
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 7.07 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 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 7.08 No Third Party Beneficiaries. Except for the provisions
of Section 5.02 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 7.09 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 7.10 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 7.11 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
-11-
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 7.11.
Section 7.12 Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties 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.]
-12-
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/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
RIVACQ LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
HIGH DESERT GAMING LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: ▇▇▇▇▇▇▇
▇▇▇, LLC, by its sole member, ONIROT
Living Trust dated 06/20/2000
By: /s/ ▇▇▇▇▇ Torino
------------------------------------
Name: ▇▇▇▇▇ Torino
Title: Trustee
Schedule 3.02
Escrow Agreement