SECURITY AGREEMENT
THIS SECURITY AGREEMENT is made and entered into this 13th day
of August, 1997 (as amended from time to time, the "Security Agreement"), by and
between RIVIERA HOLDINGS CORPORATION, a Nevada corporation ("Company"), RIVIERA
OPERATING CORPORATION, a Nevada corporation ("ROC"), RIVIERA GAMING MANAGEMENT,
INC., a Nevada corporation ("RGM"), RIVIERA GAMING MANAGEMENT OF COLORADO, INC.,
a Colorado corporation ("RGMC"), and RIVIERA GAMING MANAGEMENT-ELSINORE, INC., a
Nevada corporation ("Riviera-Elsinore") (each individually, a "Grantor", and
collectively "Grantors") and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as
collateral agent under the Indenture (as defined below) for the benefit of the
holders of the Notes (as defined below) ("Secured Party").
RECITALS
A. Notes. 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 (together with all Subsidiary Guarantees executed in
connection therewith, the "Indenture") by and among Secured Party, Company, and
ROC, RGM, RGMC, and Riviera-Elsinore, as guarantors. Any capitalized term used
in this Security Agreement without definition, but defined in the Indenture,
shall have the same meaning here as in the Indenture.
B. Deed of Trust. Secured Party is the beneficiary under a Deed of
Trust, Assignment of Rents, Leases, Fixture Filing and Security Agreement, dated
of even date herewith (the "Deed of Trust"), by and among Secured Party, United
Title Company of Nevada, a Nevada corporation, as Trustee thereunder, and the
Company, as Trustor thereunder, pursuant to which the Company granted to United
Title Company of Nevada for the benefit of Secured Party a security interest in
certain real property owned by the Company and located at 0000 Xxx Xxxxx
Xxxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxx, and all additions thereto and improvements
thereon (the "Riviera Property").
C. Stock Pledge Agreements. Secured Party is the trustee under (i)
a Stock Pledge Agreement, dated as of even date herewith (the "Company Stock
Pledge Agreement"), executed by Company on behalf of Secured Party, pursuant to
which Company pledged to Secured Party its 100% interest in ROC, (ii) a Stock
Pledge Agreement, dated as of even date herewith (the "ROC Stock Pledge
Agreement"), executed by ROC on behalf of Secured Party, pursuant to which ROC
pledged to Secured Party its 100% interest in RGM, and (iii) a Stock Pledge
Agreement, dated as of even date herewith (the "RGM Stock Pledge Agreement" and
together with the Company Stock Pledge Agreement and the ROC Stock Pledge
Agreement, the "Stock Pledge Agreements"), executed by RGM on behalf of Secured
Party pursuant to which RGM pledged to Secured Party its 100% interest in
Riviera-Elsinore, and its 100% interest in RGMC.
D. Account Agreement. Secured Party, Company and U.S. Bank of
Nevada (the "Bank") shall enter into a Restricted Account Agreement (the
"Account Agreement"), pursuant to which the Company shall create a restricted
account at the Bank for the deposit of the
proceeds from the sale of the Notes and shall grant Secured Party a security
interest in such account. This Security Agreement, the Deed of Trust, the Stock
Pledge Agreements, and the Account Agreement, together with any similar
documents executed after the date hereof pursuant to Section 4.18 of the
Indenture, are referred to herein as the "Collateral Documents."
E. Purpose. As a material inducement to Secured Party to enter into
the Indenture, Grantors have agreed to execute this Security Agreement in favor
of Secured Party and to jointly and severally pledge all of their right, title
and interest in the property described herein to Secured Party.
AGREEMENT
Now therefore, in consideration of the above recitals and the
mutual covenants hereinafter set forth, the parties hereto agree as follows:
1. Creation of Security Interest. Each Grantor hereby assigns,
pledges and grants to Secured Party a security interest in all of such Grantor's
right, title and interest in and to the collateral described in Section 2
hereinbelow (the "Collateral") in each case whether now owned or hereafter
acquired by such Grantor in order to secure the payment and performance of the
obligations of such Grantor to Secured Party described in Section 3 hereinbelow.
2. Collateral. The Collateral under this Security Agreement
is:
(a) all of each Grantor's personal property, equipment,
supplies, building and other materials of every nature whatsoever and all other
personal property wherever located, including, but not limited to, all general
equipment and devices which are or are to be installed and used in connection
with the operation of the Riviera Hotel & Casino and the Riviera Property, all
computer equipment, calculators, adding machines, and any other electronic
equipment of every nature used or located at the Riviera Property, all fixtures,
appurtenances and personal property now or in the future contained in, used in
connection with, attached to, or otherwise useful or convenient to the use,
operation, or occupancy of, or placed on, but unattached to, any part of the
Riviera Property, whether or not the same constitutes real property or fixtures
in the State of Nevada, including, without limitation, all removable window and
floor coverings, all furniture and furnishings, heating, lighting, plumbing,
ventilating, air conditioning, refrigerating, incinerating and elevator and
escalator plants, machinery, equipment and appliances, cooking facilities,
vacuum cleaning systems, telephone, television, public address and
communications systems, sprinkler systems and other fire prevention and
extinguishing apparatus and materials, motors, machinery, pipes, appliances,
equipment, fittings, fixtures, and building materials, together with all
venetian blinds, shades, draperies, drapery and curtain rods, brackets, bulbs,
cleaning apparatus, mirrors, lamps, ornaments, cooling apparatus and equipment,
ranges and ovens, garbage disposals, dishwashers, mantels, and any and all such
property, including, without limitation, all parts thereof and accessions
thereto, which is at any time installed in, affixed to or placed upon the
Riviera Property (all of the foregoing property and similar or after-acquired
property included as Collateral under Section 2(h) below being hereinafter
referred to as "FF&E");
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(b) all of each Grantor's chattel paper, including writings
that evidence both a monetary obligation and a security interest in or lease of
specific goods, instruments, promissory notes, acceptances, drafts, checks,
certificates of deposit and other writings that evidence a right to the payment
of money by an other Person, in each case whether now existing or hereafter
arising and wherever arising and whether or not earned by performance
(collectively, the "Receivables"), other general intangibles, documents of
title, warehouse receipts, leases, tax refund claims, partnership interests,
indemnification and other similar claims and contract rights, permits and
licenses, including, without limitation, any licenses held or to be held by such
Grantor necessary to operate the Riviera Hotel & Casino or conduct business on
the Riviera Property (other than any gaming or other licenses in which a
security interest cannot be granted without the consent of third parties and no
such consent has been given), franchises, certificates, stock, and all rights
in, to and under all security agreements, mortgages, deeds of trust, guarantees,
leases and other agreements or contracts securing or otherwise relating to any
of the foregoing (all of the foregoing property, including, without limitation,
the Receivables, and similar or after-acquired property included as Collateral
under Section 2(h) below being hereinafter referred to as "Intangibles");
(c) all of the trademarks and service marks now held or
hereafter acquired by each Grantor, which are registered in the United States
Patent and Trademark Office or in any similar office or agency of the United
States or any state thereof or any political subdivision thereof and any
application for such trademarks and service marks, as well as any unregistered
marks used by such Grantor in the United States and trade dress including logos,
designs, trade names, business names, fictitious business names and other
business identifiers in connection with which any of these registered or
unregistered marks are used in the United States ("Marks") together with the
registration and right to renewals thereof, and the goodwill of the business of
such Grantor symbolized by the Marks and all licenses associated therewith;
(d) all United States copyrights which each Grantor now or
hereafter has registered with the United States Copyright Office, as well as any
application for a United States copyright registration now or hereafter made
with the United States Copyright Office by such Grantor ("Copyrights");
(e) all patents and patent applications of each Grantor,
which are now or hereafter pending or granted by the United States Patent and
Trademark Office or any successor thereto ("Patents") or to which such Grantor
now or hereafter has title and any divisions or continuations thereof, as well
as all renewals thereof;
(f) all computer programs created by or for each Grantor and
which such Grantor owns the copyright with respect thereto and all intellectual
property rights therein and all other proprietary information of such Grantor,
including, but not limited to, trade secrets;
(g) all of the agreements to which each Grantor may be a
party from time to time, as such agreements may be amended or otherwise modified
from time to time (collectively, the "Assigned Agreements"), including, without
limitation, (i) all rights of such Grantor to receive moneys due and to become
due under or pursuant to the Assigned Agreements, (ii) all rights of such
Grantor to receive proceeds of any insurance, indemnity,
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warranty or guaranty with respect to any of the Collateral or the Assigned
Agreements, (iii) claims of such Grantor for damages arising out of or for
breach of or default under the Assigned Agreements, and (iv) the right of such
Grantor to terminate the Assigned Agreements, to perform thereunder and to
compel performance and otherwise exercise all remedies thereunder; and
(h) the Collateral includes all items described in this
Section 2, whether now owned or hereafter at any time acquired by each Grantor
and wherever located, and includes all replacements, additions, parts,
appurtenances, accessions, substitutions, repairs, proceeds, products,
offspring, rents and profits, relating thereto or therefrom, and all documents,
records, ledger sheets and files of such Grantor relating thereto. Proceeds
hereunder include (i) whatever is now or hereafter receivable or received by
each Grantor upon the sale, exchange, collection or other disposition of any
item of Collateral, whether voluntary or involuntary, whether such proceeds
constitute FF&E, Intangibles, or other assets; (ii) any such items which are now
or hereafter acquired by such Grantor with any proceeds of Collateral hereunder;
and (iii) any insurance or payments under any indemnity, warranty or guaranty
now or hereafter payable by reason of loss or damage or otherwise with respect
to any item of Collateral or any proceeds thereof.
Notwithstanding the foregoing, "Collateral", "FF&E", "Receivables" and
"Intangibles" shall not include any of the following assets (the "Excluded
Assets"): (i) any accounts, as such term is defined in Section 9-106 (Nevada
Revised Statute ("NRS") 104.9106) of the UCC, and any credit instruments, as
such term is defined in NRS 463.01467; (ii) any slot machines, gaming tables and
other gaming devices, as defined in NRS 463.0155, any cashless wagering system
as defined in NRS 463.014 and associated equipment as defined in NRS 463.0136
(collectively, the "Gaming Equipment") wherever located; (iii) any inventory, as
such term is defined in Section 9-109 (NRS 104.9109) of the Uniform Commercial
Code (the "UCC"), wherever located; (iv) any FF&E subject to Liens in existence
as of the date of the Indenture (as defined in the Indenture) securing
indebtedness in existence as of the date of the Indenture; (v) any agreement
with a third party that, pursuant to its terms, prohibits the grant of a lien on
such agreement, to the extent that such third party has not consented to the
liens created hereby; (vi) any Collateral which is subject to an agreement with
a third party that, pursuant to its terms, prohibits the grant of a lien on such
Collateral, to the extent that such third party has not consented to the liens
created hereby; (vii) Gaming Licenses (as defined in the Indenture) or any other
governmental approval or permit, to the extent that, under the terms and
conditions of such approval or under applicable law, it cannot be subjected to a
Lien in favor of the Secured Party without the approval of the relevant
governmental authority, to the extent that such approval has not been obtained;
(viii) any FF&E (A) the purchase of which was not financed with the proceeds of
the Notes and (B) that a Grantor is permitted to encumber and has encumbered
pursuant to clause (ii) of the second paragraph of Section 4.10 of the Indenture
and subject to clauses (v) and (vii) of the definition of "Permitted Liens" in
the Indenture; and (ix) any personal property which any Grantor is prohibited
from pledging under applicable law.
3. Secured Obligations of Grantor. The Collateral of each
Grantor secures and shall hereafter secure (i) the payment by such Grantor to
the Holders or Secured Party of all indebtedness now or hereafter owed to
Secured Party by such Grantor in connection with the Notes, the Indenture, and
the Collateral Documents executed by such Grantor (the "Riviera
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Financing"), whether at stated maturity, by acceleration or otherwise,
including, without limitation, each Grantor's obligations under the Indenture,
the Notes, the Collateral Documents or any related documents securing the
obligations thereunder, together with any interest thereon, fees, expenses,
Liquidated Damages, indemnification or otherwise, in connection therewith and
extensions, modifications and renewals thereof, (ii) the performance by each
Grantor of all other obligations and the discharge of all other liabilities of
such Grantor to Secured Party of every kind and character arising from the
Riviera Financing, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, joint, several and joint and
several, and whether created under this Security Agreement, the other Collateral
Documents or any other agreement to which such Grantor and Secured Party are
parties, (iii) any and all sums advanced by Secured Party in order to preserve
the Collateral or preserve Secured Party's security interest in the Collateral
(or the priority thereof) and (iv) the expenses of retaking, holding, preparing
for sale or lease, selling or otherwise disposing of or realizing on the
Collateral, of any proceeding for the collection or enforcement of any
indebtedness, obligations or liabilities of Secured Party referred to above, or
of any exercise by Secured Party of its rights hereunder, together with
reasonable attorneys' fees and disbursements and court costs (collectively, the
"Secured Obligations"). All payments and performance by each Grantor with
respect to any Secured Obligations shall be in accordance with the terms under
which said indebtedness, obligations and liabilities were or are hereafter
incurred or created.
4. Grantors' Representations and Warranties. Each Grantor
represents and warrants that:
(a) with respect to Collateral other than Marks, such Grantor
is (or, to the extent that the Collateral is acquired after the date hereof,
will be) the sole legal and beneficial owner of the Collateral to the extent of
its respective interest therein; with respect to the Marks listed in Annex C (as
such Annex may be amended from time to time), such Grantor is the registrant or
applicant of record, and with respect to registered Marks has the exclusive
right to use the Marks in commerce in the United States on or in connection with
the goods or services specified in the certificate of registration; there are no
security interests in, liens, charges or encumbrances on, or adverse claims of
title to, or any other interest whatsoever in, the Collateral to the extent of
its respective interest therein or any portion thereof except Permitted Liens
(as defined in the Indenture, including without limitation Liens that are
created by this Security Agreement); and no financing statement, notice of lien,
mortgage, deed of trust or instrument similar in effect covering the Collateral
to the extent of its respective interest thereof or any portion thereof or any
proceeds thereof ("Lien Notice") exists or is on file in any public office,
except as relates to Permitted Liens, including without limitation liens as may
have been filed in favor of Secured Party relating to this Security Agreement or
related agreements, or for which duly executed termination statements have been
delivered to Secured Party for filing;
(b) such Grantor has full right, power and authority to
execute, deliver and perform this Security Agreement. This Security Agreement
constitutes a legally valid and binding obligation of such Grantor, enforceable
against such Grantor in accordance with its terms. Subject to the completion of
the items identified in Section 4(c) below (and except to the extent that
registration of motor vehicles, possession of checks and instruments not
required to be delivered under Sections 4(g) and 5(c) are required for
perfection), the provisions of this
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Security Agreement are effective to create in favor of Secured Party a valid and
enforceable first, prior and perfected security interest in the Collateral to
the extent of such Grantor's interest therein subject only to Permitted Liens;
(c) except for (i) the filing or recording of the financing
statements and fixture filings done concurrently with the execution and delivery
hereof and the filing of any continuation statements and replacement financing
statements as required in Section 5 below, (ii) the actual taking of possession
of instruments constituting Collateral by the Secured Party hereunder, (iii) all
consents received and actions taken in connection with the closing of the
offering of the Notes, (iv) the actions contemplated by the parenthetical in the
third sentence of Section 4(b), and (vi) any filings necessary to perfect
Secured Party's security interest in any Patent, Trademark or Copyright, no
authorization, approval or other action by, no notice to or registration or
filing with, any person or entity, including without limitation, any stockholder
or creditor of such Grantor or any governmental authority or regulatory body is
required (x) for the grant by such Grantor of the security interest in the
Collateral to the extent of its interest therein pursuant to this Security
Agreement or for the execution, delivery or performance of this Security
Agreement by such Grantor, (y) for the perfection or maintenance of such
security interest created hereby, including the first priority nature of such
security interest subject to Permitted Liens, or (except for notices required
under the UCC) the exercise by Secured Party of the rights and remedies provided
for in this Security Agreement (other than any required governmental consent or
filing with respect to any Patents, Trademarks, Copyrights, governmental claims,
tax refunds, licenses or permits; or the exercise of remedies requiring prior
court approval, notices, consents, approvals or authorizations in connection
with the sale of any securities under laws affecting the offering and sale of
securities generally), or (z) for the enforceability of such security interest
against third parties, including, without limitation, judgment lien creditors;
(d) except as indicated on Annex A, such Grantor does not do
business, and for the previous five years has not done business, under any
fictitious business names or trade names;
(e) the Collateral, to the extent of such Grantor's interest
therein, has not been and will not be used or bought by such Grantor for
personal, family or household purposes. In addition, the Collateral does not
include crops, timber, farm products, minerals or the like or accounts resulting
from the sale of such minerals at the wellhead or minehead;
(f) (i) such Grantor's chief executive office is located at
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxx 00000, such Grantor has no
places of business other than such address and other places of business
indicated on Annex B (as such Annex may be amended from time to time) and the
Collateral, to the extent of such Grantor's interest therein, is now and will at
all times hereafter be located at such Grantor's places of business or as such
Grantor may otherwise notify Secured Party in writing;
(g) all originals of all promissory notes, other instruments
or chattel paper which evidence the Receivables with a face or fair market value
in each case in excess of $1,000,000 have been or shall be delivered to Secured
Party (with all necessary or appropriate endorsements);
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(h) none of the execution, delivery and performance of this
Security Agreement by such Grantor, the consummation of the transactions herein
contemplated, the fulfillment of the terms hereof or the exercise by Secured
Party of any rights or remedies hereunder will constitute or result in a breach
of any of the terms or provisions of, or constitute a default under, or
constitute an event which with notice or lapse of time or both will result in a
breach of or constitute a default under, any material agreement, indenture,
mortgage, deed of trust, equipment lease, instrument or other document to which
such Grantor is a party, conflict with or require approval, authorization,
notice or consent under any material law, order, rule, regulation, license or
permit applicable to such Grantor of any court or any federal or state
government, regulatory body or administrative agency, or any other governmental
body having jurisdiction over such Grantor or its properties or require notice,
consent, approval or authorization by or registration or filing with any person
or entity (including, without limitation, any stockholder or creditor of such
Grantor) other than (i) any notices to such Grantor or any Guarantor from
Secured Party required hereunder, (ii) notices and filings in connection with
the perfection of Liens hereunder and (iii) notices, consents, approvals or
authorizations in connection with the sale of any securities under laws
affecting the offering and sale of securities generally. Except for documents
entered into in connection with Permitted Liens or Indebtedness permitted under
Section 4.10 of the Indenture, none of the Collateral, to the extent of such
Grantor's interest therein, is subject to any material agreement, indenture,
mortgage, deed of trust, equipment lease, instrument or other document to which
such Grantor is a party which may restrict or inhibit Secured Party's rights or
ability to sell or dispose of the Collateral, to the extent of such Grantor's
interest therein, or any part thereof after the occurrence of an Event of
Default (as defined herein);
(i) the Marks listed in Annex C (as such Annex may be amended
from time to time) include all the United States federal registrations or
applications filed in the United States Patent and Trademark Office by such
Grantor and said registered Marks are valid, subsisting and have not been
cancelled. Such Grantor represents and warrants that except as indicated on
Annex C, to the best of its knowledge, it has common law trademark rights in or
is licensed to use or not prohibited from using all material Marks that it uses.
Such Grantor further warrants that except as indicated on Annex C, it is aware
of no third party claim that any material aspect of such Grantor's present or
contemplated business operations infringes or will infringe such Grantor's Xxxx;
and
(j) such Grantor represents and warrants that it is the true
and lawful exclusive owner or licensee of all rights in the Patents listed in
Annex D hereto (as such Annex may be amended from time to time) and in the
Copyrights listed in Annex E hereto (as such Annex may be amended from time to
time), that said Patents include all the United States patents and applications
for United States patents that such Grantor owns and that said Copyrights
constitute all the United States copyrights registered in the United States
Copyright Office and applications for United States copyrights that it now uses
or practices under. Such Grantor further warrants that, except as indicated on
Annex D or Annex E, it is aware of no third party claim that any material aspect
of such Grantor's present or contemplated business operations infringes or will
infringe any Patent or any copyright.
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5. Covenants of Grantor. Each Grantor covenants and agrees
that:
(a) such Grantor will not move or permit to be moved the
Collateral, to the extent of its interest therein, or any portion thereof to any
location other than that set forth in or referred in Section 4(f) hereof or
locations established in compliance with Section 5(b) hereof without the prior
written notice to Secured Party and the prior filing of a financing statement
with the proper office and in the proper form, to the extent necessary or
appropriate, to perfect or continue the perfection (without loss of priority) of
the security interests created herein, which filing shall be satisfactory in
form, substance and location to Secured Party prior to such filing; provided,
however that (i) such Grantor shall be permitted to move assets pursuant to
Section 4.11 of the Indenture and (ii) the foregoing shall not apply to
intangible Collateral or any vehicles included in the Collateral;
(b) such Grantor will not voluntarily or involuntarily change
its name, identity, corporate structure, or location of its chief executive
office or any of its other places of business, unless in any such case (i) such
Grantor shall have delivered written notice to Secured Party, (ii) such Grantor
shall have executed and caused to be filed financing statements with the proper
offices and in the proper form, to the extent necessary or appropriate, to
perfect or continue the perfection (without loss of priority) of the security
interests created herein, which filing shall be satisfactory in form, substance
and location to Secured Party prior to such filing, and (iii) such Grantor shall
have delivered to Secured Party any other documents that may be required by
Secured Party in a form and substance reasonably satisfactory to Secured Party
to perfect or continue the perfection (without loss of priority) of the security
interest created herein.;
(c) such Grantor will promptly take any action which is
necessary or, in the judgment of Secured Party, desirable or appropriate to
perfect or to continue the perfection, priority and enforceability of Secured
Party's security interests in the Collateral, to the extent of such Grantor's
interests therein, to enable Secured Party to exercise and enforce its rights
and remedies hereunder with respect to any Collateral, to protect the Collateral
against the rights, claims or interests of third persons (other than holders of
Permitted Liens), or to effect or to assure further the purposes and provisions
of this Security Agreement, and will pay all costs incurred in connection
therewith. Without limiting the generality of the foregoing, such Grantor will:
(i) xxxx conspicuously each item of chattel paper included in the Collateral, to
the extent of its interests therein, with a legend, in form and substance
satisfactory to Secured Party, indicating that such chattel paper and other
contracts are subject to the security interests granted hereby; (ii) execute and
file such financing or continuation statements, or amendments thereto, and such
other instruments or notices as may be necessary or desirable, which Secured
Party may reasonably request in order to perfect and preserve the perfection and
priority of the security interests granted or purported to be granted hereby;
(iii) if any amounts due such Grantor shall be evidenced by a promissory note or
other instrument or chattel paper, deliver and pledge to Secured Party such note
or instrument or chattel paper duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance reasonably
satisfactory to Secured Party; (iv) if any Collateral, to the extent of such
Grantor's interests therein, is at any time in the possession or control of any
warehouseman, bailee, consignee or any of such Grantor's agents or processors,
such Grantor shall notify such warehouseman, bailee, consignee, agent or
processor of the security interests created or
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purported to be created hereby, shall cause such warehouseman, bailee,
consignee, agent or processor to execute any financing statements or other
documents which Secured Party may request, and, upon the request of Secured
Party after the occurrence and during the continuation of an Event of Default,
shall instruct such person to hold all such Collateral, to the extent of such
Grantor's interests therein, for Secured Party's account subject to Secured
Party's instructions; (v) deliver and pledge to Secured Party all securities and
instruments (other than checks received by such Grantor in the ordinary course
of business) constituting Collateral duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to Secured Party; and (vi) at the request of Secured Party
following the occurrence of a default that, with the passage of time would
result in an Event of Default, deliver to Secured Party any and all certificates
of title, applications for title or similar evidence of ownership of all FF&E
and shall cause Secured Party to be named as lienholder on any such certificate
of title or other evidence of ownership; provided, however, that notwithstanding
anything to the contrary in this Security Agreement, the actions under clauses
(iii) and (v) shall not be required with respect to promissory notes, other
instruments, securities and chattel paper with a face or fair market value not
to exceed $1,000,000;
(d) without the prior written consent of Secured Party or as
otherwise expressly permitted by the Indenture, such Grantor will not in any way
encumber, or hypothecate, or create or permit to exist, any lien, security
interest, charge or encumbrance or adverse claim upon or other interest in the
Collateral, to the extent of its respective interests therein, except for
Permitted Liens, including without limitation encumbrances permitted by the
Indenture and the liens created by this Security Agreement, and such Grantor
will defend the Collateral, to the extent of its interests therein, against all
claims and demands of all persons at any time claiming the same or any interest
therein (other than holders of Permitted Liens), except as expressly provided
herein. Such Grantor will not permit any Lien Notices to exist or be on file in
any public office with respect to all or any portion of the Collateral, to the
extent of such Grantor's interests therein, except, in each case, for Lien
Notices of holders of Permitted Liens including without limitation encumbrances
permitted by the Indenture or except as may have been filed by or for the
benefit of Secured Party relating to this Security Agreement or related
agreements. Such Grantor shall promptly notify Secured Party of any material
attachment or other legal process levied against any of the Collateral, to the
extent of its interests therein, and any information received by such Grantor
relative to the Collateral, which may in any material way affect the value of
the Collateral or the rights and remedies of Secured Party in respect thereto;
(e) without the prior written consent of Secured Party, such
Grantor will not sell, transfer, assign (by operation of law or otherwise),
exchange or otherwise dispose of all or any portion of the Collateral, to the
extent of its interests therein, or any interest therein, except as permitted by
the Indenture and the Collateral Documents. If the proceeds of any such
prohibited sale are notes, instruments, documents of title, letters of credit or
chattel paper, such proceeds shall be promptly delivered to Secured Party to be
held as Collateral hereunder (with all necessary or appropriate endorsements).
If the Collateral, to the extent of such Grantor's interests therein, or any
part thereof or interest therein, is sold, transferred, assigned, exchanged, or
otherwise disposed of in violation of these provisions, the security interest of
Secured Party shall continue in such Collateral or part thereof notwithstanding
such sale, transfer, assignment, exchange or other disposition, and such Grantor
will hold the
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proceeds thereof in a separate account for Secured Party's benefit. Such Grantor
will, at Secured Party's request, transfer such proceeds to Secured Party in
kind;
(f) Secured Party is hereby authorized to file one or more
financing statements or fixture filings, and continuations thereof and
amendments thereto, relative to all or any part of the Collateral, to the extent
of such Grantor's interests therein, without the signature of such Grantor where
permitted by law;
(g) except as expressly permitted by the Indenture, such
Grantor will not enter into any indenture, mortgage, deed of trust, contract,
undertaking, document, instrument or other agreement, except for the Indenture
and any documents, instruments or agreements related thereto or issue any
securities which may restrict or inhibit Secured Party's rights or ability to
sell or otherwise dispose of the Collateral or any part thereof after the
occurrence of an Event of Default;
(h) except as expressly permitted by the Indenture, such
Grantor will pay and discharge all taxes, assessments and governmental charges
or levies against the Collateral, to the extent of its interests therein, prior
to delinquency thereof and will keep the Collateral, to the extent of its
interests therein, free of all unpaid claims and charges (including claims for
labor, materials and supplies) whatsoever;
(i) such Grantor will keep and maintain the Collateral, to the
extent of its interests therein, in good condition, working order and repair,
ordinary wear and tear excepted, and from time to time will make or cause to be
made all repairs, replacements and other improvements in connection therewith
that are, in such Grantor's judgment, necessary or desirable toward such end.
Such Grantor will not misuse or abuse the Collateral, or waste or allow it to
deteriorate except for the ordinary wear and tear of its normal and expected use
in such Grantor's business in accordance with such Grantor's policies as then in
effect (provided that no changes are made to such Grantor's policies as in
effect on the date hereof that would be materially adverse to the interests of
the Secured Party), and will comply with all laws, statutes and regulations
pertaining to the use or ownership of the Collateral where failure to comply
would have a material adverse effect on the Collateral or Secured Party's
interest therein. Such Grantor will promptly notify Secured Party regarding any
loss or damage to any material portion of the Collateral or portion thereof;
(j) upon the occurrence and during the continuation of an
Event of Default, (i) such Grantor will take all actions directed by Secured
Party in Secured Party's sole and absolute discretion (subject to applicable
gaming laws), to create, preserve and enforce any liens or guaranties available
to secure or guaranty payments due such Grantor under any contracts or other
agreements with third parties, will not voluntarily permit any such payments to
become more than thirty (30) days delinquent and will in a timely manner record
and assign to Secured Party, to the extent and at the earliest time permitted by
law, any such liens and rights under such guaranties and (ii) such Grantor will
give Secured Party written notice of any payments due Grantor within five (5)
days after any such payments become thirty (30) days delinquent;
10
(k) except as otherwise provided in this Section 5(k), such
Grantor shall continue to collect, at its own expense, all amounts due or to be
become due such Grantor under the Receivables. In connection with such
collections, such Grantor may take (and upon the occurrence and during the
continuation of an Event of Default, at Secured Party's direction, shall take)
such action as such Grantor may deem necessary or advisable to enforce
collection of the Receivables; provided, however, that such Grantor shall not
adjust, settle or compromise the amount or payment of any Receivable, or release
wholly or partly any debtor or obligor thereof, or allow any credit or discount
thereon, other than adjustments, settlements, or discounts that are in
accordance with such Grantor's policies as then in effect. Secured Party shall
have the right at any time after the occurrence and during the continuation of
an Event of Default to notify the debtors or obligors under any of the
Receivables of the assignment of such Receivables to Secured Party and to direct
such debtors or obligors to make payment of all amounts due or to become due to
such Grantor thereunder directly to Secured Party and, upon such notification
and at the expense of such Grantor, to enforce collection of any such
Receivables, and to adjust, settle or compromise the amount or payment thereof,
as Secured Party may deem appropriate in its sole discretion. After the
occurrence and during the continuation of an Event of Default (i) all amounts
and proceeds (including instruments) received by such Grantor in respect of the
Receivables shall be received in trust for the benefit of Secured Party
hereunder and, upon notice from Secured Party, shall be segregated from other
funds of such Grantor and shall be forthwith paid over to Secured Party in the
same form as so received (with all necessary or appropriate endorsements) to be
held as cash collateral and applied as provided by the Indenture, and (ii) such
Grantor shall not adjust, settle or compromise the amount or payment of any
Receivable, or release wholly or partly any debtor or obligor thereof, or allow
any credit or discount thereon;
(l) upon Secured Party's request, such Grantor will promptly
deliver to Secured Party records and schedules that show the status, condition
and location of the Collateral, to the extent of its interests therein,
including reports reasonably requested by Secured Party, all in reasonable
detail; will promptly notify Secured Party in writing of any event, or change of
law, regulation, business practice, or business condition that may materially
adversely affect the value of the Collateral. Secured Party shall have the right
to review and verify such records, schedules, and notices, and such Grantor will
reimburse Secured Party for all costs incurred thereby;
(m) Secured Party shall have the right during regular business
hours and upon prior reasonable notice to such Grantor to enter into and upon
any premises where any of the Collateral or records with respect thereto are
located for the purpose of inspecting the same, performing any audit, making
copies of records, observing the use of any part of the Collateral, or otherwise
protecting its security interest in the Collateral. Such Grantor will hold and
preserve all records concerning the Receivables and all originals of all chattel
paper that evidences any Receivables;
(n) Secured Party shall have the right at any time while an
Event of Default exists, but shall not be obligated, to make any payments and do
any other acts Secured Party may deem necessary or desirable to protect its
security interest in the Collateral, including, without limitation, the right to
pay, purchase, contest or compromise any encumbrance, charge or lien (excluding
any Permitted Liens) applicable or purported to be applicable to any Collateral
11
hereunder, and appear in and defend any action or proceeding purporting to
affect its security interest in and/or the value of any Collateral, and in
exercising any such powers or authority, the right to pay all expenses incurred
in connection therewith, including attorneys' fees. Such Grantor hereby agrees
that it shall be bound by any such payment made or incurred or act taken by
Secured Party hereunder and shall reimburse Secured Party for all payments made
and expenses incurred under this Security Agreement, which amounts shall be
secured under this Security Agreement. Secured Party shall have no obligation to
make any of the foregoing payments or perform any of the foregoing acts;
(o) subject to the provisions of Section 4(g) above, if such
Grantor shall become entitled to receive or shall receive any instrument,
whether as an addition to, in substitution of, or in exchange for any or all of
the Collateral, to the extent of its interests therein, or any part thereof, or
otherwise, such Grantor shall accept any such instruments as Secured Party's
agent, shall hold them in trust for Secured Party, and shall deliver them
forthwith to Secured Party in the exact form received, with such Grantor's
endorsement when necessary or appropriate, or accompanied by duly executed
instruments of transfer or assignment in blank or, if requested by Secured
Party, an additional pledge agreement or security agreement executed and
delivered by such Grantor, all in form and substance satisfactory to Secured
Party, to be held by Secured Party, subject to the terms hereof, as additional
Collateral to secure the obligations hereunder;
(p) Secured Party is hereby authorized to pay all reasonable
costs and expenses incurred in the exercise or enforcement of its rights
hereunder, including reasonable attorneys' fees, and, while an Event of Default
exists to apply any Collateral or proceeds thereof against such amounts, and
then to credit or use any further proceeds of the Collateral in accordance
herewith;
(q) Secured Party may take any actions permitted hereunder or
in connection with the Collateral by or through agents or employees and shall be
entitled to retain counsel and to act in reliance upon the advice of counsel
concerning all such matters;
(r) such Grantor hereby agrees to take all actions necessary
to maintain Secured Party's first prior security interest (subject to Permitted
Liens) in all Marks, Patents and Copyrights, to the extent of its interests
therein (if any), and such Grantor further agrees to take all actions that it
deems necessary in its reasonable business judgment with respect to any material
Marks, Patents and Copyrights used in and material to its business, to (i)
preserve the value of all such Marks, Patents and Copyrights, to the extent of
its interests therein (if any), (ii) prosecute and defend such Marks, Patents
and Copyrights against infringement, and (iii) provide Secured Party with notice
of any material pertinent information regarding any such infringement, any
material actions with the United States Patent and Trademark Office and any
other information which could have a material adverse effect on such Marks,
Patents and Copyrights. In furtherance of the foregoing:
(i) such Grantor hereby agrees not to assign to a third party
any material Xxxx absent prior written approval of the Secured Party but such
Grantor may cease using any Xxxx which it determines is no longer necessary or
desirable in the conduct of its business or is no longer advisable to use;
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(ii) such Grantor shall, at its own expense, diligently
process all documents required by the Trademark Act of 1946, 15 U.S.C. xx.xx.
1051 et seq. to maintain trademark registration, including but not limited to
affidavits of use and applications for renewals of registration in the United
States Patent and Trademark Office for all of its registered Marks pursuant to
15 U.S.C. xx.xx. 1058(a), 1059 and 1065, and shall pay all fees and
disbursements in connection therewith; provided, that such Grantor shall not be
obligated to maintain any Xxxx in the event that such Grantor determines, in its
reasonable business judgment, that the maintenance of such Xxxx is no longer
necessary or desirable in the conduct of its business or is no longer advisable
to use. Such Grantor agrees to notify the Secured Party with respect to any
registered Xxxx that the affidavits of use or the renewal is being processed or
being abandoned, as the case may be;
(iii) if any Xxxx registration issues hereafter to such
Grantor as a result of any application now or hereafter pending before the
United States Patent and Trademark office such Grantor shall amend Annex C to
this Agreement, confirming the grant thereof hereunder;
(iv) at its own expense, such Grantor shall make timely
payment of all post-issuance fees required pursuant to 35 U.S.C. ss. 41 to
maintain in force rights under each significant Patent owned by such Grantor for
any inventions which it is then using;
(v) at its own expense, such Grantor shall diligently
prosecute all applications for significant Patents owned by such Grantor, if
any, listed in Annex D hereto for any inventions which it is then using;
(vi) within 30 days of acquisition of a Patent or Copyright,
or of filing of an application for a Patent or Copyright, such Grantor shall
deliver to the Secured Party a copy of said Patent or Copyright or such
application, as the case may be, with a grant of security as to such Patent or
Copyright, as the case may be, confirming the grant thereof hereunder; and
(vii) such Grantor hereby agrees not to divest itself of any
right under any significant Copyright absent prior written approval of the
Secured Party.
(s) This Security Agreement, as applied to FF&E subject to an
FF&E Financing Agreement (as defined below), shall be subordinated to the liens
of any FF&E Financing Agreements (or if required by an FF&E Financing Agreement,
it shall be released) and any future or further advances made thereunder and to
any modifications, renewals or extensions thereof to which the lien of this
Security Agreement attaches, provided, however, that any such FF&E Financing
Agreement shall encumber only that FF&E specifically subject to the FF&E
Financing Agreement. Such Grantor covenants and agrees to comply with all of the
terms and conditions set forth in any FF&E Financing Agreement covering FF&E in
which Secured Party has taken a lien hereunder. If, under any FF&E Financing
Agreement covering FF&E in which Secured Party has taken a lien hereunder, such
Grantor shall fail to make any payment of principal of or interest, except where
such Grantor is contesting such payment in
13
good faith, then Secured Party may make such payment of the principal of or
interest on the sums secured by such security interest or may make any payment
in order to perform or observe any other term, covenant, condition or agreement
of any such FF&E Financing Agreement on such Grantor's part to be performed or
observed and any and all sums so expended by Secured Party shall be secured by
this Security Agreement and shall be repaid by such Grantor upon demand,
together with interest thereon at the interest rate on the Notes from the date
of advance. In furtherance of such subordination or release, as applicable,
Secured Party, upon receipt of an officer's certificate from such Grantor
certifying that the requirements of this Section 5(s)) have been satisfied,
shall execute, acknowledge and deliver to such Grantor, at such Grantor's
expense, any and all such evidence and documents necessary to evidence the
subordination or release of this Security Agreement in accordance with the
foregoing provisions of this Section 5(s). As used herein, "FF&E Financing
Agreement" shall mean (A) any financing (i) as to which the lender holds a
security interest in only the assets purchased, fabricated or leased by such
financing for the payment of principal, interest and other amounts in connection
therewith, (ii) which is permitted by the Indenture to be incurred and (iii) the
proceeds of which are used to acquire, construct or lease the FF&E subject to
such security interest, and (B) any refinancing or renewal of any financing
under clause (A).
6. Defaults and Remedies
(a) The occurrence of any "Event of Default" listed
in Section 6.01 of the Indenture shall constitute an Event of Default under this
Security Agreement.
(b) Upon the occurrence and continuation of an Event
of Default hereunder, each Grantor expressly covenants and agrees that Secured
Party may, at its option, subject to the terms of the Indenture, in addition to
other rights and remedies provided herein or otherwise available to it, without
notice to or demand upon such Grantor (except as otherwise required herein),
exercise any one or more of the rights as set forth as follows:
i) in accordance with the provisions in the
Indenture, declare all advances made by Secured Party to such Grantor hereunder,
all other indebtedness owed by such Grantor to Secured Party and all Secured
Obligations to be immediately due and payable, whereupon all unpaid principal
and interest on said advances and other indebtedness and Secured Obligations
shall become and be immediately due and payable;
ii) immediately take possession of any of the
Collateral wherever it may be found or require such Grantor to assemble the
Collateral, to the extent of its respective interests therein, or any part
thereof and make it available at one or more places as Secured Party may
designate, and to deliver possession of the Collateral, to the extent of its
interests therein, or any part thereof to Secured Party, who shall have full
right to enter upon any or all of such Grantor's places of business, premises
and property to exercise Secured Party's rights hereunder;
iii) exercise any or all of the rights and remedies
provided for by the Nevada Uniform Commercial Code, specifically including,
without limitation, the right to recover the attorneys' fees and other expenses
incurred by Secured Party in the enforcement
14
of this Security Agreement or in connection with any Grantor's redemption of the
Collateral. Secured Party may exercise its rights under this Security Agreement
independently of any other collateral or guaranty that any Grantor may have
granted or provided to Secured Party in order to secure payment and performance
of the Secured Obligations, and Secured Party shall be under no obligation or
duty to foreclose or levy upon any other collateral given by such Grantor to
secure any Secured Obligation or to proceed against any guarantor or other
Grantor before enforcing its rights under this Security Agreement against such
Grantor;
iv) use, manage, operate and control the Collateral
and such Grantor's business and property to preserve the Collateral or its
value, or to pay the indebtedness secured hereunder, including, without
limitation, the rights to take possession of all of such Grantor's premises and
property, to exclude such Grantor and any third parties, whether or not claiming
under such Grantor, from such premises and property, to make repairs,
replacements, alterations, additions and improvements to the Collateral and to
dispose of all or any portion of the Collateral in the ordinary course of such
Grantor's business;
v) without notice (except as specified below), sell
the Collateral or any part thereof in one or more parcels at one or more public
or private sales, at any of Secured Party's offices or elsewhere, at such time
or times, for cash, on credit or for future delivery, and at such price or
prices and upon such other terms as shall be commercially reasonable. Such
Grantor acknowledges and agrees that, to the extent notice of sale shall be
required by law, at least fifteen (15) days' written notice to such Grantor of
the time and place of any public sale or of the date on or after which any
private sale is to be made shall constitute reasonable notification. Any public
sale shall be held at such time or times during ordinary business hours and at
such place or places as Secured Party may fix in the notice of such sale.
Notwithstanding the foregoing, Secured Party shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. Secured Party
may, without notice or publication, adjourn any public or private sale, or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for sale or, with respect to a private sale, after which such sale may
take place, and any such sale may, without further notice, be made at the time
and place to which it was so adjourned or, with respect to a private sale, after
which such sale may take place. Each purchaser at any such sale shall hold the
property sold free from any claim or right on the part of such Grantor, and such
Grantor hereby waives, to the full extent permitted by law, all rights of stay
and/or appraisal which such Grantor now has or may at any time in the future
have under any rule of law or statute now existing or hereafter enacted. Such
Grantor also hereby waives any claims against Secured Party arising by reason of
the fact that the price at which any Collateral may have been sold at a private
sale was less than the price which might have been obtained at a public sale,
even if Secured Party accepts the first offer received and does not offer such
Collateral to more than one offeree. The parties hereto agree that the notice
provisions, method, manner and terms of any sale, transfer or disposition of any
Collateral in compliance with the terms set forth herein or any other provision
of this Security Agreement are commercially reasonable;
vi) proceed by an action or actions at law or in
equity to recover the indebtedness secured hereunder or to foreclose this
Security Agreement and sell the Collateral, or any portion thereof, pursuant to
a judgment or decree of a court or courts of competent jurisdiction in any
manner permitted by law, or provided for herein;
15
vii) in the event Secured Party recovers possession
of all or any part of the Collateral pursuant to a writ of possession or other
judicial process, whether prejudgment or otherwise, Secured Party may retain,
sell or otherwise dispose of such Collateral in accordance with this Security
Agreement or the Nevada Uniform Commercial Code, and following such retention,
sale or other disposition, Secured Party may voluntarily dismiss without
prejudice the judicial action in which such writ of possession or other judicial
process was issued. Such Grantor hereby consents to the voluntary dismissal
without prejudice by Secured Party of such judicial action, and such Grantor
further consents to the exoneration of any bond which Secured Party files in
such action;
viii) with respect to the sale of securities
constituting Collateral, to the extent Secured Party deems it advisable to do
so, in its sole discretion or as may be required by applicable law, restrict the
prospective bidders or purchasers to persons who in Secured Party's sole
judgment are sufficiently sophisticated and who will represent and agree that
they are purchasing the securities constituting Collateral then being sold for
their own account and not with a view to the distribution or resale thereof, and
upon consummation of any such sale, Secured Party shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
securities constituting Collateral so sold;
ix) Secured Party, in its sole discretion, if
permitted by law, may bid (which bid may be, in whole or in part, in the form of
cancellation of indebtedness) for and purchase for its account the whole or any
part of the Collateral at any public sale or sale on any securities exchange or
other recognized market;
x) to the full extent provided by law, have a court
having jurisdiction appoint a receiver, which receiver shall take charge and
possession of and protect, preserve, replace and repair the Collateral or any
part thereof, and manage and operate the same, and receive and collect all
rents, income, receipts, royalties, revenues, issues and profits therefrom. Such
Grantor shall irrevocably consent and shall be deemed to have hereby irrevocably
consented to the appointment thereof, and upon such appointment, such Grantor
shall immediately deliver possession of such Collateral, to the extent of its
interests therein, to the receiver. Such Grantor also irrevocably consents to
the entry of an order authorizing such receiver to invest upon interest any
funds held or received by the receiver in connection with such receivership.
Secured Party shall be entitled to such appointment as a matter of right, if it
shall so elect, without the giving of notice to any other party and without
regard to the adequacy of the security of the Collateral;
xi) enforce one or more remedies hereunder,
successively or concurrently, and such action shall not operate to estop or
prevent Secured Party from pursuing any other or further remedy which it may
have hereunder or by law, and any repossession or retaking or sale of the
Collateral pursuant to the terms hereof shall not operate to release such
Grantor until full and final payment of any deficiency has been made in cash.
Such Grantor shall reimburse Secured Party upon demand for, or Secured Party may
apply any proceeds of Collateral to, the costs and expenses (including
attorneys' fees, transfer taxes and any other charges) incurred by Secured Party
in connection with any sale, disposition, repair, replacement, alteration,
addition, improvement or retention of any Collateral hereunder;
16
xii) upon the occurrence of a default hereunder, any
cash held by Secured Party as Collateral and all cash proceeds received by
Secured Party in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral may, in the discretion of Secured Party,
be held by Secured Party as collateral for and/or then or at any time thereafter
applied (including application to the payment of any costs, expenses,
indemnification and other amounts payable to Secured Party hereunder, which
amounts may be paid in whole or in part prior to the other obligations secured
hereby) in whole or in part by Secured Party against all or any part of the
obligations secured hereby in such order as Secured Party shall elect. Any
surplus of such cash or cash proceeds held by Secured Party and remaining after
payment in full of all the obligations secured hereby shall be paid over to such
Grantor, to the extent of its interests therein, or to whomever may be lawfully
entitled to receive such surplus or as a court of competent jurisdiction may
direct, provided, however, that in the event that all of the conditions to
termination of this Security Agreement under Section 7(l) shall have not been
fulfilled, such balance shall be held as additional Collateral hereunder and
applied from time to time to Secured Party's costs and expenses and as otherwise
provided hereunder until all such conditions shall have been fulfilled; and
xiii) effect an absolute assignment of all of such
Grantor's right, title and interest in and to each Xxxx (and the goodwill of the
business of such Grantor associated therewith), Patent and Copyright, to the
extent of such Grantor's interest therein.
7. Miscellaneous Provisions
(a) Notices. All notices, requests, approvals,
consents and other communications required or permitted to be made hereunder
shall, except as otherwise provided, be in writing and may be delivered
personally or sent by telegram, telecopy, facsimile, telex, first class mail or
overnight courier, postage prepaid, to the parties addressed as follows:
To Grantors: Riviera Holdings Corporation
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Chief Executive Officer
With a copy to:
Dechert Price & Xxxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
17
To Secured Party: Norwest Bank Minnesota, National Association
Corporate Trust Department
6th and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx
Such notices, requests and other communications sent as provided hereinabove
shall be effective when received by the addressee thereof, unless sent by
registered or certified mail, postage prepaid, in which case they shall be
effective exactly three (3) business days after being deposited in the United
States mail. The parties hereto may change their addresses by giving notice
thereof to the other parties hereto in conformity with this section.
(b) Headings. The various headings in this Security
Agreement are inserted for convenience only and shall not affect the meaning or
interpretation of this Security Agreement or any provision hereof.
(c) Amendments. This Security Agreement or any
provision hereof may be changed, waived, or terminated only by a statement in
writing signed by the party against which such change, waiver or termination is
sought to be enforced, and then any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
(d) No Waiver. No failure on the part of Secured
Party to exercise, and no delay in exercising, and no course of dealing with
respect to, any power, privilege or right under this Security Agreement or any
related agreement shall operate as a waiver thereof nor shall any single or
partial exercise by Secured Party of any power, privilege or right under this
Security Agreement or any related agreement preclude any other or further
exercise thereof or the exercise of any other power, privilege or right. The
powers, privileges and rights in this Security Agreement are cumulative and are
not exclusive of any other remedies provided by law. No waiver by Secured Party
of any default hereunder shall be effective unless in writing, nor shall any
waiver operate as a waiver of any other default or of the same default on a
future occasion.
(e) Binding Agreement. All rights of Secured Party
hereunder shall inure to the benefit of its successors and assigns. No Grantor
shall assign any of its interest under this Security Agreement without the prior
written consent of Secured Party. Any purported assignment inconsistent with
this provision shall, at the option of Secured Party, be null and void.
(f) Entire Agreement. This Security Agreement,
together with any other agreement executed in connection herewith, is intended
by the parties as a final expression of their agreement and is intended as a
complete and exclusive statement of the terms and conditions thereof. Acceptance
of or acquiescence in a course of performance rendered under this Security
Agreement shall not be relevant to determine the meaning of this Security
Agreement even though the accepting or acquiescing party had knowledge of the
nature of the performance and opportunity for objection.
18
(g) Choice of Law. The existence, validity,
construction, operation and effect of any and all terms and provisions of this
Security Agreement shall be determined in accordance with and governed by the
substantive laws of the State of Nevada, without giving effect to its conflicts
of law principles.
(h) Severability. If any provision or obligation of
this Security Agreement should be found to be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions and obligations or any other agreement executed in connection
herewith, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby and shall nonetheless remain in
full force and effect to the maximum extent permitted by law.
(i) Survival of Provisions. All representations,
warranties and covenants of each Grantor contained herein shall survive the
execution and delivery of this Security Agreement, and shall terminate only upon
the termination of this Security Agreement pursuant to Subsection 7(l) hereof.
(j) Power of Attorney. Subject to applicable gaming
laws, each Grantor hereby irrevocably appoints Secured Party its
attorney-in-fact, which appointment is coupled with an interest, with full
authority in the place and stead of such Grantor and in the name of such
Grantor, Secured Party or otherwise, from time to time in Secured Party's
discretion (a) to execute and file financing and continuation statements (and
amendments thereto and modifications thereof) on behalf and in the name of such
Grantor with respect to the security interests granted or purported to be
granted hereby, (b) to take any action and to execute any instrument which
Secured Party may deem necessary or advisable to exercise its rights under
Section 5(p) hereunder, and (c) upon the occurrence and during the continuance
of an Event of Default, to take any action and to execute any instrument which
Secured Party may deem necessary or advisable to accomplish the purposes of this
Security Agreement, including, without limitation:
(i) to obtain and adjust insurance required to be
paid to Secured Party pursuant hereto;
(ii) to ask, demand, collect, xxx for, recover,
compound, receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(iii) to receive, endorse and collect any drafts or
other instruments, documents and chattel paper, in connection with clauses (i)
and (ii) above;
(iv) to sell, convey or otherwise transfer any item
of Collateral to any purchaser thereof; and
(v) to file any claims or take any action or
institute any proceedings which Secured Party may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce the rights
of Secured Party with respect to any of the Collateral.
19
(k) Counterparts. This Security Agreement and any
amendments, waivers, consents or supplements may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which shall together constitute one and the same agreement.
(l) Termination of Agreement. Subject to Sections
10.01 and 10.03 ------------------------ of the Indenture, this Security
Agreement and the security interest hereunder shall not terminate until (i) full
and final payment and performance of all indebtedness and obligations secured
hereunder or (ii) Legal Defeasance or Covenant Defeasance. At such time, Secured
Party shall reassign and redeliver to Grantors all of the Collateral hereunder
which has not been sold, disposed of, retained or applied by Secured Party in
accordance with the terms hereof, and execute and deliver to Grantors such
documents as Grantors may reasonably request to evidence such termination. Such
reassignment and redelivery shall be without warranty by or recourse to Secured
Party, and shall be at the expense of Grantors; provided, however, that this
Security Agreement (including all representations, warranties and covenants
contained herein) shall continue to be effective or be reinstated, as the case
may be, if at any time any amount received by Secured Party in respect of the
indebtedness and obligations secured hereunder is rescinded or must otherwise be
restored or returned by Secured Party upon or in connection with the insolvency,
bankruptcy, dissolution, liquidation or reorganization of any Grantor or any
other person or upon or in connection with the appointment of any intervenor or
conservator of, or trustee or similar official for, any Grantor or any other
person or any substantial part of its assets, or otherwise, all as though such
payments had not been made.
(m) Release of Collateral. Notwithstanding anything
to the contrary contained herein upon a release of any part of the Collateral
pursuant to Section 10.03 of the Indenture, the Secured Party shall execute,
deliver or acknowledge any necessary or proper instruments of termination,
satisfaction or release to evidence such release; provided, however, that no
part of the Collateral will be released except as expressly set forth in Section
10.03 of the Indenture.
(n) Successors and Assigns. This Security Agreement
shall inure to the benefit of Secured Party, its successors and assigns,
including the assignees of any Secured Obligation or of the benefit of any
Secured Obligation and shall bind the heirs, executors, administrators,
successors and assigns of each Grantor. This Security Agreement is assignable by
Secured Party with respect to all or any portion of the Secured Obligations, and
when so assigned, each Grantor shall be liable to the assignees under this
Security Agreement without in any manner affecting the liability of such Grantor
hereunder with respect to any of the Secured Obligations retained by Secured
Party. Each reference herein to powers or rights of Secured Party shall also be
deemed a reference to the same power or right of such assignees, to the extent
of the interest assigned to them.
(o) Interaction with Financing Documents.
(i) Incorporation by Reference. All terms, covenants,
conditions, provisions and requirements of the Indenture are incorporated by
reference in this Security Agreement.
20
(ii) Conflicts with Indenture. Notwithstanding any
other provision of this Security Agreement, the terms and provisions of this
Security Agreement shall be subject and subordinate to the terms of the
Indenture. To the extent that the Indenture provides Grantor with a particular
cure or notice period, or establishes any limitations or conditions on Secured
Party's actions with regard to a particular set of facts, each Grantor shall be
entitled to the same cure periods and notice periods, and Secured Party shall be
subject to the same limitations and conditions in place of the cure periods,
notice periods, limitations and conditions provided for under the Indenture;
provided, however, that such cure periods, notice periods, limitations and
conditions shall not be cumulative as between the Indenture and this Security
Agreement. In the event of any conflict or inconsistency between the provisions
of this Security Agreement and those of the Indenture, including, without
limitation, any conflicts or inconsistencies in any definitions herein or
therein, the provisions or definitions of the Indenture shall govern.
(iii) Conflicts with the Deed of Trust. In the event
of any conflict or inconsistency between the provisions of this Security
Agreement (as they apply to the Collateral) and those of the Deed of Trust (as
they apply to the Collateral), including, without limitation, any conflicts or
inconsistencies in any definitions herein or therein, the provisions or
definitions of this Security Agreement shall govern.
(p) Limitation by Law. All rights, remedies and
powers in this Agreement may be exercised only to the extent that the exercise
thereof does not violate any applicable provision of the Nevada Gaming Control
Act and the rules and regulations promulgated thereunder, and all of the
provisions of this Agreement are intended to be subject to all applicable
mandatory provisions of such laws, rules and regulations which may be
controlling and to be limited to the extent necessary so that they will not
render this Agreement invalid or unenforceable, in whole or in part.
21
IN WITNESS WHEREOF, the parties hereto have caused this
Security Agreement to be duly executed and delivered by their respective
undersigned duly authorized officers as of the date first above written.
GRANTORS:
RIVIERA HOLDINGS CORPORATION,
a Nevada corporation
By:___________________________________
Name:_________________________________
Title:________________________________
RIVIERA OPERATING CORPORATION,
a Nevada corporation
By:___________________________________
Name:_________________________________
Title:________________________________
RIVIERA GAMING MANAGEMENT, INC.,
a Nevada corporation
By:___________________________________
Name:_________________________________
Title:________________________________
RIVIERA GAMING MANAGEMENT OF
COLORADO, INC., a Colorado corporation
By:___________________________________
Name:_________________________________
Title:________________________________
S-1
RIVIERA GAMING MANAGEMENT-ELSINORE,
INC., a Nevada corporation
By:___________________________________
Name:_________________________________
Title:________________________________
S-2
SECURED PARTY:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
By:___________________________________
Name:_________________________________
Title:________________________________
S-3
ANNEX A
SCHEDULE OF FICTITIOUS NAMES
Riviera
Riv
Riviera Hotel
Riviera Hotel and Casino
Black Hawk
X-0
XXXXX X
XXXXXX XX XXXXXXXX
X-0
ANNEX C
TRADEMARKS AND APPLICATIONS
A. SCHEDULE OF PENDING APPLICATIONS FOR U.S. TRADEMARK
REGISTRATIONS ON THE BASIS OF USE IN COMMERCE UNDER 17 U.S.C.
ss. 1051(a)
Trademark Serial No. Owner
SPLASH & Design 75/280,775 Riviera Operating Corporation
$40 OF SLOT PLAY FOR $20 75/207,453 Riviera Operating Corporation
$40 FOR $20 75/194,182 Riviera Operating Corporation
RIVIERA 74/646,349 Riviera Operating Corporation
RIVIERA 74/645,950 Riviera Operating Corporation
B. SCHEDULE OF PENDING APPLICATIONS FOR U.S. TRADEMARK
REGISTRATIONS ON THE BASIS OF INTENT TO USE THE XXXX IN
COMMERCE UNDER 17 USC ss. 1051(b)
Trademark Serial No. Owner
BONUS 21 PLUS 75/152,286 Riviera Operating Corporation
C. SCHEDULE OF U.S. TRADEMARK REGISTRATIONS
Trademark Registration No. Owner
THE STAR OF LAS VEGAS 1,588,239 Riviera Holdings Corporation
GAMBLER'S SPREE 1,579,483 Riviera Holdings Corporation
PULL FOR THE GOLD 1,575,681 Riviera Holdings Corporation
SPLASH 1,964,935 Riviera Holdings Corporation
X-0
XXXXX X
XXXXXXXX XX XXXXXXX XXX XXXXXXXXXXXX
Xxxx
X-0
ANNEX E
SCHEDULE OF COPYRIGHTS AND APPLICATIONS
None
E-1