As filed with the Securities and Exchange Commission on June 3, 1998
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Riviera Holdings Corporation
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(Exact name of Registrant as Specified in Its Charter)
Nevada 88-0296885
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(State of Incorporation or Organization) (IRS Employer Identification No.)
2901 Las Vegas Boulevard South, Las Vegas, Nevada 89109
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(Address of Principal Executive Offices) (Zip Code)
If this form relates to the If this form relates to the
registration of a class of securities registration of a class of
pursuant to Section 12(b) of the Exchange securities pursuant to Section
Act and is effective pursuant to General 12(g) of the Exchange Act and is
Instruction A.(c), please check the effective pursuant to General
following box. 9 Instruction A.(d), please check the
the following box. [X]
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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None N/A
Securities to be registered pursuant to Section 12(g) of the Act:
Contingent Value Rights
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Item 1. Description of Registrant's Securities to be Registered.
The Board of Directors of Riviera Holdings Corporation, a Nevada
corporation (the "Company"), has authorized the distribution of one Contingent
Value Right for each share of common stock, par value $.001 per share (the
"Common Stock"), of the Company issued and outstanding as of the close of
business on May 1, 1998 (the "Record Date"), other than shares of Common Stock
which are beneficially owned by the Excluded Stockholders. The "Excluded
Stockholders" are Morgens, Waterfall, Vintiadis & Company, Inc. ("Morgens") and
the investment accounts managed by Morgens, Keyport Life Insurance Company,
SunAmerica Life Insurance Company, each of the respective Associates and
Affiliates of the foregoing and the Paulson Entities. The "Paulson Entities" are
Mr. Allen E. Paulson, R&E Gaming ("R&E Gaming"), Riviera Acquisition Sub, Inc.
("RAS"), any Person of which more than five percent of any class of securities
are beneficially owned by Mr. Paulson, and any Affiliates, Associates, agents or
transferees of any of the foregoing. As of May 1, 1997, there were 1,769,793
issued and outstanding shares of Common Stock entitled to receive a Contingent
Value Right.
The Rights are being issued pursuant to the Contingent Value Rights
Agreement, dated as of May 1, 1998 (the "Rights Agreement"), between the Company
and American Stock Transfer & Trust Company, as agent (the "Agent"). Capitalized
terms used but not defined herein have the meanings ascribed to such terms in
the Rights Agreement.
Holders of Contingent Value Rights will be entitled to receive a pro rata
share of any Collected Amounts distributed by the Company on a distribution
date, with such distribution date to be determined by the Board of Directors of
the Company in its sole discretion. "Collected Amounts" mean the amounts paid to
or collected by the Company with respect to funds which were or which were
required to be, or as a substitute or replacement for funds or other collateral
which were or which were required to be, deposited into escrow pursuant to the
terms of an escrow agreement (the "Escrow Agreement") dated as of September 15,
1997, including any amendments or modifications thereto, among the Company, R&E
Gaming and State Street Bank and Trust of California, N.A., as escrow agent (the
"Escrow Agent").
The Escrow Agreement was entered into in connection with the Agreement and
Plan of Merger (the "Riviera Merger Agreement"), dated as of September 15, 1997,
entered into by the Company with R&E Gaming and RAS, entities controlled by Mr.
Paulson, which provided for the merger of the Company with RAS (the "Riviera
Merger"). In the Riviera Merger, holders of the Company's Common Stock would
have received $15 per share in cash for each share of the Company's Common Stock
owned by them, plus an amount equal to 7% per annum from June 1, 1997 to the
date of the Riviera Merger.
The Company entered into the Escrow Agreement in connection with the
Riviera Merger Agreement. The Escrow Agreement required R&E Gaming to deposit
into escrow, for the benefit of the Company's stockholders other than the
Excluded Stockholders, funds representing 20% of the $15 per share merger
consideration, plus monthly interest payments. The Majority Stockholders entered
into an Option and Voting Agreement with R&E Gaming providing for direct payment
to them of 20% of the $15 per share merger consideration, plus monthly interest
payments.
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Following the termination of the Riviera Merger Agreement, the Company is
currently pursuing recovery of the amounts held in escrow by the Escrow Agent,
which amounts consist of $653,346 in cash and a $5,172,427 Paulson letter of
credit (the "Letter of Credit"), issued by City National Bank ("CNB"), that was
scheduled to expire on June 10, 1998 but has been extended pursuant to an
amendment to the Escrow Agreement dated as of May 1, 1998.
Pursuant to the amended Escrow Agreement, the Letter of Credit is extended
from June 10, 1998 to May 1, 1999 and will roll over for successive one-year
periods unless CNB notifies the parties before March 1 of each year that it will
not extend for an additional year. Under the Agreement (i) the Company has
agreed to drop its demand for arbitration in Las Vegas, Nevada of the disputes
with R&E Gaming relating to the escrow funds and to resolve such disputes in an
action instituted by R&E Gaming against the Company and certain other parties in
the United States District Court for the Central District of California (the
"Federal Court Action") and (ii) R&E Gaming has agreed that, until the disputes
between R&E Gaming and the Company have been determined by a final order in the
Federal Court Action, the Letter of Credit will be in effect and if for any
reason it is going to expire, the Company will be entitled after the April 15th
immediately preceding the expiration, to have the Letter of Credit cashed and
held in escrow.
There can be no assurance as to how long it will take for a decision
relating to the escrow funds to be reached in the Federal Court Action or
whether such decision will be favorable to the Company and thereby to the
holders of Contingent Value Rights. The determination of whether any funds paid
to or collected by the Company constitute Collected Amounts shall be made by the
Board of Directors in its sole discretion. The Collateral Amounts, if any, may
be distributed from time to time, in whole or in part, as the Board of Directors
will determine. The Board of Directors shall have sole discretion regarding the
timing of any distribution of any and all Collected Amounts. The Board of
Directors may elect to delay the distribution of all Collected Amounts, if any,
until the Final Expiration Date. "The Final Expiration Date" means the date
publicly announced by the Company beyond which the Company will take no further
action with respect to any claim, action, litigation, arbitration or proceeding,
whether instituted by the Company or otherwise on behalf of the Company's
stockholders, relating to any Collected Amounts. The Board of Directors may
elect, in its discretion, to declare successive Distribution Record Dates for
the purpose of distributing the Distribution Amounts as the Collected Amounts,
if any, are paid to the Company. Distribution Amounts will be paid to the
holders of record of Contingent Value Rights on a Distribution Record Date to be
determined by the Board of Directors. After the Final Expiration Date, the
Rights Agreement shall cease to be in effect and the Contingent Value Rights
shall be null and void.
The Contingent Rights Agreement that provides that no holder, as such, of
any Contingent Value Right Certificate will be entitled to vote, receive
dividends or be deemed for any purpose the holder of Common Stock or other
securities of the Company. No holder of any Contingent Value Right Certificate,
as such, will have any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders, or to receive dividends or
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subscription rights, or otherwise. If at any time following the date of the
Rights Agreement, the Board of Directors determines after consulting with
outside counsel, that the probability of any future recovery of material funds
under any Collection Matter is, at the time of such determination, remote (as
such term is used the Statement of Financial Accounting Standards No. 5), then
the Board of Directors may direct the Company and its officers, employees and
agents to abandon any further efforts with respect to such Collection Matter.
The Contingent Value Rights do not constitute a debt or obligation of the
Company, and no holder, as such, of a Contingent Value Right Certificate shall
have any claim whatsoever against any assets of the Company.
No holder, as such, of a Contingent Value Right Certificate shall be
entitled to participate in any lawsuit, litigation, arbitration, claim or other
proceeding relating to the Escrow Agreement.
The Company shall report to holders of Contingent Value Right Certificates
and to the Internal Revenue Service with respect to the distribution of any
Collected Amounts. The Company intends for federal income tax purposes to treat
any such distributions as ordinary income to holders as of the date such amounts
are determined to be Collected Amounts. Collected Amounts will not be reported
as dividends or interest; however, the Company may be required to obtain
taxpayer identification numbers from holders to avoid Abackup withholding@ under
the Internal Revenue Code. To the extent advised by their tax advisors, the
Company may withhold federal, state or local taxes from such distributions as
required by law.
The Company may and the Agent shall, if the Company so directs, supplement
or amend any provision of the Rights Agreement without the approval of any
holders of the certificates representing Contingent Value Rights.
The actual terms of the Contingent Value Rights are established under and
set forth in the Rights Agreement. A conformed copy of the Rights Agreement and
a form of the certificate representing the Contingent Value Rights are filed as
exhibits hereto, and are hereby incorporated by reference. The foregoing
description of the Contingent Value Rights is qualified in its entirety by
reference to such exhibits.
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Item 2. Exhibits.
Exhibit Number Description of Exhibit
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1.0 Contingent Value Rights Agreement, dated as
of May 1, 1998, between Riviera Holdings
Corporation and American Stock Transfer &
Trust Company, as Agent.
2.0 Form of Contingent Value Rights Certificate (included
with Exhibit 1).
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
RIVIERA HOLDINGS CORPORATION
Dated: June 1, 1998 By: /s/ Duane Krohn
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Duane Krohn
Chief Financial Officer
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RIVIERA HOLDINGS CORPORATION
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
CONTINGENT VALUE RIGHT AGREEMENT
Dated as of May 1, 1998
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<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Certain Definitions...............................................1
SECTION 2. Appointment of Agent..............................................6
SECTION 3. Issue of Contingent Value Right Certificates......................6
SECTION 4. Form of Contingent Value Right Certificates.......................6
SECTION 5. Countersignature and Registration.................................7
SECTION 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates...........9
SECTION 7. Determination and Distribution of Collected Amounts; Successive
Distributions; Invalidity of Contingent Value Rights Upon
Certain Transfers................................................10
SECTION 8. Cancellation and Destruction of Contingent Value Right
Certificates.....................................................11
SECTION 9. Taxes............................................................11
SECTION 10. Distribution Record Date.........................................12
SECTION 11. Contingent Value Right Holder Has No Right to Participate
in Collection Efforts or Compel Settlement.......................12
SECTION 12. Abandonment of Collection Efforts................................13
SECTION 13. No Liability of Company or Board of Directors....................13
SECTION 14. No Right of Action...............................................13
SECTION 15. INTENTIONALLY OMITTED............................................14
SECTION 16. Agreement of Contingent Value Right Holders......................14
SECTION 17. Contingent Value Right Certificate Holder Not Deemed a
Stockholder......................................................15
SECTION 18. Concerning the Agent.............................................16
SECTION 19. Merger or Consolidation or Change of Name of Agent...............16
SECTION 20. Duties of Agent..................................................17
SECTION 21. Change of Agent..................................................20
SECTION 22. Issuance of New Right Certificates...............................21
SECTION 23. INTENTIONALLY OMITTED............................................21
SECTION 24. Termination......................................................21
SECTION 25. Notices..........................................................21
SECTION 26. Supplements and Amendments.......................................22
SECTION 27. Successors.......................................................22
SECTION 28. Determinations and Actions by the Board of Directors.............22
SECTION 29. Benefits of this Agreement.......................................23
SECTION 30. Severability.....................................................23
SECTION 31. Governing Law....................................................24
SECTION 32. Counterparts.....................................................24
SECTION 33. Descriptive Headings.............................................25
EXHIBIT A - Form of Contingent Value Right Certificate
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CONTINGENT VALUE RIGHTS AGREEMENT
Contingent Value Rights Agreement, dated as of May 1, 1998 (as the same may
be modified, amended, supplemented and/or restated from time to time, this
"Agreement"), between Riviera Holdings Corporation, a Nevada corporation (the
"Company"), and American Stock Transfer & Trust Company, a New York corporation,
as Agent (the "Agent").
The Board of Directors of the Company has authorized the issuance of one
Contingent Value Right (a "Contingent Value Right") for each share of Common
Stock of the Company issued and outstanding as of the Close of Business (as such
terms are hereinafter defined) on May 1, 1998 (the "Record Date"), other than
shares of Common Stock which are beneficially owned by the Excluded Stockholders
(as hereinafter defined). Each Contingent Value Right evidences the right of the
holder thereof on the Distribution Record Date to receive any Distribution
Amount (as hereinafter defined).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, and intending to be legally bound hereby, the parties hereby
agree as follows:
SECTION 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
promulgated under the Securities Exchange Act of 1934, as amended (together with
the rules and regulations promulgated thereunder, the "Exchange Act"), as such
rule is in effect on the Record Date.
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(b) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own," and shall be deemed to have "beneficial ownership"
of, any securities:
(i) that such Person, or any of such Person's Affiliates or
Associates, directly or indirectly has
(A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing),
or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise;
(B) the right to vote or otherwise has "beneficial
ownership" (as determined pursuant to Rule 13d-3 of the Exchange Act),
including pursuant to any agreement, arrangement or understanding
(whether or not in writing); provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own,
pursuant to this subparagraph (B), any security as a result of any
agreement, arrangement or understanding to vote such security if such
agreement, arrangement or understanding (1) arises solely from a
revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange
Act and (2) is not also then reportable on Schedule 13D or Schedule
13G under the Exchange Act (or any comparable or successor report); or
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(ii) that are beneficially owned, including pursuant to
subparagraphs (i)(A) and (B) of this subsection (c), directly or
indirectly, by any other Person (or Affiliate or Associate thereof) with
which such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy
as described in the provision in subparagraph (i)(B) of this subsection
(c)) or disposing of any securities of the Company.
(c) "Board of Directors" means the Board of Directors of the Company.
(d) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M., New
York City time, on such date; provided, however, that if such date is not a
Business Day, it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(f) "Collected Amounts" shall mean, subject to Section 7(a), the
amounts held by, paid to or collected by the Company with respect to funds which
were or which were required to be, or as a substitute or replacement for funds
or other collateral which were or which were required to be, deposited into
escrow pursuant to the terms of the Escrow Agreement.
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(g) "Collection Matter" shall mean any claim, action, litigation,
arbitration or proceeding, whether or not instituted by the Company or otherwise
on behalf of the Stockholders, relating to any Collected Amounts.
(h) "Common Stock" when used with reference to the Company shall mean
the shares of Common Stock, par value $0.001 per share, of the Company.
(i) "Distribution Amount" shall mean, with respect to each Contingent
Value Right, the pro rata share of any Collected Amounts to be distributed on
the relevant Distribution Date. The Distribution Amount shall be determined by
aggregating the Collected Amounts to be distributed on the relevant Distribution
Date and dividing such sum by the number of valid and enforceable Contingent
Value Rights outstanding on the Close of Business on the Distribution Record
Date.
(j) "Distribution Date" shall mean a date determined by the Board of
Directors of the Company for distribution of a Distribution Amount.
(k) "Distribution Record Date" shall mean a record date set by the
Board of Directors of the Company for the purpose of determining the holders of
Contingent Value Rights entitled to receive a Distribution Amount.
(l) "Escrow Agreement" means the Escrow Agreement, dated as of
September 15, 1997, including any amendments or modifications thereto, among the
Company, Gaming and State Street Bank and Trust of California, N.A., as escrow
agent.
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(m) "Excluded Holders" shall mean the Majority Stockholders and all
Paulson Entities, collectively.
(n) "Final Expiration Date" shall mean the date publicly announced by
the Company beyond which date the Company shall take no further action with
respect to all Collection Matters.
(o) "Gaming" means R&E Gaming Corp., a Delaware corporation.
(p) "Majority Stockholders" means Morgens, Waterfall, Vintiadis &
Company, Inc. and the investment accounts managed by such persons, Keyport Life
Insurance Company and SunAmerica Life Insurance Company and their respective
Associates and Affiliates.
(q) "Paulson Entities" shall mean all or any of (i) Mr. Allen E.
Paulson, (ii) Gaming, (iii) RAS, (iv) any Person of which more than five percent
of any class of securities are beneficially owned by Mr. Allen E. Paulson, and
(v) any Affiliates, Associates, agents or transferees of any of the foregoing.
(r) "Person" shall mean any individual, corporation, partnership,
limited liability company or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(s) "RAS" means Riviera Acquisition Sub, a Nevada corporation.
(t) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interests is owned, directly or indirectly, by such Person.
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SECTION 2. Appointment of Agent. The Company hereby appoints the Agent to
act as agent for the holders of the Contingent Value Rights in accordance with
the terms and conditions hereof, and the Agent hereby accepts such appointment.
SECTION 3. Issue of Contingent Value Right Certificates. (a) As promptly as
practicable after the Record Date, the Agent will send, by first-class, insured,
postage-prepaid mail, to each record holder of shares of Common Stock as of the
Close of Business on the Record Date, other than the Excluded Stockholders, at
the address of such holder shown on the records of the Company, a Contingent
Value Right Certificate, in substantially the form of Exhibit A, evidencing one
Contingent Value Right for each share of Common Stock so held.
(b) The Contingent Value Rights shall not be in any way associated
with the Common Stock. The surrender for transfer of any certificate for shares
of Common Stock outstanding following the Record Date shall under no
circumstances constitute the transfer of the Contingent Value Rights theretofore
associated with such shares of Common Stock.
(c) The Contingent Value Rights shall not be effected by or adjusted
upon a change in the number of shares of Common Stock outstanding.
SECTION 4. Form of Contingent Value Right Certificates. (a) The Contingent
Value Right Certificates shall be substantially in the form of Exhibit A and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule
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or regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Contingent Value Rights may from time to time be listed or
any national securities association on whose interdealer quotation system the
Contingent Value Rights may from time to time be authorized for quotation, or to
conform to usage. The Contingent Value Right Certificates shall be in a form
reasonably satisfactory to the Agent. Subject to the provisions of Section 22,
the Contingent Value Right Certificates, which are issued in respect of shares
of Common Stock that were issued and outstanding as of the Close of Business on
the Record Date, shall be dated as of the Record Date.
(b) All Contingent Value Right Certificates issued pursuant to this
Agreement shall contain the following legend:
The Contingent Value Rights represented by this
Contingent Value Right Certificate are subject to the
terms and conditions of the Contingent Value Rights
Agreement (the "Agreement"), dated as of May 1, 1998
among Riviera Holdings Corporation and American Stock
Transfer & Trust Company, as Agent.
The absence of the foregoing legend on any Contingent Value Right Certificate
shall in no way effect any of the other provisions of this Agreement.
SECTION 5. Countersignature and Registration. (a) The Contingent Value
Right Certificates shall be executed on behalf of the Company by its chairman,
its president or a vice president, either manually or by facsimile signature,
and have affixed thereto the Company's seal or a facsimile thereof that shall be
attested by the secretary, or an assistant secretary or treasurer of the
Company, either
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manually or by facsimile signature. The Contingent Value Right Certificates
shall be countersigned by the Agent and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company who shall have
signed any of the Contingent Value Right Certificates shall cease to be such
officer of the Company before countersignature by the Agent and issuance and
delivery by the Company, such Contingent Value Right Certificates may
nevertheless be countersigned by the Agent and issued and delivered by the
Company with the same force and effect as though the person who signed such
Contingent Value Right Certificates had not ceased to be such officer of the
Company; and any Contingent Value Right Certificate may be signed on behalf of
the Company by any person who, at the actual date of the execution of such
Contingent Value Right Certificate, shall be a proper officer of the Company to
sign such Contingent Value Right Certificate, although at the date of the
execution of this Agreement any such person was not such an officer.
(b) Following the Record Date, the Agent will keep or cause to be
kept, at the office of the Agent designated for such purposes, books for
registration and transfer of the Contingent Value Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Contingent Value Right Certificates, the number of Contingent
Value Rights as evidenced on the face of each of the Contingent Value Right
Certificates and the date and certificate number of each of the Contingent Value
Right Certificates.
SECTION 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or S (a) At any time after the Close of
Business on the Record Date, and at or prior to the Close of Business on the
Final Expiration Date, any Contingent Value Right Certificate(s) may be
transferred, split up, combined or exchanged for one or more
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Contingent Value Right Certificate(s) entitling the holder thereof to a like
number of Contingent Value Rights that the Contingent Value Right Certificate(s)
so surrendered had entitled such holder thereof. Any registered holder desiring
to transfer, split up, combine or exchange any Contingent Value Right
Certificate shall make such request in writing delivered to the Agent, and shall
surrender the Contingent Value Right Certificate(s) to be transferred, split up,
combined or exchanged, with the form of assignment and certificate appropriately
executed, at the office of the Agent designated for such purpose. Neither the
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Contingent Value Right
Certificate(s) until the registered holder shall have completed and signed the
form of assignment on the reverse side of such Contingent Value Right
Certificate(s). Thereupon the Agent shall countersign and deliver to the person
entitled thereto a Contingent Value Right Certificate or Contingent Value Right
Certificate(s), as the case may be, as so requested. The Company may require
payment by the holder of a Contingent Value Right Certificate of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of such
Contingent Value Right Certificate.
(b) Upon receipt by the Company and the Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a
Contingent Value Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Agent of all reasonable expenses
incidental thereto, and upon surrender to the Agent and cancellation of the
Contingent Value Right Certificate if mutilated, the Company will make and
deliver a new Contingent Value Right Certificate
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of like tenor to the Agent for countersignature and delivery to the registered
owner in lieu of the Contingent Value Right Certificate so lost, stolen,
destroyed or mutilated.
SECTION 7. Determination and Distribution of Collected Amounts; Successive
Distributions; Invalidity of Contingen. (a) The determination of whether any
funds paid to or collected by the Company constitute Collected Amounts shall be
made by the Board of Directors in its sole discretion. The Collected Amounts, if
any, may be distributed from time to time, in whole or in part, as the Board of
Directors shall determine. The Board of Directors shall have sole discretion
regarding the timing of any distribution of any and all Collected Amounts. The
Board of Directors may elect to delay the distribution of any or all Collected
Amounts until the Final Expiration Date. The Board of Directors may elect, in
its discretion, to declare successive Distribution Record Dates for the purpose
of distributing the Distribution Amounts as the Collected Amounts, if any, are
paid to the Company.
(b) Neither the Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder upon the occurrence of any
purported transfer or exercise unless such registered holder shall have
completed and signed the form of assignment set forth on the reverse side of the
Contingent Value Right Certificate surrendered for such assignment.
SECTION 8. Cancellation and Destruction of Contingent Value Right
Certificates. Each Contingent Value Right Certificate surrendered for the
purpose of exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to the Agent
for cancellation or in canceled form, or, if surrendered to the Agent, shall be
canceled by it,
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and no Contingent Value Right Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Agreement. The
Company shall deliver to the Agent for cancellation and retirement, and the
Agent shall so cancel and retire, any other Contingent Value Right Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Agent shall deliver all canceled Contingent Value Right Certificates to the
Company.
SECTION 9. Taxes. The Company hereby agrees to report to holders of
Contingent Value Right Certificates and to the Internal Revenue Service with
respect to the distribution of any Collected Amounts. The Company intends for
federal income tax purposes to treat any such distributions as ordinary income
to holders as of the date such amounts are determined to be Collected Amounts.
Collected Amounts will not be reported as dividends or interest; however, the
Company may be required to obtain taxpayer identification numbers from holders
to avoid "backup withholding" under the Internal Revenue Code. To the extent
advised by its tax advisors, the Company may withhold federal, state or local
taxes from such distributions as required by law.
SECTION 10. Distribution Record Date. (a) Each Distribution Record Date
shall be publicly announced by the Board of Directors at least ten days prior to
such Distribution Record Date. Each person in whose name any Contingent Value
Right Certificate is issued on the books and records of the Agent at the Close
of Business on the Distribution Record Date shall be entitled to receive the
Distribution Amount. Following the Distribution Record Date, a holder of
Contingent Value Right Certificate shall have only the right to receive the next
succeeding Distribution Amount, if any, only if such holder is the holder of
record on the next succeeding Distribution Record Date, if any.
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(b) The Agent shall advise the Company of the number of valid
Contingent Value Rights outstanding as of the Distribution Record Date.
Following the determination of the Distribution Amount, which shall be made by
the Company, the Company shall deposit the aggregate of the Distribution Amounts
with the Agent in cash as needed. The Agent shall thereafter promptly forward
such Distribution Amount to each record holder entitled to receive such pursuant
to this Agreement.
SECTION 11. Contingent Value Right Holder Has No Right to Participate in
Collection Efforts or Compel Settlemen. No holder, as such, of a Contingent
Value Right Certificate shall be entitled to participate in any Collection
Matter and any action, litigation, arbitration, claim or proceeding relating to
the Escrow Agreement. Nothing in this Agreement or the Contingent Value Right
Certificate shall be deemed in any manner to limit the authority and discretion
of the Board of Directors, and the Board of Directors shall have sole and
absolute authority and discretion with respect to all such actions, litigations,
arbitrations, claims and proceedings relating to any Collection Matter,
including but not limited to (i) determinations regarding whether to appeal any
decision rendered or reached in connection with any Collection Matter, and (2)
determinations regarding whether to settle any action, arbitration, litigation,
claim or proceeding relating to any Collection Matter.
SECTION 12. Abandonment of Collection Efforts. If at any time following the
date of this Agreement, the Board of Directors shall determine, after consulting
with outside counsel, that the probability of any future recovery of material
funds under any Collection Matter is, at the time of such determination, remote
(as such term is used in the Statement of Financial Accounting Standards No.
12
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5), then the Board of Directors may direct the Company and its officers,
employees and agents to abandon any further efforts with respect to such
Collection Matter.
SECTION 13. No Liability of Company or Board of Directors. Neither the
Company nor any member of the Board of Directors shall have any liability to any
holder of a Contingent Value Right with respect to or arising from (i) any
determination made pursuant to Section 12, (ii) any determination to settle or
not settle any action, litigation, arbitration, claim or proceeding relating to
any Collection Matter, or (iii) any determination regarding the conduct of any
proceeding relating to any Collection Matter, including decisions relating to
the appeal of any Collection Matter.
SECTION 14. No Right of Action. No holder of a Contingent Value Right shall
have the right to institute any proceeding, judicial or otherwise, to compel the
distribution by the Company of any Collected Amounts or to challenge any action
or omission taken by the Company or the Board of Directors which is within the
discretion of the Board of Directors or the Company pursuant to the terms of
this Agreement.
SECTION 15. INTENTIONALLY OMITTED.
SECTION 16. Agreement of Contingent Value Right Holders. Every holder of a
Contingent Value Right, by accepting the same, consents and agrees with the
Company and the Agent and with every other holder of a Contingent Value Right
that:
(a) the Contingent Value Right Certificates are transferable only on
the registry books of the Agent if surrendered at the office of the Agent
designated for such purpose, duly
13
<PAGE>
endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully completed and duly executed;
(b) subject to Section 6 and Section 7(b) hereof, the Company and the
Agent may deem and treat the person in whose name the Contingent Value Right
Certificate is registered as the absolute owner thereof and of the Contingent
Value Rights evidenced thereby (notwithstanding any notations of ownership or
writing on Contingent Value Right Certificates made by anyone other than the
Company or the Agent) for all purposes whatsoever, and neither the Company nor
the Agent shall be affected by any notice to the contrary; and
(c) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Agent shall have any liability to any holder of a
Contingent Value Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
SECTION 17. Contingent Value Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Contingent Value Right Certificate shall
be entitled to vote, receive dividends or be deemed for any purpose the holder
of Common Stock or any other securities of the Company, nor shall anything
contained herein or in any Contingent Value Right Certificate be construed to
confer
14
<PAGE>
upon the holder of any Contingent Value Right Certificate, as such, any of the
rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders, or to receive dividends or
subscription rights, or otherwise. The Contingent Value Rights do not constitute
a debt or obligation of the Company, and no holder, as such, of a Contingent
Value Right Certificate shall have any claim whatsoever against any assets of
the Company.
SECTION 18. Concerning the Agent. (a) The Company agrees to pay to the
Agent such compensation as shall be agreed upon between the Company and the
Agent for all services rendered by it hereunder and, from time to time, on
demand of the Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Agent for, and to hold it harmless against, any loss, liability,
or expense, incurred without negligence, bad faith or willful misconduct on the
part of the Agent, for anything done or omitted by the Agent in connection with
the acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising therefrom. The
provisions of this Section 18(a) shall survive the expiration of the Contingent
Value Rights and the termination of this Agreement.
(b) The Agent shall be protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by it in connection with, its
administration of this Agreement in reliance upon any Contingent Value Right
Certificate, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper
15
<PAGE>
or document believed by it to be genuine and to be signed, executed by the
proper Person or Persons and, where necessary, to be verified or acknowledged.
SECTION 19. Merger or Consolidation or Change of Name of Agent. (a) Any
corporation into which the Agent or any successor Agent may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Agent or any successor Agent shall be a party, or any
corporation succeeding to all or substantially all the stock transfer or
corporate trust business of the Agent or any successor Agent, shall be the
successor to the Agent under this Agreement without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
at the time such successor Agent shall succeed to the agency created by this
Agreement, any of the Contingent Value Right Certificates shall have been
countersigned but not delivered, any such successor Agent may adopt the
countersignature of the predecessor Agent and deliver such Contingent Value
Right Certificates so countersigned; and in case at that time any of the
Contingent Value Right Certificates shall not have been countersigned, any
successor Agent may countersign such Contingent Value Right Certificates either
in the name of the predecessor Agent or in the name of the successor Agent; and
in all such cases such Contingent Value Right Certificates shall have the full
force provided in the Contingent Value Right Certificates and in this Agreement.
(b) In case at any time the name of the Agent shall be changed and at
such time any of the Contingent Value Right Certificates shall have been
countersigned but not delivered, the Agent may adopt the countersignature under
its prior name and deliver Contingent Value Right Certificates so countersigned;
and in case at that time any of the Contingent Value Right Certificates shall
not have been countersigned, the Agent may countersign such Contingent Value
Right
16
<PAGE>
Certificates either in its prior name or in its changed name, and in all such
cases such Contingent Value Right Certificates shall have the full force
provided in the Contingent Value Right Certificates and in this Agreement.
SECTION 20. Duties of Agent. The Agent may consult with legal counsel of
its selection (who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and protection to the
Agent as to any action taken or omitted by it in good faith and in accordance
with such opinion.
(a) Whenever in the performance of its duties under this Agreement the
Agent shall deem it necessary or desirable that any fact or matter (including,
without limitation, the identity or existence of any Paulson Entity) be proved
or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by any one of the chairman of the board, the president,
any vice president, the secretary, an assistant secretary or the treasurer of
the Company and delivered to the Agent; and such certificate shall be full
authorization to the Agent for any action taken or suffered in good faith by it
under the provisions of this Agreement in reliance upon such certificate.
(b) The Agent shall be liable hereunder to the Company and any other
Person only for its own negligence, bad faith or willful misconduct.
(c) The Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Contingent
Value Right Certificates (except its
17
<PAGE>
countersignature thereof) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the Company
only.
(d) The Agent shall not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Agent) or in respect of the validity or execution of any
Contingent Value Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Contingent Value Right
Certificate; nor shall the Agent be responsible for the legality of the terms
hereof in its capacity as an administrative agent.
(e) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Agent for the carrying out or performing by the Agent of the provisions
of this Agreement.
(f) The Agent is hereby authorized and directed to accept instructions
with respect to the performance of its duties hereunder from any one of the
chairman of the board, the president, any vice president, the secretary or the
treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions.
(g) The Agent and any stockholder, director, officer or employee of
the Agent may buy, sell or deal in any of the Contingent Value Rights or other
securities of the Company or become
18
<PAGE>
primarily interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully and
freely as though it were not Agent under this Agreement. Nothing herein shall
preclude the Agent from acting in any other capacity for the Company or for any
other legal entity.
(h) The Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents (other than employees), and the Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
(i) In addition to the foregoing, the Agent shall be protected and
shall incur no liability for, or in respect of, any action taken or omitted by
it in connection with its administration of this Agreement if such acts or
omissions are in reliance upon (i) the proper execution of the certification
concerning beneficial ownership appended to the form of assignment attached
hereto unless the Agent shall have actual knowledge that, as executed, such
certification is untrue, or (ii) the non-execution of such certification
including, without limitation, any refusal to honor any otherwise permissible
assignment by reason of such non-execution.
The Company agrees to give the Agent prompt written notice of any event or
ownership known to the Company which would prohibit the exercise or transfer of
the Contingent Value Right Certificates.
19
<PAGE>
SECTION 21. Change of Agent. The Agent or any successor Agent may resign
and be discharged from its duties under this Agreement upon 60 days' notice in
writing mailed to the Company by registered or certified mail. The Company may
remove the Agent or any successor Agent upon 30 days' notice in writing, mailed
to the Agent or successor Agent, as the case may be, by registered or certified
mail.
SECTION 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Contingent Value Rights to the contrary,
the Company may, at its option, issue new Contingent Value Right Certificates
evidencing Contingent Value Rights in such form as may be approved by its Board
of Directors to reflect any adjustment, change or modification of the terms of
this Agreement.
SECTION 23. INTENTIONALLY OMITTED.
SECTION 24. Termination. After the Final Expiration Date, this Agreement
shall cease to be in effect and the Contingent Value Rights shall be null and
void.
SECTION 25. Notices. Notices or demands authorized by this Agreement to be
given or made by the Agent or by the holder of any Contingent Value Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Agent) as follows:
Riviera Holdings Corporation
2901 Las Vegas Boulevard So.
Las Vegas, NV 89109
Attention: William Westerman
20
<PAGE>
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Contingent
Value Right Certificate to or on the Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
6201 15th Avenue, Floor 3L
Brooklyn, NY 11219
Attention: Paula Caroppoli
Notices or demands authorized by this Agreement to be given or made by the
Company or the Agent to or on the holder of any Contingent Value Right
Certificate shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
SECTION 26. Supplements and Amendments. The Company may and the Agent
shall, if the Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates representing
Contingent Value Rights.
SECTION 27. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
SECTION 28. Determinations and Actions by the Board of Directors. The Board
of Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be
21
<PAGE>
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement. All such actions, calculations,
interpretations and determinations which are done or made by the Board of
Directors of the Company in good faith shall be final, conclusive and binding on
the Company, the Agent, the holders of the Contingent Value Rights and all other
parties.
SECTION 29. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the Agent
and the registered holders of the Contingent Value Right Certificates any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Agent and the
registered holders of the Contingent Value Right Certificates.
SECTION 30. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
SECTION 31. Governing Law. This Agreement, each Contingent Value Right and
each Contingent Value Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Nevada and for all purposes shall
be governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such State;
22
<PAGE>
provided, however, that the rights and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of New York.
SECTION 32. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
[the remainder of this page is intentionally left blank]
23
<PAGE>
SECTION 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
RIVIERA HOLDINGS CORP.
By: /s/ Duane Krohn
------------------------------
Name: Duane Krohn
Title: Chief Financial Officer
and Treasurer
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Rights Agent
By: /s/ Paula Caroppoli
-------------------------------
Name: Paula Caroppoli
Title: Vice President
24
<PAGE>
Exhibit A
[Form of Contingent Value Right Certificate]
Certificate No. R- Contingent Value Rights
Contingent Value Right Certificate
The Contingent Value Right(s) represented by this
Contingent Value Right Certificate are subject to
the terms and conditions of the Contingent Value
Right Agreement (the "Agreement"), dated as of May
1, 1998, among Riviera Holdings Corporation and
American Stock Transfer & Trust Company, as Agent.
This certifies that ___________, or registered assigns, is the registered
owner of the number of Contingent Value Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Contingent Value Right Agreement, dated as of May 1, 1998 (the "Agreement"),
between Riviera Holdings Corporation, a Nevada corporation (the "Company"), and
American Stock Transfer & Trust Company (the "Agent"), upon presentation and
surrender of this Contingent Value Right Certificate, to receive the
Distribution Amount with respect to each Contingent Value Right represented
hereby. As provided in the Agreement, the Distribution Amount to be distributed
in respect to a Contingent Value Right are subject to modification and
adjustment upon the happening of certain events.
This Contingent Value Right Certificate is subject to all of the terms,
provisions and conditions of the Agreement, which terms, provisions and
conditions are incorporated herein by reference and made a part hereof and to
which Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Agent, the Company and the holders of the Contingent Value Right Certificates.
Copies of the Contingent Value Right Agreement are on file at the principal
executive offices of the Company and the offices of the Agent.
This Contingent Value Right Certificate, with or without other
Contingent Value Right
A-1
<PAGE>
Certificates, upon surrender at the principal office of the Agent, may be
exchanged for another Contingent Value Right Certificate or Contingent Value
Right Certificates of like tenor and date evidencing Contingent Value Rights
entitling the holder to a like aggregate number of Contingent Value Rights
evidenced by the Contingent Value Right Certificate(s) or Contingent Value Right
Certificates surrendered shall have entitled such holder to purchase.
No holder of this Contingent Value Right Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the Common
Stock or of any other securities of the Company, nor shall anything contained in
the Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Contingent Value Rights Agreement), or to receive dividends or
subscription rights, or otherwise.
This Contingent Value Right Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the Agent.
A-2
<PAGE>
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of _________, 1998.
RIVIERA HOLDINGS CORPORATION
By:
-----------------------
Name:
Title:
Attest:
By:
----------------------
Name:
Title:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY, Rights Agent
By:
----------------------
Name:
Title:
A-3
<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Contingent Value Right Certificate)
FOR VALUE RECEIVED
------------------------------------------------------------
hereby sells, assigns and transfers unto
---------------------------------------
- -------------------------------------------------------------------------------
(Please print name and address of transferee)
this Contingent Value Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
___________________ Attorney, to transfer the within Contingent Value Right
Certificate on the books of the within-named Company, with full power of
substitution.
Dated: ,
----------------------------------
Signature
- -------------------------------------------------------------------------------
NOTICE
The signatures to the foregoing Assignment must correspond to the name
as written upon the face of this Contingent Value Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
A-4
