DEPOSIT ACCOUNT AGREEMENT
DEPOSIT ACCOUNT AGREEMENT (this "Agreement") dated as of June 1999
among BANK OF AMERICA, having an office at [ ] (the "Deposit Bank"), RIVIERA
HOLDING S CORPORATION, a Nevada corporation, having an office c/o Riviera Hotel
& Casino, 2901 Las Vegas Blvd. So., Las Vegas, Nevada 89109 ("Riviera"), and
FIRST AMERICAN TITLE INSURANCE COMPANY, having an office at 602 Park Point
Drive, Suite #270, Golden, Colorado 80401 (together with its successors and
assigns, "First American").
W I T N E S E T H:
WHEREAS, Riviera Black Hawk, Inc. ("Riviera Black Hawk") is
constructing a casino and hotel in Black Hawk, Colorado and in connection
therewith has obtained from First American a mortgagee's title insurance policy
(the "Title Policy") insuring the construction mortgage against mechanics' lien
claims; and
WHEREAS, pursuant to an "Indemnity Agreement I
(Construction-Mechanics' Liens)" executed by Riviera, Riviera Black Hawk and
First American, Riviera and Riviera Black Hawk agree to indemnify First American
against claims made against First American under the Title Policy on account of
such mechanics' lien claims ("Claims"); and
WHEREAS, First American requires additional security for the
Indemnity Agreement in the form of a deposit account (the "Deposit Account") to
be held at the Deposit Bank; and
WHEREAS, First American and Riviera desire to retain the Deposit
Bank to provide the services described herein.
NOW THEREFORE, in consideration of the mutual promises contained
herein and for other good and valuable consideration the sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
Section 1. Duties of the Deposit Bank and First American.
a. Riviera has deposited the sum of $5,000,000.00 into the Deposit
Account which is entitled "Deposit Account for First American Title Company as
Indemnitee of Riviera Holdings, Corporation." The Deposit Bank shall hold
amounts deposited in the Deposit Account in trust for First American and shall
not commingle such amounts with any other amounts held on behalf of First
American or any other person.
b. If a Claim is made, First American after providing notice to, and
a right to cure by, Riviera and Riviera Black Hawk pursuant to the provisions of
the Indemnification Agreement, may, if such claim is not cured within the time
period specified in the Indemnification Agreement, withdraw from the Deposit
Account such funds as First American reasonably determines are required to
satisfy such Claim by directing the Deposit Bank to disburse such amounts from
the Deposit Account pursuant to disbursement instructions substantially in the
form of Schedule 2 attached hereto ("Disbursement Instructions").
c. Riviera may direct Deposit Bank to invest amounts held in the
Deposit Account in Permitted Investments (as defined below). All earnings on
Permitted Investments shall be for the benefit of Riviera and credited to the
Deposit Account. Riviera may withdraw funds from the Deposit Account, provided
the balance thereof does not fall below $5,000,000.00. Any actual losses
sustained on a liquidation of a Permitted Investment (which cause the balance in
the Deposit Account to fall below $5,000,000.00) shall promptly be deposited by
Riviera into the Deposit Account.
d. A "Permitted Investment" means obligations of, or obligations
fully guaranteed as to payment of principal and interest by, the United States
or any agency or instrumentality thereof provided such obligations are backed by
the full faith and credit of the United States of America or such other
obligations as are acceptable as Permitted Investments to First American.
Section 2. Fees.
Riviera hereby agrees to pay the fees and expenses of the Deposit
Bank and any successor thereto, for performing the herein-described services.
Section 3. Termination.
The Deposit Bank may resign from its obligations under this
Agreement at any time after thirty (30) days' prior written notice to the other
parties hereto, but in no event shall the Deposit Bank be released of its
obligations hereunder unless and until a substitute bank has been designated and
assumed the obligations hereunder. Riviera shall designate a substitute Deposit
Bank promptly after receipt of notice of resignation by the Deposit Bank and
shall take all reasonable actions necessary to cause such designated successors
promptly to assume the obligations of the Deposit Bank hereunder. First American
may terminate this Agreement at any time after thirty (30) days' prior written
notice to the other parties hereto. This Agreement shall be terminated upon the
Deposit Bank's receipt of notice from both Riviera and First American that the
"Final CDA Disbursement", as such term is defined in a certain Cash Collateral
and Disbursement Agreement dated June 3, 1999, has been made.
2
Section 4. Set-off
The Deposit Bank waives any right to offset any claim against
Riviera which it might have against any account maintained hereunder.
Section 5. Indemnification.
The Deposit Bank shall not be liable for any claims, suits, actions,
costs, damages, liabilities or expenses or for any interruption of services, or
incidental, consequential, special or punitive damages ("Liabilities") in
connection with the subject matter of this Agreement other than Liabilities
caused by the negligence or willful misconduct of the Deposit Bank, and Riviera
hereby agrees to indemnify and hold harmless the Deposit Bank and its Affiliates
and the directors, officers, employees and agents of any of them, and the
respective successors and assigns of the Deposit Bank from and against any and
all Liabilities arising from or in connection with any acts or omissions taken
by the Deposit Bank or any Affiliate or any director, officer, employee or agent
of any of them in connection with this Agreement, other than those Liabilities
caused by the negligence or willful misconduct of the Deposit Bank.
Section 6. Successors and Assigns, Assignments.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Deposit Bank, Riviera and First American and their respective
successors and assigns.
Section 7. Amendment.
This Agreement may be amended from time to time in writing by all
parties hereto.
Section 8. Notices.
Notices to the Deposit Bank should be sent to the address
first-above written or by telecopy to [( ) ___-___], Attention: ____________;
notices to Riviera should be sent to the address first-above written or by
telecopy to ( ) ___-____, Attention: ___________; and notices to First American
should be sent to the address first-above written or by telecopy to
(___)___-____, Attention: ___________; or, in each case, to such other address
as shall be designated in writing by the respective party to the other parties
hereto. Unless otherwise expressly provided herein, all such notices, to be
effective, shall be in writing (including by facsimile), and shall be deemed to
have been duly given or made (a) when delivered by hand or by nationally
recognized overnight carrier, (b) upon receipt after being deposited in the
mail, certified mail and postage prepaid or (c) in the case of facsimile notice,
when sent and electronically confirmed, addressed as set forth above.
3
Section 9. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
APPLIED IN NEW YORK).
Section 10. Certain Matters Affecting the Deposit Bank.
a. The Deposit Bank may rely and shall be protected in acting or
refraining from acting upon any notice (including but not limited to
electronically confirmed facsimiles of such notice) believed by it to be genuine
and to have been signed or presented by the proper party or parties; and
b. The duties and obligations of the Deposit Bank shall be
determined solely by the express provisions of this Agreement. The Deposit Bank
shall not be liable except for the performance of such party's duties and
obligations as are specifically set forth in this Agreement, and except as set
forth in Section 6 hereof, no implied covenants or obligations shall be read
into this Agreement against the Deposit Bank.
Section 11. Interpleader.
If at any time the Deposit Bank, in good faith, is in doubt as to
the action it should take under this Agreement, the Deposit Bank shall have the
right to commence an interpleader action in the United States District Court for
the Southern District of New York and to take no further action except in
accordance with joint instructions from First American and Riviera or in
accordance with the final order of the court in such action.
IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT
in several counterparts (each of which shall be deemed an original) as from the
date first above written.
BANK OF AMERICA
By: _________________________________
Name:
Title:
4
RIVIERA HOLDINGS CORPORATION
By: _________________________________
Name:
Title:
FIRST AMERICAN TITLE COMPANY
By: _________________________________
Name:
Title:
5
SCHEDULE 1
Bank Account Information
SCHEDULE 2
Disbursement Instructions
[FIRST AMERICAN LETTERHEAD]
, 1999
Bank of America
Gentlemen:
Reference is made to the Deposit Account Agreement (the "Deposit
Account Agreement") dated as of ________ __, 1999, among Bank of America (the
"Deposit Bank"), Riviera Holdings Corporation (the "Riviera") and the
undersigned. Capitalized terms not defined herein have the meanings set forth
for such terms in the Deposit Account Agreement.
As of the day of 5 1999, we hereby authorize and direct the Deposit
Bank to withdraw $ from the Deposit Account and wire such funds to the
undersigned's account at:
[Describe First American's Account]
-----------------------------
-----------------------------
Account of:
Account #:
Such funds are being withdrawn pursuant to the terms of the Deposit
Account Agreement.
Very truly yours,
First American Title Insurance Company
By: ____________________________
Name:
Title: