Exhibit 99.3
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November 13, 2006 EXECUTION COPY
Board of Directors of
Riviera Holdings Corporation
2901 Las Vegas Blvd. South
Las Vegas, NV 89109
Gentlemen:
In connection with a potential transaction involving the acquisition by
merger of the outstanding shares of common stock of Riviera Holdings Corporation
(the "Company") by an entity to be formed by (a) D. E. Shaw AQ-SP Series 4-08,
L.L.C. and/or one or more of its affiliates (collectively, "DESCO") and (b) Ian
Bruce Eichner (DESCO and Ian Bruce Eichner, collectively, "the Bidders," and the
potential transaction discussed between the Company and the Bidders, the
"Potential Transaction"), and to induce the Bidders to conduct their due
diligence investigation of the Company and to induce each of the Bidders and the
Company to pursue their respective interests in the Potential Transaction, the
Company and the Bidders have agreed as follows:
(a) During the period beginning on the date of this letter agreement
and continuing until 12:01 a.m. Eastern Time on the 30th day after the execution
date of this letter agreement (such 30th day, the "Exclusivity Period End Date"
and such period, the "Exclusivity Period"), the Company shall not, and the
Company shall cause its Subsidiaries(1) and its and their respective officers,
directors, employees, agents, advisors (including financial advisors),
affiliates and other representatives (such Persons(2), together with the
Subsidiaries of the Company, collectively, the "Company Representatives") not
to, (A) solicit, initiate or knowingly facilitate or encourage (including by way
of furnishing non-public information or providing access to its properties,
books, records or personnel) any inquiries regarding, or the making of any
proposal or offer that constitutes, or would reasonably be likely to lead to, a
Takeover Proposal(3), (B) initiate or participate in any discussions or
negotiations regarding a Takeover Proposal or furnish or disclose to any Person
(other than the Bidders or their representatives) any information in connection
with, or which would reasonably be likely to lead to, any Takeover Proposal, (C)
otherwise cooperate with, or knowingly assist or participate in, or knowingly
facilitate or encourage any effort or attempt by any Person (other than the
Bidders or their representatives) with respect to, or which would reasonably be
likely to lead to, a Takeover Proposal, (D) exempt any Person (other than the
Bidders) from the restrictions contained in any state takeover or similar laws
or any provisions of the Company's governing instruments or otherwise cause such
restrictions not to apply, or (E) enter into any term sheet, letter of intent,
agreement or other non-binding or binding understanding or arrangement with, or
accept or agree to any offer or proposal by or from, any Person other than the
Bidders with respect to a Takeover Proposal.
(b) Notwithstanding Section (a) above, the Company shall notify the
Bidders in writing not later than the Exclusivity Period End Date of any effort,
attempt or proposal by any Person (other than the Bidders or their
representatives) with respect to, or which would reasonably be likely to lead
to, a Takeover Proposal. Such written notification by the Company shall disclose
to the Bidders the identity of such Person and the price proposed by such
Person. Upon execution of this letter agreement, the Company shall, and shall
cause the Company Representatives to, cease and terminate immediately any
solicitation efforts, discussions or negotiations with respect to or in
furtherance of any Takeover Proposal with any Person other than the Bidders or
their representatives.
(c) From the date of this letter agreement until the Exclusivity Period
End Date, this letter agreement cannot be terminated by the Company or the
Bidders, except by the written consent of both the Company and the Bidders.
(d) The Company and the Bidders will begin promptly following the date
of this letter agreement to negotiate in good faith the terms of a definitive
acquisition agreement and all necessary ancillary agreements with respect to the
Potential Transaction.
(e) The agreements set forth in this letter agreement shall be governed
by and construed in accordance with the laws of the State of Nevada without
regard to the conflict of laws provisions thereof, and may be modified or waived
only by a separate writing by the Company and the Bidders expressly so modifying
or waiving such agreements. In any case of any dispute with respect to this
letter agreement, the Company and the Bidders agree (i) to submit to personal
jurisdiction in Nevada and (ii) that exclusive jurisdiction and venue shall lie
in the courts of the State of Nevada located in Clark County and the Federal
courts of the United States of America located in the District of Nevada.
(f) This letter agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original by the parties executing such
counterpart, but all of which shall be considered one and the same instrument.
(g) DESCO shall be entitled, without obtaining the consent of any other
party to this letter agreement, to assign this letter agreement and all of its
rights, privileges and obligations under this letter agreement to one or more of
its affiliates.
Please confirm your agreement to the foregoing by signing the enclosed
copy of this letter and returning it to us, whereupon it will become a binding
obligation of the Company and the Bidders.
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(1) "Subsidiary" of any Person means another Person, of which at least a
majority of the securities or ownership interests having by their terms
ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions is owned or controlled
directly or indirectly by such first Person and/or by one or more of
its Subsidiaries.
(2) "Person" means an individual, corporation, partnership, limited
partnership, limited liability partnership, limited liability company,
joint venture, association, trust, unincorporated organization,
governmental entity or other entity (including any Person as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934).
(3) "Takeover Proposal" means any proposal or offer from any Person or
"group" (within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934) (other than the Bidders and any other Person
that, at the time of determination, directly or indirectly controls, is
controlled by or is under common control with the Bidders) relating to
any direct or indirect acquisition or purchase of 30% or more of the
consolidated assets of the Company and its Subsidiaries or 30% or more
of the Company's common stock then outstanding, any tender offer or
exchange offer that if consummated would result in any Person
beneficially owning 30% or more of the Company's common stock then
outstanding, and any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction
involving the Company, other than the Potential Transaction.
Very truly yours,
D. E. SHAW AQ-SP SERIES 4-08, L.L.C.
By: D. E. Shaw & Co., L.L.C., as
manager
By:/S/ George Rizk
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George Rizk
Authorized Signatory
/s/ Ian Bruce Eichner
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IAN BRUCE EICHNER
Acknowledged and Agreed:
RIVIERA HOLDINGS CORPORATION
By: /s/ William L. Westerman
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Name:William L. Westerman
Title:Chairman