Wells Fargo Foothill was the lender under Riviera's prior senior secured revolving credit facility, which Riviera terminated in contemplation of the new credit facility. In consideration for WFF's appointment as syndication agent and its participation in the new credit facility, WFF waived its termination fee under the prior revolving credit facility.

Approximately $219 million of the $225 million seven-year term loan matures in the seventh year of the term. Earlier this month, Riviera used substantially all of the proceeds of the term loan to discharge its obligations related to the aforementioned 11% Senior Secured Notes due June 15, 2010.

The new credit facility contains affirmative and negative covenants customary for financings of this nature including, but not limited to, restrictions on Riviera's incurrence of other indebtedness. The new facility also requires Riviera to maintain a Consolidated Leverage Ratio for the 12-month period ending on the last day of each fiscal quarter. In the 18 months, the ratio cannot exceed 6.5 to 1. After that, it drops incrementally to 5 to 1 and remains there through the end of the term.

The new facility contains events of default customary for financings of this nature. One of those default provisions is a "change in control" of the company. The provision would go into effect with a person's acquisition of beneficial ownership of 35% or more of Riviera's stock coupled with a gaming license and/or approval to direct any of Riviera's gaming operations, a change in a majority of the members of Riviera's board of directors other than as a result of changes supported by Riviera's current board members or by successors who did not stand for election in opposition to Riviera's current board, or Riviera's failure to maintain 100% ownership of its subsidiaries.

Riviera last month retained a financial advisor (Jefferies & Co.) to evaluate $30 per-share offer for the company from a group led by Ian Bruce Eichner and Dune Capital Management LP. Shortly thereafter, a $34 per-share bid was submitted by Riv Acquisitions Holdings, which previously saw a $27 per-share offer summarily rejected by the board of directors because of a share lock-up agreement Riv entered into with a substantial Riviera shareholder.

Riv Acquisitions consists of Paul Kanavos and Robert Sillerman, the managing members of New York City-based Flag Luxury Properties LLC; Las Vegas developer Brett Torino; and Starwood Capital Group chairman and CEO Barry Sternlicht. "We expect the board to take this proposal very seriously and cease raising technical obstacles that we believe do not apply," stated Kanavos in a letter accompanying its latest offer.

Riviera has yet to make a statement with regard to Riv's new bid, other than to say it is being evaluated. Meanwhile, a lawsuit brought by Riv challenging the legality of Riviera's previous rejection continues to wend its way through Clark County District Court.