Elsinore Corp – ‘10-K’ for 12/31/96 – EX-10

As of:  Friday, 2/21/97   ·   For:  12/31/96   ·   Accession #:  311049-97-2   ·   File #:  1-07831

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Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                         96±   407K 
 2: EX-10       Material Contract                                     21±    83K 
 3: EX-23       Consent of Experts or Counsel                          1      7K 
 4: EX-27       Financial Data Schedule (Pre-XBRL)                     1      8K 

EX-10   —   Material Contract
Exhibit Table of Contents

INTERIM MANAGEMENT AGREEMENT

THIS INTERIM MANAGEMENT AGREEMENT (this "Agreement") is dated as of August    
  , 1996 by and between Elsinore Corporation, a Nevada corporation ("Elsinore"),
Four Queens, Inc., a Nevada corporation ("Four Queens" and, together with       
Elsinore, the "Companies"), and Riviera Gaming Management Corp.-Elsinore,       
a Nevada corporation ("Manager").                                               

PRELIMINARY STATEMENTS

A.   Elsinore owns and operates through its subsidiary, Four Queens,  
a hotel and casino commonly known as the Four Queens Hotel and Casino,          
located  at 202 Fremont Street, Las Vegas, Nevada.                              

B.   The Companies are party to those certain Chapter 11 bankruptcy   
proceedings pending in the United States Bankruptcy Court for the District of   
Nevada (the "Bankruptcy Court") as Case No. 95-24685 RCJ and Case No.           
95-24687 RCJ respectively (the "Proceedings").                                  

C.   Pursuant to a letter, dated April 1, 1996, an Affiliate (as      
defined below) of Manager has been acting as consultant to the Unofficial       
Committee                                                                       
of the Company's 12-1/2% First Mortgage Holders (the "Committee") in connection 
with the Proceedings.  The Companies and the Committee have agreed that (i)     
commencing on the Confirmation Date and in accordance with the "First Amended   
Plan                                                                            
of Reorganization Proposed Jointly by the Debtors and the Unofficial Bondholders
Committee" with respect to the Proceedings (the "Plan") until the expiration    
of the                                                                          
Term (as defined below) or earlier termination of this Agreement that the       
Companies                                                                       
shall engage Manager to manage the Project under the terms of this Agreement    
and                                                                             
(ii) the Plan will provide for Operating Capital (as defined below), including a
new $5 million equity investment and other provisions, which, in Manager's      
judgment, will give the Companies an opportunity to successfully reorganize and 
enable Manager to perform its obligations under this Agreement.                 

In consideration of the foregoing and other good and valuable consideration,  
the receipt and sufficiency of which are hereby acknowledged, and intending     
to be legally bound, the parties to this Agreement hereby agree as follows:     

   ARTICLE I.  DEFINITIONS

Unless otherwise indicated, defined terms used in this Agreement will         
correspond to the defined terms used in the Plan.  The following additional     
defined terms are used in this Agreement:                                       

"Affiliate" shall mean a person that directly or indirectly, or through one   
or more intermediaries, controls, is controlled by, or is under common          
control with                                                                    
the person in question and any stockholder or partner of any person referred    
to in                                                                           
the preceding clause owning 10% or more of such entity.                         

"Audit Day" is defined in Section 3.6(a).                                     

"Audited Statements" is defined in Section 3.6(a).                            

"Board" shall mean the duly constituted and acting Board of Directors of      
Elsinore during the Term (as defined below).                                    

"Business Days" shall mean all weekdays except those that are official        
holidays of the State of Nevada or the U.S. Government. Unless specifically     
stated                                                                          
as "Business Days," a reference to "days" means calendar days.                  

"Casino" shall mean those areas of the Project reserved for the operation of  
slot machines, table games and any other legal forms of gaming permitted under  
applicable law, and such additional ancillary service areas including           
reservations                                                                    
and admissions, cage, vault, count room, surveillance room and any other room or
area or activities therein regulated or taxed by the Nevada Gaming              
Authorities by reason of gaming operations.                                     

"Casino Bankroll" shall mean an amount reasonably determined by Manager and   
the Companies as funding required to bankroll the Casino Gaming Activities      
but in                                                                          
no case less than the amount required by Nevada gaming law or Nevada Gaming     
Authorities.  In no event shall such Casino Bankroll include any amount         
necessary                                                                       
to cover Operating Expenses or Operating Capital.  Casino Bankroll shall include
the funds located on the casino tables, in the gaming devices, cages, vault,    
counting rooms, or in any other location in the Casino where funds may be       
found and                                                                       
funds in a bank account identified by the Companies for any additional amount   
required by Nevada gaming law or Nevada Gaming Authorities or such other        
amount as                                                                       
is reasonably determined by Manager and the Companies.                          

"Casino Gaming Activities" shall mean the Casino cage, table games, slot      
machines, video machines, and other forms of gaming managed by Manager in the   
Casino.                                                                         

"Casino Operating Expenses" shall mean expenses incurred in the management of 
the Casino, including, but not limited to, gaming supplies, maintenance of the  
Casino area, gaming marketing materials, uniforms, complimentaries, Casino      
employee                                                                        
training, Casino employee compensation and entitlements, and Gaming Taxes.      

"Companies' Advances" is defined in Section 3.10.                             

"Default" or "Event of Default" is defined in Section 6.1.                    

"Gaming Taxes" shall mean any taxes, licenses or fees imposed by the Nevada   
Gaming Authorities.                                                             

"Governmental Authorities" shall mean the United States, the State of Nevada  
and any court or political subdivision agency, commission, board or             
instrumentality                                                                 
or officer thereof, whether federal, state or local, having or exercising       
jurisdiction over the Companies, Manager or the Project, including the Casino.  

"Gross Gaming Revenues" shall mean all of the revenue from the operation of   
the Casino (which is taxed by the Nevada Gaming Authorities) from all business  
conducted upon, related to or from the Casino in accordance with generally      
accepted accounting principles and shall include, but not be limited to, the    
net win from gaming activities, which is the difference between gaming wins     
and losses before deducting Gaming Taxes, and plus or minus, as appropriate,    
deposits made in respect of progressive slot machines and other similar games.  

"Gross Revenues" shall mean Gross Gaming Revenues, plus all other revenues    
resulting from the operation of the Project, minus all Gaming Taxes.            

"Management Fee" shall mean the sum of $83,333.33 per month to be paid to     
Manager as compensation for the services rendered pursuant to this Agreement.   
In                                                                              
the event that this Agreement commences on a day other than the first day of the
month, the Management Fee shall be appropriately prorated for such period.      

"Monthly Financial Statements" is defined in Section 3.7.                     

"Nevada Gaming Authorities" shall mean the Nevada Gaming Commission, State    
Gaming Control Board and all other gaming regulatory bodies, including, but not 
limited to, any municipality, political subdivision, board, commission,         
agency or                                                                       
other public body now in existence or hereafter created to regulate gaming in   
the                                                                             
State of Nevada.                                                                

"Operating Bank Accounts" is defined in Section 3.9.                          

"Operating Budget" shall mean the budget for the Project which was approved   
by the Board on January 11, 1996 as modified to provide for payment of the      
Management Fee and as may be further modified by Manager with the approval of   
the                                                                             
Board; provided, however, that if such approval is not granted, the Bankruptcy  
court shall determine as to whether such modification to the Operating Budget   
should be approved.  The Bankruptcy Court will resolve any disputes which arise 
with respect to the Operating Budget.                                           

"Operating Capital" shall mean such amount in the Operating Bank Accounts as  
will be reasonably sufficient to assure the timely payment of all current       
liabilities of the Project, including the operations of the Casino, during      
the term                                                                        
of this Agreement, and to permit Manager to perform its management              
responsibilities                                                                
and obligations hereunder, with reasonable reserves for unanticipated           
contingencies                                                                   
and for short term business fluctuations resulting from monthly variations      
from the Operating Budget.                                                      

"Operating Expenses" shall mean actual expenses incurred following the        
Effective Date in operating the Project, including the Casino Operating         
Expenses,                                                                       
employee compensation and entitlements, Operating Supplies, maintenance costs   
, fuel                                                                          
costs, utilities, taxes and the Minimum Management Fee.                         

"Operating Supplies" shall mean gaming supplies, paper supplies, cleaning     
materials, marketing materials, maintenance supplies, uniforms and all other    
materials used in the operation of the Project.                                 

"Project" shall mean the Four Queens Hotel and Casino in  Las Vegas, Nevada   
and all necessary ancillary facilities to the Project, including, but not       
limited                                                                         
to, vehicular parking area, entertainment facilities, hotels, restaurants,      
waiting                                                                         
areas, restrooms, administrative offices for, but not limited to, accounting,   
purchasing, and management information services (including offices for Manager  
management personnel) and other areas utilized in support of the operations     
of the Project.                                                                 

"Term" is defined in Section 2.2.                                             

ARTICLE II:  ENGAGEMENT OF MANAGER AND TERM OF AGREEMENT                

Section 2.1   Engagement of Manager.  The Companies hereby engage and employ  
Manager to act as their exclusive agent for the management of the business and  
affairs of the Project and to provide certain services to the Companies as      
detailed                                                                        
in Section 3.3 of this Agreement in connection with the Project, and Manager    
hereby                                                                          
accepts such engagement and employment, on the terms and conditions             
hereinafter set                                                                 
forth.  In addition, Manager may provide consulting services to Elsinore from   
time                                                                            
to time with respect to non-Project related issues and Manager agrees to provide
consulting services upon terms mutually acceptable to Manager and the           
Companies and the Committee.                                                    

Section 2.2   Term.  The management period of this Agreement (the "Term")     
shall commence upon the later of the date that (i) Manager and the Companies    
have                                                                            
received all requisite approvals of the Nevada Gaming Authorities to carry      
out the                                                                         
intention of this Agreement and enable Manager to manage the Project in         
accordance                                                                      
with the terms and conditions of this Agreement or (ii) the Confirmation Date   
, and                                                                           
shall continue until the commencement of the first calendar quarter             
subsequent to                                                                   
the Effective Date, subject to termination prior to the end of such period as   
hereinafter specified.                                                          

ARTICLE III: RESPONSIBILITIES OF THE PARTIES                

Section 3.1   Standards.  With respect to the operation of the Project        
pursuant to this Agreement and subject to Section 11.12 of this Agreement,      
Manager                                                                         
shall manage and maintain the Project in an informed manner consistent with the 
actions of a reasonably prudent manager of a similar casino/hotel located in Las
Vegas, Nevada taking into account the limitations imposed by the Proceedings    
with                                                                            
respect to the operation of the Project prior to the Effective Date.  Nothing   
contained in this Section 3.1 shall be deemed to require Manager to pay any     
expenses or make any capital expenditures with respect to the Project which     
are not                                                                         
funded by or on behalf of the Companies.                                        

Section 3.2   Continuation of Board Responsibility.  In the performance of its
duties under this Agreement, Manager shall at all times be subject to the       
exercise                                                                        
of the requisite fiduciary duties of the Boards of Directors of the Companies.  
Manager agrees that it will in good faith use its best efforts to perform its   
obligations and discharge its responsibilities in the management of the         
Project.                                                                        
The Bankruptcy Court will resolve any disputes which arise with respect to the  
discharge of the respective duties and responsibilities of the parties to this  
Agreement.                                                                      

Section 3.3   Services.  Manager covenants and agrees to perform, or cause to 
be performed, the following services in connection with the Project:            

(a)        Permits.  Manager, on behalf of and with the cooperation of the      
Companies, shall oversee obtaining and maintaining all necessary licenses,      
findings of suitability, approvals and permits required by any law, rule or     
regulation of the Nevada Gaming Authorities, as may be required for the         
operation of the Project as a casino/hotel including, without limitation,       
gaming, liquor, bar, restaurant, signage and hotel licenses and any permits     
required in connection with any refurbishing or expansion of the Project.       
Manager shall comply with the rules, regulations and orders of the Nevada       
Gaming Authorities and with any conditions set out in any such licenses and     
permits issued by any such authorities and, with the cooperation of the         
Companies, shall provide any information, report or access to records           
reasonably required by the Nevada Gaming Authorities.                           

(b)        Personnel.                                                           

(i) Except as otherwise expressly provided herein or in the             
Plan, all personnel employed at the Project shall be employees of       
Four Queens.  Manager shall hire, terminate, advance, demote,           
supervise, direct the work of and determine the compensation and        
other benefits (except for the establishment of any new employee        
pension and profit-sharing plans, which shall be determined by          
Manager and approved by the Board; provided, however that if such       
approval is not granted, the Bankruptcy Court shall determine as to     
whether the establishment of such pension and profit-sharing plans      
should be approved, it being understood that any employee pension and   
profit-sharing plans in existence as of the date hereof have been       
approved by the Board) of all personnel working at the Project;         
provided, however, that Manager will not enter into any employment      
contracts with any employees or any material employee contracts or      
benefit arrangements (i.e., any such contract or arrangement involving  
an annual compensation (including salary and bonuses) of more than      
$125,000), unless first approved by the Board; provided, however, that  
if such approval is not granted, the Bankruptcy Court shall determine   
as to whether such material employment contracts or benefit             
arrangements should be approved.  Manager agrees that employees' wages  
or benefits and conditions of employment (inclusive of any              
discretionary employee bonuses granted from time to time by Manager)    
shall be granted by Manager in a manner consistent with the existing    
standards therefor currently employed at the Project.  The parties      
hereto agree that all wages, bonuses, compensation and benefits         
(including, without limitation, severance and termination pay) of       
personnel at the Project  are the exclusive obligation of Four Queens.  

(ii)   All wages, salaries, benefits, compensation and                  
entitlements of the Project employees, including the General            
Manager, the consultants and independent contractors approved by        
the Companies and Manager, shall be paid from the Operating Bank        
Accounts by Manager.  Notwithstanding the foregoing, Manager shall      
not be liable to any of the Companies' personnel for wages,             
compensation or other employee benefit including without limitation     
to health care, insurance benefits, worker's compensation,              
severance or termination pay.                                           

(iii)  Manager shall be responsible for the training of                 
all personnel and shall cooperate with all personnel in an effort       
to obtain and maintain all required licenses issued by the Nevada       
Gaming Authorities, and will hire only persons with valid employee      
licenses, if under the rules and regulations of the Nevada Gaming       
Authorities, such employee licenses are a condition of employment.      

(iv)   The employees necessary to discharge Manager's                   
obligations and responsibilities hereunder shall be employees of        
Manager (or its Affiliates) and shall be hired, paid and discharged     
by Manager in its sole and absolute discretion.  Manager shall in       
good faith determine the number of employees necessary to discharge     
Manager's obligations and responsibilities hereunder, the salaries      
and other compensation arrangements of such employees shall be the      
responsibility of Manager and Manager shall not have any right of       
reimbursement from the Companies in respect thereof.                    

(v)    The Companies may employ such corporate                          
executives, each of whom shall be licensable if required by Nevada      
Gaming Authorities, as they may choose.                                 

    Section 3.4    Sales and Promotions.  Manager shall formulate,
coordinate and implement promotion, marketing and sales programs, and shall     
cause                                                                           
the Project to participate in promotional, marketing and sales campaigns and, as
appropriate, activities involving complimentary rooms and food and beverages to 
bona fide travel agents, tourist officials and airlines representatives, and    
to all                                                                          
other individuals and entities whatsoever which, in the exercise of good        
management                                                                      
practice, is deemed to be beneficial to the Project.                            

     Credit facilities shall be granted by Manager in its reasonable
discretion and in accordance with good management practices and Manager's and   
its Affiliates standard procedures; provided that except for extending credit   
for the purchase of goods, services, gaming or entertainment at the Project     
and except as otherwise permitted herein, Manager shall not be authorized to    
make any loans or extensions of credit for or on behalf of the Companies        
without the prior approval of the Board; provided, however, that if such        
approval is not granted, the Bankruptcy court shall determine as to whether     
such loans or extensions of credit should be approved.                          

         Section 3.5    Books and Records.  Manager shall maintain, or cause
to be maintained, a complete accounting system for and on behalf of the         
Companies                                                                       
in connection with Manager's management of the Project.  The books and records  
shall be kept in accordance with generally accepted accounting principles       
consistently applied and in accordance with the uniform system of accounts for  
hotels.  Such books and records shall  be kept on the basis of a calendar year. 
Books and accounts shall be maintained at the Project or at the principal       
office of                                                                       
Manager with a duplicate copy thereof at the Project. All books and records,    
including all daily reports prepared by Manager for internal use at the Project,
will be available for review by the Companies during regular business hours.    
Manager shall comply with all requirements with respect to internal controls and
accounting and shall prepare and provide all required reports under the rules   
and                                                                             
regulations of the Nevada Gaming Authorities.  Manager shall file with the      
Bankruptcy Court any monthly or other reports required under the Bankruptcy     
Code or                                                                         
other applicable related Code of Procedure. In addition, Manager shall pay      
out of                                                                          
Gross Revenue all fees imposed on the Debtors under 28 U.S.C. S 1930.           

Section 3.6  Audits.                                      

        (a)  Manager shall continue to engage KPMG Peat Marwick,
unless a different mutually agreed upon auditor is substituted ("Regular        
Auditor"), to audit the operations of the Companies, for the purpose of         
auditing the books and records of the Companies as of and at the end of each    
year occurring after the date hereof (the "Audited Statements").  A             
sufficient number of copies of the Audited Statements shall be furnished to     
the Companies and Manager as soon as available to permit the Companies and      
Manager to meet any public reporting requirements as may be applicable to       
them, but in no event later than ninety (90) days following the end of such     
fiscal period (such 90th day to be the "Audit Day").  Any cost of such          
statements shall be deemed an Operating Expense.                                

        (b)  Nothing herein contained shall prevent Manager from
designating Arthur Andersen, LLP or another independent nationally recognized   
accounting firm ("Special Auditor") to review one of the Audited Statements     
at Manager's expense (which shall not be an Operating Expense).                 

   (c)  The Bankruptcy Court will resolve any disputes
between Manager and the Companies over issues pertaining to accountings and     
audits performed by the Regular Auditor.                                        

  Section 3.7  Monthly Financial Statements.  On or before the
20th day of each month, Manager shall prepare an unaudited operating            
statement for the preceding calendar month detailing the Gross Revenues and     
Operating Expenses expenses incurred in the Project's operation (the "Monthly   
Financial Statements").                                                         
The Monthly Financial Statements shall include a statement detailing drop figure
accounts on all Gross Gaming Revenues.                                          

Section 3.8  Expenses.  All costs, expenses, funding or   
operating deficits and Operating Capital, real property and personal property   
taxes, insurance premiums and other liabilities incurred due to the gaming and  
nongaming operations of the Project shall be the sole and exclusive financial   
responsibility of the Companies.  It is understood that statements herein       
indicating that the Companies shall furnish, provide or otherwise supply,       
present or contribute items or services hereunder shall not be interpreted or   
construed to mean that Manager is liable or responsible to fund or pay for      
such items if the Companies do not.                                             

Section 3.9  Operating Bank Accounts.                     

      (a)  Manager shall maintain the bank accounts that are
used currently by the Companies for the operation of the Project, including     
an account for the Casino Bankroll (such accounts are hereinafter               
collectively referred to as the "Operating Bank Accounts").  The Operating      
Bank Accounts shall be named in such a manner as to identify the Project and    
particular uses for the account as the Companies and Manager may determine.     
All instructions to and checks drawn on the Operating Bank Accounts shall be    
signed only by representatives of the Companies or Manager who are covered by   
fidelity insurance and designated by Manager.  Such representatives shall be    
the only authorizing signing persons on checks drawn on the Operating Bank      
Accounts.  All checks shall be drawn only in accordance with established        
normal and customary accounting policies and procedures.  All Gross Revenues    
(excluding noncash items) shall be deposited in the Operating Bank Accounts,    
and Manager shall pay out of the Operating Bank Accounts, to the extent of      
the funds therein, from time to time, all Operating Expenses and other          
amounts required by Manager to perform its obligations under this Agreement.    
All funds in the Operating Bank Accounts shall be separate from any other       
funds of any of Manager's Affiliates and the Companies' Affiliates and          
neither the Companies nor Manager may commingle such funds in the Operating     
Bank Accounts with the funds of any other bank accounts.                        

      (b)  Manager agrees that it will not use any Operating
Bank Accounts as compensating balances related to the extension of credit to    
Manager or grant any right of set-off or bankers' lien on any such accounts     
in respect of any amounts owed by Manager to such depositories.  Manager        
shall seek to obtain reasonable rates of interest for the Operating Bank        
Accounts, with due regard to the financial stability of and services offered    
by the depositories with which such accounts are kept.  The parties to this     
Agreement agree that all funds held from time to time in the Operating Bank     
Accounts are solely the property of the Companies, and upon the expiration or   
Termination (as defined below) of this Agreement for any reason, Manager        
shall cease to withdraw funds from all Operating Bank Accounts and shall take   
such steps as shall be necessary to (1) remove Manager's designees as           
signatories to the Operating Bank Accounts and (2) authorize designees of the   
Companies to become the sole signatories to the Operating Bank Accounts.        
This provision shall survive Termination.  It is understood and agreed that     
Manager may maintain petty cash funds at the Project and make payments          
therefrom as the same are customarily made in the casino/hotel business.        

The Companies shall have the right to fund their obligations                  
under the Plan by withdrawals from Operating Bank Accounts.  The Companies'     
ability to make other withdrawals from Operating Bank Accounts shall be         
consistent with their funding obligations under this Agreement and in           
accordance with established accounting policies and procedures.                 

Section 3.10   Payment of Expenses.                       

  (a)  Manager shall pay from the Gross Revenues the following
items in the order of priority listed below, on or before their applicable      
due date:  (i) required payments to the Governmental Authorities, including     
federal, state or local payroll taxes ("Payroll Taxes"), (ii) Operating         
Expenses, including taxes (other than Payroll Taxes) and the Management Fee,    
(iii) administration expenses of the Proceedings approved by the Bankruptcy     
Court and (iv) emergency expenditures to correct a condition of an emergency    
nature, including structural repairs, which require immediate repairs to        
preserve and protect the Project.  In the event that funds are not available    
for payment of the Operating Expenses in their entirety, all Payroll Taxes or   
withholding taxes shall be paid first from the available funds.                 

(b)  During the Term of this Agreement, within five (5)   
Business Days after receipt of written notice from Manager, the Companies       
shall fund the Operating Bank Accounts designated by Manager (the "Companies'   
Advances") in such a fashion so as to adequately insure that the Operating      
Capital set forth in the Operating Budget as revised is sufficient to support   
the uninterrupted and efficient ongoing operation of the Project.  The          
written request for any additional Operating Capital shall be submitted by      
Manager to the Companies on a monthly basis based on the interim statements     
and the Operating Budget as revised.                                            

Section 3.11  Cooperation of the Companies and Manager. The Companies         
and Manager shall cooperate fully with each other during the Term, if any, of   
this Agreement to facilitate the performance of their respective obligations and
responsibilities set forth in this Agreement.                                   

Section 3.12  Financing Matters.                                              

(a)  In no event may either party represent that the other
party or any Affiliate of such party is or in any way may be liable for the     
obligations of such party in connection with (i) any financing agreement, or    
(ii) any public or private offering or sale of securities.  Manager agrees to   
reasonably cooperate with the Companies in the preparation of such agreements   
and offerings.                                                                  

(b)  Notwithstanding the above restrictions, subject to   
Manager's right of review set forth in this Section 3.12, the Companies may     
represent that the Project is managed by Manager on an interim basis pending    
the Effective Date and Manager may represent that it manages the Project on     
an interim basis pending the Effective Date and both may describe the terms     
of this Agreement and the physical characteristics of the Project in            
regulatory filings and public or private offerings.  Moreover, nothing in       
this Section shall preclude the disclosure of (i) already public information,   
or (ii) audited or unaudited financial statements from the Project required     
by the terms of this Agreement or (iii) any information or documents required   
to be disclosed to or filed with the Governmental Authorities.  Both parties    
shall use their best efforts to consult with the other concerning disclosures   
as to the Project.  The Companies and Manager shall cooperate with each other   
in providing financial information concerning the Project and Manager that      
may be required by any lender or required by any Governmental Authority.        

Section 3.13   Taxes and Insurance.  Throughout the Term, the                 
Companies shall furnish Manager with copies of all tax statements and insurance 
policies and all financing documents (including notes and mortgages) relating to
the Companies.  Manager shall cause all federal and state income and sales tax  
returns of the Companies to be prepared and shall cooperate with taxing         
authorities                                                                     
in connection with any inquiries or audits that  relate to the Companies.       
Manager                                                                         
will also assist the Companies in procuring and maintaining liability,          
property and                                                                    
such other insurance in at least such amounts and covering such risks as is     
currently maintained with respect to the Companies and in such additional       
amounts                                                                         
and covering such additional risks, if any, as Manager and Elsinore determine is
necessary in connection with the operation of the Companies, with responsible   
and                                                                             
reputable insurance companies or associations.  All such insurance policies     
shall                                                                           
name Manager as an additional insured and all insurers thereon shall be         
required to                                                                     
issue to Manager a certificate of insurance providing that such insurer shall   
deliver to Manager reasonable prior notice of termination of any such policy    
or the                                                                          
coverage provided thereby and, if and to the extent the same shall be available 
without adversely affecting Four Queens' coverage and without additional        
premiums                                                                        
or charges, waiving the rights of such insurer, if any, of subrogation against  
Manager.  Without in any way diminishing Four Queens' responsibility hereunder, 
Manager is hereby authorized and directed to pay from the Operating Bank        
Accounts                                                                        
all taxes and insurance fees including, without limitation, withholding taxes   
and                                                                             
insurance premiums, and all other items of expense relating to the ownership or 
operation of the Companies.                                                     

Section 3.14   Concessions.  Manager shall consummate, if in                  
Manager's reasonable discretion it deems the same to be in the best interest    
of the                                                                          
Project, in the name of and for the benefit of Four Queens, reasonable          
arms-length arrangements and leases with concessionaires, licensees, tenants    
and other intended users of any facilities related to the Project, provided     
that any such arrangements and leases are subject to the approval of the        
Bankruptcy Court.  Copies of all such arrangements shall be furnished to        
Elsinore.                                                                       

Section 3.15   Material Assessments.  Manager, as exclusive agent             
for Four Queens, is authorized to make and enter into any agreements (including,
without limitation, agreement with Manager's Affiliates, provided such          
agreements represent the equivalent of reasonable arm's length negotiations)    
as are, in Manager's opinion, necessary or desirable for the operation,         
supply and maintenance                                                          
of the Project, as required by this Agreement.  Manager shall not enter into any
agreement involving the incurrence of debt obligations on behalf of either or   
both of the Companies, or for Manager's own account, with respect to the        
operations of the Project, over One Hundred Thousand Dollars ($100,000)         
annually without the approval of the Bankruptcy Court.                          

Section 3.16   Trademarks.  Manager (i) acknowledges the Companies'           
exclusive rights in and to the trademarks, service marks, trade names and other 
such intellectual property utilized by the Companies in the operation of the    
Project (the "Four Queens Marks") and (ii) agrees not to do any act that will   
impair or affect the strength of the Four Queens Marks, the continuity of the   
registration of the Four Queens Marks, the Companies' ownership of the Four     
Queens Marks or the goodwill associated with the Four Queens Marks. Manager     
agrees to                                                                       
render whatever assistance Elsinore may reasonably require in the procurement   
and                                                                             
maintenance of registrations of the Four Queens Marks in the United States      
Patent                                                                          
and Trademark Office and in other jurisdictions.                                

   ARTICLE IV:  MANAGEMENT FEE

Section 4.1  Payments to Manager.  The Management Fee shall be payable in     
advance on the commencement of the Term and thereafter on the first day of each 
month during the Term.                                                          

Section 4.2  Interest on Overdue Amounts; Collection Costs.  If for any       
reason the Management Fee or any other amount due to Manager under this         
Agreement is not paid on a timely basis, such amount shall bear interest at     
the rate of 12% per annum until paid in full.  Manager shall also be entitled   
to reimbursement for the reasonable costs of collection, including reasonable   
counsel fees and disbursements, with respect to amounts due to it under this    
Agreement but which are unpaid.                                                 

ARTICLE V:  REPRESENTATIONS AND WARRANTIES

Section 5.1   Manager represents and warrants to the Companies as follows:    

(a)  Manager's Organization.  Manager is a corporation duly           
organized, validly existing and in good standing under the laws of the State    
of Nevada and has the full corporate power and authority to enter into and      
perform its obligations under this Agreement.                                   

(b)  Authorization of Agreement.  The execution, delivery and         
performance of this Agreement has been duly authorized and approved by all      
necessary corporate action on the part of Manager, and this Agreement has       
been duly executed and delivered by Manager and constitutes the legal, valid    
and binding obligation of Manager, enforceable against Manager in accordance    
with its terms, subject to applicable bankruptcy, insolvency, fraudulent        
conveyance, reorganization, moratorium and similar laws affecting creditors'    
rights and remedies generally and subject, as to enforceability, to general     
principles of equity.  The execution, delivery and performance of this          
Agreement by Manager does not and will not conflict with any law, rule or       
regulation of the Nevada Gaming Authorities.                                    

(c)  Litigation.  There are no judicial or administrative actions,    
proceedings or investigations pending or, to the best of Manager's knowledge,   
threatened against Manager that question the validity of this Agreement or      
any action taken or to be taken by Manager in connection with this Agreement    
and that, if adversely determined, would have a material adverse effect upon    
Manager's ability to perform its obligations under this Agreement.              

(d)  Consents and Approvals.  With the exception of the requisite     
approvals of the Nevada Gaming Authorities and the Bankruptcy Court, no         
authorization, consent, approval, license, finding of suitability, exemption    
from or filing or registration with any court or governmental department,       
commission, board, bureau, agency or instrumentality, domestic or foreign, is   
or will be necessary as a condition to the valid execution, delivery or         
performance by Manager of this Agreement, other than such authorizations,       
consents, approvals, licenses, findings of suitability, exemptions, filings     
or registrations as have been obtained and are in full force and effect.        

(e)  Gaming License Approval.  The Companies and Manager acknowledge  
that the receipt of a gaming license, permit or approval from the Nevada        
Gaming Authorities is a privilege and that no individual applicant has a        
vested right in the receipt of such license, permit or approval.  Further,      
the licensing and approval process is purely discretionary, and the Nevada      
Gaming Authorities may grant, deny, limit or condition any application or       
approval for any cause which they deem reasonable.  Moreover, the judgment of   
the Nevada Gaming Authorities and their individual members may not be           
predicted with any degree of certainty.  Subject to the foregoing and to its    
actual knowledge, Manager knows of no reason why its application for any        
required gaming license to manage the Project would be denied by the Nevada     
Gaming Authorities.                                                             

Section 5.2   The Companies represent and warrant to Manager as follows:      

(a)  Companies' Organization.  The Companies are corporations duly    
organized, validly existing and in good standing under the laws of the State    
of Nevada and have the full corporate power and authority to enter into and     
perform its obligations under this Agreement.                                   

(b)  Authorization of Agreement.  The execution, delivery and         
performance of this Agreement and all other agreements necessary to             
effectuate the Plan have been duly authorized and approved by all necessary     
corporate action on the part of the Companies and the Bankruptcy Court, and     
this Agreement has been duly executed and delivered by the Companies and        
constitutes the legal, valid and binding obligation of them, enforceable        
against them in accordance with its terms, subject to applicable bankruptcy,    
insolvency, fraudulent conveyance, reorganization, moratorium and similar       
laws affecting creditors' rights and remedies generally and subject, as to      
enforceability, to general principles of equity.  The execution, delivery and   
performance of this Agreement by the Companies does not and will not conflict   
with any law, rule or regulation of the Nevada Gaming Authorities.              

(c)  Consents and Approvals.  With the exception of the requisite     
approvals of the Nevada Gaming Authorities and the Bankruptcy Court, no         
authorization, consent, approval, license, finding of suitability, exemption    
from or filing or registration with any court or governmental department,       
commission, board, bureau, agency or instrumentality, domestic or foreign, is   
or will be necessary as a condition to the valid execution, delivery or         
performance by the Companies of this Agreement, other than such                 
authorizations, consents, approvals, licenses, findings of suitability,         
exemptions, filings or registrations as have been obtained and are in full      
force and effect.                                                               

(d)  No Joint Venture.  It is expressly understood and agreed that    
Manager is being employed by the Companies as an independent contractor to      
provide, or cause to be provided, supervisory management and consulting         
services in respect of the Project and not as a partner or joint venturer of    
the Companies or either or them.  All purchases and acquisitions of every       
kind and character by Manager on behalf of the Companies shall be property of   
the Companies and all debts and liabilities incurred by Manager within the      
scope of the authority granted and permitted hereunder in the course of its     
management and operation of the Project shall be debts and liabilities of the   
Companies only, and Manager shall not be liable therefor for its own account,   
except as specifically stated to the contrary herein.                           

ARTICLE VI.  DEFAULT

Section 6.1  Definition.  The occurrence of any one or more of the events     
described in the Sections 6.2, 6.3, 6.4 or 6.5 which is not cured within the    
time permitted, shall constitute a default under this Agreement (hereinafter    
referred to as a "Default" or an "Event of Default") as to the party failing    
in the performance or effecting the breaching act.                              

Section 6.2  Manager's Defaults.  An Event of Default shall occur if Manager  
shall (a) fail to perform or materially comply with any of the covenants, agree-
ments, terms or conditions contained in this Agreement applicable to Manager and
such failure shall continue for a period of thirty (30) days after written      
notice thereof from the Companies and the Committee to Manager specifying in    
detail the nature of such failure, or, in the case such failure is of a         
nature that it cannot, with due diligence and good faith, be cured within       
thirty (30) days, if Manager fails to proceed promptly and with all due         
diligence and in good faith to cure the same and thereafter to prosecute the    
curing of such failure to completion with all due diligence within ninety       
(90) days thereafter, or (b) take or fail to take any action to the extent      
required of Manager by the Nevada Gaming Authorities unless Manager cures       
such default or breach prior to the expiration of applicable notice,            
grace and cure periods, if any, provided, however, that Manager shall only be   
required to cure any defaults with respect to which Manager has a duty          
hereunder.                                                                      

Section 6.3  The Companies' Default.  An Event of Default shall occur if the  
Companies shall (a) fail to make any monetary payment required under this       
Agreement, including, but not limited to, the Companies' Advances, on or        
before the                                                                      
due date recited herein and said failure continues for five (5) Business Days   
after                                                                           
written notice from Manager specifying such failure, (b) fail to perform or     
materially comply with any of the other covenants, agreements, terms or         
conditions                                                                      
contained in this Agreement applicable to the Companies (other than monetary    
payments) and which failure shall continue for a period of thirty (30) days     
after                                                                           
written notice thereof from Manager to the Companies specifying in detail the   
nature of such failure, or, in the case such failure is of a nature that it     
cannot, with due diligence and good faith, cure within thirty (30) days, if     
the Companies fail to proceed promptly and with all due diligence and in good   
faith to cure the                                                               
same and thereafter to prosecute the curing of such failure to completion       
with all                                                                        
due diligence within ninety (90) days thereafter or (c) convert the             
Proceedings to                                                                  
Chapter 7 bankruptcy proceedings.                                               

Section 6.4  Bankruptcy.  With the exclusion of any actions taken pursuant to 
the Proceedings, an Event of Default shall occur if any party (a) applies for or
consents to the appointment of a receiver, trustee or liquidator of itself or   
any                                                                             
of its property, (b) makes a general assignment for the benefit of creditors,   
(c) is adjudicated a bankrupt or insolvent, or (d) files a voluntary petition in
bankruptcy or a petition or an answer seeking reorganization or an              
arrangement with                                                                
creditors, takes advantage of any bankruptcy, reorganization, insolvency,       
readjustment of debt, dissolution or liquidation law, or admits the material    
allegations of a petition filed against it in any proceedings under any such    
law.                                                                            

Section 6.5  Reorganization/Receiver.  With the exclusion of any actions      
taken pursuant to the Proceedings, an Event of Default shall occur if an order, 
judgment or decree is entered by any court of competent jurisdiction approving a
petition seeking reorganization of Manager or the Companies, as the case may    
be, or                                                                          
appointing a receiver, trustee or liquidator of Manager or the Companies, as the
case may be, or of all or a substantial part of any of the assets of Manager    
or the                                                                          
Companies, as the case may be, and such order, judgment or decree continues     
unstayed and in effect for a period of sixty (60) days from the date of entry   
thereof.                                                                        

Section 6.6  Delays and Omissions.  No delay or omission as to the exercise   
of any right or power accruing upon any Event of Default shall impair the       
non-defaulting party's exercise of any right or power or shall be construed     
to be a                                                                         
waiver of any Event of Default or acquiescence therein.                         

Section 6.7  Disputes.  Notwithstanding the provisions of this Article VI,    
any occurrence which would otherwise constitute an Event of Default hereunder   
shall                                                                           
not constitute an Event of Default for so long as such dispute is before the    
Bankruptcy Court pursuant to provisions of Article IX.                          

ARTICLE VII. TERMINATION

Section 7.1  Termination Events.  This Agreement may be terminated by the     
non-defaulting party upon the occurrence of an Event of Default and the         
lapsing of                                                                      
the time to cure.                                                               

Section 7.2  Notice of Termination.  In the event of the occurrence and       
continuation for the relevant cure period of an Event of Default, either        
Manager,                                                                        
the Companies or the Committee, as appropriate, may terminate ("Termination")   
this                                                                            
Agreement by giving ten (10) days written notice, and, upon Bankruptcy Court    
approval, the Term of this Agreement shall expire by limitation at the          
expiration                                                                      
of said last day specified in the notice as if said date was the date herein    
originally fixed for the expiration of the Term hereof.                         

Section 7.3  Payments Upon Termination.  The Companies shall pay to Manager   
all accrued but unpaid Management Fees and expenses of Manager and any other sum
owed Manager pursuant to this Agreement.                                        

Section 7.4   Post Termination.  Upon a Termination:                          

(a)  Manager shall promptly deliver to Elsinore any books, records,   
instruments or other documentation relating to the Project and the Companies    
in Manager's possession or under Manager's control;                             

(b)  Manager and its Affiliates shall release and waive all rights,   
claims, interests and relationships they may have to retain or discharge any    
matter of management with respect to the Project, or any other benefit          
thereunder or in connection therewith, except as specified in Section 7.3 and   
for the provisions of Article VIII which shall survive Termination; and         

(c)  Manager shall peacefully vacate and surrender possession to Four 
Queens, and shall fully cooperate in the prompt and efficient transfer of the   
management of the Project from Manager to a person or entity designated by      
the Bankruptcy Court upon motion brought by or on behalf of the Committee or    
the Board to designate a successor manager.  In connection with the             
foregoing, Manager shall act in good faith to avoid any breach or disruption    
of any contract involving the Project or the lapse of any insurance policy      
covering or pertaining to the Project.                                          

Section 7.5   Transfer of Permits and Gaming Licenses Upon Termination.  To   
the fullest extent permissible under applicable law, upon termination or        
expiration                                                                      
of this Agreement, Manager shall cooperate in the transfer of any and all       
permits,                                                                        
licenses or similar authorizations issued by any governmental body relating     
to the                                                                          
operation or management of any or all of the Project to the new manager.        

   ARTICLE VIII:  EXCULPATION AND INDEMNIFICATION.

Section 8.1   Exculpation.  Manager, its Affiliates and each of their         
respective officers, partners, directors, employees and agents shall not be     
liable                                                                          
to the Companies or any person who has acquired an interest in either or both of
the Companies, for any losses sustained or liabilities incurred, including      
monetary                                                                        
damages, as a result of any act or omission of Manager, its Affiliates or any of
their respective officers, partners, directors, employees or agents, if the     
acts or                                                                         
omissions of Manager or such  other person did not constitute actual fraud, or  
willful, wanton or reckless misconduct, or criminal misconduct ("Manager Conduct
Standard").  The negative disposition of any action, suit or proceeding by      
judgment, order, settlement, conviction or upon a plea of nolo contendere, or   
its                                                                             
equivalent, shall not, of itself, create a presumption that Manager, its        
Affiliates                                                                      
or any of their respective officers, partners, directors, employees or agents   
acted in a manner contrary to the Manager Conduct Standard.                     

Section 8.2   Indemnification.                                                

(a)  Subject to the provisions of Section 8.2(b) hereof, the parties  
shall indemnify and hold harmless each other, their respective Affiliates and   
any of their respective officers, partners, directors, employees and agents     
(each individually, an "Indemnitee"), from and against any and all losses,      
claims, damages, liabilities, expenses (including reasonable legal fees and     
expenses), judgments, fines, settlements and other amounts arising from any     
and all claims, demands, actions, suits or proceedings, civil, criminal,        
administrative or investigative, in which an Indemnitee may be involved, or     
threatened to be involved, as a party or otherwise, which relates to, or        
arises out of, the performance of any duties and services for or on behalf of   
the Companies pursuant to the terms and within the scope of this Agreement,     
regardless of whether the liability or expense accrued at or relates to, in     
whole or in part, any time before, on or after the date hereof; provided,       
however, that Manager shall only be required to indemnify and hold harmless     
an Indemnitee upon the breach of the Management Conduct Standard by Manager.    
The negative disposition of any action, suit or proceeding by judgment,         
order, settlement, conviction or upon a plea of nolo contendere, or its         
equivalent, shall not, of itself, create a presumption that an Indemnitee       
acted in a manner contrary to the Manager Conduct Standard.                     

(b)  An Indemnitee shall not be entitled to indemnification under     
this Section 8.2 with respect to any claim, issue or matter in which it has     
been finally adjudged in a nonappealable order that such Indemnitee has         
breached the Manager Conduct Standard unless and only to the extent that the    
court in which such action was brought, or another court of competent           
jurisdiction, determines upon application that, despite the adjudication of     
liability, in view of all of the circumstances of the case, the Indemnitee is   
fairly and reasonably entitled to indemnification for such liabilities and      
expenses as the court may deem proper.  In addition, notwithstanding anything   
to the contrary contained in this Article VIII, an Indemnitee shall not be      
entitled to indemnification under this Section 8.2 against losses sustained     
or liabilities incurred if such losses or liabilities are finally determined    
by a court of competent jurisdiction to have been the direct result of the      
breach of the Manager Conduct Standard by such Indemnitee.                      

(c)  In the event that any legal proceedings shall be instituted or   
any claim or demand shall be asserted by any person in  respect of which        
payment may be sought by an Indemnitee under the provisions of this Section     
8.2, the Indemnitee shall promptly cause written notice of the assertion of     
any such proceeding or claim of which it has actual knowledge to be forwarded   
to the Companies or Manager (as the case may be).  Upon receipt of such         
notice, the Companies or Manager (as the case may be) shall have the right,     
at their option and expense, to be represented by counsel of their choice,      
and to defend against, negotiate, settle or otherwise deal with any             
proceeding, claim or demand which relates to any loss, liability, damage or     
deficiency indemnified against hereunder; provided, however, that no            
settlement shall be made without prior written consent of the Indemnitee        
which shall not be unreasonably withheld; and provided further, that the        
Indemnitee may participate in any such proceeding with counsel of its choice    
and at its expense.  The Indemnitee and the Companies or Manager (as the case   
may be) agree to cooperate fully with each other in connection with the         
defense, negotiation or settlement of any such legal proceeding, claim or       
demand.                                                                         

After any final judgment or award shall have been rendered by a court,
arbitration board or administrative agency of competent jurisdiction and the    
expiration of the time in which to appeal therefrom, or a settlement shall      
have been consummated, or the Indemnitee and the Companies or Manager (as the   
case may be) shall have arrived at a mutually binding agreement with respect    
to each separate matter indemnified by the Companies hereunder, the             
Indemnitee shall forward to the Companies or Manager (as the case may be)       
notice of any sums due and owing by it pursuant to this Agreement with          
respect to such matter and the Companies or Manager (as the case may be)        
shall be required to pay all of the sums so owing to the Indemnitee in          
immediately available funds, thirty (30) days after the date of such notice.    

The indemnification provided by this Section 8.2 shall be in                  
addition to any other rights to which an Indemnitee may be entitled in any      
capacity and under any agreement, bylaw or vote of the Board or as a matter     
of law or otherwise, and the indemnification shall continue as to an            
Indemnitee who has ceased to serve in any capacity under this Agreement and     
shall inure to the benefit of the heirs, successors, assigns and                
administrators of an Indemnitee.                                                

   ARTICLE IX:  JURISDICTION

Notwithstanding anything contained in this Agreement, as provided in the      
Plan, the parties to this Agreement agree that the Bankruptcy Court shall       
have the                                                                        
exclusive jurisdiction over any and all disputes arising out of or connected    
with                                                                            
the subject matter of this Agreement.  Manager agrees to submit to the          
jurisdiction                                                                    
of the Bankruptcy court relative to any disputes that arise under this          
Agreement.                                                                      

   ARTICLE X:  NOTICES

Notice given by a party under this Agreement shall be in writing and shall be 
deemed duly given (i) when delivered by hand, (ii) when three (3) days have     
elapsed                                                                         
after its transmittal by registered or certified mail, postage prepaid, return  
receipt requested, or two (2) days have elapsed after its transmittal by        
nationally                                                                      
recognized air courier service; or (iii) when delivered by telephonic facsimile 
transmission (with a copy thereof so delivered by hand, mail or air courier if  
recipient does not acknowledge receipt of the transmission). Notices shall be   
sent                                                                            
to  the addresses set forth below, or another as to which that party has given  
notice, in each case with a copy provided in the same manner and at the same    
time to the persons shown below                                                 

if to Elsinore or Four Queens to:                             

202 Fremont Street                                            
P. O. Box 370                                                 
Las Vegas, Nevada 89101                                       
Attention:  Thomas E. Martin                                  
Facsimile No:  (702) 387-5142                                 

with a copy to:                                               

Gordon & Silver, Ltd.                                         
3800 Howard Hughes Parkway                                    
14th Floor                                                    
Las Vegas, Nevada 89109                                       
Attn:  Gerald M. Gordon, Esq.                                 
Facsimile No:  (702) 369-2666                                 

and to:                                                       

Streich Lang                                                  
3773 Howard Hughes Parkway                                    
Suite 290N                                                    
Las Vegas, Nevada 89109                                       
Attn:  John R. Clemency, Esq.                                 
Facsimile No:  (702) 792-2676                                 

if to Manager to:                                             

c/o William L. Westerman                                      
2901 Las Vegas Boulevard South                                
Las Vegas, Nevada 89109-1935                                  
Facsimile No:  (702) 794-9277                                 

with a copy to:                                               

Dechert, Price & Rhoads                                       
477 Madison Avenue                                            
New York, New York 10022                                      
Attn:  Fredric J. Klink, Esq.                                 
Facsimile No:  (212) 308-2041                                 

Any party may change the name and/or address by written notice      
given in each instance to the other parties.                                    

ARTICLE XI:  MISCELLANEOUS

Section 11.1  Nevada Gaming Control Act and Nevada Gaming Authorities.        
Notwithstanding anything to the contrary contained in this Agreement, this      
Agreement shall be deemed to include all provisions required by the Nevada      
Gaming                                                                          
Control Act, as amended, and the regulations promulgated thereunder (the "Act"),
and shall  be conditioned upon the approval of the Nevada Gaming Authorities as 
required by the Act.  To the extent that any term or provision contained in this
Agreement shall be inconsistent with the Act, the provisions of the Act shall   
govern.  All provisions of the Act, to the extent required by law to be         
included in                                                                     
this Agreement, are incorporated herein by reference as if fully restated in    
this Agreement.                                                                 

Section 11.2  Entire Agreement.  This Agreement contains the entire           
understanding of the parties to this Agreement in respect of its subject        
matter and                                                                      
supersedes all prior agreements and understandings between the parties with     
respect to such subject matter.                                                 

Section 11.3  Amendment; Waiver.  This Agreement may not be modified,         
amended, supplemented, canceled or discharged, except by written instrument     
executed by all of the parties to this Agreement and approved by the Bankruptcy 
Court.  No failure to exercise, and no delay in exercising, any right, power or 
privilege under this Agreement shall operate as a waiver, nor shall any         
single or partial exercise of any right, power or privilege hereunder           
preclude the exercise of any other right, power or privilege.  No waiver of     
any breach of any provision shall be deemed to be a waiver of any preceding     
or succeeding breach of the same or any other provision, nor shall any waiver   
be implied from any course of dealing between or among the parties.             
No extension of time for performance of any obligations or other acts           
hereunder or under any other agreement shall be deemed to be an extension of    
the time for performance of any other obligations or any other acts.            

Section 11.4  Binding Effect; Assignment; Combinations Involving the          
Companies.  The rights and obligations of this Agreement shall bind and inure to
the benefit of the parties (including their respective officers, directors,     
employees, agents and Affiliates) and their respective heirs, executors,        
successors and assigns.  No party to this Agreement shall have the right to     
assign this Agreement and its respective rights and obligations hereunder       
without the consent of each other party to this Agreement and without the       
approval of the Nevada Gaming Authorities.                                      

Section 11.5  Counterparts.  This Agreement may be executed in any            
number of counterparts, each of which shall be an original but all of which     
together shall constitute one and the same instrument.                          

Section 11.6  Terminology.  The headings contained in this Agreement are      
for convenience of reference only and are not to be given any legal effect and  
shall not affect the meaning or interpretation of this Agreement.               

Section 11.7  Governing Law.  This Agreement shall be construed in            
accordance with and governed for all purposes by the laws and public policy     
of the State of Nevada applicable to contracts executed and to be wholly        
performed within such State.                                                    

Section 11.8  Severability.  If any provision of this Agreement, or the       
application of any such provision to any person or circumstance, is held to be  
inconsistent with any present or future law, ruling, rule or regulation of any  
court or governmental or regulatory authority having jurisdiction over the      
subject matter of this Agreement, such provision shall be deemed to be          
modified to the minimum extent necessary to comply with such law, ruling,       
rule or regulation, and the remainder of this Agreement, or the application     
of such provision to persons or circumstances other than those as to which it   
is held inconsistent, shall not be affected.  If any provision is determined    
to be illegal, unenforceable, or void, which provision does not relate to any   
payments made hereunder and the payments made hereunder shall not be affected   
by such determination and this Agreement is                                     
capable of substantial performance, then such void provision shall be deemed    
rescinded and each provision not so affected shall be enforced to the extent    
permitted by law.                                                               

Section 11.9  No Third Party Benefits.  This Agreement is for the             
benefit of the parties hereto and their respective permitted successors and     
assigns.  The parties neither intend to confer any benefit hereunder on any     
person, firm or corporation other than the parties hereto, nor shall any such   
third party have any rights hereunder.                                          

Section 11.10  Drafting Ambiguities.  Each party to this Agreement and its    
counsel have had an opportunity to review and revise this Agreement. The normal 
rule of construction to the effect that any ambiguities are to be resolved      
against the drafting party shall not be employed in the interpretation of       
this Agreement or of any amendments or exhibits to this Agreement.              

Section 11.11  Attorneys' Fees.  Should either party institute an             
arbitration, action or proceeding to enforce any provisions hereof or for other 
relief due to an alleged breach of any provision of this Agreement, the         
prevailing party shall be entitled to receive from the other party all costs    
of the action or proceeding and reasonable attorneys' fees.                     

Section 11.12  Limitations on Responsibilities of Manager.  Manager shall use 
its best efforts to render the services contemplated by this Agreement in good  
faith to the Companies, but notwithstanding anything to the contrary which      
may be expressed or implied in this Agreement, Manager hereby explicitly        
disclaims any and all warranties, express or implied, including but not         
limited to the success or profitability of the Project.  In the performance     
of the services contemplated by this Agreement, Manager shall not be liable     
to the Companies for any acts or omissions in connection therewith, except      
which constitute a breach of the Manager Conduct Standard.                      

Section 11.13  No Violation.  Nothing contained in this Agreement shall       
entitle the Companies, the Manager, or any other persons acting for any of      
them to exercise control over the operation of the Casino or other operations   
of the Project in a manner which would violate any regulation of the Nevada     
Gaming Authorities.                                                             

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to  
be duly executed by an authorized representative thereof, all as of the day and 
year first above written.                                                       

ELSINORE:                                                                       

Elsinore Corporation, a Nevada                                                  
corporation                                                                 

By:                                                                             
Thomas E. Martin    
Title:              

FOUR QUEENS:                                                                    

Four Queens, Inc., a Nevada                                                     
corporation                                                                 

By:                                                                             
Thomas E. Martin                                                      
Title:                                                                

MANAGER:                                                                        

Riviera Gaming Management Corp.-Elsinore, a Nevada corporation                  

By:                                                                             
Name:                                                                 
Title:                                                                

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-K’ Filing		Date		Other Filings
Filed on:		2/21/97
For Period End:		12/31/96
		4/1/96		10-K
		1/11/96
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