DEBTORS MOTION FOR AUTHORITY TO (I) MAINTAIN CERTAIN CUSTOMER PROGRAMS AND (II) HONOR OR PAY RELATED PREPETITION OBLIGATIONS IN RESPECT THEREOF

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1 Document Page 1 of 16 UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW JERSEY Caption in compliance with D.N.J. LBR (c) FOX ROTHSCHILD LLP (Formed in the Commonwealth of Pennsylvania) Michael J. Viscount, Jr., Esq. Raymond M. Patella, Esq Atlantic Avenue, Suite 400 Atlantic City, NJ (609) /fax (609) mviscount@foxrothschild.com rpatella@foxrothschild.com WHITE & CASE LLP John K. Cunningham, Esq. (pro hac vice pending) Richard S. Kebrdle, Esq. (pro hac vice pending) Kevin M. McGill, Esq. (pro hac vice pending) Southeast Financial Center 200 South Biscayne Blvd., Suite 4900 Miami, FL (305) /fax (305) jcunningham@whitecase.com rkebrdle@whitecase.com kmcgill@whitecase.com Proposed Co-Counsel to the Debtors and Debtors in Possession In re: REVEL AC, INC., et al., Chapter 11 Case No (GMB) Debtors. 1 Joint Administration Requested DEBTORS MOTION FOR AUTHORITY TO (I) MAINTAIN CERTAIN CUSTOMER PROGRAMS AND (II) HONOR OR PAY RELATED PREPETITION OBLIGATIONS IN RESPECT THEREOF 1 The Debtors in these chapter 11 cases, along with the last four digits of each debtor s federal tax identification number, are: Revel AC, Inc. (3856), Revel AC, LLC (4456), Revel Atlantic City, LLC (9513), Revel Entertainment Group, LLC (2321), NB Acquisition, LLC (9387) and SI LLC (3856). The location of the Debtors corporate headquarters is 500 Boardwalk, Atlantic City, New Jersey

2 Document Page 2 of 16 Revel AC, Inc. and its affiliated debtors and debtors in possession (collectively, the Debtors ) in the above-captioned chapter 11 cases (the Chapter 11 Cases ) hereby file this motion (the Motion ) pursuant to sections 105(a) and 363(b) of title 11 of the United States Code, 11 U.S.C. 101, et seq. (the Bankruptcy Code ) for the entry of an order authorizing the Debtors to (i) honor and maintain prepetition customer program commitments in the ordinary course and (ii) honor or pay related prepetition obligations to their customers. In support of the Motion, the Debtors submit the Declaration of Shaun Martin in Support of First Day Motions and Applications (the Martin Declaration ) 2 filed contemporaneously herewith and incorporated herein by reference, and respectfully represent as follows: Background A. Overview 1. The Debtors own and operate a state of the art resort facility unlike any other in Atlantic City, New Jersey. The Debtors facility consists of 6.2 million square feet, located on approximately 20 acres with 820 feet of boardwalk frontage, and features the tallest building in Atlantic City, the Revel hotel, a sleek 47-story, 710-foot high tower. The Debtors 130,000 square foot casino features 110 table games and approximately 2,300 slot machines. The Debtors employ approximately 3,140 employees to operate the Revel facility. Additionally, the Debtors retail, food and beverage partners employ hundreds of employees who also work in the Debtors facility. 2. On June 19, 2014 (the Petition Date ), each of the Debtors filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code, thereby commencing these 2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Martin Declaration. 2

3 Document Page 3 of 16 Chapter 11 Cases. The Debtors continue to operate their business and manage their property as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. 3. To date, no official committee or examiner has been appointed by the Office of the United States Trustee in these Chapter 11 Cases. 4. Additional background facts on the Debtors, including an overview of the Debtors business, information on the Debtors debt structure and information on the events leading up to the Chapter 11 Cases are contained in the Martin Declaration. B. The Customer Programs 5. The Debtors have developed various customer services and programs designed to attract customers, sustain goodwill and loyalty, and enhance their competitiveness in a hyper-competitive industry. In particular, these services and programs include (a) providing Customer Comps and Discounts, (b) holding Customer Deposits, (c) incurring Progressive Gaming Obligations, (d) issuing and honoring Gaming Currency, (e) offering Gift Certificates, and (f) providing and securing Safekeeping and Front Money (each as defined herein, the Customer Programs and the obligations thereunder, the Customer Obligations ). (i) Customer Comps and Discounts 6. In the ordinary course of business and commensurate with the practices of other casino establishments worldwide, the Debtors offer a variety of programs designed to enhance their customers experience, reward continued patronage, and drive new and repeat business, including, among other things, a customer loyalty rewards program, free slot play promotions, giveaways, coupons and gift cards redeemable at the Debtors resort and casino and complimentary meals and spa services (collectively, the Customer Comps and Discounts ). The Customer Comps and Discounts encourage an important regiment of high-spending 3

4 Document Page 4 of 16 customers and a particular and affluent target audience for the Debtors given the unparalleled quality of Revel to frequent the Debtors resort and casino, thereby driving revenue. 7. The Debtors believe that, as of the Petition Date, their prepetition obligations with respect to the Customer Comps and Discounts total approximately $3.4 million. The Debtors seek authority to honor all prepetition Customer Comps and Discounts as of the Petition Date and to continue to honor, in their discretion, Customer Comps and Discounts in the ordinary course of business. (a) Revel Card Program 8. The Revel Card program is a customer loyalty rewards program that allows customers to accumulate tier points and resort dollars, also commonly referred to as comp points, based on the volume of both their gaming and non-gaming activity. Resort dollars are redeemable for complimentary rooms, food, beverage, free slot play, table play, retail, parking, spa and nightlife. Certain high earning players may also earn non-points based compensation, which the Debtors may award at their discretion, in the form of additional complimentary offers. Comp points have a defined expiration date based on whether a customer remains active in earning points. 9. The Revel Card program places customers into five status tiers Blu, Gold, Platinum, Black and Radiance based on the amount of comp points customers accrue during the year. The amount and types of promotional incentives, discretionary compensation and complimentary offers increase and become more attractive as customers earn more comp points and are promoted from the Blu tier the base tier, to the Radiance tier the highest and most elite tier. Platinum and Black tier members are eligible to receive, for example, free valet parking, access to players clubs, free suite upgrades, complimentary day passes to the Debtors 4

5 Document Page 5 of 16 in-house spa, late check-out, access to a dedicated customer service hotline and preferred seating at the Debtors concert venue. 10. As customers accumulate comp points, the Debtors accrue the associated expense in the form of non-cash obligations. As of the Petition Date, approximately $1.68 million in costs related to comp points has accrued under the Revel Card program. The Debtors seek authority to honor, in their discretion, their obligations with respect to Revel Card program in the ordinary course of business. (b) Free Slot Play 11. The Debtors mail Revel Card holders monthly free slot play offers, providing customers with a certain amount of credits to play the Debtors slot machines. The amount of free slot play offered to each target customer is based on, among other things, the customer s Average Daily Worth ( ADW ) and/or their Revel Card tier level of play. If a customer uses the free slot play or earns comp points during a qualifying period, the customer typically will receive an additional bounceback offer for additional free slot play, which is valid for a specified period of time (ranging from 1 day to 180 days). Free slot play is also rewarded to customers on select bonus days based on amount of play and to participants of various in-house promotions. With regards to table players the Debtors may choose to issue a combination of Resort Dollars, Free Slot Play or Match Play Coupons. Match Play Coupons typically require the customer to place a specified bet (i.e., $5, $10, $100) and the Match Play Coupon when presented for a single bet will double the value of the table player s wager up to the value of the Match Play Coupon. The Match Play Coupon has no value by itself. 12. As customers accumulate free slot play, the Debtors incur the associated expense as they are redeemed. As of the Petition Date, approximately $1.1 million has not yet been redeemed relating to free slot play. Though these incurred costs are non-cash obligations, 5

6 Document Page 6 of 16 the Debtors seek authority to continue to honor, in their discretion, their obligations with respect to free slot play in the ordinary course of business. (c) Cash Comp Program 13. In order to encourage high-earning customers to continue playing at the Debtors casino, the Debtors allow certain customers to receive a credit or a discount on their losses ( Cash Comp ). Cash Comps are highly discretionary and are only awarded to customers who have certain financial credentials. The monthly estimate of Cash Comp credits and discounts given to the Debtors customers is approximately $200,000. The Debtors believe that, as of the Petition Date, there is approximately $375,000 outstanding with respect to Cash Comp credits and discounts. The Debtors seek authority to honor their obligations under the Cash Comp program as of the Petition Date, and to continue honoring, in their discretion, their Cash Comp obligations in the ordinary course of business. (d) Promotions and Giveaways 14. Every month the Debtors hold various promotions or giveaways for cash and non-cash prices (e.g., cash, automobiles, trips, merchandise, free slot play, resort dollars and food) to attract new and existing customers. As an example, the Debtors currently have a promotion where new or in-active customers can join the Debtors Loyalty Program and be eligible to spin a wheel on an electronic kiosk to win free slot play or a new automobile. As of the Petition Date, the Debtors have given away one new automobile under such promotion. Typically, the Debtors have multiple promotions running simultaneously throughout the month with certain promotions on specific days and others on a weekly or monthly basis. The Debtors vary their promotions based upon the season and the promotions offered by competitor casinos. 6

7 Document Page 7 of The Debtors estimate they spend approximately $600,000 to $1.5 million per month on giveaways and promotions. The Debtors believe that, as of the Petition Date, there is approximately $206,000 worth of giveaways that have not yet been collected. (ii) Customer Deposits 16. In the ordinary course of their business, customers deposit money with the Debtors in connection with hotel stay and banquet room rentals for large corporations and group travel ( Room Rental Deposits ) as well as advance ticket sales for performances held at the Debtors facility ( Advance Ticket Sales and together with the Room Rental Deposits, the Customer Deposits ). Customers providing Room Rental Deposits utilize the Debtors services, including use of the room and catering costs, as anticipated, and the Room Rental Deposit is offset against the cost of such services. Under certain circumstances, if the customer cancels the reservation, the Room Rental Deposit is fully refundable. With respect to the Advance Ticket Sales, customers receive funds under limited circumstances where the event is cancelled or postponed. The Debtors believe that as of the Petition Date, approximately $3.02 million in refundable Customer Deposits liability has accrued. 17. Importantly, the Customer Deposits are not part of the Debtors estates and the Debtors therefore do not have an equitable interest in such deposits. Authorizing the Debtors to honor their prepetition Customer Deposit obligations will not prejudice in any way the Debtors estates, creditors or other parties in interest. Moreover, the repercussions of not authorizing to Debtors to refund the Customer Deposits would be severe and extremely disruptive and damaging to the Debtors reorganization efforts. For example, if the Debtors developed a reputation in the gaming industry for not returning their customers initial down payments for banquet hall and room reservations, the Debtors customers, fearing the Debtors will not be able to refund their money once they enter the bankruptcy proceedings, may cancel 7

8 Document Page 8 of 16 their current reservations or altogether refrain from making future reservations at the Debtors resort. Either instance could potentially cripple revenue and immediately dissipate customer goodwill. (iii) Progressive Gaming Obligations 18. The Debtors offer progressive and multi-link progressive gaming machines and table games to their customers in the ordinary course of business. Progressive gaming machines electronic games that progressively accumulate funds wagered until such funds are won and paid out and table games, including games such as Let It Ride and Spanish 21, accrue value over a period of time based on amount of customer play. Multi-link progressive gaming machines accrue value in the same manner, but do so at a more rapid rate on account of the fact that multiple progressive machines are linked together across several casinos in Atlantic City, referred to as a pot. When a customer wins the game in question, the winnings are paid by the manufacturer of the winning gaming machine. Then, every two weeks, the Debtors pay the manufacturers of the multi-link progressive machines a percentage of the amounts wagered on the gaming machines. 19. As of the Petition Date, the Debtors have accrued prepetition obligations related to the progressive and multi-link progressive gaming machines and table games (collectively, the Progressive Gaming Obligations ) of approximately $130,000. Maintaining the progressive and multi-link progressive gaming machines and table games, and honoring the obligations relating thereto, is vital to the Debtors slot players, who generate a large percentage of the Debtors revenue, and are critical to the general part of the Debtors casino business. The Debtors seek authority to honor prepetition Progressive Gaming Obligations existing as of the Petition Date, and to continue accruing and honoring, in their discretion, Progressive Gaming Obligations in the ordinary course of business. 8

9 Document Page 9 of 16 (iv) Outstanding Gaming Currency 20. As is customary in the casino business, the Debtors routinely issues gaming chips, slot vouchers and the like to customers for use at gaming tables and slot machines ( Gaming Currency ). Customers possess Gaming Currency while on the Debtors property, and some customers, whether advertently or inadvertently, retain Gaming Currency after they leave the properties ( Outstanding Gaming Currency ) hopefully for later use upon their return. While it is difficult to ascertain the exact amount, as of the Petition Date, the Debtors estimate that customers are in possession of approximately $1.3 million in Outstanding Gaming Currency. (v) Gift Certificates 21. In the ordinary course of business, the Debtors, or through third-party vendors, offer or sell customers gift certificates, vouchers, gift cards and various coupons (collectively, the Gift Certificates ). Gift Certificates may be redeemed for hotel stays, dining, entertainment and retail merchandise at various locations throughout the Debtors resort and casino. The Debtors estimate that, as of the Petition Date, their outstanding Gift Certificate obligations total approximately $220,000. (vi) Safekeeping and Front Money 22. In the ordinary course of business, the Debtors hold certain customer winnings in safekeeping until the customer claims those winnings ( Safekeeping ). For example, when a customer lacks proper identification, any winnings of that customer are held by the Debtors until the customer is able to produce proper identification to claim the winnings. Winnings not immediately claimed by a customer are held in Safekeeping until the customer claims such winnings. Such winnings may be paid via wire, check or in person. Additionally, the Debtors hold funds in Safekeeping that have been confiscated from prohibited patrons (i.e. patrons who are underage or that are excluded by the State of New Jersey); such funds are 9

10 Document Page 10 of 16 subsequently remitted to the State of New Jersey upon demand. The Debtors believe that, as of the Petition Date, approximately $2,300 is held in Safekeeping. 23. In addition, in the ordinary course of their businesses, the Debtors provide a service whereby customers may deposit funds with the casino cage 3 and later withdraw those funds while at a gaming table ( Front Money ). If a customer withdraws Front Money at a gaming table, chips are issued in the amount requested and a counter check is issued and endorsed by the customer to the Debtors in the amount of the withdrawal. The amount of Front Money held by the Debtors can fluctuate dramatically at any given time. Accordingly, it would be extremely costly and burdensome, if not impossible, for the Debtors to ascertain the exact amount of Front Money due and owing to customers as of the Petition Date. However, the Debtors estimate that they have approximately $214,000 in Front Money obligations as of the Petition Date. 24. The winnings held in Safekeeping and the Front Money deposited into the casino cage are not part of the Debtors estate, and therefore the Debtors do not have a property interest in or ownership rights of such funds. Jurisdiction 25. This Court has jurisdiction to consider this matter pursuant to 28 U.S.C. 157 and This is a core proceeding pursuant to 28 U.S.C. 157(b). Venue is proper before this Court pursuant to 28 U.S.C and Relief Requested 26. By this Motion, pursuant to sections 105(a) and 363 of the Bankruptcy Code, the Debtors respectfully request an order authorizing, but not directing, the Debtors, in 3 The casino cage is the physical location where chips are exchanged for cash in a casino. 10

11 Document Page 11 of 16 their business judgment, to (a) honor prepetition obligations under their Customer Programs and (b) continue to pay and administer their Customer Programs on a postpetition basis in the ordinary course of business. Basis for Relief 27. Pursuant to sections 363(b) and 105(a) of the Bankruptcy Code and the necessity of payment doctrine, the Debtors seek authority to honor their prepetition Customer Programs and related obligations. Section 363(b)(l) of the Bankruptcy Code provides, [t]he trustee, after notice and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate U.S.C. 363(b)(l). Section 105(a) of the Bankruptcy Code provides in pertinent part, [t]he Court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. Id. 105(a). Accordingly, this Court is authorized to grant the relief requested. 28. Under the doctrine of necessity, a bankruptcy court may exercise its equitable power to authorize a debtor to pay critical prepetition claims, even though such payment is not explicitly authorized under the Bankruptcy Code. See In re Just for Feet, Inc., 242 B.R. 821, (D. Del. 1999) (holding that section 105(a) of the Bankruptcy Code provides a statutory basis for the payment of pre-petition claims under the doctrine of necessity and noting that the Supreme Court, the United States Court of Appeals for the Third Circuit and the District Court of Delaware all accept the authority of the bankruptcy court to authorize payment of pre-petition claims when such payment is necessary for the debtor s survival during chapter 11 ); In re Columbia Gas Sys., Inc., 171 B.R. 189, (Bankr. D. Del. 1994) (explaining that the doctrine of necessity is the standard in the Third Circuit for enabling a court to authorize the payment of prepetition claims prior to confirmation of a reorganization plan); see also In re CoServ, L.L.C., 273 B.R. 487, 492 n.7 (Bankr. N.D. Tex. 2002) (necessity of payment 11

12 Document Page 12 of 16 rule is a rule of payment not of priority which allows trustees to pay prepetition debts... in order to obtain continued supplies or services essential to the continued operation of the debtor s business ); In re Ionosphere Clubs, Inc., 98 B.R. 174, 176 (Bankr. S.D.N.Y. 1989) ( This rule recognizes the existence of the judicial power to authorize a debtor in a reorganization case to pay pre-petition claims where such payment is essential to the continued operation of the debtor. ); In re Richards, 994 F.2d 763, 765 (10th Cir. 1993) (stating that use of equitable authority provided by section 105(a) of the Bankruptcy Code is permissible when such use is not inconsistent with any specific provision of the Bankruptcy Code and particularly when such use is consistent with the underlying philosophy of the Bankruptcy Code). 29. The bankruptcy court s exercise of its authority under the doctrine of necessity is appropriate to carry out specific statutory provisions of chapter 11, specifically sections 1107(a), 1108 and 363(b)(1) of the Bankruptcy Code, which collectively authorize a debtor in possession to maintain and operate the debtor s business and use estate property outside of the ordinary course of business. Indeed, a debtor in possession operating a business under section 1108 of the Bankruptcy Code has a duty to protect and preserve the value of its business, and prepetition claims may be paid if necessary to perform the debtor s duty. See In re CoServ, L.L.C., 273 B.R. at 497 ( There are occasions when this duty can only be fulfilled by the preplan satisfaction of a prepetition claim. ). 30. The Debtors seek to continue their Customer Programs as such programs have proven to be responsible for generating valuable goodwill, repeat business and net revenue increases. The Debtors believe that continuing the Customer Programs throughout their Chapter 11 Cases is essential to (a) preserve customer relationships and goodwill for the benefit of their estates and (b) maximize revenue and the value of the Debtors estates for the benefit of all 12

13 Document Page 13 of 16 stakeholders as the Debtors. If the Debtors are prohibited from honoring and maintaining the Customer Programs in a manner consistent with their past business practices, customers will lose confidence in the Debtors and may begin to patronize the Debtors competitors that do provide such programs, thereby damaging the Debtors businesses to an extent that far exceeds the cost associated with honoring and continuing such practices. Moreover, failure to maintain the Customer Programs and honor the Customer Obligations will cause irreprehensible damage to the Debtors reputation in the gaming industry. The relief requested herein will protect the Debtors customer relationship, goodwill and help maintain the going concern value of their estates during this critical time. 31. In addition, this Court has historically authorized debtors operating in the niche gaming industry to administer their customer programs and honor their prepetition customer obligations on a postpetition basis. See, e.g., In re RIH Acquisitions NJ, LLC, (GMB) (Bankr. D.N.J. Nov. 8, 2013) (authorizing casino debtors to continue customer programs and honor prepetition obligations relating thereto); In re Revel AC, Inc., Case No (JHW) (Bankr. D.N.J. Apr. 18, 2013); In re TCI 2 Holdings. LLC, No (JHW) (Bankr. D.N.J. Feb. 19, 2009); In re Adamar of N.J., Inc., No (JHW) (Bankr. D.N.J. May 1, 2009); In re THCR7LP Corp., No (JHW) (Bankr. D.N.J. Dec. 7, 2004); see also In re Station Casinos, Inc., No (GWZ) (Bankr. D. Nev. Apr. 15, 2011); In re The Majestic Star Casino, LLC., No (KG) (Bankr. D. Del. Nov. 23, 2009); In re Tropicana Ent., LLC., No (KJC) (Bankr.D Del. May 6, 2008). 32. Further, section 363(c) of the Bankruptcy Code authorizes a debtor in possession operating its business pursuant to section 1108 of the Bankruptcy Code to use property of the estate in the ordinary course of business without notice or a hearing. See 11 13

14 Document Page 14 of 16 U.S.C. 363(c). The Debtors submit that continuing, renewing, replacing, initiating and/or terminating their Customer Programs in the ordinary course of business is permitted by sections 363(c), 1107(a) and 1108 of the Bankruptcy Code without further application to the Court. Emergency Relief and Waiver of Stay 33. Pursuant to Rule 6003 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), the Court may grant relief within twenty-one (21) days after the filing of the petition regarding a motion to use property of the estate only if such relief is necessary to avoid immediate and irreparable harm. For the reasons set forth above, the relief requested herein is necessary to avoid immediate and irreparable harm to the Debtors estates. Accordingly, the relief requested herein may be granted within the twenty-one days following the Petition Date. 34. The Debtors further request a waiver of any stay of the effectiveness of the order approving this Motion to the extent such an order is entered. Pursuant to Bankruptcy Rule 6004(h), [a]n order authorizing the use, sale, or lease of property other than cash collateral is stayed until the expiration of 14 days after entry of the order, unless the court orders otherwise. Fed. R. Bankr. P. 6004(h). As set forth above, the relief requested herein is critically important to prevent irreparable damage to the Debtors operations. Accordingly, the Debtors submit that cause exists to justify a waiver of the fourteen-day stay imposed by Bankruptcy Rule 6004(h), to the extent it applies. Waiver of Memorandum of Law 35. In accordance with Rule of the District of New Jersey Local Bankruptcy Rules, no brief is being filed in support of this Motion because the legal principles involved are not novel or in dispute and are adequately set forth in the Motion. 14

15 Document Page 15 of 16 Notice 36. Notice of this Motion has been provided to the (i) Office of the United States Trustee for the District of New Jersey, (ii) counsel to the First Lien Lenders, (iii) counsel to the Second Lien Lenders, (iv) counsel to the DIP Agent, (v) the Debtors 30 largest unsecured creditors on a consolidated basis (including counsel if known), (vi) all parties requesting notices pursuant to Bankruptcy Rule 2002, (vii) the Office of the Attorney General for the State of New Jersey, (viii) the New Jersey Division of Gaming Enforcement, (ix) the New Jersey Casino Control Commission, (x) the Office of the Governor for the State of New Jersey, (xi) the United States Attorneys Office for the District of New Jersey, (xii) the United States Attorney General, (xiii) the Internal Revenue Service and (xiv) the Securities and Exchange Commission. The Debtors submit that no other or further notice need be provided. 37. No previous motion for the relief sought herein has been made to this or any other court. 15

16 Document Page 16 of 16 WHEREFORE, the Debtors respectfully request entry of an order (i) granting the relief requested herein and (ii) granting the Debtors such other and further relief as the Court deems just and proper. Dated: June 19, 2014 Atlantic City, New Jersey FOX ROTHSCHILD LLP By: /s/ Michael J. Viscount, Jr. Michael J. Viscount, Jr., Esq. Raymond M. Patella, Esq Atlantic Avenue, Suite 400 Atlantic City, NJ (609) /fax (609) and John K. Cunningham, Esq. (pro hac vice pending) Richard S. Kebrdle, Esq. (pro hac vice pending) Kevin M. McGill, Esq. (pro hac vice pending) WHITE & CASE LLP Southeast Financial Center 200 South Biscayne Boulevard, Suite 4900 Miami, Florida (305) /fax (305) Proposed Co-Counsel to the Debtors and Debtors in Possession 16

17 Case GMB Doc 11-1 Filed 06/19/14 Entered 06/19/14 18:40:21 Desc Proposed Order Page 1 of 5 EXHIBIT A (Proposed Order)

18 Case GMB Doc 11-1 Filed 06/19/14 Entered 06/19/14 18:40:21 Desc Proposed Order Page 2 of 5 UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW JERSEY Caption in compliance with D.N.J. LBR (c) FOX ROTHSCHILD LLP (Formed in the Commonwealth of Pennsylvania) Michael J. Viscount, Jr., Esq. Raymond M. Patella, Esq Atlantic Avenue, Suite 400 Atlantic City, NJ (609) /fax WHITE & CASE LLP John K. Cunningham, Esq. (pro hac vice pending) Richard S. Kebrdle, Esq. (pro hac vice pending) Kevin M. McGill, Esq. (pro hac vice pending) Southeast Financial Center 200 South Biscayne Blvd., Suite 4900 Miami, FL (305) /fax (305) Proposed Co-Counsel to the Debtors and Debtors in Possession In re: REVEL AC, INC., et al., Debtors. 1 Chapter 11 Case No (GMB) Joint Administration Requested Re: Docket No. ORDER AUTHORIZING THE DEBTOR TO (I) MAINTAIN CERTAIN CUSTOMER PROGRAMS AND (II) HONOR OR PAY RELATED PREPETITION OBLIGATIONS IN RESPECT THEREOF The relief set forth on the following pages two (2) through four (4) is hereby ORDERED: 1 The Debtors in these chapter 11 cases, along with the last four digits of each debtor s federal tax identification number, are: Revel AC, Inc. (3856), Revel AC, LLC (4456), Revel Atlantic City, LLC (9513), Revel Entertainment Group, LLC (2321), NB Acquisition, LLC (9387) and SI LLC (3856). The location of the Debtors corporate headquarters is 500 Boardwalk, Atlantic City, New Jersey

19 Case GMB Doc 11-1 Filed 06/19/14 Entered 06/19/14 18:40:21 Desc (Page 2) Debtors: Proposed Order Revel AC, Inc., et al. Page 3 of 5 Case No.: (GMB) Caption of Order: ORDER AUTHORIZING THE DEBTOR TO (I) MAINTAIN CERTAIN CUSTOMER PROGRAMS AND (II) HONOR OR PAY RELATED PREPETITION OBLIGATIONS IN RESPECT THEREOF Upon the motion (the Motion ) 2 of Revel AC, Inc. and its affiliated debtors and debtors in possession (collectively, the Debtors ) pursuant to sections 105(a) and 363(b) of the Bankruptcy Code for the entry of an order authorizing the Debtors to (i) honor and maintain prepetition Customer Programs in the ordinary course and (ii) honor or pay related prepetition obligations to their customers, all as more fully set forth in the Motion; and upon consideration of the Declaration of Shaun Martin in Support of First Day Motions and Applications; and it appearing that the Court has jurisdiction over this matter; and it appearing that due notice of the Motion as set forth therein is sufficient under the circumstances, and that no other or further notice need be provided; and it further appearing that the relief requested in the Motion is in the best interests of the Debtors and their estates and creditors; and upon all of the proceedings had before the Court; and after due deliberation and sufficient cause appearing therefor, it is hereby ORDERED that the Motion is GRANTED; and it is further ORDERED that the Debtors are authorized and empowered, pursuant to sections 105(a) and 363(b) of the Bankruptcy Code, to continue, renew, replace, implement, modify and/or terminate the Customer Programs, as they deem appropriate, in the ordinary course of business and without further application of the Court; and it is further ORDERED that the Debtors are authorized to pay all prepetition claims relating to Customer Obligations, including Comps and Discounts, Customer Deposits, Progressive 2 Motion. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the 2

20 Case GMB Doc 11-1 Filed 06/19/14 Entered 06/19/14 18:40:21 Desc (Page 3) Debtors: Proposed Order Revel AC, Inc., et al. Page 4 of 5 Case No.: (GMB) Caption of Order: ORDER AUTHORIZING THE DEBTOR TO (I) MAINTAIN CERTAIN CUSTOMER PROGRAMS AND (II) HONOR OR PAY RELATED PREPETITION OBLIGATIONS IN RESPECT THEREOF Gaming Obligations, outstanding Gaming Currency, Gift Certificates, Safekeeping, Front Money, and all other similar programs and policies; and it is further ORDERED that the Debtors are authorized to issue postpetition checks, or to effect postpetition fund transfer requests, in replacement of any prepetition checks or fund transfer requests in respect of Customer Programs that are dishonored or rejected; and it is further ORDERED that the banks and financial institutions on which checks were drawn or electronic payment requests made in payment of the prepetition obligations approved herein are authorized and directed to receive, process, honor and pay all such checks and electronic payment requests when presented for payment, and all such banks and financial institutions are authorized to rely on the Debtors designation of any particular check or electronic payment request as being approved by this Order; and it is further ORDERED that nothing in the Motion or this order, nor the Debtors payment of claims pursuant to this order, shall be deemed or construed as (a) an admission as to the validity of any claim against the Debtors; (b) a waiver of the Debtors rights to dispute any claim on any grounds; (c) a promise to pay any claim; (d) an implication or admission that any particular claim is a claim for payments authorized pursuant to this order; or (e) a request to assume any executory contract or unexpired lease, pursuant to section 365 of the Bankruptcy Code; and it is further ORDERED notwithstanding anything to the contrary contained herein, any payment to be made, or authorization contained hereunder, shall be subject to the terms and 3

21 Case GMB Doc 11-1 Filed 06/19/14 Entered 06/19/14 18:40:21 Desc (Page 4) Debtors: Proposed Order Revel AC, Inc., et al. Page 5 of 5 Case No.: (GMB) Caption of Order: ORDER AUTHORIZING THE DEBTOR TO (I) MAINTAIN CERTAIN CUSTOMER PROGRAMS AND (II) HONOR OR PAY RELATED PREPETITION OBLIGATIONS IN RESPECT THEREOF conditions of, and the requirements imposed upon the Debtors under, the Court s interim or final orders authorizing the Debtors to enter into the debtor-in-possession financing with the DIP Agent, including, but not limited to, the DIP Budget (as defined in such orders); and it is further ORDERED that the requirements set forth in Bankruptcy Rule 6003(b) are satisfied by the contents of the Motion; and it is further ORDERED that notwithstanding the possible applicability of Bankruptcy Rules 6004(h), 7062, 9014 or otherwise, this order shall be immediately effective and enforceable upon its entry. this order; and it is further ORDERED that the Debtors are authorized to take all steps necessary to carry out ORDERED that this Court shall retain jurisdiction with respect to all matters arising from or in relation to the implementation and interpretation of this order. 4