ENVIRONMENTAL INDEMNITY AGREEMENT
This
Environmental Indemnity Agreement (as amended, restated, supplemented and
otherwise modified from time to time, this “Agreement”) is
entered into as of July 23, 2010, by NEVADA
GOLD & CASINOS, INC., a Nevada corporation (“Borrower’s Parent”),
XX
XXXXXXXXXX XX HOLDINGS, INC. a Delaware limited liability company (“Borrower”) and XX
XXXXXXXXXX XX, LLC, a Washington limited liability company (“Borrower’s
Subsidiary” and, collectively with Borrower’s Parent and Borrower, the
“Indemnitors”
and each an “Indemnitor”) in favor
of FORTRESS
CREDIT CORP., a Delaware corporation, (“Agent”), as agent to
Lenders (as defined hereinafter) with reference to the following
matters:
A. Pursuant
to the terms and conditions of that certain Credit Agreement of even date
herewith (as amended, restated, supplemented and otherwise modified from time to
time, the “Credit
Agreement”), among Borrower, the financial and banking institutions party
thereto from time to time (“Lenders”) and Agent,
Lenders have agreed to provide extensions of credit and other financial
accommodations to Borrower for the purposes described in Section 6.2
thereof. Capitalized terms used but not otherwise defined herein
shall have the meanings set forth in the Credit Agreement.
B. As
a condition to making the Loans, Lenders require Indemnitors to indemnify and
hold harmless Lenders from any Environmental Claim or violation of any
Environmental, Health or Safety Requirements of Law or any Environmental Permit
attributable to Contaminants in which Borrower or Operator owns an interest
(including all Real Property related thereto, the “Property”). Lenders
would not make the Loans without this Agreement and Indemnitors acknowledge and
understand that this Agreement is a material inducement for Lenders’ agreement
to make the Loans.
NOW
THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt of and sufficiency of which are hereby acknowledged,
Indemnitors agree as follows:
1. Definitions. For
purposes of this Agreement, the following terms shall have the following
meanings:
(a)
“Environmental
Claim” shall include, but not be limited to, any claim, demand, action,
suit, loss, cost, damage, fine, penalty, expense, liability, judgment,
proceeding, or injury, whether threatened, sought, brought, or imposed, that
seeks to impose Liabilities and Costs for any of the following on, under,
emanating or arising directly or indirectly from the Property: (i) noise; (ii)
pollution or contamination of the air, surface water, ground water, or land;
(iii) solid, gaseous, or liquid waste generation, handling, treatment, storage,
disposal, or transportation; (iv) exposure to Contaminants; (v) the manufacture,
processing, distribution in commerce, use, or storage of Contaminants; (vi)
injury to or death of any person or persons directly or indirectly connected
with Contaminants; (vii) destruction or contamination of any property directly
or indirectly connected with Contaminants; or (viii) any and all penalties
directly or indirectly connected with Contaminants. The term “Environmental Claim”
also includes (i) the costs of removal of any and all Contaminants from all or
any portion of the Property, (ii) costs required to take necessary precautions
to protect against the Release of Contaminants on, in, under, or affecting the
Property or into the air, surface water, ground water, land, any public domain,
or any surrounding areas, and (iii) costs incurred to comply, in connection with
all or any portion of the Property or any surrounding areas affected by
Contaminants on, under or emanating from the Property, with any Environmental,
Health or Safety Requirements of Law. “Environmental Claim”
also means any asserted or actual breach or violation of any Environmental,
Health or Safety Requirements of Law, or any event, occurrence, or condition as
a consequence of which, pursuant to any Environmental, Health or Safety
Requirements of Law, (i) Borrower, any Borrower, Subsidiary, Agent, Lenders, or
any owner, occupant, or person having any interest in the Property shall be
liable or suffer any disability, or (ii) the Property shall be subject to any
restriction on use, ownership, transferability, or (iii) any action to (A) clean
up, remove, treat or in any other way address Contaminants in the indoor or
outdoor environment; (B) prevent the Release or threat of Release or minimize
the further Release of Contaminants; or (C) investigate and determine if a
remedial or other response is needed and to design such a response and
post-remedial investigation, monitoring, operation and maintenance and care
(each a “Remedial
Action”) shall be required.
(b) “Environmental Permit”
means any permit, license, approval, or other authorization with respect to any
activities, operations, or businesses conducted on or in relation to the
Property under any Environmental, Health or Safety Requirements of
Law.
2. Additional
Defined Terms and Rules of Construction. Article and Section
captions used in this Agreement are for convenience only and shall not affect
the construction of this Agreement. All references to “Articles” and
“Sections,” without reference to a document other than this Agreement are
intended to designate articles and sections of this Agreement, and the words
“herein,” “hereof,” “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular Article or Section, unless
specifically designated otherwise. The use of the term “including”
shall mean in all cases “including, but not limited to,” unless specifically
designated otherwise. No rules of construction against the drafter of
this Agreement shall apply in any interpretation or enforcement of this
Agreement, any documents or certificates executed pursuant hereto, or any
provisions of any of the foregoing.
FORTRESS/NEVADA GOLD & CASINOS
3. Indemnification.
(a) Indemnitors
shall protect, defend, indemnify, and hold harmless Agent, Lenders, their
assigns and their respective affiliates, investment advisors, clients,
shareholders and managed accounts, and each of their respective officers,
directors, shareholders, and employees and their respective heirs, legal
representatives, successors, and assigns (Lenders and all such other persons and
entities being referred to herein individually, as an “Indemnitee” and
collectively, as “Indemnitees”) from
and against any of the following (collectively, “Indemnified
Losses”): all liabilities, losses, costs, damages, expenses or
claims, including, but not limited to, remedial, removal, response, abatement,
cleanup, legal, investigative, and monitoring costs and other related costs,
expenses, losses, damages, penalties, fines, liabilities, obligations, defenses,
judgments, suits, proceedings, and disbursements (including, without limitation,
actual attorneys’ and experts’ fees and disbursements) of any kind or of any
nature whatsoever, which may at any time be imposed upon any Indemnitee,
incurred by any Indemnitee, arising directly or indirectly: (i) from
Environmental, Health or Safety Requirements of Law related to the Property;
(ii) with respect to Environmental Claims related to the Property; (iii) from
the failure to obtain, maintain, or comply with any Environmental Permit for, or
related to, the Property, and/or (iv) otherwise, from the presence or existence
of Contaminants on, under or emanating from the Property, including all
consequential damages related thereto.
(b) Notwithstanding
anything contained herein to the contrary, Indemnitors shall not be liable for
any Indemnified Losses to the extent that such Indemnified Losses: (i) are
determined in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Indemnitee claiming such Indemnified Losses; or (ii) do not arise or result
from, or relate to, any ownership, operation, or control of the Property by any
Indemnitor.
(c) In
the event that any Remedial Action is required under any Environmental, Health
or Safety Requirements of Law because of, or in connection with, the current or
future presence, suspected presence, Release or suspected Release of a
Contaminant from the Property (or any portion thereof), in or into the air,
soil, groundwater, surface water or soil vapor at, on, about, under or within
the Property (or any portion thereof), Indemnitors shall within thirty (30) days
after written demand for performance thereof by Indemnitees (or such shorter
period of time as may be required under any Environmental, Health or Safety
Requirements of Law), commence to perform, or cause to be commenced, and
thereafter diligently prosecute to completion, all such Remedial
Action. All Remedial Action shall be performed by one or more
contractors, approved in advance in writing by Indemnitees (which approval shall
not be unreasonably withheld or delayed), and under the supervision of a
consulting engineer approved in advance in writing by Indemnitees (which
approval shall not be unreasonably withheld or delayed). All
reasonable costs and expenses of such Remedial Action shall be paid by
Indemnitors, including, without limitation, the reasonable charges of
contractor(s), consulting engineer(s), and attorney(s) incurred by Indemnitees
in connection with monitoring or review of such Remedial Action. In
the event Indemnitors shall fail to timely commence, or cause to be commenced,
or fail to diligently prosecute to completion, such Remedial Action, Indemnitees
may, but shall not be required to, cause such Remedial Action to be performed
and all costs and expenses thereof, or incurred in connection therewith, shall
become an Environmental Claim hereunder.
(d) This
Agreement, and all rights and obligations hereunder, shall survive performance
and repayment of the Obligations evidenced by and arising under the other Loan
Documents, surrender of the Note(s), release of other security provided in
connection with the Loans, transfer of any Lender’s rights in the Loans, the
Loan Documents and any collateral covered by the Loan Documents. This
Agreement shall be deemed a “Loan Document” and the payment of all sums due
hereunder and the performance and discharge of each and every obligation,
covenant and agreement of Indemnitors contained herein, are, and shall be deemed
to be “Obligations” and “Guaranteed Obligations”.
(e) Nothing
contained in this Agreement shall prevent or in any way diminish or interfere
with any rights and remedies, including without limitation, the right to
contribution, which Lenders may have against Indemnitors or any other party
under any Environmental, Health or Safety Requirements of Law.
FORTRESS/NEVADA GOLD & CASINOS
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4. Notice of
Actions.
(a) Borrower
shall promptly (but in no event later than ten (10) Business Days from the
occurrence of the event in question) notify Lenders and Agent of: (i)
any proceeding, inquiry, notice, or other communication by or from any
Governmental Authority, including, without limitation, the Environmental
Protection Agency, regarding the presence or existence of any Contaminant on,
under, or about the Property or any migration thereof from or to the Property or
any actual or alleged violation of Environmental, Health or Safety Requirements
of Law; (ii) all Environmental Claims and any other claims made or threatened
against Borrower or the Property relating to any loss or injury resulting from
or pertaining to any Contaminant on, under or emanating from the Property or any
alleged breach or violation of any Environmental, Health or Safety Requirements
of Law by or with respect to the Property; (iii) any Indemnitor’s discovery of
any occurrence or condition on any real property adjoining or in the vicinity of
the Property that could cause the Property or any part thereof to be subject to
any restrictions on ownership, occupancy, transferability, or use, or subject
the owner or any person having any interest in the Property to any liability,
penalty, or disability under any Environmental, Health or Safety Requirements of
Law; and (iv) any Indemnitor’s receipt of any notice or discovery of any
information regarding any actual, alleged, or potential use, production,
storage, seepage, Release or any other presence or existence of any Contaminant
on, under, or about the Property, or any alleged breach or violation of any
Environmental, Health or Safety Requirements of Law pertaining to the
Property.
(b) Borrower
shall promptly (but in no event later than ten (10) Business Days after receipt
of same) deliver or cause to be delivered to Lenders and Agent copies of any and
all Environmental Claims, and any and all orders, notices, permits,
applications, reports, and other communications, documents, and instruments
pertaining to the actual, alleged, or potential presence or existence of any
Contaminant on, under, or about the Property.
5. Procedures
Relating to Indemnification.
(a) Indemnitors
shall, at their own cost, expense, and risk: (i) defend all suits,
actions, or other legal or administrative proceedings that may be brought or
instituted against an Indemnitee or Indemnitees, as the case may be, on account
of any matter or matters indemnified against in Section 3 above (an
“Indemnified
Matter”); (ii) pay in or satisfy any judgment or decree that may be
recorded against any Indemnitees in any such suit, action, or other legal or
administrative proceedings as to any Indemnified Matter; (iii) reimburse
Indemnitees for the cost of, or for any payment made by any of them, with
respect to any reasonable expenses incurred in connection with the Contaminants
undertaken as a result of any demands, causes of actions, lawsuits, proceedings,
or any other claims threatened, made, or brought against Indemnitees arising out
of the obligations of Indemnitors under this Agreement or any Indemnified
Matter; and (iv) reimburse Indemnitees for any and all reasonably necessary
expenses, including, but not limited to, legal expenses, arising out of or
attributable to, any Indemnified Matter or in connection with enforcing the
rights of Indemnitees under this Agreement or in monitoring and participating in
any action, proceeding, or litigation as to any Indemnified Matter.
(b) Counsel
selected by Indemnitors pursuant to Section 5(a) above
shall be subject to the reasonable approval of the Indemnitees asserting a claim
hereunder; provided, however, that, if, in the reasonable judgment of such
Indemnitee (i) the defense is not proceeding or being conducted in a
satisfactory manner, or (ii) there is a conflict of interest among any of the
parties to such lawsuit, action, legal, or administrative proceeding, any
Indemnitee may employ its own legal counsel and consultants to prosecute,
negotiate, or defend any such claim, lawsuit, action, cause of action, or legal
or administrative proceeding and such Indemnitee shall have the right to
compromise or settle the same in good faith without the necessity of showing
actual liability therefor, and without the consent of
Indemnitors. Indemnitors shall reimburse such Indemnitee upon demand
for all costs and expenses incurred by such Indemnitee, including the amount of
all costs of settlements entered into in good faith, and the fees and other
costs and expenses of such attorneys and consultants.
(c) Notwithstanding
anything in this Agreement to the contrary, Indemnitors shall not, without the
prior written consent of any Indemnitee asserting a claim hereunder (which
consent shall not be unreasonably withheld or delayed), (i) settle or compromise
any action, suit, proceeding, or claim or consent to the entry of any judgment
that does not include as an unconditional term thereof the delivery by the
claimant or plaintiff to such Indemnitee of a written release of such Indemnitee
(in form, scope and substance satisfactory to such Indemnitee, in its sole
discretion reasonably exercised) from all liability in respect of such action,
suit, or proceeding; or (ii) settle or compromise any action, suit, proceeding,
or claim in any manner that may materially and adversely affect such Indemnitee
as determined by such Indemnitee, reasonably exercised.
6. Binding
Effect. This Agreement shall be binding upon and inure to the
benefit of Indemnitors and Indemnitees and their respective heirs, personal
representatives, successors and assigns, including, as to Lenders, without
limitation, any Participants and Assignees in accordance with Sections 13.2 and
13.3,
respectively, of the Credit Agreement and any affiliate of Lenders which
acquires all or part of the Property by any sale, assignment or foreclosure
under a mortgage which hereafter may be given by Borrower to Lenders as
additional security for the Loans, by deed or other assignment in lieu of
foreclosure, or otherwise.
FORTRESS/NEVADA GOLD & CASINOS
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7. Limitation
of Liability of Indemnitees. Notwithstanding any ownership by
any Indemnitee at any time of all or any portion of the Property, in no event
shall any Indemnitee (including any Participants and Assignees in accordance
with Sections
13.2 and 13.3, respectively,
of the Credit Agreement) be bound by any obligations or liabilities of any of
the Indemnitors.
8. Liability
of Indemnitors. The liability of Indemnitors under this
Agreement shall in no way be limited or impaired by, any amendment or
modification of the provisions of any other Loan Document. In
addition, the liability of Indemnitors under this Agreement shall in no way be
limited or impaired by (i) any extensions of time for performance required by
any of the Loan Documents; (ii) any sale, assignment, or foreclosure of the
Note(s) or a mortgage which hereafter may be given to Lenders as additional
security for the Loans or any sale or transfer of all or part of the Property;
(iii) any exculpatory provision in any of the Loan Documents, (iv) the accuracy
or inaccuracy of the representations and warranties made by Borrower under any
of the Loan Documents; (v) the release of Borrower or any other person or entity
from performance or observance of any of the agreements, covenants, terms, or
conditions contained in any of the Loan Documents by operation of law, any
Lender’s voluntary act, or otherwise; (vi) the release or substitution in whole
or in part of any security for the Note(s); or (vii) any Lender’s failure to
perfect, protect, secure, or insure any security interest or lien given as
security for the Note(s); and, in any such case, whether with or without notice
to Borrower and with or without consideration.
9. Waiver. Indemnitors
waive any right or claim of right to cause a marshalling of the assets of
Indemnitors or to cause Lenders to proceed against any of the security for the
Loans before proceeding under this Agreement against Indemnitors or to proceed
against Indemnitors in any particular order; Indemnitors agree that any payments
required to be made hereunder shall become due on demand. Indemnitors
expressly waive and relinquish all rights and remedies accorded by applicable
law to Indemnitors, except any rights of subrogation that Indemnitors may have,
provided that the indemnity provided for hereunder shall neither be contingent
upon the existence of any such rights of subrogation nor subject to any claims
or defenses whatsoever that may be asserted in connection with the enforcement
or attempted enforcement of such subrogation rights, including, without
limitation, any claim that such subrogation rights were abrogated by any acts of
Lenders. Indemnitors hereby agree to postpone the exercise of any and
all rights of subrogation to the rights of Lenders against Indemnitors hereunder
and any rights of subrogation to any collateral securing the Loans until the
Loans shall have been paid in full.
10. Waiver of
Jury Trial. EACH INDEMNITOR, INDEMNITEE, LENDER AND AGENT
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
11. Joint and
Several Liability. The obligations of each of the respective
Indemnitors under this Agreement shall be the joint and several obligations of
each of them.
12. Delay. No
delay on Agent’s or any Lender’s part in exercising any right, power, or
privilege under any of the Loan Documents shall operate as a waiver of any such
privilege, power, or right.
13. Execution;
Counterparts. This Agreement may be executed in any number of
counterparts and by a different party on separate counterparts, each of which,
when executed and delivered, will be deemed an original, and all of which, when
taken together, shall constitute one and the same agreement. Delivery
of an executed counterpart of this Agreement via facsimile
transmission or in Adobe .pdf format by electronic mail shall be binding, and as
effective as delivery of a manually executed counterpart, and may be used as
admissible evidence that the party so transmitting intends to be bound by the
terms set forth herein.
14. Notices. All
notices and other communications to be given hereunder shall be in writing and
be given as set forth in Section 14.1 of the
Credit Agreement.
15. Attorneys’
Fees. Indemnitors shall reimburse each Indemnitee for all
actual attorneys’ fees, costs and expenses, arising from and after the date
hereof, incurred hereunder in connection with the enforcement of such
Indemnitee’s rights under this Agreement, including, without limitation, actual
reasonable attorneys’ fees, costs and expenses for trial, appellate proceedings,
out-of-court negotiations, workouts and settlements, and for enforcement of
rights under any state or federal statute, including, without limitation,
reasonable attorneys’ fees, costs and expenses incurred in bankruptcy and
insolvency proceedings such as (but not limited to) in connection with seeking
relief from stay in a bankruptcy proceeding. The term “expenses”
means any expenses incurred by such Indemnitee in connection with any of the
out-of-court, or state, or federal or bankruptcy proceedings referenced above,
including but not limited to the fees and expenses of any appraisers,
consultants and expert witnesses retained or consulted by such Indemnitee in
connection with any of those proceedings. Such Indemnitee shall also be entitled
to its attorneys’ fees, costs and expenses incurred in any post-judgment
proceedings to collect and enforce the judgment. This provision is
separate and several and shall survive the merger of this agreement into any
judgment on this Agreement.
FORTRESS/NEVADA GOLD & CASINOS
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16. Successive
Actions. A separate right of action hereunder shall arise each
time any Lender acquires knowledge of any matter described in Section 1 or Section 3
hereof. Separate and successive actions may be brought hereunder to
enforce any of the provisions hereof at any time and from time to
time. No action hereunder shall preclude any subsequent action, and
Indemnitors hereby waive and covenant not to assert any defense in the nature of
splitting of causes of action or merger of judgments.
17. Severability. If
any one or more of the provisions of this Agreement, or the applicability of any
such provision to a specific situation, shall be held invalid or unenforceable,
such provision shall be modified to the minimum extent necessary to make it or
its application valid and enforceable, and the validity and enforceability of
all other provisions of this Agreement and all other applications of any such
provision shall not be affected thereby.
18. Interest
on Unpaid Amounts. All amounts required to be paid or
reimbursed to any Indemnitee hereunder shall bear interest from the date of
expenditure by such Indemnitee or the date of written demand to the Indemnitors,
whichever is earlier, until paid to Indemnitee(s). The interest rate
shall be the maximum rate then permitted under applicable law.
19. Governing
Law. This Agreement shall be construed in accordance with the
internal laws of the State of New York, without regard to the conflict of laws
provisions
20. Exculpation. Each
Lender’s and Agent’s ability to enforce the liabilities and obligations set
forth hereunder is governed by Section 9.3 of the
Credit Agreement.
[Signature
Page Follows]
FORTRESS/NEVADA GOLD & CASINOS
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IN WITNESS WHEREOF, Indemnitors have
executed this Environmental Indemnity Agreement as of the date first set forth
above.
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INDEMNITORS:
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NEVADA
GOLD & CASINOS, INC.
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/s/
Xxxxxx X. Xxxxxxx
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Name:
Xxxxxx X. Xxxxxxx
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Title:
CEO
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XX
XXXXXXXXXX XX, LLC
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/s/
Xxxxxx X. Xxxxxxx
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Name:
Xxxxxx X. Xxxxxxx
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Title:
Manager
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XX
XXXXXXXXXX XX HOLDINGS, LLC
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/s/
Xxxxxx X. Xxxxxxx
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Name:
Xxxxxx X. Xxxxxxx
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Title:
Manager
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SIGNATURE PAGE TO
FORTRESS/NEVADA GOLD & CASINOS
