EXHIBIT 10.4
INDEMNITY AGREEMENT
INDEMNITY AGREEMENT ("Agreement") dated as of July 25, 1996, between
ELDORADO RESORTS LLC, a Nevada limited-liability company (the "Company"), and
ELDORADO CAPITAL CORP., a Nevada corporation ("Capital").
WITNESSETH:
WHEREAS, pursuant to the terms of a Purchase Agreement dated July 25, 1996,
between the Company and Capital, on the one hand, and Bear, Stearns & Co. Inc.,
Wasserstein Perella Securities, Inc. and BA Securities, Inc., as initial
purchasers (the "Initial Purchasers"), on the other hand, the Company and
Capital will issue and deliver $100 million principal amount of 10 1/2% Senior
Subordinated Notes due 2006 (the "Notes") to the Initial Purchasers;
WHEREAS, Capital is a wholly-owned subsidiary of the Company and was
incorporated for the sole purpose of serving as co-issuer of the Notes;
WHEREAS, Capital does not currently own any assets and will not during its
life own any assets;
WHEREAS, Capital has not transacted any business and will not during its
life transact any business;
WHEREAS, other than its obligations as co-obligor under the Notes and under
the Loan Agreement, dated as of March 25, 1994, among the Company, the banks
named therein and Bank of America NT&SA, as administrative agent, as amended or
supplemented now or in the future (as amended or supplemented now or in the
future, the "Loan Agreement"), Capital has not incurred any debt and will not
during its life incur any debt; and
WHEREAS, all of the proceeds from the sale of the Notes were distributed to
the Company and Capital did not receive any of such proceeds.
NOW, THEREFORE, in consideration of the premises and of the agreements
contained herein, it is hereby agreed as follows:
1. Capital not to Conduct Business. Capital hereby covenants and agrees
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that it will not transact, carry on or engage in any business activity
whatsoever during the term of this Agreement, including, without limitation,
enter into any contract for any purpose, acquire or hold any assets, create or
incur any indebtedness (other than indebtedness as co-obligor under the Notes
and the Loan Agreement), maintain bank accounts, or permit any person or agent
to take any such action on its behalf.
2. Indemnity. The Company shall indemnify and hold harmless Capital and any
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person authorized to act and who acts on behalf of Capital (an "Agent") against
any obligation under the Notes or the Loan Agreement and against any losses,
claims, damages, liabilities, costs (including the costs of preparation and
attorneys' fees) and expenses (collectively, "Losses") incurred by Capital in
connection with the Notes or the Loan Agreement and pursuant to any
investigation or proceeding against Capital or any Agent arising out of or in
connection with the Notes, the Loan Agreement, this Agreement or otherwise in
connection with the transactions contemplated thereby. The Company agrees to pay
promptly for all such Losses as such obligations arise. The obligations of the
Company to Capital and each of its Agents hereunder shall be separate
obligations and the Company's liability to Capital and any
of its Agents hereunder and shall survive the redemption of the Notes, mandatory
or otherwise, the termination of the Loan Agreement and the termination of this
Agreement.
3. Payment of the Notes and Amounts Due Under the Loan Agreement. The
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Company hereby covenants and agrees to pay as due all obligations, whether for
principal, interest or otherwise, under the Notes and the Loan Agreement. If at
any time, or from time to time, Capital receives any demand for payment under
the Notes or the Loan Agreement, Capital shall deliver a notice demanding
payment by the Company which notice shall specify the amount of payment due and
the person to whom payment shall be made. No later than ten days following the
date of such notice, the Company shall pay the amount due in full to Capital or
such person as may be designated by Capital in such notice.
4. Waiver of Contribution. The Company hereby waives all right to
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contribution from Capital to which it would otherwise be entitled under
applicable law.
5. Interest Deduction. As the Company is hereby obligated to pay all
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interest expense under the Notes and the Loan Agreement, the Company and Capital
hereby agree that the Company, and not Capital, shall be entitled to claim as a
deduction for income tax purposes all interest expense under the Notes and the
Loan Agreement, regardless of whether such deduction may be claimed prior to
actual payment of such interest expense by the Company.
6. Nature of Obligations. The obligations of the Company hereunder are
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direct, absolute, unconditional and irrevocable and may be enforced by Capital
without first making any payment under the Notes or the Loan Agreement. The
obligations of the Company hereunder shall not in any way be reduced, limited,
terminated, discharged, affected or otherwise impaired by, (i) any invalidity or
irregularity in whole or in part of the Notes, (ii) any waiver by any person of
the performance or observance by the Company or Capital of any of the
agreements, covenants, terms or conditions contained in the Notes or the Loan
Agreement, (iii) any indulgence in or the extension of the time for payment by
the Company or Capital of any amounts payable under or in connection with the
Notes or the Loan Agreement, or of the time for performance by the Company or
Capital of any other obligations under or arising out of the Notes or the Loan
Agreement, (iv) any modification or amendment (whether material or otherwise) of
any duty, agreement or obligation of the Company or Capital set forth in the
Notes or the Loan Agreement, (v) the voluntary or involuntary liquidation, sale
or other disposition of all or substantially all the assets of the Company or
Capital, or receivership, insolvency, bankruptcy, reorganization, or other
similar proceedings affecting the Company or Capital or any of their respective
assets, (vi) the consolidation or merger of the Company or Capital, (vii) the
failure of the Company to pay a fee or provide other consideration in
consideration of its issuance of this Agreement, (viii) the occurrence or
continuance of any event of default under the Notes or the Loan Agreement or any
acceleration or required prepayment of any indebtedness of the Company or
Capital under or in respect of the Notes or the Loan Agreement as a result
thereof or otherwise, (ix) any change of circumstances, whether or not
foreseeable, and whether or not any such change does or may vary the risk of the
Company under this Agreement, (x) any right, claim or defense, waiver, surrender
or compromise that any person may have under or in respect of this Agreement or
otherwise or (xi) any other cause or circumstance, whether similar or dissimilar
to the foregoing which might otherwise constitute a defense available to, or
discharge of, the Company in respect of its obligations under the Notes or the
Loan Agreement.
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7. Remedies; No Waiver.
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(a) Capital may protect and enforce its rights hereunder in any court
or other tribunal by an action at law, suit in equity or other appropriate
proceedings, whether for damages, for the specific performance of any term
hereof or otherwise, or in aid of the exercise of any power granted hereby
or in law.
(b) No failure or delay by Capital in exercising any right, power or
remedy shall operate as a waiver thereof or otherwise impair any of its
rights, powers or remedies. No single or partial exercise of any such
right shall preclude any other or further exercise thereof or the exercise
of any other legal right. No waiver of any such right shall be effective
unless given in writing.
(c) The rights or remedies provided for herein are cumulative and are
not exclusive of any other rights, powers or remedies provided by law. The
assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion of any other appropriate right
or remedy.
8. Successors and Assigns. This Agreement shall bind the successors and
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assigns of the Company and shall inure to the benefit of Capital, its successors
and assigns. The Company may not assign any of its obligations hereunder
without the prior written consent of Capital or its successors or assigns.
9. Notices. Each notice, demand or other communication relating to this
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Agreement shall be in writing, shall be hand-delivered or sent by mail, postage
prepaid, telegram or facsimile (with confirmation by mail) and shall be deemed
duly given when sent to the following addresses, or to such other address or
number as a party shall have last specified by notice to the other party:
To the Company:
Eldorado Resorts LLC
Fourth and Virginia Streets
Reno, Nevada 89501
Attention: Chief Financial Officer
Telecopier: (702) 348-7513
To Capital:
Eldorado Capital Corp.
Fourth and Virginia Streets
Reno, Nevada 89501
Attention: Secretary
Telecopier: (702) 348-7513
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10. GOVERNING LAW; HEADINGS. THIS AGREEMENT SHALL BE GOVERNED BY AND
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CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEVADA. THE
HEADINGS IN THIS AGREEMENT ARE FOR PURPOSES OF REFERENCE ONLY AND DO NOT LIMIT
OR AFFECT ITS MEANING.
11. Amendments. The provisions hereof may be waived, supplemented, or
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amended only by an instrument in writing signed by a duly authorized
representative of each of the parties hereto.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed and delivered as of the day and year first above written.
ELDORADO RESORTS LLC
By: /s/ Donald L. Carano
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Name: Donald L. Carano
Title: Chief Executive Officer, President and
Presiding Manager
By: /s/ Gary L. Carano
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Name: Gary L. Carano
Title: Corporate Representative of Recreational
Enterprises, Inc., Manager
ELDORADO CAPITAL CORP.
By: /s/ Donald L. Carano
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Name: Donald L. Carano
Title: President
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