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ENVIRONMENTAL INDEMNITY
(Riviera Hotel & Casino in Las Vegas, Nevada)
This ENVIRONMENTAL INDEMNITY (as amended, modified or
otherwise
supplemented from time to time, this "Indemnity") is made and
entered into as of
June 8, 2007, by and among RIVIERA HOLDINGS CORPORATION, a
Nevada corporation
("RHC"), as indemnitor ("Indemnitor"), and WACHOVIA BANK,
NATIONAL ASSOCIATION,
as administrative agent (the "Agent") for the benefit of the
Lenders referred to
below.
RECITALS
(A) RHC is the present owner of the real property located in
Las
Vegas, Nevada included in the Collateral and more particularly
described on
Exhibit A (the "Trust Property").
(B) RHC and the Agent are, contemporaneously with the execution
and
delivery of this Indemnity, entering into that certain Credit
Agreement, dated
as of substantially even date herewith (as amended, restated,
supplemented, or
otherwise modified from time to time, the "Credit Agreement"),
by and among RHC
(the "Borrower"), the subsidiaries of the Borrower from time to
time party
thereto, the lenders from time to time party thereto
(individually, a "Lender"
and collectively, the "Lenders"), and Wachovia Bank, National
Association, as
administrative agent. As used herein and in the Credit
Agreement, the term
"Lenders" means, individually and collectively, the Agent and
the Lenders.
(C) The Credit Agreement and the Credit Party Obligations are
secured,
in part, by RHC's interest in the Trust Property. The Trust
Property is secured
by that certain Deed of Trust, Assignment of Leases and Rents,
Security
Agreement and Fixture Filing, between RHC and the Agent (for the
benefit of the
Lenders), dated as of the date hereof (as the same may be
amended, restated,
supplemented, or otherwise modified from time to time, the "Deed
of Trust").
(D) The Lenders have required, as a condition precedent to
entering
into the Credit Agreement, that Indemnitor shall have executed
and delivered
this Indemnity in favor of the Agent for the benefit of the
Lenders.
NOW, THEREFORE, the parties hereto agree as follows:
1. Recitals. The Recitals are incorporated herein by this
reference.
2. Definitions. Capitalized terms used herein but not otherwise
defined
shall have the meanings assigned to such terms in the Credit
Agreement. For
purposes of this Indemnity, the following terms have the
meanings set forth
below.
"Adjacent Property" means any property so situated as to pose a
risk
that a Hazardous Material could spread onto the Trust
Property.
"Environmental Laws" collectively means and includes any and
all
applicable present and, other than with respect to Section 3,
future local,
state and federal law relating to the environment and
environmental conditions,
including, without limitation: the Nevada Hazardous Materials
Act (NRS Chapter
459); NRS Chapters 444, 445A, 445B and 445C; NRS Chapter 590;
NRS ss. 477.045;
NRS ss. 618.750 to 618.850, inclusive; the Uniform Fire Code, as
adopted by and
now or hereafter in effect in the State of Nevada; the Resource
Conservation and
Recovery Act of 1976 ("RCRA"), 42 U.S.C. ss. 6901 et seq.; the
Comprehensive
Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), 42
U.S.C. ss.ss. 9601-9657, as amended by the Superfund Amendments
and
Reauthorization Act of 1986 ("SARA"), the Hazardous Materials
Transportation
Act, 49 U.S.C. ss. 6901, et seq.; the Federal Water Pollution
Control Act, 33
U.S.C. ss.ss. 1251 et seq.; the Clean Air Act, 42 U.S.C. ss.ss.
741 et seq.; the
Clean Water Act, 33 U.S.C. ss. 7401 et seq.; the Toxic
Substances Control Act,
15 U.S.C. ss.ss. 2601-2629, the Safe Drinking Water Act, 42
U.S.C. ss.ss.
300f-300j, or any other similar federal, state or local law of
similar effect,
each as amended, and any and all regulations, orders, and
decrees now or
hereafter promulgated thereunder or any and all common law
requirements, rules
and bases of liability regulating, relating to or imposing
liability or
standards of conduct concerning pollution or protection of human
health or the
environment, as now or may at any time hereafter be in
effect.
"Hazardous Materials" means any substance, material or waste
that is
or becomes designated or regulated as "toxic", "hazardous",
"pollutant", or
"contaminant" or a similar designation or regulation under any
Environmental Law
or other federal, state or local law (whether under common law,
statute,
regulation or otherwise) or judicial or administrative
interpretation of such,
including, without limitation, asbestos, petroleum products or
by-products
(including, without limitation, crude oil or any fraction
thereof), the group of
organic compounds known as polychlorinated biphenyls, radon gas,
natural gas,
urea formaldehyde, radioactive materials, toxic, infectious,
reactive,
corrosive, ignitable or flammable chemicals and chemicals known
to cause cancer
or adverse health effects.
"Premises" means the Trust Property, and all improvements now
or
hereafter located thereon, and all rights and interests of RHC
therein.
"Remedial Work" means any investigation, site monitoring,
containment,
cleanup, removal, restoration or other remedial work of any kind
or nature
reasonably necessary under any applicable, local, state or
federal law or
regulation, any judicial order, or by any governmental or
nongovernmental entity
or person because of, or in connection with, the current or
future presence,
suspected presence, release or suspected release of Hazardous
Materials in or
into the air, soil, groundwater, surface water or soil vapor at,
on, about,
under or within the Premises (or any portion thereof).
3. Representations and Warranties. Except as would not
constitute a
Material Adverse Effect, the Indemnitor represents and warrants
that: (1) no
Hazardous Material has been installed, used, generated,
manufactured, treated,
handled, refined, produced, processed, stored or disposed of in,
on or under the
Trust Property, including, without limitation, the surface and
subsurface waters
of the Trust Property, except in compliance in all material
respects with
Environmental Laws; (2) no activity has been undertaken on the
Trust Property by
Indemnitor, its agents, employees, contractors, licensees,
guests or tenants or
to its knowledge any other Person, which would cause, or has
caused, (i) the
Trust Property to become a hazardous waste treatment, storage or
disposal
facility, as such terms are defined and classified under any
currently effective
Environmental Law, (ii) a release or threatened release of
Hazardous Materials
on, under, about or from the Trust Property within the meaning
of, or otherwise
violate, any currently effective Environmental Law (except as
expressly
permitted in writing by a Governmental Authority), or (iii) the
discharge or
emission of Hazardous Materials which would require a permit
under any currently
effective Environmental Law that has not been obtained and is in
full force and
effect; (3) no conditions caused by Indemnitor, its agents,
employees,
contractors, licensees, guests or tenants or, to its knowledge,
any other
Person, with respect to the Trust Property cause a violation or
support a claim
under any currently effective Environmental Law; (4) to the best
of Indemnitor's
knowledge after due inquiry, no underground storage tanks are
located on the
Trust Property or have been located on the Trust Property and
subsequently
removed or filled; (5) with respect to the Trust Property,
Indemnitor has not
received any notice at any time that it (or any of its tenants
or guests) is or
was claimed to be in violation of or in non-compliance with the
conditions of
any currently effective Environmental Law; and (6) there is not
now pending or
threatened any action, judgment, claim, consent decree, judicial
or
administrative orders or agreements, or governmental liens with
respect to
Indemnitor or the Trust Property relating to any currently
effective
Environmental Law.
4. Covenants. Indemnitor covenants: (i) that no Hazardous
Materials
shall be installed, used, generated, manufactured, treated,
handled, refined,
produced, processed, stored or disposed of in, on or under the
Trust Property,
except in all material respects in compliance with all
applicable rules,
regulations and laws; (ii) that no activity shall be undertaken
on the Trust
Property which would cause (A) the Trust Property to become a
hazardous waste
treatment, storage or disposal facility, as such terms are
defined and
classified under any Environmental Law, (B) a release or
threatened release of
Hazardous Materials on, under, about or from the Trust Property
within the
meaning of, or otherwise violate, any Environmental Law (except
as expressly
permitted in writing by a governmental authority), or (C) the
discharge or
emission of Hazardous Materials into any watercourse, body of
surface or
subsurface water or wetland, or the discharge into the
atmosphere of any
Hazardous Materials, that would require a permit under any
Environmental Law and
for which no such permit has been issued; (iii) that no activity
shall be
undertaken or permitted to be undertaken by Indemnitor on the
Trust Property
which would reasonably be expected to result in a violation
under any
Environmental Law; (iv) that soils excavated during construction
and groundwater
generated during dewatering activities on the Trust Property
shall be handled
and disposed of in compliance with Environmental Laws in all
material respects;
(v) that if any Remedial Work is required under any applicable
Environmental
Laws because of or in connection with current or future
presence, suspected
presence, release or suspected release of a Hazardous Material
into the air,
soil, ground water, surface water; or soil vapor on, under or
about the Premises
or any portion thereof, Indemnitor shall promptly commence and
diligently
prosecute to completion all such Remedial Work; provided that
the Remedial Work
shall have been approved by any environmental regulatory agency
having
jurisdiction over such work; (vi) all Remedial Work shall be
performed by
contractors, and under the supervision of a consulting engineer,
each approved
in advance by the Agent and any necessary environmental
regulatory agencies and
all costs and expenses of such Remedial Work and Agent's or its
agents' or
representatives' monitoring or review of such Remedial Work
(including
reasonable attorneys' fees, charges and disbursements) shall be
paid by
Indemnitor; (vii) if Indemnitor does not timely commence and
diligently
prosecute to completion the Remedial Work, Agent and its agents
and
representatives may (but shall not be obligated to) cause such
Remedial Work to
be performed and Indemnitor agrees to bear and shall pay or
reimburse Agent (for
the benefit of the Lenders) on demand for all expenses
(including reasonable
attorneys' fees, charges and disbursements) relating to or
incurred by Agent
(for the benefit of the Lenders) and its agents and
representatives in
connection with monitoring, reviewing or performing any Remedial
Work; (viii)
Indemnitor shall not commence any Remedial Work or enter into
any settlement
agreement, consent decree or other compromise relating to any
Hazardous
Materials or Environmental Laws which might impair the value of
the Lenders'
security hereunder or under the other Credit Documents, unless
such Remedial
Work is required to be performed by an environmental regulatory
agency under
applicable law in which case Indemnitor shall use its best
efforts not to impair
the value of the Lenders' security under the Credit Documents;
and (ix) promptly
following completion of any remedial actions imposed upon
Indemnitor under any
Environmental Law by a governmental agency in response to a
violation of
Environmental Laws or any environmental permits, licenses,
approvals or
authorizations or a release of Hazardous Materials at or from
the Trust
Property, Indemnitor shall obtain and deliver to the Agent (for
the benefit of
the Lenders), either (x) an environmental report in form and
substance
reasonably acceptable to the Agent from an environmental
consultant reasonably
acceptable to the Agent, stating that all required action has
been taken, and
that upon completion of such action, the Trust Property is, to
the knowledge of
such professional, then in compliance with applicable
Environmental Laws, or (y)
a statement from the governmental agency that required such
action to the effect
that all required action has been taken to its satisfaction.
5. Indemnities. Indemnitor hereby agrees to unconditionally
indemnify,
defend, and hold Lenders harmless against: (1) any loss, fines,
penalties,
actions, suits, proceedings, liability, damage, expense or claim
incurred in
connection with, arising out of, resulting from or incident to
the application
of any Environmental Law with respect to the Trust Property; (2)
any breach of
any representation or warranty or the inaccuracy of any
representation made by
Indemnitor in or pursuant to this Indemnity; (3) any breach of
any covenant or
agreement made by Indemnitor in or pursuant to this Indemnity,
(4) any liability
or obligation arising out of CERCLA, any equivalent state
statute or any other
Environmental Law which may be incurred or asserted against the
Lenders,
directly or indirectly, under Environmental Laws, with respect
to the Trust
Property; and (5) any other loss, liability, damage, expense or
claim which may
be incurred by or asserted against the Lenders, directly or
indirectly,
resulting from the presence of Hazardous Material on the Trust
Property,
including (A) all foreseeable and unforeseeable consequential
damages, (B) the
costs of any required or necessary investigation, repair,
cleanup, remediation
or detoxification and (C) the costs of the preparation and
implementation of any
closure, remedial or other remedial plans. Notwithstanding
anything herein to
the contrary, this Indemnity shall not be construed to impose
liability on
Indemnitor for Hazardous Materials placed, released or disposed
of on the Trust
Property or any obligation or liability under Environmental Law
(except to the
extent caused by the acts or omissions of Indemnitor or its
agents, employees,
contractors, licensees, guests and tenants) (i) after the date
of foreclosure,
assignment (other than an assignment by the Agent to a successor
"Agent" under
the Credit Agreement) or sale, (ii) after the acceptance by the
Agent (for the
benefit of the Lenders) of a deed in lieu of foreclosure, (iii)
during any
period during which a receiver appointed upon the request or
petition of the
Agent (for the benefit of the Lenders) is in possession of the
Trust Property or
the Agent (for the benefit of the Lenders) operates the Trust
Property as a
mortgagee in possession, or (iv) to the extent such liability
arises from the
gross negligence or willful misconduct of the Agent (for the
benefit of the
Lenders) or any indemnitee hereunder.
6. Duration of Indemnity. The duration of Indemnitor's
obligations
hereunder shall cease upon (i) payment in full in cash of all
Credit Party
Obligations and the irrevocable termination of all commitments
of the Lenders to
extend credit under the Credit Agreement and/or (ii) the release
of the Deed of
Trust; provided, however that Indemnitor's obligations with
respect to Sections
5 and 9 shall not cease until the expiration of the statute of
limitations
period applicable to the subject matter of the underlying
claim.
7. Notices from Indemnitor. Indemnitor shall, promptly after
obtaining
knowledge thereof, advise the Agent (for the benefit of the
Lenders) in writing
of: (i) any governmental or regulatory actions instituted or
threatened in
writing under any Environmental Law affecting the Trust Property
or this
Indemnity or any requirement by a government or regulatory
agency to take
material response action with respect to the presence of
Hazardous Materials on
the Trust Property, including, without limitation, any notice of
inspection
(other than routine inspections), abatement or noncompliance;
(ii) all claims
made or threatened in writing by any third party against
Indemnitor or the Trust
Property relating to any Hazardous Material or a violation of an
Environmental
Law with respect to the Trust Property; (iii) Indemnitor's
discovery of any
occurrence or condition on the Trust Property or any Adjacent
Property that
would reasonably be expected to subject Indemnitor or the Trust
Property to (A)
a material claim under any Environmental Law or (B) any
restriction on
ownership, occupancy, transferability or material change in use
of the Trust
Property under any Environmental Law; and (iv) the commencement
of any Remedial
Work. Indemnitor shall deliver to the Agent (for the benefit of
the Lenders)
such documentation or records as the Agent may reasonably
request and that are
susceptible of being obtained by Indemnitor relating to the
Trust Property in
relation to any Environmental Law without undue cost or expense
and without the
necessity for initiating legal proceedings to obtain the same.
Agent, for the
benefit of the Lenders, may join and participate in, as a party
if it so
determines, any legal or administrative proceeding or action
concerning the
Premises under any Environmental Law. Indemnitor agrees to bear
and shall pay or
reimburse Agent (for the benefit of the Lenders) on demand for
all reasonable
expenses (including reasonable attorneys' fees, charges and
disbursements)
relating to or incurred by Agent (for the benefit of the
Lenders) in connection
with any such action or proceeding.
8. Notice of Claims Against Indemnitees. The Agent (for the
benefit of
the Lenders) agrees that it shall provide Indemnitor with
written notice of any
claim or demand that the Agent (for the benefit of the Lenders)
has determined
could give rise to a right of indemnification under this
Indemnity; provided
that the failure to give any such notice shall not limit
Indemnitor's
obligations hereunder. Such notice shall be given a reasonable
time after the
Agent (for the benefit of the Lenders) becomes aware of the
relevant facts and
shall specify, to the best of the Agent's knowledge, the facts
giving rise to
the alleged claim, and the amount, to the extent determinable,
of liability for
which indemnity is asserted. Indemnitor agrees that in any
action, suit or
proceeding brought against the Lenders, the Lenders may be
represented by
counsel chosen by the Lenders, without affecting or otherwise
impairi
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