EXHIBIT 10.55
INDEMNIFICATION
AGREEMENT
This Indemnification Agreement (this
“ Agreement ”), dated as of November 30, 2006,
made by and between BH/RE, L.L.C, a Nevada limited liability
company (the “ Indemnitor ”), and the Mezzanine
Investors (as such term is defined in the Investor Rights
Agreement, defined below). Capitalized terms not defined
herein have the meaning specified in the Investor Rights
Agreement.
RECITALS
WHEREAS, EquityCo, L.L.C., a Nevada
limited liability company and a subsidiary of the Indemnitor
(“ EquityCo ”), MezzCo, L.L.C., a Nevada limited
liability company and a subsidiary of EquityCo (“
MezzCo ”), and the Mezzanine Investors have entered
into that certain Amended and Restated Investor Rights Agreement,
dated as of the date hereof (as amended, modified, restated or
supplemented from time to time, the “ Investor Rights
Agreement ”), which agreement sets forth certain rights
and obligations with respect to the Warrants; and
WHEREAS, in order to induce the
Mezzanine Investors to consummate the transactions contemplated by
the Restructuring Documents, the Indemnitor has agreed to provide
certain indemnification protection to the Mezzanine Investors, as
provided in this Agreement.
NOW, THEREFORE, for good and
valuable consideration, the receipt of which is hereby
acknowledged, the parties, intending to be legally bound, hereby
agree as follows:
1.
Indemnification . The Indemnitor hereby agrees to
indemnify, pay and hold harmless each of the Mezzanine Investors
and each of their respective successors and assigns (each, an
“ Indemnified Party ”) from and against, any and
all liabilities, obligations, losses (including the failure to
realize value in respect of the Warrants), damages, penalties,
actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever, including, without
limitation, the reasonable fees and disbursements of counsel for
such Indemnified Party in connection with any investigative,
administrative or judicial proceeding, whether or not such
Indemnified Party shall be designated a party thereto
(collectively, “ Losses ”) to which the
Indemnified Parties may incur or suffer, directly or indirectly,
arising out of, or relating to (a) the lack of Gaming Approval
prior to the date hereof for the issuance of the Warrants in the
form attached as Exhibit A hereto (including, without limitation,
any Losses that the Indemnified Parties may suffer due to the
inability (if any) of the Mezzanine Investors to exercise the
rights set forth in the Warrants at the time, and in the manner,
specified therein), or (b) the lack of Gaming Approval prior to the
date hereof for the granting of a Lien by EquityCo to the Mezzanine
Investors in the Equity Interests in MezzCo as more fully described
in the Pledge Agreement attached as Exhibit B hereto (including,
without limitation, any Losses that the Indemnified Parties may
suffer due to the failure of EquityCo to deliver to the Indemnified
Parties on the date hereof the
1
physical securities that evidence
EquityCo’s Equity Interest in MezzCo and the inability (if
any) of the Mezzanine Investors to exercise the rights set forth in
the Pledge Agreement at the time, and in the manner, specified
therein), or (c) the inability of any Indemnified Party to exercise
the Warrants during the period from and after the date hereof to
the earlier of (x) the date on which EquityCo has inserted the new
SPE and received Gaming Approval for such insertion pursuant to
Section 3.9 of the Investor Rights Agreement and (y) July 1, 2007;
provided that the Indemnitor shall have no indemnification
obligation to any Indemnified Party hereunder for Losses that are
determined by a final, non-appealable decision of a court of
competent jurisdiction to have resulted (a) primarily from the
gross negligence or willful misconduct of such Indemnified Party,
or (b) from the failure by EquityCo or MezzCo to receive any Gaming
Approvals or by such Indemnified Party to be able to exercise any
Warrants, in each case, primarily as a result of (i) the breach by
such Indemnified Party of its obligations under Section 3.10 of the
Investor Rights Agreement, (ii) any violation of the Gaming Laws by
such Indemnified Party or (iii) the failure by EquityCo or MezzCo
to receive Gaming Approval to issue the Warrants because such
Indemnified Party is deemed unsuitable by the Gaming
Authorities. Notwithstanding the foregoing, the Indemnitor
shall not be responsible to any Indemnified Party for any punitive,
incidental, consequential or indirect damages, including loss of
future revenue or income, or loss of business reputation or
opportunity.
2.
Contribution . The Indemnitor and each Indemnified
Party agree that to the extent that the undertaking to indemnify,
pay and hold harmless set forth in Section 1 may be determined by a
final, non-appealable decision of a court of competent jurisdiction
to be unenforceable because it violates any law or public policy,
the Indemnitor shall contribute to the Losses for which such
indemnification or reimbursement is held unavailable in such
proportion as is appropriate to reflect (a) the relative benefits
to the Indemnitor on the one hand and the Indemnified Party on the
other hand, in connection with the transaction to which such
indemnification or reimbursement relates or (b) if the allocation
provided by clause (a) above is not available, in such proportion
as is appropriate to reflect not only the relative benefits
referred to in such clause (a), but also the relative fault of the
parties as well as any other relevant equitable considerations,
provided, however, no contribution shall be made if (i) the
Indemnitor would not have been liable for indemnification under the
standards set forth in Section 1 of this Agreement or (ii) it is
deter
