EXHIBIT 10.1
LETTER AGREEMENT
Wells Fargo Foothill, Inc.
2450 Colorado Avenue
Suite 3000W
Santa Monica, California 90404
September 17, 2008
B & B B, INC.
911 North Buffalo, Suite 201
Las Vegas, Nevada
Attn: Robert R. Black, Sr.
Re: Borrowing Base Reserves
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement entered into as of
December 20, 2004, as amended by that certain Joinder Agreement and Amendment
dated as of December 31, 2006, as further amended by that certain First
Amendment to Credit Agreement entered into as of October 26, 2007, and as
further amended by that Second Amendment to Credit Agreement as of June 20, 2008
(as previously amended and as further amended, restated, supplemented, or
otherwise modified from time to time, the “Credit Agreement”), among B & B B,
INC., a Nevada corporation (“B&B B”), CASABLANCA RESORTS, LLC, a Nevada limited
liability company (“CBR”), OASIS INTERVAL MANAGEMENT, LLC, a Nevada limited
liability company (“OIM ”), OASIS INTERVAL OWNERSHIP, LLC, a Nevada limited
liability company (“OIO”), OASIS RECREATIONAL PROPERTIES, INC., a Nevada
corporation (“ORC”), RBG, LLC, a Nevada limited liability company (“RBG”), and
VIRGIN RIVER CASINO CORPORATION, a Nevada corporation (“VRCC” ; B&BB, CBR, OIM,
OIO, ORC, RBG, and VRCC, are referred to hereinafter each individually as a
“Borrower”, and individually and collectively, jointly and severally, as the
“Borrowers”), the lenders signatory thereto (the “Lenders”), and Wells Fargo
Foothill, Inc., a California corporation, as the arranger and administrative
agent for the Lenders (“Agent”). Capitalized terms used herein but not defined
shall have the meanings ascribed to them in the Credit Agreement.
Pursuant to Section 2.1(b) of the Credit Agreement, Agent has the right to
establish certain reserves in such amounts, and with respect to such matters, as
Agent in its Permitted Discretion shall deem necessary or appropriate, against
the Borrowing Base, including the Environmental Reserve and the Lien Reserve.

 

-1-

--------------------------------------------------------------------------------

 

As of the Closing Date, the Agent established the Environmental Reserve in the
amount of $750,000 for the potential liabilities of the Borrowers for any
groundwater contamination at the site of the Oasis Hotel & Casino and related
property as described on Schedule 4.14 to the Credit Agreement. In anticipation
of marketing the golf course property during 2006, CBR and certain of its
Affiliates entered into several agreements (the “WSR Agreements”) with WSR, Inc.
and certain of its Affiliates (collectively, “WSR”), the former owners of the
Oasis Hotel & Casino, to terminate WSR’s remaining rights in the golf course
property, among other matters, for approximately $1.1 million. Pursuant to the
agreements, the funds paid to WSR were to be used by WSR to remediate the
existing environmental liability at the Oasis Hotel & Casino.
As of the Closing Date, the Agent further established the Lien Reserve in the
amount of $1,250,000 for certain liens against the Borrowers including liens
arising out of the action commenced in the District Court, Clark County, Nevada,
dated June 15, 2000, Case No. A420360, entitled, “NOTICE OF LIS PENDENS”, A.F.
CONSTRUCTION COMPANY, a Nevada corporation, Plaintiff -vs- VIRGIN RIVER CASINO
CORPORATION, a Nevada corporation; FIRST CREDIT BANK, a California corporation;
RICHARD ROY KELLEY, an individual; PMJ ENTERPRISES, INC., a Nevada corporation;
BANK OF HAWAII, a Hawaii corporation; SAM HON, an individual; OLD REPUBLIC TITLE
COMPANY, a Nevada corporation; NEVADA TITLE COMPANY, a Nevada corporation,
Defendants (the “A.F. Construction Company Claims”). The amount claimed under
the A.F. Construction Company Claims was approximately $900,000. The Borrowers
have notified the Agent that the A.F. Construction Company Claims have been
dismissed and the Borrowers have no further liabilities to any third party with
respect to the A.F. Construction Company Claims.
The Agent in its Permitted Discretion hereby reduces (i) the amount reserved
against the Borrowing Base under the Environmental Reserve to $0 and (ii) the
amount reserved against the Borrowing Base under the Lien Reserve to $250,000,
each effective as of July 31, 2008.
Anything in this agreement to the contrary notwithstanding, the Agent reserves
all right to establish reserves against the Borrowing Base as permitted under
Section 2.1(b) of the Credit Agreement including the right to re-establish the
full amount of the Environmental Reserve and the Lien Reserve as Agent in its
Permitted Discretion shall deem necessary or appropriate.
This letter agreement shall be construed under and governed by the laws of the
State of New York, and may be executed in any number of counterparts and by
different parties on separate counterparts. Each of such counterparts shall be
deemed to be an original, and all of such counterparts, taken together, shall
constitute but one and the same agreement. Delivery of an executed counterpart
of this letter by telefacsimile or other electronic method shall be equally
effective as delivery of a manually executed counterpart.

 

-2-

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have caused this letter agreement to be executed
and delivered by their duly authorized representative as of the date first
written above.
Very truly yours,
WELLS FARGO FOOTHILL, INC.,
as Agent

                  By:   /s/ Steve Scott         Name:   Steve Scott       
Title:   Vice President   

 

 

--------------------------------------------------------------------------------

 

         

Accepted and agreed to
as of the date first above written:
B & B B, INC.,
a Nevada corporation

                  By:   /s/ Sean P. McKay     Name: Sean P. McKay   
Title: Chief Accounting Officer     

CASABLANCA RESORTS, LLC,
a Nevada limited liability company

                  By:   /s/ Sean P. McKay     Name: Sean P. McKay   
Title: Chief Accounting Officer     

OASIS INTERVAL MANAGEMENT, LLC,
a Nevada limited liability company

                  By:   /s/ Sean P. McKay     Name: Sean P. McKay   
Title: Chief Accounting Officer     

OASIS INTERVAL OWNERSHIP, LLC,
a Nevada limited liability company

                  By:   /s/ Sean P. McKay     Name: Sean P. McKay   
Title: Chief Accounting Officer     

OASIS RECREATIONAL PROPERTIES, INC.,
a Nevada corporation

                  By:   /s/ Sean P. McKay     Name: Sean P. McKay   
Title: Chief Accounting Officer   

 

 

--------------------------------------------------------------------------------

 

         

RBG, LLC,
a Nevada limited liability company

                  By:   /s/ Sean P. McKay     Name: Sean P. McKay   
Title: Chief Accounting Officer     

VIRGIN RIVER CASINO CORPORATION,
a Nevada corporation

                  By:   /s/ Sean P. McKay     Name: Sean P. McKay   
Title: Chief Accounting Officer