**Exhibit3.11**

 

**OperatingAgreement**

 

 

**of**

 

 

# **Black Gaming, LLC**

 

----

 

## **Operating Agreement Table of Contents**

## ** **

| **Article       THE  COMPANY**                                |   |   |
|--------------------------------------------------------------------------------------------------|--------|--------|
| **Organization  and Name**                                                                       |   | 1      |
| **Purpose**                                                                                      |   | 1      |
| **Initial Resident Agent and  Initial Principal Office**                                         |   | 1      |
| **Management:**                                                                                  |   | 2      |
| **No Payments of Individual  Obligations:**                                                      |   | 2      |
| **Title to Property**                                                                            |   | 2      |
| **Term**                                                                                         |   | 2      |
| **Article         MEMBERS AND CAPITAL CONTRIBUTIONS**         |   | 2      |
| **Members;  Initial Capital Contributions**                                                      |   | 2      |
| **Loans**                                                                                        |   | 2      |
| **Obligations to  Other Members**                                                                |   | 4      |
| **Liability of  Members**                                                                        |   | 4      |
| **No Interest on  Contributions**                                                                |   | 5      |
| **Withdrawal of Capital**                                                                        |   | 5      |
| **Article         ACCOUNTING AND RECORDS**                    |   | 5      |
| **Books and  Records**                                                                           |   | 5      |
| **Reports**                                                                                      |   | 5      |
| **Tax Returns**                                                                                  |   | 5      |
| **Fiscal Year**                                                                                  |   | 5      |
| **Banking**                                                                                      |   | 6      |
| **Article         MANAGEMENT, RIGHTS, AND DUTIES OF MEMBERS** |   | 6      |
| **In General**                                                                                   |   | 6      |
| **Management Duties and Powers:**                                                                |   | 6      |
| **Duties Regarding Bookkeeping  and Records:**                                                   |   | 6      |
| **Waiver of Partition**                                                                          |   | 6      |
| **Restrictive Covenants:**                                                                       |   | 6      |
| **Article         VOTING**                                    |   | 7      |
| **Method of Voting; Company  Meetings**                                                          |   | 7      |
| General                                                                                          |   | 7      |
| Meetings                                                                                         |   | 7      |
| Unanimous Consent                                                                                |   | 7      |
| Vote by Proxy                                                                                    |   | 7      |
| Records                                                                                          |   | 8      |
| **Article       ADDITIONAL  MEMBERS**                         |   | 8      |
| **Admission**                                                                                    |   | 8      |
| **Capital Contributions**                                                                        |   | 8      |
| **Admission Mechanics**                                                                          |   | 8      |
| **Article       DISTRIBUTIONS  OTHER THAN AT DISSOLUTION**    |   | 8      |
| **Article       BUY/SELL  EVENT**                             |   | 9      |
| **Death of a Member**                                                                            |   | 9      |
| **The Termination of Membership  of a Member For Any Reason**                                    |   | 9      |
| **Default**                                                                                      |   | 9      |
| Right to Purchase Defaulting Member’s Units                                                 |   | 9      |
| Consequences of Breach                                                                           |   | 10     |
| **No Bonding**                                                                                   |   | 10     |
| **ARTICLE       PURCHASE  PRICE AND PAYMENT TERMS**           |   | 11     |

 

i

----

 
| **Purchase of Units**                                                             |   | 11 |
|-----------------------------------------------------------------------------------|--------|----|
| **Purchase Price**                                                                |   | 11 |
| Purchase Price Calculation                                                        |   | 11 |
| **Notice**                                                                        |   | 11 |
| **Closing; Payment of Purchase  Price, Etc.**                                     |   | 11 |
| Closing                                                                           |   | 11 |
| Closing Date                                                                      |   | 11 |
| Payment of Purchase Price                                                         |   | 12 |
| Delivery of Instruments                                                           |   | 12 |
| **Article         TRANSFERS; WITHDRAWALS**     |   | 12 |
| **Restrictions on Transfers**                                                     |   | 12 |
| **Article         DISSOLUTION AND WINDING UP** |   | 13 |
| **Liquidating Events**                                                            |   | 13 |
| **Winding Up**                                                                    |   | 14 |
| **Notice of Dissolution**                                                         |   | 14 |
| **Article         ALLOCATIONS**                |   | 14 |
| **Profits and Losses**                                                            |   | 14 |
| **General**                                                                       |   | 14 |
| **Article       DEFINITIONS**                  |   | 15 |
| **Agreement**                                                                     |   | 15 |
| **Capital Contributions**                                                         |   | 15 |
| **Company**                                                                       |   | 15 |
| **Effective Date**                                                                |   | 15 |
| **Event of Bankruptcy**                                                           |   | 15 |
| **Manager**                                                                       |   | 15 |
| **Members**                                                                       |   | 15 |
| **Person**                                                                        |   | 16 |
| **Property**                                                                      |   | 16 |
| **Transfer**                                                                      |   | 16 |
| **Article         Miscellaneous**              |   | 16 |
| **Attorneys Fees**                                                                |   | 16 |
| **Binding Effect**                                                                |   | 16 |
| **Construction**                                                                  |   | 16 |
| **Counterpart Execution**                                                         |   | 16 |
| Entire  Agreement                                                                 |   | 16 |
| **Further Action**                                                                |   | 16 |
| **Governing Law**                                                                 |   | 16 |
| **Headings**                                                                      |   | 17 |
| **Incorporation by Reference**                                                    |   | 17 |
| **Mediation and Arbitration**                                                     |   | 17 |
| Mediation                                                                         |   | 17 |
| Arbitration                                                                       |   | 17 |
| **Modification of Agreement**                                                     |   | 17 |
| **Notices**                                                                       |   | 17 |
| **Severability**                                                                  |   | 18 |
| **Time**                                                                          |   | 18 |
| **Variation of Pronouns**                                                         |   | 18 |

 

ii

----

** **

**OperatingAgreement of**

**BlackGaming, LLC**

 

This Operating Agreementis made and entered into as of the Effective Date, by and among the persons orentities executing **Exhibit A**, theMembers and the Manager, pursuant to the provisions of Chapter 86 of the NevadaRevised Statutes:

 

**1.****             Article     THECOMPANY**

 

**1.1.**         **Organizationand Name:**  The name of thisLimited Liability Company shall be Black Gaming, LLC (the “Company”) or suchother name as the Members may from time to time determine. The Company wasorganized under the laws of the State of Nevada. The Members agree that theyshall execute and file documents to enable this Limited Liability Company to maintaina S Election for tax purposes, and in accordance with Code Section 1361,further agree that the Company and the Members must meet the following criteriain order to maintain the Company’s S Election which shall include but is notlimited to:

 

(a)   The Company shall not have morethan one hundred (100) Members.

 

(b)   All Members must be (i)individuals who are not nonresident aliens; (ii) trusts or estates that meetthe criteria set forth in Code Section 1361(c), (d) or (e); or (iii) anorganization described in Code Section 401(a) or 501(c)(3) which is exempt fromtax under Code Section 501(a).

 

(c)   The Company shall have only one(1) class of stock.

 

(d)   The Company and the Members shallcomply with all other applicable provisions contained in Subchapter S of theCode, the Regulations thereunder and all other IRS rulings, cases, etc. thatgovern the Company’s ability to retain its S election.

 

Members or potential Members meeting the criteria setforth in clauses (a) or (b) above are collectively referred to as “Qualified SCorporation Members” or individually as a “Qualified S Corporation Member.” Inaddition, certain states may provide criteria which are different than thoseprovided above, and it is the intent of the parties to this Agreement to alsomeet these criteria for each state in which the Company does business, to theextent possible.

 

**1.2.**         **Purpose:**  The character and general nature of thebusiness to be conducted by the Company is to act as a holding company and todirectly or indirectly operate, manage, and conduct gaming in a hotel casino andhospitality services on or within the premises known as Virgin River Hotel andCasino; CasaBlanca Hotel and Casino; and Oasis Resort and Casino located inMesquite, Nevada, or for any other lawful purpose.

 

**1.3.**         **InitialResident Agent and Initial Principal Office:**  The Company’s initial agent for service ofprocess shall be**Black, LoBello & Sparks**,****whose initial address is **6885 W. CharlestonBlvd., Las Vegas, Nevada 89117**. The address of the office where theCompany’s records will be maintained shall be 10777 West Twain, Third Floor,Las Vegas, Nevada 89135 or such other address as the Manager may, from time totime, elect.

 

1

----

 

**1.4.**         **Management:**  Management authority is vested in the Manager.The Manager of the Company shall be Robert R. Black, Sr. Upon Robert R. BlackSr.’s resignation or other inability to carry out the Manager’s obligation andduties as set forth herein, a successor Manager may be appointed by a vote of aMajority of the Units of the Members subject to all regulatory approvals.

 

**1.5****          No Payments ofIndividual Obligations:**  The Managerand the Members shall use the Company’s credit and assets solely for thebenefit of the Company. No asset of the Company shall be transferred orencumbered for or in payment of any individual obligation of a Member.

 

**1.6.****         Title to Property:**  All real and personal property owned by theCompany shall be owned by the Company as an entity and no Member shall have anyownership interest in such property in the Member’s individual name or right,and each Member’s interest in the Company shall be considered personal propertyfor all purposes.

 

**1.7.****         Term:**  The term of the Company shall commence on theEffective Date and shall have perpetual existence or exist until such time asthe winding up and liquidation of the Company and its business is completedfollowing a Liquidating Event, as provided below, whichever occurs first.

 

**2.****             Article     MEMBERS AND CAPITAL CONTRIBUTIONS**

 

**2.1.****         Members; Initial CapitalContributions:**  The names, addressesand initial number of Units for each of the Members are set forth in **Exhibit A** to this Agreement. The initial CapitalContributions for those Units shall be made upon execution of **Exhibit A**.

 

**2.2.**         **Loans:**  Any Member may, upon approval of the Manager,lend or advance money to the Company. If any Member makes a loan or loans tothe Company, the amount of any such loan shall not be treated as a CapitalContribution to the Company but shall be a debt due from the Company. Theamount of any such loan by a lending Member shall be repayable out of theCompany’s cash and shall bear interest at an agreed upon rate not to exceed 18%per year. No Member shall be obligated to make any loan or advance to theCompany.

 

**2.3.**         **AdditionalCapital Contribution; Default:** The Manager shall promptly notify allMembers in writing of any additional Capital Contribution required by theManager (including, without limitation those relating to the Company’s ownbusiness, and those necessary to fund capital calls made by entities in whichthe Company is an owner), indicating the pro rata share (determined inaccordance with such Members’ respective Unit ownership) of such additionalCapital Contribution that each Member is required to make. Full payment of therequired additional Capital Contribution, in cash or immediately availablefunds, shall be due within thirty (30) days of such notice.

 

Each Member agrees that the making when due of its prorata share of additional Capital Contributions (as required under this Section2.3) pursuant to the provisions of this Agreement is of the essence, that anyDefault (as defined herein below) of any Member would cause injury to theCompany and to the other Members and that the amount of damages caused by anysuch injury would be extremely difficult to calculate. Therefore, the Membersagree to the following provisions regarding additional Capital Contributions.

 

2

----

 

If any Member fails topay when due all or any portion of a Capital Contribution required under thisSection 2.3 (such Member being referred to as a “Defaulting Member,” and theamount of such required additional Capital Contribution that such Member failsto pay being referred to as the “Default Amount” of such Member), such failureshall constitute a “Default” of such Member unless such failure shall have beenwaived by the Manager in his sole and absolute discretion.

 

On the occurrence of aDefault of a Member: (A) the Manager shall promptly give all Members writtennotice of such Default; (B) the Default Amount of such Member shall accrueinterest (for the benefit of any non-defaulting Member(s) or other person(s)who fund the Default Amount pursuant to this Section 2.3) commencing on the duedate for the additional Capital Contribution, at a rate not to exceed eighteen(18%) percent; and (C) the Manager may exercise any or all of the rights andremedies set forth in this Section 2.3:

 

(1)           To cause the Company torecover the Default Amount, plus accrued interest, from the Defaulting Member,and/or to pursue whatever other rights and/or remedies are available to itagainst the Defaulting Member under this Agreement, at law or in equity, and inany such case the Defaulting Member shall be required to compensate the Companyand the other Members for all costs incurred and damages suffered by reason ofsuch Default, including reasonable attorneys’ fees and expenses. The Companymay cause distributions that would otherwise be made by the Company to suchDefaulting Member to be applied against such Defaulting Member’s Default Amount,and accrued interest.

 

(2)           To obtain the agreementof one or more non-defaulting Members to increase their respective additional CapitalContributions (pro rata in accordance with their respective Unit ownership oras otherwise agreed among them), or to call additional capital from allnon-defaulting Members (pro rata in accordance with their respective Unitownership) pursuant to the provisions of this Section 2.3, in either case in anaggregate amount that does not exceed the Default Amount. If the non-defaultingMembers fund all or any portion of the Default Amount in either of theforegoing manners, then the Defaulting Member shall forfeit a portion of his orits Units equivalent to one and one-quarter (11⁄4) times the ratio that theDefault Amount bears to the Defaulting Member’s total capital contributionobligation, as follows. Specifically, to accomplish the foregoing, the Unitownership of the Defaulting Member shall be reduced by one hundred twenty-fivepercent (125%) of the excess of the Defaulting Member’s Unit ownership, overthe product of (x) the Defaulting Member’s Unit ownership, and (y) a fraction,the numerator of which is the aggregate amount of the Capital Contributionsmade by the Defaulting Member as of the date of the Default, and thedenominator of which is the aggregate amount of the Capital Contributions madeby the Defaulting Member as of the date of the Default plus the aggregateamount of the Default Amount funded by the non-defaulting Members. Any portionof the Defaulting Member’s Units so forfeited by the Defaulting Member shall bereallocated to the non-defaulting Members who fund the Default Amount, inproportion to the manner in which they make such contribution(s). Withoutlimiting the foregoing, the following example is intended as an illustration ofthe application of this subsection (2):

 

Example:  Assume that a Defaulting Member holding a Unitownership of 12.5 Units (out of a total of 100 Units) has contributed $250,000of initial capital, but fails to timely

 

3

----

 

provide a $50,000additional capital contribution as required pursuant to Section 2.3 hereof. Furtherassume that the other Members have previously contributed the aggregate amountof $1,750,000 and have also contributed an additional $400,000, including the$50,000 Default Amount of the Defaulting Member. The dilution of the DefaultingMember’s Units is calculated as follows:

 

(a)           1.25 x {12.5 – 12.5 x[250,000 ÷ (250,000 + 50,000)]} =

1.25 x{12.5 – 12.5 x [0.833]} =

1.25 x{12.5 – 10.417} =

1.25 x2.083 = 2.604 Reduction in Defaulting Member’s Units

 

(b)           12.5 –2.604 =9.896  Defaulting Member’s diluted Units.

 

(3)           To cause a forcedredemption of all of such Defaulting Member’s Units by the Company, or a forcedsale thereof to any other person(s) acceptable to the Manager (including, ifthe Manager so determines, one or more non-defaulting Members) who have agreedto acquire such Units. In either case, the Defaulting Member will be obligatedto convey his or its Units to the Company or the purchaser(s), as applicable. Anysuch sale or redemption shall be at a price equal to such Defaulting Member’saggregate Capital Contributions, less one hundred twenty-five percent (125%) ofthe Default Amount (together with accrued interest) of such Defaulting Member. Inthe case of a sale of the Defaulting Member’s Units: (x) the purchaser(s) ofsuch Units shall be obligated, pro rata, to fund any Default Amount stilloutstanding; (y) each purchaser who is not already a Member will execute acounterpart of the Operating Agreement and thereupon become a Member; and (z)such Defaulting Member shall be treated as having withdrawn from the Company asa Member and shall have no further interest, economic or otherwise, in theCompany.

 

The rights and remediesreferred to in this Section 2.3 may be exercised in any order or combinationchosen by the Manager, in his sole discretion. Failure to exercise any remedyhereunder in any one instance shall not preclude its exercise in any differentor subsequent instance. A Default by a Member shall not relieve any otherMember of its obligation to make Capital Contributions under this Agreement. Inaddition, except to the extent of a sale or redemption under (3), above, aDefault by a Member shall not relieve such Member of its obligation to make hisor its pro rata share of additional Capital Contributions required subsequentto such Default. The provisions of this Section 2.3 (and the Members’ obligationsto make additional Capital Contributions to the Company hereunder) shall not befor the benefit of any third party.

 

**2.4.****         Obligations to OtherMembers:**  In the event any Member isrequired to pay any Company obligation by virtue of that Member’s personalguaranty of any of the Company’s obligations, the other Members are obligatedto reimburse the paying Member in proportion to each Member’s relative numberof Units and this reimbursement shall be paid within seven (7) days fromwritten request.

 

**2.5.**         **Liability ofMembers:**  The liability ofeach Member shall be limited to the amount of Capital Contributions which eachMember is required to make in accordance with the provisions of this Agreement.Except as provided herein, none of the Members shall have any further personal

 

4

----

 

liability to contribute money to or in respect ofliabilities or obligations of the Company, nor shall the Members be personallyliable for any obligations of the Company.

 

**2.6.****         No Interest onContributions:**  No Member shall be entitledto receive interest on contributions to the Company.

 

**2.7.****         Withdrawalof Capital:**

 

2.7.1.       Except as otherwiseprovided in this Agreement, no Member shall demand or receive a  return of Capital Contributions or withdrawfrom the Company until:

 

2.7.1. (a)        All liabilities of theCompany, except liabilities to Members on account of their CapitalContributions, have been paid or there remains property of the Company Sufficientto pay them; and

 

2.7.1 (b)        The vote of the Members asprovided below in the section on voting.

 

2.7.2        No Member shall receiveany interest, salary, or draw with respect to such Member’s Capital Contributionsor for services rendered on behalf of the Company or otherwise in such Member’scapacity as Member, except as agreed in writing by the Members pursuant to aMajority vote of the Members.

 

**3.****             Article     ACCOUNTINGAND RECORDS**

 

**3.1.****         Books and Records:**  The Company shall maintain books of accountfor the Company which shall show a true and accurate record of all costs andexpenses incurred, all charges made, all credits made and received, and allincome derived in connection with the operation of the Company business inaccordance with generally accepted accounting procedures (GAAP). Each Membershall, at such Member’s sole expense, have the right, upon reasonable notice tothe Company, to examine, copy, and audit the Company’s books and records duringnormal business hours as long as such review does not unreasonably disrupt theCompany’s business.

 

**3.2.****         Reports:**  Within a reasonable time after the end ofeach fiscal year, the Company shall provide each Member with a copy of thebalance sheet of the Company as of the last day of such year and a statement ofincome or loss for the Company for such year, including a statement showing anyitem of income, deduction, credit, or loss allocable for federal income taxpurposes pursuant to the terms of this Agreement. Such statements shall bereviewed by the Company’s accountants.

 

**3.3.****         Tax Returns:**  Upon the written request of a Member, theCompany shall furnish each Member with a copy of each income tax return filedby the Company, together with any schedules or other information which eachMember may require in connection with such Member’s own tax affairs.

 

**3.4.****         Fiscal Year:**  The fiscal year of the Company shall be thecalendar year, unless otherwise approved by a Majority vote of the Members. Asused in this Agreement, a fiscal year shall include any partial fiscal year atthe beginning and end of the Company term.

 

5

----

 

**3.5.****         Banking:**  All funds of the Company shall be depositedin the Company’s name, in such account or accounts with such bank, banks, orfinancial institutions as a Majority vote of the Members shall determine, fromtime to time. Withdrawals of funds from the Company accounts shall be made onsuch signature or signatures as determined by the Manager.

 

**4.****             Article     MANAGEMENT,RIGHTS, AND DUTIES OF MEMBERS**

 

**4.1.****         In General:**  Except as otherwise provided in thisAgreement, all determinations, decisions, approvals, and actions affecting theCompany and its business and affairs shall be determined, made, approved, orauthorized only by the Manager or vote of the Members pursuant to thisAgreement and subject to all applicable gaming statutes and regulations.

 

**4.2.****         Management Duties andPowers:**  Subject to the terms andconditions of this Agreement, management of the Company shall be solely vestedin the Manager, except as otherwise provided herein.

 

**4.3.****         Duties RegardingBookkeeping and Records:**  In additionto the general duties of the Manager, the Manager shall perform the followingduties:

 

4.3.1.       Maintain at the expense ofthe Company complete and accurate records of all rights and interests acquiredfor or disposed of by the Company, all correspondence relating to the Companybusiness and records of all statements, bills and other instruments furnishedthe Company in connection with its business, all of which shall be kept in thepossession and control of the Company for not less than five (5) years.

 

4.3.2.       Maintain at the expense ofthe Company adequate records and accounts of all operations and expendituresand furnish the Members with annual statements of account as of the end of eachcalendar year, together with all necessary tax reporting information.

 

4.3.3.       Employ at the expense ofthe Company such public accounting firm as the Manager may deem desirable tomaintain Company accounts and prepare statements of account together with alltax reporting information.

 

4.3.4.       Make any and all taxelections as the Manager deems necessary to further the business of the Company,including the filing of any QSSS elections made under Code Section 1361(b)(2).

 

**4.4.****         Waiver of Partition:**  No Member shall, either directly orindirectly, take any action to require partition or appraisement of the Companyor of any of its assets or properties or cause the sale of any Companyproperty, and notwithstanding any provisions of applicable law to the contrary,each Member (and each such Member’s legal representatives, successors orassigns) irrevocably waives any and all right to maintain any action forpartition or to compel any sale with respect to such Member’s Units, or withrespect to any assets or properties of the Company, unless expressly provided elsewherein this Agreement.

 

**4.5.****         Restrictive Covenants:**  The Manager and Member(s) shall be requiredto devote only such time and attention to the business of the Company as isnecessary to satisfy their respective obligations as set forth herein. The Manageror Member(s), may, without accountability to the Company or to any of the otherMembers, and without any disclosure or consent whatsoever,

 

6

----

 

engage in any other business or businesses, exceptthat which is in direct competition with the Company or such businesses oractivities that would jeopardize said Manager’s or Member’s gaming approval or licenseor such activity or business which is in violation of any gaming statute orregulation.

 

**5.****             Article     VOTING**

 

**In General:**  When a vote of the Members is required bythis Agreement for any decision, it shall be authorized by a vote of the Majorityof the Members with each Member voting in accordance with their respective Unitownership. Any Member, by written delegation, may delegate such Member’sauthority or vote to any other Member, upon the terms and conditions, and forthe time provided in any such written delegation. Unless otherwise statedherein, decisions of the Company are to be made by the Manager, except where avote of the Members is provided in this Agreement.

 

**5.1.****         Method of Voting; CompanyMeetings**.

 

5.1.1.       General. Unless otherwisestated herein, whenever a vote of Members is required by this Agreement for anydecision, it shall be authorized by vote of a Majority of the Units of theMembers. A vote of more than fifty percent (50%) of the Units shall constitutea Majority.

 

5.1.2.       Meetings. The Manager or anyMember may call a meeting to consider approval of an action or decision underany provision of this Agreement by delivering to the Manager and to each otherMember notice of the time and purpose of such meeting at least five (5) daysbefore the day of such meeting. A Member may waive the requirement of notice ofa meeting by executing a written waiver of notice before or after such meetingor by attending such meeting unless such attendance is for the sole purpose ofobjecting to the holding of the meeting without the required notice. Unless allof the Members consent in writing or by their attendance, the time and place ofany such meeting shall be held during the Company’s normal business hours atits principal place of business.

 

5.1.3.       Consent of Members. TheManager or a Member may propose that the Company authorize an action or decisionpursuant to any provision of this Agreement by the written consent of aMajority of the Members in lieu of a meeting. A Member’s written consent may beevidenced by such Member’s signature on a counterpart of the proposal or by aseparate writing (including a fax, telex, telecopy, telegram, etc.) thatidentifies the proposal with reasonable specificity and states that such Memberconsents to such proposal.

 

5.1.4.       Vote by Proxy. A Member mayvote (or execute a written consent) by proxy given to any other Member. Anysuch proxy must be in writing and must identify the specific meeting or matterto which the proxy applies or state that it applies to all matters (subject tospecified reservations, if any) coming before the Company for approval underany provision of this Agreement prior to a specified date (which shall not belater than the first anniversary date of the date on which such proxy is given).Any such proxy shall be revocable at any time and shall not be effective at anymeeting at which the Member giving such proxy is in attendance.

 

7

----

 

5.1.5.       Records. The Company shallmaintain permanent records of all actions taken by the Members pursuant to anyprovision of this Agreement, including minutes of all Company meetings, copiesof all actions taken by consent of the Members, and copies of all proxiespursuant to which one Member votes or executes a consent on behalf of another.

 

**6.****             Article     ADDITIONALMEMBERS**

 

**6.1.****         Admission**. Upon aMajority vote of the then existing Members, the Company may, from time to time,admit additional Members who will promote, contribute and benefit the Companybusiness undertaken pursuant to this Agreement. Generally, additional Membersshall be admitted as of the first day of any month.

 

**6.2.****         Capital Contributions**.Upon the admission of an additional Member, the number of Units issued to the additionalMember shall be an amount determined by the  Manager. Such new Members shall also makeadditional Capital Contributions from time to time on the same basis as otherMembers.

 

**6.3.****         Admission Mechanics**. NoPerson shall be admitted as an additional Member unless such Person executes,acknowledges, and delivers to the Company such instruments as the Manager maydeem necessary or advisable to effect the admission of such Person as anadditional Member, including, but without limitation, approval by the NevadaGaming Commission of the Person’s suitability to becoming a Member of theCompany, the written acceptance and adoption by such Person of the provisionsof this Agreement as well as any amendment to the Articles of Organization andattorneys fees and costs necessitated by the admission of such additionalMember. **Exhibit A** shall also be revised toreflect the admission of the additional Member.

 

**7.****             Article     DISTRIBUTIONSOTHER THAN AT DISSOLUTION.**

 

Subject to all applicablegaming statutes and regulations and except as otherwise provided below, alldistributions of cash may be paid to the Members at the discretion of the Managerafter the Manager reasonably determines amounts needed to meet the reasonableforeseeable cash requirements and needs of the business and activities of theCompany in addition to establishing an adequate reserve for the payment ofCompany liabilities and contingencies. Distributions to Members shall be madein accordance with the relative number of Units held by the Members.

 

**7.1.****         Distribution WhileMaintaining a S Election:** The parties acknowledge that the Company  intends to be treated as a “S Corporation,”and pursuant thereto, all of its income for federal tax purposes will betaxable to the Members, in accordance with their pro rata share of the Units ofthe Company. Therefore, the Members agree as follows:

 

(a)   If the dividend distributionsto the Members hereunder shall exceed thirty-five (35%) percent of theestimated pre-tax profit attributable to any one fiscal year, upon the Manager’sconsent, each Member shall reimburse at the request of the Chief FinancialOfficer of the Company, the pro rata difference overpaid hereunder. In thealternative, the Company may deduct such overpayments from any distributionsdue in the subsequent fiscal year.

 

8

----

 

(b)   The requirement fordistributions hereunder shall not include any distributions which apply todistributions made for taxes from prior fiscal years or for other dividendsdeclared for prior years unrelated to distributions for tax purposes.

 

(c)   The parties acknowledge thattax brackets of each Member may differ, and the Company is not liable for anytax liability which is greater than the distribution amount.

 

(d)   Any adjustment of thisdistribution shall be subject to the approval of the Manager or vote of aMajority of the Units of the Members.

 

**8.****          ****Article     BUY/SELL EVENT**.

 

A Buy/Sell Event is defined herein as the occurrence of one of thefollowing events:  Involuntary Terminationof a Member or a Voluntary Termination of a Member. Voluntary Termination of a Membershall include a Member’s voluntary election to withdraw from the Company. InvoluntaryTermination of a Member shall include the death of a Member, the loss of aMember’s gaming license, the divorce of a Member, the bankruptcy of a Member ora Member’s default under this Agreement including the failure to make a capitalcontribution. A Member who directly or indirectly causes a Buy/Sell Event shallbe referred to herein as a Terminating Member. The Company shall continuewithout dissolution; and the Terminating Member or his personal representativeshall cease to be a Member and shall have no further right to participate inthe Company’s business, profits, losses, or distributions, but shall have onlythe rights provided below. Each Member hereby grants and gives the Companyfirst and the other Members second the right and option to purchase all of the Unitsof a Terminating Member on the terms and conditions stated below. This rightand option to purchase shall be effective from the date the Manager becomesaware of the Buy/Sell Event for a period of thirty (30) days at which time thisright and option shall expire. This right and option may be exercised by givingnotice of exercise thereof within said thirty (30) day period of time.

 

**8.1.****         Death of a Member**. Ifa Member dies and the Units of the deceased Member is not purchased as providedbelow, the personal representative, beneficiaries, heirs or other successorsshall take the Units and rights of the deceased Member subject to the terms ofthis Agreement.

 

**8.2.****         The Termination of Membershipof a Member For Any Reason.**   Upon  a Voluntary Termination or an InvoluntaryTermination, that Terminating Member hereby grants and gives to the Companyfirst and to the other Members second, the right to purchase all of theTerminating Member’s Units in accordance with the terms and conditions of thisAgreement.

 

**8.3.****         Default**. In additionto the remedy set forth in Section 2.3 for a default of a Capital Contributionand in addition to any and all other rights and remedies of the Company and theMembers herein, the Company first and the other Members second shall have theright and option, and each Member hereby grants to the Company the right andoption, to take all of the following actions in the event that any Member(hereinafter also referred to as the “Defaulting Member,” with the otherNon-defaulting Members being hereinafter referred to as the “Non-DefaultingMembers”) defaults under the provisions of this Agreement.

 

**8.3.1.**      Right to Purchase DefaultingMember’s Units.  The Company shall have,and the Members hereby grant and give to the Company, the first right topurchase all of the Defaulting Member’s Units in accordance with the PurchasePrice and Payment Terms below.

 

9

----

 

**8.3.2.**      Consequences of Breach. Notwithstandinganything to the contrary in the law, if a Defaulting Member attempts to (i)Transfer a Unit, (ii) cause a partition, (iii) withdraw from the Company ordissolve the Company, or (iv) otherwise breaches the provisions of thisAgreement, the Company shall continue and such Defaulting Member shall besubject to the provisions of this Section 8.3. In such event the followingshall occur.

 

8.3.2.(a)         The Defaulting Membershall immediately cease to be a voting Member and shall have no further powerto act for or bind the Company but shall be treated as an assignee. TheDefaulting Member’s Units shall become nonvoting Units;

 

8.3.2.(b)        The Defaulting Membershall be liable in damages, without requirement of a prior accounting, to theCompany for all costs and liabilities that the Company or any Member may incuras a result of such breach;

 

8.3.2.(c)         The Company may, bynotice to the Defaulting Member, elect to purchase the Defaulting Member’s Unitsin the Company;

 

8.3.2.(d)        The Company shall treatthe Defaulting Member as if he were an unadmitted assignee of the Units of theDefaulting Member and shall make distributions to the Defaulting Member only ofthose amounts otherwise payable with respect to such Units after offset of anysums due the Company from the Defaulting Member;

 

8.3.2.(e)         The Company may deductfrom any distribution(s) otherwise payable with respect to such Units tosatisfy any claims it may have against the Defaulting Member; and

 

8.3.2.(f)         The Defaulting Membershall have no right to inspect the Company’s books or records or obtain otherinformation concerning the Company’s operations.

 

**8.4.****         No Bonding**. Notwithstandinganything to the contrary in the law, if the Company treats a Defaulting Member asan unadmitted assignee of Units in the Company, and elects to purchase his Units,the Company shall not be obligated to secure the value of the Defaulting Member’sUnits by bond or otherwise; provided, however, that if a court of competentjurisdiction determines that, in order to continue the business of the Company,such value must be so secured, the Company may provide such security, but allMembers hereby agree that no such court-ordered bond shall exceed $500.00. Ifthe Company provides such security, the Defaulting Member shall not have anyright to participate in Company profits or distributions during the term of thedefault and shall be liable to the Company in the amount of the so providedsecurity along with any costs incident thereto and shall be subject to Section8.3.2(b).

 

10

----

 

**9.**             **ARTICLE     PURCHASEPRICE AND PAYMENT TERMS**

 

**9.1.****         Purchase of Units**. Whena Buy/Sell Event occurs the Company may purchase, and the Terminating Membershall sell, the total Units which the Terminating Member owns for the price andupon the terms herein provided.

 

**9.2.****         Purchase Price**. Unlessotherwise agreed by the remaining Members, the Purchase Price of theTerminating Member’s Units shall be the following calculation as adjustedbelow:

 

9.2.1.(a)         Purchase PriceCalculation. The Purchase Price of the Terminating Member’s Units shall bedetermined as follows:  The TerminatingMember and Company, or Non-Terminating Members if the Company elects not topurchase that Terminating Member’s Units, shall agree upon a Purchase Pricewithin thirty (30) days of the Terminating Member’s notice of election to sell pursuantto a Voluntary Termination or the Company or other Member’s election to purchaseupon the occurrence of an Involuntary Termination.

 

9.2.1.(b)        If the Purchase Price andterms of payment are not agreed upon within the timeframe set forth in Section9.2.1.(a) above, then the Purchase Price for the selling Member’s Units shallbe the most recent valuation of Units previously determined by the Members, ifand only, if such valuation is no more than one (1) year from the date of theBuy/Sell Event.

 

9.2.1.(c)         If the valuationreferenced in Section 9.2.1(b) above has aged more than one (1) year from thedate of the Buy/Sell Event, then the Manager shall select a qualified appraiserto conduct an appraisal of the Company to determine the market value of theUnits. The appraiser’s valuation shall be binding on all parties and the costof such appraisal shall be born by the Terminating Member.

 

**9.3.****         Notice**. In the event aMember should voluntarily elect to terminate its interest (“VoluntaryTermination”), the Terminating Member shall provide written notice of suchMember’s intention to withdraw from the Company at least forty-five (45) daysprior to the proposed withdrawal date. In the event of an InvoluntaryTermination of the Member by the Company or the other Members, the effectivedate of such termination shall be the date of notice. Each Member shall obtainhis or her spouses’ signature where indicated on Exhibit A within 10 days ofthe Member executing this Agreement or marriage, whichever occurs later. In theevent of a divorce, the effective date shall be the date a divorce proceedingis filed with the court or the date of a property settlement agreement,whichever occurs first.

 

**9.4.****         Closing; Payment ofPurchase Price, Etc.**

 

9.4.1.       Closing.Closing shall take place at the Company’s principal office or such other placeas the Company shall direct.

 

9.4.2.       Closing Date. The ClosingDate shall be a date not later than one hundred twenty (120)  days after the establishment of the PurchasePrice.

 

11

----

 

9.4.3.             Payment of PurchasePrice. Unless otherwise agreed upon, the Purchase Price shall be paid asfollows:  20% of the Purchase Price shallbe paid in cash to the Terminating Member on or before the Closing Date. Thebalance of the Purchase Price shall be evidenced by a promissory note providing(i) 5 yearly installments of principal and interest; (ii) interest to accrue ata rate not to exceed 18% per year; (iii) with payments commencing on the firstannual anniversary date of the Closing and continuing on each of the nextannual anniversary dates of the Closing Date until fully paid;  (iv) the privilege of prepayment at any time,without penalty; (v) attorneys fees and costs if there is a default; and (vi)the acceleration of all remaining installments of principal and interest in theevent any installment remains unpaid for twenty (20) calendar days after the dateupon which any installment becomes due.

 

9.4.4.             Delivery ofInstruments. On the Closing Date, the Terminating Member or his personalrepresentative shall deliver to the Company appropriate duly-executedinstruments of transfer and assignment, assigning and transferring good andmarketable title to the Units purchased, free from any liens or encumbrances orrights of others therein. The Terminating Member or his personal representativeshall pay the cost (including the Company’s attorneys fees) of such transfer,and shall execute and deliver such other instruments as may reasonably berequested.

 

**10.****          Article     TRANSFERS;WITHDRAWALS**

 

**10.1.****       Restrictions on Transfers**.No Member shall Transfer all or any portion of a Unit or any rights thereinwithout the consent of the Manager and a vote of the Majority of the Members asprovided above subject to all applicable gaming statutes and regulations. AnyTransfer or attempted Transfer by any Member in violation of the precedingsentence shall be null and void and of no effect whatever. Each Memberacknowledges the reasonableness of the restrictions on Transfer imposed by thisAgreement in view of the Company purposes and the relationship of the Members. Accordingly,the restrictions on Transfer contained in this Agreement shall be specificallyenforceable with a bond, if required, not to exceed the sum of $100.00. EachMember further agrees to hold the Company and each other Member (and each otherMember’s successors and assigns) wholly and completely harmless from any cost,liability, or damage (including, without limitation, liabilities for incometaxes and costs of enforcing this indemnity) incurred by the Company or any ofsuch indemnified Members as a result of a Transfer or an attempted Transfer inviolation of this Agreement. Notwithstanding this restriction on Transfer, anyMember may transfer his or her Units to a family trust or other similar entitywhich, in the sole discretion of the Manager, is controlled by suchtransferring Member and only if such transferring Member pays all costs andexpenses, including attorneys fees and reasonable compensation to the Manager,related to such transfer. In addition, such trust must qualify as a Qualified SCorporation Member. During the time that the S Elections for the Company are ineffect, the Company and each Member shall refrain from taking any action oromitting to take any action, which action or omission would cause thetermination of any S Election.

 

**10.2.****       Termination of S Election.**Uponelection of the Manager, the Company may elect to revoke the Company’s statusas a S Corporation as defined in Code Section 1361 or any successor provision. Insuch case, all language in this Agreement relating to such election which shallinclude but is not limited to membership, transfer of Units, or Companyrestrictions shall

 

12

----

 

terminate and no longer be applicable. Notwithstandingthe foregoing, all other provisions of this Agreement shall remain in fullforce and effect, including Section 10.1, except for the last two sentences.

 

**11.****          Article     GAMING**

 

**11.1.****      ****Disposition of Interests.**Notwithstanding anything to thecontrary expressed or implied in this Agreement, the issuance, sale,assignment, transfer, pledge or other disposition of any Units in the Companyis ineffective unless approved in advance by the Nevada Gaming Commission (“Commission”).If at any time the Commission finds that a Member which owns any such Units isunsuitable to hold those Units, the Commission shall immediately notify theCompany of that fact. The Company shall, within ten (10) days from the datethat it receives the notice from the Commission, terminate such Member’sMembership and return to the unsuitable Member the amount of his Capital Contributionas reflected on the books of the Company. Beginning on the date when theCommission serves notice of a determination of unsuitability upon the Company,pursuant to the preceding sentence, it is unlawful for the unsuitable Member:a) To receive any share of the distribution of profits or cash or any otherproperty of, or payments upon dissolution of, the Company, other than a returnof capital as required above; b) To exercise directly or through a trustee ornominee, any voting right conferred by such interest; c) To participate in themanagement of the business and affairs of the Company; or d) To receive anyremuneration in any form from the Company for services rendered or otherwise. Adetermination by the Commission of a Member’s unsuitability will be treated asan Involuntary Termination as set forth in Article 8.

 

**11.2.****      ****Suitability.**Notwithstanding anything to the contraryexpressed or implied in this Agreement, any Member that is found unsuitable bythe Commission shall return all evidence of any ownership in the Company to theCompany. Upon payment to the Member of his Capital Contribution, the unsuitableMember shall no longer have any direct or indirect interest in the Company.

 

**12.****          Article     DISSOLUTIONAND WINDING UP**

 

**12.1.****       Liquidating Events**. TheMembers agree that the Company shall not dissolve prior to the occurrence of aLiquidating Event. If a court of competent jurisdiction determines that theCompany has dissolved prior to the occurrence of a Liquidating Event, theMembers agree to continue the business of the Company without a winding up orliquidation. The Company shall dissolve and commence winding up and liquidatingupon the first to occur of any of the following **LiquidatingEvents**:

 

12.1.1.     Upon a vote of a Majority ofthe Units of the Members, the Members may elect to terminate the Company.

 

12.1.2      The happening of any otherevent that makes it unlawful or impossible to carry on the business of theCompany.

 

13

----

 

**12.2.****       Winding Up**. Upon theoccurrence of a Liquidating Event, the Company shall continue solely to wind upits affairs in an orderly manner. The Company shall liquidate its assets andsatisfy the claims of its creditors and Members. No Member shall take anyaction that is inconsistent with, or not necessary to or appropriate for,winding up the Company’s business and affairs. The Manager shall be responsiblefor overseeing the winding up and liquidation of the Company, and shall takefull account of the Company’s liabilities and assets and the assets shall beliquidated as promptly as is consistent with obtaining the fair value of the assets,and the proceeds therefrom, to the extent sufficient therefor, shall be appliedand distributed in the following order:

 

12.1.1.     First, to the payment anddischarge of all of the Company’s debts and liabilities to creditors other thanMembers;

 

12.1.2      Second, to the payment anddischarge of all of the Company’s debts and liabilities to Members; and

 

12.1.3      The balance, if any, to theMembers in proportion to their Units.

 

**12.3.****       Notice of Dissolution**. Inthe event a Liquidating Event occurs or an event occurs that would, otherwiseresult in a dissolution of the Company, the Company shall, within 30 daysthereafter, provide written notice thereof to each of the Members and to allother parties with whom the Company regularly conducts business.

 

**13.****          Article     ALLOCATIONS**

 

**13.1****        Profits and Losses**. Exceptas provided above, profits and losses for each fiscal year shall be allocatedamong the Members as provided in Section 13.2.

 

**13.2****        General**.

 

13.2.1      All items of Company income,gain, loss, deduction, and any other allocations not otherwise provided forshall be divided among the Members in proportion to each Member’s relativenumber of Units in a manner consistent with Code Sections 1366 and 1377.

 

13.2.2      The Members are aware of theincome tax consequences of the allocations made by this Agreement and agree tobe bound by the provisions hereof in reporting their shares of Company incomeand loss for income tax purposes.

 

13.2.3      Notwithstanding Section13.2.1 above, the Members herby agree to the election allowed in Code Section1377(a)(2) if the Manager so chooses to make such election for the Company.

 

14

----

 

**14.****          Article     DEFINITIONS**.

 

Capitalizedwords and phrases used in this Agreement have the following meanings:

 

**14.1****        Agreement** means thisOperating Agreement, as amended from time to time.

 

**14.2****        Articles of Organization**means the Company’s Articles of Organization initially filed with the Nevada ofSecretary of State on August 4, 2006, as amended, restated, or otherwisemodified from time to time.

 

**14.3****        Capital Account**means,with respect to any Member, the Capital Account which shall be credited such Member’sCapital Contriubtions.

 

**14.4****        Capital Contributions**means, with respect to any Member, the amount of money and the initial  fair market value of any property contributedto the Company with respect to the Units held by such Member pursuant to the termsof this Agreement.

 

**14.5****        Company**means the limited liability company to which this Operating Agreement applies.

 

**14.6****        EffectiveDate** means 11:59 p.m. on December 31, 2006, concurrent with the CapitalContributions reflected in **Exhibit A.**

 

**14.7****        Event of Bankruptcy**means, with respect to any Member or the Company, any of the following:

 

14.7.1      Filing a voluntary petitionin bankruptcy or for reorganization or for the adoption of an arrangement underthe Bankruptcy Code (as now or in the future amended) or an admission seekingthe relief therein provided;

 

14.7.2      Making a general assignmentfor the benefit of creditors;

 

14.7.3      Consenting to theappointment of a receiver for all or a substantial part of such Person’sproperty;

 

14.7.4      In the case of the filing ofan involuntary petition in bankruptcy, an entry of an order for relief;

 

14.7.5      The entry of a court orderappointing a receiver or trustee for all or a substantial part of such Person’sproperty without the consent of such Person; or

 

14.7.6      The assumption of custody orsequestration by a court of competent jurisdiction of all or substantially allof such Person’s property.

 

**14.8****        Manager** is the dulyelected Manager, or if no Manager has been designated in the Articles ofOrganization, the Manager is defined as the Members who shall manage by vote asprovided herein.

 

**14.9****        Members** means thoseindividuals and entities executing this Agreement as Members. **Member** means any one of the Members.

 

15

----

 

**14.10****      Person** means anyindividual, partnership, limited liability company, corporation, trust, orother entity.

 

**14.11****      Property** means all realand personal property acquired by the Company and any improvements thereto, andshall include both tangible and intangible property.

 

**14.12****      Transfer** means, as anoun, any voluntary or involuntary transfer, sale, pledge, hypothecation, orother disposition, and, as a verb, voluntarily or involuntarily to transfer,sell, pledge, hypothecate, or otherwise dispose of.

 

**14.13****      Unit**refers to theinterest of a Member in the Company, and shall entitle the holder thereof to aninterest in certain of the capital, income, gains, losses, deductions, creditsand distributions of the Company as set forth in this Agreement.

 

**15****           Article     Miscellaneous**

 

**15.1****        Attorneys Fees**. In theevent any legal action or proceeding brought by a Member against another Memberor against the Company to enforce any provision of this Agreement by reason ofany alleged breach hereunder, for a declaration of rights or obligationshereunder, or for any other remedy, the prevailing party shall be entitled torecover such amounts as a court of competent jurisdiction may adjudge to bereasonable attorneys fees; and such amount shall be included in any judgmentrendered in any such action or proceeding.

 

**15.2****        Binding Effect**. Exceptas otherwise provided in this Agreement, every covenant, term and provision ofthis Agreement shall be binding upon and inure to the benefit of the Membersand their respective heirs, legatees, legal representatives, successors,transferees, and assigns.

 

**15.3****        Construction**. Everycovenant, term, and provision of this Agreement shall be construed simplyaccording to its fair meaning and not strictly for or against any Member.

 

**15.4****        Counterpart Execution**.The Agreement may be executed in any number of counterparts with the sameeffects as if all of the Members had signed the same document. All counterpartsshall be construed together and shall constitute one agreement.

 

**15.5****        Entire Agreement**. ThisAgreement constitutes the entire agreement between and among the Members. Allnegotiations, proposals, modifications and agreements prior to the date hereofare merged into this Agreement and hereby superseded. There are no other terms,conditions, promises, understandings, statements or representations, express orimplied, concerning this Agreement unless set forth in writing and signed bythe Members.

 

**15.6****        Further Action**. EachMember agrees to perform all further acts and execute, acknowledge, and deliverany documents which may be reasonably necessary, appropriate, or desirable tocarry out the provisions of this Agreement.

 

**15.7****        Governing Law**. Thelaws of the State of Nevada shall govern the validity of this Agreement, theconstruction of its terms, and the interpretation of the rights and duties ofthe Members.

 

16

----

 

**15.8****        Headings**. Paragraphand other headings contained in this Agreement are for reference purposes onlyand are not intended to describe, interpret, define, or limit the scope,extent, or intent of this Agreement or any provision of this Agreement.

 

**15.9****        Incorporation by Reference**.Every exhibit, schedule, and other appendix attached to this Agreement and towhich reference is made in this Agreement is incorporated in this Agreement byreference.

 

**15.10****      Mediation and Arbitration**.

 

15.10.1    Mediation. If a dispute arisesout of or relates to this Agreement, or the breach thereof, or if the disputecannot be settled through negotiation, the Members agree first to try in goodfaith to settle any such dispute by mediation administrated by the AmericanArbitration Association under its commercial mediation rules before resortingto arbitration unless otherwise agreed by vote of the Members. Fees applicableto the administration of the mediation and the mediator’s fee shall be paidequally by all Members.

 

**15.11****     **Arbitration. If theMembers are unable to resolve any controversy or claim arising out of orrelating to this Agreement or any breach of this Agreement through mediation,or if a Member objects to mediation, the controversy or claim shall besubmitted to arbitration administered by the American Arbitration Associationin accordance with the Commercial Arbitration Rules, with a Las Vegas arbitratorwith at least 15 years experience in the general subject matter of thisAgreement. The Arbitrator shall enter findings of fact and conclusions of lawto support his or her award, and the Parties agree that there shall be noappeal from any trial court’s review of the record, findings of fact, andconclusions of law. The standard of review for the trial court shall be thesame as if the Nevada Supreme Court were reviewing findings and conclusions ofa trial court after a trial. The arbitrator(s) is authorized to award to anyparty whose claims are sustained, such sums as the arbitrator (or a majority ofthem) shall deem proper and shall compensate such party for the time andexpense of the arbitration proceeding, including any and all reasonableattorneys fees, professional fees and costs expended. If the arbitration wasdemanded without reasonable cause, the arbitrator(s) may also award furtherdamages in the discretion of the arbitrator(s). Unless otherwise agreed by,between and among the Members in writing, the arbitrator(s) shall assess suchcosts and charges of the proceedings upon the Members in the arbitrator(s) owndiscretion.

 

**15.12****      Modification of Agreement**.This Agreement may be altered or amended by a vote of a Majority of the Unitsof the Members.

 

**15.13****      Notices**. Any notice,payment, demand, or communication required or permitted to be given by anyprovision of this Agreement shall be in writing. Wherever provision is made inthis Agreement for the giving, service or delivery of any notice, statement, orother instrument, the same shall be deemed to have been duly given, served, anddelivered: (i) on the date personally delivered and faxed; (ii) on the secondbusiness day following the date on which mailed by United States registered orcertified mail (return receipt requested), postage prepaid and faxed; (iii) onthe first business day following the date on which mailed by United StatesExpress Mail, postage prepaid, or delivered to a commercially-responsibleovernight courier which provides service between the point of origin and thepoint of destination and faxed; or (iv) on

 

17

----

 

the date upon which transmitted by facsimiletransmitter, addressed as follows: If to the Company, to the Company at theaddress set forth in this Agreement, or to such other address as the Companymay from time to time specify by notice to the Members; if to a Member, to suchMember at the address set forth on Exhibit A, or to such other address as suchMember may from time to time specify by notice to the Company.

 

**15.14****      Severability**. Everyprovision of this Agreement is intended to be severable. If any term orprovision of this Agreement is illegal or invalid for any reason whatsoever,such illegality or invalidity shall not affect the validity or legality of theremainder of this Agreement.

 

**15.15****      Time**. Time is of theessence with respect to this Agreement.

 

**15.16****      Variation of Pronouns**. Allpronouns and any variations thereof shall be deemed to refer to masculine,feminine, or neuter, singular or plural, as the identity of the person orpersons may require.

 

 

**. . .**

 

**. . .**

 

**. . .**

 

**. . .**

 

**. . .**

 

**. . .**

 

**. . .**

 

**. . .**

 

**. . .**

 

**. . .**

 

**. . .**

 

**. . .**

 

**. . .**

 

**. . .**

 

**. . .**

 

**. . .**

 

**. . .**

 

18

----

 

**. . .**

 

**. . .**

 

 

**INWITNESS WHEREOF**, the Members have entered into this OperatingAgreement as of the Effective Date by executing **Exhibit A**or a copy thereof.

 

Exhibit A

 

Member of BlackGaming, LLC

 

**Name, Address, and Signature ofMember****& Initial CapitalContribution**

 
| Name:                   | Black Gaming, LLC                                                                                    |
|-------------------------|------------------------------------------------------------------------------------------------------|
|                    |                                                                                                 |
| By:                     | Robert R. Black, Sr.,  as trustee for Robert R. Black Sr. Gaming Properties Trust u/a/d May 24, 2004 |
|                    |                                                                                                 |
| Address:                | 911 North Buffalo  Drive, Suite 201                                                                  |
|                    | Las Vegas, Nevada 89128                                                                              |
|                    |                                                                                                 |
|                    |                                                                                                 |
| Capital Contribution:   |         Virgin  River shares                                 |
|                    |         BB&B  shares                                     |
| Units:                  | 9,903                                                                                                |
| Social Security/Tax ID: | [intentionally omitted]                                                                              |
|                         |                                                                                                      |  |  |

 

The signature below is anacknowledgment and representation that the undersigned has received a copy andhas read Pages 1 through      of the Operating Agreement of**Black Gaming, LLC** and agrees to bebound by its terms, conditions, and obligations including any amendmentsthereto.

 
| X /s/ Robert R. Black,  Sr. |        |
|-----------------------------|-------------|
|                        |        |
|                        |        |
| STATE OF NEVADA             | )           |
|                        | )  ss: |
| COUNTY OF CLARK             | )           |

 

On this 31st dayof December, 2006, personally appeared before me, a Notary Public, Robert R.Black, Sr., who acknowledged to me that he executed the foregoing instrument.

 

 
|   | /s/           |   |
|--------|---------------|--------|
|   | NOTARY PUBLIC |

 

19

----

 

. . .

 

. . .

 

. . .

 

. . .

 

Member of BlackGaming, LLC

 

**Name, Address, and Signature ofMember****& Initial CapitalContribution**

 
| Name:                   | Black Gaming, LLC                                                    |
|-------------------------|----------------------------------------------------------------------|
|                    |                                                                 |
| By:                     | Glenn J. Teixeira                                                    |
|                    |                                                                 |
| Address:                | 776 Thompson                                                         |
|                    | Nipomo, California  93444                                            |
|                    |                                                                 |
|                    |                                                                 |
| Capital Contribution:   |         Virgin  River shares |
| Units:                  | 97                                                                   |
| Social Security/Tax ID: | [intentionally omitted]                                              |
|                         |                                                                      |  |  |

 

The signature below is anacknowledgment and representation that the undersigned has received a copy andhas read Pages 1 through      of the Operating Agreement of**Black Gaming, LLC** and agrees to bebound by its terms, conditions, and obligations including any amendmentsthereto.

 
| X /s/ Glenn J. Teixeira |        |
|-------------------------|-------------|
|                    |        |
|                    |        |
| STATE OF NEVADA         | )           |
|                    | )  ss: |
| COUNTY OF CLARK         | )           |

 

On this 31st dayof December, 2006, personally appeared before me, a Notary Public, Robert R. Black,Sr., who acknowledged to me that he executed the foregoing instrument.

 

 
|   | /s/           |   |
|--------|---------------|--------|
|   | NOTARY PUBLIC |

 

. . .

 

. . .

 

. . .

 

. . .

 

20

----

 

. . .

 

. . .

 

. . .

 

Manager of BlackGaming, LLC

 

**Name, Address, and Signature ofMember****& Initial CapitalContribution**

 
| Name:                   | Robert R. Black, Sr.                |
|-------------------------|-------------------------------------|
|                    |                                |
| By:                     | Robert R. Black, Sr.                |
|                    |                                |
| Address:                | 911 North Buffalo  Drive, Suite 201 |
|                    | Las Vegas, Nevada 89128             |
|                    |                                |
|                    |                                |
| Social Security/Tax ID: | [intentionally omitted]             |
|                         |                                     |  |

 

The signature below is anacknowledgment and representation that the undersigned has received a copy andhas read Pages 1 through      of the Operating Agreement of**Black Gaming, LLC** and agrees to bebound by its terms, conditions, and obligations including any amendments thereto.

 
| X /s/ Robert R. Black,  Sr. |        |
|-----------------------------|-------------|
|                        |        |
|                        |        |
| STATE OF NEVADA             | )           |
|                        | )  ss: |
| COUNTY OF CLARK             | )           |

 

On this 31st dayof December, 2006, personally appeared before me, a Notary Public, Robert R.Black, Sr., who acknowledged to me that he executed the foregoing instrument.

 

 
|   | /s/           |   |
|--------|---------------|--------|
|   | NOTARY PUBLIC |

 

. . .

 

. . .

 

. . .

 

. . .

 

. . .

 

21

----

 

. . .

 

. . .

 

. . .

 

**Exhibit “B”**

 

**SPOUSE’SCONSENT**

 

I acknowledge that I haveread the foregoing Operating Agreement of Black Gaming, LLC which has beenexecuted by the Members of Black Gaming, LLC, a Nevada limited liabilitycompany (the “Company”), including my spouse, Glenn J. Teixeira, and that Iknow its contents. I am aware that by its provisions my spouse agrees to sellall his Units of the Company, including any community interest in them, on theoccurrence of certain events, and that my community property interest in suchUnits is subject to certain options upon the occurrence of certain events. I amalso aware that the Agreement affects my community property interest in thoseUnit in various other ways.

 

I agree that I will notmake, or cause to be made, any transfer (other than to my spouse) of anyinterest in said Units either prior to or upon my death, by will or otherwise. Ifurther agree that the Agreement shall bind my personal or legalrepresentative.

 

I hereby consent to anysale of those Units required or permitted under the Agreement, approve of allthe provisions of the Agreement, and agree that those Units and my interest inthem are subject to the provisions of the Agreement and that I will take noaction at any time to hinder operation of the Agreement on those Units or myinterest in them.

 

I hereby appoint myspouse, Glenn J. Teixeira, as my authorized representative to hereafter amendor otherwise modify the terms and conditions of this Agreement and to vote myinterest in the Units as defined therein, for any purposes which arecontemplated within the terms and conditions of this Agreement, even to theextent they relate to my community property interest.

 

 
| Dated: December 31,  2006 |   | /s/ Karen Sue Teixeira                           |   |
|---------------------------|--------|--------------------------------------------------|--------|
|                      |   | Karen Sue Teixeira,  Spouse of Glenn J. Teixeira |

 

22

----