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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
 þ
    
    ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the fiscal year ended December 31, 2008
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 333-123179
 BLACK GAMING, LLC
  Nevada
    
    20-8160036(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 (Address and telephone number of principal executive offices) (Zip Code)
 (702) 318-6888
  Title of each class
    
    Name of each exchange on which registeredNone.
  (Title of each class)
 (Title of each class)
 Yes o No þ
 Yes o No þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-Accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



TABLE OF CONTENTS
 PagePART I
    
    
    1ITEM 1. BUSINESS
    
    
    1ITEM 1A. RISK FACTORS
    
    
    11ITEM 1B. UNRESOLVED STAFF COMMENTS
    
    
    26ITEM 2. PROPERTIES
    
    
    27ITEM 3. LEGAL PROCEEDINGS
    
    
    28ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    28PART II
    
    
    29ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
    
    
    29ITEM 6. SELECTED FINANCIAL DATA
    
    
    29ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    30ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    39ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    41INDEX TO FINANCIAL STATEMENTS
    
    
    41ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    74ITEM 9A(T). CONTROLS AND PROCEDURES
    
    
    74ITEM 9B. OTHER INFORMATION
    
    
    75PART III
    
    
    76ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
    
    76ITEM 11. EXECUTIVE COMPENSATION
    
    
    77ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
    
    
    82ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
    
    
    82ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
    
    
    84PART IV
    
    
    85ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
    
    
    85SIGNATURES
    
    
    87SIGNATURES
    
    
    88SIGNATURES
    
    
    89SIGNATURES
    
    
    90EXHIBIT INDEX
    
    
    91Exhibit 3.12Exhibit 3.14Exhibit 3.16Exhibit 3.19Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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PART I
 
 ITEM 1. BUSINESS.
  Forward-looking Statements
  The Company
     - 1 -




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Casino Properties
 CasaBlanca Hotel & Casino. ®
 Oasis Hotel & Casino. ® ®
   - 2 -




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Virgin River Hotel & Casino. ®
 Virgin River Convention Center.
 Recent Developments
     - 3 -




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Competition
 General.
  Mesquite, Nevada.
 Las Vegas, Nevada.
 West Wendover, Nevada.
  - 4 -




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California Gaming Market.
 Employees
  Environmental Matters
    - 5 -




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Regulation and Licensing
   
    
    the prevention of unsavory or unsuitable persons from having a direct or indirect
involvement with gaming at any time or in any capacity;
 
    
    the establishment and maintenance of responsible accounting practices and
procedures;
 
    
    the maintenance of effective controls over the financial practices of licensees,
including the establishment of minimum procedures for internal fiscal affairs and the
safeguarding of assets and revenues, providing reliable record keeping and requiring
the filing of periodic reports with the Nevada Gaming Authorities;
 
    
    the prevention of cheating and fraudulent practices; and
 
    
    providing a source of state and local revenues through taxation and licensing fees.
     - 6 -




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
    
    voting on all matters voted on by stockholders;
 
    
    making financial and other inquiries of management of the type normally made by
securities analysts for informational purposes and not to cause a change in its
management, policies or operations; and
 
    
    other activities as the Nevada Gaming Commission may determine to be consistent with
such investment intent.
  - 7 -




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
    
    pay that person any dividend or interest upon voting securities;
 
    
    allow that person to exercise, directly or indirectly, any voting right conferred
through securities held by that person;
 
    
    pay remuneration in any form to that person for services rendered or otherwise; or
 
    
    fail to pursue all lawful efforts to require the unsuitable person to relinquish his
voting securities for cash at fair market value.
    
    
    pays to the unsuitable person any dividend, interest, or any distribution
whatsoever;
 
    
    recognizes any voting right by the unsuitable person in connection with debt
securities;
 
    
    pays the unsuitable person remuneration in any form; or
 
    
    makes any payment to the unsuitable person by way of principal, redemption,
conversion, exchange, liquidation or similar transaction.
  - 8 -




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
    
    a percentage of the gross revenues received;
 
    
    the number of gaming devices operated; or
 
    
    the number of table games operated.
   - 9 -




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Treasury Department Regulations
   Potential Changes in Tax and Regulatory Requirements
  Compliance with Other Laws and Regulations
   - 10 -




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ITEM 1A. RISK FACTORS.
  Risks Related to Our Business
 Going Concern Opinion The opinion of our independent registered public accounting firm with respect
to our financial statements for the year ended December 31, 2008 contains a going concern
qualification.
  Oasis Hotel & Casino Temporary Closure As of December 5, 2008 operations at the Oasis were
significantly reduced on a temporary basis.
  Geographic Concentration of Properties We are subject to greater risks than a geographically
diversified gaming company.
  
    
    a downturn in local or regional economic conditions;
 
    
    an increase in competition in the surrounding area;
 
    
    inaccessibility to our properties due to road construction or closure of Interstate
15; and
 
    
    natural and other disasters in the surrounding area, including severe weather,
flooding, fire, and other casualty losses.
  - 11 -




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Competition We face substantial competition in the gaming industry.
      - 12 -




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Dependence on Management We rely on our Chairman of the Board, Chief Executive Officer and
President, the loss of whose services could materially and adversely affect our business.
  Governmental Regulations We face extensive regulation from gaming and other government authorities.
     Gaming Taxes and Fees  If the State of Nevada or Clark County increases gaming taxes and fees, our
results of operations could be adversely affected.
   - 13 -




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Concentration of OwnershipO ur Chairman of the Board, Chief Executive Officer and President owns a
substantial majority of the Company and could have interests that conflict with the noteholders.
  Union Efforts to Organize Employees Our business, financial condition, and results of operation may
be harmed by union efforts to organize our employees.
  Factors Beyond Our Control Our business, financial condition and results of operations are
dependent in part on a number of factors that are beyond our control.
  
    
    continued increases in healthcare costs;
 
    
    general economic conditions and economic conditions specific to our primary markets;
 
    
    levels of disposable income of casino customers;
 
    
    increases in transportation costs;
 
    
    local conditions in key gaming markets, including seasonal and weather-related
factors;
 
    
    increase in gaming taxes or fees;
 
    
    decline in tourism and travel due to occurrences or threats of terrorism or other
destabilizing events;
 
    
    substantial increases in the cost of electricity, natural gas and other forms of
energy;
  - 14 -




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
    
    competitive conditions in the gaming industry, including the effect of such
conditions on the pricing of our games and products;
 
    
    the relative popularity of entertainment alternatives to casino gaming that compete
for the leisure dollar;
 
    
    the adoption of additional anti-smoking regulations;
 
    
    an outbreak or suspicion of an outbreak of an infectious communicable disease;
 
    
    environmental disaster; and
 
    
    unionization of workforce
  Environmental Matters We are subject to environmental laws and potential exposure to environmental
liabilities. This may cause us to incur costs or affect our ability to develop, sell or rent our
property or to borrow money where such property is required to be used as collateral.
     - 15 -




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Risks Associated with Construction Projects Expansion and renovation efforts are inherently subject
to significant development and construction risks.
  
    
    the availability of financing and the terms and covenants in our Foothill Facility
and other debt;
 
    
    shortages in materials;
 
    
    insufficient public infrastructure improvements or maintenance;
 
    
    shortages of skilled labor or work stoppages;
 
    
    unforeseen construction, scheduling, engineering, environmental or geological
problems;
 
    
    weather interference, floods, fires or other casualty losses;
 
    
    the failure to obtain required licenses, permits or approvals;
 
    
    regulatory or private litigation arising out of projects; and
 
    
    unanticipated cost increases and budget overruns.
  Uninsured Losses We may incur losses that are not adequately covered by insurance which may harm
our financial condition and results of operations.
  Economic Developments The global financial crisis may have an impact on our business and
financial condition in ways that we currently cannot predict.
   - 16 -




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Risks Related to the Notes
  Default status We are currently in default under our amended Foothill Facility and our Senior
Secured Notes.
  Substantial Debt Our substantial level of debt could adversely affect our financial condition and
prevent us from fulfilling our obligations under the Notes and our other debt.
  Access to Capital The volatility and disruption of the capital and credit markets and adverse
changes in the global economy may negatively impact our ability to access financing .
   - 17 -




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Value of Collateral Securing the Senior Secured Notes The fair market value of the collateral
securing our Senior Secured Notes may not be sufficient to pay the amounts owed under our Senior
Secured Notes. As a result, holders of our Senior Secured Notes may not receive full payment
following an event of default.
       - 18 -




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Lien Subordination of Senior Secured Notes The lien on the collateral securing the Senior Secured
Notes is contractually subordinated pursuant to the intercreditor agreement to the liens securing
our Foothill Facility and also is subject to the prior claim of purchase money lenders and holders
of mechanics liens.
   Limited Ability of Holders of Senior Secured Notes to Exercise Remedies The rights of the trustee
and holders of Senior Secured Notes to exercise remedies under the indenture are limited by an
intercreditor agreement between the trustee and the lenders under our Foothill Facility.
   - 19 -




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Limited Ability of Holders of Senior Secured Notes to Realize on Collateral Gaming laws, bankruptcy
laws and other factors may delay or otherwise impede the trustees ability to foreclose on the
collateral securing the Senior Secured Notes.
      - 20 -




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
    
    whether any payments under the notes would be made;
 
    
    whether or when the trustee could foreclose upon or sell the collateral;
 
    
    whether the term or other conditions of the Notes or any rights of the holders could
be altered in a bankruptcy case without the trustees or the noteholders consent;
 
    
    whether the trustee or Note holders would be able to enforce the noteholders rights
against the guarantors under their guarantees; or
 
    
    whether or to what extent holders of the Senior Secured Notes would be compensated
for any delay in payment or decline in the collaterals value.
  Senior Subordinated Notes Are Unsecured If we fail to meet our payment or other obligations under
our secured debt, including the Senior Secured Notes and our Foothill Facility, the holders of our
secured debt could foreclose on, and acquire control of, substantially all of our assets.
  Subordination of Senior Subordinated Notes The right to receive payments on the Senior Subordinated
Notes or under the guarantees thereof is subordinated to our senior debt, including the Senior
Secured Notes and our Foothill Facility.
   - 21 -




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Restrictive Covenants The indentures governing the Notes and our Foothill Facility contain
covenants that significantly restrict our operations.
  
    
    pay dividends, redeem stock or make other distributions or restricted payments;
 
    
    incur debt or issue preferred equity interests;
 
    
    make certain investments;
 
    
    create liens;
 
    
    agree to payment restrictions affecting the subsidiary guarantors;
 
    
    consolidate or merge;
 
    
    sell or otherwise transfer or dispose of assets, including equity interests of our
restricted subsidiaries;
 
    
    enter into transactions with our affiliates;
 
    
    designate our subsidiaries as unrestricted subsidiaries; and
 
    
    use the proceeds of permitted sales of our assets.
  
    
    indebtedness evidenced by the Notes or refinancing of the Notes;
 
    
    indebtedness to finance purchases of furniture, fixture and equipment, or FF&E, so
long as the financing does not exceed $2.5 million for non-gaming FF&E;
  - 22 -




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
    
    indebtedness to finance our general liability insurance premium so long as the
amount does not exceed $1.0 million;
 
    
    indebtedness secured by our contracts between us and owners of timeshare interests
in our timeshare units so long as the amount does not exceed $1.0 million; and
 
    
    other indebtedness in an amount not to exceed $1.0 million.
   Ability to Repurchase Notes Our ability to repurchase the Notes upon a change of control or an
asset sale may be limited.
    - 23 -




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Required Regulatory Redemption Noteholders may be required to be licensed by a gaming authority
and, if not so licensed, their Notes will be subject to redemption.
   Fraudulent Transfer Under certain circumstances, a court could cancel the guarantees of our
subsidiaries or limit the obligations of an individual issuer under the Notes.
 i.e.
  
    
    the guarantor was insolvent or rendered insolvent by reason of incurring its
obligations under its guarantee or granting a security interest in its assets;
 
    
    the guarantor was engaged in a business or transaction for which its remaining
assets constituted unreasonably small capital; or
 
    
    the guarantor intended to incur, or believed (or reasonably should have believed)
that it would incur, debts beyond its ability to pay as those debts matured.
  - 24 -




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Limited Existing Trading Market for the Notes There is currently a limited trading market for the
Notes, and an active trading market may not develop for the Notes. The failure of a market to
develop for the Notes could affect the liquidity and value of the Notes.
   Original Issue Discount on Senior Subordinated Notes The Senior Subordinated Notes have significant
original issue discount, or OID, for United State federal income tax purposes, and accordingly,
United States holders of the Senior Subordinated Notes will be required to include OID in income in
advance of the receipt of cash attributable to such income.
  Redemption We may choose to redeem the Notes at anytime on or after January 15, 2009.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS.
   - 26 -




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ITEM 2. PROPERTIES.
  Location and Function(s)
    
    Ownership StructureCasaBlanca Hotel & CasinoMain Site and Improvements
    
    OwnedTimeshare Units
    
    Owned by us and unrelated third partiesTimeshare Unit Land
    
    Owned(1)CasaBlanca Golf Club
    
    Leased(2)Unimproved Land
    
    OwnedOasis Hotel & CasinoMain Site and Improvements
    
    OwnedPalms Golf Course
    
    Arizona Land Owned (76 acres) / Arizona Land Leased (180 acres)(3)Oasis Recreational Facility
    
    Owned(4)Timeshare Units
    
    Owned by us and unrelated third parties(5)Timeshare Units Land
    
    Owned by us and unrelated third partiesVirgin River Hotel, Casino & BingoMain Site and Improvements
    
    Owned(6)Unimproved Land
    
    OwnedVirgin River Convention Center Hotel & CasinoMain Site and Improvements
    
    OwnedUnimproved Land
    
    Owned
 
 (1)
    
    In addition to land owned, we formerly leased the land on which some of our former timeshare
units are situated pursuant to a 50-year lease with our affiliate, MDW Mesquite, LLC.
Pursuant to an agreement which became effective December 15, 2004, RBG, LLC and MDW Mesquite,
LLC terminated the lease. See Item 13. Certain Relationships and Related Transactions.(2)
    
    We lease the land on which the golf club is located pursuant to a 99-year lease with River
View, LLC that expires in June 2094.(3)
    
    The Palms Golf Course is located on a 256-acre site in Arizona, of which 180 acres are leased
from the State of Arizona pursuant to a 10-year lease that expired in May 2008. Currently we
are in the process of renegotiating this lease.(4)
    
    The Oasis Recreational Facility consists of a gun club as well as motocross and equestrian
facilities in Arizona.(5)
    
    In January 2006, Oasis Interval Ownership, LLC entered into an agreement with Global Exchange
Development Corp. to sell substantially all of the unsold time share intervals at the Oasis
Hotel and Casino.(6)
    
    Title to the main site and related improvements is held by the Virgin River Casino Corporation.  - 27 -




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ITEM 3. LEGAL PROCEEDINGS.
   
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
   - 28 -




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PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES.
  
 ITEM 6. SELECTED FINANCIAL DATA.
  Years ending December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(dollars in thousands)Statement of Operations Data:Net revenues
    
    
    131,637
    
    
    
    163,183
    
    
    
    168,230
    
    
    
    162,262
    
    
    
    154,010Operating expenses
    
    
    164,899
    
    
    
    159,781
    
    
    
    161,465
    
    
    
    152,428
    
    
    
    140,898Operating (loss) income
    
    
    (33,262
    )
    
    
    3,402
    
    
    
    6,765
    
    
    
    9,834
    
    
    
    13,112Net (loss) income
    
    
    (54,587
    )
    
    
    (17,230
    )
    
    
    (12,164
    )
    
    
    (8,414
    )
    
    
    2,859Other Financial Data:Depreciation and amortization
    
    
    16,586
    
    
    
    16,823
    
    
    
    17,274
    
    
    
    12,539
    
    
    
    8,180
  - 29 -




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As of December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(dollars in thousands)Balance Sheet Data:Cash and cash equivalents
    
    
    11,464
    
    
    
    9,503
    
    
    
    11,118
    
    
    
    15,632
    
    
    
    17,033Total assets
    
    
    150,468
    
    
    
    194,284
    
    
    
    201,627
    
    
    
    212,944
    
    
    
    205,630Total debt and capital leases
    
    
    206,093
    
    
    
    193,587
    
    
    
    181,954
    
    
    
    182,665
    
    
    
    168,564Total Members (deficit) equity
    
    
    (75,266
    )
    
    
    (20,679
    )
    
    
    (3,449
    )
    
    
    6,268
    
    
    
    16,465
  
 ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
  Overview
     - 30 -




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
    
    VRCC received 100 shares of R. Black, Inc. (RBI) from the Black Trust. The Black Trust
owns 100% of the outstanding shares of VRCC. The 100 shares of RBI representing 100% of the
outstanding capital stock of RBI, was exchanged for 3.68 shares of VRCC held by the Black
Trust, representing 3.68% of the outstanding capital stock of VRCC. RBI does not have any
material operations, liabilities or assets other than a 5.47% ownership in RBG. The
transfer of shares of RBI to VRCC was accounted for at the historical cost of RBG as RBI
and VRCC were under common control.
 
    
    VRCC received a 3.8% membership interest in RBG from the Black Trust in exchange for
2.57 shares of VRCC held by the Black Trust, representing 2.57% of the outstanding capital
stock of VRCC. The transfer of membership interests of RBG to VRCC was accounted for at
historical cost as the Black Trust and VRCC were under common control.
 
    
    VRCC received a 1.92% membership interest in RBG from Glenn Teixeira in exchange for 1.29
shares of VRCC held by the Black Trust, representing 1.29% of the outstanding capital stock
of VRCC. The acquisition of the membership interests from RBG from Glenn Teixeira was
accounted for at fair value as it was considered an acquisition of a minority interest of a
subsidiary. Based upon an internal analysis the fair value of Glenn Teixeiras interest
approximated book value.
    - 31 -




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Key Performance Indicators
       - 32 -




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Financial Highlights of Black Gaming, LLC and Subsidiaries
  Year endedDecember 31,
    
    
    
    
    
    Years ended December 31,2008
    
    

%
Change
    
    
    2007
    
    
    % Change
    
    
    2006Casino revenues
    
    $
    81,831
    
    
    
    (23.6
    %)
    
    $
    107,112
    
    
    
    1.3
    %
    
    $
    105,762Casino expenses
    
    
    42,693
    
    
    
    (19.4
    %)
    
    
    52,998
    
    
    
    11.7
    %
    
    
    47,444Profit margin
    
    
    47.8
    %
    
    
    
    
    
    
    50.5
    %
    
    
    
    
    
    
    55.1
    %Food and beverage revenues
    
    $
    31,849
    
    
    
    (23.0
    %)
    
    $
    41,342
    
    
    
    (4.2
    %)
    
    $
    43,172Food and beverage expenses
    
    
    20,514
    
    
    
    (7.6
    %)
    
    
    22,205
    
    
    
    (13.6
    %)
    
    
    25,711Profit margin
    
    
    35.6
    %
    
    
    
    
    
    
    46.3
    %
    
    
    
    
    
    
    40.4
    %Hotel revenues
    
    $
    29,141
    
    
    
    (15.0
    %)
    
    $
    34,278
    
    
    
    (2.2
    %)
    
    $
    35,062Hotel expenses
    
    
    7,068
    
    
    
    12.2
    %
    
    
    6,298
    
    
    
    (11.2
    %)
    
    
    7,090Profit margin
    
    
    75.7
    %
    
    
    
    
    
    
    81.6
    %
    
    
    
    
    
    
    79.8
    %Other revenues
    
    $
    16,348
    
    
    
    (17.9
    %)
    
    $
    19,905
    
    
    
    (1.8
    %)
    
    $
    20,280Other expenses
    
    
    9,258
    
    
    
    (20.4
    %)
    
    
    11,633
    
    
    
    (5.8
    %)
    
    
    12,352Promotional allowances
    
    $
    27,532
    
    
    
    (30.2
    %)
    
    $
    39,454
    
    
    
    9.5
    %
    
    $
    36,046Percent of gross revenues
    
    
    17.3
    %
    
    
    
    
    
    
    19.5
    %
    
    
    
    
    
    
    17.7
    %General and administrative expenses
    
    $
    41,270
    
    
    
    (17.0
    %)
    
    $
    49,714
    
    
    
    (0.6
    %)
    
    $
    50,009Percent of net revenues
    
    
    31.4
    %
    
    
    
    
    
    
    30.5
    %
    
    
    
    
    
    
    29.7
    %
 Year 2008 Compared to Year 2007
 Consolidated Net Revenues.
 Consolidated Operating Income.
 Casino.
  - 33 -




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Food and Beverage.
 Hotel.
 Other Revenues.
 Promotional Allowances.
 General and Administrative (G&A).
 Depreciation and Amortization.
  - 34 -




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Goodwill and Intangible Asset Impairment.
 Impairment of Long Lived Assets.
   Interest Expense.
 Year 2007 Compared to Year 2006
 Consolidated Net Revenues.
 Consolidated Operating Income.
  - 35 -




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Casino.
 Food and Beverage.
 Hotel.
 Other Revenues.
 Promotional Allowances.
 General and Administrative (G&A).
  - 36 -




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Depreciation and Amortization.
 Change in Fair Value of Swaps.
 Interest Expense.
 Impairment of Long Lived Assets.
 Liquidity
and Capital Resources for Black Gaming, LLC.
  Default status
    - 37 -




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Cash Flows
  Operating Activities
   Investing Activities
   Financing Activities
    - 38 -




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Capital
Expenditures for Black Gaming, LLC.
  Off Balance Sheet Arrangements for Black Gaming, LLC.
  Contractual Obligations and Commitments for Black Gaming, LLC.
  Payments Due by PeriodLess than
    
    
    
    
    
    
    
    
    
    
    AfterTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    5 Years(dollars in thousands)Contractual obligations:Long-term debt(1)
    
    $
    205,836
    
    
    $
    205,836
    
    
    $
    
    
    
    $
    
    
    
    $
    Gaming equipment financing
    
    
    246
    
    
    
    121
    
    
    
    125
    
    
    
    
    
    
    
    Capital leases
    
    
    328
    
    
    
    173
    
    
    
    155
    
    
    
    
    
    
    
    Operating leases
    
    
    24,520
    
    
    
    545
    
    
    
    816
    
    
    
    816
    
    
    
    22,343Total contractual obligations
    
    $
    230,930
    
    
    $
    206,675
    
    
    $
    1,096
    
    
    $
    816
    
    
    $
    22,343
 (1)
    
    We are currently in default
under our Foothill Facility and Senior Secured Notes. Therefore, our
obligations under the Foothill Facility and Senior Secured Notes
could be accelerated. In such event, we would be in default under our
Senior Subordinated Notes, and our obligations under our Senior
Subordinated Notes could be accelerated. Therefore, these amounts have been
displayed as current liabilities. 
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 3 4
  - 39 -




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EstimatedMaturity
    
    
    Face
    
    
    Carrying
    
    
    FairDate
    
    
    Amount
    
    
    Value
    
    
    Value(in thousands)Foothill
Facility at an average interest rate of 8.9%
    
    December 2008
    *
    
    $
    15,000

        
    $
    14,836

        
    $
    14,8369% Senior Secured Notes
    
    January 2012
    *
    
        125,000
    
    
    
    125,000
    
    
    
    37,03812 3/4 % Senior Subordinated Notes
    
    January 2013
    *
    
    
    66,000
    
    
    
    65,683
    
    
    
    3,056Total
    
    
    
    
    
    $
    206,000
    
    
    $
    205,519
    
    
    $
    54,930
 *
    
    Due to current defaults, our obligations under the Foothill Facility and our Senior Notes could
be accelerated prior to their stated maturity dates. In such event there would be a default under
our Senior Subordinated Notes and these obligations could be accelerated as well.   As of December 31,2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    Thereafter
    
    
    Total(dollars in thousands)Long-term debt
(including current
portion):Fixed-rate
    
    $
    191,000
    (1)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    191,000Average interest rate
    
    
    10.29
    %
    
    
    10.30
    %
    
    
    10.30
    %
    
    
    10.30
    %
    
    
    10.30
    %
    
    
    
    
    
    
    10.19
    %Variable-rate
    
    $
    14,836
    (1)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    14,836Average interest rate
    
    
    8.9
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8.9
    %
 
 (1)
    
    As of the date of this report our forbearance periods have expired and have not been renewed;
therefore our debt is being presented as due within a year. We continue to evaluate our financial
and strategic alternatives. Refer to our discussion under Item 7. Managements Discussion and
Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources for Black
Gaming, LLC.   - 40 -




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
 INDEX TO FINANCIAL STATEMENTS
 BLACK GAMING, LLC AND SUBSIDIARIES CONSOLIDATED
FINANCIAL STATEMENTSDecember 31, 2008 and 2007 and for Each of the Three Years
in the Period Ended December 31, 2008:Report of Independent Registered Public Accounting Firm
    
    
    42Consolidated Financial Statements:Consolidated Balance Sheets at December 31, 2008 and 2007
    
    
    43Consolidated Statements of Operations
For the years ended December 31, 2008, 2007 and 2006
    
    
    44Consolidated Statements of Members Deficit
For the years ended December 31, 2008, 2007 and 2006
    
    
    45Consolidated Statements of Cash Flows
For the years ended December 31, 2008, 2007 and 2006
    
    
    46Notes to Consolidated Financial Statements
    
    
    48
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BLACK GAMING, LLC. AND SUBSIDIARIES
 
 Consolidated Balance Sheets
 (in thousands)
 December 31,2008
    
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    11,464
    
    
    $
    9,503Accounts
receivable, net of allowance of $763 and $741 for 2008 and 2007, respectively
    
    
    1,013
    
    
    
    1,986Related party receivables
    
    
    460
    
    
    
    327Inventories
    
    
    1,529
    
    
    
    1,800Property held for vacation interval sales
    
    
    
    
    
    
    336Prepaid expenses
    
    
    3,377
    
    
    
    4,180Current portion of notes receivable
    
    
    261
    
    
    
    150Total current assets
    
    
    18,104
    
    
    
    18,282Property and equipment, net
    
    
    111,330
    
    
    
    131,480Notes receivable, less current portion
    
    
    117
    
    
    
    537Goodwill and other intangible assets, net
    
    
    14,177
    
    
    
    35,828Deferred financing fees
    
    
    4,787
    
    
    
    6,259Other assets
    
    
    1,953
    
    
    
    1,898Total assets
    
    $
    150,468
    
    
    $
    194,284Liabilities and Members DeficitCurrent liabilities:Bank overdraft
    
    $
    
    
    
    $
    821Current portion of obligations under capital leases
    
    
    173
    
    
    
    Current portion of gaming equipment financing
    
    
    121
    
    
    
    1,025Current portion of long-term debt and debt in default
    
    
    205,519
    
    
    
    9,500Accounts payable
    
    
    2,557
    
    
    
    2,950Accrued liabilities
    
    
    17,084
    
    
    
    17,605Total current liabilities
    
    
    225,454
    
    
    
    31,901Gaming equipment financing, less current portion
    
    
    125
    
    
    
    15Obligations under capital leases
    
    
    155
    
    
    
    Long term debt
    
    
    
    
    
    
    183,047Total liabilities
    
    
    225,734
    
    
    
    214,963Commitments and contingencies (Note 13)Members deficit
    
    
    (75,266
    )
    
    
    (20,679
    )Total liabilities and members deficit
    
    $
    150,468
    
    
    $
    194,284
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BLACK GAMING, LLC. AND SUBSIDIARIES
 
 Consolidated Statements of Operations
 For the Years Ended December 31,
 (in thousands)
 2008
    
    
    2007
    
    
    2006Revenues:Casino
    
    $
    81,831
    
    
    $
    107,112
    
    
    $
    105,762Food and beverage
    
    
    31,849
    
    
    
    41,342
    
    
    
    43,172Hotel
    
    
    29,141
    
    
    
    34,278
    
    
    
    35,062Other
    
    
    16,348
    
    
    
    19,905
    
    
    
    20,280Total revenues
    
    
    159,169
    
    
    
    202,637
    
    
    
    204,276Lesspromotional allowances
    
    
    (27,532
    )
    
    
    (39,454
    )
    
    
    (36,046
    )Net revenues
    
    
    131,637
    
    
    
    163,183
    
    
    
    168,230Operating expenses:Casino
    
    
    42,693
    
    
    
    52,998
    
    
    
    47,444Food and beverage
    
    
    20,514
    
    
    
    22,205
    
    
    
    25,711Hotel
    
    
    7,068
    
    
    
    6,298
    
    
    
    7,090Other
    
    
    9,258
    
    
    
    11,633
    
    
    
    12,352General and administrative
    
    
    41,270
    
    
    
    49,714
    
    
    
    50,009Depreciation and amortization
    
    
    16,586
    
    
    
    16,823
    
    
    
    17,274Loss on sale and disposal of assets
    
    
    198
    
    
    
    110
    
    
    
    235Impairment of long lived assets
    
    
    14,815
    
    
    
    
    
    
    
    1,350Goodwill impairment
    
    
    12,497
    
    
    
    
    
    
    
    Total operating expenses
    
    
    164,899
    
    
    
    159,781
    
    
    
    161,465Operating (loss) income
    
    
    (33,262
    )
    
    
    3,402
    
    
    
    6,765Other (income) expense:Other income
    
    
    (315
    )
    
    
    
    
    
    
    Interest expense, net
    
    
    21,640
    
    
    
    20,632
    
    
    
    19,808Change in fair value of interest rate swaps
    
    
    
    
    
    
    
    
    
    
    (195
    )Return on investment with MDW LLC
    
    
    
    
    
    
    
    
    
    
    (928
    )Loss before
cummulative effect of change in accounting principle and minority interest
    
    
    (54,587
    )
    
    
    (17,230
    )
    
    
    (11,920
    )Cummulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    (196
    )Loss before minority interest
    
    
    (54,587
    )
    
    
    (17,230
    )
    
    
    (12,116
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    (48
    )Net loss
    
    $
    (54,587
    )
    
    $
    (17,230
    )
    
    $
    (12,164
    )
   - 44 -




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BLACK GAMING, LLC. AND SUBSIDIARIES
 
 Consolidated Statements of Members Deficit
 For the Years Ended December 31, 2008, 2007 and 2006
 (in thousands)
 Total MembersDeficitBalance, January 1, 2006
    
    $
    6,268Net loss
    
    
    (12,164
    )Members contribution
    
    
    2,447Balance, December 31, 2006
    
    $
    (3,449
    )Net loss
    
    
    (17,230
    )Balance, December 31, 2007
    
    $
    (20,679
    )Net loss
    
    
    (54,587
    )Balance, December 31, 2008
    
    $
    (75,266
    )
   - 45 -




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##### Table of Contents



BLACK GAMING, LLC. AND SUBSIDIARIES
 
 Consolidated Statements of Cash Flows
 For the Years Ended December 31,
 (in thousands)
 2008
    
    
    2007
    
    
    2006Cash flows from operating activities:Net loss
    
    $
    (54,587
    )
    
    $
    (17,230
    )
    
    $
    (12,164
    )Cummulative effect of change in accounting
principle
    
    
    
    
    
    
    
    
    
    
    196Depreciation and amortization
    
    
    16,586
    
    
    
    16,823
    
    
    
    17,274Minority interest
    
    
    
    
    
    
    
    
    
    
    48Change in fair value of interest rate swaps
    
    
    
    
    
    
    
    
    
    
    (195
    )Loss on sale and disposal of assets
    
    
    198
    
    
    
    110
    
    
    
    235Impairment of long lived assets
    
    
    14,815
    
    
    
    
    
    
    
    1,350Goodwill impairment
    
    
    12,497
    
    
    
    
    
    
    
    Amortization of deferred financing fees
    
    
    1,622
    
    
    
    1,601
    
    
    
    1,605Accretion of senior subordinated notes
    
    
    7,637
    
    
    
    6,749
    
    
    
    5,965Interest expense on gaming equipment financing
    
    
    4
    
    
    
    5
    
    
    
    76Cost of vacation interval sales
    
    
    15
    
    
    
    84
    
    
    
    40Change in operating assets and liabilities:Accounts and related party receivables, net
    
    
    840
    
    
    
    859
    
    
    
    (3,058
    )Inventories
    
    
    271
    
    
    
    (52
    )
    
    
    296Prepaid expenses
    
    
    803
    
    
    
    1,031
    
    
    
    (656
    )Notes receivable
    
    
    309
    
    
    
    542
    
    
    
    699Change in other assets
    
    
    (266
    )
    
    
    (639
    )
    
    
    (188
    )Accounts payable and accrued liabilities
    
    
    (603
    )
    
    
    (797
    )
    
    
    1,841Net cash provided by operating activities
    
    
    141
    
    
    
    9,086
    
    
    
    13,364Cash flows from investing activities:Proceeds received from sale of assets
    
    
    317
    
    
    
    85
    
    
    
    54Capital expenditures
    
    
    (955
    )
    
    
    (14,461
    )
    
    
    (10,958
    )Purchase of property rights
    
    
    
    
    
    
    
    
    
    
    (1,100
    )Net cash used in investing activities
    
    
    (638
    )
    
    
    (14,376
    )
    
    
    (12,004
    )Cash flows from financing activities:Proceeds from issuance of long term debt and
debt in default
    
    
    14,331
    
    
    
    15,500
    
    
    
    5,000Payment of gaming equipment financing
    
    
    (1,879
    )
    
    
    (4,876
    )
    
    
    (4,308
    )Payment of long term debt and debt in default
    
    
    (8,996
    )
    
    
    (6,000
    )
    
    
    (7,788
    )Payment of obligation under capital lease
    
    
    (27
    )
    
    
    
    
    
    
    Payment of financing costs
    
    
    (150
    )
    
    
    
    
    
    
    (Decrease) increase in bank overdraft
    
    
    (821
    )
    
    
    (949
    )
    
    
    1,222Net cash provided by (used in) financing activities
    
    
    2,458
    
    
    
    3,675
    
    
    
    (5,874
    )Net increase (decrease) in cash and cash equivalents
    
    
    1,961
    
    
    
    (1,615
    )
    
    
    (4,514
    )Cash and cash equivalents at beginning of period
    
    
    9,503
    
    
    
    11,118
    
    
    
    15,632Cash and cash equivalents at end of period
    
    $
    11,464
    
    
    $
    9,503
    
    
    $
    11,118
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##### Table of Contents



BLACK GAMING, LLC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (continued)
For the Years Ended December 31,
(in thousands)
 2008
    
    
    2007
    
    
    2006Supplemental cash flow disclosure:Cash paid for interest
    
    $
    12,550
    
    
    $
    12,218
    
    
    $
    12,401Noncash investing and financing activities:Acquisition of assets with gaming equipment financing
    
    $
    1,082
    
    
    $
    363
    
    
    $
    335Capital lease obligation
    
    $
    356
    
    
    $
    
    
    
    $
    Equity contribution
    
    $
    
    
    
    $
    
    
    
    $
    1,377Exchange of minority interest for equity
    
    $
    
    
    
    $
    
    
    
    $
    1,070
   - 47 -




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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
 
 Notes to Consolidated Financial Statements
 1. Organization, Description of Business, Basis of Presentation, Liquidity and Capital Resources
    
    
    VRCC received 100 shares of R. Black, Inc. (RBI) from the Black
Trust. The Black Trust owns 100% of the outstanding shares of VRCC.
The 100 shares of RBI representing 100% of the outstanding capital
stock of RBI, was exchanged for 3.68 shares of VRCC held by the Black
Trust, representing 3.68% of the outstanding capital stock of VRCC.
RBI does not have any material operations, liabilities or assets other
than a 5.47% ownership in RBG. The transfer of shares of RBI to VRCC
was accounted for at the historical cost of RBG as RBI and VRCC were
under common control.
    
    VRCC received a 3.8% membership interest in RBG from the Black Trust
in exchange for 2.57 shares of VRCC held by the Black Trust,
representing 2.57% of the outstanding capital stock of VRCC. The
transfer of membership interests of RBG to VRCC was accounted for at
historical cost as the Black Trust and VRCC were under common control.
    
    VRCC received a 1.92% membership interest in RBG from Glenn Teixeira
in exchange for 1.29 shares of VRCC held by the Black Trust,
representing 1.29% of the outstanding capital stock of VRCC. The
acquisition of the membership interests from RBG from Glenn Teixeira
was accounted for at fair value as it was considered an acquisition of
a minority interest of a subsidiary. Based upon an internal analysis
the fair value of Glenn Teixeiras interest approximated book value.
    - 48 -




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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
  2. Summary of Significant Accounting Policies
 Casino Revenue and Promotional Allowances
 For the years ended December 31,2008
    
    
    2007
    
    
    2006Food and beverage
    
    $
    9,574
    
    
    $
    10,786
    
    
    $
    9,798Hotel
    
    
    4,878
    
    
    
    5,024
    
    
    
    4,795Other
    
    
    1,769
    
    
    
    4,237
    
    
    
    2,681$
    16,221
    
    
    $
    20,047
    
    
    $
    17,274
  Vacation Interval Sales
 Cash and Cash Equivalents
 Inventories
  - 49 -




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BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 Property Held for Vacation Interval Sales
 Notes and Accounts Receivable Accounting for Real Estate Time-Sharing Transactions Accounting for
Real Estate Time-Sharing Transactions
   Fair Value of Financial Instruments
 Property and Equipment
  Buildings
    
    
    31.5 to 39.5 yearsLand improvements
    
    15 yearsLeasehold improvements
    
    
    5 to 10 yearsFurniture, fixtures and equipment
    
    5 years
 Accounting
for the Impairment or Disposal of Long-lived Assets
  - 50 -




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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 Income Taxes
 Advertising Costs
 Deferred Financing Costs
 Goodwill and Other Intangible Assets
  Interest Rate Swaps Accounting for Derivative Instruments and Hedging Activities
  - 51 -




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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 Use of Estimates
 Players Club Liability Accounting for
Points and Certain Other Time-Based or Volume-Based Sales Incentive Offers, and Offers for Free
Products or Services to Be Delivered in the Future
   Self-Insurance
Reserves
 Segment Information
  Reclassifications
 Recently Issued Accounting Standards
  - 52 -




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BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
         - 53 -




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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
  3. Discontinued Operations
   For the year endedDecember 31, 2006Operating revenues
    
    $
    3,185Operating expenses
    
    
    3,164Depreciation and amortization
    
    
    268Interest expense
    
    
    Net Loss
    
    $
    (247
    )
 
  - 54 -




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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 4. Property and Equipment
  December 31,2008
    
    
    2007Land
    
    $
    32,812
    
    
    $
    32,812Building
    
    
    77,549
    
    
    
    77,897Land and leasehold improvements
    
    
    13,509
    
    
    
    17,940Furniture and fixtures
    
    
    84,825
    
    
    
    83,922Construction in progress
    
    
    1,518
    
    
    
    5,325210,213
    
    
    
    217,896Less: accumulated depreciation
    
    
    (98,883
    )
    
    
    (86,416
    )Property and equipment, net
    
    $
    111,330
    
    
    $
    131,480
   5. Notes Receivable
 December 31,2008
    
    
    2007Vacation interval notes receivable
    
    $
    603
    
    
    $
    912Allowance for possible credit losses
    
    
    (225
    )
    
    
    (225
    )378
    
    
    
    687Less: current portion
    
    
    (261
    )
    
    
    (150
    )Non-current notes receivable
    
    $
    117
    
    
    $
    537
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BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
  Years ending December 31:2009
    
    $
    3002010
    
    
    1922011
    
    
    922012
    
    
    192013
    
    
    Thereafter
    
    
    603Less: allowance
    
    
    (225
    )$
    378
 6. Accrued Liabilities
  December 31,2008
    
    
    2007Accrued management fees
    
    $
    550
    
    
    $
    863Accrued taxes
    
    
    730
    
    
    
    1,072Accrued insurance
    
    
    1,376
    
    
    
    1,212Accrued slot program
    
    
    4,168
    
    
    
    4,299Accrued wages, benefits and other personnel costs
    
    
    3,242
    
    
    
    2,043Accrued interest
    
    
    5,336
    
    
    
    5,343Accrued other
    
    
    1,682
    
    
    
    2,773Total accrued liabilities
    
    $
    17,084
    
    
    $
    17,605
 
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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 7. Gaming Equipment Financing
   December 31,2008
    
    
    2007Gaming equipment financing to purchase 478
games, no payments for one year and monthly
payments of $251 for 24 months beginning
February 2006
    
    $
    
    
    
    $
    248Gaming equipment financing to purchase 68 games,
no payments for one year and monthly payments of
$43 for 24 months beginning January 2006
    
    
    
    
    
    
    43Gaming equipment financing to purchase 70 games,
no payments for one year and monthly payments of
$39 for 24 months beginning March 2006
    
    
    
    
    
    
    38Gaming equipment financing to purchase 80 games,
monthly payments of $27 for 36 months beginning
April 2005
    
    
    
    
    
    
    165Gaming equipment financing to purchase 64 games,
no payments for one year and monthly payments of
$26 for 24 months beginning February 2006
    
    
    
    
    
    
    52Gaming equipment financing to purchase 38 games,
monthly payments of $13 for 36 months beginning
April 2005
    
    
    
    
    
    
    37Gaming equipment financing to purchase 55 games,
no payments for one year and monthly payments of
$16 for 24 months beginning January 2006
    
    
    
    
    
    
    282Gaming equipment financing, monthly payments of
$3 for 36 months beginning January 2005
    
    
    
    
    
    
    1Gaming equipment financing to purchase 4 games,
monthly payments of $1 for 36 months beginning
April 2005
    
    
    
    
    
    
    8Gaming equipment financing to purchase 6 games,
no payments for one year and monthly payments of
$6 for 24 months beginning February 2007
    
    
    3
    
    
    
    36Gaming equipment financing, monthly payments of
$1 for 36 months beginning July 2006
    
    
    6
    
    
    
    18Gaming equipment financing, no payments for 18
months and monthly payments of $1 for 36 months
beginning July 2006
    
    
    3
    
    
    
    104Gaming equipment financing, monthly payments of
$1 for 36 months and beginning on July 2006
    
    
    3
    
    
    
    8Gaming equipment financing, monthly payments of
$10 for 28 months beginning October 2008
    
    
    231
    
    
    
    246
    
    
    
    1,040Less: current portion
    
    
    (121
    )
    
    
    (1,025
    )Gaming equipment financing, long-term portion
    
    $
    125
    
    
    $
    15
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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
  Years ending December 31:2009
    
    $
    1212010
    
    
    1142011
    
    
    112012
    
    
    2013
    
    
    Thereafter
    
    
    $
    246
 8. Debt
  December 31,2008
    
    
    2007Revolving credit facility totaling $15
million with Wells Fargo Foothill,
Inc. at a margin above prime or LIBOR,
as defined; collateralized by
substantially all assets of the
Company as defined
    
    $
    14,836
    
    
    $
    9,5009% senior secured notes, interest
payable semiannually, principal due
January 15, 2012, callable January 15,
2009
    
    
    125,000
    
    
    
    125,00012 3/4 % senior subordinated notes,
non-cash interest will accrue at an
annual rate of 12 3/4 % in the form
of increase accreted value until
January 15, 2009. Beginning July 15,
2009, interest payable semiannually,
principal due January 15, 2013,
callable January 15, 2009
    
    
    65,683
    
    
    
    58,047205,519
    
    
    
    192,547Less: current portion  debt in default
    
    
    (205,519
    )
    
    
    (9,500
    )Total long-term debt
    
    $
    
    
    
    $
    183,047
 Revolving Facility
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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
  1.
    
    The LIBOR Rate Margin has been increased to 5% from 3.50%, and the Base Rate
Margin has been increased to 5% from 2%. Therefore, the interest rate premium payable
in respect of loans available under the Credit Agreement has been increased accordingly;2.
    
    The minimum EBITDA covenant has been reduced from $15.0 million to $10.0 million
for the September 2008 through December 2008 reporting periods;3.
    
    The Borrowing Base multiple has been increased from 1.0x to 1.5x from the
execution of the Forbearance Agreement until January 15, 2009;4.
    
    The Company has been allowed to temporarily reduce operations at the Oasis during
the Forbearance Period.
   Subsequent Events
 
    
    On January 15, 2009, the Company entered into a First Amendment to Forbearance, Consent
and Third Amendment to Credit Agreement (First Amendment to Forbearance). The First
Amendment to Forbearance extended the Forbearance Period from January 15, 2009 to
February 2, 2009. No other provisions of the Forbearance Agreement were amended, the terms
of the Forbearance Agreement remained in full force and effect in accordance with their
respective terms.
 
    
    On February 2, 2009, the Company entered into a Second Amendment to Forbearance, Consent
and Third Amendment to Credit Agreement (Second Amendment to Forbearance). The Second
Amendment to Forbearance extended the Forbearance Period from February 2, 2009 to
February 12, 2009. Section 3 of the Forbearance Agreement was also amended to allow the
Company to transfer slot machines and video poker machines from the Suspended Location, as
defined in the Forbearance Agreement, to one of the Companys other operating casino
locations. No other provisions of the Forbearance Agreement were amended, and the
terms of the Forbearance Agreement remained in full force and effect in accordance with their
respective terms.
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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 
    
    On February 12, 2009, the Company entered into the Amended and Restated Forbearance
Agreement with respect to the Foothill Facility. Pursuant to the Amended and Restated
Forbearance Agreement, during the Forbearance Period (as defined in the Amended and
Restated Forbearance Agreement) Wells Fargo Foothill agreed to forbear from enforcing its
rights under the Foothill Facility that arise because of certain Designated Events of
Default (as defined in the Amended and Restated Forbearance Agreement) including the
non-payment of interest on the Senior Secured Notes. Upon the expiration of the Forbearance
Period, the forbearance shall terminate and Wells Fargo Foothill shall have the right to
exercise any and all rights and remedies under the Foothill Facility, including the
acceleration of the Companys obligations under the Foothill Facility of approximately
$14.8 million. The Forbearance Termination Date (as defined in the Amended and Restated
Forbearance Agreement) is March 2, 2009, subject to extension to March 9, 2009 or earlier
termination as provided in the Amended and Restated Forbearance Agreement. A covenant in
the Amended and Restated Forbearance Agreement required the Company to execute a
forbearance agreement with the holders of the Senior Secured Notes (Senior Noteholders)
by February 17, 2009 with respect to the Senior Secured Notes. As no forbearance agreement
was executed with the Senior Noteholders within this timeframe, the Company was in breach
of the terms of the Amended and Restated Forbearance Agreement, and Wells Fargo Foothill
has the right to exercise any and all rights and remedies under the Foothill Facility,
including the acceleration of the Companys obligations under the Foothill Facility of
approximately $14.8 million. Wells Fargo Foothill also consented to the continued reduction
of operations at the Oasis during the Forbearance Period.
    
    On February 25, 2009, the Company entered into a Second Amended and Restated Forbearance
Agreement (Second Amended Forbearance) with respect to the Foothill Facility. The Second
Amended Forbearance amended and restated in its entirety the Amended and Restated
Forbearance Agreement. Pursuant to the Second Amended Forbearance, during the Forbearance
Period (as defined in the Second Amended Forbearance Agreement) Wells Fargo Foothill agreed
to forbear from enforcing its rights under the Foothill Facility that arise because of
certain Designated Events of Default (as defined in the Second Amended Forbearance
Agreement). Upon the expiration of the Forbearance Period, the forbearance shall terminate
and Wells Fargo Foothill shall have the right to exercise any and all rights and remedies
under the Foothill Facility, including the acceleration of the Companys obligations under
the Foothill Facility of approximately $14.8 million. The Forbearance Termination Date (as
defined in the Second Amended Forbearance Agreement) was March 2, 2009, subject to
extension to March 9, 2009 if the Company provided a restructuring term sheet to Wells
Fargo Foothill by March 2, 2009. The Company also agreed to provide Wells Fargo Foothill
with certain projections by March 6, 2009. Wells Fargo Foothill also consented to the
continued reduction of operations at the Oasis during the Forbearance Period and to the
ability of the Company to transfer equipment from the Oasis to one of the Companys other
operating casino locations.
    
    As of the date of this report the Forbearance Termination Date has passed. The Company
has provided a restructuring term sheet and certain projections to Wells Fargo Foothill by
the required date. The Company is continuing to evaluate its financial and strategic
alternatives in light of the expiration of the Forbearance Period. Accordingly, our
obligations under the Foothill Facility are classified as current in the accompanying
balance sheet.
 Senior Secured and Senior Subordinated Notes
 3 4
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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
       Subsequent Events
 
    
    On January 15, 2009, the Company failed and is continuing to fail to make the
$5.625 million semi-annual interest payment then due to the Noteholders. The Companys
30-day grace period expired on February 15, 2009. The Company is in discussions with an ad
hoc committee of holders of Senior Notes (the Senior Noteholders) regarding the Companys
financial alternatives. Because the interest payment was not made prior to the expiration
of the 30-day grace period, the aggregate principal amount of the Senior Notes, plus the
unpaid interest payment and any other amounts due and owing on the Senior Notes could be
declared immediately due and payable by the Trustee under the Indenture or by holders of
25% or more of the aggregate principal amount of the Senior Notes. The acceleration of the
Companys obligation under the Senior Notes would constitute an event of default under the
Senior Sub Notes. In such event, the aggregate principal amount of the Senior Sub Notes,
plus accrued and unpaid interest, if any, and any other amounts due and owing on the Senior
Sub Notes could be declared immediately due and payable by the Trustee under the indenture
governing the Senior Sub Notes or by holders of 25% or more of the aggregate principal
amount of the Senior Sub Notes. Failure to make the interest payment on the Senior Notes
also constituted an event of default under the Foothill Facility. Wells Fargo Foothill is
currently able to declare the Companys obligations under the Foothill Facility immediately
due and payable.
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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 
    
    On February 19, 2009, the Company entered into a Forbearance Agreement (Noteholders
Forbearance Agreement) with the Senior Noteholders who have represented that they hold
more than 75% of the Companys Senior Notes. The Noteholders Forbearance Agreement provides
that during the Forbearance Period (as defined in the Noteholders Forbearance Agreement)
the Senior Noteholders would forbear from exercising rights and remedies that are available
under the Indenture governing the Senior Notes and the other Loan Documents (as defined in
the Noteholders Forbearance Agreement) relating to certain Specified Defaults (as defined
in the Noteholders Forbearance Agreement) including the Companys failure to make the
interest payment on the Senior Notes. The Senior Noteholders also agreed to forbear from
taking any action to cause the Trustee under the Indenture to exercise any of the Trustees
rights or remedies arising out of the Specified Defaults, and, if the Trustee does take any
action with respect to any of the Specified Defaults during the Forbearance Period, to the
extent provided for in the Loan Documents, the Senior Noteholders would cause the Trustee
to forbear from exercising any of its rights or remedies under the Loan Documents. The
Forbearance Period commenced on the Effective Date and went through March 9, 2009, provided
that (i) the Company provided a restructuring term sheet to the professional advisors of
the Senior Noteholders by March 2, 2009 and (ii) the Company provided certain projections
to the professional advisors of the Senior Noteholders by March 6, 2009.
 
    
    As of the date of this report the termination date of the Noteholders Forbearance
Agreement has passed. The Company has provided a term sheet and certain projections to the
professional advisors of the Senior Noteholders by the required date. The Company is
continuing to evaluate its financial and strategic alternatives in light of the termination
of the Forbearance Agreement.
   Interest Rate Swaps
   9. Leases
 Capital Leases
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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
  Years ending December 31:2009
    
    $
    1732010
    
    
    1552011
    
    
    2012
    
    
    2013
    
    
    Thereafter
    
    
    $
    328
 Operating Leases
     Years ending December 31:2009
    
    $
    5452010
    
    
    4082011
    
    
    4082012
    
    
    4082013
    
    
    408Thereafter
    
    
    22,343$
    24,520
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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 10. Related Party Transactions
          - 64 -




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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 11. Impairment of Long Lived Assets, Goodwill and Intangibles
 Long lived assets
     Goodwill and Intangibles
    - 65 -




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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
   12. 401(k) Plan and Other Benefit Plans
   13. Commitments and Contingencies
 Litigation
 Environmental Matter
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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 Sales and Use Tax on Complimentary Meals
 Other
 14. Rental Revenue
    Years ending December 31:2009
    
    $
    2052010
    
    
    1202011
    
    
    782012
    
    
    2013
    
    
    Thereafter
    
    
    $
    403
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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 
    
    Subsequent EventDuring the first quarter of 2009 Westates Theatre made the decision to cease operations at
the Virgin River Hotel/Casino/Bingo. The Company and Westates Theater are negotiating a lease
termination settlement. The Company does not expect to have rental income from the operations
of the theater during 2009.
 15. Going Concern
 3 4
  16. Supplemental Guarantor Condensed Consolidating Financial Statements
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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 17. Condensed Consolidating Financial Information
 Parent
    
    
    Issuers
    
    
    Guarantor
    
    
    Non-GuarantorBG LLC
    
    
    B&BB
    
    
    RBG
    
    
    VRCC
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAs of December 31, 2008BALANCE SHEET:Current Assets, including intercompany accounts
    
    $
    4,957
    
    
    $
    24,191
    
    
    $
    28,875
    
    
    $
    4,071
    
    
    $
    13,140
    
    
    $
    
    
    
    $
    (57,130
    )
    
    $
    18,104Property and equipment, net
    
    
    214
    
    
    
    7,856
    
    
    
    40,197
    
    
    
    33,208
    
    
    
    29,855
    
    
    
    
    
    
    
    
    
    
    
    111,330Goodwill and Other Intangibles
    
    
    
    
    
    
    6,140
    
    
    
    6,049
    
    
    
    
    
    
    
    1,988
    
    
    
    
    
    
    
    
    
    
    
    14,177Other assets excluding intercompany accounts
    
    
    
    
    
    
    811
    
    
    
    26,545
    
    
    
    91,131
    
    
    
    1,463
    
    
    
    
    
    
    
    (113,093
    )
    
    
    6,857$
    5,171
    
    
    $
    38,998
    
    
    $
    101,666
    
    
    $
    128,410
    
    
    $
    46,446
    
    
    $
    
    
    
    $
    (170,223
    )
    
    $
    150,468Current Liabilities, including intercompany accounts
    
    $
    9,610
    
    
    $
    237,875
    
    
    $
    225,532
    
    
    $
    211,090
    
    
    $
    20,187
    
    
    $
    
    
    
    $
    (478,840
    )
    
    $
    225,454Long-term capital lease obligation
    
    
    
    
    
    
    
    
    
    
    83
    
    
    
    
    
    
    
    72
    
    
    
    
    
    
    
    
    
    
    
    155Long-term debt, less current portion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gaming equipment financing, less current portion
    
    
    
    
    
    
    125
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    125Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Members (Deficit) Equity
    
    
    (4,439
    )
    
    
    (199,002
    )
    
    
    (123,949
    )
    
    
    (82,680
    )
    
    
    26,187
    
    
    
    
    
    
    
    308,617
    
    
    
    (75,266
    )$
    5,171
    
    
    $
    38,998
    
    
    $
    101,666
    
    
    $
    128,410
    
    
    $
    46,446
    
    
    $
    
    
    
    $
    (170,223
    )
    
    $
    150,468
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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 Parent
    
    
    Issuers
    
    
    Guarantor
    
    
    Non-GuarantorBG LLC
    
    
    B&BB
    
    
    RBG
    
    
    VRCC
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedFor the year ending December 31, 2008STATEMENT OF OPERATIONSNet revenues
    
    $
    
    
    
    $
    41,916
    
    
    $
    48,669
    
    
    $
    6,909
    
    
    $
    40,443
    
    
    $
    
    
    
    $
    (6,300
    )
    
    $
    131,637Operating expenses:Casino
    
    
    
    
    
    
    14,897
    
    
    
    15,206
    
    
    
    
    
    
    
    12,590
    
    
    
    
    
    
    
    
    
    
    
    42,693Food and beverage
    
    
    
    
    
    
    6,638
    
    
    
    7,849
    
    
    
    
    
    
    
    6,027
    
    
    
    
    
    
    
    
    
    
    
    20,514Hotel
    
    
    
    
    
    
    2,060
    
    
    
    2,311
    
    
    
    10
    
    
    
    2,687
    
    
    
    
    
    
    
    
    
    
    
    7,068Other
    
    
    
    
    
    
    1,193
    
    
    
    4,710
    
    
    
    
    
    
    
    3,355
    
    
    
    
    
    
    
    
    
    
    
    9,258General and administrative
    
    
    1,988
    
    
    
    16,347
    
    
    
    14,326
    
    
    
    406
    
    
    
    14,503
    
    
    
    
    
    
    
    (6,300
    )
    
    
    41,270Depreciation and amortization
    
    
    49
    
    
    
    4,584
    
    
    
    5,313
    
    
    
    1,508
    
    
    
    5,132
    
    
    
    
    
    
    
    
    
    
    
    16,586Loss on disposal of assets
    
    
    
    
    
    
    55
    
    
    
    82
    
    
    
    
    
    
    
    61
    
    
    
    
    
    
    
    
    
    
    
    198Impairment of long lived asset
    
    
    
    
    
    
    465
    
    
    
    4,551
    
    
    
    
    
    
    
    9,799
    
    
    
    
    
    
    
    
    
    
    
    14,815Goodwill impairment
    
    
    
    
    
    
    1,043
    
    
    
    5,727
    
    
    
    
    
    
    
    5,727
    
    
    
    
    
    
    
    
    
    
    
    12,497Operating (loss) income
    
    
    (2,037
    )
    
    
    (5,366
    )
    
    
    (11,406
    )
    
    
    4,985
    
    
    
    (19,438
    )
    
    
    
    
    
    
    
    
    
    
    (33,262
    )Other (income) expense:Other income
    
    
    
    
    
    
    (105
    )
    
    
    (105
    )
    
    
    
    
    
    
    (105
    )
    
    
    
    
    
    
    
    
    
    
    (315
    )Interest expense, net
    
    
    2
    
    
    
    2,054
    
    
    
    19
    
    
    
    19,541
    
    
    
    24
    
    
    
    
    
    
    
    
    
    
    
    21,640Change in fair value of swaps
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Return on investment with MDW
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Loss before cumulative effect of change in
accounting principle and minority interest
    
    
    (2,039
    )
    
    
    (7,315
    )
    
    
    (11,320
    )
    
    
    (14,556
    )
    
    
    (19,357
    )
    
    
    
    
    
    
    
    
    
    
    (54,587
    )Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Loss before minority interest
    
    
    (2,039
    )
    
    
    (7,315
    )
    
    
    (11,320
    )
    
    
    (14,556
    )
    
    
    (19,357
    )
    
    
    
    
    
    
    
    
    
    
    (54,587
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (2,039
    )
    
    $
    (7,315
    )
    
    $
    (11,320
    )
    
    $
    (14,556
    )
    
    $
    (19,357
    )
    
    $
    
    
    
    $
    
    
    
    $
    (54,587
    )STATEMENT OF CASH FLOWSNet cash provided by (used in) operating activities
    
    $
    12
    
    
    $
    4,867
    
    
    $
    1,358
    
    
    $
    (5,208
    )
    
    $
    (888
    )
    
    $
    
    
    
    $
    
    
    
    $
    141Net cash (used in) provided by investing activities
    
    
    (12
    )
    
    
    (263
    )
    
    
    45
    
    
    
    (11
    )
    
    
    (397
    )
    
    
    
    
    
    
    
    
    
    
    (638
    )Net cash (used in) provided by financing activities
    
    
    
    
    
    
    (678
    )
    
    
    (1,487
    )
    
    
    5,185
    
    
    
    (562
    )
    
    
    
    
    
    
    
    
    
    
    2,458
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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 Parent
    
    
    Issuers
    
    
    Guarantor
    
    
    Non-GuarantorBG LLC
    
    
    B&BB
    
    
    RBG
    
    
    VRCC
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAs of December 31, 2007BALANCE SHEET:Current Assets, including intercompany accounts
    
    $
    5,257
    
    
    $
    13,668
    
    
    $
    17,820
    
    
    $
    2,713
    
    
    $
    8,800
    
    
    $
    
    
    
    $
    (29,976
    )
    
    $
    18,282Property and equipment, net
    
    
    420
    
    
    
    10,562
    
    
    
    47,912
    
    
    
    34,694
    
    
    
    37,892
    
    
    
    
    
    
    
    
    
    
    
    131,480Goodwill and Other Intangibles
    
    
    
    
    
    
    8,954
    
    
    
    13,194
    
    
    
    
    
    
    
    13,680
    
    
    
    
    
    
    
    
    
    
    
    35,828Other assets excluding intercompany accounts
    
    
    
    
    
    
    818
    
    
    
    46,213
    
    
    
    123,091
    
    
    
    1,699
    
    
    
    
    
    
    
    (163,127
    )
    
    
    8,694$
    5,677
    
    
    $
    34,002
    
    
    $
    125,139
    
    
    $
    160,498
    
    
    $
    62,071
    
    
    $
    
    
    
    $
    (193,103
    )
    
    $
    194,284Current Liabilities, including intercompany accounts
    
    $
    8,077
    
    
    $
    29,663
    
    
    $
    12,888
    
    
    $
    14,898
    
    
    $
    16,521
    
    
    $
    
    
    
    $
    (50,146
    )
    
    $
    31,901Long-term debt, less current portion
    
    
    
    
    
    
    183,047
    
    
    
    192,547
    
    
    
    183,047
    
    
    
    
    
    
    
    
    
    
    
    (375,594
    )
    
    
    183,047Gaming equipment financing, less current portion
    
    
    
    
    
    
    6
    
    
    
    3
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    15Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Members (Deficit) Equity
    
    
    (2,400
    )
    
    
    (178,714
    )
    
    
    (80,299
    )
    
    
    (37,447
    )
    
    
    45,544
    
    
    
    
    
    
    
    232,637
    
    
    
    (20,679
    )$
    5,677
    
    
    $
    34,002
    
    
    $
    125,139
    
    
    $
    160,498
    
    
    $
    62,071
    
    
    $
    
    
    
    $
    (193,103
    )
    
    $
    194,284
  - 71 -




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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 Parent
    
    
    Issuers
    
    
    Guarantor
    
    
    Non-GuarantorBG LLC
    
    
    B&BB
    
    
    RBG
    
    
    VRCC
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedFor the year ending December 31, 2007STATEMENT OF OPERATIONSNet revenues
    
    $
    
    
    
    $
    49,596
    
    
    $
    60,598
    
    
    $
    6,819
    
    
    $
    52,470
    
    
    $
    
    
    
    $
    (6,300
    )
    
    $
    163,183Operating expenses:Casino
    
    
    
    
    
    
    17,198
    
    
    
    20,578
    
    
    
    
    
    
    
    15,222
    
    
    
    
    
    
    
    
    
    
    
    52,998Food and beverage
    
    
    
    
    
    
    6,253
    
    
    
    8,803
    
    
    
    
    
    
    
    7,149
    
    
    
    
    
    
    
    
    
    
    
    22,205Hotel
    
    
    
    
    
    
    2,122
    
    
    
    1,643
    
    
    
    5
    
    
    
    2,528
    
    
    
    
    
    
    
    
    
    
    
    6,298Other
    
    
    
    
    
    
    1,329
    
    
    
    6,056
    
    
    
    
    
    
    
    4,248
    
    
    
    
    
    
    
    
    
    
    
    11,633General and administrative
    
    
    2,377
    
    
    
    19,172
    
    
    
    17,624
    
    
    
    441
    
    
    
    16,400
    
    
    
    
    
    
    
    (6,300
    )
    
    
    49,714Depreciation and amortization
    
    
    23
    
    
    
    4,695
    
    
    
    5,419
    
    
    
    1,535
    
    
    
    5,151
    
    
    
    
    
    
    
    
    
    
    
    16,823Loss on disposal of assets
    
    
    
    
    
    
    37
    
    
    
    39
    
    
    
    
    
    
    
    34
    
    
    
    
    
    
    
    
    
    
    
    110Impairment of long lived asset
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating (loss) income
    
    
    (2,400
    )
    
    
    (1,210
    )
    
    
    436
    
    
    
    4,838
    
    
    
    1,738
    
    
    
    
    
    
    
    
    
    
    
    3,402Other (income) expense:Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest expense, net
    
    
    
    
    
    
    2,110
    
    
    
    82
    
    
    
    18,377
    
    
    
    63
    
    
    
    
    
    
    
    
    
    
    
    20,632Change in fair value of swaps
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Return on investment with MDW
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Loss before cumulative effect of change in
accounting principle and minority interest
    
    
    (2,400
    )
    
    
    (3,320
    )
    
    
    354
    
    
    
    (13,539
    )
    
    
    1,675
    
    
    
    
    
    
    
    
    
    
    
    (17,230
    )Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Loss before minority interest
    
    
    (2,400
    )
    
    
    (3,320
    )
    
    
    354
    
    
    
    (13,539
    )
    
    
    1,675
    
    
    
    
    
    
    
    
    
    
    
    (17,230
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (2,400
    )
    
    $
    (3,320
    )
    
    $
    354
    
    
    $
    (13,539
    )
    
    $
    1,675
    
    
    $
    
    
    
    $
    
    
    
    $
    (17,230
    )STATEMENT OF CASH FLOWSNet cash provided by (used in) operating activities
    
    $
    434
    
    
    $
    4,090
    
    
    $
    9,057
    
    
    $
    (9,443
    )
    
    $
    4,948
    
    
    $
    
    
    
    $
    
    
    
    $
    9,086Net cash used in investing activities
    
    
    (434
    )
    
    
    (3,159
    )
    
    
    (7,553
    )
    
    
    (43
    )
    
    
    (3,187
    )
    
    
    
    
    
    
    
    
    
    
    (14,376
    )Net cash (used in) provided by financing activities
    
    
    
    
    
    
    (2,132
    )
    
    
    (1,739
    )
    
    
    9,500
    
    
    
    (1,954
    )
    
    
    
    
    
    
    
    
    
    
    3,675
  - 72 -




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##### Table of Contents



BLACK GAMING, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 Parent
    
    
    Issuers
    
    
    Guarantor
    
    
    Non-GuarantorBG LLC
    
    
    B&BB
    
    
    RBG
    
    
    VRCC
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedFor the year ending December 31, 2006STATEMENT OF OPERATIONSNet revenues
    
    $
    
    
    
    $
    51,885
    
    
    $
    60,662
    
    
    $
    6,889
    
    
    $
    55,094
    
    
    $
    
    
    
    $
    (6,300
    )
    
    $
    168,230Operating expenses:Casino
    
    
    
    
    
    
    14,389
    
    
    
    18,923
    
    
    
    
    
    
    
    14,132
    
    
    
    
    
    
    
    
    
    
    
    47,444Food and beverage
    
    
    
    
    
    
    7,762
    
    
    
    9,550
    
    
    
    
    
    
    
    8,399
    
    
    
    
    
    
    
    
    
    
    
    25,711Hotel
    
    
    
    
    
    
    2,202
    
    
    
    1,799
    
    
    
    300
    
    
    
    2,789
    
    
    
    
    
    
    
    
    
    
    
    7,090Other
    
    
    
    
    
    
    1,355
    
    
    
    6,107
    
    
    
    
    
    
    
    4,890
    
    
    
    
    
    
    
    
    
    
    
    12,352General and administrative
    
    
    
    
    
    
    19,936
    
    
    
    17,734
    
    
    
    393
    
    
    
    18,246
    
    
    
    
    
    
    
    (6,300
    )
    
    
    50,009Depreciation and amortization
    
    
    
    
    
    
    4,880
    
    
    
    5,412
    
    
    
    1,509
    
    
    
    5,473
    
    
    
    
    
    
    
    
    
    
    
    17,274Loss on disposal of assets
    
    
    
    
    
    
    (16
    )
    
    
    69
    
    
    
    
    
    
    
    182
    
    
    
    
    
    
    
    
    
    
    
    235Impairment of long lived asset
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,350
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,350Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating (loss) income
    
    
    
    
    
    
    1,377
    
    
    
    1,068
    
    
    
    3,337
    
    
    
    983
    
    
    
    
    
    
    
    
    
    
    
    6,765Other (income) expense:Other income
    
    
    
    
    
    
    
    
    
    
    (928
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (928
    )Interest expense, net
    
    
    
    
    
    
    2,268
    
    
    
    294
    
    
    
    17,042
    
    
    
    204
    
    
    
    
    
    
    
    
    
    
    
    19,808Change in fair value of swaps
    
    
    
    
    
    
    
    
    
    
    (41
    )
    
    
    (55
    )
    
    
    (99
    )
    
    
    
    
    
    
    
    
    
    
    (195
    )Loss before
cumulative effect of change in accounting
principle and minority interest
    
    
    
    
    
    
    (891
    )
    
    
    1,743
    
    
    
    (13,650
    )
    
    
    878
    
    
    
    
    
    
    
    
    
    
    
    (11,920
    )Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    125
    
    
    
    
    
    
    
    71
    
    
    
    
    
    
    
    
    
    
    
    196Loss before minority interest
    
    
    
    
    
    
    (891
    )
    
    
    1,618
    
    
    
    (13,650
    )
    
    
    807
    
    
    
    
    
    
    
    
    
    
    
    (12,116
    )Minority interest
    
    
    (48
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48
    )Net loss
    
    $
    (48
    )
    
    $
    (891
    )
    
    $
    1,618
    
    
    $
    (13,650
    )
    
    $
    807
    
    
    $
    
    
    
    $
    
    
    
    $
    (12,164
    )STATEMENT OF CASH FLOWSNet cash provided by operating activities
    
    $
    
    
    
    $
    2,946
    
    
    $
    3,676
    
    
    $
    906
    
    
    $
    5,836
    
    
    $
    
    
    
    $
    
    
    
    $
    13,364Net cash used in investing activities
    
    
    
    
    
    
    (2,985
    )
    
    
    (2,489
    )
    
    
    (350
    )
    
    
    (6,180
    )
    
    
    
    
    
    
    
    
    
    
    (12,004
    )Net cash used in financing activities
    
    
    
    
    
    
    (1,616
    )
    
    
    (1,563
    )
    
    
    (2,000
    )
    
    
    (695
    )
    
    
    
    
    
    
    
    
    
    
    (5,874
    )
  - 73 -




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##### Table of Contents



ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
  
 ITEM 9A(T). CONTROLS AND PROCEDURES.
 Evaluation of Disclosure Controls
   Limitations on the Effectiveness of Controls
  Conclusions
   - 74 -




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##### Table of Contents



Changes in Internal Controls
 i.e.
 Managements Report on Internal Control Over Financial Reporting
    
 ITEM 9B. OTHER INFORMATION.
   - 75 -




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
 Directors and Executive Officers
  Name
    
    Age
    
    Black Gaming, LLCRobert R. Black, Sr.
    
    
    56
    
    
    Majority Member and Sole ManagerSean P. McKay
    
    
    31
    
    
    Chief Accounting OfficerAnthony Toti
    
    
    49
    
    
    Chief Operating OfficerMartha Rapson
    
    
    57
    
    
    Vice President of Marketing OperationsMarleen Szalay
    
    
    55
    
    
    Vice President of Hotel Operations
 Robert R. Black, Sr.
  Sean P. McKay.
 Anthony Toti
 Martha
Rapson
 Marleen
Szalay
 Key Employees
 Kevin Boyer
  - 76 -




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##### Table of Contents



Marcus A. Hall.
 Code of Ethics
  
 ITEM 11. EXECUTIVE COMPENSATION.
 Compensation Discussion and Analysis
 Compensation Philosophy
   Setting Executive Compensation
  Elements of Compensation
  
    
    Base salary and
    
    Annual bonus
  - 77 -




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##### Table of Contents



Base Salary
  Annual Bonus
   Post-Termination Compensation
  Perquisites and Other Personal Benefits
   - 78 -




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##### Table of Contents



Summary Compensation Table
   All OtherSalary
    
    
    Bonus
    
    
    Compensation
    
    
    TotalName and Principal Position
    
    Year
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)Robert S. Black, Sr.
    
    
    2008
    
    
    
    556,500
    
    
    
    
    
    
    
    551,150
    (1), (2)
    
    
    1,107,650Chief Executive Officer
    
    
    2007
    
    
    
    556,500
    
    
    
    
    
    
    
    872,500
    (1), (3)
    
    
    1,429,0002006
    
    
    
    525,385
    
    
    
    
    
    
    
    1,078,639
    (4)
    
    
    1,604,024Sean P. McKay
    
    
    2008
    
    
    
    178,000
    
    
    
    45,000
    
    
    
    
    
    
    
    223,000Chief Accounting Officer
    
    
    2007
    
    
    
    117,866
    
    
    
    54,733
    
    
    
    
    (5)
    
    
    172,5982006
    
    
    
    107,112
    
    
    
    20,000
    
    
    
    
    
    
    
    127,112Anthony Toti
    
    
    2008
    
    
    
    249,995
    
    
    
    50,000
    
    
    
    
    (6)
    
    
    299,995Chief Operating Officer
    
    
    2007
    
    
    
    48,076
    
    
    
    
    
    
    
    
    (7)
    
    
    48,076Martha Rapson
    
    
    2008
    
    
    
    114,000
    
    
    
    
    
    
    
    
    
    
    
    114,000Vice
President of Marketing Operations
    
    
    2007
    
    
    
    107,120
    
    
    
    23,544
    
    
    
    
    
    
    
    130,6642006
    
    
    
    105,885
    
    
    
    
    
    
    
    
    
    
    
    105,885Marleen
Szalay
    
    
    2008
    
    
    
    123,000
    
    
    
    
    
    
    
    
    
    
    
    123,000Vice
President of Hotel Operations
    
    
    2007
    
    
    
    113,580
    
    
    
    25,456
    
    
    
    
    
    
    
    139,0362006
    
    
    
    113,415
    
    
    
    
    
    
    
    
    
    
    
    113,415
 
 (1)
    
    Management fees are paid at the direction of Mr. Black and are accrued quarterly. Pursuant
to the terms of the indentures governing the notes and the agreement governing our Foothill
Facility, so long as no default has occurred and is continuing, we may pay Mr. Black
management fees up to 5% of our consolidated EBITDA (as that term is defined in the indentures
governing the notes and the agreement governing our Foothill Facility) for the immediately
preceding fiscal year. Mr. Black has advised us that it is his present intention to charge us
and collect management fees in the maximum amount permitted under the indentures and our
Foothill Facility. In addition to management fees, commencing January 1, 2005, we have paid
Mr. Black a salary at an annualized
rate of $556,500. Although Mr. Black has sole authority to set his own salary, he has advised
us that his salary will not exceed industry standards.  - 79 -




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##### Table of Contents



(2)
    
    Representing $541,150 in
management fees, accrued but not paid, related to fiscal year 2008, $0 in dividends and
distributions accrued to Mr. Black by us and $10,000 in perquisites provided to Mr. Black and
his wife in the form of compensatory use of hotel rooms, the Company limousine, golf and spa
services, meals and Company tickets for events.(3)
    
    Representing $862,500 in management fees related to fiscal year 2007, $0 in dividends and
distributions paid to Mr. Black by us and $10,000 in perquisites provided to Mr. Black and his
wife in the form of compensatory use of hotel rooms, the Company limousine, golf and spa
services, meals and Company tickets for events.(4)
    
    Representing $1,068,639 in management fees related to fiscal year 2006, $0 in dividends and
distributions paid to Mr. Black by us and $10,000 in perquisites provided to Mr. Black and his
wife in the form of compensatory use of hotel rooms, the Company limousine, golf and spa
services, meals and Company tickets for sporting events.(5)
    
    Mr. McKay assumed the position of Chief Accounting Officer in January 2008. Mr. McKay served
as the Companys Corporate Controller in 2007 and 2006.(6)
    
    Mr. Toti assumed the position of Chief Operating Office in December 2008. Mr. Toti served as
the Companys Vice President of Gaming Operations in 2008 and 2007.(7)
    
    Mr. Toti began his tenure with Black Gaming in November 2007. Employment Agreements
    Compensation Committee Interlocks and Insider Participation
   - 80 -




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##### Table of Contents



THE FOLLOWING REPORT OF THE MANAGEMENT BOARD SHALL NOT BE DEEMED TO BE SOLICITING MATERIAL OR
TO BE FILED WITH THE SEC UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934 OR
INCORPORATED BY REFERENCE IN ANY DOCUMENT SO FILED.
 Management Board Compensation Report
  March 31, 2009
    
    MANAGEMENT BOARDRobert R. Black, Sr.
  - 81 -




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##### Table of Contents



ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.
  Black Gaming, LLC
 Title of Class
    
    Name and Address of Beneficial Owner(1)
    
    
    Membership Interest
    
    
    Percent of 
ClassMembership Interest
    
    Robert R. Black, Sr.(2)
    
    
    99.03
    %
    
    
    99.03
    %Membership Interest
    
    Sean P. McKay
    
    
    0
    
    
    
    0
    %Membership Interest
    
    Anthony Toti
    
    
    0
    
    
    
    0
    %Membership Interest
    
    Martha Rapson
    
    
    0
    
    
    
    0
    %Membership Interest
    
    Marleen Szalay
    
    
    0
    
    
    
    0
    %Membership Interest
    
    All executive officers and directors as a group(5 persons)
    
    
    99.03
    %
    
    
    99.03
    %
 
 (1)
    
    The address for each individual listed is Black Gaming, LLC, 10777 West Twain Ave., Las
Vegas, Nevada 89135.(2)
    
    Owned by Robert R. Black, Sr. as trustee of the Robert R. Black Sr. Gaming Properties
Trust u/a/d May 24, 2004. 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
    - 82 -




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Policy for Related Party Transactions
   - 83 -




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##### Table of Contents



ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
  2008
    
    
    2007Audit fees(1)
    
    $
    280,000
    
    
    $
    344,000Audit-related fees(2)
    
    
    20,000
    
    
    
    20,000Tax fees
    
    
    
    
    
    
    All other fees
    
    
    
    
    
    
    Total fees
    
    $
    300,000
    
    
    $
    364,000
 
 (1)
    
    Represents the aggregate fees Ernst & Young LLP billed us for each of the last
two fiscal years for professional services for the audits of our annual financial
statements and review of financial statements included in our reports on Form 10-Q or
services that are normally provided by Ernst & Young LLP in connection with those
filings. In the year ended December 31, 2008 we were billed $60,000 for audit fees
related to our quarterly reports and $220,000 related to our annual report. In the
year ended December 31, 2007, we were billed $54,000 quarterly for audit fees related
to our quarterly reports, and $290,000 related to our annual report.(2)
    
    Represents the aggregate fees Ernst & Young LLP billed us for each of the last
two fiscal years for assurance and related services that are reasonably related to the
performance of the audit.   - 84 -




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
 (a)
    
    List the following documents filed as part of the report:
 (1)
    
    All financial statements.
  (2)
    
    Financial Statement Schedules.
  (3)
    
    Exhibit Index.
  (b)
    
    Exhibits.
  (c)
    
    Financial Statement
Schedules.
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SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
(In thousands)
 Balance at
    
    
    Provision for
    
    
    Write-offs,
    
    
    Balance atBeginning of
    
    
    Doubtful
    
    
    net of
    
    
    End ofDescription
    
    Period
    
    
    Accounts
    
    
    Recoveries
    
    
    PeriodAllowance for Doubtful AccountsYear Ended December 31, 2008
    
    $
    741
    
    
    $
    371
    
    
    $
    (349
    )
    
    $
    763Year Ended December 31, 2007
    
    $
    719
    
    
    $
    126
    
    
    $
    (104
    )
    
    $
    741Year Ended December 31, 2006
    
    $
    725
    
    
    $
    435
    
    
    $
    (441
    )
    
    $
    719
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##### Table of Contents



SIGNATURES
  Black Gaming, LLC
(Registrant)By:
    /s/ Robert R. Black, Sr.Date: March 31, 2009
    
    Robert R. Black, Sr.Its:                Manager  Signature
    
    Title
    
    Date/s/ Robert R. Black, Sr.

Robert R. Black, Sr.
    
    Manager
(Principal Executive Officer)
    
    March 31, 2009/s/ Sean P. McKay

Sean P. McKay
    
    Chief Accounting Officer

(Principal Financial and
Accounting Officer)
    
    March 31, 2009
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##### Table of Contents



SIGNATURES
  Virgin River Casino Corporation
(Registrant)By:
    /s/ Robert R. Black, Sr.Date: March 31, 2009
    
    Robert R. Black, Sr.Its:                      Chairman of the Board,

       Chief Executive Officer and
President  Signature
    
    Title
    
    Date/s/ Robert R. Black, Sr.

Robert R. Black, Sr.
    
    Chairman of the Board, Chief
Executive Officer and
President

(Principal Executive Officer)
    
    March 31, 2009/s/ Sean P. McKay

Sean P. McKay
    
    Chief Accounting Officer

(Principal Financial and
Accounting Officer)
    
    March 31, 2009
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##### Table of Contents



SIGNATURES
  RBG, LLC
(Registrant)By:
    /s/ Robert R. Black, Sr.Date:  March 31, 2009
    
    Robert R. Black, Sr.Its:                Manager  Signature
    
    Title
    
    Date/s/ Robert R. Black, Sr.

Robert R. Black, Sr.
    
    Manager
(Principal Executive Officer)
    
    March 31, 2009/s/ Sean P. McKay

Sean P. McKay
    
    Chief Accounting Officer

(Principal Financial and
Accounting Officer)
    
    March 31, 2009
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##### Table of Contents



SIGNATURES
  B & B B, Inc.
(Registrant)By:
    /s/ Robert R. Black, Sr.Date:  March 31, 2009
    
    Robert R. Black, Sr.Its:                Chairman of the Board, 
       Chief
Executive Officer and President  Signature
    
    Title
    
    Date/s/ Robert R. Black, Sr.

Robert R. Black, Sr.
    
    Chairman of the Board, Chief
Executive Officer and
President

(Principal Executive Officer)
    
    March 31, 2009/s/ Sean P. McKay

Sean P. McKay
    
    Chief Accounting Officer
(Principal Financial and
Accounting Officer)
    
    March 31, 2009
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##### Table of Contents



EXHIBIT INDEX
 Index No.
    
    Description3.1
    
    
    Articles of Organization of Black Gaming, LLC filed August 4,
2006, incorporated by reference to registrants Form 10-K, as
filed with the Securities and Exchange Commission on April 2,
2007.3.2
    
    
    Amendment to Articles of Organization of Black Gaming, LLC filed
December 15, 2006, incorporated by reference to registrants
Form 10-K, as filed with the Securities and Exchange Commission
on April 2, 2007.3.3
    
    
    Articles of Incorporation of Virgin River Casino Corporation
filed July 1, 1988, incorporated by reference to registrants
Registration Statement on Form S-4, as filed with the Securities
and Exchange Commission on March 8, 2005.3.4
    
    
    Articles of Organization of RBG, LLC filed February 18, 1997,
incorporated by reference to registrants Registration Statement
on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.3.5
    
    
    Articles of Incorporation of B & B B, Inc. filed December 7,
1989, incorporated by reference to registrants Registration
Statement on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.3.6
    
    
    Articles of Organization of CasaBlanca Resorts, LLC filed
February 6, 2001, incorporated by reference to registrants
Registration Statement on Form S-4, as filed with the Securities
and Exchange Commission on March 8, 2005.3.7
    
    
    Articles of Organization of Oasis Interval Ownership, LLC filed
May 31, 2001, incorporated by reference to registrants
Registration Statement on Form S-4, as filed with the Securities
and Exchange Commission on March 8, 2005.3.8
    
    
    Articles of Organization of Oasis Interval Management, LLC filed
May 31, 2001, incorporated by reference to registrants
Registration Statement on Form S-4, as filed with the Securities
and Exchange Commission on March 8, 2005.3.9
    
    
    Articles of Incorporation of Oasis Recreational Properties, Inc.
filed May 23, 2001, incorporated by reference to registrants
Registration Statement on Form S-4, as filed with the Securities
and Exchange Commission on March 8, 2005.3.10
    
    
    Articles of Incorporation of R. Black, Inc. filed February 19,
1997, incorporated by reference to registrants Form 10-K, as
filed with the Securities and Exchange Commission on April 2,
2007.3.11
    
    
    Operating Agreement of Black Gaming, LLC adopted December 31,
2006, incorporated by reference to registrants Form 10-K, as
filed with the Securities and Exchange Commission on April 2,
2007.3.12
    
    

Amendment
to Operating Agreement of Black Gaming, LLC adopted January 13,
2009.3.13
    
    
    By-laws of Virgin River Casino Corporation adopted July 14,
1988, incorporated by reference to registrants Registration
Statement on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.3.14
    
    
    Amendment
to By-laws of Virgin River Casino Corporation adopted January 13, 2009.3.15
    
    
    Operating Agreement of RBG, LLC adopted March 17, 1997,
incorporated by reference to registrants Registration Statement
on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.3.16
    
    

Amendment
to Operating Agreement of RBG, LLC adopted January 13, 2009.
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Index No.
    
    Description3.17
    
    
    By-laws of B & B B, Inc. adopted December 8, 1989, incorporated
by reference to registrants Registration Statement on Form S-4,
as filed with the Securities and Exchange Commission on March 8,
2005.3.18
    
    
    Operating Agreement of CasaBlanca Resorts, LLC adopted May 31,
2001, incorporated by reference to registrants Registration
Statement on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.3.19
    
    

Amendment
to Operating Agreement of Casablanca Resorts, LLC adopted
January 13, 2009.3.20
    
    
    Operating Agreement of Oasis Interval Ownership, LLC adopted
June 13, 2001, incorporated by reference to registrants
Registration Statement on Form S-4, as filed with the Securities
and Exchange Commission on March 8, 2005.3.21
    
    
    Operating Agreement of Oasis Interval Management, LLC adopted
June 6, 2001, incorporated by reference to registrants
Registration Statement on Form S-4, as filed with the Securities
and Exchange Commission on March 8, 2005.3.22
    
    
    By-laws of Oasis Recreational Properties, Inc. adopted June 13,
2001, incorporated by reference to registrants Registration
Statement on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.3.23
    
    
    By-laws of R. Black, Inc. adopted February 19, 1997,
incorporated by reference to registrants Form 10-K, as filed
with the Securities and Exchange Commission on April 2, 2007.4.1
    
    
    Agreement for Purchase and Sale or Redemption of Equity
Interests dated November 22, 2004 by and among James A. Black
Gaming Properties Trust, Gary W. Black Gaming Properties Trust,
Michael T. Black Gaming Properties Trust, Jorco, Inc., Marcus A.
Hall, James Ritchie and Barry R. Moore, Robert R. Black, Sr.,
Virgin River Casino Corporation and B & B B, Inc., incorporated
by reference to registrants Registration Statement on Form S-4,
as filed with the Securities and Exchange Commission on March 8,
2005.4.2
    
    
    Agreement for Purchase and Sale or Redemption of Equity
Interests dated December 9, 2004 by and among Scott M. Nielson,
Robert R. Black, Sr. and B & B B, Inc., incorporated by
reference to registrants Registration Statement on Form S-4, as
filed with the Securities and Exchange Commission on March 8,
2005.4.3
    
    
    Indenture dated as of December 20, 2004 between Virgin River
Casino Corporation, RBG, LLC and B & B B, Inc., certain
guarantors and The Bank of New York Trust Company, N.A. relating
to Series A and Series B 9% Senior Secured Notes due 2012,
incorporated by reference to registrants Registration Statement
on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.4.4
    
    
    Indenture dated as of December 20, 2004 between Virgin River
Casino Corporation, RBG, LLC and B & B B, Inc., certain
guarantors and The Bank of New York Trust Company, N.A. relating
to Series A and Series B 123/4% Senior Subordinated Discount Notes
due 2012, incorporated by reference to registrants Registration
Statement on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.4.5
    
    
    Form of 123/4% Series B Senior Subordinated Discount Notes due
2012 (included as part of Indenture at Exhibit A), incorporated
by reference to registrants Registration Statement on Form S-4,
as filed with the Securities and Exchange Commission on March 8,
2005.
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Index No.
    
    Description4.6
    
    
    Registration Rights Agreement dated as of December 20, 2004, by
and among Virgin River Casino Corporation, RBG, LLC, B & B B,
Inc., certain subsidiaries and Jefferies & Company, Inc.,
incorporated by reference to registrants Registration Statement
on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.4.7
    
    
    Purchase Agreement dated as of December 10, 2004 by and among
Virgin River Casino Corporation, RBG, LLC, B & B B, Inc.,
certain subsidiaries, certain pledgors and Jefferies & Company,
Inc., incorporated by reference to registrants Registration
Statement on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.4.8
    
    
    Senior Secured Notes Security Agreement dated December 20, 2004,
by and among Virgin River Casino Corporation, RBG, LLC, B & B B,
Inc., certain subsidiaries and The Bank of New York Trust
Company, N.A., as collateral agent, incorporated by reference to
registrants Registration Statement on Form S-4, as filed with
the Securities and Exchange Commission on March 8, 2005.4.9
    
    
    Parent Pledge Agreement dated December 20, 2004 by R. Black,
Inc. and The Robert R. Black, Sr. Gaming Properties Trust in
favor of The Bank of New York Trust Company, N.A., as collateral
agent, incorporated by reference to registrants Registration
Statement on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.4.10
    
    
    Trademark Security Agreement dated December 20, 2004, by and
among Virgin River Casino Corporation, RBG, LLC, B & B B, Inc.,
certain subsidiaries and The Bank of New York Trust Company,
N.A., incorporated by reference to registrants Registration
Statement on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.4.11
    
    
    Credit Agreement dated December 20, 2004, by and among Virgin
River Casino Corporation, RBG, LLC, B & B B, Inc., certain
subsidiaries, Wells Fargo Foothill, Inc. as the arranger and
administrative agent and the other lending parties thereto,
incorporated by reference to registrants Registration Statement
on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.4.12
    
    
    Security Agreement dated December 20, 2004 B & B B, Inc.,
CasaBlanca Resorts, LLC, Oasis Interval Management, LLC, Oasis
Interval Ownership, LLC, Oasis Recreational Properties, Inc.,
RBG, LLC and Virgin River Casino Corporation and Wells Fargo
Foothill, Inc., as agent, incorporated by reference to
registrants Registration Statement on Form S-4, as filed with
the Securities and Exchange Commission on March 8, 2005.4.13
    
    
    Parent Pledge Agreement dated December 20, 2004 by and among
Robert R. Black, Sr., The Robert R. Black, Sr. Gaming Properties
Trust, R. Black, Inc. in favor of Wells Fargo Foothill Inc.,
incorporated by reference to registrants Registration Statement
on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.4.14
    
    
    Trademark Security Agreement dated December 20, 2004 by and
among B & B B, Inc., RBG, LLC, Virgin River Casino Corporation,
certain subsidiaries and Wells Fargo Foothill, Inc.,
incorporated by reference to registrants Registration Statement
on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.4.15
    
    
    Bailee Agreement dated December 20, 2004 by and among Wells
Fargo Foothill, Inc., The Bank of New York Trust Company, N.A.,
Nevada Title Company, Robert R. Black, Sr., R. Black, Inc. and
Virgin River Casino Corporation, incorporated by reference to
registrants Registration Statement on Form S-4, as filed with
the Securities and Exchange Commission on March 8, 2005.
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Index No.
    
    Description4.16
    
    
    Intercompany Subordination Agreement dated December 20, 2004 by
and among B & B B, Inc., RBG, LLC, Virgin River Casino
Corporation, certain subsidiaries and Wells Fargo Foothill,
Inc., incorporated by reference to registrants Registration
Statement on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.4.17
    
    
    Intercreditor and Lien Subordination Agreement dated December
20, 2004 by and among B & B B, Inc., RBG, LLC, Virgin River
Casino Corporation, certain subsidiaries and Wells Fargo
Foothill, Inc., Wells Fargo Foothill, Inc. and The Bank of New
York Trust Company, N.A., incorporated by reference to
registrants Registration Statement on Form S-4, as filed with
the Securities and Exchange Commission on March 8, 2005.4.18
    
    
    Leasehold and Fee Deed of Trust, Security Agreement and Fixture
Filing with Assignment of Rents (Nevada) dated as of December
20, 2004 and made by Virgin River Casino Corporation, RBG, LLC,
CasaBlanca Resorts, LLC and Oasis Interval Ownership, LLC to
Nevada Title Company, as trustee, for the benefit of The Bank of
New York Trust Company, N.A., incorporated by reference to
registrants Registration Statement on Form S-4, as filed with
the Securities and Exchange Commission on March 8, 2005.4.19
    
    
    Leasehold and Fee Deed of Trust, Security Agreement and Fixture
Filing with Assignment of Rents (Arizona) dated as of December
20, 2004 and made by Oasis Recreational Properties, Inc. to
Transnation Title Insurance Company, as trustee, for the benefit
of The Bank of New York Trust Company, N.A., incorporated by
reference to registrants Registration Statement on Form S-4, as
filed with the Securities and Exchange Commission on March 8,
2005.4.20
    
    
    Leasehold and Fee Deed of Trust, Fixture Filing with Assignment
of Rents and Leases, and Security Agreement (Nevada) dated as of
December 20, 2004 and made by and from RBG, LLC, Virgin River
Casino Corporation, CasaBlanca Resorts, LLC, B & B B, Inc., and
Oasis Interval Ownership, LLC to Nevada Title Company, as
trustee, for the benefit of Wells Fargo Foothill, Inc.,
incorporated by reference to registrants Registration Statement
on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.4.21
    
    
    Leasehold and Fee Deed of Trust, Assignment of Rents and Leases,
Security Agreement and Fixture Filing (Arizona) dated as of
December 20, 2004 and made by and from Oasis Recreational
Properties, Inc. to Transnation Title Insurance Company, as
trustee, for the benefit of Wells Fargo Foothill, Inc.,
incorporated by reference to registrants Registration Statement
on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.4.22
    
    
    Assignment of Entitlements, Contracts, Rents and Revenues
(Nevada) dated December 16, 2004 by and between Virgin River
Casino Corporation, RBG, LLC, CasaBlanca Resorts, LLC, Oasis
Interval Ownership, LLC, B & B B, Inc. and The Bank of New York
Trust Company, N.A., incorporated by reference to registrants
Registration Statement on Form S-4, as filed with the Securities
and Exchange Commission on March 8, 2005.4.23
    
    
    Assignment of Entitlements, Contracts, Rents and Revenues
(Arizona) dated December 17, 2004 by and between Oasis
Recreational Properties, Inc. and The Bank of New York Trust
Company, N.A., incorporated by reference to registrants
Registration Statement on Form S-4, as filed with the Securities
and Exchange Commission on March 8, 2005.
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Index No.
    
    Description4.24
    
    
    Assignment of Entitlements, Contracts, Rents and Revenues
(Nevada) dated December 20, 2004 and made by and between Virgin
River Casino Corporation, RBG, LLC, CasaBlanca Resorts, LLC,
B & B B, Inc. and Oasis Interval Ownership, LLC and Wells Fargo
Foothill, Inc., incorporated by reference to registrants
Registration Statement on Form S-4, as filed with the Securities
and Exchange Commission on March 8, 2005.4.25
    
    
    Assignment of Entitlements, Contracts, Rents and Revenues
(Arizona) dated December 20, 2004 and made by and between Oasis
Recreational Properties, Inc. and Wells Fargo Foothill, Inc.,
incorporated by reference to registrants Registration Statement
on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.4.26
    
    
    Collateral Assignment of Notes and Deeds of Trust dated December
16, 2004 by and between Oasis Interval Ownership, LLC and The
Bank of New York Trust Company, N.A., incorporated by reference
to registrants Registration Statement on Form S-4, as filed
with the Securities and Exchange Commission on March 8, 2005.4.27
    
    
    Collateral Assignment of Notes and Deeds of Trust dated December
20, 2004 by and between Oasis Recreational Properties, Inc. and
Wells Fargo Foothill, Inc., incorporated by reference to
registrants Registration Statement on Form S-4, as filed with
the Securities and Exchange Commission on March 8, 2005.4.28
    
    
    Estoppel Certificate Consent and Agreement dated December 20,
2004 by River View Limited Liability Company and RBG, LLC, for
the benefit of The Bank of New York, as collateral agent, and
Wells Fargo Foothill, Inc., as arranger and administrative
agent, incorporated by reference to registrants Registration
Statement on Form S-4, as filed with the Securities and Exchange
Commission on March 8, 2005.4.29
    
    
    Convertible Senior Secured Note Purchase Agreement dated
December 20, 2004 by and between R. Black, Inc., Robert R. Black
Sr., Trustee of the Robert R. Black, Sr. Gaming Properties Trust
u/a/d May 24, 2004 and Michael Gaughan, incorporated by
reference to registrants Pre-Effective Amendment No. 1 to Form
S-4, as filed with the Securities and Exchange Commission on May
2, 2005.4.30
    
    
    Convertible Note Pledge Agreement dated December 20, 2004 by and
between Robert R. Black Sr., Trustee of the Robert R. Black, Sr.
Gaming Properties Trust u/a/d May 24, 2004 and Michael Gaughan,
incorporated by reference to registrants Pre-Effective
Amendment No. 1 to Form S-4, as filed with the Securities and
Exchange Commission on May 2, 2005.4.31
    
    
    Convertible Promissory Note dated December 20, 2004 made by R.
Black, Inc. in favor of Michael J. Gaughan, incorporated by
reference to registrants Pre-Effective Amendment No. 1 to Form
S-4, as filed with the Securities and Exchange Commission on May
2, 2005.10.1
    
    
    Lease Buy-Out and Condominium Conversion Management Agreement
dated January 24, 2005 by and between MDW Mesquite, LLC, RBG,
LLC and Robert R. Black, Sr., incorporated by reference to
registrants Pre-Effective Amendment No. 1 to Form S-4, as filed
with the Securities and Exchange Commission on May 2, 2005.10.2
    
    
    Black Gaming Long-term Incentive Plan, effective as of October
1, 2006, incorporated by reference to registrants Form 10-Q, as
filed with the Securities and Exchange Commission on November
14, 2006.*10.3
    
    
    Agreement and Plan of Reorganization dated December 31, 2006,
incorporated by reference to registrants Current Report of Form
8-K, as filed with the Securities and Exchange Commission on
January 3, 2007.
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Index No.
    
    Description10.4
    
    
    Guarantee for the Senior Secured Notes dated December 31, 2006,
incorporated by reference to registrants Current Report of Form
8-K, as filed with the Securities and Exchange Commission on
January 3, 2007.10.5
    
    
    Guarantee for the Senior Subordinated Notes dated December 31,
2006, incorporated by reference to registrants Current Report
of Form 8-K, as filed with the Securities and Exchange
Commission on January 3, 2007.10.6
    
    
    First Supplemental Indenture for the Senior Secured Notes dated
December 31, 2006, incorporated by reference to registrants
Current Report of Form 8-K, as filed with the Securities and
Exchange Commission on January 3, 2007.10.7
    
    
    First Supplemental Indenture for the Senior Subordinated Notes
dated December 31, 2006, incorporated by reference to
registrants Current Report of Form 8-K, as filed with the
Securities and Exchange Commission on January 3, 2007.10.8
    
    
    Joinder to the Registration Rights Agreement dated December 31,
2006, incorporated by reference to registrants Current Report
of Form 8-K, as filed with the Securities and Exchange
Commission on January 3, 2007.10.9
    
    
    Security Agreement Supplement dated December 31, 2006,
incorporated by reference to registrants Current Report of Form
8-K, as filed with the Securities and Exchange Commission on
January 3, 2007.10.10
    
    
    Pledged Interests Addendum dated December 31, 2006, incorporated
by reference to registrants Current Report of Form 8-K, as
filed with the Securities and Exchange Commission on January 3,
2007.10.11
    
    
    Consent by the Bank of New York Trust Company, N.A., dated
December 31, 2006, incorporated by reference to registrants
Current Report of Form 8-K, as filed with the Securities and
Exchange Commission on January 3, 2007.10.12
    
    
    Amended and Restated Parent Pledge Agreement dated December 31,
2006, incorporated by reference to registrants Current Report
of Form 8-K, as filed with the Securities and Exchange
Commission on January 3, 2007.10.13
    
    
    General Continuing Guaranty dated December 31, 2006,
incorporated by reference to registrants Current Report of Form
8-K, as filed with the Securities and Exchange Commission on
January 3, 2007.10.14
    
    
    Joinder Agreement and Amendment dated December 31, 2006,
incorporated by reference to registrants Current Report of Form
8-K, as filed with the Securities and Exchange Commission on
January 3, 2007.10.15
    
    
    Consent by Wells Fargo Foothill, Inc., dated December 31, 2006,
incorporated by reference to registrants Current Report of Form
8-K, as filed with the Securities and Exchange Commission on
January 3, 2007.10.16
    
    
    Joinder to Bailee Agreement dated December 31, 2006,
incorporated by reference to registrants Current Report of Form
8-K, as filed with the Securities and Exchange Commission on
January 3, 2007.
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Index No.
    
    Description10.17
    
    
    First Amendment to Credit Agreement dated October 26, 2007, by
and among Virgin River Casino Corporation, RBG, LLC, B & B B,
Inc., certain subsidiaries, Wells Fargo Foothill, Inc. as the
arranger and administrative agent and the other lending parties
thereto, incorporated by reference to registrants Current
Report of Form 8-K, as filed with the Securities and Exchange
Commission on October 31, 2007.10.18
    
    
    Executive Employment Agreement dated May 14, 2007 made by Black
Gaming, LLC with Jason Goudie, incorporated by reference to
registrants Current Report on Form 8-K, as filed with the
Securities and Exchange Commission on May 17, 2007.*10.19
    
    
    Separation of Employment Agreement And General Release dated
September 28, 2007 made by Black Gaming, LLC with Jonathan
Lowenhar, incorporated by reference to registrants Current
Report on Form 8-K, as filed with the Securities and Exchange
Commission on October 1, 2007.*10.20
    
    
    Separation of Employment Agreement And General Release dated
September 28, 2007 made by Black Gaming, LLC with Scott
DeAngelo, incorporated by reference to registrants Current
Report on Form 8-K, as filed with the Securities and Exchange
Commission on October 1, 2007.*10.21
    
    
    Executive Employment Agreement dated January 7, 2008 made by
Black Gaming, LLC with Sean P. McKay, incorporated by reference
to registrants Form 10-K, as filed with the Securities and
Exchange Commission on March 31, 2008. *10.22
    
    
    Second Amendment to Credit Agreement dated June 20, 2008, by and
among Virgin River Casino Corporation, RBG, LLC, B & B B, Inc.,
certain subsidiaries, Wells Fargo Foothill, Inc. as the arranger
and administrative agent and the other lending parties thereto,
incorporated by reference to registrants Current Report of Form
8-K, as filed with the Securities and Exchange Commission on
June 24, 2008.10.23
    
    
    Letter Agreement dated September 17, 2008, by and among Virgin
River Casino Corporation, RBG, LLC, B & B B, Inc., certain
subsidiaries, Wells Fargo Foothill, Inc., incorporated by
reference to registrants Current Report of Form 8-K, as filed
with the Securities and Exchange Commission on September 22,
2008.10.24
    
    
    Executive Employment Agreement dated January 8, 2009 made by
Black Gaming, LLC with Robert R. Black, Sr., incorporated by
reference to registrants Current Report on Form 8-K, as filed
with the Securities and Exchange Commission on January 14,
2009.*10.25
    
    
    Executive Employment Agreement dated January 8, 2009 made by
Black Gaming, LLC with Anthony Toti, incorporated by reference
to registrants Current Report on Form 8-K, as filed with the
Securities and Exchange Commission on January 14, 2009.*10.26
    
    
    Forbearance, Consent and Third Amendment to Credit Agreement
dated November 3, 2008, by and among Black Gaming, LLC, B & B B,
Inc., Virgin River Casino Corporation, RBG, LLC, Casablanca
Resorts, LLC, Oasis Interval Management, LLC, Oasis Interval
Ownership, LLC, Oasis Recreational Properties, Inc., R. Black,
Inc., Wells Fargo Foothill, Inc. as the arranger and
administrative agent and the other lending parties thereto,
incorporated by reference to registrants Form 10-Q, as filed
with the Securities and Exchange Commission on November 7, 2008.
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##### Table of Contents



Index No.
    
    Description10.27
    
    
    First Amendment to Forbearance, Consent and Third Amendment to
Credit Agreement dated January 15, 2009, by and among Virgin
River Casino Corporation, RBG, LLC, B & B B, Inc., certain
subsidiaries, Wells Fargo Foothill, Inc. as the arranger and
administrative agent and the other lending parties thereto,
incorporated by reference to registrants Current Report of Form
8-K, as filed with the Securities and Exchange Commission on
January 20, 2009.10.28
    
    
    Second Amendment to Forbearance, Consent and Third Amendment to
Credit Agreement dated February 2, 2009, by and among Virgin
River Casino Corporation, RBG, LLC, B & B B, Inc., certain
subsidiaries, Wells Fargo Foothill, Inc. as the arranger and
administrative agent and the other lending parties thereto,
incorporated by reference to registrants Current Report of Form
8-K, as filed with the Securities and Exchange Commission on
February 6, 2009.10.29
    
    
    Amended and Restated Forbearance Agreement dated February 12,
2009, by and among Virgin River Casino Corporation, RBG, LLC,
B & B B, Inc., certain subsidiaries, Wells Fargo Foothill, Inc.
as the arranger and administrative agent and the other lending
parties thereto, incorporated by reference to registrants
Current Report of Form 8-K, as filed with the Securities and
Exchange Commission on February 19, 2009.10.30
    
    
    Forbearance Agreement dated February 19, 2009, by and among
Virgin River Casino Corporation, RBG, LLC, B & B B, Inc.,
certain subsidiaries, and Drawbridge Special Opportunities
Advisors LLC, BlackRock Financial Management, Inc. High Yield
Group, Midland National Life Insurance Company and 1 888 FUND,
LTD., and Silver Point Capital Offshore Fund Ltd., incorporated
by reference to registrants Current Report of Form 8-K, as
filed with the Securities and Exchange Commission on February
23, 2009.10.31
    
    
    Second Amended and Restated Forbearance Agreement dated February
25, 2009, by and among Virgin River Casino Corporation, RBG,
LLC, B & B B, Inc., certain subsidiaries, Wells Fargo Foothill,
Inc. as the arranger and administrative agent and the other
lending parties thereto, incorporated by reference to
registrants Current Report of Form 8-K, as filed with the
Securities and Exchange Commission on March 2, 2009.21.1
    
    
    List of Subsidiaries of the Registrant, incorporated by
reference to registrants Form 10-K, as filed with the
Securities and Exchange Commission on April 2, 2007.31.1
    
    
    Certification of Robert R. Black, Sr. pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of Sean P. McKay pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    
    Certification of Robert R. Black, Sr. pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification of Sean P. McKay pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 *
    
    Management contracts or compensatory arrangements that were previously filed as exhibits pursuant
to Item 601(b)(10)(iii) of Regulation S-K  - 98 -