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Exhibit 10.1
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is
made and entered into as of the 31st day of December, 2006, by and
among Virgin River Casino Corporation, a Nevada corporation
("Virgin River"), RBG, LLC, a Nevada limited-liability company
("RBG"), B & B B, Inc., a Nevada corporation ("B&BB")
(Virgin River, RBG and B&BB are hereafter, the "Operating
Companies"), Black Gaming, LLC, a newly organized Nevada
limited-liability company ("Black Gaming"), Robert R. Black, Sr.,
as trustee of the Robert R. Black Sr. Gaming Properties Trust u/a/d
May 24, 2004 (the "Black Trust"), R. Black, Inc., a Nevada
corporation ("RBI") and Glenn J. Teixeira, an individual ("Mr.
Teixeira") (the Black Trust, RBI and Mr. Teixeira are hereafter the
"Owners").
W I T N E S S E T H:
A.
WHEREAS, the Operating Companies and their
respective Owners desire to reorganize into a holding company form
of ownership (the "Reorganization") pursuant to which the Operating
Companies will be wholly owned by Black Gaming;
B.
WHEREAS, Black Gaming was organized under Nevada law
as a limited-liability company for the purpose of becoming the
holding company of the Operating Companies;
C.
WHEREAS, RBI is currently owned 100% by the Black
Trust;
D.
Whereas, Virgin River is currently owned 100% by the
Black Trust;
E.
WHEREAS, RBG is currently owned 3.81% by the Black
Trust, 5.47% by RBI, 88.8% by Virgin River and 1.92% by Mr.
Teixeira;
F.
Whereas, B&BB is currently owned 100% by the
Black Trust;
G.
WHEREAS, as a result of the Reorganization, the
Black Trust and Mr. Teixeira will each receive membership units
constituting 100% of the outstanding membership units of Black
Gaming ("Black Units") (as more particularly described below) and
the Operating Companies will have a single common parent, and be
wholly owned by, Black Gaming; and
H.
WHEREAS, the Reorganization is intended to be
tax-free to the parties under the Internal Revenue Code of 1986, as
amended.
1.
REORGANIZATION
1.1.
EXCHANGE OF SHARES/UNITS
(a)
The Operating Companies, Black Gaming and Owners
agree, on the terms and subject to the conditions of this
Agreement, that the following exchanges shall occur, at the
effective times provided below:
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(1)
At 11:58 pm Pacific Standard Time on December 31,
2006 (the "Exchange Date"), all of the 100 outstanding shares of
capital stock of RBI (the "RBI Shares") which are owned by the
Black Trust, representing all of the issued and outstanding capital
stock of, and all of the voting power in RBI, shall be exchanged
for an aggregate of 3.68 outstanding shares of capital stock
of Virgin River (the "Virgin River Shares") which are owned by the
Black Trust, representing 3.68% of the issued and outstanding
capital stock (or approximately 26.25 RBI Shares for each Virgin
River Share).
(2)
At 11:58 pm Pacific Standard Time on the Exchange
Date, all of the Black Trust’s membership interests in RBG
(the "RBG Interest") representing 3.81% of the voting power in RBG
prior to the Reorganization, shall be exchanged for an aggregate of
2.57 Virgin River Shares, representing 2.57% of the issued and
outstanding capital stock (or approximately .67 Virgin River Shares
for each 1.0% of RBG Interest).
(3)
At 11:58 pm Pacific Standard Time on the Exchange
Date, all of Mr. Teixeira’s ownership interest in RBG,
representing 1.92% of the voting power of RBG prior to the
Reorganization, shall be exchanged for an aggregate of
approximately 1.29 Virgin River Shares, representing 1.29% of the
issued and outstanding capital stock (or .67 Virgin River Shares
for each 1.0% of RBG Interest).
(4)
At 11:59 pm Pacific Standard Time on the Exchange
Date, all of the 16.75 outstanding shares of capital stock of
B&BB (the "B&BB Shares"), which are owned by the Black
Trust, representing all of the issued and outstanding capital stock
of, and all of the voting power in B&BB, shall be exchanged for
an aggregate of 2,514 newly-issued Black Units representing 25.14%
of the issued and outstanding membership interests following the
Reorganization (or approximately 150.09 Black Units for each
B&BB Share).
(5)
At 11:59 pm Pacific Standard Time on the Exchange
Date, an aggregate of 100 Virgin River Shares, consisting of all of
the Virgin River Shares owned by the Black Trust and Mr. Teixeira,
shall be exchanged for an aggregate of 7,486 newly-issued Black
Units (or 74.86 Black Units for each Virgin River Share),
representing 73.89% and .97% respectively of the issued and
outstanding membership interests following the
Reorganization.
(b) Immediately following the transactions described above on the
Exchange Date (the "Effective Time"), the Operating Companies shall
have each, directly or indirectly, become a wholly owned subsidiary
of Black Gaming.
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(c)
The ownership of the Operating Companies and Black
Gaming immediately before and immediately after the exchange of
shares/units described in Section 1.1(a) as set forth in Exhibit
A attached hereto and incorporated by this
reference.
(d) The parties hereby acknowledge and agree that the transfers of
ownership interests in the Operating Companies described in Section
1.1(a) above are made subject to certain existing pledges of such
interests in favor of Michael J. Gaughan, The Bank of New York
Trust Company, N.A. (in its capacity as collateral agent), and
Wells Fargo Foothill, Inc. (in its capacity as administrative
agent), as set forth in Exhibit B attached hereto and
incorporated by this reference.
1.2.
EFFECTS OF EXCHANGE OF SHARES
(a)
At the Effective Time, the effects of the exchange
of shares/units shall be as provided in this Agreement.
Without limiting the generality of the foregoing, the Owners’
interest in the Operating Companies shall be exchanged as provided
herein and the Owners of the Operating Companies shall be entitled
only to the rights provided in this Agreement.
(b)
Each Owner, by accepting Black Units, shall be
deemed to have agreed (to the extent permitted by law) that if the
relevant Nevada Gaming Authority (defined below) determines that a
holder or beneficial owner of Black Units must be found suitable
under applicable law, and if such holder or beneficial owner is not
found suitable, or is subsequently found unsuitable, such holder
shall, upon the request of Black Gaming, dispose of such
holder’s Black Units within thirty (30) days after receipt of
such request.
1.3.
COOPERATION; BEST EFFORTS
Each of the parties will use its respective best efforts to
consummate the transactions contemplated by this Agreement and
cooperate in any action necessary or advisable to facilitate such
consummation including, without limitation, making all filings
required in order to obtain any necessary consents or comply with
law and providing any information required in connection
therewith.
1.4.
CHANGE IN STRUCTURE OF TRANSACTIONS
Notwithstanding anything in this Agreement to the contrary, if
at any time after the date hereof, it shall appear that a change in
the structure of the transactions contemplated hereby shall be
necessary or desirable in order to make the Reorganization tax-free
to any parties or to comply with applicable law or the requirements
of the regulatory authorities having jurisdiction over the
transactions, the parties hereto agree to cooperate in making such
changes in this Agreement and other documents contemplated hereby
and in taking such other actions as may be required to effectuate
such changes.
Each of the Operating Companies represents and warrants to, and
covenants with, the other parties hereto, that except as set forth
in writing referring specifically to this Agreement
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and delivered to the other parties hereto
simultaneously with the delivery hereof, the following statements
are, as of the date hereto, and will be, as of the Effective Time,
true and correct:
2.1.
CONSENTS AND APPROVALS
Except as provided in Sections 4.3 and 4.4 hereto, no consent,
approval or authorization of any non-governmental third party,
other than such consents, approvals or authorizations which, if not
made or obtained, would not have a material adverse effect, and no
consent, approval, authorization or declaration of, or filing or
registration with, any federal, state or local government or
regulatory authority, is required to be made or obtained by the
Operating Companies of the transactions contemplated hereby.
Any reference in this Agreement to any event, change or effect
being "material" with respect to any entity means a material event,
change or effect related to the condition (financial or otherwise),
properties, assets, liabilities, businesses, prospects or
operations of such entity.
2.2.
AUTHORIZATION OF AGREEMENT
The execution, delivery and (subject to obtaining the approvals
and preconditions referred to in Section 5.1), performance of this
Agreement has been duly and validly authorized by the respective
Owners and boards of directors or managers, as applicable, of the
Operating Companies.
Black Gaming represents and warrants to, and covenants with, the
other parties hereto, that except as set forth in writing referring
specifically to this Agreement and delivered to the other parties
hereby simultaneously with the delivery hereof, the following
statements are, as of the date hereof, and will b
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