EXHIBIT 10.4
July 17, 1998
Mr. Xxx Xxxxxxxx
000 Xxxx Xxxx
Xxx Xxxxx, Xxxxxxxxx 00000
Re: River Port Truck Stop, L.L.C. / Operating Agreement
Dear Don:
Reference is hereby made to the proposed Operating Agreement (the
"Agreement") of River Port Truck Stop, L.L.C. (the "Company"), to be entered
into between Xxx Xxxxxxxx ("Xxxxxxxx") and North American Gaming and
Entertainment Corporation ("NAG"), in the form delivered to Xxxxx Xxxxx under
cover of the letter of Xxxx Xxxxxxx dated July 17, 1998. The parties have
agreed to delete Section 8.20 of the Agreement and to memorialize their
agreement in respect of the matters contemplated therein, as follows
(capitalized terms not otherwise defined herein shall have the meaning ascribed
in the Agreement):
Issuance of Additional Membership Interests and Sharing Ratios; Net Profits
Interest Participation. Anything contained in the Agreement
notwithstanding, at the election of NAG, additional Membership Interests
and Sharing Ratios may be created and issued by the Company, or transferred
by NAG and Xxxxxxxx, in an amount (i.e., 0.2%) that would first reduce
Xxxxxxxx' Membership Interest and Sharing Ratio so that they are the same
as NAG's Membership Interest and Sharing Ratio and then would reduce each
of NAG's and Xxxxxxxx' Membership Interests and Sharing Ratios pro rata
from such levels (i.e., 49.9%) to as little as 40%, but only to one or more
persons or entities who were formerly holders of Class A Preferred Stock of
NAG, on such terms and conditions, and to such of said former holders of
Class A Preferred Stock of NAG, as NAG may determine, but only for the
purpose of discharging or paying debts or accrued dividends of NAG,
redeeming or acquiring equity securities of NAG and/or settling any other
potential claims of such Class A Preferred Stock holders against OM
Operating, L.L.C., NAG and/or Xxxxxxxx; or, alternatively, at the election
of NAG, the Company may enter into an agreement with one or more persons to
carve out a "net profits interest" to such persons equal to up to 20% of
the net profits and cash flow of the Company which, shall be applied first
against Xxxxxxxx' Sharing Ratio to equalize the
manner in which the remaining net profits and cash flow are split between
NAG and Xxxxxxxx and then proportionately thereafter. Anything contained
herein to the contrary notwithstanding, in no event shall the Membership
Interests, Sharing Ratio or "net profits interest" of Xxxxxxxx be lower
than that of NAG. NAG and Xxxxxxxx agree to execute such amendments to the
Agreement and such other documents, and to take such actions, as may be
reasonably necessary to effect the foregoing provisions of this paragraph.
It is intended that the "net profits interest" would be a deductible
expense of the Company and that cash flow distributed pursuant to such "net
profits interest" would be a distributed at the same priority level as
distributions to Members of the Company. Notwithstanding the foregoing
provisions, any such additional issuance or any such transfer is
conditioned upon Louisiana residents who meet the suitability requirements
of Applicable Laws owning at least a majority of the Membership Interests
and Sharing Ratios following such issuance or transfer in accordance with
Applicable Laws necessary for the Company to be able to maintain its
licenses to operate a truck stop video poker casino. Upon any such issuance
or transfer, Exhibit "A" to the Agreement shall be amended to reflect the
correct Sharing Ratios.
To the extent of any conflicts or inconsistencies between the Agreement and
this letter agreement, this letter agreement shall control. If the foregoing
accurately reflects the agreement between you and NAG, please sign a copy of
this letter and fax the signed copy back to me.
Yours truly,
NORTH AMERICAN GAMING AND
ENTERTAINMENT CORPORATION
By:
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X.X. Xxxxx XX, President
ACKNOWLEDGED AND AGREED
THIS __ DAY OF JULY, 1998
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Xxxxxx X. Xxxxxxxx
