NevStar Gaming & Entertainment Corporation
0000 Xxxx Xxxx Xxxx
Xxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
(000) 000-0000 FAX: (000) 000-0000
May 14, 1998
A.F. Construction Company, Inc.
Attn: Xxxx X. Xxxxxxxx
0000 Xxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Re: Payment by Note
Dear Xx. Xxxxxxxx:
This letter sets forth an agreement by and between NevStar Gaming &
Entertainment Corporation (formerly known as Mesquite Gaming Corp.)
("NevStar"), and A.F. Construction Company, Inc. ("A.F.") regarding Six
Hundred Thousand Dollars ($600,000) of the total sum currently owed by NevStar
to A. F. pursuant to the Standard Form of Agreement Between Owner and
Contractor between the parties, dated August 30, 1994 (the "Standard Form").
1. The Deferred Amount. The parties agree that the issuance of the
Promissory Note to A.F. attached hereto as Exhibit "A" and incorporated herein
by this reference (the "Promissory Note") shall constitute a payment and
credit of $600,000 against amounts due from NevStar to A.F. pursuant to the
terms of the Standard Form.
2. Warrants. In consideration for accepting the Promissory Note as
payment in lieu of cash, A.F. shall be issued warrants in the form attached
hereto as Exhibit "B" and incorporated herein by this reference to purchase
Fifteen Thousand (15,000) shares of NevStar Common Stock at a per share
exercise price of $2.25, which amount is equal to a discount of approximately
thirty five percent (35%) off of the closing bid price of NevStar's Common
Stock on the NASDAQ Small Cap Market on May 11, 1998. In addition, A.F. shall
be issued additional warrants pursuant to the form of warrant attached in
connection with each one (1) month extension of the Note as follows: for each
One Hundred Thousand Dollar ($100,000) principal amount (or pro rata portion
thereof) outstanding on the business day immediately following the Payment
Date pursuant to Section 3 of the Promissory Note and each Extension Date as
described therein, A.F. shall receive an additional one thousand two hundred
fifty (1,250) warrants, to purchase shares of NevStar Common Stock at a
purchase price of $2.25. By means of example only, if principal of Two
Hundred Thousand Dollars ($200,000) is outstanding on the relevant date, A.F.
shall be entitled to warrants to purchase an additional two thousand five
hundred (2,500) shares of NevStar Common Stock.
3. Entire Agreement. This Agreement, including its exhibits,
constitutes the entire agreement between the parties, and supersedes all prior
oral or written agreements, understandings, representations and warranties,
and courses of conduct and dealing between the parties on the subject matter
hereof. Except as otherwise provided herein, this Agreement may be amended or
modified only by a writing executed by all of the parties.
4. Governing Law. This Agreement will be governed by and construed
under the laws of the State of Nevada without regard to conflicts of laws
principles.
5. Counterparts. This Agreement may be executed in one or more
counterparts, all of which when fully executed and delivered by all parties
hereto and taken together shall constitute a single agreement, binding against
each of the parties. To the maximum extent permitted by law or by any
applicable governmental authority, any document may be signed and transmitted
by facsimile with the same validity as if it were an ink-signed document.
If you are in agreement with the foregoing, please sign and return one
copy of this letter agreement, which thereupon will constitute our agreement
with respect to its subject matter.
Sincerely,
NEVSTAR GAMING & ENTERTAINMENT
CORPORATION, a Nevada corporation
By:/s/ Xxxxxxx X. Xxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxx
Chairman and Chief Executive Officer
The undersigned hereby acknowledge and agree to the terms and conditions
set forth above, as of May 14, 1998.
A.F. CONSTRUCTION COMPANY, INC.
By:/s/ Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx, President
[Signature Page to Letter Agreement]
C:\MyFiles\98063010KSB\9810kx33.txt
