Exhibit 10.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of the 11th day of October, 2005, by and between Halter Financial
Investments, L.P., a Texas limited partnership ("Purchaser"), maintaining an
address at 00000 Xxxxxxx Xxxx, Xxxxxx, Xxxxx 00000, and Nevstar Gaming and
Entertainment Corporation, a Nevada corporation (the "Company"), maintaining an
address at 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, the Company desires to sell to Purchaser and Purchaser desires
to purchase from the Company a total of 75,000,000 newly issued, restricted
shares (the "Shares") of the common capital stock of the Company, par value
$0.01 per share, representing approximately 59.7% of the Company's issued and
outstanding common capital stock at the time of Closing (as hereinafter
defined), upon the terms, provisions, and conditions and for the consideration
hereinafter set forth; and
WHEREAS, Xxxxxxx X. Xxxxxxxxxx, the Principal Executive Officer,
Principal Financial Officer and a member of the Board of Directors of Company
("Xxxxxxxxxx"), has agreed to be a party to this Agreement solely for purposes
of complying with Section 6.2 of this Agreement; and
NOW, THEREFORE, for and in consideration of the premises and mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto do hereby represent, warrant, covenant, and agree as follows:
Section 1. Issuance and Sale of Shares.
Based upon the representations, warranties, and covenants and subject
to the terms, provisions, and conditions contained in this Agreement, the
Company agrees to sell and deliver the Shares to Purchaser, free and clear of
all liens, pledges, encumbrances, security interests, and adverse claims, and
Purchaser agrees to purchase the Shares from the Company for the consideration
hereinafter set forth.
Section 2. Purchase Price.
The total purchase price to be paid to the Company by Purchaser for the
Shares is $75,000.00 (the "Purchase Price"), payable in cash by wire transfer of
immediately available funds or certified check.
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Section 3. The Closing.
Upon execution of this Agreement (the "Closing"), the Company shall
deliver to Purchaser a certificate(s) evidencing the Shares issued in the name
of Purchaser, and immediately upon delivery thereof, Purchaser shall deliver to
Company the Purchase Price.
Section 4. Representations and Warranties of the Company.
In connection with the transactions contemplated by this Agreement, the
Company hereby represents and warrants to Purchaser as follows:
4.1. Organization, Standing and Power.
The Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is incorporated and has the
requisite corporate power and authority to carry on its business as now being
conducted. The Company is duly qualified or licensed to do business and is in
good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary. The Company has heretofore delivered to the Purchaser true and
complete copies of its Articles of Incorporation, as amended, and By-laws, each
as currently in effect. The Company has no subsidiaries and does not own or
control, directly or indirectly, any shares of capital stock of any other
corporation or any interest in any partnership, limited liability company, joint
venture or other non-corporate business enterprise.
4.2. Validity of Transaction.
This Agreement and, as applicable, each other agreement contemplated
hereby are, or upon execution will be, valid and legally binding obligations of
the Company, enforceable in accordance with their respective terms against the
Company, except as limited by bankruptcy, insolvency and similar laws affecting
creditors generally, and by general principles of equity. At the time that the
Shares are sold, assigned, transferred and conveyed to Purchaser pursuant to
this Agreement, the Shares will be duly authorized, validly issued, fully paid
and nonassessable. The execution, delivery and performance of this Agreement
have been duly authorized by the Company and will not violate any applicable
federal or state law, any order of any court or government agency or the
Articles of Incorporation or By-laws of the Company. The execution, delivery and
performance of this Agreement and each other agreement contemplated hereby will
not result in any breach of or default under, or result in the creation of any
encumbrance upon any of the assets of the Company pursuant to the terms of any
agreement by which the Company or any of its respective assets may be bound. The
Company does not have any knowledge that any consent, approval or authorization
of, or registration or filing with any governmental authority or other
regulatory agency, is required for the validity of the execution and delivery by
the Company of this Agreement or any documents related thereto.
4.3. Capital Structure.
The authorized capital stock of the Company consists of 126,396,450
shares of common stock, par value $0.01 per share (the "Company Common Stock").
As of the date of this Agreement, there are 50,715,008 shares of Company Common
Stock issued and outstanding. No shares of Company Common Stock are held by the
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Company in its treasury. All outstanding shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and nonassessable,
and were not subject to preemptive or similar rights at the time of issuance. No
bonds, debentures, notes or other indebtedness of the Company having the right
to vote (or convertible into, or exchangeable for, securities having the right
to vote) on any matters on which the stockholders of the Company may vote are
issued or outstanding. There are no outstanding stock appreciation rights or
similar derivative securities or rights, including options or warrants, of the
Company.
4.4. Absence of Certain Changes or Events; No Undisclosed Material
Liabilities.
Except as otherwise set forth in Schedule 4.4 to this Agreement, the
Company has no Liabilities. "Liability" means, as to any person, all debts,
liabilities and obligations, direct, indirect, absolute or contingent of such
person, whether accrued, vested or otherwise, whether known or unknown and
whether or not actually reflected, or required in accordance with accounting
practices generally accepted in the United States ("GAAP") to be reflected, in
such person's balance sheet.
4.5. Compliance with Applicable Laws.
The Company has, and after giving effect to the transactions contemplated hereby
will have, in effect all federal, state, local and foreign governmental
approvals, authorizations, certificates, filings, franchises, licenses, notices,
permits and rights ("Permits") necessary for it to own, lease or operate its
properties and assets and to carry on its business as now conducted, and there
has occurred no default under any such Permit, except (a) for the lack of
Permits and for defaults under Permits which individually or in the aggregate
would not have a Company Material Adverse Effect, or (b) notices to be filed
with the U.S. Securities and Exchange Commission ("SEC") and state securities
agencies with regard to transactions contemplated herein. For purposes of this
Agreement, the term "Company Material Adverse Effect" means any material adverse
effect with respect to the Company, taken as a whole, or any change or effect
that adversely affects, or is reasonably expected to adversely affect, the
ability of the Company to maintain its current business operations or to
consummate the transactions contemplated by this Agreement in any material
respect. The Company is in compliance with, and has no liability or obligation
under, all applicable statutes, laws, ordinances, rules, orders and regulations
of any court or governmental or regulatory authority or body ("Governmental
Entity"), including any liability or obligation to undertake any remedial action
under hazardous substances laws, except for (y) instances of non-compliance,
liabilities or obligations, which individually or in the aggregate would only
have an immaterial effect, or (z) notices to be filed with the SEC and state
securities agencies with regard to transactions contemplated herein.
4.6. Litigation, etc.
As of the date hereof, (a) there is no suit, claim, action or
proceeding (at law or in equity) pending or threatened against the Company
(including, without limitation, any product liability claims) before any
Governmental Entity, and (b) the Company is not subject to any outstanding
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order, writ, judgment, injunction, order, decree or arbitration order that, in
any such case described in clauses (a) and (b), (i) could reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect or
(ii) involves an allegation of criminal misconduct or a violation of the
Racketeer and Influenced Corrupt Practices Act, as amended. As of the date
hereof, there are no suits, actions, claims or proceedings pending or
threatened, seeking to prevent, hinder, modify or challenge the transactions
contemplated by this Agreement.
4.7. Disclosure.
The representations and warranties and statements of fact made in this
Agreement are, as applicable, accurate, correct and complete and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements and information contained herein not
false or misleading.
4.8. Taxes and Tax Returns.
All taxes payable have been paid when due; there is no examination or
audit, or any claim, asserted deficiency or assessment for additional taxes in
progress, pending, or threatened, nor is there any reasonable basis for the
assertion of any such claim, deficiency or assessment; no material special
charges, penalties, fines, liens, or similar encumbrances have been asserted
against the Company with respect to payment of or failure to pay any taxes which
have not been paid or resolved without further liability to the Company. The
Company has not executed or filed with any taxing authority any agreements
extending the period for assessment or collection of any taxes. Proper amounts
have been withheld by the Company from its employees' compensation payments for
all periods in compliance with the tax withholding provisions of applicable
federal and state laws. The Company is not a party to any tax-sharing or
tax-allocation agreement, nor does the Company owe any amounts under any
tax-sharing or tax-allocation agreement.
4.9. Employee Benefit Plans.
The Company does not have in place any arrangement or policy (written
or oral) providing for insurance coverage, workers' compensation, disability
benefits, supplemental unemployment benefits, vacation benefits, retirement
benefits or deferred compensation, profit sharing, bonuses, stock options, stock
appreciation rights, stock purchases or other forms of incentive compensation or
post-retirement insurance, compensation or benefits which is maintained or
administered by the Company, or to which the Company contributes, and which
covers any employee or former employee of the Company or under which the Company
has any liability, including "employee welfare benefit plan," "employee benefit
plan" and "employee pension benefit plan" as defined under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
The Company is not a party to any collective bargaining agreements.
There are no strikes or labor disputes or lawsuits, unfair labor or unlawful
employment practice charges, contract grievances or similar charges or actions
pending or threatened by any of the employees, former employees or employment
applicants of the Company that would have a Company Material Adverse Effect.
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4.10. Certain Contracts.
There are no written employment agreements or termination agreements
with current officers, directors or consultants of the Company and to which the
Company is a party.
As of the date of this Agreement, (i) the Company is not a party to or
bound by any commitment, agreement or other instrument (excluding commitments
and agreements in connection with extensions of credit by the Company) which
contemplates the payment of amounts in excess of $5,000, or which otherwise is
material to the operations, assets or financial condition of the Company,
including but not limited to any royalty, franchising fees, or any other fee
based on a percentage of revenues or income and (ii) no commitment, agreement or
other instrument to which the Company is a party or by which it is bound limits
the freedom of the Company to compete in any line of business or with any
person.
As of the date of this Agreement, the Company is not in default in any
material respect under any material lease, contract, mortgage, promissory note,
deed of trust, loan agreement, license agreement (as to royalty payments) or
other commitment or arrangement.
4.11. Assets; Properties and Insurance.
The Company has no assets, whether tangible or intangible, owns no real
property and maintains no insurance of any kind.
4.12. Minute Books.
The minute book of the Company contains records which, in all material
respects, accurately record all meetings of their stockholders and Board of
Directors (including committees of the Board of Directors).
4.13. Environmental Matters.
The Company has not received any written notice, citation, claim,
assessment, proposed assessment or demand for abatement alleging that the
Company is responsible for the correction or cleanup of any condition resulting
from the violation of any law, ordinance or other governmental regulation
regarding environmental matters, which correction or cleanup would be material
to the business, operations, assets or financial condition of the Company. The
Company does not have any knowledge that any toxic or hazardous substances or
materials have been emitted, generated, disposed of or stored on any real
property owned or leased by the Company, or owned or controlled by the Company
as a trustee or fiduciary (collectively, "Properties"), in any manner that
violates or, after the lapse of time may violate, any presently existing
federal, regional, state or local law or regulation governing or pertaining to
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such substances and materials, the violation of which would have a Company
Material Adverse Effect. The Company does not have any knowledge that, during
the Company's ownership or lease of such Properties, any of such Properties has
been operated in any manner that violated any applicable national, state or
local law or regulation governing or pertaining to toxic or hazardous substances
and materials.
4.14. Loans, etc.
As of the date of this Agreement, there are no liabilities, obligations
or indebtedness of any kind whatsoever chargeable to any Company stockholder and
payable to the Company by a Company stockholder.
4.15. Intellectual Property.
There are no arrangements relating to the use by the Company of any
intellectual property owned by another person, and the Company has not at any
time been in breach of such arrangements. The Company has not granted and is not
obligated to grant a license, assignment or other right with respect to any
intellectual property.
4.16. Bankruptcy.
On September 6, 2005, a final decree was entered in the United States
Bankruptcy Court, District of Nevada, regarding the Company's voluntary petition
for relief under Chapter 11, Case No. BK-S-00-15075-LBR. Since that final decree
was entered, the Company has neither filed a voluntary bankruptcy petition nor
been the subject of an involuntary bankruptcy petition nor is the Company the
subject of an action under state insolvency laws or any other relevant laws.
4.17. Criminal Proceedings.
Neither the Company and its respective officers, directors, affiliates,
promoters nor any predecessor of the Company have been subject to or suffered
any of the following:
o Any conviction in a criminal proceeding or being subject to a
pending criminal proceeding (excluding traffic violations and
other misdemeanor offenses) within ten (10) years from the
date hereof;
o Any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or
otherwise limiting such person's involvement in any type of
business, securities or banking activities within ten (10)
years from the date hereof; or
o Being found guilty by a court of competent jurisdiction (in a
civil action), the SEC or the Commodity Futures Trading
Commission ("CFTC") to have violated a federal or state
securities or commodities law within ten (10) years from the
date hereof, and the judgment has not been reversed, suspended
or vacated.
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4.18. No Stockholder Approval Required.
The provisions of Sections 78.378 to 78.3793, inclusive, of the Nevada
General Corporation Law ("NGCL") do not apply to the Company due to the fact
that the Company does not meet the definition of "issuing corporation" set forth
in Section 78.3788 of the NGCL.
Section 5. Representations and Warranties of Purchaser.
Purchaser acknowledges and understands that the Shares are being
acquired for investment in a transaction that is considered to be exempt from
registration. In connection with the transactions contemplated hereby, Purchaser
hereby represents and warrants to the Company that:
5.1. Investment Purposes.
Purchaser is acquiring the Shares solely for investment purposes and
not with a view to, or for resale in connection with, any distribution thereof
or with any present intention of distributing or selling any of the Shares,
except as allowed by the Securities Act of 1933, as amended, or any rules or
regulations promulgated thereunder (collectively, the "Act").
5.2. Disposition of Shares.
Purchaser will hold the Shares subject to all of the applicable
provisions of the Act, and Purchaser will not at any time make any sale,
transfer, or other disposition of the Shares in contravention of said Act.
5.3. Economic Risk.
Purchaser acknowledges that it must bear the economic risk of its
investment in the Shares for an indefinite period of time since the Shares have
not been registered under the Act and therefore cannot be sold unless the Shares
are subsequently registered or an exemption from registration is available.
5.4. No Public Solicitation.
The sale of the Shares to Purchaser is being made without any public
solicitation or advertisements.
5.5. Criminal Proceedings.
Neither the Purchaser and its respective officers, directors,
affiliates, promoters nor any predecessor of the Purchaser have been subject to
or suffered any of the following:
o Any conviction in a criminal proceeding or being subject to a
pending criminal proceeding (excluding traffic violations and
other misdemeanor offenses) within ten (10) years from the
date hereof;
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o Any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or
otherwise limiting such person's involvement in any type of
business, securities or banking activities within ten (10)
years of the date hereof; or
o Being found guilty by a court of competent jurisdiction (in a
civil action), the SEC or the CFTC to have violated a federal
or state securities or commodities law within ten (10) years
of the date hereof, and the judgment has not been reversed,
suspended or vacated.
5.6. Information.
Purchaser has received and reviewed such information as Purchaser deems
necessary to evaluate the risks and merits of its investment in the Company.
5.7. Accredited Investor.
Purchaser is an "accredited investor" within the meaning of rule 501 of
Regulation D promulgated under the Act.
5.8. Financial Matters Experience.
Purchaser has such knowledge and experience in financial matters as to
be capable of evaluating the merits and risks of an investment in the Shares.
Section 6. Conditions to the Obligations of Purchaser at Closing.
The obligations of Purchaser at Closing are conditioned upon
satisfaction, on or prior to such date, of the following conditions, which
conditions are further conditioned upon the delivery of the Purchase Price by
Purchaser:
6.1. Stock Certificates.
The Company shall have delivered to Purchaser certificate(s) issued in
the name of Purchaser representing the number of Shares to be purchased by
Purchaser pursuant to this Agreement.
6.2. Resignation and Appointment of Officers and Directors.
The Company shall have delivered duly executed letters of resignation
from each of its officers and each director other than Xxxxxxxxxx, who shall
remain a director of the Company. The Company shall have also delivered
resolutions approved by the Board of Directors duly appointing Xxxxxxx X. Xxxxxx
as the sole officer of the Company, holding the titles of President, Secretary
and Chief Accounting Officer, and as a member of the Board of Directors.
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Section 7. Closing and Post-Closing Obligations.
7.1. Reverse Split.
Within 30 days of the Closing, the Company shall, under the direction
of Purchaser, make all necessary filings to effect a 300 for one reverse split
of the Company's common capital stock (the "Reverse Split"). Pursuant to the
Reverse Split, following the 300 for one conversion any partial shares of common
capital stock will be rounded up to the next full share.
7.2. Additional Issuance to Purchaser.
Immediately following the Reverse Split, the Company will sell to
Purchaser an additional 723,641 newly issued, restricted shares of its common
capital stock for a purchase price of $0.30 per share (for an aggregate purchase
price of $217,092.30).
7.3. Settlement and Stock Issuance Agreement with W/F Investment.
Immediately following the Reverse Split, the Company and W/F Investment
Corp., a California corporation ("W/F Investment"), shall enter into a
Settlement and Stock Issuance Agreement pursuant to which (i) W/F Investment
shall forgive the approximately $416,857 that is owed to it by the Company and
(ii) the Company will pay W/F Investment $100,000 and issue 107,000 newly
issued, restricted shares of the Company's common capital stock to W/F
Investment. The Settlement and Stock Issuance Agreement shall be in the form and
substance as agreed to by Purchaser and W/F Investment prior to the Closing.
7.4. Put Option Agreement.
Immediately following the execution of the Settlement and Stock
Issuance Agreement referred to in Section 7.3, Purchaser and W/F Investment
shall enter into a Put Option Agreement pursuant to which W/F Investment may
require Purchaser to purchase up to 199,869 shares of common capital stock of
the Company held by W/F Investment at a price per share of $2.00 at any time
during the period of time (i) commencing 180 days following the Closing and (ii)
ending upon the earlier of six (6) months following the Company's completion of
a transaction whereby the Company acquires operating control, or substantially
all of the assets, of a privately held corporation generating revenues as
reported in financial statements audited in conformity with GAAP or two (2)
years following the Closing. The Put Option Agreement shall be in the form and
substance agreed to by Purchaser and W/F Investment prior to the Closing.
Section 8. Indemnification.
The Company acknowledges that it understands the meaning and legal
consequences of its representations, warranties and covenants and that the
Purchaser has relied upon such representations, warranties, and covenants, and
the Company hereby agrees to indemnify and hold harmless the Purchaser and its
agents and employees for a period of one year from the date of this Agreement
from and against any and all loss, damage or liability due to or arising out of
a breach of any such representation, warranty, or covenant or any adverse
consequence suffered by Purchaser as a result of the operation of the Company by
Purchaser.
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Section 9. Survival of Representations and Warranties.
All representations, warranties, covenants, and agreements contained
herein shall not be discharged or dissolved upon, but shall survive the Closing
and shall be unaffected by any investigation made by any party at any time.
Section 10. Entirety and Modification.
This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes any and all
prior agreements and understandings, whether oral or written, between the
parties hereto relating to such subject matter. No modification, alteration,
amendment, or supplement to this Agreement shall be valid or effective unless
the same is in writing and signed by all parties hereto.
Section 11. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
respective parties hereto, their successors and permitted assigns, heirs, and
personal representatives.
Section 12. Notices.
All notices or other communications required or permitted to be given
pursuant to this Agreement shall be in writing and shall be considered as
properly given or made if hand delivered, mailed from within the United States
by certified mail, or sent by overnight delivery service to the applicable
address appearing in the preamble to this Agreement, or to such other address as
either party may have designated by like notice forwarded to the other party
hereto. All notices shall be deemed given when postmarked (if mailed), when
delivered to an overnight delivery service or, if hand delivered, when delivered
to the recipient.
Section 13. Severability.
Every provision of this Agreement is intended to be severable. If any
term or provision hereof is illegal or invalid for any reason whatever, such
illegality or invalidity shall not affect the validity of the remainder of this
Agreement.
Section 14. Headings.
The headings of this Agreement are inserted for convenience and
identification only, and are in no way intended to describe, interpret, define
or limit the scope, extent or intent hereof.
Section 15. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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Section 16. Legal Fees and Costs.
If a legal action is initiated by any party to this Agreement against
another, arising out of or relating to the alleged performance or
non-performance of any right or obligation established hereunder, or any dispute
concerning the same, any and all fees, costs and expenses reasonably incurred by
each successful party or his, her or its legal counsel in investigating,
preparing for, prosecuting, defending against, or providing evidence, producing
documents or taking any other action in respect of, such action shall be the
joint and several obligation of and shall be paid or reimbursed by the
unsuccessful party or parties.
Section 17. Publicity.
Except as otherwise required by law, none of the parties hereto shall
issue any press release or make any other public statement, in each case
relating to, connected with or arising out of this Agreement or the matters
contained herein, without obtaining the prior approval of the other to the
contents and the manner of presentation and publication thereof.
Section 18. Governing Law.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Nevada without reference to conflicts
of law provisions..
Section 19. Jurisdiction.
Each party to this Agreement hereby irrevocably agrees that any legal
action or proceeding arising out of or relating to this Agreement or any
agreements or transactions contemplated hereby may be brought in the courts of
the State of Nevada or of the United States of America for the District of
Nevada and hereby expressly submits to the personal jurisdiction and venue of
such courts for the purposes thereof and expressly waives any claim of improper
venue and any claim that such courts are an inconvenient forum. Each party
hereby irrevocably consents to the service of process of any of the
aforementioned courts in any such suit, action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to the address
specified in Section 12, such service to become effective 10 days after such
mailing.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
agreement as of the date first written above.
PURCHASER: HALTER FINANCIAL INVESTMENTS, L.P.
By: Halter Financial Investments GP, LLC,
its general partner
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Xxxxx X. Xxxxxxxx, President
THE COMPANY: NEVSTAR GAMING AND ENTERTAINMENT
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxxxxxx,
President
XXXXXXXXXX: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxxxxx, solely as to
Section 6.2 hereof.
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Schedule 4.4
to
Stock Purchase Agreement
Nevstar Gaming & Entertainment Corporation
Schedule of Liabilities
October 11, 2005
Xxxxx and Xxxxxxx $ 39,670.47
Xxxxxx Bowler Tayler $ 12,876.25
Rosc, Xxxxxx & Xxxxxx $ 3,500.00
Nevada Gaming Control Board - Principal $ 57,219.33
Nevada Gaming Control Board - Interest $ 3,984.54
Nevada Dept of Taxation - Principal $113,638.32
Nevada Dept of Taxation - Interest $ 7,279.41
Subtotal $238,168.32
W/F Investment Corp $452,875.64
Total $691,043.96
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