EXHIBIT 10.9
OPTION AGREEMENT
THIS OPTION AGREEMENT ("Agreement") is entered into this 1st day of May
1998, by and between NuOasis International Inc., a corporation organized under
the laws of the Commonwealth of the Bahamas ("NuOasis"), and Flexweight Corp., a
Kansas corporation (the "Company").
WHEREAS, the Company proposes to issue to NuOasis options to purchase
shares of its $.10 par value common stock (the "Common Stock") in connection
with the Company's exchange of securities with NuOasis International Inc.
("NuOasis") pursuant to the Exchange Agreement dated May 21, 1998 between the
Company and NuOasis, a copy of which is attached hereto as Exhibit "A" and
incorporated by reference herein (the "Exchange Agreement"); and,
WHEREAS, to induce NuOasis to execute the Exchange Agreement the
Company hereby grants NuOasis an option to purchase additional shares of the
Company's Common Stock subject to the terms and conditions set forth below.
NOW, THEREFORE, for and in consideration of the mutual promises herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and subject to the terms and conditions set forth
below, NuOasis and the Company agree as follows:
1. The Option
The Company hereby grants to NuOasis or its assignee (hereinafter
"Holder") an option (the "Option") to acquire Two Hundred Fifty
Thousand (250,000) shares of the Company common stock, subject to
adjustment as set forth herein (such shares, as adjusted, are
hereinafter referred to as the "Option Shares"), at a purchase price of
$.10 per share ("Option Price").
2. Term and Exercise of Option
A. Term of Option. Subject to the terms of this Agreement, Holder
shall have the right to exercise the Option in whole or in part,
commencing the date hereof through the close of business on July
1, 1999.
B. Exercise of the Option. The Option may be exercised upon written
notice to the Company at its principal office setting out the
number of Option Shares to be purchased, together with payment of
the Option Price (as defined in and determined in accordance with
the provisions of paragraphs 4 and 5 hereof.
Subject to paragraph 5 hereof, upon such notice of exercise and
payment of the Option Price, the Company shall issue and cause to
be delivered with all reasonable dispatch to or upon the written
order of Holder, or its successor as provided for herein, and in
such name or names as the Holder may designate, a certificate or
certificates for the number of Option Shares so purchased. The
rights of purchase represented by the Option shall be exercisable,
at the election of the Holder thereof, either in full or from time
to time in part, and in the event the Option is exercised in
respect of less than all of the Option Shares purchasable on such
exercise at any time prior to the date of expiration hereof, the
remaining Option Shares shall continue to be subject to Adjustment
as set forth in paragraph 5 hereof. The Company irrevocably agrees
to reconstitute the Option Shares as provided herein. The Option
represented by this Agreement may only be assigned or
transferred by NuOasis to an Affiliate or subsidiary, or as the
result of a corporate reorganization or recapitalization. For the
purpose of this Option the term "Affiliate" shall be defined as a
person or enterprises that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under
common control with the Company.
3. Reservation of Option Shares
The Company shall at all times keep reserved and available, out of its
authorized Common Stock, such number of shares of Common Stock as shall
be sufficient to provide for the exercise of the rights to purchase the
Company's Common Stock represented by this Option Agreement. The
transfer agent for the Common Stock and any successor transfer agent
for any shares of the Company's capital stock issuable upon the
exercise of any of such rights of purchase, will be irrevocably
authorized and directed at all times to reserve such number of
authorized shares as shall be requisite for such purpose. The Company
will keep a copy of this Agreement on file with the transfer agent or
its successors.
4. Adjustment of the Number of Option Shares
The number of Option Shares purchasable pursuant to this Agreement
shall be subject to adjustment from time to time upon the happening of
certain events, as follows:
A. Adjustment for Future Issuances of Capital Stock. Except as
provided below, the number of Option Shares purchasable hereunder
shall be increased to that total number of shares of the Company's
Common Stock equal to the difference between one million
(1,000,000) plus the number of shares of Common Stock previously
purchased pursuant to this Option and nineteen and one-half
percent (19.5%) of the total number of shares of Common Stock on a
fully diluted basis issued and outstanding at any time, during the
term of this Agreement.
B. Adjustment for Recapitalization. Subject to paragraph 4.A above,
in the event the Company shall (a) subdivide its outstanding
shares of Common Stock, (b) reverse split or otherwise reduce its
outstanding shares of Common Stock into a smaller number of shares
of Common Stock, or (c) issue or convert by a reclassification or
recapitalization of its shares of Common Stock into, for, or with
other securities (a "Recapitalization"), the number of Option
Shares purchasable hereunder immediately following such
Recapitalization shall be adjusted so that the Holder shall be
entitled to receive the kind and number of Option Shares or other
securities of the Company which it would have owned or have been
entitled to receive after such Recapitalization, had such Option
been exercised immediately prior to the happening of such event or
any record date with respect thereto. An adjustment made pursuant
to this paragraph shall be calculated and effected taking into
account the formula set forth in paragraph 4.A. above and shall
become effective immediately after the effective date of such
event retroactive to the effective date.
C. Preservation of Purchase Rights Under Consolidation. Subject to
paragraph 4.A above, in case of any Recapitalization or any other
consolidation of the Company with or merger of the Company into
another corporation, or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety
or substantially as an entirety, the Company shall prior to the
closing of such transaction, cause such successor or purchasing
corporation, as the case may be, to acknowledge and accept
responsibility for the Company's obligations hereunder and to
grant the Holder the right thereafter upon payment of the Option
Price to purchase the kind and amount of shares and other
securities and property which he would have owned or have been
entitled to receive after the happening of such consolidation,
merger, sale or conveyance. The provisions of this paragraph shall
similarly apply to successive consolidations, mergers, sales or
conveyances.
D. Notice of Adjustment. Whenever the number of Option Shares
purchasable hereunder is adjusted, as herein provided, the Company
shall mail by first class mail, postage prepaid, to the Holder
notice of such adjustment or adjustments, and shall deliver to
Holder setting forth the adjusted number of Option Shares
purchasable and a brief statement of the facts requiring such
adjustment, including the computation by which such adjustment was
made.
E. No Adjustment for Dividends. Except as provided herein, no
adjustment to the Option Shares shall be made in respect of any
cash dividend.
5. Failure to Deliver Option Shares Constitutes Breach Under Exchange
Agreement
Failure by the Company, for any reason, to deliver the certificates
representing any shares purchased pursuant to this Option, or the
placement of a Stop Transfer order by the Company, shall constitute a
"Breach" under the Exchange Agreement and, for the purpose of this
Option, failure to deliver or transfer the subject shares shall
automatically toll the expiration of this Agreement for a period of
time equal to the delay in delivering the subject shares or term of the
Stop Transfer order.
6. Assignment
This Agreement and the rights hereunder shall not be assigned by either
party hereto; provided, however, that in the event NuOasis or the
Company are deemed by reason of their respective ownership of each
other's shares to be subject to review by the Gaming Control Board of
Nevada or other jurisdiction and the respective party does not wish to
submit the necessary applications or pay the attendant fees, or for any
reason is deemed unsuitable for licensing in a jurisdiction where one
of the parties has or intends to submit to the applicable gaming rules
and regulations, then in such event, the party not wishing to subject
to the respective rules and regulations or pay the attendant fees may
be allowed to assign and dispose of its interest in the shares of the
party submitting itself to the licensing procedure. Such disposal shall
be accomplished either by (a) a sale of the shares of the licensee to a
buyer mutually acceptable to both parties at a price not less than fair
market value, or (b) the transfer of the subject shares of the licensee
by the other party into a "blend" trust or other type of trust which
satisfies the requirements of the subject gaming regulatory body.
7. Counterparts
A facsimile, telecopy or other reproduction of this instrument may be
executed by one or more parties hereto and such executed copy may be
delivered by facsimile or similar instantaneous electronic transmission
device pursuant to which the signature of or on behalf of such party
can be seen, and such execution and delivery shall be considered valid,
binding and effective for all purposes. At the request of any party
hereto, all parties agree to execute an original of this instrument as
well as any facsimile, telecopy or other reproduction hereof.
8. Further Documentation
Each party hereto agrees to execute such additional instruments and
take such action as may be reasonably requested by the other party to
effect the transaction, or otherwise to carry out the intent and
purposes of this Agreement.
9. Notices
All notices and other communications hereunder shall be in writing and
shall be sent by prepaid first class mail to the parties at the
following addresses, as amended by the parties with written notice to
the other:
To NuOasis: NuOasis International Inc.
00 Xxxxxxxxx Xxxxxx, Xxx X-0000
Nassau, Bahamas
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copy to: Xxxxxx & Weed
0000 XxxXxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Company: Flexweight Corp.
0000 Xxxxxxx Xxx
Xxxxxxxx, Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
10. Counterparts
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
11. Governing Law
This Agreement was negotiated, and shall be governed by the laws of the
Commonwealth of the Bahamas notwithstanding any conflict-of-law
provision to the contrary.
12. Entire Agreement
This Agreement sets forth the entire understanding between the parties
hereto and no other prior written or oral statement or agreement shall
be recognized or enforced.
13. Severability
If a court of competent jurisdiction determines that any clause or
provision of this Agreement is invalid, illegal or unenforceable, the
other clauses and provisions of the Agreement shall remain in full
force and effect and the clauses and provision which are determined to
be void, illegal or unenforceable shall be limited so that they shall
remain in effect to the extent permissible by law.
14. Amendment or Waiver
Every right and remedy provided herein shall be cumulative with every
other right and remedy, whether conferred herein, at law, or in equity,
and may be enforced concurrently herewith, and no waiver by any party
of the performance of any obligation by the other shall be construed as
a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to Closing, this
Agreement may be amended by a writing signed by all parties hereto.
15. Headings
The section and subsection headings in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first written above.
"NuOasis"
NuOasis International Inc.
By: /s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: President
Address: 00 Xxxxxxxxx Xxxxxx, Xxx X-0000
Nassau, Bahamas
"Flex"
Flexweight Corp.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: President
Address: 0000 Xxxxxxx Xxx
Xxxxxxxx, Xxxxxx 00000
