EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (the "Agreement") is made this day of May 1998,
by and between NuOasis International Inc., a corporation organized under the
laws of the Commonwealth of the Bahamas (the "Company") and Flexweight Corp., a
Kansas corporation ("Flex").
WHEREAS, Flex owns or has the right to acquire a hotel and casino
project in Oasis, Nevada and intends to pursue the business of owning,
developing and operating hotel and casino properties; it is a publicly-held
corporation whose shares are traded in the U.S. on the NASDAQ Electronic
Bulletin Board; and
WHEREAS, the Company is an international company engaged in owning,
developing and operating hotel and casino properties through investments in
equities of operational and development stage hotel and casino companies; and
WHEREAS, the Company owns certain shares of common stock of NuOasis
Resorts Inc., a Nevada corporation ("Resorts"); and
WHEREAS, the Company and Flex wish to diversify their respective
investment portfolios by exchanging shares f Resorts owned by the Company for
shares of Flex to be issued by Flex; and
WHEREAS, this Agreement is executed in reliance upon the transaction
exemption afforded by Section 4(2) of the Securities Act of 1933, as amended
("33 Act") and Regulations S and D as promulgated by the Securities and Exchange
Commission ("SEC") under the 33 Act.
IN CONSIDERATION of the mutual promises contained herein, the benefits
to be derived by each party hereunder and other good and valuable consideration,
the receipt and sufficiency of which are hereby expressly acknowledged, the
Company and Flex agree as follows:
1. Exchange
On the basis of the representations and warranties herein contained,
subject to the terms and conditions set forth herein, Flex agrees to
issue and exchange 1,000,000 shares of its common stock, representing
approximately 19.5% of Flex' total outstanding shares (the "Flex
Shares") and to grant the Company the option to purchase shares of Flex
common stock in the future so as to maintain the great of a 19.5%
equity interest in Flex or $2.5 million in Market Value of Flex Shares,
as more fully described in the Option Agreement attached hereto as
Exhibit "A" (the "Option"). In exchange for the Flex Shares and the
Option the Company shall transfer to Flex Three Million Two Hundred
Fifty Thousand (3,250,000) shares of Resorts (the "Resorts Shares").
2. Closing
A. Method of Exchange. Within ten (10) business days following
execution hereof, the company shall deliver the Resorts Shares
and Flex shall issue and deliver the Flex Shares to the escrow
agent identified in the Joint Escrow Instructions attached
hereto as Exhibit "B" (the "Escrow holder"), in one or more
share certificates, in accordance with this Agreement and the
Joint Escrow Instructions attached hereto. By signing this
Agreement, the Company and Flex each agree to all of the terms
and conditions of, and becomes a party to the Joint Escrow
Instructions, all of the provisions of which are incorporated
herein by this reference as if set forth herein in full.
B. Closing Date. The closing of the exchange contemplated by this
Agreement (the "Closing") shall occur upon such date that the
parties have satisfied their respective obligations and
covenants contained herein, but shall not be later than June
30, 1998. At the Closing, the Company shall assign and deliver
the Resorts Shares to Flex and Flex shall issue and deliver
the Flex Shares to the Company. Notwithstanding the date of
Closing, the Effective Date shall be May 30, 1998.
3. Flex Shares
A. Description. The Flex Shares shall be equal in voting power,
preferences, liquidations rights and relative, participating
optional or any other special rights of Flex' common stock as
presently constituted.
B. Status of Flex Shares. The Flex Shares when issued, will be
validly issued for consideration which Flex hereby
acknowledges and agrees is fair and reasonable. Further, as an
inducement to the Company to enter into this Agreement, Flex
agrees that it will not for any reason place a "stop transfer"
order or assert any claim which xxxx serve to restrict the
transfer or exchange of the Flex Shares. Flex represents that
it has not created any option, security interest, preemptive
right or encumbrance which could affect the Flex Shares,
otherwise would give rise to any claims by third parties or
create a conflict with or preclude the exchange as
contemplated herein.
4. Flex Business Plan
Flex' working capital, including the proceeds from loans against, or
the sale of the Resorts Shares, will be used for the development of its
Flex Project, a more fully described in Exhibit "C" attached hereto and
incorporated herein by reference.
5. Representations and Warranties of Flex
Flex hereby represents and warrants to the Company that:
A. Organization. Flex is a corporation validly existing and in
good standing under the laws of Kansas, with the pow and
authority to carry on its business as now being conducted. The
execution and delivery of this Agreement and the consummation
of the transaction contemplated in this Agreement have been,
or will be prior to Closing, duly authorized by all requisite
corporate action on the part of Flex. This Agreement has been
duly executed and delivered by Flex and constitutes a binding,
and enforceable obligation of Flex.
B. Capitalization. As of the date of execution of this Agreement,
the capitalization of Flex is comprised of 25,000,000
authorized shares of $.10 par value common stock of which
5,418,588 are issued and outstanding. Al l of the issued and
outstanding shares are duly authorized, validly issued, fully
paid, and nonassessable and have been offered, issued, sold,
and delivered by Flex in compliance with all applicable
securities laws; with the exception of shares issued or
reserved for issuance as disclosed herein, there are no other
outstanding shares, options, warrants, preemptive, conversion,
or other rights issued by or binding on Flex to purchase or
acquire any shares of its capital stock.
C. Third Party Consent. No authorization, consent, or approval of
, or registration or filing with, any governmental authority
or any other person is required to be obtained or made by Flex
in connection with the execution, delivery, or performance of
this Agreement, or if required, Flex has or will obtain same
prior to Closing.
D. Litigation. Neither Flex nor any of its officers and directors
are defendants or plaintiffs against whom a counterclaim has
been made or reduced to judgement, in any litigation or
proceedings before any locate, state or U.S. government, or
any department, board body or agency thereof, which could
result in a judgement or claim against the Flex Project or
otherwise impede or delay the development of the Flex Project,
or result in a claim against the Flex Shares; and,
E. Authority. This Agreement has been duly executed by Flex, and
the execution and performance of this Agreement will not
violate, or result in a breach of, or constitute a default in
any agreement, instrument, judgement, order or decree to which
Flex is a party or to which Flex is subject; and,
F. Disclosure Documents. Flex is a publicly-held company and is
subject to the reporting requirements of Sections 12, 13(a),
14(a), and 15(d) of the Securities and Exchange Act of 1934,
as amended (the "34 Act"), including but not limited to Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K, and proxy statements (the "Disclosure
Documents"). Flex agrees to furnish the Company with a
description of any material changes in Flex' financial
conditions up to and including the date of Closing that may
not be disclosed in the Disclosure Documents.
G. Tax Matters. Flex has filed or will file prior to Closing all
federal, state, and local income, excise, property, and other
tax returns, forms, or reports, which are due or required to
be filed by it and has paid, or made adequate provision for
payment prior to Closing of all taxes, interest, penalty fees,
assessments, or deficiencies shown to be due or claimed to be
due or which have or may become due on or in respect to such
returns or reports.
H. Directors and Officers. The Flex Disclosure Documents
accurately set forth the names and titles of the persons
serving as its directors and officers and their beneficial
interest in the capital of Flex.
I. Full Disclosure. The information concerning Flex, set forth in
this Agreement and in the Disclosure Documents is, to the best
of Flex' knowledge and belief, complete and accurate in all
material respects and does not contain any untrue statement of
a material fact or omit to state a material fact required to
make the statements made, in light of the circumstances under
which they were made, not misleading.
6. Conditions Precedent to Obligations of the Company and Flex
All obligations of the Company under this Agreement are subject to the
fulfillment, prior to or as of the Closing Date, of each of the
following conditions:
A. Transfer and Delivery of the Consideration. The Company shall
have delivered the Resorts Shares to Escrow holder pursuant to
this Agreement.
B. Transfer and Delivery of the Flex Shares. Flex shall have
taken all action necessary to issue and deliver the Flex
Shares to Escrow holder.
C. Acceptance of Documents. All instruments and documents
delivered to the Company and Flex pursuant to the provisions
of this Agreement shall be satisfactory to the Company and
Flex and their legal counsel.
D. Valuation. The Company, in its sole satisfaction, shall have
the right o determine that the value of the Flex Project, and
the Flex Shares to be acquired shall not have declined in
value from the date hereof through the date of Closing. If
there is any adverse change in Flex' financial condition or
change in its management, or if the value of the Flex Project
or the Flex Shares declined prior to Closing, the Company
shall have the option to terminate this Agreement without
penalty. Alternatively, the Company may elect, in its sole
discretion, to proceed with Closing in reliance upon a
warranty of title, guaranty of value, adjustment to the
consideration, or other mutually acceptable form of assurance
to be made by Flex.
E. Flex Board of Directors. Flex shall, simultaneously with
Closing, add one member to its Board of Directors submitted by
the Company. Approval of such new director shall not be
unreasonably withheld by Flex.
F. Acceptance of Documents. All instruments and documents
delivered to the parties pursuant to the provisions of this
Agreement shall be satisfactory to the parties and their legal
counsel. The Company and Flex shall each provide to the other
prior to Closing evidence satisfactory the other that the
representations made herein and the rights to the subject
shares are legally crated and duly enforceable.
7. Availability of Information
The Company and Flex each represent that, by virtue of their respective
business activities and economic bargaining power or otherwise, they
have been able to conduct their own due diligence and have had access
to or have been furnished with, prior to or concurrently with the
execution hereof, the information which hey consider to be adequate to
make a decision to exchange the Flex Shares for the Resorts Shares.
8. Private Transaction
A. Private Offering. Flex and the Company understand each that
the exchange contemplated herein constitutes a private,
arms-length transaction between a willing seller and a willing
buyer without the use or reliance upon a distribution or
securities underwriter.
B. Purchase for Own Account. Neither Flex nor the Company are
underwriters of, or dealers in, the respective securities to
be exchange hereunder, and neither party is acting as such or
participating, pursuant to a contractual agreement, in the
distribution of such securities.
C. Investment Risk. Because of their financial positions and
other factors, but subject to paragraphs 3 and 6 above, the
exchange contemplated by this Agreement may involve a high
degree of financial risk, including the risk that one or both
parties may lose its entire investment, and the parties hereto
agree to execute and deliver to each other at Closing an
investment letter in the form attached hereto as Exhibit "D"
(the "Investment Letter").
D. Access to Information. Flex and the Company and their advisors
have been afforded the opportunity to discuss the transaction
with legal and accounting professional and to examine and
evaluate the financial impact of the exchange contemplated
herein.
9. Termination
Flex and the Company may terminate this Agreement prior to the date of
Closing upon written notice with mutual consent. Failing to have mutual
consent, without prejudice to any other remedy to which the terminating
party may be entitled, if any, either party may terminate this
Agreement upon written notice on the occurrence of any one of the
following events:
A. By the Company
(i) If Flex fails to issue and deliver the Flex Shares or
provide information required hereunder; or
(ii) If Flex willfully breaches or neglects the duties
required to be performed hereunder; or
(iii) If Flex has a receiver appointed for its assets or
property, or otherwise becomes insolvent or unable to
timely satisfy its obligations in the ordinary course
of business; or
(iv) If Flex institutes, make a general assignment for the
benefit of creditors, has instituted against it any
bankruptcy proceeding for reorganization for
rearrangement of its financial affairs, files a
petition in a court of bankruptcy, or is adjudicated
a bankrupt; or
(v) If any of the disclosures made herein or subsequent
hereto by Flex to the Company are determined to be
materially false or misleading.
B. By Flex
(i) If during the term of this Agreement, the Company, or
its assignee, is unable to provide the Resorts Shares
as set forth herein; or
(ii) If the Company willfully breaches or neglects the
duties required to be performed hereunder; or
(iii) If the Company has a receiver appointed for its
assets or property, or otherwise becomes insolvent or
unable to timely satisfy its obligations in the
ordinary course of business; or
(iv) If the Company institutes, make a general assignment
for the benefit of creditors, has instituted against
it any bankruptcy proceeding for reorganization for
rearrangement of its financial affairs, files a
petition in a court of bankruptcy, or is adjudicated
a bankrupt; or
(v) If any of the disclosures made herein or subsequent
hereto by the Company to Flex are determined to be
materially false or misleading; or
In the event a party elects to terminate this Agreement prior to
Closing without mutual consent or cause, as set forth above, such
terminating party shall be responsible to pay the non-terminating party
for such non-terminating party's costs and expenses not to exceed
$25,000.
10. Damages and Limit of Liability
Subsequent to Closing the Company and Flex shall be liable to each
other for any breach of the representations, warranties and covenants
contained herein which results in any loss or expense to the other
party, or in a failure to perform any obligations under this Agreement;
provided however that, the remedy in connection with such reach or
failure to perform under this Agreement, shall be limited to (a) the
return of the respective securities originally transferred by the
parties hereto pursuant to this Agreements and, (b) actual costs and
expenses, including legal fees, not to exceed $25,000.
11. Limitation on Sale of Shares
Flex and the Company mutually agree that, until the first anniversary
hereof, they will sell not more than Two Hundred Thousand (200,000) of
the respective shares in any five (5) consecutive business days.
12. Option to Repurchase
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 on 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 it 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 "blind trust or other type of trust which satisfies the requirements
of the subject gaming regulatory body.
13. Miscellaneous
A. Authority. The officers of the Company and Flex executing this
Agreement are duly authorized to do so and each party has
taken all action required by law or otherwise to properly and
legally execute this Agreement.
B. Notices. Any notice under this Agreement shall be deemed to
have been sufficiently given if sent by registered or
certified mail, postage prepaid, addressed as follows:
To Flex: Flexweight Corp.
0000 Xxxxxxx Xxx
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
The Company: NuOasis International, Inc.
00 Xxxxxxxxx Xxxxxx, Xxx XX-00000
Xxxxxx, Bahamas
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With Copy to: NuOasis International, Inc.
0000 XxxXxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to any other address which may hereafter be designated by
either party by notice given in such manner. All notices shall
be deemed to have been given as of the date of receipt.
C. 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.
D. Severability. If a court of competent jurisdiction determined
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.
E. Assignment. The parties hereto acknowledge that the Flex
Shares are to be acquired by the Company as Replacement
Property, as such term is defined in the Agreement of Exchange
date the 30th of September, 1996 between the Company and C/A/K
Trustkantoor N.V. ("C/A/K") and that this Agreement will be
assigned to C/A/K who shall deliver the Resorts or, in the
event of death or incapacity, on the parties hereto, their
heirs, executors, administrators and successors.
F. Applicable Law. This Agreement has been negotiated and is
being contracted for in the Commonwealth of the Bahamas, it
shall be governed by the laws of the Bahamas, notwithstanding
any conflict-of-law provision to the contrary.
G. Attorney's Fees. If any legal action or other preceeding
(non-exclusively including arbitration) is brought for the
enforcement of or to declare any right or obligation under
this Agreement or as a result of a breach, default or
misrepresentation in connection with any of the provisions of
his Agreements, or otherwise because of a dispute among the
parties hereto, the prevailing party will be entitled to
recover actual attorney's fees (including for appeals and
collection) and other expenses incurred in such action or
proceeding, in addition to any other relief to which such
party may be entitled.
H. No Third Party Beneficiary. Nothing in this Agreement,
expressed or implied, is intended to confer upon any person,
other than the parties hereto and their successors, any rights
or remedies under or by reason of this Agreement, unless this
Agreement specifically states such intent.
I. Counterparts. It is understood and agreed that this Agreement
may be executed in any number of identical counterparts, each
of which may be deemed an original for all purposes.
J. Further Assurances. At any time after the Closing, each party
hereto will execute such additional instruments and take such
action as may be reasonably requested by the other party to
confirm or perfect title to the Warrants to be transferred
hereunder, or otherwise to carry out the intent and purposes
of this Agreement.
K. Broker's or Finder's Fee: Expenses. Flex and the Company each
warrant that they have not incurred any liability, contingent
or otherwise, for brokers' or finders' fees or commissions
relating to this Agreement for which the other party shall
have responsibility. Except as otherwise provided herein, or
mutually agreed between the parties in writing prior to
closing, all fees, costs and expenses incurred by either party
relating to this Agreement shall be paid by the party
incurring same.
L. Confidentiality. Except as may be required by Flex under
applicable United State federal or state securities rules and
regulations, neither party shall disclose the contents of this
Agreement to any person or entity, including, but not limited
to the public or the media provided, however: (I) that the
Company may make such disclosures of this Agreement to persons
whose third party consents are necessary for purposes of
closing this transaction, and (ii) that the Flex may make such
disclosures of this Agreement to any federal, state or local
agency which Flex, in its sole discretion, deems necessary to
know of nay or all of the terms of this Agreement and to any
persons whose third party consents are necessary for purposes
of closing this transaction.
M. 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.
N. 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.
O. Facsimile. 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.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed the day and year first above written.
The "Company"
NuOasis International Inc.
By:/s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: President
"Flex"
Flexweight Corp.
By:/s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: President
