EXHIBIT 10.164
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (which together with the attached
exhibits, are referred to herein as "Agreement") is entered into this 1st day of
March 1996, by and between NuOasis Gaming Inc., a Delaware corporation (the
"Company") and the shareholders of National Pools Corporation, a California
corporation ("NPC"), who agree to become parties to this Agreement ("Selling
Shareholders") evidenced by their signatures hereto.
WHEREAS, the Selling Shareholders wish to sell and the Company desires
to purchase the NPC Shares in exchange for a series of Secured Convertible
Promissory Notes in the aggregate principal amount of $1,200,000, upon the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of and in reliance on the mutual
promises and representations and warranties contained in this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Selling Shareholders and the Company agree as follows:
1. Definitions
1.1 "Associate" means with respect to any person, (I) any member of
the immediate family of such person, (ii) any entity of which
such person, or any member of the immediate family of such
person, directly or indirectly, owns any equity interest, (iii)
any entity of which such person, or any member of the immediate
family of such person, serves as a director or executive officer,
and (iv) any entity that directly or indirectly controls, or that
is directly or indirectly controlled by or under common control
with, such person or any member of the immediate family of such
person.
1.2 "Company Disclosure Documents" means the Company Financials (as
defined herein), material agreements and corporate documents, and
other information related to the Company material to its
operations for the three (3) fiscal years ending September 30,
1995, and any and all interim data or filings through the date
hereof to be provided by the Company pursuant to this Agreement,
including but not limited to the Company Financials (as defined
herein) and other information required pursuant to the provisions
of the Securities Exchange Act of 1934 (the " '34 Act") or the
Securities Act of 1933, as amended (the "'33 Act") as listed in
Exhibit "C" to this Agreement.
1.3 "Liabilities" means liabilities, obligations, or commitments of
any nature, absolute, accrued, contingent, or otherwise, known or
unknown, whether matured or unmatured.
1.4 "NPC Shares" means all the issued and outstanding shares of
National Pools Inc., a California corporation, comprising
33,324,684 shares of No Par value common stock or such number of
shares as is delivered.
1.5 "New Company Shares" means shares of common stock in the Company
issued after the effectiveness of the one-for-five (1 for 5)
reverse stock split, defined in paragraph 6.4.
1.6 "NPC Disclosure Documents" means the NPC Financials (as defined
in Section 5.4 herein) and the documents listed in Exhibit "D" to
this Agreement.
1.7 NPC Assets means assets (excluding the books and records of the
Selling Shareholders), properties, leases, contracts, agreements,
and rights of NPC of every type and description, real, personal,
and mixed, tangible and intangible, including without limitation,
all cash on hand and in banks, trade accounts receivable, other
accounts receivable, deposits, prepaid
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items, furniture and fixtures, office equipment and supplies,
real property and improvements, leases and leasehold
improvements, trademarks, including the Hit-LottoTM, 1-800 Hit
LottoTM, and 1-900 Hit LotttoTM trademarks and Hit-Lotto Value
Card deferred pre-operating costs, other tangible properties, and
its business as a going concern, goodwill and proprietary
computer software operating system, as contained in the NPC
Financials and more fully described in Exhibit "B" hereto.
1.8 "Person" means any individual, corporation, professional
corporation, limited partnership, association, or any other legal
entity through which an individual or business might organize
himself or itself.
1.9 "Subsidiary" means any corporation, joint venture, or other
entity in which either the Company, the Selling Shareholders, or
any other person directly or indirectly own any voting or equity
interest.
1.10 "Tax" or "Taxes" mean any federal, state, local, or foreign
income, gross receipts, profits, franchise, doing business,
transfer, sales, use, payroll, occupation, real or personal
property, excise and similar taxes (including interest,
penalties, or additions to such taxes).
1.11 "Tax Returns" or "Tax Reports" mean all returns, reports,
estimates, information returns, and statements of any nature with
respect to Taxes.
2. Purchase and Sale of NPC Shares
2.1 Purchase and Sale. Upon the terms and subject to the conditions
of this Agreement, on the Closing Date, as defined in Paragraph
3.1, the Selling Shareholders agree to sell and transfer the NPC
Shares to the Company and the Company agrees to purchase the NPC
Shares for the consideration set forth in this Agreement.
2.2 Purchase Price. In exchange for the NPC Shares, the Company shall
issue and deliver to the Selling Shareholders:
2.2.1Secured Convertible Promissory Notes in the aggregate
principal amount of One Million, Two Hundred Thousand
Dollars ($1,200,000), together with a Security Agreement in
denominations and in the names of such Selling Shareholders
as they mutually agree and designate in writing at Closing.
The Notes may be convertible into a total of 75,000,000 New
Company Shares as follows:
(A) For every $250,000 of net operating income reported by
NPC under generally accepted accounting principles
after the Closing, $4,000 in principal amount of the
Notes may be converted into 250,000 New Company Shares.
Note conversions shall occur annually following the
issuance of audited financial statements. The
conversion features are set forth on page 2 of the
Notes.
2.2.2Two Hundred Thousand (200,000) New Company Shares in such
denominations as Selling Shareholders shall designate prior
to the Closing.
2.3 Adjustment to Purchase Price. In the event one or more of the
Selling Shareholders listed on the signature page hereof are
unable to deliver any of the NPC Shares, the aggregate principal
amount of the Notes and New Company Shares shall be decreased by
the percentage of NPC Shares which cannot be delivered at
Closing.
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3. Closing
3.1 Date and Place. The closing of the delivery and transfer of the
NPC Shares (the "Closing") shall occur on a date ("Closing Date")
to be mutually agreed upon by the Selling Shareholders and the
Company after (I) exchange of all books, records, financial
information, documents, and other materials reasonably deemed
necessary to completion of the transaction contemplated under
this Agreement and (ii) completion of all review periods, as
provided for in this Agreement. Exchange of documents under this
Agreement shall begin as soon as possible after execution. In any
case, the Closing Date shall be no later than December 31, 1996,
and the effective date of this transaction shall be the date of
Closing (the "Effective Date").
3.2 Transactions and Document Exchange at Closing. At the Closing,
the following transactions shall occur and documents shall be
exchanged, all of which shall be deemed to occur simultaneously:
(A) By the Selling Shareholders. The Selling Shareholders will
deliver, or cause to be delivered, to the Company:
(1) The documents necessary to transfer the NPC Shares to
the Company pursuant to this Agreement, in proper form
and substance reasonably acceptable to the Company;
(2) The Certificate of Representations and Warranties
executed by the President of NPC, as defined in
Paragraph 7.1;
(3) The opinion of counsel as set forth in Paragraph 7.6;
(4) Such other documents, instruments, and/or certificates,
if any, as are required to be delivered pursuant to the
provisions of this Agreement, or which are reasonably
determined by the parties to be required to effectuate
the transactions contemplated in this Agreement, or as
otherwise may be reasonably requested by the Company in
furtherance of the intent of this Agreement;
(5) Audited financial statements of NPC dated as of its
most recent month end prior to the Closing Date
covering all operations since the inception of NPC.
Such financial statements shall be audited by an
international certified public accounting firm. If
audited financial statements are not available,
alternatively Selling Shareholders shall deliver all
books and records of NPC to the extent available and
necessary to perform such audit in accordance with
Regulation S-X, which books and records shall present
fairly the financial condition and results of
operations of NPC since inception, in accordance with
generally accepted accounting principles applied on a
basis consistent with prior accounting periods.
(6) A certificate dated within 30 days of the Closing Date
from the Secretary of State of California to the effect
that NPC is in good standing in the State of
California;
(7) All federal and state income payroll tax and sales tax
returns filed by NPC and all correspondence related
thereto;
(8) The denominations and names for issuance of the Notes.
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(B) By the Company. The Company will deliver, or cause the
following to be delivered, to the Selling Shareholders:
(1) The Notes, as calculated according to Paragraph 2.2 and
2.3;
(2) Stock certificate(s) in the name of the Selling
Shareholders aggregating 200,000 New Company Shares.
(3) The Company Certificate of Representations and
Warranties, as defined in Paragraph 6.1;
(4) A certificate dated at or within 30 days of the date of
the Closing from the Secretary of state of Delaware to
the effect that the Company is a corporation duly
organized, validly existing, and in good standing under
the laws of the State of Delaware;
(5) The opinion of counsel as set forth in Paragraph 6.7;
(6) Such other documents, instruments, and/or certificates,
if any, as are required to be delivered pursuant to the
provisions of this Agreement, or which are reasonably
determined by the parties to be required to effectuate
the transactions contemplated in this Agreement, or as
otherwise may be reasonably requested by the Selling
Shareholders in furtherance of the intent of this
Agreement.
3.3 Post-Closing Documents. From time to time after the Closing, upon
the reasonable request of any party, the party to whom the
request is made shall deliver such other and further documents,
instruments, and/or certificates as may be necessary to more
fully vest in the requesting party the consideration provided for
in this Agreement or to enable the requesting party to obtain the
rights and benefits contemplated by this Agreement, including but
not limited to delivery of records of all books and records of
NPC since inception.
4. Representations and Warranties of the Company
The Company represents and warrants to the Selling Shareholders that:
4.1 Organization and Authority. The Company is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Delaware, with the corporate power and
authority to carry on its business as now being conducted. The
execution and delivery of this Agreement and the consummation of
the transactions contemplated in this Agreement have been, or
will be prior to closing, duly authorized by all requisite
corporate actions on the part of the Company. This Agreement has
been duly executed and delivered by the Company and constitutes
the valid, binding, and enforceable obligation of the Company.
4.2 Ability to Carry Out Agreement. To the best of the Company's
knowledge and belief, the execution and performance of this
Agreement will not violate, or result in a breach of, or
constitute a default in, any provisions of applicable law, any
agreement, instrument, judgment, order or decree to which the
Company is a party or to which the Company is subject. No
consents of any persons under any contract or agreement required
to be disclosed pursuant to this Agreement are required for the
execution, delivery, and performance by the Company of this
Agreement.
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4.3 The Notes. The Notes to be issued pursuant to this Agreement will
be issued at Closing, free and clear of liens, claims, and
encumbrances, and the Company has all necessary right and power
to issue the Notes to the Selling Shareholders as provided in
this Agreement without the consent or approval of any person,
firm, corporation, or governmental authority.
4.4 Capitalization of the Company. The capitalization of the Company
is, as of the date hereof, comprised of Thirty Million
(30,000,000) shares of authorized $.01 par value common stock of
which no more than Twenty Nine Million, Nine Hundred Thousand
(29,900,000) shares are issued and outstanding, and One Million
(1,000,000) shares of $.01 par value preferred stock of which One
Hundred Seventy Thousand (170,000) shares of 14% Cumulative Class
A Preferred Stock and Two Hundred Fifty Thousand (250,000) shares
of Class B Preferred Stock are issued and outstanding. The
Company has certain warrants to purchase common stock issued and
outstanding consisting of 1,530,000 New Class A Warrants
exercisable at $.50 per share; 3,080,000 New Class B Warrants
exercisable at $.75 per share; 1,510,000 New Class C Warrants
exercisable at $1.00 per share; and 6,000,000 New Class D
Warrants to purchase common stock, each New Class D Warrant
entitling the holder thereof to purchase two common shares at a
purchase price of $.50 per share. 1,325,193 warrants to purchase
shares of common stock are exercisable at .21875 per share are
also outstanding and held by a former executive officer.
Additionally, the Company has approximately 6,375,000 shares
reserved for issuance under incentive and non-qualified stock
options granted to past and present officers, directors,
employees and consultants. All issued and outstanding shares are
legally issued, fully paid, and non-assessable, and are not
issued in violation of the preemptive or other right of any
person.
4.5 Financial Information. The Company has provided to the Selling
Shareholders, or will provide prior to Closing, copies of its
Annual Report on Form 10-K and/or 10-KSB for the three (3) years
ending at or prior to September 30, 1995 and the interim
quarterly financial statement on Form 10-QSB for the quarters
ended December 31, 1994, March 31, 1995 and June 30, 1995. The
quarterly financial statements and such Annual Reports, and all
other information included in such reports, shall be referred to
as the "Company Financials". The Company has no obligations or
liabilities (whether accrued, absolute, contingent, liquidated or
otherwise, including without limitation any tax liabilities due
or to become due) which are not fully disclosed and adequately
provided for in the Company Financials, excepting current
liabilities incurred and obligations under agreements entered
into in the usual and ordinary course of business since the date
of the Company Financials, none of which (individually or in the
aggregate) are material except as expressly indicated in the
Company Financials. The Company is not a guarantor or otherwise
contingently liable for any material amount of such indebtedness.
Except as indicated in the Company Financials or the Company
Disclosure Documents, there exists no default under the
provisions of any instrument evidencing such indebtedness or of
any agreement relating thereto.
4.6 Litigation. To the best knowledge and belief of the Company,
except as disclosed in the Company Disclosure Documents or
Company Financials or pursuant to this Agreement, there is
neither pending nor threatened, any action, suit or arbitration
to which its property, assets or business is or is likely to be
subject and in which an unfavorable outcome, ruling or finding
will or is likely to have a material adverse effect on the
condition, financial or otherwise, or properties, assets,
business or operations, which would create a material liability
on the part of the Company, or which would conflict with this
Agreement or any action taken or to be taken in connection with
it.
4.7 Tax Matters. The Company has filed or will file 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 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.
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4.8 Contracts. Except as disclosed pursuant to this Agreement, or in
the Company Disclosure Documents, there are no contracts, actual
or contingent obligations, agreements, franchises, license
agreements, or other commitments between the Company and the
Company or other third parties which are material to the
business, financial condition, or results of operation of the
Company, taken as a whole. For purposes of the preceding
sentence, the term "material" refers to any obligation or
liability which by its terms calls for aggregate payments of more
than $50,000.
4.9 Material Contract Breaches; Defaults. To the best of the
Company's knowledge and belief, except as disclosed in the
Company Financials, it has not materially breached, nor has it
any knowledge of any pending or threatened claims or any legal
basis for a claim that it has materially breached, any of the
terms or conditions of any agreements, contracts, or commitments
to which it is a party or is bound and which might give rise to a
claim by anyone against the Company Shares. To the best of its
knowledge and belief, the Company is not in default in any
material respect under the terms of any outstanding contract,
agreement, lease, or other commitment which might give rise to a
claim against the Company Shares, and there is no event of
default or other event which, with notice or lapse of time or
both, would constitute a default in any material respect under
any such contract, agreement, lease, or other commitment which
might give rise to a claim against the Company Shares in respect
of which the Company has not taken adequate steps to prevent such
a default from occurring.
4.10 Securities Laws. The Company is a public company and represents
that, to the best of its knowledge, except as disclosed in the
Company Disclosure Documents, or except as disclosed in Company
Financials, it has no existing or threatened liabilities, claims,
lawsuits, or basis for the same with respect to its original
stock issuance to its founders, its initial public offering, any
other issuance of stock, or any dealings with its stockholders,
the public, the brokerage community, the SEC, any state
regulatory agencies, or other persons. The Company is required to
file periodic reports under Section 12(g) of the '34 Act. The
Company represents that all reports required to be filed pursuant
to the '34 Act and any applicable U.S. state "Blue Sky" laws have
been filed.
4.11 Brokers. The Company has not agreed to pay any brokerage fees,
finder's fees, or other fees or commissions with respect to the
transactions contemplated in this Agreement which could give rise
to a claim against the New Company Shares, NPC Shares or the
Notes, or any portion thereof. To the best of the Company's
knowledge, no person or entity is entitled, or intends to claim
that it is entitled, to receive any such fees or commissions in
connection with such transactions. The Company further agrees to
indemnify and hold harmless the other parties to this Agreement
against liability to any broker claiming to act on behalf of the
Company.
4.12 Approvals. Except as otherwise provided in this Agreement, 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 the Company in connection with the
execution, deliver, or performance of this Agreement.
4.13 Full Disclosure. The information concerning the Company, set
forth in this Agreement, and in the Company Disclosure Documents,
is, to the best of the Company's 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.
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4.14 Date of Representations and Warranties. Each of the
representations and warranties of the Company set forth in this
Agreement is true and correct at and as of the Closing Date, with
the same force and effect as though made at and as of the Closing
Date, except for changes permitted or contemplated by this
Agreement.
5. Representations and Warranties of the Selling Shareholders
The Selling Shareholders represent and warrant to the Company that:
5.1 Organization and Authority. NPC is a corporation duly organized,
validly existing and in good standing under the laws of the State
of California, with the power and authority to carry on its
business as now being conducted. In addition, NPC is duly
qualified to do business in each jurisdiction in which the nature
of its business requires it to be so qualified, except to the
extent that the failure to so qualify does not have a material
adverse effect on the business of NPC, taken as a whole. The
execution and delivery of this Agreement and the consummation of
the transactions contemplated in this Agreement have been, or
will be prior to closing, duly authorized by all requisite action
on the part of NPC as required, or otherwise, to the extent, if
any, that such authorizations are necessary. This Agreement has
been duly executed and delivered by NPC and constitutes the
valid, binding, and enforceable obligation of NPC, subject to
equitable principles and laws of bankruptcy and similar laws.
5.2 Ability to Carry out Agreement. To the best of the Selling
Shareholders' knowledge and belief, the execution and performance
of this Agreement will not violate, or result in a breach of, or
constitute a default in, any provisions of applicable law, any
agreement, instrument, judgment, order or decree to which NPC is
a party or to which NPC is subject, other than such violations,
breaches, or defaults which, singly or in the aggregate, do not
have a material adverse effect on its business as a whole or on
the enforceability or validity of this Agreement. No consents of
any persons under any contract or agreement required to be
disclosed or disclosed pursuant to this Agreement are required
for the execution, delivery, and performance by the Selling
Shareholders of this Agreement.
5.3 Capitalization of NPC. As of the date of execution of this
Agreement, the capitalization of NPC is comprised of one class of
capital stock consisting of Thirty Five Million (35,000,000)
shares of No Par value common stock, of which 33,324,684 shares
were issued and are presently outstanding and held, of record, by
the Selling Shareholders in the amounts opposite their names on
the signature page hereto. All of the issued and outstanding
shares are duly authorized, validly issued, fully paid, and have
been offered, issued, sold, and delivered by NPC in material
compliance with all applicable federal and state securities laws.
5.4 Financial Information. The Selling Shareholders have provided to
the Company, or will provide prior to Closing, financial
statements of NPC for all fiscal years ended since the inception
of NPC and reports for such interim periods ending since the
latest fiscal year ended, and such other documents and
information relating to NPC's current financial condition
including but not limited to its purchase, operation and
disposition, if any, of any NPC assets and liabilities. Such
financial statements and other financial information shall be
referred to as the "NPC Financials". If not audited, the Selling
Shareholders represent that all financial statements and reports
included in the NPC Financials have been prepared from the books
and records of NPC (subject to normal year-end adjustments) and
present fairly the financial condition of NPC and the results of
their operations for the periods therein specified, all in
accordance with generally accepted accounting principles applied
on a basis consistent with prior accounting periods. Except as
set forth in the NPC Financials, NPC has no obligations or
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liabilities (whether accrued, absolute, contingent, liquidated or
otherwise, including without limitation any tax liabilities due
or to become due) which are not fully disclosed and adequately
provided for, excepting current liabilities incurred and
obligations under agreements entered into in the usual and
ordinary course of business since September 30, 1995, none of
which (individually or in the aggregate) are material. NPC is not
a guarantor or otherwise contingently liable for any material
amount not disclosed in the NPC Financials, nor does there exist
any default under the provisions of any instrument evidencing any
indebtedness of NPC or of any agreement relating thereto.
5.5 Conduct of Business. Since September 30, 1995, except as
disclosed in the NPC Disclosure Documents, NPC has not (i)
discharged or satisfied any liens other than those securing, or
paid any obligation or liability other than, current liabilities
shown on the NPC Financials and current liabilities incurred
since the date of the NPC Financials, in each case in the usual
or ordinary course of business, (ii) mortgaged, pledged or
subjected to lien any of their tangible or intangible assets
(other than purchase money liens incurred in the ordinary course
of business for such assets not yet paid for), (iii) sold,
transferred or leased any of their assets except in the usual and
ordinary course of business, (iv) canceled or compromised any
material debt or claim, or waived or released any right of
material value, (v) suffered any physical damage, destruction or
loss (whether or not covered by insurance) materially adversely
affecting its properties, business or prospects, (vi) entered
into any transaction other than in the usual and ordinary course
of business, except as contemplated by this Agreement, (vii)
encountered any labor difficulties or labor union organizing
activities, (viii) made or agreed to any wage or salary increase
or entered into any employment agreement, (ix) issued or sold any
securities or granted any options with respect thereto, except as
disclosed pursuant to this Agreement, (x) amended its Articles of
Incorporation, (xi) agreed to declare or pay any distributions
with respect to their outstan ding capital stock, or (xii)
suffered or experienced any change in, or condition affecting,
the condition (financial or otherwise) of their properties,
assets, liabilities, business, operations or prospects, other
than changes, events or conditions in the ordinary course of
their business none of which has (individually or in the
aggregate) been materially adverse, except as disclosed in the
NPC Financials or Disclosure Documents.
5.6 Litigation. To the best knowledge and belief of NPC, except as
disclosed in the NPC Disclosure Documents, there is neither
pending nor threatened, any action, suit or arbitration to which
NPC's property, assets or business is or is likely to be subject
and in which an unfavorable outcome, ruling or finding will or is
likely to have a material adverse effect on the condition,
financial or otherwise, or properties, assets, business or
operations of NPC, or create any material liability on the part
of NPC or conflict with this Agreement or any action taken or to
be taken in connection herewith.
5.7 Tax Matters. NPC has filed all federal, state and local income,
payroll and sales tax returns and reports which are due or
required to be filed by it, and, except as disclosed in the NPC
Disclosure Documents, has paid, or made adequate provision for
the payment of, all taxes, interest, penalties, 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 tax returns and
reports. Such federal and state income, payroll and sales tax
returns, to the best of the Selling Shareholders' knowledge and
belief, have not been audited and are not being audited by any
governmental authority.
5.8 Contracts and Options. Except as disclosed in the NPC Disclosure
Documents, there are no contracts, actual or contingent
obligations, agreements, franchises, license agreements, or other
commitments to which NPC is a party or by which it or any of its
properties or assets are bound which are material to the
business, financial condition, or its results of operation. For
purposes of the preceding sentence, the term "material" refers to
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any obligation or liability which by their terms calls for
aggregate payments of more than $10,000. Xxx XxXxx holds an
option to purchase 3,700,000 NPC Shares.
5.9 Material Contract Breaches; Defaults. Except as disclosed by the
NPC Financials or as reserved for therein, to the best of their
knowledge and belief of the Selling Shareholders, NPC has not
materially breached, nor have they any knowledge of any pending
or threatened claims or any legal basis for a claim that NPC has
materially breached, any of the terms or conditions of any
agreements, contracts, or commitments to which they are a party
or is bound and which are material to the business, financial
condition, or results of operation of NPC, taken as a whole.
Except as disclosed by the NPC Financials or as reserved for
therein, to the best of their knowledge and belief, neither the
Selling Shareholders nor NPC are not in default in any material
respect under the terms of any outstanding contract, agreement,
lease, or other commitment which is material to the business,
operations, properties, assets, or condition of NPC, and there is
no event of default or other event which, with notice or lapse of
time or both, would constitute a default in any material respect
under any such contract, agreement, lease, or other commitment in
respect of which NPC has not taken adequate steps to prevent such
a default from occurring.
5.10 Selling Shareholders. Exhibit "F" hereto accurately sets forth
the identity of and their relationship with NPC, and the names,
and titles of the persons serving as directors and officers of a
Selling Shareholder, if any such Selling Shareholder is a
corporation.
5.11 Employee and Labor Matters. The NPC Disclosure Documents
accurately set forth the names, positions, and annual salary of
each person employed by NPC, including officers, whose annual
salary including bonuses exceeds Ten Thousand Dollars ($10,000).
Except as disclosed in the NPC Disclosure Documents, NPC has no
employment agreement that cannot be cancelled on thirty (30) days
notice, or collective bargaining agreement covering any of its
employees and has encountered no material labor difficulties. The
NPC Disclosure Documents also set forth a complete and accurate
list of all employee benefit plans, including all profit sharing,
bonus, stock, pension, or similar plans to which NPC is a party
or by which NPC is bound. The Selling Shareholders will deliver
or cause to be delivered to the Company prior to Closing complete
and correct copies of all the agreements, plans, or other written
materials identified in the NPC Disclosure Documents. There is no
existing default by NPC under any of the agreements, plans, or
arrangements identified in the NPC Disclosure Documents, and
there exists no condition or circumstance which, with notice or
lapse of time or both, would constitute such a default. Except as
disclosed in the NPC Disclosure Documents, there is no pending or
threatened labor dispute, strike, slowdown, or work stoppage, no
unfair labor practice pending against NPC before the National
Labor Relations Board, NPC is not engaged in any unfair labor
practice, and there is no grievance or arbitration proceeding
pending against, or threatened to be asserted or commenced
against NPC under any collective bargaining agreement or other
labor contract. All Taxes relating to NPC which NPC is required
by law to withhold or collect have been duly withheld or
collected and have been timely paid over to the proper
authorities to the extent due and payable.
5.12 Real Properties. Except as disclosed pursuant to this Agreement,
NPC has good and marketable fee simple title to all of the real
properties owned by it, including without limitation those
reflected in the NPC Financials, free and clear of any liens or
encumbrances except for current local property taxes not yet
payable and any utility or other easements that do not and will
not affect operations upon or about such real properties or the
economic value or marketability thereof.
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5.13 Other Properties and Equipment. Except as disclosed pursuant to
this Agreement, NPC has good title, subject to no security
interests, liens, encumbrances, or claims of others, to all
structures, facilities, machinery and equipment, supplies, raw
materials, vehicles, tools, parts, office equipment, furniture,
furnishings, and all items of personal property and equipment in,
at, on or about such real properties owned or leased by it, or
used or necessary in its operations or business, including
without limitation those reflected in the NPC Financials. All
such structures, facilities, equipment, machinery, vehicles and
tools are in reasonably good operating condition and repair and
are sufficient to enable NPC to carry on its operations.
5.14 Trademarks. Except for the Hit-LottoTM, 1-800 Hit LottoTM, and
1-900 Hit LotttoTM trademarks or as disclosed in the NPC
Disclosure Documents, (i) NPC does not own or use any trademark,
service xxxx, trade name, copyright or patent, or any
registration or application for registration of any of the
foregoing, and (ii) to the best of NPC's knowledge and belief, it
has not infringed or is infringing upon any trademark, service
xxxx, trade name, copyright, or patent that is owned or used by
any other person.
5.15 Leaseholds and Executory Contracts. Except as disclosed pursuant
to this Agreement, each and every lease or executory contract to
which NPC is a party is valid and enforceable. NPC has not
received any notice of default by it under the terms of any such
lease or executory contract which default remains uncured, and it
is not in material breach or default by them under the terms of
any such lease or executory contract.
5.16 Investments. NPC has provided, or will provide to the Company,
prior to Closing, a complete and accurate description of the NPC
Assets, including but not limited to a list of all investments of
NPC, which accurately sets forth the nature of NPC's interest or
ownership in each investment and, if applicable, the
jurisdictions in which the respective investments have been
incorporated, organized, and currently doing business. Except for
the entities identified on the list to be provided to the
Company, there is no corporation, limited partnership, limited
partnership, joint venture, association, trust, or other entity
or organization which NPC directly or indirectly controls or in
which NPC directly or indirectly owns any equity interest or any
other interest.
5.17 Permits. Except as disclosed pursuant to this Agreement, NPC has
obtained and maintained in full force and effect all franchises,
permits, certificates, authorizations, licenses and other similar
authority required by law or governmental regulations from all
applicable federal, state or local authorities and any other
regulatory authorities, which are necessary for the conduct of
its business as now being conducted by it and as planned to be
conducted, and it is not in default or noncompliance in any
material respect under any of such franchises, permits,
certificates, authorizations, licenses or other similar
authority.
5.18 Compliance with Laws, Rules, Etc. The capitalization, business
and operations of NPC is and has been conducted in compliance
with all applicable federal, state, and local laws, rules and
regulations, and it is not in violation of any terms of any
mortgage, indenture, contract, agreement, instrument, judgment,
decree, order, statute, rule or regulation to which it is
subject, except to the extent any violation or noncompliance
would not materially and adversely affect its business,
operations, properties, assets, or financial condition, except to
the extent that any violation or noncompliance would not result
in the incurring of any material liability. Further, NPC not been
notified by any regulatory or governmental authority that it is
now in violation of any law, rule, regulation, ordinance, or
order.
5.19 Conflict of Interest Transactions. Except as disclosed in the NPC
Disclosure Documents, no past or present shareholder or employee
of NPC, or any affiliate, and no Associate of any past or present
shareholder or employee of NPC or any affiliate, (i) is indebted
[NUOGAM\AGR:NPCSTKPR.AGR]-5
to, or has any financial, business, or contractual relationship
or arrangement with NPC or any affiliate, (ii) has any direct or
indirect interest in any property, asset, or right which is owned
or used by NPC or any affiliate, or (iii) has been directly or
indirectly involved in any transaction with NPC or any affiliate.
5.20 Corporate Records. Copies of all corporate books and records,
including but not limited to stock transfer ledgers, and any
other documents and records of NPC will be provided to the
Company at Closing. All such records and documents are complete,
true, and correct.
5.21 Banking Records. A true, correct, and complete list of the names
of each bank in which NPC has an account and the names of all
persons authorized to draw thereon will be delivered to the
Company as part of the NPC Disclosure Documents; NPC has no safe
deposit box.
5.22 Brokers. NPC has agreed to pay brokerage fees, finder's fees, or
other fees or commissions with respect to the transactions
contemplated in this and other Agreements to Xxxxxx X. Xxxxx and
Xxxxx Xxxxx and/or Public Gaming Research Institute Inc. To the
best of NPC's knowledge, no other person or entity is entitled,
or intends to claim that they are entitled, to receive any such
fees or commissions in connection with such transactions. NPC and
the Selling Shareholders further agree to indemnify and hold
harmless the Company against liability to any other broker
claiming to act on behalf of NPC.
5.23 Approvals. Except as otherwise provided in this Agreement, to the
best knowledge and belief of the Selling Shareholders, 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 the Selling Shareholders or NPC in
connection with the execution, delivery, or performance of this
Agreement.
5.24 Full Disclosure. The information concerning NPC set forth in this
Agreement, in the NPC Disclosure Documents, and in the NPC
Financials is, to the best of the Selling Shareholders' 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.
5.25 Date of Representations and Warranties. Each of the
representations and warranties of the Selling Shareholders set
forth in this Agreement are joint and several, and are true and
correct at and as of the Closing Date, with the same force and
effect as though made at and as of the Closing Date, except for
changes permitted or contemplated by this Agreement.
6. Conditions Precedent to Obligations of the Selling Shareholders
All obligations of the Selling Shareholders under this Agreement are
subject to the fulfillment, prior to or as of the Closing Date, of each
of the following conditions:
6.1 Representations and Warranties. The representations and
warranties by the Company set forth in this Agreement shall be
true and correct at and as of the Closing Date, with the same
force and effect as though made at and as of the Closing Date,
except for changes permitted or contemplated by this Agreement.
The Company shall deliver on the Closing Date a certificate to
this effect, referred to as the Company Certificate of
Representations and Warranties.
6.2 No Breach or Default. The Company shall have performed and
complied with all covenants, agreements, and conditions required
by this Agreement to be performed or complied with by it prior to
or at the Closing.
[NUOGAM\AGR:NPCSTKPR.AGR]-5
6.3 Action to Pay Purchase Price. The Company shall have taken all
corporate and other action necessary to issue and deliver the
Notes representing the Purchase Price to the Selling Shareholders
pursuant to this Agreement.
6.4 Reverse Split. The Company agrees to take the necessary corporate
action to effect the 1 share for 5 share reverse split ("Reverse
Split"), which shall apply to all currently issued and
outstanding Company common stock. Selling Shareholders
acknowledge the Company must hold a Shareholders' Meeting to
approve the Reverse Split prior to implementation of the Reverse
Split and prior to issuance of New Company Shares to Selling
Shareholders.
6.5 Company Disclosure Documents. Before Closing, the Company will
have delivered to the Selling Shareholders, or caused the
delivery of, the Company Disclosure Documents.
6.6 Approval of Other Instruments and Documents by the Selling
Shareholders. All instruments and documents delivered to the
Selling Shareholders pursuant to the provisions of this Agreement
shall be reasonably satisfactory to their legal counsel.
6.7 Opinion of Counsel. The Company shall have delivered to the
Selling Shareholders an opinion of counsel dated the Closing Date
to the effect that:
(A) The Company is duly organized, validly existing, and in good
standing under the laws of the United States, State of
Delaware.
(B) The Company has the corporate power to conduct business and,
specifically, to carry on its business as now being
conducted and is duly qualified to do business in the United
States, State of California.
(C) All corporate actions and director approvals have been
properly obtained and completed by the Company, to the
extent, if any, that they are necessary, for all actions
required under this Agreement prior to Closing.
(D) This Agreement has been duly authorized, executed, and
delivered by the Company and is a valid and binding
obligation of the Company and, in this regard, the Company
shall provide the Selling Shareholders at Closing with a
certified copy of the resolution or resolutions of the Board
of Directors of the Company, approving and authorizing the
issuance by the Company of the Notes upon the terms and
conditions herein set forth.
7. Conditions Precedent to Obligations of the Company
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:
7.1 Representations and Warranties. The representations and
warranties executed by the President of NPC on behalf of the
Selling Shareholders set forth in this Agreement shall be true
and correct at and as of the Closing Date, with the same force
and effect as though made at and as of the Closing Date, except
for changes permitted or contemplated by this Agreement. The
Selling Shareholders shall cause to be delivered on the Closing
Date the certificate to this effect, referred to in this
Agreement as the Certificate of Representations and Warranties
executed by the President and Chief Executive Officer of NPC.
7.2 No Breach or Default. The Selling Shareholders shall have
performed and complied with all covenants, agreements, and
conditions required by this Agreement to be performed or complied
with by them prior to or at the Closing.
[NUOGAM\AGR:NPCSTKPR.AGR]-5
7.3 Action to Transfer NPC Shares. The Selling Shareholders shall
have taken all action necessary to transfer the NPC Shares to the
Company pursuant to this Agreement. In this regard, the
conveyance(s) of the NPC Shares shall contain such good and
sufficient stock powers, and other good and sufficient
instruments of sale, conveyance, transfer, and assignment, in
form and substance reasonably satisfactory to the Company's
counsel and with all requisite documentary stamps, if any,
affixed, as shall be required or as may be appropriate in order
effectively to vest in the Company's good, indefeasible, and
marketable title to the NPC Shares free and clear of all liens,
mortgages, conditional sales, and other title retention
agreements, pledges, assessments, covenants, restrictions,
reservations, easements, and all other encumbrances of every
nature.
In addition to the conveyance and delivery of the NPC Shares, the
Selling Shareholders shall have taken all action necessary to
deliver all of NPC's corporate books and records, including but
not limited to its files, documents, papers, agreements,
formulas, books of account, and records pertaining to its
business, and evidence of compliance with the California
Corporations Code with respect to its securities, if required and
requested by the Company's counsel.
7.4 NPC Financials. Before Closing, the Selling Shareholders will
have delivered the NPC Financials and all NPC Disclosure
Documents to the Company. The NPC Disclosure Documents shall
specifically include income statements related to the operations
of NPC's business interests up to and including December 31,
1995.
7.5 Approval of Other Instruments and Documents by the Company. All
instruments and documents delivered to the Company pursuant to
the provisions of this Agreement shall be reasonably satisfactory
to the Company and its legal counsel.
7.6 Opinions, Affidavits and Declarations by the Selling
Shareholders. The Selling Shareholders shall have delivered to
the Company evidence reasonably satisfactory to the Company, and
their counsel and auditors, dated as at the Closing Date, that:
(A) NPC is duly organized, validly existing, and in good
standing under the laws of California and that the NPC
Shares are free and clear of any and all liens, encumbrances
or contingent liabilities except as disclosed pursuant to
this Agreement.
(B) NPC has the corporate power to carry on its business as now
being conducted and is duly qualified to do business in
California and in any other jurisdiction where required or
where the non-qualification to do business would have a
material adverse affect on the value of its business.
(C) All action and approvals required in connection to the
transfer of the NPC Shares to the Company have been properly
taken, completed or obtained by the Selling Shareholders, to
the extent, if any, that they are necessary.
(D) This Agreement has been duly authorized, executed, and
delivered by the Selling Shareholders and is a valid and
binding obligation of the Selling Shareholders.
[NUOGAM\AGR:NPCSTKPR.AGR]-5
8. Covenants and Agreements of the Selling Shareholders
Up to and including the Closing Date, the Selling Shareholders covenant
that:
8.1 Access and Information. After the execution of this Agreement,
the Selling Shareholders will cause NPC to permit the Company to
have reasonable access to all information necessary to verify the
representations and warranties made herein. After the Closing,
the Selling Shareholders will cause NPC to continue to permit the
Company access to such additional documentation and information
as is reasonably necessary to completion of the transactions
contemplated under this Agreement.
8.2 Conduct of Business as Usual. Up until the Closing Date, the
Selling Shareholders shall insure that NPC's operations shall be
conducted only in the usual and ordinary course, and that no
change will be made to such operations which might adversely
affect the value of the NPC Shares to be transferred to the
Company.
8.3 Best Efforts. The Selling Shareholders shall use their best
efforts to fulfill all conditions of the Closing including the
timely solicitation of affirmative consent of all third parties
necessary to effect a Closing under this Agreement.
8.4 Assent to Sale of NPC Shares. In the event the sale of NPC Shares
is consummated, then each of the Selling Shareholders agrees to
such sale and waives, surrenders, and agrees not to exercise any
rights which such Selling Shareholders might have to purchase any
NPC Shares or have NPC redeem any NPC Shares.
9. Covenants and Agreements of the Company
Up to and including the Closing Date, the Company covenants that:
9.1 Change in the Company Directors. The Company's Board of Directors
currently consists of five (5) seats four of which are vacant. At
Closing, the Company agrees that two (2) of the four (4) vacant
seats on the Company's Board may be filled by two (2) new
directors to be chosen by the Selling Shareholders. The parties
acknowledge by separate agreement Gaming Solutions International
will designate one director to fill one of the other two (2) of
such four (4) vacancies. In the event Gaming Solutions
International does not complete the transaction specified by
separate agreement, then Xxxx Xxxxxxx'x XX, Inc. shall be
entitled to designate one director instead of Gaming Solutions
International. Neither NuOasis management nor its Board shall
recommend the election of any new outside director or other
candidate to fill a subsequently created seat on the Board unless
such candidate has been approved by the NPC representatives or
the Board or the Selling Shareholders as a group, such consent
not to be unreasonably withheld or delayed.
9.2 Maintenance of Capital Structure. Up until the Closing Date, or
termination hereof, whichever is the earlier, except for the
reverse split or as disclosed herein or required under the terms
of this Agreement, no change shall be made in the Articles of
Incorporation or Bylaws of the Company, or the authorized capital
stock of the Company.
9.3 Avoidance of Distributions. Up until the Closing Date, the
Company shall not declare any dividends, make any payments or
distributions to its stockholders or purchase for cash or redeem
any of its shares of capital stock.
9.4 Access and Information. After the execution of this Agreement,
the Company will permit the Selling Shareholders to have
reasonable access to all information necessary to verify the
representations and warranties of the Company. After the Closing,
[NUOGAM\AGR:NPCSTKPR.AGR]-5
the Company will continue to permit the Selling Shareholders
access to such additional documentation and information regarding
the Company as is reasonably necessary to completion of the
transactions contemplated under this Agreement.
9.5 Best Efforts. The Company shall use its best efforts to fulfill
or obtain the fulfillment of all conditions of the Closing.
10. Termination
10.1 Termination without Cause This Agreement may be terminated at any
time prior to the Closing Date without cost or penalty to either
party:
(A) Mutual Consent. By mutual consent of the Selling
Shareholders and the Company.
(B) Actions or Proceedings. By the Selling Shareholders or the
Company, (unless the action or proceeding referred to is
caused by a breach or default on the part of the Selling
Shareholders or the Company of any of their representations,
warranties, or obligations under this Agreement), if there
shall be any actual or threatened action or proceeding by or
before any court or any other governmental body which shall
seek to restrain, prohibit, or invalidate the transactions
contemplated by this Agreement and which, in the judgment of
the Selling Shareholders or the Company, made in good faith
and based upon the advice of legal counsel, makes it
inadvisable to proceed with the transactions contemplated by
this Agreement.
(C) Less than 80% of NPC Shares Participate. By the Company, if
less than 80% of the outstanding shares of NPC are tendered
to the Company at the Closing.
10.2 Termination with Cause
This Agreement may be terminated, with the terminating party to
be reimbursed by the other party of all expenses and costs
related to this Agreement, if:
(A) Breach or Noncompliance by the Selling Shareholders. The
Selling Shareholders shall fail to comply in any material
aspect with any of their representations, warranties, or
obligations under this Agreement, or if any of the
representations or warranties made by the Selling
Shareholders, or any one of them, under this Agreement shall
be inaccurate in any material respect.
(B) Breach or Noncompliance by the Company. The Company shall
fail to comply in any material aspect with any of its
representations, warranties, or obligations under this
Agreement, or if any of the representations or warranties
made by the Company under this Agreement shall be inaccurate
in any material respect.
11. Securities Registration; Disclosure
11.1 Private Transaction. The Selling Shareholders understand that the
Notes issued pursuant to this Agreement, have not been nor will
they be registered under the Securities Act of 1933 as amended
("'33 Act"), but are issued pursuant to exemptions from
registration including but not limited to Regulation D and
Section 4(2) of the '33 Act, and the Company's reliance on such
exemptions in issuing the Notes is predicated in part on the
representations of the Selling Shareholders set forth herein and
in the Investment Letter attached hereto as Exhibit "E" (the
"Investment Letter"), to be executed by each of the Selling
Shareholders and delivered to the Company at Closing.
[NUOGAM\AGR:NPCSTKPR.AGR]-5
11.2 Access to Information. Each of the Selling Shareholders
represents that, by virtue of their respective economic
bargaining power or otherwise, he/she has had access to or have
been furnished with, prior to or concurrently with Closing, the
same kind of information that would be available in a
registration statement under the '33 Act should registration of
the Notes issued pursuant to this Agreement have been necessary,
and that they have had the opportunity to ask questions of and
receive answers from the Company's officers and directors, or any
party acting on their behalf, concerning the business of the
Company and that they have had the opportunity to obtain any
additional information, to the extent that the Company possesses
such information or can acquire it without unreasonable expense
or effort, necessary to verify the accuracy of information
obtained or furnished by the Company.
12. Indemnification
As provided herein, the Selling Shareholders and the Company shall each
indemnify and hold harmless the other for one (1) year following the
date of Closing under this Agreement against and in respect of any
liability, damage, or deficiency, all actions, suits, proceedings,
demands, assessments, judgments, costs and expenses resulting from any
misrepresentations, breach of covenant or warranty, or from any
misrepresentation contained in any certificate furnished hereunder. In
this regard, the Selling Shareholders agree that the Company is held
harmless from and indemnified against any loss, damage, or expense
resulting from the falsity or breach of any of the representations,
warranties, or agreements of the Selling Shareholders contained herein
under which the Notes hereunder are transferred to the Selling
Shareholders. The Company's right of indemnification shall be limited
exclusively to the right of offset of any loss, damages and expenses
incurred against sums due Selling Shareholders under the Notes.
13. Covenant Not to Compete
13.1 Each Selling Shareholder agrees that for a period of five (5)
years from and after the date of the Closing, he will not, unless
acting with the Company's prior written consent, directly or
indirectly, own, manage, operate, join, control, or participate
in the ownership, management, operation, or control of, or be
connected as an officer, employee, partner, or otherwise with,
any business engaged in the business of organizing or managing a
pooled betting scheme or lottery debit cards and related
activities within the United States, except any Selling
Shareholder may own not more than five percent (5%) of the common
stock of any company whose stock is traded in any stock exchange
or over-the-counter. The Selling Shareholders agree that the
remedy at law for any breach of the foregoing will be inadequate
and that the Company and NPC shall be entitled, inter alia, to
temporary and permanent injunctive relief without the necessity
of proving actual damage to the Company or NPC.
13.2 In consideration of the Selling Shareholders' agreement not to
compete set forth in subparagraph 13.1 above, but regardless of
whether or not such agreement is legally enforceable (and
regardless of whether or not any stockholder remains in life or
remains as custodian), the Company has agreed to grant the
Selling Shareholders the option to convert any and all principal
and interest accruing under the Notes into New Company Shares as
set forth herein and in the Notes.
14. Right of Set-Off
In the event that the Selling Shareholders incur any liability under
this Agreement to the Company over and above the limitations herein
provided, the Company shall allocate such liability among such Selling
Shareholders pro rata in accordance with their respective stock, and
shall then have the right to set off such proportionate liability
against the principal amount due to such Selling Shareholder(s) under
the Notes. The rights of the Company to indemnification shall be
limited exclusively to the right of set-off, but shall not in any
event exceed the amount of $1,200,000 plus any accrued interest.
[NUOGAM\AGR:NPCSTKPR.AGR]-5
15. Right to Transfer or Liquidate NPC and Substitute Collateral
The Selling Shareholders specifically agree that the Company shall be
entitled at any time after the Closing to transfer any and all of the
NPC Shares to any person, firm, or entity, including, but not limited
to a corporation controlled by or affiliated with the Company, provided
that no such transfer shall in any way relieve the Company of its
obligations under this Agreement or under the terms of the Notes. In
the event of any such transfer, the transferee shall be authorized to
liquidate and dissolve NPC. In such event the New Company Shares shall
be substituted as collateral for the NPC Assets liquidated as to which
a security interest is granted to the Selling Shareholders under the
terms of the Notes, a copy of which is attached as Exhibit "A". In the
event of any such transfer and dissolution, the parties specifically
agree to execute or cause to be executed as reasonably requested by any
other party from time to time such instruments and documents as may be
necessary in order to carry out and effectuate the purposes of this
Agreement and particularly of this paragraph 15.
16. Confidential Information
Notwithstanding any termination of this Agreement, the Company, NPC and
the Selling Shareholders, and their representatives, agree to hold in
confidence any information not generally available to the public
received by them from the Company, NPC or the Selling Shareholders
pursuant to the terms of this Agreement. If this Agreement is
terminated for any reason, the Company, NPC and the Selling
Shareholders and their representatives will continue to hold such
information as to NPC in confidence and will, to the extent requested
by the Selling Shareholders, promptly return to them all written
material and all copies or abstracts thereof furnished to the Company,
NPC and the Selling Shareholders pursuant hereto. Notwithstanding any
termination of this Agreement, the Selling Shareholders and their
representatives agree to hold in confidence any information not
generally available to the public received by them from the Company
pursuant to the terms of this Agreement. If this Agreement is
terminated for any reason, the Selling Shareholders and their
representatives will continue to hold such information in confidence
and will, to the extent requested by the Company, promptly return to
the Company all written material and all copies or abstracts thereof
given to them or their representatives pursuant thereto.
17. Conditions Subsequent to Closing
In the event the Reverse Split defined in paragraph 6.4 is not
implemented by the Closing, the parties to this Agreement may elect to
proceed with the Closing in which event the Company shall, as soon as
legally permitted, cause the Shareholders' Meeting to be held and the
Reverse Split approved and implemented, and the 200,000 New Company
Shares set forth in paragraph 2.2.2 delivered to Selling Shareholders.
18. Miscellaneous Provisions
18.1 Survival of Representations and Warranties. All representations,
warranties, and covenants made by any party in this Agreement
shall survive the Closing hereunder and the consummation of the
transactions contemplated hereby for three (3) years from the
Closing Date. The Selling Shareholders and the Company are
executing and carrying out the provisions of this Agreement in
reliance on the representations, warranties, and covenants and
agreements contained in this Agreement or at the Closing of the
transactions herein provided for including any investigation upon
which they might have made or any representations, warranty,
agreement, promise, or information, written or oral, made by the
other party or any other person other than as specifically set
forth herein.
[NUOGAM\AGR:NPCSTKPR.AGR]-5
18.2 Approval of the Selling Shareholders. The Company and the Selling
Shareholders understand that this Agreement requires approval and
participation by a majority of the Selling Shareholders holding
at least 80% of the NPC Shares, and thus that all rights and
obligations hereunder are subject to securing such approval. Each
Selling Shareholder, by its execution hereof, hereby gives its
consent to the transaction contemplated by this Agreement. In the
event that the requisite number of Selling Shareholders shall
fail to approve this Agreement, then notwithstanding anything
contained herein to the contrary, this Agreement shall be
terminated without liability to either the Selling Shareholders
or the Company.
18.3 Costs and Expenses. Subject to paragraph 10 herein, all costs and
expenses in the proposed sale and transfer described in this
Agreement shall be borne by the Selling Shareholders and the
Company in the following manner:
(A) Attorneys Fees and Costs. Each party has been represented by
its own attorney(s) in this transaction, shall pay the fees
of its own attorney(s), except as may be expressly set forth
herein to the contrary.
(B) Costs of Closing. Each party shall bear its reasonable share
of all other Closing costs and expenses arising from this
Agreement.
18.4 Further Assurances. At any time and from time to time, after the
effective date, each party will execute such additional
instruments and take such action as may be reasonably requested
by the other party to confirm or perfect title to any property
transferred hereunder or otherwise to carry out the intent and
purposes of this Agreement.
18.5 Waiver. Any failure of any party to this Agreement to comply with
any of its obligations, agreements, or conditions hereunder may
be waived in writing by the party to whom such compliance is
owed. The failure of any party to this Agreement to enforce at
any time any of the provisions of this Agreement shall in no way
be construed to be a waiver of any such provision or a waiver of
the right of such party thereafter to enforce each and every such
provision. No waiver of any breach of or non-compliance with this
Agreement shall be held to be a waiver of any other or subsequent
breach or non-compliance.
18.6 Notices. All notices and other communications hereunder shall
either be in writing and shall be deemed to have been given if
delivered in person, sent by overnight delivery service or sent
by facsimile transmission, to the parties hereto, or their
designees, as follows:
To the Selling Shareholders: As their names and addresses
appear on the signature page
hereto
To the Company: NuOasis Gaming Inc.
0 Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
18.7 Headings. The paragraph and subparagraph headings in this
Agreement are inserted for convenience only and shall not affect
in any way the meaning or interpretation of this Agreement.
18.8 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.
[NUOGAM\AGR:NPCSTKPR.AGR]-5
18.9 Governing Law. This Agreement shall be governed by the laws of
the United States, State of California.
18.10Binding Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties, their respective
heirs, administrators, executors, successors, and assigns.
18.11Entire Agreement. This Agreement contains the entire agreement
between the parties hereto and supersedes any and all prior
agreements, arrangements, or understandings between the parties
relating to the subject matter of this Agreement. No oral
understandings, statements, promises, or inducements contrary to
the terms of this Agreement exist. No representations,
warranties, covenants, or conditions, express or implied, other
than as set forth herein, have been made by any party.
18.12Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full
force and effect.
18.13Amendment. This Agreement may be amended only by a written
instrument executed by the parties or their respective successors
or assigns.
18.14Facsimile Counterparts. A facsimile, telecopy or other
reproduction of this Agreement may be executed by one or more
parties hereto and such executed copy may be delivered by
facsimile of 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 Agreement as well as any facsimile, telecopy or other
reproduction hereof.
18.15Time is of the Essence. Time is of the essence of this Agreement
and of each and every provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
"Company"
NUOASIS GAMING INC.
a Delaware corporation
By: /s/ Xxxx X. Xxxx
----------------------------------
Name: Xxxx X. Xxxx
"Selling Shareholders"
/s/ Xxxxxxx Xxxxxxxx
/s/ Xxxxx Xxxxxx
[NUOGAM\AGR:NPCSTKPR.AGR]-5
/s/ Xxxxxx, Eng, Linn & Xxxxxxx,
a Law Corporation
/s/ Xxxxxxx Xxxxxxx, Xx.
/s/ Xxxx Xxxxxxxxx
/s/ Xxxxxx Xxxxxxxxx
/s/ Xxxx Xxxxxx
/s/ Xxxxxxx Burgers
/s/ Xxxxx Xxxxxxxxx
/s/ Xxxxxxx Xxxxx
/s/ Xxxx Xxxxxxx
[NUOGAM\AGR:NPCSTKPR.AGR]-5
/s/ Xxxx Xxxxxxx
/s/ Xxxxxxx Xxxxxxx
/s/ Dell'Oca Trust
/s/ Xxxxx Xxxxxxx
/s/ Xxxx Xxxxx
/s/ Xxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxx
/s/ Drake Heslip
/s/ Xxxx Xxxxxx
/s/ Xxxxxx Xxxxxx
[NUOGAM\AGR:NPCSTKPR.AGR]-5
/s/ Xxxxxx Trust
/s/ Xxxxxx Xxxx
/s/ Xxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxx
/s/ Xxxxx Xxxxx
/s/ Xxxxxx Xxxx
/s/ Xxxx Xxxx
/s/ Xxxxx Xxxx
/s/ Xxxxxxx Xxxxxxx
/s/ Xxxxx Xxxxx XxXxxx
[NUOGAM\AGR:NPCSTKPR.AGR]-5
/s/ Xxxx XxXxxx
/s/ Xxxxxx XxXxx
/s/ Xxxxx XxXxxx
/s/ Xxxxxxxx Xxxxxxxxxx
/s/ Xxxxxxx Xxxxxxxxxx
/s/ Xxx Xxxxxxxxxx
/s/ Xxxxxx Xxxxxxxxxx
/s/ Xxxxxx Xxxx Trust
/s/ Xxxxxx Xxxx
/s/ Xxxxxxxxx Xxxx
[NUOGAM\AGR:NPCSTKPR.AGR]-5
/s/ Xxx Xxxx
/s/ Xxxxx Xxxx
/s/ Xxxx Xxxxx
/s/ Xxxxxxx Xxxxx
/s/ Xxxxxxx Xxxx
/s/ Lane X. Xxxx
/s/ Xxxxxx Xxxxxxx
[NUOGAM\AGR:NPCSTKPR.AGR]-5
EXHIBIT "A"
to the
Stock Purchase Agreement
Dated December 19, 1996
NOTES
CONVERTIBLE SECURED PROMISSORY NOTE
U.S. $ January, 0000
Xxxxxx, Xxxxxxxxxx
FOR VALUE RECEIVED, NuOasis Gaming Inc., a corporation organized under
the laws of the United States, State of Delaware, with its principal place of
business in California ("Maker"), hereby promises to pay to , a former
shareholder of National Pools Inc., a California corporation ("Payee"or
"Holder") the principal sum of $( ) with principal and accrued interest at the
rate of eight percent (8%) per annum due and payable on February 28, 1998 (the
"Due Date"). This Convertible Secured Promissory Note (the "Note") is issued by
Maker pursuant to the Stock Purchase Agreement of even date (the "Purchase
Agreement").
To secure the payment of this Note, Maker hereby grants to the Holder
pursuant to a Security Agreement dated of even date between Maker and Holder a
security interest in the personal property set forth in Exhibit "A" hereto (the
"Collateral"). Upon default, the Holder may resort to any remedy against the
Collateral available to a secured party under the Uniform Commercial Code;
provided, however, that notwithstanding anything contained herein to the
contrary this Note is non-recourse and Holder may not maintain an action against
Maker.
All documents and instruments now or hereafter evidencing and/or
securing the indebtedness evidenced hereby or any part thereof, including but
not limited to this Note and the Security Agreement of even date, are sometimes
collectively referred to herein as the "Security Documents."
All agreements in this Note and all other Security Documents are
expressly limited so that in no contingency or event whatsoever, whether by
reason of acceleration of maturity of the indebtedness evidenced hereby or
otherwise, shall the amount agreed to be paid hereunder for the use, forbearance
or detention of money exceed the highest lawful rate permitted under applicable
usury laws. If, for any circumstance whatsoever, fulfillment of any provision of
this Note or any other Security Document at the time performance of such
provision shall be due shall involve exceeding any usury limit prescribed by law
which a court of competent jurisdiction may deem applicable hereto, then, ipso
facto, the obligations to be fulfilled shall be reduced to allow compliance with
such limit, and if, from any circumstance whatsoever, Payee shall ever receive
as interest an amount which would exceed the highest lawful rate, the receipt of
such excess shall be deemed a mistake and shall be canceled automatically or, if
theretofore paid, such excess shall be credited against the principal amount of
the indebtedness evidenced hereby to which the same may lawfully be credited,
and any portion of such excess not capable of being so credited shall be
refunded immediately to Maker. Maker and Payee affirm that the indebtedness
evidenced represents the total consideration for the Property being acquired by
Maker pursuant to the Purchase Agreement.
[NUOGAM\AGR:NPCSTKPR.AGR]-5
Maker shall pay to Payee all reasonable costs, expenses, charges,
disbursements and attorneys' fees incurred by Payee following an Event of
Default in collecting, enforcing or protecting this Note or any other Security
Document, whether incurred in or out of court, including appeals and bankruptcy
proceedings.
Maker utilizes the Collateral in any way to secure financing, Maker
agrees to pay the net proceeds of such financing to Payee to the extent of the
principal balance of the Note, and all accrued and unpaid interest, before
distributing any of such financing proceeds for other purposes.
Conversion Features of the Note
This Note is convertible, in whole or in part, into shares of the
Maker's common stock as hereinafter provided.
NPC's financial position shall be audited every year for the next ten
(10) years for the twelve months ending September 30. The audit shall be
performed by an internationally recognized independent public accounting firm.
Said audit shall be completed as soon as possible under the circumstances.
Following completion of the audit conversion features of this Note are
activated.
For the year ending September 30, 1996. At any time during the 15 days
following the release of audited year end financial statements by NPC, the
Company shall notify each Noteholder of the option to convert all or part of the
principal amount of the Note into New Company Shares based upon the following
formula. "For every $250,000 of net operating income reported by NPC under
generally accepted accounting principles after Closing, $4,000 in principal
amount of the Notes may be converted into 250,000 New Company Shares."(the
"Conversion Formula") All Noteholders as a group shall have the option but not
the obligation, to convert all or part of their Notes in accordance with the
Conversion Formula. Within 20 days after receiving notice, any Noteholder
desiring to convert all or part of the principal amount of his or her Note,
shall deliver to the secretary of the Company a written election to convert to
shares based upon the Conversion Formula. If the total amount specified in the
elections by Noteholders exceeds the amount available under the Conversion
Formula, then each Noteholder shall have priority, up to the dollar amount of
principal specified in his or her notice of election, to convert to shares, in
the same proportion that the amount of principal, that he or she holds, bears to
the total amount of principal eligible for conversion under the Conversion
Formula. Any eligible principal not converted on such a priority basis shall be
allocated in one or more successive allocations to those Noteholders electing to
convert more than the principal amount to which they have a priority right, up
to the amount of principal specified in their respective notices, in the
proportion that the amount of principal held by each of them bears to the
outstanding principal held by all of them. Further, if the Company has adequate
cash reserves, (i.e., more than $1,500,000 in cash) a Noteholder can request
payment in full instead of exercising the option to convert or waiting for the
Note to mature on February 28, 1998.
For the year ending September 30, 1997. At any time during the 15 days
following the release of audited year end financial statements by NPC, the
Company shall notify each Noteholder of the option to convert all or part of the
principal amount of the Note into New Company Shares based upon the following
formula. "For every $250,000 of net operating income reported by NPC under
generally accepted accounting principles after Closing, $4,000 in principal
amount of the Notes may be converted into 250,000 New Company Shares."(the
"Conversion Formula") All Noteholders as a group shall have the option but not
the obligation, to convert all or part of their Notes in accordance with the
Conversion Formula. Within 20 days after receiving notice, any Noteholder
desiring to convert all or part of the principal amount of his or her Note,
shall deliver to the secretary of the Company a written election to convert to
shares based upon the Conversion Formula. If the total amount specified in the
elections by Noteholders exceeds the amount available under the Conversion
Formula, then each Noteholder shall have priority, up to the dollar amount of
principal specified in his or her notice of election, to convert to shares, in
the same proportion that the amount of principal, that he or she holds, bears to
the total amount of principal eligible for conversion under the Conversion
Formula. Any eligible principal not converted on such a priority basis shall be
allocated in one or more successive allocations to those Noteholders electing to
[NUOGAM\AGR:NPCSTKPR.AGR]-5
convert more than the principal amount to which they have a priority right, up
to the amount of principal specified in their respective notices, in the
proportion that the amount of principal held by each of them bears to the
outstanding principal held by all of them.
For the years ending September 30 1998 through 2001. Any principal on
the Note outstanding as of February 28, 1998, at the election of the Noteholder
shall be paid in full by the Company or be placed into an earn out pool. The
earn out pool shall be created upon the surrender of the Note to the Company and
in lieu of payment. The earn out pool shall exist until the completion of the
annual audit of NPC for the year ending September 30, 2001 or full conversion of
all Note principal in accordance with the Conversion Formula, i.e. for every
$250,000 of net operating income reported by NPC under generally accepted
accounting principles after Closing, $4,000 in principal amount of the Notes may
be converted into 250,000 New Company Shares. Each Noteholder shall participate
in conversion based upon the proportion that the amount of principal held by
each of them in the earn out pool bears to the outstanding principal held by all
of them in the earn out pool.
Each of the following events or occurrences shall constitute an "Event
of Default" hereunder: (a) if default is made in the payment of any installment
hereunder, or of any monetary amount payable hereunder, under the terms of any
Security Document, or under the terms of any other obligation of Maker to Payee
hereunder, within thirty (30) days following the date the same is due; (b) if
default is made in the performance of any other promise or obligation described
herein, in any Security Document, or in any other document evidencing or
securing any indebtedness of Maker to Payee following thirty (30) days prior
notice to Maker of such default and the failure of Maker to cure such default
within said thirty (30) day period; (c) if Maker shall execute an assignment of
any of its property for the benefit of creditors, fail to meet any obligations
herein described, be unable to meet its debts as they mature, suspend its active
business or be declared insolvent by any court, suffer any judgment or decree to
be rendered against it in an amount greater than US$10,000, suffer a receiver to
be appointed for any of its property, voluntarily seek relief or have
involuntary proceedings brought against it under any provision now in force or
hereinafter enacted of any law relating to bankruptcy, or forfeit its charter,
dissolve, or terminate its existence; (d) if any writ of attachment, garnishment
or execution shall be issued against Maker; (e) if any tax lien be assessed or
filed against Maker; (f) if any warranty, representation or statement made or
furnished to Payee by or on behalf of Maker, including but not limited to any
information provided to Payee in conjunction with the Purchase Agreement.
Upon the occurrence of any Event of Default, which is not cured within
thirty (30) days after notice of such default is given by Payee or at any time
thereafter when any Event of Default may continue, Payee may, at its option and
in its sole discretion, declare the entire balance of this Note to be
immediately due and payable, and upon such declaration all sums outstanding and
unpaid under this Note shall become and be in default, matured and immediately
due and payable, without presentment, demand, protest or notice of any kind to
Maker or any other person, all of which are hereby expressly waived, anything in
this Note or any other Security Document to the contrary notwithstanding.
Payee and Maker hereby agree to trial by court and irrevocably agree to
waive jury trial in any action or proceeding (including but not limited to any
counterclaim) arising out of or in any way related to or connected with this
Note or any other Security Document, the relationship created thereby, or the
origination, administration or enforcement of the indebtedness evidenced and/or
secured by this Note or any other Security Document.
This Note has been delivered to Payee and accepted by Payee in the
State of California, and shall be governed and construed generally according to
the laws of said State except to the extent that creation, validity, perfection
or enforcement of any liens or security interests securing this Note are
governed by the laws of another jurisdiction. Venue of any action brought
pursuant to this Note or any other Security Document, or relating to the
indebtedness evidenced hereby or the relationships created by or under the
Security Documents shall, at the election of the party bringing the action, be
brought in a State or United States federal court of appropriate jurisdiction
located in or having jurisdiction over the State of California.
[NUOGAM\AGR:NPCSTKPR.AGR]-5
Maker and Payee each waives any objection to the jurisdiction of or venue in any
such court and to the service of process issued by such court and agrees that
each may be served by any method of process described in the State of California
or United States Federal Rules of Civil Procedure. Maker and Payee each waives
the right to claim that any such court is an inconvenient forum or any similar
defense.
If, in any jurisdiction, any provision of this Note shall, for any
reason, be held to be invalid, illegal, or unenforceable in any respect, such
holding shall not affect any other provisions of this Note, and this Note shall
be construed, to the extent of such invalidity, illegality or unenforceability
(and only to such extent) as if any such provision had never been contained
herein. Any such holding of invalidity, illegality or unenforceability in one
jurisdiction shall not prevent valid enforcement of any affected provision if
allowed under the laws of another relevant jurisdiction.
No waiver by the holder of any payment or other right under this Note
shall operate as a waiver of any other payment or right.
In the event Maker incurs any liability as a result of the breach of
any representations (or omission to state any material facts) made (or omitted)
by Payee or National Pools Corporation pursuant to the Purchase Agreement,
Maker's exclusive remedy shall be to offset against all sums due hereunder such
amounts it may deem necessary to fully indemnify it from any such liabilities.
As used in this Note, the term "person" shall include, but is not
limited to, natural persons, corporations, partnerships, trusts, joint ventures
and other legal entities, and all combinations of the foregoing natural persons
or entities, and the term "obligation" shall include any requirement to pay any
indebtedness and/or perform any promise, term, provision, covenant or agreement
included or provided for in this Note or any other Security Document.
This Note and any and all certificates issued in replacement thereof or
in exchange therefor, will bear a restrictive transfer legend in the following
form:
"The obligations represented by this certificate and right to acquire
shares of the Company's common stock contained herein, have not been
registered under the Securities Act of 1933 (the "Act") and are
"restricted securities" as that term is defined in Rule 144 under the
Act. Neither this debt instrument nor the shares for which this
obligation may be exchanged may be offered for sale, sold or otherwise
transferred except pursuant to an effective Registration Statement
under the Act or pursuant to an exemption from registration under the
Act, the availability of which is to be established to the satisfaction
of the Company."
Executed by the undersigned the year and day first above written.
NUOASIS GAMING INC.
By: /s/ Xxxx X. Xxxx
----------------------------------
Name: Xxxx X. Xxxx
[NUOGAM\AGR:NPCSTKPR.AGR]-5
EXHIBIT "A"
to the
Convertible Secured Promissory Note
dated December 19, 1996
THE COLLATERAL
The assets of National Pools Inc. described as follows:
Office Equipment
Software Order Processing System
The trade names of Hit-LottoTM 1-800 Hit LottoTM, and 1-900 Hit LottoTM
[NPC to provide detailed Asset descriptions]
[NUOGAM\AGR:NPCSTKPR.AGR]-5
SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is executed as of this day of
January, 1996, by NUOASIS GAMING INC. (hereinafter referred to as the "Debtor"),
with a place of business located at 0 Xxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx
00000, in favor of , its successors and assigns (hereinafter referred to as the
"Secured Party").
WHEREAS, the following recitals of fact are a material part of this
Agreement; and,
WHEREAS, Secured Party is granting credit to Debtor pursuant to a
Convertible Secured Promissory Note dated of even date which is required to be
secured by the real property described in Exhibit "A" to the Convertible Secured
Promissory Note (all of which documents and instruments evidencing and/or
securing indebtedness of Debtor to Secured Party are collectively referred to
herein, along with this Agreement, as the "Security Documents"). Secured Party
is unwilling to grant credit to Debtor unless Debtor grants to Secured Party the
security interest granted herein according to the terms and conditions hereof.
1. In consideration of the granting of credit to Debtor by Secured Party,
Debtor hereby grants to Secured Party a security interest (hereinafter
referred to as the "Security Interest") in the property described on
Exhibit "A" attached hereto and made a part hereof, whether now owned
or hereafter acquired, including all proceeds and products thereof and
additions and accessions thereto (hereinafter referred to as the
"Collateral"). This Agreement and the rights hereby granted shall
secure the following (hereinafter collectively referred to as the
"Obligations"):
A. Principal and Interest. The principal amount of Borrower's
indebtedness to Lender with interest thereon as specified in the
Security Documents and any other sums due under any Loan
Document, and any renewals, extensions or modifications thereof;
and
B. Expenses. The expense of all legal proceedings, including
attorneys' fees, brought by the Secured Party to enforce any Loan
Document executed by Debtor or this Agreement and all other costs
and expenses paid or incurred by the Secured Party in respect of
or in connection with the Collateral; and
C. Performance. The observance and performance by the Debtor of all
of the terms, provisions, covenants and obligations on its part
to be observed or performed under any Loan Document, this
Agreement; and
D. Other. Any and all indebtedness, obligations and liabilities of
any kind and nature of the Debtor to Secured Party, direct or
indirect, absolute or contingent, due or to become due, now
existing or hereafter arising.
2. Debtor's Warranties, Covenants and Agreements
Debtor hereby warrants, covenants and agrees that:
A. Purpose. The Collateral covered by this Agreement is used or
purchased for use primarily for business purposes. Although
proceeds of Collateral are covered by this Agreement, this shall
not be construed to mean that Secured Party consents to any sale
of the Collateral, except in ordinary course of business.
B. Transfer of Collateral Prohibited. Debtor will not, without
obtaining the prior written consent of Secured Party, transfer or
permit any transfer of the Collateral or any part thereof to be
made, or any interest therein to be created by way of a sale
(except as permitted above), or by way of a grant of a security
interest, or by way of levy or other judicial process.
[NUOGAM\AGR:NPCSTKPR.AGR]-5
C. Access and Inspection. Debtor will, at all reasonable times,
allow Secured Party or its representatives free and complete
access to all of the Debtor's records for such inspection and
examination as Secured Party deems necessary. Debtor shall also
upon request of Secured Party from time to time submit up-to-date
schedules of the items comprising the Collateral in such detail
as Secured Party shall require.
D. Third Party Claims. Debtor at its cost and expense will protect
and defend this Agreement, all of the rights of Secured Party
hereunder and the Collateral against the claims and demands of
all other parties. Debtor will promptly notify Secured Party of
any levy, distraint or other seizure by legal process or
otherwise of any part of the Collateral, and of any threatened or
filed claims or proceedings that might in any way affect or
impair any of the terms of the Agreement.
E. Insurance. Debtor at its expense will obtain and maintain in
force insurance policies including fire and flood insurance,
covering losses or damage to the Collateral. The insurance
policies to be obtained by Debtor shall be in form and amounts
acceptable to Secured Party. Secured Party is hereby irrevocably
appointed Debtor's attorney in fact to endorse any check or draft
that may be payable to the Debtor, alone or jointly with other
payees, so that the Secured Party may collect the proceeds
payable for any loss under such insurance. The proceeds of such
insurance, less any costs and expenses incurred or paid by the
Secured Party in the collection thereof, shall be applied in
Secured Party's sole discretion either toward the costs of the
repair or replacement of the items damaged or destroyed, or on
account of any sums secured hereby, whether or not then due or
payable.
F. Notices. Debtor will give Secured Party immediate written notice
of any change in location of Debtor's place of business.
3. Events of Default
The occurrence of any of the following events shall constitute and is
hereby defined to be an "Event of Default":
A. Breach of Security Agreement Any failure or neglect to observe or
perform any of the terms, provisions, promises, agreements or
covenants of this Agreement and the continuance of such failure
or neglect after notice thereof to the Debtor; or
B. Failure to Pay. Any failure of the Debtor to pay any installment
of principal and/or interest, or any other sum due under any Loan
Document within ten (10) days following the date such installment
became due and payable; or
C. False Statements. Any warranty, representation or statement
contained in this Agreement or otherwise made or furnished to the
Secured Party by or on behalf of the Debtor shall be or shall
prove to have been false when made or furnished; or
D. Destruction or Demise of Collateral. Any loss, theft, substantial
damage, destruction of, or the attachment of an encumbrance to
any of the Collateral, or the voluntary or involuntary transfer
of any of the Collateral (and said Collateral is not immediately
replaced, restored or returned) or the transfer of possession
thereof to anyone, or the sale, creation of a security interest,
lien, attachment, levy, garnishment, distraint, or other process
of, in or upon any of the Collateral, and if such attachment or
other similar process is not bonded or released within thirty
(30) days after levy.
[NUOGAM\AGR:NPCSTKPR.AGR]-5
E Breach of Conversion Rights. If the Debtor shall fail to honor
the Secured Party's conversion rights under the Note following
thirty (30) days prior notice to Debtor and following Secured
Party's compliance with all the procedures of Debtor for
conversion and the failure of Debtor to either tender the shares
issuable upon conversion or to notify Secured Party of additional
third party requirements (i.e. transfer agent) within said thirty
(30) day period.
4. Secured Party's Remedies
Upon the occurrence of any Event of Default hereunder, Secured Party
shall have the following rights and remedies:
A. Acceleration and Possession. Secured Party may, at its option,
declare all or any part of the Obligations immediately due and
payable and Debtor shall on demand by Secured Party deliver the
Collateral to the Secured Party. Secured Party may, without
further notice or demand and without legal process, take
possession of the Collateral wherever found and, for this
purpose, may enter upon any property occupied by or in the
control of Debtor.
B. All Remedies Available. Secured Party may pursue any legal remedy
available to collect all sums secured hereby and to enforce its
title in and right to possession of the Collateral, and to
enforce any and all other rights or remedies available to it, and
no such action shall operate as a waiver of any other right or
remedy of the Secured Party under the terms hereof or under
applicable law.
C. Waiver of Defenses. Debtor waives any requirements of
presentment, protest, notices of protest, notices of dishonor,
and all other formalities. Debtor waives all rights and/or
privileges it might otherwise have to require Secured Party to
proceed against or exhaust the Collateral encumbered hereby or by
any Loan Document or to proceed against any guarantor of the
Obligations or to pursue any other remedy available to Secured
Party in any particular manner or order under the legal or
equitable doctrine or principle of marshalling and/or suretyship
and further agrees that Secured Party may proceed against any or
all of the Collateral encumbered hereby or by any other Loan
Document in the event of default in such order and manner as
Secured Party in its sole discretion may determine. Any Debtor
that has signed this Agreement as a surety or accommodation
party, or that has subjected its property to this Agreement to
secure the indebtedness of another hereby expressly waives the
benefits of the provisions of any laws which could delay, defeat
or render more costly the Secured Party's realization upon the
Collateral, waives any defense arising by reason of any
disability or other defense of Debtor or by reason of the
cessation from any cause whatsoever of the liability of Debtor,
and waives the benefit of any statutes of limitation affecting
the enforcement hereof.
D. Sale of Collateral. Secured Party may sell all or any part of the
Collateral at public or private sale either with or without
having such Collateral at the place of sale, and with notice to
Debtor as provided herein. The proceeds of such sale, after
deducting therefrom all expenses of Secured Party in taking,
storing, repairing and selling the Collateral (including
attorneys' fees and court costs) shall be applied to the payment
of any part or all of the Obligations and any other indebtedness
or liability of Debtor to Secured Party, and any surplus
thereafter remaining shall be paid to any person that may be
legally entitled thereto. In the event of a deficiency between
such net proceeds from the sale of Collateral and the total
amount of Obligations owing by Debtor, Debtor will promptly upon
demand pay the amount of such deficiency to Secured Party.
[NUOGAM\AGR:NPCSTKPR.AGR]-5
E. Secured Party as Purchaser. At any sale, public or private, of
the Collateral or any part thereof, made in the enforcement of
the rights and remedies of Secured Party, Secured Party may
purchase any part or parts of the Collateral or all thereof
offered at such sale.
F. Notice of Sale. Secured Party shall give Debtor reasonable notice
of any sale or other disposition of the Collateral or any part
thereof. Debtor agrees that notice shall be conclusively deemed
to be reasonable and effective if such notice is mailed by
registered or certified mail postage prepaid, to Debtor at
Debtor's principal place of business at least ten (10) days prior
to such sale or other dispositions.
G. Applicable Law Remedies. Secured Party shall have all the rights
and remedies afforded a Secured Party under applicable law.
5. Miscellaneous Provisions
A. Waivers and Cumulative Remedies. No Event of Default hereunder by
Debtor shall be deemed to have been waived by Secured Party
except by a writing to that effect signed by Secured Party and no
waiver of any such Event of Default shall operate as a waiver of
any other Event of Default on a future occasion, or as a waiver
of that Event of Default after written notice thereof and demand
by Secured Party for strict performance of this Agreement. All
rights, remedies and privileges of Secured Party hereunder shall
be cumulative and not alternative, and shall, whether or not
specifically so expressed, inure to the benefit of the Secured
Party, its successors and assigns, and all obligations of the
Debtor shall bind its successors and legal representatives.
B. Debtor's Possession of Collateral. Until an Event of Default, the
Debtor may retain possession of the Collateral and may use it in
any lawful manner not inconsistent with this Agreement or with
the provisions of any policies of insurance thereon.
C. Waiver of Jury Trial. Secured Party and Debtor hereby agree to
trial by court and irrevocably waive jury trial in any action or
proceeding (including but not limited to any counterclaim)
arising out of or in any way related to or connected with this
agreement or any other Loan Document, the relationship created
thereby, or the origination, administration or enforcement of the
indebtedness evidenced and/or secured by this Agreement or any
other Loan Document.
D. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
E. Written Amendment Required. No modification, rescission, waiver,
release or amendment of any provision of this Agreement shall be
made except by a written agreement subscribed by Debtor and
Secured Party.
F. Full Force and Effect. This Agreement shall remain in full force
and effect until all of the indebtedness and any extensions or
renewals thereof shall be paid in full.
G. Successors and Assigns. Secured Party and Debtor as used herein
shall include the heirs, executors or administrators, or
successors or assigns of those parties. The provisions of this
Agreement shall apply to the parties according to the context
hereof and without regard to the number or gender of words and
expressions used herein.
[NUOGAM\AGR:NPCSTKPR.AGR]-5
H. Financing Statements. A carbon, photographic or other reproduced
copy of this Agreement and/or any financing statement relating
hereto shall be sufficient for filing and/or recording as a
financing statements. Notwithstanding the foregoing, Debtor shall
provide, shall execute and shall cooperate with Secured Party in
the execution and filing of such financing statements, documents
and instruments as Secured Party may reasonably request in order
to perfect the security interest granted to Secured Party
hereunder or otherwise to carry out the purposes of this
Agreement.
I. Governing Law. This Security Agreement and the transaction
evidenced hereby shall be construed under the laws of the State
of California, as the same may from time to time be in effect.
IN WITNESS WHEREOF, this Agreement has been executed and delivered on
behalf of and in the name of Debtor on the date indicated above.
"Debtor"
NUOASIS GAMING INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxx
----------------------------------
Name: Xxxx X. Xxxx
"Secured Party"
/s/ Secured Party
---------------------------------------
Secured Party
[NUOGAM\AGR:NPCSTKPR.AGR]-5
EXHIBIT "B"
to the
Stock Purchase Agreement
Dated December 19, 1996
NPC ASSETS
[NUOGAM\AGR:NPCSTKPR.AGR]-5
EXHIBIT "C"
to the
Stock Purchase Agreement
Dated December 19, 1996
COMPANY DISCLOSURE DOCUMENTS
[NUOGAM\AGR:NPCSTKPR.AGR]-5
EXHIBIT "D"
to the
Stock Purchase Agreement
Dated December 19, 1996
NPC DISCLOSURE DOCUMENTS
All filings made with the California Department of Corporations, and any and all
material agreements related to the NPC Shares, the Selling Shareholders and the
operations of NPC since inception through the date hereof, to be provided by the
Selling Shareholders pursuant to this Agreement.
[NUOGAM\AGR:NPCSTKPR.AGR]-5
EXHIBIT "E"
to the
Stock Purchase Agreement
Dated December 19, 1996
Form of
INVESTMENT LETTER
The Undersigned hereby represents to NuOasis Gaming Inc. ("NuOasis")
(1) The Secured Convertible Promissory Note of NuOasis (the "Note"), which
is being acquired by the Undersigned, is being acquired by the
Undersigned for the Undersigned's own account and for investment. Upon
conversion of the Notes into shares the Undersigned may be deemed an
affiliate of NuOasis and may be required to file Schedule 13-D and Form
3 pursuant to the requirements of the Securities Exchange Act of 1934
(the "Act").
(2) The Undersigned acknowledges that the Note is being issued by NuOasis
in reliance on exemptions from registration, including but not limited
to Section 4(2) of the Security Act of 1933, as amended (the " '33
Act") and applicable state securities laws, and the Undersigned agrees
not to sell, transfer or otherwise dispose of the Note except in
compliance with the '33 Act, and applicable state securities laws. The
representations and warranties by the Undersigned in this Investment
Letter will be used and relied upon by NuOasis to issue the Note to the
Undersigned pursuant to Section 4(2) of the '33 Act and Regulation D
thereunder, and applicable state securities laws, and the Undersigned
will notify NuOasis immediately of any material changes to the
representations made herein.
(3) The Undersigned acknowledges that it has been furnished with disclosure
documents which it feels adequate and necessary to make an economic
decision to acquire the Note, including but not limited to a copy of
NuOasis' most recent Annual Report on Form 10-KSB and all reports or
documents required to be filed under Sections 13(a), 14(a), and 15(d)
of the '34 Act, and quarterly reports on Form 10-QSB, Current Reports
on Form 8-K, and proxy statements (the "Disclosure Documents"). In
addition, the Undersigned has been furnished with a description of
NuOasis's capital structure and any material changes in NuOasis's
financial condition that may not have been disclosed in the Disclosure
Documents.
(4) The Undersigned further acknowledges that it has had an opportunity to
ask questions of and receive answers from duly designated
representatives of NuOasis concerning the terms and conditions pursuant
to which the Note is being purchased. The Undersigned has had the
opportunity to obtain any additional information which it possesses or
can acquire without unreasonable effort or expense necessary to verify
the accuracy of information furnished by NuOasis. The Undersigned has
been afforded an opportunity to examine such documents and other
information which it has requested for the purpose of verifying the
financial stability of NuOasis;
(5) The Undersigned is fully aware that there is no market for the Note.
The Undersigned is also aware of the applicable limitations on its
resale of any securities such as the Note, and that the Note, and any
and all certificates issued in replacement thereof or in exchange
therefore, will bear a restrictive transfer legend in the following
form:
[NUOGAM\AGR:NPCSTKPR.AGR]-5
"The obligations represented by this certificate and right to
acquire shares of the Company's common stock contained herein,
have not been registered under the Securities Act of 1933 (the
"Act") and are "restricted securities" as that term is defined
in Rule 144 under the Act. Neither this debt instrument nor
the shares for which this obligation may be exchanged may be
offered for sale, sold or otherwise transferred except
pursuant to an effective Registration Statement under the Act
or pursuant to an exemption from registration under the Act,
the availability of which is to be established to the
satisfaction of the Company."
(6) By reason of the Undersigned's knowledge and experience in financial
and business matters in general, and investments in particular, the
Undersigned is capable of evaluating the merits and bearing the
economic risks of an investment in the Note and fully understands the
speculative nature of the Note and the possibility of loss of the
Undersigned's entire investment in the securities used to acquire the
Note.
(7) The present financial condition of the Undersigned is such that it is
under no present or contemplated future need to dispose of any portion
of the Note to satisfy an existing or contemplated undertaking, need or
indebtedness.
Very truly yours,
[NUOGAM\AGR:NPCSTKPR.AGR]-5
EXHIBIT "F"
to the
Stock Purchase Agreement
Dated December 19, 1996
SELLING SHAREHOLDERS
Xxxxxxx Xxxxxxxx Xxxxx Xxxxxx & Xxxxxxx Xxxxxx Xxxxx XxXxxx
Xxxxx Xxxxxx Xxxxx Xxxxxx Xxxxxxxx Xxxxxxxxxx
Xxxxxx, Eng, Linn & Xxxxxxx, Xxxx Xxxxxx, a Law Corporation Xxxxxxx Xxxxxxxxxx
Xxxxxxx Xxxxxxx, Xx. Xxxxxx Xxxxxx Xxx Xxxxxxxxxx
Xxxx Xxxxxxxxx Xxxxxx Trust Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxxxx Xxxxxx Xxxx Xxxxxx Xxxx Trust
Xxxx Xxxxxx Xxxxx Xxxxxxx Xxxxxx Xxxx
Xxxxxxx Burgers Xxxxxx Xxxxxx Xxxxxxxxx Xxxx
Xxxxx Xxxxxxxxx Xxxxx Xxxxx Xxx Xxxx
Xxxxxxx Xxxxx Xxxxxx Xxxx Xxxxx Xxxx
Xxxx Xxxxxxx Xxxx Xxxx Xxxx Xxxxx
Xxxx Xxxxxxx Xxxxx Xxxx Xxxxxxx Xxxxx
Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxxx Xxxx
Dell'Oca Trust Xxxxx Xxxxx XxXxxx Xxxx X. Xxxx
Xxxxx Xxxxxxx Xxxx XxXxxx Xxxxxx Xxxxxxx
Xxxx Xxxxx Xxxxxx XxXxx
[NUOGAM\AGR:NPCSTKPR.AGR]-5
