EXHIBIT 10.7
WARRANT AGREEMENT
THIS WARRANT AGREEMENT effective the 19th day of October 1998, is
entered into by and between Flexweight Corporation, a Kansas corporation (the
"Company"), NuOasis International Inc., a corporation organized under the laws
of the Commonwealth of the Bahamas ("NuOasis") and the undersigned who, by their
execution hereof, agrees to serve as the agent for registration and transfer of
the Warrants (as defined below).
WHEREAS, the Company proposes to issue a class up to an aggregate of
Thirty Six Million (36,000,000) warrants (the "Warrants") to purchase shares of
its Common Stock (as hereinafter described), subject to adjustment as provided
herein (the shares of Common Stock issuable on exercise of the Warrants being
referred to herein as the "Warrant Shares"). The Warrants are being issued and
the Warrant Shares are hereinafter being reserved by the Company in connection
with that certain Asset Purchase Agreement dated August , 1998 ("Purchase
Agreement") between the Company, NuOasis and NuOasis Resorts Inc., a Nevada
corporation ("Resorts"), sole shareholder of NuOasis, pursuant to which the
Company is acquiring shares of capital stock of Cleopatra Palace Resort and
Casinos Limited, a UK corporation ("CPR") and the rights of NuOasis to the share
capital of NuOasis Resort & Casino N.V., a Netherlands Antilles corporation in
organization ("NRCNV"). The Purchase Agreement is attached hereto and
incorporated by reference herein as Exhibit "A"; and
WHEREAS, the Company has selected the current registrar ("Transfer
Agent") for its $ par value common stock (the "Common Stock") to serve as the
Warrant Agent, and by its signature below, the Warrant Agent is willing to act
in connection with the issuance, division, transfer,
exchange, redemption and exercise of Warrants and the Warrant Shares.
NOW, THEREFORE, for value received, the sufficiency and adequacy of
which is hereby acknowledged and accepted, and in consideration of the foregoing
and for the purposes of defining the terms and provisions of the Warrants, and
the respective rights and obligations hereunder of the Company and NuOasis (or
its transferees as the registered owners of the Warrants, collectively, the
"Holders"), the Company, NuOasis and the Warrant Agent hereby agree as follows:
1. Appointment of Warrant Agent
The Company hereby appoints the Warrant Agent to serve in accordance with
the instructions set forth in this Agreement, for the benefit of NuOasis
and the Company, and the Warrant Agent hereby accepts such appointment.
2. Registration, Transferability and Form of Warrant
2.1 Registration. The Warrants shall be numbered and shall be
registered in a Warrant register by the Warrant Agent as they are
issued. The Company and the Warrant Agent shall be entitled to
treat the Holder of any Warrant(s) as the owner in fact thereof
for all purposes, and shall not be bound to recognize any
equitable or other claim to or interest in such Warrant(s) on the
part of any other person.
2.2 Transferability. The Warrants shall be transferable by the Holders
upon notice and delivery of such transfer delivered to the Company
or the Warrant Agent at the respective address, properly endorsed by
the registered Holder or transferor, or their duly authorized
attorney or representative, and accompanied by proper evidence
succession, assignment or authority to transfer. In all cases of
transfer by an attorney, the original power of attorney, duly
approved by the Warrant Agent, or a copy thereof, duly notarized,
shall be deposited and remain with the Warrant Agent. In case of
transfer by executors, administrators, guardians or other legal
representatives, duly authenticated evidence of their authority
shall be produced, and may be required to be deposited and remain
with the Warrant Agent in its discretion. Upon any registration of
transfer, the Warrant Agent shall countersign and deliver a new
Warrant or Warrants to the persons entitled thereto.
2.3. Form of Warrant. The terms and conditions pursuant to which the
Warrants have been established and approved by the Company, and
Warrants are established pursuant to which the Warrants shall be
issued and available for future transfer, is set forth in the
resolutions adopted by the Company's Board of directors on behalf of
the Company effective October 19, 1998, copies of which resolutions
are available for inspection at the Company's principal office
during normal business hours, the language of which shall be set
forth a form of Warrant containing each certificate representing the
Warrants attached hereto as Exhibit "B"
The Warrants shall be dated as of October 19, 1998 notwithstanding
the date of countersignature thereof by the Warrant Agent or upon
division, exchange, substitution or transfer. Warrants shall be
numbered as follows: "ORI-XXXXX".
3. Countersignature of Warrants
The price to purchase each Warrant Share and the number of Warrant
Shares issuable upon exercise of each Warrant are subject to adjustment
upon the occurrence of certain events, all as hereinafter provided. The
Warrants shall each be executed on behalf of the Company by its
Chairman of the Board or President under its corporate seal reproduced
thereon and attested by its Secretary or an Assistant Secretary. The
signature of any such officers on the Warrants may be manual or
facsimile.
Warrants bearing the manual or facsimile signature of individuals who
were at any time the proper officers of the Company shall bind the
Company, notwithstanding that such individuals or any one of them shall
have ceased to hold such office prior to the delivery of such Warrants,
or did not hold such office on the date of this Agreement.
The Warrants shall be countersigned by the Warrant Agent (or any
successor to the Warrant Agent then acting as Warrant Agent under this
Agreement) and shall not be valid for any purpose unless so
countersigned. Warrants may be countersigned, however, by the Warrant
Agent (or by its successor as Warrant Agent hereunder) and may be
delivered by the Warrant Agent, notwithstanding that the persons whose
manual or facsimile signatures appear thereon as proper officers of the
Company shall have ceased to be such officers at the time of such
countersignature, issuance or delivery. Unless otherwise provided in
this Agreement, the Warrant Agent shall, upon written instruction of
the Chairman of the Board, President, or Secretary of the Company,
countersign, issue and deliver the Warrants which, according to the
terms hereof, shall entitle the Holders thereof to purchase in the
aggregate up to Thirty Six Million (36,000,000) shares of the Company's
Common Stock (subject to the conditions and set forth herein).
4. Exchange of Warrant Certificates
The certificate(s) representing a Warrant or Warrants may be exchanged
for another certificate or certificates entitling the Holder thereof to
purchase a like aggregate number of Warrant Shares as the certificate
or certificates surrendered then entitle such Holder to purchase. Any
Holder desiring to exchange a Warrant certificate or certificates shall
make such request in writing delivered to the Warrant Agent, and shall
surrender, properly endorsed, the certificate or certificates to be so
exchanged. Thereupon, the Warrant Agent shall countersign and deliver
to the person entitled thereto a new Warrant certificate or
certificates, as the case may be, as so requested.
5. Term of Warrants; Exercise of Warrants
5.1. Term of Warrants. Subject to the terms hereof, NuOasis and/or
the Holders shall have the right, which may be exercised
commencing the Effective Date of issuance and until September
30, 2003, to purchase from the Company the number of fully paid
and non-assessable Warrant Shares which NuOasis and/or the
Holder may at the time be entitled to purchase on exercise of
such Warrants.
5.2. Exercise of Warrants. Warrants may only be exercised for the
purchase of whole Warrant Shares. Warrants may be exercised
upon surrender of the certificate or certificates evidencing the
Warrants to be exercised (except as otherwise provided below),
or directly to the Company at its principal office together with
the form of election to purchase using the Warrant Exercise Form
attached hereto as Exhibit "C" (duly completed and signed and
accompanied by the payment of the Exercise Price (as defined in
and determined in accordance with the provisions hereof), for
the account of the Company for the number of Warrant Shares in
respect of which such Warrants are then exercised.
5.3 Transferability. The Warrants are freely transferable without
the prior consent or notice to the Company. If the Warrants are
assigned or transferred by NuOasis or a registered Holder,
unless such assignment or transfer is to a NuOasis Affiliate or
Subsidiary, or is the result of a corporate reorganization or
recapitalization of NuOasis, the Exercise Price for the Warrant
Shares must be paid in cash. In the event the Warrants are
retained by NuOasis, or are assigned or transferred to a NuOasis
Affiliate or Subsidiary, or are assigned or transferred as a
result of a corporate reorganization or recapitalization of
NuOasis, the Exercise Price may be paid in cash or by the
application of the surrender and cancellation of a pro rata
portion of the Notes (as defined in the Purchase Agreement), or
by the transfer by NuOasis of assets of pro rata value, the
valuation of which shall be subject to recognized independent
valuation experts.
The term "Affiliate" for the purposes of this Agreement shall
mean, as applied to any Person, (i) any other Person directly or
indirectly controlling, controlled by or under common control
with, that Person, (ii) any other Person that owns or controls
five percent (5%) or more of any class of equity securities
(including any equity securities issuable upon the exercise of
any Option) of that Person or any of its Affiliates, or (iii)
any member, director, partner, officer, agent, employee or
relative of such Person. For the purposes of this definition,
"control" (including with correlative meanings, the terms
"controlling", "controlled by", and "under common control with")
as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of
the management and policies of that Person, whether through
ownership of voting securities or by contract or otherwise.
The term "Subsidiary" for the purposes of the Agreement shall
mean, any Person in which Oasis, directly or indirectly,
beneficially owns more than fifteen percent (15%) of either the
equity interests in, or the voting control of, such Person.
Subject to Section 5 hereof, upon such surrender of Warrants and
payment of the Exercise Price, upon the exercise of such
Warrants, the Company shall issue and cause to be delivered with
all reasonable dispatch to or upon the written order of NuOasis
and/or the Holder, and in such name or names as NuOasis and/or
the Holder may designate, a certificate or certificates for the
number of full Warrant Shares so purchased together with cash,
as provided herein, in respect of any fractional Warrant Shares
otherwise issuable upon such exercise of Warrants. Such
certificate or certificates shall be deemed to have been issued
and any person so designated to be named therein shall be deemed
to have become a holder of record of such Warrant Shares as of
the date of the surrender of such Warrants and payment of such
Warrant Price, as set forth herein; provided, however, that if,
at the date of surrender of such Warrants and payment of such
Warrant Price, the transfer books for the Warrant Shares or
other class of stock purchasable upon the exercise of such
Warrants shall be closed, the certificates for the Warrant
Shares in respect of which such Warrants are then exercised
shall be issuable as of the date on which such books shall next
be opened and until such date the Company shall be under no duty
to deliver any certificate for such Warrant Shares. However,
that the transfer books of record, unless otherwise required by
law, shall not be closed at any one time for a period of longer
than twenty days. The rights of purchase represented by the
Warrants shall be exercisable, at the election of the Holders
thereof, either in full or from time to time in part, and in the
event that a certificate evidencing warrants is exercised in
respect of less than all of the Warrant Shares purchasable on
such exercise at any time prior to the date of expiration of the
Warrant, a new certificate evidencing the remaining Warrant or
Warrants will be issued, and the Warrant Agent is hereby
irrevocably authorized to countersign and to deliver the
required new Warrant certificate or certificates pursuant to the
provisions of this paragraph and otherwise set forth herein. The
Company, whenever required by the Warrant Agent, will supply the
Warrant Agent with Warrant certificates duly executed on behalf
of the Company for such purpose.
6. Payment of Taxes
The Company will pay all documentary stamp taxes, if any, attributable
to the initial issuance of Warrant Shares upon the exercise of
Warrants; provided, however, that the Company shall not be required to
pay any tax or taxes which may be payable in respect of any transfer
involved in the issue or deliver of any Warrants or certificates for
Warrant Shares in a name other than that of the registered Holder of
Warrants in respect of which such Warrant Shares are issued. Any and
all other taxes or assessments are the sole responsibility and
obligation of the Holder(s).
7. Mutilated or Missing Warrants
In case any of the certificates evidencing the Warrants shall be
mutilated, lost, stolen or destroyed, the Company may in its discretion
issue, and the Warrant Agent shall countersign and deliver in exchange
and substitution for and upon cancellation of the mutilated Warrant
certificate, or in lieu of and substitution for the Warrant certificate
lost, stolen or destroyed, a new Warrant certificate of like tenor and
representing an equivalent right or interest; but only upon receipt of
evidence satisfactory to the Company and the Warrant Agent of such
loss, theft or destruction of such Warrant and indemnity if requested,
also satisfactory to them. An applicant for such a substitute Warrant
certificate shall also comply with such other reasonable regulations
and pay such other reasonable charges as the Company or the Warrant
Agent may prescribe.
8. Reservation of Warrant Shares; Purchase and Cancellation of Warrants
8.1. Reservation of Warrant Shares. There have been reserved, and
the Company shall at all times keep reserved and available
out of its authorized Common Stock, such number of shares of
its Common Stock as shall be sufficient to provide for the
exercise of the outstanding Warrants. The Transfer Agent for
the Common Stock and every subsequent transfer agent for any
shares of the Company's capital stock issuable upon the
exercise of the Warrants will be irrevocably authorized and
directed at all times to reserve such number of authorized
shares as shall be requisite for such purpose. The Company will
keep a copy of this Agreement on file with its Transfer Agent,
or its successors, and with every subsequent transfer agent for
any shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Warrants.
The Warrant Agent is hereby irrevocably authorized to
requisition from time to time from the Transfer Agent (if they
are not one in the same), or its successors, the stock
certificates required to honor outstanding Warrants upon
exercise thereof in accordance with the terms of this Agreement.
The Company agrees to timely supply its Transfer Agent or its
successors with duly executed stock certificates for such
purposes and will provide or otherwise make available any cash
which may be payable as provided for herein. All Warrants
surrendered in the exercise of the rights thereby evidenced
shall be cancelled by the Warrant Agent and shall thereafter be
delivered to the Company.
8.2. Purchase of Warrants by the Company. The Company shall have the
right, except as limited by law, other agreement or herein, to
purchase or otherwise acquire Warrants at such times, in such
manner and for such consideration as it may deem appropriate.
8.3. Cancellation of Warrants. In the event the Company shall
purchase or otherwise acquire Warrants, the same shall thereupon
be delivered to the Warrant Agent and be cancelled by it and
retired. The Warrant Agent shall cancel any Warrants surrendered
for exchange, substitution, transfer or exercise in whole or in
part.
9. Exercise Price
Each Warrant shall entitle the holder thereof to purchase one (1) share
of the Company's Common Stock (subject to adjustment as set forth
herein), at a purchase price per share (the "Exercise Price") of Five
Dollars ($5.00).
10. Adjustment of Exercise Price and Number of Warrant Shares
At any time after the Company first issues the Warrants and while any
of the Warrants remain outstanding, if the Company shall effect a
subdivision or combination of its Common Stock, subject to the
Protective Provisions (as defined below), the Exercise Price and number
of Warrant Shares then in effect immediately before that subdivision or
combination shall be proportionately adjusted. Any adjustment shall
become effective at the close of business on the date the subdivision
or combination becomes effective, as hereinafter defined:
10.1. Mechanical Adjustments. The number of Warrant Shares
purchasable upon the exercise of each Warrant and the
Exercise Price shall be subject to adjustment as follows:
(a) Reclassification, Exchange or Substitution. In case
the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of
Common Stock, (ii) subdivide its outstanding shares
of Common Stock, (iii) combine its outstanding shares
of capital stock into a greater number of shares of
Common Stock, or (iv) issue by reclassification of
recapitalization of its shares of Common Stock other
securities of the Company, the number of Warrant
Shares purchasable upon exercise of each Warrant
immediately prior thereto shall be adjusted so that
the Holder of each Warrant shall be entitled to
receive the kind and number of Warrant Shares or
other securities of the Company which he would have
owned or have been entitled to receive after the
happening of any of the events described above, had
such Warrant been exercised immediately prior to the
happening of such event or any record date with
respect thereto. An adjustment made pursuant to this
paragraph (a) shall become effective immediately
after the effective date of such event retroactive to
the record date, if any, for such event.
(b) Dividend, Distribution, Subscription Rights. In case
the Company shall distribute to all holders of its
shares of Common Stock evidence of its indebtedness
or assets (excluding cash dividends or distributions
payable out of consolidated earnings or earned
surplus and dividends or distributions referred to in
paragraph (a) above, or rights, options or warrants
or exercisable or exchangeable securities containing
the right to subscribe for or purchase shares of
Common Stock, then in each case the number of Warrant
Shares thereafter purchasable upon the exercise of
each Warrant, by a fraction, of which the numerator
shall be the then current market price per share of
Common Stock (as defined in Section 10.2 hereof) on
the date of such distribution, and of which the
denominator shall be the then current market price
per share of Common Stock, less the then fair value
(as determined by the Board of Directors of the
Company, whose determination shall be conclusive) of
the portion of the assets or evidences of
indebtedness so distributed or of such subscription
rights, options or warrants, or of such exercisable
or exchangeable securities applicable to one
share of Common Stock. Such adjustment shall be made
whenever any such distribution is made, and shall
become effective on the date of distribution
retroactive to the record date for the determination
of stockholders entitled to receive such
distribution.
(c) Reorganization, Mergers, Consolidations or Sales of
Assets. At any time after the Company first issues
the Warrants and while any of the Warrants remain
outstanding, if there shall be a capital
reorganization of the Common Stock (other than a
subdivision, combination, reclassification, or
exchange of shares), or a merger or consolidation of
the Company with or into another Company, or the sale
of all or substantially all of the Company's assets
to any other person, then as a part of such
reorganization, merger, consolidation, or sale,
provision shall be made so that the holders of the
Warrants thereafter shall be entitled to receive upon
exercise of the Warrants, the number of shares of
Common Stock or other securities or property of the
Company, or of the successor Company resulting from
such merger or consolidation or sale, to which a
holder of Warrants deliverable upon exercise would
have been entitled on such capital reorganization,
merger, consolidation, or sale.
The provisions of this paragraph shall similarly apply to
successive consolidations, mergers, sales or conveyances. The
Warrant Agent shall be under no duty or responsibility to
determine the correctness of any provisions contained in any
such agreement relating either to the kind or amount of
shares of stock or other securities or property receivable
upon exercise of Warrants or with respect to the method
employed and provided therein for any adjustments.
10.2 Adjustment to Exercise Price. Except as otherwise provided
herein, whenever the number of Warrant Shares purchasable
upon the exercise of each Warrant is adjusted, as herein
provided, the Exercise Price payable upon exercise of each
Warrant in effect immediately prior to such adjustment, shall
be adjusted by multiplying such Exercise Price immediately
prior to such adjustment by a fraction, of which the
numerator shall be the number of Warrant Shares purchasable
upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number
of Warrant Shares so purchasable immediately thereafter.
10.3 Definitions and Recalculation of Exercise Price and Warrant
Shares. For the purpose of this Agreement, the term "shares
of Common Stock" shall mean (i) the class of stock designated
as the Common Stock of the Company at the date of this
Agreement, or (ii) any other class of stock resulting from
successive changes or reclassification of such shares
consisting solely of changes in par value, or from par value
to no par value, or from no par value to par value. In the
event that at any time, as a result of an adjustment made
pursuant to the terms hereof, the Holders shall become
entitled to purchase any shares of the Company other than
shares of Common Stock, thereafter the number of such other
shares so purchasable upon exercise of each Warrant and the
Exercise Price of such shares shall be subject to adjustment
from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to
the Warrant Shares contained in paragraphs 10.1(a) through
Section 10.1(c) and paragraph 10.2 above, and the provisions
of paragraphs 10.2 and 10.3 hereof, with respect to the
Warrant Shares, shall apply on like terms to any such other
shares.
For the purpose of any computation under this Agreement, or
otherwise set forth herein, the current market price per
share of Common Stock at any date shall be the average
closing bid price of the Common Stock (if then traded in the
over-the-counter market) or the average closing price of the
Common Stock (if then traded on any other national securities
exchange) for the five consecutive trading days ending the
day prior to the date as of which such computation is made.
If the Common Stock is not so listed or admitted to unlisted
trading privileges, or if bid or closing prices are not so
reported, the current market price per share shall be
determined in such reasonable manner as may be prescribed by
the Board of Directors of the Company, but in no event more
than the liquidation value of the Company divided by the
total number of shares of capital stock outstanding on a
fully diluted basis.
10.4. Notice of Adjustment. Whenever the number of Warrant Shares
purchasable upon the exercise of each Warrant or the Exercise
Price of such Warrant Shares is adjusted, as herein provided,
the Company shall cause the Warrant Agent promptly to mail by
first class mail, postage prepaid, to each Holder notice of
such adjustment or adjustments, and shall deliver to the
Warrant Agent a certificate of a firm of independent public
accountants selected by the Board of Directors of the Company
(who may be the regular accountants employed by the Company)
setting forth the number of Warrant Shares purchasable upon
the exercise of each Warrant and the Exercise Price of such
Warrant Shares after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting
forth the computation by which such adjustment was made. Such
certificate shall be conclusive of the correctness of such
adjustment. The Warrant Agent shall be entitled to rely on
such certificate and shall be under no duty or responsibility
with respect to any such certificate, except to exhibit the
same, from time to time, to any Holder desiring an inspection
thereof during reasonable business hours. The Warrant Agent
shall not at any time be under any duty or responsibility to
any Holders to determine whether any facts exist which may
require any adjustment of the Exercise Price or the number of
Warrant Shares or other stock or property purchasable on
exercise thereof, or with respect to the nature or extent of
any such adjustment when made, or with respect to the method
employed in making such adjustment.
10.5. No Adjustment for Dividends. Except as provided herein, no
adjustment in respect of any cash dividend shall be made
during the term of a Warrant or upon the exercise of a
Warrant.
10.6. Reduction of Exercise Price. The Company shall have the
right to reduce the Exercise Price at any time upon thirty
days prior written notice to all Holders.
10.7 Statement on Warrants. Irrespective of any adjustments in
the Exercise Price or the number or kind of equity securities
purchasable upon the exercise of the Warrants, the Warrant
certificates issued pursuant to this Agreement may continue
to express the same price and number and kind of shares as
are stated in the Warrant certificates initially issuable
pursuant to this Agreement.
10.8 Protective Provisions. Notwithstanding anything contained
herein to the contrary, including but not limited to
paragraphs 10.1 through 10.3 above, so long as any of the
Warrants shall be outstanding, the Company shall not without
first obtaining the approval (by vote or written consent, as
provided by law) of the holders of at least two-thirds of the
total number of Warrants:
(i) alter or change the rights, preferences or privileges
contained in the Warrants by way of reverse stock
split, reclassification, merger consolidation or
otherwise, so as to adversely affect in any manner
the rights of the Holder(s); notwithstanding the
effects of any reverse stock split, recapitalization,
or reincorporation which has the effect of reducing
the total number of issued and outstanding shares of
the Company's Common Stock, each Warrant shall
entitle the Holder to purchase one (1) Warrant Share
at an exercise Price not to exceed Five Dollars
($5.00);
(ii) create any new class of Warrants to purchase Common
Stock, or increase the authorized number of Warrants;
(iii) create any new class of shares having preferences
over or being on a parity with the Company's Common
Stock as presently constituted as to dividends or
assets, unless the purpose of creation of such class
is, and the proceeds to be derived from the sale and
issuance thereof are to be used for, the retirement
of all the Notes then outstanding;
(iv) effect a merger, consolidation or reorganization of
the Company;
(v) effect a sale or other transfer of all or
substantially all of the Company's assets;
(vi) effect a sale of additional shares of the Company's
Common Stock so as to give a person or entity fifty
percent (50%) or greater voting control of the
Company;
(vii) effect a purchase or redemption by the Company of its
capital stock except as provided herein;
(viii) make a payment of a dividend or distribution from
funds legally available therefor;
(ix) issue or sell any shares of Common Stock (other than
the Warrant Shares) without consideration or for a
consideration per share less than the Exercise Price
in effect immediately prior to the time of such issue
or sale, unless and except the Company forthwith upon
such issuance or sale, reduces the Exercise Price of
the Warrant Shares to a price (computed to the
nearest cent) determined by dividing (i) the sum of
(x) the number of shares of Common Stock outstanding
immediately prior to such issue or sale multiplied by
the Exercise Price in effect immediately prior to
such issue or sale, and (y) the consideration, if
any, received by the Company upon such issue or sale,
by (ii) the total number of shares of Common Stock
outstanding immediately after such issue or sale.
For purposes of this subsection, the following
provisions (A) to (B) shall also be applicable:
(A) Options. In case the Company shall in any manner
grant any right to subscribe for or to purchase or
any option for the purchase of Common Stock
(collectively, "Rights") or any stock or other
securities convertible into or exchangeable for
Common Stock (such convertible or exchangeable
stock or securities being hereinafter referred to
as "Convertible Securities") other than the
Warrants, and the minimum price per share for
which Common Stock is issuable, pursuant to such
Rights or upon conversion or exchange of such
Convertible Securities (determined by dividing (i)
the total amount, if any, received or receivable
by the Company as consideration for the granting
of such Rights, plus the minimum aggregate amount
of additional consideration payable to the Company
upon the exercise of such Rights, plus, in the
case of such Convertible Securities, the minimum
aggregate amount of additional consideration, if
any, payable upon the conversion or exchange
thereof, by (ii) the total maximum number of
shares of Common Stock issuable pursuant to such
Rights or upon the conversion or exchange of the
total maximum amount of such Convertible
Securities issuable upon the exercise of such
Rights) shall be less than the Exercise Price in
effect immediately prior to the time of the
granting of such Rights, then the total maximum
number of shares of Common Stock issuable pursuant
to such Rights or upon conversion or exchange of
the total maximum amount of such Convertible
Securities issuable upon the exercise of such
Rights shall (as of the date of granting of such
Rights) be deemed to be outstanding and to have
been issued for said price per share as so
determined; provided, that no further adjustment
of the Exercise Price shall be made upon the
actual issue of Common Stock so deemed to have
been issued; and further provided, that, upon the
expiration of such Rights (including Rights to
convert or exchange or options to purchase), (a)
the number of shares of Common Stock deemed to
have been issued and outstanding by reason of the
fact that they were issuable pursuant to such
Rights (including Rights to convert or exchange)
that were not so issued, shall no longer be deemed
to be issued and outstanding, and (b) the Exercise
Price shall forthwith be adjusted to the price
which would have prevailed had all adjustments
been made on the basis of the issue only of the
shares of Common Stock actually issued upon the
exercise of such Rights or upon conversion or
exchange of such Convertible Securities.
(B) Convertible Securities. In case the Company shall
in any manner issue or sell any Convertible
Securities, and the minimum price per share for
which Common Stock is issuable upon conversion or
exchange of such Convertible Securities
(determined by dividing (i) the total amount
received or receivable by the Company as
consideration for the issue or sale of such
Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any,
payable to the Company upon the conversion or
exchange thereof, by (ii) the total maximum number
of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible
Securities) shall be less than the Exercise Price
in effect immediately prior to the time of such
issue or sale, then the total maximum number of
shares of Common Stock issuable upon conversion or
exchange of all such Convertible Securities shall
(as of the date of the issue or sale of such
Convertible Securities) be deemed to be
outstanding and to have been issued for said price
per share as so determined; provided, that no
further adjustment of the Exercise Price shall be
made upon the actual issue of Common Stock so
deemed to have been issued; and further provided,
that if any such issue or sale of such Convertible
Securities is made upon exercise of any Rights
related to such Convertible Securities for which
an adjustment of the Exercise Price has been or is
to be made pursuant to other provisions of this
paragraph no further adjustment of the Exercise
Price shall be made by reason of such issue or
sale; and, further provided, that, upon the
termination of the right to convert or to exchange
such Convertible Securities for Common Stock, (a)
the number of shares of Common Stock deemed to
have been issued and outstanding by reason of the
fact that they were issuable upon conversion or
exchange of any such Convertible Securities, which
were not so issued, shall no longer be deemed to
be issued and outstanding, and (b) the Exercise
Price shall forthwith be adjusted to the price
which would have prevailed had all adjustments
been made on the basis of the issue only of the
shares of Common Stock actually issued upon
conversion or exchange of such Convertible
Securities.
Upon the happening of any of the above events,
namely, if the purchase price provided for any
Rights, option or warrant granted by the Company to
subscribe for or to purchase additional stock or
convertible securities,
or the additional consideration, if any, payable upon
the conversion or exchange of any Convertible
Securities, or the rate at which any Convertible
Securities are convertible into or exchangeable for
additional stock shall change in any manner and at
any time (other than under or by reason of provisions
designed to protect against dilution), the Exercise
Price in effect at the time of such event shall
forthwith be adjusted or re-adjusted to the Exercise
Price which would have been in effect at such time
had such Rights or Convertible Securities still
outstanding provided for such changed purchase price,
additional consideration or rate of conversion or
exchange, as the case may be, at the time initially
granted, issued or sold. On the expiration of any
Rights granted by the Company to subscribe for or to
purchase additional stock or Convertible Securities
or the termination of any right to convert or
exchange such Convertible Securities, the Exercise
Price then in effect hereunder shall forthwith be
adjusted to the Exercise Price which would have been
in effect at the time of such expiration or
termination had such Rights or Convertible
Securities, to the extent outstanding immediately
prior to such expiration or termination, never been
issued, and the additional stock issuable thereunder
shall be no longer deemed to be outstanding;
(x) Determination of Issue Price. In case any shares
of Common Stock or convertible Securities or any
Rights to purchase any such stock or securities shall
be issued for cash the consideration received
therefor, before deducting therefrom any commission
or other expenses paid or incurred by the Company for
any underwriting of, or otherwise in connection with,
the issuance thereof, shall be deemed to be the
amount received by the Company therefor. In case any
shares of Common Stock or Convertible Securities or
any Rights to purchase any such stock or securities
shall be issued for a consideration part or all of
which
shall be other than cash, then, for the purpose of
this paragraph, the Board of Directors of the Company
shall determine the fair value of such consideration,
irrespective of accounting treatment, and such Common
Stock, Convertible Securities or Rights shall be
deemed to have been issued for an amount of cash
equal to the value so determined by the Board of
Directors. The re-classification of securities other
than Common Stock into securities including Common
Stock shall be deemed to involve the issuance for a
consideration other than cash of such Common Stock
immediately prior to the close of business on the
date fixed for the determination of security holders
entitled to receive such Common Stock. In case any
shares of Common Stock or Convertible Securities or
any Rights to purchase any such stock or other
securities shall be issued together with other stock
or securities or other assets of the Company for a
consideration which includes both, the Board of
Directors of the Company shall determine what part of
the consideration so received is to be deemed to be
consideration for the issue of such shares of such
Common Stock, Convertible Securities or Rights.
(xi) Determination of Date of Issue. In case the
Company shall take a record of the holders of any
Common Stock for the purpose of entitling them (i) to
receive a dividend or other distribution payable in
Common Stock or in Convertible Securities, or (ii)
Rights to subscribe for or purchase Common Stock or
Convertible Securities, then such record date shall
be deemed to be the date of the issue or sale of the
shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or the
make of such other distribution or the date of the
granting of such right of subscription or purchase,
as the case may be.
(xii) Treasury Shares. For the purpose of this
subsection shares of Common Stock at any relevant
time owned or held by, or for the account of, the
Company shall not be deemed outstanding.
11. Expiration of Warrants
All outstanding Warrants shall become void, and all Rights of the
Holders thereof under this Agreement shall cease at the close of
business on September 30, 2003.
12. Fractional Shares
The Company shall not be required to issue fractional Warrant Shares on
the exercise of Warrants. The number of full Warrant Shares which shall
be issuable upon the exercise of Warrants shall be computed on the
basis of the aggregate number of Warrant Shares purchasable on exercise
of the Warrant so presented. And, if the amount tendered by a holder of
a Warrant is less than the full Exercise Price times the Warrants being
exercised, the Company may return all of that portion of the Exercise
Price which is deficient.
13. No Rights as Stockholders; Notices to Holders
Nothing contained in this Agreement or in any of the Warrants shall be
construed as conferring upon the Holders of the Warrants, or their
transferees, the right to vote or to receive dividends or to consent to
or receive notice as stockholders in respect of any meeting of
stockholders for the election of directors of the Company or any other
matter, or any Rights whatsoever as stockholders of the Company. If,
however, at any time prior to the expiration of the Warrants and prior
to their exercise, any of the following events shall occur:
(i) the Company shall declare any dividend payable in any
securities upon its shares of Common Stock, or make any
distribution (other than a cash dividend) to the holders of
its shares of Common Stock; or
(ii) the Company shall offer to the holders of its shares of
Common Stock any additional shares of Common Stock or
securities exercisable into shares of Common Stock or any
right to subscribe thereto; or
(iii) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation, merger, or
sale of all or substantially all of its property, assets, and
business as an entirety) shall be proposed;
then, in any one or more of said events, the Company shall (i) give
notice in writing, as provided for herein, of such event to the Warrant
Agent and the Holders as provided for herein; and (ii) cause notice of
such event to be published once in one or more newspapers printed in
the English language and in United States national circulation, such
giving of notice and publication to be completed at least fifteen days
prior to the date fixed as a record date or the date of closing the
transfer books for the determination of the stockholders entitled to
such dividend, distribution, or subscription Rights, or for the
determination of stockholders entitled to vote on such proposed
dissolution, liquidation or winding up. Such notice shall specify such
record date or the date of closing the transfer books, as the case may
be. Failure to publish or mail such notice or any defect therein or in
the publication or mailing thereof shall not affect the validity of any
action taken in connection with such dividend, distribution or
subscription Rights, or proposed dissolution, liquidation or winding
up.
14. Disposition of Proceeds on Exercise of Warrants; Inspection of
Warrant Agreement
The Warrant Agent agrees to account promptly to the Company following
the close of each calendar quarter with respect to Warrants exercised,
and concurrently tender to the Company promptly any and all checks or
drafts, and to wire transfer all monies received by the Warrant Agent
for the purchase of the Warrant Shares through the exercise of such
Warrants.
The Company and the Warrant Agent shall each keep copies of this
Agreement and any notices given or received hereunder available for
inspection by the Holders during normal business hours at their
principal offices. The Company shall supply the Warrant Agent from time
to time with such numbers of copies of this Agreement as the Warrant
Agent may request.
15. Merger or Consolidation or Change of Warrant Agent
Any corporation into which the Warrant Agent may be merged or with
which it may be consolidated, or any corporation resulting from any
merger or consolidation or sale of assets to which the Warrant Agent
shall be a party, shall be the successor to the Warrant Agent hereunder
without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation would
be eligible for appointment as a successor Warrant Agent as provided
herein. In case at the time such successor to the Warrant Agent shall
succeed to the agency created by this Agreement, any of the Warrants
shall have been countersigned but not delivered, any such successor to
the Warrant Agent may adopt the countersignature of the original
Warrant Agent and deliver such Warrants so countersigned; and in case
at that time any of the Warrants shall not have been countersigned, any
successor to the Warrant Agent may countersign such Warrants either in
the name of the predecessor Warrant Agent or in the name of the
successor Warrant Agent; and in all such cases Warrants shall have the
full force provided in the Warrants and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrants shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignatures under its
prior name and deliver such Warrants so countersigned; and in case at
that time any of the Warrants shall not have been countersigned, the
Warrant Agent
may countersign such Warrants either in its prior name or in its
changed name; and in all such cases such Warrants shall have the full
force provided in the Warrants and in this Agreement.
16. Concerning the Warrant Agent
By its execution of this Agreement the Warrant Agent agrees to
undertake the duties and obligations set forth herein upon the
following terms and conditions, by all of which the Company, NuOasis
and the Holders, by their acceptance of Warrants, shall be bound:
16.1. Correctness of Statements. The statements contained
herein and in the Warrants shall be taken as statements of the
Company and the Warrant Agent assumes no responsibility for
the correctness of any of the same except such as describe the
Warrant Agent or action taken by it. The Warrant Agent assumes
no responsibility with respect to the distribution of the
Warrants except as herein otherwise provided.
16.2. Breach of Covenants. The Warrant Agent shall not be
responsible for any failure of the Company to comply with the
covenants contained in this Agreement or in the Warrants to be
complied with by the Company.
16.3. Performance of Duties. The Warrant Agent may execute any
of the Rights or powers hereby vested in it or perform any
duty hereunder either itself or by or through its attorneys or
agents (which shall not include its employees).
16.4. Reliance on Counsel. The Warrant Agent may consult at
any time with legal counsel satisfactory to it (who may be
counsel for the Company), and the Warrant Agent shall incur no
liability or responsibility to the Company, NuOasis, or to any
Holder in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with the opinion
or the advice of such counsel.
16.5. Proof of Actions Taken. Whenever in the performance of
its duties under this Agreement the Warrant Agent shall deem
it necessary or desirable that any fact or matter be proved or
established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be
deemed conclusively to be proved and established by a
certificate signed by the Chairman of the Board, President and
Secretary or Assistant Secretary of the Company and delivered
to the Warrant Agent; and such certificate shall be full
authorization to the Warrant Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
16.6. Compensation. The Company agrees to pay the Warrant
Agent compensation for all services rendered by the Warrant
Agent in the performance of its duties under this Agreement;
to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges incurred by the Warrant
Agent in the performance of its duties under this Agreement in
accordance with a schedule of fees to be mutually agreed
between the Company and the Warrant Agent concurrently with
the execution hereof. The Company further agrees to indemnify
the Warrant Agent and hold it harmless against any and all
liabilities, including judgments, costs and actual counsel
fees, for anything done or omitted in good faith by the
Warrant Agent in the performance of its duties under this
Agreement except liabilities, including judgments, costs and
fees arising as a result of the Warrant Agent's negligence or
bad faith, to be agreed in writing between the parties
concurrently with the execution of this Agreement.
16.7. Legal Proceedings. The Warrant Agent shall be under no
obligation to institute any action, suit or legal proceeding
or to take any other action likely to involve expense unless
the Company, NuOasis or one or more Holders shall furnish the
Warrant Agent with reasonable security and indemnity for any
costs and expenses which it may incur, but this provision
shall not affect the power of the Warrant Agent to take such
action as the Warrant Agent may consider proper, whether with
or without any such security or indemnity. All Rights of
action under this Agreement or under any of the Warrants may
be enforced by the Warrant Agent without the possession of any
of the Warrants or the production thereof at any trial or
other proceeding relative thereto, and any such action, suit
or proceeding instituted by the Warrant Agent shall be brought
in its name as Warrant Agent, and any recovery of judgment
shall be for the ratable benefit of the Holders, as their
respective Rights or interests may appear.
16.8. Other Transactions in Securities of Company. The Warrant
Agent and any stockholder, director, officer or employee of
the Warrant Agent may buy, sell or deal in any of the
Warrants, the Common Stock or other securities of the Company,
or hold a beneficial interest in any transaction in which the
Company may be interested, or otherwise act as fully and
freely as though it were not the Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent
from acting in any other capacity for the Company or for any
other legal entity.
16.9. Liability of Warrant Agent. The Warrant Agent shall act
hereunder solely as agent, and its duties shall be determined
solely by the provisions thereof. The Warrant Agent shall not
be liable for anything which it may do or refrain from doing
in connection with this Agreement except for its own
negligence or bad faith.
16.10. Reliance on Documents. The Warrant Agent will not incur
any liability or responsibility to the Company, NuOasis or to
any Holder for any action taken in reliance on any notice,
resolution, waiver, consent, order, certificate, or other
paper, document or instrument reasonably believed by it to be
genuine and to have been signed, sent or presented by the
proper party or parties.
16.11. Validity of Agreement, etc. The Warrant Agent shall not
be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the due
execution hereof by the Warrant Agent) or in respect of the
validity or execution of any Warrant (except its
countersignature thereof) or in respect of the necessity or
the extent of any adjustment to the Exercise Price or the
number of Warrant Shares purchasable under a Warrant; nor
shall the Warrant Agent by any act hereunder be deemed to make
any representation or warranty as to the authorization,
reservation, value or registration under securities laws of
any Warrant Shares (or other stock) to be issued pursuant to
this Agreement or any Warrant, or as to whether any Warrant
Shares(or other stock) will, when issued, be validly issued,
fully paid and non-assessable, or as to the Exercise Price or
the number or amount of Warrant Shares or other securities or
other property issuable upon exercise of any Warrant or the
method employed in making any adjustment to the foregoing.
16.12. Instructions from Company. The Warrant Agent is hereby
authorized and directed to rely upon the resolutions adopted
by the Company concurrently with the execution hereof, and, in
the absence of written instructions signed by a majority of
the Company's Board of Directors from time to time, accept
instructions with respect to the performance of its duties
hereunder from the Chairman of the Board or the President when
countersigned by either the Secretary or Assistant Secretary
of the Company, and to apply to such officers, as the case may
be, for advice or instructions in connection with any conflict
as to its duties. The Warrant Agent shall not be liable for
any action taken or suffered to be taken by it in good faith
in
accordance with instruction of any such officer or officers or
the attached resolutions, as the case may be.
17. Change of Warrant Agent
The Warrant Agent may resign and be discharged from all further duties
and liabilities under this Agreement (except liabilities arising as a
result of the Warrant Agent's own negligence or bad faith) by giving to
the Company thirty days prior notice in writing. The Warrant Agent may
be removed by like notice to the Warrant Agent from the Company. If the
Warrant Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Warrant Agent. If the Company shall fail to make such appointment
within a period of thirty days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning
or incapacitated Warrant Agent or by any Holder (who shall with such
notice submit his Warrant for inspection by the Company), then any
Holder may apply to any court of competent jurisdiction for the
appointment of a successor to the Warrant Agent. Any successor warrant
agent, whether appointed by the Company or such a court, shall be a
bank or trust company, in good standing, incorporated under the laws of
the United States of America or any state thereof and having at the
time of its appointment as warrant agent a combined capital and surplus
of at least $50,000,000, or a stock transfer company. After acceptance
in writing of such appointment is received by the Company, the
successor warrant agent shall be vested with the same powers, Rights,
duties and responsibilities as if it had been originally named as
Warrant Agent without further act or deed; but the former Warrant Agent
shall deliver and transfer to the successor warrant agent any property
at the time held by it hereunder, and legally and validly execute and
deliver any further assurance, conveyance, act or deed necessary for
that purpose. Failure to file any notice provided for in this
Agreement, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Warrant Agent
or the appointment of the successor warrant agent, as the case may be.
In the event of such resignation or removal, the successor warrant
agent shall mail by first class mail, postage prepaid, to each Holder,
written notice of such resignation or removal and the name and address
of such successor warrant agent.
18. Identity of Transfer Agent
Forthwith upon the appointment of any transfer agent other than the
Company's Transfer Agent on the date hereof, subsequent to the date
hereof, the Company will promptly notify the Warrant Agent in writing
setting forth the name and address of such subsequent transfer agent.
19. Notices
Any notice pursuant to this Agreement, to the Warrant Agent, to the
Company or NuOasis by the parties hereto or by any Holder, shall be in
writing and shall be mailed first class, postage prepaid, or delivered
concurrently (a) to the Company at its offices at 000 Xxxxx Xxxxx,
Xxxxxxxx, Xxxxxx 00000, to the attention of the President, with copies
to Law Offices of Xxxxxxx X. Xxxx, Xxxxxx & Weed, 0000 XxxXxxxxx Xxxxx,
Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000; (b) to NuOasis, 00
Xxxxxxxxx Xxxxxx, Xxx X-0000, Xxxxxx, Bahamas, with copy to NuOasis
Resorts Inc., 0000 Xx. Xxxxxxx Xxxx, Xxx Xxxxx, Xxxxxx 00000; and, (c)
to the Warrant Agent as its address appears below. Each party hereto
may from time to time change the address to which notices to it are to
be delivered or mailed hereunder by notice in writing to the other
party.
Any notice mailed pursuant to this Agreement shall be in writing and
shall be mailed first class, postage prepaid, or delivered to the
Company, the Warrant Agent, NuOasis or such Holders, as the case may
be, at their respective addresses in accordance to the records of the
Warrant Agent.
20. Supplements and Amendments
The Company and the Warrant Agent may from time to time supplement or
amend this Agreement, in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other
provisions in regard to matters or questions arising hereunder which
the Company and the Warrant Agent may deem necessary or desirable, and
which shall not be inconsistent with the provisions of the Warrants and
which shall not adversely affect the interests of NuOasis or the
Holders; provided, however, that this Agreement shall not otherwise be
supplemented or amended in any respect except with the consent in
writing of NuOasis or the Holders of Warrants at the time of such
proposed amendment, representing not less than 50% of the Warrants then
outstanding; and provided further that no change in the number or
nature of the securities purchasable upon the exercise of any Warrant,
or the Exercise Price therefor shall be made without the consent in
writing of NuOasis or the Holder of the certificate representing such
Warrant, other than changes as are specifically prescribed by this
Agreement as originally executed.
21. Successors
All the covenants and provisions of this Agreement by or for the
benefit of the Company, NuOasis, or the Warrant Agent shall bind and
inure to the benefit of their respective successors and assigns.
22. Applicable Law
This Agreement and each Warrant issued hereunder shall be governed by
and construed in accordance with the laws of the State of Nevada,
without giving effect to any principles of conflicts of law.
23. Benefits of this Agreement
Nothing in this Agreement shall be construed to give any person or
corporation other than the Warrant Agent, the Company, Resorts, NuOasis
and the Holders of the Warrants from time to time, any legal or
equitable right, remedy or claim under this Agreement; this Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant
Agent and the Holders of the Warrants.
24. Counterparts
This Agreement may be executed in any number of counterparts, and each
of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one
and the same instrument.
25. Captions
The captions of the paragraphs and subsections of this Agreement have
been inserted for convenience only and shall have no substantive
effect.
26. Termination
This Agreement shall terminate at the close of business at 5:00 p.m.,
Pacific Daylight Savings Time, September 30, 2003, or such earlier date
upon which all Warrants have been exercised (the "Expiration Date")
except as to Warrants exercised and postmarked prior to the Expiration
Date but received by the Warrant Agent with the appropriate Exercise
Price after the termination hereof.
The "Company"
Flexweight Corporation,
a Kansas corporation
By: /s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: President
"NuOasis"
NuOasis International Inc.
a corporation organized under the Commonwealth
of the Bahamas
By: /s/ Xxxxxxxx Xxxxx
Name: Xxxxxxxx Xxxxx
Title: Assistant Secretary
The "Warrant Agent"
By: Xxxx Xxxx
Name:
Title:
Address: 0000 XxxXxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000