-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BsCEPz/RVMgwXRxNpX1qw/Gh3UapzFVfRJT4Z3PqbanOJAeEBI/z4tlzfz441eUV uQ8UKI7gNnPJuhhXnQmSUQ== 0000316128-00-000007.txt : 20000425 0000316128-00-000007.hdr.sgml : 20000425 ACCESSION NUMBER: 0000316128-00-000007 CONFORMED SUBMISSION TYPE: 10KSB/A PUBLIC DOCUMENT COUNT: 17 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 20000424 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OASIS RESORTS INTERNATIONAL INC /NV CENTRAL INDEX KEY: 0000316128 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 480680109 STATE OF INCORPORATION: NV FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10KSB/A SEC ACT: SEC FILE NUMBER: 000-09476 FILM NUMBER: 607471 BUSINESS ADDRESS: STREET 1: 3753 HOWARD HUGHES PARKWAY SUITE 200 CITY: LAS VEGAS STATE: NV ZIP: 89109 BUSINESS PHONE: 7028923742 MAIL ADDRESS: STREET 1: 3753 HOWARD HUGHES PARKWAY SUITE 200 CITY: LAS VEGAS STATE: NV ZIP: 89109 FORMER COMPANY: FORMER CONFORMED NAME: FLEXWEIGHT CORP DATE OF NAME CHANGE: 19920703 10KSB/A 1 AMENDED FORM 10KSB/A FOR YEAR ENDED 6/30/99 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB/A Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended June 30, 1999 Commission file number 0-9476 OASIS RESORTS INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Nevada 48-0680109 (State of other jurisdiction of (I.R.S. Employer I.D. No.) incorporation or organization) 3753 Howard Hughes Parkway, Suite 200, Las Vegas, Nevada 89103 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (949) 833-5381 ____________ Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.001 Par Value Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No X Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K, is not contained herein and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. The Registrant's revenues for its most recent fiscal year were $5,523,000 The aggregate market value of the voting stock held by non-affiliates computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of February 29, 2000 was approximately $4,800,000 Class Outstanding at April 7, 2000 Common Stock, $.001 par value 11,301,945 shares Documents Incorporated by Reference: None TABLE OF CONTENTS PART I Page Item 1. Description of Business............................................ 1 Item 2. Description of Property............................................ 9 Item 3. Legal Proceedings.................................................. 9 Item 4. Submission of Matters to a Vote of Security-Holders................10 PART II Item 5. Market for Common Equity and Related Stockholder Matters...........10 Item 6. Management's Discussion and Analysis of Financial Condition and Results of Operations...................12 Item 7. Financial Statements...............................................16 Item 8. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure............................................15 PART III Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act...............16 Item 10. Executive Compensation.............................................19 Item 11. Security Ownership of Certain Beneficial Owners and Management.....21 Item 12. Certain Relationships and Related Transactions.....................21 Item 13. Exhibits and Reports on Form 8-K...................................22 PART I ITEM 1. DESCRIPTION OF BUSINESS. (a) General Oasis Resorts International Inc. (the "Company" or "Oasis") was originally incorporated under the name Flexweight Drillpipe Company in 1958, and became publicly-held in August 1980. From 1961 through 1985, the Company's activities were limited to the manufacture and sale of oilfield equipment. In 1985, the Company filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code in the District of Kansas. During the pendency of its reorganization proceedings, the Company liquidated all of its oilfield related assets. The Company filed a Plan of Reorganization in June 1987, which was approved in February 1988, and resumed, on a limited scale, its manufacturing operations. During fiscal 1995, the Company discontinued its manufacturing operations and liquidated its remaining assets. Following the close of fiscal 1995, the Company began evaluating investment and merger opportunities outside of the manufacturing industry. During fiscal 1996, the Company experienced a change in control and, in the process, adopted a new strategy to renew operations and grow by acquiring and developing business interests in the legalized gaming, hotel management and real estate industries. Following the change of control in fiscal 1996 and the adoption of a new business plan and growth strategy in May, 1998, the Company acquired 100% interest of Oasis Hotel, Resort & Casinos III Inc. ("Oasis III"), which owned and was in the process of developing a destination resort hotel and casino gaming property in Oasis, Nevada (the "Oasis III Property"). In October 1998, the Company acquired the operational and development-stage international hotel and gaming assets of NuOasis International Inc. ("NuOasis"), a wholly-owned subsidiary of NuOasis Resorts Inc. ("Resorts"), making NuOasis the Company's largest single shareholder. (b) Business Development Through subsidiaries, the Company now develops, owns interests in, leases, manages and operates themed hotels, gaming casinos and related operations worldwide. The Company operates its facilities under two marketing themes: "Cleopatra Palace" and "Oasis Resorts." The Company's "Cleopatra"-themed facilities are owned and operated by Cleopatra Palace Resorts and Casinos Limited, a British corporation ("CPRC"), a 75% owned subsidiary. CPRC conducts its operations through Cleopatra Cap Gammarth Casino Limited, a Tunisian corporation in organization ("CCGL") and Cleopatra's World Inc., a British Virgin Island corporation ("CWI"), entities which, at June 30, 1999 were 90% and 80% owned, respectively. (c) Description of Business The Company's business interests are comprised of casino gaming and hotel management, and to a limited extent, real estate acquisition and development. The casino gaming and resort hotels, operated and planned for development by the Company and its subsidiaries, are presently located in the Mediterranean and the United States, and are Las Vegas-style facilities. Some of the Company's casino facilities are or will be associated with Company-managed hotel properties. The Company's strategy is to acquire existing hotel and casino facilities, or obtain management contracts, with a view to re-branding the facilities as "Cleopatra" or "Oasis"-themed properties. 1 The Company's focus and target markets are growth-stage vacation markets in the Mediterranean, Caribbean, South Pacific (including certain Asian markets and Pacific Rim islands) and the United States. The Company also intends to develop "sportsbook" and Internet-based gaming activities where possible. In addition to its present activities and interests in Tunisia, North Africa and the United States, the Company is evaluating casino and hotel projects located in Spain, Morocco, and South Korea which it hopes to acquire outright or on which it intends to obtain management rights. (1) Gaming and Hotel Management Activities Domestic Gaming and Hotel Facilities As a result of the merger in May 1998 of Flex Holdings Inc. ("Flex"), a wholly-owned subsidiary of the Company, into Oasis III, the Company acquired the Oasis III Property, a 20-acre interest in partially-developed land located in Oasis, Nevada together with an option to acquire an additional 30 acres adjacent to the 20-acre parcel. The Oasis III Property presently contains a 6-unit motel, an eight-pump truck stop, a cafe and mini-market store and was subdivided from an 1100- acre parcel originally purchased in December, 1995 by Oasis III from Oasis International Hotel & Casinos Inc. ("OHIC"), which was at the time of the transaction, and continues to be, a shareholder of the Company. The Company intends to develop the Oasis III Property as a 500-room resort hotel with a 30,000 square-foot Las Vegas style gaming casino with 38 gaming tables, Keno, Sportsbook, and 1,000 slot machines, together with an entertainment complex with movie theaters, outdoor rodeo facilities, and bowling alley. The Company is currently evaluating financing proposals to develop this property. International Gaming and Hotel Activities Through the acquisition of CPRC, the Company intends to develop and expand its casino gaming and resort hotel activities outside of the United States. The Company believes that international leisure and entertainment opportunities offer much greater potential, and have far less competition than domestic market because of the "emerging market" status of many of the host countries. The Company's goal is to capitalize on the expected growth in tourism trade and the surge of entertainment spending worldwide, and to take advantage of certain investment opportunities in emerging markets which appear to be the greatest beneficiaries of this expected growth. Prior to and following its acquisition of CPRC, the Company has been soliciting and evaluating prospects in certain resort hotel and casino gaming markets in Asia, North Africa, South America, the Caribbean, and the South Pacific. CPRC's predecessor, Cleopatra Palace Limited ("CPL"), developed the concept of resort hotels and Las Vegas style gaming casinos designed along the theme "Cleopatra Palace," in 1993. In October 1994, CPL became the lessee of a 200,000 square foot casino and Las Vegas- style showroom (the "Cap Gammarth Casino") pursuant to a Casino Lease Agreement and Operating Management Contract (the "Gammarth Casino Lease") with Societe Animation Loisers Touristique ("SALT"). The Cap Gammarth Casino is part of a large resort development located in Tunisia, North Africa, in the town of Gammarth, approximately 6 miles north of the city of Tunis, the country's capital. In conjunction with this casino, an affiliate of SALT, Societe Touristique Tunisie Golfe ("STTG"), partially constructed a five-star hotel (the "Le Palace Hotel"), is currently 2 attempting to complete construction on an adjacent health and sports center, a beach club, a 54-unit shopping mall and 250 apartments, all located within walking distance to the Cap Gammarth Casino (collectively, the "Gammarth Resort"). The Gammarth Casino Lease was subsequently assigned by CPL to CWI who serves as the operator of the Gammarth Resort. In 1996, CPL deposited approximately $2,000,000 with SALT as a lease deposit on the Cap Gammarth Casino. In April 1998, CPL converted the Cap Gammarth Casino lease deposit to a 9% equity ownership in SALT. After a long history of missed completion dates set by STTG, CWI opened the Le Palace Hotel in October 1996 with only 100 of 350 total rooms ready for occupancy, and without any of the other resort facilities. Through internally operated cash flow and working capital provided by NuOasis, CWI completed the Le Palace Hotel and marketed the facility since its opening. And, while the balance of the resort remained unfinished at June 30, 1999, the Le Palace Hotel has been actively managed and marketed by CWI with steadily increasing annual room rental rates and revenues; however, the reputation of the hotel is not what is expected by management for a 5-star Hotel due to such delays as completing the Hotel by STTG. In October 1994, in a separate transaction, CPL entered into an agreement to lease and operate a casino and French-style cabaret in Hammamet, Tunisia (the "Hammamet Casino"). The Hammamet Casino was completed in the first half of calendar 1997 and opened December 6, 1997. Adjoining the Hammamet Casino is a five-star hotel and villa resort (the "Hammamet Hotel") which was completed and opened in September 1996, and is operated by the Occidental Group. The Hammamet Hotel is one of forty-five (45) hotels planned or currently under construction in south Hammamet as part of a Tunisian government-sponsored expansion of the Hammamet resort area. When completed, these additional hotels are expected to provide up to thirty-eight thousand (38,000) additional beds for the Hammamet area. Both the Hammamet Casino and Hammamet Hotel are situated within walking distance of other hotels, with approximately eighteen hundred (1,800) beds. CPL financed the completion and opening of the Hammamet Casino through loans from NuOasis and financing from Cedric Investment Company Inc., a Panamanian corporation ("Cedric"). In connection with a $1.5 million loan from Cedric to complete and open the Hammamet Casino, the Company pledged its 70% interest in Cleopatra Hammamet Casino, Ltd., the lease holder of the Hammamet Casino to Cedric. The Company had the right to repurchase such interest for $1.5 million plus interest. Such right expired September 22, 1998 and accordingly, the Company had no further interest in the Hammamet Casino. To finance the remaining expenditures on the Cap Gammarth Casino, CPRC has been negotiating possible joint ventures with foreign banks and investment groups, and attempting early collection of its receivables. Between 1996 and 1999, CPL and other related CPRC subsidiaries, increased their interest in CWI and entered into Letters of Intent and contracts to acquire additional proposed and existing resort hotel and casino gaming interests in the Mediterranean and Southern Europe. On July 7, 1996, CPL entered into an agreement between Compagnie Monastirienne Immobiliere et Touristique S.A. ("CMI") to take over and operate a casino in Monastir, Tunisia (the "Monastir Casino Lease"); it entered into an agreement with CMI dated July 7, 1996 to take over and operate a resort hotel in Monastir, Tunisia (the "Monastir Hotel Lease"); it entered into an agreement in principle to lease an existing potential casino site and to acquire a gaming license in Morocco (the "Morocco Project"); and, it entered into an agreement to acquire certain real property interests in San Roque, Spain and the gaming license related to a casino under construction in Marbella, 3 Spain (the "Marbella Casino"). However, at June 30, 1999, none of the properties under contract or agreements in principle have been acquired by the Company or any of its subsidiaries. (2) Real Estate Activities The Company did not have any real estate operations during fiscal 1998 or fiscal 1999. (d) Marketing (1) Gaming and Hotel Management Domestic Gaming The Company did not have any domestic gaming activities in fiscal 1998 and fiscal 1999 and did not utilize or rely upon any marketing for domestic gaming activities in fiscal 1998. International Casino Gaming and Hotel Management The Company's current international activities are located in North Africa, but the Company intends to enter the European and Caribbean markets beginning in fiscal 2000. The Company's marketing strategy is to target past and repeat middle-market, value- oriented visitors to its facilities by systematic marketing programs directed to the individual visitors and to the tour operators who have historically promoted and booked the tours to the respective areas in the past. The Company uses general marketing approaches to attract first time customers to its casinos by advertising its slot player club program, popular entertainment and other promotions. Once customers enter the Company's casinos, the Company attempts to capture the name and playing level of each slot machine and table game player. The Company uses this information to follow up promotions. The Company believes that utilizing the "Cleopatra" name in the Mediterranean area, and the proposed "Oasis" theme in other areas, combined with personalized database driven marketing programs, will create a strong brand image synonymous with quality casino gaming and hotel facilities, service and food. With respect to its existing hotel and casino gaming activities in Tunisia, the Company is currently working with the Tunisian government and local organizations with the goal of promoting the areas to increase the number of tourists. As the markets surrounding the Company's current and future hotel and casino facilities continue to mature, it intends to expand its focus to other markets in the respective regions. The Company has utilized and intends to continuously monitor the effectiveness of direct mail, television advertising, newspapers, billboards and tourist magazine advertising placed in the surrounding areas to increase the visibility of the Company's facilities and to promote the image that these facilities are part of the history and romance of the region of the past. Management believes that the advent of Las Vegas-style casino gaming in the Mediterranean area will increase the current length of a tourist's stay as well as increase the number of tourists into its market areas. 4 (e) Raw Materials The Company's casino gaming and hotel management, and its related real estate acquisition and development activities, are not manufacturing-based businesses and, therefore, do not rely on raw materials. (f) Patents, Trademarks and Licenses The Company's proposed gaming activities do not require patents or trademarks, and the Company does not intend to rely on patents or trademarks. The operations of the proposed gaming casinos and resort hotel properties will depend on and be subject to gaming licenses and permits from their respective jurisdictions. (g) Seasonality The Company's domestic gaming activities were non-operational in fiscal 1998 and fiscal 1999. The Company's international casino gaming and hotel management activities are seasonal and are strongly affected by weather and other factors that influence the tourist trade in Tunisia. Higher revenues are typically realized from the Company's current operations in North Africa during the late spring, summer and early fall months. Additionally, due to their location on the southern Mediterranean coast, tourist traffic can be especially adversely affected by severe weather. (h) Customer Dependence The Company's domestic gaming activities were in the development stage during fiscal 1998 and fiscal 1999; its international casino gaming and hotel management activities, except for one Tunisian casino and its Tunisian hotel management operations, were also development stage and, therefore, not subject to customer dependence. The Company's resort hotel operations are solely dependent upon Tunisian tourism and the Company's ability to attract foreign visitors to its Tunisian operations; two Tunisian gaming segments remained under development at the close of fiscal 1999. (i) Backlog of Orders The Company's domestic gaming, international gaming and hotel management, and real estate subsidiaries were not subject to the type of business activities which would give rise to "orders." (j) Government Contracts None of the Company's industry segment activities involved government contracts in fiscal 1998 or fiscal 1999. 5 (k) Competition Gaming and Hotel Management Activities Domestic Gaming The Company did not have any domestic gaming activities in fiscal 1998 or fiscal 1999 and, therefore, was not subject to competition. International Gaming and Hotel Management Activities The Company competes with other gaming companies for opportunities to manage casino gaming and hotel management activities in emerging international gaming jurisdictions. The Company expects many competitors to enter new international jurisdictions that authorize gaming, some of whom may have more personnel and greater financial and other resources than the Company or its subsidiaries. Further expansion of international legalized gaming in the markets where the Company is active or proposes to become active could also significantly and adversely affect its proposed gaming activities. In particular, the expansion of casino gaming in or near any geographic area where the Company is active, or in pursuit of a gaming license or rights to manage casino gaming activities, may diminish or otherwise detract from the activities of the Company or its subsidiaries. In this regard, the Company believes that its gaming markets are extremely competitive and expects them to become even more competitive as the number of gaming and other entertainment establishments increases. Such competition is growing in the Mediterranean market and the Company also competes with gaming facilities worldwide. It is also possible that substantial competition could cause the supply of casino gaming facilities to exceed the demand for casino gaming. Additionally, many of the Company's competitors have more casino gaming industry experience, larger operations or significantly greater financial and other resources than the Company. Given these factors it is possible that substantial competition could have a material adverse effect on the Company's future results of operations. (3) Real Estate Activities Real estate investments through June 30, 1999 consisted solely of the Oasis III Property, which was undeveloped at the close of fiscal 1999 and, therefore, competition as it relates to real estate activities is not applicable. (l) Research and Development The Company's business strategy is to acquire or obtain management contracts on upscale hotels, resorts and gaming casinos and to renovate (where necessary) and re-brand in growth-stage vacation markets in the Mediterranean, Caribbean, South Pacific (including certain Asian markets and Pacific Rim islands) and the United States. The Company also intends to develop "sportsbook" and Internet-based gaming opportunities where possible. 6 (m) Government Regulation (1) Gaming and Hotel Management Activities Domestic Gaming The Company did not have any domestic gaming activities during fiscal 1998 or fiscal 1999 and, therefore, was not subject to government regulation. International Casino Gaming and Hotel Management Activities The Company's international operations are generally dependent on the continued licenseability, qualification and operations of the Company or the subsidiaries and/or that hold the requisite licenses or permits in the jurisdictions where it conducts or proposes to conduct gaming and hotel management activities. Generally, such operations are reviewed periodically by local, state and/or federal governmental authorities. In addition, in most jurisdictions, the Company's directors and many of the employees of casinos and hotels are often required to be approved. The failure of the Company or any of its key personnel to obtain or retain a license or a permit in a particular jurisdiction could have a material adverse effect on the Company's ability to continue or expand its casino gaming and/or hotel management operations, or to obtain or retain licenses or permits in other jurisdictions. In addition, any regulations adopted by the local, state and/or federal governmental authorities, the legislatures or any governmental authority in jurisdictions in which the Company intends to have casino gaming and/or hotel management operations, may materially adversely affect its operations. At the close of fiscal 1999, the Company's only international casino gaming and hotel management investments were in Tunisia, North Africa. Under Tunisian law, casino gaming is closely supervised and monitored through the use of on-site government representatives and strict published operating procedures. The process through which a company obtains a license to conduct casino gaming in Tunisia is similar to that of many of the various states in the U.S. which have recently adopted legalized gaming statutes, involving background checks, personal interviews and the discretionary right of the government body overseeing gaming activities to deny or withdraw a license to any applicant. The Tunisian government has approved the Company's management for gaming licenses at the Cap Gammarth Casino and the Hammamet Casino. (2) Real Estate Activities The Company did not have any real estate development activities in fiscal 1998 or fiscal 1999 and, therefore, was not subject to government regulation. (n) Compliance With Environmental Laws Compliance with United States federal, state and local provisions regulating the discharge of materials into the environment or otherwise relating to the protection of the environment has no material effect on the capital expenditures, earnings and competitive position and operations of the Company's casino gaming and hotel management activities. 7 (o) Employees There were two (2) corporate officers of the Company and 176 employees of significant subsidiaries who rendered services during fiscal 1999 and fiscal 1998. (p) Forward Looking Statements The statements contained herein include forward-looking statements based on management's current expectations of the Company's future performance. Predictions relating to future performance are inherently uncertain and subject to a number of risks. Consequently, the Company's actual results could differ materially from the expectations expressed in this Report. Factors that could cause the Company's actual results to differ materially from the expected results include, among other things: increases in the number and the intensely competitive nature of competitors in the markets in which the Company operates; the seasonality of the hotel and casino gaming industry in certain markets in which the Company operates; the susceptibility of the Company's operating results to adverse weather conditions and natural disasters; the availability of sufficient capital to finance the Company's business plan on terms satisfactory to the Company; the risk that jurisdictions in which the Company proposes to operate hotels or casinos rescind or fail to enact legislation permitting casino gaming or do not enact such legislation in a timely manner; changes in governmental regulations governing the Company's activities; changes in labor, equipment and capital costs; the ability of the Company to consummate contemplated joint ventures and acquisitions on terms satisfactory to the Company, and to obtain necessary regulatory approvals therefor; and other risks detailed in the Company's filings with the Securities and Exchange Commission ("SEC"). Additionally, all statements contained herein that are not historical facts, including but not limited to statements regarding the Company's current business strategy, the Company's prospective joint ventures, asset sales and expansions of existing projects, and the Company's plans for future development and operations, are based upon current expectations. In addition to being forward- looking in nature, these statements involve a number of risks and uncertainties. Generally, the words "anticipates," "believes," "estimates," "expects," and similar expressions as they relate to the Company and its management are intended to identify forward-looking statements. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which statements are made pursuant to the Private Litigation Reform Act of 1995 and, as such, speak only as of the date made. (q) Year 2000 Issues Many computers systems today may be unable to interpret data correctly after December 31, 1999 because they allow only two digits to indicate the year in a date. The Company and its subsidiaries have been engaged in assessing this Year 2000 issue as it relates to their businesses, including their electronic interactions with banks, vendors, customers, and others. This project along with developing and implementing solutions to the year 2000 issue has been completed and management has concluded that the impact of the Year 2000 issue on its complete systems will not have a material impact on the Company's consolidated financial results or position. The Company's consolidated financial results could be adversely affected if one or more of the companies in which it has material investments were materially adversely affected by the Year 2000 issue. 8 ITEM 2. DESCRIPTION OF PROPERTY. (a) Corporate Headquarters The Company currently leases space and maintains its executive office at 3753 Howard Hughes Parkway, Las Vegas, Nevada. From May 1998 to December 31, 1998, the Company was provided office space at the office of its President in Wendover, Nevada. (b) Gaming and Hotel Management Facilities Domestic Gaming At the close of fiscal 1999, the Company did not own any domestic real property interests related to its proposed hotel and casino gaming activities, nor did it have any domestic casinos or hotel management activities subject to lease obligations. International Gaming and Hotel Management Facilities At the close of fiscal 1999, the Company, through its subsidiaries, was a lessee under three (3) lease agreements related to the Cap Gammarth Casino, the Gammarth Resort, and Hammamet Casino in Tunisia. Due to its position as a lessee, neither the Company or its subsidiaries owned any real or personal property. (c) Real Estate Activities The Company did not have any domestic real estate operations at the close of fiscal 1998 or fiscal 1999. ITEM 3. LEGAL PROCEEDINGS. The Company settled, or had agreements to settle all material litigation where it was a defendant at the close of fiscal 1999 and knows of no material threatened legal proceedings, other than ordinary routine litigation incidental to its business; provided however that one of the Company's indirect subsidiaries, CWI, is currently in arbitration with STTG, the developer/owner of the Gammarth Resort over the amount of rent due for the LePalace Hotel since its opening. An initial judgement was granted, however the parties by mutual agreement are continuing the matter and this arbitration remained open at June 30, 1999. On July 13, 1998, Resorts filed a civil complaint for damages in the U.S. District Court, District of Nevada against SALT and several other defendants. On July 2, 1999 the District Court adjudged and decreed compensatory damages in the amount of $292 Million plus interest and $10 Million in punitive damages (the "SALT Judgment"). The SALT Judgment affects the Cap Gammarth Casino and is expected to result in the Company foreclosing on the interest of SALT and the individual defendants equity ownership of SALT. CPRC management currently has instituted proceedings in Tunisia to collect upon its money judgement. 9 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS. On April 8, 1998, there was a special meeting of the Company's shareholders (the "Fiscal 98 Meeting") at which: (a) Ms. Tammy Gehring, Mr. Cliff Halling, and Ms. Bonnie Jean C. Tippetts were elected to serve as the directors of the Company; (b) the shareholders approved an amendment to the Company's Articles of Incorporation to increase the number of authorized shares of the Company's $0.10 par value common stock from 5,000,000 shares to 25,000,000 shares; (c) the shareholders approved a 1-for- 100 reverse stock split of the Company's issued and outstanding common stock; (d) the shareholders approved the selection of Jones, Jensen & Company as the Company's independent auditors for the fiscal year ended August 31, 1998 (which were subsequently dismissed). The Company's Board of Directors, at the time of the Fiscal 98 Meeting, recommended in the Proxy Statement that shareholders vote for each of the proposals presented. No solicitation in opposition to management's nominees was received prior to, nor presented at the meeting, and all of the proposals were passed by margins of at least 89% of the shares represented at the meeting. On October 19, 1998, there was a special meeting of the Company's shareholders (the "Fiscal 99 Meeting") at which the Company's shareholders approved an Agreement of Merger with Oasis Resorts International, Inc., a Nevada corporation ("Oasis") to implement a reincorporation of the company known as Flexweight Corporation in the state of Nevada. Oasis was incorporated by the company known as Flexweight Corporation specifically for the purpose of implementing the reincorporation. Oasis had no assets or liabilities. As a result of the reincorporation, the name of the Company was changed to Oasis Resorts International, Inc. and all the assets and liabilities of the company known as Flexweight Corporation became the assets and liabilities of Oasis, and each share of $.10 par value common stock for one (1) share of preferred stock in the company known as Flexweight Corporation was exchanged for one (1) share of common stock and one (1) share of preferred stock of preferred stock in Oasis. The Company's Board of Directors, at the time of the Fiscal 99 Meeting, recommended in the Proxy Statement that shareholders vote in favor of each of the proposal's presented. No solicitation in opposition to management's recommendations was received prior to or at the meeting, and all of the proposals were passed by margins of at least 67% of the shares represented at the meeting. PART II ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. (a) Market Information Through November 1998, the Company's common stock was traded through the NASDAQ Over- the-Counter Electronic Bulletin Board system under the symbol "FXWA." From November 1998 to March 2000, the Company's shares have traded on the NASDAQ Electronic Bulletin Board system under the symbol "OAIS." In February 2000, as a result of the Company failing to be in compliance with respect to the disclosure requirements of the Exchange Act, the NASD delisted the Company's common stock and ceased trading on the Bulletin Board. The Company intends to take the steps necessary to resume trading after it becomes current with its Exchange Act filing requirements. On March 3, 2000, the Company's symbol was changed to "OAII." 10 The range of high and low "bid" quotations for the Company's common stock for the last two fiscal years as reported by NASDAQ OTC Bulletin Board are provided below. These over-the-counter market quotations reflect inter-dealer prices without retail markup, markdown or commissions and may not necessarily represent actual transactions. Bid Price of Common Stock Fiscal 1999 High (1) Low (1) Quarter ended 06/30/99 $10.05 $ 2.50 Quarter ended 03/31/99 $33.75 $ 3.15 Quarter ended 12/31/98 $36.25 $26.25 Quarter ended 09/30/98 $47.50 $26.25 Fiscal 1998 High (1) Low (1) Quarter ended 06/30/98 $36.25 $18.20 Quarter ended 03/31/98 $ .05 $ .05 Quarter ended 12/31/97 $ .05 $ .05 Quarter ended 09/30/97 $ .05 $ .05 _____________ (1) Amounts have been adjusted to give retroactive effect for the five to one reverse stock split in February 2000 and the one for 100 reverse stock split of April 1998. (b) Holders The Company had approximately 722 holders of record of its single class of equity securities at June 30, 1999. This approximate number of record holders of common stock does not include an unknown number of beneficial holders whose shares are registered in "street name." (c) Dividends The Company has not paid any cash dividends with respect to its common stock since its inception. No cash or property dividends were paid or declared during fiscal 1998 or fiscal 1999. At the close of fiscal 1999, the Board of Directors of the Company had not approved a dividend distribution policy, however, there are no contractual restrictions on the Company's present or future ability to pay dividends. 11 ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (a) Forward Looking Statements EXCEPT FOR HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS DISCUSSED IN THIS FORM 10-KSB ARE FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE SET FORTH IN SUCH FORWARD LOOKING STATEMENTS. SUCH RISKS AND UNCERTAINTIES INCLUDE, WITHOUT LIMITATION, THE COMPANY'S DEPENDENCE ON THE TIMELY DEVELOPMENT, INTRODUCTION AND CUSTOMER ACCEPTANCE OF SERVICES AND PRODUCTS, THE IMPACT OF COMPETITION AND DOWNWARD PRICING PRESSURES, THE ABILITY OF THE COMPANY TO REDUCE ITS OPERATING EXPENSES AND RAISE ANY NEEDED CAPITAL AND THE EFFECT OF CHANGING ECONOMIC CONDITIONS. (b) Significant Events During the Fiscal Year Ended June 30, 1999 and 1998 On May 1, 1998, the Company, a Nevada corporation and a wholly owned subsidiary of the Company, merged with Oasis III, which held assets consisting of 20 acres of partially-developed land in Oasis, Nevada. In connection with the merger, the Company issued 602,000 shares of common stock to the shareholders of Oasis III to acquire 100% of the issued and outstanding common stock of Oasis III. In addition, the Company issued the shareholders of Oasis III 200,000 shares of its common stock in connection with the real estate agreement dated April 9, 1998. Upon the close of the merger, the shareholders of the Company held 149,916 shares of the Company's common stock and the shareholders of Oasis III held approximately 802,000 shares of the Company's common stock, representing approximately 80% of the issued and outstanding common stock. In October 1998, the Company entered into an Asset Purchase Agreement with NuOasis which resulted in the Company acquiring 75% of CPRC. The consideration for the purchase of CPRC consisted of 1,563,450 shares of the Company's common stock (the "Oasis Stock"), warrants to purchase 7.2 million shares of the Company's common stock at $30.00 per share (the "Oasis Warrants") and $80 million of promissory notes issued by the Company (the "Oasis Notes"). CPRC acquired all of the equity interest owned by NuOasis in CCGL (which operates the casino Cleopatra Cap Gammarth), a right to re-acquire an interest in Cleopatra Hammamet Limited (which operates the casino Cleopatra Hammamet Casino) and CWI (which operates the Le Palace Hotel & Resort at Cap Gammarth). All of the properties are located in Tunisia. The Oasis Warrants represent the right to acquire 7,200,000 shares of the Company's common stock at $30.00 per share. The Oasis Notes consist of promissory notes with an aggregate face value of $180 million. At the time of the transaction, Oasis had no ability to repay the notes, and therefore, the notes had an estimated fair value at the date of issuance of $7 million. Management estimated the fair value of the $180 million of notes payable to NuOasis at approximately $7 million based on an enterprise value of Oasis. Management considered factors such as the fair value of the assets received from Oasis III, as well as the value of the Company's common stock at the date of the acquisition and post-acquisition period of 90 to 120 days. Management estimated a fair value of Oasis III at $16.6 million. The $7 million fair value of the notes was deemed a constructive dividend since the amount is payable to the controlling shareholders, NuOasis, and accordingly, the value of such notes was reflected as a reduction of paid-in capital. On November 15, 1999, NuOasis converted the notes into 8.1 million shares or $0.87 per share. After the conversion, the shareholders of NuOasis controlled approximately 85% of the issued and outstanding common stock. 12 The acquisition of NuOasis interests by the Company has been accounted for as a "reverse acquisition," whereby NuOasis is the acquiror, and since the operations of NuOasis are more significant than that of the Company and, NuOasis acquired a controlling interest in Oasis on November 15, 1999. Accordingly, the accompanying consolidated financial statements include the operations of NuOasis interests acquired for all periods presented. The net assets of Oasis are deemed to have been acquired in the reverse acquisition and, accordingly, the assets and liabilities were recorded at fair value at the date of acquisition. (c) Going Concern The Company's working capital resources during the years ended June 30, 1999 and 1998 were provided by utilizing the cash on hand and from the operations of the Le Palace Hotel. The Company has experienced recurring net losses, has limited liquid resources, negative working capital. Management's intent is to continue searching for additional sources of capital and, in the case of NuOasis International, new casino gaming and hotel management opportunities. In the interim, the Company intends to continue operating with minimal overhead and key administrative functions provided by consultants who are compensated in the form of the Company's common stock. It is estimated, based upon its historical operating expenses and current obligations, that the Company may need to utilize its common stock for future financial support to finance its needs during fiscal 2000. Accordingly, the accompanying consolidated financial statements have been presented under the assumption the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty. (d) Liquidity and Capital Resources A comparison of working capital, cash and cash equivalents and current ratios for the past two fiscal years are reflected in the following table:
June 30, 1999 1998 Working Capital (Deficit) $ (5,021,869) $ (3,769,553) Cash and Cash Equivalents $ 51,698 $ 104,454 Current Ratio .20 .48
The most significant effects on working capital and its components during fiscal 1999 were the operations of the Le Palace Hotel & Resort, the continued accrual of rent on the Le Palace Hotel & Resort as well as general administrative expenses, legal and professional advisory fees, and the acquisition of a controlling interest of CPRC and its subsidiaries. The Company's current plan for growth is to increase its working capital by arranging debt and equity financing to finance the activities of its subsidiaries and for future acquisitions. Additionally, the Company anticipates receiving a distribution of net operating revenues from its hotel management activities and its proposed international casino gaming activities beginning in fiscal 2000 or its fiscal year ended June 30, 2001 ("fiscal 2001"). However, the Le Palace Hotel & Resort has been in operation for more than one (1) year, but has yet been able to generate positive cash flows and there are no assurances that it will be able to generate positive cash flow, or that the Cap Gammarth Casino will open or generate positive cash flow. As of the close of fiscal 1999, the Company's sole operations were derived from its hotel management subsidiary and, therefore, there is considerable risk that the Company will not have adequate working capital to sustain its current status or that the Company or its subsidiaries may not be able to secure the required debt or equity financing to complete their proposed projects on a timely basis. In such event the Company or its 13 subsidiaries may be forced to sell all or certain projects, or contribute them to a third party on terms which would preclude the Company from realizing significant future benefit, or any benefit at all from the projects. The Company may also need to issue additional shares of its common stock to pay for services incurred, to generate working capital for the development and current operations of its subsidiaries, or to continue to sustain itself. (e) Capital Expenditures General The Company has no commitments for material capital expenditures; however, the Company's subsidiaries, CPRC and Oasis III, are seeking financing commitments in the aggregate amount of $100 Million to complete their various properties. As to any future projects undertaken by the Company, additional project financing will be required. Capital investments may include all or some of the following: acquisition and development of land, acquisition of leasehold investments and contract rights, and construction of other facilities. In connection with development activities relating to potential acquisitions or new jurisdictions, the Company also makes expenditures for professional services which are expenses as incurred. The Company's financing requirements depend upon actual development costs, the amounts and timing of such expenditures, the amount of available cash flow from operations and the availability of other financing arrangements including selling equity securities and selling or borrowing against assets (including current facilities). The Company may also consider strategic combinations or alliances. Although there can be no assurance that the Company can effectuate any of the financing strategies discussed above, the Company believes that if it determines to seek any additional licenses to operate gaming or permits to conduct hotel operations in other jurisdictions it will be able to raise sufficient capital to pursue its strategic plan. If for any reason, any of the Company's subsidiaries' joint ventures or projects are unable to borrow or otherwise meet their commitments under current agreements to provide the furniture, fixtures, equipment and working capital to acquire, develop and operate future casino gaming and hotel management projects, the Company may be required to intercede and provide the requisite financing and working capital, or be forced to sell all or a portion of the respective interests, or lose the respective rights to the projects and properties entirely. Cap Gammarth Casino At June 30, 1999, the Cap Gammarth Casino had approximately $1,000,000 remaining to be paid as security deposits and advance rent before the Company could take possession and open the facility. Additionally, there was approximately $6,000,000 remaining to be paid for furniture, fixtures and equipment, bankroll and pre-opening costs for the casino. To finance the remaining expenditures on the Cap Gammarth Casino, the Company has been negotiating debt financing and possible joint ventures with foreign banks and investment groups. Gammarth Resort During fiscal 1998, CWI made a partial payment on the lease on the Gammarth Resort and, simultaneously, filed a request for arbitration in its dispute with the developer, STTG, claiming that STTG had breached the terms of the underlying lease by not completing for occupancy, on a timely basis, the Le Palace Hotel, the shopping arcade, the health club or the beach club comprising the resort in accordance with the terms of the lease, causing CWI significant loss of revenue and profits. The matter was removed from the arbitration calendar by mutual agreement between the parties, however, in fiscal 1999, the matter was 14 put back on the arbitration calendar and subsequent to the close of fiscal 1999, in December 1999, the arbitration board awarded CWI damages of approximately $2,500,000 to offset against the past due rent. The arbitration board did not address the issue of the reduction of rent due to STTG as a result of the resort not being completed and CWI has requested arbitration in France to have the rent issue decided. (f) Cash Flows Cash used by operating activities was $134,000 for the year ended June 30, 1999 as compared to cash provided by operations of $210,000 for the comparable period last year. The increase is due to the increase in cash paid for interest. Cash used by investing activities was $613,000 for the year ended June 30, 1999 as compared to cash provided by investing activities of $218,000 for the comparable period last year. During fiscal 1999 the Company purchased equipment and during fiscal 1998 the Company made certain advances. Cash provided by financing activities was $539,000 for the year ended June 30, 1999 as compared to cash used in financing activities of $986,000 for the comparable period last year. During fiscal 1999, advances from the lessor decreased advances to the controlling shareholder were increased, and additional capital contributions were made. (g) Results of Operations Year Ended June 30, 1999 Compared to Year Ended June 30, 1998. The Company's total revenues for the year ended June 30, 1999 were $5.5 million as compared to $5.3 million for the year ended June 30, 1998. These revenues were entirely derived from the operations of the LePalace Hotel. To date, the hotel has not been able to realize its potential due the failure of the developer to complete certain amenities at the hotel, the Cap Gammarth Casino and the surrounding properties associated with the complex. Occupancy rates have been in the 35% to 45% range during the summer months and 10% to 18% during the winter months. Total cost of revenues were $5.8 million in fiscal 1999 as compared to $5.5 million in fiscal 1998. The increase is due to increased rent expense due to scheduled rent increases. Selling, general and administrative costs decreased $233,000. In fiscal 1999 and 1998, the Company recorded impairments of long-lived assets of $8.3 million and $3.5 million, respectively. As of June 30, 1999, management believed that the goodwill generated by the reverse acquisition of Oasis was impaired, and accordingly, the Company charged operations $8.3 million. In 1998, management determined that its investment in the Cleopatra Cap Gammarth casino and its Club Hammamet receivable was impaired, and accordingly, they recorded a provision totaling approximately $3.5 million. As a result of change in stock ownership which occurred in fiscal 1999, the Company's use of its net operating loss carry forwards may be limited by Section 382 of the Internal Revenue Code until such net operating loss carry forwards expire. ITEM 7. FINANCIAL STATEMENTS. The financial statements are filed as a part of this Annual Report on Form 10-KSB commencing on page F-1 attached hereto. 15 ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. During fiscal 1999, in connection with the restructuring of the Company, the Board of Directors, decided to replace Jones, Jensen & Company as the independent accountants for the Company with the accounting firm of McKennon, Wilson & Morgan LLP. Jones, Jensen & Company previously issued a report dated November 11, 1997. The report noted that the Company was a development stage company and had no operating capital which raises significant doubt about the ability of the Company to continue as a going concern. Other than the Company's ability to continue as a going concern, the report did not contain any adverse opinion or disclaimer of opinion, or any qualification as to uncertainty, audit scope or accounting principles. Such report subsequent to issuance has not been modified by Jones, Jensen & Company. There were no disagreements with Jones, Jensen & Company on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure during the two-year period prior covered by their report and subsequently through April 10, 2000. PART III ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT. (a) Identification of Directors and Executive Officers. The Company, pursuant to its Bylaws is authorized to maintain executive officers as needed, but not less than three (3) and not more than nine (9) members on its Board of Directors. The directors and officers for fiscal 1998 and fiscal 1999 were as follows: Name Age Position Period Served as Director Walt Sanders 53 President May 1, 1998 to present Director Charles R. Longson 51 Director May 1, 1998 to present Richard O. Weed 37 Director October 1, 1998 to present Jon L. Lawver 61 Director October 1, 1998 to present All directors of the Company hold office until the next annual meeting of shareholders and until their successors have been elected and qualified. Vacancies in the Board of Directors are filled by the remaining members of the Board until the next annual meeting of shareholders. The officers of the Company are elected by the Board of Directors at its first meeting after each annual meeting of the Company's shareholders and serve at the discretion of the Board of Directors or until their earlier resignation or death. (b) Business Experience The following is a brief account of the business experience during the past five years of each director, director nominee and executive officer of the Company, including principal occupations and employment during that period and the name and principal business of any corporation or other organization in which such occupation and employment were carried on. Walter Sanders. Walter Sanders was appointed CEO, President and Director of the Company on May 1, 1998. Mr. Sanders is currently the Mayor of the City of West Wendover, Nevada and the President of Nevlink Enterprises, Inc. a construction company ("Nevlink"). Mr. Sanders' construction experience 16 includes the development of both commercial and residential projects primarily in the western region of the United States. Mr. Sanders, through his role as President of Nevlink, is currently focusing on the development of casinos, hotels, golf courses, housing projects and large public works projects. Mr. Sanders has a wide range of skills in engineering, design and surveying. Mr. Sanders' experience also includes a substantial role in the development of several casinos located in Wendover, Nevada including: Nevada Crossing Hotel and Casino, State Line Hotel and Casino, Peppermill Hotel and Casino and several other casinos. Charles R. Longson. Charles R. Longson was appointed Vice-President and Director of the Company on May 1, 1998. Mr. Longson has been the general manager of the Silver Smith Casino and Resort in Wendover, Nevada since 1979. His experience includes over 26 years in developing and managing large gaming resorts. Mr. Longson specializes in start-up construction, including: design, development, floor layouts and operations and personnel. Richard O. Weed. Richard O. Weed (Director), is Managing Director/Special Projects with Weed & Co. L.P. in Newport Beach, California. Weed & Co. provides advice on capital formation, business strategy and legal matters on a special project basis. Mr. Weed is known for using analytical firepower, creative problem solving and resourceful implementation to assist clients. Mr. Weed's abilities are the result of his association with prominent law firms in California and Texas and graduate business education. Mr. Weed received a Master of Business Administration - International Management in 1992 from the University of Southern California, Juris Doctor in 1987 from St. Mary's University School of Law, and Bachelor of Business Administration - International Business in 1984 from The University of Texas at Austin. Mr. Weed is a member of the State Bar of California and State Bar of Texas. Jon L. Lawver. Mr. Jon L. Lawver has been Secretary and a Director of the Company since October 1, 1998. Mr. Lawver has twenty-two (22) years of experience in the area of bank financing where he has assisted medium size companies by providing expertise in documentation preparation and locating financing for expansion requirements. Mr. Lawver was with Bank of America from 1961 to 1970, ending his employment as Vice President and Manager of one of its branches. From 1970 to present Mr. Lawver has served as President and a Director of J.L. Lawver Corp., a financial consulting firm ("Lawver Corp."). Since 1988, as President and a Director of Eurasia Inc., a private finance equipment leasing company. (c) Identification of Certain Significant Employees and Consultants In fiscal 1996, the Company entered into a Consulting Agreement with AZ Professional Consultants Inc. ("AZ") pursuant to which the Company agreed to engage AZ to provide certain services related to the day-to-day management record keeping and regulatory reporting requirements of the company, the ("AZ" Agreement). The AZ Agreement had a term of one (1) year and continued on a month-to-month basis after expiration of the one-year term. The Agreement was mutually terminated on April 1, 1997. During the term of the AZ Agreement, the Company issued to AZ, as consideration for the services provided by AZ, approximately One Hundred Eighty Thousand (180,000) shares of its common stock. On July, 1997, the Company entered into consulting agreements with Mr. Kurtz, doing business as Park Street (the "Park Street Agreement"). Pursuant to the Park Street Agreement, the Company agreed to pay Mr. Kurtz Four Thousand (4,000) shares of its common stock each month for the term of the subject agreement and further compensate Park Street for the introduction of businesses which are acquired by the Company. These agreements expired in July, 1999. During fiscal 1998, the Company entered into an Exchange Agreement with NuOasis pursuant to which the Company issued Two Hundred Thousand (200,000) shares of its common stock to NuOasis in exchange for Six Hundred Fifty Thousand (650,000) shares of common stock of Resorts owned by NuOasis. As part of the transaction, the Company also granted NuOasis an Option to purchase an additional Fifty Thousand (50,000) shares of its common stock (the "NuOasis Option") at $0.50 per share. At June 30, 1999, 17 NuOasis had not exercised the NuOasis Option; the options were scheduled to expire July 1, 1999; however, such option term was extended until July 1, 2003. During fiscal 1999, the Company entered into two (2) consulting agreements, one with Hudson Consulting Group Inc. ("Hudson") on July 18, 1998, as amended September 15, 1998 (the "Hudson Agreement") and another with NuVen Advisors Inc. ("NuVen") on July 18, 1999 subsequently amended and assigned to NuVen Advisors Limited Partnership on July 1, 1999 (the "NuVen Agreement"). The Company agreed to pay Hudson certain performance based fees upon the merger with or acquisition of a business introduced by Hudson, and to pay Hudson Three Thousand (3,000) shares of its common stock each month for the term of the subject agreement. Following the purchase of the assets of NuOasis in October 1998, the Company issued 300,000 shares of its common stock to Hudson as its fee for identifying and assisting in the closing of the transaction. The Hudson Agreement had a term of one (1) year and expired on January 1, 1999. Pursuant to the NuVen Agreement, the Company agreed to retain NuVen to assist it in identifying and effecting the purchase of business and assets relative to its hotel and gaming business (the "NuVen Agreement"). The NuVen Agreement became effective April 1, 1998 and expired in March 31, 1999 and resulted in the Company issuing Eight Thousand (8,000) shares of its common stock for services; NuVen waived its right to expense reimbursement and to receive additional shares of the Company's common stock on the closing of the purchase of the assets of NuOasis. As incentive to execute the NuVen Agreement, the Company granted NuVen the option to purchase Seventy Thousand (70,000) shares of the Company; common stock at a price of $30.00 per share. At June 30, 1999, NuVen had not exercised the NuVen Option. In connection with the purchase of CPRC in fiscal 1999, the Company acquired the existing operations of a resort hotel and development-stage casino gaming interests in Tunisia, North Africa and, with it, acquired employee relationships with certain executives who hold officers', directors' and key management positions in various foreign subsidiaries of CPRC. None of these individuals are shareholders of the Company and the Company is not dependent on any single such individual for operations. At June 30, 1999, NuOasis owned 1,563,450 shares, or approximately forty-nine percent (49%), of the issued and outstanding common stock of the Company, and it has two (2) appointees sitting on the Company's four (4) member Board of Directors. On November 15, 1999, NuOasis was issued 8.1 million shares as settlement of the $7 million of notes taken at fair value. Fred G. Luke is the President of NuOasis and its parent corporation, Resorts, and he has been instrumental in the Company's purchase of the NuOasis assets and in identifying, acquiring, financing and developing the assets and business interests of Resorts and NuOasis, including those acquired by the Company. Pursuant to the relationship between the Company and NuVen Limited Partnership ("NuVen LP") and as a result of Mr. Luke's position with NuOasis and Resorts, he is in a position to influence the business affairs of the Company and therefore deemed a "control person," as defined in the Exchange Act. Mr. Luke has been President of NuOasis since fiscal 1995, and the Chief Executive Officer and Director of Resorts, the parent of NuOasis since June 1993. Mr. Luke has more than thirty (30) years of experience in domestic and international financing and the management of private and publicly held companies. Since 1982, Mr. Luke has provided financial and corporate restructuring consulting services and has served, for brief periods lasting usually six months, as Chief Executive Officer and/or Chairman of the Board of various publicly held and privately held companies in conjunction with such financial and corporate restructuring services. In addition to his position with Resorts and NuOasis, Mr. Luke currently serves as Chairman and President of NuVen and General Partner, NuVen LP, which have provided consulting services, office space and other general and administrative services to the Company since the beginning of fiscal 1999. NuVen and NuVen LP currently provide managerial, acquisition, and administrative services to other public 18 and private companies in addition to the Company. NuVen LP and NuVen are controlled by Mr. Luke and are affiliates of the Company. Mr. Luke received a Bachelor of Arts Degree in Mathematics from California State University, San Jose in 1969. Mr. Gabriel Tabarani serves as Director of CPRC and CWI. Fred Graves Luke, Fred G. Luke's father, is a Director of CPRC and owns personally 10% of CPRC. (d) Family Relationships Fred Graves Luke is the father of Fred G. Luke. He serves as a Director of CPRC, CCGL, CHL and CWI. (e) Involvement in Certain Legal Proceedings. During the past five years, no director or officer of the Company has: (1) Filed or has filed against him a petition under the federal bankruptcy laws or any state insolvency law, nor has a receiver, fiscal agent or similar officer been appointed by a court for the business or property of such person, or any partnership in which he was a general partner, or any corporation or business association of which he was an executive officer at or within two years before such filings. (2) Been convicted in a criminal proceeding; (3) Been the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining such person from, or otherwise limiting his involvement in any type of business, securities or banking activities. (4) Been found by a court of competent jurisdiction in a civil action, the SEC or the Commodity Futures Trading Commission ("FTC") to have violated any federal or state securities or commodities law, which judgment has not been reversed, suspended, or vacated. (f) Compliance with Section 16(a) of the Exchange Act Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act") requires the Company's directors and officers and persons who own more than ten percent (10%)of the Company's equity securities, to file reports of ownership and changes in ownership with the SEC. Directors, officers and greater than ten-percent shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports filed. ITEM 10. EXECUTIVE COMPENSATION. (a) Summary Compensation Table The following summary compensation table sets forth in summary form the compensation received during each of the Company's last three completed fiscal years by the Company's President and four most highly compensated executive officers other than the President. 19 Name and Principal Fiscal Salary Other Annual Options Position Year ($) Compensation ($) Granted (#) Walter Sanders, 1999 - - - President 1998 - - - 1997 - - - (b) Stock Options During the years ended June 30, 1999 and 1998, the Company had no stock options granted to employees. However, the Company granted options and warrants to non-employees. The Company issued warrants to purchase 7,200,000 shares at $30.00 per share to NuOasis and 200,000 shares at $0.50 per share. The Company issued options to NuVen to purchase 70,000 shares at $30.00 per share. On November 15, 1999, Oasis cancelled the 7,200,000 warrants and issued 8,111,240 shares of common stock to NuOasis. (c) Long-Term Incentive Plans Not applicable. (d) Compensation of Directors The Company has no standard arrangement for the compensation of directors or their committee participation or special assignments. (e) Contracts With Executive Officers None (f) Change of Control On May 1, 1998, following the Company's acquisition of Oasis III, Tammy Gehring, Bonnie Jean Tippetts and Cliff Halling resigned from their respective positions as officers and directors of the Company in favor of Mr. Walter Sanders and Mr. Charles Longson. In fiscal 1999, following the purchase of the NuOasis assets, Mr. Jon L. Lawver and Mr. Richard O. Weed were appointed to hold positions as directors of the Company. (g) Report on Repricing of Options Not applicable. 20 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (a) and (b) Security Ownership of Certain Beneficial Owners and Management. The following table sets forth information regarding the ownership of the Company's voting securities by persons owning more than 5% of such securities as of February 29, 2000, the most recent practicable date. Title of Name and Address Amount and Nature of Percent Class of Beneficial Owner Beneficial Interest (1) of Class $.001 par value NuOasis Resorts Int'l Inc. 9,674,690 85.6% Common Stock 43 Elizabeth Avenue, Box N-8680 Nassau, Bahamas (1) Amounts have been adjusted to give retroactive effect to the five for one reverse stock split in February 2000. The following sets forth information with respect to the Company's voting stock beneficially owned by each current and former officer and director, and by all current and former officers and directors as a group, as of February 29, 2000: Title Amount and Nature of Name and Address of Percent Class of Beneficial Owner Beneficial Interest(1) of Class $.001 par value Mr. Walter Sanders 400,000 3.6% Common Stock P.O. Box 2329 West Wendover NV 89883 $.001 par value All Officers and 400,000 3.6% Common Stock Directors as a group (1) Amounts have been adjusted to give retroactive effect to the five for one reverse stock split in February 2000. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. (a) Transactions with Directors and Affiliates. There were no transactions or series of similar related transactions during fiscal 1999 or fiscal 1998 that exceeded an aggregate amount of $60,000. (b) Indebtedness of Management There were no transactions, or series of similar related transactions during fiscal 1999 or fiscal 1998. (c) Transactions with Promoters Not applicable. 21 PART IV ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K. (a) Consolidated Financial Statements The Consolidated Financial Statements included in this Item are indexed on Page F-1, "Index to Consolidated Financial Statements." (b) Financial Statement Schedules Not applicable. (c) Exhibits Unless otherwise noted, Exhibits are filed herewith. Exhibit Number Description 3.1 Articles of Incorporation of Oasis Resorts International, Inc. 3.2 Bylaws of Oasis Resorts International, Inc. 10.1 Exchange Agreement between Cleopatra's Palace Resorts and Casinos Limited and Cleopatra's World, Inc. 10.2 Exchange Agreement between Cleopatra's World, Inc. and Cleopatra Palace Limited 10.3 Exchange Agreement between Cleopatra's Palace Resorts and Casinos Limited and Cleopatra Palace Limited 10.4 Exchange Agreement between Cleopatra's Palace Resorts and Casinos Limited and NuOasis International Inc. 10.5 Advisory Agreement between NuVen Advisors, Inc. and Flexweight Corporation 10.6 Merger Agreement between Oasis Resorts International, Inc. and Flexweight Corporation 10.7 Warrant Agreement between NuOasis International Inc. and Flexweight Corporation 10.8 Asset Purchase Agreement between NuOasis International Inc. and Flexweight Corporation 10.9 Option Agreement between NuOasis International Inc. and Flexweight Corporation 10.10 Option Agreement between NuVen Advisors Inc.. and Flexweight Corporation 10.11 Flexweight Corporation 1998 Stock Option Plan 10.12 Exchange Agreement between NuOasis International Inc. and Cleopatra's World, Inc. 22.1 Schedule of Subsidiaries of the Company 27 Financial Data Schedule 22 SIGNATURES In accordance with Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. OASIS RESORTS INTERNATIONAL, INC. (formerly, Flexweight Corporation) Date: April 20, 2000 By: /s/ Walter Sanders Walter Sanders, President and Director Date: April 20, 2000 By: /s/ Jon L. Lawver Jon L. Lawver, Principal Accounting Officer and Director In accordance with the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated. OASIS RESORTS INTERNATIONAL, INC. (formerly, Flexweight Corporation) Date: April 20, 2000 By: /s/ Walter Sanders Walter Sanders, President and Director Date: April 20, 2000 By: /s/ Jon L. Lawver Jon L. Lawver, Principal Accounting Officer and Director Date: April 20, 2000 By: /s/ Charles Longson Charles Longson, Director Date: April 20, 2000 By: /s/ Richard O. Weed Richard O. Weed, Director 23 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Index to Consolidated Financial Statements Description Page Independent Auditors' Report................................................F-2 Consolidated Balance Sheet as of June 30, 1999..............................F-3 Consolidated Statements of Operations and Comprehensive Loss for the years ended June 30,1999 and 1998.................................F-4 Consolidated Statements of Stockholders' Equity (Deficit) and Comprehensive Loss for the years ended June 30,1999 and 1998..........F-5 Consolidated Statements of Cash Flows for the years ended June 30,1999 and 1998.....................................................F-7 Notes to Consolidated Financial Statements..................................F-9 F-1 INDEPENDENT AUDITORS' REPORT Board of Directors Oasis Resorts International, Inc. (Formerly Flexweight Corporation) We have audited the accompanying consolidated balance sheet of Oasis Resorts International, Inc., formerly Flexweight Corporation ("Oasis"), and subsidiaries (collectively the "Company") a company controlled by NuOasis Resorts International, Inc. ("NuOasis"), as of June 30, 1999, and the related consolidated statements of operations, stockholders' equity (deficit) and cash flows for each of the years in the two-year period ended June 30, 1999. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Oasis Resorts International, Inc., formerly Flexweight Corporation, as of June 30, 1999, and the consolidated results of their operations and their cash flows for each of the years in the two-year period ended June 30, 1999, in conformity with generally accepted accounting principles. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has recurring losses from operations since its inception. The Company requires substantial long-term financing to complete certain projects, as well as working capital financing to meet its past- due and current obligations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. As discussed in Notes 1 and 2, Oasis entered into an exchange agreement accounted for as a reverse acquisition, whereby Oasis is deemed to have been acquired by NuOasis for accounting purposes. Accordingly, the accompanying consolidated financial statements have been retroactively restated to include the historical assets and liabilities, and the historical operations of the net assets acquired from NuOasis for all periods presented. The operations of Oasis are included in the accompanying consolidated financial statements from the date of acquisition, October 19, 1998, to June 30, 1999. /s/ McKennon, Wilson & Morgan LLP Irvine, California April 4, 2000 F-2 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Consolidated Balance Sheet June 30, 1999
ASSETS Cash and cash equivalents $ 51,698 Accounts receivable, net 373,550 Inventory 170,126 Marketable securities (Note 4) 345,000 Receivable from NuOasis (Note 4) 264,000 Other current assets 84,729 Total current assets 1,289,103 Property and equipment, net 256,834 Receivable from Lessor (Note 3) 1,183,858 Lease deposit (Note 6) 687,000 Land held for development (Note 5) 3,700,000 Investment, at cost (Notes 2 and 3) 2,000,000 Other 598,389 Total assets $ 9,715,184 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 1,801,078 Due Lessor (Notes 3 and 8) 3,397,146 Accrued liabilities 511,525 Current portion of notes payable (Note 7) 601,223 Total current liabilities 6,310,972 Notes payable, net of current portion (Note 7) 3,348,777 Fair value of notes payable to NuOasis (Note 1) 7,000,000 Total liabilities 16,659,749 Commitments and contingencies (Note 8) Stockholders' deficit (Notes 1, 2, and 9): Preferred stock, par value $0.001; 25,000,000 shares authorized, no shares issued and outstanding - Common stock, par value $0.001; 75,000,000 shares authorized, 3,190,705 shares issued and outstanding 3,190 Additional paid-in capital 23,462,668 Accumulated deficit (24,176,499) Accumulated other comprehensive loss (233,924) Notes receivable from Resorts (6,000,000) Total stockholders' deficit (6,944,565) Total liabilities and stockholders' deficit $ 9,715,184
See accompanying notes to these consolidated financial statements. F-3 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Consolidated Statements of Operations and Comprehensive Loss For The Years Ended June 30, 1999 and 1998
1999 1998 Revenues $ 5,522,626 $ 5,292,604 Costs of revenues 5,795,187 5,512,702 Gross profit (loss) (272,561) (220,098) Selling, general and administrative expenses 1,012,300 1,244,870 Impairment of long-lived assets (Notes 2 and 3) 8,319,241 3,453,000 Loss from operations (9,604,102) (4,917,968) Loss on sale of marketable securities 803,000 - Interest expense 400,309 31,591 Net loss (10,807,411) (4,949,559) Other comprehensive income (loss): Unrealized gain (loss) on marketable securities 133,000 (590,000) Foreign currency translation adjustment 154,781 79,005 Comprehensive loss $(10,519,630) $ (5,460,554) Basic and diluted net loss per share $ (4.01) $ (3.17) Weighted average shares included in basic and diluted net loss per share 2,698,008 1,563,450
See accompanying notes to these consolidated financial statements. F-4 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Consolidated Statements of Stockholders' Equity (Deficit) and Comprehensive Loss For The Years Ended June 30, 1999 and 1998
Notes Preferred Stock Common Stock Additional Other Receivable Paid-In Accumulated Comprehensive From Shares Amount Shares Amount Capital Deficit Loss Resorts Total Balances, July 1, 1997 - $ - 1,563,450 $ 1,563 $12,136,144 $ (8,419,529) $ (10,710) $ - $ 3,707,468 Recapitalization by NuOasis - - - - 10,657,000 - - (10,000,000) 657,000 Shares of Oasis assigned from NuOasis for lease deposit - - - - - - - 1,000,000 1,000,000 Constructive dividend to CPL - - - - (13,000,000) - - - (13,000,000) Capital contributions - - - - 551,126 - - - 551,126 Net loss and comprehensive loss - - - - - (4,949,559) (510,995) - (5,460,554) Balances, June 30, - $ - 1,563,450 $ 1,563 $10,344,270 $(13,369,088) $ (521,705)$ (9,000,000)$(12,544,960) 1998
See accompanying notes to these consolidated financial statements. F-5 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Consolidated Statements of Stockholders' Equity (Deficit) and Comprehensive Loss (continued) For The Years Ended June 30, 1999 and 1998
Notes Additional Other Receivable Preferred Stock Common Stock Paid-In Accumulated Comprehensive From Capital Deficit Income (Loss) Resorts Total Shares Amount Shares Amount Restructuring, July 1, 1998 - $ - - $ - $10,000,000 $ - $ - $ 3,000,000 $ 13,000,000 Capital contributions - - - - 466,750 - - - 466,750 Cancellation of note payable to NuOasis - - - - 1,517,000 - - - 1,517,000 Common stock retained by Oasis shareholders after reverse acquisition - - 1,627,255 1,627 8,134,648 - - - 8,136,275 Constructive dividend for fair value of notes payable issued to NuOasis - - - - (7,000,000) - - - (7,000,000) Net loss and - comprehensive loss - - - - - (10,807,411) 287,781 - (10,519,630) Balances, June 30, - $ - 3,190,705 $ 3,190 $23,462,668 $(24,176,499) $(233,924) $(6,000,000)$ (6,944,565) 1999
See accompanying notes to these consolidated financial statements. F-6 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Consolidated Statements of Cash Flows For The Years Ended June 30, 1999 and 1998
1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(10,807,411) $(4,949,559) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 9,777 - Write-off of note receivable from Club Hammamet - 1,905,000 Impairment of SALT equity investment and Cleopatra Cap Gammarth Casino interest - 1,548,000 Loss on sale of marketable securities 803,000 - Impairment of goodwill 8,006,241 - Impairment of lease deposit 313,000 - Changes in operating assets and liabilities: Accounts receivable 245,734 (357,793) Inventory 1,111 22,764 Other current assets (84,729) 2,231 Accounts payable 89,445 635,720 Accrued liabilities (166,729) 157,070 Due Lessor 1,456,450 1,247,019 Net cash provided by (used in) operating activities (134,111) 210,452 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of equipment (266,611) (52,597) Advances on note receivable from Club Hammamet - (154,200) Other assets (345,980) 424,647 Net cash provided by (used in) investing activities (612,591) 217,850 CASH FLOWS FROM FINANCING ACTIVITIES: Advances due from Lessor (198,966) (984,892) Payments on notes payable (25,000) - Repayment of short-term bank loans - (300,000) Advances (repayments) from NuOasis 296,381 (252,574) Capital contributions 466,750 551,126 Net cash provided by (used in) financing activities 539,165 (986,340) Foreign currency effect on cash 154,781 79,005 Net decrease in cash (52,756) (479,033) Cash and cash equivalents at beginning of year 104,454 583,487 Cash and cash equivalents at end of year $ 51,698 $ 104,454
See accompanying notes to these consolidated financial statements. F-7 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Consolidated Statements of Cash Flows (continued) For The Years Ended June 30, 1999 and 1998
1999 1998 Supplemental Disclosure of Cash Flows - Cash paid during the year for interest $ 350,489 $ 31,591 Non-Cash Financing and Investing Activities: Capital contribution of marketable securities by NuOasis - 657,000 Lease deposit exchanged for note receivable from Resorts - 1,000,000 Constructive dividend resulting from notes payable issued to CPL in exchange for assets - 13,000,000 Contribution of notes receivable from Resorts in recapitalization 10,000,000 - Effective capital contribution from cancellation of notes issued to CPL for shares of CPRC in restructuring 13,000,000 - Effective capital contribution resulting from restructuring 10,000,000 - Exchange of note receivable from Resorts in restructuring 3,000,000 - Notes payable assumed in reverse acquisition with Oasis III 3,925,000 - Acquisition of land held for development in reverse acquisition with Oasis III 3,700,000 - Estimated fair value of shares retained by shareholders of Oasis in 8,136,275 - reverse acquisition Constructive dividend resulting from estimated fair value of notes payable issued in reverse acquisition of Oasis 7,000,000 - Receivable from NuOasis resulting from sale of marketable securities 264,000 -
See accompanying notes to these consolidated financial statements. F-8 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Notes to Consolidated Financial Statements 1 - Organization and History Oasis Resorts International, Inc. (formerly Flexweight Corporation, a Kansas Corporation) was originally incorporated under the name Flexweight Drill Pipe Company in 1958. Oasis Resorts International Inc., herein referred to as "Oasis" and its subsidiaries (collectively the "Company"), develop and operate resort hotel and gaming operations, primarily in Tunisia, North Africa, and held undeveloped land in Oasis, Nevada. On May 1, 1998, Oasis, then Flexweight Corporation, merged with Oasis Resorts, Hotel & Casino-III, Inc. ("Oasis III"), which held assets representing 20 acres of partially-developed land in Oasis, Nevada. In connection with the merger, Oasis issued 602,000 shares of common stock to the shareholders of Oasis III to acquire 100% of the issued and outstanding common stock of Oasis III. In addition, the Company issued the shareholders of Oasis III 200,000 shares of Oasis common stock in connection with the real estate agreement dated April 9, 1998 (Note 5). Upon the close of the merger, the shareholders of Oasis held 149,916 shares of common stock and the shareholders of Oasis III held approximately 80% of the issued and outstanding common stock of Oasis. Oasis III has title to 20 acres of commercial real estate located in Nevada which management intends to develop into a gaming complex. On October 19, 1998, the Company reincorporated in Nevada and changed its name from Flexweight Corporation to Oasis Resorts International, Inc. to better reflect its new corporate direction. The Company then entered into an exchange agreement with NuOasis International, Inc. ("NuOasis"), a wholly-owned subsidiary of NuOasis Resorts, Inc. ("Resorts") to acquire NuOasis's 75% interest in Cleopatra Palace Resorts and Casinos Ltd. ("CPRC"). CPRC had previously acquired all of the equity interest owned by NuOasis in Cleopatra Cap Gammarth, Limited ("CCGL") which operates the casino Cleopatra Cap Gammarth, a right to re-acquire an interest in Cleopatra Hammamet Limited, which operates the casino Cleopatra Hammamet Casino, and Cleopatra's World, Inc. ("CWI") which operates the Le Palace Hotel & Resort at Cap Gammarth (see Note 3). All of the properties are located in Tunisia. Cleopatra Palace Ltd. ("CPL") is a predecessor company to CPRC, an entity controlled by NuOasis, which previously held the interests in the Cleopatra Hammamet Casino and the Cleopatra Cap Gammarth Casino. In connection with the acquisition of CPRC, the Company issued 1,363,450 shares of common stock, common stock purchase warrants representing the right to acquire 7,200,000 shares at $30.00 per share, and issued promissory notes with an aggregate face value of $180 million to NuOasis in exchange for certain assets in NuOasis. At the time of the transaction, Oasis had no ability to repay the notes, and therefore, the notes had an estimated fair value substantially less than the face value at the date of issuance. Based on the enterprise value of Oasis at the date of the reverse acquisition of approximately $16.6 million, the Company valued the debt at $7 million. On November 15, 1999, management of Oasis agreed to extinguish this debt and cancel the 7,200,000 warrants for the issuance of 8,111,240 shares of common stock (Note 9), such that the NuOasis shareholders control approximately 86% of the Company's issued and outstanding common stock. F-9 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Notes to Consolidated Financial Statements (continued) 2 - Basis of Presentation and Principles of Accounting Basis of Presentation This acquisition of NuOasis interests by the Company on October 19, 1998 is accounted for as a reverse acquisition, whereby NuOasis is the acquiror, since the operations of NuOasis are more significant than Oasis and NuOasis acquired a controlling interest in the Company on November 15, 1999. Accordingly, the accompanying consolidated financial statements include the historical assets and liabilities, and the historical operations of NuOasis interests acquired for all periods presented. The operations of Oasis are included in the accompanying consolidated financial statements from the date of acquisition, October 19, 1998, through June 30, 1999. The net assets of Oasis were recorded at fair value at the date of acquisition. Assets, consisting primarily of land valued at $3.7 million based upon an independent appraisal, and marketable securities of $350,000, and liabilities consisting of $3.975 million in secured notes, were recorded at fair value. The purchase price in the reverse acquisition was approximately $8.1 million, with the excess of the purchase price over the fair value of the net assets acquired of $8 million allocated to goodwill (see below). Proforma Financial Data The unaudited proforma statements of operations data for the years ended June 30, 1999 and 1998, assuming the acquisition of Oasis occurred on July 1, 1997, are as follows: 1999 1998 Revenues $ 5,522,626 $ 5,292,604 Net loss $(10,106,787) $ (9,684,469) Basic and diluted net loss per share $ (3.17) $ (3.04) The above unaudited proforma amounts are not necessarily indicative of what the actual results might have been if the acquisitions had occurred on July 1, 1997. Going Concern Considerations The Company has recurring losses from operations, and at June 30, 1999, the Company has a working capital deficit of $5 million. The Company requires approximately $5 million of immediate working capital to complete the final phase of construction of the Le Palace Hotel & Resort and the Cleopatra Cap Gammarth casino, as well as service certain past-due trade creditors. The Company will require additional capital to meet obligations of the hotel and casino as they become due during the next 12 months. The Company is currently a plaintiff in litigation with the owners of the Cleopatra Cap Gammarth casino due to delays in the completion of the project by the owner. The Company has received a judgment totaling approximately $292 million against Societe D'Animation et de Loisirs Touristique, a Tunisian corporation ("SALT"), the ultimate collectibility of which is unknown (see Note 3). The Company is a defendant in a matter initiated by the owners of the Le Palace Hotel & Resort for 1999 rents unpaid by the Company. At June 30, 1999, the Company owed approximately $3.4 million under the lease agreement. F-10 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Notes to Consolidated Financial Statements (continued) The Company requires approximately $70 million to continue the development of it's gaming facility in Oasis, Nevada, and may be subject to foreclosure proceedings in the event the Company is unable to raise the financing necessary to complete the project. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans with respect to these matters include obtaining sources of capital to complete the projects, and pay its past-due trade creditors and rents. Meanwhile, the Company will attempt to perfect its judgment against the landlords of SALT. There are no assurances that such financing will be consummated on terms favorable to the Company, if at all, nor that the Company will be successful in collecting on its judgment against SALT. Consolidation The accompanying consolidated financial statements include the accounts of the Company and its controlled subsidiaries. All inter-company accounts have been eliminated in consolidation. The accompanying consolidated balance sheet excludes a minority interest for its 75% interest in CPRC, 80% interest in CWI, and its 90% interest in CCGL since the entities have shareholder deficiencies. Fiscal Year End The Company changed its fiscal year end from August 31 to June 30 as a result of the change in basis of accounting to coincide with the operations of NuOasis acquired. Cash and Cash Equivalents Cash equivalents include short-term, highly liquid investments with maturities of three months or less at the time of acquisition. Marketable Securities The Company accounts for its equity securities as available-for-sale securities. In connection therewith, the Company records unrealized gains and losses as a component of shareholders' equity. Realized gains and losses are recorded in operations. The Company uses the specific identification method for accounting for its marketable securities. Property and Equipment Property and equipment are depreciated over their estimated useful lives using the straight-line method ranging from three to five years. Additions and betterments are capitalized. The cost of maintenance and repairs is charged to expense as incurred. When depreciable property is retired or otherwise disposed of, the related cost and accumulated depreciation and amortization are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations. Depreciation expense reflected in the accompanying consolidated financial statements was not significant. Goodwill Goodwill represents the excess of purchase price over the fair value of the net assets of acquired businesses. Goodwill is stated at cost and is amortized on a straight-line basis over the expected period to be benefitted. F-11 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Notes to Consolidated Financial Statements (continued) As discussed above, the Company generated goodwill of $8 million in connection with the reverse acquisition of Oasis on October 19, 1998 (see impairment discussion below). Impairment of Long-lived Assets The Company assesses the recoverability of long-lived assets by determining whether the depreciation and amortization of property and goodwill over their remaining life can be recovered through projected undiscounted future cash flows. The amount of impairment, if any, is measured based on fair value and is charged to operations in the period in which such impairment is determined by management. Oasis originally acquired its interest in Oasis III in May 1998. Oasis III had no significant operations, however, Oasis III has a management team, which upon the close of a funding, intends to obtain a casino gaming license in the state of Nevada. The Company has been seeking capital to begin construction of its casino in Oasis, Nevada, with the assistance of NuVen Advisors, Inc. ("NuVen"), an affiliate of NuOasis, since July 1998. Through June 30, 1999, the Company had been unsuccessful in obtaining necessary financing, one year after commencing its search for capital with the assistance of NuVen, and accordingly, the Company charged operations totaling $8 million, since the recovery of such goodwill is unlikely. Through March 31, 2000, no construction financing has been obtained by management of the Company to commence its development in Oasis, Nevada. In 1998, management determined that its interests in the Cleopatra Cap Gammarth Casino, SALT, and Hammamet were impaired, and accordingly, they charged operations totaling approximately $3.4 million (see Investments, at cost below and Note 3). Interest Capitalization The Company capitalizes interest charges incurred for development of its land. However, since management has curtailed development until such time funds can be raised, no interest is capitalized. Investments, at cost The Company holds a 9% equity interest in SALT. This investment is carried at cost, less amounts deemed necessary to reflect the asset at its net realizable value. The investment was exchanged from CPL to CWI with a carrying value of $3.1 million. CPL had also incurred costs of $424,000 in connection with its interest. During 1998, management determined the investment was impaired, and accordingly, they recorded a provision for loss of $1.5 million in fiscal 1998. The impairment was based on collection of the money judgement against SALT and certain of its shareholders (see Note 3). The carrying value at June 30, 1999 is $2 million. Foreign Currency The consolidated financial statements of the Company's non-U.S. operations are translated into U.S. dollars for financial reporting purposes. The assets and liabilities of non-U.S. operations whose functional currencies are other than the U.S. dollar are translated at rates of exchange at fiscal year-end, and revenues and expenses are translated at average exchange rates for the fiscal year. The cumulative translation effects are reflected in stockholders' equity. Foreign currency gains and losses on transactions denominated in other than the F-12 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Notes to Consolidated Financial Statements (continued) functional currency of an operation are reflected in other income (expense). Revenue Recognition Revenues from hotel operations are recorded when the services are rendered. Revenues from food and beverage sales are recognized upon delivery of the product and service. Provision for Income Taxes The Company accounts for its income taxes under an asset and liability method whereby deferred tax assets and liabilities are determined based on temporary differences between bases used for financial reporting and income tax reporting purposes. Income taxes are provided based on the enacted tax rates in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. The Company's net deferred tax assets at June 30, 1999, consist of net operating loss carryforwards amounting to approximately $20 million. At June 30, 1999, the Company provided a 100% valuation allowance for these net operating loss carryforwards totaling $8 million. During the years ended June 30, 1999 and 1998, the Company's valuation allowance increased $4 million, and $2 million, respectively. The Company's annual use of net operating loss carryforwards are limited due to the change in ownership experienced in 1998. No benefit for income taxes has been provided since all deferral tax assets have been fully reserved. Income tax expense is not material to the accompanying consolidated statements of operations. Loss Per Share Basic EPS is computed as net income divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options, warrants and other convertible securities. Diluted EPS is equal to basic EPS since the effect of common stock purchase warrants would be anti-dilutive. See Note 9 for common stock purchase warrants outstanding which are anti-dilutive for EPS reporting purposes. Stock Splits All per share amounts are reported, as adjusted, after the one for 100 reverse stock split approved on April 8, 1998 and one for five reverse stock splits approved on February 8, 2000 (Note 9). Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. F-13 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Notes to Consolidated Financial Statements (continued) Reporting Comprehensive Income The Company reports the components of comprehensive income using the income statement approach. Comprehensive income includes net income, as well as certain non-shareholder items that are reported directly within a separate component of stockholders' equity and bypass net income. Components which give rise to the other comprehensive income are foreign currency translations adjustments and temporary gains and losses on marketable securities. Disclosures about Segments of an Enterprise and Related Information The Company provides disclosures of financial and descriptive information about an enterprise's operating segments in annual and interim financial reports issued to stockholders. The Company defines an operating segment as a component of an enterprise that engages in business activities that generate revenue and incur expense, whose operating results are reviewed by the chief operating decision maker in the determination of resource allocation and performance, and for which discrete financial information is available. As of June 30, 1999 and 1998, the Company has only one reportable operating segment. Stock-based Compensation The Company accounts for its employee stock options using the intrinsic method of accounting prescribed by Accounting Principles Board Opinion No. 25 ("APB 25"), "Accounting for Stock Issued to Employees." The Company must make pro forma disclosures of net income and earnings per share, as if the fair value method of accounting defined in Statement of Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting for Stock-Based Compensation," had been applied. Through June 30, 1999, the Company had no employee stock options outstanding. The Company accounts for transactions in which goods or services are the consideration received for the issuances of its equity instruments based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Accounting for Derivative Instruments and Hedging Activities The Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" (FAS 133). Under the provisions of FAS 133, the Company will be required to recognize all derivatives as either assets or liabilities in the statements of financial position and measure these instruments at fair value. The Company has adopted FAS 133 during fiscal 1999. Currently, the Company does not have any instruments that would qualify as derivatives under FAS 133. Accordingly, the Company does not believe that FAS 133 would have a material impact on its current financial position or results of operations. Financial assets with carrying values approximating fair value include cash and cash equivalents, marketable securities, notes receivable and other investments. Financial liabilities with carrying values approximating fair value include accounts payable and accrued interest, and notes payable. Notes due to and from related parties have no readily ascertainable fair value. F-14 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Notes to Consolidated Financial Statements (continued) 3 - Tunisian Operations Le Palace Hotel & Resort During fiscal 1997, NuOasis exchanged 600,000 shares of common stock of The Hartcourt Companies Inc., valued at approximately $862,000 based on a national quotation system, for a 50% equity ownership in CWI. CWI is the lessee of the Le Palace Hotel & Resort surrounding the Cap Gammarth Casino (see Note 8 for discussion of this lease). On June 1, 1998, CWI acquired certain interests from CPL for $13 million in notes payable. The assets acquired consisted of an equity interest of 9% in SALT, with a carrying value of $3.1 million, the leasehold interest in the Cap Gammarth Casino, with a carrying value of approximately $424,000, and a receivable from the Societe Loisirs Club Hammamet ("Club Hammamet") with a face value of $1.9 million. Since the historical carrying value of the assets acquired of $5.4 million have been reported in these consolidated financial statements for the periods presented, the purchase price of $13 million was deemed a constructive dividend to this related party as reflected in the accompanying consolidated statements of shareholders' equity (deficit) during the year ended June 30, 1998, since the companies were under common control at the date of acquisition. In connection with a letter agreement dated April 26, 1998, effective June 1, 1998, NuOasis recapitalized, and increased its interest to 60% equity ownership in CWI with $10 million of notes due from Resorts (Note 9), marketable securities consisting of 2,000,000 shares of Resorts valued at $254,000 and 280,000 shares of common stock of The Hartcourt Companies, Inc. valued at $403,000 (Note 4); a Put/Option Agreement between Resorts and J. Monterosso dated August 22, 1997 with no carrying value and a face value of $715,000 and a promissory note dated August 22, 1997 with no carrying value, and a balance due of $1,135,000 at the date of recapitalization. The debtor of these notes is in bankruptcy; therefore the ultimate collection of amounts due the Company is uncertain. The aggregate historical value of these assets, including the notes of $10 million, was approximately $10.7 million at the date of transfer as reflected in the accompanying consolidated statements of stockholders' equity (deficit) for the year ended June 30, 1998. In connection with the reorganization of CPRC (see below), the Company effectively increased its ownership interest to 80% in CWI through the purchase of an additional equity interest from an individual affiliated with the Company and existing shareholder of CPRC. No value was attributed to this transaction since CWI had no significant net assets. Restructuring As stated in Note 1, NuOasis entered into an exchange agreement to acquire its 75% interest in CPRC on July 1, 1998. CPRC was formed by the management of NuOasis as a means to consolidate its off-shore hotel and casino operations, principally in Tunisia. CPRC was a multi-step restructuring, whereby CPRC first issued 12,553,125 shares to CWI to acquire from CWI its 9% equity interest in SALT, the SALT Casino Lease rights, and $1.9 million note due from Club Hammamet; CWI immediately thereafter exchanged 8,490,625 CPRC shares to fully satisfy the $13 million notes payable to CWI. Then CPRC acquired the remaining CPL assets for 946,875 shares and a $3 million note due from Resorts, then acquired an 80% interest in CWI and a 100% interest in Club Hammamet from NuOasis for 11,500,000 CPRC shares, and finally, CPRC increased its ownership in CCGL to 90% by assigning to CCGL, $3.5 million of notes due F-15 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Notes to Consolidated Financial Statements (continued) from Resorts and its rights to the SALT Casino Lease. As a result, CPRC owns an 80% interest in CWI, a 90% interest in CCGL, a 100% interest in Club Hammamet and a 9% equity interest in SALT. In addition, the restructuring of CPRC satisfied the $13 million of notes due CPL by CWI, recapitalized the Company by $10 million, and reduced a portion of its notes receivable from Resorts by $3 million. In connection with the operation of the Le Palace Hotel & Resorts, the Company provides employees of Societe Touristique Tunisie-Golfe ("STTG" or the "Lessor") meals and allowances while working at the Cap Gammarth complex. In fiscal 1999 and 1998, the Company incurred reimbursable expenses amounting to approximately $199,000 and $985,000, respectively. At June 30, 1999, the Company had a receivable from the Lessor amounting to $1,184,000. Refer to the arbitration settlement reached with the Lessor regarding lease payments and costs incurred by the Company in Note 8. Management believes that amounts receivable from the Lessor will be subject to right of offset when the judgement becomes due. Accordingly, no provision for loss has been reflected against amounts due from STTG. Cleopatra Cap Gammarth Casino Cleopatra is the lessee of a 200,000 square foot casino and Las Vegas-style showroom presently under construction (the "Cap Gammarth Casino"), and substantially complete, pursuant to a Casino Lease Agreement and Operating Management Contract with STTG. The lease on the Cap Gammarth Casino was transferred by SALT resulting in a change in lessor from STTG to SALT. See Note 8 for further discussion of this lease arrangement. On July 13, 1998, the Company filed a civil complaint for damages in the U.S. District Court, District of Nevada against SALT and several other defendants. On July 2, 1999, the District Court adjudged and decreed compensatory damages in the amount of $292 million plus interest, and $10 million in punitive damages. Management is proceeding in Tunisia to collect upon its money judgement. No amounts have been recorded in these consolidated financial statements as a result of this potential gain contingency. Hammamet Casino In October 1994, Cleopatra entered into an agreement with Club Hammamet to lease and operate a 60,000 square foot casino and French-style cabaret recently completed in Hammamet, Tunisia (the "Hammamet Casino"). On or about September 26, 1997, in order to finance the remaining expenditures on the Hammamet Casino, the Company and Club Hammamet entered into an agreement with Cedric International Company Inc., a Panamanian corporation ("Cedric") pursuant to which the Company and Cedric each agreed to contribute $1.5 million to the capital of Club Hammamet in making the first annual lease payments on the Hammamet Casino, the Company pledged to Cedric its 70% interest in Hammamet Casino. The Company and Cedric agreed that Cedric will return such interest when and if the Company reimburses Cedric for all funds advanced prior to September 26, 1998 (on an all or nothing basis), plus interest at the rate of 15% per annum. The Company did not reimburse Cedric, due to sustained losses at the Hammamet Casino, and the Company forfeited its right to reacquire its interest in Hammamet Casino. Accordingly, the Company impaired its interest in Hammamet Casino and charged operations approximately $1.9 million in fiscal 1998. F-16 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Notes to Consolidated Financial Statements (continued) 4 - Marketable Securities At June 30, 1998, the Company held 2,000,000 shares of Resorts and 880,000 shares of Hartcourt as available-for-sale securities. Through the acquisition of Oasis III, the Company acquired an additional 3,250,000 shares of Resorts common stock valued at $350,000. During fiscal 1999, NuOasis, on behalf of the Company, liquidated 741,872 shares of the Hartcourt companies for $264,000. In connection therewith, the Company recorded a provision for loss of $803,000 in fiscal 1999. At June 30, 1999, the Company had a receivable from NuOasis totaling $264,000. The Company has the following marketable securities as of June 30, 1999: Investee Shares Market Value Cost NuOasis Resorts Inc. 5,250,000 $ 241,500 $ 604,000 The Hartcourt Companies, Inc. 138,128 103,500 198,000 Totals $ 345,000 $ 802,000 Subsequent to June 30, 1999, the Company sold 138,128 shares of Hartcourt for $199,000 and the amounts are currently held by NuOasis in a securities account on behalf of the Company. Such amounts will be remitted to the Company upon the establishment of an account for CWI. 5 - Land Held for Development As discussed in Note 1, Oasis III retained a 20-acre interest in partially-developed land located in Oasis, Nevada and an option to acquire an additional 30 acres adjacent to the 20-acre interest. The subject property was subdivided from a 1100-acre parcel originally purchased on December 27, 1995 for $1,450,000 by Oasis International Hotel & Casino, Inc. ("OIHC"), a current shareholder of the Company through the merger of Oasis III on May 1, 1998 (Note 1). The property contains a 6-unit motel and an eight-pump truck stop, including a cafe and mini store. Substantial expenditures would have to be made to the property improvements in order for the property to be operative in its current state. OIHC entered into a real estate purchase agreement dated April 9, 1998, as amended, with Oasis III. In connection therewith, the agreement called for a purchase price of $5,000,000, consisting of shares of the Company's common stock valued at $1,000,000, the assumption of $550,000 First Trust Deed Note Payable and the issuance of a note payable to OIHC totaling $3,450,000 (see Note 7). Oasis closed escrow on the property on or about May 7, 1998. In December 1998, the Company obtained an independent appraisal valuing the 20-acre parcel at $3.7 million on an "as-is" basis. In connection with the reverse acquisition (Note 1), the Company valued the property at $3.7 million. All land-related costs subsequent to October 19, 1998, have been expensed as incurred. F-17 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Notes to Consolidated Financial Statements (continued) 6 - Lease deposit The Company is required to maintain a lease deposit totaling $3 million for the benefit of the leaseholders of the Le Palace Hotel. In fiscal 1998, the Company pledged 200,000 shares of its common stock as collateral for the required lease deposit. At June 30, 1999, the value of the underlying securities was $687,000. The Company charged operations of $313,000 in 1999 as a result of this decline in value. At June 30, 1999, the Company was deficient in the collateral held for the lease deposit. In February 2000, the Company issued 2.75 million shares of its common stock to provide additional security under the lease arrangement. Based on the value of such shares of common stock, the Company may be required to deposit additional collateral. 7 - Notes Payable In connection with the reverse acquisition of Oasis III on October 19, 1998, Oasis assumed the $550,000 note payable (See Note 5). The note was due May 11, 1999, with interest-only payments (at an annual rate of 10.9% per annum) of $5,000 per month. The note amounting to $550,000, outstanding at June 30, 1999, was extended and is currently due on demand. Total interest expense included in operations in connection with this note in fiscal 1999 was $45,000. The Company also assumed a Second Deed of Trust note payable in the amount of $3.425 million related to the 20-acre parcel payable to OIHC. The term of this Second Deed of Trust is for 30 years principal and interest payable at 9% per annum. The Company has been unable to make the required principal payments, however, OIHC has not notified the Company of any intent to foreclose on the loan. The Company's ability to continue to make the required payments is contingent upon its raising additional capital. The principal amount outstanding at June 30, 1999, was $3.4 million. Total interest expense in fiscal 1999 was $305,792 related to this note agreement. Future annual minimum principal payments of notes payable are as follows: Year Ending June 30 Amounts Due 2000 $ 601,223 2001 28,201 2002 30,846 2003 33,740 2004 36,905 Thereafter 3,219,085 $ 3,950,000 F-18 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Notes to Consolidated Financial Statements (continued) 8 - Commitments and Contingencies Leases CCGL and CWI are lessees under lease agreements related to the Cap Gammarth Casino and the Le Palace Hotel, respectively, which require annual lease payments to be made, monthly or quarterly, over their respective terms, which range from 14 to 20 years (also see Note 3). The Company has not begun operations at the casino; therefore, this lease is not yet in effect. Upon consummating the lease, the Company will be required to pay the amounts reflected in the table below. Management expects the lease to be consummated by June 2000. Future annual minimum lease payments by these entities in each of the next five years and thereafter are as follows: Amounts Due Cap Year Ending Gammarth Le Palace June 30 Casino Hotel Total 2000 $ 3,000,000 $ 7,138,146 $ 10,138,146 2001 3,000,000 4,007,150 7,007,150 2002 3,300,000 4,287,650 7,587,650 2003 3,600,000 4,587,785 8,187,785 2004 3,900,000 4,908,930 8,808,930 Thereafter 74,700,000 52,872,889 127,572,889 $ 91,500,000 $ 77,802,550 $169,302,550 Prior to taking possession of the Cleopatra Cap Gammarth Casino under its lease agreement, the Company is required to make a lease deposit totaling $1 million. No rental expense has been included in operations under this arrangement. Total rent expense included in operations under the Le Palace Hotel lease for the years ended June 30, 1999 and 1998 was $2.5 million and $2.0 million, respectively. Litigation The Company has been a party to litigation with STTG due to significant delays in completing the Le Palace Hotel & Resorts. Through June 30, 1999, the Company has not paid rents to STTG in connection with its lease arrangement. However, the Company has paid opening costs and purchased equipment totaling approximately $1.8 million which were the responsibility of STTG. STTG filed a complaint and received an arbitration award for calendar year lease rental payments for 1997 and 1998, net of amounts expended by the Company. At June 30, 1999, the Company owed STTG approximately $3.4 million for the net rental payments under the agreement. Also, see Note 3 for discussion of amounts due to the Company from STTG. The Company is subject to claims and suits that arise from time to time out of the ordinary course of its business. Through June 30, 1999, management of the Company is not aware of any claims that will have a material impact on the Company's business, financial condition or results of operations which are not reflected in the accompanying consolidated financial statements. F-19 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Notes to Consolidated Financial Statements (continued) 9 - Stockholders' Deficit Capital Structure On April 8, 1998, the shareholders approved among other matters a one for 100 reverse split of the Company's common stock, par value $0.10, and to amend the Articles of Incorporation to increase the number of authorized shares from 5,000,000 to 25,000,000. All share and per share amounts have been restated to reflect this reverse stock split for all periods presented. Effective October 19, 1998, the Company increased its authorized capital stock from 25,000,000 shares of $0.10 par value common stock to 75,000,000 shares of $0.001 par value common stock and 25,000,000 shares of $0.001 par value preferred stock. Each share of the Company was exchanged for one (1) share in the new corporation. All share amounts have been restated to reflect this amendment to the Company's Articles of Incorporation. On February 8, 2000, the board of directors approved a one for five reverse stock split of the Company's $0.001 par value common stock. All share and per share amounts have been restated to reflect this reverse stock split for all periods presented. Common Stock In connection with the recapitalization on June 1, 1998, the Company received contributions from NuOasis of $10,000,000 of notes receivable from Resorts and $657,000 in marketable securities. Immediately thereafter, in order to meet the lease deposit requirements of the Le Palace Hotel, the Company received 200,000 shares of the Company's common stock held by NuOasis, valued at $1 million, in exchange for a reduction of $1 million in notes receivable from Resorts. See Note 3 and below for further discussion. As discussed in Note 3, the Company acquired certain assets and liabilities from CPL which were part of the control group, and included in the assets and liabilities, as well as the operations of the net assets acquired for all periods presented (see basis of presentation). Accordingly, the $13 million in notes issued to CPL for such assets, is treated as a constructive dividend in the accompanying consolidated statement of stockholders' equity (deficit) for the year ended June 30, 1998. As part of the restructuring on July 1, 1998 (Note 3), the Company exchanged certain shares held by the Company in CPRC with CPL for cancellation of $13 million in notes payable due CPL and transfer of $3 million in notes receivable from Resorts held by the Company. Since the companies are under common control, the net effect of this transaction was to capitalize the Company by $13 million as reflected in the accompanying consolidated statements of stockholders' equity (deficit) for the year ended June 30, 1999. On July 1, 1998, the Company also transferred certain shares in CPRC for cancellation of $1.5 million in notes payable to NuOasis. The reduction of such obligation with NuOasis is treated as an effective contribution of capital in the accompanying consolidated statements of stockholders' equity (deficit) for the year ended June 30, 1999. As discussed in Note 1, the Company's reverse acquisition caused the 1,563,450 shares of common stock held by NuOasis on October 19, 1998, to be reflected as outstanding on July 1, 1997, with the 1,627,255 shares held by the Oasis shareholders reflected as consideration. NuOasis shareholders were issued 1,363,450 share of the Company's common stock in connection with the reverse acquisition (Note 1) and 200,000 shares issued in the exchange for 3,250,000 shares of Resorts (Note 10). The shares were valued by the board of directors of the Company at $5.00 per share or $8.1 million, based on the market price of the Company's common stock subsequent to the close of the transaction. F-20 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Notes to Consolidated Financial Statements (continued) On November 15, 1999, the Company issued 8,111,240 share of the Company's common stock in satisfaction of Notes payable to NuOasis valued at $7,000,000 and warrants to purchase 7,200,000 at $30.00 per share. Common Stock Purchase Warrants Prior to October 19, 1998, the Company issued options to purchase 200,000 shares at $0.50 per share and options to purchase 70,000 shares at $30.00 per share outstanding and exercisable. Such options and warrants expire from July 1, 2001 to July 1, 2003. On October 19, 1998, the Company issued warrants to purchase 7,200,000 shares at $30.00 per share. On November 15, 1999, the Company canceled such warrants to purchase 7,200,000 shares of common stock as part of the extinguishment of Notes payable to NuOasis (Note 1). Notes Receivable From Resorts On July 1, 1998, in connection with the recapitalization of the Company by NuOasis (see Note 3), the Company received a contribution of notes receivable from Resorts in the amount of $10,000,000. These notes are due on demand and bear interest at the rate of 6% per annum. Management has reflected such notes as a reduction of shareholders' deficit since the original capitalization was reflected as additional paid- in capital. A provision will be included in the accompanying consolidated financial statements in the event the notes become uncollectible. Management of Resorts intends to satisfy these notes with in-kind consideration. 10 - Related Party Transactions On May 30, 1998, the Company issued 200,000 shares of its common stock in exchange for 3,250,000 shares of Resorts, classified as marketable securities. The fair value of the NuOasis shares of common stock were valued at $350,000, based on the closing bid price of such shares at the date of issuance. The effects of this transaction were reflected prior to the reverse merger on October 19, 1998. On May 30, 1998, the Company granted NuOasis an option to purchase up to 50,000 shares of its common stock at $.50 per share. The term of the option is through July 1, 2001, and allows the holder to adjust the number of options to an amount that allows NuOasis to maintain the greater of its percentage ownership in the Company or 19.5%. The shares under option were increased to 200,000 shares as a result of this anti- dilution provision of this agreement. In addition, the Company approved the appointment of a director to the Company's board of directors. Using the Black-Scholes model, the Company valued these warrants at $4.56 per share, or $910,000 and were charged to operations prior to the acquisition of Oasis on October 19, 1998, and not to the operations herein. Advisory Agreement On July 18, 1998, the Company entered into an advisory agreement with NuVen through April 1, 1999. In connection therewith, the Company issued warrants to purchase 70,000 shares of common stock at $30.00 per share. The estimated fair value of these warrants using the Black-Scholes model was determined to be $3.25 per share or approximately $227,500 of which approximately $130,000 was charged to operations from the acquisition of Oasis on October 19, 1998 to June 30, 1999. The options expire on July 1, 2001. No other remuneration was granted to NuVen in connection with this advisory agreement. F-21 OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation) Notes to Consolidated Financial Statements (continued) Director Compensation Two directors of the Company have entered into agreements which expired September 30, 1999, but have continued on a month-to-month basis since that date, which provide for payments of $3,000 per month. No payments have been made. Included in accounts payable are amounts due such directors of $72,000 at June 30, 1999. See Notes 1, 3, 8, and 9 for additional related party transactions. F-22 EX-3.1 2 ARTICLES OF INCORPORATION EXHIBIT 3.1 ARTICLES OF INCORPORATION OF OASIS RESORTS INTERNATIONAL, INC. * * * * * FIRST: The name of the corporation is: Oasis Resorts International, Inc. SECOND: Its registered office in the State of Nevada is located at 4001 South Decatur Blvd., Suite #37-130, Las Vegas Nevada 89103. The name of its resident agent at that address is Fred Graves Luke. THIRD: The aggregate number of shares of all classes of stock, which the Corporation shall have authority to issue is One Hundred Million (100,000,000) of which Seventy Five Million (75,000,000) shares will be designated Common Stock, with $.001 par value; and Twenty Five Million (25,000,000) shares shall be designated $.001 par value "Preferred Stock". Without further authorization from the shareholders, the Board of Directors shall have the authority to divide and issue from time to time any or all of the Twenty Five Million (25,000,000) shares of such Preferred Stock into one or more series with such designations, preferences and relative, participating, optional or other special rights, or qualification, limitations or restrictions thereof, as may be designated by the Board of Directors, prior to the issuance of such series, and the Board of Directors is hereby expressly authorized to fix by resolution or resolutions only and without further action or approval, prior to such issuance, such designations, preferences and relative, participating, optional or other special rights, or qualifications, limitations or restrictions, including, without limitation the date and times at which, and the rate, if any, or rates at which dividends on such series of Preferred Stock shall be paid; the rights, if any, of the holders of such series of the Preferred Stock to vote and the manner of voting, except as otherwise provided by the law, the rights, if any, of the holders of shares of such series of Preferred Stock to convert the same into, or exchange the same for, other classes of stock of the Corporation, and the terms and conditions for such conversion or exchange; the redemption price or prices and the time at which, and the terms and conditions of which, the shares of such series of Preferred Stock may be redeemed; the rights of the holders of shares of such series of Preferred Stock upon the voluntary or involuntary liquidation, distribution or sale of assets, dissolution or winding up of the Corporation, and the terms of the sinking fund or redemption or purchase account, if any, to be provided for such series of Preferred Stock. The designations, preferences, and relative, participating, optional or other special rights, the qualifications, limitations or restrictions thereof, of each additional series, if any, may differ from those of any and all other series already outstanding. Further, the Board of Directors shall have the power to fix the number of shares constituting any classes or series and thereafter to increase or decrease the number of shares of any such class or series subsequent to the issue of shares of that class or series but not below the number of shares of that class or series then outstanding. FOURTH: The governing Board of this Corporation shall be known as directors, and the number of directors may from time to time be increased or decreased in such manner as shall be provided by the by-laws of this Corporation. The names and addresses of the first Board of Directors, which shall be one (1) in number, is as follows: NAME ADDRESS Jon L. Lawver 4695 MacArthur Court, Suite 530 Newport Beach, California 92660 FIFTH: The name and address of the incorporator signing the Articles of Incorporation is as follows: NAME ADDRESS Jon L. Lawver 4695 MacArthur Court, Suite 530 Newport Beach, California 92660 SIXTH: To the fullest extent permitted by Nevada Revised Statute 78.037 as the same exists or may hereafter be amended, an officer or director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages due to breach of fiduciary duty as such officer or director. SEVENTH: The purpose of this Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of Nevada. EIGHTH: The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders: (1) The Board of Directors shall have power without the assent or vote of the stockholders: (a) To make, alter, amend, change, add to or repeal the by-laws of the Corporation; to fix and vary the amount of capital or shares of the Corporation's capital stock to be reserved or issued for any proper purpose; to authorize and cause to be executed mortgages and liens upon all or any part of the property of the Corporation; to determine the use and disposition of any surplus or net profits; and to fix the times for the declaration and payment of dividends. (b) To determine from time to time whether, and to what times and places, and under what conditions the accounts and books of the Corporation (other than the stock ledger) or any of them, shall be open to the inspection of the stockholders. (2) The directors in their discretion may submit any contract or act for approval or ratification at any annual meeting of the stockholders or any meeting of the stockholders called for the purpose of considering any such act or contract, and any contract or act that shall be approved or be ratified by the vote of the holders of a majority of the stock of the Corporation which is represented in person or by proxy at such meeting and entitled to vote thereat (provided that a lawful quorum of stockholders be there represented in person or by proxy) shall be as valid and as binding upon the Corporation and upon all the stockholders as though it has been approved or ratified by every stockholder of the Corporation, whether or not the contract or act would otherwise be open to legal attack because of directors' interest, or for any other reason. (3) In addition to the powers and authorities hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation; subject, nevertheless, to the provisions of the statutes of Nevada, of this certificate, and to any by-laws from time to time made by the stockholders; provided, however, that no by-laws so made shall invalidate any prior act of the directors which would have been valid if such by-law had not been made. (4) The holders of one-third of the voting power of the shares entitled to vote at a meeting, represented either in person or by proxy, shall constitute a quorum for the transaction of business at any regular or special meeting of shareholders. (5) Cumulative voting by the shareholders of this Corporation shall not be permitted in any election of directors. IN WITNESS WHEREOF, the undersigned, Jon L. Lawver, for the purpose of filing the Corporation's Articles of Incorporation pursuant to the General Corporation Law of the State of Nevada, does make and file the Articles of Incorporation, hereby declaring and certifying that the facts herein stated are true; and accordingly I have hereunto set my hand this 14nd day of October, 1998. /s/ Jon L. Lawver Jon L. Lawver, Incorporator State of California County of Orange On October 14, 1998 before me, Julie Bienias, Notary Public , Date Name and Title of Officer (e.g., "Jane Doe, Notary Public") personally appeared Jon Lawver Name(s) of Signer(s) |_| personally known to me - OR - |_| proved to me on the basis of satisfactory evidence to be the person(s) whose name (s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. /s/ Julie Bienias Signature of Notary Public EX-3.2 3 BY-LAWS EXHIBIT 3.2 Oasis Resorts International, Inc. * * * * * B Y - L A W S * * * * * ARTICLE I OFFICES Section 1. The registered office shall be in Las Vegas, Nevada. Section 2. The corporation may also have offices at such other places both within and without the State of Nevada as the board of directors may from time to time determine or the business of the corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section l. All annual meetings of the stockholders shall be held in the City of Las Vegas, State of Nevada. Special meetings of the stockholders may be held at such time and place within or without the State of Nevada as shall be stated in the notice of the meeting, or in a duly executed waiver of notice thereof. Section 2. Annual meetings of stockholders shall be held on October 20th, if not a legal holiday, and if a legal holiday, then on the next secular day following, at 10:00~A.M., at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting. Section 3. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the articles of incorporation, may be called by the president and shall be called by the president or secretary at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. Section 4. Notices of meetings shall be in writing and signed by the president or a vice president, or the secretary, or an assistant secretary, or by such other person or persons as the directors shall designate. Such notice shall state the purpose or purposes for which the meeting is called and the time when and the place where it is to be held. A copy of such notice shall be either delivered personally to or shall be mailed, postage prepaid, to each stockholder of record entitled to vote at such meeting not less than ten nor more than sixty days before such meeting. If mailed, it shall be directed to a stockholder at his address as it appears upon the records of the corporation and upon such mailing of any such notice, the service thereof shall be complete, and the time of the notice shall begin to run from the date upon which such notice is deposited in the mail for transmission to such stockholder. Personal delivery of any such notice to any officer of a corporation or association, or to any member of a partnership shall constitute delivery of such notice to such corporation, association or partnership. In the event of the transfer of stock after delivery or mailing of the notice of and prior to the holding of the meeting it shall not be necessary to deliver or mail notice of the meeting to the transferee. Section 5. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Section 6. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the articles of incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. Section 7. When a quorum is present or represented at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the articles of incorporation a different vote is required in which case such express provision shall govern and control the decision of such question. Section 8. Every stockholder of record of the corporation shall be entitled at each meeting of stockholders to one vote for each share of stock standing in his name on the books of the corporation. Section 9. At any meeting of the stockholders, any stockholder may be represented and vote by a proxy or proxies appointed by an instrument in writing. In the event that any such instrument in writing shall designate two or more persons to act as proxies, a majority of such persons present at the meeting, or, if only one shall be present, then that one shall have and may exercise all of the powers conferred by such written instrument upon all of the persons so designated unless the instrument shall otherwise provide. No such proxy shall be valid after the expira tion of six months from the date of its execution, unless coupled with an interest, or unless the person executing it specifies therein the length of time for which it is to continue in force, which in no case shall exceed seven years from the date of its execution. Subject to the above, any proxy duly executed is not revoked and continues in full force and effect until an instrument revoking it or a duly executed proxy bearing a later date is filed with the secretary of the corporation. Section 10. Any action, which may be taken by the vote of the stockholders at a meeting, may be taken without a meeting if authorized by the written consent of stockholders holding at least a majority of the voting power, unless the provisions of the statutes or of the articles of incorporation require a greater proportion of voting power to authorize such action in which case such greater proportion of written consents shall be required. ARTICLE III DIRECTORS Section l. The number of directors shall be neither more than 5 nor less than 3. The number of directors is to be fixed by vote of the shareholders. The directors shall be elected at the annual meeting of the stockholders, and except as provided in Section 2 of this article, each director elected shall ] hold office until his successor is elected and qualified. Directors need not be stockholders. Section 2. Vacancies, including those caused by an increase in the number of directors, may be filled by a majority of the remaining directors though less than a quorum. When one or more directors shall give notice of his or their resignation to the board, effective at a future date, the board shall have power to fill such vacancy or vacancies to take effect when such resignation or resignations shall become effective, each director so appointed to hold office during the remainder of the term of office of the resigning director or directors. Section 3. The business of the corporation shall be managed by its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the articles of incorporation or by these by-laws directed or required to be exercised or done by the stockholders. MEETINGS OF THE BOARD OF DIRECTORS Section 4. The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Nevada. Section 5. The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors. Section 6. Regular meetings of the board of directors may be held without notice at such time and place as shall from time to time be determined by the board. Section 7. Special meetings of the board of directors may be called by the president or secretary on the written request of one director. Written notice of special meetings of the board of directors shall be given to each director at least 3 days before the date of the meeting. Section 8. A majority of the board of directors, at a meeting duly assembled, shall be necessary to constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the board of directors, except as may be otherwise specifically provided by statute or by the articles of incorporation. Any action required or permitted to be taken at a meeting of the directors may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the directors entitled to vote with respect to the subject matter thereof. COMMITTEES OF DIRECTORS Section 9. The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation, which, to the extent provided in the resolution, shall have and may exercise the powers of the board of directors in the management of the business and affairs of the corporation, and may have power to authorize the seal of the corporation to be affixed to all papers on which the corporation desires to place a seal. Such committee or commit tees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Section 10. The committees shall keep regular minutes of their proceedings and report the same to the board when required. COMPENSATION OF DIRECTORS Section 11. The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings. ARTICLE IV NOTICES Section l. Notices to directors and stockholders shall be in writing and delivered personally or mailed to the directors or stockholders at their addresses appearing on the books of the corporation. Notice by mail shall be deemed to be given at the time when the same shall be mailed. Notice to directors may also be given by facsimile telecommunication. Section 2. Whenever all parties entitled to vote at any meeting, whether of directors or stockholders, consent, either by a writing on the records of the meeting or filed with the secretary, or by presence at such meeting and oral consent entered on the minutes, or by taking part in the deliberations at such meeting without objection, the doings of such meeting shall be as valid as if had at a meeting regularly called and noticed, and at such meeting any business may be transacted which is not excepted from the written consent or to the consideration of which no objection for want of notice is made at the time, and if any meeting be irregular for want of notice or of such consent, provided a quorum was present at such meeting, the proceedings of said meeting may be ratified and approved and rendered likewise valid and the irregularity or defect therein waived by a writing signed by all parties having the right to vote at such meetings; and such consent or approval of stockholders may be by proxy or attorney, but all such proxies and powers of attorney must be in writing. Section 3. Whenever any notice whatever is required to be given under the provisions of the statutes, of the articles of incorporation or of these by-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. ARTICLE V OFFICERS Section l. The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice president, a secretary and a treasurer. Any person may hold two or more offices. Section 2. The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, a vice president, a secretary and a treasurer, none of whom need be a member of the board. Section 3. The board of directors may appoint additional vice presidents, and assistant secretaries and assistant treasurers and such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board. Section 4. The salaries of all officers and agents of the corporation shall be fixed by the board of directors. Section 5. The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors. Any vacancy occurring in any office of the corporation by death, resignation, removal or otherwise shall be filled by the board of directors. THE PRESIDENT Section 6. The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors, shall have general and active management of the business of the corporation, and shall see that all orders and resolutions of the board of directors are carried into effect. Section 7. He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. THE VICE PRESIDENT Section 8. The vice president shall, in the absence or disability of the president, perform the duties and exercise the powers of the president and shall perform such other duties as the board of directors may from time to time prescribe. THE SECRETARY Section 9. The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all the proceedings of the meetings of the corporation and of the board of directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be. He shall keep in safe custody the seal of the corporation and, when authorized by the board of directors, affix the same to any instrument requiring it and, when so affixed, it shall be attested by his signature or by the signature of the treasurer or an assistant secretary. THE TREASURER Section 10. The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors. Section 11. He shall disburse the funds of the corporation as may be ordered by the board of directors taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at the regular meetings of the board, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation. Section 12. If required by the board of directors, he shall give the corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under hiscontrol belonging to the corporation. ARTICLE VI CERTIFICATES OF STOCK Section l. Every stockholder shall be entitled to have a certificate, signed by the president or a vice president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation, certifying the number of shares owned by him in the corporation. If the corporation is authorized to issue shares of more than one class or more than one series of any class, there shall be set forth upon the face or back of the certificate, or the certificate shall have a statement that the corporation will furnish to any stockholders upon request and without charge, a full or summary statement of the designations, preferences and relative, participating, optional or other special rights of the various classes of stock or series thereof and the qualifications, limitations or restrictions of such rights, and, if the corporation shall be authorized to issue only special stock, such certificate shall set forth in full or summarize the rights of the holders of such stock. Section 2. Whenever any certificate is countersigned or otherwise authenticated by a transfer agent or transfer clerk, and by a registrar, then a facsimile of the signatures of the officers or agents of the corporation may be printed or lithographed upon such certificate in lieu of the actual signatures. In case any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on, any such certificate or certificates shall cease to be such officer or officers of the corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the corporation, such certificate or certificates may nevertheless be adopted by the corporation and be issued and delivered as though the person or persons who signed such certificate or certificates, or whose facsimile signature or signatures shall have been used thereon, had not ceased to be an officer or officers of such corporation. LOST CERTIFICATES Section 3. The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost or destroyed. TRANSFER OF STOCK Section 4. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. CLOSING OF TRANSFER BOOKS Section 5. The directors may prescribe a period not exceeding sixty days prior to any meeting of the stock holders during which no transfer of stock on the books of the corporation may be made, or may fix a day not more than sixty days prior to the holding of any such meeting as the day as of which stockholders entitled to notice of and to vote at such meeting shall be determined; and only stockholders of record on such day shall be entitled to notice or to vote at such meeting. REGISTERED STOCKHOLDERS Section 6. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Nevada. ARTICLE VII GENERAL PROVISIONS DIVIDENDS Section l. Dividends upon the capital stock of the corporation, subject to the provisions of the articles of incorporation, if any, may be declared by the board of directors at any regular or special meeting pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the articles of incorporation. Section 2. Before payment of any dividend, there may be set aside out of any funds of the corporation avail able for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserves in the manner in which it was created. CHECKS Section 3. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate. FISCAL YEAR Section 4. The fiscal year of the corporation shall be fixed by resolution of the board of directors. SEAL Section 5. The corporate seal shall have inscribed thereon the name of the corporation, the year of its incorporation and the words "Corporate Seal, Nevada." ARTICLE VIII AMENDMENTS Section l. These by-laws may be altered or repealed at any regular meeting of the stockholders or of the board of directors or at any special meeting of the stockholders or of the board of directors if notice of such alteration or repeal be contained in the notice of such special meeting. I, THE UNDERSIGNED, being the secretary of Oasis Resorts International, Inc., DO HEREBY CERTIFY the foregoing to be the by-laws of said corporation, as adopted at a meeting of the shareholders held on the 19th day of October, 1998. /s/ Charles Longson Charles Longson, Secretary EX-10.1 4 EXCHANGE AGREEMENT EXHIBIT 10.1 EXCHANGE AGREEMENT BETWEEN: 1. Cleopatra's Palace Resorts and Casinos Limited ("CPR&C") and 2. Cleopatra's World Inc. (the "Company"). Whereas, the Company owns certain assets consisting of (a) Negotiable Promissory notes in the aggregate principal amount of Six Million Five Hundred Thousand Dollars (USD6,500,000) issued by NuOasis Resorts Inc., copies of which are annexed hereto on Schedule 1 (the "Notes"), (b) shares of capital stock of Societe D'Animation et de Loisirs Touristiques, a Tunisian corporation ("SALT") comprising approximately twenty percent (20%) of the total equity of SALT (the "SALT Shares"), (c) the rights to the Casino Lease and Management Agreement dated October 1993, as amended, between SALT and Cleopatra Palace Limited, a copy of which is annexed hereto as Schedule "2" (the "SALT Lease") and, (d) the trade account receivable in the approximate amount of One Million Nine Hundred Thousand Dollars (USD1,900,000) due from Cleopatra Hammamet Limited (the "CHL Receivable"); and, Whereas, CPR&C wishes to acquire the Company's interest in the Notes, the SALT Interest and the SALT Lease and the CHL Receivable in exchange for newly issued ordinary 1.00 pound sterling par value shares of CPR&C. In consideration of the mutual promises contained herein, the benefits to be derived by each party hereunder and other good and valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, CPR&C and the Company agree as follows: 1.0 On the basis of the representations and warranties herein contained, subject to the terms and conditions set forth herein, the Company agrees to exchange its interest in the Notes, the SALT Interest and the SALT Lease for Twelve Million, Five Hundred Fifty-Three Thousand One Hundred Twenty Five (12,553,125) shares of 1.00 pound sterling par value shares of CPR&C (the "Shares"). 2.0 The closing of the exchange contemplated by this Agreement (the "Closing" or "Transfer Date") shall occur not later than 30 September 1998. At the Closing, CPR&C shall the Company shall deliver the Notes, the SALT Interest and the SALT Lease to CPR&C, and CPR&C shall issue and deliver the Shares to the Company. Notwithstanding the date of Closing, the Effective Date shall be the 1st of July, 1998. 3.0 The parties agree to select a mutually agreeable third party to act as escrowholder ("Escrowholder") and to effect the exchange transaction contemplated through such Escrowholder, through which the parties will deliver the Notes and the Shares. 4.0 The Company hereby represents and warrants to CPR&C that: 4.1 The Company is a corporation validly existing and in good standing under the laws of the British Virgin Islands, with the power and authority to carry on its business as now being conducted. The execution and delivery of this Agreement and the consummation of the transaction contemplated in this Agreement have been, or will be prior to Closing, duly authorized by all requisite corporate action on the part of the Company. This Agreement has been duly executed and delivered by the Company and constitutes a binding, and enforceable obligation of the Company; 4.2 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, delivery, or performance of this Agreement, or if required, the Company has or will obtain same prior to Closing; 4.3 The Company is not a defendant or a plaintiff against whom a counterclaim has been made or reduced to judgement, in any litigation or proceedings before any local, state or U.S. government, or any department, board, body or agency thereof, which could result in a claim against the Notes; 4.4 The Notes and the SALT Shares were validly issued by Resorts and SALT, respectively, and to the best of CPR&C's knowledge the Notes and the SALT Shares were issued for valid consideration. Further, there is not in effect or pending, any claim by Resorts or SALT which would serve as an offset to or to restrict the transfer or exchange of the Notes or the SALT Shares, respectively, as contemplated herein. Additionally, the Company has not created any option, security interest or encumbrance involving the Notes, the SALT Shares or the SALT Lease that would give rise to any claims by third parties or otherwise conflict with or preclude the exchange as contemplated herein; and 4.5 This Agreement has been duly executed by the Company, and the execution and performance of this Agreement will not violate, or result in a breach of, or constitute a default in any agreement, instrument, judgement, order or decree to which the Company is a party or to which the Company is subject. 5.0 All obligations of CPR&C under this Agreement are subject to the fulfillment, prior to or as of the Closing Date, of each of the following conditions: 5.1 CPR&C shall have issued and delivered the Shares to the Escrowholder. 5.2 The Company shall have taken all action necessary to assign and deliver the Notes, the SALT Shares and the SALT Lease to Escrowholder. 5.3 All instruments and documents delivered to CPR&C and the Company pursuant to the provisions of this Agreement shall be satisfactory to CPR&C and the Company and their legal counsel. 6.0 CPR&C and the Company each represent that, by virtue of their respective business activities and economic bargaining power or otherwise, they have been able to conduct their own due diligence and have had access to or have been furnished with, prior to or concurrently with the execution hereof, the information which they consider to be adequate to make a decision to exchange the Notes, the SALT Shares and the SALT Lease for the Shares. 7.0 The officers of CPR&C and the Company executing this Agreement are duly authorized to do so and each party has taken all action required by law or otherwise to properly and legally execute this Agreement. 8.0 Any notice under this Agreement shall be deemed to have been sufficiently given if sent by registered or certified mail, postage prepaid, addressed as follows: To the Company: Cleopatra's Palace Resorts and Casinos Limited 21 Aylmer Parade Aylmer Road London, England N2 OPE Telephone: +181 340-4646 Facsimile: +181 340-6100 With copy to: NuOasis International Inc. 43 Elizabeth Avenue, Box N-8680, Nassau, Bahamas Telephone: (809) 356-2903 Facsimile: (809) 326-8434 To the Company: Cleopatra's World Inc. c/o Flat 2, Chartwell House 80 Wimbledon Parkside London SW19 5LN, ENGLAND or to any other address which may hereafter be designated by either party by notice given in such manner. All notices shall be deemed to have been given as of the date of receipt. 9.0 This Agreement sets forth the entire understanding between the parties hereto and no other prior written or oral statement or agreement shall be recognized or enforced. 10.0 If a court of competent jurisdiction determines that any clause or provision of this Agreement is invalid, illegal or unenforceable, the other clauses and provisions of the Agreement shall remain in full force and effect and the clauses and provision which are determined to be void, illegal or unenforceable shall be limited so that they shall remain in effect to the extent permissible by law. 11.0 None of the parties hereto may assign this Agreement without the express written consent of the other parties and any approved assignment shall be binding on and inure to the benefit of such successor or, in the event of death or incapacity, on assignor's heirs, executors, administrators and successors. 12.0 This Agreement has been negotiated and is being contracted for in England and shall be governed by the laws of England, notwithstanding any conflict-of-law provision to the contrary. 13.0 If any legal action or other preceding (non-exclusively including arbitration) is brought for the enforcement of or to declare any right or obligation under this Agreement or as a result of a breach, default or misrepresentation in connection with any of the provisions of this Agreement, or otherwise because of a dispute among the parties hereto, the prevailing party will be entitled to recover actual attorney's fees (including for appeals and collection) and other expenses incurred in such action or proceeding, in addition to any other relief to which such party may be entitled. 14.0 Nothing in this Agreement, expressed or implied, is intended to confer upon any person, other than the parties hereto and their successors, any rights or remedies under or by reason of this Agreement, unless this Agreement specifically states such intent. 15.0 At any time, and from time to time after the Closing, each party hereto will execute such additional instruments and take such action as may be reasonably requested by the other party to confirm or perfect title to the Shares, the Notes, the SALT Shares and the SALT Lease to be transferred hereunder, or otherwise to carry out the intent and purposes of this Agreement. 16.0 Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing. At any time prior to Closing, this Agreement may be amended by a writing signed by all parties hereto. 17.0 The section and subsection headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 18.0 A facsimile, telecopy or other reproduction of this instrument may be executed by one or more parties hereto and such executed copy may be delivered by facsimile or similar instantaneous electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties agree to execute an original of this instrument as well as any facsimile, telecopy or other reproduction hereof. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. SIGNED AS A DEED FOR AND ON BEHALF OF Cleopatra's Palace Resorts and Casinos Limited For Grosvenor Administration Limited For Grosvenor Secretaries Limited By:/s/Grosvenor Administration Limited By:/s/Grosvenor Secretaries Limited Authorised signature(s) Authorised signature Secretary Effective the 1st day of July, 1998 SIGNED AS A DEED FOR AND ON BEHALF OF Cleopatra's World Inc. By: /s/ Gabriel Tabarani Authorised signature(s) Effective the 1st day of July, 1998 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. SIGNED AS A DEED FOR AND ON BEHALF OF Cleopatra's Palace Resorts and Casinos Limited By: /s/ Fred G. Luke Authorised signature(s) Effective the 1st day of July, 1998 SIGNED AS A DEED FOR AND ON BEHALF OF Cleopatra's World Inc. By: /s/ Gabriel Tabarani Authorised signature(s) Effective the 1st day of July, 1998 EX-10.2 5 EXCHANGE AGREEMENT EXHIBIT 10.2 EXCHANGE AGREEMENT BETWEEN THE UNDERSIGNED: 1 - Cleopatra's World Inc., a joint stock company having its head office at Box 3186, Road Town, Tortola, British Virgin Islands hereinafter called the "Company" On the one hand, and 2 - Cleopatra Palace Limited, a joint stock company having its head office at Flat 2, Chartwell House, 80 Wimbledon Parkside, London SW19 5LN, England hereinafter called "CPL"). On the other hand Preamble Whereas, the Company owns ordinary shares of Cleopatra's Palace Resorts and Casinos Limited, a limited liability company organised under the laws of England ("CPR&C") ; and, Whereas, CPL owns certain Promissory Notes issued by the Company in the aggregate principal amount of Thirteen Million Dollars, excluding accrued interest through the date hereof, copies of which are annexed hereto on Schedule "1" (the "Notes"); and, Whereas, the Company wishes to extinguish and settle the Notes by way of the transfer to CPL of 1.00 par value shares of Cleopatra Palace Resorts and Casinos Limited ("CPR&C"). The following has been agreed and settled: Article 1: On the basis of the representations and warranties herein contained, subject to the terms and conditions set forth herein, CPL agrees to exchange the Notes for Eight Million, Four Hundred Ninety Thousand, Six Hundred Twenty Five (8,490,625) shares of CPR&C 1.00 pound sterling par value ordinary shares (the "CPR Shares"). Article 2: The closing of the exchange contemplated by this Agreement (the "Closing" or "Transfer Date") shall occur upon the transfer of the Notes to the Company, but shall not be later than 30th September 1998. At the Closing, the Company shall deliver the Notes to CPL and CPL shall issue and deliver the CPR Shares to the Company. Notwithstanding the date of Closing, the Effective Date shall be the 1st of July, 1998. Article 3: The parties agree to select a mutually agreeable third party to act as escrowholder ("Escrowholder") and to effect the exchange transaction contemplated through such Escrowholder, through which the parties will deliver the Notes and the CPR Shares Article 4: CPL hereby represents and warrants to the Company that: 4.1 CPL is a corporation validly existing and in good standing under the laws of the British Virgin Islands, with the power and authority to carry on its business as now being conducted. The execution and delivery of this Agreement and the consummation of the transaction contemplated in this Agreement have been, or will be prior to Closing, duly authorized by all requisite corporate action on the part of CPL. This Agreement has been duly executed and delivered by CPL and constitutes a binding, and enforceable obligation of CPL; 4.2 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 CPL in connection with the execution, delivery, or performance of this Agreement, or if required, CPL has or will obtain same prior to Closing; 4.3 CPL is not a defendant or a plaintiff against whom a counterclaim has been made or reduced to judgement, in any litigation or proceedings before any local, state or U.S. government, or any department, board, body or agency thereof, which could result in a claim against the Notes; 4.4 The CPR Shares are validly issued by CPR&C and, to the best of the Company's knowledge, the CPR Shares were issued for valid consideration which was delivered to and accepted by CPR&C, as the issuer. Further, there is not in effect or pending, any claim by CPR&C which would serve as an offset to or to restrict the transfer or exchange of the Notes as contemplated herein. Additionally, CPL has not created any option, security interest or encumbrance involving the CPR Shares that would give rise to any claims by third parties or otherwise conflict with or preclude the exchange as contemplated herein; and 4.5 This Agreement has been duly executed by CPL, and the execution and performance of this Agreement will not violate, or result in a breach of, or constitute a default in any agreement, instrument, judgement, order or decree to which CPL is a party or to which CPL is subject. Article 5: 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: 5.1 The Company shall have delivered the CPR Shares to the Escrowholder with all appropriate executed stockpowers and transfer documents. 5.2 CPL shall have taken all action necessary to assign and deliver the original Notes to Escrowholder marked "Paid." 5.3 All instruments and documents delivered to the Company and CPL pursuant to the provisions of this Agreement shall be satisfactory to the Company and CPL and their legal counsel. Article 6: The Company and CPL each represent that, by virtue of their respective business activities and economic bargaining power or otherwise, they have been able to conduct their own due diligence and have had access to or have been furnished with, prior to or concurrently with the execution hereof, the information which they consider to be adequate to make a decision to exchange the Notes for the CPR Shares. Article 7: The officers of the Company and CPL executing this Agreement are duly authorized to do so and each party has taken all action required by law or otherwise to properly and legally execute this Agreement. Article 8: Any notice under this Agreement shall be deemed to have been sufficiently given if sent by registered or certified mail, postage prepaid, addressed as follows: To CPL: Cleopatra's World Inc. c/o Flat 2, Chartwell House 80 Wimbledon Parkside London SW19 5LN, ENGLAND With copy to: NuOasis International Inc. 43 Elizabeth Avenue, Box N-8680 Nassau, Bahamas Telephone: (809) 356-2903 Facsimile: (809) 326-8434 To CPL: Cleopatra Palace Limited c/o Flat 2, Chartwell House 80 Wimbledon Parkside London SW19 5LN, ENGLAND or to any other address which may hereafter be designated by either party by notice given in such manner. All notices shall be deemed to have been given as of the date of receipt. Article 9: This Agreement sets forth the entire understanding between the parties hereto and no other prior written or oral statement or agreement shall be recognized or enforced. Article 10: If a court of competent jurisdiction determines that any clause or provision of this Agreement is invalid, illegal or unenforceable, the other clauses and provisions of the Agreement shall remain in full force and effect and the clauses and provision which are determined to be void, illegal or unenforceable shall be limited so that they shall remain in effect to the extent permissible by law. Article 11: None of the parties hereto may assign this Agreement without the express written consent of the other parties and any approved assignment shall be binding on and inure to the benefit of such successor or, in the event of death or incapacity, on assignor's heirs, executors, administrators and successors. Article 12: This Agreement has been negotiated and is being contracted for outside of England but shall be governed by the laws of England, notwithstanding any conflict-of-law provision to the contrary. Article 13: If any legal action or other preceding (non-exclusively including arbitration) is brought for the enforcement of or to declare any right or obligation under this Agreement or as a result of a breach, default or misrepresentation in connection with any of the provisions of this Agreement, or otherwise because of a dispute among the parties hereto, the prevailing party will be entitled to recover actual attorney's fees (including for appeals and collection) and other expenses incurred in such action or proceeding, in addition to any other relief to which such party may be entitled. Article 14: Nothing in this Agreement, expressed or implied, is intended to confer upon any person, other than the parties hereto and their successors, any rights or remedies under or by reason of this Agreement, unless this Agreement specifically states such intent. Article 15: At any time, and from time to time after the Closing, each party hereto will execute such additional instruments and take such action as may be reasonably requested by the other party to confirm or perfect title to the CPR Shares to be transferred hereunder, or otherwise to carry out the intent and purposes of this Agreement. Article 16: Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing. At any time prior to Closing, this Agreement may be amended by a writing signed by all parties hereto. Article 17: The section and subsection headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. Article 18: A facsimile, telecopy or other reproduction of this instrument may be executed by one or more parties hereto and such executed copy may be delivered by facsimile or similar instantaneous electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties agree to execute an original of this instrument as well as any facsimile, telecopy or other reproduction hereof. IN WITNESS WHEREOF, this Agreement is executed in duplicate copies of like terms and effective the 1st day of July, 1998. Cleopatra's World Inc. By: /s/ Gabriel Tabarani Authorised signature(s) For Cleopatra Palace Limited By: /s/ Fred G. Luke Authorised signature(s) EX-10.3 6 EXCHANGE AGREEMENT EXHIBIT 10.3 EXCHANGE AGREEMENT BETWEEN: 1. Cleopatra's Palace Resorts and Casinos Limited ("CPR&C") and 2. Cleopatra Palace Limited ("CPL"). Whereas, CPR&C owns certain Negotiable Promissory notes in the aggregate principal amount of Three Million Five Hundred Thousand Dollars (USD3,000,000) issued by NuOasis Resorts Inc. ("Resorts"), copies of which are annexed hereto on Schedule 1 (the "Notes"); and, Whereas, CPL wishes to acquire the Notes and to receive newly issued shares of CPR&C's 1.00 pound sterling par value ordinary shares, in exchange for certain investments and assets of CPL, as set forth herein. In consideration of the mutual promises contained herein, the benefits to be derived by each party hereunder and other good and valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, CPR&C and CPL agree as follows: 1.0 On the basis of the representations and warranties herein contained, subject to the terms and conditions set forth herein, in exchange for the Notes, and Nine Hundred Forty Six Thousand, Eight Hundred Seventy Five (946,875) shares of CPR&C 1.00 pound sterling par value shares (the "Shares"), CPL agrees to assign and transfer to CPR&C certain of its assets consisting of (a) CPL's investment in, and receivables due from Cleopatra Cap Gammarth Limited, a company in formation under the laws of Tunisia ("CCGL") in the amount of Two Million Fifty Seven Thousand, One Hundred Forty Dollars (USD2,057,140) along with CPL's rights to CCGL share capital exclusive of ten percent (10%) of CCGL's share capital which shall be retained by CPL (collectively, the rights to all but 10% of the CCGL share capital and the CCGL Receivable shall be referred to herein as the "CCGL Interest"); and (b) its investment in Cleopatra Monastir Limited, a company in formation under the laws of Tunisia ("CML"), in the amount of approximately Three Thousand Dollars (USD3,000) and any rights to CML share capital (collectively, the "CML Interest") along with (c) the receivable due from Belgravia Fund Ltd. ("BFL") in the amount of Sixty Five Thousand Dollars (USD65,000) and (d) the receivable due from Pennydome Ltd. ("Pennydome") in the amount of Four Hundred Thousand Dollars (USD400,000). 2.0 The closing of the exchange contemplated by this Agreement (the "Closing" or "Transfer Date") shall occur upon the transfer of the Notes to CPR&C, but shall not be later than 30th September 1998. At the Closing, CPL shall deliver the CCGL Interest, the Belgravia Receivable, the Pennydome Receivable and the CML Interest to CPR&C, and CPR&C shall issue and deliver the Shares to CPL. Notwithstanding the date of Closing, the Effective Date shall be 1st day of July, 1998. 3.0 The parties agree to select a mutually agreeable third party to act as escrowholder ("Escrowholder") and to effect the exchange transaction contemplated through such Escrowholder, through which the parties will deliver the CCGL Interest, the Belgravia Receivable, the Pennydome Receivable and the CML Interest and the Shares. 4.0 CPL hereby represents and warrants to CPR&C that: 4.1 CPL is a limited liability company validly existing and in good standing under the laws of Ireland, with the power and authority to carry on its business as now being conducted. The execution and delivery of this Agreement and the consummation of the transaction contemplated in this Agreement have been, or will be prior to Closing, duly authorized by all requisite corporate action on the part of CPL. This Agreement has been duly executed and delivered by CPL and constitutes a binding, and enforceable obligation of CPL; 4.2 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 CPL in connection with the execution, delivery, or performance of this Agreement, or if required, CPL has or will obtain same prior to Closing; 4.3 CPL is not a defendant or a plaintiff against whom a counterclaim has been made or reduced to judgement, in any litigation or proceedings before any local, state or U.S. government, or any department, board, body or agency thereof, which could result in a claim against the Notes; 4.4 This Agreement has been duly executed by CPL, and the execution and performance of this Agreement will not violate, or result in a breach of, or constitute a default in any agreement, instrument, judgement, order or decree to which CPL is a party or to which CPL is subject. 5.0 All obligations of CPR&C and CPL under this Agreement are subject to the fulfillment, prior to or as of the Closing Date, of each of the following conditions: 5.1 CPR&C shall have issued and delivered the Shares to the Escrowholder. 5.2 CPL shall have taken all action necessary to assign and deliver all documents necessary to effect the transfer to CPR&C of the CCGL Interest, the Belgravia Receivable, the Pennydome Receivable and the CML Interest to Escrowholder. 5.3 All instruments and documents delivered to CPR&C and CPL pursuant to the provisions of this Agreement shall be satisfactory to CPR&C and CPL and their legal counsel. 6.0 CPR&C and CPL each represent that, by virtue of their respective business activities and economic bargaining power or otherwise, they have been able to conduct their own due diligence and have had access to or have been furnished with, prior to or concurrently with the execution hereof, the information which they consider to be adequate to make a decision to exchange the CCGL Interest, the Belgravia Receivable, the Pennydome Receivable and the CML Interest for the Shares. 7.0 The officers of CPR&C and CPL executing this Agreement are duly authorized to do so and each party has taken all action required by law or otherwise to properly and legally execute this Agreement. 8.0 Any notice under this Agreement shall be deemed to have been sufficiently given if sent by registered or certified mail, postage prepaid, addressed as follows: To CPR&C: Cleopatra's Palace Resorts and Casinos Limited 21 Aylmer Place Aylmer Road London, England N2 OPE Telephone: +181 340-4646 Facsimile: +181 340-6100 To CPL: Cleopatra Palace Limited c/o Flat 2, Chartwell House 80 Wimbledon Parkside London SW19 5LN, ENGLAND or to any other address which may hereafter be designated by either party by notice given in such manner. All notices shall be deemed to have been given as of the date of receipt. 9.0 This Agreement sets forth the entire understanding between the parties hereto and no other prior written or oral statement or agreement shall be recognized or enforced. 10.0 If a court of competent jurisdiction determines that any clause or provision of this Agreement is invalid, illegal or unenforceable, the other clauses and provisions of the Agreement shall remain in full force and effect and the clauses and provision which are determined to be void, illegal or unenforceable shall be limited so that they shall remain in effect to the extent permissible by law. 11.0 None of the parties hereto may assign this Agreement without the express written consent of the other parties and any approved assignment shall be binding on and inure to the benefit of such successor or, in the event of death or incapacity, on assignor's heirs, executors, administrators and successors. 12.0 This Agreement has been negotiated and is being contracted for in England and shall be governed by the laws of England, notwithstanding any conflict-of-law provision to the contrary. 13.0 If any legal action or other preceding (non-exclusively including arbitration) is brought for the enforcement of or to declare any right or obligation under this Agreement or as a result of a breach, default or misrepresentation in connection with any of the provisions of this Agreement, or otherwise because of a dispute among the parties hereto, the prevailing party will be entitled to recover actual attorney's fees (including for appeals and collection) and other expenses incurred in such action or proceeding, in addition to any other relief to which such party may be entitled. 14.0 Nothing in this Agreement, expressed or implied, is intended to confer upon any person, other than the parties hereto and their successors, any rights or remedies under or by reason of this Agreement, unless this Agreement specifically states such intent. 15.0 At any time, and from time to time after the Closing, each party hereto will execute such additional instruments and take such action as may be reasonably requested by the other party to confirm or perfect title to the Shares, the Notes, the CCGL Interest, the Belgravia Receivable, the Pennydome Receivable and the CML Interest to be transferred hereunder, or otherwise to carry out the intent and purposes of this Agreement. 16.0 Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing. At any time prior to Closing, this Agreement may be amended by a writing signed by all parties hereto. 17.0 The section and subsection headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 18.0 A facsimile, telecopy or other reproduction of this instrument may be executed by one or more parties hereto and such executed copy may be delivered by facsimile or similar instantaneous electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties agree to execute an original of this instrument as well as any facsimile, telecopy or other reproduction hereof. SIGNED AS A DEED FOR AND ON BEHALF OF Cleopatra's Palace Resorts and Casinos Limited By: /s/ Grosvenor Administration Limited Authorised signature(s) Effective the 1st day of July, 1998 SIGNED AS A DEED FOR AND ON BEHALF OF Cleopatra Palace Limited By: /s/ Fred G. Luke Authorised signature(s) Effective the 1st day of July, 1998 EX-10.4 7 EXCHANGE AGREEMENT EXHIBIT 10.4 EXCHANGE AGREEMENT BETWEEN: 1. Cleopatra's Palace Resorts and Casinos Limited ("CPR&C") and 2. NuOasis International Inc. (the "Company"). Whereas, the Company owns Thirty Thousand (30,000) shares of Cleopatra's World Inc., a corporation organized under the laws of the British Virgin Islands contained in certificates, copies of which are annexed hereto on Schedule "1" (the "CWI Shares"); and, Whereas, the Company owns Seventy Thousand (70,00) shares of Cleopatra Hammamet Limited, a Tunisian corporation, contained in certificates, copies of which are annexed hereto on Schedule "2" (the "CHL Shares"); and, Whereas, the Company owns, or has the right to acquire One Hundred Thousand (100,000) shares of Cleopatra Hammamet Limited, a Tunisian corporation (the "CHL Shares"); and, Whereas, CPR&C wishes to acquire the CWI Shares and the CHL Shares in exchange for newly issued shares of 1.00 pound srerling par value shares of CPR&C. In consideration of the mutual promises contained herein, the benefits to be derived by each party hereunder and other good and valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, CPR&C and the Company agree as follows: 1.0 On the basis of the representations and warranties herein contained, subject to the terms and conditions set forth herein, the Company agrees to the exchange of the CHL Shares and the CWI Shares for Eleven Million Five Hundred Thousand (11,500,000) shares of CPR&C 1.00 pound sterling par value ordinary shares (the "CPR Shares"). 2.0 The closing of the exchange contemplated by this Agreement (the "Closing") shall occur upon the transfer of the CWI Shares to CPR&C (the "Transfer Date"), but shall not be later than 30 September 1998. At the Closing, CPR&C shall deliver the CWI Shares and the CHL Shares to the Company and the Company shall issue and deliver the CPR Shares to CPR&C. Notwithstanding the date of Closing, the Effective Date shall be 1 July 1998. 3.0 The parties agree to select a mutually agreeable third party to act as escrowholder ("Escrowholder") and to effect the exchange transaction contemplated through such Escrowholder, through which the parties will deliver the CWI Shares, the CHL Shares and the CPR Shares. 4.0 The Company hereby represents and warrants to CPR&C that: 4.1 The Company is a corporation validly existing and in good standing under the laws of the Commonwealth of the Bahamas, with the power and authority to carry on its business as now being conducted. The execution and delivery of this Agreement and the consummation of the transaction contemplated in this Agreement have been, or will be prior to Closing, duly authorized by all requisite corporate action on the part of the Company. This Agreement has been duly executed and delivered by the Company and constitutes a binding, and enforceable obligation of the Company; 4.2 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, delivery, or performance of this Agreement, or if required, the Company has or will obtain same prior to Closing; 4.3 The Company is not a defendant or a plaintiff against whom a counterclaim has been made or reduced to judgement, in any litigation or proceedings before any local, state or U.S. government, or any department, board, body or agency thereof, which could result in a claim against the CWI Shares or the CHL Shares; 4.4 This Agreement has been duly executed by the Company, and the execution and performance of this Agreement will not violate, or result in a breach of, or constitute a default in any agreement, instrument, judgement, order or decree to which the Company is a party or to which the Company is subject. 5.0 All obligations of CPR&C under this Agreement are subject to the fulfillment, prior to or as of the Closing Date, of each of the following conditions: 5.1 CPR&C shall have issued and delivered the CPR Shares to the Escrowholder. 5.2 The Company shall have taken all action necessary to assign and deliver the CWI Shares and the CHL Shares to Escrowholder. 5.3 All instruments and documents delivered to CPR&C and the Company pursuant to the provisions of this Agreement shall be satisfactory to CPR&C and the Company and their legal counsel. 6.0 CPR&C and the Company each represent that, by virtue of their respective business activities and economic bargaining power or otherwise, they have been able to conduct their own due diligence and have had access to or have been furnished with, prior to or concurrently with the execution hereof, the information which they consider to be adequate to make a decision to exchange the CWI Shares and the CHL Shares for the CPR Shares. 5.1 The officers of CPR&C and the Company executing this Agreement are duly authorized to do so and each party has taken all action required by law or otherwise to properly and legally execute this Agreement. 5.2 Any notice under this Agreement shall be deemed to have been sufficiently given if sent by registered or certified mail, postage prepaid, addressed as follows: To the Company: Cleopatra's Palace Resorts and Casinos Limited 21 Alymer Parade, Alymer Road London N2 OPE Telephone: +181 340 4646 Facsimile: +181 340 6100 To the Company: NuOasis Resorts Inc. 4001 So. Decatur Blvd., Suite Las Vegas, Nevada With copy to: NuOasis International Inc. 43 Elizabeth Avenue, Box N-8680 Nassau, Bahamas Telephone: (809) 356-2903 Facsimile: (809) 326-8434 or to any other address which may hereafter be designated by either party by notice given in such manner. All notices shall be deemed to have been given as of the date of receipt. 9.0 This Agreement sets forth the entire understanding between the parties hereto and no other prior written or oral statement or agreement shall be recognized or enforced. 10.0 If a court of competent jurisdiction determines that any clause or provision of this Agreement is invalid, illegal or unenforceable, the other clauses and provisions of the Agreement shall remain in full force and effect and the clauses and provision which are determined to be void, illegal or unenforceable shall be limited so that they shall remain in effect to the extent permissible by law. 11.0 None of the parties hereto may assign this Agreement without the express written consent of the other parties and any approved assignment shall be binding on and inure to the benefit of such successor or, in the event of death or incapacity, on assignor's heirs, executors, administrators and successors. 12.0 This Agreement has been negotiated and is being contracted for outside of England shall be governed by the laws of England, notwithstanding any conflict-of-law provision to the contrary. 13.0 If any legal action or other preceding (non-exclusively including arbitration) is brought for the enforcement of or to declare any right or obligation under this Agreement or as a result of a breach, default or misrepresentation in connection with any of the provisions of this Agreement, or otherwise because of a dispute among the parties hereto, the prevailing party will be entitled to recover actual attorney's fees (including for appeals and collection) and other expenses incurred in such action or proceeding, in addition to any other relief to which such party may be entitled. 14.0 Nothing in this Agreement, expressed or implied, is intended to confer upon any person, other than the parties hereto and their successors, any rights or remedies under or by reason of this Agreement, unless this Agreement specifically states such intent. 15.0 At any time, and from time to time after the Closing, each party hereto will execute such additional instruments and take such action as may be reasonably requested by the other party to confirm or perfect title to the CWI Shares, the CHL Shares and the CPR Shares to be transferred hereunder, or otherwise to carry out the intent and purposes of this Agreement. 16.0 Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing. At any time prior to Closing, this Agreement may be amended by a writing signed by all parties hereto. 17.0 The section and subsection headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 18.0 A facsimile, telecopy or other reproduction of this instrument may be executed by one or more parties hereto and such executed copy may be delivered by facsimile or similar instantaneous electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties agree to execute an original of this instrument as well as any facsimile, telecopy or other reproduction hereof. SIGNED AS A DEED FOR AND ON BEHALF OF Cleopatra's Palace Resorts and Casinos Limited By: /s/ James Ward Authorised signature(s) Effective the 1st day of July, 1998 SIGNED AS A DEED FOR AND ON BEHALF OF NuOasis International Inc. By: /s/ Fred G. Luke Authorised signature(s) Effective the 1st day of July, 1998 EX-10.5 8 ADVISORY AGREEMENT EXHIBIT 10.5 ADVISORY AGREEMENT THIS ADVISORY AGREEMENT ("Agreement") is made this 18th day of July 1998, by and between NuVen Advisors, Inc., a Nevada corporation ("Advisor") and Flexweight Corporation, a Kansas corporation (the "Company"). WHEREAS, Advisor and Advisor's Personnel (as defined below) have experience in evaluating and effecting mergers and acquisitions, supervising corporate management, and in performing general administrative duties for publicly-held companies and development stage investment ventures; and WHEREAS, the Company desires to retain Advisor to advise and assist the Company in its development on the terms and conditions set forth below. NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Advisor agree as follows: 1. Engagement The Company hereby retains Advisor, retroactive to April 1, 1998, the date Advisor first began providing the services (the "Effective Date") and continuing until termination as provided herein, to assist the Company in it's effecting the purchase of businesses and assets relative to its business and growth strategy (the "Services"). The Services are to be provided on a "best efforts" basis directly and through Advisor's officers or others employed or retained and under the direction of Advisor ("Advisor's Personnel"); provided, however, that the Services shall expressly exclude all legal advice, accounting services or other services which require licenses or certification which Advisor may not have. 2. Term This Agreement shall have an initial term of one (1) year (the "Primary Term"), commencing with the Effective Date. At the conclusion of the Primary Term this Agreement will automatically be extended on an annual basis (the "Extension Period") unless Advisor or the Company shall serve written notice on the other party terminating the Agreement. Any notice to terminate given hereunder shall be in writing and shall be delivered at least thirty (30) days prior to the end of the Primary Term or any subsequent Extension Period. 3. Time and Effort of Advisor Advisor shall allocate time and Advisors Personnel as it deems necessary to provide the Services. The particular amount of time may vary from day to day or week to week. Except as otherwise agreed, Advisor's monthly statement identifying, in general, tasks performed for the Company shall be conclusive evidence that the Services have been performed. Additionally, in the absence of willful misfeasance, bad faith, negligence or reckless disregard for the obligations or duties hereunder by Advisor, neither Advisor nor Advisor's Personnel shall be liable to the Company or any of its any shareholders for any act or omission in the course of or connected with rendering the Services, including but not limited to losses that may be sustained in any corporate act in any subsequent Business Opportunity (as defined herein) undertaken by the Company as a result of advice provided by Advisor or Advisor's Personnel. 4. Compensation The Company agrees to pay Advisor a fee for the Services (the "Initial Fee") by way of the issuance by the Company of Forty Thousand (40,000) shares of the Company's common stock following the Company's closing on the purchase of the initial Business Opportunity (as defined below), and a monthly fee ("Advisory Fee") equal to Three Thousand Dollars (USD $3,000), payable monthly in cash or shares of the Company's common stock, at the Company's election. As incentive to execute this Agreement, the Company hereby grants to Advisor an option to purchase Three Hundred Fifty Thousand (350,000) shares of the Company's common stock ("Option Shares") exercisable at a price of $6.00 per share, which is approximately 110% of the 10-day moving average closing bid price for such shares at July 15, 1998. Advisory's right to purchase such Option Shares shall be governed by the terms and conditions of the Option Agreement attached hereto as Exhibit "A" and incorporated herein by reference (the "Option"). The right of Advisor to exercise such Option will vest to Advisor upon execution hereof. 5. Other Services If, following the Closing by the Company of the first Business Opportunity, the Company enters into a merger or exchange securities with, or purchases the assets or enters into a joint venture with, or makes an investment in a company introduced by Advisor (a "Business Opportunity"), the Company agrees to pay Advisor a fee equal to five percent (5%) of the value of each Business Opportunity introduced by Advisor and acquired or otherwise participated in by the Company (collectively referred to herein, in each instance, as the "Transaction Fee"), which shall be payable immediately following the closing of each such transaction, in cash or in shares of the Company's common stock. The Company and Advisor acknowledge that in the event Advisor, as a result of this Agreement, receives shares of the Company's common stock it may be considered an affiliate subject to Section 16(b) of the Securities Exchange Act of 1934 (the "'34 Act"). In this regard the Company and Advisor agree, that for purposes of any "profit" computation under Section 16(b) of the '34 Act, the price paid for such shares is equal to the Initial Fee, the Advisory Fee or the Transaction Fee, as the case may be. 6. Registration of Shares No later than ten (10) days following the date hereof as to shares issued to satisfy the Advisory Fee (if paid in shares), the Option Shares and, as to an event giving use to the Company's obligation to pay a Transaction Fee, such shares shall be registered by the Company with the Securities and Exchange Commission under a Form S-8 or other applicable registration statement, and the Company shall cause such registration statement to be remain effective until the earlier of the first anniversary of the issuance of the most recently issued shares, or the sale of all such shares by Advisor, whichever is the earlier date. At Advisor's election, such shares may be issued prior to registration in reliance on exemptions from registration provided by Section 4(2) of the Securities Act of 1933 (the "'33 Act"), Regulation D of the '33 Act, and applicable state securities laws. Such issuance or reservation of shares shall be in reliance on representations and warranties of Advisor set forth herein. Failing to register such shares, or maintain the effectiveness of the applicable registration statement, the Company shall satisfy any Initial Fee, Transaction Fee or Advisory Fee in cash within ten (10) days of receipt of Advisor's statement setting out the amount and type of fee then due and payable. 7. Costs and Expenses All third party and out-of-pocket expenses incurred by Advisor in the performance of the Services shall be paid by the Company, or Advisor shall be reimbursed if paid by Advisor on behalf of the Company, within ten (10) days of receipt of written notice by Advisor, provided that the Company must approve in advance all such expenses in excess of $500 per month. 8. Place of Services The Services provided by Advisor or Advisor's Personnel hereunder will be performed at Advisor's offices except as otherwise mutually agreed by Advisor and the Company. 9. Independent Contractor Advisor and Advisor's Personnel will act as an independent contractor in the performance of its duties under this Agreement. Accordingly, Advisor will be responsible for payment of all federal, state, and local taxes on compensation paid under this Agreement, including income and social security taxes, unemployment insurance, and any other taxes due relative to Advisor's Personnel, and any and all business license fees as may be required. This Agreement neither expressly nor impliedly creates a relationship of principal and agent, or employee and employer, between Advisor's Personnel and the Company. Neither Advisor nor Advisor's Personnel are authorized to enter into any agreements on behalf of the Company. The Company expressly retains the right to approve, in its sole discretion, each Business Opportunity introduced by Advisor, and to make all final decisions with respect to effecting a transaction on any Business Opportunity. 10. Rejected Business Opportunity If, during the Primary Term of this Agreement or any Extension Period, the Company elects not to proceed to acquire, participate or invest in any Business Opportunity identified and/or selected by Advisor, notwithstanding the time and expense the Company may have incurred reviewing such transaction, such Business Opportunity shall revert back to and become proprietary to Advisor, and Advisor shall be entitled to acquire or broker the sale or investment in such rejected Business Opportunity for its own account, or submit such assets or Business Opportunity elsewhere. In such event, Advisor shall be entitled to any and all profits or fees resulting from Advisor's purchase, referral or placement of any such rejected Business Opportunity, or the Company's subsequent purchase or financing with such Business Opportunity in circumvention of Advisor. 11. No Agency Express or Implied This Agreement neither expressly nor impliedly creates a relationship of principal and agent between the Company and Advisor, or employee and employer as between Advisor's Personnel and the Company. 12. Termination The Company and Advisor may terminate this Agreement prior to the expiration of the Primary Term upon thirty (30) days written notice with mutual written consent. Failing to have mutual consent, without prejudice to any other remedy to which the terminating party may be entitled, if any, either party may terminate this Agreement with thirty (30) days written notice under the following conditions: (A) By the Company. (i) If during the Primary Term of this Agreement or any Extension Period, Advisor is unable to provide the Services as set forth herein for thirty (30) consecutive business days because of illness, accident, or other incapacity of Advisor's Personnel; or, (ii) If Advisor willfully breaches or neglects the duties required to be performed hereunder; or, (B) By Advisor. (i) If the Company breaches this Agreement or fails to make any payments or provide information required hereunder; or, (ii) If the Company ceases business or, other than in the Initial Merger, sells a controlling interest to a third party, or agrees to a consolidation or merger of itself with or into another corporation, or enters into such a transaction outside of the scope of this Agreement, or sells substantially all of its assets to another corporation, entity or individual outside of the scope of this Agreement; or, (iii) If the Company has a receiver appointed for its business or assets, or otherwise becomes insolvent or unable to timely satisfy its obligations in the ordinary course of business, including but not limited to the obligation to pay the Initial Fee, the Transaction Fee, or the Advisory Fee; or, (iv) If the Company institutes, makes a general assignment for the benefit of creditors, has instituted against it any bankruptcy proceeding for reorganization for rearrangement of its financial affairs, files a petition in a court of bankruptcy, or is adjudicated a bankrupt; or, (v) If any of the disclosures made herein or subsequent hereto by the Company to Advisor are determined to be materially false or misleading. In the event Advisor elects to terminate without cause or this Agreement is terminated prior to the expiration of the Primary Term or any Extension Period by mutual written agreement, or by the Company for the reasons set forth in A(i) and (ii) above, the Company shall only be responsible to pay Advisor for unreimbursed expenses, Advisory Fee and Transaction Fee accrued up to and including the effective date of termination. If this Agreement is terminated by the Company for any other reason, or by Advisor for reasons set forth in B(i) through (v) above, Advisor shall be entitled to any outstanding unpaid portion of reimbursable expenses, Transaction Fee, if any, and the balance of the Advisory Fee for the remainder of the unexpired portion of the applicable term (Primary Term or Extension Period) of the Agreement. 13. Indemnification Subject to the provisions herein, the Company and Advisor agree to indemnify, defend and hold each other harmless from and against all demands, claims, actions, losses, damages, liabilities, costs and expenses, including without limitation, interest, penalties and attorneys' fees and expenses asserted against or imposed or incurred by either party by reason of or resulting from any action or a breach of any representation, warranty, covenant, condition, or agreement of the other party to this Agreement. 14. Remedies Advisor and the Company acknowledge that in the event of a breach of this Agreement by either party, money damages would be inadequate and the non-breaching party would have no adequate remedy at law. Accordingly, in the event of any controversy concerning the rights or obligations under this Agreement, such rights or obligations shall be enforceable in a court of equity by a decree of specific performance. Such remedy, however, shall be cumulative and non-exclusive and shall be in addition to any other remedy to which the parties may be entitled. 15. Miscellaneous (A) Subsequent Events. Advisor and the Company each agree to notify the other party if, subsequent to the date of this Agreement, either party incurs obligations which could compromise its efforts and obligations under this Agreement. (B) Amendment. This Agreement may be amended or modified at any time and in any manner only by an instrument in writing executed by the parties hereto. (C) Further Actions and Assurances. At any time and from time to time, each party agrees, at its or their expense, to take actions and to execute and deliver documents a may be reasonably necessary to effectuate the purposes of this Agreement. (D) 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. (E) Assignment. Neither this Agreement nor any right created by it shall be assignable by either party without the prior written consent of the other. (F) Notices. Any notice or other communication required or permitted by this Agreement must be in writing and shall be deemed to be properly given when delivered in person to an officer of the other party, when deposited in the United States mails for transmittal by certified or registered mail, postage prepaid, or when deposited with a public telegraph company for transmittal, or when sent by facsimile transmission charges prepared, provided that the communication is addressed: (i) In the case of the Company: Flexweight Corporation 915 North Wells Wendover, NV 89803 Telephone: (702) 664-3919 Facsimile: (702) 664-2331 With copy to: Hudson Consulting Group 268 West 400 South, suite 300 Salt Lake City, Utah 84101 Telephone: (801) 575-8073 Telefax: (801) 575-8092 (ii) In the case of Advisor: NuVen Advisors, Inc. 6337 So. Highland Drive, Suite 319 Salt Lake City, Utah 84121 Telephone: (801) 277-8755 Telefax: (801) 277-8755 With copy to: Richard O. Weed Archer & Weed 4695 MacArthur Court, Suite #530 Newport Beach, CA 92660 Telephone: (714) 833-5363 Telefax: (714) 833-5384 or to such other person or address designated in writing by the Company or Advisor to receive notice. (G) Headings. The section and subsection headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. (H) Governing Law. This Agreement was negotiated and is being contracted for in Nevada, and shall be governed by the laws of the Nevada, notwithstanding any conflict-of-law provision to the contrary. (I) Binding 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. (J) Entire 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. (K) Severability. If any part of this Agreement is deemed to be unenforceable the balance of the Agreement shall remain in full force and effect. (L) Counterparts. A facsimile, telecopy, or other reproduction of 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, 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. In this event, 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. (M) Time 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 on the date above written. "Advisor" NUVEN ADVISORS, INC. a Nevada corporation By: /s/ Fred G. Luke Name: Fred G. Luke Title: President The "Company" Flexweight Corporation a Kansas corporation By: /s/ Walter G. Sanders Name: Walter G. Sanders Title: President/CEO EX-10.6 9 MERGER AGREEMENT EXHIBIT 10.6 MERGER AGREEMENT THIS MERGER AGREEMENT ("Agreement") is made and entered into as of the 19th day of October, 1998 by and between Oasis Resorts International Inc., a Nevada corporation (hereinafter "Oasis"), and Flexweight Corporation, a Kansas corporation ("Flexweight"). Oasis and Flexweight are hereinafter sometimes referred to collectively as the "Constituent Corporations." WHEREAS, Flexweight is a privately-held company; and, WHEREAS, Oasis is a recently formed privately-held Nevada corporation; and, WHEREAS, the Boards of Directors of Flexweight and Oasis have determined that it is advisable that Flexweight merge with and into Oasis, and that the shareholders of Flexweight exchange their shares of the capital stock of Flexweight for shares of the capital stock of Oasis. The transaction contemplated hereby is hereinafter referred to as the "Merger"; and, WHEREAS, the Constituent Corporations desire to enter into and adopt this Merger Agreement for the purpose of setting forth certain terms and provisions that will govern the Merger and to consummate the Merger as a "change in domicile merger" in accordance with the provisions of Section 368 (a)(2)(F) of the Internal Revenue Code of 1986, as amended (the "Code"); and, WHEREAS, the principal purpose of the Merger is to effectuate a change in corporate domicile from Kansas to Nevada. NOW, THEREFORE, in consideration of the agreements hereinafter set forth, in accordance with the business corporation law of the State of Nevada and the State of Kansas, and for the purpose of setting forth the terms and conditions of the Merger, the mode of completing the Merger, and the manner of converting the shares of the capital stock of Flexweight into shares of capital stock of Oasis, the parties agree as follows: 1. The Reorganization 1.1 The Effective Time. The Merger shall be accomplished by filing appropriate articles of merger with the Secretary of State of the State of Nevada and the Secretary of State of the State of Kansas in the form provided for by the business corporation laws of such States as soon as practicable after execution of this Merger Agreement. The term "Effective Time" shall mean the time at which all necessary Certificates of Merger have been issued by the Secretary of State of the State of Nevada and the Secretary of State of the State of Kansas. 1.2 Manner of Merger. At the Effective Time, Flexweight shall be merged into Oasis, which shall be the corporation that survives the Merger. The corporate existence of Oasis with all its purposes, powers and objects shall continue unaffected and unimpaired by the Merger; and, as the corporation surviving the Merger, Oasis shall be governed by the laws of the State of Nevada and shall succeed to all rights, assets, liabilities and obligations of Flexweight, as provided in the business corporation laws of the State of Kansas. The separate existence and corporate organizations of Oasis and Flexweight shall cease at the Effective Time, and thereafter Oasis shall continue as Oasis under the laws of the State of Nevada under the new name of Oasis Resorts International Inc., a Nevada corporation. All the property, real, personal, and mixed, and all debts of other obligations due to Flexweight, shall be transferred to and shall be vested in Oasis, without further act or deed, as provided in the business corporation laws of the States of Nevada and Kansas. 1.3 Articles of Incorporation and Bylaws of Oasis. (a) At the Effective Time, the Articles of Incorporation, as amended, and By-Laws of Oasis, copies of which are attached hereto as Exhibits "A" and "B" respectively, and incorporated herein by reference, shall become the surviving Articles and By-Laws of the Constituent Corporations. (b) The directors and officers of Oasis as of the Effective Time shall be the directors and officers of Flexweight, until their successors shall have been elected and qualified, or as otherwise provided by the General Corporation Law of the State of Nevada and in the Bylaws of Oasis. If at the Effective Time a vacancy exists in the Board of Directors or in any of the offices of Oasis, such vacancy shall thereafter be filled in the manner provided in the Bylaws of Oasis. 1.4 Status and Conversion of Shares. The manner of converting the shares of capital stock of Flexweight outstanding immediately prior to the Merger into shares of common stock of Oasis shall be as follows: (a) At the Effective Time, each share of the issued and outstanding $0.10 par value common stock of Flexweight shall, by virtue of the Merger and without any action on the part of the holder thereof, become and be converted into one (1) share of the $.001 par value common stock of Oasis. (b) Any shares of the capital stock of Flexweight held in treasury as of the Effective Time shall become an equal number of shares held in the treasury of Oasis. (c) After the Effective Time, each holder of a certificate or certificates theretofore representing outstanding shares of the capital stock of Flexweight may surrender such certificate or certificates to such agent or agents as shall be appointed by Oasis (the "Exchange Agent"), and shall be entitled to receive in exchange therefor a certificate or certificates representing the number of whole shares of capital stock of Oasis into which the shares of capital stock of Flexweight theretofore represented by the certificates so surrendered have been converted. (d) If any certificate evidencing shares of the capital stock of Flexweight is to be issued in a name other than the name in which the certificate surrendered is registered, the certificate so surrendered shall be properly endorsed and shall otherwise be in proper form for transfer. The person requesting the transfer shall pay to the Exchange Agent any transfer or other fees or taxes required by reason of the issuance of a certificate in name other than that of the registered holder of the certificate surrendered. (e) Oasis may, without notice to any person, terminate all exchange agencies at any time after 120 days following the Effective Time. After such termination, all exchanges, payments and notices provided for in this Agreement to be made to or by the Exchange Agent shall be made to or by Oasis or its agent. (f) On or before October 19, 1998, notice of the proposed merger will be given to all shareholders of record of Flexweight, and such holders of a majority of the outstanding shares of the $0.10 par value common stock, representing all classes of capital stock of Flexweight entitled to vote on and approve or reject the Merger. In such Notice to Shareholders, all Flexweight shareholders, shall be made aware of any dissenter's rights under Kansas law and, in particular, that they will have waived any dissenter's rights under the Business Corporation Act of the State of Kansas by voting in favor of such merger. (g) The sole share of $.001 par value common stock of Oasis owned by Flexweight shall be canceled as of the Effective Time and shall not thereafter be issued or outstanding. 2. Miscellaneous 2.1 Amendments. This Merger Agreement may be amended with the approval of the Boards of Directors of the Constituent Corporations at any time before or after the approval hereof by their respective shareholders, but after any such approval no amendment shall be made that substantially and adversely changes the terms hereof as to any party without the approval of the shareholders of such party. 2.2 Extension; Waiver. At any time before the Effective Time, the Board of Directors of either of the Constituent Corporations may (a) extend the time for the performance of any of the obligations or other acts of another party hereto, or (b) waive compliance by another party with any of the agreements or conditions contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing duly executed and delivered on behalf of such party. IN WITNESS WHEREOF, the Constituent Corporations have executed this Merger Agreement as of the day and year first above written. "Oasis" Oasis Resorts International Inc., a Nevada corporation By: /s/ Fred G. Luke Name: Fred G. Luke Title: President "Flexweight" Flexweight Corporation, a Kansas corporation By: /s/ Walter G. Sanders Name: Walter G. Sanders Title: President/CEO EX-10.7 10 WARRANT AGREEMENT 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 915 North Wells, Wendover, Nevada 89803, to the attention of the President, with copies to Law Offices of Richard O. Weed, Archer & Weed, 4695 MacArthur Court, Suite 530, Newport Beach, California 92660; (b) to NuOasis, 43 Elizabeth Avenue, Box N-8680, Nassau, Bahamas, with copy to NuOasis Resorts Inc., 4001 So. Decatur Blvd, Las Vegas, Nevada 89103; 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/ Fred G. Luke Name: Fred G. Luke Title: President "NuOasis" NuOasis International Inc. a corporation organized under the Commonwealth of the Bahamas By: /s/ Theodora Savas Name: Theodora Savas Title: Assistant Secretary The "Warrant Agent" By: Rick Weed Name: Title: Address: 4695 MacArthur Court, Suite 530 Newport Beach, CA 92660 EX-10.8 11 ASSET PURCHASE AGREEMENT EXHIBIT 10.8 ASSET PURCHASE AGREEMENT ASSET PURCHASE AGREEMENT, ("Agreement") dated this 30th day of September 1998, among Flexweight Corporation, a Kansas corporation ("Flexweight") and NuOasis International Inc., a corporation organized under the laws of The Commonwealth of the Bahamas ("NuOasis"). WHEREAS, Flexweight desires to acquire the assets of NuOasis consisting of not less than 75% of the capital stock of Cleopatra Palace Resorts and Casinos Limited, a U.K. corporation ("CPR") and not less than 80% of the total issued and outstanding capital stock of NuOasis Resorts & Casinos N.V., a Netherlands Antilles corporation in organization ("NAC") for a purchase price of Two Hundred Twenty Million Dollars $220,000,000 (the "Purchase Price); WHEREAS, NuOasis desires to sell the NuOasis Assets (as defined below) to Flexweight for the Purchase Price; and WHEREAS, Flexweight is a SEC reporting company whose shares of common stock are traded on the NASDAQ OTC Bulletin Board. NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS Definitions. (a) As used in this Agreement, the following defined terms shall have the meanings indicated below: "Actions or Proceedings" means any action, suit, proceeding, arbitration or Governmental or Regulatory Authority investigation or audit. "Affiliate" means, 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. "Agreement" means this Asset Purchase Agreement, the Exhibits and the Disclosure Schedule and the certificates delivered in connection herewith, as the same may be amended, modified or restated from time to time in accordance with the terms hereof. "Assets and Properties" of any Person means all assets and properties of every kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever situated), including the goodwill related thereto, operated, owned or leased by such Person, including, without limitation, cash, cash equivalents, accounts and notes receivable, chattel paper, documents, instruments, general intangibles, real estate, equipment, inventory, goods and Intellectual Property. "Audited Financial Statements" has the meaning ascribed to it in Section 3.8. "Books and Records" means all files, documents, instruments, papers, books and records relating to the Business, NuOasis or the Subsidiaries, including without limitation financial statements, Tax Returns and related work papers and letters from accountants, budgets, pricing guidelines, ledgers, journals, deeds, title policies, minute books, stock certificates and books, stock transfer ledgers, Contracts, Permits, customer lists, computer files and programs, retrieval programs, operating data and plans and environmental studies and plans. "Business Combination" means with respect to any Person any (i) merger, consolidation or combination to which such Person is a party, (ii) any sale, issuance dividend, split or other disposition of any capital stock or other equity interests (or any security or loan convertible into or exchangeable for such capital stock or other equity interests) of such Person, (iii) any tender offer (including without limitation a self-tender), exchange offer, recapitalization, liquidation, dissolution or similar transaction, (iv) any sale, dividend or other disposition of all or a material portion of the Assets and Properties of such Person or (v) the entering into of any agreement or understanding, or the granting of any rights or options, with respect to any of the foregoing. "Business Day" means a day other than Saturday, Sunday or any day on which banks located in the State of Nevada are authorized or obligated to close. "Business and/or Condition of NuOasis" means the Business, condition (financial or otherwise), results of operations, Assets and Properties of NuOasis and the Subsidiaries taken as a whole. "Closing Date" means September 30, 1998, or such earlier date as the parties hereto may mutually agree. "Code" means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder. "Contract" means any agreement, lease, license, evidence of Indebtedness, mortgage, indenture, security agreement or other contract or other commitment (whether written or oral). "NuOasis Assets" means, collectively, the 75% equity ownership of CPR,consisting of not less than 18,750,000 shares of CPR capital stock (the "CPR shares") and 80.0% equity ownership of NRC, consisting of not less than 4,000,000 shares of NRC capital stock (the "NRC Shares") "Disclosure Schedule" means the schedules delivered to Flexweight by or on behalf of NuOasis, containing all lists, descriptions, exceptions and other information and materials as are required to be included therein by NuOasis pursuant to Article 3 of this Agreement. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC thereunder. "GAAP" means United States generally accepted accounting principles, consistently applied throughout the specified period and in all prior comparable periods. "Governmental or Regulatory Authority" means any court, tribunal, authority, agency, commission, official or other instrumentality of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision, any arbitrator, tribunal or panel of arbitrators and, shall include, without limitation, any stock exchange, quotation service and the National Association of Securities Dealers. "Indebtedness" means, as to any Person: (i) all obligations, whether or not contingent, of such Person for borrowed money (including, without limitation, reimbursement and all other obligations with respect to surety bonds, letters of credit and bankers' acceptances, whether or not matured), (ii) all obligations of such Person evidenced by notes, bonds, debentures or similar instruments, (iii) all obligations of such Person representing the balance of deferred purchase price of property or services, except trade accounts payable and accrued commercial or trade liabilities arising in the ordinary course of business, (iv) all interest rate and currency swaps, caps, collars and similar agreements or hedging devices under which payments are obligated to be made by such Person, whether periodically or upon the happening of a contingency, (v) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (vi) all obligations of such Person under leases which have been or should be, in accordance with GAAP, recorded as capital leases, (vii) all indebtedness secured by any Lien (other than Liens in favor of lessors under leases other than leases included in clause (vii)) on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is non-recourse to the credit of that Person, and (viii) all Indebtedness of any other Person referred to in clauses (i) through (vii) above, guaranteed, directly or indirectly, by that Person. "Intellectual Property" means all patents and patent rights, trademarks and trademark rights, trade names and trade name rights, service marks and service mark rights, service names and service name rights, brand names, inventions, processes, formulae, copyrights and copyright rights, trade dress, business and product names, logos, slogans, trade secrets, industrial models, processes, designs, methodologies, computer programs (including all source codes) and related documentation, technical information, manufacturing, engineering and technical drawings, know-how and all pending applications for and registrations of patents, trademarks, service marks and copyrights. "IRS" means the United States Internal Revenue Service. "Laws" means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision or of any Governmental or Regulatory Authority. "Liabilities" means all Indebtedness, obligations and other liabilities of a Person (whether absolute, accrued, contingent, known or unknown, fixed or otherwise, or whether due or to become due). "Liens" means any mortgage, pledge, assessment, security interest, lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or any conditional sale Contract, title retention Contract or Contract committing to grant any of the foregoing. "Loss" means any and all damages, fines, fees, penalties, deficiencies, losses and expenses, including, without limitation, interest, reasonable expenses of investigation, court costs, reasonable fees and expenses of attorneys, accountants and other experts or other expenses of litigation or other proceedings or of any claim, default or assessment (such fees and expenses to include without limitation, all fees and expenses, including, without limitation, fees and expenses of attorneys, incurred in connection with (i) the investigation or defense of any third party claims or (ii) asserting or disputing any rights under this Agreement against any party hereto or otherwise). "Option" with respect to any Person means any security, right, subscription, warrant, option, "phantom" stock right or other Contract that gives the right to (i) purchase or otherwise receive or be issued any shares of capital stock or other equity interests of such Person or any security of any kind convertible into or exchangeable or exercisable for any shares of capital stock or other equity interest of such Person or (ii) receive any benefits or rights similar to any rights enjoyed by or accruing to the holder of shares of capital stock or other equity interest of such Person, including, without limitation, any rights to participate in the equity, income or election of directors, management committee members or officers of such Person. "Order" means any writ, judgment, decree, injunction or similar order of any Governmental or Regulatory Authority (in each such case whether preliminary or final). "Permits" means all licenses, permits, certificates of authority, authorizations, approvals, registrations, franchises and similar consents granted or issued by any Governmental or Regulatory Authority. "Permitted Lien" means (i) any Lien for Taxes, governmental, charges or levies not yet due or delinquent or being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP, (ii) the Liens set forth in any Disclosure Schedule, (iii) any minor imperfection of title, easements, rights of way or similar Lien as normally exist with respect to property similar in character to the property affected thereby and which individually or in the aggregate with other such Liens does not impair the value or marketability of the property subject to such Lien or interfere with the use of such property in the conduct of the business of the Company or any Subsidiary and which do not secure obligations for money borrowed and (iv) Liens imposed by any law, such as mechanic's, materialman's, landlord's, warehouseman's and carrier's Liens, securing obligations incurred in the ordinary course of business which are not yet overdue or which are being diligently contested in good faith by appropriate proceedings and, with respect to such obligations which are being contested, for which the Company has set aside adequate reserves. "Person" means any individual, corporation, joint stock corporation, limited liability company or partnership, general partnership, limited partnership, proprietorship, joint venture, other business organization, trust, union, association or Governmental or Regulatory Authority. "Projections" means the projections for the NuOasis assets, results of operations, assets, liabilities, cash flow and other information supplied by NuOasis. "Purchase Price" has the meaning ascribed to it in Section 2.1. "Flexweight" has the meaning ascribed to it in the forepart of this Agreement. "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations thereunder. "Subsidiary" means any Person in which NuOasis, directly or indirectly, beneficially owns more than fifteen percent (15%) of either the equity interests in, or the voting control of, such Person. "Tax" or "Taxes" means all federal, state, local or foreign net or gross income, gross receipts, net proceeds, sales, use, ad valorem, value added, franchise, bank shares, withholding, payroll, employment, excise, property, alternative or add-on minimum, environmental or other taxes, assessments, duties, fees, levies or other governmental charges of any nature whatever, whether disputed or not, together with any interest, penalties, additions to tax or additional amounts with respect thereto. "Tax Returns" means any returns, reports or statements (including any information returns) required to be filed for purposes of a particular Tax. "Taxing Authority" means any governmental agency, board, bureau, body, department or authority of any United States Federal, state or local jurisdiction or any foreign jurisdiction, having or purporting to exercise jurisdiction with respect to any Tax. "Transfer Taxes" means sales, use, transfer, real property transfer, recording, gains, stock transfer and other similar taxes and fees. "Unaudited Financial Statements" has the meaning ascribed to it in Section 3.8. (b) Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender, (ii) words using the singular or plural number also include the plural or singular number, respectively, (iii) the terms "hereof," "herein," "hereby" and derivative or similar words refer to this entire Agreement, (iv) the terms "Article" or "Section" refer to the specified Article or Section of this Agreement, and (v) the phrases "ordinary course of business" and "ordinary course of business consistent with past practice" refer to the business and practice of NuOasis or a Subsidiary. All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP. (c) When used herein, the phrase "to the knowledge of " any Person, "to the best knowledge of " any Person or any similar phrase, means (i) with respect to any Person who is an individual, the actual knowledge of such Person, and (ii) with respect to any other Person, the actual knowledge of the directors, officers, members, general partners and other similar Person in a similar position or having similar powers and duties; and, in the case of each of (i) and (ii), the knowledge of facts that such individuals should have after reasonable inquiry. ARTICLE II SALE OF PURCHASED INTERESTS; CLOSING 2.1 Purchase and Sale. On the terms and subject to the conditions of this Agreement, (a) At the Closing, Flexweight shall purchase from NuOasis, free and clear of all Liens, all of the NuOasis Assets. (b) The Purchase Price shall be payable at the Closing as set forth below. (c) The Purchase Price shall consist of (a) Seven Million (7,000,000) shares of Flexweight's Common Stock (the "Flexweight Shares"), (b) Promissory Notes in the aggregate principal amount of One Hundred Eighty Million Dollars ($180,000,000), and (c) Six Million (6,000,000) Warrants to Purchase Common Stock ("Warrants") pursuant to which NuOasis, or the holder of the Warrants, may purchase six (6) shares of Flexweight Common Stock for each Warrant at a price of six dollars ($6.00) per share. 2.2 Closings. The Closing will take place at the offices of Archer & Weed, 4695 MacArthur Court, Suite 530, Newport Beach, California 92660 on the Closing Date in accordance with the terms of this Agreement, or at such other place or time as Flexweight and NuOasis mutually agree. At the Closing, Flexweight shall pay to NuOasis the Purchase Price pursuant to Section 2.1. Simultaneously, NuOasis shall deliver to Flexweight one or more certificates representing the NuOasis Assets together with all necessary instruments of transfer, in form and substance reasonably satisfactory to Flexweight. At the Closing, there shall also be delivered to Flexweight and NuOasis the opinions, certificates and other Contracts, documents and instruments required to be delivered under the terms of this Agreement. ARTICLE III REPRESENTATIONS AND WARRANTIES OF NUOASIS NuOasis represents and warrants to Flexweight that the statements contained in this Article III are true and correct as of the date of this Agreement, and will be true and correct as of the Closing Date (as though made then and as though such Closing Date was substituted for the date of this Agreement throughout this Article III). NuOasis has delivered a Disclosure Schedule (including exhibits thereto) to Flexweight setting forth certain information, the disclosure of which is required or appropriate in relation to any or all of the following representations and warranties. 3.1 Organization of NuOasis. (a) NuOasis is a corporation duly incorporated, validly existing and in good standing under the laws of Kansas. The property and business activity of NuOasis is the ownership (beneficial and of record), on the Closing Date, of the NuOasis Assets, that is (a) NuOasis is duly qualified, licensed or admitted to do business and is in good standing in those jurisdictions in which the ownership, use or leasing of its Assets and Properties, or the conduct or nature of its business, makes such qualification, licensing or admission necessary. NuOasis agrees, prior to the Closing Date, to deliver to Flexweight true and complete English language copies of its (i) certificate of incorporation with all amendments thereto (the "Charter") and (ii) by-laws, in each case as in effect on the date hereof and the name of each director and officer and the position held by each of them with NuOasis. 3.2 Power and Authority. NuOasis has the requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by NuOasis of this Agreement, the performance by NuOasis of the obligations hereunder and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action. This Agreement has been duly and validly executed and delivered by NuOasis and constitutes a legal, valid and binding obligation of NuOasis enforceable against NuOasis in accordance with its terms. 3.3 Capitalization. As of the date hereof, and immediately prior to the consummation of the transactions contemplated hereby and before giving effect to such transactions, the authorized capital stock of NuOasis consists of Seventy Five Million (75,000,000) shares of Common Stock, of which not more than Seven Five Million (75,000,000) shares are issued and outstanding and Twenty Five Million (25,000,000) shares of Preferred Stock of which Twenty Four Million (24,000,000) shares are issued and outstanding as Series A Convertible Preferred Stock (the "Series A Shares"). As of the date hereof, there are no preemptive or similar rights to purchase or otherwise acquire shares of the capital stock of NuOasis pursuant to any provision of law, the Charter or By- laws (in each case, as amended and in effect on the date hereof), or any agreement to which NuOasis is a party. All of the outstanding shares of capital stock of NuOasis have been duly authorized and validly issued, are fully paid and non-assessable. 3.4 Subsidiaries. Section 3.4 of the Disclosure Schedule lists the name of each Subsidiary and the ownership interest of NuOasis therein. Each Subsidiary is a corporation duly organized, validly existing and in good standing under the Laws of its jurisdiction of incorporation or organization and has full power and authority to conduct its business as presently conducted and to own, use and lease its Assets and Properties. Each Subsidiary is duly qualified, licensed or admitted to do business and is in good standing in those jurisdictions in which the ownership, use or leasing of such Subsidiary's Assets and Properties, or the conduct or nature of its business, makes such qualification, licensing or admission necessary. All of the outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued, are fully paid and non assessable, and, except as set forth in any Disclosure Schedule, are owned, beneficially and of record, by NuOasis or Subsidiaries wholly owned by the Company free and clear of all Liens. There are no outstanding Options with respect to any Subsidiary. NuOasis agrees, prior to the Closing Date, to deliver to Flexweight true and complete copies of the certificate or articles of incorporation and by-laws (or other comparable charter documents) of each of the Subsidiaries. Except for the Subsidiaries, the Company holds no equity, partnership, limited liability company, joint venture or other interest in any Person. 3.5 No Conflicts. The execution and delivery by NuOasis this Agreement, the performance by NuOasis of its obligations hereunder and the consummation of the transactions contemplated hereby does not and will not: (a) conflict with or result in a violation or breach of any of the terms, conditions or provisions of the Charter or the certificate or articles of incorporation or organization or by-laws (or other comparable charter documents) of NuOasis, or any Subsidiary; (b) conflict with or result in a violation or breach of any term or provision of any Law or Order applicable to NuOasis, or any Subsidiary or any of their respective Assets and Properties; or (c) (i) conflict with or result in a violation or breach of, (ii) constitute (with or without notice or lapse of time or both) a default under, (iii) require NuOasis, or any Subsidiary to obtain any consent or approval, make any filing with or give any notice to any Person as a result or under the terms of, (iv) result in or give to any Person any right of termination, cancellation, acceleration or modification in or with respect to, (v) result in or give to any Person any additional rights or entitlement to increased, additional, accelerated or guaranteed payments under, (vi) result in the creation of any new additional or increased liability of the Company or any Subsidiary under or (vii) result in the creation or imposition of any Lien upon, NuOasis or any Subsidiary or any of their respective Assets and Properties under, any Contract or Permit to which NuOasis, or any Subsidiary is a party or by which any of their respective Assets and Properties are bound. 3.6 Governmental Approvals and Filings. No consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority on the part of NuOasis, or any Subsidiary is required in connection with the execution, delivery and performance of this Agreement, or the consummation of the transactions contemplated hereby. 3.7 Corporate Formalities; Books and Records. (a) NuOasis has complied in all material respects with all corporate formalities required to be complied with under applicable laws. (b) The minute books and other similar records of NuOasis and each Subsidiary as made available to Flexweight prior to the Closing Date under this Agreement contain a true and complete record, in all material respects, of all action taken at all meetings and by all written consents in lieu of meetings of directors, members, stockholders, the management committee or boards of directors, subcommittees and committees of the boards of directors of NuOasis and each Subsidiary. 3.8 Financial Statements. (a) NuOasis has furnished the Flexweight with true and complete copies of its audited consolidated balance sheets and its Subsidiaries as of June 30, 1998 and 1997 and the related consolidated statements of operations, statement of changes in stockholder's equity and cash flows for the years then ended, together with the notes thereto, (the "NuOasis Financial Statements"), setting forth in each case in comparative form the corresponding figures for the corresponding dates and periods of the previous fiscal year, together with reports of auditors thereon, except as to June 30, 1998 which is presently unaudited. The June 30, 1998 financial statements and those of CPR and NRC and their subsidiaries for periods ending prior to June 30, 1998 which are unaudited, if any, fairly present in all material respects the consolidated financial position of NuOasis and its Subsidiaries as of the respective dates thereof, and the results of operations, changes in stockholder's equity and cash flows for the periods set forth therein, all in conformity with GAAP. The Unaudited Financial Statements fairly present in all material respects the consolidated financial position of NuOasis and its Subsidiaries as of the dates thereof and the results of operations, changes in stockholder's equity and cash flows of the Company and its Subsidiaries for the periods set forth therein, all in conformity with GAAP, except as specifically noted in the notes thereto. (b) The Projections constitute a reasonable forecast of the NuOasis Assets and business operations for the periods set forth therein. The Projections have been prepared based on the estimates and assumptions set forth therein, which assumptions and estimates are all of the assumptions and estimates used in formulating such Projections and are reasonable and fair in light of current conditions and reflect the reasonable estimate of NuOasis of the results of operations, assets, liabilities, cash flow and other information projected therein. To the knowledge of NuOasis, no facts exist which would result in any material change in any such Projections, save the adjustments set forth above. 3.9 Absence of Changes. Since June 30, 1998 except (a) as set forth in Section 3.9 of the Disclosure Schedule or (b) the transactions contemplated by this Agreement, there has not been any event or development which, individually or together with other such events, could reasonably be expected to have a material adverse effect on the NuOasis Assets. In addition, without limiting the foregoing, except as disclosed in Section 3.9 of the Disclosure Schedule and except for the transactions contemplated by this Agreement since June 30, 1998 neither NuOasis nor any Subsidiary: (a) has (i) declared, set aside or paid any dividend or other distribution in respect of the capital stock of NuOasis or any Subsidiary or (ii) directly or indirectly redeemed, purchased or otherwise acquired any such capital stock or other equity interests; (b) authorized, issued, sold or otherwise disposed of, or granted any Option with respect to any shares of capital stock or other equity interests of NuOasis or any Subsidiary, or modified or amended any right of any holder of any outstanding shares of capital stock or other equity interests of NuOasis or any Subsidiary or Option with respect thereto; (c) (i) increased salary, wages or other compensation (including, without limitation, any bonuses, commissions and any other payments) of any officer, employee or consultant of NuOasis or any Subsidiary whose annual salary, wages and such other compensation is, or after giving effect to such change would be, in the aggregate, $100,000 or more per annum; (ii) established or modified (A) targets, goals, pools or similar provisions under any benefit plan, employment contract or other employee compensation arrangement or (B) salary ranges, increase guidelines or similar provisions in respect of any benefit plan, employment Contract or other employee compensation arrangement; or (iii) adopted, entered into, amended, modified or terminated (in whole or in part) any benefit plan; (d) (i) incurred any Indebtedness, (ii) made or agreed to make any loans to any Person or (iii) made or agreed to make any voluntary purchase, cancellation, prepayment or complete or partial discharge in advance of a scheduled payment date with respect to, or waiver of any right of NuOasis or any Subsidiary under, any Indebtedness of or owing to NuOasis or any Subsidiary; (e) suffered any physical damage, destruction or other casualty loss (whether or not covered by insurance) adversely affecting any of the real or personal property or equipment of the material Assets and Properties of NuOasis or any Subsidiary; (f) failed to pay or satisfy when due any obligation of NuOasis or any Subsidiary, except when the failure would not have a material adverse effect on the Business or Condition of NuOasis or its Subsidiaries; (g) acquired any business or Assets and Properties of any Person (whether by merger, consolidation or otherwise) or disposed or leased, or incurred a Lien (other than a Permitted Lien) on, any Assets and Properties of NuOasis or any Subsidiary, in each case, other than acquisitions or dispositions of products in the ordinary course of business of NuOasis or such Subsidiary consistent with past practice; (h) entered into, amended, modified, terminated (in whole or in part) or granted a waiver under or given any consent with respect to any Intellectual Property; (i) commenced, terminated or changed any line of the Business; (j) entered into any transaction with any stockholder or Affiliate of NuOasis or any Subsidiary, other than pursuant to any Contract in effect on the Audited Financial Statement Date; (k) made any change in the accounting methods or procedures of NuOasis or any Subsidiary or became subject to any conditions or event which has or could reasonably be expected to have a material adverse effect on the Business or Condition of NuOasis; or (l) entered into any agreement to do any of the things described in the preceding paragraphs, including, without limitation, with respect to any Business Combination not otherwise restricted by the preceding paragraphs. 3.10 No Undisclosed Liabilities. At Closing, NuOasis will have no Liabilities of, relating to or affecting the NuOasis Assets or any Subsidiary or any of their respective Assets and Properties, except (i) Liabilities reflected or reserved against in the Audited Financial Statements, (ii) Liabilities disclosed in Section 3.10 of the Disclosure Schedule, or (iii) Liabilities incurred in the ordinary course of business consistent with past practice since the Audited Financial Statement Date and in accordance with the provisions of this Agreement. 3.11 Taxes. (a) All Taxes which could constitute a lien on the Assets and Properties of NuOasis or the Subsidiaries and which were due and payable by NuOasis or the Subsidiaries with respect to the Closing Date and all periods beginning and ending prior thereto have been or will be paid by NuOasis prior to delinquency. All Tax Returns that have been filed by or with respect to NuOasis or any Subsidiary, or any affiliated, combined, consolidated, unitary or similar group of which NuOasis is or was a member with any Taxing Authority correctly and completely reflects the income, franchise or other Tax liability and all other information required to be reported thereon. NuOasis and the Subsidiaries have withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or due and payable to any employee, creditor, independent contractor or other third party. (b) NuOasis does not expect any Taxing Authority to assess any additional Taxes against or in respect of it or any Subsidiary for any past period. There is no dispute or claim concerning any Tax liability of NuOasis or any Subsidiary either (i) claimed or raised by any Taxing Authority or (ii) otherwise known to NuOasis, or any Subsidiary. NuOasis has delivered to Flexweight, with respect to NuOasis and each Subsidiary, complete and correct copies of all federal, state, local and foreign income Tax Returns filed by, and all correspondence, agreements, notices, reports or statements of deficiencies with, from or to any Taxing Authority, in each case since January 1, 1996. 3.12 Legal Proceedings. (a) (i) Neither NuOasis nor any Subsidiary has knowledge of any Orders outstanding against NuOasis or any Subsidiary; and (ii) there are no Actions or Proceedings pending or, to the knowledge of NuOasis, or any Subsidiary, threatened against, relating to or affecting NuOasis or any Subsidiary or any of their respective Assets and Properties. Neither NuOasis nor any Subsidiary is in default with respect to any Order of any court or Governmental or Regulatory Authority and there are no unsatisfied judgments against NuOasis, or any Subsidiary. 3.13 Compliance With Laws and Orders. NuOasis and the Subsidiaries and the conduct of the Business are in compliance with all applicable Laws and Orders, except where the failure to comply would not have a material adverse effect on the Business or Condition of NuOasis or the NuOasis Assets. None of NuOasis, or any Subsidiary has any knowledge that it is not in compliance with any of such Laws or Orders where the failure to comply would have a material adverse effect on the Business or Condition of NuOasis or the NuOasis Assets. None of NuOasis, or any Subsidiary has any reasonable basis to anticipate that any presently existing circumstances are likely to result in violations of any such Laws or Orders which would, individually or in the aggregate, have a material adverse effect on the Business or Condition of NuOasis. 3.14 Permits. Section 3.14 of the Disclosure Schedule contains a true and complete list of all Permits used in and material to the business or operations of NuOasis or any Subsidiary, setting forth the owner, the function and the expiration and renewal date of each. Prior to the execution of this Agreement, NuOasis has delivered to Flexweight true and complete copies of all such Permits. Except as disclosed in Section 3.14 of the Disclosure Schedule: (i) NuOasis and each Subsidiary own or validly hold all Permits that are material to the Business, (ii) each Permit listed in Section 3.14 of the Disclosure Schedule is valid, binding and in full force and effect and (iii) neither NuOasis nor any Subsidiary is, or has received any notice that it is, in default (or with the giving of notice or lapse of time or both, would be in default) under any such Permit. 3.15 Affiliate Transactions. (a) Except as disclosed in Section 3.15(a) of the Disclosure Schedule and except as contemplated by this Agreement, (i) there are no Liabilities owed to NuOasis or any Subsidiary, on the one hand, by any current or former equity holder or Affiliate of NuOasis, on the other hand, (ii) there are no liabilities owed by NuOasis or any Subsidiary on the one hand, to any such current or former stockholder or Affiliate of NuOasis or any Affiliate of any such stockholder or Affiliate, on the other hand, (iii) neither NuOasis, nor any such current or former stockholder or Affiliate provides or causes to be provided any Assets and Properties, services or facilities to NuOasis or any Subsidiary, and (iv) neither NuOasis nor any Subsidiary provides or causes to be provided any assets, services or facilities to any such current or former stockholder or Affiliate. (b) Except as disclosed in Section 3.15(b) of the Disclosure Schedule, each of the Liabilities and transactions listed in Section 3.15(a) of the Disclosure Schedule was incurred or engaged in, as the case may be, on an arm's-length basis on competitive terms. 3.16 Business Relationships. Since June 30, 1998, no business relationship of NuOasis or any Subsidiary with any customer, supplier or any group of customers or suppliers whose purchases or sales, as the case may be, are individually or in the aggregate material to the Business or Condition of NuOasis has been, or to the knowledge of NuOasis, or any Subsidiary, has been threatened to be, terminated, canceled, limited or changed or modified adversely, and, to the knowledge of NuOasis, or any Subsidiary, there exists no present condition or state of facts or circumstances with respect to such business relationship that would materially adversely affect the Business or Condition of NuOasis, or prevent NuOasis from conducting the Business after the consummation of the transactions contemplated by this Agreement, in substantially the same manner in which it has heretofore been conducted. 3.17 Other Negotiations; Brokers. Except as set forth in Section 3.17 of the Disclosure Schedule, neither NuOasis, nor any of their respective Affiliates (nor any investment banker, financial advisor, attorney, accountant or other Person retained by or acting for or on behalf of NuOasis, any Subsidiary, or any such Affiliate) (i) has entered into any agreement that conflicts with any of the transactions contemplated by this Agreement or (ii) has entered into any agreement or had any discussions with any third party regarding any transaction involving the Company or any Subsidiary which could result in Flexweight or its members, officers, director, employee, agent or Affiliate of any of them being subject to any claim for liability to said third party as a result of entering into this Agreement or consummating the transactions contemplated hereby or thereby. 3.18 Disclosure. This Agreement does not, and the documents and certificates executed by NuOasis or otherwise furnished by NuOasis to Flexweight do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading. 4. Representations and Warranties of Flexweight Flexweight represents and warrants to NuOasis that: 4.1 Organization and Authority. Flexweight is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Kansas, 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 Flexweight. This Agreement has been duly executed and delivered by Flexweight and constitutes the valid, binding, and enforceable obligation of Flexweight. 4.2 Ability to Carry Out Agreement. To the best of Flexweight'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 Flexweight is a party or to which Flexweight 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 Flexweight of this Agreement. 4.3 The Shares. The Shares to be issued pursuant to this Agreement will be issued at Closing, free and clear of liens, claims, and encumbrances, and Flexweight has all necessary right and power to issue the Shares to NuOasis as provided in this Agreement without the consent or approval of any person, firm, corporation, or governmental authority. 4.4 Capitalization of Flexweight. The capitalization of Flexweight is, as of the date hereof, comprised of forty million (40,000,000) shares of authorized no par value common stock of which, as of the Closing Date, not more than Seven Million Five Hundred Thousand (7,500,000) shares will be issued and outstanding. 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. In addition to the shares outstanding, there will be, as of the Closing Date, certain outstanding options and warrants to purchase shares of Flexweight's common stock as follows: (i) stock options with an exercise price of $6.00 per share covering 300,000 shares; [(ii) stock options with an exercise price of $3.00 per share covering 400,000 shares; (iii) stock options with an exercise price of $5.00 per share covering 20,000 shares; (iv) Class A Warrants granting the holder the right to buy up to 1,000,000 shares of Flexweight Common Stock at $6.00 per share; (v) Class B Warrants granting the holder the right to buy up to 2,000,000 shares of Flexweight Common Stock at $7.00 per share; (vi) and Class C Warrants granting the holder the right to buy up to 1,000,000 shares of Flexweight Common Stock at $8.00 per share. 4.5 Financial Information. Flexweight has provided to NuOasis, or will provide prior to Closing, copies of its Annual Report on Form 10-K and/or 10-KSB for the two (2) years ending at or prior to August 30, 1997 and the interim quarterly financial statement on Form 10-QSB for the quarters ended November 30, 1997, February 28, 1998 and May 31, 1998. The quarterly financial statements and such Annual Reports, and all other information included in such reports, shall be referred to as the "Flexweight's Financials." Flexweight 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 Flexweight Financials, excepting current liabilities incurred and obligations under agreements entered into in the usual and ordinary course of business since the date of Flexweight Financials, none of which (individually or in the aggregate) are material except as expressly indicated in Flexweight Financials. Flexweight is not a guarantor or otherwise contingently liable for any material amount of such indebtedness. Except as indicated in Flexweight Financials or Flexweight 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 Flexweight, except as disclosed 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 Flexweight, or which would conflict with this Agreement or any action taken or to be taken in connection with it. 4.7 Tax Matters. Flexweight 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. 4.8 Contracts. Except as disclosed pursuant to this Agreement, there are no contracts, actual or contingent obligations, agreements, franchises, license agreements, or other commitments between Flexweight and other third parties which are material to the business, financial condition, or results of operation of Flexweight, 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 $25,000. The following material contracts will be valid and binding obligations of Flexweight with third parties ("Approved Agreements") as of the Closing Date: 4.8.1 Advisory Agreement with NuVen Advisors Inc. 4.8.2 Agreement with OTC Communications for Investor Relations 4.8.3 Class A Warrant Agreement 4.8.4 Class B Warrant Agreement 4.8.5 Class C Warrant Agreement 4.8.6 Stock Option Agreement with NuVen Advisors Inc. 4.8.7 Stock Option Agreement with Richard Surber 4.8.8 Stock Option Agreement with NuOasis International Inc. 4.8.9 Stock Option and Warrant Plan 4.9 Material Contract Breaches; Defaults. To the best of Flexweight's knowledge and belief, except as disclosed in Flexweight 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 Flexweight. To the best of its knowledge and belief, Flexweight 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 Flexweight, 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 Flexweight in respect of which Flexweight has not taken adequate steps to prevent such a default from occurring. 4.10 Securities Laws. Flexweight is a public company and represents that, except as disclosed in Flexweight Disclosure Documents and in Flexweight's 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. Flexweight is required to file periodic reports under Section 12(g) of the '34 Act. Flexweight 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. Flexweight 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 Shares. To the best of Flexweight's knowledge, except for Hudson Consulting Group Inc. and NuVen Advisors Inc., 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. Flexweight further agrees to indemnify and hold harmless the other parties to this Agreement against liability to any other broker claiming to act on behalf of Flexweight. 4.12 Corporate Records. Copies of all corporate books and records, including, but not limited to, any other documents and records of Flexweight relating to the proceeding of its shareholders and directors will be provided to NuOasis prior to Closing at the request of NuOasis. All such records and documents are and will be complete, true, and correct. 4.13 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 Flexweight in connection with the execution, delivery, or performance of this Agreement. 4.14 Full Disclosure. The information concerning Flexweight, set forth in this Agreement, and in Flexweight Disclosure Documents, is, to the best of Flexweight'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. 4.15 Date of Representations and Warranties. Each of the representations and warranties of Flexweight 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. Without limiting the generality of the foregoing, Company represents and warrants that as of the Closing Date, its payables will be $20,000 or less. 5. Conditions Precedent to Obligations of NuOasis All obligations of NuOasis under this Agreement are subject to the fulfillment, prior to or as of the Closing Date, of each of the following conditions: 5.1 Representations and Warranties. The representations and warranties by Flexweight 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. Flexweight shall deliver on the Closing Date a certificate to this effect, referred to as Flexweight Certificate of Representations and Warranties. 5.2 No Breach or Default. Flexweight 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. 5.3 Action to Pay Purchase Price. Flexweight shall have taken all corporate and other action necessary to issue and deliver the Shares, the Notes and the Warrants representing the Purchase Price to NuOasis pursuant to this Agreement at Closing. 5.4 Company Disclosure Documents. Before Closing, Flexweight will have delivered to NuOasis, or caused the delivery of, Flexweight Disclosure Documents. 5.5 Approval of Other Instruments and Documents by NuOasis. All instruments and documents delivered to NuOasis pursuant to the provisions of this Agreement shall be reasonably satisfactory to their legal counsel. 5.6 Opinion of Counsel. Flexweight shall have delivered to NuOasis an opinion of counsel dated the Closing Date to the effect that: (A) Flexweight is duly organized, validly existing, and in good standing under the laws of the United States, State of Kansas. (B) Flexweight 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 Kansas. (C) All corporate actions and director approvals have been properly obtained and completed by Flexweight, 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 Flexweight and is a valid and binding obligation of Flexweight and, in this regard, Flexweight shall provide NuOasis at Closing with a certified copy of the resolution or resolutions of the Board of Directors of Flexweight, approving and authorizing the issuance by Flexweight of the Shares upon the terms and conditions herein set forth. 6. Conditions Precedent to Obligations of Flexweight All obligations of Flexweight 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 executed by and on behalf NuOasis 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. NuOasis 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 NuOasis. 6.2 No Breach or Default. NuOasis 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. 6.3 Action to Transfer the NuOasis Assets. NuOasis shall have taken all action necessary to transfer the NuOasis Assets to Flexweight pursuant to this Agreement. In this regard, the conveyance(s) of the NuOasis Assets 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 Flexweight'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 Flexweight's good, indefeasible, and marketable title to the NuOasis Assets 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 NuOasis Assets, NuOasis shall have taken all action necessary to deliver all of NuOasis'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 applicable securities laws, if required and requested by Flexweight's counsel. 6.4 NuOasis Financials. Before Closing, NuOasis will have delivered the Audited Financial Statements and the Unaudited Financial Statements translated into English to Flexweight. The NuOasis Disclosure Documents shall specifically include the information set forth in paragraph 3.8. 6.5 Approval of Other Instruments and Documents by Flexweight. All instruments and documents delivered to Flexweight pursuant to the provisions of this Agreement shall be reasonably satisfactory to Flexweight and its legal counsel. 6.6 Opinions, Affidavits and Declarations of NuOasis. NuOasis shall have delivered to Flexweight an opinion of qualified legal counsel reasonably satisfactory to Flexweight, and its counsel and auditors, dated as at the Closing Date, that: (A) NuOasis is duly organized, validly existing, and in good standing under the laws of the Commonwealth of the Bahamas and that the NuOasis Assets are free and clear of any and all liens, encumbrances or contingent liabilities except as disclosed pursuant to this Agreement. (B) NuOasis has the corporate power to carry on its business as now being conducted and is duly qualified to do business 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 NuOasis Assets to Flexweight have been properly taken, completed or obtained by NuOasis, to the extent, if any, that they are necessary. (D) This Agreement has been duly authorized, executed, and delivered by NuOasis and is a valid and binding obligation of NuOasis. 7. Covenants and Agreements of NuOasis Up to and including the Closing Date, NuOasis covenants that: 7.1 Access and Information. After the execution of this Agreement, NuOasis will permit Flexweight to have reasonable access to all information necessary to verify the representations and warranties made herein. After the Closing, NuOasis will continue to permit Flexweight access to such additional documentation and information as is reasonably necessary to completion of the transactions contemplated under this Agreement. 7.2 Conduct of Business as Usual. Up until the Closing Date, NuOasis shall insure that NuOasis'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 NuOasis Assets to be transferred to Flexweight. 7.3 Best Efforts. NuOasis shall use its 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. 7.4 Assent to Sale of NuOasis Assets. In the event the sale of the NuOasis Assets is consummated, then the shareholders of NuOasis agree to such sale and waive, surrender, and agree not to exercise any rights which such shareholders might have concerning the sale of the NuOasis Assets. 8. Covenants and Agreements of Flexweight Up to and including the Closing Date, Flexweight covenants that: 8.1 Change in Flexweight Directors. Flexweight's Board of Directors will consist of five (5) seats. At Closing, Flexweight agrees that four (4) of the five (5) seats on Flexweight's Board will be vacant and may be filled by two (2) new directors to be chosen by NuOasis and two (2) new directors to be chosen by mutual agreement between Flexweight and NuOasis, with such directors to be "Independent", as such termis defined in the Listing Requirements for the Nasdaq National Market System. 8.2 Maintenance of Capital Structure. Up until the Closing Date, or termination hereof, whichever is the earlier, except as disclosed herein or required under the terms of this Agreement, no change shall be made in the Articles of Incorporation or Bylaws of Flexweight, or the authorized capital stock of Flexweight. 8.3 Avoidance of Distributions. Up until the Closing Date, Flexweight 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. 8.4 Conduct of Business as Usual. Up until the Closing Date, Flexweight shall conduct its operations only in the usual and ordinary course, and that no change will be made to such operations which might adversely affect the value of Flexweight. 8.5 Access and Information. After the execution of this Agreement, Flexweight will permit NuOasis to have reasonable access to all information necessary to verify the representations and warranties of Flexweight. After the Closing, Flexweight will continue to permit NuOasis access to such additional documentation and information regarding Flexweight as is reasonably necessary to completion of the transactions contemplated under this Agreement. 8.6 Best Efforts. Flexweight shall use its best efforts to fulfill or obtain the fulfillment of all conditions of the Closing, including the timely solicitation of affirmative consent of all third parties necessary to effect a Closing under this Agreement. 9. Termination 9.1 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 NuOasis and Flexweight. (B) Actions or Proceedings. By NuOasis or Flexweight, (unless the action or proceeding referred to is caused by a breach or default on the part of NuOasis or Flexweight 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 NuOasis or Flexweight, made in good faith and based upon the advice of legal counsel, makes it inadvisable to proceed with the transactions contemplated by this Agreement. 9.2 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 NuOasis. NuOasis 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 NuOasis under this Agreement shall be inaccurate in any material respect and is not cured within ten (10) business days of notice of such breach. (B) Breach or Noncompliance by Flexweight. Flexweight 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 Flexweight under this Agreement shall be inaccurate in any material respect and is not cured within ten (10) business days of notice of such breach. 10. Securities Registration; Disclosure 10.1 Private Transaction. NuOasis understand that the Shares 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 Flexweight's reliance on such exemptions in issuing the Shares is predicated in part on the representations of NuOasis set forth herein and in the Investment Letter attached hereto as Exhibit "A" (the "Investment Letter"), to be executed by NuOasis and delivered to Flexweight at Closing. 10.2 Access to Information. NuOasis represents that, by virtue of its economic bargaining power or otherwise, it has had access to or has 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 Shares issued pursuant to this Agreement have been necessary, and that they have had the opportunity to ask questions of and receive answers from Flexweight's officers and directors, or any party acting on their behalf, concerning the business of Flexweight and that they have had the opportunity to obtain any additional information, to the extent that Flexweight possesses such information or can acquire it without unreasonable expense or effort, necessary to verify the accuracy of information obtained or furnished by Flexweight. 11. Indemnification As provided herein, NuOasis and Flexweight 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, NuOasis agrees that Flexweight 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 NuOasis contained herein under which the Shares hereunder are transferred to NuOasis. 12. Confidential Information Notwithstanding any termination of this Agreement, Flexweight, NuOasis and their representatives, agree to hold in confidence any information not generally available to the public received by them from the other party pursuant to the terms of this Agreement. If this Agreement is terminated for any reason, Flexweight, NuOasis and their representatives will continue to hold such information in confidence and will, to the extent requested by any party, promptly return to the requesting party all written material and all copies or abstracts thereof previously furnished. 13. Miscellaneous Provisions 13.1 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. NuOasis and Flexweight 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. 13.2 Costs and Expenses. Subject to paragraph 9 herein, all costs and expenses in the proposed sale and transfer described in this Agreement shall be borne by NuOasis and Flexweight 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. 13.3 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. 13.4 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. 13.5 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 Flexweight: Flexweight Corp. 1946 Plateau Way Wendover, Nevada 89883 Telephone: (702) 664-3919 Facsimile: (702) 664-2331 13.6 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. 13.7 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. 13.8 Governing Law. This Agreement shall be governed by the laws of the United States, State of Nevada. 13.9 Binding 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. 13.10 Entire 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. 13.11 Severability. If any part of this Agreement is deemed to be unenforceable the balance of the Agreement shall remain in full force and effect. 13.12 Amendment. This Agreement may be amended only by a written instrument executed by the parties or their respective successors or assigns. 13.13 Facsimile 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. 13.14 Time 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. "Flexweight" Flexweight Corporation By: Walter G. Sanders Name: Walter G. Sanders Title: President/CEO "NuOasis" NuOasis International Inc. By: /s/ Fred G. Luke Name: Fred G. Luke Title: President EX-10.9 12 OPTION AGREEMENT EXHIBIT 10.9 OPTION AGREEMENT THIS OPTION AGREEMENT ("Agreement") is entered into this 1st day of May 1998, by and between NuOasis International Inc., a corporation organized under the laws of the Commonwealth of the Bahamas ("NuOasis"), and Flexweight Corp., a Kansas corporation (the "Company"). WHEREAS, the Company proposes to issue to NuOasis options to purchase shares of its $.10 par value common stock (the "Common Stock") in connection with the Company's exchange of securities with NuOasis International Inc. ("NuOasis") pursuant to the Exchange Agreement dated May 21, 1998 between the Company and NuOasis, a copy of which is attached hereto as Exhibit "A" and incorporated by reference herein (the "Exchange Agreement"); and, WHEREAS, to induce NuOasis to execute the Exchange Agreement the Company hereby grants NuOasis an option to purchase additional shares of the Company's Common Stock subject to the terms and conditions set forth below. NOW, THEREFORE, for and in consideration of the mutual promises herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and subject to the terms and conditions set forth below, NuOasis and the Company agree as follows: 1. The Option The Company hereby grants to NuOasis or its assignee (hereinafter "Holder") an option (the "Option") to acquire Two Hundred Fifty Thousand (250,000) shares of the Company common stock, subject to adjustment as set forth herein (such shares, as adjusted, are hereinafter referred to as the "Option Shares"), at a purchase price of $.10 per share ("Option Price"). 2. Term and Exercise of Option A. Term of Option. Subject to the terms of this Agreement, Holder shall have the right to exercise the Option in whole or in part, commencing the date hereof through the close of business on July 1, 1999. B. Exercise of the Option. The Option may be exercised upon written notice to the Company at its principal office setting out the number of Option Shares to be purchased, together with payment of the Option Price (as defined in and determined in accordance with the provisions of paragraphs 4 and 5 hereof. Subject to paragraph 5 hereof, upon such notice of exercise and payment of the Option Price, the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of Holder, or its successor as provided for herein, and in such name or names as the Holder may designate, a certificate or certificates for the number of Option Shares so purchased. The rights of purchase represented by the Option shall be exercisable, at the election of the Holder thereof, either in full or from time to time in part, and in the event the Option is exercised in respect of less than all of the Option Shares purchasable on such exercise at any time prior to the date of expiration hereof, the remaining Option Shares shall continue to be subject to Adjustment as set forth in paragraph 5 hereof. The Company irrevocably agrees to reconstitute the Option Shares as provided herein. The Option represented by this Agreement may only be assigned or transferred by NuOasis to an Affiliate or subsidiary, or as the result of a corporate reorganization or recapitalization. For the purpose of this Option the term "Affiliate" shall be defined as a person or enterprises that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with the Company. 3. Reservation of Option Shares The Company shall at all times keep reserved and available, out of its authorized Common Stock, such number of shares of Common Stock as shall be sufficient to provide for the exercise of the rights to purchase the Company's Common Stock represented by this Option Agreement. The transfer agent for the Common Stock and any successor transfer agent for any shares of the Company's capital stock issuable upon the exercise of any of such rights of purchase, will be irrevocably authorized and directed at all times to reserve such number of authorized shares as shall be requisite for such purpose. The Company will keep a copy of this Agreement on file with the transfer agent or its successors. 4. Adjustment of the Number of Option Shares The number of Option Shares purchasable pursuant to this Agreement shall be subject to adjustment from time to time upon the happening of certain events, as follows: A. Adjustment for Future Issuances of Capital Stock. Except as provided below, the number of Option Shares purchasable hereunder shall be increased to that total number of shares of the Company's Common Stock equal to the difference between one million (1,000,000) plus the number of shares of Common Stock previously purchased pursuant to this Option and nineteen and one-half percent (19.5%) of the total number of shares of Common Stock on a fully diluted basis issued and outstanding at any time, during the term of this Agreement. B. Adjustment for Recapitalization. Subject to paragraph 4.A above, in the event the Company shall (a) subdivide its outstanding shares of Common Stock, (b) reverse split or otherwise reduce its outstanding shares of Common Stock into a smaller number of shares of Common Stock, or (c) issue or convert by a reclassification or recapitalization of its shares of Common Stock into, for, or with other securities (a "Recapitalization"), the number of Option Shares purchasable hereunder immediately following such Recapitalization shall be adjusted so that the Holder shall be entitled to receive the kind and number of Option Shares or other securities of the Company which it would have owned or have been entitled to receive after such Recapitalization, had such Option been exercised immediately prior to the happening of such event or any record date with respect thereto. An adjustment made pursuant to this paragraph shall be calculated and effected taking into account the formula set forth in paragraph 4.A. above and shall become effective immediately after the effective date of such event retroactive to the effective date. C. Preservation of Purchase Rights Under Consolidation. Subject to paragraph 4.A above, in case of any Recapitalization or any other consolidation of the Company with or merger of the Company into another corporation, or in case of any sale or conveyance to another corporation of the property of the Company as an entirety or substantially as an entirety, the Company shall prior to the closing of such transaction, cause such successor or purchasing corporation, as the case may be, to acknowledge and accept responsibility for the Company's obligations hereunder and to grant the Holder the right thereafter upon payment of the Option Price to purchase the kind and amount of shares and other securities and property which he would have owned or have been entitled to receive after the happening of such consolidation, merger, sale or conveyance. The provisions of this paragraph shall similarly apply to successive consolidations, mergers, sales or conveyances. D. Notice of Adjustment. Whenever the number of Option Shares purchasable hereunder is adjusted, as herein provided, the Company shall mail by first class mail, postage prepaid, to the Holder notice of such adjustment or adjustments, and shall deliver to Holder setting forth the adjusted number of Option Shares purchasable and a brief statement of the facts requiring such adjustment, including the computation by which such adjustment was made. E. No Adjustment for Dividends. Except as provided herein, no adjustment to the Option Shares shall be made in respect of any cash dividend. 5. Failure to Deliver Option Shares Constitutes Breach Under Exchange Agreement Failure by the Company, for any reason, to deliver the certificates representing any shares purchased pursuant to this Option, or the placement of a Stop Transfer order by the Company, shall constitute a "Breach" under the Exchange Agreement and, for the purpose of this Option, failure to deliver or transfer the subject shares shall automatically toll the expiration of this Agreement for a period of time equal to the delay in delivering the subject shares or term of the Stop Transfer order. 6. Assignment This Agreement and the rights hereunder shall not be assigned by either party hereto; provided, however, that in the event NuOasis or the Company are deemed by reason of their respective ownership of each other's shares to be subject to review by the Gaming Control Board of Nevada or other jurisdiction and the respective party does not wish to submit the necessary applications or pay the attendant fees, or for any reason is deemed unsuitable for licensing in a jurisdiction where one of the parties has or intends to submit to the applicable gaming rules and regulations, then in such event, the party not wishing to subject to the respective rules and regulations or pay the attendant fees may be allowed to assign and dispose of its interest in the shares of the party submitting itself to the licensing procedure. Such disposal shall be accomplished either by (a) a sale of the shares of the licensee to a buyer mutually acceptable to both parties at a price not less than fair market value, or (b) the transfer of the subject shares of the licensee by the other party into a "blend" trust or other type of trust which satisfies the requirements of the subject gaming regulatory body. 7. Counterparts A facsimile, telecopy or other reproduction of this instrument may be executed by one or more parties hereto and such executed copy may be delivered by facsimile or similar instantaneous electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties agree to execute an original of this instrument as well as any facsimile, telecopy or other reproduction hereof. 8. Further Documentation Each party hereto agrees to execute such additional instruments and take such action as may be reasonably requested by the other party to effect the transaction, or otherwise to carry out the intent and purposes of this Agreement. 9. Notices All notices and other communications hereunder shall be in writing and shall be sent by prepaid first class mail to the parties at the following addresses, as amended by the parties with written notice to the other: To NuOasis: NuOasis International Inc. 43 Elizabeth Avenue, Box N-5680 Nassau, Bahamas Telephone: (809) 356-2903 Facsimile: (809) 326-8434 With copy to: Archer & Weed 4695 MacArthur Court, Suite 530 Newport Beach, California 92660 Telephone: (714) 833-5363 Facsimile: (714) 833-5384 To the Company: Flexweight Corp. 1946 Plateau Way Wendover, Nevada 89883 Telephone: (702) 664-3919 Facsimile: (702) 664-2331 10. Counterparts This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 11. Governing Law This Agreement was negotiated, and shall be governed by the laws of the Commonwealth of the Bahamas notwithstanding any conflict-of-law provision to the contrary. 12. Entire Agreement This Agreement sets forth the entire understanding between the parties hereto and no other prior written or oral statement or agreement shall be recognized or enforced. 13. Severability If a court of competent jurisdiction determines that any clause or provision of this Agreement is invalid, illegal or unenforceable, the other clauses and provisions of the Agreement shall remain in full force and effect and the clauses and provision which are determined to be void, illegal or unenforceable shall be limited so that they shall remain in effect to the extent permissible by law. 14. Amendment or Waiver Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing. At any time prior to Closing, this Agreement may be amended by a writing signed by all parties hereto. 15. Headings The section and subsection headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first written above. "NuOasis" NuOasis International Inc. By: /s/ Fred G. Luke Name: Fred G. Luke Title: President Address: 43 Elizabeth Avenue, Box N-8680 Nassau, Bahamas "Flex" Flexweight Corp. By: /s/ Walter G. Sanders Name: Walter G. Sanders Title: President Address: 1946 Plateau Way Wendover, Nevada 89883 EX-10.10 13 OPTION AGREEMENT EXHIBIT 10.10 OPTION AGREEMENT THIS OPTION AGREEMENT ("Agreement") is entered into and effective this 1st day of July 1998, by and between NuVen Advisors Inc., a Nevada corporation ("NuVen"), and Flexweight Corp., a Kansas corporation (the "Company"). WHEREAS, the Company proposes to issue to NuVen options to purchase shares of its common stock (the "Common Stock") in connection with the Company's engagement of NuVen pursuant to the Advisory Agreement of even date between the Company and NuVen, a copy of which is attached hereto as Exhibit "A" and incorporated by reference herein (the "Advisory Agreement"); and, WHEREAS, to induce NuVen to execute the Advisory Agreement the Company hereby grants NuVen an option to purchase shares of the Company's Common Stock subject to the terms and conditions set forth below. NOW, THEREFORE, for and in consideration of the mutual promises herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and subject to the terms and conditions set forth below, NuVen and the Company agree as follows: 1. The Option The Company hereby grants to NuVen (hereinafter "Holder") an option (the "Option") to acquire Three Hundred Fifty Thousand (350,000) shares of the Company's Common Stock, subject to adjustment as set forth herein (such shares, as adjusted, are hereinafter referred to as the "Option Shares"), at a purchase price of $6.00 per share ("Option Price"). 2. Term and Exercise of Option A. Term of Option. Subject to the terms of this Agreement, Holder shall have the right to exercise the Option in whole or in part, commencing the date hereof through the close of business on July 1, 2001. B. Exercise of the Option. The Option may be exercised upon written notice to the Company at its principal office setting out the number of Option Shares to be purchased, together with payment of the Option Price C. Issuance of Option Shares. Upon such notice of exercise and payment of the Option Price, the Company shall issue and cause to be delivered within five (5) business days following the written order of Holder, or its successor as provided for herein, and in such name or names as the Holder may designate, a certificate or certificates for the number of Option Shares so purchased. The rights of purchase represented by the Option shall be exercisable, at the election of the Holder thereof, either in full or from time to time in part, and in the event the Option is exercised in respect of less than all of the Option Shares purchasable on such exercise at any time prior to the date of expiration hereof, the remaining Option Shares shall continue to be subject to Adjustment as set forth in paragraph 4 hereof. The Company irrevocably agrees to reconstitute the Option Shares as provided herein. 3. Reservation of Option Shares The Company shall at all times keep reserved and available, out of its authorized Common Stock, such number of shares of Common Stock as shall be sufficient to provide for the exercise of the rights represented by this Agreement. The transfer agent for the Common Stock and any successor transfer agent for any shares of the Company's capital stock issuable upon the exercise of any of such rights of purchase, will be irrevocably authorized and directed at all times to reserve such number of shares as shall be requisite for such purpose. The Company will cause a copy of this Agreement to be kept on file with the transfer agent or its successors. 4. Adjustment of Option Shares The number of Option Shares purchasable pursuant to this Agreement shall be subject to adjustment from time to time upon the happening of certain events, as follows: A. Adjustment for Recapitalization. Subject to paragraph 4.B below, in the event the Company shall (a) subdivide its outstanding shares of Common Stock, or (b) issue or convert by a reclassification or recapitalization of its shares of Common Stock into, for, or with other securities (a "Recapitalization"), the number of Option Shares purchasable hereunder immediately following such Recapitalization shall be adjusted so that the Holder shall be entitled to receive the kind and number of Option Shares or other securities of the Company measured as a percentage of the total issued and outstanding shares of the Company's Common Stock as of the hereof which it would have been entitled to receive immediately preceding such Recapitalization, had such Option been exercised immediately prior to the happening of such event or any record date with respect thereto. An adjustment made pursuant to this paragraph shall be calculated and effected taking into account the formula set forth in paragraph 4.B. below and shall become effective immediately after the effective date of such event retroactive to the effective date. B. Adjustment of the Exercise Price and Number of Option Shares. In the event of any change in the Company's Common Stock by reason of a reverse stock split, the number and Option Price of the shares subject to this Option shall not change or be adjusted. C. Preservation of Purchase Rights Under Consolidation. Subject to paragraph 4.B above, in case of any Recapitalization or any other consolidation of the Company with or merger of the Company into another corporation, or in case of any sale or conveyance to another corporation of the property of the Company as an entirety or substantially as an entirety, the Company shall prior to the closing of such transaction, cause such successor or purchasing corporation, as the case may be, to acknowledge and accept responsibility for the Company's obligations hereunder and to grant the Holder the right thereafter upon payment of the Option Price to purchase the kind and amount of shares and other securities and property which he would have owned or have been entitled to receive after the happening of such consolidation, merger, sale or conveyance. The provisions of this paragraph shall similarly apply to successive consolidations, mergers, sales or conveyances. D. Notice of Adjustment. Whenever the number of Option Shares purchasable hereunder is adjusted, as herein provided, the Company shall mail by first class mail, postage prepaid, to the Holder notice of such adjustment or adjustments, and shall deliver to Holder setting forth the adjusted number of Option Shares purchasable and a brief statement of the facts requiring such adjustment, including the computation by which such adjustment was made. 5. Failure to Deliver Option Shares Constitutes Breach Under Advisory Agreement Failure by the Company, for any reason, to deliver the certificates representing any shares purchased pursuant to this Option within the five (5) business day period set forth in paragraph 2 above, or the placement of a Stop Transfer order by the Company on any Option Shares once issued, shall constitute a "Breach" under the Advisory Agreement and, for the purpose of determining the terms of this Agreement, shall automatically toll the expiration of this Agreement for a period of time equal to the delay in delivering the subject shares or term of the Stop Transfer order. 6. Assignment The Option represented by this Agreement may only be assigned or transferred by NuVen to an Affiliate or subsidiary, or as the result of a corporate reorganization or recapitalization. For the purpose of this Option the term "Affiliate" shall be defined as a person or enterprise that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with the Company otherwise, this Agreement and the rights hereunder shall not be assigned by either party hereto. 7. Counterparts A facsimile, telecopy or other reproduction of this instrument may be executed by one or more parties hereto and such executed copy may be delivered by facsimile or similar instantaneous electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties agree to execute an original of this instrument as well as any facsimile, telecopy or other reproduction hereof. 8. Further Documentation Each party hereto agrees to execute such additional instruments and take such action as may be reasonably requested by the other party to effect the transaction, or otherwise to carry out the intent and purposes of this Agreement. 9. Notices All notices and other communications hereunder shall be in writing and shall be sent by prepaid first class mail to the parties at the following addresses, as amended by the parties with written notice to the other: To NuVen: NuVen Advisors Inc. 6337 So. Highland, Suite 319 Salt Lake City, Utah 84121 Telephone: (801) 277-8755 Telefax: (801) 277-8755 With copy to: Archer & Weed 4695 MacArthur Court, Suite 530 Newport Beach, California 92660 Telephone: (714) 833-5363 Facsimile: (714) 833-5384 To the Company: Flexweight Corp. 1946 Plateau Way Wendover, Nevada 89883 Telephone: (702) 664-3919 Facsimile: (702) 664-2331 10. Counterparts This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 11. Governing Law This Agreement was negotiated, and shall be governed by the laws of Nevada notwithstanding any conflict-of-law provision to the contrary. 12. Entire Agreement This Agreement sets forth the entire understanding between the parties hereto and no other prior written or oral statement or agreement shall be recognized or enforced. 13. Severability If a court of competent jurisdiction determines that any clause or provision of this Agreement is invalid, illegal or unenforceable, the other clauses and provisions of the Agreement shall remain in full force and effect and the clauses and provision which are determined to be void, illegal or unenforceable shall be limited so that they shall remain in effect to the extent permissible by law. 14. Amendment or Waiver Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing. At any time prior to Closing, this Agreement may be amended by a writing signed by all parties hereto. 15. Headings The section and subsection headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first written above. "NuVen" NuVen Advisors Inc. By: /s/ Fred G. Luke Name: Fred G. Luke Title: President Address: 6337 So. Highland, Suite 319 Salt Lake City, Utah 84121 The "Company" Flexweight Corp. By: /s/ Walter G. Sanders Name: Walter G. Sanders Title: President/CEO Address: 1946 Plateau Way Wendover, Nevada 89883 EX-10.11 14 1998 STOCK OPTION PLAN EXHIBIT 10.11 FLEXWEIGHT CORPORATION 1998 STOCK OPTION PLAN Amended by the Board of Directors to increase number of option or shares by 1,018,333 September 15, 1998 10. Purpose. The purpose of this plan (the "Plan") is to secure for Flexweight Corporation (the "Company") and its shareholders the benefits arising from capital stock ownership by employees or officers of and consultants or advisors to, the Company who have contributed to the Company in the past and who are expected to contribute to the Company's future growth and success. Except where the context otherwise requires, the term "Company" shall include the parent and all present and future subsidiaries of the Company as defined in Sections 424(e) and 424(f) of the Internal Revenue Code of 1986, as amended or replaced from time to time (the "Code"). 11. Type of Stock or Options and Administration. (a) Types of Stock or Options. The shares of Common Stock issued for services rendered or the stock options granted pursuant to the Plan shall be authorized by action of the Board of Directors of the Company (the "Board"), or a Committee (the "Committee") designated by the Board of Directors. The stock options are non-statutory options and are not intended to meet the requirements of Section 422 of the Code. (b) Administration. The Plan will be administered by the Board, whose construction and interpretation of the terms and provisions of the Plan shall be final and conclusive. The Board may, to the full extent permitted by or consistent with applicable laws or regulations (including, without limitation, applicable state laws and Rule 16b-3 promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), or any successor rule ("Rule 16b- 3")), delegate any or all of its powers under the Plan to a Committee appointed by the Board, and if the Committee is so appointed all references to the "Board" in this Plan shall mean and relate to such Committee. The Board may in its sole discretion authorize the Company's Common Stock ("Common Stock") and issue shares upon exercise of such options as provided in the Plan, or the Board may delegate the power to issue shares or grant options to the Committee. The Board shall have authority, subject to the express provisions of the Plan, to construe the respective stock issuance agreements, the option agreements and the Plan, to prescribe, amend and rescind rules and regulations relating to the Plan, to determine the terms and provisions of the respective stock issuance agreements or option agreements, which need not be identical, and to make all other determinations in the judgment of the Board necessary or desirable for the administration of the Plan. The Board may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any stock issuance agreement or option agreement in the manner and to the extent it shall deem expedient to carry the Plan into effect and it shall be the sole and final judge of such expediency. No director or person acting pursuant to authority delegated by the Board or the Committee shall be liable for any action or determination under the Plan made in good faith. (c) Applicability of Rule 16b-3. Those provisions of the Plan which make express reference to Rule 16b-3 shall apply only to such persons as are required to file reports under Section 16(a) of the Exchange Act (a "Reporting Person"). 3. Eligibility. (a) General. Options may be granted to persons who are, at the time of issuance or grant, employees or officers of, or consultants or advisors to, the Company and Common Stock or Options may be issued to consultants to render (in the case of Options) consulting or advisory services, including Professional advisory services, to the Company, not involving a capital raising transaction. (b) Grant of Options to Officers. The selection of an officer (as the term "officer" is defined for purposes of Rule 16b-3) as a recipient of either stock or an option, the timing of the stock issuance or the option grant, the exercise price of the option and the number of shares subject to the issuance or the option shall be determined either (i) by the Board, or (ii) by two or more directors having full authority to act in the matter, each of whom shall be a "disinterested person." For the purposes of the Plan, a director shall be deemed to be a "disinterested person" only if such person qualifies as a "disinterested person" within the meaning of Rule 16b-3, as such term is interpreted from time to time. (c) Issuance of Stock. Stock may be issued only to eligible persons for (i) services (as defined in Section 3(a) above) which have been rendered (including incidental expenses incurred in connection with the rendering of services) to the Company, or (ii) upon the exercise of previously granted stock options. 4. Stock Subject to Plan. Subject to adjustment as provided in Section 14 below, the maximum number of shares of Common Stock of the Company which may be issued and sold under the Plan, including shares issuable pursuant to the exercise of stock options, is 2,518,333 shares. If an option granted under the Plan shall expire or terminate for any reason without having been exercised in full, the unpurchased shares subject to such option shall again be available for subsequent option grants or stock issuances under the Plan. 5. Forms of Stock Issuance Agreements and Option Agreements. As a condition to the issuance of Stock or the grant of an option under the Plan, each recipient of either stock or an option shall execute either an employee or advisor compensation agreement or an option agreement in such form not inconsistent with the Plan as may be approved by the Board. Such agreements may differ among recipients. 6. Purchase Price. (a) General. The stock issuance price and the purchase price per share of stock deliverable upon the exercise of an option shall be determined by the Board. (b) Payment of Purchase Price. Options granted under the Plan may provide for the payment of the exercise price by delivery of cash or a check to the order of the Company in an amount equal to the exercise price of such options, or, to the extent provided in the applicable option agreement, (i) by delivery to the Company of shares of Common Stock of the Company already owned and held by the optionee for at least twelve months and having a fair market value equal in amount to the exercise price of the options being exercised, (ii) by any other means which the Board determines are consistent with the purpose of the Plan and with applicable laws and regulations (including, without limitation, the provisions of Rule 16b-3 and Regulation T promulgated by the Federal Reserve Board), or (iii) by any combination of such methods of payments. The fair market value of any shares of the Company's Common Stock or other non-cash consideration which may be delivered upon exercise of any option shall be determined by the Board. 7. Option Period. (a) Each option and all rights thereunder shall expire on such date as shall be set forth in the applicable option agreement, and options shall be subject to earlier termination as provided in the Plan. 8. Exercise of Options. Each option granted under the Plan shall be exercisable either in full or in installments at such time or times and during such period as shall be set forth in the agreement evidencing such option subject to the provisions of the Plan. 9. Nontransferability of Options. All options granted to Reporting Persons shall not be assignable or transferable by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the life of the optionee, shall be exercisable only by the optionee; provided, however, that options may be transferred pursuant to a qualified domestic relations order (as defined in Rule 16b-3). 10. Effect of Termination of Employment or Other Relationship. (a) Options. Subject to the provisions of the Plan, the Board shall determine the period of time during which an optionee or his/her valid assigns may exercise an option following (i) the termination of the optionee's employment or other relationship with the Company or (ii) the death or disability of the optionee, but such period shall in no event be less than three months. Such periods shall be set forth in the agreement evidencing such option. (b) Stock. Shares of stock that are issued for services rendered pursuant to the Plan may not be canceled by the Company, provided that when the shares are issued, the recipient of the shares shall acknowledge having received full payment for the services previously rendered and shall waive any right to additional or different payment by the Company for such services. 11. Additional Provisions. (a) Additional Option Provisions. The Board may, in its sole discretion, include additional provisions in option agreements covering options granted under the Plan, including without limitations, restrictions on transfer, repurchase rights, commitments to pay cash bonuses, to make, arrange for or guaranty loans or to transfer other property to optionees upon exercise of options, or such provisions as shall be determined by the Board; provided that such additional provisions shall not be inconsistent with any other term or condition of the Plan. (b) Acceleration, Extension, Etc. The Board may, in its sole discretion, (i) accelerate the date or dates on which all or any particular option or options granted under the Plan may be exercised or (ii) extend the dates during which all or any particular, option or options granted under the Plan may be exercised, provided, however, that no such extension shall be permitted if it would cause the Plan to fail to comply with Rule 16b-3. 12. General Restrictions. The shares issued pursuant to the Plan and each option shall be subject to the requirement that if, at any time, counsel to the Company shall determine that the listing, registration or qualification of the shares, including the shares subject to such option, upon any securities exchange or under any state or federal law, or that the consent or approval of any governmental or regulatory body, or that the disclosure of non-public information or the satisfaction of any other condition is necessary as a condition of or in connection with the issuance or purchase of shares thereunder, such shares may not be issued or such option may not be exercised, in whole or in part unless such listing, registration, qualification, consent or approval, or satisfaction of such condition shall have been effected or obtained on conditions acceptable to the Board. 13. Rights as a Shareholder. The holder of an option shall have no rights as a shareholder with respect to any shares covered by the option (including, without limitation, any rights to receive dividends or non-cash distributions with respect to such shares) until the date of issue of a stock certificate to him or her for such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. 14. Adjustment Provisions for Recapitalizations and Related Transactions. (a) General. If, through or as a result of any merger, consolidation, sale of all or substantially all of the assets of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, (i) the outstanding shares of Common Stock are increased, decreased or exchanged for a different number or kind of shares or other securities of the Company, or (ii) additional shares or new or different shares or other securities, as appropriate and proportionate adjustment may be made in (x) the maximum number and kind of shares reserved for issuance under the Plan, (y) the number and kind of shares or other securities subject to any then outstanding options under the Plan, and (z) the price for each share subject to any then outstanding options under the Plan, without changing the aggregate purchase price as to which such options remain exercisable. Notwithstanding the foregoing, no adjustment shall be made pursuant to this Section 14 if such adjustment would cause the Plan to fail to comply with rule 16b-3. (b) Board Authority to Make Adjustments. Any adjustments under this Section 14 will be made by the Board, whose determination as to what adjustments, if any, will be made and the extent thereof will be final, binding and conclusive. No fractional shares will be issued under the Plan on account of any such adjustments. 15. Merger, Consolidation, Asset Sale, Liquidation, Etc. (a) General. In the event of a consolidation or merger or sale of all or substantially all of the assets of the Company in which outstanding shares of Common Stock are exchanged for securities, cash or other property of any other corporation or business entity, or in the event of a liquidation of the Company, the Board, or the board of directors of any corporation assuming the obligations of the Company, may, in its discretion, take any one or more of the following actions, as to outstanding options (i) provide that such options shall be assumed, or equivalent options shall be substituted, by the acquiring or succeeding corporation (or affiliate thereof), (a) upon written notice to the optionees, provide that all unexercised options will terminate immediately prior to the consummation of such transactions unless exercised by the optionee with a specified period following the date of such notice, (iii) in the event of a merger; under the terms of which holders of the Common Stock of the Company will receive upon consummation thereof a cash payment for each share surrendered in the merger ("Merger Price"), make or provide for a cash payment to the optionees equal to the difference between (A) the Merger Price times the number of shares of Common Stock subject to such outstanding options (to the extent then exercisable at prices not in excess of the Merger Price) and (B) the aggregate exercise price of all such outstanding options in exchange for the termination of such options, and (iv) provide that all or any outstanding options shall become exercisable in full immediately prior to such event. (b) Substitute Stock or Options. The Company may issue stock or grant options under the Plan in substitution for stock or options held by employees of, or consultants or advisors to, another corporation who become employees of or consultants or advisors to the Company or a subsidiary of the Company, as the result of a merger or consolidation of the employing corporation with the Company or a subsidiary of the Company, or as a result of the acquisition by the Company, or one of its subsidiaries, or property or stock of the employing corporation. The Company may direct that substitute stock be issued or options be granted on such terms and conditions as the Board considers appropriate in the circumstances. 16. No Special Employment Rights. Nothing contained in the Plan or in any stock issuance or option shall confer upon any recipient or optionee any right with respect to the continuation of his or her employment by the Company or interfere in any way with the right of the Company any time to terminate such employment or to increase or decrease the compensation of the recipient or optionee. 17. Amendment of the Plan. (a) The Board may at any time, and from time to time, modify or amend the Plan in any respect, except that if at any time the approval of the shareholders of the Company is required under any law or rule, the Board may not effect such modification or amendment without such approval. (b) The termination or any modification or amendment of the Plan shall not, without the consent of a recipient of stock or an optionee, affect his or her rights under stock or an option previously issued or granted to him or her. With the consent of the recipient or optionee affected, the Board may amend outstanding stock agreements or option agreements in a manner not inconsistent with the Plan. The Board shall have the right to amend or modify the terms and provisions of the Plan and of any outstanding stock or option to the extent necessary to ensure the qualifications of the Plan under rule 16b-3. 18. Withholding. (a) The Company shall have the right to deduct from payments of any kind otherwise due to the recipient or optionee any federal, state or local taxes of any kind required by law to be withheld with respect to any shares issued or issuable upon exercise of options under the Plan. Subject to the prior approval of the Company, which may be withheld by the Company in its sole discretion, the recipient or optionee may elect to satisfy such obligations, in whole or in part, (i) by causing the Company to withhold shares of Common Stock otherwise issued or issuable pursuant to the exercise of an option or (a) by delivering to the Company shares of Common Stock already owned by the recipient or the optionee. The shares so delivered or withheld shall have a fair market value equal to such withholding obligations. The fair market value of the shares used to satisfy such withholding obligation shall be determined by the Company as of the date that the amount of tax to be withheld is to be determined. A recipient or optionee who has made an election pursuant to this Section 18(a) may only satisfy his or her withholding obligation with shares of Common Stock which are not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements. (b) Notwithstanding the foregoing, in the case of a Reporting Person, no election to use shares for the payment of withholding taxes shall be effective unless made in compliance with any applicable requirements of Rule 16b-3. 19. Cancellation and New Grant of Options, Etc. The Board shall have the authority to effect, at any time and from time to time, with the consent of the affected optionees, (i) the cancellation of any or all outstanding options under the Plan and the grant in substitution thereof of new options under the Plan covering the same or different numbers of shares of Common Stock and having an option exercise price per share which may be lower or higher than the exercise price per share of the canceled options or (ii) the amendment of the terms of any and all outstanding options under the Plan to provide an option exercise price per share which is higher or lower than the then-current exercise price per share of such outstanding options. 20. Effective Date and Duration of the Plan. (a) Effective Date. The Plan shall become effective when adopted by the board. Amendments to the Plan shall become effective when adopted by the Board. Shares may be issued and options may be granted under the Plan at any time after the effective date and before the date fixed as the termination date of the Plan. (b) Termination. Unless sooner expressly terminated in accordance with the provisions of the Plan, the Plan shall terminate upon the earlier of (i) the close of business on the day next preceding the tenth anniversary of the date of its adoption by the Board, or (ii) the date on which all shares available for issuance under the Plan shall have been issued pursuant to the issuance of shares or the exercise or cancellation of options granted under the Plan. Unless sooner expressly terminated in accordance with the provisions of the Plan, the Plan shall terminate with respect to options on the date specified in (ii) above, then options outstanding on such date shall continue to have force and effect in accordance with the provisions of the instruments evidencing such options. 21. Provision for Foreign Participants. The Board of Directors, may, without amending the Plan, modify stock issuances or options granted to participants who are foreign nationals or employed outside the United States to recognize differences in laws, rules, regulations or customs or such foreign jurisdiction with respect to tax, securities, currency, employee benefit or other matters. 22. Registration of Shares and Options. In the Board's discretion, the Board may agree with respect to certain shares and options issued under the Plan, to prepare and file Registration Statements on Form S-8, which Registration Statements may include reoffer prospectuses as that term is defined in Form S-8, to register and continue to keep effectively registered for resale the shares issued as compensation under the Plan and the shares of Common Stock issued upon the exercise of options granted under the Plan. Adopted by the Board of Directors September 15, 1998 By: /s/ Walter G. Sanders Walter G. Sanders President/Director EX-10.12 15 EXCHANGE AGREEMENT EXHIBIT 10.12 EXCHANGE AGREEMENT THIS EXCHANGE AGREEMENT (the "Agreement") is made effective June 15, 1998 by and between NuOasis International, Inc., organized under the laws of the Commonwealth of the Bahamas ("NUOI") and Cleopatra's World, Inc., a corporation organized under the laws of the British Virgin Islands ("CWI"). WHEREAS, NUOI is the Assignee and beneficial owner of one million (1,000,000) shares of Flexweight Corp., a Kansas corporation ( the "Flex Shares"); and, WHEREAS, CWI owns a Promissory Note in the principal amount of one million dollars ($1,000,000) issued by NuOasis Resorts, Inc. ("Resorts"), a copy of which is attached hereto as Exhibit "A" and incorporated herein by reference (the "Resorts Note"); and, WHEREAS, CWI and NUOI wish to exchange the Resorts Note owned by CWI for the Flex Shares owned by NUOI. NOW, THEREFORE, IN CONSIDERATION of the mutual promises contained herein, the benefits to be derived by each party hereunder and other good and valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, CWI and NUOI agree as follows: 1. Exchange On the basis of the representations and warranties herein contained, subject to the terms and conditions set forth herein, NUOI hereby exchanges and agrees to assign and deliver the Flex Shares for the NuOasis Note. 2. Closing The closing of the exchange contemplated by this Agreement (the "Closing") shall occur upon the transfer of the Flex Shares to CWI (the "Transfer Date"), but shall not be later than June 30, 1998. At the Closing, CWI shall deliver the NuOasis Note to NUOI and NUOI shall deliver the Flex Shares to CWI. 3.1 Representations and Warranties of NUOI NUOI hereby represents and warrants to CWI that: A. Organization. NUOI is a corporation validly existing and in good standing under the laws of the Commonwealth of the Bahamas, with the power and authority to carry on its business as now being conducted. The execution and delivery of this Agreement and the consummation of the transaction contemplated in this Agreement have been, or will be prior to Closing, duly authorized by all requisite corporate action on the part of NUOI. This Agreement has been duly executed and delivered by NUOI and constitutes a binding, and enforceable obligation of NUOI; and, B. Third Party Consent. No authorization, consent, or approval of, or registration or filing with, any governmental authority or any other person is required to be obtained or made by NUOI in connection with the execution, delivery, or performance of this Agreement, or if required, NUOI has or will obtain same prior to Closing; and, C. Litigation. NUOI is not a defendant or a plaintiff against whom a counterclaim has been made or reduced to judgement, in any litigation or proceedings before any state, local or federal government, or any department, board, body or agency thereof, which could result in a claim against the Flex Shares; and, D. Status of Flex Shares. To the best of NUOI's knowledge, the Flex Shares are validly123 issued and there is no claim by any third parties which would serve to restrict the assignment, transfer or exchange of the Flex Shares as contemplated herein. Further, NUOI has not created any option, security interest or encumbrance involving the Flex Shares that would give rise to any claims by third parties or otherwise conflict with or preclude the exchange as contemplated herein; and E. Authority. This Agreement has been duly executed by NUOI, and the execution and performance of this Agreement will not violate, or result in a breach of, or constitute a default in any agreement, instrument, judgement, order or decree to which NUOI is a party or to which NUOI is subject. 3.2 Representations and Warranties of CWI CWI hereby represents and warrants to NUOI that: A. Organization. CWI is a corporation validly existing and in good standing under the laws of the British Virgin Islands, with the power and authority to carry on its business as now being conducted. The execution and delivery of this Agreement and the consummation of the transaction contemplated in this Agreement have been, or will be prior to Closing, duly authorized by all requisite corporate action on the part of CWI. This Agreement has been duly executed and delivered by CWI and constitutes a binding, and enforceable obligation of CWI; and, B. Third Party Consent. No authorization, consent, or approval of, or registration or filing with, any governmental authority or any other person is required to be obtained or made by CWI in connection with the execution, delivery, or performance of this Agreement, or if required, CWI has or will obtain same prior to Closing; and C. Litigation. CWI is not a defendant or a plaintiff against whom a counterclaim has been made or reduced to judgement, in any litigation or proceedings before any state, local or federal government, or any department, board, body or agency thereof, which could result in a claim against the NuOasis Note; and, D. Status of the NuOasis Note. To the best of CWI's knowledge, the NuOasis Note is validly issued by NuOasis Resorts, Inc. or any third parties and there is no claim by NuOasis Resorts, Inc. or any third parties which would serve to restrict the collection, transfer or exchange of the NuOasis Note as contemplated herein. Further, CWI has not created any option, security interest or encumbrance involving the rights to the NuOasis Note that would give rise to any claims by third parties or otherwise conflict with or preclude the exchange as contemplated herein; and E. Authority. This Agreement has been duly executed by CWI, and the execution and performance of this Agreement will not violate, or result in a breach of, or constitute a default in any agreement, instrument, judgement, order or decree to which CWI is a party or to which CWI is subject. 4. Conditions Precedent to Obligations of CWI and NUOI All obligations of CWI and NUOI under this Agreement are subject to the fulfillment, prior to or as of the Closing Date, of each of the following conditions: A. Transfer and Delivery of the NuOasis Note. CWI shall have executed proper transfer documents to assign and convey merchantable title to the NuOasis Note and the underlying collateral, and delivered same along with the original of such NuOasis Note to NUOI; and B. Transfer and Delivery of the Flex Shares. NUOI shall have taken all action necessary to deliver the Flex Shares to CWI; and C. Acceptance of Documents. All instruments and documents delivered by CWI and NUOI pursuant to the provisions of this Agreement shall be satisfactory to CWI and NUOI and their legal counsel. 5. Availability of Information CWI and NUOI each represent that, by virtue of their respective business activities and economic bargaining power or otherwise, they have been able to conduct their own due diligence and have had access to or have been furnished with, prior to or concurrently with the execution hereof, the information which they consider to be adequate to make a decision to exchange the NuOasis Note for the Flex Shares. 6. Private Transaction A. Private Offering. NUOI and CWI understand each that the exchange contemplated herein constitutes a private, arms-length transaction between the parties without the use or reliance upon a distribution or securities underwriter; and, B. Purchase for Own Account. Neither NUOI nor CWI are underwriters of, or dealers in, the respective securities to be exchanged hereunder, and neither party is acting as such or participating in the distribution of such securities; and C. Investment Risk. Because of their financial position and other factors, the exchange contemplated by this Agreement may involve a high degree of financial risk, including the risk that one or both parties may lose its entire investment; and D. Access to Information. NUOI, CWI and their respective advisors have been afforded the opportunity to discuss the transaction with legal and accounting professionals and to examine and evaluate the financial impact of the exchange contemplated herein. 7. Termination This Agreement may be terminated at anytime prior to the date of Closing by either party if (a) 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 transaction contemplated by this Agreement, and which, in the judgment of such party giving notice to terminate and based upon the advice of legal counsel, makes it inadvisable to proceed with the transaction contemplated by this Agreement, or (b) if the transaction contemplated herein has not closed by June 30, 1998. 8. Miscellaneous A. Authority. The officers of CWI and NUOI executing this Agreement are duly authorized to do so and each party has taken all action required by law or otherwise to properly and legally execute this Agreement. B. Notices. Any notice under this Agreement shall be deemed to have been sufficiently given if sent by registered or certified mail, postage prepaid, addressed as follows: To NUOI: NuOasis International Incorporated 43 Elizabeth Avenue, Box N-8680 Nassau, Bahamas Telephone: (809) 326-2903 Facsimile: (809) 326-8434 To CWI: Cleopatra's World, Inc. P.O. Box 3186, Road Town Tortola, British Virgin Islands Telephone: (949) 475-7731 Facsimile: (949) 475-7738 or to any other address which may hereafter be designated by either party by notice given in such manner. All notices shall be deemed to have been given as of the date of receipt. C. Entire Agreement. This Agreement sets forth the entire understanding between the parties hereto and no other prior written or oral statement or agreement shall be recognized or enforced. D. Severability. If a court of competent jurisdiction determines that any clause or provision of this Agreement is invalid, illegal or unenforceable, the other clauses and provisions of the Agreement shall remain in full force and effect and the clauses and provision which are determined to be void, illegal or unenforceable shall be limited so that they shall remain in effect to the extent permissible by law. E. Assignment. None of the parties hereto may assign this Agreement without the express written consent of the other parties and any approved assignment shall be binding on and inure to the benefit of such successor or, in the event of death or incapacity, on assignor's heirs, executors, administrators and successors. F. Applicable Law. This Agreement has been negotiated and is being contracted for in the State of Nevada, it shall be governed by the laws of the State of Nevada, County of Clark, notwithstanding any conflict-of-law provision to the contrary. G. Attorney's Fees. If any legal action or other preceding (non-exclusively including arbitration) is brought for the enforcement of or to declare any right or obligation under this Agreement or as a result of a breach, default or misrepresentation in connection with any of the provisions of this Agreement, or otherwise because of a dispute among the parties hereto, the prevailing party will be entitled to recover actual attorney's fees (including for appeals and collection) and other expenses incurred in such action or proceeding, in addition to any other relief to which such party may be entitled. H. No Third Party Beneficiary. Nothing in this Agreement, expressed or implied, is intended to confer upon any person, other than the parties hereto and their successors, any rights or remedies under or by reason of this Agreement, unless this Agreement specifically states such intent. I. Counterparts. It is understood and agreed that this Agreement may be executed in any number of identical counterparts, each of which may be deemed an original for all purposes. J. Further Assurances. At any time, and from time to time after the Closing, each party hereto will execute such additional instruments and take such action as may be reasonably requested by the other party to confirm or perfect title to the NuOasis Note and the Flex Shares, or otherwise to carry out the intent and purposes of this Agreement. K. Broker's or Finder's Fee; Expenses. NUOI and CWI each warrant that they have not incurred any liability, contingent or otherwise, for brokers' or finders' fees or commissions relating to this Agreement for which the other party shall have responsibility. Except as otherwise provided herein, all fees, costs and expenses incurred by either party relating to this Agreement shall be paid by the party incurring same. L. Amendment or Waiver. Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing. At any time prior to Closing, this Agreement may be amended by a writing signed by all parties hereto. M. Headings. The section and subsection headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. N. Facsimile. A facsimile, telecopy or other reproduction of this instrument may be executed by one or more parties hereto and such executed copy may be delivered by facsimile or similar instantaneous electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties agree to execute an original of this instrument as well as any facsimile, telecopy or other reproduction hereof. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. "CWI" Cleopatra's World, Inc. By: /s/ Gabriel Tabarani Name: Gabriel Tabarani Title: Chairman "NUOI" NuOasis International, Incorporated By: /s/ Fred G. Luke Name: Fred G. Luke Title: President EX-22.1 16 SCHEDULE OF SUBSIDIARIES EXHIBIT 22.1 SCHEDULE OF SUBSIDIARIES OF THE COMPANY
Jurisdiction of Parent Percentage Subsidiary Incorporation Corporation Ownership Oasis Hotel, Resorts & Casino III ("Oasis III") Nevada Company 100% Cleopatra Palace Resorts and Casinos Limited United Kingdom Company 75% ("CPRC") Cleopatra Cap Gammarth Limited ("CCGL")(1) Ireland CPRC 90% Cleopatra's World Inc. ("CWI") British Virgin CPRC 90% Islands NuOasis Resorts & Casinos N.V.(1) Netherlands Company 80% Antilles
(1) In organization: capital stock not issued at June 30, 1999. EX-27 17 ART. 5 FDS FOR 12 MONTHS ENDED 6/30/99
5 12-MOS JUN-30-1999 JUN-30-1999 51,698 345,000 373,550 0 170,126 1,289,103 256,834 0 9,715,184 6,310,972 0 0 0 3,190 (6,947,755) 9,715,184 5,522,626 5,522,626 5,795,187 6,807,487 803,000 8,319,241 400,309 (10,807,411) 0 (10,807,411) 0 0 0 (10,807,411) (4.01) (4.01)
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