Auroraflex is a modifier that allows individual faces or vertices of an object, to move. For modern games, it might be used for speaking, making the lips move etc, for NWN it is not used at all on the head of a pc.
On the right hand side of your screen inside max, you have various things showing depending on what button you click along the top edge of that side. You need to look for the object that looks like a big blue arc. It will say "modify". Click on that.
Under that, you find the roll-out menu that gives you the ability to work with modifiers.
When you look at the actual modifier list for the "head" object (you have to have it selected), you will see the following:
AuroraTrimesh
AuroraFlex
EditableMesh
Each of those has a "+" next to it.
The way it all works, the AuroraTrimesh is the primary modifier, and it must ALWAYS be there for anything to do with NWN objects, creatures, etc.
The AuroraFlex modifier allows you to set the sensitivity of individual vertices or faces on the selected object, that sensitivity is controlled by a color chart, NWN only uses the red channel, and really is only reading that channel to get numbers for the "weight" of that specific face or vertice that is selected. It is really detailed, and I have already created a tutorial for how to use AuroraFlex located
here.
In your specific case, AuroraFlex is not needed. The easiest way to handle getting rid of the export error is to just right click on the AuroraFlex modifier and choose "collapse to"
You will get a warning message about losing animations... but there are NO animations assigned to that object anyway, so there is nothing to lose. Just answer yes.
Make sure you did NOT delete/collapse the AuroraTrimesh as you do need that modifier.
Now, re-select your mdl base and you can export.
Warning, this mdl came from some other game, the .max scene is looking for two separate texture files, (head_face.tga, and mouth_ey.tga). NWN will not allow you to assign two different textures to a single object. So, it won't work the way you expect it to work in game anyway.
You will have to re-uvw map a single texture to that head OR split the head into multiple objects so you can apply separate textures to each.