EXCHANGE AGREEMENT
THIS AGREEMENT dated January 5, 2001, by and between SILK
XXXXXXXXXX.XXX, INC., a Florida corporation (hereinafter called
"Company") and XXXXXX X. XXXXXXXX (hereinafter called "Shareholder").
W I T N E S S E T H:
WHEREAS, the Board of Director of the Company desire to
restructure the Company and in the best interests of its shareholders,
desires to uphold the contractual agreement which does not allow
dilution of the shareholder's stock position, and therefore have
adopted and approved this Exchange Agreement ("Agreement");
NOW, THEREFORE, in consideration of the mutual covenants,
agreements, warranties and representations contained in this Agreement
and in order to consummate the transactions described above, Company
and Shareholders approve and adopt this agreement and plan of
reorganization and mutually covenant and agree with each other as
follows:
1. Shares To Be Transferred and Shares To Be Issued
1.1 The Shareholder shall transfer to the Company certificates for
4,042,687 shares of the Company's common stock. These certificates
shall be duly endorsed in blank by the applicable Shareholder or
accompanied by duly executed stock powers in blank with signatures
guaranteed by a bank or trust Company or member firm of the New York
Stock Exchange, and shall be returned to the Company's Transfer Agent
and cancelled on the books of the Company.
1.2 In exchange for the Company's stock being transferred pursuant to
subparagraph 1.1, Company shall on the closing date, and
contemporaneously with the transfer of Company's common stock to it by
Shareholder, issue and deliver to the Shareholder 4,042,687 shares of
Company's Series 2000 Preferred Stock, having such rights and
preferences as set forth in the Written Consent of the Majority
Shareholders and Board of Directors adopted on December 26, 2000.
1.3 The shares of Series 2000 Preferred Stock being issued to
Shareholder are in consideration for the waiver of the non-dilution
provision as provided by contract between the parties.
2. Representations and Warranties of Shareholder
2.1 Ownership of Stock
Shareholder is the record and beneficial owner and holder of the
number of fully paid and nonassessable shares of the Company's common
stock listed in Paragraph 1.1 above as of this date and all shares of
Company common stock are owned free and clear of all liens,
encumbrances, charges and assessments of every nature and subject to
no restrictions with respect to transferability. The Shareholder has
Exhibit 4.1 - Pg. 1
full power and authority to assign and transfer his shares of the
Company in accordance with these terms.
2.2 Accuracy of All Statements Made by Shareholder
No representation or warranty by shareholder in this agreement, nor
any statement, certificate, schedule or exhibit furnished or to be
furnished by or on behalf of shareholder pursuant to this agreement,
nor any document or certificate delivered to the Company pursuant to
this agreement or in connection with actions contemplated, contains
or shall contain any untrue statement of material fact or omits or
shall omit a material fact necessary to make the statement contained
not misleading.
3. Representations and Warranties of Company
Company represents and warrants as follows:
3.1 Organization and Good Standing
Company is a corporation duly organized, validly existing and in good
standing under the laws of Florida.
3.2 Performance of This Agreement
The execution and performance of this agreement and the issuance of
stock contemplated have been authorized by the board of directors of
Company.
3.3 Legality of Shares To Be Issued
The shares of Company's preferred stock to be delivered pursuant to
this agreement, when delivered, will have been duly and validly
authorized and issued by Company and will be fully paid and
nonassessable.
3.4 Disclosure
No representation or warranty by either party in this Agreement, nor
any document, written information, statement or certificate furnished
or to be furnished by Company to Shareholder pursuant hereto or in
connection with the transactions contemplated hereby, contains or will
contain any untrue statement of a material fact, or omits or will omit
to state a material fact necessary to make the statements contained
herein or therein not misleading.
4. Law Governing
This agreement may not be modified or terminated orally, and shall be
construed and interpreted according to the laws of the State of
Florida.
5. Assignment
This agreement shall not be assigned by any party without the written
consent of the others.
6. Entire Agreement
This instrument embodies the entire agreement between the parties with
respect to the transactions contemplated, and there have been and are
no agreements, representations or warranties between the parties
other than those set forth or provided for.
Exhibit 4.1 - Pg. 2
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.
8. Headings
The headings in the paragraphs of this agreement are inserted for
convenience only and shall not constitute a part of the agreement.
9. Further Documents
Company and Shareholder agree to execute any and all other documents,
and to take any other action or corporate proceedings which may be
necessary or desirable to carry out the terms of this agreement.
IN WITNESS OF, the parties have caused this agreement to be duly
executed all as of the day and year first written above.
COMPANY: SILK XXXXXXXXXX.XXX, INC.
/s/_______________________________
By:
SHAREHOLDER:
/s/_______________________________
XXXXXX X. XXXXXXXX
Exhibit 4.1 - Pg. 3
EXHIBIT A
(1.) Shareholder shall be awarded 4,042,687 shares of Series 2000
Preferred Stock, convertible into common stock on a one for
one basis at any time after January 5, 2002.
Exhibit 4.1 - Pg. 4
