EXHIBIT 10.3
AGREEMENT AND PLAN OF EXCHANGE
This AGREEMENT AND PLAN OF EXCHANGE (the "Exchange Agreement"), is made as
of March 1, 1997, by and between Exactly Sportswear, Inc., a Nevada Corporation
("ESI"), Seirios Staff Services, Inc., a Nevada corporation ("SSS") and each of
the stockholders of SSS who hereafter tender their shares for exchange as
provided herein ("SSS Stockholders"). The principal business address of SSS is
00000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, and the principal business
address of ESI is Xxx Xxxx Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx
00000-000.
The authorized capital stock of SSS consists of 50,000,000 shares of Common
Stock, par value $0.001 ("SSS Common Stock") and 5,000,000 shares of Preferred
Stock, par value $0.001, and the authorized capital stock of ESI consists of
50,000,000 shares of Common Stock, $0.001 par value (the "ESI Common Stock").
The Directors of both ESI and SSS deem it advisable and to the advantage of said
Corporations that ESI acquire SSS as a subsidiary upon the terms and conditions
provided herein.
NOW THEREFORE, the parties hereby adopt the plan of reorganization
encompassed by this Exchange Agreement and hereby agree that ESI shall acquire
SSS as a subsidiary on the following terms, conditions and other provisions.
1. Terms and Conditions.
1.1 Exchange. Pursuant to this Agreement, all issued and outstanding
shares of SSS Common Stock are being transferred and assigned to ESI in exchange
for ESI capital stock as follows:
(a) The SSS Stockholders listed on Exhibit A attached hereto shall
transfer and assign to ESI SSS Common Stock in exchange for ESI Common Stock at
the rate of one share of SSS Common Stock for three fully paid and nonassessable
shares of ESI Common Stock, or a total of 12,800,000 shares of SSS Common Stock
for 38,400,000 shares of ESI Common Stock.
(b) Within 20 days following the completion of the exchange described in
paragraph 1.1(a) above, ESI shall take all action required by law, its articles
of incorporation, and its bylaws to effect the following actions:
(i) To effect a three-to-one reverse split in the issued and
outstanding ESI Common Stock;
(ii) Amend the Articles of Incorporation of ESI by striking Article
One in its entirety and replacing therefor:
ARTICLE ONE. (NAME). The name of the corporation is:
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Seirios International, Inc.
(iii) Amend the Articles of Incorporation of ESI by striking Article
Four in its entirety and replacing therefor:
ARTICLE FOUR. (CAPITAL STOCK)
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1. Shares, Classes and Series Authorized. The total number of shares
of all classes of capital stock which the corporation shall have authority
to issue is 55,000,000 shares. Stockholders shall not have any preemptive
rights, nor shall stockholders have the right to cumulative voting in the
election of Directors or for any other purpose. The classes and the
aggregate number of shares of stock of each class which the Corporation
shall have authority to issue are as follows:
(a) 50,000,000 shares of common stock, $0.001 par value ("Common Stock")
(b) 5,000,000 shares of preferred stock, $0.001 par value ("Preferred
Stock").
2. Powers and Rights of the Preferred Stock. The Preferred Stock may
be issued from time to time in one or more series, with such distinctive
serial designations as may be stated or expressed in the resolution or
resolutions providing for the issue of such stock adopted from time to time
by the Board of Directors, and in such resolution or resolutions providing
for the issuance of shares of each particular series, the Board of
Directors is also expressly authorized to fix: the right to vote, if any;
the consideration for which the shares of such series are to be issued; the
number of shares constituting such series, which number may be increased
(except as otherwise fixed by the Board of Directors) or decreased (but not
below the number of shares thereof then outstanding) from time to time by
action of the Board of Directors; the rate of dividends upon which and the
times at which dividends on shares of such series shall be payable and the
preference, if any, which such dividends shall have relative to dividends
on shares of any other class or classes or any other series of stock of the
Corporation; whether such dividends shall be cumulative or noncumulative,
and if cumulative, the date or dates from which dividends on shares of such
series shall be cumulative; the rights, if any, which the holders of shares
of such series shall have in the event of any voluntary or involuntary
liquidation, merger, consolidation, distribution or sale of assets,
dissolution or winding up of the affairs of the Corporation, the rights, if
any, which the holders of shares of such series that shall have to convert
such shares into or exchange such shares for shares of any other class or
classes or any other series of stock of the Corporation or for any debt
securities of the Corporation and the terms and conditions, including price
and rate of exchange, of such conversion or exchange; whether shares of
such series shall be subject to redemption, and the redemption price or
prices and other terms of redemption, if any, for shares of such series
including, without limitation, a redemption price or prices payable in
shares of Common Stock; the terms and amounts of any sinking fund for the
purchase or redemption of shares of such series; and any and all other
designations, preferences, and relative, participating, optional or other
special rights, qualifications, limitations or restrictions thereof
pertaining to shares of such series' permitted by law.
3. Issuance of the Common Stock and the Preferred Stock. The Board
of Directors of the Corporation may from time to time authorize by
resolution the issuance of any or all shares of the Common Stock and the
Preferred Stock herein authorized in accordance with the terms and
conditions set forth in these Articles of Incorporation for such purposes
in such amounts, to such persons, corporations or entities, for such
consideration, and in the case of the Preferred Stock, in one or more
series, all as the Board of Directors in its discretion may determine and
without any vote or other action by the Stockholders, except as otherwise
required by law. The capital stock, after the amount of the subscription
price, or par value, has been paid in shall not be subject to assessment to
pay the debts of the Corporation.
(iv) Amend the Articles of Incorporation of ESI by the addition of
Article Twelve as follows:
ARTICLE TWELVE. (OFFICER AND DIRECTOR LIABILITY). To the fullest
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extent that the Nevada Revised Statutes exist on the date hereof or as
they may hereafter be amended permits the limitation or elimination of the
liability of Directors and Officers, no Director or Officer of the
Corporation shall be liable to the Corporation or its Stockholders for
monetary damages for breach of fiduciary duty as a Director or Officer. No
amendment to these Articles of Incorporation, directly or indirectly by
merger, consolidation, or otherwise, having the effect of amending or
repealing any of the provisions of this Article Twelve shall apply to have
any effect on the liability or alleged liability of any Director or
Officer of the Corporation for or with respect to any acts or omissions of
such Director or Officer occurring prior to such amendment or repeal,
unless such amendment shall have the effect of further limiting or
eliminating such liability.
(v) Amend the Articles of Incorporation of ESI by the addition of
Article Thirteen as follows:
ARTICLE THIRTEEN. (CONTROLLING INTEREST/ INTERESTED STOCKHOLDERS).
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The Corporation elects not to be governed by the terms and provisions of
Sections 78.378 through 78.3793, inclusive, and Sections 78.411 through
78.444, inclusive, of the Nevada Revised Statutes, as the same may be
amended, superseded, or replaced by any successor section, statute, or
provision. No amendment to these Articles of Incorporation, directly or
indirectly, by merger or consolidation or otherwise, having the effect of
amending or repealing any of the provisions of this Article Thirteen shall
apply to or have any effect on any transaction involving acquisition of
control by any person or any transaction with an interested stockholder
occurring prior to such amendment or repeal.
(c) Within 20 days following the completion of the actions described in
paragraph 1.1(b). above, the SSS Stockholders listed on Exhibit B attached
hereto shall transfer and assign to ESI SSS Common Stock in exchange for ESI
non-voting convertible preferred stock ("ESI Preferred Stock"), at the rate of
20,000 shares of SSS Common Stock for one fully paid and nonassessable share of
ESI Preferred
Stock, or a total of 1,240,000 shares of SSS Common Stock for 62 shares of ESI
Common Stock.
2. Additional Covenants.
2.1 Directors. Immediately upon the completion of the actions described in
paragraph 1.1(a), above, each of the Directors of ESI shall resign in favor of
the appointment of a new Director designated by SSS, and the Board of Directors
of ESI will take all corporate action required to effect the change in the
membership of the Board of Directors to the designees of SSS.
2.2 Options and Warrants. Within 20 days following the completion of the
actions described in paragraph 1.1(b), above, ESI will take all action required
to adopt, assume, and continue the stock option plan of SSS and any successor
plan or plans, the outstanding and unexercised portions of all options to buy
SSS Common Stock shall become options for the proportionate number of shares of
ESI Common Stock with no other changes in the terms and conditions of such
options, including exercise prices.
2.3 Amendment. At any time prior to the completion of the actions
described in paragraph 1.1(a), above, this Exchange Agreement may be amended in
any manner as may be determined in the judgment of the respective Boards of
Directors of SSS and ESI to be necessary, desirable or expedient in order to
clarify the intention of the parties hereto or to effect or facilitate the
purpose and intent of this Exchange Agreement.
2.4 Abandonment. At any time prior to the completion of the actions
described in paragraph 1.1(a), above, this Exchange Agreement may be terminated
and the exchange may be abandoned by the Board of Directors of SSS or ESI.
2.5 Reverse Splits. For a period of two years following the completion of
the actions described in paragraph 1.1(a), above, neither ESI nor any of its
successors shall effect a reverse split in the issued and outstanding common
stock of ESI; provided, that this restriction shall not apply from and after the
date on which any "person", as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended ("Exchange Act"), (other than
ESI, a majority-owned subsidiary of ES, an affiliate of ESI within the meaning
of the Exchange Act, or an employee benefit plan of ESI, including any trustee
of such plan acting as trustee), is or becomes a "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
ESI (or a successor to ESI) representing 60% or more of the combined voting
power of the then outstanding securities of ESI or such successor.
2.6 SSS Status and Approval. As an inducement to, and to obtain the
reliance of ESI, SSS represents and warrants as follows:
(a) SSS is a corporation duly organized and validly existing under the
laws of the state of Nevada. The execution and delivery of this Exchange
Agreement does not, and the consummation of the transactions contemplated by
this Exchange Agreement in accordance with the terms hereof will not: violate
any provision of the Articles of Incorporation, Charter or Bylaws of SSS, result
in the breach of, constitute a default under, result in the acceleration of,
create in any person the right to accelerate, terminate, modify, cancel, or
require any notice
under, any material agreement, contract, lease, license, instrument, or other
arrangement to which SSS is a party or by which it is bound or to which any of
its assets is subject, or, violate any statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court of which SSS has knowledge and to which it is
subject, the result of which would have a material adverse effect on the
proposed business operations, assets, or financial condition of SSS.
(b) SSS has full power and authority, and has taken all action required by
law, its Articles of Incorporation and Bylaws, and otherwise to execute and
deliver this Exchange Agreement and to perform its obligations hereunder.
Without limiting the generality of the foregoing, the Board of Directors of SSS
has duly authorized the execution, delivery, and performance of this Exchange
Agreement by SSS. This Exchange Agreement represents the valid and binding
obligation of SSS enforceable in accordance with its terms.
2.7 ESI Status and Approval. As an inducement to, and to obtain the
reliance of SSS, ESI represents and warrants as follows:
(a) ESI is a corporation duly organized and validly existing under the
laws of the state of Nevada. The execution and delivery of this Exchange
Agreement does not, and the consummation of the transactions contemplated by
this Exchange Agreement in accordance with the terms hereof will not: violate
any provision of the Articles of Incorporation, Charter or Bylaws of SSS, result
in the breach of, constitute a default under, result in the acceleration of,
create in any person the right to accelerate, terminate, modify, cancel, or
require any notice under, any material agreement, contract, lease, license,
instrument, or other arrangement to which ESI is a party or by which it is bound
or to which any of its assets is subject, or, violate any statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court of which ESI has knowledge and
to which it is subject, the result of which would have a material adverse effect
on the proposed business operations, assets, or financial condition of ESI.
(c) ESI has full power and authority, and has taken all action required by
law, its Articles of Incorporation and Bylaws, and otherwise to execute and
deliver this Exchange Agreement and to perform its obligations hereunder.
Without limiting the generality of the foregoing, the Board of Directors of ESI
has duly authorized the execution, delivery, and performance of this Exchange
Agreement by ESI. This Exchange Agreement represents the valid and binding
obligation of ESI enforceable in accordance with its terms.
2.7 Governing Law. This Exchange Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada.
IN WITNESS WHEREOF, this Exchange Agreement has been signed as of the date
first-above written for and on behalf of the Corporate parties hereto by the
undersigned thereunto duly authorized.
SEIRIOS STAFF SERVICES, INC. EXACTLY SPORTSWEAR, INC.
/s/ XXXXX XXXXXXX /s/ XXXXXX X. XXXXXXX
By:____________________________ By:________________________________
Xxxxx Xxxxxxx, President Xxxxxx X. Xxxxxxx, President
