Agreement and Plan of Reorganization
by and between
Bayview Corporation
a Nevada corporation
and
Xpention
a Colorado corporation
dated: February 15, 2005
AGREEMENT AND PLAN OF REORGANIZATION
Bayview Corporation
and
Xpention
This Agreement and Plan of Reorganization ("Agreement"), dated as of
February, 2005, among Bayview Corporation (BVC), a Nevada Corporation, Xpention
("XPI"), a Colorado Corporation, and the subscribing shareholders of Xpention
("XPI Shareholders") who will join this Agreement by execution.
W I T N E S S E T H:
A. WHEREAS, XPI and BVC are corporations duly organized under the laws
of the State of Colorado and Nevada, respectively.
B. Plan of Reorganization. The subscribing XPI Shareholders are the
owners of at least 100% of the issued and outstanding common stock of XPI. It is
the intention that 100% of the issued and outstanding stock of XPI shall be
acquired by BVC in exchange solely for its voting stock. For federal income tax
purposes it is intended that this exchange shall qualify as a reorganization
within the meaning of SEC 368 (a)(1)(B) of the Internal Revenue Code of 1986, as
amended (the "Code").
C. Exchange of Shares. BVC and the subscribing XPI Shareholders agree
that 100% of the approximately 1,000 common shares issued and outstanding of XPI
shall be exchanged with BVC for 1,100,000 shares of the common stock of BVC. The
BVC shares, on the closing date, shall be delivered ratably divided to the
individual subscribing shareholders of XPI in exchange for their XPI shares as
hereinafter set forth.
D. WHEREAS, the parties hereto wish to enter into this Agreement,
pursuant to the provisions of the Nevada Corporation Act.
NOW, THEREFORE, it is agreed among the parties as follows:
ARTICLE I
The Consideration
1.1 Subject to the conditions set forth herein on the "Closing Date"
(as herein defined), the subscribing Shareholders of XPI shall exchange all of
their shares of XPI (constituting at least 100% of the issued and outstanding
common stock of XPI) for
2
1,100,000 common shares of BVC common stock. The transactions contemplated by
this Agreement shall be completed at a closing ("Closing") on a closing date
("Closing Date") which shall be as soon as practicable after joinder in this
exchange by XPI Shareholders holding 100% of the outstanding XPI common shares,
except that such transaction must be completed on or before February 28, 2005 or
this Agreement shall expire unless extended in writing.
All of the documents to be furnished to BVC and XPI, including the
documents to be furnished pursuant to Article VII of this Agreement, shall be
delivered to M.A. Xxxxxxx, to be held in escrow until the Closing Date or the
date of termination of this Agreement, whichever first occurs, and thereafter
shall be promptly distributed to the parties as their interests may appear.
1.2 At the Closing Date, XPI shall become a wholly owned subsidiary of
BVC. Shareholders shall receive pro rata shares of voting common stock as
follows:
BVC shall issue 1,100,000 of its shares of common stock for
100% of the outstanding common shares of XPI to the
subscribing shareholders of XPI, ratably according to their
interests.
1.3 If this Agreement is duly executed by the holders of 100% of the
outstanding common stock of XPI, subject to the other provisions hereof, it
shall become effective, and such date of final execution shall be the effective
date of this Agreement.
ARTICLE II
Issuance and Exchange of Shares
2.1 The shares of common stock of BVC shall be issued by it to the
subscribing XPI shareholders at Closing.
2.2 BVC represents that no outstanding options or warrants for its
unissued shares exist.
2.3 The stock transfer books of XPI shall be closed on the Closing Date, and
thereafter no transfers of the stock of XPI shall be made. XPI shall appoint M.
A. Xxxxxxx as exchange agent ("Exchange Agent"), to accept surrender of the
certificates representing the common shares of XPI, and to deliver in exchange
for such surrendered certificates, shares of common stock of BVC.
2.4 No fractional shares of BVC stock shall be issued as a result of
the Agreement. Shares shall be rounded up to nearest whole share.
2.5 At the Closing Date, each holder of a certificate or certificates
representing common shares of XPI, upon presentation and surrender of such
certificate or certificates to the Exchange Agent, shall be entitled to receive
the consideration set forth herein.
3
ARTICLE III
Representations, Warranties
and Covenants of Xpention
No representations or warranties are made by any director, officer,
employee or shareholder of XPI as individuals, except as and to the extent
stated in this Agreement or in a separate written statement (the "XPI Disclosure
Statement"), if any. XPI hereby represents, warrants and covenants to BVC except
as stated in the XPI Disclosure Statement, as follows:
3.1 XPI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado, and has the corporate power
and authority to own or lease its properties and to carry on its business as it
is now being conducted. The Certificate of Incorporation and Bylaws of XPI are
complete and accurate, and the minute books of XPI contain a record, which is
complete and accurate in all material respects, of all meetings, and all
corporate actions of the shareholders and board of directors of XPI.
3.2 The aggregate number of shares which XPI is authorized to issue is
100,000,000 shares of common stock of which 1,000 shares are issued and
outstanding; and no shares of preferred stock.
3.3 XPI has complete and unrestricted power to enter into and, upon the
appropriate approvals as required by law, to consummate the transactions
contemplated by this Agreement.
3.4 Neither the making of nor the compliance with the terms and
provisions of this Agreement and consummation of the transactions contemplated
herein by XPI will conflict with or result in a breach or violation of the
Articles of Incorporation or Bylaws of XPI.
3.5 The execution, delivery and performance of this Agreement has been
duly authorized and approved by XPI' Board of Directors.
3.6 There are no legal proceedings or regulatory proceedings involving
material claims pending, or to the knowledge of the executive officers of XPI,
threatened against XPI or affecting any of its assets or properties, and to the
knowledge of XPI' officers, XPI is not in any material breach or violation of or
default under any contract or instrument to which XPI is a party, or under its
respective Articles of Incorporation or Bylaws, nor is there any court or
regulatory order pending, applicable to XPI.
4
3.7 The representations and warranties of XPI shall be true and correct
as of the date hereof and as of the Closing Date.
3.8 No representation or warranty by XPI in this Agreement, the XPI
Disclosure Statement or any certificate delivered pursuant hereto contains any
untrue statement of a material fact or omits to state any material fact
necessary to make such representation or warranty not misleading.
3.9 Prior to Closing, XPI will deliver to BVC audited financial
statements of XPI dated December 31, 2004. All such statements, herein sometimes
called "XPI Financial Statements," are (and will be) complete and correct in all
material respects and, together with the notes to these financial statements,
present fairly the financial position and results of operations of XPI for the
periods indicated. All financial statements of XPI will have been prepared in
accordance with generally accepted accounting principles.
3.10 Since the dates of the XPI Financial Statements, there have not
been any material adverse changes in the business or condition, financial or
otherwise, of XPI. XPI does not have any material liabilities or obligations,
secured or unsecured except as shown on the updated financials of XPI dated
December 31, 2004 (whether accrued, absolute, contingent or otherwise).
ARTICLE IV
Representations, Warranties and Covenants of
Bayview Corporation.
No representations or warranties are made by any director, officer,
employee or shareholder of BVC as individuals, except as and to the extent
stated in this Agreement or in a separate written statement.
BVC hereby represents, warrants and covenants to XPI and its
shareholders, except as stated in the BVC Disclosure Statement, as follows:
4.1 BVC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada, and has the corporate power and
authority to own or lease its properties and to carry on its business as it is
now being conducted. The Articles of Incorporation and Bylaws of BVC, copies of
which have been delivered to XPI, are complete and accurate, and the minute
books of BVC contain a record, which is complete and accurate in all material
respects, of all meetings, and all corporate actions of the shareholders and
Board of Directors of BVC.
4.2 The aggregate number of shares which BVC is authorized to issue is
100,000,000 shares of common stock and 10,000,000 shares of preferred stock, of
which 3,272,500 shares of such common stock are issued and outstanding, fully
paid and non-assessable, and will be at the Closing under this Agreement. BVC
will have, on the Closing Date, no outstanding options, warrants or other rights
5
to purchase, or subscribe to, or securities convertible into or exchangeable for
any shares of capital stock. No preferred stock of BVC is outstanding.
4.3 BVC has complete and unrestricted power to enter into and, upon the
appropriate approvals as required by law, to consummate the transactions
contemplated by this Agreement. Neither the making of nor the compliance with
the terms and provisions of this Agreement and consummation of the transactions
contemplated herein by BVC will conflict with or result in a breach or violation
of the Articles of Incorporation or Bylaws of BVC.
4.4 BVC has filed all reports required under the Rules and Regulations
of the Securities Exchange Act of 1934 with the exception of the 10QSB for
period ended November 30, 2004, which is in the process of being prepared.
4.5 The execution of this Agreement has been duly authorized and
approved by the Board of Directors of BVC.
4.6 BVC has delivered to XPI audited financial statements of BVC dated
May 31, 2004, herein sometimes called "BVC Financial Statements," are (and will
be) complete and correct in all material respects and, together with the notes
to these financial statements, present fairly the financial position and results
of operations of BVC for the periods indicated. All statements of BVC will have
been prepared in accordance with generally accepted accounting principles.
4.7 Since the dates of the BVC Financial Statements, there have not
been any material adverse changes in the business or condition, financial or
otherwise, of BVC. BVC does not have any material liabilities or obligations,
secured or unsecured except as shown on the updated (unaudited) of BVC dated
August 31,2004 (whether accrued, absolute, contingent or otherwise).
4.8 There are no legal proceedings or regulatory proceedings involving
material claims pending, or, to the knowledge of the officers of BVC, threatened
against BVC or affecting any of its assets or properties, and BVC is not in any
material breach or violation of or default under any contract or instrument to
which BVC is a party, and no event has occurred which with the lapse of time or
action by a third party could result in a material breach or violation of or
default by BVC under any contract or other instrument to which BVC is a party or
by which they or any of their respective properties may be bound or affected, or
under their respective Articles of Incorporation or Bylaws, nor is there any
court or regulatory order pending, applicable to BVC.
4.9 BVC shall not enter into or consummate any transactions prior to
the Closing Date other than in the ordinary course of business and will pay no
dividend, or increase the compensation of officers and will not enter into any
agreement or transaction which would adversely affect its financial condition
except pursuant to the proposed minutes of the Board of Directors of BVC
presented herewith for approval by XPI.
6
4.10 The representations and warranties of BVC shall be true and
correct as of the date hereof and as of the Closing Date.
4.11 BVC corporate books and records are true records of its actions.
BVC will also deliver to XPI on or before the Closing Date any reports relating
to the financial and business condition of BVC which occur after the date of
this Agreement and any other reports sent generally to its shareholders after
the date of this Agreement.
4.12 BVC has no employee benefit plan in effect at this time.
4.13 BVC is not current in its filing obligations under the federal
securities laws. No report filed by BVC with the Securities and Exchange
Commission contains any untrue statement of a material fact or omits to state
any material fact necessary to make such representation or warranty not
misleading, and all such reports comply as to form and substance in all material
respects with all applicable SEC requirements.
4.14 BVC agrees that all rights to indemnification now existing in
favor of the employees, agents, directors or officers of XPI and its
subsidiaries, as provided in the Articles of Incorporation or Bylaws or
otherwise in effect on the date hereof shall survive the transactions
contemplated hereby in accordance with their terms, and BVC expressly assumes
such indemnification obligations of XPI.
4.15 BVC shall file within 10 days hereafter, the 10QSB which is
currently due to be filed with the Securities Exchange Commission pursuant to
Section 13 and Section 15d of the Securities exchange Act of 1034.
ARTICLE V
Obligations of the Parties Pending the Closing Date
5.1 At all times prior to the Closing Date during regular business
hours, each party will permit the other to examine its books and records and the
books and records of its subsidiaries and will furnish copies thereof on
request. It is recognized that, during the performance of this Agreement, each
party may provide the other parties with information which is confidential or
proprietary information. The recipient of such information shall at all times
protect such information from disclosure, other than disclosure required by
rule, regulation, or law, other than to members of its own or affiliated
organizations and its professional advisers, in the same manner as it protects
its own confidential or proprietary information from unauthorized disclosure,
and not use such information to the competitive detriment of the disclosing
party. In addition, if this Agreement is terminated for any reason, each party
shall promptly return or cause to be returned all documents or other written
records of such confidential or proprietary information, together with all
copies of such writings and, in addition, shall either furnish or cause to be
furnished, or shall destroy, or shall maintain with such standard of care as is
exercised with respect to its own confidential or proprietary information, all
copies of all documents or other written records developed or prepared by such
7
party on the basis of such confidential or proprietary information. No
information shall be considered confidential or proprietary if it is (a)
information already in the possession of the party to whom disclosure is made,
(b) information acquired by the party to whom the disclosure is made from other
sources, or (c) information in the public domain or generally available to
interested persons or which at a later date passes into the public domain or
becomes available to the party to whom disclosure is made without any wrongdoing
by the party to whom the disclosure is made.
5.2 BVC and XPI shall promptly provide each other with information as
to any significant developments in the performance of this Agreement, and shall
promptly notify the other if it discovers that any of its representations,
warranties and covenants contained in this Agreement or in any document
delivered in connection with this Agreement was not true and correct in all
material respects or became untrue or incorrect in any material respect.
5.3 All parties to this Agreement shall take all such action as may be
reasonably necessary and appropriate and shall use their best efforts in order
to consummate the transactions contemplated hereby as promptly as practicable.
ARTICLE VI
Procedure For Exchange
6.1 At the Closing Date, the exchange shall be effected upon completion
of all conditions in Article VII and receipt by M. A. Xxxxxxx, as Escrow Agent,
of the XPI common stock certificates representing 100% of the issued and
outstanding common stock of XPI, together with the signed Exchange Agreement,
containing the information necessary to issue the BVC shares to the exchanging
shareholders of XPI, by instructing the transfer agent of BVC to issue the new
certificates and sending the certificates of BVC by Federal Express to the
exchanging shareholders.
ARTICLE VII
Conditions Precedent to the
Consummation of the Exchange
The following are conditions precedent to the consummation of the
Agreement on or before the Closing Date:
7.1 XPI and BVC shall have performed and complied with all of its
respective obligations hereunder which are to be complied with or performed on
or before the Closing Date and BVC and XPI shall provide one another at the
Closing with a certificate to the effect that such party has performed each of
the acts and undertakings required to be performed by it on or before the
Closing Date pursuant to the terms of this Agreement.
8
7.2 This Agreement, the transactions contemplated herein shall have
been duly and validly authorized, approved and adopted, at meetings of the
shareholders of XPI duly and properly called for such purpose in accordance with
the applicable laws.
7.3 No action, suit or proceeding shall have been instituted or shall
have been threatened before any court or other governmental body or by any
public authority to restrain, enjoin or prohibit the transactions contemplated
herein, or which might subject any of the parties hereto or their directors or
officers to any material liability, fine, forfeiture or penalty on the grounds
that the transactions contemplated hereby, the parties hereto or their directors
or officers, have violated any applicable law or regulation or have otherwise
acted improperly in connection with the transactions contemplated hereby, and
the parties hereto have been advised by counsel that, in the opinion of such
counsel, such action, suit or proceeding raises substantial questions of law or
fact which could reasonably be decided adversely to any party hereto or its
directors or officers.
7.4 All actions, proceedings, instruments and documents required to
carry out this Agreement and the transactions contemplated hereby and the form
and substance of all legal proceedings and related matters shall have been
approved by counsel for XPI and BVC.
7.5 The representations and warranties made by XPI and BVC in this
Agreement shall be true as though such representations and warranties had been
made or given on and as of the Closing Date.
7.6 XPI shall have furnished BVC with:
(1) Audited Financial Statements to December 31, 2004 prepared
in accordance with Securities Exchange Regulations as applicable.
7.7 a) BVC shall furnish XPI with a certified copy of a resolution or
resolutions duly adopted by the Board of Directors of BVC, approving this
Agreement and the transactions contemplated by it, and appointing new officers
and directors as contemplated in this agreement.
b) BVC shall have filed its 10Qsb for period ended November
30, 2004 with the Securities Exchange Commission pursuant to applicable rules.
ARTICLE VIII
Termination and Abandonment
8.1 Anything contained in this Agreement to the contrary
notwithstanding, the Agreement may be terminated and abandoned at any time prior
to the Closing Date:
(a) By mutual consent of XPI and BVC;
9
(b) By XPI, or BVC, if any condition set forth in Article VII
relating to the other party has not been met by the effective date or has not
been waived in writing by the other party;
(c) By XPI, or BVC, if any suit, action or other proceeding
shall be pending or threatened by the federal or a state government before any
court or governmental agency, in which it is sought to restrain, prohibit or
otherwise affect the consummation of the transactions contemplated hereby;
(d) By any party, if there is discovered any material error,
misstatement or omission in the representations and warranties of another party;
(e) By any party if the Closing Date passes without
performance.
8.2 Any of the terms or conditions of this Agreement may be waived in
writing at any time by the party which is entitled to the benefit thereof, by
action taken by its Board of Directors provided; however, that such action shall
be taken only if, in the judgment of the Board of Directors taking the action,
such waiver will not have a materially adverse effect on the benefits intended
under this Agreement to the party waiving such term or condition.
ARTICLE IX
Termination of Representation and
Warranties and Certain Agreements
9.1 The respective representations and warranties of the parties hereto
shall expire with, and be terminated and extinguished three years after the
Closing Date of the Agreement; provided, however, that the covenants and
agreements of the parties hereto shall survive in accordance with their terms.
ARTICLE X
Miscellaneous
10.1 This Agreement embodies the entire agreement between the parties,
and there have been and are no agreements, representations or warranties among
the parties other than those set forth herein or those provided for herein.
10.2 To facilitate the execution of this Agreement, any number of
counterparts hereof may be executed, and each such counterpart shall be deemed
to be an original instrument, but all such counterparts together shall
constitute but one instrument.
10.3 All parties to this Agreement agree that if it becomes necessary
or desirable to execute further instruments or to make such other assurances as
are deemed necessary, the party requested to do so will use its best efforts to
10
provide such executed instruments or do all things necessary or proper to carry
out the purpose of this Agreement.
10.4 This Agreement may be amended upon approval of the Board of
Directors of each party provided that the shares issuable hereunder shall not be
amended without approval of the requisite shareholders of XPI.
10.5 Any notices, requests, or other communications required or
permitted hereunder shall be delivered personally or sent by overnight courier
service, fees prepaid, addressed as follows:
To: Xpention:
To: Bayview Corporation:
or such other addresses as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
received.
10.6 No press release or public statement will be issued relating to
the transactions contemplated by this Agreement without prior approval of XPI
and BVC. However, either XPI or BVC may issue at any time any press release or
other public statement it believes on the advice of its counsel it is obligated
to issue to avoid liability under the law relating to disclosures, but the party
issuing such press release or public statement shall make a reasonable effort to
give the other party prior notice of and opportunity to participate in such
release or statement.
10.7 The Board of Directors of BVC shall appoint the following
individuals to the Board of Directors of BVC concurrent with the closing of the
transaction contemplated in this agreement :
1. Xxxxx Xxxxxxxx
2. Xxxxx Xxxxxxxxx
10.8 Mssrs. Kittrell and Xxxxxxxxx shall be appointed effective
immediately and the resignation of the current Board members shall be effective
the at the close of the Meeting at which new directors are appointed.
10.10 Mssrs. Ng and Xxxxxxxx shall resign as officers at closing, on
the form provided by XPI.
11
IN WITNESS WHEREOF, the parties have set their hands and seals this
15th day of February, 2005.
Bayview Corporation
By: /s/ Xxxx Xxxxx
------------------------------------------
Xxxx Xxxxx as attorney-in-fact for Xxxxx
Xxxxxxxx, President
Attest: /s/ Xxxx Xxxxx
----------------------------------
Xxxx Xxxxx as attorney-in-fact for
Xxxx Xx, Secretary
Xpention
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
President
Attest: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Secretary
Xpention SHAREHOLDERS (by signature below or pursuant to execution of the
Exchange Agreement and Representations incorporating this Agreement by
reference.)
Signatures Please Print Names
1 Xxxxx X. Xxxxxxxx Xxxxx X. Xxxxxxxx
----------------- -----------------
12
