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Exhibit 2
Execution
AGREEMENT AND PLAN OF
MERGER
BY AND AMONG
PACKETPORT.COM,
INC.
PACKETPORT ACQUISITIONS,
INC.
WYNDSTORM
CORPORATION
Dated as of October 31,
2007
AGREEMENT AND PLAN OF
MERGER
This Agreement and Plan of Merger (this
“ Agreement ”) is made and entered into
as of October 31, 2007, by and among Packetport.com, a Nevada
corporation (“ Parent ”); Packetport
Acquisitions, Inc., a Delaware corporation and a wholly-owned
subsidiary of Parent (“ Merger Sub ”) and
Wyndstorm Corporation, a Delaware corporation (the “
Company ”).
RECITALS
WHEREAS, the respective Boards of
Directors of Parent, Merger Sub and the Company have determined
that the merger of Merger Sub with and into the Company, in the
manner contemplated herein (the “ Merger
”), is desirable and in the best interests of their
respective stockholders and, by resolutions duly adopted, have
approved and adopted this Agreement; and
WHEREAS, the parties desire to make
certain representations, warranties, covenants and agreements in
connection with the Merger and also to prescribe various conditions
to the Merger.
NOW, THEREFORE, in consideration of
these premises and their promises hereinafter set forth, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1
The Merger. Upon the terms and
subject to the conditions set forth in this Agreement, and in
accordance with the Delaware General Corporation Law (the “
DGCL ”), Merger Sub shall be merged with and
into the Company at the Effective Time (as defined below). As a
result of the Merger, the separate corporate existence of Merger
Sub shall cease and the Company shall continue its existence under
the laws of the State of Delaware as a wholly-owned subsidiary of
Parent. The Company, in its capacity as the corporation surviving
the Merger, is hereinafter sometimes referred to as the “
Surviving Corporation .”
1.2
Effective Time. As promptly as
practicable on the Closing Date (as defined below), the parties
shall cause the Merger to be consummated by filing with the
Secretary of State of the State of Delaware (the “
Delaware Secretary of State ”) a certificate of
merger (the “ Certificate of Merger ”) in
such form as is required by and executed in accordance with the
DGCL. The Merger shall become effective (the “
Effective Time ”) when the Certificate of
Merger has been filed with the Delaware Secretary of State or at
such later time as shall be agreed upon by Parent and the Company
and specified in the Certificate of Merger. Prior to the filing
referred to in this Section 1.2, a Closing Date (the “
Closing Date ”) shall be held at the offices of
Bingham McCutchen, 2020 K Street, NW., Washington, D.C. 20007, or
such other place as the parties may agree upon, as soon as
practicable (but in any event within ten (10) business days)
following the date upon which all conditions set forth in Article
VI that are capable of being satisfied prior to the Closing Date
have been satisfied or waived, or at such other date as Parent and
the Company may agree; provided that the conditions set forth in
Article VI have been satisfied or waived at or prior to such date.
The date on which the Closing Date takes place is referred to
herein as the “ Closing Date .” For all
purposes, the Closing Date shall be effective as of 11:59 p.m. on
the Closing Date.
1.3
Effects of the Merger. At and
after the Effective Time, the separate existence of Merger Sub will
cease, and the Company, as the Surviving Corporation and successor,
shall succeed to all of the rights and property of Merger Sub and
the Company, and shall be subject to all the debts and liabilities
of Merger Sub and the Company except as otherwise expressly
provided in reference to this Agreement.
1.4
Certificate of Incorporation and
Bylaws. The Certificate of Incorporation of the Surviving
Corporation shall be amended in its entirety to contain the
provisions set forth in the Certificate of Incorporation of Merger
Sub, as in effect immediately prior to the Effective Time (the
“ Merger Sub Certificate ”), and
(b) the Bylaws of Merger Sub, as in effect immediately prior
to the Effective Time (the “ Merger Sub Bylaws
”), shall be the Bylaws of the Surviving Corporation; in each
case, until amended in accordance with the DGCL.
ARTICLE II
CONVERSION OF
SECURITIES
2.1
Merger Consideration; Conversion of
Capital Stock.
At the Effective Time, by virtue of the
Merger and without any action on the part of Parent, Merger Sub or
the Company or their respective stockholders, each share of the
Company’s common stock (“ Company Common
Stock ”) issued and outstanding immediately prior to
the Effective Time shall be converted into, and shall represent the
right to receive such number of shares of Parent Common Stock (as
defined in Section 3.6)(such aggregate number of shares, the
“ Merger Consideration ”) equaling 86% of
the issued and outstanding shares of Parent Common Stock, computed
on a fully diluted basis, taking into account any outstanding
warrants, options or other rights with regard to Parent Common
Stock. The Merger Consideration shall be allocated and distributed
as set forth on Schedule 1.
2.2
Conversion of Merger Sub Stock.
Each share of capital stock of Merger Sub outstanding at the
Effective Time shall be converted into and become one validly
issued, fully paid and non-assessable share of common stock of the
Surviving Corporation.
2.3
Exchange of
Certificates.
(a)
Exchange Procedures .
(i)
Promptly after the Closing Date, the
Surviving Corporation shall send to all the Company stockholders
(the “ Stockholders ”) a notice informing
such Stockholders of the consummation of the Merger, instructing
such Stockholders to deliver duly endorsed stock certificates to
the Surviving Corporation within the twenty (20) day period
following the date of such notice (the “ Delivery
Period ”). In exchange for such delivery of the stock
certificates, such Stockholder shall receive, as soon as
practicable after the end of the Delivery Period, stock
certificates in Parent.
(ii)
If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact
by the person claiming such Certificate to be lost, stolen or
destroyed and, if required by Parent, the posting by such person of
a bond in such reasonable amount as Parent may direct as indemnity
against any claim that may be made against it with respect to such
Certificate, Parent will deliver in exchange for such lost, stolen
or destroyed Certificate, the Merger Consideration, payable at
Closing Date, with respect to the shares of the Company Capital
Stock that were represented by such Certificate, as provided in
this Article II.
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(b)
No Further Ownership Rights in the
Company Common Stock. All Merger Consideration issued and/or
paid and any cash payments in lieu of fractional shares upon
surrender of Certificates (or affidavits) in accordance with the
terms hereof shall be deemed to have been issued and/or paid in
full satisfaction of all rights pertaining to such shares of the
Company Common Stock represented thereby, and, as of the Closing
Date, the stock transfer books of the Company shall be closed and
there shall be no further registration of transfers on the stock
transfer books of the Company of shares of the Company Common Stock
outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be cancelled and exchanged
as provided in this Section 2.4.
(c)
Restrictive Legend. Each
certificate evidencing shares of Parent Common Stock issued
pursuant to this Agreement shall bear the following legend in
conspicuous type:
THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY STATE
SECURITIES LAWS. THE SHARES MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION
WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT
SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF PARENT AND MERGER SUB
In order to induce the Company to enter
into this Agreement, Parent and Merger Sub, jointly and severally,
hereby represent and warrant to the Company that the statements
contained in this Article III are true, correct and complete,
except as otherwise expressly set forth in this Article III as of
the date hereof and as of the Closing Date unless another date is
expressly stated below or except as otherwise set forth in the
Parent Disclosure Schedule attached to this Agreement.
3.1
Organization and
Standing.
(a)
Each of Parent, Merger Sub and each
other subsidiary of Parent is or prior to Closing Date shall be a
corporation duly organized, validly existing and, where applicable,
in good standing under the laws of its state of incorporation with
corporate power and authority to own, lease, use and operate its
properties and to conduct its business as and where now owned,
leased, used, operated and conducted.
(b)
Each of Parent, Merger Sub and each
other subsidiary of Parent is or prior to Closing Date shall be
duly qualified to do business and in good standing in each
jurisdiction in which the nature of the business conducted by it or
the property it owns, leases or operates, requires it to so
qualify, except where failure to be so qualified would not have a
Material Adverse Effect. Parent is not in default in the
performance, observance or fulfillment of any provision of the
Articles of Incorporation of the Parent, as amended (the “
Parent Articles ”), or the bylaws of the
Parent, as amended, as in effect on the date hereof (the “
Parent Bylaws ”), and Merger Sub and each other
subsidiary of Parent is not in default in the performance,
observance or fulfillment of any provisions of its Certificate of
Incorporation or Bylaws.
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3.2
Corporate Power and Authority.
Each of Parent and Merger Sub has all requisite corporate power and
authority to enter into and deliver this Agreement to perform its
obligations hereunder and to consummate the transactions
contemplated by this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby by Parent and Merger Sub has been duly authorized by all
necessary corporate action on the part of each of Parent and Merger
Sub, other than as provided in Section 3.8. This Agreement has
been duly executed and delivered by each of Parent and Merger Sub
and shall constitute the legal, valid and binding obligation of
each of Parent and Merger Sub enforceable against each of them in
accordance with its terms, except to the extent that such
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the
enforcement of creditors’ rights generally or by general
equitable principles.
3.3
Conflicts; Consents and
Approvals. Neither the execution and delivery of this Agreement
by Parent and Merger Sub nor the consummation of the transactions
contemplated hereby will:
(a)
conflict with, or result in a breach of
any provision of, the Parent Articles or the Parent Bylaws, the
Merger Sub Certificate or the Merger Sub Bylaws or the governing
documents of any other subsidiary of Parent;
(b)
materially violate, or conflict with, or
result in a material breach of any provision of, or constitute a
material default (or an event that, with the giving of notice, the
passage of time or otherwise, would constitute a default) under, or
entitle any party (with the giving of notice, the passage of time
or otherwise) to terminate, accelerate, modify or call a material
default under, or result in the creation of any material
Encumbrance (as defined below) upon any of the properties or assets
of Parent or any of its subsidiaries under, any of the terms,
conditions or provisions of any material note, bond, mortgage,
indenture, deed of trust, license, contract, undertaking,
agreement, lease or other instrument or obligation to which Parent
or any of its subsidiaries is a party (for purposes of this
Agreement, “ Encumbrance ” means any
charge, claim, mortgage, servitude, easement, right of way,
equitable interest, lease or other possessory interest, conditional
sale or other title retention arrangement, lien, pledge, security
interest, preference, priority, right of first refusal or similar
restriction);
(c)
materially violate any (i) order,
writ, injunction, decree, statute, ruling, assessment, or
arbitration or award of any governmental authority or
(ii) applicable laws relating to Parent or any of its
subsidiaries or their respective properties or assets;
or
(d)
require any action or consent or
approval of, or review by, or registration or filing by Parent or
any of its affiliates with, any third party or any governmental
authority, other than (i) registrations or other actions
required under federal and state securities laws or the rules and
regulations of the national securities exchange or national
securities quotation system on which the Parent Common Stock is
then listed, and (ii) the filing of the Certificate of Merger
with the Delaware Secretary of State.
3.4
Actions. There are no Actions
pending or, to the knowledge of Parent, threatened against Parent
or Merger Sub, including any Action which questions the validity of
this Agreement or the Merger or any action taken or to be taken
pursuant hereto or pursuant to the Merger, or relating to its
method of doing business or its relationship with past or existing
users or purchasers of any goods or services, and there is no
outstanding order, writ, injunction or decree of any governmental
authority against Parent or Merger Sub. With regard to the SEC
Investigations (as defined and disclosed in the Parent Disclosure
Schedule), Parent has no liability to the SEC and the directors and
management have no liability to the SEC in excess of $275,000 in
the aggregate. For purposes of this Agreement, “
Action ” means any action, arbitration, audit,
examination, suit, proceeding, hearing or litigation, whether
formal or informal, and whether public or private, commenced,
brought, conducted or heard by or before any court or governmental
authority.
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3.5
Financial Ability. At the
Effective Time, Parent will have a sufficient number of shares of
Parent Common Stock authorized to pay the Merger
Consideration.
3.6
Capitalization of
Parent.
(a)
The authorized capital stock of Parent
consists of 149,000,000 common shares (the “ Parent
Common Stock ”). At the date of this Agreement,
(i) 22,107,520 shares of Parent Common Stock are issued and
outstanding, (ii) 3,750,000 shares of Parent Common Stock are
reserved for issuance upon the exercise or conversion of options,
warrants or convertible securities granted or issuable by Parent,
including pursuant to Parent’s stock option and stock
purchase plans. Each outstanding share of Parent Common Stock is
duly authorized and validly issued, fully paid and nonassessable
and has not been issued in violation of any preemptive or similar
rights. The issuance and sale of all of the shares of Parent Common
Stock described in this Section 3.6 have been in compliance in
all material respects with applicable federal and state securities
laws.
(b)
As of the date hereof, other than as set
forth in clause (a) above, there are no outstanding
subscriptions, options, warrants, puts, calls, agreements,
understandings, claims or other commitments or rights of any type
relating to the issuance, sale, repurchase or transfer by Parent of
any securities of Parent, nor are there outstanding any securities
which are convertible into or exchangeable for any shares of Parent
Common Stock, and Parent has no obligation of any kind to issue any
additional securities or to pay for or repurchase any securities of
Parent or any predecessor.
(c)
The shares of Parent Common Stock to be
issued at the Effective Time have been duly authorized and will, at
the Effective Time, be fully paid and nonassessable and issued in
reliance on exceptions from the registration and qualification
requirements of federal and state securities laws.
(d)
The transactions contemplated by this
Agreement, including without limitation, the issuance of Parent
Common Stock and the ownership of the Parent Common Stock by the
Stockholders, will not create any obligation by Parent to sell or
otherwise issue any shares of Parent Common Stock or any other
securities, or otherwise cause the application of, any control
share acquisition, shareholder approval requirement (other than the
Parent Stockholder Approval), poison pill (including any
distribution under a rights agreement) or other similar
anti-takeover provision under the Parent Articles or the laws of
the state of its incorporation or other applicable law.
(e)
Prior to Closing Date, Parent Common
Stock shall have been reverse split 1:20 so as to provide this
transaction with between 8,000,000 and 12,000,000 shares of Parent
Common Stock for consideration.
3.7
Brokerage and Finders’
Fees. Neither Parent nor any stockholder, director, officer or
employee thereof has incurred or will incur on behalf of Parent or
any of its affiliates, any brokerage, finders’ or similar fee
in connection with the transactions contemplated by this Agreement,
other than to Source Capital Group, 276 Post Road West, Westport,
CT 06880.
3.8
Board Recommendation; Required
Vote. The Board of Directors of Parent, at a meeting duly
called and held, has by the requisite vote of those directors
present and constituting a quorum of the directors then in office
(a) determined that this Agreement and the transactions
contemplated hereby, including the Merger, are fair to and in the
best interests of Parent and its stockholders, and (b) has
recommended that the stockholders of Parent vote for approval of
the issuance of Parent Common Stock.
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The affirmative vote of a majority of
the total votes cast by the holders of Parent Common Stock, in
favor of the issuance of Parent Common Stock, if any, is the only
vote of the Parent stockholders necessary to approve the issuance
of the consummation of the Merger and the authorization, issuance
and payment of the Merger Consideration.
3.9
Parent SEC Documents.
(a) Parent has timely filed with the U.S. Securities and
Exchange Commission (the “ Commission ” ) all
forms, reports, schedules, statements and other documents
(including exhibits and other information incorporated therein)
required to be filed by it since July 1, 2004 under the
Securities Act of 1933, as amended (the “ Securities
Act ” ), or the Securities Exchange Act of 1934, as
amended (the “ Exchange Act ”) (such
documents, as supplemented and amended since the time of filing,
collectively, the “ Parent SEC Documents
”). No subsidiary of Parent is required to file any form,
report, registration statement, prospectus or other document with
the Commission.
(b)
The Parent SEC Documents, including any
financial statements or schedules included in the Parent SEC
Documents, at the time filed (and, in the case of registration
statements and proxy statements, on the dates of effectiveness and
the dates of mailing, respectively and, in the case of any Parent
SEC Document amended or superseded by a filing prior to the date of
this Agreement, then on the date of such amending or superseding
filing): (i) did not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading and (ii) complied in all material respects with
the applicable requirements of the Exchange Act and the Securities
Act, as the case may be.
(c)
The financial statements of Parent
(including the related notes) included in the Parent SEC Documents
at the time filed (and, in the case of registration statements and
proxy statements, on the dates of effectiveness and the dates of
mailing, respectively, and, in the case of any Parent SEC Document
amended or superseded by a filing prior to the date of this
Agreement, then on the date of such amending or superseding filing)
complied in all material respects with applicable accounting
requirements and with the published rules and regulations of the
Commission with respect thereto, were prepared in accordance with
GAAP applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto or, in the case of
unaudited statements, as permitted by Form 10-Q or Form 10-QSB of
the Commission), and fairly present (subject, in the case of
unaudited statements, to normal, recurring audit adjustments not
material in amount) in all material respects the consolidated
financial position of Parent and its consolidated subsidiaries as
at the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended.
3.10
Specific Matters
Parent represents and warrants that, as
of the Closing Date, there is no liability to the Company or Parent
regarding any of the following matters:
(a)
any matter relating to any creditor or
successor in interest who trades under the name of Themis or
similar related name;
(b)
any matter relating to any creditor or
successor in interest who trades under the name of NewChip or
similar related name;
(c)
any matter relating to any creditor or
successor in interest who trades under the name of GKLZ or similar
related name;
(d)
any matter relating to any creditor or
successor in interest who trades under the name of Portellis or
similar related name; or
(e)
any matter relating to any creditor or
successor in interest who trades under the name of Transcom or
similar related name.
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3.11
Undisclosed Liabilities . As of
the Closing Date, neither Parent nor Merger Sub has any liabilities
or obligations of any nature (whether accrued, absolute, contingent
or otherwise) other than (a) accrued liabilities disclosed on
Parent’s consolidated financial statements, or in the notes
thereto, not to exceed $80,000 with respect to Ronald A. Durando
and $150,000 with respect to any other parties, each incurred prior
to January 31, 2007, (b) additional liabilities not to
exceed $50,000 incurred from January 31, 2007 through the
Closing Date, each as set forth in the Parent Disclosure
Schedule.
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
In order to induce Parent to enter into
this Agreement, the Company hereby represents and warrants to
Parent and Merger Sub that the statements contained in this
Agreement are true, correct and complete, except as
otherwise expressly set forth herein, as of the date hereof and as
of the Closing Date unless another date is expressly stated below
or as otherwise set forth in the Company Disclosure Schedule
attached to this Agreement.
4.1
Organization and
Standing.
Upon execution of this Agreement, the
Company shall be a corporation duly organized and validly existing
under the laws of the State of Delaware with full corporate power
and authority to own, lease, use and operate its properties and to
conduct its business as and where now owned, leased, used, operated
and conducted.
Prior to Closing Date, the Company shall
be duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of the business
conducted by it or t
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