Exhibit
2.3
AGREEMENT AND PLAN OF
MERGER
This Agreement
and Plan of Merger is entered into this 18 th day of
September ,2006, by and among Pacific Magtron International
Corporation, Inc., a Nevada corporation (“PMIC”);
LiveWarehouse, Inc., a California corporation (“LW”);
and Herborium, Inc., a Delaware corporation
(“Herborium”).
RECITALS
:
WHEREAS , LW is a wholly-owned subsidiary of PMIC;
and
WHEREAS , Drs. Agnes P. Olszewski (“Dr.
Olszewski”) and James P. Gilligan (“Dr.
Gilligan”) (Drs. Olszewski and Gilligan are referred to as
the “Original Herborium Shareholders”) and other
individuals, as further identified on Schedule 3.04, collectively
own a 100% interest in Herborium (Olszewski, Gilligan and the other
individuals identified on Schedule 3.04 are collectively referred
to as the “Herborium Shareholders”); and
WHEREAS , on or about May 11, 2005, PMIC and LW, as well
as Pacific Magtron, Inc. (“PMI”) and Pacific Magtron
(GA), Inc. (“PMIGA”), filed for protection under the
United States Bankruptcy Code, 11 U.S.C. §§101 et
seq. , in the United States Bankruptcy Court for the District
of Nevada, (Case Nos. BK-S-05-14331 LBR, BK-S-05-14335 LBR, and
BK-S-05-14339 LBR, jointly administered under Case No.
BK-S-05-14326 LBR) (the “Bankruptcy Cases”);
and
WHEREAS , on or about June 21, 2006, PMIC and LW filed
their respective Fourth Amended Plans of Reorganization (the
“Plans”); and
WHEREAS , PMI and PMIGA liquidated in the Bankruptcy
Cases pursuant to Plans of Liquidation which were confirmed by
Bankruptcy Court Order entered on January 24, 2006; and
WHEREAS , on or about August 11, 2006, the United States
Bankruptcy Court entered an Order confirming the Plans of PMIC and
LW; and
WHEREAS , the board of directors of Herborium has
approved the Merger (as defined below) of LW with and into
Herborium in accordance with the provisions of this
Agreement.
NOW,
THEREFORE ,
intending to be legally bound hereby, the parties agree as
follows:
ARTICLE
I
DEFINITIONS
Unless
otherwise defined in this Agreement, when used herein, the
following terms shall have the meanings indicated:
"Affiliate"
shall mean with respect to PMIC, LW or Herborium, as the case may
be, any person or entity which directly or indirectly is in control
of, is controlled by or is under common control with such
corporation or entity.
"Certificate of
Merger" means the Certificate of Merger to be filed with the
Secretary of State of each of Delaware and California in the form
annexed hereto as Exhibit “A”.
"Claim" means
any claim, security interest, pledge, mortgage, lien, charge, deed
of trust, right of first refusal, option, conditional sale,
bailment, lease, encumbrance or other interest in property, real or
personal, tangible or intangible.
"Closing" means
the taking and completion of all actions required by this Agreement
to be taken at Closing or necessary and appropriate to carry out
the Merger and other transactions contemplated hereby to be
completed at Closing, all of which, except as otherwise provided
herein, shall be deemed taken at the same time and effective only
upon the completion of all such actions.
"Closing Date"
means on or before September 11, 2006, or any other date agreed by
the parties.
"Constituent
Corporations" means LW and Herborium.
"Effective
Time" has the meaning set forth in Section 2.01(a)
below.
"Herborium
Financials" means the balance sheet of Herborium for the fiscal
year ended November 30, 2004 and 2005, and the six months ending
May 31, 2006, together with the statements of income for the
twelve-month and six-month periods then ended as well as any
financial information during the gap period until Closing, copies
of which have previously been delivered by Herborium to
PMIC.
"Knowledge"
means the following: (a) an individual will be deemed to have
"Knowledge" of a particular fact or matter if: (i) such individual
is actually aware of such fact or other matter, or (ii) a prudent
individual could be expected to discover or otherwise become aware
of such fact or other matter in the course of conducting a
reasonably comprehensive investigation concerning the existence of
such fact or other matter; and (b) a Person (other than an
individual) will be deemed to have "Knowledge" of a particular fact
or other matter if any individual who is serving, or who has at any
time served, as a director or officer of such Person (or in a
similar capacity) has, or at any time had, Knowledge of such fact
or other matter.
"Liabilities"
means, as of any given date as to any given person, any Obligation
pursuant to which any other person now or with the passage of time
or upon the occurrence of any event in the future has or will have
a right to assert a claim for money or equitable relief, including,
without limiting the generality of the foregoing, taxes, fees,
assessments or pension, profit sharing or other employee benefit
plan contributions that have or may become due.
"Merger" means
the merger of LW with and into Herborium, as set forth in Section
2.01(a) below.
"Obligation"
means any legal obligation, whether matured or unmatured,
liquidated or unliquidated, absolute, fixed or contingent, disputed
or undisputed.
"PMIC
Financials" means the consolidated balance sheet of PMIC for the
fiscal year ending December 31, 2004 and 2005 and statements of
income and cash flows of PMIC for the twelve month periods then
ended, and statement of cash on hand for exclusive use in paying
distributions with respect to Allowed Claims and Equity Interests
of the Creditors of PMIC and LW under the Plans copies of which
have been delivered by PMIC to Herborium.
"Surviving
Corporation" shall mean Herborium.
ARTICLE
II
THE
MERGER
2.01.
Merger of the Constituent
Corporations
(a)
The Merger shall be effected as of,
and the term "Effective Time" shall mean, the date and time that
the Certificate of Merger is filed with the Secretary of State of
Delaware and the Secretary of State of California, whichever is
last to occur.
(b)
At the Effective Time and subject
to the terms and conditions of this Agreement, LW shall be merged
with and into Herborium and the separate existence of LW shall
cease. Herborium shall be the Surviving Corporation, and shall
continue its corporate existence and thereupon and thereafter
possess all rights, privileges, powers and franchises of a public
as well as a private nature of the Constituent Corporations, and be
subject to all the restrictions, disabilities and duties, and shall
assume full responsibility for all Claims, Obligations and
Liabilities, of each of the Constituent Corporations. At the
Effective Time, all of the property, personal and mixed, tangible
or intangible, and all of the franchises of each of the Constituent
Corporations, and all debts due to any of the Constituent
Corporations, on whatever account, shall be vested in the Surviving
Corporation.
(c)
As a result of the Merger,
the Certificate of Incorporation of Herborium, as in effect
immediately prior to the Effective Time shall be immediately after
the Effective Time the Certificate of Incorporation of the
Surviving Corporation, except that Article 4 should be amended to
provide that the authorized capital stock of the Surviving
Corporation shall consist of one (1) share of Common Stock, par
value $.001.
(d)
The Bylaws of Herborium, as in
effect immediately prior to the Effective Time, shall be
immediately after the Effective Time the Bylaws of the Surviving
Corporation until thereafter amended.
(e)
The directors of the Surviving
Corporation and PMIC shall be Dr. Agnes P. Olszewski, Dr. James P.
Gilligan, Max G. Ansbacher, Wayne I. Danson and an independent
director to be selected by a majority of the vote of the named
directors, to serve until their successors are duly elected by the
shareholders of the Surviving Corporation and PMIC, as the case may
be, or until their earlier death, resignation or
removal.
(f)
The officers of Herborium
immediately prior to the Effective Time shall, after the Effective
Time, be the officers of the Surviving Corporation and PMIC with
such title as designated in the Plans until their successors are
elected and qualified in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation or until
their earlier death, resignation or removal.
(g)
As soon as reasonably practicable
following the Effective Time, PMIC shall amend its Articles of
Incorporation and Bylaws, as may be necessary, and take all steps
reasonably necessary, including any filings with the United States
Securities and Exchange Commission, to change its registered
corporate name to Herborium Group, Inc. Concurrently with the
Closing, PMIC shall adopt the November 30 fiscal year end for tax
and accounting purposes.
(h)
For accounting purposes, Herborium
shall be deemed the “acquirer” since it will hold a
majority interest in post-Merger PMIC.
2.02.
Status and Conversion of
Securities .
(a)
At the Effective Time, without the
necessity of any action on the part of the Constituent Corporations
or PMIC, 100% of the interests held by the Herborium Shareholders
immediately prior to the Effective Time (the “Herborium
Interests”) shall be exchanged for 92,282,018 shares of
post-Merger PMIC authorized and previously unissued Common Stock
(“PMIC Stock”), certificates for which PMIC Stock shall
be delivered to the Herborium Shareholders at Closing in exchange
for the certificates representing the Herborium Interests, and the
issued and outstanding shares of PMIC Stock shall consist of
108,567,080 shares of PMIC Stock.
(b)
Any and all shares of LW Capital
Stock issued and outstanding immediately prior to the Effective
Time shall be converted into one share of Common Stock of the
Surviving Corporation and shall be owned by PMIC.
(c)
Each of PMIC, the Constituent
Corporations and the Original Herborium Shareholders respectively
agrees to use its or his best efforts to take all such action as
may be necessary or appropriate to effectuate the Merger in
accordance with the terms of this Agreement. If, at any time after
the Effective Time, any further action is necessary or desirable to
carry out the purposes of this Agreement and to vest in the
Surviving Corporation full right, title and possession to all
assets, property, rights, privileges, powers and franchises of any
of the Constituent Corporations, the officers of the Surviving
Corporation are fully authorized in the name of any of the
Constituent Corporations to take, and shall take, all such lawful
and necessary action.
(d)
In order to effectuate the
securities conversions contemplated by this Section 2.02, and as
contemplated by the Plans, all issued and outstanding PMIC Series A
Convertible Preferred Shares shall convert into 800,000 shares of
PMIC Stock. The post-Merger PMIC Stock ownership of PMIC shall be
divided among the Herborium Shareholders and other categories of
shareholders in accordance with the Plans and as set forth in
Section 2.02(a) above on Schedule 2.02 annexed hereto.
(e)
Each of PMIC, the Constituent
Corporations, and the Herborium Shareholders shall take all
reasonable steps necessary to complete and satisfy all requirements
of the United States Securities and Exchange Commission as a result
of this Merger and the transactions contemplated herein.
ARTICLE
III
HERBORIUM'S AND ORIGINAL
HERBORIUM SHAREHOLDERS’
REPRESENTATIONS AND
WARRANTIES
The following
representations and warranties are being given and made by
Herborium to induce PMIC and LW to enter into this Agreement and to
carry out the Merger and other transactions contemplated by this
Agreement, and Herborium acknowledges that PMIC and LW have relied
upon such representations and warranties.
3.01.
Organization and
Qualification .
Herborium is a corporation duly organized, validly existing and in
good standing under the laws of Delaware, has the corporate power
and authority to carry on its business as such business is now
being conducted and to enter into and perform its obligations
hereunder. Herborium has no offices in the United States outside of
the State of New Jersey and is not required to qualify as a foreign
corporation to do business in any other jurisdiction in which the
failure to qualify would have a material adverse effect on
Herborium. Herborium will qualify as a foreign corporation to do
business in California for purposes of effecting the Merger.
Herborium has one wholly-owned subsidiary, Herborium.com,
Inc.
3.02.
Authorization of
Agreement and Approval of Merger . The execution, delivery and performance of
this Agreement by Herborium has been duly and validly authorized
and approved by its Board of Directors and Herborium Shareholders
and no further corporate action or authorization on the part of
Herborium is required to deliver this Agreement and perform the
transactions contemplated hereby, and this Agreement is a legal,
valid and binding obligation of Herborium, enforceable against it
in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium and other laws
affecting creditors’ rights generally, from time to time, in
effect and to general equitable principles.
3.03.
No
Conflict . To
the best of its Knowledge, neither the execution and delivery of
this Agreement nor the consummation of the transactions
contemplated hereby, nor compliance by any of the parties with
any of the provisions hereof, will (a) conflict with or result in
any breach of any provision of the Articles of Incorporation or
By-laws of Herborium (b) require any consent, approval,
authorization or permit of, or filing with or notification to, any
governmental or regulatory authority or any other person except for
such as will have been obtained or given on or before Closing,
except for such that would not have a material adverse effect on
Herborium and except for certain filings with the United States
Securities and Exchange Commission and “blue sky”
filings with certain state securities authorities; (c) result in a
default (or give rise to any right of renegotiation, termination,
cancellation or acceleration) under any of the terms, conditions or
provisions of any agreement or other instrument to which Herborium
is a party or by which any of the assets of Herborium are bound; or
(d) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Herborium. Copies of Herborium's
Certificate of Incorporation and By-laws, as amended through the
date hereof, heretofore delivered to PMIC are complete, accurate,
and such Certificate of Incorporation and By-laws are in full force
and effect.
3.04.
Equitable Interests in
Herborium .
Except as provided in Schedule 3.04, there are no holders of
outstanding Herborium Interests or other Herborium Shareholders.
The Herborium Interests have been duly authorized, are validly
issued and outstanding, and are fully-paid and nonassessable, with
no personal liability attaching to the ownership thereof. Except as
set forth in Schedule 3.04, Herborium does not have any capital
stock or other interests outstanding, and Herborium has no
outstanding stock appreciation or similar rights, nor do there
exist any convertible securities, warrants, rights, options, or
other contractual rights or commitments pursuant to which any
person may cause or require authorized but unissued shares of
capital stock or any other security of Herborium to be issued to
any person. Neither of the Original Herborium Shareholders is a
party to any agreement by which any person may have the right to
require such Shareholder to transfer all, part of or any interest
in any of such Shareholder’s Herborium Interests nor is
either of the Original Herborium Shareholders a party to any
agreement or instrument granting any proxy or restricting such
Shareholder's voting of such interest or giving another person the
right to vote such interests. To the best of its Knowledge,
Herborium does not believe that any of the Herborium Shareholders
is a party to any agreement by which any person may have the right
to require such Shareholder to transfer all, part of or any
interest in any of such Shareholder’s Herborium Interests nor
are any of the Herborium Shareholders a party to any agreement or
instrument granting any proxy or restricting such Shareholder's
voting of such interest or giving another person the right to vote
such interests.
3.05.
Financial
Information .
(a)
As of May 31, 2006, except as set
forth in the Herborium Financials or as described in Schedule 3.04
and 3.05, Herborium had no material Liabilities, contingent or
otherwise, and there were no Claims against property of Herborium.
The Herborium Financials fairly present Herborium's financial
position as of their respective dates, and the results of
operations for the respective periods then ended.
(b)
Except as otherwise disclosed in
Schedule 3.05, since May 31, 2006, and until Closing, Herborium has
not incurred and will not incur any Liabilities other than in the
ordinary course of business, consistent with past practices, except
for professional fees in connection with the transactions described
in this Agreement, which fees shall be paid by Herboriu