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AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

AGREEMENT AND PLAN OF MERGER | Document Parties: HERBORIUM | PACIFIC MAGTRON INTERNATIONAL CORPORATION INC You are currently viewing:
This Agreement and Plan of Merger involves

HERBORIUM | PACIFIC MAGTRON INTERNATIONAL CORPORATION INC

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Title: AGREEMENT AND PLAN OF MERGER
Governing Law: Delaware     Date: 9/22/2006
Industry: Computer Peripherals     Law Firm: Eckert Seamans; Feder Kaszovitz     Sector: Technology

AGREEMENT AND PLAN OF MERGER, Parties: herborium , pacific magtron international corporation inc
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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.

 

2


 

 

"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.

 

3


 

 

(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.

 

4


 

 

(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.

 

5


 

 

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


 
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