ACQUISITION AGREEMENT AND PLAN OF MERGER
DATED AS OF OCTOBER 16, 2001
BETWEEN
CORONADO EXPOLORATIONS LTD.
AND
NATUROL, INC.
TABLE OF CONTENTS
ARTICLE 1. The Merger 1
Section 1.1. The Merger 1
Section 1.2. Effective Time 1
Section 1.3. Closing of the Merger 2
Section 1.4. Effects of the Merger 2
Section 1.5. Board of Directors and Officers 2
Section 1.6. Conversion of Shares 3
Section 1.7. Exchange of Certificates 3
Section 1.8. Stock Options 4
Section 1.9. Taking of Necessary Action;
Further Action 4
ARTICLE 2. Representations and Warranties of Coronado 5
Section 2.1. Organization and Qualification 5
Section 2.2. Capitalization of Coronado 5
Section 2.3. Authority Relative to this Agreement; Recommendation. 6
Section 2.4. SEC Reports; Financial Statements 6
Section 2.5. Information Supplied 7
Section 2.6. Consents and Approvals; No Violations 7
Section 2.7. No Default 8
Section 2.8. No Undisclosed Liabilities; Absence of Changes 8
Section 2.9. Litigation 8
Section 2.10. Compliance with Applicable Law 9
Section 2.11. Employee Benefit Plans; Labor Matters 9
Section 2.12. Environmental Laws and Regulations 11
Section 2.13. Tax Matters 11
Section 2.14. Title To Property 12
Section 2.15. Intellectual Property 12
Section 2.16. Insurance 12
Section 2.17. Vote Required 12
Section 2.18. Tax Treatment 13
Section 2.19. Affiliates 13
Section 2.20. Certain Business Practices 13
Section 2.21. Insider Interests 13
Section 2.22. Opinion of Financial Adviser 13
Section 2.23. Brokers 13
Section 2.24. Disclosure 13
Section 2.25. No Existing Discussion 13
Section 2.26. Material Contracts 14
ARTICLE 3. Representations and Warranties of Naturol. 14
Section 3.1. Organization and Qualification 14
Section 3.2. Capitalization of Naturol 15
Section 3.3. Authority Relative to this Agreement; Recommendation 16
Section 3.4. SEC Reports; Financial Statements 16
Section 3.5. Information Supplied 16
Section 3.6. Consents and Approvals; No Violations 17
Section 3.7. No Default 17
Section 3.8 No Undisclosed Liabilities; Absence of Changes 17
Section 3.9. Litigation 18
Section 3.10. Compliance with Applicable Law 18
Section 3.11. Employee Benefit Plans; Labor Matters 19
Section 3.12. Environmental Laws and Regulations 20
Section 3.13. Tax Matters 20
Section 3.14. Title to Property 21
Section 3.15. Intellectual Property 21
Section 3.16. Insurance 21
Section 3.17. Vote Required 21
Section 3.18. Tax Treatment 22
Section 3.19. Affiliates 22
Section 3.20. Certain Business Practices 22
Section 3.21. Insider Interests 22
Section 3.22. Opinion of Financial Adviser 22
Section 3.23. Brokers 22
Section 3.24. Disclosure 22
Section 3.25. No Existing Discussions 22
Section 3.26. Material Contracts 22
ARTICLE 4. Covenants 23
Section 4.1. Conduct of Business of Coronado 23
Section 4.2. Conduct of Business of Naturol 25
Section 4.3. Preparation of 8-K and the Proxy Statement 27
Section 4.4. Other Potential Acquirers 27
Section 4.5. Meetings of Stockholders 27
Section 4.6. NASD OTC:BB Listing 28
Section 4.7. Access to Information 28
Section 4.8. Additional Agreements; Reasonable Efforts. 28
Section 4.9. Employee Benefits; Stock Option and Employee
Purchase Plans 28
Section 4.10. Public Announcements 29
Section 4.11. Indemnification 29
Section 4.12. Notification of Certain Matters 30
ARTICLE 5. Conditions to Consummation of the Merger 30
Section 5.1. Conditions to Each Party's Obligations to
Effect the Merger 30
Section 5.2. Conditions to the Obligations of Coronado 31
Section 5.3. Conditions to the Obligations of Naturol 31
ARTICLE 6. Termination; Amendment; Waiver 32
Section 6.1. Termination 33
Section 6.2. Effect of Termination 33
Section 6.3. Fees and Expenses 33
Section 6.4. Amendment 33
Section 6.5. Extension; Waiver 33
ARTICLE 7. Miscellaneous 34
Section 7.1. Nonsurvival of Representations and Warranties 34
Section 7.2. Entire Agreement; Assignment 34
Section 7.3. Validity 34
Section 7.4. Notices 34
Section 7.5. Governing Law 35
Section 7.6. Descriptive Headings 35
Section 7.7. Parties in Interest 35
Section 7.8. Certain Definitions 35
Section 7.9. Personal Liability 35
Section 7.10. Specific Performance 36
Section 7.11. Counterparts 36
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement"), dated as of
October 16, 2001, is between CORONADO EXPOLORATIONS LTD., a Delaware
corporation ("Coronado") with a place of business at 000 Xxxxxxx Xxxxxx,
Xxxxx 000, XX, Xxxxxx, X0X 0X0, and NATUROL, INC., a Nevada corporation
("Naturol") with a place of business at 0000 Xxxxxxxxx Xxx, Xxx Xxxxx, XX
00000.
Whereas, the Boards of Directors of Coronado and Naturol each have, in
light of and subject to the terms and conditions set forth herein, (i)
determined that the Merger (as defined below) is fair to their respective
stockholders and in the best interests of such stockholders and (ii) approved
the Merger in accordance with this Agreement;
Whereas, for Federal income tax purposes, it is intended that the Merger
qualify as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
Whereas, Coronado and Naturol 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 the premises and the
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, Coronado and Naturol hereby agree as
follows:
ARTICLE I
The Merger
Section 1.1. The Merger. Prior to the Effective Time (as defined below)
Coronado shall take such action as is necessary to form a new corporation, as
a wholly owned subsidiary of Coronado, Coronado Subsidiary Corp. ("CSC") as a
Nevada corporation. At the Effective Time and upon the terms and subject to
the conditions of this Agreement and in accordance with the General
Corporation Law of the state of Nevada (the "NGCL"), CSC shall be merged with
and into Naturol (as defined below) (the ``Merger`). Following the Merger,
Naturol shall continue as the surviving corporation (the "Surviving
Corporation"), shall continue to be governed by the laws of the jurisdiction
of its incorporation or organization and the separate corporate existence of
CSC shall cease. Naturol shall continue its existence as a wholly owned
subsidiary of Coronado. Prior to the Effective Time, the parties hereto
shall mutually agree as to the name of the Surviving Corporation; however,
initially the Surviving Corporation shall be named NATUROL, INC., a Delaware
corporation. The Merger is intended to qualify as a tax-free reorganization
under Section 368 of the Code as relates to the non-cash exchange of stock
referenced herein.
Section 1.2. Effective Time. Subject to the terms and conditions set
forth in this Agreement, a Certificate of Merger (the "Merger Certificate")
shall be duly executed and acknowledged by each of Naturol, CSC and Coronado,
and thereafter the Merger Certificate reflecting the Merger shall be
delivered to the Secretary of State of the State of Nevada for filing
pursuant to the NGCL on the Closing Date (as defined in Section 1.3). The
Merger shall become effective at such time as a properly executed and
certified copy of the Merger Certificate is duly filed by the Secretary of
State of the State of Nevada in accordance with the NGCL or such later time
as the parties may agree upon and set forth in the Merger Certificate (the
time at which the Merger becomes effective shall be referred to herein as the
"Effective Time"). Concurrently, at the Effective Time Coronado shall amend
its Certificate of Incorporation to change its name to Naturol, Inc.
Section 1.3. Closing of the Merger. The closing of the Merger (the
"Closing") will take place at a time and on a date to be specified by the
parties, which shall be no later than the second business day after
satisfaction of the latest to occur of the conditions set forth in Article 5
(the "Closing Date"), at the offices of Sperry Young & Xxxxxxxxxx, 0000 X.
Xxxxxxxx Xx., Xxxxx 000, Xxx Xxxxx, Xxxxxx, unless another time, date or
place is agreed to in writing by the parties hereto.
Section 1.4. Effects of the Merger. The Merger shall have the effects
set forth in the NGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all the properties, rights,
privileges, powers of CSC shall vest in the Surviving Corporation, and all
debts, liabilities and duties of CSC shall become the debts, liabilities and
duties of the Surviving Corporation. Concurrently, Naturol shall remain a
wholly owned subsidiary of Coronado.
Section 1.5. Board of Directors and Officers.
(a) Board of Directors of CSC. At or prior to the Effective Time,
Coronado agrees to take such action as is necessary (i) to cause the number
of directors comprising the full Board of Directors of CSC to be one (1)
person and (ii) to cause Xxxxxxx X. Hethey, (the "Coronado Designee") to be
elected as director of CSC.
(b) Board of Directors of Coronado. At or prior to the Effective Time,
each of Naturol and Coronado agrees to take such action as is necessary (i)
to cause the number of directors comprising the full Board of Directors of
Coronado to be three (3) persons and (ii) to cause Xxxx XxXxxxx, Xxxxx Xxxx,
and Xxxxxxx X. Ram, (the "Naturol Designees") to be elected as directors of
Coronado. In addition, majority stockholders of Coronado at the Effective
Time shall take all action necessary to cause, to the greatest extent
practicable, the Naturol Designees to serve on Coronado's Board of Directors
until the 2002 Annual Meeting. If the Naturol Designee, respectively, shall
decline or be unable to serve as a director prior to the Effective Time,
Naturol shall nominate another person to serve in such person's stead, which
such person shall be subject to approval of the other party. From and after
the Effective Time, and until successors are duly elected or appointed and
qualified in accordance with applicable law, Xxxx XxXxxxx shall be Chief
Executive Officer, President Chairman, Xxxxx Xxxx shall be Secretary and
Treasurer of Coronado.
Section 1.6. Conversion of Shares.
(a) At the Effective Time, each share of common stock, par value $.001
per share of Naturol (individually a "Naturol Share" and collectively, the
"Naturol Shares") issued and outstanding immediately prior to the Effective
Time shall, by virtue of the Merger and without any action on the part of
Naturol, Coronado, CSC or the holder thereof, be converted into and shall
become fully paid and nonassessable Coronado common shares determined by
dividing (i) Fifty Million (50,000,000), by (ii) the total number of shares
of Naturol, anticipated to be Fifty Million (50,000,000) outstanding at the
Effective Time (such quotient, the "Exchange Ratio"). The holder of one or
more shares of Naturol common stock shall be entitled to receive in exchange
therefor a number of shares of Coronado Common Stock equal to the product of
(x) (the number of shares of Naturol common stock (50,000,000), times (y)
(the Exchange Ratio). Coronado Shares and Naturol Shares are sometimes
referred to collectively herein as "Shares." By way of example,
50,000,000/50,000,000 = 1.00 (the Exchange Ratio). The number of shares of
Naturol common stock held by a stockholder (100,000) times the Exchange Ratio
of 1.00 equals 100,000 shares of Coronado Shares to be issued.
(b) At the Effective Time, each Naturol Share held in the treasury of
Naturol, by Naturol immediately prior to the Effective Time shall, by virtue
of the Merger and without any action on the part of Naturol, CSC or Coronado
be canceled, retired and cease to exist and no payment shall be made with
respect thereto.
Section 1.7. Exchange of Certificates.
(a) Prior to the Effective Time, Coronado shall enter into an agreement
with, and shall deposit with, Sperry Young & Xxxxxxxxxx, or such other agent
or agents as may be satisfactory to Coronado and Naturol (the "Exchange
Agent"), for the benefit of the holders of Naturol Shares, for exchange
through the Exchange Agent in accordance with this Article I: (i)
certificates representing the appropriate number of Coronado Shares to be
issued to holders of Naturol Shares issuable pursuant to Section 1.6 in
exchange for outstanding Naturol Shares.
(b) As soon as reasonably practicable after the Effective Time, the
Exchange Agent shall mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding Naturol Shares (the "Certificates") whose shares were converted
into the right to receive Coronado Shares pursuant to Section 1.6: (i) a
letter of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon delivery
of the Certificates to the Exchange Agent and shall be in such form and have
such other provisions as Naturol and Coronado may reasonably specify) and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing Coronado Shares. Upon surrender of a
Certificate to the Exchange Agent, together with such letter of transmittal,
duly executed, and any other required documents, the holder of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole Coronado Shares and, if applicable, a check
representing the cash consideration to which such holder may be entitled on
account of the Cash Fund, which such holder has the right to receive pursuant
to the provisions of this Article I, and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of Naturol
Shares which are not registered in the transfer records of Naturol, a
certificate representing the proper number of Coronado Shares may be issued
to a transferee if the Certificate representing such Naturol Shares is
presented to the Exchange Agent accompanied by all documents required by the
Exchange Agent or Coronado to evidence and effect such transfer and by
evidence that any applicable stock transfer or other taxes have been paid.
Until surrendered as contemplated by this Section 1.7, each Certificate shall
be deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the certificate representing Coronado Shares as
contemplated by this Section 1.8.
(c) No dividends or other distributions declared or made after the
Effective Time with respect to Coronado Shares with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate
with respect to the Coronado Shares represented thereby until the holder of
record of such Certificate shall surrender such Certificate.
(d) In the event that any Certificate for Naturol Shares or Coronado
Shares shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange therefor, upon the making of an affidavit of that fact by
the holder thereof such Coronado Shares and cash in lieu of fractional
Coronado Shares, if any, as may be required pursuant to this Agreement;
provided, however, that Coronado or the Exchange Agent, may, in its
respective discretion, require the delivery of a suitable bond, opinion or
indemnity.
(e) All Coronado Shares issued upon the surrender for exchange of
Naturol Shares in accordance with the terms hereof shall be deemed to have
been issued in full satisfaction of all rights pertaining to such Naturol
Shares. There shall be no further registration of transfers on the stock
transfer books of either of Naturol or Coronado of the Naturol Shares or
Coronado Shares which were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates are presented to Coronado
for any reason, they shall be canceled and exchanged as provided in this
Article I.
(f) No fractional Coronado Shares shall be issued in the Merger, but in
lieu thereof each holder of Naturol Shares otherwise entitled to a fractional
Coronado Share shall, upon surrender of its, his or her Certificate or
Certificates, be entitled to receive an additional share to round up to the
nearest round number of shares.
Section 1.8. Stock Options. At the Effective Time, each outstanding
option to purchase Naturol Shares, if any (a "Naturol Stock Option" or
collectively, "Naturol Stock Options") issued pursuant to any Naturol Stock
Option Plan or Naturol Long Term Incentive Plan whether vested or unvested,
shall be cancelled.
Section 1.9. Taking of Necessary Action; Further Action. If, at any time
after the Effective Time, Naturol or Coronado reasonably determines that any
deeds, assignments, or instruments or confirmations of transfer are necessary
or desirable to carry out the purposes of this Agreement and to vest Coronado
with full right, title and possession to all assets, property, rights,
privileges, powers and franchises of Naturol, the officers and directors of
Coronado and Naturol are fully authorized in the name of their respective
corporations or otherwise to take, and will take, all such lawful and
necessary or desirable action.
ARTICLE 2
Representations and Warranties of Coronado
Except as set forth on the Disclosure Schedule delivered by Coronado to
Naturol (the "Coronado Disclosure Schedule"), Coronado hereby represents and
warrants to Naturol as follows:
Section 2.1. Organization and Qualification.
(a) Coronado is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization and
has all requisite power and authority to own, lease and operate its
properties and to carry on its businesses as now being conducted, except
where the failure to be so organized, existing and in good standing or to
have such power and authority would not have a Material Adverse Effect (as
defined below) on Coronado. When used in connection with Coronado, the term
"Material Adverse Effect" means any change or effect (i) that is or is
reasonably likely to be materially adverse to the business, results of
operations, condition (financial or otherwise) or prospects of Coronado,
other than any change or effect arising out of general economic conditions
unrelated to any business in which Coronado is engaged, or (ii) that may
impair the ability of Coronado to perform its obligations hereunder or to
consummate the transactions contemplated hereby.
(b) Coronado has heretofore delivered to Naturol accurate and complete
copies of the Certificate of Incorporation and Bylaws (or similar governing
documents), as currently in effect, of Coronado. Except as set forth on
Schedule 2.1 of the Coronado Disclosure Schedule, Coronado is duly qualified
or licensed and in good standing to do business in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except in
such jurisdictions where the failure to be so duly qualified or licensed and
in good standing would not have a Material Adverse Effect on Coronado.
Section 2.2. Capitalization of Coronado.
(a) The authorized capital stock of Coronado consists of Two Hundred
Million (200,000,000) Coronado Common Shares, of which, as of July 31, 2001,
25,000,000 Coronado Shares were issued and outstanding. All of the
outstanding Coronado Shares have been duly authorized and validly issued, and
are fully paid, nonassessable and free of preemptive rights. Except as set
forth herein, as of the date hereof, there are no outstanding (i) shares of
capital stock or other voting securities of Coronado, (ii) securities of
Coronado convertible into or exchangeable for shares of capital stock or
voting securities of Coronado, (iii) options or other rights to acquire from
Coronado and, except as described in the Coronado SEC Reports (as defined
below), no obligations of Coronado to issue, any capital stock, voting
securities or securities convertible into or exchangeable for capital stock
or voting securities of Coronado, and (iv) equity equivalents, interests in
the ownership or earnings of Coronado or other similar rights (collectively,
"Coronado Securities"). As of the date hereof, except as set forth on
Schedule 2.2(a) of the Coronado Disclosure Schedule there are no outstanding
obligations of Coronado or its subsidiaries to repurchase, redeem or
otherwise acquire any Coronado Securities or stockholder agreements, voting
trusts or other agreements or understandings to which Coronado is a party or
by which it is bound relating to the voting or registration of any shares of
capital stock of Coronado. For purposes of this Agreement, ``Lien" means,
with respect to any asset (including, without limitation, any security) any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind
in respect of such asset.
(b) The Coronado Shares constitute the only class of equity securities
of Coronado registered or required to be registered under the Exchange Act.
(c) Coronado does not own directly or indirectly more than fifty percent
(50%) of the outstanding voting securities or interests (including membership
interests) of any entity, other than as specifically disclosed in the
disclosure documents.
Section 2.3. Authority Relative to this Agreement; Recommendation.
(a) Coronado has all necessary corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement, and the consummation of
the transactions contemplated hereby, have been duly and validly authorized
by the Board of Directors of Coronado (the "Coronado Board") and no other
corporate proceedings on the part of Coronado are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby, except, as
referred to in Section 2.17, the approval and adoption of this Agreement by
the holders of at least a majority of the then outstanding Coronado Shares.
This Agreement has been duly and validly executed and delivered by Coronado
and constitutes a valid, legal and binding agreement of Coronado, enforceable
against Coronado in accordance with its terms.
(b) The Coronado Board has resolved to recommend that the stockholders
of Coronado approve and adopt this Agreement.
Section 2.4. SEC Reports; Financial Statements.
(a) Coronado has filed all required forms, reports and documents with
the Securities and Exchange Commission (the "SEC") since the filing of its
10SB on June 9, 1999, each of which has complied in all material respects
with all applicable requirements of the Securities Act of 1933, as amended
(the "Securities Act"), and the Exchange Act (and the rules and regulations
promulgated thereunder, respectively), each as in effect on the dates such
forms, reports and documents were filed. Coronado has heretofore delivered or
promptly will deliver prior to the Effective Date to Naturol, in the form
filed with the SEC (including any amendments thereto but excluding any
exhibits), (i) its Annual Report on Form 10-KSB for the fiscal year ended
January 31, 2001, (ii) all definitive proxy statements relating to Coronado's
meetings of stockholders (whether annual or special) held since January 31,
2001, if any, and (iii) all other reports or registration statements filed by
Coronado with the SEC since January 31, 2001 (all of the foregoing,
collectively, the "Coronado SEC Reports"). None of such Coronado SEC Reports,
including, without limitation, any financial statements or schedules included
or incorporated by reference therein, contained, when filed, any untrue
statement of a material fact or omitted to state a material fact required to
be stated or incorporated by reference therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The audited financial statements of Coronado included
in the Coronado SEC Reports fairly present, in conformity with generally
accepted accounting principles applied on a consistent basis (except as may
be indicated in the notes thereto), the financial position of Coronado as of
the dates thereof and its results of operations and changes in financial
position for the periods then ended. All material agreements, contracts and
other documents required to be filed as exhibits to any of the Coronado SEC
Reports have been so filed.
(b) Coronado has heretofore made available or promptly will make
available to Naturol a complete and correct copy of any amendments or
modifications which are required to be filed with the SEC but have not yet
been filed with the SEC, to agreements, documents or other instruments which
previously had been filed by Coronado with the SEC pursuant to the Exchange
Act.
Section 2.5. Information Supplied. None of the information supplied or
to be supplied by Coronado for inclusion or incorporation by reference in
connection with the Merger (the "Proxy Statement") will at the date mailed to
stockholders of Coronado and at the times of the meeting or meetings of
stockholders of Coronado to be held in connection with the Merger, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement, insofar as it relates to the meeting of
Coronado's stockholders to vote on the Merger, will comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations thereunder.
Section 2.6. Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky laws, the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1916, as amended (the ``HSR Act''), the rules of the National Association
of Securities Dealers, Inc. ("NASD"), the filing and recordation of the
Merger Certificate as required by the NGCL, and as set forth on Schedule 2.6
of the Coronado Disclosure Schedule no filing with or notice to, and no
permit, authorization, consent or approval of, any court or tribunal or
administrative, governmental or regulatory body, agency or authority (a
"Governmental Entity") is necessary for the execution and delivery by
Coronado of this Agreement or the consummation by Coronado of the
transactions contemplated hereby, except where the failure to obtain such
permits, authorizations, consents or approvals or to make such filings or
give such notice would not have a Material Adverse Effect on Coronado.
Except as set forth in Section 2.6 of the Coronado Disclosure Schedule,
neither the execution, delivery and performance of this Agreement by Coronado
nor the consummation by Coronado of the transactions contemplated hereby will
(i) conflict with or result in any breach of any provision of the respective
Certificate of Incorporation or Bylaws (or similar governing documents) of
Coronado, (ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation or acceleration or Lien) under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or
obligation to which Coronado is a party or by which any of its properties or
assets may be bound, or (iii) violate any order, writ, injunction, decree,
law, statute, rule or regulation applicable to Coronado or any of its
properties or assets, except in the case of (ii) or (iii) for violations,
breaches or defaults which would not have a Material Adverse Effect on
Coronado.
Section 2.7. No Default. Except as set forth in Section 2.7 of the
Coronado Disclosure Schedule, Coronado is not in breach, default or violation
(and no event has occurred which with notice or the lapse of time or both
would constitute a breach default or violation) of any term, condition or
provision of (i) its Certificate of Incorporation or Bylaws (or similar
governing documents), (ii) any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which
Coronado is now a party or by which any of its respective properties or
assets may be bound or (iii) any order, writ injunction, decree, law,
statute, rule or regulation applicable to Coronado or any of its respective
properties or assets, except in the case of (ii) or (iii) for violations,
breaches or defaults that would not have a Material Adverse Effect on
Coronado. Except as set forth in Section 2.7 of the Coronado Disclosure
Schedule, each note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which Coronado is now a party
or by which its respective properties or assets may be bound that is material
to Coronado and that has not expired is in full force and effect and is not
subject to any material default thereunder of which Coronado is aware by any
party obligated to Coronado thereunder.
Section 2.8. No Undisclosed Liabilities; Absence of Changes. Except as
set forth in Section 2.8 of the Coronado Disclosure Schedule and except as
and to the extent publicly disclosed by Coronado in the Coronado SEC Reports,
as of September 18, 2001, Coronado does not have any liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise,
that would be required by generally accepted accounting principles to be
reflected on a balance sheet of Coronado (including the notes thereto) or
which would have a Material Adverse Effect on Coronado. Except as publicly
disclosed by Coronado, since September 18, 2001, Coronado has not incurred
any liabilities of any nature, whether or not accrued, contingent or
otherwise, which could reasonably be expected to have, and there have been no
events, changes or effects with respect to Coronado having or which
reasonably could be expected to have, a Material Adverse Effect on Coronado.
Except as and to the extent publicly disclosed by Coronado in the Coronado
SEC Reports and except as set forth in Section 2.8 of the Coronado Disclosure
Schedule, since September 18, 2001, there has not been (i) any material
change by Coronado in its accounting methods, principles or practices (other
than as required after the date hereof by concurrent changes in generally
accepted accounting principles), (ii) any revaluation by Coronado of any of
its assets having a Material Adverse Effect on Coronado, including, without
limitation, any write-down of the value of any assets other than in the
ordinary course of business or (iii) any other action or event that would
have required the consent of any other party hereto pursuant to Section 4.1
of this Agreement had such action or event occurred after the date of this
Agreement.
Section 2.9. Litigation. Except as publicly disclosed by Coronado in the
Coronado SEC Reports, there is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of Coronado, threatened against
Coronado or any of its subsidiaries or any of their respective properties or
assets before any Governmental Entity which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect on
Coronado or could reasonably be expected to prevent or delay the consummation
of the transactions contemplated by this Agreement. Except as publicly
disclosed by Coronado in the Coronado SEC Reports, Coronado is not subject to
any outstanding order, writ, injunction or decree which, insofar as can be
reasonably foreseen in the future, could reasonably be expected to have a
Material Adverse Effect on Coronado or could reasonably be expected to
prevent or delay the consummation of the transactions contemplated hereby.
Section 2.10. Compliance with Applicable Law. Except as publicly
disclosed by Coronado in the Coronado SEC Reports, Coronado holds all
permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities necessary for the lawful conduct of their respective
businesses (the `'Coronado Permits"), except for failures to hold such
permits, licenses, variances, exemptions, orders and approvals which would
not have a Material Adverse Effect on Coronado. Except as publicly disclosed
by Coronado in the Coronado SEC Reports, Coronado is in compliance with the
terms of the Coronado Permits, except where the failure so to comply would
not have a Material Adverse Effect on Coronado. Except as publicly disclosed
by Coronado in the Coronado SEC Reports, the business of Coronado is not
being conducted in violation of any law, ordinance or regulation of any
Governmental Entity except that no representation or warranty is made in this
Section 2.10 with respect to Environmental Laws (as defined in Section 2.12
below) and except for violations or possible violations which do not, and,
insofar as reasonably can be foreseen, in the future will not, have a
Material Adverse Effect on Coronado. Except as publicly disclosed by Coronado
in the Coronado SEC Reports, no investigation or review by any Governmental
Entity with respect to Coronado is pending or, to the knowledge of Coronado,
threatened, nor, to the knowledge of Coronado, has any Governmental Entity
indicated an intention to conduct the same, other than, in each case, those
which Coronado reasonably believes will not have a Material Adverse Effect on
Coronado.
Section 2.11. Employee Benefit Plans; Labor Matters.
(a) Except as set forth in Section 2.11(a) of the Coronado Disclosure
Schedule with respect to each employee benefit plan, program, policy,
arrangement and contract (including, without limitation, any "employee
benefit plan," as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), maintained or contributed to at
any time by Coronado or any entity required to be aggregated with Coronado
pursuant to Section 414 of the Code (each, a "Coronado Employee Plan"), no
event has occurred and to the knowledge of Coronado, no condition or set of
circumstances exists in connection with which Coronado could reasonably be
expected to be subject to any liability which would have a Material Adverse
Effect on Coronado.
(b) (i) No Coronado Employee Plan is or has been subject to Title IV of
ERISA or Section 412 of the Code; and (ii) each Coronado Employee Plan
intended to qualify under Section 401(a) of the Code and each trust intended
to qualify under Section 501(a) of the Code is the subject of a favorable
Internal Revenue Service determination letter, and nothing has occurred which
could reasonably be expected to adversely affect such determination.
(c) Section 2.11(c) of the Coronado Disclosure Schedule sets forth a
true and complete list, as of the date of this Agreement, of each person who
holds any Coronado Stock Options, together with the number of Coronado Shares
which are subject to such option, the date of grant of such option, the
extent to which such option is vested (or will become vested as a result of
the Merger), the option price of such option (to the extent determined as of
the date hereof), whether such option is a nonqualified stock option or is
intended to qualify as an incentive stock option within the meaning of
Section 422(b) of the Code, and the expiration date of such option. Section
2.11(c) of the Coronado Disclosure Schedule also sets forth the total number
of such incentive stock options and such nonqualified options. Coronado has
furnished Naturol with complete copies of the plans pursuant to which the
Coronado Stock Options were issued. Other than the automatic vesting of
Coronado Stock Options that may occur without any action on the part of
Coronado or its officers or directors, Coronado has not taken any action that
would result in any Coronado Stock Options that are unvested becoming vested
in connection with or as a result of the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
(d) Coronado has made available to Naturol (i) a description of the
terms of employment and compensation arrangements of all officers of Coronado
and a copy of each such agreement currently in effect; (ii) copies of all
agreements with consultants who are individuals obligating Coronado to make
annual cash payments in an amount exceeding $60,000; (iii) a schedule listing
all officers of Coronado who have executed a non-competition agreement with
Coronado and a copy of each such agreement currently in effect; (iv) copies
(or descriptions) of all severance agreements, programs and policies of
Coronado with or relating to its employees, except programs and policies
required to be maintained by law; and (v) copies of all plans, programs,
agreements and other arrangements of Coronado with or relating to its
employees which contain change in control provisions all of which are set
forth in Section 2.11(d) of the Coronado Disclosure Schedule.
(e) There shall be no payment, accrual of additional benefits,
acceleration of payments, or vesting in any benefit under any Coronado
Employee Plan or any agreement or arrangement disclosed under this Section
2.11 solely by reason of entering into or in connection with the transactions
contemplated by this Agreement.
(f) There are no controversies pending or, to the knowledge of Coronado,
threatened, between Coronado and any of their employees, which controversies
have or could reasonably be expected to have a Material Adverse Effect on
Coronado. Neither Coronado nor any of its subsidiaries is a party to any
collective bargaining agreement or other labor union contract applicable to
persons employed by Coronado or any of its subsidiaries (and neither Coronado
nor any of its subsidiaries has any outstanding material liability with
respect to any terminated collective bargaining agreement or labor union
contract), nor does Coronado know of any activities or proceedings of any
labor union to organize any of its or employees. Coronado has no knowledge of
any strike, slowdown, work stoppage, lockout or threat thereof, by or with
respect to any of its employees.
Section 2.12. Environmental Laws and Regulations.
(a) Except as publicly disclosed by Coronado in the Coronado SEC
Reports, (i) Coronado is in material compliance with all applicable federal,
state, local and foreign laws and regulations relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, ground water, land surface or subsurface strata)
(collectively, "Environmental Laws"), except for non-compliance that would
not have a Material Adverse Effect on Coronado, which compliance includes,
but is not limited to, the possession by Coronado of all material permits and
other governmental authorizations required under applicable Environmental
Laws, and compliance with the terms and conditions thereof; (ii) Coronado has
not received written notice of, or, to the knowledge of Coronado, is the
subject of, any action, cause of action, claim, investigation, demand or
notice by any person or entity alleging liability under or non-compliance
with any Environmental Law (an ``Environmental Claim") that could reasonably
be expected to have a Material Adverse Effect on Coronado; and (iii) to the
knowledge of Coronado, there are no circumstances that are reasonably likely
to prevent or interfere with such material compliance in the future.
(b) Except as publicly disclosed by Coronado, there are no Environmental
Claims which could reasonably be expected to have a Material Adverse Effect
on Coronado that are pending or, to the knowledge of Coronado, threatened
against Coronado or, to the knowledge of Coronado, against any person or
entity whose liability for any Environmental Claim Coronado has or may have
retained or assumed either contractually or by operation of law.
Section 2.13. Tax Matters.
(a) Except as set forth in Section 2.13 of the Coronado Disclosure
Schedule: (i) Coronado has filed or has had filed on its behalf in a timely
manner (within any applicable extension periods) with the appropriate
Governmental Entity all income and other material Tax Returns (as defined
herein) with respect to Taxes (as defined herein) of Coronado and all Tax
Returns were in all material respects true, complete and correct; (ii) all
material Taxes with respect to Coronado have been paid in full or have been
provided for in accordance with GAAP on Coronado's most recent balance sheet
which is part of the Coronado SEC Documents. (iii) there are no outstanding
agreements or waivers extending the statutory period of limitations
applicable to any federal, state, local or foreign income or other material
Tax Returns required to be filed by or with respect to Coronado; (iv) to the
knowledge of Coronado none of the Tax Returns of or with respect to Coronado
is currently being audited or examined by any Governmental Entity; and (v) no
deficiency for any income or other material Taxes has been assessed with
respect to Coronado which has not been abated or paid in full.
(b) For purposes of this Agreement, (i) "Taxes" shall mean all taxes,
charges, fees, levies or other assessments, including, without limitation,
income, gross receipts, sales, use, ad valorem, goods and services, capital,
transfer, franchise, profits, license, withholding, payroll, employment,
employer health, excise, estimated, severance, stamp, occupation, property or
other taxes, customs duties, fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts imposed by any taxing authority and (ii) "Tax Return"
shall mean any report, return, documents declaration or other information or
filing required to be supplied to any taxing authority or jurisdiction with
respect to Taxes.
Section 2.14. Title to Property. Coronado has good and defensible title
to all of its properties and assets, free and clear of all liens, charges and
encumbrances except liens for taxes not yet due and payable and such liens or
other imperfections of title, if any, as do not materially detract from the
value of or interfere with the present use of the property affected thereby
or which, individually or in the aggregate, would not have a Material Adverse
Effect on Coronado; and, to Coronado's knowledge, all leases pursuant to
which Coronado leases from others real or personal property are in good
standing, valid and effective in accordance with their respective terms, and
there is not, to the knowledge of Coronado, under any of such leases, any
existing material default or event of default (or event which with notice of
lapse of time, or both, would constitute a default and in respect of which
Coronado has not taken adequate steps to prevent such a default from
occurring) except where the lack of such good standing, validity and
effectiveness, or the existence of such default or event, would not have a
Material Adverse Effect on Coronado.
Section 2.15. Intellectual Property.
(a) Coronado owns, or possesses adequate licenses or other valid rights
to use, all existing United States and foreign patents, trademarks, trade
names, service marks, copyrights, trade secrets and applications therefor
that are material to its business as currently conducted (the "Coronado
Intellectual Property Rights").
(b) The validity of the Coronado Intellectual Property Rights and the
title thereto of Coronado is not being questioned in any litigation to which
Coronado is a party.
(c) Except as set forth in Section 2.15(c) of the Coronado Disclosure
Schedule, the conduct of the business of Coronado as now conducted does not,
to Coronado's knowledge, infringe any valid patents, trademarks, trade names,
service marks or copyrights of others. The consummation of the transactions
completed hereby will not result in the loss or impairment of any Coronado
Intellectual Property Rights.
(d) Coronado has taken steps it believes appropriate to protect and
maintain its trade secrets as such, except in cases where Coronado has
elected to rely on patent or copyright protection in lieu of trade secret
protection.
Section 2.16. Insurance. Coronado currently does not maintain general
liability and other business insurance.
Section 2.17. Vote Required. The affirmative vote of the holders of at
least a majority of the outstanding Coronado Shares is the only vote of the
holders of any class or series of Coronado's capital stock necessary to
approve and adopt this Agreement and the Merger.
Section 2.18. Tax Treatment. Neither Coronado nor, to the knowledge of
Coronado, any of its affiliates has taken or agreed to take action that would
prevent the Merger from constituting a reorganization qualifying under the
provisions of Section 368(a) of the Code.
Section 2.19. Affiliates. Except for Principal Coronado Stockholder
("PCS") and the directors and executive officers of Coronado, each of whom is
listed in Section 2.19 of the Coronado Disclosure Schedule, there are no
persons who, to the knowledge of Coronado, may be deemed to be affiliates of
Coronado under Rule 1-02(b) of Regulation S-X of the SEC (the "Coronado
Affiliates").
Section 2.20. Certain Business Practices. None of Coronado or any
directors, officers, agents or employees of Coronado has (i) used any funds
for unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity, (ii) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic
political parties or campaigns or violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended (the "FCPA"), or (iii) made any
other unlawful payment.
Section 2.21. Insider Interests. Except as set forth in Section 2.21 of
the Coronado Disclosure Schedule, neither PCS nor any officer or director of
Coronado has any interest in any material property, real or personal,
tangible or intangible, including without limitation, any computer software
or Coronado Intellectual Property Rights, used in or pertaining to the
business of Coronado, except for the ordinary rights of a stockholder or
employee stock optionholder.
Section 2.22. Opinion of Financial Adviser. No advisers, as of the date
hereof, have delivered to the Coronado Board a written opinion to the effect
that, as of such date, the exchange ratio contemplated by the Merger is fair
to the holders of Coronado Shares.
Section 2.23. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Coronado.
Section 2.24. Disclosure. No representation or warranty of Coronado in
this Agreement or any certificate, schedule, document or other instrument
furnished or to be furnished to Naturol pursuant hereto or in connection
herewith contains, as of the date of such representation, warranty or
instrument, or will contain any untrue statement of a material fact or, at
the date thereof, omits or will omit to state a material fact necessary to
make any statement herein or therein, in light of the circumstances under
which such statement is or will be made, not misleading.
Section 2.25. No Existing Discussions. As of the date hereof, Coronado
is not engaged, directly or indirectly, in any discussions or negotiations
with any other party with respect to any Third Party Acquisition (as defined
in Section 4.4).
Section 2.26. Material Contracts.
(a) Coronado has delivered or otherwise made available to Naturol true,
correct and complete copies of all contracts and agreements (and all
amendments, modifications and supplements thereto and all side letters to
which Coronado is a party affecting the obligations of any party thereunder)
to which Coronado is a party or by which any of its properties or assets are
bound that are, material to the business, properties or assets of Coronado
taken as a whole, including, without limitation, to the extent any of the
following are, individually or in the aggregate, material to the business,
properties or assets of Coronado taken as a whole, all: (i) employment,
product design or development, personal services, consulting,
non-competition, severance, golden parachute or indemnification contracts
(including, without limitation, any contract to which Coronado is a party
involving employees of Coronado); (ii) licensing, publishing, merchandising
or distribution agreements; (iii) contracts granting rights of first refusal
or first negotiation; (iv) partnership or joint venture agreements; (v)
agreements for the acquisition, sale or lease of material properties or
assets or stock or otherwise entered into since July 1, 2001; (vi) contracts
or agreements with any Governmental Entity. and (vii) all commitments and
agreements to enter into any of the foregoing (collectively, together with
any such contracts entered into in accordance with Section 4.1 hereof, the
"Coronado Contracts"). Coronado is not a party to or bound by any severance,
golden parachute or other agreement with any employee or consultant pursuant
to which such person would be entitled to receive any additional compensation
or an accelerated payment of compensation as a result of the consummation of
the transactions contemplated hereby.
(b) Each of the Coronado Contracts is valid and enforceable in
accordance with its terms, and there is no default under any Coronado
Contract so listed either by Coronado or, to the knowledge of Coronado, by
any other party thereto, and no event has occurred that with the lapse of
time or the giving of notice or both would constitute a default thereunder by
Coronado or, to the knowledge of Coronado, any other party, in any such case
in which such default or event could reasonably be expected to have a
Material Adverse Effect on Coronado.
(c) No party to any such Coronado Contract has given notice to Coronado
of or made a claim against Coronado with respect to any breach or default
thereunder, in any such case in which such breach or default could reasonably
be expected to have a Material Adverse Effect on Coronado.
ARTICLE 3
Representations and Warranties of Naturol
Except as set forth on the Disclosure Schedule delivered by Naturol to
Coronado (the "Naturol Disclosure Schedule"), Naturol hereby represents and
warrants to Coronado as follows:
Section 3.1. Organization and Qualification.
(a) Each of Naturol and its subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has all requisite power and authority to
own, lease and operate its properties and to carry on its businesses as now
being conducted, except where the failure to be so organized, existing and in
good standing or to have such power and authority would not have a Material
Adverse Effect (as defined below) on Naturol. When used in connection with
Naturol, the term "Material Adverse Effect'' means any change or effect (i)
that is or is reasonably likely to be materially adverse to the business,
results of operations, condition (financial or otherwise) or prospects of
Naturol and its subsidiaries, taken as a whole, other than any change or
effect arising out of general economic conditions unrelated to any businesses
in which Naturol and its subsidiaries are engaged, or (ii) that may impair
the ability of Naturol to consummate the transactions contemplated hereby.
(b) Naturol has heretofore delivered to Coronado accurate and complete
copies of the Certificate of Incorporation and Bylaws (or similar governing
documents), as currently in effect, of Naturol. Each of Naturol and its
subsidiaries is duly qualified or licensed and in good standing to do
business in each jurisdiction in which the property owned, leased or operated
by it or the nature of the business conducted by it makes such qualification
or licensing necessary except in such jurisdictions where the failure to be
so duly qualified or licensed and in good standing would not have a Material
Adverse Effect on Naturol.
Section 3.2. Capitalization of Naturol.
(a) As of August 1, 2001, the authorized capital stock of Naturol
consists of; (i) Fifty Million (50,000,000) Naturol common Shares, $0.001 par
value, 48,400,000 common Shares were issued and were outstanding. All of the
outstanding Naturol Shares have been duly authorized and validly issued, and
are fully paid, nonassessable and free of preemptive rights.
(b) Except as set forth in Section 3.2(b) of the Naturol Disclosure
Schedule, Naturol is the record and beneficial owner of all of the issued and
outstanding shares of capital stock of its subsidiaries.
(c) Except as set forth in Section 3.2(c) of the Naturol Disclosure
Schedule and the 506 offering dated August 15, 2001 and any amendment
thereto, whereby Naturol is offering 1,600,000 Shares at $0.25 per share,
between September 1, 2001 and the date hereof, no shares of Naturol's capital
stock have been issued and no Naturol Stock options have been granted. Except
as set forth in Section 3.2(a) above, as of the date hereof, there are no
outstanding (i) shares of capital stock or other voting securities of
Naturol, (ii) securities of Naturol or its subsidiaries convertible into or
exchangeable for shares of capital stock or voting securities of Naturol,
(iii) options or other rights to acquire from Naturol or its subsidiaries, or
obligations of Naturol or its subsidiaries to issue, any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of Naturol, or (iv) equity equivalents, interests
in the ownership or earnings of Naturol or its subsidiaries or other similar
rights (collectively, "Naturol Securities"). As of the date hereof, there are
no outstanding obligations of Naturol or any of its subsidiaries to
repurchase, redeem or otherwise acquire any Naturol Securities. There are no
stockholder agreements, voting trusts or other agreements or understandings
to which Naturol is a party or by which it is bound relating to the voting or
registration of any shares of capital stock of Naturol.
(d) Except as set forth in Section 3.2(d) of the Naturol Disclosure
Schedule, there are no securities of Naturol convertible into or exchangeable
for, no options or other rights to acquire from Naturol, and no other
contract, understanding, arrangement or obligation (whether or not
contingent) providing for the issuance or sale, directly or indirectly, of
any capital stock or other ownership interests in, or any other securities
of, any subsidiary of Naturol.
(e) The Naturol Shares constitute the only class of equity securities of
Naturol or its subsidiaries.
(f) Except as set forth in Section 3.2(f) of the Naturol Disclosure
Schedule, Naturol does not own directly or indirectly more than fifty percent
(50%) of the outstanding voting securities or interests (including membership
interests) of any entity.
Section 3.3. Authority Relative to this Agreement; Recommendation.
(a) Naturol has all necessary corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of Naturol (the "Naturol Board"), and no other
corporate proceedings on the part of Naturol are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby, except, as
referred to in Section 3.17, the approval and adoption of this Agreement by
the holders of at least a majority of the then outstanding Naturol Shares.
This Agreement has been duly and validly executed and delivered by Naturol
and constitutes a valid, legal and binding agreement of Naturol, enforceable
against Naturol in accordance with its terms.
(b) The Naturol Board has resolved to recommend that the stockholders of
Naturol approve and adopt this Agreement.
Section 3.4. SEC Reports; Financial Statements. Naturol is not required
to file forms, reports and documents with the SEC.
Section 3.5. Information Supplied. None of the information supplied or
to be supplied by Naturol for inclusion or incorporation by reference to (i)
the 8-K will, at the time the 8-K is filed with the SEC and at the time it
becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and (ii)
the Proxy Statement will, at the date mailed to stockholders of Coronado, if
any, and at the times of the meeting or meetings of stockholders of Coronado
to be held in connection with the Merger, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Proxy Statement,
insofar as it relates to the meeting of Naturol's stockholders to vote on the
Merger, will comply as to form in all material respects with the provisions
of the Exchange Act and the rules and regulations thereunder, and the 8-K
will comply as to form in all material respects with the provisions of the
Securities Act and the rules and regulations thereunder.
Section 3.6. Consents and Approvals; No Violations. Except as set forth
in Section 3.6 of the Naturol Disclosure Schedule, and for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky laws, the HSR Act, the rules of the NASD, and the
filing and recordation of the Merger Certificate as required by the NGCL, no
filing with or notice to, and no permit, authorization, consent or approval
of, any Governmental Entity is necessary for the execution and delivery by
Naturol of this Agreement or the consummation by Naturol of the transactions
contemplated hereby, except where the failure to obtain such permits,
authorizations consents or approvals or to make such filings or give such
notice would not have a Material Adverse Effect on Naturol.
Neither the execution, delivery and performance of this Agreement by
Naturol nor the consummation by Naturol of the transactions contemplated
hereby will (i) conflict with or result in any breach of any provision of the
respective Certificate of Incorporation or Bylaws (or similar governing
documents) of Naturol or any of Naturol's subsidiaries, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration or Lien) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which Naturol or any of
Naturol's subsidiaries is a party or by which any of them or any of their
respective properties or assets may be bound or (iii) violate any order,
writ, injunction, decree, law, statute, rule or regulation applicable to
Naturol or any of Naturol's subsidiaries or any of their respective
properties or assets, except in the case of (ii) or (iii) for violations,
breaches or defaults which would not have a Material Adverse Effect on
Naturol.
Section 3.7. No Default. None of Naturol or any of its subsidiaries is
in breach, default or violation (and no event has occurred which with notice
or the lapse of time or both would constitute a breach, default or violation)
of any term, condition or provision of (i) its Certificate of Incorporation
or Bylaws (or similar governing documents), (ii) any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or
obligation to which Naturol or any of its subsidiaries is now a party or by
which any of them or any of their respective properties or assets may be
bound or (iii) any order, writ, injunction, decree, law, statute, rule or
regulation applicable to Naturol, its subsidiaries or any of their respective
properties or assets, except in the case of (ii) or (iii) for violations,
breaches or defaults that would not have a Material Adverse Effect on
Naturol. Each note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which Naturol or any of its
subsidiaries is now a party or by which any of them or any of their
respective properties or assets may be bound that is material to Naturol and
its subsidiaries taken as a whole and that has not expired is in full force
and effect and is not subject to any material default thereunder of which
Naturol is aware by any party obligated to Naturol or any subsidiary
thereunder.
Section 3.8. No Undisclosed Liabilities; Absence of Changes. Except as
and to the extent disclosed by Naturol in the Naturol, none of Naturol or its
subsidiaries had any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, that would be required by generally
accepted accounting principles to be reflected on a consolidated balance
sheet of Naturol and its consolidated subsidiaries (including the notes
thereto) or which would have a Material Adverse Effect on Naturol. Except as
disclosed by Naturol, none of Naturol or its subsidiaries has incurred any
liabilities of any nature, whether or not accrued, contingent or otherwise,
which could reasonably be expected to have, and there have been no events,
changes or effects with respect to Naturol or its subsidiaries having or
which could reasonably be expected to have, a Material Adverse Effect on
Naturol. Except as and to the extent disclosed by Naturol there has not been
(i) any material change by Naturol in its accounting methods, principles or
practices (other than as required after the date hereof by concurrent changes
in generally accepted accounting principles), (ii) any revaluation by Naturol
of any of its assets having a Material Adverse Effect on Naturol, including,
without limitation, any write-down of the value of any assets other than in
the ordinary course of business or (iii) any other action or event that would
have required the consent of any other party hereto pursuant to Section 4.2
of this Agreement had such action or event occurred after the date of this
Agreement.
Section 3.9. Litigation. Except as set forth in Schedule 3.9 of the
Naturol Disclosure Schedule there is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of Naturol, threatened against
Naturol or any of its subsidiaries or any of their respective properties or
assets before any Governmental Entity which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect on
Naturol or could reasonably be expected to prevent or delay the consummation
of the transactions contemplated by this Agreement. Except as disclosed by
Naturol, none of Naturol or its subsidiaries is subject to any outstanding
order, writ, injunction or decree which, insofar as can be reasonably
foreseen in the future, could reasonably be expected to have a Material
Adverse Effect on Naturol or could reasonably be expected to prevent or delay
the consummation of the transactions contemplated hereby.
Section 3.10. Compliance with Applicable Law. Except as disclosed by
Naturol, Naturol and its subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals of all Governmental Entities necessary for
the lawful conduct of their respective businesses (the "Naturol Permits"),
except for failures to hold such permits, licenses, variances, exemptions,
orders and approvals which would not have a Material Adverse Effect on
Naturol. Except as disclosed by Naturol, Naturol and its subsidiaries are in
compliance with the terms of the Naturol Permits, except where the failure so
to comply would not have a Material Adverse Effect on Naturol. Except as
disclosed by Naturol, the businesses of Naturol and its subsidiaries are not
being conducted in violation of any law, ordinance or regulation of any
Governmental Entity except that no representation or warranty is made in this
Section 3.10 with respect to Environmental Laws and except for violations or
possible violations which do not, and, insofar as reasonably can be foreseen,
in the future will not, have a Material Adverse Effect on Naturol. Except as
disclosed by Naturol no investigation or review by any Governmental Entity
with respect to Naturol or its subsidiaries is pending or, to the knowledge
of Naturol, threatened, nor, to the knowledge of Naturol, has any
Governmental Entity indicated an intention to conduct the same, other than,
in each case, those which Naturol reasonably believes will not have a
Material Adverse Effect on Naturol.
Section 3.11. Employee Benefit Plans; Labor Matters.
(a) With respect to each employee benefit plan, program, policy,
arrangement and contract (including, without limitation, any "employee
benefit plan," as defined in Section 3(3) of ERISA), maintained or
contributed to at any time by Naturol, any of its subsidiaries or any entity
required to be aggregated with Naturol or any of its subsidiaries pursuant to
Section 414 of the Code (each, a "Naturol Employee Plan"), no event has
occurred and, to the knowledge of Naturol, no condition or set of
circumstances exists in connection with which Naturol or any of its
subsidiaries could reasonably be expected to be subject to any liability
which would have a Material Adverse Effect on Naturol.
(b) (i) No Naturol Employee Plan is or has been subject to Title IV of
ERISA or Section 412 of the Code; and (ii) each Naturol Employee Plan
intended to qualify under Section 401(a) of the Code and each trust intended
to qualify under Section 501(a) of the Code is the subject of a favorable
Internal Revenue Service determination letter, and nothing has occurred which
could reasonably be expected to adversely affect such determination.
(c) Section 3.11(c) of the Naturol Disclosure Schedule sets forth a true
and complete list, as of the date of this Agreement, of each person who holds
any Naturol Stock Options, together with the number of Naturol Shares which
are subject to such option, the date of grant of such option, the extent to
which such option is vested (or will become vested as a result of the
Merger), the option price of such option (to the extent determined as of the
date hereof), whether such option is a nonqualified stock option or is
intended to qualify as an incentive stock option within the meaning of
Section 422(b) of the Code, and the expiration date of such option. Section
3.11(c) of the Naturol Disclosure Schedule also sets forth the total number
of such incentive stock options and such nonqualified options. Naturol has
furnished Coronado with complete copies of the plans pursuant to which the
Naturol Stock Options were issued. Other than the automatic vesting of
Naturol Stock Options that may occur without any action on the part of
Naturol or its officers or directors, Naturol has not taken any action that
would result in any Naturol Stock Options that are unvested becoming vested
in connection with or as a result of the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
(d) Naturol has made available to Coronado (i) a description of the
terms of employment and compensation arrangements of all officers of Naturol
and a copy of each such agreement currently in effect; (ii) copies of all
agreements with consultants who are individuals obligating Naturol to make
annual cash payments in an amount exceeding $60,000; (iii) a schedule listing
all officers of Naturol who have executed a non-competition agreement with
Naturol and a copy of each such agreement currently in effect; (iv) copies
(or descriptions) of all severance agreements, programs and policies of
Naturol with or relating to its employees, except programs and policies
required to be maintained by law; and (v) copies of all plans, programs,
agreements and other arrangements of the Naturol with or relating to its
employees which contain change in control provisions.
(e) Except as disclosed in Section 3.11(e) of the Naturol Disclosure
Schedule there shall be no payment, accrual of additional benefits,
acceleration of payments, or vesting in any benefit under any Naturol
Employee Plan or any agreement or arrangement disclosed under this Section
3.11 solely by reason of entering into or in connection with the transactions
contemplated by this Agreement.
(f) There are no controversies pending or, to the knowledge of Naturol
threatened, between Naturol or any of its subsidiaries and any of their
respective employees, which controversies have or could reasonably be
expected to have a Material Adverse Effect on Naturol. Neither Naturol nor
any of its subsidiaries is a party to any collective bargaining agreement or
other labor union contract applicable to persons employed by Naturol or any
of its subsidiaries (and neither Naturol nor any of its subsidiaries has any
outstanding material liability with respect to any terminated collective
bargaining agreement or labor union contract), nor does Naturol know of any
activities or proceedings of any labor union to organize any of its or any of
its subsidiaries' employees. Naturol has no knowledge of any strike,
slowdown, work stoppage, lockout or threat thereof by or with respect to any
of its or any of its subsidiaries' employees.
Section 3.12. Environmental Laws and Regulations.
(a) Except as disclosed by Naturol, (i) each of Naturol and its
subsidiaries is in material compliance with all Environmental Laws, except
for non-compliance that would not have a Material Adverse Effect on Naturol,
which compliance includes, but is not limited to, the possession by Naturol
and its subsidiaries of all material permits and other governmental
authorizations required under applicable Environmental Laws, and compliance
with the terms and conditions thereof; (ii) none of Naturol or its
subsidiaries has received written notice of, or, to the knowledge of Naturol,
is the subject of, any Environmental Claim that could reasonably be expected
to have a Material Adverse Effect on Naturol; and (iii) to the knowledge of
Naturol, there are no circumstances that are reasonably likely to prevent or
interfere with such material compliance in the future.
(b) Except as disclosed by Naturol, there are no Environmental Claims
which could reasonably be expected to have a Material Adverse Effect on
Naturol that are pending or, to the knowledge of Naturol, threatened against
Naturol or any of its subsidiaries or, to the knowledge of Naturol, against
any person or entity whose liability for any Environmental Claim Naturol or
its subsidiaries has or may have retained or assumed either contractually or
by operation of law.
Section 3.13. Tax Matters. Except as set forth in Section 3.13 of the
Naturol Disclosure Schedule: (i) Naturol and each of its subsidiaries has
filed or has had filed on its behalf in a timely manner (within any
applicable extension periods) with the appropriate Governmental Entity all
income and other material Tax Returns with respect to Taxes of Naturol and
each of its subsidiaries and all Tax Returns were in all material respects
true, complete and correct; (ii) all material Taxes with respect to Naturol
and each of its subsidiaries have been paid in full or have been provided for
in accordance with GAAP on Naturol's most recent balance sheet which is part
of the Naturol SEC Documents; (iii) there are no outstanding agreements or
waivers extending the statutory period of limitations applicable to any
federal, state, local or foreign income or other material Tax Returns
required to be filed by or with respect to Naturol or its subsidiaries; (iv)
to the knowledge of Naturol none of the Tax Returns of or with respect to
Naturol or any of its subsidiaries is currently being audited or examined by
any Governmental Entity; and (v) no deficiency for any income or other
material Taxes has been assessed with respect to Naturol or any of its
subsidiaries which has not been abated or paid in full.
Section 3.14. Title to Property. Naturol and each of its subsidiaries
have good and defensible title to all of their properties and assets, free
and clear of all liens, charges and encumbrances except liens for taxes not
yet due and payable and such liens or other imperfections of title, if any,
as do not materially detract from the value of or interfere with the present
use of the property affected thereby or which, individually or in the
aggregate, would not have a Material Adverse Effect on Naturol; and, to
Naturol's knowledge, all leases pursuant to which Naturol or any of its
subsidiaries lease from others real or personal property are in good
standing, valid and effective in accordance with their respective terms, and
there is not, to the knowledge of Naturol, under any of such leases, any
existing material default or event of default (or event which with notice or
lapse of time, or both, would constitute a material default and in respect of
which Naturol or such subsidiary has not taken adequate steps to prevent such
a default from occurring) except where the lack of such good standing,
validity and effectiveness, or the existence of such default or event of
default would not have a Material Adverse Effect on Naturol.
Section 3.15. Intellectual Property.
(a) Each of Naturol and its subsidiaries owns, or possesses adequate
licenses or other valid rights to use, all existing United States and foreign
patents, trademarks, trade names, services marks, copyrights, trade secrets,
and applications therefor that are material to its business as currently
conducted (the "Naturol Intellectual Property Rights").
(b) Except as set forth in Section 3.15(b) of the Naturol Disclosure
Schedule the validity of the Naturol Intellectual Property Rights and the
title thereto of Naturol or any subsidiary, as the case may be, is not being
questioned in any litigation to which Naturol or any subsidiary is a party.
(c) The conduct of the business of Naturol and its subsidiaries as now
conducted does not, to Naturol's knowledge, infringe any valid patents,
trademarks, tradenames, service marks or copyrights of others. The
consummation of the transactions contemplated hereby will not result in the
loss or impairment of any Naturol Intellectual Property Rights.
(d) Each of Naturol and its subsidiaries has taken steps it believes
appropriate to protect and maintain its trade secrets as such, except in
cases where Naturol has elected to rely on patent or copyright protection in
lieu of trade secret protection.
Section 3.16. Insurance. Naturol and its subsidiaries maintain general
liability and other business insurance that Naturol believes to be reasonably
prudent for its business.
Section 3.17. Vote Required. The affirmative vote of the holders of at
least a majority of the outstanding Naturol Shares is the only vote of the
holders of any class or series of Naturol's capital stock necessary to
approve and adopt this Agreement and the Merger.
Section 3.18. Tax Treatment. Neither Naturol nor, to the knowledge of
Naturol, any of its affiliates has taken or agreed to take any action that
would prevent the Merger from constituting a reorganization qualifying under
the provisions of Section 368(a) of the Code.
Section 3.19. Affiliates. Except for the directors and executive
officers of Naturol, each of whom is listed in Section 3.19 of the Naturol
Disclosure Schedule, there are no persons who, to the knowledge of Naturol,
may be deemed to be affiliates of Naturol under Rule 1-02(b) of Regulation
S-X of the SEC (the "Naturol Affiliates").
Section 3.20. Certain Business Practices. None of Naturol, any of its
subsidiaries or any directors, officers, agents or employees of Naturol or
any of its subsidiaries has (i) used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political
activity, (ii) made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the FCPA, or (iii) made any other
unlawful payment.
Section 3.21. Insider Interests. Except as set forth in Section 3.21 of
the Naturol Disclosure Schedule, no officer or director of Naturol has any
interest in any material property, real or personal, tangible or intangible,
including without limitation, any computer software or Naturol Intellectual
Property Rights, used in or pertaining to the business of Naturol or any
subsidiary, except for the ordinary rights of a stockholder or employee stock
optionholder.
Section 3.22. Opinion of Financial Adviser. No advisers, as of the date
hereof, have delivered to the Naturol Board a written opinion to the effect
that, as of such date, the exchange ratio contemplated by the Merger is fair
to the holders of Naturol Shares.
Section 3.23. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finders or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Naturol.
Section 3.24. Disclosure. No representation or warranty of Naturol in
this Agreement or any certificate, schedule, document or other instrument
furnished or to be furnished to Coronado pursuant hereto or in connection
herewith contains, as of the date of such representation, warranty or
instrument, or will contain any untrue statement of a material fact or, at
the date thereof, omits or will omit to state a material fact necessary to
make any statement herein or therein, in light of the circumstances under
which such statement is or will be made, not misleading.
Section 3.25. No Existing Discussions. As of the date hereof, Naturol is
not engaged, directly or indirectly, in any discussions or negotiations with
any other party with respect to any Third Party Acquisition (as defined in
Section 5.4).
Section 3.26. Material Contracts.
(a) Naturol has delivered or otherwise made available to Coronado true,
correct and complete copies of all contracts and agreements (and all
amendments, modifications and supplements thereto and all side letters to
which Naturol is a party affecting the obligations of any party thereunder)
to which Naturol or any of its subsidiaries is a party or by which any of
their properties or assets are bound that are, material to the business,
properties or assets of Naturol and its subsidiaries taken as a whole,
including, without limitation, to the extent any of the following are,
individually or in the aggregate, material to the business, properties or
assets of Naturol and its subsidiaries taken as a whole, all: (i) employment,
product design or development, personal services, consulting,
non-competition, severance, golden parachute or indemnification contracts
(including, without limitation, any contract to which Naturol is a party
involving employees of Naturol); (ii) licensing, publishing, merchandising or
distribution agreements; (iii) contracts granting rights of first refusal or
first negotiation; (iv) partnership or joint venture agreements; (v)
agreements for the acquisition, sale or lease of material properties or
assets or stock or otherwise. (vi) contracts or agreements with any
Governmental Entity; and (vii) all commitments and agreements to enter into
any of the foregoing (collectively, together with any such contracts entered
into in accordance with Section 5.2 hereof, the `Naturol Contracts"). Neither
Naturol nor any of its subsidiaries is a party to or bound by any severance,
golden parachute or other agreement with any employee or consultant pursuant
to which such person would be entitled to receive any additional compensation
or an accelerated payment of compensation as a result of the consummation of
the transactions contemplated hereby.
(b) Each of the Naturol Contracts is valid and enforceable in accordance
with its terms, and there is no default under any Naturol Contract so listed
either by Naturol or, to the knowledge of Naturol, by any other party
thereto, and no event has occurred that with the lapse of time or the giving
of notice or both would constitute a default thereunder by Naturol or, to the
knowledge of Naturol, any other party, in any such case in which such default
or event could reasonably be expected to have a Material Adverse Effect on
Naturol.
(c) No party to any such Naturol Contract has given notice to Naturol of
or made a claim against Naturol with respect to any breach or default
thereunder, in any such case in which such breach or default could reasonably
be expected to have a Material Adverse Effect on Naturol.
ARTICLE 4
Covenants
Section 4.1. Conduct of Business of Coronado. Except as contemplated by
this Agreement or as described in Section 4.1 of the Coronado Disclosure
Schedule, during the period from the date hereof to the Effective Time,
Coronado will conduct its operations in the ordinary course of business
consistent with past practice and, to the extent consistent therewith, with
no less diligence and effort than would be applied in the absence of this
Agreement, seek to preserve intact its current business organization, keep
available the service of its current officers and employees and preserve its
relationships with customers, suppliers and others having business dealings
with it to the end that goodwill and ongoing businesses shall be unimpaired
at the Effective Time. Without limiting the generality of the foregoing,
except as otherwise expressly provided in this Agreement or as described in
Section 4.1 of the Coronado Disclosure Schedule, prior to the Effective Time,
Coronado will not, without the prior written consent of Naturol:
(a) amend its Certificate of Incorporation or Bylaws (or other similar
governing instrument);
(b) amend the terms of any stock of any class or any other securities
(except bank loans) or equity equivalents.
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock, make any other actual, constructive or deemed distribution in respect
of its capital stock or otherwise make any payments to stockholders in their
capacity as such, or redeem or otherwise acquire any of its securities;
(d) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of Coronado (other than the Merger);
(e) (i) incur or assume any long-term or short-term debt or issue any
debt securities except for borrowings or issuances of letters of credit under
existing lines of credit in the ordinary course of business; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person.
(iii) make any loans, advances or capital contributions to, or investments
in, any other person; (iv) pledge or otherwise encumber shares of capital
stock of Coronado; or (v) mortgage or pledge any of its material assets,
tangible or intangible, or create or suffer to exist any material Lien
thereupon (other than tax Liens for taxes not yet due);
(f) except as may be required by law, enter into, adopt or amend or
terminate any bonus, profit sharing, compensation, severance, termination,
stock option, stock appreciation right, restricted stock, performance unit,
stock equivalent, stock purchase agreement, pension, retirement, deferred
compensation, employment, severance or other employee benefit agreement,
trust, plan, fund or other arrangement for the benefit or welfare of any
director, officer or employee in any manner, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay
any benefit not required by any plan and arrangement as in effect as of the
date hereof (including, without limitation, the granting of stock
appreciation rights or performance units); provided, however, that this
paragraph (f) shall not prevent Coronado from (i) entering into employment
agreements or severance agreements with employees in the ordinary course of
business and consistent with past practice or (ii) increasing annual
compensation and/or providing for or amending bonus arrangements for
employees for fiscal 1999 in the ordinary course of year-end compensation
reviews consistent with past practice and paying bonuses to employees for
fiscal 1999 in amounts previously disclosed to Naturol (to the extent that
such compensation increases and new or amended bonus arrangements do not
result in a material increase in benefits or compensation expense to
Coronado);
(g) acquire, sell, lease or dispose of any assets in any single
transaction or series of related transactions (other than in the ordinary
course of business);
(h) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(i) revalue in any material respect any of its assets including, without
limitation, writing down the value of inventory or writing-off notes or
accounts receivable other than in the ordinary course of business;
(j) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or
division thereof or any equity interest therein; (ii) enter into any contract
or agreement other than in the ordinary course of business consistent with
past practice which would be material to Coronado; (iii) authorize any new
capital expenditure or expenditures which, individually is in excess of
$1,000 or, in the aggregate, are in excess of $5,000; provided, however that
none of the foregoing shall limit any capital expenditure required pursuant
to existing contracts;
(k) make any tax election or settle or compromise any income tax
liability material to Coronado;
(l) settle or compromise any pending or threatened suit, action or claim
which (i) relates to the transactions contemplated hereby or (ii) the
settlement or compromise of which could have a Material Adverse Effect on
Coronado;
(m) commence any material research and development project or terminate
any material research and development project that is currently ongoing, in
either case, except pursuant to the terms of existing contracts or in the
ordinary course of business; or
(n) take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.1(a) through 4.1(m) or any action which would make
any of the representations or warranties of contained in this Agreement
untrue or incorrect.
Section 4.2. Conduct of Business of Naturol. Except as contemplated by
this Agreement or as described in Section 4.2 of the Naturol Disclosure
Schedule during the period from the date hereof to the Effective Time,
Naturol will conduct its operations in the ordinary course of business
consistent with past practice and, to the extent consistent therewith, with
no less diligence and effort than would be applied in the absence of this
Agreement, seek to preserve intact its current business organization, keep
available the service of its current officers and employees and preserve its
relationships with customers, suppliers and others having business dealings
with it to the end that goodwill and ongoing businesses shall be unimpaired
at the Effective Time. Without limiting the generality of the foregoing,
except as otherwise expressly provided in this Agreement or as described in
Section 4.2 of the Naturol Disclosure Schedule, prior to the Effective Time,
Naturol will not, without the prior written consent of:
(a) amend its Certificate of Incorporation or Bylaws (or other similar
governing instrument);
(b) authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any
stock of any class or any other securities (except bank loans) or equity
equivalents (including, without limitation, any stock options or stock
appreciation rights;
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock, make any other actual, constructive or deemed distribution in respect
of its capital stock or otherwise make any payments to stockholders in their
capacity as such, or redeem or otherwise acquire any of its securities;
(d) adopt a plan of complete or partial liquidation, dissolution, merger
consolidation, restructuring, re-capitalization or other reorganization of
Naturol (other than the Merger);
(e) (i) incur or assume any long-term or short-term debt or issue any
debt securities except for borrowings or issuances of letters of credit under
existing lines of credit in the ordinary course of business. (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person;
(iii) make any loans, advances or capital contributions to or investments in,
any other person; (iv) pledge or otherwise encumber shares of capital stock
of Naturol or its subsidiaries; or (v) mortgage or pledge any of its material
assets, tangible or intangible, or create or suffer to exist any material
Lien thereupon (other than tax Liens for taxes not yet due);
(f) except as may be required by law, enter into, adopt or amend or
terminate any bonus, profit sharing, compensation, severance, termination,
stock option, stock appreciation right, restricted stock, performance unit
stock equivalent, stock purchase agreement, pension, retirement, deferred
compensation, employment, severance or other employee benefit agreement,
trust, plan, fund or other arrangement for the benefit or welfare of any
director, officer or employee in any manner, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay
any benefit not required by any plan and arrangement as in effect as of the
date hereof (including, without limitation, the granting of stock
appreciation rights or performance units); provided, however, that this
paragraph (f) shall not prevent Naturol or its subsidiaries from (i) entering
into employment agreements or severance agreements with employees in the
ordinary course of business and consistent with past practice or (ii)
increasing annual compensation and/or providing for or amending bonus
arrangements for employees for fiscal 1999 in the ordinary course of yearend
compensation reviews consistent with past practice and paying bonuses to
employees for fiscal 1999 in amounts previously disclosed to (to the extent
that such compensation increases and new or amended bonus arrangements do not
result in a material increase in benefits or compensation expense to
Naturol);
(g) acquire, sell, lease or dispose of any assets in any single
transaction or series of related transactions other than in the ordinary
course of business;
(h) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(i) revalue in any material respect any of its assets, including,
without limitation, writing down the value of inventory of writing-off notes
or accounts receivable other than in the ordinary course of business;
(j) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership, or other business organization or
division thereof or any equity interest therein; (ii) enter into any contract
or agreement other than in the ordinary course of business consistent with
past practice which would be material to Naturol; (iii) authorize any new
capital expenditure or expenditures which, individually, is in excess of
$1,000 or, in the aggregate, are in excess of $5,000: provided, however that
none of the foregoing shall limit any capital expenditure required pursuant
to existing contracts;
(k) make any tax election or settle or compromise any income tax
liability material to Naturol and its subsidiaries taken as a whole;
(l) settle or compromise any pending or threatened suit, action or claim
which (i) relates to the transactions contemplated hereby or (ii) the
settlement or compromise of which could have a Material Adverse Effect on
Naturol;
(m) commence any material research and development project or terminate
any material research and development project that is currently ongoing, in
either case, except pursuant to the terms of existing contracts or except in
the ordinary course of business; or
(n) take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.2(a) through 4.2(m) or any action which would make
any of the representations or warranties of the Naturol contained in this
Agreement untrue or incorrect.
Section 4.3. Preparation of 8-K and the Proxy Statement. Naturol and
Coronado shall promptly prepare and file with the SEC the Proxy Statement, if
required by counsel.
Section 4.4. Other Potential Acquirers.
(a) Naturol, its affiliates and their respective officers, directors,
employees, representatives and agents shall immediately cease any existing
discussions or negotiations, if any, with any parties conducted heretofore
with respect to any Third Party Acquisition.
Section 4.5. Meetings of Stockholders. Each of Naturol and Coronado
shall take all action necessary, in accordance with the respective General
Corporation Law of its respective state, and its respective certificate of
incorporation and bylaws, to duly call, give notice of, convene and hold a
meeting of its stockholders as promptly as practicable, to consider and vote
upon the adoption and approval of this Agreement and the transactions
contemplated hereby. The stockholder votes required for the adoption and
approval of the transactions contemplated by this Agreement shall be the vote
required by the NGCL and its charter and bylaws, in the case of Coronado and
the General Corporation Law of its respective state, and its charter and
bylaws, in the case of Naturol. Coronado and Naturol will, through their
respective Boards of Directors, recommend to their respective stockholders
approval of such matters
Section 4.6. OTC:BB Listing. The parties shall use all reasonable
efforts to cause the Coronado Shares, subject to Rule 144, to be traded on
the Over The Counter Bulletin Board (OTC:BB).
Section 4.7. Access to Information.
(a) Between the date hereof and the Effective Time, Coronado will give
Naturol and its authorized representatives, and Naturol will give Coronado
and its authorized representatives, reasonable access to all employees,
plants, offices, warehouses and other facilities and to all books and records
of itself and its subsidiaries, will permit the other party to make such
inspections as such party may reasonably require and will cause its officers
and those of its subsidiaries to furnish the other party with such financial
and operating data and other information with respect to the business and
properties of itself and its subsidiaries as the other party may from time to
time reasonably request.
(b) Between the date hereof and the Effective Time, Coronado shall
furnish to Naturol, and Naturol will furnish to Coronado, within 25 business
days after the end of each quarter, quarterly statements prepared by such
party (in conformity with its past practices) as of the last day of the
period then ended.
(c) Each of the parties hereto will hold and will cause its consultants
and advisers to hold in confidence all documents and information furnished to
it in connection with the transactions contemplated by this Agreement.
Section 4.8. Additional Agreements, Reasonable Efforts. Subject to the
terms and conditions herein provided, each of the parties hereto agrees to
use all reasonable efforts to take, or cause to be taken, all action, and to
do, or cause to be done, all things reasonably necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation,
(i) cooperating in the preparation and filing of the Proxy Statement and the
8-K, any filings that may be required under the HSR Act, and any amendments
to any thereof; (ii) obtaining consents of all third parties and Governmental
Entities necessary, proper or advisable for the consummation of the
transactions contemplated by this Agreement; (iii) contesting any legal
proceeding relating to the Merger and (iv) the execution of any additional
instruments necessary to consummate the transactions contemplated hereby.
Subject to the terms and conditions of this Agreement, Naturol and Coronado
agree to use all reasonable efforts to cause the Effective Time to occur as
soon as practicable after the stockholder votes with respect to the Merger.
In case at any time after the Effective Time any further action is necessary
to carry out the purposes of this Agreement, the proper officers and
directors of each party hereto shall take all such necessary action.
Section 4.9. Employee Benefits; Stock Option and Employee Purchase
Plans. It is the parties' present intent to provide after the Effective Time
to employees of Naturol employee benefit plans (other than stock option or
other plans involving the potential issuance of securities of Coronado)
which, in the aggregate, are not less favorable than those currently provided
by Naturol. Notwithstanding the foregoing, nothing contained herein shall be
construed as requiring the parties to continue any specific employee benefit
plans.
Section 4.10. Public Announcements. Naturol, and Coronado will consult
with one another before issuing any press release or otherwise making any
public statements with respect to the transactions contemplated by this
Agreement, including, without limitation, the Merger, and shall not issue any
such press release or make any such public statement prior to such
consultation, except as may be required by applicable law or by obligations
pursuant to any listing agreement with the NASD Over The Counter Bulletin
Board (OTC:BB) as determined by Naturol or Coronado.
Section 4.11. Indemnification.
(a) To the extent, if any, not provided by an existing right under one
of the parties' directors and officers liability insurance policies, from and
after the Effective Time, Coronado shall, to the fullest extent permitted by
applicable law, indemnify, defend and hold harmless each person who is now,
or has been at any time prior to the date hereof, or who becomes prior to the
Effective Time, a director, officer or employee of the parties hereto or any
subsidiary thereof (each an "Indemnified Party" and, collectively, the
``Indemnified Parties") against all losses, expenses (including reasonable
attorneys' fees and expenses), claims, damages or liabilities or, subject to
the proviso of the next succeeding sentence, amounts paid in settlement
arising out of actions or omissions occurring at or prior to the Effective
Time and whether asserted or claimed prior to, at or after the Effective
Time) that are in whole or in part (i) based on, or arising out of the fact
that such person is or was a director, officer or employee of such party or a
subsidiary of such party or (ii) based on, arising out of or pertaining to
the transactions contemplated by this Agreement. In the event of any such
loss expense, claim, damage or liability (whether or not arising before the
Effective Time), (i) Coronado shall pay the reasonable fees and expenses of
counsel selected by the Indemnified Parties, which counsel shall be
reasonably satisfactory to Coronado, promptly after statements therefor are
received and otherwise advance to such Indemnified Party upon request
reimbursement of documented expenses reasonably incurred, in either case to
the extent not prohibited by the NGCL or its certificate of incorporation or
bylaws, (ii) Coronado will cooperate in the defense of any such matter and
(iii) any determination required to be made with respect to whether an
Indemnified Party's conduct complies with the standards set forth under the
NGCL and Coronado's certificate of incorporation or bylaws shall be made by
independent counsel mutually acceptable to Coronado and the Indemnified
Party; provided, however, that Coronado shall not be liable for any
settlement effected without its written consent (which consent shall not be
unreasonably withheld). The Indemnified Parties as a group may retain only
one law firm with respect to each related matter except to the extent there
is, in the opinion of counsel to an Indemnified Party, under applicable
standards of professional conduct, conflict on any significant issue between
positions of any two or more Indemnified Parties.
(b) In the event Coronado or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity or such consolidation or merger
or (ii) transfers all or substantially all of its properties and assets to
any person, then and in either such case, proper provision shall be made so
that the successors and assigns of Coronado shall assume the obligations set
forth in this Section 4.11.
(c) To the fullest extent permitted by law, from and after the Effective
Time, all rights to indemnification now existing in favor of the employees,
agents, directors or officers of Coronado and Naturol and their subsidiaries
with respect to their activities as such prior to the Effective Time, as
provided in Coronado's and Naturol's certificate of incorporation or bylaws,
in effect on the date thereof or otherwise in effect on the date hereof,
shall survive the Merger and shall continue in full force and effect for a
period of not less than six years from the Effective Time.
(d) The provisions of this Section 4.11 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party, his or her
heirs and his or her representatives.
Section 4.12. Notification of Certain Matters. The parties hereto shall
give prompt notice to the other parties, of (i) the occurrence or
nonoccurrence of any event the occurrence or nonoccurrence of which would be
likely to cause any representation or warranty contained in this Agreement to
be untrue or inaccurate in any material respect at or prior to the Effective
Time, (ii) any material failure of such party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder, (iii) any notice of, or other communication relating to, a default
or event which, with notice or lapse of time or both, would become a default,
received by such party or any of its subsidiaries subsequent to the date of
this Agreement and prior to the Effective Time, under any contract or
agreement material to the financial condition, properties, businesses or
results of operations of such party and its subsidiaries taken as a whole to
which such party or any of its subsidiaries is a party or is subject, (iv)
any notice or other communication from any third party alleging that the
consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement, or (v) any material adverse
change in their respective financial condition, properties, businesses,
results of operations or prospects taken as a whole, other than changes
resulting from general economic conditions; provided, however, that the
delivery of any notice pursuant to this Section 4.12 shall not cure such
breach or non-compliance or limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
ARTICLE 5
Conditions to Consummation of the Merger
Section 5.1. Conditions to Each Party's Obligations to Effect the
Merger. The respective obligations of each party hereto to effect the Merger
are subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) this Agreement shall have been approved and adopted by the requisite
vote of the stockholders of Coronado and Naturol;
(b) this Agreement shall have been approved and adopted by the Board of
Directors of Coronado and Naturol;
(c) no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
United States court or United States governmental authority which prohibits,
restrains, enjoins or restricts the consummation of the Merger;
(d) any waiting period applicable to the Merger under the HSR Act shall
have terminated or expired, and any other governmental or regulatory notices
or approvals required with respect to the transactions contemplated hereby
shall have been either filed or received; and
Section 5.2. Conditions to the Obligations of Coronado. The obligation
of Coronado to effect the Merger is subject to the satisfaction at or prior
to the Effective Time of the following conditions:
(a) the representations of Naturol contained in this Agreement or in any
other document delivered pursuant hereto shall be true and correct (except to
the extent that the breach thereof would not have a Material Adverse Effect
on Naturol) at and as of the Effective Time with the same effect as if made
at and as of the Effective Time (except to the extent such representations
specifically related to an earlier date, in which case such representations
shall be true and correct as of such earlier date), and at the Closing
Naturol shall have delivered to Coronado a certificate to that effect;
(b) each of the covenants and obligations of Naturol to be performed at
or before the Effective Time pursuant to the terms of this Agreement shall
have been duly performed in all material respects at or before the Effective
Time and at the Closing Naturol shall have delivered to Coronado a
certificate to that effect;
(d) Naturol shall have obtained the consent or approval of each person
whose consent or approval shall be required in order to permit the Merger as
relates to any obligation, right or interest of Naturol under any loan or
credit agreement, note, mortgage, indenture, lease or other agreement or
instrument, except those for which failure to obtain such consents and
approvals would not, in the reasonable opinion of Coronado, individually or
in the aggregate, have a Material Adverse Effect on Naturol;
(e) there shall have been no events, changes or effects with respect to
Naturol or its subsidiaries having or which could reasonably be expected to
have a Material Adverse Effect on Naturol; and
Section 5.3. Conditions to the Obligations of Naturol. The respective
obligations of Naturol to effect the Merger are subject to the satisfaction
at or prior to the Effective Time of the following conditions:
(a) the representations of Coronado contained in this Agreement or in
any other document delivered pursuant hereto shall be true and correct
(except to the extent that the breach thereof would not have a Material
Adverse Effect on Coronado) at and as of the Effective Time with the same
effect as if made at and as of the Effective Time (except to the extent such
representations specifically related to an earlier date, in which case such
representations shall be true and correct as of such earlier date), and at
the Closing Coronado shall have delivered to Naturol a certificate to that
effect;
(b) each of the covenants and obligations of Coronado to be performed at
or before the Effective Time pursuant to the terms of this Agreement shall
have been duly performed in all material respects at or before the Effective
Time and at the Closing Coronado shall have delivered to Naturol a
certificate to that effect; and
(c) there shall have been no events, changes or effects with respect to
Coronado having or which could reasonably be expected to have a Material
Adverse Effect on Coronado.
ARTICLE 6
Termination; Amendment; Waiver
Section 6.1. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether
before or after approval and adoption of this Agreement by Coronado's or
Naturol's stockholders:
(a) by mutual written consent of Coronado and Naturol;
(b) by Naturol or Coronado if (i) any court of competent jurisdiction in
the United States or other United States Governmental Entity shall have
issued a final order, decree or ruling or taken any other final action
restraining, enjoining or otherwise prohibiting the Merger and such order,
decree, ruling or other action is or shall have become nonappealable or (ii)
the Merger has not been consummated by February 1, 2002; provided, however,
that no party may terminate this Agreement pursuant to this clause (ii) if
such party's failure to fulfill any of its obligations under this Agreement
shall have been the reason that the Effective Time shall not have occurred on
or before said date;
(c) by Coronado if (i) there shall have been a breach of any
representation or warranty on the part of Naturol set forth in this
Agreement, or if any representation or warranty of Naturol shall have become
untrue, in either case such that the conditions set forth in Section 5.2(a)
would be incapable of being satisfied by February 1, 2002 (or as otherwise
extended), (ii) there shall have been a breach by Naturol of any of their
respective covenants or agreements hereunder having a Material Adverse Effect
on Naturol or materially adversely affecting (or materially delaying) the
consummation of the Merger, and Naturol, as the case may be, has not cured
such breach within 20 business days after notice by Coronado thereof,
provided that Coronado has not breached any of its obligations hereunder,
(iii) Coronado shall have convened a meeting of its stockholders to vote upon
the Merger and shall have failed to obtain the requisite vote of its
stockholders; or (iv) Coronado shall have convened a meeting of its Board of
Directors to vote upon the Merger and shall have failed to obtain the
requisite vote;
(d) by Naturol if (i) there shall have been a breach of any
representation or warranty on the part of Coronado set forth in this
Agreement, or if any representation or warranty of Coronado shall have become
untrue, in either case such that the conditions set forth in Section 5.3(a)
would be incapable of being satisfied by February 1, 2002 (or as otherwise
extended), (ii) there shall have been a breach by Coronado of its covenants
or agreements hereunder having a Material Adverse Effect on Coronado or
materially adversely affecting (or materially delaying) the consummation of
the Merger, and Coronado, as the case may be, has not cured such breach
within twenty business days after notice by Naturol thereof, provided that
Naturol has not breached any of its obligations hereunder, (iii) the Coronado
Board shall have recommended to Coronado's stockholders a Superior Proposal,
(iv) the Coronado Board shall have withdrawn, modified or changed its
approval or recommendation of this Agreement or the Merger or shall have
failed to call, give notice of, convene or hold a stockholders' meeting to
vote upon the Merger, or shall have adopted any resolution to effect any of
the foregoing, (v) Naturol shall have convened a meeting of its stockholders
to vote upon the Merger and shall have failed to obtain the requisite vote of
its stockholders or (vi) Coronado shall have convened a meeting of its
stockholders to vote upon the Merger and shall have failed to obtain the
requisite vote of its stockholders.
Section 6.2. Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 6.1, this Agreement shall
forthwith become void and have no effect, without any liability on the part
of any party hereto or its affiliates, directors, officers or stockholders,
other than the provisions of this Section 6.2 and Sections 4.7(c) and 6.3
hereof. Nothing contained in this Section 6.2 shall relieve any party from
liability for any breach of this Agreement.
Section 6.3. Fees and Expenses. Except as specifically provided in this
Section 6.3, each party shall bear its own expenses in connection with this
Agreement and the transactions contemplated hereby.
Section 6.4. Amendment. This Agreement may be amended by action taken by
Coronado and Naturol at any time before or after approval of the Merger by
the stockholders of Coronado and Naturol (if required by applicable law) but,
after any such approval, no amendment shall be made which requires the
approval of such stockholders under applicable law without such approval.
This Agreement may not be amended except by an instrument in writing signed
on behalf of the parties hereto.
Section 6.5. Extension; Waiver. At any time prior to the Effective Time,
each party hereto may (i) extend the time for the performance of any of the
obligations or other acts of any other party, (ii) waive any inaccuracies in
the representations and warranties of any other party contained herein or in
any document, certificate or writing delivered pursuant hereto or (iii) waive
compliance by any other party with any of the agreements or conditions
contained herein. Any agreement on the part of any party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party hereto to
assert any of its rights hereunder shall not constitute a waiver of such
rights.
ARTICLE 7
Miscellaneous
Section 7.1. Nonsurvival of Representations and Warranties. The
representations and warranties made herein shall not survive beyond the
Effective Time or a termination of this Agreement. This Section 7.1 shall not
limit any covenant or agreement of the parties hereto which by its terms
requires performance after the Effective Time.
Section 7.2. Entire Agreement; Assignment. This Agreement (a)
constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all other prior agreements and
understandings both written and oral, between the parties with respect to the
subject matter hereof and (b) shall not be assigned by operation of law or
otherwise.
Section 7.3. Validity. If any provision of this Agreement, or the
application thereof to any person or circumstance, is held invalid or
unenforceable, the remainder of this Agreement, and the application of such
provision to other persons or circumstances, shall not be affected thereby,
and to such end, the provisions of this Agreement are agreed to be severable.
Section 7.4. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by
facsimile or by registered or certified mail (postage prepaid, return receipt
requested), to each other party as follows:
If to Naturol:
NATUROL, INC.
Xxxx XxXxxxx
0000 Xxxxxxxxx Xxx,
Xxx Xxxxx, Xxxxxx 00000
with a copy to:
Xxxxxxxxxx Law Group
Xxxxxx X. Xxxxxxxxxx, Esq.
Suite 400
000 Xxxx Xxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
if to Coronado:
COLORADO EXPOLORATIONS LTD.
000 Xxxxxxx Xxxxxx
Xxxxx 000
XX, Xxxxxx X0X 0X0
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
Section 7.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada, without regard
to the principles of conflicts of law thereof.
Section 7.6. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of
or to affect the meaning or interpretation of this Agreement.
Section 7.7. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and its successors and
permitted assigns, and except as provided in Sections 4.9 and 4.11, nothing
in this Agreement, express or implied, is intended to or shall confer upon
any other person any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
Section 7.8. Certain Definitions. For the purposes of this Agreement,
the term:
(a) "affiliate" means (except as otherwise provided in Sections 2.19,
3.19 and 4.13) a person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
the first mentioned person;
(b) "business day" means any day other than a day on which Nasdaq is
closed;
(c) "capital stock" means common stock, preferred stock, partnership
interests, limited liability company interests or other ownership interests
entitling the holder thereof to vote with respect to matters involving the
issuer thereof;
(d) "knowledge'' or "known'' means, with respect to any matter in
question, if an executive officer of Coronado or Naturol or its subsidiaries,
as the case may be, has actual knowledge of such matter;
(e) "person" means an individual, corporation, partnership, limited
liability company, association, trust, unincorporated organization or other
legal entity; and
(f) "subsidiary" or "subsidiaries" of Coronado, Naturol or any other
person, means any corporation, partnership, limited liability company,
association, trust, unincorporated association or other legal entity of which
Coronado, Naturol or any such other person, as the case may be (either alone
or through or together with any other subsidiary), owns, directly or
indirectly, 50% or more of the capital stock, the holders of which are
generally entitled to vote for the election of the board of directors or
other governing body of such corporation or other legal entity.
Section 7.9. Personal Liability. This Agreement shall not create or be
deemed to create or permit any personal liability or obligation on the part
of any direct or indirect stockholder of Coronado, Naturol or any officer,
director, employee, agent, representative or investor of any party hereto.
Section 7.10. Specific Performance. The parties hereby acknowledge and
agree that the failure of any party to perform its agreements and covenants
hereunder, including its failure to take all actions as are necessary on its
part to the consummation of the Merger, will cause irreparable injury to the
other parties for which damages, even if available, will not be an adequate
remedy. Accordingly, each party hereby consents to the issuance of injunctive
relief by any court of competent jurisdiction to compel performance of such
party's obligations and to the granting by any court of the remedy of
specific performance of its obligations hereunder; provided, however, that,
if a party hereto is entitled to receive any payment or reimbursement of
expenses pursuant to Sections 6.3(a), (b) or (c), it shall not be entitled to
specific performance to compel the consummation of the Merger.
Section 7.11. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement.
In Witness Whereof, each of the parties has caused this Agreement to be duly
executed on its behalf as of the day and year first above written.
NATUROL, INC.
By: /s/Xxxx McClory_____
Name: Xxxx XxXxxxx
Title: President
COLORADO EXPOLORATIONS LTD.
By: /s/Xxxx X. Hethey___
Name: Xxxx X. Hethey
Title: President
CORONADO DISCLOSURE SCHEDULE
Schedule 2.1 Organization See Amended
Articles/Bylaws/Minutes
Schedule 2.2(c) Subsidiary Coronado
Subsidiary Corp. - 100% owned
Schedule 2.6 Consents & Approvals None
Required
Schedule 2.7 No Default Not Applicable
Schedule 2.8 No Undisclosed Liability None
Exist
Schedule 2.9 Litigation None Exist
Schedule 2.10 Compliance with
Applicable Law Not Applicable -
full disclosed in 10KSB
Schedule 2.11 Employee Benefit Plans Section
2.11(a) Not Applicable - None
Exist
Section 2.11(b) No Benefit
Plan Exist
Section 2.11( c)No Options
Exist
Section 2.11(d) No
Agreements Exist
Schedule 2.12 Environmental Laws and
Regs Not Applicable
Schedule 2.13 Tax Matters None Exist
Schedule 2.14 Title to Property None Exist
Schedule 2.15 Intellectual Property None
Exist
Schedule 2.16 Insurance None Exist
Schedule 2.17 Vote Required See Shareholder
Meeting Certificate
Schedule 2.18 Tax Treatment Not Applicable
Schedule 2.19 Affiliates Xxxx X. Hethey
Carsten Mide
Xxxxxx Xxxxx
Schedule 2.20 Certain Business
Practices None Exist
Schedule 2.21 Insider Interest None Exist
Schedule 2.22 Opinion of Financial
Adviser Waived - None Exist
Schedule 2.23 Broker None Exist
Schedule 4.1 Conduct of Business See Amended
& Restated Articles
NATUROL DISCLOSURE SCHEDULE
Schedule 3.2(b) Subsidiary Stock None Exist
Schedule 3.2(c) Capital Stock Rights None Exist other than as in
Articles
Schedule 3.2(d) Securities conversions None Exist
Schedule 3.2 (f) Subsidiaries None Exist
Schedule 3.6 Consents & Approvals None Required
Schedule 3.7 No Default Not Applicable
Schedule 3.8 No Undisclosed Liability None Exist
Schedule 3.9 Litigation None Exist
Schedule 3.10 Compliance with Applicable Law Not Applicable
Schedule 3.11 Employee Benefit Plans Section 3.11(c)No Options Exist
Section 3.11(e) No Agreements
Exist
Schedule 3.12 Environmental Laws and Regs Not Applicable
Schedule 3.13 Tax Matters None Exist
Schedule 3.14 Title to Property None Exist
Schedule 3.15(b) Intellectual Property None Exist
Schedule 3.16 Insurance None Exist
Schedule 3.17 Vote Required See Shareholder Meeting
Certificate
Schedule 3.18 Tax Treatment Not Applicable
Schedule 3.19 Affiliates Xxxx XxXxxxx
Xxxxx Xxxx
Xxxxxxx X. Ram
Schedule 3.20 Certain Business Practices None Exist
Schedule 3.21 Insider Interest None Exist
Schedule 3.22 Opinion of Financial Adviser Waived - None Exist
Schedule 2.23 Broker None Exist
Schedule 4.2 Conduct of Business See Amended & Restated Articles
