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Exhibit 10.2
PLAN OF REORGANIZATION AND EXCHANGE AGREEMENT
THIS AGREEMENT dated as of March 20, 2000 between Cooperative
Holdings, Inc., a Delaware corporation ("Cooperative Holdings"), Cooperative
Communications, Inc., a New Jersey corporation ("Cooperative Communications"),
The ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 1996 Family Limited Partnership, The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
1996 Family Limited Partnership and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. (each a
"Stockholder", and collectively, the "Stockholders") and ▇▇▇▇▇ ▇▇▇▇▇▇ (the
"Optionholder"). The Stockholders and the Optionholder are sometimes
collectively referred to herein as, the "Holders".
W I T N E S S E T H:
WHEREAS, the Holders seek to reorganize (the "Reorganization")
Cooperative Communications to facilitate an initial public offering under the
Securities Act of 1933, and in connection therewith, seek to exchange all of the
issued and outstanding securities of Cooperative Communications for the
securities of Cooperative Holdings, whereby Cooperative Communications will
become a wholly-owned subsidiary of Cooperative Holdings and Cooperative
Holdings will offer shares of its Common Stock, $0.01 par value, to the public
in such public offering; and
WHEREAS, in connection with the Reorganization, the Stockholders, who
together comprise all of the members of Eastern Computer Services, LLC ("Eastern
Computer") and hold all of the ownership interests of Eastern Computer
("Interests"), shall contribute to Cooperative Holdings all of their Interests
in Eastern Computer so that Eastern Computer shall become an entity wholly-owned
by Cooperative Holdings; and
WHEREAS, in connection with the Reorganization, Cooperative Holdings
will issue to each Stockholder who together comprise all of the stockholders of
Cooperative Communications and hold all of the issued and outstanding shares of
the capital stock of Cooperative Communications, 3.444 shares of Cooperative
Holdings' Common Stock (the "Parent Shares") in exchange for each share of
Cooperative Communications' Common Stock (the "Subsidiary Shares") held by each
Stockholder; and
WHEREAS, in connection with the Reorganization, Cooperative Holdings
will issue to the Optionholder an option (the "Parent Option") to purchase
30,000 shares of Cooperative Holdings' Common Stock, in exchange for the option
(the "Subsidiary Option") held by the Optionholder to purchase 30,000 shares of
Cooperative Communications' Common Stock, such exchange of options to be made on
a share-for-share basis (the Subsidiary Options and the Subsidiary Shares are
sometimes collectively referred to herein as, the "Subsidiary Securities").
NOW, THEREFORE, in consideration of the promises and the mutual
covenants and agreements hereinafter set forth, and for other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:
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' SECTION I
EXCHANGE OF SECURITIES
1.1 EXCHANGE OF SECURITIES. Subject to the terms and conditions of this
Agreement and on the basis of the representations, warranties, covenants and
agreements herein contained, Cooperative Holdings hereby agrees to issue, sell
and convey to each Holder, and each Holder subscribes for and agrees to
purchase, acquire and accept from Cooperative Holdings the Parent Shares or the
Parent Options, as applicable, in exchange for the Subsidiary Shares or
Subsidiary Options held by such Holder, as follows: (i) 3.444 Parent Shares in
exchange for each Subsidiary Share; and (ii) a Parent Option to purchase one (1)
share of Cooperative Holdings' Common Stock, in exchange for each Subsidiary
Option to purchase one (1) share of Cooperative Communications' Common Stock.
SECTION II
THE CLOSING
2.1 TIME AND PLACE OF THE CLOSING; ESCROW. The closing (the "Closing")
shall be held at the offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Professional Corporation
("▇▇▇▇▇▇▇▇ Ingersoll"), ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ at
10:00 A.M., local time, on March 20, 2000 (the "Closing Date") or at such
other time, place and date as the Holders shall determine. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
shall serve as escrow agent in connection with the Closing and shall hold all
documentation and signatures for each of the Holders until such time as all
requisite signatures have been received, at which time ▇▇▇▇▇▇▇▇ Ingersoll shall
be authorized, without further action, to consummate the Closing.
2.2 DELIVERY OF THE PARENT SHARES AND THE PARENT OPTION BY COOPERATIVE
HOLDINGS. On the Closing Date, Cooperative Holdings shall (i) deliver to each
Stockholder stock certificates representing the applicable Parent Shares, and
(ii) deliver to the Optionholder the Parent Option to purchase that number of
shares of Cooperative Holdings as set forth in the Subsidiary Options.
2.3 DELIVERY OF THE SUBSIDIARY SECURITIES BY THE HOLDERS. On the
Closing Date, each Stockholder shall deliver to Cooperative Holdings, the stock
certificates representing the Subsidiary Shares held by such Stockholder and any
other documents necessary to transfer to Cooperative Holdings good and
marketable title to all of the Subsidiary Shares held by such Stockholder, free
and clear of any Encumbrance (as defined in Section 4.1). On the Closing Date,
the Optionholder shall deliver to Cooperative Holdings the Subsidiary Option
held by the Optionholder, free and clear of any Encumbrance.
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SECTION III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF COOPERATIVE HOLDINGS
Cooperative Holdings represents, warrants and covenants to the
Holders as follows:
3.1 ORGANIZATION; GOOD STANDING. Cooperative Holdings is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware.
3.2 AUTHORITY. Cooperative Holdings has full corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder, and no consent or approval of any other person or governmental
authority is required therefor. The execution and delivery of this Agreement by
Cooperative Holdings, the performance by Cooperative Holdings of its agreements
hereunder and the consummation by Cooperative Holdings of the transactions
contemplated hereby have been duly authorized by all necessary corporate action.
This Agreement constitutes a valid and binding obligation of Cooperative
Holdings, enforceable against Cooperative Holdings in accordance with its terms.
3.3 NO CONFLICTS. Neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, violates any
provision of the Certificate of Incorporation or ByLaws of Cooperative Holdings
or any law, statute, ordinance, regulation, order, judgment or decree of any
court or governmental agency, or conflicts with or results in any breach of any
of the terms of, or constitutes a default under or results in the termination of
or the creation of any lien or any other rights pursuant to the terms of any
contract or agreement to which Cooperative Holdings is a party or by which
Cooperative Holdings or any of its assets is bound.
3.4 DUE AUTHORIZATION; CAPITALIZATION. The Parent Shares and the Parent
Option being issued hereunder have been duly authorized and, in the case of the
Parent Shares, when issued to each Stockholder for the consideration herein
provided, shall be fully paid and nonassessable, and in the case of the Parent
Option, the shares of Cooperative Holdings' Common Stock underlying the Parent
Option when issued to the Optionholder as provided herein and upon exercise of
such Parent Option in accordance with the provisions of the applicable agreement
representing such Subsidiary Option shall be fully paid and nonassesable. Other
than the Parent Shares and the Parent Option being issued hereunder, as of the
Closing Date, there are no other equity securities of Cooperative Holdings
issued and outstanding.
SECTION IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF COOPERATIVE COMMUNICATIONS
Cooperative Communications represents, warrants and covenants to
the Holders as follows:
4.1 ORGANIZATION; GOOD STANDING. Cooperative Communications is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New Jersey.
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4.2 AUTHORITY. Cooperative Communications has full corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder, and no consent or approval of any other person or governmental
authority is required therefor. The execution and delivery of this Agreement by
Cooperative Communications, the performance by Cooperative Communications of its
agreements hereunder and the consummation by Cooperative Communications of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action. This Agreement constitutes a valid and binding obligation of
Cooperative Communications, enforceable against Cooperative Communications in
accordance with its terms.
4.3 NO CONFLICTS. Neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, violates any
provision of the Certificate of Incorporation or ByLaws of Cooperative
Communications, as amended, or any law, statute, ordinance, regulation, order,
judgment or decree of any court or governmental agency, or conflicts with or
results in any breach of any of the terms of, or constitutes a default under or
results in the termination of or the creation of any lien or any other rights
pursuant to the terms of any contract or agreement to which Cooperative
Communications is a party or by which Cooperative Communications or any of its
assets is bound.
4.4 CAPITALIZATION.
The capital stock of Corporate Communications, as authorized by the
Certificate of Incorporation, as amended, consists of 20,000,000 shares of
Common Stock, no par value, of which 5,400,000 shares are issued and outstanding
and held of record, in the aggregate, by the Stockholders. The Company has also
reserved 30,000 shares of Common Stock, no par value, for issuance upon the
exercise by the Optionholder of the Subsidiary Options.
SECTION V
REPRESENTATIONS AND WARRANTIES OF THE HOLDERS
Each of the Holders severally, and not jointly, represents and warrants
to Cooperative Holdings and Cooperative Communications as follows:
5.1 OWNERSHIP. The Subsidiary Shares or the Subsidiary Option, as the
case may be, held by such Holder, as set forth on Schedule I hereto, is lawfully
owned of record and beneficially by such Holder, free and clear of any claim,
lien, pledge, option or other encumbrance (collectively, "Encumbrances"). Except
for the Subsidiary Securities: (i) the Holder does not own beneficially or of
record, any shares of the capital stock of Cooperative Communications; (ii) the
Holder does not own any subscription, warrant, option, convertible security, or
other right (contingent or otherwise) to purchase or otherwise acquire any
capital stock or other equity securities of Cooperative Communications from
Cooperative Communications or from any other person; and (iii) the Holder does
not claim any right (preemptive or otherwise) to receive any shares,
subscriptions, warrants, options, convertible securities, or other such rights
to be issued at any time by Cooperative Communications. Upon the exchange of the
Holder's Subsidiary Securities for the Parent Shares or the Parent Option, as
applicable, as provided for herein, Cooperative Holdings shall acquire good
title
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to such Subsidiary Securities, free and clear of all Encumbrances and
Cooperative Communications shall be entitled to cancel all of the outstanding
Subsidiary Securities held by such Holder, whether or not such Holder has
tendered such instruments thereto or to Cooperative Holdings. Each Holder
represents and agrees that such Holder does not claim any right (preemptive or
otherwise) to receive any shares, subscriptions, warrants, options, convertible
securities, or other such rights to receive any other security of Cooperative
Holdings other than as set forth herein.
5.2 AUTHORITY. The Holder has the full power and authority to execute
and deliver this Agreement and to perform the obligations hereunder, and no
consent or approval of any other person or governmental authority is required
therefor. The execution and delivery of this Agreement by the Holder, the
performance by the Holder of its agreements hereunder and the consummation by
the Holder of the transactions contemplated hereby have been duly authorized by
all necessary action.
5.3 NO CONFLICTS. Neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated hereby (i) violates any
other organizational document to which such Holder is a party or subject to,
(ii) violates any law, statute, ordinance, regulation, order, judgment or decree
of any court or governmental agency, or (iii) conflicts with or results in any
breach of any terms of, or constitutes a default under or results in the
termination of or the creation of any lien or any other rights pursuant to the
terms of any contract or agreement to which such Holder is a party or by which
such Holder or any of its assets are bound.
5.4 RELEASE. The Holder knowingly and voluntarily releases and forever
discharges Cooperative Communications and Cooperative Holdings and/or all of its
stockholders, executors, assigns, past and present affiliates, subsidiaries,
officers, directors, employees and agents from any and all claims known and
unknown, which any such Holder may have, including, but not limited to, any
claim arising from Cooperative Communications' original issuance of the
Subsidiary Securities to such Holder and with respect to the Optionholder,
arising from that certain Option Agreement, dated as of June 12, 1996 by and
between Cooperative Communications and the Optionholder.
SECTION VI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
6.1 SURVIVAL OF REPRESENTATION AND WARRANTIES. All representations,
warranties, waivers and acknowledgements contained herein (including with
respect to the information contained on the Schedules hereto) shall survive the
execution and delivery hereof and the Closing hereunder and shall continue in
full force and effect thereafter; notwithstanding any investigation at any time
made by or on behalf of any party hereto.
6.2 INDEMNIFICATION. Each Holder shall jointly and severally indemnify
and hold harmless Cooperative Holdings and Cooperative Communications against
and from any losses, claims, damages or liabilities (or actions in respect
thereof) arising out of or based upon the breach, falsity or incorrectness as of
the Closing of any representation, warranty, waiver or acknowledgement of such
Holder contained herein. Notwithstanding the foregoing, each Holder expressly
agrees and acknowledges that the right of indemnification granted herein to
Cooperative Holdings and
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Cooperative Communications shall not be deemed to be the exclusive remedy
available to Cooperative Holdings and Cooperative Communications.
SECTION VII
ACTIONS OF PARENT AND SUBSIDIARY WITH RESPECT TO THE REORGANIZATION
7.1 BOOKS AND RECORDS. Each Holder hereby consents to the taking of all
actions necessary to effect the Reorganization and the transactions set forth in
this Agreement on the books and records of Cooperative Holdings and Cooperative
Communications, including, without limitations, the cancellation of all
outstanding Subsidiary Securities, whether or not such Subsidiary Securities are
surrendered for cancellation.
SECTION VIII
TAX FREE REORGANIZATION
8.1 TAX FREE REORGANIZATION. The Reorganization contemplated herein is
intended to qualify as a non-taxable reorganization pursuant to Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended. Each Holder
further agrees to cooperate with Cooperative Holdings, Cooperative
Communications and each of the other Holders (including but not limited to,
consistent reporting and filing with each appropriate tax authority) in order
for the transactions to qualify as such a non-taxable reorganization.
SECTION IX
REVIEW BY ADVISORS
9.1 REVIEW BY ADVISORS. Each Holder acknowledges and agrees that such
Holder has had an adequate opportunity to review this Agreement. Each Holder
acknowledges that Cooperative Holdings and Cooperative Communications has
recommended that this Agreement be reviewed by such Holder's legal, financial
and accounting advisors. Each Holder acknowledges that it has had an opportunity
to review this Agreement with such Holder's legal, financial and accounting
advisors.
SECTION X
MISCELLANEOUS
10.1 NOTICES. All notices required or permitted under this Agreement
shall be in writing and delivered by any method providing for proof of delivery
to the address of the party or parties set forth on the signature page hereof.
Any notice shall be deemed to have been given on the date of receipt.
10.2 ASSIGNMENT. Other than as provided herein, this Agreement shall
not be assignable by any of the parties hereto except pursuant to a writing
executed by all of the parties hereto.
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10.3 INVALIDITY, ETC. If any provision of this Agreement, or the
application of any such provision to any person or circumstance, shall be held
invalid by a court of competent jurisdiction, the remainder of this Agreement,
or the application of such provision to persons or circumstances other than
those as to which it is held invalid, shall not be affected thereby.
10.4 HEADINGS. The headings of this Agreement are for convenience of
reference only and are not part of the substance of this Agreement.
10.5 BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
10.6 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware applicable in the case of
agreements made and to be performed entirely within such State.
10.7 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first above written.
PARENT: STOCKHOLDERS:
COOPERATIVE HOLDINGS, INC. THE ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 1996
FAMILY LIMITED PARTNERSHIP
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇
__________________________ ____________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
_______________________ __________________________
Title: President and Chief Title: General Partner
Executive Officer
Address: ▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Address: ▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile:
SUBSIDIARY:
COOPERATIVE COMMUNICATIONS, INC. THE ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 1996
FAMILY LIMITED PARTNERSHIP
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_______________________________ ___________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President Title: Co-General Partner
Address: ▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile:_____________________
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
_______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
OPTIONHOLDER:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
___________________________________
▇▇▇▇▇ ▇▇▇▇▇▇
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