CONTRIBUTION AGREEMENT,
PLAN AND AGREEMENT OF REORGANIZATION AND DISTRIBUTION
This Agreement is made as of ------- --, 2000, by GENROCO, INC.
("GENROCO"), a Wisconsin corporation, with offices at 000 Xxxx Xxxxxxx,
Xxxxxxx, Xxxxxxxxx 00000 and VIDEOPROPULSION, INC. ("VideoPropulsion"), a
Wisconsin corporation, with offices at 000 Xxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxx
00000.
WHEREAS, VideoPropulsion is a corporation formed on [October --, 1999],
and established for the purpose of taking title to certain assets associated
with the video business of GENROCO (the "Division") and assuming certain of
the liabilities associated with the video Division, such that VideoPropulsion
will own substantially all of the assets, business and operations formerly and
currently used and conducted by the Division (the "Division Business");
WHEREAS, the parties wish to provide for the transfer of such net assets
as will be transferred and delivered to VideoPropulsion, solely in exchange
for the common stock of VideoPropulsion in accordance with the provisions of
Section 351 of the Internal Revenue Code of 1986, as amended;
WHEREAS, the parties wish to provide for the assumption by
VideoPropulsion of certain liabilities associated with the Division and the
Division Business;
WHEREAS, GENROCO intends to distribute all of the common stock of
VideoPropulsion, pro rata, to the shareholders of GENROCO in accordance with
resolu tions of the Board of Directors of GENROCO and in accordance with the
terms of a tax opinion obtained from GENROCO's tax counsel to the effect that
such distribution will not be taxable to the shareholders of GENROCO (the
"Distribution"), so that after the Distribution GENROCO will own no shares of
stock representing the equity of VideoPropulsion and VideoPropulsion will be a
corporation whose shares are quoted and traded as an over the counter
security;
WHEREAS, the parties wish to provide for their agreements with respect to
certain matters pertaining to their business relationships following the
Distribution and other matters mutual to their interest;
NOW THEREFORE, in furtherance of the foregoing purposes and in considera
tion of the issuance of the common stock of VideoPropulsion to GENROCO as
provided in Section 3.1 and the mutual promises and undertakings herein
contained and contained in any agreement or other document executed in
connection with this Agreement, the parties agree as follows:
ARTICLE I
EFFECTIVE DATE AND CLOSING
SECTION 1.1 Unless otherwise provided in this Agreement, or in any
agreement to be executed in connection with this Agreement, the effective date
of each transfer of property, assumption of liability, license, undertaking,
or agreement in connection herewith shall be 12:01 a.m., Central Standard
Time, January 1, 2000 (the "Effective Date"), or such other date as may be
fixed by the Board of Directors of GENROCO.
SECTION 1.2 This Agreement shall be void if the Board of Directors of
GENROCO refrains from declaring or proceeding with the Distribution.
SECTION 1.3 Unless otherwise provided herein, the closing of the
transactions contemplated hereunder shall occur by the lodging of each of the
executed instruments of transfer, assumptions of liability, undertakings,
agreements, instruments or other documents executed or to be executed in
connection with this Agreement with Xxxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, attorneys for GENROCO, to be held in
escrow for delivery as provided in Section 1.4 of this Agreement.
SECTION 1.4 Upon receipt of a certificate of the Secretary of GENROCO in
the form attached to this Agreement as Exhibit A, Xxxxxxx & Xxxxx LLP shall
deliver to VideoPropulsion on behalf of GENROCO all of the items required to
be delivered by GENROCO hereunder lodged with it pursuant to Section 1.3 of
this Agreement and each such item shall be deemed to be delivered to
VideoPropulsion as of the Effective Date upon delivery of such certificate.
Upon receipt of a certificate of the Secretary of VideoPropulsion in the form
attached to this Agreement as Exhibit B, Xxxxxxx & Xxxxx LLP shall deliver to
GENROCO on behalf of VideoPropulsion all of the items required to be delivered
by VideoPropulsion hereunder and each such item shall be deemed to be
delivered to GENROCO as of the Effective Date upon receipt of such
certificate.
ARTICLE II
CLOSING
SECTION 2.1 As of the Effective Date, GENROCO will or will cause an
appropriate subsidiary to deliver to VideoPropulsion all of the following:
(a) Duly executed lease, substantially in the form annexed as Exhibit C,
to certain facilities used by VideoPropulsion;
(b) Duly executed General Assignment, Assumption and Agreement Regarding
Litigation, Claims and Other Liabilities (the "Assignment")
substantially in the form annexed as Exhibit D;
(c) Duly executed assignments of the patents listed on Schedule 2.1(c)
and a license of certain patents listed on Schedule 2.1(c), and a
duly executed Transitional Trademark Use and License Agreement
substantially in the form annexed as Exhibit E;
(d) Duly executed Insurance Matters Agreement substantially in the form
annexed as Exhibit F;
(e) Cash, as provided in the Assignment;
(f) A duly executed Employee Benefits and Compensation Agreement
substantially in the form annexed as Exhibit G;
(g) A duly executed Tax Sharing and Indemnification Agreement (the "Tax
Agreement") substantially in the form annexed as Exhibit H;
(h) Such documents or instructions as may be necessary to satisfy the
provisions of Section 4.7 of this Agreement;
(i) A duly executed Interim Administrative Services Agreement
substantially in the form annexed as Exhibit I;
(j) A duly executed Confidentiality and Non-Disclosure Agreement
substantially in the form annexed as Exhibit J;
(k) Such other agreements, documents or instruments as the parties may
agree are necessary or desirable in order to achieve the purposes
hereof including a Xxxx of Sale and Assumption of Liabilities in the
form annexed as Exhibit K;
SECTION 2.2 As of the Effective Date, VideoPropulsion will deliver to
GENROCO all of the following:
(a) In each case where VideoPropulsion is a party to any agreement or
instrument referred to in Section 2.1, a duly executed counterpart
of such agreement or instrument;
(b) A certificate or certificates representing all of the outstanding
shares of the common stock of VideoPropulsion other than those
already owned by GENROCO, all as provided in Section 3.1;
(c) Resignations of each person employed by VideoPropulsion who is an
officer of GENROCO, or any of its subsidiaries or affiliates not
constituting part of the Division, immediately prior to the
Effective Date;
(d) Such other agreements, documents or instruments as the parties may
agree are necessary or desirable in order to achieve the purposes
hereof.
ARTICLE III
THE DISTRIBUTION
SECTION 3.1 By the Effective Date, VideoPropulsion shall issue and
deliver to GENROCO a certificate or certificates registered in the name of
GENROCO representing that number of shares of the common stock of
VideoPropulsion which, when taken together with the shares of common stock
already owned by GENROCO, will result in GENROCO owning, of record and
beneficially, all of the issued and outstanding shares of VideoPropulsion
common stock and a number such that GENROCO shall own one (1) share of the
common stock of VideoPropulsion for each one (1) share of the common stock of
GENROCO issued and outstanding (the "Distribution Ratio") on the Record Date
for the Distribution (the "Record Date"). Each share of the common stock of
VideoPropulsion shall be validly issued, fully paid, nonassessable and free of
preemptive rights, except for statutory liability under Wis. Stats. Section
180.0622(2)(b). References to Wis. Stats. Section 180.0622(2)(b) shall
include authoritative judicial interpretations thereof (and of the
substantially identical predecessor statute, Section 180.40(6) of the
Wisconsin Business Corporation Law, in effect prior to January 1, 1991).
SECTION 3.2 Nothing contained in Section 3.1 or elsewhere in this
Agreement, including the Schedules, Exhibits, and Annexes hereto, shall be
construed to limit or alter the authority of the Board of Directors of GENROCO
to declare or refrain from declaring the Distribution, fixing or changing the
Record Date, fixing or changing the Effective Date, or fixing or changing all
the appropriate procedures in connection with the Distribution, including the
Distribution Ratio, and no rights shall have been created hereunder in favor
of any person, whether or not a party to this Agreement, in respect of this
Distribution. In the event the Board of Directors of GENROCO refrains from
declaring the Distribution, GENROCO will be responsible for any costs or
expenses incurred by GENROCO or VideoPropulsion in connection with the
Distribution.
ARTICLE IV
OTHER MATTERS
SECTION 4.1 In addition to the specific agreements, documents and
instruments of transfer and assumption annexed to this Agreement as Exhibits,
GENROCO and VideoPropulsion agree to execute or cause to be executed by the
appropriate parties and deliver, as appropriate, such other agreements,
instruments and other documents as may be necessary or desirable in order to
effect the purposes of this Agreement.
SECTION 4.2 GENROCO does not, in this Agreement or any other agreement,
instrument or document contemplated by this Agreement, make any representation
as to, warranty of or covenant with respect to:
(a) the value of any asset or thing of value to be transferred to
VideoPropulsion;
(b) the freedom from encumbrance of any asset or thing of value to be
transferred to VideoPropulsion;
(c) the absence of defenses or freedom from counterclaims with respect
to any claim, including accounts receivable, to be transferred to
VideoPropulsion; or
(d) the legal sufficiency of any assignment, document or instrument
delivered hereunder to convey title to any asset or thing of value
upon its execution, delivery and filing.
All assets to be transferred to VideoPropulsion shall be transferred "AS
IS, WHERE IS" and VideoPropulsion shall bear the economic, legal or other risk
that any conveyance shall prove to be insufficient to vest in VideoPropulsion
good and marketable title, free and clear of any lien, claim, equity or other
encumbrance.
SECTION 4.3 Each of GENROCO and VideoPropulsion will execute and deliver
such further instruments of conveyance, transfer and assignment and will take
such other actions as either of them may reasonably request of the other in
order to effectuate the purposes of this Agreement and to carry out the terms
hereof. At the request of VideoPropulsion and without further consideration,
GENROCO will execute and deliver to VideoPropulsion such other instruments of
transfer, conveyance, assignment, substitution and confirmation and take such
action as VideoPropulsion may reasonably deem necessary or desirable in order
more effectively to transfer, convey and assign to VideoPropulsion and,
subject to the provisions of Section 4.2, confirm VideoPropulsion's title to
all of the assets, rights and other things of value contemplated to be
transferred to VideoPropulsion hereunder, to place VideoPropulsion in actual
possession and operating control thereof and to permit VideoPropulsion to
exercise all rights with respect thereto (including, without limitation,
rights under contracts and other arrangements as to which the consent of any
third party to the transfer thereof shall not have previously been obtained).
At the request of GENROCO and without further consideration, VideoPropulsion
will execute and deliver to GENROCO all instruments, assumptions, novations,
undertakings, substitutions or other documents and take such other action as
GENROCO may reasonably deem necessary or desirable in order to have
VideoPropulsion fully and unconditionally assume and discharge the liabilities
contemplated to be assumed by VideoPropulsion under this Agreement or any
document in connection herewith and to relieve GENROCO of any liability or
obligation with respect thereto and evidence the same to third parties.
Neither GENROCO nor VideoPropulsion shall be obligated, in connection with the
foregoing, to expend money other than reasonable out-of-pocket expenses,
attorneys' fees and recording or similar fees.
GENROCO and VideoPropulsion will use their reasonable efforts to obtain
any consent, substitution, approval or amendment required to novate or assign
all agreements, leases, licenses and other rights of any nature whatsoever
relating to the assets, rights and other things of value to VideoPropulsion;
provided, however, that neither GENROCO nor VideoPropulsion shall be obligated
to pay any consideration therefor (except for filing fees and other similar
charges) to the third party from whom such consents, approvals, substitutions
and amendments are requested. If GENROCO or VideoPropulsion is unable to
obtain any such required consent, approval, substitution or amendment, GENROCO
shall continue to be bound by such agreements, leases, licenses and other
rights and, unless not permitted by law or the terms thereof, VideoPropulsion
shall, as agent for GENROCO or as subcontractor, pay, perform and discharge
fully all the obligations of GENROCO thereunder from and after the Effective
Date and indemnify and hold harmless GENROCO from and against all losses,
claims, damages, liabilities and expenses whatsoever arising out of or in
connection with VideoPropulsion's performance of, or omission to perform, its
obligations thereunder. VideoPropulsion will not be responsible for or
indemnify GENROCO for any claims, damages, liabilities, and expenses
whatsoever arising out of or in connection with GENROCO performance of or
omissions to perform any of its remaining obligations under such agreements,
leases, licenses and other rights thereof. GENROCO shall, without further
consideration, pay, transfer or remit, as the case may be, to VideoPropulsion
promptly all money, rights and other consideration received in respect of such
performance. GENROCO shall exercise its rights and options under all such
agreements, leases, licenses and other rights and obligations referred to in
this Section 4.3 only as reasonably directed by VideoPropulsion and at
VideoPropulsion's expense. If and when any such consent shall be obtained or
such agreement, lease, license or other rights shall otherwise become
assignable or able to be novated, GENROCO shall promptly assign all its rights
and obligations thereunder to VideoPropulsion without payment of further
consideration and VideoPropulsion shall, without the payment of any further
consideration, assume such rights and obligations. To the extent that the
assignment of any contract or agreement or the proceeds thereof pursuant to
this Section 4.3 is prohibited by law, the assignment provisions of this
paragraph shall operate to create a subcontract with VideoPropulsion to
perform each relevant, unassignable contract or agreement, and the subcontract
price paid to VideoPropulsion shall be equal to the money, rights and other
consideration received by GENROCO with respect to the performance by
VideoPropulsion under such subcontract.
SECTION 4.4 VideoPropulsion and GENROCO agree to cooperate to determine
the amount of sales, transfer or other similar taxes or fees (including, but
not limited to, all patent, copyright transfer taxes and recording fees)
payable in connection with the transactions contemplated by this Agreement.
GENROCO and VideoPropulsion agree to file promptly and timely returns for such
taxes with the appropriate taxing authorities and remit payment thereof in
accordance with the terms of the Tax Agreement.
SECTION 4.5 VideoPropulsion shall authorize the execution and cause the
authorized officers of VideoPropulsion to execute all documents, notes and
undertakings and to do such other things required in connection with the
irrevocable and unconditional assumption by VideoPropulsion without any
recourse whatsoever to GENROCO of all obligations of GENROCO related to the
Division including the assumption of any debt outstanding thereunder and the
novation thereof.
SECTION 4.6 VideoPropulsion shall, in addition to its obligations under
the Tax Agreement, cooperate with GENROCO and tax counsel to GENROCO in
obtaining an opinion from the tax counsel to the effect that the Distribution
will be tax free to GENROCO and GENROCO shareholders. In that regard,
VideoPropulsion agrees that it will authorize, cause to be executed and comply
with any and all undertakings, representations or agreements required in
connection with obtaining tax counsel's opinion.
SECTION 4.7 GENROCO and VideoPropulsion agree that the expenses
associated with preparation of this Agreement, the transfers contemplated
hereunder, matters related to the organization of VideoPropulsion, the
Distribution and related employment matters shall be borne by GENROCO.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 This Agreement, including the Schedules, Annexes and Exhibits
hereto, any related agreements and the agreements and other documents referred
to herein, shall constitute the entire Agreement between GENROCO and
VideoPropulsion with respect to the subject matter hereof and shall supersede
all previous negotiations, commitments and writings with respect to such
subject matter.
SECTION 5.2 This Agreement shall be governed and construed and enforced
in accordance with the internal laws of the State of Wisconsin as to all
matters, including without limitation, matters of validity, construction,
effect, performance and remedies.
SECTION 5.3 This Agreement may be amended, modified or supplemented only
by a written agreement of the parties.
SECTION 5.4 This Agreement and all the provisions hereof shall be binding
upon and inure to the benefit of the parties and their respective successors
and permitted assigns, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by either party without
the prior written consent of the other party.
SECTION 5.5 This Agreement is solely for the benefit of the parties and
is not intended to confer upon any person except the parties any rights or
remedies hereunder. There are no third party beneficiaries to this Agreement.
SECTION 5.6 This Agreement, and any other agreement to be executed in
connection herewith, may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
SECTION 5.7 In the event of conflict between this Agreement and any other
agreement executed in connection herewith, the provisions of such other
agreement, including the Schedules, Annexes, and Exhibits hereto, shall
prevail.
SECTION 5.8 If any section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, such determination
shall not affect the validity or enforceability of any other section,
paragraph or provision hereof.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed
by their duly authorized officers this ---- day of -------, 2000.
GENROCO, INC. VIDEOPROPULSION, INC.
By: ----------------------------- By: -----------------------------
Xxxxx Xxxx Xxxxx Xxxx
Executive Vice President Executive Vice President
and Chief Financial Officer and Chief Technical Officer
