INSURANCE MATTERS
This Agreement, dated as of ------- --, 2000, between GENROCO, INC., a
Wisconsin corporation ("GENROCO"), and VIDEOPROPULSION, INC., a Wisconsin
corporation ("VideoPropulsion"), shall govern the rights and obligations of
GENROCO and VideoPropulsion with respect to various pre-existing contracts
insuring GENROCO and covering risks associated with, or arising out of, the
assets, business or operations of its video Division.
WHEREAS, GENROCO has transferred to VideoPropulsion, effective as of
January 1, 2000 (the "Effective Date"), certain GENROCO assets related to
GENROCO's video business formerly conducted by the Division as described in
the Contribution Agreement, Plan and Agreement of Reorganization and
Distribution (the "Contribution Agreement") of even date herewith, including,
without limitation, the development, production, manufacture, marketing, use,
storage, distribution, disposal and sale of certain video products (all of
which shall be referred to collectively as the "Division Business.")
WHEREAS, in certain years prior to this transfer, GENROCO obtained
various policies of insurance (the "Policies"), covering, among other things,
risks associated with, or arising out of, the assets, business or operations
of the Division.
WHEREAS, the Policies may provide coverage in a number of areas,
including, without limitation: automobile liability; comprehensive and
general liability; employer's liability; fiduciary liability, directors' and
officers' liability and excess liability; including liabilities under the
owner controlled insurance program.
WHEREAS, without relinquishing its rights as an owner of, and insured
under, the Policies, GENROCO now wishes to permit VideoPropulsion to share
certain of GENROCO's benefits, and VideoPropulsion wishes to assume certain of
GENROCO's responsibilities, under the Policies.
NOW THEREFORE, in consideration of the mutual promises contained in this
document, the parties agree that:
1. INSURANCE COVERAGE.
1.1. GENROCO shall continue at all times as owner of, and beneficiary
under, the Policies, and this Agreement shall not be considered as an
attempted assignment of the Policies or as a contract of insurance.
1.2. The Policies which are listed on related Exhibit 1.2 were obtained
by GENROCO at various times prior to the date of this Agreement and may cover
risks associated with, or arising out of, the Division Business. GENROCO does
not warrant that related Exhibit 1.2 contains or will contain an accurate or
complete list of the insurance potentially available to cover the Division
Business, and states only that it has compiled the list to the best of its
abilities based on currently available information. GENROCO shall have no
obligation to undertake any further search of its records, or the records of
any third parties, to seek additional policies or information about policies
not found on the exhibit. However, each party agrees that it will share with
the other any information it gathers about additional policies, and that such
additional policies which are found potentially to provide coverage for risks
associated with the Division Business shall be subject to the provisions of
this Agreement as if listed on related Exhibit 1.2 and shall be deemed within
the definition of Policies.
1.3. GENROCO does not warrant that the Policies or any other policies of
insurance provide any coverage to VideoPropulsion or GENROCO generally, or
with respect to any particular risk.
1.4. With respect to coverages after the Effective Date, GENROCO shall
have no obligation to continue in force the Policies or any other policy of
insurance and may cease to continue in force any policy of insurance without
notice to VideoPropulsion and GENROCO will be entitled to receive any refund
of proceeds or policy premium thereof. After March 1, 2000 VideoPropulsion
shall be solely responsible for obtaining and maintaining all policies of
insurance covering its business and other activities after such date.
2. PENDING INSURED LITIGATION.
2.1. VideoPropulsion shall compile Exhibit 2.1 which contains a list of
the litigation, if any, allegedly associated with, or arising out of, the
Division Business prior to the date of this Agreement for which
VideoPropulsion believes there may be insurance coverage under the Policies.
This litigation together with all threatened litigation and claims arising out
of the Division Business shall be referred to as "Pending Insured Litigation".
VideoPropulsion does not warrant that this exhibit will contain an accurate or
complete list of such litigation, and states only that it has compiled and
will compile the list to the best of its abilities based on currently
available information. Additional litigation and threatened litigation
determined by VideoPropulsion at a later date as having been omitted from the
exhibit shall be subject to this Agreement as if listed on the exhibit and
shall be deemed included within the definition of litigation or threatened
litigation.
2.2. With respect to Pending Insured Litigation, VideoPropulsion states
to the best of its knowledge that all appropriate insurance carriers have been
or will be placed on notice in a timely fashion, as or if required by the
terms of the Policies.
3. NEW INSURED LITIGATION.
3.1. The parties acknowledge that after the Effective Date there may be
further litigation or other claims made, filed, commenced or threatened
against VideoPropulsion or GENROCO allegedly associated with, or arising out
of, the Division Business ("New Insured Litigation").
3.2. VideoPropulsion shall notify GENROCO of any New Insured Litigation
which may be covered under GENROCO's insurance policies and Xx. Xxxxx Xxxx, a
GENROCO employee, shall be responsible for notifying any appropriate insurance
carriers.
3.3. Except as provided in Paragraph 3.2 above, VideoPropulsion shall be
solely responsible for notifying all appropriate insurance carriers providing
coverage to VideoPropulsion or for the activities and operations of the
Division, if any, regarding New Insured Litigation and all other litigation
and claims, except in cases where the insurance carriers have refused in
writing to deal directly with VideoPropulsion, in which case VideoPropulsion
shall promptly notify GENROCO. VideoPropulsion shall notify GENROCO of any
litigation and claims VideoPropulsion has submitted to GENROCO's excess
insurers. VideoPropulsion also shall notify GENROCO promptly if it appears
that New Insured Litigation may involve the assets, business or operations of
GENROCO.
4. CASE HANDLING AND COOPERATION.
4.1. VideoPropulsion agrees that it shall notify, report to, and
cooperate fully with the insurance carriers and GENROCO with respect to
Pending Insured Litigation and New Insured Litigation as though
VideoPropulsion were the named insured under the policies of insurance.
4.2. The parties acknowledge that VideoPropulsion has been designated the
case handler for all Pending Insured Litigation and, likewise, may be
designated by GENROCO as the case handler for all New Insured Litigation,
under the terms of the Assignment Agreement.
4.3. GENROCO will notify the insurance carriers issuing the Policies of
the terms of this Agreement and the Contribution Agreement and the Assignment
Agreement and will request that the insurance carriers deal directly with
VideoPropulsion, as case handler regarding the management of any Pending
Insured Litigation and any New Insured Litigation.
4.4. In the event that an insurance carrier shall refuse or fail to deal
directly with VideoPropulsion, VideoPropulsion shall continue as case handler
and GENROCO shall provide reasonable support to VideoPropulsion in
communicating with the insurance carrier.
4.5. In the event VideoPropulsion wishes to commence an action against an
insurance carrier for failure to provide defense or indemnification for
Pending Insured Litigation or New Insured Litigation under one or more of the
Policies, it shall not do so without the written consent of GENROCO. Upon a
request by VideoPropulsion, GENROCO may, in its sole discretion, permit
VideoPropulsion to prosecute such an action in the name of GENROCO, in which
case VideoPropulsion shall bear all expenses of the litigation and shall hold
GENROCO harmless from any costs of such litigation, including without
limitation fees, expenses, charges, awards of any type or judgments which may
be assessed against GENROCO. GENROCO's consent to the prosecution of such an
action will not be withheld or delayed unreasonably.
5. PAYMENT OF COSTS AND PROCEEDS.
5.1. To the extent that an insurance carrier pays GENROCO for all or any
portion of the costs of defense of, or pays all or any portion of the amounts
in settlement of, or in satisfaction of a judgment for, Pending Insured
Litigation or New Insured Litigation, for which VideoPropulsion provided
GENROCO with defense and indemnification as required by the Assignment
Agreement, GENROCO shall pay over such sums in excess of GENROCO's own
reasonable expenses and costs (including attorneys' fees) or cause such sums
to be paid over to VideoPropulsion or for its benefit within thirty days of
their receipt.
5.2. If VideoPropulsion fails to defend and indemnify GENROCO for a
Pending Insured Litigation matter or New Insured Litigation matter as required
under the Assignment Agreement, GENROCO shall have no obligation to pay over
to VideoPropulsion any portion of the payments received with respect to that
matter from the insurance carriers; however, receipt of such payments by
GENROCO shall not relieve VideoPropulsion of its obligations to defend or
indemnify GENROCO to the extent such proceeds are insufficient to meet
VideoPropulsion's obligations.
5.3. To the extent that a Pending Insured Litigation matter or New
Insured Litigation matter involves assets, businesses or operations of GENROCO
not transferred to VideoPropulsion, and GENROCO is wholly or partially
responsible for the costs of defense, costs of settlement or costs of
satisfaction of a judgment under the Assignment Agreement, then the amounts
paid by the insurance carriers with respect to that matter under this
Agreement will be shared by the parties in the same proportion as the parties
are responsible for paying such amounts under the Assignment Agreement.
5.4. Notwithstanding the foregoing, if GENROCO incurs out-of-pocket
expenses prior to the time VideoPropulsion defends and indemnifies GENROCO as
required under the Assignment Agreement for a Pending Insured Litigation
matter or a New Insured Litigation matter, then GENROCO shall first apply the
payments received with respect to that matter from the insurance carriers to
offset GENROCO's own reasonable expenses and costs and then shall pay over any
balance received to VideoPropulsion.
5.5. It is understood between the parties that VideoPropulsion's
obligation to defend, indemnify, save and hold harmless GENROCO under the
Assignment Agreement shall arise at a time specified in that Agreement which
will often be prior to the time insurance proceeds will be available.
Furthermore, it is agreed that, ultimately, the right to a defense and
indemnification under the Assignment Agreement applies only insofar as it is
not covered by insurance. Therefore, the parties acknowledge that
VideoPropulsion's obligation to provide a defense and indemnification under
the Assignment Agreement shall not be delayed pending the results of any
claims made under insurance policies and that GENROCO and VideoPropulsion
shall account between themselves at the conclusion of a matter if any
financial adjustments are required due to the receipt of such proceeds.
6. DISPUTE RESOLUTION.
6.1. In an effort to resolve informally and amicably any claim or
controversy arising out of or related to the interpretation or performance of
this Agreement without resorting to litigation, a party shall first notify the
other of any difference or dispute under this Agreement that requires
resolution. GENROCO and VideoPropulsion each shall designate an employee to
investigate, discuss and seek to settle the matter between them. If the two
are unable to settle the matter within 30 days after notification (or such
longer period as may be agreed to expressly by the parties), the matter shall
be submitted to a senior officer of GENROCO and VideoPropulsion, respectively,
for consideration.
6.2. If settlement cannot be reached through the efforts of the senior
officers within an additional 30 days, or such longer time period as they
shall agree upon, the parties shall consider mediation, arbitration or other
alternative means to resolve the dispute. If they are unable to agree on an
alternative dispute resolution mechanism, either party may initiate legal
proceedings to resolve the matter.
7. NOTICES.
7.1. All notices and communications required or permitted under this
Agreement shall be in writing and any communication or delivery of them shall
be deemed to have been duly made if actually delivered, or if mailed by first
class or certified mail, postage prepaid, or by air express service, with
charges prepaid. Except for notices to insurance carriers under Section 3.2
and 3.3 and for bills and payments under Section 6 of this Agreement, all
notices and communications shall be addressed as follows:
If to GENROCO: GENROCO, Inc.
000 Xxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: CEO
If to VideoPropulsion: VideoPropulsion, Inc.
000 Xxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: CEO
7.2. Either party may, by written notice so delivered to the other,
change the address to which future delivery shall be made.
8. AMENDMENT AND NON-WAIVER.
8.1. This Agreement may not be altered or amended, nor any rights
hereunder be waived, except by an instrument in writing executed by the party
or parties to be charged with such amendment or waiver.
8.2. No waiver of any term, provision or condition of this Agreement or
failure to exercise any right, power or remedy or failure to enforce any
provision of this Agreement, in any one or more instances, shall be deemed to
be a further or continuing waiver of any such term, provision or condition or
as a waiver of any other term, provision or condition or enforcement right of
this Agreement or deemed to be an impairment of any right, power or remedy or
acquiescence to any breach.
9. GOVERNING LAW.
This Agreement and the transactions it contemplates shall be construed in
accordance with, and governed by, the internal laws of the State of Wisconsin.
10. ENTIRE AGREEMENT.
This Agreement and the Contribution Agreement and the other agreements
executed and delivered thereunder constitute the entire understanding of the
parties with respect to their subject, superseding all negotiations, prior
discussions and prior agreements and understandings relating to such subject
matter.
11. PARTIES IN INTEREST.
Neither party may assign its rights or delegate any of its duties under
this Agreement without prior written consent of the other. This Agreement
shall be binding upon, and shall inure to the benefit of, the parties hereto
and their respective successors and assigns. Nothing contained in this
Agreement, express or implied, is intended to confer upon any third party any
benefits, rights or remedies.
12. REFORMATION AND SEVERABILITY.
If any provision of this Agreement shall be held to be invalid,
unenforceable or illegal in any jurisdiction under any circumstances for any
reason, (i) such provision shall be reformed to the minimum extent necessary
to cause such provision to be valid, enforceable and legal and preserve the
original intent of the parties, or (ii) if such a provision cannot be
reformed, such provision shall be severed from this Agreement. Such holding
shall not affect or impair the validity, enforceability or legality of such
provision in any other jurisdiction or under any other circumstances. Neither
such holding nor such reformation or severance shall affect or impair the
legality, validity or enforceability of any other provision of this Agreement
to the extent that such other provision is not itself actually in conflict
with any applicable law.
13. TITLES AND HEADINGS.
All titles and headings have been inserted solely for the convenience of
the parties and are not intended to be a part of this Agreement or to affect
its meaning or interpretation.
14. CONFLICTS
In the event of conflict between this Agreement and the Contribution
Agreement or any agreement, schedule, exhibit, or annex thereto, this
Agreement, to the extent any part specifically covers a matter, shall control;
provided that any specific matters covered in the Employee Benefits and
Compensation Agreement, dated December 31. 1999 will control over any
conflicting provisions of this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized officers as of this ---- day of -------, 2000.
GENROCO, INC.
By:-------------------------------
Xxxxx Xxxx
Executive Vice President and
Chief Financial Officer
VIDEOPROPULSION, INC.
By:-------------------------------
Xxxxx Xxxx
Executive Vice President and
Chief Technical Officer
