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CONFORMED COPY
DISTRIBUTION AGREEMENT dated as of November 1, 1995, among ITT
CORPORATION, a Delaware corporation ("ITT"), ITT DESTINATIONS, INC., a
Nevada corporation ("ITT Destinations"), and ITT HARTFORD GROUP, INC.,
a Delaware corporation ("ITT Hartford").
WHEREAS, the Board of Directors of ITT has determined that it is
appropriate and desirable to distribute to the holders of shares of Common
Stock, par value $1.00 per share, of ITT (the "ITT Common Stock") all the
outstanding shares of common stock of ITT Destinations (the "ITT Destinations
Common Shares") and all the outstanding shares of common stock of ITT Hartford
(the "ITT Hartford Common Shares");
WHEREAS, each of ITT, ITT Destinations and ITT Hartford has determined
that it is necessary and desirable to allocate and assign responsibility for
those liabilities in respect of the activities of the businesses of such
entities on the Distribution Date (as defined herein) and those liabilities in
respect of other businesses and activities of ITT and its former subsidiaries
and other matters; and
WHEREAS, each of ITT, ITT Destinations and ITT Hartford has determined
that it is necessary and desirable to set forth the principal corporate
transactions required to effect such distribution and to set forth other
agreements that will govern certain other matters following the distribution.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. General. As used in this Agreement, the following terms
shall have the following meanings
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(such meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"Action" shall mean any action, suit, arbitration, inquiry, proceeding
or investigation by or before any court, any governmental or other regulatory or
administrative agency, body or commission or any arbitration tribunal.
"Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the person
specified.
"Agent" shall have the meaning as defined in Section 2.01(b).
"Ancillary Agreements" shall mean all of the written agreements,
instruments, understandings, assignments or other arrangements (other than this
Agreement) entered into in connection with the transactions contemplated hereby,
including, without limitation, the Conveyancing and Assumption Instruments, the
Employee Benefits Services and Liability Agreement, the Tax Allocation Agreement
and the Intellectual Property Agreements.
"Claims Administration" shall mean the processing of claims made under
the Company Policies, including, without limitation, the reporting of losses or
claims to insurance carriers (including, without limitation, as a result of
reports provided to ITT Industries by ITT Destinations or ITT Hartford),
management and defense of claims, the settlement of claims (except to the extent
settlement authority remains with another party as contemplated by the second
proviso to Section 7.03(a)) and providing for appropriate releases upon
settlement of claims.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the Treasury regulations promulgated thereunder, including any successor
legislation.
"Commission" shall have the meaning as defined in Section 4.02(b).
"Company Policies" shall mean all Policies, current or past, which are
or at any time were maintained by or on behalf of or for the benefit or
protection of ITT or any
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of its predecessors which relate to any Shared Liability, the ITT Industries
Business, the ITT Destinations Business or the ITT Hartford Business, or current
or past directors, officers, employees or agents of any of the foregoing
Businesses, including, without limitation, the Policies identified on Schedule
7.01(a) hereto.
"Conveyancing and Assumption Instruments" shall mean, collectively, the
various agreements, instruments and other documents to be entered into to effect
the transfer of assets and the assumption of Liabilities in the manner
contemplated by this Agreement.
"Distribution" shall mean the distribution on the Distribution Date to
holders of record of shares of ITT Common Stock as of the Distribution Record
Date of (i) the ITT Destinations Common Shares owned by ITT on the basis of one
ITT Destinations Common Share for each outstanding share of ITT Common Stock and
(ii) the ITT Hartford Common Shares owned by ITT on the basis of one ITT
Hartford Common Share for each outstanding share of ITT Common Stock.
"Distribution Date" shall mean such date as may hereafter be determined
by ITT's Board of Directors as the date as of which the Distribution shall be
effected.
"Distribution Record Date" shall mean such date as may hereafter be
determined by ITT's Board of Directors as the record date for the Distribution.
"Effective Time" shall mean 11:59 p.m., New York time, on the
Distribution Date.
"Employee Benefits Services and Liability Agreement" shall mean the
Employee Benefits Services and Liability Agreement dated as of November 1, 1995,
among ITT, ITT Destinations and ITT Hartford.
"Indemnifiable Losses" shall mean any and all losses, liabilities,
claims, damages, demands, costs or expenses (including, without limitation,
reasonable attorneys' fees and any and all out-of-pocket expenses) whatsoever
reasonably incurred in investigating, preparing for or defending against any
Actions or potential Actions.
"Indemnifying Party" shall have the meaning as defined in Section 3.04.
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"Indemnitee" shall have the meaning as defined in Section 3.04.
"Insurance Administration" shall mean, with respect to each Company
Policy, the accounting for premiums, retrospectively-rated premiums, defense
costs, indemnity payments, deductibles and retentions, as appropriate, under the
terms and conditions of each of the Company Policies, and the distribution of
Insurance Proceeds as contemplated by this Agreement.
"Insurance Proceeds" shall mean those monies (i) received by an insured
from an insurance carrier or (ii) paid by an insurance carrier on behalf of an
insured, in either case net of any applicable premium adjustment,
retrospectively-rated premium, deductible, retention, or cost of reserve paid or
held by or for the benefit of such insured.
"Insured Claims" shall mean those Liabilities that, individually or in
the aggregate, are covered within the terms and conditions of any of the Company
Policies, whether or not subject to deductibles, co-insurance, uncollectability
or retrospectively-rated premium adjustments, but only to the extent that such
Liabilities are within applicable Company Policy limits, including aggregates.
"Intellectual Property Agreements" shall mean the various intellectual
property and licensing agreements entered into in connection with the
Distribution.
"ITT" shall mean ITT Corporation, a Delaware corporation and its
predecessor Maryland corporation.
"ITT Destinations" shall mean ITT Destinations, Inc., a Nevada
corporation.
"ITT Destinations Assets" shall mean, collectively, all the rights and
assets of ITT and its Subsidiaries relating to the ITT Destinations Business,
including, without limitation, (i) the assets included on the consolidated
balance sheet of ITT Destinations as of September 30, 1995, and any assets
acquired by ITT or any of its Subsidiaries relating to the ITT Destinations
Business from October 1, 1995, to the Distribution Date, (ii) all the
outstanding capital stock or other interests of ITT
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Destinations in Subsidiaries of ITT Destinations and (iii) rights to the Company
Policies to the extent set forth in Article VII hereof.
"ITT Destinations Business" shall mean the businesses of (i) those
business entities listed on Schedule 1.01(b) hereto, (ii) any other division,
Subsidiary or investment of ITT managed or operated as of the date of this
Agreement or any prior time by any such business entity unless such other
division, Subsidiary or investment is listed on Schedule 1.01(a), Schedule
1.01(c) or Schedule 1.01(d) hereto and (iii) business entities acquired or
established by or for ITT Destinations or any of its Subsidiaries after the date
of this Agreement.
"ITT Destinations Indemnitees" shall mean ITT Destinations, each
Affiliate of ITT Destinations, each of their respective directors, officers,
employees and agents and each of the heirs, executors, successors and assigns of
any of the foregoing.
"ITT Destinations Liabilities" shall mean, collectively, (i) all the
Liabilities of ITT Destinations and its Subsidiaries under this Agreement and
any of the Ancillary Agreements and (ii) all the Liabilities of the parties
hereto or their respective Subsidiaries (whenever arising whether prior to, at
or following the Effective Time) arising out of or in connection with or
otherwise relating to the management or conduct before or after the Effective
Time of the ITT Destinations Business (the Liabilities listed in clauses (i) and
(ii) above being collectively referred to as the "True ITT Destinations
Liabilities") and (iii) 33-1/3% of the amount of all Shared Liabilities.
"ITT Hartford" shall mean ITT Hartford Group, Inc., a Delaware
corporation.
"ITT Hartford Assets" shall mean, collectively, all the rights and
assets of ITT and its Subsidiaries relating to the ITT Hartford Business,
including, without limitation, (i) the assets included on the consolidated
balance sheet of ITT Hartford as of September 30, 1995, and any assets acquired
by ITT or any of its Subsidiaries relating to the ITT Hartford Business from
October 1, 1995, to the Distribution Date, (ii) all the outstanding capital
stock or other interests of ITT Hartford in Subsidiaries of ITT Hartford and
(iii) rights to the Company Policies to the extent set forth in Article VII
hereof.
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"ITT Hartford Business" shall mean the businesses of (i) those business
entities listed on Schedule 1.01(c) hereto, (ii) any other division, Subsidiary
or investment of ITT managed or operated as of the date of this Agreement or any
prior time by any such business entity unless such other division, Subsidiary or
investment is listed on Schedule 1.01(a), Schedule 1.01(b) or Schedule 1.01(d)
hereto and (iii) business entities acquired or established by or for ITT
Hartford or any of its Subsidiaries after the date of this Agreement.
"ITT Hartford Indemnitees" shall mean ITT Hartford, each Affiliate of
ITT Hartford, each of their respective directors, officers, employees and agents
and each of the heirs, executors, successors and assigns of any of the
foregoing.
"ITT Hartford Liabilities" shall mean, collectively, (i) all the
Liabilities of ITT Hartford and its Subsidiaries under this Agreement and any of
the Ancillary Agreements and (ii) all the Liabilities of the parties hereto or
their respective Subsidiaries (whenever arising whether prior to, at or
following the Effective Time) arising out of or in connection with or otherwise
relating to the management or conduct before or after the Effective Time of the
ITT Hartford Business (the Liabilities listed in clauses (i) and (ii) above
being collectively referred to as the "True ITT Hartford Liabilities") and (iii)
33-1/3% of the amount of all Shared Liabilities.
"ITT Industries" shall mean (i) ITT Industries, Inc., an Indiana
corporation and the legal successor to ITT, or (ii) ITT, after giving effect to
the transactions contemplated by Section 2.01 hereof or as if such transactions
had occurred, in each case as the context requires.
"ITT Industries Assets" shall mean, collectively, all the rights and
assets of ITT and its Subsidiaries relating to the ITT Industries Business,
including, without limitation, (i) the assets included on the consolidated
balance sheet of ITT Industries as of September 30, 1995, and any assets
acquired by ITT or any of its Subsidiaries relating to the ITT Industries
Business from October 1, 1995, to the Distribution Date, (ii) all the
outstanding capital stock or other interests of ITT Industries in Subsidiaries
of ITT Industries and (iii) rights to the Company Policies to the extent set
forth in Article VII hereof.
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"ITT Industries Business" shall mean the businesses of (i) those
business entities listed on Schedule 1.01(a) hereto, (ii) any other division,
Subsidiary or investment of ITT managed or operated as of the date of this
Agreement or any prior time by any such business entity unless such other
division, Subsidiary or investment is listed on Schedule 1.01(b), Schedule
1.01(c) or Schedule 1.01(d) hereto and (iii) business entities acquired or
established by or for ITT Industries or any of its Subsidiaries after the date
of this Agreement.
"ITT Industries Indemnitees" shall mean ITT Industries, each Affiliate
of ITT Industries, each of their respective directors, officers, employees and
agents and each of the heirs, executors, successors and assigns of any of the
foregoing.
"ITT Industries Liabilities" shall mean collectively, (i) all the
Liabilities of ITT Industries and its Subsidiaries under this Agreement and any
of the Ancillary Agreements and (ii) all the Liabilities of the parties hereto
or their respective Subsidiaries (whenever arising whether prior to, at or
following the Effective Time) arising out of or in connection with or otherwise
relating to the management or conduct before or after the Effective Time of the
ITT Industries Business (the Liabilities listed in clauses (i) and (ii) above
being collectively referred to as the "True ITT Industries Liabilities") and
(iii) 33-1/3% of the amount of all Shared Liabilities.
"Liabilities" shall mean any and all debts, liabilities and
obligations, absolute or contingent, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown, whenever arising,
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any court, any governmental or other regulatory or administrative
agency or commission or any award of any arbitration tribunal, and those arising
under any contract, guarantee, commitment or undertaking.
"person" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership or government, or any agency or
political subdivision thereof.
"Policies" shall mean insurance policies and insurance contracts of any
kind (other than life and
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benefits policies or contracts), including, without limitation, primary, excess
and umbrella policies, commercial general liability policies, fiduciary
liability, automobile, aircraft, property and casualty, workers' compensation
and employee dishonesty insurance policies, bonds and self-insurance and captive
insurance company arrangements, together with the rights, benefits and
privileges thereunder.
"Provider" shall have the meaning as defined in Section 5.01.
"Proxy Statement" shall mean the Proxy Statement sent to the holders of
shares of ITT Common Stock in connection with the Distribution, including any
amendment or supplement thereto.
"Recipient" shall have the meaning as defined in Section 5.01.
"Shared Liability" means any Liability of the parties hereto or their
respective Subsidiaries (whether arising prior to, at or following the Effective
Time) which (i) arises out of or is in connection with or otherwise relates to
the management or conduct prior to the Effective Time of the businesses of ITT
and its Subsidiaries and (ii) is not a True ITT Industries Liability, True ITT
Destinations Liability or True ITT Hartford Liability, including, without
limitation, Shared Liabilities listed on Schedule 1.01(d) hereto.
"Subsidiary" shall mean any corporation, partnership or other entity of
which another entity (i) owns, directly or indirectly, ownership interests
sufficient to elect a majority of the Board of Directors (or persons performing
similar functions) (irrespective of whether at the time any other class or
classes of ownership interests of such corporation, partnership or other entity
shall or might have such voting power upon the occurrence of any contingency) or
(ii) is a general partner or an entity performing similar functions (e.g., a
trustee). For purposes of this Agreement, Madison Square Garden, L.P., and
ITT-Dow Xxxxx Television and their respective Subsidiaries are Subsidiaries of
ITT Destinations.
"Tax" shall mean all Federal, state, local and foreign taxes and
assessments, including all interest,
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penalties and additions imposed with respect to such amounts.
"Tax Allocation Agreement" shall mean the Tax Allocation Agreement
dated as of November 1, 1995, among ITT, ITT Destinations and ITT Hartford.
"Third Party Claim" shall have the meaning as defined in Section 3.05.
"True ITT Destinations Liabilities" shall have the meaning as defined
under "ITT Destinations Liabilities."
"True ITT Hartford Liabilities" shall have the meaning as defined under
"ITT Hartford Liabilities."
"True ITT Industries Liabilities" shall have the meaning as defined
under "ITT Industries Liabilities."
SECTION 1.02. References; Interpretation. References to an "Exhibit" or
to a "Schedule" are, unless otherwise specified, to one of the Exhibits or
Schedules attached to this Agreement, and references to a "Section" are, unless
otherwise specified, to one of the Sections of this Agreement.
ARTICLE II. DISTRIBUTION AND OTHER TRANSACTIONS; CERTAIN COVENANTS
SECTION 2.01. The Distribution and Other Transactions.
(a) Certain Transactions. On or prior to the Distribution Date:
(i) ITT will contribute to ITT Destinations the business entities that
are to comprise the ITT Destinations Business (to the extent they are not owned
by ITT Destinations or any of its Subsidiaries).
(ii) ITT will contribute to ITT Hartford the business entities that are
to comprise the ITT Hartford Business (to the extent they are not owned by ITT
Hartford or any of its Subsidiaries).
(iii) ITT Industries shall, on behalf of itself and its Subsidiaries,
transfer to ITT Destinations effective as of the Effective Time all of ITT
Industries' and its
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Subsidiaries' right, title and interest in the ITT Destinations Assets. ITT
Industries shall, on behalf of itself and its Subsidiaries, transfer to ITT
Hartford effective as of the Effective Time all of ITT Industries' and its
Subsidiaries' right, title and interest in the ITT Hartford Assets.
(iv) ITT Destinations shall, on behalf of itself and its Subsidiaries,
transfer to ITT Industries effective as of the Effective Time all of ITT
Destinations' and its Subsidiaries' right, title and interest in the ITT
Industries Assets. ITT Destinations shall, on behalf of itself and its
Subsidiaries, transfer to ITT Hartford effective as of the Effective Time all of
ITT Destinations' and its Subsidiaries' right, title and interest in the ITT
Hartford Assets.
(v) ITT Hartford shall, on behalf of itself and its Subsidiaries,
transfer to ITT Destinations effective as of the Effective Time all of ITT
Hartford's and its Subsidiaries' right, title and interest in the ITT
Destinations Assets. ITT Hartford shall, on behalf of itself and its
Subsidiaries, transfer to ITT Industries effective as of the Effective Time all
of ITT Hartford's and its Subsidiaries' right, title and interest in the ITT
Industries Assets.
(b) Stock Dividends to ITT. On or prior to the Distribution Date:
(i) ITT Destinations shall issue to ITT as a stock dividend a number of
ITT Destinations Common Shares as required to effect the Distribution, as
certified by the ITT Corporate Stock Services Department (the "Agent"). In
connection therewith ITT shall deliver to ITT Destinations for cancellation the
share certificate (or certificates) currently held by it representing ITT
Destinations Common Shares and shall receive a new certificate (or certificates)
representing the total number of ITT Destinations Common Shares to be owned by
ITT after giving effect to such stock dividend.
(ii) ITT Hartford shall issue to ITT as a stock dividend a number of ITT
Hartford Common Shares as required to effect the Distribution, as certified by
the Agent. In connection therewith ITT shall deliver to ITT Hartford for
cancellation the share certificate currently held by it representing ITT
Hartford Common Shares and shall receive a new certificate (or certificates)
representing the total
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number of ITT Hartford Common Shares to be owned by ITT after giving effect to
such stock dividend.
(c) Charters; By-laws. On or prior to the Distribution Date:
(i) All necessary actions shall have been taken to provide for the
adoption of the form of Articles of Incorporation and By-laws filed by ITT
Destinations with the Commission.
(ii) All necessary actions shall have been taken to provide for the
adoption of the form of Articles of Incorporation and By-laws filed by ITT
Hartford with the Commission.
(iii) ITT Destinations shall have filed with the Secretary of State of
Nevada an amendment to its Articles of Incorporation to change its name to "ITT
Corporation".
(d) Directors. On or prior to the Distribution Date, ITT, as the sole
shareholder of ITT Destinations and ITT Hartford, shall have taken all necessary
action to elect, or cause to be elected, to the Board of Directors of ITT
Destinations and the Board of Directors of ITT Hartford the individuals
identified in the Proxy Statement as directors of New ITT (as defined in the
Proxy Statement) and ITT Hartford, respectively.
(e) Certain Licenses and Permits. (i) On or prior to the Distribution
Date or as soon as reasonably practicable thereafter, all transferrable
licenses, permits and authorizations issued by governmental or regulatory
entities which relate to the ITT Destinations Business or the ITT Hartford
Business but which are held in the name of ITT or any of its Subsidiaries (other
than ITT Destinations or ITT Hartford or any of their respective Subsidiaries),
or any of their respective employees, officers, directors, stockholders, agents,
or otherwise, on behalf of ITT Destinations (or its Subsidiaries) or ITT
Hartford (or its Subsidiaries), as applicable, shall be duly and validly
transferred by ITT to ITT Destinations (or its Subsidiaries) or ITT Hartford (or
its Subsidiaries), as applicable.
(ii) On or prior to the Distribution Date or as soon as reasonably
practicable thereafter, all transferrable licenses, permits and authorizations
issued by governmental or regulatory entities which relate to the ITT Industries
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Business or the ITT Hartford Business but which are held in the name of ITT
Destinations or any of its Subsidiaries, or any of their respective employees,
officers, directors, stockholders, agents, or otherwise, on behalf of ITT
Industries (or its Subsidiaries) or ITT Hartford (or its Subsidiaries), as
applicable, shall be duly and validly transferred by ITT Destinations to ITT
Industries (or its Subsidiaries) or ITT Hartford (or its Subsidiaries), as
applicable.
(iii) On or prior to the Distribution Date or as soon as reasonably
practicable thereafter, all transferrable licenses, permits and authorizations
issued by governmental or regulatory entities which relate to the ITT
Destinations Business or the ITT Industries Business but which are held in the
name of ITT Hartford or any of its Subsidiaries, or any of their respective
employees, officers, directors, stockholders, agents, or otherwise, on behalf of
ITT Destinations (or its Subsidiaries) or ITT Industries (or its Subsidiaries),
as applicable, shall be duly and validly transferred by ITT Hartford to ITT
Destinations (or its Subsidiaries) or ITT Industries (or its Subsidiaries), as
applicable.
(f) Transfer of Agreements. (i) ITT hereby agrees that on or prior to
the Distribution Date or as soon as reasonably practicable thereafter, subject
to the limitations set forth in this Section 2.01(f), it will, and it will cause
its Subsidiaries (other than ITT Destinations or ITT Hartford or any of their
respective Subsidiaries) to, assign, transfer and convey to ITT Destinations or
ITT Hartford, as applicable, all of ITT's or such Subsidiary's respective right,
title and interest in and to any and all agreements that relate exclusively to
the ITT Destinations Business or ITT Hartford Business, as applicable. ITT
Destinations hereby agrees that on or prior to the Distribution Date or as soon
as reasonably practicable thereafter, subject to the limitations set forth in
this Section 2.01(f), it will, and it will cause its Subsidiaries to, assign,
transfer and convey to ITT Industries or ITT Hartford, as applicable, all of ITT
Destinations' or such Subsidiary's respective right, title and interest in and
to any and all agreements that relate exclusively to the ITT Industries Business
or ITT Hartford Business, as applicable. ITT Hartford hereby agrees that on or
prior to the Distribution Date or as soon as reasonably practicable thereafter,
subject to the limitations set forth in this Section 2.01(f), it will, and it
will cause its Subsidiaries
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to, assign, transfer and convey to ITT Industries or ITT Destinations, as
applicable, all of ITT Hartford's or such Subsidiary's respective right, title
and interest in and to any and all agreements that relate exclusively to the ITT
Industries Business or ITT Destinations Business, as applicable.
(ii) Subject to the provisions of this Section 2.01(f), any agreement
to which any of the parties hereto or any of their Subsidiaries is a party that
inures to the benefit of more than one of the ITT Industries Business, ITT
Destinations Business and ITT Hartford Business shall be assigned in part, on or
prior to the Distribution Date or as soon as reasonably practicable thereafter,
so that each party shall be entitled to the rights and benefits inuring to its
business under such agreement.
(iii) The assignee of any agreement assigned, in whole or in part,
hereunder (an "Assignee") shall assume and agree to pay, perform, and fully
discharge all obligations of the assignor under such agreement or, in the case
of a partial assignment under paragraph (f)(ii), such Assignee's related portion
of such obligations as determined in accordance with the terms of the relevant
agreement, where determinable on the face thereof, and otherwise as determined
in accordance with the practice of the parties prior to the Distribution.
(iv) Notwithstanding anything in this Agreement to the contrary, this
Agreement shall not constitute an agreement to assign any agreement, in whole or
in part, or any rights thereunder if the agreement to assign or attempt to
assign, without the consent of a third party, would constitute a breach thereof
or in any way adversely affect the rights of the Assignee thereof. Until such
consent is obtained, or if an attempted assignment thereof would be ineffective
or would adversely affect the rights of any party hereto so that the Assignee
would not, in fact, receive all such rights, the parties will cooperate with
each other in any arrangement designed to provide for the Assignee the benefits
of, and to permit the Assignee to assume liabilities under, any such agreement.
(g) Consents. The parties hereto shall use their commercially
reasonable efforts to obtain required consents to assignment of agreements
hereunder.
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(h) Delivery of Shares to Agent. ITT shall deliver to the Agent the
share certificates representing the ITT Destinations Common Shares and the ITT
Hartford Common Shares issued to ITT by ITT Destinations and ITT Hartford,
respectively, pursuant to Section 2.01(b) and shall instruct the Agent to
distribute, on or as soon as practicable following the Distribution Date, such
Common Shares to holders of record of shares of ITT Common Stock on the
Distribution Record Date as further contemplated by, and subject to the
conditions contained in, the Proxy Statement and this Agreement. ITT
Destinations and ITT Hartford shall provide all share certificates that the
Agent shall require in order to effect the Distribution.
(i) Other Transactions. On or prior to the Distribution Date, each of
ITT, ITT Destinations and ITT Hartford shall have consummated those other
transactions in connection with the Distribution that are contemplated by the
Proxy Statement and the ruling request submission by ITT to the Internal Revenue
Service dated June 22, 1995 (as subsequently supplemented), and not specifically
referred to in subparagraphs (a)-(h) above.
SECTION 2.02. Certain Financial and Other Arrangements.
(a) Intercompany Accounts.
(i) Without limiting the terms of Section 2.03, all intercompany
receivables, payables and loans (other than receivables, payables and loans
otherwise specifically provided for in any of the Ancillary Agreements or
hereunder), including, without limitation, in respect of any cash balances, any
cash balances representing deposited checks or drafts for which only a
provisional credit has been allowed or any cash held in any centralized cash
management system, between ITT Destinations or any of its Subsidiaries, on the
one hand, and ITT Industries or any of its Subsidiaries, on the other hand,
shall, as of the Effective Time, be settled, capitalized or converted into
ordinary trade accounts, in each case as may be agreed in writing prior to the
Effective Time by duly authorized representatives of ITT Industries and ITT
Destinations.
(ii) Without limiting the terms of Section 2.03, all intercompany
receivables, payables and loans (other than receivables, payables and loans
otherwise specifically provided for in any of the Ancillary Agreements or
hereunder),
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including, without limitation, in respect of any cash balances, any cash
balances representing deposited checks or drafts for which only a provisional
credit has been allowed or any cash held in any centralized cash management
system, between ITT Hartford or any of its Subsidiaries, on the one hand, and
ITT Industries or any of its Subsidiaries, on the other hand, shall, as of the
Effective Time, be settled, capitalized or converted into ordinary trade
accounts, in each case as may be agreed in writing prior to the Effective Time
by duly authorized representatives of ITT Industries and ITT Hartford.
(iii) Without limiting the terms of Section 2.03, all intercompany
receivables, payables and loans (other than receivables, payables and loans
otherwise specifically provided for in any of the Ancillary Agreements or
hereunder), including, without limitation, in respect of any cash balances, any
cash balances representing deposited checks or drafts for which only a
provisional credit has been allowed or any cash held in any centralized cash
management system, between ITT Destinations or any of its Subsidiaries, on the
one hand, and ITT Hartford or any of its Subsidiaries, on the other hand, shall,
as of the Effective Time, be settled, capitalized or converted into ordinary
trade accounts, in each case as may be agreed in writing prior to the Effective
Time by duly authorized representatives of ITT Destinations and ITT Hartford.
(b) Operations in Ordinary Course. Each of ITT Industries, ITT
Destinations and ITT Hartford covenants and agrees that, except as otherwise
provided in any Ancillary Agreement, during the period from the date of this
Agreement through the Distribution Date, it will, and will cause any entity that
is a Subsidiary of such party at any time during such period to, conduct its
business in a manner substantially consistent with current and past operating
practices and in the ordinary course, including, without limitation, with
respect to the payment and administration of accounts payable and the
administration of accounts receivable, the purchase of capital assets and
equipment and the management of inventories.
SECTION 2.03. Capital Structure. ITT, ITT Destinations and ITT Hartford
each agrees to use its commercially reasonable efforts to achieve a
capitalization at December 31, 1995 which is substantially the same as its
respective forecasted capitalization under the heading "ITT Industries
Forecasted Capitalization", "New ITT Forecasted
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Capitalization" or "ITT Hartford Forecasted Capitalization" in ITT's Current
Report on Form 8-K filed with the Commission on November 7, 1995.
SECTION 2.04. Assumption and Satisfaction of Liabilities; Management
Responsibility for Shared Liabilities; Rights and Assets Relating to Shared
Liabilities. (a) Except as otherwise specifically set forth in any Ancillary
Agreement, from and after the Effective Time, (i) ITT Industries shall, and
shall cause its Subsidiaries to, assume, pay, perform and discharge all ITT
Industries Liabilities, (ii) ITT Destinations shall, and shall cause its
Subsidiaries to, assume, pay, perform and discharge all ITT Destinations
Liabilities, and (iii) ITT Hartford shall, and shall cause its Subsidiaries to,
assume, pay, perform and discharge all ITT Hartford Liabilities.
(b) The parties acknowledge that various claims and administrative
matters may arise from time to time in respect of Shared Liabilities and that it
would be in the best interests of the parties hereto to designate responsibility
for managing and administering Shared Liabilities, including, without
limitation, as contemplated by Section 3.05(b) hereto. The parties accordingly
agree that such responsibilities shall be allocated as provided in Schedule
1.01(d) hereto; such responsibilities for Shared Liabilities not covered by
Schedule 1.01(d) shall be as mutually agreed upon among the parties. All costs
and expenses (including, without limitation, reasonable attorneys' fees and all
out-of-pocket expenses whatsoever reasonably incurred) incurred by or on behalf
of the party with such management and administrative responsibility shall be
shared among the parties equally.
(c) The parties hereto shall be entitled to share in any rights and
assets (including, without limitation, recoveries, claims and proceeds of asset
sales) that relate to Shared Liabilities (including, without limitation,
Insurance Proceeds received under Company Policies) equally.
SECTION 2.05. Resignations. (a) ITT Industries shall cause all its
employees to resign, effective as of the Effective Time, from all positions as
officers of ITT Destinations or as officers or directors of any Subsidiary of
ITT Destinations in which they serve. ITT Destinations shall cause all its
employees to resign, effective as of the Effective Time, from all positions as
officers of ITT
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Industries or as officers or directors of any Subsidiary of ITT Industries in
which they serve.
(b) ITT Industries shall cause all its employees to resign, effective
as of the Effective Time, from all positions as officers of ITT Hartford or as
officers or directors of any Subsidiary of ITT Hartford in which they serve. ITT
Hartford shall cause all its employees to resign, effective as of the Effective
Time, from all positions as officers of ITT Industries or as officers or
directors of any Subsidiary of ITT Industries in which they serve.
(c) ITT Hartford shall cause all its employees to resign, effective as
of the Effective Time, from all positions as officers of ITT Destinations or as
officers or directors of any Subsidiary of ITT Destinations in which they serve.
ITT Destinations shall cause all its employees to resign, effective as of the
Effective Time, from all positions as officers of ITT Hartford or as officers or
directors of any Subsidiary of ITT Hartford in which they serve.
SECTION 2.06. Further Assurances. In case at any time after the
Effective Time any further action is reasonably necessary or desirable to carry
out the purposes of this Agreement and the Ancillary Agreements, the proper
officers of each party to this Agreement shall take all such necessary action.
Without limiting the foregoing, ITT, ITT Destinations and ITT Hartford shall use
their commercially reasonable efforts to obtain all consents and approvals, to
enter into all amendatory agreements and to make all filings and applications
that may be required for the consummation of the transactions contemplated by
this Agreement and the Ancillary Agreements, including, without limitation, all
applicable governmental and regulatory filings.
SECTION 2.07. No Representations or Warranties. Each of the parties
hereto understands and agrees that, except as otherwise expressly provided, no
party hereto is, in this Agreement or in any other agreement or document
contemplated by this Agreement or otherwise, making any representation or
warranty whatsoever, including, without limitation, as to title, value or legal
sufficiency. It is also agreed and understood that all assets either transferred
to or retained by the parties, as the case may be, shall be "as is, where is"
and that (subject to Section 2.06) the party to which such assets are to be
transferred hereunder shall
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bear the economic and legal risk that any conveyances of such assets shall prove
to be insufficient or that such party's or any of the Subsidiaries' title to any
such assets shall be other than good and marketable and free from encumbrances.
Similarly, each party hereto understands and agrees that no party hereto is, in
this Agreement or in any other agreement or document contemplated by this
Agreement or otherwise, representing or warranting in any way that the obtaining
of any consents or approvals, the execution and delivery of any amendatory
agreements and the making of any filings or applications contemplated by this
Agreement will satisfy the provisions of any or all applicable agreements or the
requirements of any or all applicable laws or judgments, it being agreed and
understood that the party to which any assets are transferred shall bear the
economic and legal risk that any necessary consents or approvals are not
obtained or that any requirements of laws or judgments are not complied with.
SECTION 2.08. Guarantees. (a) Except as otherwise specified in any
Ancillary Agreement, ITT Industries, ITT Destinations and ITT Hartford shall use
their commercially reasonable efforts to have, on or prior to the Distribution
Date, or as soon as practicable thereafter, ITT Industries and any of its
Subsidiaries removed as guarantor of or obligor for any ITT Destinations
Liability or ITT Hartford Liability, including, without limitation, in respect
of those guarantees set forth on Schedule 2.08(a).
(b) Except as otherwise specified in any Ancillary Agreement, ITT
Industries, ITT Destinations and ITT Hartford shall use their commercially
reasonable efforts to have, on or prior to the Distribution Date, or as soon as
practicable thereafter, ITT Destinations and any of its Subsidiaries removed as
guarantor of or obligor for any ITT Industries Liability or ITT Hartford
Liability, including, without limitation, in respect of those guarantees set
forth on Schedule 2.08(b).
(c) Except as otherwise specified in any Ancillary Agreement, ITT
Industries, ITT Destinations and ITT Hartford shall use their commercially
reasonable efforts to have, on or prior to the Distribution Date, or as soon as
practicable thereafter, ITT Hartford and any of its Subsidiaries removed as
guarantor of or obligor for any ITT Industries Liability or ITT Destinations
Liability, including, without limitation, in respect of those guarantees set
forth on Schedule 2.08(c).
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SECTION 2.09. Witness Services. At all times from and after the
Distribution Date, each of ITT Industries, ITT Destinations and ITT Hartford
shall use their commercially reasonable efforts to make available to each other
party hereto, upon reasonable written request, its and its Subsidiaries'
officers, directors, employees and agents as witnesses to the extent that (i)
such persons may reasonably be required in connection with the prosecution or
defense of any Action in which the requesting party may from time to time be
involved and (ii) there is no conflict in the Action between the requesting
party and ITT Industries, ITT Destinations or ITT Hartford, as applicable. A
party providing witness services to the other party under this Section shall be
entitled to receive from the recipient of such services, upon the presentation
of invoices therefor, payments for such amounts, relating to supplies,
disbursements and other out-of-pocket expenses and direct and indirect costs of
employees who are witnesses, as may be reasonably incurred in providing such
witness services.
SECTION 2.10. Certain Post-Distribution Transactions. (a)(i) ITT
Industries shall comply with and otherwise not take action inconsistent with
each representation and statement made, or to be made, to the Internal Revenue
Service in connection with the request by ITT for a revenue ruling in respect of
the Distribution or to ITT's outside tax counsel in connection with such firm's
rendering an opinion to ITT, ITT Destinations and ITT Hartford as to certain tax
aspects of the Distribution and (ii) until one year after the Distribution Date,
ITT Industries will maintain its status as a company engaged in the active
conduct of a trade or business, as defined in Section 355(b) of the Code.
(b)(i) ITT Destinations shall comply with and otherwise not take action
inconsistent with each representation and statement made, or to be made, to the
Internal Revenue Service in connection with the request by ITT for a revenue
ruling in respect of the Distribution or to ITT's outside tax counsel in
connection with such firm's rendering an opinion to ITT, ITT Destinations and
ITT Hartford as to certain tax aspects of the Distribution and (ii) until one
year after the Distribution Date, ITT Destinations will maintain its status as a
company engaged in the active conduct of a trade or business, as defined in
Section 355(b) of the Code.
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(c)(i) ITT Hartford shall comply with and otherwise not take action
inconsistent with each representation and statement made, or to be made, to the
Internal Revenue Service in connection with the request by ITT for a revenue
ruling in respect of the Distribution or to ITT's outside tax counsel in
connection with such firm's rendering an opinion to ITT, ITT Destinations and
ITT Hartford as to certain tax aspects of the Distribution and (ii) until one
year after the Distribution Date, ITT Hartford will maintain its status as a
company engaged in the active conduct of a trade or business, as defined in
Section 355(b) of the Code.
SECTION 2.11. Directors and Officers Liability Insurance. ITT
Industries agrees that, from and after the Effective Time to the seventh
anniversary of the Distribution Date, it will maintain in full force and effect
the Company Policy numbered 16 on Schedule 7.01(a) hereto (or, through the
purchase of extended discovery, the full benefits and coverage of such Company
Policy) and shall not amend the terms of such Policy in a manner adverse to any
persons covered by such insurance. The provisions of this Section 2.11 are
intended for the benefit of, and shall be enforceable by, each of the persons
covered by the Company Policy numbered 16 on Schedule 7.01(a) hereto.
SECTION 2.12. Insurance. Except as contemplated by Article VII and
Section 2.11 hereof, any and all coverage of ITT Destinations, ITT Hartford and
their respective Subsidiaries under Company Policies has terminated or will
terminate no later than the Effective Time (and will not be replaced by ITT).
SECTION 2.13. Transfers Not Effected Prior to the Distribution;
Transfers Deemed Effective as of the Distribution Date. To the extent that any
transfers contemplated by this Article II shall not have been consummated on or
prior to the Distribution Date, the parties shall cooperate to effect such
transfers as promptly following the Distribution Date as shall be practicable.
Nothing herein shall be deemed to require the transfer of any assets or the
assumption of any Liabilities which by their terms or operation of law cannot be
transferred; provided, however, that the parties hereto and their respective
Subsidiaries shall cooperate to seek to obtain any necessary consents or
approvals for the transfer of all assets and Liabilities contemplated to be
transferred pursuant to this Article II. In the event that any such transfer of
assets or Liabilities has not been consummated, from and after the Distribution
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Date the party retaining such asset or Liability shall hold such asset in trust
for the use and benefit of the party entitled thereto (at the expense of the
party entitled thereto) or retain such Liability for the account of the party by
whom such Liability is to be assumed pursuant hereto, as the case may be, and
take such other action as may be reasonably requested by the party to whom such
asset is to be transferred, or by whom such Liability is to be assumed, as the
case may be, in order to place such party, insofar as is reasonably possible, in
the same position as would have existed had such asset or Liability been
transferred as contemplated hereby. As and when any such asset or Liability
becomes transferable, such transfer shall be effected forthwith. The parties
agree that, as of the Distribution Date, each party hereto shall be deemed to
have acquired complete and sole beneficial ownership over all of the assets,
together with all rights, powers and privileges incident thereto, and shall be
deemed to have assumed in accordance with the terms of this Agreement all of the
Liabilities, and all duties, obligations and responsibilities incident thereto,
which such party is entitled to acquire or required to assume pursuant to the
terms of this Agreement.
SECTION 2.14. Ancillary Agreements. Prior to the Distribution Date,
each of ITT Industries, ITT Destinations and ITT Hartford shall enter into,
and/or (where applicable) shall cause their respective Subsidiaries to enter
into, the Ancillary Agreements and any other agreements in respect of the
Distribution reasonably necessary or appropriate in connection with the
transactions contemplated hereby and thereby.
ARTICLE III. INDEMNIFICATION
SECTION 3.01. Indemnification by ITT Industries. Except as otherwise
specifically set forth in any provision of this Agreement or of any Ancillary
Agreement, ITT Industries shall indemnify, defend and hold harmless the ITT
Destinations Indemnitees and the ITT Hartford Indemnitees from and against any
and all Indemnifiable Losses of the ITT Destinations Indemnitees and the ITT
Hartford Indemnitees, respectively, arising out of, by reason of or otherwise in
connection with (i) the ITT Industries Liabilities or (ii) the breach by ITT
Industries of any provision of this Agreement or any Ancillary Agreement.
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SECTION 3.02. Indemnification by ITT Destinations. Except as otherwise
specifically set forth in any provision of this Agreement or of any Ancillary
Agreement, ITT Destinations shall indemnify, defend and hold harmless the ITT
Industries Indemnitees and the ITT Hartford Indemnitees from and against any and
all Indemnifiable Losses of the ITT Industries Indemnitees and the ITT Hartford
Indemnitees, respectively, arising out of, by reason of or otherwise in
connection with (i) the ITT Destinations Liabilities or (ii) the breach by ITT
Destinations of any provision of this Agreement or any Ancillary Agreement.
SECTION 3.03. Indemnification by ITT Hartford. Except as otherwise
specifically set forth in any provision of this Agreement or of any Ancillary
Agreement, ITT Hartford shall indemnify, defend and hold harmless the ITT
Industries Indemnitees and the ITT Destinations Indemnitees from and against any
and all Indemnifiable Losses of the ITT Industries Indemnitees and the ITT
Destinations Indemnitees, respectively, arising out of, by reason of or
otherwise in connection with (i) the ITT Hartford Liabilities or (ii) the breach
by ITT Hartford of any provision of this Agreement or any Ancillary Agreement.
SECTION 3.04. Limitations on Indemnification Obligations. The amount
that any party (an "Indemnifying Party") is or may be required to pay to any
other person (an "Indemnitee") pursuant to Section 3.01, Section 3.02 or Section
3.03, as applicable, shall be reduced (retroactively or prospectively) by any
Insurance Proceeds or other amounts actually recovered by or on behalf of such
Indemnitee in respect of the related Indemnifiable Loss. If an Indemnitee shall
have received the payment required by this Agreement from an Indemnifying Party
in respect of an Indemnifiable Loss and shall subsequently actually receive
Insurance Proceeds or other amounts in respect of such Indemnifiable Loss, then
such Indemnitee shall pay to such Indemnifying Party a sum equal to the amount
of such Insurance Proceeds or other amounts actually received, up to the
aggregate amount of any payments received from such Indemnifying Party pursuant
to this Agreement in respect of such Indemnifiable Loss.
SECTION 3.05. Procedures for Indemnification. (a) Third Party Claims
(other than in respect of Shared Liabilities). If a claim or demand is made
against an Indemnitee by any person who is not a party to this Agree-
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ment (a "Third Party Claim") as to which such Indemnitee is entitled to
indemnification pursuant to this Agreement, such Indemnitee shall notify the
Indemnifying Party in writing, and in reasonable detail, of the Third Party
Claim promptly (and in any event within 15 business days) after receipt by such
Indemnitee of written notice of the Third Party Claim; provided, however, that
failure to give such notification shall not affect the indemnification provided
hereunder except to the extent the Indemnifying Party shall have been actually
prejudiced as a result of such failure (except that the Indemnifying Party shall
not be liable for any expenses incurred during the period in which the
Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver
to the Indemnifying Party, promptly (and in any event within 15 business days)
after the Indemnitee's receipt thereof, copies of all notices and documents
(including court papers) received by the Indemnitee relating to the Third Party
Claim.
If a Third Party Claim is made against an Indemnitee, the Indemnifying
Party shall be entitled to participate in the defense thereof and, if it so
chooses and acknowledges in writing its obligation to indemnify the Indemnitee
therefor, to assume the defense thereof with counsel selected by the
Indemnifying Party; provided that such counsel is not reasonably objected to by
the Indemnitee. Should the Indemnifying Party so elect to assume the defense of
a Third Party Claim, the Indemnifying Party shall not be liable to the
Indemnitee for legal or other expenses subsequently incurred by the Indemnitee
in connection with the defense thereof. If the Indemnifying Party assumes such
defense, the Indemnitee shall have the right to participate in the defense
thereof and to employ counsel, at its own expense, separate from the counsel
employed by the Indemnifying Party, it being understood that the Indemnifying
Party shall control such defense. The Indemnifying Party shall be liable for the
fees and expenses of counsel employed by the Indemnitee for any period during
which the Indemnifying Party has failed to assume the defense thereof (other
than during the period prior to the time the Indemnitee shall have given notice
of the Third Party Claim as provided above). If the Indemnifying Party so elects
to assume the defense of any Third Party Claim, all of the Indemnitees shall
cooperate with the Indemnifying Party in the defense or prosecution thereof.
If the Indemnifying Party acknowledges in writing liability for a Third
Party Claim, then in no event will the
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Indemnitee admit any liability with respect to, or settle, compromise or
discharge, any Third Party Claim without the Indemnifying Party's prior written
consent; provided, however, that the Indemnitee shall have the right to settle,
compromise or discharge such Third Party Claim without the consent of the
Indemnifying Party if the Indemnitee releases the Indemnifying Party from its
indemnification obligation hereunder with respect to such Third Party Claim and
such settlement, compromise or discharge would not otherwise adversely affect
the Indemnifying Party. If the Indemnifying Party acknowledges in writing
liability for a Third Party Claim, the Indemnitee will agree to any settlement,
compromise or discharge of a Third Party Claim that the Indemnifying Party may
recommend and that by its terms obligates the Indemnifying Party to pay the full
amount of the liability in connection with such Third Party Claim and releases
the Indemnitee completely in connection with such Third Party Claim and that
would not otherwise adversely affect the Indemnitee; provided, however, that the
Indemnitee may refuse to agree to any such settlement, compromise or discharge
if the Indemnitee agrees that the Indemnifying Party's indemnification
obligation with respect to such Third Party Claim shall not exceed the amount
that would be required to be paid by or on behalf of the Indemnifying Party in
connection with such settlement, compromise or discharge.
Notwithstanding the foregoing, the Indemnifying Party shall not be
entitled to assume the defense of any Third Party Claim (and shall be liable for
the fees and expenses of counsel incurred by the Indemnitee in defending such
Third Party Claim) if the Third Party Claim seeks an order, injunction or other
equitable relief or relief for other than money damages against the Indemnitee
which the Indemnitee reasonably determines, after conferring with its counsel,
cannot be separated from any related claim for money damages. If such equitable
relief or other relief portion of the Third Party Claim can be so separated from
that for money damages, the Indemnifying Party shall be entitled to assume the
defense of the portion relating to money damages.
This Section 3.05(a) shall govern all claims under this Article III for
indemnification against Third Party Claims except Third Party Claims in respect
of Shared Liabilities, as to which Section 3.05(b) shall govern.
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(b) Third Party Claims in Respect of Shared Liabilities. If a Third
Party Claim in respect of a Shared Liability is made against an Indemnitee, such
Indemnitee shall notify the Indemnifying Parties in writing, and in reasonable
detail, of the Third Party Claim promptly (and in any event within 15 business
days) after receipt by such Indemnitee of written notice of the Third Party
Claim; provided, however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the extent an
Indemnifying Party shall have been actually prejudiced as a result of such
failure (except that the Indemnifying Parties shall not be liable for any
expenses incurred during the period in which the Indemnitee failed to give such
notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Parties,
promptly (and in any event within 15 business days) after the Indemnitee's
receipt thereof, copies of all notices and documents (including court papers)
received by the Indemnitee relating to the Third Party Claim.
Each Indemnifying Party shall be entitled to participate in the defense
of such Third Party Claim subject to the following provisions of this paragraph.
Without limiting the terms of Section 3.01, Section 3.02 or Section 3.03 hereof,
the Indemnitee and Indemnifying Parties shall use commercially reasonable
efforts to agree as soon as reasonably practicable upon a party (the "Managing
Party") which shall have management and administrative responsibility in respect
of the Third Party Claim against the Indemnitee unless a party is designated on
Schedule 1.01(d) to have management responsibility for the related Shared
Liability (in which case the party so designated shall be the "Managing Party").
Such management and administrative responsibility shall entail the defense of
such Third Party Claim, negotiation with claimants and potential claimants
(subject to the limitations in the following paragraph) and other reasonably
related activities. If the Indemnifying Parties acknowledge in writing their
respective obligations to indemnify the Indemnitee for the Third Party Claim to
the extent contemplated by this Agreement, and an Indemnifying Party is selected
as the Managing Party, such Indemnifying Party may assume the defense thereof
with counsel selected by such Indemnifying Party; provided that such counsel is
not reasonably objected to by the Indemnitee or any other Indemnifying Party. If
there is a Managing Party and such party conducts the defense of the Third Party
Claim, the legal or other expenses in respect of such Third Party Claim incurred
by or
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on behalf of any person other than such Managing Party shall not be
Indemnifiable Losses for purposes of this Agreement; provided, however, the
Indemnifying Parties shall be liable for fees and expenses of counsel employed
by the Indemnitee for any period during which an Indemnifying Party, in its
capacity as Managing Party, has failed to assume the defense thereof (other than
during the period prior to the time the Indemnitee shall have given notice of
such Third Party Claim as provided above), but only to the extent contemplated
by the final paragraph of this Section 3.05(b). If there is a Managing Party and
such party conducts the defense of the Third Party Claim, the Managing Party
shall control the defense of such Third Party Claim, although the Indemnitee (if
not the Managing Party) shall have the right to participate in such defense and
to employ counsel, at its own expense, separate from the counsel employed by the
Managing Party. All of the Indemnitees and each Indemnifying Party shall
cooperate with any Managing Party and each other in the defense or prosecution
of such Third Party Claim.
If each of the Indemnifying Parties acknowledges in writing liability
for such Third Party Claim to the extent contemplated by this Agreement, then in
no event will the Indemnitee admit any liability with respect to, or settle,
compromise or discharge, any such Third Party Claim without each of the
Indemnifying Party's prior written consent; provided, however, that the
Indemnitee shall have the right to settle, compromise or discharge such Third
Party Claim without the consent of the Indemnifying Parties if the Indemnitee
releases each of the Indemnifying Parties from their respective indemnification
obligation hereunder with respect to such Third Party Claim and such settlement,
compromise or discharge would not otherwise adversely affect the Indemnifying
Parties. If the Indemnifying Parties acknowledge in writing liability for such
Third Party Claim, an Indemnitee will agree to any settlement, compromise or
discharge of such Third Party Claim that the Managing Party may recommend and
that by its terms obligates the Indemnifying Parties to pay the full amount of
the liability in connection with such Third Party Claim and releases the
Indemnitee completely in connection with such Third Party Claim (or portion
thereof, as applicable) and that would not otherwise adversely affect the
Indemnitee; provided, however, that the Indemnitee may refuse to agree to any
such settlement, compromise or discharge if the Indemnitee agrees that each of
the Indemnifying Party's indemnification obligations with respect to such Third
Party Claim shall not
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exceed the amount that would be required to be paid by or on behalf of such
Indemnifying Party in connection with such settlement, compromise or discharge.
Notwithstanding the foregoing, an Indemnifying Party shall not be
entitled to assume the defense of such Third Party Claim (and shall be liable
for the fees and expenses of counsel incurred by an Indemnitee in defending such
Third Party Claim to the extent contemplated by this Agreement) if the Third
Party Claim seeks an order, injunction or other equitable relief or relief for
other than money damages against the Indemnitee which the Indemnitee reasonably
determines, after conferring with its counsel, cannot be separated from any
related claim for money damages. If such equitable relief or other relief
portion of the Third Party Claim can be so separated from that for money
damages, an Indemnifying Party shall be entitled to assume the defense of the
portion relating to money damages as contemplated above.
Legal and other expenses incurred in connection with each such Third
Party Claim which are Indemnifiable Losses shall be shared by the parties in the
same proportions in which the related Shared Liability is shared.
SECTION 3.06. Indemnification Payments. Indemnification required by
this Article III shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
loss, liability, claim, damage or expense is incurred.
SECTION 3.07. Other Adjustments. (i) The amount of any Indemnifiable
Loss shall be (x) increased to take into account any net Tax cost actually
incurred by the Indemnitee arising from any payments received from the
Indemnifying Party (grossed up for such increase) and (y) reduced to take
account of any net Tax benefit actually realized by the Indemnitee arising from
the incurrence or payment of any such Indemnifiable Loss. In computing the
amount of such Tax cost or Tax benefit, the Indemnitee shall be deemed to
recognize all other items of income, gain, loss, deduction or credit before
recognizing any item arising from the receipt of any payment with respect to an
Indemnifiable Loss or the incurrence or payment of any Indemnifiable Loss.
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(ii) In addition to any adjustments required pursuant to Section 3.04
hereof or clause (i) of this Section 3.07, if the amount of any Indemnifiable
Loss shall, at any time subsequent to the payment required by this Agreement, be
reduced by recovery, settlement or otherwise, the amount of such reduction, less
any expenses incurred in connection therewith, shall promptly be repaid by the
Indemnitee to the Indemnifying Party, up to the aggregate amount of any payments
received from such Indemnifying Party pursuant to this Agreement in respect of
such Indemnifiable Loss.
SECTION 3.08. Survival of Indemnities. The obligations of ITT
Industries, ITT Destinations and ITT Hartford under this Article III shall
survive the sale or other transfer by any of them of any assets or businesses or
the assignment by any of them of any Liabilities, with respect to any
Indemnifiable Loss of any Indemnitee related to such assets, businesses or
Liabilities.
ARTICLE IV. ACCESS TO INFORMATION
SECTION 4.01. Provision of Corporate Records.
(a) Unless otherwise specified in the procedures set forth in Schedule
4.03(b) hereto, after the Distribution Date, upon the prior written request by
ITT Destinations or ITT Hartford for specific and identified agreements,
documents, books, records or files including, without limitation, computer
files, microfiche, tape recordings and photographs (collectively, "Records"),
relating to or affecting ITT Destinations or ITT Hartford, as applicable, ITT
Industries shall arrange, as soon as reasonably practicable following the
receipt of such request, for the provision of appropriate copies of such Records
(or the originals thereof if the party making the request has a reasonable need
for such originals) in the possession of ITT Industries or any of its
Subsidiaries, but only to the extent such items are not already in the
possession of the requesting party.
(b) Unless otherwise specified in the procedures set forth in Schedule
4.03(b) hereto, after the Distribution Date, upon the prior written request by
ITT Industries or ITT Hartford for specific and identified Records relating to
or affecting ITT Industries or ITT Hartford, as applicable, ITT Destinations
shall arrange, as soon as reasonably prac-
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ticable following the receipt of such request, for the provision of appropriate
copies of such Records (or the originals thereof if the party making the request
has a reasonable need for such originals) in the possession of ITT Destinations
or any of its Subsidiaries, but only to the extent such items are not already in
the possession of the requesting party.
(c) Unless otherwise specified in the procedures set forth in Schedule
4.03(b) hereto, after the Distribution Date, upon the prior written request by
ITT Industries or ITT Destinations for specific and identified Records relating
to or affecting ITT Industries or ITT Destinations, as applicable, ITT Hartford
shall arrange, as soon as reasonably practicable following the receipt of such
request, for the provision of appropriate copies of such Records (or the
originals thereof if the party making the request has a reasonable need for such
originals) in the possession of ITT Hartford or any of its Subsidiaries, but
only to the extent such items are not already in the possession of the
requesting party.
SECTION 4.02. Access to Information. (a) Unless otherwise specified in
the procedures set forth in Schedule 4.03(b) hereto, from and after the
Distribution Date, each of ITT Industries, ITT Destinations and ITT Hartford
shall afford to the other and its authorized accountants, counsel and other
designated representatives reasonable access during normal business hours,
subject to appropriate restrictions for classified, privileged or confidential
information, to the personnel, properties, books and records of such party and
its Subsidiaries insofar as such access is reasonably required by the other
party.
(b) For a period of five years following the Distribution Date, each of
ITT Industries, ITT Destinations and ITT Hartford shall provide to the other,
promptly following such time at which such documents shall be filed with the
Securities and Exchange Commission (the "Commission"), all documents that shall
be filed by it and by any of its respective Subsidiaries with the Commission
pursuant to the periodic and interim reporting requirements of the Securities
Exchange Act of 1934, and the rules and regulations of the Commission
promulgated thereunder.
SECTION 4.03. Reimbursement; Other Matters. (a) Except to the extent
otherwise contemplated by any Ancillary Agreement, a party providing Records or
access to
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information to the other party under this Article IV shall be entitled to
receive from the recipient, upon the presentation of invoices therefor, payments
for such amounts, relating to supplies, disbursements and other out-of-pocket
expenses, as may be reasonably incurred in providing such Records or access to
information.
(b) The parties hereto shall comply with those document retention
policies as shall be set forth in Schedule 4.03(b) hereto or established and
agreed to in writing by their respective authorized officers on or prior to the
Distribution Date in respect of Records and related matters.
SECTION 4.04. Confidentiality. Each of (i) ITT Industries and its
Subsidiaries, (ii) ITT Destinations and its Subsidiaries and (iii) ITT Hartford
and its Subsidiaries shall not use or permit the use of (without the prior
written consent of the other) and shall hold, and shall cause its consultants
and advisors to hold, in strict confidence, all information concerning the other
parties in its possession, its custody or under its control (except to the
extent that (A) such information has been in the public domain through no fault
of such party or (B) such information has been later lawfully acquired from
other sources by such party or (C) this Agreement or any other Ancillary
Agreement or any other agreement entered into pursuant hereto permits the use or
disclosure of such information) to the extent such information (x) relates to
the period up to the Effective Time, (y) relates to any Ancillary Agreement or
(z) is obtained in the course of performing services for the other party
pursuant to any Ancillary Agreement, and each party shall not (without the prior
written consent of the other) otherwise release or disclose such information to
any other person, except such party's auditors and attorneys, unless compelled
to disclose such information by judicial or administrative process or unless
such disclosure is required by law and such party has used commercially
reasonable efforts to consult with the other affected party or parties prior to
such disclosure. To the extent that a party hereto is compelled by judicial or
administrative process to disclose such information under circumstances in which
any evidentiary privilege would be available, such party agrees to assert such
privilege in good faith prior to making such disclosure. Each of the parties
hereto agrees to consult with each relevant other party in connection with any
such judicial or administrative process, including, without limitation, in
determining whether any privilege is
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available, and further agrees to allow each such relevant party and its counsel
to participate in any hearing or other proceeding (including, without
limitation, any appeal of an initial order to disclose) in respect of such
disclosure and assertion of privilege.
ARTICLE V. ADMINISTRATIVE SERVICES
SECTION 5.01. Performance of Services. Beginning on the Distribution
Date, each party will provide, or cause one or more of its Subsidiaries to
provide, to the other party and its Subsidiaries such services on such terms as
may be agreed upon between (i) ITT Industries (or any of its Subsidiaries) and
ITT Destinations (or any of its Subsidiaries), (ii) ITT Industries (or any of
its Subsidiaries) and ITT Hartford (or any of its Subsidiaries) or (iii) ITT
Destinations (or any of its Subsidiaries) and ITT Hartford (or any of its
Subsidiaries) from time to time in writing. The party that is to provide the
services (the "Provider") will use (and will cause its Subsidiaries to use) its
commercially reasonable efforts to provide such services to the other party (the
"Recipient") and its Subsidiaries in a satisfactory and timely manner and as
further specified in writing by the parties.
SECTION 5.02. Independence. All employees and representatives of the
Provider providing the scheduled services to the Recipient will be deemed for
purposes of all compensation and employee benefits matters to be employees or
representatives of the Provider and not employees or representatives of the
Recipient. In performing such services, such employees and representatives will
be under the direction, control and supervision of the Provider (and not the
Recipient) and the Provider will have the sole right to exercise all authority
with respect to the employment (including, without limitation, termination of
employment), assignment and compensation of such employees and representatives.
SECTION 5.03. Non-exclusivity. Nothing in this Agreement precludes any
party from obtaining, in whole or in part, services of any nature that may be
obtainable from the other parties from its own employees or from providers other
than the other parties.
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ARTICLE VI. DISPUTE RESOLUTION
In the event of a controversy, dispute or claim arising out of, in
connection with, or in relation to the interpretation, performance,
nonperformance, validity or breach of this Agreement or otherwise arising out
of, or in any way related to this Agreement, including, without limitation, any
claim based on contract, tort, statute or constitution (collectively, "Agreement
Disputes"), the general counsels of the relevant parties shall negotiate in good
faith for a reasonable period of time to settle such Agreement Dispute.
If after such reasonable period such general counsels are unable to
settle such Agreement Dispute (and in any event after 60 days have elapsed from
the time the relevant parties began such negotiations), such Agreement Dispute
shall be determined, at the request of any relevant party, by arbitration
conducted in New York City, before and in accordance with the then-existing
Rules for Commercial Arbitration of the American Arbitration Association (the
"Rules"), and any judgment or award rendered by the arbitrator shall be final,
binding and nonappealable (except upon grounds specified in 9 U.S.C. Section
10(a) as in effect on the date hereof), and judgment may be entered by any state
or Federal court having jurisdiction thereof in accordance with Section 8.19
hereof. Unless the arbitrator otherwise determines, the pre-trial discovery of
the then-existing Federal Rules of Civil Procedure and the then-existing Rules
46 and 47 of the Civil Rules for the United States District Court for the
Southern District of New York shall apply to any arbitration hereunder. Any
controversy concerning whether an Agreement Dispute is an arbitrable Agreement
Dispute, whether arbitration has been waived, whether an assignee of this
Agreement is bound to arbitrate, or as to the interpretation of enforceability
of this Article VI shall be determined by the arbitrator. The arbitrator shall
be a retired or former judge of any United States District Court or Court of
Appeals or such other qualified person as the relevant parties may agree to
designate, provided such individual has had substantial professional experience
with regard to settling sophisticated commercial disputes. The parties intend
that the provisions to arbitrate set forth herein be valid, enforceable and
irrevocable. The designation of a situs or a governing law for this Agreement or
the arbitration shall not be deemed an election to preclude application of the
Federal Arbitration Act, if it would be applicable. In his award the arbitrator
shall allocate, in
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his discretion, among the parties to the arbitration all costs of the
arbitration, including, without limitation, the fees and expenses of the
arbitrator and reasonable attorneys' fees, costs and expert witness expenses of
the parties. The undersigned agree to comply with any award made in any such
arbitration proceedings that has become final in accordance with the Rules and
agree to the entry of a judgment in any jurisdiction upon any award rendered in
such proceedings becoming final under the Rules. The arbitrator shall be
entitled, if appropriate, to award any remedy in such proceedings, including,
without limitation, monetary damages, specific performance and all other forms
of legal and equitable relief; provided, however, the arbitrator shall not be
entitled to award punitive damages.
ARTICLE VII. INSURANCE
SECTION 7.01. Policies and Rights Included Within Assets. (a) The ITT
Destinations Assets shall include any and all rights of an insured party under
each of the Company Policies set forth on Schedule 7.01(a) hereto and all
predecessor Policies thereto, subject to the terms of such Company Policies and
any limitations or obligations of ITT Destinations contemplated by this Article
VII or Schedule 7.01(a), specifically including rights of indemnity and the
right to be defended by or at the expense of the insurer, with respect to all
claims, suits, actions, proceedings, injuries, losses, liabilities, damages and
expenses incurred or claimed to have been incurred prior to the Distribution
Date by any party in or in connection with the conduct of the ITT Destinations
Business or, to the extent any claim is made against ITT Destinations or any of
its Subsidiaries, the conduct of the ITT Industries Business or the ITT Hartford
Business, and which claims, suits, actions, proceedings, injuries, losses,
liabilities, damages and expenses may arise out of an insured or insurable
occurrence under one or more of such Company Policies; provided, however, that
nothing in this clause shall be deemed to constitute (or to reflect) an
assignment of such Company Policies, or any of them, to ITT Destinations.
(b) The ITT Hartford Assets shall include any and all rights of an
insured party under the Company Policies numbered 16 and 17 on Schedule 7.01(a)
hereto and all predecessor Policies thereto, subject to the terms of such
Company Policies and any limitations or obligations of ITT Hartford contemplated
by this Article VII or
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Schedule 7.01(a), specifically including rights of indemnity and the right to be
defended by or at the expense of the insurer, with respect to all claims, suits,
actions, proceedings, injuries, losses, liabilities, damages and expenses
incurred or claimed to have been incurred prior to the Distribution Date by any
party in or in connection with the conduct of the ITT Hartford Business or, to
the extent any claim is made against ITT Hartford or any of its Subsidiaries,
the conduct of the ITT Industries Business or the ITT Destinations Business, and
which claims, suits, actions, proceedings, injuries, losses, liabilities,
damages and expenses may arise out of an insured or insurable occurrence under
either such Company Policy; provided, however, that nothing in this clause shall
be deemed to constitute (or to reflect) an assignment of either of such Company
Policies to ITT Hartford.
(c) The ITT Industries Assets shall include any and all rights of a
named additional insured party under Policies where ITT is a named additional
insured party, subject to the terms of such Policies and any limitations or
obligations of ITT contemplated by this Article VII, specifically including
rights of indemnity and the right to be defended by or at the expense of the
insurer, with respect to all claims, suits, actions, proceedings, injuries,
losses, liabilities, damages and expenses incurred or claimed to have been
incurred prior to the Distribution Date by any party in or in connection with
the conduct of the ITT Industries Business or, to the extent any claim is made
against ITT Industries or any of its Subsidiaries, the conduct of the ITT
Destinations Business or the ITT Hartford Business, and which claims, suits,
actions, proceedings, injuries, losses, liabilities, damages and expenses may
arise out of an insured or insurable occurrence under either such Policy;
provided, however, that nothing in this clause shall be deemed to constitute (or
to reflect) an assignment of such Policies to ITT Industries.
SECTION 7.02. Post-Distribution Date Claims. (a) If, subsequent to the
Distribution Date, any person shall assert a claim against ITT Destinations or
any of its Subsidiaries (including, without limitation, where ITT Destinations
or its Subsidiaries are joint defendants with other persons) with respect to any
claim, suit, action, proceeding, injury, loss, liability, damage or expense
incurred or claimed to have been incurred prior to the Distribution Date in or
in connection with the conduct of the ITT Destinations Business or, to the
extent any claim is made
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against ITT Destinations or any of its Subsidiaries (including, without
limitation, where ITT Destinations or its Subsidiaries are joint defendants with
other persons), the conduct of the ITT Industries Business or the ITT Hartford
Business, and which claim, suit, action, proceeding, injury, loss, liability,
damage or expense may arise out of an insured or insurable occurrence under one
or more of the Company Policies, ITT Industries shall, at the time such claim is
asserted, to the extent any such Policy may require that Insurance Proceeds
thereunder be collected directly by the party against whom the Insured Claim is
asserted, be deemed to designate, without need of further documentation, ITT
Destinations as the agent and attorney-in-fact to assert and to collect any
related Insurance Proceeds under such Company Policy, and shall further be
deemed to assign, without need of further documentation, to ITT Destinations any
and all rights of an insured party under such Company Policy with respect to
such asserted claim, specifically including rights of indemnity and the right to
be defended by or at the expense of the insurer and the right to any applicable
Insurance Proceeds thereunder; provided, however, that nothing in this Section
7.02(a) shall be deemed to constitute (or to reflect) an assignment of the
Company Policies, or any of them, to ITT Destinations; provided further,
however, that, with respect to those Company Policies set forth on Schedule
7.01(a) hereto for which ITT Destinations has payment obligations as reflected
on such Schedule, ITT Destinations and its Subsidiaries shall only have the
rights set forth under this Section 7.02(a) with respect to such Company
Policies if such payment obligations have been satisfied by ITT Destinations at
the relevant time as contemplated by Schedule 7.01(a).
(b) If, subsequent to the Distribution Date, any person shall assert a
claim against ITT Hartford or any of its Subsidiaries (including, without
limitation, where ITT Hartford or its Subsidiaries are joint defendants with
other persons) with respect to any claim, suit, action, proceeding, injury,
loss, liability, damage or expense incurred or claimed to have been incurred
prior to the Distribution Date in or in connection with the conduct of the ITT
Hartford Business or, to the extent any claim is made against ITT Hartford or
any of its Subsidiaries (including, without limitation, where ITT Hartford or
its Subsidiaries are joint defendants with other persons), the conduct of the
ITT Industries Business or the ITT Destinations Business, and which claim, suit,
action, pro-
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ceeding, injury, loss, liability, damage or expense may arise out of an insured
or insurable occurrence under the Company Policy numbered 16 or 17 on Schedule
7.01(a) hereto, ITT Industries shall, at the time such claim is asserted, to the
extent such Policy may require that Insurance Proceeds thereunder be collected
directly by the party against whom the Insured Claim is asserted, be deemed to
designate, without need of further documentation, ITT Hartford as the agent and
attorney-in-fact to assert and to collect any related Insurance Proceeds under
such Company Policy, and shall further be deemed to assign, without need of
further documentation, to ITT Hartford any and all rights of an insured party
under such Company Policy with respect to such asserted claim, specifically
including rights of indemnity and the right to be defended by or at the expense
of the insurer and the right to any applicable Insurance Proceeds thereunder;
provided, however, that nothing in this Section 7.02(b) shall be deemed to
constitute (or to reflect) an assignment of either of such Company Policies to
ITT Hartford; provided further, however, that, with respect to the Company
Policy numbered 17 on Schedule 7.01(a) hereto, ITT Hartford and its Subsidiaries
shall only have the rights set forth under this Section 7.02(b) with respect to
such Company Policy if the payment obligations of ITT Hartford set forth in
Schedule 7.01(a) with respect to such Policy have been satisfied by ITT Hartford
at the relevant time as contemplated by Schedule 7.01(a).
SECTION 7.03. Administration; Other Matters. (a) Administration. Except
as otherwise provided in Section 7.02 hereof, from and after the Distribution
Date ITT Industries shall be responsible for (i) Insurance Administration of the
Company Policies and (ii) Claims Administration under such Company Policies with
respect to ITT Industries Liabilities, ITT Destinations Liabilities and ITT
Hartford Liabilities; provided that the retention of such responsibilities by
ITT Industries is in no way intended to limit, inhibit or preclude any right to
insurance coverage for any Insured Claim of a named insured under such Policies
as contemplated by the terms of this Agreement; and provided further that ITT
Industries' retention of the administrative responsibilities for the Company
Policies shall not relieve the party submitting any Insured Claim of the primary
responsibility for reporting such Insured Claim accurately, completely and in a
timely manner (it being understood that, as specified in the definitions of
"Claims Administration" and "Insurance Administration", ITT Destinations and ITT
Hartford shall report Insured
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Claims to the relevant carrier through ITT Industries) or of such party's
authority to settle (within the periods specified in Schedule 7.01(a) in the
cases of the Company Policies numbered 1, 3 and 4 on said Schedule) any such
Insured Claim. ITT Industries may discharge its administrative responsibilities
under this Section 7.03 by contracting for the provision of services by
independent parties. Except as contemplated by Schedule 7.01(a) hereto or this
Agreement, each of the parties hereto shall administer and pay any costs
relating to defending its respective Insured Claims under Company Policies to
the extent such defense costs are not covered under such Policies and shall be
responsible for obtaining or reviewing the appropriateness of releases upon
settlement of its respective Insured Claims under Company Policies. The
disbursements, out-of-pocket expenses and direct and indirect costs of employees
or agents of ITT Industries relating to Claims Administration and Insurance
Administration contemplated by this Section 7.03(a) shall be the responsibility
of ITT Industries, provided that, if such disbursements, out-of-pocket expenses
and direct and indirect costs of employees or agents of ITT Industries shall be
materially in excess of the comparable historical disbursements, out-of-pocket
expenses and direct and indirect costs of employees or agents of ITT, the
relevant parties hereto agree to negotiate in good faith an equitable allocation
of responsibility for such disbursements, out-of-pocket expenses and direct and
indirect costs of employees or agents of ITT Industries.
(b) Access to Specified Policies. Where ITT Destinations Liabilities or
ITT Hartford Liabilities, as applicable, are specifically covered under the
Company Policies set forth on Schedule 7.01(a) hereto numbered 16 or 17 for
periods prior to the Distribution Date, or under either such Company Policy
covering claims made after the Distribution Date with respect to an occurrence
prior to the Distribution Date, then from and after the Distribution Date ITT
Destinations and ITT Hartford may claim coverage for Insured Claims under such
Company Policy as and to the extent that such insurance is available up to the
full extent of the applicable limits of liability of such Company Policy (and
may receive any Insurance Proceeds with respect thereto as contemplated by
Section 7.02 or Section 7.03(d) hereof).
(c) Liability Limitation. Except as specifically contemplated by
lettered items under Schedule 7.01(a), ITT
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Industries, ITT Destinations and ITT Hartford shall not be liable to one another
for claims not reimbursed by insurers for any reason not within the control of
ITT Industries, ITT Destinations or ITT Hartford, as the case may be, including,
without limitation, coinsurance provisions, deductibles, quota share
deductibles, exhaustion of aggregates, self-insured retentions, bankruptcy or
insolvency of an insurance carrier, Company Policy limitations or restrictions,
any coverage disputes, any failure to timely claim by ITT Industries, ITT
Destinations or ITT Hartford or any defect in such claim or its processing.
(d) Allocation of Insurance Proceeds. Except as otherwise provided in
Section 7.02, Insurance Proceeds received with respect to claims, costs and
expenses under the Company Policies shall be paid to ITT Industries in trust,
which shall thereafter administer the Company Policies by paying the Insurance
Proceeds, as appropriate, to ITT Industries with respect to ITT Industries
Liabilities, to ITT Destinations with respect to ITT Destinations Liabilities,
to ITT Hartford with respect to the ITT Hartford Liabilities and as provided in
Section 2.04(c) with respect to Shared Liabilities. Payment of the allocable
portions of indemnity costs of Insurance Proceeds resulting from such Policies
will be made by ITT Industries to the appropriate party upon receipt from the
insurance carrier. In the event that the aggregate limits on any Company
Policies are exceeded by the aggregate of outstanding Insured Claims by two or
more of the relevant parties hereto, such parties shall agree on an equitable
allocation of Insurance Proceeds based upon their respective bona fide claims.
The parties agree to use commercially reasonable efforts to maximize available
coverage under those Company Policies applicable to it, and to take all
commercially reasonable steps to recover from all other responsible parties in
respect of an Insured Claim to the extent coverage limits under a Company Policy
have been exceeded or would be exceeded as a result of such Insured Claim.
SECTION 7.04. Agreement for Waiver of Conflict and Shared Defense. In
the event that Insured Claims of more than one of the parties hereto exist
relating to the same occurrence, the relevant parties shall jointly defend and
waive any conflict of interest necessary to the conduct of the joint defense.
Nothing in this Section 7.04 shall be
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construed to limit or otherwise alter in any way the obligations of the parties
to this Agreement, including those created by this Agreement, by operation of
law or otherwise.
SECTION 7.05. Cooperation. The parties agree to use their commercially
reasonable efforts to cooperate with respect to the various insurance matters
contemplated by this Agreement (including, without limitation, in connection
with Policies where ITT is a named additional insured party).
ARTICLE VIII. MISCELLANEOUS
SECTION 8.01. Complete Agreement; Construction. This Agreement,
including the Exhibits and Schedules, and the Ancillary Agreements shall
constitute the entire agreement between the parties with respect to the subject
matter hereof and shall supersede all previous negotiations, commitments and
writings with respect to such subject matter. In the event of any inconsistency
between this Agreement and any Schedule hereto, the Schedule shall prevail.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of any Ancillary Agreement, such Ancillary
Agreement shall control.
SECTION 8.02. Ancillary Agreements. This Agreement is not intended to
address, and should not be interpreted to address, the matters specifically and
expressly covered by the Ancillary Agreements.
SECTION 8.03. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the parties and delivered to the other parties.
SECTION 8.04. Survival of Agreements. Except as otherwise contemplated
by this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
SECTION 8.05. Expenses. Except as otherwise set forth in this Agreement
or any Ancillary Agreement, all costs and expenses incurred on or prior to the
Distribution
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Date (whether or not paid on or prior to the Distribution Date) in connection
with the preparation, execution, delivery and implementation of this Agreement
and any Ancillary Agreement, the Proxy Statement and the Distribution and the
consummation of the transactions contemplated thereby shall be charged to and
paid by ITT, provided that ITT shall not be responsible for those costs or
expenses incurred by ITT Hartford or ITT Destinations (including, without
limitation, any attorney or financial advisor fees owing to attorneys or
financial advisors retained by ITT Destinations or ITT Hartford). Except as
otherwise set forth in this Agreement or any Ancillary Agreement, each party
shall bear its own costs and expenses incurred after the Distribution Date.
SECTION 8.06. Notices. All notices and other communications hereunder
shall be in writing and hand delivered or mailed by registered or certified mail
(return receipt requested) or sent by any means of electronic message
transmission with delivery confirmed (by voice or otherwise) to the parties at
the following addresses (or at such other addresses for a party as shall be
specified by like notice) and will be deemed given on the date on which such
notice is received:
To ITT Corporation (ITT Industries, Inc.
after the Distribution):
0 Xxxx Xxx Xxx Xxxx
Xxxxx Xxxxxx, XX 00000
Attn: Senior Vice President and General Counsel
To ITT Destinations, Inc. (ITT Corporation
after the Distribution):
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Executive Vice President
and General Counsel
To ITT Hartford Group, Inc.:
Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Senior Vice President and General Counsel
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SECTION 8.07. Waivers. The failure of either party to require strict
performance by the other party of any provision in this Agreement will not waive
or diminish that party's right to demand strict performance thereafter of that
or any other provision hereof.
SECTION 8.08. Amendments. Subject to the terms of Section 8.11 hereof,
this Agreement may not be modified or amended except by an agreement in writing
signed by the parties.
SECTION 8.09. Assignment. This Agreement shall be assignable in whole
in connection with a merger or consolidation or the sale of all or substantially
all the assets of a party hereto so long as the resulting, surviving or
transferee entity assumes all the obligations of the relevant party hereto by
operation of law or pursuant to an agreement in form and substance reasonably
satisfactory to the other parties to this Agreement. Otherwise this Agreement
shall not be assignable, in whole or in part, directly or indirectly, by any
party hereto without the prior written consent of the others, and any attempt to
assign any rights or obligations arising under this Agreement without such
consent shall be void.
SECTION 8.10. Successors and Assigns. The provisions of this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
and their respective permitted successors and permitted assigns.
SECTION 8.11. Termination. This Agreement (including, without
limitation, Section 2.11 and Article III hereof) may be terminated and the
Distribution may be amended, modified or abandoned at any time prior to the
Distribution by and in the sole discretion of ITT without the approval of ITT
Destinations or ITT Hartford or the shareholders of ITT. In the event of such
termination, no party shall have any liability of any kind to any other party or
any other person. After the Distribution, this Agreement may not be terminated
except by an agreement in writing signed by the parties; provided, however, that
Section 2.11 and Article III shall not be terminated or amended after the
Distribution in respect of the third party beneficiaries thereto without the
consent of such persons.
SECTION 8.12. Subsidiaries. Each of the parties hereto shall cause to
be performed, and hereby guarantees the performance of, all actions, agreements
and obligations
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set forth herein to be performed by any Subsidiary of such party or by any
entity that is contemplated to be a Subsidiary of such party on and after the
Distribution Date.
SECTION 8.13. Third Party Beneficiaries. Except as provided in Section
2.11 relating to directors and officers liability insurance and in Article III
relating to Indemnitees, this Agreement is solely for the benefit of the parties
hereto and their respective Subsidiaries and Affiliates and should not be deemed
to confer upon third parties any remedy, claim, liability, reimbursement, claim
of action or other right in excess of those existing without reference to this
Agreement.
SECTION 8.14. Attorney Fees. Except as contemplated by the third to the
last sentence of Article VI hereof, a party in breach of this Agreement shall,
on demand, indemnify and hold harmless the other parties hereto for and against
all out-of-pocket expenses, including, without limitation, legal fees, incurred
by such other party by reason of the enforcement and protection of its rights
under this Agreement. The payment of such expenses is in addition to any other
relief to which such other party may be entitled hereunder or otherwise.
SECTION 8.15. Title and Headings. Titles and headings to sections
herein are inserted for the convenience of reference only and are not intended
to be a part of or to affect the meaning or interpretation of this Agreement.
SECTION 8.16. Exhibits and Schedules. The Exhibits and Schedules shall
be construed with and as an integral part of this Agreement to the same extent
as if the same had been set forth verbatim herein.
SECTION 8.17. Specific Performance. Each of the parties hereto
acknowledges that there is no adequate remedy at law for failure by such parties
to comply with the provisions of this Agreement and that such failure would
cause immediate harm that would not be adequately compensable in damages, and
therefore agree that their agreements contained herein may be specifically
enforced without the requirement of posting a bond or other security, in
addition to all other remedies available to the parties hereto under this
Agreement.
SECTION 8.18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE
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LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED IN AND TO BE
PERFORMED IN THAT STATE.
SECTION 8.19. Consent to Jurisdiction. Without limiting the provisions
of Article VI hereof, each of the parties irrevocably submits to the exclusive
jurisdiction of (a) the Supreme Court of the State of New York, New York County,
and (b) the United States District Court for the Southern District of New York,
for the purposes of any suit, action or other proceeding arising out of this
Agreement or any transaction contemplated hereby. Each of the parties agrees to
commence any action, suit or proceeding relating hereto either in the United
States District Court for the Southern District of New York or if such suit,
action or other proceeding may not be brought in such court for jurisdictional
reasons, in the Supreme Court of the State of New York, New York County. Each of
the parties further agrees that service of any process, summons, notice or
document by U.S. registered mail to such party's respective address set forth
above shall be effective service of process for any action, suit or proceeding
in New York with respect to any matters to which it has submitted to
jurisdiction in this Section 8.19. Each of the parties irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in (i) the Supreme Court of the State of New York, New York County, or
(ii) the United States District Court for the Southern District of New York, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
SECTION 8.20. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
ITT CORPORATION,
by
/s/ D. Xxxxxx Xxxxx
-----------------------------------
Name: D. Xxxxxx Xxxxx
Title: Executive Vice
President
ITT DESTINATIONS, INC.,
by
/s/ X. X. Xxxx
-----------------------------------
Name: X. X. Xxxx
Title: Executive Vice
President, General
Counsel
ITT HARTFORD GROUP, INC.,
by
/s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice
President
