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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
--------------------------------
Name:
Title:
ITT DESTINATIONS, INC.,
by
--------------------------------
Name:
Title:
ITT HARTFORD GROUP, INC.,
by
--------------------------------
Name:
Title:
