Exhibit 10.2
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TRANSITION SERVICES AGREEMENT
By and Among
RELIANCE GROUP HOLDINGS, INC.,
RELIANCE INSURANCE COMPANY,
KEMPER CASUALTY, INC.
and
KEMPER CASUALTY INSURANCE COMPANY
Dated as of July 14, 2000
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS
Section 1.1 Definitions...........................................................2
Section 1.2 Interpretation........................................................2
ARTICLE II TRANSITION SERVICES
Section 2.1 Scope of Transition Services..........................................2
Section 2.2 Pricing...............................................................3
Section 2.3 Service Levels; Remedy................................................3
Section 2.4 Orderly Transfer......................................................4
Section 2.5 Billing and Cash Settlement Procedures................................4
Section 2.6 Subcontracting........................................................4
Section 2.7 Audit of Transition Services..........................................5
Section 2.8 Archiving.............................................................5
ARTICLE III TERM; TERMINATION
Section 3.1 Term..................................................................5
Section 3.2 Termination...........................................................6
ARTICLE IV CERTAIN LIMITATIONS
Section 4.1 Limitations on Transition Services....................................6
Section 4.2 Force Majeure.........................................................6
Section 4.3 Other Limitations.....................................................7
ARTICLE V CONFIDENTIALITY
Section 5.1 Confidentiality and Security of Data..................................7
Section 5.2 Acknowledgment and Precautions........................................7
Section 5.3 Disclosure of Confidential Information................................8
Section 5.4 Notification Upon Discovery of Disclosure.............................8
Section 5.5 Ownership of Data.....................................................8
Section 5.6 Security..............................................................8
ARTICLE VI ARBITRATION
Section 6.1 Arbitration...........................................................9
ARTICLE VII INDEMNIFICATION
Section 7.1 Indemnification by the Reliance Parties..............................10
Section 7.2 Indemnification by the Kemper Parties................................10
Section 7.3 Indemnification Procedures...........................................10
ARTICLE VIII MISCELLANEOUS
Section 8.1 Entire Agreement ....................................................11
Section 8.2 Waiver...............................................................11
Section 8.3 Relationships of the Parties.........................................11
Section 8.4 Setoff...............................................................11
Section 8.5 Governing Law........................................................12
Section 8.6 Notices..............................................................12
Section 8.7 Captions.............................................................13
Section 8.8 Assignment; Binding Agreement........................................13
Section 8.9 Third Party Beneficiaries............................................13
Section 8.10 Severability........................................................14
Section 8.11 Counterparts........................................................14
Section 8.12 Expenses............................................................14
Section 8.13 Survival............................................................14
Section 8.14 Consent to Jurisdiction.............................................14
Section 8.15 Cooperation.........................................................15
Section 8.16 Title to Software, etc...............................................15
Section 8.17 Disclaimer...........................................................15
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INDEX OF SCHEDULES
SCHEDULE 1 Transition Services............................Schedule 1-1
TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT (this "Agreement"), dated
as of July 14, 2000, by and among Reliance Group Holdings, Inc., a Delaware
corporation ("RGH"), Reliance Insurance Company, a Pennsylvania insurance
company and an indirect wholly-owned subsidiary of RGH ("RIC" and together with
RGH, the "Reliance Parties"), Kemper Casualty, Inc., a Delaware corporation
("KCI"), and Kemper Casualty Insurance Company, an Illinois insurance company
and wholly-owned subsidiary of KCI ("KCIC" and together with KCI, the "Kemper
Parties").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Transfer and Purchase Agreement dated
as of July 14, 2000 (the "Business Transfer Agreement"), entered into by and
among the Reliance Parties, Reliance National Indemnity Company, a Wisconsin
insurance company and a wholly-owned subsidiary of Reliance ("RNIC"), United
Pacific Insurance Company, a Pennsylvania insurance company and a wholly-owned
subsidiary of Reliance ("UPIC"), Reliance Insurance Company of Illinois, an
Illinois insurance company and a wholly-owned subsidiary of Reliance ("RICI"),
Reliance National Insurance Company, a Delaware insurance company and a
wholly-owned subsidiary of Reliance ("Reliance National Insurance") and Reliance
Universal Insurance Company, a California insurance company and wholly-owned
subsidiary of RIC ("RUIC")(the Reliance Parties, RNIC, UPIC, RICI, Reliance
National Insurance and RUIC, collectively, the "Seller Parties"), the Kemper
Parties, the Seller Parties are transferring to the Kemper Parties the Business
(as such term is defined in the Business Transfer Agreement); and
WHEREAS, in order to provide for the orderly transition of the
Business, and upon the terms and subject to the conditions set forth in this
Agreement, the Parties hereto agree to the provision by the Reliance Parties to
the Kemper Parties of certain transition services.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, agreements and conditions set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Certain capitalized and uncapitalized
terms used but not defined in this Agreement shall have the meanings ascribed to
such terms in the Business Transfer Agreement.
Section 1.2 Interpretation. (a) The parties hereto have
participated jointly in the negotiation and drafting of this Agreement.
Consequently, in the event that an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provision
of this Agreement.
(b) When a reference is made in this Agreement to a Section or
Article, such reference shall be to a section or article of this Agreement
unless otherwise clearly indicated to the contrary. Whenever the words
"include", "includes" or "including" are used in this Agreement they shall be
deemed to be followed by the words "without limitation." The words "hereof,"
"herein" and "herewith" and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement. The meaning assigned to each term used
in this Agreement shall be equally applicable to both the singular and the
plural forms of such term, and words denoting any gender shall include all
genders. Where a word or phrase is defined herein, each of its other grammatical
forms shall have a corresponding meaning.
ARTICLE II
TRANSITION SERVICES
Section 2.1 Scope of Transition Services. (a) Subject to the
provisions of Article IV hereof and subject to Section 5.13 of the Business
Transfer Agreement, during the Transition Period (as such term is defined in
Section 3.1 hereof), the Reliance Parties shall provide, and shall cause their
Affiliates to provide, as applicable, to the Kemper Parties and their
Affiliates, as applicable, with systems support, including the operation and
maintenance of those systems currently being used by the Business as of June 19,
2000 (the "Systems Support Services") and such other services expressly set
forth on Schedule 1 hereto (collectively, the "Transition Services"). With
respect to any Transition Service performed on specific hardware or software,
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the Reliance Parties will not be obligated to provide a Transition Service
performed on such hardware or software following the time at which the Kemper
Parties (A) take physical possession of and install such hardware or cease
processing information with respect to the Business or such hardware or cease
processing information with respect to the business capital hardware or (B)
materially change such software to the extent that the Reliance Parties could no
longer reasonably be expected to be able to perform Transition Services
thereon.The Reliance Parties shall not be required to provide support with
respect to the Computer Programs listed on Schedule 3.14(c)(iii) to the Business
Transfer Agreement as being unsupported.
(b) Until fifteen (15) days after the date hereof, the Kemper
Parties may reasonably request additional transition services or increases to
current Transition Services from the Reliance Parties, and the Reliance Parties
agree to provide, and shall cause their Affiliates to provide, as applicable,
such additional transition services or increases to current Transition Services
to the Kemper Parties and their Affiliates, as applicable, subject to the terms
and conditions of this Agreement including, but not limited to, Article IV
hereof.
(c) The Kemper Parties shall use their reasonable best efforts
to obtain, and the Reliance Parties shall use their reasonable best efforts to
assist in obtaining, any and all consents or approvals from any third party
necessary for the Kemper Parties' receipt of the Transition Services pursuant to
this Agreement. The Kemper Parties shall be responsible for any costs payable to
a third party which are incurred in obtaining such third party's consent. If a
license, consent or approval is specifically required for Seller Parties'
receipt of a particular Transition Service hereunder, the Reliance Parties shall
not be obligated to perform such Transition Service until such license, consent
or approval is obtained.
Section 2.2 Pricing. The fee, rate or amount (collectively,
"Fee") to be charged for each Transition Service is set forth on Schedule 1
hereto; provided, however, for the first three months from the date hereof, no
Fee shall be charged to the Kemper Parties for the provision of any Transition
Service which is not a Systems Support Service.
Section 2.3 Service Levels; Remedy. Subject to the final
sentence of Section 2.4, the Transition Services shall be provided at such
levels of quality, care and service which are at least equal to the levels of
quality, care and service which are provided for the Business as of June 19,
2000.
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Section 2.4 Orderly Transfer. Each of the Reliance Parties and
the Kemper Parties shall fully cooperate with one another in the orderly
transfer of the provision of the Transition Services from the Reliance Parties
to the Kemper Parties. Each shall in good faith make available to the other the
personnel reasonably needed to facilitate such orderly transfer. Subject to the
rights set forth in the Business Transfer Agreement, the Reliance Parties shall
maintain staffing at levels capable of delivering Transition Services at such
levels of quality, care and service which are at least equal to the levels of
quality, care and service which have are provided for the Business as of June
19, 2000. If additional Transition Services or increases to current Transition
Services are added pursuant to Section 2.1(b), the staffing or service level
with respect such Transition Service shall not exceed a level which the Reliance
Parties could reasonably be expected to be able to provide based on the Reliance
Parties' resources as of the date on which the Kemper Parties requested such
additional Transition Services or increase to current Transition Services.
Section 2.5 Billing and Cash Settlement Procedures. Billing
and cash settlement for Transition Services shall occur monthly. Bills shall be
sent in a format as may be mutually agreed upon by the parties. The Reliance
Parties and the Kemper Parties shall settle payment for Transition Services
within fifteen (15) days of the Reliance Parties' delivery to the Kemper Parties
of an itemized summary of the Fees relating thereto (the "Settlement Date");
provided, that the Reliance Parties shall have received from the Kemper Parties
all reasonably requested information necessary to complete such settlement.
Settlement shall be made by wire transfer or check of immediately available
funds. In the event that any amount remains unsettled after the Settlement Date,
such amount shall bear interest until the full settlement thereof at a rate per
annum equal to the 60-Day Treasury Rate. For purposes of this Agreement, "60-Day
Treasury Rate" means the annual yield rate, on the date to which the 60-Day
Treasury Rate relates, of actively traded U.S. Treasury securities having a
remaining duration to maturity of two months, as such rate is published under
"Treasury Constant Maturities" in Federal Reserve Statistical Release H.15(519).
Section 2.6 Subcontracting. The Reliance Parties may
subcontract or outsource to any third party for the performance of any
Transition Services; provided, however, that the subcontracting or outsourcing
of the performance of any Transition Services shall (i) not increase the Fee
relating to such Transition Services and (ii) not affect the quality of such
Transition Services. In the event that any Transition Services are subcontracted
or outsourced pursuant to this Section 2.6, (i) the Reliance Parties shall
remain fully responsible and liable for their obligations hereunder (including
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adherence to the service standards referred to in Section 2.3), (ii) the
Reliance Parties shall be responsible for all communications with any third
parties performing Transition Services on their behalf; (iii) the Kemper Parties
may continue to conduct all written or oral communications regarding matters
contemplated by this Agreement with the Reliance Parties without reference to
any third party performing Transition Services on behalf of the Reliance
Parties; (iv) the Kemper Parties shall be provided by the Reliance Parties the
direct right to bring a lawsuit against any such third party for breach of the
outsourcing or subcontracting agreement; and (v) the Reliance Parties shall take
all actions necessary to assure that the third party performing Transition
Services meets the Reliance Parties' obligations under this Agreement.
Section 2.7 Audit of Transition Services. Upon reasonable
request during normal business hours, the Reliance Parties shall permit the
Kemper Parties or its authorized representatives, to examine and make copies and
abstracts from the books and records of the Reliance Parties for the purpose of
auditing the performance of, and the charges of, the Reliance Parties under the
terms of this Agreement; provided, however, that all costs and expenses of such
inspection shall be borne by the Kemper Parties.
Section 2.8 Archiving. The Reliance Parties and the Kemper
Parties shall archive all data related to the Business consistent with the
archiving practices of the Business as of June 19, 2000, or as otherwise
required by Applicable Law. Upon reasonable request of the other party, each
party hereto shall use reasonable efforts to retrieve and to make available the
archived data at the expense of the party in possession of the data. The form in
which such archived data so retrieved shall be made available shall be
consistent with the way it was originally stored. If the party archiving data
determines to destroy such data, it shall provide the other party with not less
than thirty (30) days prior notice thereof and within such thirty (30) day
period the other party may elect to retain such data at its own expense.
ARTICLE III
TERM; TERMINATION
Section 3.1 Term. Each Transition Service shall be provided
for such term (the "Transition Period"), as set forth on Schedule 1 hereto.
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Section 3.2 Termination. (a) Notwithstanding Section 3.1
hereof, the Kemper Parties may, without cause, upon forty-five (45) days prior
written notice to the Reliance Parties, terminate any or all Transition
Services.
(b) In the event that the Kemper Parties elect to terminate
less than all Transition Services, the Reliance Parties shall be obligated to
continue to provide the remaining Transition Services in accordance with the
terms and conditions of this Agreement.
ARTICLE IV
CERTAIN LIMITATIONS
Section 4.1 Limitations on Transition Services. (a) Nothing in
this Agreement or the Business Transfer Agreement shall require the Reliance
Parties or any of their Affiliates, as applicable, to obtain any additional
licenses, systems or personnel to provide or comply with the obligations set
forth in this Agreement.
(b) Notwithstanding anything to the contrary contained in this
Agreement or the Business Transfer Agreement, in the event that any Affiliate of
the Reliance Parties or the Kemper Parties ceases to be an Affiliate of the
Reliance Parties or the Kemper Parties, respectively, or in the event that any
business conducted by the Reliance Parties or the Kemper Parties and providing
or receiving any Transition Services, respectively, is transferred to a third
party, all such Transition Services being provided by or to such transferred
entity or which relate to such transferred business, as the case may be, shall
automatically terminate.
(c) Notwithstanding anything to the contrary contained in this
Agreement or the Business Transfer Agreement, the Reliance Parties and the
Kemper Parties acknowledge and agree that the Transition Services shall not be
resold, transferred to a non-Affiliate or otherwise be used in any way other
than in the conduct of the Business.
Section 4.2 Force Majeure. Neither the Reliance Parties nor
the Kemper Parties shall have any liability for any failure to perform this
Agreement in accordance with its terms if such failure arises out of causes
beyond the control of such person. Such causes may include, but are not limited
to, unavailability of communications facilities, acts of God or the public
enemy, acts of third parties
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including delays of maintenance and vendors, acts of civil or military
authority, fires, floods, storms, earthquakes, accidents, explosions, sabotage,
strikes, lockouts or other labor disturbances, national emergency, commotion,
unavailability of energy sources, materials or equipment, delay in
transportation, riots or war. If the Reliance Parties are unable to
substantially perform Transition Services for any of the reasons described in
this Section 4.2, the provision of such Transition Services by the Reliance
Parties shall be suspended for the duration, and to the extent of, such force
majeure event, provided that the Reliance Parties shall promptly notify the
Kemper Parties of their inability to so perform, the steps they plan to take to
rectify such inability and the anticipated length of such inability.
Section 4.3 Other Limitations. Without in any way limiting the
provisions of Article 2 hereof or the last sentence of Section 5.6 hereof, the
Reliance Parties and the Kemper Parties agree that in no event shall they have
any liability under this Agreement for any loss of interest, profit, sales,
revenue or goodwill by any person or for any consequential, indirect, special,
punitive or exemplary damages suffered by any person.
ARTICLE V
CONFIDENTIALITY
Section 5.1 Confidentiality and Security of Data. The parties
hereto acknowledge that the Reliance Parties have disclosed or will disclose
certain confidential information to the Kemper Parties and that the Kemper
Parties have disclosed or will disclose certain confidential information to the
Reliance Parties, in each case, in connection with the provision of Transition
Services. For the purposes of this Article V, the party disclosing such
confidential information including their Affiliates, shall be referred to as the
"Disclosing Party" and the party receiving such confidential information
including their Affiliates, shall be known as the "Receiving Party."
Section 5.2 Acknowledgment and Precautions. The Receiving
Party acknowledges the confidential and proprietary nature of the confidential
information and agrees not to reveal or disclose it for any purpose to any other
person, or to use any confidential information for any purpose other than as
contemplated by this Agreement, without the prior written consent of the
Disclosing Party, except as provided in Section 5.3. The Receiving Party agrees
to maintain adequate security procedures and take reasonable precautions (no
less rigorous than the Receiving Party
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takes with respect to its own comparable confidential information) to prevent
misuse, unauthorized or inadvertent disclosure or loss of the confidential
information.
Section 5.3 Disclosure of Confidential Information.
Confidential information may be disclosed by the Receiving Party pursuant to any
statute, regulation, order, subpoena or document discovery request, provided
that prior written notice of such disclosure is furnished to the Disclosing
Party as soon as practicable in order to afford the Disclosing Party an
opportunity to seek a protective order (it being agreed that if the Disclosing
Party is unable to obtain or does not seek a protective order and the Receiving
Party is legally compelled to disclose such confidential information, disclosure
of such confidential information may be made without liability under this
Agreement or otherwise).
Section 5.4 Notification Upon Discovery of Disclosure. The
Receiving Party shall notify the Disclosing Party immediately upon discovery of
any prohibited use or disclosure of the confidential information by itself or
their Affiliates, or any other breach of this Article V by the Receiving Party,
and shall fully cooperate with the Disclosing Party to help the Disclosing Party
regain possession of the confidential information and prevent the further
prohibited use or disclosure of confidential information.
Section 5.5 Ownership of Data. Except as otherwise provided in
the Business Transfer Agreement or other Ancillary Agreement, each party hereto
acknowledges and agrees that the Reliance Parties and the Kemper Parties shall
each retain exclusive rights to and ownership of their own data and their
respective Affiliates' data utilized in the provision of Transition Services.
Section 5.6 Security. Each party hereto shall, and shall cause
their Affiliates to, use all reasonable steps to protect the data owned by the
other party hereto or such other party's Affiliates. In the event that any such
data is lost or destroyed due to the negligence of the other party hereto or
such other party's Affiliates, the parties hereto agree that (i) the exclusive
remedy of the non-negligent party shall be that the negligent party, at the
negligent party's cost and expense, shall use its reasonable best efforts to
reconstruct such data with the cooperation of the non-negligent party and their
Affiliates and (ii) in no event shall the Reliance Parties and the Kemper
Parties have any liability in respect of such negligence other than as provided
in clause (i).
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ARTICLE VI
ARBITRATION
Section 6.1 Arbitration.
(a) Subject to the provisions of paragraph (f) hereof, any
dispute arising out of this Agreement shall be submitted to a panel of
arbitrators composed of two (2) arbitrators and an umpire, meeting in New York,
New York, unless otherwise agreed by the parties hereto.
(b) The members of the panel of arbitrators shall be active or
retired disinterested officers of insurance or reinsurance companies other than
the parties or their Affiliates. Each party shall appoint its arbitrator, and
each of the two (2) arbitrators shall propose list of three (3) potential umpire
candidates. In the event that the two (2) arbitrators fail to agree upon the
appointment of any of the individuals proposed as umpire within two (2) weeks,
either party may apply to the United States District Court for the Southern
District of New York to select an umpire other than the potential umpire
candidates proposed by each of the arbitrators.
(c) The claimant shall submit its initial statement within
twenty (20) days from appointment of the umpire. The respondent shall submit its
statement within twenty (20) days after receipt of the claimant's statement, and
the claimant may submit a reply statement within ten (10) days after receipt of
the respondent's statement. Thereafter, the panel shall hold a hearing and
receive evidence.
(d) The panel shall issue its decision in writing based upon
evidence introduced at a hearing or by other means of submitting evidence in
which strict rules of evidence need not be followed, but in which
cross-examination and rebuttal shall be allowed, if requested. The panel shall
make its decision within, based upon applicable law, forty-five (45) days
following the termination of the hearings unless the parties consent to an
extension. The majority decision of the panel shall be final and binding upon
all parties to the proceeding. Judgment may be entered upon the award of the
panel in any court having jurisdiction thereof.
(e) Each party shall bear the expenses of its own arbitrator
and shall equally bear the expenses of the umpire. The remaining costs of the
arbitration proceeding shall be allocated by the panel.
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(f) Notwithstanding the foregoing, either may initiate action
in court when the only remedy sought is specific performance or injunctive
relief.
ARTICLE VII
INDEMNIFICATION
Section 7.1 Indemnification by the Reliance Parties. The
Reliance Parties hereby indemnify the Kemper Parties against, and agree to hold
the Kemper Parties and their Affiliates, and each of their officers, directors,
employees and other Representatives harmless from any and all Damages incurred
or suffered by the Kemper Parties or their affiliates, or their officers,
directors, employees or other Representatives arising out of or relating to, (i)
after notice and opportunity to cure any breach or nonfulfillment by the
Reliance Parties of, or any failure by the Reliance Parties to perform, any of
the covenants, terms or conditions of, or any duties or obligations under this
Agreement; and (ii) any enforcement of this indemnity.
Section 7.2 Indemnification by the Kemper Parties. The Kemper
Parties hereby indemnify the Reliance Parties against, and agree to hold the
Reliance Parties and their affiliates, and each of their officers, directors,
employees and other Representatives harmless from any and all Damages incurred
or suffered by the Reliance Parties or their affiliates, or their officers,
directors, employees or other Representatives arising out of or relating to, (i)
after notice and opportunity to cure any breach or nonfulfillment by the Kemper
Parties of, or any failure by the Kemper Parties to perform, any of the
covenants, terms or conditions of, or any duties or obligations under this
Agreement; (ii) any enforcement of this indemnity; (iii) any use or occupancy of
any real estate facilities or leased property contemplated by this Agreement;
and (iv) so long as the Reliance Parties are not in material breach of this
Agreement, any action, suit or proceeding by any third party alleging any
violation of law, breach of contract or commission of any tort in connection
with the performance of the Transition Services in accordance with this
Agreement.
Section 7.3 Indemnification Procedures. In the event either
the Reliance Parties or the Kemper Parties shall have a claim for indemnity
against the other party under the terms of this Agreement, the parties shall
follow the procedures set forth in Article 6 of the Business Transfer Agreement.
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ARTICLE VIII
MISCELLANEOUS
Section 8.1 Entire Agreement. This Agreement, the Business
Transfer Agreement and the other Ancillary Agreements constitute the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersede all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.
Section 8.2 Waiver. (a) Any provision of this Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed, in the case of an amendment, by each party to this Agreement, or in the
case of a waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies therein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 8.3 Relationships of the Parties. The parties hereto
and their respective Affiliates are and shall remain independent contractors and
not employees or agents of each other. Except as expressly granted by the other
party in writing, neither the Reliance Parties nor the Kemper Parties shall have
any authority, express or implied, to act as an agent of the other party or its
subsidiaries or Affiliates under this Agreement. It is not the intent of the
parties hereto to create, nor should this Agreement be construed to create, a
partnership or employment relationship among or between the parties (including
their respective officers, employees, agents or representatives).
Section 8.4 Setoff. Each of the Reliance Parties and the
Kemper Parties agree that it shall have the right to off-set or set-off any
payment due pursuant to this Agreement, the Business Transfer Agreement, or
other Ancillary Agreement against any other payment to be made pursuant to this
Agreement, the Business Transfer Agreement, or other Ancillary Agreement.
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Section 8.5 Governing Law. This Agreement shall be governed by
and construed in accordance with the law of the State of New York, without
regard to the choice of laws rules thereof.
Section 8.6 Notices. All notices and other communications
under this Agreement shall be in writing and shall be delivered personally, sent
by facsimile transmission or sent by overnight courier or certified, registered
or express mail, postage prepaid. Any such notice or other communication shall
be deemed given: (i) upon actual delivery if presented personally or sent by
facsimile transmission, (ii) one (1) Business Day following delivery to an
overnight courier or (iii) three (3) Business Days following deposit in the
United States mail, if sent by certified, registered or express mail, postage
prepaid, in each case to the following addresses:
(i) If to the Kemper Parties:
Kemper Casualty, Inc.
One World Trade Center
35th Floor
New York, NY 10048
Attn: James F. Meehan, General Counsel
Facsimile No.: (212) 313-4124
With concurrent copies, which shall not constitute
notice, to:
Lumbermens Mutual Casualty Company
One Kemper Drive
Long Grove, IL 60049
Attn: John Conway, General Counsel
Facsimile No.: (847) 320-4202
and
Robert J. Sullivan, Esq.
Skadden, Arps, Slate, Meagher & Flom, LLP
Four Times Square
New York, NY 10036-6522
Facsimile No.: (212) 735-2000
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(ii) If to the Reliance Parties:
Reliance Insurance Company
77 Water Street
New York, New York 10005
Attn: General Counsel
Facsimile No.: (212) 858-9118
With concurrent copies, which shall not constitute
notice, to:
Reliance Group Holdings
Park Avenue Plaza
55 East 52nd Street, 29th Floor
New York, NY 10055
Attn: General Counsel
Facsimile No.: (212) 909-1864
and
Jonathan L. Freedman, Esq.
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, NY 10019
Facsimile No.: (212) 259-6333
Section 8.7 Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
Section 8.8 Assignment; Binding Agreement. Except as set forth
under Section 2.6 hereof, neither this Agreement, nor any rights, interests or
obligations hereunder, may be directly or indirectly assigned by any party to
this Agreement, in whole or in part, to any other person (including any
bankruptcy trustee) by operation of law or otherwise, whether voluntarily or
involuntarily, without the prior written consent of the other parties hereto.
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the party hereto and their respective permitted successors and
permitted assigns.
Section 8.9 Third Party Beneficiaries. Nothing in this
Agreement, express or implied, is intended to or shall confer upon any person
(including, without limitation, the Affiliates of the Reliance Parties and the
Kemper Parties) other than the
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parties to this Agreement any rights, benefits or remedies of any nature
whatsoever under or by reason of this Agreement.
Section 8.10 Severability. If any provision of this Agreement
is held to be legally invalid or unenforceable under any present or future law
or if determined by a court of competent jurisdiction to be unenforceable, and
if the rights or obligations of the Reliance Parties and the Kemper Parties
under this Agreement will not be materially and adversely effected thereby, such
provision shall be fully severable, and this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of this Agreement, and the remaining provision of this
Agreement shall remain in full force and will not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom.
Section 8.11 Counterparts. This Agreement may be signed in a
multiple counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other party hereto and then become effective as
of the date hereof.
Section 8.12 Expenses. Unless otherwise specifically provided
herein, all costs and expenses incurred in connection with this Agreement shall
be paid by the party incurring such cost or expense.
Section 8.13 Survival. The provisions of Sections 2.7, 4.3,
8.12 hereof and Articles V , VI and VII shall survive the termination of this
Agreement.
Section 8.14 Consent to Jurisdiction. Subject to the
provisions of Article VI hereof, each of the parties hereto irrevocably and
unconditionally submits to the exclusive jurisdiction of The United States
District Court for the Southern District of New York or, if such court does not
have jurisdiction, New York State Supreme Court in the borough of Manhattan, for
purposes of enforcing this Agreement. The parties shall take such actions as are
within their control to cause any matter contemplated hereby to be assigned to
the Commercial Division of the Supreme Court. In any such action, suit or other
proceeding, each of the parties hereto irrevocably and unconditionally waives
and agrees not to assert by way of motion, as a defense or otherwise any claims
that it is not subject to the jurisdiction of the above court, that such action
or suit is brought in an inconvenient forum or that the venue of such action,
suit or other proceeding is improper. Each of the parties hereto also agrees
that any final and unappealable judgment against a party hereto in connection
with any action, suit or other proceeding shall be conclusive and binding on
such party and that such award or judgment may be enforced in any court of
competent jurisdiction, either
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within or outside of the United States. A certified or exemplified copy of such
award or judgment shall be conclusive evidence of the fact and amount of such
award or judgment. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 8.6 shall be deemed
effective service of process on such party.
Section 8.15 Cooperation.
(a) The Kemper Parties agree to share on a timely basis
information and otherwise cooperate to the extent necessary to facilitate the
provision of services under this Agreement. In addition, the parties shall
cooperate in a commercially reasonable manner in order that the obligations of
the Reliance Parties under this Agreement shall be effectively, efficiently and
promptly discharged. Each party shall, at all reasonable times under the
circumstances, make available to the other party properly authorized personnel
for the purpose of consultation and decision.
(b) The Kemper Parties shall take such actions to move the
Business to its own systems and to terminate the provision of Transition
Services hereunder as soon as practicable.
Section 8.16 Title to Software, etc. Except for those assets
transferred or licensed to Purchaser pursuant to the Business Transfer Agreement
or any Ancillary Agreement, the Reliance Parties shall retain all right, title
and interest in any software, hardware, firmware and other management and
control system (such as computers, computer programs, and other computer-related
technology), and related information, plans, technical data, ideas, discoveries,
works of authorship, patentable and unpatentable inventions, copyrights,
trademarks, trade names, trade secrets and other Intellectual Property,
know-how, engineering, drawings and equipment resulting from or arising out of a
Reliance Party's provision of the Transition Services hereunder.
Section 8.17 Disclaimer. Except as provided in Sections 2.3
and 2.4 of this Agreement, and except for all such representations and
warranties as are set forth in the Business Transfer Agreement, the Reliance
Parties make no representations or warranties, express or implied, with respect
to the Transition Services provided pursuant to this Agreement and the implied
warranties of merchantability and fitness for a particular purpose are
specifically excluded with respect to the Transition Services to be provided
hereunder.
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IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf by its officer thereunto duly authorized,
all as of the day and year first above written.
KEMPER CASUALTY, INC.
By: /s/ Dennis Kane
---------------------------------------
Name: Dennis Kane
Title: President & CEO
KEMPER CASUALTY INSURANCE
COMPANY
By: /s/ Dennis Kane
---------------------------------------
Name: Dennis Kane
Title: President & CEO
RELIANCE GROUP HOLDINGS, INC.
By: /s/David Grill
---------------------------------------
Name: David Grill
Title: Vice President & Treasurer
RELIANCE INSURANCE COMPANY
By: /s/ George Terry Van Gilder
---------------------------------------
Name: George Terry Van Gilder
Title: President & CEO