UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 15, 2004
ITT INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Indiana 1-5672 13-5158950
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
4 West Red Oak Lane
White Plains, New York 10604
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (914) 641-2000
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (See General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Not Applicable
(Former name or former address, if changed since last report)
ITEM 1.01. Entry into a Material Definitive Agreement
On December 15, 2004, ITT Industries, Inc. (ITT) entered into a financing
arrangement with Rexus L.L.C (Rexus), and Air Bail S.A.S. and RBS Lombard, Inc.
as the investors. Pursuant to a participation agreement among ITT, Rexus and the
investors and a master lease agreement and certain lease supplements between
Rexus, as lessor, and ITT, as lessee, ITT transferred certain real property
owned by ITT to Rexus, an entity wholly owned by the investors, for a total
consideration of $120 million, and Rexus leased such properties back to ITT. The
proceeds will be used for general corporate purposes. The leases have a term of
ten years and the total amount payable by ITT under all of the leases, including
the interest component of the lease payments, is approximately $160 million. The
properties involved in the sale-leaseback transaction include facilities owned
by ITT in Fort Wayne, Indiana, Cheektowaga, New York, Colorado Springs,
Colorado, Archbold, Ohio, Morton Grove, Illinois, and Chicago, Illinois.
The parties intend that for (i) financial accounting purposes with
respect to ITT, (ii) United States federal and all United States state and
local income tax purposes and (iii) United States state real estate and
commercial law and bankruptcy purposes, (1) the lease arrangement will be
treated as a financing arrangement, (2) Rexus will be deemed a lender making a
loan to ITT which loan is secured by the properties, and (3) ITT will be
treated as the owner of the properties and will be entitled to all tax benefits
ordinarily available to an owner of properties similar to the properties for
such tax purposes. Lease payments during the term of the leases will be paid
yearly in arrears in amounts sufficient to satisfy ITT's obligations under the
master lease. ITT will also pay supplemental rent from time to time to cover
administrative costs of the lessor and other amounts that may be due the lessor
or the investors. ITT will remain responsible for operating, repairing,
insuring and maintaining the leased properties, the payment of taxes due on the
properties, and all costs, expenses and liabilities incurred in connection with
the properties.
ITT's obligations under the leases are unconditional and absolute, without
set-off, counterclaim or recoupment rights, and are secured by a collateral
assignment of its leasehold interests as well as by a lien on its facility in
Clifton, New Jersey which was not included in the sale-leaseback arrangements
described above.
The participation agreement includes covenants of ITT that are usual and
customary for agreements of this type, including covenants requiring the
provision of financial reports to the lessor, maintaining insurance on each of
the properties, and limitations on mergers and sales of assets, liens and
further sale and leaseback transactions. The participation agreement also
requires that ITT will not permit its ratio of consolidated earnings to
consolidated interest expense to be less than 3.75 to 1.0.
In the event of a default by ITT under the master lease, the lessor may, among
other things, declare the entire remaining amounts under the leases due and
payable, terminate the master lease and expel ITT from the properties.
At the end of the lease term, ITT retains the right to repurchase all (but not
less than all) of the leased properties from the lessor for total consideration
of one dollar.
Copies of the participation agreement, master lease and lease supplements are
attached as Exhibits 10.1 through 10.10 and are incorporated herein by
reference. The foregoing summaries of the terms of the participation agreement,
master lease and supplemental leases do not purport to be complete and are
qualified in their entirety by reference to each of the participation agreement,
master lease and the supplemental leases.
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ITEM 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
The information set forth above in Item 1.01 regarding ITT's entry into a
participation agreement, master lease and related lease supplements, each dated
as of December 15, 2004, is hereby incorporated into Item 2.03(a) by reference.
ITEM 9.01. Financial Statements and Exhibits
(c) Exhibits
10.1 Participation Agreement, dated as of December 15, 2004, by and among ITT
Industries, Inc., Rexus L.L.C., Air Bail S.A.S. and RBS Lombard, Inc.
10.2 Master Lease and Deed of Trust, Deed to Secure Debt and Mortgage, dated as
of December 15, 2004, between ITT Industries, Inc. and Rexus L.L.C.
10.3 Mortgage, Security Agreement and Financing Statement (including Fixture
Filing), and Supplement and Short Form/Memorandum of Lease, dated as of
December 15, 2004, between ITT Industries, Inc. and Rexus L.L.C. (with
respect to property located in Fort Wayne, Indiana)
10.4 Mortgage, Security Agreement and Financing Statement (including Fixture
Filing), dated as of December 15, 2004, between ITT Industries, Inc. and
Rexus L.L.C. (with respect to property located in Cheektowaga, New York)
10.5 Lease Supplement and Short Form/Memorandum of Lease, dated as of December
15, 2004, between ITT Industries, Inc. and Rexus L.L.C. (with respect to
property located in Cheektowaga, New York)
10.6 Mortgage, Security Agreement and Financing Statement (including Fixture
Filing), and Supplement and Short Form/Memorandum of Lease, dated as of
December 15, 2004, between ITT Industries, Inc. and Rexus L.L.C. (with
respect to property located in Colorado Springs, Colorado)
10.7 Open-End Mortgage, Security Agreement and Financing Statement (including
Fixture Filing), and Supplement and Short Form/Memorandum of Lease, dated
as of December 15, 2004, between ITT Industries, Inc. and Rexus L.L.C.
(with respect to property located in Archbold, Ohio)
10.8 Mortgage, Security Agreement and Financing Statement (including Fixture
Filing), and Supplement and Short Form/Memorandum of Lease, dated as of
December 15, 2004, between ITT Industries, Inc. and Rexus L.L.C. (with
respect to property located in Morton Grove, Illinois)
10.9 Mortgage, Security Agreement and Financing Statement (including Fixture
Filing), and Supplement and Short Form/Memorandum of Lease, dated as of
December 15, 2004, between ITT Industries, Inc. and Rexus L.L.C. (with
respect to property located in Chicago Illinois)
10.10 Mortgage, Security Agreement and Financing Statement (including Fixture
Filing), dated as of December 15, 2004, between ITT Industries, Inc. and
Rexus L.L.C. (with
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respect to property located in Clifton, New Jersey)
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ITT INDUSTRIES, INC.
By: /s/ Kathleen S. Stolar
-----------------------------
Kathleen S. Stolar
Its: Vice President, Secretary
and Associate General Counsel
Date: December 20, 2004
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