JOINT DEFENSE AGREEMENT

Exhibit 10.29

 

JOINT DEFENSE AGREEMENT

 

THIS JOINT DEFENSE AGREEMENT (“Joint Defense Agreement”) is entered into as of this 19th day of January 2005, by and among The Rugby Group Ltd., f/k/a The Rugby Group PLC, an English company (“Rugby”), Rugby IPD Corp., a Delaware corporation (“Rugby IPD”), and Huttig Building Products, Inc., a Delaware corporation (“Huttig”) (Rugby, Rugby IPD and Huttig being referred to herein separately as a “Party” and collectively as the “Parties”).

 

WITNESSETH:

 

WHEREAS, Rugby Building Products (as defined herein) transferred to Rugby IPD, on December 10, 1999, certain assets pursuant and subject to the terms of the Exchange Agreement (as defined herein); and

 

WHEREAS, Rugby contributed to Huttig, on the Closing Date (as defined herein), all of the outstanding common shares of Rugby’s then wholly-owned subsidiary, Rugby USA (as defined herein), pursuant and subject to the terms of the Share Exchange Agreement (as defined herein); and

 

WHEREAS, Huttig has contended that Rugby and Rugby IPD are required to defend, indemnify and hold harmless Huttig from and against the Stanline Asbestos Claims (as defined herein) pursuant to the Share Exchange Agreement and the Exchange Agreement, respectively; and

 

 

* Material has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

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Exhibit 10.29

 

WHEREAS, Rugby and Rugby IPD have denied that they have any liability to defend, indemnify and hold harmless Huttig from and against the Stanline Asbestos Claims; and

 

WHEREAS, Huttig has filed the Pending Litigation (as defined herein) to determine whether Rugby and Rugby IPD have an obligation to defend, indemnify and hold harmless Huttig from and against the Stanline Asbestos Claims; and

 

WHEREAS, the Parties desire to settle and resolve their disputes regarding the Stanline Asbestos Claims by executing the Settlement Agreement (as defined herein) and this Joint Defense Agreement; and

 

WHEREAS, the Parties share a mutuality of interest in connection with the defense of the Future Stanline Asbestos Claims (as defined herein) and agree that it is in their best interest to cooperate in efforts to defend the Future Stanline Asbestos Claims; and

 

WHEREAS, the Parties recognize that the common interests of the Parties are best served by exchanging information; and

 

WHEREAS, even upon such exchange, such information is privileged from disclosure to adverse or other third parties as a result of the attorney-client privilege, the attorney work product doctrine, the work product doctrine, the joint defense privilege, the common interest doctrine and/or other privileges or immunities with respect to disclosure to third parties; and

 

 

* Material has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

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Exhibit 10.29

 

WHEREAS, the Parties desire to further their common interests by establishing procedures for cooperation and the exchange and sharing of information between and among themselves; and

 

WHEREAS, it is the purpose of this Joint Defense Agreement to, inter alia, (i) protect the confidential and privileged nature of all exchanged information and (ii) ensure that the exchange and disclosure of information contemplated herein does not diminish in any way the confidentiality of the information and does not constitute a waiver of any privilege or protection;

 

NOW, THEREFORE, in consideration of the mutual promises contained herein and other valuable consideration, the adequacy and sufficiency of which are hereby acknowledged, the Parties hereby covenant and agree as follows:

 

1. Definitions

 

The following terms shall have the following meanings for purposes of this Joint Defense Agreement:

 

(a) “Claim” shall mean all claims, rights, duties, obligations, demands, actions, causes of action, suits, debts, liabilities and losses of any kind whatsoever and expressly includes all Defense Costs incident thereto.

 

(b) “Closing Date” shall mean December 16, 1999, which was the date of the closing of the transactions contemplated by the Share Exchange Agreement.

 

 

* Material has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

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(c) “Court” shall mean the Supreme Court of the State of New York, County of New York.

 

(d) “Crane” shall mean Crane Co., a corporation organized and existing under the laws of Delaware with its principal place of business in Connecticut.

 

(e) “Defense Costs” shall include all amoun ts reasonably incurred and paid in the defense, compromise or satisfaction of a Claim, including those resulting from (i) the fees and the customary costs of attorneys, investigators, consultants, experts and court reporters, but excluding internal costs such as employees’ salaries and/or (ii) a judgment or a settlement.

 

(f) “Defense Counsel” shall mean counsel selected by Huttig to defend any Claim subject to this Joint Defense Agreement.

 

(g) “Exchange Agreement” shall mean the Exchange Agreement between Rugby Building Products and Rugby IPD dated as of December 10, 1999.

 

(h) “Future Stanline Asbestos Claims” shall mean all Stanline Asbestos Claims, if any, that may be asserted after the Settlement Date.

 

(i) “Huttig” shall have the meaning set forth in the first paragraph of this Joint Defense Agreement.

 

(j) “Joint Defense Account” shall mean the account established and maintained pursuant to, and in accordance with, Section 2 of this Joint Defense Agreement.

 

 

* Material has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

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Exhibit 10.29

 

(k) “Joint Defense Agreement” shall have the meaning set forth in the first paragraph of this Joint Defense Agreement.

 

(l) “Joint Defense Materials” shall mean the confidential information relating to the defense of the Future Stanline Asbestos Claims described in Section 7 of this Joint Defense Agreement.

 

(m) “Joint Defense Fund” shall mean the money contributed by Rugby and Huttig to the Joint Defense Account, pursuant to, and in accordance with Section 2 of this Joint Defense Agreement.

 

(n) “*Cap” shall mean the cap amounting to a cumulative total contribution to the Joint Defense Fund of * applicable to each of Rugby and Huttig equally, excluding interest earned on any contributions.

 

(o) “Parties” shall have the meaning set forth in the first paragraph of this Joint Defense Agreement.

 

(p) “Pending Litigation” shall mean the litigation pending in the Court styled Huttig Building Products, Inc. v. The Rugby Group Ltd., f/k/a The Rugby Group P.L.C. and Rugby IPD Corp., Index No.: 601515/02.

 

(q) “Renewed Litigation” shall mean the renewed litigation that may be commenced by any of the Parties pursuant to Section 6 of the Settlement Agreement.

 

 

* Material has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

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Exhibit 10.29

 

(r) “Rugby” shall have the meaning set forth in the first paragraph of this Joint Defense Agreement.

 

(s) “Rugby Building Products” shall mean Rugby Building Products, Inc., which, as of the Closing Date, was a subsidiary of Rugby USA and was a corporation organized under the laws of Delaware with its principal place of business in Georgia.

 

(t) “Rugby IPD” shall have the meaning set forth in the first paragraph of this Joint Defense Agreement.

 

(u) “Rugby USA” shall mean Rugby USA, Inc., a corporation that, as of the Closing Date, was organized under the laws of the state of Georgia with its principal place of business in Georgia.

 

(v) “Settlement Agreement” shall mean the Settlement Agreement among the Parties executed simultaneously with this Joint Defense Agreement.

 

(w) “Settlement Date” shall mean the date first written above.

 

(x) “Share Exchange Agreement” shall mean the Share Exchange Agreement among Rugby, Crane and Huttig dated October 19, 1999.

 

(y) “Stanline” shall mean Stanline, Inc., which, from approximately 1961 until approximately 1994, was a California corporation.

 

(z) “Stanline Asbestos Claims” shall mean all Claims by any person for personal injury or damages to property (i) alleged by any such person to be

 

 

* Material has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

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Exhibit 10.29

 

attributable to Stanline’s manufacture, distribution or sale of a product allegedly containing asbestos and (ii) asserted, directly or indirectly, against any of the Parties or any of their present or past subsidiary, predecessor or successor companies (including, without limitation, Stanline, Rugby Building Products and Rugby USA).

 

2. Joint Defense Fund

 

(a) On or before the Settlement Date, Huttig shall open the Joint Defense Account, which shall be a segregated, interest-bearing account at a U.S. bank selected by Huttig and shall be established and maintained for the joint interest of Rugby and Huttig for the sole purpose of depositing, holding and disbursing the Joint Defense Fund subject to, and in accordance with, the terms of this Joint Defense Agreement. Huttig shall have sole signatory authority over the Joint Defense Account, which authority it shall exercise subject to, and in accordance with, this Joint Defense Agreement, and both Huttig and Rugby shall receive the monthly statements for the Joint Defense Account.

 

(b) In no event shall Rugby or Huttig be required to make any contribution to the Joint Defense Fund that would exceed the *Cap, except as otherwise provided in Section 5 below or unless this Settlement Agreement is modified in accordance with Section 28 hereof.

 

 

* Material has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

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Exhibit 10.29

 

(c) On the Settlement Date, Rugby and Huttig shall each make an initial contribution of the sum of * to the Joint Defense Account to establish the initial balance of the Joint Defense Fund.

 

(d) If, at any time, the balance of the Joint Defense Fund drops below the sum of * or is insufficient to pay any Defense Costs that are due, Rugby and Huttig shall thereafter each make additional equal contributions to the Joint Defense Account to increase the balance of the Joint Defense Fund, as required, up to the sum of * or to any sum in excess of * that is required to pay any Defense Costs that are due, subject to the * Cap. If additional contributions are required to be made to the Joint Defense Account to increase the balance of the Joint Defense Fund, both Rugby and Huttig agree to make such contributions within ten (10) business days of receipt of written notice from Huttig to Rugby that the balance of the Joint Defense Fund has dropped below the sum of * or is insufficient to pay Defense Costs that are due, subject to the * Cap.

 

3. Claims Subject to Joint Defense Agreement

 

This Joint Defense Agreement shall apply to all Future Stanline Asbestos Claims only and no other Claims, unless this Joint Defense Agreement is modified in accordance with Section 28 hereof, subject to the following, and in all events subject to Section 2(b) above:

 

* (3 pages omitted)

 

 

* Material has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

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Exhibit 10.29

 

4. Payment of Defense Costs

 

The Joint Defense Fund shall pay all Defense Costs incurred for any Future Stanline Asbestos Claim in the following manner:

 

(a) The Joint Defense Fund shall be charged only with Defense Costs incurred in defending Future Stanline Asbestos Claims and not in connection with any other matter including, without limitation, defending or advising Huttig with respect to any issues that may arise between Huttig and Rugby under the Settlement Agreement and/or this Joint Defense Agreement.

 

(b) Huttig shall submit invoices for any Defense Costs incurred for any Future Stanline Asbestos Claim subject to this Joint Defense Agreement to Rugby. Such invoices shall include sufficient detail for Rugby to determine whether the Defense Costs are properly payable, and Huttig shall provide Rugby with any additional information that Rugby may reasonably request in order to make such determination.

 

(c) If no objection to an invoice is received by Huttig from Rugby within ten (10) business days after Huttig’s submission of the invoice, then Huttig shall pay the invoice thereafter from the Joint Defense Fund.

 

(d) If an objection to an invoice or a portion of an invoice is received by Huttig from Rugby within ten (10) business days after Huttig’s submission of the invoice to Rugby, then Huttig shall not pay the amount of the objected to portion

 

 

* Material has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

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Exhibit 10.29

 

of the invoice from the Joint Defense Fund until it receives written instructions from Rugby, or an arbitration award issued pursuant to Section 24 hereof determines that some or all of the objected portion of the invoice should be paid. If such objection is not resolved by the Parties within thirty (30) days of the date of the objection, then Rugby shall commence arbitration pursuant to Section 24 within forty (40) days of the date of the objection unless the Parties agree in writing to extend the time for Rugby to commence the arbitration. If Rugby fails to commence the arbitration within forty (40) days of the date of the objection and the Parties do not agree in writing to extend the time for Rugby to commence the arbitration, then Rugby will be deemed to have waived its objection to the invoice and Huttig shall pay the invoice thereafter from the Joint Defense Fund.

 

5. Control of Defense

 

The Parties agree that Huttig shall have responsibility for the defense of any Future Stanline Asbestos Claims subject to this Joint Defense Agreement, including the right to choose Defense Counsel and to direct the day-to-day defense of any such Claims, subject to and in accordance with the following:

 

(a) Any Defense Counsel engaged to defend Future Stanline Asbestos Claims under this Joint Defense Agreement will have an attorney-client relationship with Huttig but not with Rugby or Rugby IPD.

 

 

* Material has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

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Exhibit 10.29

 

(b) Rugby and/or Rugby IPD may engage counsel to act on their behalf and at their expense in connection with any Future Stanline Asbestos Claim.

 

(c) Huttig shall provide Rugby with written notice of any Claim asserted against Huttig in the future that Huttig believes is or may be a Future Stanline Asbestos Claim subject to this Joint Defense Agreement. Defense Counsel shall provide Huttig and Rugby, or their respective counsel, with information or documents regarding any such Future Stanline Asbestos Claim as may be reasonably requested.

 

(d) Huttig may settle any Future Stanline Asbestos Claim in any amount Huttig reasonably believes to be appropriate. However, Rugby shall not be responsible for the payment of its share of the amount of any settlement or judgment, which, when aggregated with Rugby’s share of other Defense Costs, would exceed the * Cap, unless Rugby expressly consents thereto. In the event that Huttig requests that Rugby pay any such amount that would exceed the * Cap, Rugby may, at its option: (i) consent to such settlement or judgment, in which event the entire amount of the settlement or judgment shall be charged to and paid by the Joint Defense Fund with each of Rugby and Huttig contributing their respective shares notwithstanding that such contributions would exceed the * Cap, and, having made such contributions, each of Rugby and Huttig shall have the right to terminate this Joint Defense Agreement pursuant to Section 13(a) hereof or (ii)

 

 

* Material has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

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Exhibit 10.29

 

reject such settlement or judgment, in which event Huttig may nonetheless accept such settlement or judgment and the entire amount of the settlement or judgment shall be charged to and paid by the Joint Defense Fund with each of Rugby and Huttig contributing their respective shares up to the * Cap, Huttig paying the remainder of the settlement or judgment, and both Rugby and Huttig having the right to terminate this Joint Defense Agreement pursuant to Section 13 hereof.

 

6. Cooperation

 

The Parties shall cooperate in efforts to defend the Future Stanline Asbestos Claims, which cooperation includes, but is not limited to, providing information, documents and/or testimony if Defense Counsel deems it necessary.

 

7. Joint Defense Materials

 

The Parties and Defense Counsel may from time to time share certain confidential information relating to the defense of the Future Stanline Asbestos Claims (the “Joint Defense Materials”). Joint Defense Materials may include, but are not limited to, factual material, mental impressions, conclusions, opinions, legal theories, documents, memoranda, notes, data and reports prepared by consultants, experts or investigators acting on behalf of counsel, strategies, client confidences, witness interview summaries and investigative reports which would otherwise be protected from disclosure to third parties by virtue of the joint defense, common interest, attorney-client and/or work-product privileges. The

 

 

* Material has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

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Exhibit 10.29

 

Parties further agree that: (a) Joint Defense Materials exchanged or disclosed may contain confidential and privileged communications; (b) Joi