Exhibit 10.28
SETTLEMENT
AGREEMENT
THIS SETTLEMENT
AGREEMENT (“Settlement Agreement”) is entered
into as of this 19 th 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 (“Hutti g ”) (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
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 and intend to settle and
resolve their disputes regarding the Stanline Asbestos Claims and
to dismiss the Pending Litigation in accordance with the terms of
this Settlement Agreement;
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 Settlement
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.
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(b) “Closed Stanline Asbestos
Claims” shall mean the following Stanline Asbestos Claims
that were asserted against Huttig after the Closing Date and that
Huttig has resolved by dismissal or settlement prior to the
Settlement Date: (i) Peterson v. AcandS, Inc. et al. , No.
2001-03187; (ii) Scott v. AcandS, Inc. et al. , No.
2201-132665; (iii) Skelton v. AcandS, Inc. et al. , No.
2002-050630; (iv) Basford v. AcandS, Inc. et al. , No.
2002-049977; (v) Baker v. Asbestos Defendants , No. 315677;
and (vi) Ferro v. Anderson, Rowe & Buckley, Inc. et al.
, No. RG04138376.
(c) “Closing Date” shall
mean December 16, 1999, which was the date of the closing of the
transactions contemplated by the Share Exchange
Agreement.
(d) “Court” shall mean
the Supreme Court of the State of New York, County of New
York.
(e) “Crane” shall mean
Crane Co., a corporation organized and existing under the laws of
Delaware with its principal place of business in
Connecticut.
(f) “Defense Costs”
shall include all amounts 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.
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(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 Settlement
Agreement.
(j) “Joint Defense
Venture” shall mean the joint defense venture established
pursuant and subject to the terms of the Joint Defense
Agreement.
(k) “Joint Defense
Agreement” shall mean the Joint Defense Agreement among
Rugby, Rugby IPD and Huttig executed simultaneously with this
Settlement Agreement.
(l) “Parties” shall have
the meaning set forth in the first paragraph of this Settlement
Agreement.
(m) “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.
(n) “Renewed Litigation”
shall mean the litigation that may be commenced by any of the
Parties pursuant to Section 6 of this Settlement
Agreement.
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(o) “Rugby” shall have
the meaning set forth in the first paragraph of this Settlement
Agreement.
(p) “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.
(q) “Rugby IPD” shall
have the meaning set forth in the first paragraph of this
Settlement Agreement.
(r) “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.
(s) “Settlement
Agreement” shall have the meaning set forth in the first
paragraph of this Settlement Agreement.
(t) “Settlement Date”
shall mean the date first written above.
(u) “Share Exchange
Agreement” shall mean the Share Exchange Agreement among
Rugby, Crane and Huttig dated October 19, 1999.
(v) “Stanline” shall
mean Stanline, Inc., which, from approximately 1961 until
approximately 1994, was a California corporation.
(w) “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
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attributable to Stanline’s manufacture,
distribution or sale of a product allegedly containing asbestos and
(ii) asserted, directly or indirectly, against Huttig or any of its
present or past subsidiary, predecessor or successor companies
(including without limitation, Stanline, Rugby Building Products
and Rugby USA).
(x) “Termination for
Cause” shall mean the termination for cause of the Joint
Defense Venture pursuant to Section 13 of the Joint Defense
Agreement.
2. Settlement of Closed Stanline
Asbestos Claims.
Rugby shall pay Huttig the sum of
SIX HUNDRED NINE THOUSAND, FIVE HUNDRED EIGHTY-ONE DOLLARS, AND
FORTY-SIX CENTS ($609,581.46), representing fifty percent (50%) of
the Defense Costs of Huttig resulting from the Closed Stanline
Asbestos Claims. Rugby shall make such payment simultaneously with
the execution of this Settlement Agreement pursuant to wire
transfer instructions provided by Huttig.
3. Settlement of Future Stanline
Asbestos Claims.
In connection with Future Stanline
Asbestos Claims, the Parties are executing and delivering the Joint
Defense Agreement simultaneously herewith and shall fully perform
all of their respective duties and obligations
thereunder.
4. Dismissal of Pending
Litigation.
Within five (5) business days of the
receipt of the wire transfer described in Section 2, above, the
Parties shall cause their respective counsel to execute and
file
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with the Court a stipulation to dismiss without
prejudice and to take such other steps as may be required to effect
the dismissal without prejudice of the Pending Litigation. All
Parties shall bear their own costs and expenses incurred in the
prosecution and/or defense of the Pending Litigation.
5. Mutual
Releases.
Except in the event that this
Settlement Agreement is rescinded pursuant to Section 6 hereof
and/or for Claims otherwise arising under the terms of this
Settlement Agreement:
(a) Huttig hereby releases,
discharges and covenants not to sue each of Rugby and Rugby IPD,
and all of Rugby’s and Rugby IPD’s stockholders,
officers, directors, employees, agents, subsidiaries and
affiliates, from, against and/or account of all Claims that (i)
Huttig has or shall have against either of Rugby or Rugby IPD,
arising from, or in connection with, Stanline Asbestos Claims,
including both Closed Stanline Asbestos Claims and Future Stanline
Asbestos Claims, and/or (ii) were alleged or could have been
alleged in the Pending Litigation.
(b) Each of Rugby and Rugby IPD
hereby releases, discharges and covenants not to sue Huttig, its
stockholders, officers, directors, employees, agents, subsidiaries
and affiliates, from, against and/or on account of all Claims that
(i) either Rugby or Rugby IPD has or shall have against Huttig,
arising from, or in
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connection with (i) Stanline Asbestos Claims,
including both Closed Stanline Asbestos Claims and Future Stanline
Asbestos Claims, and/or (ii) were alleged or could have been
alleged in the Pending Litigation.
6. Rescission of Settlement
Agreement.
In the event that a Termination for
Cause occurs, this Settlement Agreement shall be deemed to be
rescinded without further action or notice, and the rights and
obligations of the Parties shall be restored as they were
immediately before the Settlement Date. In such event:
(a) For the sixty (60) day period
commencing on the effective date of a Termination for Cause, Huttig
shall have the exclusive right, and thereafter the non-exclusive
right, at its option, to institute Renewed Litigation against Rugby
and/or Rugby IPD to adjudicate, inter alia , whether, and to
what extent, Rugby and/or Rugby IPD have an obligation to defend,
indemnify and hold harmless Huttig from and against the Stanline
Asbestos Claims under the Share Exchange Agreement and/or the
Exchange Agreement, respectively, and to obtain all appropriate
relief resulting from such adjudication. Rugby and/or Rugby IPD
shall have the right to assert whatever defenses or counterclaims
that they deem appropriate in response to Huttig’s filing of
the Renewed Litigation. If the Renewed Litigation names only Rugby
as a defendant, Huttig shall file such lawsuit in a federal court
of the State of New York. If the Renewed Litigation
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names both Rugby and Rugby IPD and complete
diversity does not exist between Huttig, on the one hand, and
R
