SETTLEMENT AND RELEASE AGREEMENT

SETTLEMENT AND RELEASE AGREEMENT THIS SETTLEMENT AND RELEASE AGREEMENT ( Agreement ) is made as of the day of, 2012, by and between the CENTENNIAL SCHOOL DISTRICT, with offices located at 433 Centennial Road, Warminster, PA 18974 ( Owner ) and E. R. STUEBNER, INC., with offices located at 227 Blair Avenue, Reading, PA 19601 ( Contractor ). From time to time throughout this Settlement Agreement, the foregoing firms or entities shall be referred to collectively as the Parties or individually as a Party to this Settlement Agreement. WHEREAS, Owner, after public bidding, entered into a written contract with Contractor, dated as of June 23, 2009 ( the Contract ), pursuant to which Contractor agreed to perform certain General Construction and related work in connection with the construction of certain additions and alterations to the William Tennent High School (the Project ), as to which Reynolds Construction Management, Inc. served as Construction Manager (the Construction Manager ) and Stantec Architecture and Engineering, LLC f/k/a Burt Hill, Inc. served as Architect ( the Architect). WHEREAS, during the course of work on the Project, Contractor submitted certain claims for extra and additional compensation to the Owner in the form of various Proposed Change Orders (PCO s), including, without limitation, those which are more fully identified on Exhibit 1 hereto (the PCO Claims ). WHEREAS, the Owner disputed the PCO Claims, and asserted various claims for backcharges against the Contractor, including, without limitation, those which are more fully identified on Exhibit 2 hereto (the Owner Backcharges ), all of which were disputed by the Contractor. CSD_ver 3.0 06.25.2012 Page 1

WHEREAS, on or about August, 2011, the Contractor submitted a request for mediation of the parties disputes to the American Arbitration Association, which the AAA docketed as matter no. 14-124-01100-11 (the Mediation Request ), in response to which the Owner contested the Contractor s rights to request mediation. The Request for Mediation has been stayed pending further discussion by the parties. WHEREAS, thereafter the parties met on several occasions in an effort to amicably resolve their disputes. WHEREAS, the parties have agreed to amicably resolve their disputes and desire to set forth the terms thereof in writing. NOW THEREFORE, in consideration of the mutual promises and covenants herein contained and intending to be legally bound hereby, the parties agree as follows: 1. Additional Compensation to Be Paid by the Owner. Owner agrees to pay to Contractor the total sum of Three Hundred Nineteen Thousand and 00/100 Dollars ($319,000.00) (the Owner Settlement Payment ), in the time and manner hereinafter set forth, in full satisfaction of the Contractor s claims as hereinafter set forth, including the PCO Claims. The Owner Settlement Payment consists of three components, as follows: a. The sum of One Hundred Sixty Thousand and 00/100 Dollars ($160,000.00), which shall be added to the Contract Sum by change order in the form attached hereto as Exhibit 3; b. The sum of Eighty Four Thousand and 00/100 Dollars ($84,000.00), which is already included in the Contract Sum by reason of the following three allowance items which have been approved for payment in the identified amounts as part of the Contractor s Application for Payment No. 31: CSD_ver 3.0 06.25.2012 Page 2

i. Line Item No. s 1-210, 1-211 - Egress Tunnels, in the approved amount of $18,000.00; and ii. Line Item No. s 1-305, 1-306, 1-310, 1-311 - Temporary Partitions / Doors, in the approved amount of $17,600.00 and iii. Line Item No. 1-360 Labor Cleanup, in the additional approved amount of $48,400.00. A true and correct copy of the Contractor s Application for Payment No. 31 is attached hereto as Exhibit 4; and c. The sum of Seventy Five Thousand and 00/100 Dollars ($75,000.00), which shall be added to the Contract Sum by a change order to be prepared and executed by the parties on or about August 31, 2012. 2. Time and Manner of Payments. a. When this Settlement Agreement is approved by the Board of School Directors of the Owner and has been fully executed and delivered, the parties will execute the change order attached hereto as Exhibit 3. The Contractor will then submit its Application for Payment to the Owner, requesting payment of the sum referenced in the change order, as authorized in paragraph 1(a) above. The Owner will pay such amount to the Contractor in the time and manner required by the further provisions of the Contract Documents, by check made payable to E. R. Stuebner, Inc. b. The Contractor acknowledges receipt of payment for the additional allowance items set forth in paragraph 1(b) above, which were processed for payment as part of its Application for Payment No. 31, Exhibit 4. CSD_ver 3.0 06.25.2012 Page 3

c. When the final $75,000 component of the Owner s Settlement Payment has been added to the Contract Sum by change order, the Contractor will then submit its Application for Payment to the Owner requesting payment of such sum, as authorized in paragraph 1(c) above. The Owner will pay such amount to the Contractor in the time and manner required by the further provisions of the Contract Documents, by check made payable to E. R. Stuebner, Inc. 3. Release of Claims by the Contractor. Except as hereinafter provided, for and in consideration of the payments to be made pursuant hereto, the sufficiency of which are acknowledged by Contractor, as well as the mutual promises and covenants herein contained, and effective upon the payment of all sums due under this Agreement, Contractor, for and on behalf of itself and all persons claiming by, through or under it, hereby remises, releases and forever discharges the Owner, its Board of School Directors, Construction Manager and Architect, and all of their officers, directors, shareholders, employees, attorneys, agents and servants and their respective predecessors, successors and assigns, of and from, any and all claim, loss, liability, damage, cost or expense that arises out of or relates to the Contract or the Project, from the commencement of the Work through the Contractor s Application for Payment No. 31, Exhibit 4 and whether for contract balances, extra or additional work, change orders, delays, acceleration, disruption, lost productivity or inefficiency, cost escalation, extended home or field office overhead or expense, interest, penalties for late payment, attorneys fees, or any other financial or economic loss or damage of any kind or nature, and whether arising in tort (including negligence and negligent misrepresentation), in contract or otherwise, including, without limitation, the PCO Claims as more fully set forth on Exhibit 1. Provided, however, that the provisions of this paragraph are not intended to, and shall not, remise, release or CSD_ver 3.0 06.25.2012 Page 4

discharge any claim or defense which the Contractor may have against: (a) any released party for indemnity or contribution arising from third party personal injury or property damage claims or claims of other prime contractors on the Project; (b) the Owner for contract retainage earned by the Contractor as of its Application for Payment No. 31, Exhibit 4, but not yet paid; (c) the Owner for Work shown as incomplete and yet to be performed by Contractor as of its Application for Payment No. 31, Exhibit 4, including, without limitation, terrazzo flooring; and (d) the Owner for payment of the PCO s that are identified on the list attached hereto as Exhibit 5, which PCO s will be submitted to the Board of School Directors for approval but which are not included on Application for Payment No. 31, Exhibit 4. 4. Release of Claims by the Owner. Except as hereinafter provided, for and in consideration of the mutual promises and covenants herein contained, and effective upon the payment of all sums due under this Agreement, Owner, for and on behalf of itself and all persons claiming by, through or under it, hereby remises, releases and forever discharges the Contractor, and all of its officers, directors, shareholders, employees, attorneys, agents and servants and its predecessors, successors and assigns, of and from, any and all claim, loss, liability, damage, cost or expense that arises out of or relates to the Contract or the Project, from the commencement of the Work through the Contractor s Application for Payment No. 31, Exhibit 4, and whether for defects or deficiencies in the work, delays, acceleration, disruption, lost productivity or inefficiency, cost escalation, interest, penalties, attorneys fees, or any other financial or economic loss or damage of any kind or nature, and whether arising in tort (including negligence and negligent misrepresentation), in contract or otherwise, including, without limitation, the Owner Backcharges as more fully set forth on Exhibit 2. Provided, however, that the provisions of this paragraph are not intended to, and shall not, remise, release or discharge any CSD_ver 3.0 06.25.2012 Page 5

claim or defense which the Owner may have against the Contractor for: (a) indemnity or contribution arising from: (i) third party personal injury or property damage claims; (ii) claims asserted by the Contractor s subcontractors or suppliers, including, without limitation, Powell Steel Corporation; and (iii) claims of other prime contractors on the Project; (b) contract retainage earned by the Contractor as of its Application for Payment No. 31, Exhibit 4, but not yet paid; (c) completion of the Work shown as incomplete and yet to be performed by Contractor as of its Application for Payment No. 31, Exhibit 4, including, without limitation, terrazzo flooring; (d) unexpired warranties or guaranties; and (e) latent defects or deficiencies in Contractor s Work. 5. Completion, Final Close Out and Final Payment. Nothing set forth in this Settlement and Release Agreement is intended or shall be construed to alter the requirements of the Contract Documents for: (a) completion of the Work, including the Work shown as incomplete and yet to be performed by Contractor as of its Application for Payment No. 31, Exhibit 4, (b) final close-out and (c) final payment, which requirements shall continue in accordance with their terms. The parties acknowledge that the Work remaining incomplete as of Application for Payment No. 31 is presently scheduled to be substantially completed on or before July 31, 2012. 6. Indemnity for Claims of Powell Steel Corporation. As a further inducement to the Owner to enter into this Settlement and Release Agreement, Contractor hereby agrees to indemnify and hold the Owner harmless from and against all liability, loss, cost and expense, including attorneys fees, incurred by the Owner on account of any claims that may be asserted against the Owner by Powell Steel Corporation arising from or related to the Contract or the Project, from the commencement of the Work through Contractor s Application for Payment No. CSD_ver 3.0 06.25.2012 Page 6

31, Exhibit 4, including, without limitation, Powell Steel Corporation s claims included in PCO No. s 96 99 which are more fully identified on Exhibit 1 attached hereto. 7. Discontinuance of Request for Mediation. Within ten (10) days of the date on which this Settlement Agreement is fully executed and delivered, the Contractor shall, at its sole cost and expense, take all such actions as may be required to discontinue the Mediation Request. 8. Common Terms as to All Parties. (a). Nothing in this Settlement Agreement shall constitute an admission of liability with regard to the subject matter of this Settlement Agreement. By entering into this Settlement Agreement, no Party intends to make, nor shall they be deemed to have made, any admission of any kind. The parties agree that they are entering into this Settlement Agreement solely as an accommodation for the purposes of settling certain disputes between them and to avoid the cost of further litigation with respect to these disputes. This Settlement Agreement is the product of informed negotiations and compromises of previously stated legal positions. This Settlement Agreement shall be deemed to fall within the protection afforded to compromises and offers to compromise by the Pennsylvania Rules of Evidence and the parties to this Settlement Agreement agree to its inadmissibility in any proceeding except an action to enforce any provision of this Settlement Agreement. (b). In executing this Settlement Agreement, no Party has relied upon any oral or written promises, representations or covenants of any other Party or any other Party s representatives except as are expressly provided for herein. The Parties acknowledge that they have each been represented by counsel of their own choosing and that they have carefully and thoroughly reviewed this Settlement Agreement, in its entirety, with counsel, that they understand the import and significance of this document, that they are competent to execute this Settlement CSD_ver 3.0 06.25.2012 Page 7

Agreement, and that they are duly authorized to execute this Settlement Agreement. The Parties each acknowledge that in executing this Settlement Agreement they have relied solely on their own judgment, belief and knowledge, and such advice as they may have received from their own counsel, and that they have not been influenced by any representation or statements made by the opposing Party or opposing counsel. (c). This Settlement Agreement shall be binding upon the Parties hereto, their predecessors, successors, parents, wholly and partially owned subsidiaries, affiliates, assigns, agents, directors, officers, employees, attorneys, heirs and personal representatives. (d). All questions relating to this Settlement Agreement, including, but not limited to, questions of validity, effect, construction, interpretation, performance or breach, shall be determined in accordance with the laws of the Commonwealth of Pennsylvania. (e). Should any litigation be commenced to enforce the terms of this Settlement Agreement, the prevailing Party shall be entitled to recover its reasonable attorneys fees and all costs of litigation from the Party(ies) which breached the terms of this Settlement Agreement. A breach by one Party to this Settlement Agreement shall not diminish the rights, remedies and defenses of any non-breaching Party. (f). This Settlement Agreement may be executed in one or more counterparts, and shall become effective when each Party has executed and delivered to the other one or more counterparts hereof, each of which shall constitute an original and all of which shall constitute one and the same Settlement Agreement. Facsimile signature pages and/or signature pages in *.PDF or other electronic format shall have the same force and effect as original signatures. CSD_ver 3.0 06.25.2012 Page 8

(g). Each Party shall bear its own costs, expenses and attorneys fees in connection with this Settlement Agreement and all actions contemplated hereby, unless otherwise expressly noted herein. (h). The Parties agree that this Settlement Agreement constitutes the entire agreement between the Parties on the subject matter hereof and supersedes all other oral or written understandings or agreements among the parties regarding the subject matter of this Settlement Agreement. (i). No addition, amendment, or modification to this Settlement Agreement shall be effective unless set forth in a writing signed by all Parties that have executed this Agreement. IN WITNESS WHEREOF, the undersigned parties have each executed this Settlement and Release Agreement as of the date indicated hereinabove by a duly authorized officer. CENTENNIAL SCHOOL DISTRICT By: Name: Title: E. R. STUEBNER, INC. By: Name: Title: CSD_ver 3.0 06.25.2012 Page 9