RELEASE AND SETTLEMENT AGREEMENT This Release and Settlement Agreement ( Agreement ) is entered into this 2 nd day of April, 2014 by and among American Contractors Indemnity Company ( ACIC ); C3 Construction, LLC ( C3 Construction ); James Hardie Building Products, Inc. ( James Hardie ); HD Supply Waterworks, LLC ( HD Supply); and the City of DeBary, Florida (the City or the City of DeBary ) (collectively the Parties ); WHEREAS, ACIC issued performance bond nos. 251373 and 251374 (the Bonds ) (true and accurate copies of the Bonds are attached herewith as Exhibit A) on behalf of its principal, C3 Construction, the purpose of which was to secure C3 Construction s performance on a project generally known as the Park Lane and Seminole Drive drainage improvements in the City of DeBary, Florida (collectively known as the Project ); WHEREAS, Defendant C3 Construction was the aforementioned principal to ACIC and the general contractor on the Project; WHEREAS, Defendant James Hardie manufactured the pipe that was installed on the Project; WHEREAS, HD Supply sold the pipe that was manufactured by James Hardie to C3 Construction; WHEREAS, ACIC has sought indemnity from C3 Construction, as corporate indemnitor, and Charles C. Horan, Sidney C. Peterson, Jr., Sidney C. Peterson III, Deborah Peterson, and/or Jennifer Peterson, (the Indemnity Action ) for any amounts and payments relating to the Bond; WHEREAS, ACIC did receive claims against the Bonds by the City of DeBary; WHEREAS, the City of DeBary filed a lawsuit against C3 Construction and ACIC in the Circuit Court for the Seventh Judicial Circuit in and for Volusia County, Florida, case number 2010-20951-CINS, alleging claims of Breach of Page 1 of 9
Contract against C3 and ACIC for cracks in the stormwater pipes installed at Park Lane and Seminole Drive (the Litigation ); WHEREAS C3 Construction filed a third party claim against HD Supply in the Litigation, alleging claims of Strict Liability, Breach of Implied Warranty of Merchantability, Breach of Implied Warranty of Fitness for a Particular Purpose, Common Law Indemnification, and Contribution for HD Supply s role in selling C3 Construction pipe that allegedly failed at the Project; WHEREAS HD Supply filed a fourth party claim against James Hardie Pipes in the Litigation alleging claims of Common Law Indemnification and Contribution for James Hardie Pipe s role in selling HD Supply the pipe that allegedly failed at the Project, but James Hardie agreed to indemnify and defend HD Supply commencing on July 3, 2012; WHEREAS, C3 filed an Amended Third Party Complaint against James Hardie and HD Supply alleging various claims for breach of warranty, indemnification, contribution, and strict liability. WHEREAS all of the above-listed parties have opted to resolve this dispute and this litigation except James Hardie and HD Supply mutually agree that HD Supply s attorneys fee and costs claim against James Hardie is not resolved and James Hardie and HD Supply mutually agree that HD Supply reserves its claims for reimbursement of attorneys fees and up to $1,500.00 in costs incurred in connection with this Litigation and James Hardie reserves all defenses to the same; WHEREAS Miller Pipeline Corp. has been tendered as a replacement contractor to remediate the project with cast-in-place concrete piping, as indicated in Miller Pipeline Corporation s proposal attached herewith as Exhibit B; WHEREAS the City of DeBary, Florida has accepted Miller Pipeline Corp. as a replacement contractor to correct any and all alleged deficiencies in the Project (the work) pursuant to the terms and conditions of Exhibit B as modified by the City s Response attached as Exhibit C and the Construction Contract and General Conditions of Contract attached as Exhibit D ; NOW be it therefore agreed as follows: Page 2 of 9
1. This Release and Settlement Agreement is contingent on Miller Pipeline Corp. executing and delivering the Construction Contract for repairs at the agreed-upon price, obtaining a performance and payment bond in a form acceptable to the City, the receipt by the City of good funds from all other parties as described below, and approval by the DeBary City Council. 2. Specific Release. As a material consideration for and inducement for ACIC and C3 to enter into this Agreement, the City of DeBary, Florida, on behalf of itself and its officers, directors, shareholders, employees, agents, parents, subsidiaries, affiliates, predecessors, successors, assigns, receivers, trustees, insurers, attorneys, and any other representatives that may have or claim to have the right to bring claims on its behalf, releases, waives, acquits, and discharges ACIC and C3 from any and all claims, demands, rights, actions, causes of action, damages, interest, penalties, attorneys fees, costs, and compensation, of whatever type or nature, whether legal or equitable, whether known or unknown, from the beginning of time to the date of this release, arising out of the Project including, but not limited to, all claims alleged in the Litigation As further material consideration and inducement for the Parties to enter into this Agreement, the City of DeBary, Florida, ACIC, C3 Construction, James Hardie, and HD Supply, and its officers, directors, shareholders, employees, agents, parents, subsidiaries, affiliates, predecessors, successors, assigns, receivers, trustees, insurers, attorneys, and any other representatives that may have or claim to have the right to bring claims on its behalf, releases, waives, acquits, and discharges each and every party to this lawsuit and its/their officers, directors, shareholders, employees, agents, parents, subsidiaries, affiliates, predecessors, successors, assigns, receivers, trustees, insurers, attorneys, and any other representatives from any and all claims, demands, rights, actions, causes of action, damages, interest, penalties, attorneys fees, costs, and compensation, of whatever type or nature, whether legal or equitable, whether known or unknown, from the beginning of time to the date of this release, arising out of out of the Project including, but not limited to, all claims alleged in the Litigation, but expressly excluding any rights ACIC Page 3 of 9
may have that arise out of an agreement of indemnity executed by certain individual and corporate indemnitors described more fully in Paragraph 6 of this Agreement. However, HD Supply s claim for reimbursement for attorneys fees and costs based on its indemnity and/or contribution claim previously asserted against James Hardie and as set forth in a September 27, 2012 letter agreement are not resolved by this litigation but instead HD Supply s claim for reimbursement of attorneys fees and up to $1,500 in costs incurred in connection with this Litigation is reserved as are James Hardie s defenses to the same. HD Supply and James Hardie mutually agree that HD Supply is permitted to assert such claims against James Hardie which may assert its defenses in the appropriate court notwithstanding this Release which otherwise releases all other claims. 3. Payment. ACIC, C3 Construction, and James Hardie shall pay or cause to be paid to the Trust Account of Fishback Dominick, and delivered to Richard S. Geller, Esq., Fishback Dominick, 1947 Lee Road, Winter Park, Florida, 32789, as attorneys for the City of DeBary, the total sum of $172,245.89, which is comprised of Miller Pipeline Corp. s contract price of $146,382.25 plus an additional $25,000.00 to cover the cost of the City s administration and oversight of the remedial work, plus $863.64 for a performance and payment bond, funded by James Hardie. The amounts shall be paid as follows: ACIC shall pay $65,000.00; Westfield Insurance Company as insurer for C3 Construction shall pay $65,000.00; James Hardie shall pay $42,245.92. The conditions upon and timing of final payment to Miller Pipeline Corp. and final completion of the Work shall be the same as governed by the Construction Contract between the City of DeBary and Miller Pipeline Corp. Page 4 of 9
Payments shall be made by check to the IOLTA Trust Account of Fishback Dominck, the law firm representing the City of DeBary in the Litigation. Monies Held in Trust. At the City of DeBary s direction, Fishback Dominick may immediately, upon receipt and clearance of funds, disburse to the City of DeBary the settlement funds received into the Trust Account of Fishback Dominick. The parties acknowledge and agree that Fishback Dominick and its attorneys serve as the City Attorney and counsel to City of DeBary. In the event of any dispute, conflict or lawsuit, between parties (or any combination thereof) concerning funds held in trust under this Agreement, the parties agrees that the Fishback Dominick and its attorneys may continue to serve as the attorneys for City of DeBary in any dispute concerning or arising from this Agreement and funds being held hereunder. Further, in the event of any dispute, conflict or lawsuit, involving any funds being held in trust under this Agreement, Fishback Dominick may interplead the disputed funds with the Clerk of the Circuit Court, and thereafter be released from its remaining obligations under this Agreement, if any. The parties shall each hold Fishback Dominick harmless from any and all losses, damages, claims, disputes, lawsuits, interests, and other adverse matters caused by Fishback Dominick excluding gross negligence of Fishback Dominick. Monies held by in trust under this Agreement will not accrue interest in favor of any party to this Agreement. 4. Dismissal. In exchange for the above-listed payment by ACIC, C3 Construction, and James Hardie to the City of DeBary, Florida, (the City ), the City expressly agrees to dismiss its lawsuit (under case no. 2010-20951- CINS) against C3 and ACIC with prejudice within ten (10) days of payment or Miller Pipeline Corp s execution of the Construction Contract, whichever is later. Further, C3 shall dismiss its third party claims against HD Supply and James Hardie within ten (10) days. The entire Litigation shall be dismissed with prejudice with each party to bear its own fees and costs. Dismissal of the Litigation shall not vary, alter or extinguish any rights, claims or defenses of James Hardie or HD Supply with regard to the issues of attorney s fees and costs as reflected in the September 27, 2012 letter agreement. Page 5 of 9
5. Non-Admission. The terms set out in this Agreement are a compromise settlement of disputed claims. Neither the terms nor the fact of this Agreement shall be deemed or construed as an admission by any party of any wrongful acts whatsoever, it being expressly understood that all such claims against each Party are in all respects denied by ACIC, C3, James Hardie, and HD Supply. 6. Representations. Each party warrants and represents that it has not assigned or otherwise transferred, by way of subrogation, operation of law, or otherwise, any right to any other person to assert any claims of any kind or character against any of the other parties hereto. There are no intended third party beneficiaries to this Agreement except insofar as funds are provided for the Work to be performed by Miller Pipeline Corp. This Agreement is not intended in any way to release any signatories from any obligations to ACIC under the terms of the General Indemnity Agreement executed by the C3 Construction, as corporate indemnitor, and Charles C. Horan, Sidney C. Peterson, Jr., Sidney C. Peterson III, Deborah Peterson, and Jennifer Peterson, as individual indemnitors on March 19, 2007 (or any other indemnity agreement executed by the indemnitors with ACIC) or otherwise impair any rights or remedies that ACIC may be entitled to, notwithstanding the terms of this agreement, including subrogation rights, pursuant to or arising under or in relation to the General Indemnity Agreement or the Bond. Nor does C3 or any of the signatories to the Indemnity Agreement waive or release any claims or defenses available to them in the Indemnity Action. There are no claims or rights against James Hardie or HD Supply contained in or otherwise available to anybody in the General Indemnity Agreement, the Bonds or the Indemnity Action. 7. Entire Agreement. This Agreement embodies the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein. There are no promises, representations, warranties, covenants, conditions, or undertakings, other than those expressly set forth or referred to herein. No inducements to enter into this Agreement were made other than those explicitly spelled out in the terms herein, or Page 6 of 9
incorporated herein by reference. This Agreement supersedes all prior agreements and understandings between the parties. 8. Severability. It is the desire and intent of the parties hereto that the provisions of this Agreement shall be enforced to the fullest extent permissible under the law. Accordingly, if any particular provision hereof shall be adjudicated to be invalid or unenforceable, this Agreement shall be deemed amended to delete therefrom the portion thus adjudicated. However nothing contained herein shall be amended or deleted regarding HD Supply s and James Hardie s mutual agreement to preserve HD Supply s claim for attorney s fees and up to $1,500 costs as described above and as set forth in the September 27, 2012 letter agreement between James Hardie and HD Supply. 9. Headings. The section and paragraph headings of this Agreement are for reference only and are not to be construed in any way as part of this Agreement. 10. Governing law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Florida. 11. Modification. This agreement shall not be modified except if reduced to writing and executed by all parties. IN WITNESS WHEREOF, each Party by its duly authorized corporate officer does hereunto set its hand and seal as of the date first written above. American Contractors Indemnity Company this day of, March 2014. Page 7 of 9
[additional signatures on following page] GENERAL RELEASE AND SETTLEMENT AGREEMENT City of DeBary, Florida v. C3 Construction & ACIC C3 Construction v. HD Supply HD Supply v. James Hardie The City of DeBary, Florida [continued from previous page] this day of, April 2014. C3 Construction, Inc. this day of, March 2014. [additional signatures on following page] Page 8 of 9
GENERAL RELEASE AND SETTLEMENT AGREEMENT City of DeBary, Florida v. C3 Construction & ACIC C3 Construction v. HD Supply HD Supply v. James Hardie [continued from previous page] James Hardie Building Products, Inc. this day of, March 2014. HD Supply Waterworks, LLC this day of, March 2014. Page 9 of 9