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NORTH CAROLINA IN THE GENERAL COURT OF
JUSTICE |
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WILLIAM ARTHUR RUFF, and wife BARBARA ANN RUFF, PETER T. BROWN,
and wife MARLEE MURPHY BROWN, JOAN BOZEMAN, ROBERT K. PENTZ,
ERNEST L. LIBORIO, and wife LOIS P. LIBORIO, MARY FRANCES DILLON,
DON CLARK, and wife PATRICIA A. CLARK, and ANDREW J. HUTCHINSON,
and wife CAROL A. HUTCHINSON, and MILLER HOMES, f/k/a RUSTIC
HOMES OF WILMINGTON, INC., MARSH HARBOUR GOLF & YACHT CLUB
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PAREX, INC., STO CORP., W. R. BONSAL COMPANY, CONTINENTAL
STUCCO PRODUCTS, SENERGY, INC., THOMAS WATERPROOF COATINGS CO.,
DRYVIT SYSTEMS, INC., UNITED STATES GYPSUM CO., and SHIELDS INDUSTRIES,
INC.,
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3. SUBMISSION FOR PRELIMINARY APPROVAL
4. PRIMA FACIE PRODUCT IDENTIFICATION
5. DISTRIBUTION OF SETTLEMENT FUND TO CLAIMANTS
6. SETTLEMENT FUND AND PAYMENT OBLIGATION
7. SELECTION, DUTIES AND COMPENSATION OF CLAIMS ADMINISTRATOR
10. SETTLEMENT CLASS MEMBERS' REQUEST FOR INCLUSION
11. IMMEDIATE IMPLEMENTATION OF CLASS MEMBER BENEFITS
12. STATUTES OF LIMITATIONS OR REPOSE AND REACTIVATION OF CLAIMS
13. EXCLUSIVE REMEDY; DISMISSAL OF ACTION; JURISDICTION OF COURT
15. ATTORNEYS' FEES, EXPENSES AND COSTS
16. ENFORCEMENT OF THE COURT'S SETTLEMENT APPROVAL ORDER
17. REPRESENTATIONS AND WARRANTIES
18. TERMINATION OF THE SETTLEMENT AGREEMENT
19. JUDGMENT REDUCTION PROVISION
THIS AGREEMENT is entered into this 23rd day of December, 1999 by and among:
(1) named plaintiffs with Defendant Sto Corp.'s EIFS on their Property in the above litigation ("Plaintiffs"), for themselves and on behalf of the plaintiff settlement class as hereinafter defined (the "Settlement Class"); and (2) Defendant Sto Corp. (the "Settling Defendant"). The Settling Defendant and Plaintiffs, shall hereinafter be referred to as "Party" or "Parties," as appropriate.
WHEREAS, subject to the Court's approval, as required by Rule 23 of the North Carolina Rules of Civil Procedure, and as hereinafter provided, it is hereby stipulated and agreed by the Parties that, in consideration of the promises and covenants set forth in this Settlement Agreement and upon the entry by the Court of a Final Order and Judgment approving the Settlement Agreement and directing the implementation of the terms and conditions of the settlement as set forth in this Settlement Agreement, this Action shall be settled and compromised as to the Parties to this Settlement Agreement upon the terms and conditions contained herein; and
WHEREAS, claims have been filed against Settling Defendant regarding residential structures clad with Settling Defendant's Exterior Insulation and Finish Systems ("EIFS" or "EIF System"); and
WHEREAS, Plaintiffs in this Action contend that EIFS related Damage occurs to the Property upon or shortly after installation and continues until remediation; and
WHEREAS, this Action was filed on January 6, 1996, and certified ex parte as a class action on January 9, 1996, pursuant to North Carolina Rule of Civil Procedure 23 (which is unique and varies from its Federal counterpart), a ruling which was subsequently reaffirmed by order dated September 18, 1996 and, further, the Court having denied Settling Defendant's motion to decertify the class and also having questioned whether the Action would be certified were the issue presented today, the Parties, in considering the legal and factual difficulties of this analysis, desire to resolve all disputes between them as further described herein; and
WHEREAS, the Parties have investigated the facts and law relating to the matters set forth in this Action and have conducted extensive pretrial discovery on the claims and defenses asserted therein; and
WHEREAS, the Parties have engaged in extensive, arms-length negotiations regarding settlement of the claims against Settling Defendant; and
WHEREAS, based upon analysis of the facts and the law applicable to this Settlement Agreement, taking into account the burdens and expense of litigation, including the risks and uncertainties associated with protracted trials and appeals and with Settling Defendant's ability or inability to satisfy any judgment in this action, as well as other EIFS related claims, and the fair, cost-effective, and assured method of resolving claims of the Settlement Class provided in this Settlement Agreement, Plaintiffs' Class Counsel have concluded that this Settlement Agreement provides substantial benefits to the Settlement Class and is fair and reasonable, and in the best interests of the Settlement Class; and
WHEREAS, Settling Defendant has denied all allegations of wrongdoing and has asserted affirmative defenses to Plaintiffs' claims, and, while continuing to deny all allegations of liability, including all allegations that this action could have been maintained as a class action through trial, also desires to settle, compromise and terminate the Plaintiffs' claims against it so as to avoid the further substantial expense, inconvenience and distraction of this burdensome and protracted litigation, and put to rest forever all claims that have or could have been asserted against Settling Defendant in this Action, or elsewhere, which arise from or are in any way related to the acts, transactions or occurrences alleged or that could have been alleged in this Action and relating to any Settled Claim against Settling Defendant; and
NOW, THEREFORE, the Parties, by and through their respective counsel, stipulate and agree that all claims of the Settlement Class shall be finally settled and resolved on the terms and conditions set forth below, subject to the Court's approval of this Settlement Agreement as a good faith, fair, reasonable, and adequate settlement under Rule 23 of the North Carolina Rules of Civil Procedure.
As used in this Settlement Agreement, in the Plan of Distribution, and in the exhibits annexed hereto, in addition to any definitions elsewhere in this Settlement Agreement, the following terms shall have the meanings set forth below.
Action means Civil Action Number 96-CVS-0059, pending in Superior Court for New Hanover County, North Carolina.
Claim Period means the period commencing on the Notice Date and terminating either (A) June 30, 2000 or (B) the date the Settlement Agreement is terminated pursuant to any provision in the Agreement, whichever is earlier.
Claimant means a Person who is both a Settlement Class Member and who has timely filed a Claim Form with the Claims Administrator.
Claims Administrator means Settling Defendant, or such person or persons agreed upon by Settling Defendant and Plaintiffs' Class Counsel to process claims in accordance with this Settlement Agreement and the Plan of Distribution.
Claim Form means the form completed by Settlement Class Members pursuant to the terms of this Settlement Agreement substantially in the form attached as Exhibit "A", hereto.
Claim Payment Date means the date or dates as provided in the Plan of Distribution following which the Claims Administrator is authorized to make payments to Claimants from the Settlement Fund.
Class Notice of Settlement means the form of Court-approved notice substantially in the form attached as Exhibit "1", to the Notice Plan.
Court means the Honorable Ben F. Tennille, Special Superior Court Judge for Complex Business Cases, or his successor, Superior Court for New Hanover County, North Carolina.
Date of the Claim means the date on which a Claim Form is post-marked under this Settlement Agreement by a Settlement Class Member.
EIF System or EIFS means Settling Defendant's non-drainable Exterior Insulation and Finish System, installed on the Property of a Settlement Class Member.
Fairness Hearing means the hearing to be conducted by the Court in connection with the determination of the fairness, adequacy and reasonableness of this Settlement Agreement under Rule 23 of the North Carolina Rules of Civil Procedure.
Final Order and Judgment means the Order to be entered by the Court, in a form that is mutually agreeable to the Parties, approving this Settlement Agreement without material alterations, as fair, adequate and reasonable under Rule 23 of the North Carolina Rules of Civil Procedure and making such other findings and determinations as the Court deems necessary and appropriate to effectuate the terms of this Settlement Agreement.
Former Owner means a Settlement Class Member who owned a Property clad, in whole or in part, with Settling Defendant's EIFS, prior to September 18, 1996, but who no longer owns the Property.
Identification Protocol means the product identification protocol used to identify whether Settling Defendant's EIFS was installed on the Claimant's Property.
Mixed Product means an EIFS that is not, in its entirety, an EIFS, sold, marketed and/or distributed by Settling Defendant.
Notice Date means the date set by the Court by which Class Notice of Settlement must be initially disseminated.
Notice Plan means the proposal for dissemination of the Class Notice of Settlement. The Notice Plan is substantially in the form attached as Exhibit "B", hereto.
Person means both an individual and an entity, and their respective successors or assigns.
Plaintiffs' Class Counsel means the following counsel: (A) Gary K. Shipman and Carl W. Thurman III of Shipman & Associates, L.L.P.; (B) Marvin K. Blount, Jr., of The Blount Law Firm, P.L.L.C.; (C) Everette L. Doffermyre of Doffermyre, Shields, Canfield, Knowles & Devine; (D) William M. Audet of Alexander, Hawes & Audet, L.L.P.; (E) Gary E. Mason of Cohen, Milstein, Hausfeld & Toll, P.L.L.C.; (F) Samuel D. Heins and Kent Williams of Heins Mills & Olson, P.L.C.; (G) Joseph McLeod of the McLeod Law Firm, P.A.; (H) Michael A. Worel and Richard T. Dorman of Cunningham, Bounds, Yance, Crowder & Brown; (I) A. Hoyt Rowell and H. Blair Hahn of Ness, Motley, Loadholt, Richardson & Poole; (J) Laurence S. Berman of Levin, Fishbein, Sedran & Berman; (K) Laura Shamp of Brown & Shamp; (L) Joel Rhine of Lea, Clyburn & Rhine; (M) Auley M. Crouch III of Block, Crouch, Keeter & Huffman.
Plan of Distribution means the allocation plan governing distribution of the Settlement Fund among Settlement Class Members to be submitted by Class Counsel to the Court for approval with a copy to Settling Defendant.
Preliminary Approval means the Court's order granting Preliminary Approval of this Settlement Agreement and approval of the Class Notice of Settlement pursuant to Rule 23 of the North Carolina Rules of Civil Procedure and entry of an order substantially in the form attached as Exhibit "C" hereto.
Preliminary Approval Hearing means the hearing to be conducted by the Court in connection with the Preliminary Approval of the Settlement Agreement.
Property means any one or two family residential dwelling and townhouse located in North Carolina.
Settled Claim means any claim, liability, right, demand, suit, matter, obligation, damage, loss or cost, action or cause of action, of every kind, nature and description that any class member, on behalf of himself or herself, and any Person claiming by or through his or her heir, administrator, devisee, predecessor, successor, representative of any kind, shareholder, partner, director, owner of any kind, affiliate, subrogee, assignee, or insurer, has or may have, whether known or unknown, asserted or unasserted, latent or patent, that is, has been, could have been or in the future might be asserted either in this Action or in any other action or proceeding in this Court or any other court or forum, regardless of legal theory, and regardless of the type or amount of relief or damages claimed, against Settling Defendant, arising from or in any way relating to any defects or alleged defects of EIFS relating to damage and/or potential damage to the Property. Without limiting the generality of the foregoing, Settled Claim shall include:
(A) any claim for breach or violation of any federal, state, common or other law;
(B) any claim for breach of any duty imposed by law, by contract or otherwise;
(C) any claim based on product liability, agency, respondeat superior, third party beneficiary, negligence, breach of express or implied warranty, racketeering, fraud, conspiracy, consumer fraud, negligent misrepresentation, or intentional misrepresentation;
(D) any claim arising from or in any way related to the design, promotion, manufacture, production, sale, warnings, distribution, assembly or installation of any EIF Systems;
(E) any claim for emotional distress or mental anguish associated with any of the above; and
(F) any claim for penalties, punitive damages, exemplary damages, or any claim for damages based upon multiplication of compensatory damages associated with the above.
Settled Claim does not include and specifically excludes: (A) any claim for bodily injury (including wrongful death) and associated or resulting emotional distress and mental anguish, (B) any claims arising from the purchase of Settling Defendant's EIFS distributed, marketed and/or sold by the Settling Defendant after the Notice Date, and (C) any claim related to a Mixed Product; (D) any claim asserted by or on behalf of any person with respect to a residential structure that does not meet the definition of Property.
Settlement Agreement means this Settlement Agreement, including all exhibits hereto.
Settlement Class means a class composed of all Persons who, as of September 18, 1996, owned or formerly owned Property in the State of North Carolina clad, in whole or in part, with Settling Defendant's EIFS.
Excluded from the Settlement Class are:
(A) All Persons who are builders, developers or contractors, except as to the Property in which they personally reside;
(B) All Persons who previously opted out of the Action pursuant to the notice of class action disseminated on or about July 25, 1997 or pursuant to the Court Order dated June 16, 1999, and have not otherwise Opted In to the proposed Settlement;
(C) Settling Defendant, the parent and any subsidiary, affiliate and controlled entity of Settling Defendant, and the officers and directors of Settling Defendant;
(D) Persons who, prior to the Notice Date, have previously released Settling Defendant;
(E) Any assignee who acquired a right or interest in a settled claim, except for assignees who received the assignment prior to the Notice Date while purchasing or selling a Property, or while providing relocation services in connection with the purchase or sale of Property.
Settlement Class Member(s) means a Person (or Persons) who falls (or fall) within the definition of the Settlement Class.
Settlement Date means the date of entry of the Final Order and Judgment.
Settlement Fund means the obligation of Settling Defendant, secured by an irrevocable Letter of Credit from Dresdner Bank or another institution acceptable to Class Counsel and in a form acceptable to Class Counsel and Settling Defendant, to fund two million five hundred thousand dollars (plus interest at six percent (6%) on the outstanding balance from the date of Final Order and Judgment until the date of full performance of the funding obligation) from which all claims and attorneys' fees, costs and expenses (except the costs of Notice and Administration) shall be paid.
Settling Defendant means Sto Corp. unless otherwise stated.
Summary Notice of Settlement means the Court-approved Notice substantially in the form attached as Exhibit "3" to the Notice Plan.
Square Foot of EIFS means each square foot of EIFS installed on a Property, exclusive of doors, windows, fenestrations and other penetrations.
Term of the Agreement means the period commencing upon the Settlement Date and ending the earlier of: (A) payment of all timely submitted Claim Forms for which entitlement to a recovery is made; or (B) termination of this Settlement Agreement.
. This Settlement Agreement is for settlement purposes only, and neither the fact of, nor any provision contained in this Settlement Agreement or its attachments, nor any action taken hereunder shall constitute, be construed as, or be admissible in evidence as, any admission of the validity of any claim or any fact alleged by Plaintiffs in this Action or in any other action or proceeding of any nature or of any wrongdoing, fault, violation of law, or liability of any kind on the part of Settling Defendant or any admission by them of any claim or allegation made in this Action or in any action or proceeding of any nature, or as an admission that class action litigation is lawful or appropriate against Settling Defendant in any other Court or forum, or against any other party to the Action that class action litigation is appropriate, nor as an admission by any of the Plaintiffs, Settlement Class Members or Plaintiffs' Class Counsel of the validity of any fact or defense asserted by them or against them in this Action.
. Notwithstanding Section 2.1, the provision of this Settlement Agreement may be admissible in any proceeding to enforce the rights, obligations or effect of the terms herein. .
3. SUBMISSION FOR PRELIMINARY APPROVAL
. Promptly after execution of this Settlement Agreement, the Parties shall jointly submit this Settlement Agreement, through their respective counsel of record, to the Court for Preliminary Approval.
. The Parties hereto shall obtain from the Court an order (the "Preliminary Approval Order"), specifically including, inter alia, provisions that:
(A) Approve this Settlement Agreement preliminarily, subject to the right of Settlement Class Members to be heard on the terms and on the reasonableness of the Settlement at the Fairness Hearing scheduled as described below;
(B) Approve the Notice Plan;
(C) Direct the Parties to disseminate the Class Notice of Settlement to those Settlement Class Members who can be identified through reasonable effort, and to publish or cause to be published a Summary Notice of Settlement in accordance with the Notice Plan;
(D) Find that the Notice of Class Settlement constitutes the best notice practicable under the circumstances, and is due and sufficient notice to the Settlement Class, and that the Notice Plan fully satisfies the requirements of due process, Rule 23 of the North Carolina Rules of Civil Procedure and other applicable law;
(E) Set a date for a Fairness Hearing, to be held by the Court to determine whether there exists any reasonable basis why the Settlement should not be approved as being fair, reasonable and adequate to the Settlement Class and why judgment should not be entered thereon;
(F) Provide that any objection to the proposed Settlement, and any papers submitted in support of said objection, shall be received by the Court at the Fairness Hearing (unless, in its discretion, the Court shall direct otherwise), only if, on or before a date to be specified in the Class Notice of Settlement, the Person making objection shall file notice of his or her intentions and copies of such papers he or she proposes to submit at the hearing with the Clerk of the Court on or before the date specified in the Class Notice of Settlement and, on or before such date, such papers are served in accordance with the instruction contained in the Class Notice of Settlement. In addition, any objection to the Settlement Agreement must include: (1) the identity of the Property clad with Settling Defendant's EIFS; and (2) proof of past or present ownership of the Property; and (3) prima facie evidence of product identification as demonstrated by submitting with the objection papers one of the following: (a) a Settling Defendant's warranty with respect to the Property; or (b) an Inspection Report issued by Settling Defendant indicating that it is Settling Defendant's EIFS; or (c) Bill of Sale/purchase documents indicating the purchase of Settling Defendant's EIFS with respect to the Property; or (d) correspondence from Settling Defendant indicating that it is the Settling Defendant's EIFS;
(G) Provide that Plaintiffs' Class Counsel will apply for approval by the Court to pay attorneys' fees and reimbursement of costs with the hearing thereon at the same date and time of the Fairness Hearing; and
(H) Provide that the Fairness Hearing may, from time to time, and without further notice to the Settlement Class, be continued or adjourned by order of the Court.
4. PRIMA FACIE PRODUCT IDENTIFICATION
. The Claims Administrator shall determine whether the Property is or was clad, in whole or in part, with Settling Defendant's EIFS. In determining product identification, the Claims Administrator may rely on the information provided on the Claim Form.
. The Claim Form shall contain certain information relating to the Property and EIFS cladding. The information provided in connection with submission of the Claim Form will be used by the Claims Administrator to make an initial product identification determination.
. In determining EIFS product identification, a Claimant establishes a prima facie showing of Settling Defendant's EIFS by submitting with the Claim Form any one of the following: (A) Settling Defendant's warranty with respect to the Property, provided the Settling Defendant has a corresponding warranty; or (B) an inspection report issued by Settling Defendant indicating it is the Settling Defendant's EIFS; or (C) Bill of Sale/purchase documents indicating the purchase of Settling Defendant's EIFS with respect to the Property; or (D) correspondence from Settling Defendant indicating that it is Settling Defendant's EIFS; or (E) an affidavit by a builder, contractor or applicator stating that, based on personal knowledge, the Property is clad with Settling Defendant's EIFS; (F) a report under seal from a licensed engineer or architect stating that the Property is clad with Settling Defendant's EIFS, provided that this determination is based on first-hand personal knowledge of the engineer or architect, obtained through his or her inspection of the Property and, if the report is created subsequent to the Notice Date, the report identifies the facts that support the determination.
. Where a prima facie showing is not or cannot be established, the Claimant may submit to the Claims Administrator for consideration other evidence of product identification of Settling Defendant's EIFS including, but not limited to, one or more of the following: (A) a report from an inspector stating that the Property is clad with Settling Defendant's EIFS provided that this determination is based on first-hand personal knowledge of the inspector obtained by his or her inspection of the Property and, if the report is created subsequent to the Notice Date, the report identifies the facts that support the determination, or (B) A statement identifying or presenting the physical characteristics of the EIFS such as texture and color of the finish coat, the mesh weave and color, type and color of the base coat. The mesh color may be established by either submission of a color photograph that shows the color of the mesh, or submission of a sample of EIFS of sufficient size to determine the mesh color.
. Unless a different time is set by the Court, the Claims Administrator shall make all necessary product identification determinations within one hundred and twenty (120) days after June 30, 2000. Any product identification procedures used in connection with this Settlement Agreement shall be limited to determining whether the product is Settling Defendant's EIFS.
5. DISTRIBUTION OF SETTLEMENT FUND TO CLAIMANTS
. Class Counsel shall develop and submit for Court approval and distribution as part of the Notice Program, a Plan of Distribution of the Settlement Fund to Claimants. Settling Defendant retains its right to object to any Plan of Distribution which imposes undue administrative burdens or expense.
6. SETTLEMENT FUND AND PAYMENT OBLIGATION
. Settling Defendant will be obligated to pay Two Million Five Hundred Thousand Dollars to the Settlement Fund ("the Funding Obligation"). Such obligation arises on the date of Preliminary Approval and terminates upon full performance or termination of this Settlement Agreement. Settling Defendant may meet its Funding Obligation by (a) providing an irrevocable Letter of Credit from Dresdner Bank or another institution acceptable to Class Counsel and in a form acceptable to Class Counsel and Settling Defendant, (b) payment of interest at six percent (6%) on the outstanding balance from the Settlement Date until the date of full performance of the Funding Obligation, and (c) payment of the Funding Obligation amount into an account designated by Class Counsel (and approved by the Court) on or before September 30, 2000. Upon payment of the Funding Obligation amount into the designated account, Settling Defendant's obligation to pay further interest shall cease and Class Counsel shall execute such documents as necessary to release the Letter of Credit.
7. SELECTION, DUTIES AND COMPENSATION OF CLAIMS ADMINISTRATOR
. Appointment of the Claims Administrator shall be subject to approval by the Court.
. The Claims Administrator shall, under supervision of the Court, administer the claims process as set forth in this Settlement Agreement and in the Plan of Distribution, by resolving claims submitted by Claimants in a rational, responsive, cost-effective, and timely manner and shall have the authority (with right of appeal by any interested party to the Court) after consultation with Class Counsel and Settling Defendant, to adopt reasonable operating policies and procedures and to resolve disputed issues and questions of fact in favor of individual Claimants in order to expedite implementation of the Settlement Agreement and the Plan of Distribution.
. All fees and expenses incurred in relation to the performance of the duties and obligations of the Claims Administrator, including without limitation salary, benefits, and insurance shall be paid by Settling Defendant.
. The Claims Administrator will submit periodic reports to Class Counsel, Settling Defendant and the Court during the Term of the Agreement. Nothing in this Settlement Agreement shall be interpreted to make any documents in the possession or control of the Claims Administrator public documents.
. In the event Plaintiffs' Class Counsel reasonably believe that the Claims Administrator is not properly applying any of the terms of this Settlement Agreement or in the event there is a question about the application of the terms of this Settlement Agreement by the Claims Administrator, then:
(A) Class Counsel shall notify counsel for Settling Defendant in writing of their concern;
(B) Plaintiffs' Class Counsel and counsel for the Settling Defendant will meet within thirty (30) days of receipt of the written notification to try to resolve the concern;
(C) In the event Plaintiffs' Class Counsel and counsel for Settling Defendant cannot resolve the concern, then the dispute shall be submitted to the Court.
. Prior to implementation of policies or procedures not provided for in this Settlement Agreement, the Claims Administrator shall notify Class Counsel and Settling Defendant of the proposed policy or procedure. Any dispute as to the implementation of any proposed policy or procedure shall be resolved by agreement between the Parties or, if no agreement can be reached, by submission to the Court.
. Upon termination of this Settlement Agreement for any reason, all records maintained by the Claims Administrator pursuant to this Settlement Agreement shall be maintained for two (2) years for the limited purpose of determining compliance with the terms of this Settlement Agreement.
. Unless otherwise provided in this Settlement Agreement, any and all disputes between Class Counsel, Claimants and Settling Defendant arising under this Settlement Agreement shall be submitted to the Court for resolution. Disputes between Claimants and the Claims Administrator regarding product identification and distributions from the Settlement Fund shall be resolved as provided in the Plan of Distribution.
. Claimants, Class Counsel and Settling Defendant, may compromise any dispute arising under this Settlement Agreement or the Plan of Distribution in writing, and such writing shall supersede the provisions of this Settlement Agreement only as expressly agreed to between the Claimant, Class Counsel and Settling Defendant. A copy of any such compromise shall be maintained by the Claims Administrator.
. Upon Preliminary Approval, and as the Court may direct, the Parties or their designees shall cause notice of the pendency of the Action, the settlement embodied herein, and the Fairness Hearing to be disseminated to Settlement Class Members as provided in this Section.
. Defendant agrees to utilize the services of Kinsella Communications, Ltd., a professional claims administrator, for the purposes of mailing the Notice and arranging for publication of the Summary Notice and Supplemental Notice. Settling Defendant shall be responsible to pay the sum of $50,000 in connection with implementation of the Notice Plan. Settling Defendant's $50,000 payment obligation under this provision shall be separate and in addition to its Settlement Fund obligations. This amount shall be Settling Defendant's full obligation in connection with the Notice Plan. If, for any reason, the Settlement is terminated pursuant to the provisions of this Settlement Agreement, neither Plaintiffs nor Class Counsel shall have any responsibility or obligation to reimburse the Settling Defendant for any funds used or committed for costs incurred in connection with providing Notice to the Class and/or administration of the Settlement.
. A Summary Notice of Settlement shall be published in newspapers, trade journals, and magazines, and/or broadcast by radio and/or television in a manner reasonably calculated to reach Settlement Class Members, as more particularly described in the Notice Plan to be submitted by the Parties and approved by the Court. The Class Notice of Settlement shall inform the reader, listener or viewer of a toll-free telephone number through which he or she may arrange for a mailing of the Class Notice of Settlement, Plan of Distribution and Claim Form.
. The Class Notice, to be approved by the Court, shall be mailed, first class postage prepaid, together with a Claim Form, to each Settlement Class Member identified by the Parties through reasonable efforts, and to each Person who would be a Settlement Class Member, but who previously opted out of the Action, a Claim Form and Request for Revocation of Prior Election. In addition, such mailing shall be sent to each Settlement Class Member whose identity becomes known as a result of the Class Notice of Settlement or who contacts the Claims Administrator during the Term of the Agreement.
. Prior to the dissemination of the Class Notice of Settlement, the Parties or their designees shall cause a toll-free telephone facility to be established under the direction of the Claims Administrator. This facility shall be capable of: (A) receiving requests for the Class Notice of Settlement and other related materials; (B) providing a generalized telephone recording concerning submission of Claim Forms and presentations to the Court at the Fairness Hearing; and (C) mailing the appropriate Notice and other materials to Settlement Class Members as provided in this Settlement Agreement. The facility may, as appropriate under instructions from Plaintiffs' Class Counsel, subject to prior approval of Settling Defendant, provide additional information or refer individual inquiries to Plaintiffs' Class Counsel for response. The facility shall maintain records of all mailings and such other information as Settling Defendant and Plaintiffs' Class Counsel may agree. The records maintained by the facility will be made available to the Parties upon request and reasonable notice.
. The Class Notice of Settlement, either substantially in its original form or as modified by the Court, shall begin on the Notice Date and be disseminated throughout the Claim Period as additional Settlement Class Members are identified.
10. SETTLEMENT CLASS MEMBERS' REQUEST FOR INCLUSION
. Persons who would be Settlement Class Members, but previously opted out of the Action pursuant to the notice of class action disseminated on or about July 25, 1997, or pursuant to the Court order dated June 16, 1999, may participate in this Settlement Agreement ("Opt In"), as may any other Person whose Property is or was clad with Sto EIFS, by timely mailing to the Claims Administrator the Claim Form and Request for Revocation of Prior Election during the Claims Period, attached hereto as Exhibit "D".
. Upon submitting a request to Opt In, that Person shall be deemed a Settlement Class Member and be bound by this Settlement Agreement for all purposes and shall have no standing to object to or otherwise be heard by the Court and/or on appeal with respect to any aspect of this Settlement Agreement.
11. IMMEDIATE IMPLEMENTATION OF CLASS MEMBER BENEFITS
. This Settlement Agreement becomes effective upon entry of the Final Order and Judgment by the Court. Implementation of the terms of this Settlement Agreement, unless otherwise provided herein, shall not be affected or delayed by any appeal from the Final Order and Judgment. Any Party may petition the Court for relief from the obligation of immediate implementation of this Settlement Agreement except that any release or acknowledgement of acceptance of benefits executed by a Claimant shall be binding notwithstanding any appeal or the outcome thereof to the extent that it was executed or benefits were accepted before relief from the obligation of immediate implementation was obtained.
12. STATUTES OF LIMITATIONS OR REPOSE AND REACTIVATION OF CLAIMS
. A Claimant shall not be barred from obtaining relief for any Settled Claim under this Settlement Agreement because of application of any statute of limitations or repose.
. Nothing in this Settlement Agreement is intended nor shall it be construed to toll any statute of limitations or repose period or to revive any claim of any Person including, but not limited to, those Persons who elected to Opt Out or otherwise be excluded from the Action pursuant to the notice of class action disseminated on July 25, 1997, or thereafter pursuant to the Court's order dated June 16, 1999, except as to any Person who, as of September 18, 1996, owned or formerly owned a residential dwelling designed to accommodate more than two families and which is three stories or less (the "Structure"), provided the owner of such Structure can establish reliance on the Action and product identification pursuant to Section 4 above. For Persons entitled to tolling under this Section, both the statute of limitations and repose shall be presumed tolled as of July 25, 1997, or such earlier or later date as may be established by competent evidence, but in no event shall tolling begin prior to January 6, 1996 or extend later than: (A) thirty (30) days after the date of entry of the Final Order and Judgment; or (B) thirty (30) days after completion of the claim process, including any dispute under the Plan of Distribution, provided the Claim Form is submitted within thirty (30) days after entry of the Final Order and Judgement; or (C) June 30, 2000, whichever is later.
13. EXCLUSIVE REMEDY; DISMISSAL OF ACTION; JURISDICTION OF COURT
. Except as otherwise provided in this Settlement Agreement, this Settlement Agreement shall be the sole and exclusive remedy for any and all Settled Claims of Settlement Class Members against Settling Defendant arising from its EIFS and, upon entry of the Final Order and Judgment by the Court, each Settlement Class Member shall be barred from initiating, asserting or prosecuting any Settled Claim against Settling Defendant.
. Plaintiffs' Class Counsel agree to dismiss any other action of any Settlement Class Member for Settled Claims pending in any Court against the Settling Defendant and for which a Plaintiffs' Class Counsel is counsel of record or otherwise on the pleadings.
. The Final Order and Judgment shall dismiss the Settling Defendant from the Action, with prejudice, on the condition that the Court shall retain exclusive and continuing jurisdiction of the Action, all Parties, and Settlement Class Members, to interpret and enforce the terms, conditions and obligations of this Settlement Agreement.
. Upon entry of the Final Order and Judgment, each Settlement Class Member on behalf of himself or herself, and any Person claiming by or through his or her heir, administrator, devisee, predecessor, successor, representative of any kind, shareholder, partner, director, owner of any kind, affiliate, subrogee, assignee, or insurer (the "Releasing Party") shall be deemed to and does hereby release and forever discharge Settling Defendant and its insurers, including any and all of their predecessors, successors, subsidiaries, divisions, departments, affiliates, counsel and any and all of their past, present and future officers, directors, partners, agents, servants, successors, subrogees and assigns of and from any and all Settled Claims and related subrogation claims of the Releasing Party's subrogees or insurance carriers. Each Releasing Party, upon entry of the Final Order and Judgment shall be deemed to and does hereby release and discharge Settling Defendant of and from any and all Settled Claims. Any person who claims and receives a recovery under the Settlement Agreement shall be deemed a class member and a Releasing Party and shall be bound by the terms of this Settlement Agreement.
. Nothing in this Settlement Agreement shall prejudice or in any way interfere with the rights of the Plaintiffs, Settlement Class Members and Settling Defendant to pursue all of their rights and remedies against non-settling Persons, third-parties or their respective insurers, including, without limitation, claims for contribution and/or indemnity.
. Notwithstanding the provisions of the preceding paragraph, upon entry of the Final Order and Judgment, the Settling Defendant shall release and have no right to seek or otherwise obtain any payment a Settlement Class Member may receive or recover from any third party and/or insurance company as a result of a Settled Claim. Nothing in this Settlement Agreement shall be interpreted to create any subrogation claim or right on the part of Settling Defendant or any of its agents as against any monies or recovery by the Settlement Class Member for claims against third parties and/or under any insurance policy relating to a Settled Claim.
. Upon entry of Final Order and Judgment and subject to the warranties made and obligations imposed under the terms of this Settlement Agreement, Settling Defendant, and its agents (including Settling Defendant' counsel in this Action), assigns and insurers, shall release Settlement Class Members, and Plaintiffs' Class Counsel from all claims arising out of, relating to, or in connection with the filing, assertion or resolution of the Action.
15. ATTORNEYS' FEES, EXPENSES AND COSTS
. Plaintiffs' Class Counsel intends to apply for an award of attorney's fees, costs and expenses to be paid from, and in the amount of thirty (30%) percent of, the Settlement Fund. Plaintiffs' Class Counsel's fees, costs and expenses awarded by the Court shall be paid from the Settlement Fund at such time and upon such conditions as determined by the Court. The Parties agree that payment of the amount awarded by the Court shall be paid to Doffermyre, Shields, Canfield, Knowles & Devine (ATTN: Everette Doffermyre), 1355 Peachtree Street, Atlanta, Georgia 30309. Settling Defendant acknowledges that it has no interest as to the amount of attorneys fees to be paid from the Settlement Fund and will remain silent on this issue. Plaintiffs' Class Counsel agree not to seek any additional fees, costs and expenses from Settling Defendant.
16. ENFORCEMENT OF THE COURT'S SETTLEMENT APPROVAL ORDER
. This Settlement Agreement is subject to and conditioned upon the issuance by the Court following the Fairness Hearing, of a Final Order and Judgment granting final approval of the Settlement Agreement. After issuance of a Final Order and Judgment, the Parties shall be obligated to comply with the terms of the Settlement Agreement, notwithstanding (A) objections to the Settlement, (B) the possibility of an appeal, or (C) the filing of an appeal or notice of appeal, unless the Court relieves the Parties from any such obligations.
. In the event any Party fails to comply with its obligations under the terms of this Settlement Agreement, or is in default of this Settlement Agreement in any other respect, the non-defaulting Party shall so notify the Court. The defaulting Party shall then be given up to twenty (20) calendar days to meet its obligations under the Settlement Agreement. If the defaulting Party does not meet its obligations within twenty (20) calendar days, the non-defaulting Party may apply to the Court for relief.
17. REPRESENTATIONS AND WARRANTIES
. Settling Defendant represents and warrants that: (A) it has all requisite corporate power and authority to execute this Settlement Agreement and to consummate and perform the transactions contemplated herein; and (B) this Settlement Agreement has been duly and validly executed and delivered by Settling Defendant and constitutes a legal, valid and binding obligation.
. Plaintiffs' Class Counsel represent and warrant that they have the authority to enter into and execute this Settlement Agreement and to consummate and perform the transactions contemplated herein as of the date of execution of this Settlement Agreement. Plaintiffs' Class Counsel hereby represent and warrant that this Settlement Agreement has been duly and validly executed and delivered by them and constitutes a legal, valid and binding obligation.
18. TERMINATION OF THE SETTLEMENT AGREEMENT
. The performance of this Settlement Agreement is expressly contingent upon the Court's issuance of the Final Order and Judgment. If the Court fails to issue such Order within ninety (90) days following the conclusion of the Fairness Hearing, either Party may elect to terminate this Settlement Agreement, rendering it as having no force or effect whatsoever, null and void ab initio, and not admissible as evidence for any purpose in any pending or future litigation (in any jurisdiction) involving any of the Parties.
. Settling Defendant agrees to use its best efforts to preserve all documents produced (or withheld upon attorney-client privilege or work product doctrine) by it in this Action through January 1, 2001. Settling Defendants may preserve such documents in any manner including, without limitation, as paper copies, including by way of example, documents maintained in the In Re Stucco repository, or in electronic form in lieu of paper copies.
19. JUDGMENT REDUCTION PROVISION
. The purpose of this Section is to eliminate the possibility of any liability of Settling Defendant based on claims against Settling Defendant (regardless of the legal theory on which such claims may be based) for contribution (under any theory of law or equity including pro rata or otherwise) toward, or indemnity for, all or any part of (A) the amount of any judgment or settlement in favor of Settlement Class Members (individually or otherwise) against any third party in any other action, including attorneys' fees and costs, or (B) the amount paid by any third party in settlement of any action proceeding and/or claim, so that the payment obligations of Settling Defendant pursuant to this Settlement Agreement, if any, shall be all that Settling Defendant shall ever be required to pay in connection with any of the matters alleged, or that could have been alleged, in this or any subsequent action.
. Each Settlement Class Member agrees to reduce the amount of any total judgment against any third party to which it may be entitled in any action by the amount, if any, of such total judgment for which the fact finder determines the Settling Defendant is liable and which the third party would be entitled to recover from the Settling Defendant by way of contribution (under any theory of law or equity including pro rata or otherwise), indemnification or otherwise, but for the release or any other term of this Settlement Agreement. Each Settlement Class Member also consents to determination of any claim of contribution or indemnity against Settling Defendant in the same action or proceeding in which such Settlement Class Member asserts claims against any other party without the necessity of joinder of Settling Defendant.
. Some Class Members may pursue separate actions against builders or other third parties who may be responsible for damages to their homes, including damages for which those third parties may contend that the Settling Defendant is liable in whole or in part. It is the intent of the Parties that, because of the terms of the Settlement Agreement, the participation of the Settling Defendant shall not be required in such separate actions. If claims for indemnity or contribution are brought against a Settling Defendant despite the provisions of this Section, the Settling Defendant shall:
A. notify the counsel for the Class Member of the assertion of the claims. Such notice shall be given before the expiration of time for the Settling Defendant to answer or otherwise respond to any such contribution or indemnity claim, including any extension thereof, or as soon as practicable after an answer or other response, if any, is filed by the Settling Defendant.
B. expressly authorize and acknowledge the right of the Settlement Class Member to intervene in his or her own name or in the name of the Settling Defendant in any proceeding asserting a contribution or indemnity claim against a Settling Defendant as described above in order to plead any matter in defense of such contribution and indemnity claim or in avoidance of any determination of liability which would cause a reduction to such Settlement Class Member's judgment as provided in Paragraph 19.2 of the Settlement Agreement.
. The Court shall retain continuing jurisdiction over the Parties and this Settlement for any and all purposes related to this Settlement including all rights, duties and obligations arising herein.
. This Settlement Agreement, including all exhibits attached hereto, shall constitute the entire Settlement Agreement among the Parties with regard to the subject of this Settlement Agreement and shall supersede any previous agreements and understandings between the Parties with respect to the subject matter of this Settlement Agreement. This Settlement Agreement may not be changed, modified, or amended except in writing signed by all Parties, subject to Court approval.
. Notwithstanding any provision to the contrary, in the event the Court does not enter Final Order and Judgment or this Settlement is reversed or vacated on appeal, or rejected upon remand, or terminated pursuant to this Settlement Agreement, any expense or costs incurred by any Party in connection with this Settlement Agreement may be deemed a litigation cost to the extent permitted by law and may be awarded, if at all, as provided by the Court.
. This Settlement Agreement shall be construed under and governed by the laws of the State of North Carolina, applied without regard to its laws applicable to choice of law.
. This Settlement Agreement may be executed by the Parties in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
. This Settlement Agreement shall be binding upon and inure to the benefit of the Settlement Class, the Parties, and their representatives, heirs, successors, and assigns.
. The headings of the sections of this Settlement Agreement are included for convenience only and shall not be deemed to constitute part of this Settlement Agreement or to affect its construction. The decimal numbering of provisions herein is intended to designate sub-sections where applicable.
. Any notice, request, instruction, application for Court approval or application for Court orders sought in connection with this Settlement Agreement, or other document to be given by any Party to any other Party, shall be in writing and delivered personally or sent by registered or certified mail, postage prepaid, if to the Settling Defendant, to the attention of Settling Defendant's respective representative, and to Plaintiffs' Counsel on behalf of Settlement Class Members or to other recipients as the Court may specify.
IN WITNESS WHEREOF, the Parties hereto have caused this Settlement Agreement to be executed by their duly authorized attorneys, as of the dates indicated, with the most recent date constituting the date of this Settlement Agreement.
By: Date:
W. Andrew Copenhaver
F. Bruce Williams
WOMBLE, CARLYLE, SANDRIDGE & RICE
150 Fayetteville Street Mall, Suite 2100
Raleigh NC 27601
Telephone: 919.755.2171
Fax: 919.755.2150
Attorneys for Sto Corp.
STO CORP.
By: Date:
Richard A. Reyes, Esq.
Director of Administration
and General Counsel
6175 Riverside Drive, SW
Atlanta, GA 30336
Telephone: 404.346.3666
Fax: 404.346.3119
PLAINTIFFS' COUNSEL
By: Date:
Gary K. Shipman
SHIPMAN & ASSOCIATES
11 South Fifth Avenue
Wilmington, NC 28401
Telephone: 910.762.1990
Fax: 910.762.6752
Marvin K. Blount, Jr.
THE BLOUNT LAW FIRM, P.L.L.C.
400 West First Street
Greenville, North Carolina 27835
Telephone: 919.752.6000
Fax: 919.752.2174
Everette Doffermyre
DOFFERMYRE, SHIELDS, CANFIELD,
KNOWLES & DEVINE
1600 The Peachtree
1355 Peachtree Street
Atlanta, Georgia 30309
Telephone: 404.881.8900
Fax: 404.881.3007
Co-Lead Plaintiffs' Counsel
William M. Audet
ALEXANDER, HAWES & AUDET, L.L.P.
152 North Third St., Suite 600
San Jose, CA 95112
Telephone: 408.289.1776
Fax: 408.287.1776
Gary E. Mason
COHEN, MILSTEIN, HAUSFELD &
TOLL, P.L.L.C.
1100 New York Avenue, NW
West Tower, Suite 500
Washington, D.C. 20005
Telephone: 202.408.4600
Fax: 202.408.4699
Samuel D. Heins
Kent M. Williams
HEINS MILLS & OLSON, P.L.C.
608 Second Avenue South, Suite 700
Minneapolis, MN 55402
Telephone: 612.338.4605
Fax: 612.338.4692
Joe McLeod
THE McLEOD LAW FIRM, P.A.
705 First Citizen Bank Building
109 Green Street
Post Office Box 1539
Fayetteville, NC 28302
Telephone: 910.323.1425
Fax: 910.323.4582
A. Hoyt Rowell, III
H. Blair Hahn
NESS, MOTLEY, LOADHOLT,
RICHARDSON & POOLE
174 East Bay Street, Suite 100
P.O. Box 1137
Charleston, SC 29402
Telephone: 803.720.9000
Fax: 803.723.6665
Richard T. Dorman
Michael A. Worel
CUNNINGHAM, BOUNDS, YANCE,
CROWDER & BROWN
1601 Dauphin Street
Post Office Box 66705
Mobile, AL 36660
Telephone: 334.471.6191
Fax: 334.479.1031
Laurence S. Berman
LEVIN, FISHBEIN, SEDRAN & BERMAN
510 Walnut Street, Suite 500
Philadelphia, PA 19106
Telephone: 215.592.1500
Fax: 215.592.4663
Plaintiffs' Steering Committee
Auley M. Crouch, III
CROUCH & KEETER, L.L.P.
202 North Third Street
Post Office Box 4
Wilmington, NC 28401
Telephone: 910.762.0595
Fax: 910.762.6429
Joel Rhine
LEA, CLYBURN & RHINE
8 South 7th Street
Wilmington, NC 28401
Telephone: 910.772.9960
Fax: 910.772.9062
Laura M. Shamp
BROWN & SHAMP
230 Peachtree Street, Suite 1501
Atlanta, GA 30303
Telephone: 404.893.9400
Fax: 404.523.5671
Other Plaintiff's Counsel