TRANSITION SERVICES AGREEMENT
This Transition Services Agreement ("AGREEMENT") between Huttig
Building Products, Inc., a Delaware corporation ("HUTTIG"), and The Rugby Group
PLC, a company registered in England and Wales under company number 206 971, and
having its registered office at Crown House, Rugby, United Kingdom ("RUGBY")
(each, a "PARTY" and, together, the "PARTIES") takes effect on the day of
, 1999 (the "EFFECTIVE DATE").
Capitalized terms used herein without definition shall have the
meaning ascribed to them in the Share Exchange Agreement, dated October 19,
1999, among Rugby, Crane Co., a Delaware corporation, and Huttig (the "SHARE
EXCHANGE AGREEMENT").
RECITALS
a. Pursuant to the Share Exchange Agreement, Rugby shall dispose of
the Excluded Assets and Liabilities and shall transfer to Huttig all the common
stock of Rugby's wholly-owned subsidiary, Rugby USA, Inc., a Georgia corporation
("RUGBY USA").
b. Pursuant to the Share Exchange Agreement, Huttig has agreed to
provide Rugby with certain transition services, as set forth herein, that Rugby
USA is currently providing to Rugby USA's industrial businesses (the "INDUSTRIAL
BUSINESS").
NOW, THEREFORE, in consideration of the premises and covenants set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:
1. Transition Services. During the term of this Agreement, Huttig will
provide, or will cause Rugby USA or its Affiliates to provide, to Rugby or a
Subsidiary of Rugby designated by Rugby the services that are currently being
provided by Rugby USA to the Industrial Business as further described in Annex A
attached hereto (the "SERVICES") in a manner and at a level of service
consistent in all material respects with the services provided by Rugby USA to
the Industrial Business immediately prior to the date hereof. Services other
than those described on Annex A ("OTHER SERVICES") may be contracted for by
Rugby or a Subsidiary of Rugby on a project-by-project basis. The Services shall
be provided by Huttig to Rugby or a Subsidiary of Rugby for the fees set forth
on Annex A corresponding to the Service provided (the "FEES").
2. Billing and Payment. Huttig will invoice Rugby for the Fees for all
Services (plus the fees for Other Services, if any) rendered hereunder on a
monthly basis. All invoices shall be due and payable within thirty (30) days.
3. Term and Termination.
3.1 Term. Subject to Section 3.2, this Agreement shall commence on the
date hereof and shall terminate 6 months following the date hereof (the "TERM").
3.2 Early Termination. This Agreement may be terminated prior to the
end of the Term as follows:
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(a) Rugby Notice. Rugby may terminate any or all of the Services or
Other Services provided under this Agreement by giving fifteen (15) days prior
written notice to Huttig and by paying Huttig for any accrued but unpaid sums
for any Services or Other Services completed by Huttig for which Rugby has not
previously paid Huttig in full.
3.3 Delivery of Books and Records. At the end of the Term, or upon
early termination of this Agreement by Rugby pursuant to Section 3.2, Huttig
shall promptly deliver to Rugby any books, records, instruments or other
documentation in the possession of Huttig that relate exclusively to the
Industrial Business or the Services or Other Services provided by Huttig to
Rugby or a Subsidiary of Rugby pursuant to this Agreement.
4. Confidentiality. Each Party shall cause each of its Affiliates and each
of their officers, directors and employees to hold all information relating to
the business of the other Party disclosed to it by reason of this Agreement
confidential and will not disclose any of such information to any third party
unless legally compelled to disclose such information; provided, however, that
to the extent that either Party may become so legally compelled, they may only
disclose such information if they shall first have used reasonable efforts to,
and, if practicable, shall have afforded the other party the opportunity to
obtain, an appropriate protective order or other satisfactory assurance of
confidential treatment for the information required to be so disclosed.
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5. Assignments. This Agreement may not be assigned, in whole or in part, by
either Party without the prior written consent of the other Party, provided,
however, that Rugby may assign this agreement in connection with a sale of all
or substantially all of the assets of the Industrial Business through a merger,
consolidation, sale of assets, sale of stock or otherwise. Subject to the
limitations on assignment in this Section 5, the provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
6. Indemnification. Rugby will indemnify and hold Huttig harmless from and
against any and all obligations, liabilities, claims, demands, expenses and
costs (including reasonable attorneys' fees) for any loss or damage to property
or injuries to any persons which may be asserted against Huttig by reason, or as
a result, of any acts or omissions of Rugby related to provision of the Services
or Other Services hereunder, except to the extent that such obligations,
liabilities, claims, demands, expenses or costs are caused by the gross
negligence or willful misconduct of Huttig.
7. Relationship of Parties. Neither of the Parties shall act or represent
or hold itself out as having authority to act as an agent or partner of the
other Party, or in any way bind or commit the other Party to any obligations.
Nothing contained in this Agreement shall be construed as creating a
partnership, joint venture, agency, trust or other association of any kind, each
Party being individually responsible only for its obligations as set forth in
this Agreement.
8. Governing Law. This agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to the
provisions thereof relating to the conflict of laws.
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9. Cash Management.
9.1 Rugby Customer Payments. Huttig will, or will cause its
Subsidiaries to, forward promptly to Rugby (for the account of Rugby)
or a Subsidiary of Rugby designated by Rugby any customer payments in
respect of accounts receivable owed to Rugby or a Subsidiary of Rugby
and received by Huttig or a Subsidiary of Huttig, whether received in
lock boxes, via wire transfer or otherwise.
9.2 Huttig Customer Payments. Rugby will, or will cause its
Subsidiaries to, forward promptly to Huttig (for the account of Huttig)
or a Subsidiary of Huttig designated by Huttig any customer payments in
respect of accounts receivable owed to Huttig or a Subsidiary of Huttig
and received by Rugby or a Subsidiary of Rugby, whether received in
lock boxes, via wire transfer or otherwise.
10. Miscellaneous.
10.1 Notices. Any and all notices or other communications required or
permitted under this Agreement shall be given in writing and
delivered in person or sent by United States certified or
registered mail, postage prepaid, return receipt requested, or by
overnight express mail, or by telex, facsimile or telecopy to the
address of such party set forth below. Any such notice shall be
effective upon receipt or three days after placed in the mail,
whichever is earlier.
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If to Rugby:
The Rugby Group PLC
Crown House
Rugby CV212D
United Kingdom
Attention: Company Secretary
Facsimile No: 011-44-1788-54672
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019-6064
Attention: Toby S. Myerson, Esq.
Facsimile No.: 212-757-3990
If to Huttig:
Huttig Building Products, Inc.
Lakeview Center, Suite 400
14500 South Outer Forty Road
Chesterfield, Missouri 63017
Attention: Chief Executive Officer
Facsimile No: 314-216-2601
with a copy to:
Kirkpatrick & Lockhart LLP
1500 Oliver Building
Pittsburgh, PA 15222
Facsimile No.: (412) 355-6501
Any Party may, by notice so delivered, change its address for notice
purposes hereunder.
10.2 Entire Agreement. This Agreement, together with all annexes
hereto, constitutes the entire agreement and understanding of the
Parties with respect to the subject matter of this Agreement and
supersedes all prior conversations, understandings, correspondence
and
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agreements between the Parties, both oral and written, with
respect to such subject matter.
10.3 Amendment. Neither this Agreement nor any part hereof may be
amended, modified or waived except by an express declaration in
writing signed by the Parties.
10.4 No Waiver. No delay or omission by either Party to exercise any
right or power occurring upon any noncompliance or default by the
other Party will impair any such right or power or may be
construed to be a waiver thereof. A waiver by either Party of any
provision of this Agreement may not be construed to be a waiver of
that provision at any other time or under any other circumstances.
10.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which is deemed an original, but all of
which together constitute one and the same agreement.
10.6 Headings. The section or paragraph headings used in this Agreement
are for convenience of reference only and shall not affect the
construction of this Agreement.
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IN WITNESS WHEREOF, the partners have duly executed and delivered this agreement
of the date first written above.
THE RUGBY GROUP PLC
By:
---------------------------------
Name:
Title:
HUTTIG BUILDING PRODUCTS, INC.
By:
---------------------------------
Name:
Title:
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ANNEX A TO THE TRANSITION SERVICES AGREEMENT
SERVICES
Huttig shall provide any or all of the following services to Rugby for the
following fees pursuant to the Agreement to which this Annex A is attached:
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SERVICE FEE
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1. General Accounting.
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a. Providing daily general $6,000 per month for
ledger and fixed asset three months from
maintenance, preparing Effective Date
balance sheet
reconciliations, preparing $12,000 per month
journal entries as a part of thereafter
closing the general ledger
on a monthly basis and
preparing monthly internal
financial statements
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2. Cash Management.
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a. Managing the customer $5,000 per month
remittance procedure to three months from
lock boxes for credit to Effective Date
Rugby's accounts
$10,000 per month
thereafter
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b. Managing payments to $4,000 per month for
vendors for all of Rugby's three months from
locations and managing the Effective Date
disbursing bank accounts
$8,000 per month
thereafter
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c. Consolidating and investing $1,000 per month for
Rugby's surplus cash as three months from
directed by Rugby Effective Date
$2,000 per month
thereafter
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SERVICE FEE
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3. Taxes.
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a. Preparing monthly state and $1,500 per month for
local sales and use tax three months from
returns Effective Date
$3,000 per month
thereafter
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b. Preparing annual state and $400 per month for three
local property tax returns months from Effective
Date
$800 per month
thereafter
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c. Filing of annual federal, $6,000 per month for
state or local income tax three months from
returns, quarterly estimated Effective Date
payments and tax compliance
$12,000 per month
thereafter
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4. Payroll.
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a. Administering payroll $4,000 per month for
services (including, without three months from
limitation, preparation of Effective Date
payroll checks for
employees, maintenance of $8,000 per month
employee payroll records, thereafter
payroll-related tax filings,
data processing and record
keeping) as may be required
in the ordinary course of
business
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5. Human Resources.
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a. Administering benefits $4,000 per month for
(including, without three months from
limitation, health insurance, Effective Date
401(K) plan and Rugby
Share Option Plan) $8,000 per month
thereafter
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SERVICE FEE
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b. Providing support to ensure $1,000 per month for
legal compliance with labor three months from
and other laws related to Effective Date
employees (including,
without limitation, workers' $2,000 per month
compensation) thereafter
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6. Information Technology.
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a. Providing certain computer $9,050 per month for
services, including technical three months from
support services of Effective Date
management consulting,
applications support, $18,100 per month
systems analysis and thereafter
programming support in all
the currently-existing Trend
applications.
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b. Providing hardware, $5,050 per month for
network infrastructure and three months from
database support and Effective Date
maintaining necessary
licensing of software $10,100 per month
thereafter
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7. Transportation.
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a. Administering fleet of $1,000 per month for
leased trucks, tractors, three months from
trailers and passenger Effective Date
vehicles (including, without
limitation, compliance with $2,000 per month
DOT, state and federal thereafter
registration requirements)
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SERVICE FEE
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8. Miscellaneous.
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a. Administering insurance $2,000 per month for
coverage (including, three months from
without limitation, property Effective Date
and casualty insurance,
general liability insurance, $4,000 per month
officer and director liability thereafter
insurance, environmental
impairment liability
insurance, workers'
compensation insurance,
employee fidelity insurance,
automobile insurance, life
insurance, long term
disability insurance and
pension benefits)
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