Exhibit 99.7
SETTLEMENT AGREEMENT AND RELEASE BY,
BETWEEN AND AMONG CONGOLEUM CORPORATION
AND FEDERAL INSURANCE COMPANY
This Settlement Agreement and Release (the "Agreement") is made by,
between and among (a) each of the following (each, a "Debtor" and, collectively,
the "Debtors"): Congoleum Corporation (together with its affiliates,
predecessors, successors and assigns, collectively "Congoleum"), Congoleum
Sales, Inc., and Congoleum Fiscal, Inc., as debtors and debtors-in-possession,
and their affiliates, predecessors, successors and assigns, (b) Federal
Insurance Company and its parents, affiliates, predecessors, successors and
assigns (collectively, "Federal"); and (c) upon its creation, the Plan Trust.
The Debtors, Federal and the Plan Trust, upon its creation, are each referred to
herein in their individual capacity as a "Party" and collectively as the
"Parties."
RECITALS
WHEREAS, numerous "Asbestos Claims" (as defined herein) have been asserted
against Congoleum; and
WHEREAS, Federal issued to Congoleum the liability insurance policies
listed on Attachment A hereto (the "Subject Policies," as defined herein); and
WHEREAS, there is a dispute between the Debtors and Federal regarding
their respective rights and obligations with respect to insurance coverage for
Asbestos Claims (the "Coverage Dispute"); and
WHEREAS, Congoleum and Federal are parties to a lawsuit styled Congoleum
Corporation v. ACE American Insurance Company, et al., Docket No. MID-L-8908-01
pending in the Superior Court of New Jersey, Law Division, Middlesex County (the
"Coverage Action"); and
WHEREAS, the "Plan Proponents" (as defined herein) distributed their Joint
Prepackaged Plan of Reorganization Under Chapter 11 of the Bankruptcy Code for
Congoleum Corporation, et al., dated October 27, 2003, as amended (the "Original
Plan"); and
WHEREAS, on or about December 31, 2003, the Debtors filed reorganization
Case No. 03-51524 (KCF) jointly administered pursuant to chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy Court for the
District of New Jersey (the "Chapter 11 Case"), and the Debtors continue to
operate their businesses as debtors and debtors-in-possession; and
WHEREAS, Congoleum seeks in the Coverage Action declaratory relief, actual
compensatory and consequential damages, plus interest thereon, among other
relief, and Federal denies that it owes any damages as alleged and has defended
against Congoleum's claims in the Coverage Action; and
WHEREAS, on or about July 22, 2005, the Debtors filed with the Bankruptcy
Court the Sixth Modified Joint Plan of Reorganization Under Chapter 11 of the
Bankruptcy Code of Congoleum Corporation, et al. (the "Sixth Modified Plan");
and
WHEREAS, the Debtors and Federal entered into settlement negotiations to
resolve the Coverage Dispute and to further define their respective rights and
obligations under the Subject Policies and (a) the Debtors and Federal agreed to
a settlement involving the "Settlement Amount" (as defined herein) (less any
credits that may apply pursuant to Paragraph II.K below); (b) and Federal agreed
to pay to the Plan Trust or as otherwise directed by the Bankruptcy Court the
Settlement Amount (plus any and all interest accrued thereon as provided for
herein), provided that Federal is designated as a Settling Asbestos Insurance
Company under the Plan and the other conditions to the Trigger Date are
satisfied; and
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WHEREAS, subject to the terms of this Agreement, the Debtors and Federal
now wish to enter into an agreement, as set forth below, to settle and resolve
the Coverage Dispute as between them, to provide for mutual releases of their
claims under the Subject Policies, to provide for dismissals with prejudice of
the Coverage Action as between them, to provide for a permanent withdrawal of
all of Federal's claims, objections and appeals, if any, in the Chapter 11 Case,
and to resolve certain other matters, all as set forth below; and
WHEREAS, the Debtors and Federal desire that, upon creation of the Plan
Trust, the Plan Trust shall become a Party to this Agreement; and
WHEREAS, the Parties now wish to enter into an agreement, as set forth
below, to settle and resolve the outstanding disputes referred to above;
NOW, THEREFORE, in consideration of the foregoing facts and the mutual
covenants contained herein, and intending to be legally bound hereby, the
Parties hereby agree as follows:
AGREEMENT
I. DEFINITIONS
A. For purposes of this Agreement, the following definitions apply to the
capitalized terms herein wherever those terms appear in this Agreement,
including the prefatory paragraph, recitals, the sections below and any
attachments hereto. Capitalized terms in the prefatory paragraph, recitals, the
sections below and any attachments hereto have the meanings ascribed to them
therein to the extent they are not otherwise defined in this Definitions
section. Capitalized terms that are not defined in this Agreement are given the
meanings designated in the Plan. Moreover, each defined term stated in the
singular shall include the plural and each defined term stated in the plural
shall include the singular. The word "including" means "including but not
limited to."
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B. "Approval Order" means a Final Order (as defined herein) of a court of
competent jurisdiction approving this Agreement and the compromise and
settlement memorialized herein between the Debtors and Federal, which order
shall be in the form of Attachment A hereto or such other order that is in a
form and substance acceptable to the Debtors and Federal.
C. "Asbestos Claims" means any and all past, present and future Claims (as
defined herein), demands, actions, suits, proceedings, notices of partial or
total responsibility, whether presently known or unknown, that seek
compensatory, punitive or statutory damages, declaratory judgment, injunctive
relief, medical monitoring, or any other form of relief whatsoever, on account
of alleged bodily injury, personal injury, fear of future injury, medical
monitoring, mental injury or anguish, emotional distress, shock, sickness,
disease, or any other illness or condition, death, property damage, loss of use
of property, or diminution in the value of property arising from alleged,
potential or actual exposure of any type or nature whatsoever to asbestos, an
asbestos-containing product, and/or any other substance, product, matter or
material in any form or state that contains or is alleged to contain asbestos,
either alone or in combination with any other substance. The term "Asbestos
Claims" also includes, without limitation, claims or suits alleging in whole or
in part exposure to asbestos and/or asbestos containing products in addition to
any other substance, chemical, pollutant, waste, or material of any nature as
well as claims that involve, in whole or in part, alleged exposure to asbestos
or asbestos containing products relating to or arising out of or from the
installation, removal, manufacture, distribution, sale, re-sale, existence or
presence (whether on premises owned or controlled by the Debtors or otherwise)
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of asbestos or an asbestos-containing product, either alone or in combination
with any other substance. The term "Asbestos Claims" also includes the
definitions of the following terms, as set forth in Section 1.2 of the Plan: ABI
Asbestos Claim, Asbestos Personal Injury Claim, Asbestos Property Damage Claim,
Asbestos Property Damage Contribution Claim, Indirect Asbestos Claim, and
Unknown Asbestos Claim.
D. "Asbestos Legislation" means any legislation enacted by the United
States Congress and signed by the President of the United States by no later
than January 3, 2006, or that becomes law without the President's signature by
no later then January 3, 2006, that (1) regulates, limits or controls the
prosecution of substantially all Plan Trust Asbestos Claims in the state or
federal courts; (2) creates or purports to create an obligation on Federal to
pay money pursuant to the legislation for the benefit of asbestos claimants; and
(3) replaces, at least in part, Federal's obligations to policyholders under
policies of insurance covering or alleged to cover Asbestos Claims. The term
"Asbestos Legislation" is intended to encompass what is commonly understood to
be "asbestos reform" legislation and is not intended to encompass general tort
reform, class action reform, malpractice reform, or tax reform, or any other
legislation that would regulate, limit or control Claims without regard to
whether they arise from or attributable to exposure to asbestos or
asbestos-containing products. For the avoidance of doubt, the fact that
legislation alters or modifies the requirements or standards for establishing
liability against the Debtors and/or the Plan Trust (including legislation that
imposes medical and/or exposure criteria, imposes strict liability on the
Debtors and/or the Plan Trust, or regulates or limits the jurisdiction or forum
in which an Asbestos Claim may be brought) does not make such legislation
"Asbestos Legislation" under this Paragraph I.D.
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E. "Claim" means any of the following: (1) "Claim" as that term is defined
in the United States Bankruptcy Code, 11 U.S.C. ss. 101(5); (2) Demand; or (3)
any claim, whether past, present or future, known or unknown, asserted or
unasserted, foreseen or unforeseen, fixed or contingent, or direct or indirect,
and whether in law, equity, admiralty or otherwise (including any claim (a)
arising out of, related to, or involving asbestos or any other substance,
product, matter or material in any form or state, any cumulative or other injury
or damage, any activity, operation, premises, or exposure or any alleged bad
faith, unfair claim practices, unfair trade practices, deceptive trade
practices, insurance code violations, fraud, misrepresentation, non-disclosure,
breach of fiduciary duty, conspiracy, or extra-contractual or tort liability;
(b) for any form of damages, indemnity or defense obligations, insurance
premiums (whether retrospectively rated or otherwise), deductibles, self-insured
retentions, costs, expenses, contribution or subrogation (except as specified in
Paragraph II.I, below); or (c) pursuant to or under a contract, other agreement,
promise, representation or warranty; or (d) pursuant to any direct action or
statutory or regulatory right of action, assertion of right, complaint,
cross-complaint, counterclaim, affirmative defense, writ, demand, inquiry,
request, suit, lawsuit, liability, action, cause of action, administrative
proceeding, governmental action, order, judgment, settlement, lien, loss, cost
or expense.
F. "Confirmation Order" means an order entered by the Bankruptcy Court in
the Chapter 11 Case confirming the Plan, together with any order of the United
States District Court issued pursuant to section 524(g)(3)(A) of the Bankruptcy
Code confirming or affirming such order.
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G. "Congoleum" means (1) the corporation now named Congoleum Corporation
that was incorporated in the State of Delaware in 1986 ("Congoleum
Corporation"); (2) Congoleum Corporation's predecessors, successors and past and
present assigns, all its past and present subsidiaries and the predecessors,
successors and past and present assigns of such subsidiaries, any person in
which Congoleum Corporation has an ownership interest, directly or indirectly,
of fifty percent (50%) or more, and any Persons; provided that as to each of the
foregoing, Congoleum Corporation has the power and authority to release claims
under the Subject Policies on their behalf (3) any Persons that have been
acquired by, merged into or combined with any of the Persons identified in
sub-paragraph I.G(1) above, provided that Congoleum Corporation has the power
and authority to release claims under the Subject Policies on their behalf; (4)
any and all Persons named as insureds, other insureds, or otherwise insured or
claimed to be insured under the Subject Policies, provided that, as to each of
the foregoing, Congoleum Corporation has the power and authority to release
claims under the Subject Policies on their behalf; (5) Congoleum Sales, Inc. and
Congoleum Fiscal, Inc., debtors and debtors-in-possession; and (6) the
directors, officers, agents, employees, representatives and attorneys of any of
the foregoing Persons, solely in their respective capacities as such, provided
that, as to each of the foregoing, Congoleum Corporation has the power and
authority to release claims under the Subject Policies on their behalf.
H. "Congoleum Releasees" means (i) Congoleum and each of the other
Debtors; (ii) each of their respective parents, subsidiaries, divisions, holding
companies, merged companies, companies acquired before the Execution Date,
predecessors-in-interest, successors-in-interest and assigns, solely in their
capacities as such; (iii) the directors, members, officers, shareholders, agents
and employees of the foregoing, solely in their capacities as such; and (iv) its
attorneys and agents.
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I. "Creditors' Committee" means the Official Committee of Unsecured
Asbestos Claimants initially appointed by the United States Trustee in the
Reorganization Cases on or about April 21, 2004.
J. "Entity" means "Entity" as that term is defined in the Plan, as
amended.
K. "Execution Date" means the earliest date on which this Agreement is
signed by the Debtors and Federal.
L. "Federal Releasees" means (i) Federal; (ii) each of Federal's parents,
subsidiaries, divisions, holding companies, merged companies, acquired
companies, predecessors-in-interest, successors-in-interest and assigns, solely
in their capacities as such; (iii) each of the directors, officers,
shareholders, agents and employees of the foregoing, solely in their capacities
as such; and (iv) its attorneys and agents.
M. "Final Order" means an order or judgment of a court, the
implementation, operation or effect of which has not been stayed and as to which
the time to appeal, seek review, petition for certiorari, or move for
reargument, reconsideration or rehearing has expired and as to which no appeal,
petition for review, reconsideration, rehearing or certiorari or other
proceedings for reargument or rehearing shall then be pending; provided,
however, if an appeal, writ of certiorari, reargument, reconsideration or
rehearing thereof has been filed or sought, such order of the court shall have
been affirmed by the highest court to which such order was appealed, or
certiorari shall have been denied or reargument or rehearing shall have been
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denied or resulted in no modification of such order, and the time to take any
further appeal, petition for certiorari, or move for reargument, reconsideration
or rehearing shall have expired; provided, further, that, for the avoidance of
doubt, the Parties acknowledge and agree that the possibility that a motion
filed with respect to such order under Rule 59 or Rule 60 of the Federal Rules
of Civil Procedure, or other analogous rule under the Bankruptcy Rules, may be
filed, does not cause such order not to be a Final Order (provided, further,
that such a motion has not been filed as of a date that such order would
otherwise be considered a Final Order.
N. "FCR" means the Futures Representative appointed pursuant to the
Bankruptcy Court's February 18, 2004 Order in the Chapter 11 Case, solely in his
capacity as such.
O. "Motion" has the meaning ascribed to such term in sub-paragraph III.E.c
of this Agreement.
P. "Percentage of Undisputed Limits Resolved" means, for each insurer
party in the Coverage Action (1) whose only insurance policies issued to
Congoleum were issued at the $21,000,000 attachment point or higher; and (2)
that executes a Asbestos Insurance Settlement Agreement with Congoleum, which
settlement resolves said insurer's disputes with Congoleum in the Coverage
Action and the Chapter 11 case and grants such insurer the injunctive protection
afforded under section 524(g) of the Bankruptcy Code, the percentage calculated
by dividing the settlement amount required to be paid by said settling insurer
under such Asbestos Insurance Settlement Agreement by the total amount of
undisputed limits applicable and available to pay Asbestos Claims under the
insurance policy(ies) that are the subject of such Asbestos Insurance Settlement
Agreement. With respect to a settling insurer whose settlement requires multiple
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payments over time, for purposes of calculating the Percentage of Undisputed
Limits Resolved, the settlement amount shall be the net present value of the sum
of all such required payments under the settlement agreement, utilizing a 5%
discount rate, present valued as of the date on which such settlement was
executed.
Q. "Person" means any natural person, corporation, limited liability
company, syndicate, trust, joint venture, association, company, partnership,
governmental authority or other entity.
R. "Plan" means the Sixth Modified Plan, as such Sixth Modified Plan may
be further modified from time to time in accordance with the terms thereof;
provided, however, that (i) such modifications are consistent with the terms of
this Agreement and do not adversely affect the interests of Federal under this
Agreement and such modifications do not revise or delete the Claimant Agreement
(Exhibit "E" to the Disclosure Statement), and (ii) the Sixth Modified Plan, as
so further modified, provides an injunction at least as broad and inclusive as
the "Asbestos Channeling Injunction" (as defined in the Fourth Modified Plan)
that applies to Settling Asbestos Insurance Companies.
S. "Plan Proponents" means the Debtors in the Chapter 11 cases jointly
administered under Case No. 03-51524 (KCF) in the United States Bankruptcy Court
for the District of New Jersey.
T. "Plan Trust" means the Plan Trust as defined in the Plan.
U. "Subject Policies" means any known or unknown policies issued by
Federal to the Debtors, including but not limited to policy number 7932-98-47
effective from January 1, 1977 to January 1, 1978 and policy number
(00)0000-00-00 effective from January 1, 1978 to January 1, 1979.
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V. "Termination Event" means the occurrence for any reason of any of the
contingencies set forth in Paragraph III.H below and/or the subsequent
declaration of this Agreement as null and void in accordance with Paragraph
III.H below.
W. "Trigger Date" means the earliest date upon which written notice is
sent to Federal by the Debtors, pursuant to Section V below, stating that all of
the following events have occurred, if ever: (1) the Approval Order is a Final
Order; (2) the "Effective Date," as defined in the Plan, has occurred; (3) the
Confirmation Order is a Final Order; and (4) Federal has been designated as a
Settling Asbestos Insurance Company (entitled to all of the rights and
protections of a Settling Asbestos Insurance Company, including an injunction
under section 524(g) of the Bankruptcy Code under the Plan) in the schedule of
Settling Asbestos Insurance Companies filed by the Plan Proponents prior to the
conclusion of the Confirmation Hearing, pursuant to the Plan.
X. "Variable Amount" means the product of (i) the weighted average of the
Percentage of Undisputed Limits Resolved for all insurer parties in the Coverage
Action (a) whose only insurance policies issued to Congoleum were issued at the
$21,000,000 attachment point or higher; and (b) that execute Asbestos Insurance
Settlement Agreements with Congoleum, which Asbestos Insurance Settlement
Agreements resolve said insurers' disputes with Congoleum in the Coverage Action
and the Chapter 11 case and grant such insurers the injunctive protection
afforded under section 524(g) of the Bankruptcy Code, multiplied by (ii) Ten
Million Dollars ($10,000,000.00) (the nominal value of the undisputed limits
applicable and available to pay Asbestos Claims under each of the Subject
Insurance Policies).
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II. PAYMENT BY FEDERAL
A. Within thirty (30) Business Days of the Trigger Date, Federal shall pay
to the Plan Trust or as otherwise directed by the Bankruptcy Court, the total
amount of Four Million Dollars ($4,000,000.00) (the "Settlement Amount") (less
any credits that may apply pursuant to Paragraph II.K below) representing costs
associated with Asbestos Claims.
B. The proceeds of Federal's payment in full of the Settlement Amount
hereunder shall be used only to pay Asbestos Claims and/or to pay other amounts
payable by the Plan Trust pursuant to the Plan and the Trust Distribution
Procedures for the Congoleum Plan Trust, as may be amended.
C. Federal covenants and agrees that it shall not, without the written
consent of the Debtors, and after the Effective Date, the Plan Trust, consent
to, the entry of any order, decree, judgment or injunction that would require
Federal to make payment of the Settlement Amount (or any interest accrued
thereon as provided for herein) to, or for the benefit of, a Person other than
the Plan Trust or as directed by the Bankruptcy Court, as applicable, or that
would prohibit, divert, channel or otherwise limit or restrict payment of the
Settlement Amount (together with any and all interest accrued thereon as
provided for herein) to the Plan Trust or to such other Person as may be
directed by the Bankruptcy Court, or which would have any such effect.
D. The Debtors covenant and agree that they shall not, without the written
consent of Federal, (1) serve any subpoena upon Federal; or (2) designate the
deposition testimony of Federal or any Federal employee in his or her individual
capacity (if any), in connection with the Coverage Action or the Chapter 11
Case.
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E. Time is of the essence with respect to payment of the Settlement Amount
(together with any and all interest accrued thereon as provided for herein).
Subject to the provisions of Paragraphs II.A and II.B above, all payments made
by Federal pursuant hereto shall be made no later than the date when due,
without any set off, counterclaim, dimunition or any other deduction except for
reductions or deductions that may apply pursuant to Paragraph II.K below,
provided, however, that if such applicable date is not a Business Day, then such
payment shall be made on the next Business Day.
F. In the event that the Settlement Amount is not paid in full when due,
the Settlement Amount shall bear interest from (and including) the date that is
three days after the date of notice of such overdue payment to Federal in the
manner specified in Section V herein to (but excluding) the date said Settlement
Amount plus all interest accrued thereon is actually paid in full, at an
interest rate equal to the prime rate of Citibank, N.A. in effect on the date
such payment was due plus two percent (2%), compounded daily. No interest shall
apply to any amounts in dispute under Paragraph II.K below.
G. From and after the Trigger Date, and unless this Agreement is declared
null and void pursuant to Paragraph III.H below, any and all payments by Federal
shall be deemed final and irrevocable payments.
H. Federal shall have the right to allocate the Settlement Amount, or any
portions thereof, solely for its own purposes, in its own books and records, to
the various types and classifications of claims released by the Debtors pursuant
to Section IV, below; provided, however, that neither the Debtors nor the Plan
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Trust shall be bound by or be deemed to agree with any such allocation for any
reason or purpose and that Federal's allocation shall not, in any way, limit its
obligation to pay the Settlement Amount in full (less any deductions that may
apply pursuant to Paragraph II.K below) when due or limit the Debtors' or the
Plan Trust's use or allocation of the Settlement Amount.
I. Federal shall not seek reimbursement of any payments that it has made
or is obligated to make under this Agreement or otherwise, whether by way of a
claim for contribution or subrogation, or otherwise, from any Entity other than
Federal's reinsurers in their capacity as such. Each of the Debtors shall use
its reasonable best efforts to obtain from all insurers with which it settles an
agreement similar to that set forth in the preceding sentence; provided that,
notwithstanding anything to the contrary herein, the failure of the Debtors to
obtain such an agreement from any other insurer with which it settles shall not
constitute a breach of this Agreement. Notwithstanding the foregoing, subject to
the effect of any injunction issued pursuant to section 524(g) of the Bankruptcy
Code, Federal may file a cross-complaint or counterclaim against any Entity that
has first asserted a claim seeking reimbursement for any payment that it has
paid or is required to pay, whether by way of a claim for contribution and/or
subrogation or otherwise, against Federal in connection with any Claims released
hereunder; provided that, to the extent Federal recovers any amount in respect
of such cross-complaint or counterclaim from such third party, the proceeds of
such recovery shall be paid by Federal per the instruction of the Debtors or the
Plan Trust, (as the case may be) after Federal is reimbursed from such proceeds
for their reasonable fees, costs and expenses incurred in prosecuting and
defending such claim. For the avoidance of doubt, any payment of such proceeds
per the Debtors' or the Plan Trust's instructions shall not reduce or count
towards Federal's obligation to pay the Settlement Amount (plus any and all
interest accrued thereon as provided for herein).
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J. In the event that any insurer of the Debtors obtains a binding
arbitration award or final judgment against or a settlement with Federal (with
the consent of the Debtors prior to the "Effective Date" (as defined in the
Plan) or with the consent of the Plan Trust following said Effective Date (which
consent in either case shall not be unreasonably withheld) entitling it to
obtain a sum certain from Federal as a result of said insurer's claim for
contribution, subrogation, indemnification, reimbursement or other similar
claim, against Federal for Federal's alleged share or equitable share of the
defense and/or indemnity of the Debtors for any Claims released pursuant to this
Agreement, the Debtors or the Plan Trust (as the case may be) shall voluntarily
reduce the amount of any such final judgment or settlement payment that they
have obtained or may obtain from such other insurer by the amount of such other
insurer's binding arbitration award or final judgment awarded against or
settlement with Federal in connection with such contribution, subrogation,
indemnification or other similar claim and shall direct that Federal shall not
be subject to liability for such judgment, arbitration award or settlement. Such
a reduction in judgment or arbitration award or settlement will be accomplished
by subtracting from the judgment, arbitration award or settlement against the
other insurers the share of the judgment, arbitration award or settlement
attributable to Federal.
K. In the event that the Settlement Amount exceeds One Hundred Five
percent (105%) of the Variable Amount, then the Settlement Amount shall be
reduced to equal the Variable Amount.
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L. If any Party believes that the provisions of Paragraph II.K above are
triggered, the Parties shall meet and confer in good faith to attempt to reach
an agreement as to the appropriate adjustment of the Settlement Amount. In the
event that the Parties are unable to reach an agreement as to an appropriate
adjustment of the Settlement Amount, then the Parties agree to resolve the
dispute by binding arbitration by a mutually-selected single arbitrator from a
list provided by Jams/Endispute in New York, New York. Each Party shall bear its
own costs in the arbitration.
M. Solely in the event that Asbestos Legislation (if any) does not entitle
Federal to receive (or Federal does not in fact otherwise receive, for any
reason whatsoever) a setoff or other decrease in its payment or contribution or
liability to pay or contribute under such Asbestos Legislation that is (1) equal
to or greater than the Settlement Amount; and (2) attributable to and based upon
its payment of the Settlement Amount, then the Parties intend that Federal will
not be required to pay under this Agreement any portion of the Settlement Amount
that Federal will be required to pay (or does in fact pay) with respect to the
Subject Policies pursuant to the Asbestos Legislation. If, however, Asbestos
Legislation (if any) permits a setoff or other decrease in Federal's payment or
contribution or liability to pay or contribute under such Asbestos Legislation
that is (x) equal to or greater than the Settlement Amount; and (y) attributable
to and based upon its payment of the Settlement Amount, then the Parties intend
that Federal shall pay the Settlement Amount in full to the Plan Trust, or as
otherwise directed by the Court, pursuant to the terms of this Agreement. In the
event of Asbestos Legislation, the Parties promptly will meet and confer in good
faith, and will exercise their reasonable best efforts to agree to a method to
effectuate their intent as stated in this Paragraph II.M. In the event that the
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Parties have met and conferred in good faith pursuant to this Paragraph II.M and
are unable to agree to a method to effectuate the intent of this Paragraph II.M,
each Party shall reserve its rights to as to the application and enforcement of
this Paragraph II.M. Nothing in this Settlement Agreement or in this Paragraph
II.M shall require or be construed to require Federal to violate the terms of
any Asbestos Legislation.
N. Notwithstanding the provisions of Paragraph II.M above, only in the
event that any of the Debtors enters into a final, written Asbestos Insurance
Settlement Agreement with any other Settling Asbestos Insurance Company prior to
the time that the Confirmation Order becomes a Final Order, and if such Asbestos
Insurance Settlement Agreement contains a provision that allows such Settling
Asbestos Insurance Company to void or nullify that Asbestos Insurance Settlement
Agreement because of the enactment of federal legislation designed to resolve
the asbestos-related bodily injury Claims that are the subject of this Agreement
(a "Legislation Clause"), then Federal shall have, and shall be deemed to have,
the same right to void or nullify this Agreement as is provided in the
Legislation Clause of that other Asbestos Insurance Settlement Agreement;
provided, however, that, that any such right to void or nullify this Agreement
shall terminate on the date on which the Confirmation Order becomes a Final
Order.
III. BANKRUPTCY OBLIGATIONS
A. In consideration for the promises and covenants hereunder, the Plan
Proponents shall (i) designate Federal as a Settling Asbestos Insurance Company
(entitled to all of the rights and protections of Settling Asbestos Insurance
Companies under the Plan) in the schedule of Settling Asbestos Insurance
Companies filed by the Plan Proponents prior to the conclusion of the
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Confirmation Hearing, pursuant to the Plan; and (ii) file, within ten (10)
Business Days of the Execution Date, the Motion (as defined herein) pursuant to
Federal Rule of Bankruptcy Procedure 9019 seeking entry of the Approval Order,
and Federal will support the Plan Proponents' efforts to obtain such approval.
B. Upon the later of (1) the Effective Date or (2) the Confirmation Order
becoming a Final Order, if any Claim released under the Subject Policies
pursuant to this Agreement, or that is subject to the Asbestos Channeling
Injunction or any other injunctive protection provided for in the Plan or
Confirmation Order, is brought against Federal, then the Plan Trust will
cooperate with Federal in establishing that Federal is a Settling Asbestos
Insurance Company entitled to the protections afforded Settling Asbestos
Insurance Companies under the Plan.
C. Congoleum and the Plan Trust shall not seek to terminate, reduce or
limit the scope of the Asbestos Channeling Injunction with respect to Federal
after the Confirmation Order becomes a Final Order. Notwithstanding the
foregoing, Congoleum and the Plan Trust may seek to modify the Asbestos
Channeling Injunction, provided such modifications do not terminate, reduce or
limit the scope of such injunction, after first obtaining the written consent of
Federal, which consent shall not be unreasonably withheld.
D. Federal will not assert, file, or pursue any motions, objections,
claims, proofs of claim, or appeals in the Chapter 11 Case and shall support and
not oppose entry of the Approval Order. However, nothing in this paragraph shall
require Federal to join in each factual assertion or legal argument propounded
by Congoleum.
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E. Federal will not object to or oppose confirmation of the Plan (or of
any subsequently modified plan(s) of reorganization in the Chapter 11 Case), and
Federal will not appeal the Confirmation Order provided that the Plan does not
in any way impair, diminish or detract from the benefit to Federal of this
Agreement and provided further that the Approval Order includes findings that:
a. Federal's payment in full of the Settlement Amount together with any
and all interest accrued thereon as provided for in Paragraph II.F,
above, (less any credits that may apply pursuant to Paragraph II.K.
above), shall satisfy and extinguish in full Federal's obligation
for Claims under the Subject Policies.
b. Federal's payment in full of the Settlement Amount, together with
any and all interest accrued thereon as provided for in Paragraph
II.F, above, (less any credits that may apply pursuant to Paragraph
II.K above) shall be made to the Plan Trust or as otherwise directed
by the Bankruptcy Court. The proceeds of the Settlement Amount shall
be paid only to pay Asbestos Claims and/or to pay other amounts
payable by the Trust pursuant to the Plan and the Trust Distribution
Procedures for the Congoleum Plan Trust, as may be amended.
c. Adequate notice of the Debtors' Motion for Approval of the
Settlement Agreement Between the Debtors and Federal Insurance
Company (the "Motion") and of the hearing on the Motion was given by
mailing a copy of the Motion and notice of the hearing on the Motion
to: (a) the members of the Official Committee of Asbestos Claimants
(the "Committee") and the Committee's counsel; (b) the FCR and the
counsel for the FCR; (c) the Claimants' Counsel; (d) all other
Persons or Entities, including but not limited to Congoleum's
insurers, that, as of the date the Motion was filed, had filed a
notice of appearance or other demand for service of papers in the
Debtors' Chapter 11 Case; (e) Congoleum's insurers that are or were
parties to the Coverage Action; (f) the United States Trustee; (g)
the Collateral Trustee (the "Collateral Trustee") of the Congoleum
Collateral Trust (the "Collateral Trust") established pursuant to a
Collateral Trust Agreement dated April 17, 2003; (h) Congoleum
Corporation's majority shareholder, American Builtrite, Inc.; (i)
any other presently existing Entities that are insureds under the
Subject Policies; (j) counsel to all known holders of Asbestos
Claims as reflected in the claims filed in this case, claims
19
submitted in connection with the Settlement Between Congoleum
Corporation and Various Asbestos Claimants attached as Exhibit E to
the Disclosure Statement with respect to the Fourth Modified Plan
(the "Claimant Agreement"), or ballots submitted in connection with
this case; and (k) to all known holders of Asbestos Claims whose
counsel is not included within the preceding clause who, as of at
least five (5) days prior to the Hearing, became known through
filing of a proof of claim or otherwise.
d. Notice to an attorney for the holder of an Asbestos Claim
constitutes notice to the claimant for purposes of the Agreement.
e. Notice of the Agreement, the Motion and the Hearing is sufficient to
bind the Creditors' Committee and its members, all known creditors
and claimants, the FCR and all future claimants and demand holders
whose interests are represented by the FCR, and all other Persons or
Entities, including but not limited to the Debtors' insurers, that,
as of the date the Motion was filed, had filed a notice of
appearance and demand for service of papers in the Debtors' Chapter
11 Case.
f. The Approval Order and each of its Findings and Conclusions are
binding upon the Creditors' Committee and its members, all known
creditors and claimants, the FCR and all future claimants and demand
holders whose interests are represented by the FCR, and all other
Persons or Entities, including but not limited to the Debtors'
insurers, that, as of the date the Motion was filed, had filed a
notice of appearance or other demand for service of papers in the
Debtors' Chapter 11 Case. Federal will not object to or oppose
confirmation of the Plan (or confirmation of any subsequently
modified plan(s) of reorganization in the Chapter 11 Case), and
Federal will not appeal the Confirmation Order provided that the
Plan does not in any way impair, diminish or detract from the
benefit to Federal of this Agreement and provided further that the
Approval Order includes a provision acknowledging that the Plan, as
amended, states that any right, claim or cause of action that an
Asbestos Insurance Company may have been entitled to assert against
a Settling Asbestos Insurance Company under the Federal Policies
based on or relating to Asbestos Claims shall be channeled to and
become a right, claim or cause of action against the Plan Trust and
not against the Settling Asbestos Insurance Company in question and
that all persons, including any Asbestos Insurance Company, shall be
enjoined from asserting any such right, claim or cause of action
against a Settling Asbestos Insurance Company under the Federal
Policies, which Settling Asbestos Insurance Company shall be
protected by injunction from assertion against it, by an Asbestos
Insurance Company, of any Asbestos Claims.
20
F. Upon its creation, the Plan Trust (1) automatically and without need
for further action shall become a Party to this Agreement; and (2) promptly
shall execute this Agreement. Upon the Trigger Date, and without limiting the
obligations of the Debtors under this Agreement, the Plan Trust automatically
shall succeed to all of the rights and be bound by all of the obligations of the
Debtors under this Agreement without necessity of further action; provided,
however, that the release provisions of Section IV below shall be binding on and
inure to the benefit of the Debtors, the Plan Trust and Federal. The Debtors
shall include in the Plan Trust Agreement as an obligation of the Plan Trust,
effective from the creation of the Plan Trust, that such trust shall be subject
to and bound by this Agreement and the Approval Order.
G. Upon the occurrence of the Trigger Date, all of the Debtors' Asbestos
Insurance Rights under this Agreement shall be assigned to the Plan Trust
pursuant to the Plan and the Plan Documents, automatically and without need of
further action by any Party or Entity; provided that the provisions of Sections
IV and IX below shall remain binding on and shall continue to inure to the
benefit of the Debtors and Federal, and in addition shall be binding on and
inure to the benefit of the Plan Trust. The Plan Proponents shall propose to the
Bankruptcy Court technical modifications to the Plan providing that the
provisions of the Asbestos Insurance Settlement Agreements shall be binding on
the Plan Trust with the same force and effect as if the Plan Trust were a party
to the Asbestos Insurance Settlement Agreements.
H. Notwithstanding Paragraph III.G above, and subject to Paragraph III.I
below, any Party may declare this Agreement, except for the provisions in
Paragraph III.I and Sections I and V herein, to be null and void upon the
21
occurrence of any of the following contingencies: (i) the entry of an order by
the Bankruptcy Court (or the District Court exercising its original bankruptcy
jurisdiction) denying approval of this Agreement; (ii) the entry of an order by
the Bankruptcy Court (or the District Court exercising its original bankruptcy
jurisdiction) converting the Chapter 11 Case into a Chapter 7 case or dismissing
the Chapter 11 Case prior to the Approval Order becoming a Final Order or prior
to the Confirmation Order becoming a Final Order; (iii) the failure of the
Bankruptcy Court (or the District Court exercising its original bankruptcy
jurisdiction) to find in the Approval Order that Federal's payment in full of
the Settlement Amount, together with any and all interest accrued thereon as
provided for herein, satisfies in full and extinguishes Federal's obligation for
Claims under the Subject Policies; (iv) if the Plan as confirmed does not
contain a provision stating that any right, claim or cause of action that an
Asbestos Insurance Company may have been entitled to assert against a Settling
Asbestos Insurance Company under the Subject Policies based on or relating to
Asbestos Claims shall be channeled to and become a right, claim or cause of
action against the Plan Trust and not against the Settling Asbestos Insurance
Company in question and that all persons, including any Asbestos Insurance
Company, shall be enjoined from asserting any such right, claim or cause of
action against a Settling Asbestos Insurance Company (including Federal), which
Settling Asbestos Insurance Company shall be protected by injunction from
assertion against it, by an Asbestos Insurance Company, of any Asbestos Claims
under the Subject Policies; (v) the failure of the Confirmation Order to become
a Final Order within twenty-four (24) months of the Execution Date; or (vi) the
confirmation of a plan of reorganization that is not substantially similar to
the Sixth Modified Plan. Any such declaration pursuant to this Paragraph III.H
must be made in writing and sent to all Parties in the manner set forth in
Section V below.
22
I. Notwithstanding anything in this Agreement to the contrary, in the
event that this Agreement is declared null and void pursuant to Paragraph III.H
above, (1) this Agreement (except for Sections I and V and Paragraphs III.H and
III.I herein) shall be vitiated and shall be a nullity; (2) Federal shall not be
obligated to pay or to cause to be paid the Settlement Amount pursuant to this
Agreement; (3) no Party shall be bound by the terms of any Approval Order; (4)
the Subject Policies shall remain in the same force and effect as if this
Agreement had never existed, and the Debtors and Federal shall have all of the
rights and obligations under or with respect to the Subject Policies that they
would have had if this Agreement had never existed; (5) Federal shall not be
entitled to and shall not claim, any right or benefit of a Settling Asbestos
Insurance Company; (6) any and all statutes of limitation or repose, or other
time-related limitations, shall be deemed to have been tolled for the period
from May 23, 2005 through the date that is thirty (30) days following the date
on which the Agreement is declared null and void, and no Party shall assert or
rely on any time-related defense to any Claim or Demand by any other Party
related to such period; and (7) Federal shall be free to pursue their objections
to the Plan and to appeal from the Confirmation Order and Congoleum shall be
free to oppose any such objections or appeals.
IV. RELEASE, DISMISSAL AND WAIVER
A. Effective upon payment in full by Federal of the Settlement Amount,
together with any and all interest accrued thereon as provided for herein, to or
for the benefit of the Plan Trust in the manner contemplated in this Agreement:
1. Each of the Debtors and the Plan Trust releases the Federal
Releasees forever from any and all known or unknown, suspected or unsuspected,
past, present, existing, potential or future obligations, duties, Claims,
23
demands, penalties, costs, fees, attorneys' fees, debts, actions, causes of
action, choses in action, administrative actions or proceedings, suits,
arbitrations, mediations or other proceedings, offsets, damages, injuries,
rights, agreements, requests for relief, sums of money, losses or liabilities of
any kind, nature, character or description, whether fixed or unliquidated,
whether conditional or contingent, whether in law or equity (a) for insurance
coverage with respect to the applicable products/completed operations hazards
limits under the Subject Policies; (b) for insurance coverage for Claims under
the Subject Policies; (c) that were asserted or could have been asserted in the
Coverage Action; (d) any violation or alleged violation (whether or not in bad
faith) of any statute or regulation, including, without limitation Unfair Claim
Practices Acts or similar statutes of each of the fifty (50) states (when
applicable) concerning, relating to and/or arising out of the Subject Policies;
(e) any negligent undertaking or alleged negligent undertaking by or on the part
of Federal concerning or relating to the Subject Policies; or (f) any other
misconduct committed by Federal prior to the Effective Date concerning, relating
to and/or arising out of the Subject Policies. In furtherance of their express
intent to effect the release contained in this Section IV, Debtors, as of the
Effective Date, expressly waive any and all rights each of them may have under
any contract, statute, code, regulation, ordinance, or common law, that may
limit or restrict the effect of a general release of Claims or Demands not known
to or suspected to exist in their favor at the time of the execution of this
Agreement concerning, relating to and/or arising out of the Subject Policies.
Without limiting the foregoing releases, Debtors acknowledge and agree that
Federal shall have no further obligation whatever to provide coverage, defense,
indemnity and/or any other benefits relating to, arising out of, and/or in
connection with the Subject Policies. It is expressly agreed and understood that
Debtors will assert no other or further Claims whatever against Federal in
24
connection with any liability that has arisen or may arise in the future under
the Subject Policies. Notwithstanding anything to the contrary herein, nothing
in this Paragraph IV.A shall be construed as releasing Federal from its
obligations under this Agreement, including, without limitation, the obligation
to pay in full the Settlement Amount less any credits that may apply pursuant to
Paragraph II.K above.
2. Federal releases the Congoleum Releasees and the Plan Trust
forever from any and all known or unknown, suspected or unsuspected, past,
present, existing, potential or future obligations, duties, Claims, demands,
penalties, costs, fees, attorneys' fees, debts, actions, causes of action,
choses in action, administrative actions or proceedings, suits, arbitrations,
mediations or other proceedings, offsets, damages, injuries, rights, agreements,
requests for relief, sums of money, losses or liabilities of any kind, nature,
character or description, whether fixed or unliquidated, whether conditional or
contingent, whether in law or equity relating to, arising out of and/or in
connection with (a) the Subject Policies; (b) any Claims under the Subject
Policies; and/or (c) any litigation associated with Claims under the Subject
Policies. In furtherance of its express intent to effect the release contained
in this Section IV, Federal, as of the Effective Date, expressly waives any and
all rights it may have under any contract, statute, code, regulation, ordinance,
or common law, that may limit or restrict the effect of a general release of
Claims or Demands not known to or suspected to exist in its favor at the time of
the execution of this Agreement concerning, relating to and/or arising out of
the Subject Policies.
25
B. Upon the Execution Date, Congoleum will promptly dismiss Federal and
the Subject Policies from the Coverage Action by entering into a stipulation of
dismissal, and the Parties shall bear their own fees, costs and expenses
incurred in connection with the Coverage Action, the Chapter 11 Case and this
Agreement. The stipulation of dismissal shall state that Congoleum's claims are
dismissed with prejudice except that such stipulation will provide that, in the
event that this Agreement becomes null and void pursuant to Paragraph III.H
above, Congoleum may re-join Federal to the Coverage Action and re-assert all
claims against Federal in the Coverage Action except claims for bad faith,
breach of the implied covenant of good faith and fair dealing or any other extra
contractual claim. In such event, the Parties agree that each of Congoleum and
Federal will be bound by all issues adjudicated or rulings thereon in the
Coverage Action during the period from the date of the stipulation of dismissal
to the rejoinder of Federal, despite the fact that Federal did not actually
participate in the litigation of such issues during such period.
C. The Parties acknowledge that they have been advised by their respective
legal counsel and are familiar with the provisions of Section 1542 of the
California Civil Code, which provides:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of the
executing of the release which if known by him or her must have
materially affected his or her settlement with the debtor.
The Parties hereto expressly consent that this settlement and release shall be
given full force and effect according to each and all of its express terms and
provisions, including those dealing with unknown and unsuspected claims, and
causes of action. The Parties further agree that this reference to the
California Civil Code shall not give rise to any argument that California law
applies to this Agreement or the disputes resolved pursuant hereto.
26
D. Notwithstanding anything in this Section IV to the contrary, the
foregoing release provisions of this Section IV shall not be construed to apply
to any breach by a Party of any of its obligations under this Agreement or to
discharge any rights that any of the Parties has to enforce this Agreement.
V. NOTICES
Any and all statements, communications or notices to be provided pursuant
to or in connection with this Agreement shall be in writing and sent by
facsimile, e-mail and first-class mail, postage prepaid. Such notices shall be
sent to the individuals noted below, or to such other individuals as hereafter
designated in writing:
TO CONGOLEUM CORPORATION AND THE OTHER DEBTORS:
Xxxxxx X. Xxxxx III
Congoleum Corporation
00 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
e-mail: xxxxxx@xxxxxx.xxxxxxxxx.xxx
With a copy to
Pillsbury Winthrop LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Xxxxx X. Xxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
e-mail: xxxxxxx@xxxxxxxxxxxxxxxxx.xxx
xxxxxxxx@xxxxxxxxxxxxxxxxx.xxx
27
and
Xxxxxxx Xxxxxx & Xxxxxxxx LLP
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxx Xxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
e-mail: xxxx@xxxxx.xxx
TO FEDERAL:
Xxxxxx X. Xxxx, Esquire
Vice President, National Specialty
Risk Casualty Claims
Chubb Group of Insurance Companies
00 Xxxxxxxx Xxxx Xxxx
Xxxxxx, XX 00000
With a copy to
Xxxxxxx X. Xxxxxxx, Esquire
Cozen X'Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
e-mail: xxxxxxxx@xxxxx.xxx
VI. NO ADMISSIONS BY THE PARTIES; RIGHTS OF THIRD PARTIES
A. Nothing contained herein is or shall be deemed to be: (1) an admission
by Federal that any of the Debtors or any other Entity was or is entitled to any
insurance coverage under the Subject Policies, or as to the validity of any of
the positions that have been or could have been asserted by any of the Debtors;
(2) an admission by any of the Debtors as to the validity of any of the
positions or defenses to coverage that have been or could have been asserted by
28
Federal; or (3) an admission by any of the Debtors or Federal of any liability
whatsoever with respect to Asbestos Claims or other Claims or Demands. In
entering into this Agreement, no Party has waived nor shall be deemed to have
waived, modified, or retracted any rights, obligations, privileges, or positions
it has asserted or might in the future assert in connection with any Claim or
Demand, matter, bankruptcy procedure or process, insurance policy, or Entity
outside the scope of this Agreement.
B. Notwithstanding anything to the contrary herein, the releases in
Section IV above in no way impair any third party or direct claim or action by
any Entity against Federal for any wrongful conduct allegedly committed by
Federal arising from Federal's insurance of any manufacturer, supplier,
distributor, or user of asbestos or asbestos-containing products other than the
Debtors or defense of or settlement of any asbestos claims against any
manufacturer, supplier, distributor, or user of asbestos or asbestos-containing
products other than the Debtors.
VII. CONFIDENTIALITY
The Parties agree, subject to any disclosure obligations imposed by law,
to hold confidential, and not to disclose to third parties, this Agreement
unless and until the Debtors file the Motion seeking entry of an Approval Order.
Notwithstanding anything to the contrary in this Section VII, any Party may
disclose this Agreement at any time (i) to the Party's reinsurers, auditors,
regulators, reinsurance intermediaries, creditors, and lenders; (ii) as required
to obtain the necessary court approval of this Agreement or the Plan in the
Chapter 11 Case; and/or (iii) to Entities by the Plan Trust in connection with
the ordinary course of the Plan Trust's operations.
29
VIII. COOPERATION
A. Federal shall use its reasonable best efforts to comply with reasonable
requests from the Debtors or the Plan Trust for claims payment records or
policies issued by Federal required by the Debtors or the Plan Trust in
connection with any insurance claims, arbitrations, or litigations related to
the Settlement Amount, this Agreement, or the Debtors' Asbestos Claims.
B. Each of the Debtors and the Plan Trust shall use their reasonable best
efforts to comply with reasonable requests from Federal for documents and other
information required by Federal in connection with any reinsurance claims,
arbitrations, or litigations relating to the Settlement Amount, this Agreement,
or the Debtors' Asbestos Claims. For purposes of this Section VIII, "reasonable
best efforts" shall not include disclosure of information that is subject to a
confidentiality agreement or privilege.
IX. REPRESENTATIONS AND WARRANTIES
A. Each of the Debtors represents and warrants that it has full corporate
authority to enter this Agreement as a binding and legal obligation of such
Debtor, subject to approval by the Bankruptcy Court. The person signing this
Agreement on behalf of any of the Debtors represents and warrants that he or she
is authorized by such Debtor to execute this Agreement as a binding and legal
obligation of such Debtor, subject to approval by the Bankruptcy Court.
B. The Plan Trust, upon its execution and delivery of this Agreement,
represents and warrants that it has full trust authority to enter this Agreement
as a binding and legal obligation of the Plan Trust. The person signing this
Agreement on behalf of the Plan Trust represents and warrants that he or she is
authorized by the Plan Trust to execute this Agreement as a binding and legal
obligation of the Plan Trust, subject to approval by the Bankruptcy Court.
30
C. Federal represents and warrants that Federal has full corporate
authority to enter this Agreement as a binding and legal obligation of Federal.
The person signing this Agreement on behalf of Federal represents and warrants
that he or she is authorized by Federal to execute this Agreement as a binding
and legal obligation of Federal.
D. Each Party represents and warrants that as of the Execution Date, it is
not aware of any the existence of any liability insurance policies issued to
Congoleum and subscribed to by Federal other than the Subject Policies.
X. JURISDICTION
The Bankruptcy Court shall retain exclusive jurisdiction over any dispute
relating to this Agreement.
XI. NO PREJUDICE AND CONSTRUCTION OF AGREEMENT
This Agreement is the product of informed negotiations and involves
compromises of the Parties' previously stated legal positions. This Agreement is
without prejudice to positions taken by Federal with regard to other insureds or
by the Debtors with regard to other insurers. This Agreement is the jointly
drafted product of arm's-length negotiations between the Parties with the
benefit of advice from counsel, and the Parties agree that it shall be so
construed. As such, no Party will claim that any ambiguity in this Agreement
shall be construed against any other Party by reason of the identity of the
drafter.
31
XII. ENTIRE AGREEMENT AND TERM
A. This Agreement and the Approval Order express the entire agreement and
understanding between the Debtors, Federal and the Plan Trust. Except as
expressly set forth in this Agreement, there are no representations, warranties,
promises, or inducements, whether oral, written, expressed or implied, that in
any way affect or condition the validity of this Agreement or alter its terms.
If the facts or law related to the subject matter of this Agreement are found
hereafter to be other than is now believed by any of the Parties, the Parties
expressly accept and assume the risk of such possible difference of fact or law
and agree that this Agreement nonetheless shall be and remain effective
according to its terms.
B. Titles and captions contained in this Agreement are inserted only as a
matter of convenience and are for reference purposes only. Such titles and
captions are intended in no way to define, limit, expand, or describe the scope
of this Agreement or the intent of any provision hereof.
XIII. MODIFICATION
No change or modification of this Agreement shall be valid unless it is
made in writing and signed by the Parties hereto.
XIV. EXECUTION
This Agreement shall be executed in counterparts, each of which shall be
deemed an original and all of which, taken together, shall constitute one and
the same instrument. Upon execution of the counterparts by the Plan Trust, the
Plan Trust shall provide its address for notices to the other Parties under
Section V. Each counterpart may be delivered by facsimile transmission, and a
faxed signature shall have the same force and effect as an original signature.
32
XV. MISCELLANEOUS
A. Notwithstanding anything to the contrary herein, the Parties hereby
agree that no Party hereto shall have any liability to the other Parties for the
occurrence of any Termination Event or the failure of the Trigger Date to occur.
B. The settlement negotiations leading up to this Agreement and all
related discussions and negotiations shall be deemed to fall within the
protection afforded to compromises and to offers to compromise by Rule 408 of
the Federal Rules of Evidence and any parallel state law provisions.
[The remainder of this page is left blank intentionally.]
33
IN WITNESS WHEREOF, this Agreement, consisting of thirty-four (34) pages,
including this signature page, and one (1) Attachment, has been read and signed
by the duly authorized representatives of the Parties as of the dates set forth
below.
August 3, 2005 CONGOLEUM CORPORATION
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
-------------------------------------
Title: Chief Financial Officer
------------------------------------
August 3, 2005 CONGOLEUM SALES, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
-------------------------------------
Title: Vice President
------------------------------------
August 3, 2005 CONGOLEUM FISCAL, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
-------------------------------------
Title: Vice President
------------------------------------
July 29, 2005 FEDERAL INSURANCE COMPANY
BY: /s/ Xxxxxx X. Xxxx
---------------------------------------
Name: Xxxxxx X. Xxxx
-------------------------------------
Title: Vice President, Chubb & Son,
-------------------------------------
A division of Federal Insurance Company
34
ATTACHMENT A
Insurer Policy No. Policy Period
Federal Insurance Company 7932-98-47 01/01/77 to 01/01/78
Federal Insurance Company (00)0000-00-00 01/01/78 to 01/01/79
00
XXXXXXXXXX X
------------------------------------------------
XXXXXX XXXXXX BANKRUPTCY COURT
DISTRICT OF NEW JERSEY
------------------------------------------------
Caption in Compliance with D.N.J. LBR
9004-2(c)
Xxxx, Xxxxxxxxx & XxXxxx L.L.P.
Xxxxxx Plaza, 000 Xxxxxx Xxxxxx
Xxxx Xxx, XX 00000
(000) 000-0000
Xxxx X. Xxxxxxxxx (PH-2681)
Pillsbury Xxxxxxxx Xxxx Xxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
(000) 000-0000
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Attorneys for Debtors and Debtors-In-Possession
------------------------------------------------
In re: Chapter 11
CONGOLEUM CORPORATION, et al., Case No. 03-51524 (KCF)
Debtors. Jointly Administered
------------------------------------------------
ORDER AUTHORIZING AND APPROVING SETTLEMENT
AGREEMENT AND RELEASE BY, BETWEEN AND
AMONG CONGOLEUM CORPORATION
AND FEDERAL INSURANCE COMPANY
The relief set forth on the following pages, numbered two (2) through
fifteen (15) is hereby ORDERED.
DATED: _______________ _____________________________________
Xxxxxxxxx Xxxxxxx X. Xxxxxxxx
United States Bankruptcy Judge
The Court has considered the Motion to Approve Settlement Agreement and
Release By, Between and Among Congoleum Corporation and Federal Insurance
Company, dated August 4, 2005 (the "Motion"), filed by Congoleum Corporation,
Congoleum Sales, Inc., and Congoleum Fiscal, Inc., the debtors and
debtors-in-possession herein (collectively, the "Debtors"), seeking approval,
pursuant to Rules 2002(a)(3), 9014 and 9019 of the Federal Rules of Bankruptcy
Procedure (the "Bankruptcy Rules") and sections 363(f), 1107, 1108 and1146(c)
and other applicable sections of the title 11 of the United States Code, 11
U.S.C. xx.xx. 101 et seq. (the "Bankruptcy Code"), of that certain Settlement
Agreement and Release (such agreement, including the exhibits thereto, the
"Settlement Agreement") dated as of August 3, 2005, by, between and among (a)
Congoleum Corporation, Congoleum Sales, Inc., and Congoleum Fiscal, Inc. as
debtors and debtors-in-possession, together with their respective affiliates,
predecessors, successors and assigns (collectively, "Congoleum"); (b) Federal
Insurance Company and its parents, affiliates, predecessors, successors and
assigns (collectively, "Federal"); and (c) upon its creation, the Plan Trust.(1)
Capitalized terms used in this Approval Order and not otherwise defined herein
shall have the meanings ascribed to such terms in the Settlement Agreement. The
Settlement Agreement relates to the Subject Policies.
Adequate notice of the Motion was given by individual mailing to:
(a) the members of the Official Committee of Asbestos Claimants (the
"Committee") and the Committee's counsel; (b) the FCR and the counsel for the
FCR; (c) the Claimants' Counsel; (d) all other Persons or Entities, including
----------
(1) As defined in the Sixth Modified Joint Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code of Congoleum Corporation, et al., dated
June 10, 2005 (the "Sixth Modified Plan"), as presently constituted.
2
but not limited to Congoleum's insurers, that, as of the date the Motion was
filed, had filed a notice of appearance or other demand for service of papers in
the Debtors' Chapter 11 Case; (e) Congoleum's insurers that are or were parties
to the Coverage Action; (f) the United States Trustee; (g) the Collateral
Trustee (the "Collateral Trustee") of the Congoleum Collateral Trust (the
"Collateral Trust") established pursuant to a Collateral Trust Agreement dated
April 17, 2003; (h) Congoleum Corporation's majority shareholder, American
Biltrite, Inc.; (i) any other presently existing Entities that are insureds
under the Subject Policies; (j) counsel to all known holders of Asbestos Claims
as reflected in the claims filed in this case, claims submitted in connection
with the Settlement Between Congoleum Corporation and Various Asbestos Claimants
attached as Exhibit E to the Disclosure Statement with respect to the Plan (the
"Claimant Agreement"), or ballots submitted in connection with this case; and
(k) to all known holders of Asbestos Claims whose counsel are not included
within the preceding clause who, as of at least five (5) days prior to the
Hearing, became known through filing of a proof of claim or otherwise.
A hearing was held on August __, 2005, ("Hearing") to consider the
Motion and the Settlement Agreement, and all interested parties were given an
opportunity to be heard and to present evidence. Objections to the Motion, if
any, have been resolved by agreement or are overruled, and after due
deliberation and sufficient cause appearing therefore, this Court hereby makes
the following Findings of Fact and Conclusions of Law:
3
I. FINDINGS OF FACT:
IT IS HEREBY FOUND AND DETERMINED THAT:(2)
Jurisdiction, Final Order And Statutory Predicates
A. This Court has jurisdiction to hear and determine the Motion and
to grant the relief requested therein pursuant to 28 U.S.C. xx.xx. 157(b)(1) and
1334(b). This Motion presents a core proceeding pursuant to 28 U.S.C. xx.xx.
157(b)(2)(A), (M) and (O).
B. This Approval Order constitutes a final order within the meaning
of 28 U.S.C. ss. 158(a). The parties may consummate the Settlement Agreement
immediately upon entry of this Approval Order, provided that the other
conditions precedent have been satisfied or waived in accordance with the terms
of the Settlement Agreement. To any extent necessary under Bankruptcy Rule 9014
and Rule 54(b) of the Federal Rules of Civil Procedure, as made applicable by
Bankruptcy Rule 7054, the Court expressly finds that there is no just reason for
delay in the implementation of this Approval Order.
Notice of the Motion and the Settlement
C. The notice of the Motion described above constitutes due,
sufficient and timely notice of the Motion, the Hearing, and the Settlement
Agreement to all Entities entitled thereto in accordance with the requirements
of the Bankruptcy Code, the Bankruptcy Rules, this Court's orders in these
Chapter 11 Cases, and of due process. No other or further notice of the Motion,
the Hearing, the Settlement Agreement or this Approval Order is necessary. This
Court hereby further finds that notice to an attorney for the holder of an
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(2) Findings of fact shall be construed as conclusions of law, and conclusions
of law shall be construed as findings of fact when appropriate. See Fed.
R. Bankr. P. 7052.
4
Asbestos Claim constitutes notice to such holder for purposes of notice of the
Motion, the Hearing, the Settlement Agreement or this Approval Order and any
other matters set forth in this Order.
The Consent and/or Interposition of No Objection from Claimants
Representative, the Committee, the FCR and the Collateral Trustee
D. [MAY BE MODIFIED TO REFLECT A DIFFERENT POSITION OF THE CLAIMANTS
REPRESENTATIVE AND/OR FCR. WE NEED TO CONFIRM THEIR POSITIONS ONCE THE AGREEMENT
IS FINALIZED] The Claimants Representative has expressly consented to the
Settlement Agreement. The Committee, the FCR, and the Collateral Trustee have
interposed no objection to: (1) the Debtors' and Plan Trust's entry into the
Settlement Agreement and (2) the entry of this Approval Order by this Court.
Good Faith Nature of Settlement Agreement and Reasonableness of the Terms
of the Settlement Agreement
E. The Debtors negotiated with Federal at arm's length and in good
faith to reach agreement on the matters resolved through the Settlement
Agreement.
F. Pursuant to Bankruptcy Rule 9019, and in consideration of the
terms, compromises and exchanges of consideration contained in the Settlement
Agreement and all other facts and circumstances of this Chapter 11 Case, the
provisions of the Settlement Agreement are (i) fair and reasonable settlements;
(ii) valid and proper exercises of the Debtors' business judgment; (iii)
exchanges for reasonably equivalent value; (iv) fair, equitable, and well within
the range of reasonableness required for approval of the Settlement Agreement;
and (v) considering all the factors set forth in In re Xxxxxx, 91 F.3d 389, 393
(3d Cir. 1996), as discussed in the Motion, in the best interests of the
Debtors, their Estates, their creditors, the Plan Trust, and other
parties-in-interest.
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G. The Settlement Agreement confers a substantial benefit upon the
Debtors' Estates by providing for, among other things: (i) the settlement of
complex litigation; and (ii) payment to the Plan Trust of the Settlement Amount,
as provided for in the Settlement Agreement (plus interest thereon to the extent
provided in the Settlement Agreement and less any credits that may be due
pursuant to the Settlement Agreement).
H. The payments by Federal under the Subject Policies and pursuant
to the Settlement Agreement constitute a reasonable and substantial settlement
and fair resolution of the alleged liability of Federal under the Subject
Policies for Asbestos Claims and other Claims, and such contributions satisfy
the liability of Federal, if any, for Asbestos Claims and other Claims under the
Subject Policies.
Authority To Enter Into Settlement Agreement And To Effect The Transactions
I. Each of the Debtors and, upon its creation, the Plan Trust: (i)
has full corporate or trust (as the case may be) power and authority to enter
into and perform the Settlement Agreement; and (ii) has the authority to take
all corporate or trust action (as the case may be) necessary to authorize and
approve the Settlement Agreement. In addition, no consent, authorization or
approval, and no filing or registration, of any type or kind, other than those
expressly provided for in the Settlement Agreement, is required for the Debtors
and the Plan Trust to give effect to the terms of the Settlement Agreement.
Further, the consummation of the Settlement Agreement by the Debtors and the
Plan Trust does not conflict, contravene, or cause a breach, default or
violation of any law, rule, regulation, contractual obligation or organizational
or formation document.
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Releases And Designation Of Federal As
A Settling Asbestos Insurance Company
J. Subject to the terms and conditions of the Settlement Agreement,
each of the Debtors and the Plan Trust releases the Federal Releasees forever
from any and all known or unknown, suspected or unsuspected, past, present,
existing, potential or future obligations, duties, Claims, demands, penalties,
costs, fees, attorneys' fees, debts, actions, causes of action, choses in
action, administrative actions or proceedings, suits, arbitrations, mediations
or other proceedings, offsets, damages, injuries, rights, agreements, requests
for relief, sums of money, losses or liabilities of any kind, nature, character
or description, whether fixed or unliquidated, whether conditional or
contingent, whether in law or equity (a) for insurance coverage with respect to
the applicable products/completed operations hazards limits under the Subject
Policies; (b) for insurance coverage for Claims under the Subject Policies; (c)
that were asserted or that could have been asserted in the Coverage Action; (d)
any violation or alleged violation (whether or not in bad faith) of any statute
or regulation, including, without limitation Unfair Claim Practices Acts or
similar statutes of each of the fifty (50) states (when applicable) concerning,
relating to and/or arising out of the Subject Policies; (e) any negligent
undertaking or alleged negligent undertaking by or on the part of Federal
concerning or relating to the Subject Policies; and (f) any other misconduct
committed by Federal prior to the Effective Date concerning, relating to and/or
arising out of the Subject Policies. Notwithstanding anything to the contrary
herein, nothing in this paragraph shall be construed as releasing Federal from
its obligations under the Settlement Agreement, including, without limitation,
its obligation to pay in full the Settlement Amount (plus interest thereon to
the extent provided in the Settlement Agreement and less any credits that may be
due pursuant to the Settlement Agreement).
K. Federal will be entitled to exercise the termination provisions
of Paragraph III.H of the Settlement Agreement if the plan of reorganization
that is confirmed herein does not:
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1. Contain an injunction for the benefit of Federal pursuant to
section 524(g) that bars any action directed against Federal
to the extent that (a) Federal is alleged to be directly or
indirectly liable for the conduct of, claims against, or
demands on any of the Debtors, and (b) the alleged liability
of Federal arises by reason of Federal's provision of
insurance to the Debtors;
2. grant Federal all the of the benefits of a Settling Asbestos
Insurance Company as described, and as provided for, in the
Debtor's Sixth Amended Plan; and
3. provide that any right, claim or cause of action that an
Asbestos Insurance Company may have been entitled to assert
against Federal under the Subject Policies based on or
relating to Asbestos Claims (as defined in the Plan) shall be
channeled to and become a right, claim or cause of action
against the Plan Trust and not against Federal.
Federal may object to any proposed plan of reorganization that would
not satisfy the requirements listed above.
No Objections Filed
L. [TO BE MODIFIED TO THE EXTENT ANY OBJECTIONS ARE FILED] To the
extent any Entity (a) either (i) received proper notice of these matters (or is
represented by an Entity (including, without limitation, the FCR or counsel)
that received such notice) or (ii) having had notice of this Chapter 11 Case,
elected not to request notices regarding this Chapter 11 Case, and (b) failed to
object to the Motion and the entry of the Approval Order, then such Entities
(including, without limitation, the Debtors and the Plan Trust (or, to the
extent that it has not yet been formed or does not yet exist, its predecessor(s)
in interest), the FCR, the Claimants Representative and the Committee) hereby
shall have no right to file or prosecute an appeal of this Approval Order.
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II. CONCLUSIONS OF LAW
NOW, THEREFORE, BASED ON THE FOREGOING FINDINGS OF FACT, IT IS HEREBY
ORDERED, ADJUDGED AND DECREED EFFECTIVE IMMEDIATELY, AS FOLLOWS:
To the extent any Conclusion of Law set forth below herein
constitutes a Finding of Fact, this Court so finds.
General Provisions
1. Pursuant to the terms of this Approval Order, the relief
requested in the Motion is granted and approved in all respects, and the
Settlement Agreement is hereby approved in all respects.
2. All objections, if any, to the Motion or the relief requested
therein that have not been withdrawn, waived, or settled, and all reservations
of rights included in such objections, are overruled on the merits.
Approval of Settlement Agreement
3. The Settlement Agreement and all of the terms and conditions
thereof are hereby approved in their entirety and, notwithstanding anything to
the contrary in this Approval Order, to the extent of any conflict or
inconsistency between the provisions of this Approval Order and the terms and
conditions of the Settlement Agreement, as between the Debtors, Plan Trust, and
Federal, as the case may be, the Settlement Agreement shall govern and control.
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4. Each of the Debtors and the Plan Trust are authorized and
empowered, and hereby directed, to take any and all actions necessary or
appropriate, in accordance with the terms of the Settlement Agreement, and,
without further order of the Court, to (a) consummate, carry out and implement
the Settlement Agreement, (b) execute and deliver, perform under, consummate,
carry out, implement and close fully the Settlement Agreement, together with all
additional instruments and documents that may be reasonably necessary or
desirable to implement the Settlement Agreement and, and (c) to take all further
actions as may be reasonably requested in accordance with the Settlement
Agreement by Federal as may be reasonably necessary or appropriate to the
performance of the obligations as contemplated by the Settlement Agreement. The
Settlement Agreement and this Approval Order constitute valid and binding
obligations of the Debtors, their Estates and the Plan Trust, which shall be
enforceable in accordance with the terms thereof. The Plan Trust Agreement shall
include as an obligation of the Plan Trust, effective from the creation of the
Plan Trust, that such trust shall be subject to and bound by the Settlement
Agreement and the Approval Order. Upon its creation, the Plan Trust, without
further order of any court or action by any Entity, shall be deemed to be
automatically a party to the Settlement Agreement. The Debtors are hereby
authorized and directed to amend the Plan Trust Agreement (as defined in the
Plan) in accordance with Section III.F of the Settlement Agreement to provide
that the Plan Trust shall be subject to and bound by the Settlement Agreement
and the Approval Order.
5. All of the terms and provisions of this Approval Order shall be
binding in all respects upon each of the Debtors, the Plan Trust, any trustees
of any of the Debtors, the Debtors' Estates, the FCR and each of the Entities
whose interests he represents, the Collateral Trustee, the Collateral Trust, the
Claimants Representative, each Asbestos Claimant, all other creditors and
shareholders of any of the Debtors, all interested parties, and their respective
successors and assigns.
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Releases
6. Except with respect to any rights, obligations, Claims or
liabilities under or relating to the Settlement Agreement, and subject to the
limitations set forth in the Settlement Agreement, and subject to all of the
provisions of the Settlement Agreement, including provisions rendering the
Settlement Agreement null and void in certain circumstances, immediately upon
Federal's payment in full of the Settlement Amount to the Plan Trust or as
otherwise ordered by this Court, and without the necessity of any further act by
the Debtors, Plan Trust or further order of this Court, the releases and
provisions set forth in section IV.A of the Settlement Agreement shall be
effective and binding upon the Entities set forth therein, and all those who
might claim derivatively through such Entities, including, without limitation,
any holder of an Asbestos Claim, any other holder of a Claim against any of the
Debtors, the Debtors' successors, assigns, affiliates and shareholders,
including, but not limited to, American Builtrite, Inc., and any beneficiary of
the Plan Trust.
7. Upon the Execution Date, the Debtors on the one hand, and
Federal, on the other hand, shall dismiss all Claims against each other in the
Coverage Action with prejudice, with each Party bearing its own fees, costs and
expenses. The Parties' stipulation of dismissal shall state that Congoleum's
claims are dismissed with prejudice except that such stipulation will provide
that, in the event that the Settlement Agreement becomes null and void pursuant
to Paragraph III.H thereof, Congoleum may re-join Federal to the Coverage Action
and re-assert all claims against Federal in the Coverage Action, other than the
bad faith claims that have been asserted in the Coverage Action, which bad faith
claims shall not be re-asserted against Federal in the Coverage Action or in any
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new action. The Parties have agreed that in such event, each of Congoleum and
Federal will be bound by all issues adjudicated or rulings thereon in the
Coverage Action during the period from the date of the stipulation of dismissal
to the rejoinder of Federal, despite the fact that Federal did not actually
participate in the litigation of such issues during such period.
8. Federal's payment in full of the Settlement Amount, as provided
for in Paragraph II.A of the Settlement Agreement, shall satisfy and extinguish
in full Federal's obligation for Asbestos Claims and other Claims under the
Subject Policies. Additional Provisions
9. The terms and provisions of the Settlement Agreement, together
with the terms and provisions of this Approval Order, shall be binding in all
respects upon all entities, including the Debtors, the Plan Trust, any trustee
of any Debtor, the Debtors' Estates, the FCR and each of the Entities whose
interests it represents, the Collateral Trustee, the Collateral Trust, the
Claimants Representative, each Asbestos Claimant, the Debtors' other creditors,
shareholders of any of the Debtors, and all parties in interest, administrative
agencies, governmental units, secretaries of state, federal, state and local
officials, maintaining any authority relating to the Settlement Amount, and
their respective successors or assigns.
10. Federal's payment of the Settlement Amount shall be made to the
Plan Trust or as otherwise directed by the Bankruptcy Court. The proceeds of the
Settlement Amount shall be utilized only to pay Asbestos Claims and/or to pay
other amounts payable by the Trust pursuant to the Plan and the Trust
Distribution Procedures for the Congoleum Plan Trust, as may be amended.
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11. Nothing contained in the Plan or any other plan of
reorganization or liquidation, or order of any type or kind entered in (a) this
Chapter 11 Case, (b) any subsequent chapter 7 case into which the chapter 11
case may be converted, or (c) any related proceeding subsequent to entry of this
Approval Order, shall conflict with or derogate from the provisions of the
Settlement Agreement or the terms of this Approval Order. This Approval Order
shall be binding upon and enforceable against, among others, each of the
Debtors, their Estates, any and all chapter 7 and chapter 11 trustees thereof,
the Plan Trust, the FCR and each of the Entities whose interests it represents,
the Collateral Trustee, the Collateral Trust, the Claimants Representative and
each Asbestos Claimant.
12. The failure specifically to include any particular provision of
the Settlement Agreement in this Approval Order shall not diminish or impair the
efficacy of such provision, it being the intent of this Court that the
Settlement Agreement and each and every provision, term, and condition thereof
be authorized and approved in its entirety.
13. This Approval Order shall be effective immediately upon its
entry. The ten (10) day stay provided in Bankruptcy Rule 6004(c) is hereby
waived.
14. The Settlement Agreement and other related documents may be
modified, amended, or supplemented by the parties thereto, in a writing signed
by such parties in accordance with the terms thereof, without further order of
the Court, provided that (a) any such modification, amendment, or supplement is
not material and (b) to the extent practicable, notice of any modification,
amendment, or supplement should be delivered to (i) the Committee, (ii) the FCR
and (iii) the Claimants' Counsel at least five (5) days prior to the effective
date of any such modification, amendment, or supplement.
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15. Notwithstanding any other provision of this Approval Order, if
the Settlement Agreement is properly terminated under the terms thereof, then
this Approval Order, with the exception of sections 7, 16 and 17 hereof, subject
to the terms of sections III.H and III.I of the Settlement Agreement, shall be
null and void and not be binding on any entity.
16. If the Settlement Agreement is properly terminated under the
terms thereof, then any and all statutes of limitation or repose or other
time-related limitations, with respect to any Claim by any Entity, shall be
deemed to have been tolled for the period from May 23, 2005 through the date
that is thirty (30) days following the date on which the Settlement Agreement is
declared terminated or null and void, and no Party shall be entitled to assert
or rely on any time-related defense to any Claim by any other Party related to
such period.
17. The Court shall retain exclusive jurisdiction over any
proceeding that involves the validity, application, construction, modification
or termination of the Settlement Agreement and this Approval Order, and may make
such further orders with respect thereto as are proper and appropriate.
18. The provisions of this Approval Order are non-severable and
mutually dependent.
19. In the event that a court with competent jurisdiction over a
coverage dispute between an insurer (other than Federal) (an "Other Insurer")
and the Debtors (or their successors or assigns) determines that such Other
Insurer would have been entitled, but for the terms of this Approval Order, to
recover from Federal as a result of said Other Insurer's claim for contribution,
subrogation, indemnification, reimbursement or other similar claim, against
Federal for Federal's alleged share or equitable share of the defense and/or
indemnity of the Debtors (or their successors or assigns), for any claims
released pursuant to the Settlement Agreement then, as adequate protection for
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any interest that such Other Insurer may have had in the Subject Policies, such
Other Insurer's obligation to the Debtors (and their successors or assigns)
shall be reduced, dollar for dollar, by the amount of said Other Insurer's
determined claim against Federal eliminated by this Approval Order. Nothing in
this Approval Order is intended to determine or affect the appropriate
allocation of claims-related defense costs or liabilities to Congoleum's
insurance coverages as provided by applicable law. Nothing in this paragraph
limits the relief afforded to Federal under this Approval Order or the
Settlement Agreement, or may serve as a basis for or shall be relied upon as
imposing liability on Federal for any present or future Asbestos Claims under
the Subject Policies or otherwise.
20. Counsel for the Debtors shall immediately serve a copy of this
Approval Order on all parties who have filed a request for notice in this case,
all parties to the Settlement Agreement, counsel to the Committee, the
Claimants' Counsel, the Collateral Trustee, and the FCR and file a certificate
of service with the Clerk of the Bankruptcy Court within ten (10) days hereof.
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