Exhibit 99.5
CONFIDENTIAL SETTLEMENT AGREEMENT
AND RELEASE
AMONG
CONGOLEUM CORPORATION, THE PLAN TRUST
And
MT. XxXXXXXX INSURANCE COMPANY
AND EVEREST REINSURANCE COMPANY
September 30, 2005
CONFIDENTIAL SETTLEMENT AGREEMENT AND RELEASE
This Confidential Settlement Agreement and Release (the "Agreement") is
made this 30th day of September, 2005, by and between Congoleum Corporation, on
its own behalf and on behalf of all other "Persons" (as defined herein),
including Congoleum Sales, Inc. and Congoleum Fiscal, Inc., within the
definition of "Congoleum" (as defined herein) and, upon its creation, the Plan
Trust, on the one part, and Mt. XxXxxxxx Insurance Company and Everest
Reinsurance Company ("Mt. XxXxxxxx and Everest," each as hereinafter defined),
on the other part, (Congoleum, the Plan Trust, Mt. XxXxxxxx and Everest are each
referred to herein as a "Party" and collectively as the "Parties").
WITNESSETH THAT:
WHEREAS, Mt. XxXxxxxx and Everest issued certain policies of insurance
that provide insurance to Congoleum (the "Subject Policies," as more fully
described and defined herein); and
WHEREAS, Persons within the definition of Congoleum have incurred and may
incur in the future certain liabilities, expenses and losses arising out of
various "Claims" (as defined herein), including asbestos-related bodily injury
claims, other asbestos-related claims, environmental claims and/or other types
of claims; and
WHEREAS, Congoleum asserts that Mt. XxXxxxxx and Everest are obligated
under the Subject Policies to make liability payments and pay defense costs in
connection with Claims, including Claims for asbestos-related bodily injury; and
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WHEREAS, there are disputes among the Parties regarding their respective
rights and obligations with respect to insurance coverage for asbestos-related
bodily injury claims and environmental claims (the "Coverage Dispute"); and
WHEREAS, the Coverage Dispute is the subject of a pending 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, 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, in consideration of certain monetary payments and other
considerations, as more fully set forth herein, by this Agreement, the Parties
intend to adopt, by way of compromise, and without (i) prejudice to or waiver of
their respective positions in other matters, (ii) trial or adjudication of any
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issues of fact or law, and (iii) Mt. XxXxxxxx'x and Everest's admission of
liability or responsibility under the Subject Policies, a full and final
settlement that releases and terminates all rights, obligations and liabilities
(if any) that Mt. XxXxxxxx and Everest may owe Congoleum or the Plan Trust under
the Subject Policies, any other agreement among or between the Parties
concerning the Subject Policies (if any), and/or the Coverage Action.
AGREEMENTS:
NOW, THEREFORE, in full consideration of the foregoing and of the mutual
agreements contained herein, and intending to be legally bound hereby, the
Parties agree as follows:
1. Definitions
For purposes of this Agreement and the attachments hereto, 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 Sixth Modified Plan, as
presently constituted. Moreover, each defined term stated in the singular shall
include the plural and each defined term stated in the plural shall include the
singular, and each defined term stated in the masculine form or in the feminine
form or in the neuter form shall include all others. The word "including" means
"including but not limited to."
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A. Agreement: The term "Agreement" means this Confidential
Settlement Agreement and Release, as the same may be amended from time to time
in writing in accordance with the provisions thereof.
B. Approval Order: The term "Approval Order" means an order of the
Bankruptcy Court (or the District Court exercising its original bankruptcy
jurisdiction) approving this Agreement and the compromise and settlement
memorialized herein between Congoleum and Mt. XxXxxxxx and Everest, which order
shall be in the form of Attachment B hereto or such other order that is in a
form and substance acceptable to Congoleum and Mt. XxXxxxxx and Everest.
C. Asbestos Claims: The term "Asbestos Claims" means any and all
past, present and future claims, 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,
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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) of
asbestos or an asbestos-containing product, either alone or in combination with
any other substance. The term "Asbestos Claims" also includes, without
limitation, Plan Trust Asbestos Claims.
D. Business Day: The term "Business Day" means any day that is not a
Saturday, a Sunday or a federal holiday in the United States of America.
E. Claim: The term "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" as that term is defined in the United States Bankruptcy
Code, 11 U.S.C. Sec. 524(g)(5); 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 without limitation, an Asbestos Claim. The term "Claim"
further includes, without limitation 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
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damages, indemnity or defense obligations, insurance premiums (whether
retrospectively rated or otherwise), deductibles, self-insured retentions,
costs, expenses, contribution or subrogation; 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: The term "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.
G. Creditors' Committee: The term "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.
H. Execution Date: The term "Execution Date" means the earliest date
upon which all of the Parties (or their authorized representatives) have
executed this Agreement.
I. Escrow Account: The term "Escrow Account" means the account
established pursuant to the "Escrow Agreement" (as defined herein).
J. Escrow Agent: The term "Escrow Agent" means the Escrow Agent as
defined in the Escrow Agreement.
K. Escrow Agreement: The term "Escrow Agreement" means the agreement
entered into by Congoleum, Mt. XxXxxxxx and Everest and the Escrow Agent, which
agreement shall be in the form of Attachment C hereto or such other agreement
that is in form and substance acceptable to Congoleum and Mt. XxXxxxxx and
Everest.
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L. FCR: The term "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.
M. Final Order: The term "Final Order" means an order as to which
the time to appeal, petition for certiorari, or move for reargument, rehearing
or reconsideration has expired and as to which no appeal, petition for
certiorari, or other proceedings for reargument, rehearing, or reconsideration
shall then be pending or as to which any right to appeal, petition for
certiorari, reargue, rehear or reconsider shall have been waived in writing by
the Entity possessing such right, or, in the event that an appeal, writ of
certiorari, or reargument, rehearing or reconsideration thereof has been sought,
such order shall have been affirmed by the highest court to which such order was
appealed, or from which certiorari has been denied or reargument, rehearing or
reconsideration was sought and denied, and the time to take any further appeal,
petition for certiorari, or move for further reargument, rehearing or
reconsideration shall have expired.
N. Congoleum: The term "Congoleum" shall mean:
(i) the corporation now named Congoleum Corporation that was
incorporated in the State of Delaware in 1986
("Congoleum Corporation");
(ii) all present subsidiaries of Congoleum Corporation, any
Persons in which Congoleum Corporation has an ownership
interest, directly or indirectly, of fifty percent (50%)
or more, and any other Persons on whose behalf Congoleum
Corporation has the power and authority to release
claims under the Subject Policies;
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(iii) any Persons that have been acquired by, merged into or
combined with any of the Persons identified in
sub-paragraph 1.N(i) and (ii) above;
(iv) Congoleum Corporation's predecessors, successors, past,
present and future assigns, joint ventures, affiliates
other than American Biltrite Inc, all of Congoleum
Corporation's past subsidiaries and the predecessors,
successors and past and present assigns of such past
subsidiaries; 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;
(v) 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;
(vi) Congoleum Sales, Inc. and Congoleum Fiscal, Inc.,
debtors and debtors-in-possession;
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(vii) American Biltrite Inc., solely to the extent that its
seeks coverage under insurance policies issued by
Everest and/or Mt. XxXxxxxx to Congoleum Corporation;
and
(viii) the directors, officers, agents, employees,
representatives and attorneys of any of the foregoing
Persons, solely in their respective capacities as
such.
O. Mt. XxXxxxxx and Everest: The term "Mt. XxXxxxxx and Everest"
shall mean both entities collectively or individually.
The term "Mt. XxXxxxxx" shall mean Mt. XxXxxxxx Insurance Company,
formerly known as Gibraltar Casualty Company, all of its corporate predecessors,
and all of their former or current corporate parents, subsidiaries and
affiliates, and their respective directors, officers, employees, agents,
partners, representatives, attorneys, joint venturers and assigns, solely in
their respective capacities as such.
The term "Everest" shall mean Everest Reinsurance Company, formerly
known as Prudential Reinsurance Company, all of its corporate predecessors, and
all of their former or current corporate parents, subsidiaries and affiliates,
and their respective directors, officers, employees, agents, partners,
representatives, attorneys, joint venturers and assigns, solely in their
respective capacities as such.
P. Person: The term "Person" shall mean an individual, a
corporation, a partnership, a joint venture, an association, a trust, any other
Entity or organization, and any federal, state or local government or any
governmental or quasi-governmental body or political subdivision or any agency,
department, board or instrumentality thereof.
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Q. Plan: The term "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 such modifications:
1. are consistent with the terms of this Agreement;
2. do not materially and adversely affect the interests under
this Agreement of Mt. XxXxxxxx and Everest or Congoleum;
3. continue to provide for an injunction that is at least as
broad and inclusive as the "Asbestos Channeling Injunction"
(as defined in the Sixth Modified Plan) that applies to
Settling Asbestos Insurance Companies; and
4. continue to provide for a judgment reduction provision
consistent with Section 8 of this Agreement; and
5. continue to provide that the Plan Trust shall be bound to the
provisions of this Agreement with the same force and effect as
if the Plan Trust were a party to this Agreement from the
Execution Date.
R. Plan Proponents: The term "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.
S. Settlement Amount: The term "Settlement Amount" means the sum of
Twenty Xxx Xxxxxxx Xxxx Xxxxxxx Xxxxxxxx Xxxxxx Xxxxxx dollars. (US
$21,500,000).
T. Subject Policies: The term "Subject Insurance Policies" shall
mean: (1) all insurance policies at issue in the Coverage Action, listed in
Attachment A hereto and (2) all known and unknown policies issued or allegedly
issued by Mt. XxXxxxxx and Everest to Congoleum.
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U. Trigger Date: The term "Trigger Date" means the day on which
written notice is provided to Mt. XxXxxxxx and Everest in the manner set forth
in Section 18 of this Agreement, stating that all of the following have
occurred, provided that all of the following have in fact occurred:
1. the Approval Order becomes a Final Order;
2. Mt. XxXxxxxx and Everest are (1) designated as Settling
Asbestos Insurance Companies (entitled to all the rights and protections
afforded Settling Asbestos Insurance Companies under the Plan, including
the protection of an injunction under Section 524(g) of the Bankruptcy
Code) in the schedule of Settling Asbestos Insurance Companies filed by
the Plan Proponents prior to the conclusion of the confirmation hearing
and such designation has not been deleted or modified (2) this Agreement
is designated as an Asbestos Insurance Settlement Agreement (3) and all
requirements necessary to make effective the designation of Mt. XxXxxxxx
and Everest as Settling Asbestos Insurance Companies have been met.
3. the Confirmation Order becomes a Final Order; and
4. the occurrence of the Plan Effective Date.
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2. Payment of the Settlement Amount
A. Within fifteen (15) Business Days of the Execution Date, Mt. XxXxxxxx
and Everest agree to pay the Settlement Amount into the Escrow Account by wire
transfer as follows:
ABA No. 000000000
D/5000000016439
CT/BRANCH 2800
Bank Name: WACHOVIA BANK, NATIONAL ASSOCIATION
CHARLOTTE, NC
Account No. 2572008669
Acct Name: Congo/EveMck Esc
Attn. Xxxx Xxxxxx
Subject to the provisions of Paragraph 2.D below, and provided that no asbestos
legislation, as contemplated in Paragraph 2.D below, has been enacted prior to
the Trigger Date, then within ten (10) Business Days of the Trigger Date, the
Parties shall jointly direct the Escrow Agent to release the Settlement Amount
in full, along with any and all interest or investment income accrued thereon
(less (a) any expenses that the Escrow Agent incurs; (b) any reserves required
under the Approval Order to be held for the payment of taxes, indemnities, or
otherwise; and (c) losses incurred under any investment of the Settlement Amount
permissible under the terms of the Approval Order and the Escrow Agreement) to
the Plan Trust or as otherwise directed by the Court. Subject to the provisions
of Paragraph 2.D below, upon the release of the Settlement Amount pursuant to
this Paragraph 2.A, legal and equitable title to the Settlement Amount shall
pass irrevocably to the Plan Trust or to such other Entity as is directed by the
Court.
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B. Time is of the Essence.
Time is of the essence with respect to the payment of the Settlement
Amount.
C. Finality of Payment.
The Settlement Amount is in addition to any and all amounts paid prior to
the Execution Date by or on behalf of Mt. XxXxxxxx and Everest to or for the
benefit of Congoleum in connection with Asbestos Claims or otherwise (the "Prior
Payments"). Subject to the provisions of Paragraph 2.D below, relating to
Federal Asbestos Legislation, any and all payments by Mt. XxXxxxxx and Everest,
including, without limitation, the Prior Payments (if any) and the Settlement
Amount are deemed final and irrevocable payments upon the occurrence of the
Trigger Date. Mt. XxXxxxxx'x and Everest's payment of the Settlement Amount is
in addition to any and all payments made by Mt. XxXxxxxx and Everest to or for
the benefit of Congoleum prior to the Execution Date, including any Prior
Payments.
D. Federal Asbestos Legislation
1. Definitions for this Paragraph 2.D
a. Asbestos Legislation: The term "Asbestos Legislation" means
any legislation enacted by the United States Congress and signed by the
President of the United States by no later than the Trigger Date, or that
becomes law without the President's signature by no later than the Trigger Date,
that (1) regulates, limits or controls the prosecution of Asbestos Claims in the
state or federal courts, (2) creates or purports to create an obligation on Mt.
XxXxxxxx and/or Everest to pay money pursuant to the legislation for the benefit
of asbestos claimants; and (3) replaces, at least in part, Mt. XxXxxxxx'x and/or
Everest's obligations to policyholders under policies of insurance covering or
alleged to cover Asbestos Claims. The term "Asbestos Legislation" is intended to
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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 such claims arise from or are
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, in itself, make such legislation "Asbestos Legislation" under
this sub-paragraph 2.D.1.a.
b. Federal Fund: "Federal Fund" means the Person to which Mt.
XxXxxxxx and/or Everest are obligated or purportedly obligated to pay money
pursuant to Asbestos Legislation.
c. Repayment Amount: "Repayment Amount" means (A + B) - (Y +
Z) where:
A = the Settlement Amount;
B = all interest or other investment return on the Settlement Amount
balance from the date that the Settlement Amount is deposited into the Escrow
Account to the date the Settlement Amount balance is disbursed pursuant to this
Paragraph 2.D;
Y = any actual monetary decrease in Mt. XxXxxxxx'x and/or Everest's
payment or contribution or liability to pay or contribute under any Asbestos
Legislation that is attributable to their payment of the Settlement Amount under
this Agreement; and
Z = the reasonable and proper charges, fees and expenses of the Plan
Trustee and the Escrow Agent. For purposes of this paragraph, the fees and
expenses of the Plan Trustee are limited to those reasonable fees and expenses
incurred by the Plan Trustee in the administration of or in connection with the
Escrow Account.
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2. Subject to the provisions of this Paragraph 2.D, the Parties
intend that, if Asbestos Legislation is enacted into law, Mt. XxXxxxxx and
Everest will not be required to pay under this Agreement any portion of the
Settlement Amount that Mt. XxXxxxxx and Everest will be required to pay (or do
in fact pay) to the Federal Fund in their capacity as insurers that issued
policies to Congoleum.
3. Solely in the event that Asbestos Legislation (if any) is enacted
into law, then, notwithstanding any other provision in this Agreement to the
contrary, the Plan Trustee or the Escrow Agent (as the case may be) shall hold
the Repayment Amount until one of the following events has occurred:
a. Pursuant to the Asbestos Legislation, a date is set on
which Mt. XxXxxxxx and Everest are legally obligated to pay money to the Federal
Fund. In that event, Mt. XxXxxxxx and Everest shall have the right, in their
sole discretion, to direct the Plan Trustee or the Escrow Agent (as the case may
be) to pay the Repayment Amount to the Federal Fund or to Mt. XxXxxxxx and
Everest on the date and in the manner that Mt. XxXxxxxx and Everest are legally
obligated to pay money pursuant to the Asbestos Legislation. The Plan Trustee or
the Escrow Agent (as the case may be) shall be required under the Trust
Agreement or the Escrow Agreement (as the case may be) to pay the Repayment
Amount as directed by Mt. XxXxxxxx and Everest pursuant to this sub-paragraph
2.D.3.a.
b. If the Plan Trustee or the Escrow Agent (as the case may
be) has not disbursed money pursuant to Mt. XxXxxxxx'x and Everest's direction
as authorized by sub-paragraph 2.D.3.a above, and there is a legal challenge
relating to the Asbestos Legislation that results in a Final Order pursuant to
which Mt. XxXxxxxx and Everest have no legal obligation to pay money pursuant to
the Asbestos Legislation, then the Plan Trustee or the Escrow Agent (as the case
may be) shall retain the Repayment Amount and shall disburse such amounts in the
case of the Plan Trustee, pursuant to the Plan and the TDPs, or in the case of
the Escrow Agent, pursuant to the Escrow Agreement.
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c. If the Plan Trustee or the Escrow Agent (as the case may
be) has disbursed money to the Federal Fund pursuant to Mt. XxXxxxxx'x and
Everest's direction as authorized by sub-paragraph 2.D.3.a above, and there is a
legal challenge relating to the Asbestos Legislation that results in a Final
Order pursuant to which the Repayment Amount disbursed to the Federal Fund under
sub-paragraph 2.D.3.a above is repaid to Mt. XxXxxxxx and/or Everest and such
repayment is attributable to a disbursement under sub-paragraph 2.D.3.a above,
then Mt. XxXxxxxx and/or Everest shall, within ten (10) Business Days of receipt
of the Repayment Amount, pay the Repayment Amount to the Plan Trust or deposit
the Repayment Amount into the Escrow Account, as applicable.
4. Congoleum, the Plan Trust and Mt. XxXxxxxx and Everest agree that
they shall take such action as is necessary to facilitate payment of the
Repayment Amount as authorized by this Paragraph 2.D and expressly agree that
they will not take (and shall not be permitted to take, support or sponsor) an
action that might directly or indirectly delay such payment.
5. If Asbestos Legislation is enacted into law, at the request of
any Party, the Parties shall meet and confer concerning the practical
implementation of this Paragraph 2.D in light of the Asbestos Legislation.
6. Any Dispute among the Parties arising out of or relating to this
Paragraph 2.D, including the breach, termination or validity thereof, shall be
finally resolved by binding arbitration in accordance with the CPR Rules for
Non-Administered Arbitration then currently in effect by a sole arbitrator. Such
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arbitration must be resolved on an expedited basis, and must be completed with
an award by the arbitrator entered no more than ninety (90) days from the date
any Party demands arbitration pursuant to this sub-paragraph 2.D.6. The
arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C.
ss.ss.1-16, and judgment upon the award rendered by the arbitrator(s) may be
entered by any court having jurisdiction thereof. Each Party shall bear its own
fees and costs incurred in connection with the arbitration.
3. Release
A. Releases By Congoleum
1. Upon Mt. XxXxxxxx'x and Everest's payment to the Escrow
Agent in full of the Settlement Amount as provided by the terms of this
Agreement, and except for the obligations created by this Agreement, Congoleum
and the future assigns of all Persons within the definition of Congoleum, in
their capacity as such, and the Plan Trust, upon its creation, shall be deemed
to release, remise, covenant not to xxx and forever discharge Mt. XxXxxxxx and
Everest from and against all manner of action, causes of action, suits, debts,
accounts, promises, warranties, damages (consequential or punitive), agreements,
costs, expenses, Claims or Demands whatsoever, in law or in equity, whether
presently known or unknown, asserted or unasserted, whether sounding in tort or
contract, or arising under the statutes or administrative regulations of any
jurisdiction, with respect to any and all past, present or future claims, of any
type whatsoever, that Congoleum ever had, now has, or hereafter may have (a) for
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insurance coverage, including both defense costs and indemnification claims,
under the Subject Insurance Policies; (b) arising out of or relating to any act,
omission, representation, or conduct of any sort in connection with any of the
Subject Policies, including but not limited to the issuance of the Subject
Policies and the handling of any claim thereunder; (c) arising out of or in
connection with any agreements between or among the Parties relating to the
Subject Policies and/or the Coverage Action, other than this Agreement; and (d)
arising under or relating in any way to the Subject Policies.
2. The payment of the Settlement Amount in accordance with
this Agreement shall be deemed by the Parties to (a) terminate any and all
obligations whatsoever of Mt. XxXxxxxx and Everest to Congoleum and the Plan
Trust arising under or relating to the Subject Policies, (b) exhaust all limits
of liability, including without limitation all occurrence and aggregate limits,
of the Subject Policies, and (c) constitute a "policy buyback" fully and finally
extinguishing and exhausting all rights, duties, limits and coverage under the
Subject Policies as if they were never issued. The Parties agree that as to any
coverage bought back as set forth in this Agreement, such coverage is henceforth
rescinded. If any Person thereafter inquires regarding exhaustion of the Subject
Policies, Congoleum, Mt. XxXxxxxx and Everest shall represent that all limits of
liability of the Subject Policies have been exhausted or are no longer available
to Congoleum. It is the intention of Congoleum and the Plan Trust to reserve no
rights or benefits whatsoever under the Subject Policies or in connection with
any past, present or future claims under the Subject Policies, and to assure Mt.
XxXxxxxx and Everest their peace and freedom from such claims and from all
assertions of rights in connection with such claims.
3. Upon Mt. XxXxxxxx'x and Everest's payment in full of the
Settlement Amount to the Escrow Agent, any and all rights, duties,
responsibilities and obligations of Mt. XxXxxxxx and Everest created by or in
connection with the Subject Policies are hereby terminated. As of the date of
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such payment in full, Congoleum shall no longer have any insurance coverage from
Mt. XxXxxxxx and Everest under the Subject Policies. The various releases
contained in this Paragraph 3.A are intended to operate as though Mt. XxXxxxxx
and Everest had never issued the Subject Policies.
4. CONGOLEUM ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY ITS
ATTORNEYS CONCERNING, AND IS FAMILIAR WITH, THE CALIFORNIA CIVIL CODE SECTION
1542 AND EXPRESSLY WAIVES ANY AND ALL RIGHTS UNDER CALIFORNIA CIVIL CODE SECTION
1542, WHICH PROVIDES THAT "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
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR," AND UNDER ANY OTHER FEDERAL OR
STATE STATUTE OR LAW OF SIMILAR EFFECT.
5. Congoleum expressly assumes the risk that acts, omissions,
matters, causes or things may have occurred that they do not know or do not
suspect to exist. Congoleum hereby waives the terms and provisions of any
statute, rule or doctrine of common law that either: (i) narrowly construes
releases purporting by their terms to release claims in whole or in part based
upon, arising from, or related to such acts, omissions, matters, causes or
things; or, (ii) restricts or prohibits the releasing of such claims.
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B. Release By Mt. XxXxxxxx and Everest
1. At the same time the releases described in Paragraph 3.A
above become effective, Mt. XxXxxxxx and Everest, and any subsequently appointed
trustee or representative acting for Mt. XxXxxxxx and Everest, shall remise,
release, covenant not to xxx and forever discharge Congoleum from and against
all manner of action, causes of action, suits, debts, accounts, promises,
warranties, damages (consequential or punitive), agreements, costs, expenses,
Claims or Demands whatsoever, in law or in equity, whether presently known or
unknown, asserted or unasserted, whether sounding in tort or in contract, or
arising under the statutes or administrative regulations of any jurisdiction,
with respect to any and all past, present or future claims, of any type
whatsoever, that Mt. XxXxxxxx and Everest ever had, now has, or hereinafter may
have arising under or in any way relating to the Subject Policies.
2. MT. XxXXXXXX AND EVEREST ACKNOWLEDGE THAT THEY HAVE BEEN
ADVISED BY THEIR ATTORNEYS CONCERNING, AND ARE FAMILIAR WITH, THE CALIFORNIA
CIVIL CODE SECTION 1542 AND EXPRESSLY WAIVE ANY AND ALL RIGHTS UNDER CALIFORNIA
CIVIL CODE SECTION 1542, WHICH PROVIDES THAT "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 EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR," AND UNDER ANY
OTHER FEDERAL OR STATE STATUTE OR LAW OF SIMILAR EFFECT.
3. Mt. XxXxxxxx and Everest expressly assume the risk that
acts, omissions, matters, causes or things may have occurred that they do not
know or do not suspect to exist. Mt. XxXxxxxx and Everest hereby waive the terms
and provisions of any statute, rule or doctrine of common law that either: (i)
21
narrowly construes releases purporting by their terms to release claims in whole
or in part based upon, arising from, or related to such acts, omissions,
matters, causes or things; or, (ii) restricts or prohibits the releasing of such
claims.
4. It is the intention of Mt. XxXxxxxx and Everest to reserve
no rights or benefits whatsoever under or in connection with the Subject
Policies, with respect to any past, present or future claims, and to assure
Congoleum its peace and freedom from all such claims and from all assertions of
rights in connection with such claims.
4. Defense Of The Asbestos Channeling Injunction
A. Subject to the provisions of Paragraph 4.D below, in the event
that any Claim is brought against Mt. XxXxxxxx and/or Everest that is subject to
the Asbestos Channeling Injunction, the Plan Trust will exercise its reasonable
best efforts (at the expense of the Plan Trust) to establish that such Claim is
enjoined as to Mt. XxXxxxxx and Everest by operation of the Asbestos Channeling
Injunction. To that end, subject to the provisions of Paragraph 4.D below, the
Plan Trust will, at its expense, defend the application of the Asbestos
Channeling Injunction as to any Claim asserted against Mt. XxXxxxxx and Everest
that is subject to the Asbestos Channeling Injunction.
B. In the event that the Plan Trust is precluded by an order of any
court of competent jurisdiction from defending the application of the Asbestos
Channeling Injunction as to any Claim asserted against Mt. XxXxxxxx and/or
Everest that is subject to the Asbestos Channeling Injunction, the Plan Trust
shall reimburse Mt. XxXxxxxx and/or Everest, subject to the provisions of
22
Paragraph 4.D below, for the reasonable costs they incur in defending the
Asbestos Channeling Injunction; provided, however, that the Plan Trust shall
have no obligation to pay any internal costs of Mt. XxXxxxxx or Everest
(including costs associated with time or expenses of Mt. XxXxxxxx'x and
Everest's employees). For the avoidance of doubt, other than the reimbursement
obligation provided in this Paragraph 4.B, the Plan Trust has no obligation:
1. to defend any Claim against Mt. XxXxxxxx and Everest with respect
to any issue, including the application of any defense to insurance
coverage or defense to any tort liability; or
2. to indemnify Mt. XxXxxxxx and Everest to any extent for any
Claims, whether for defense costs, expenses, judgments, settlements,
or otherwise.
C. Within fifteen (15) Business Days of receipt of any demand,
notice, summons or other process received by Mt. XxXxxxxx and Everest in
connection with any Claim that Mt. XxXxxxxx and Everest believe is subject to
the Asbestos Channeling Injunction, Mt. XxXxxxxx and Everest shall forward such
demand, notice, summons or other process to the Plan Trust. The Plan Trust shall
notify Mt. XxXxxxxx and Everest in writing within fifteen (15) Business Days of
receipt of notice of such Claim from Mt. XxXxxxxx and Everest whether the Plan
Trust agrees that such Claim triggers the Plan Trust's obligations pursuant to
Paragraph 4.A above. In the event that there is a dispute whether a Claim
triggers the Plan Trust's obligations pursuant to Paragraph 4.A above, the Plan
23
Trust and Mt. XxXxxxxx and Everest shall meet and confer to attempt to resolve
any such dispute. If they are unable to resolve such dispute by meeting and
conferring, they may litigate before the Court (or, if the Court refuses to
exercise jurisdiction, before any court of competent jurisdiction) whether the
Claim at issue triggers the Plan Trust's obligations pursuant to Paragraph 4.A
above. While such dispute remains unresolved, Mt. XxXxxxxx and Everest have the
right to defend the Asbestos Channeling Injunction as they deem appropriate. Mt.
XxXxxxxx and Everest shall cooperate reasonably with the Plan Trust with respect
to the obligations provided in this Section 4.
D. Notwithstanding anything in this Section 4 to the contrary, in no
event shall the Plan Trust's obligation pursuant to this Section 4 exceed
$500,000 in the aggregate in the defense of Claims brought against the Settling
Asbestos Insurance Companies, which Claims are subject to the Asbestos
Channeling Injunction.
5. Dismissal of Coverage Action
No later than fourteen (14) days after the date that the Court enters the
Approval Order:
A. Congoleum will dismiss without prejudice its Claims, counterclaims
or cross-claims (if any) against Mt. XxXxxxxx and Everest in the
Coverage Action;
B. Mt. XxXxxxxx and Everest shall dismiss without prejudice their
Claims, counterclaims or cross-claims (if any) against Congoleum in
the Coverage Action.
C. Upon the occurrence of the Trigger Date, the Parties shall submit a
stipulation of dismissal with prejudice with respect to the Claims,
counterclaims or cross-claims (if any) each asserted against the
other in the Coverage Action. The Parties shall bear their own
costs, expenses, and counsel fees in the Coverage Action. Nothing
herein shall prevent Congoleum from recovering its costs, expenses
and counsel fees in the Coverage Action from any Entity other than
Mt. XxXxxxxx and Everest; and
24
D. The Parties' stipulation of dismissal with prejudice, as referenced
in Paragraph 5.C above, shall state that, in the event that this
Agreement becomes null and void pursuant to Section 7 below,
Congoleum may re-join Mt. XxXxxxxx and Everest to the Coverage
Action and re-assert all claims against Mt. XxXxxxxx and Everest 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 Mt. XxXxxxxx and Everest in the Coverage Action
or in any new action. In such event, the Parties agree that each of
Congoleum and Mt. XxXxxxxx and Everest will not be bound by any
rulings and or decisions in the Coverage Action made after September
6, 2005.
6. Bankruptcy Obligations
A. Pursuant to the Plan, prior to the conclusion of the Confirmation
Hearing, the Plan Proponents shall designate Mt. XxXxxxxx and Everest as
Settling Asbestos Insurance Companies in the schedule of Settling Asbestos
Insurance Companies filed by the Plan Proponents.
B. Congoleum shall file, no later than ten (10) Business Days after the
Execution Date, a motion pursuant to Federal Rule of Bankruptcy Procedure 9019
seeking entry of the Approval Order, which motion shall be in a form and in
substance reasonably satisfactory to Mt. XxXxxxxx and Everest, and Mt. XxXxxxxx
and Everest will reasonably support and Mt. XxXxxxxx and Everest will not oppose
the Plan Proponents' efforts to obtain such approval.
25
C. Promptly following the Execution Date, Mt. XxXxxxxx and Everest and the
Debtors shall advise the Bankruptcy Court that the Parties have entered into a
settlement agreement. Provided that the Approval Order includes the findings set
forth in Paragraph 6.E below, promptly following the date on which the Approval
Order becomes a Final Order, unless and until this Agreement becomes null and
void pursuant to its terms (if ever), Mt. XxXxxxxx and Everest shall:
1. not cooperate with any other defendant in the Coverage Action;
2. cease their participation in any and all objections they have made
to the Plan and/or to any findings or conclusions of law issued by
or recommended by the Bankruptcy Court, other than those findings or
conclusions of law consistent with this Agreement, and any and all
motions, Claims, and any appeals or notices of appeal that they have
filed or made in the Chapter 11 Reorganization Cases;
3. not file any new objections to the Plan or appeal the Confirmation
Order (for the avoidance of doubt, this provision does not apply to
a plan of reorganization other than the Plan)
4. not pursue any Claims against the Debtors;
5. withdraw their participation in any and all outstanding discovery
requests; and
6. serve no new discovery requests in the Debtors' confirmation
proceeding.
26
D. Following the Execution Date, Congoleum shall (i) serve no new
discovery in the Debtors' confirmation proceeding upon Mt. XxXxxxxx and/or
Everest and shall not pursue any outstanding discovery in connection with
Debtors' confirmation proceeding and (ii) will not seek to introduce evidence in
any way related to Mt. XxXxxxxx and/or Everest in either the confirmation
proceeding or the Coverage Action; provided, however, that Congoleum may seek to
introduce as evidence (x) only in the confirmation proceeding, this Agreement
and the Settlement Amount to be paid hereunder; (y) the policies of insurance
issued by Mt. XxXxxxxx and/or Everest to Congoleum Corporation; and (z) such
portions of any documents or other materials that are not specific to Mt.
XxXxxxxx and/or Everest and that do not characterize any act, decision,
obligation or position of Mt. XxXxxxxx and/or Everest or characterize the terms
and conditions of any of the Subject Policies. Notwithstanding anything in this
Paragraph 6.D to the contrary, Congoleum may seek to introduce as evidence in
the confirmation proceeding and/or the Coverage Action communications with
multiple entities that includes Mt. XxXxxxxx and/or Everest but Congoleum will
not characterize any act, decision, obligation or position of Mt. XxXxxxxx
and/or Everest.
E. As a condition precedent to the obligations of Mt. XxXxxxxx and Everest
under Paragraph 6.C above, the Approval Order must include findings that:
1. Mt. XxXxxxxx'x and Everest's payment in full of the Settlement
Amount shall satisfy and extinguish in full their obligations under
the Subject Policies.
2. The Settlement Amount 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.
27
3. Adequate notice of the Debtors' Motion for Approval of the
Settlement Agreement Between the Debtors and Mt. XxXxxxxx and
Everest (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 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) the United States Trustee; (f)
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; (g) Congoleum
Corporation's majority shareholder, American Biltrite, Inc.; (h) any
other presently existing Entities that are insureds under the
Subject Policies; (i) 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
(j) 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.
28
4. As required by Court order, notice to an attorney for the holder of
an Asbestos Claim constitutes notice to the claimant for purposes of
the Agreement and the Motion.
5. 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,
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.
6. 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, the Plan Trust
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.
7. 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 based on or relating to
Asbestos Claims shall be channeled to and become a right, claim or
29
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 which shall be protected by
injunction from assertion against it, by an Asbestos Insurance
Company, of any Asbestos Claims.
F. Upon the occurrence of the Plan Effective Date, all of Congoleum's
Asbestos Insurance Rights under this Agreement shall be assigned to the Plan
Trust pursuant to the Plan, automatically and without need of further action by
any Party or Entity, provided that this Agreement has not then and does not
thereafter become null and void pursuant to its terms.
G. 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 Congoleum under this Agreement, the Plan Trust automatically
shall succeed to all the rights and be bound by all of the obligations of the
Debtors under this Agreement without necessity of further action. Congoleum
shall include in the Plan Trust Agreement as an obligation of the Plan Trust,
effective from its creation (in language and terms satisfactory to Mt. XxXxxxxx
and Everest), that such trust shall be subject to and bound by this Agreement
and the Approval Order.
30
H. Congoleum and the Plan Trust shall not seek to terminate, reduce, or
limit the scope of the Asbestos Channeling Injunction with respect to Mt.
XxXxxxxx and Everest after the Confirmation Order becomes a Final Order.
7. Effectiveness Of Agreement And Voidability
A. This Agreement is subject to the contingencies set forth in
sub-paragraphs 7.A.1 - 7.A.5 below. If any of the following events occurs, any
Party may declare this Agreement null and void by providing written notice to
the other Parties in the manner provided in Section 18 below, in which case,
this Agreement shall terminate, subject to the provisions of Paragraph 7.C
below:
1. The Court or a court of competent jurisdiction enters an order
confirming a Chapter 11 plan of reorganization for Congoleum
or one or more of the other Debtors other than the Plan;
2. The Court or a court of competent jurisdiction enters an order
that provides that Mt. XxXxxxxx and/or Everest are not
Settling Asbestos Insurance Companies or otherwise contravenes
the designation of Mt. XxXxxxxx and/or Everest as Settling
Asbestos Insurance Companies;
3. The Court, or any other court of competent jurisdiction enters
an order denying approval of the Agreement;
4. The Court or a court of competent jurisdiction enters an order
converting the Chapter 11 Case into a Chapter 7 case or
dismissing the Chapter 11 Case;
31
5. The Court or a court of competent jurisdiction enters an order
appointing a trustee or examiner substantially possessing the
rights, powers and duties of a trustee in the Chapter 11 Case;
or
6. The Confirmation Order and the Approval Order do not become
Final Orders within two years of the Execution Date.
B. In the event that the Court or a court of competent jurisdiction
enters an order approving the Agreement, which order is other than an Approval
Order that includes the findings set forth in Paragraph 6.E above, then any
Party may declare the Agreement to be null and void within sixty (60) days
following the entry of such order approving the Agreement. The Parties shall
meet and confer at some point during said sixty (60) day period to determine
whether the order so entered is satisfactory to each of them and/or to explore
whether a proposed order can be fashioned and jointly submitted to the Court for
approval.
C. Notwithstanding anything in this Agreement to the contrary, in the
event this Agreement is declared by any Party to be null and void pursuant to
this Section 7:
1. this Agreement, other than Sections 1, 7 and 18 (which
sections shall remain in full force and effect), shall be
vitiated and shall be a nullity and shall be void ab initio;
2. The Parties shall direct the Escrow Agent to return to or at
the direction of Mt. XxXxxxxx and Everest, with thirty (30)
days prior written notice to the Congoleum and the Plan Trust,
if it exists, the Settlement Amount plus any interest or
investment income accrued on the Settlement Amount minus: (i)
any reasonable and proper costs incurred by the Escrow Agent;
(ii) any reserves required under the Escrow Agreement to be
held for the payment of taxes, indemnities, or otherwise; or
(iii) losses incurred under any investment of the Settlement
Amount permissible under the terms of the Approval Order;
32
3. None of the Parties shall be bound by the terms of any
Approval Order;
4. Mt. XxXxxxxx and/or Everest shall not be designated as
Settling Asbestos Insurance Companies, and Mt. XxXxxxxx and
Everest shall not seek or receive any benefit or protection of
a Settling Asbestos Insurance Company;
5. the Parties shall have the rights, defenses and obligations
under or with respect to the Subject Policies that they would
have had absent this Agreement,
6. the releases provided in Section 3 above shall become null and
void ab initio;
7. Mt. XxXxxxxx and Everest shall be free to pursue their
objections to the Plan, to appeal from the Confirmation Order
and otherwise participate in the Bankruptcy Case, Congoleum
shall be free to oppose any such objections or appeals and the
Parties shall be free to pursue their claims against one
another in the Coverage Action; and
8. any otherwise applicable statutes of limitations or repose, or
other time-related limitations, shall be deemed to have been
tolled for the period from the Execution Date through the date
that this Agreement is declared null and void, and no Party
shall assert, plead, raise or otherwise rely on or take
advantage, whether actively or passively, of any time-related
33
defense to any Claim by any other Party related to such
period, and if any Party breaches this obligation, it shall be
deemed to have created a new cause of action against it at the
time of such breach for which it shall be liable in damages
equal to the amount of damages it avoided by reason of the
breach.
8. Judgment Reduction
In the event that another insurer of the Debtors brings a claim for
contribution, subrogation, indemnification, reimbursement or other similar
claim, against Everest and/or Mt. XxXxxxxx in connection with Claims released in
this Agreement, and such insurer obtains a final binding arbitration award or
final judgment against or a settlement with Everest and/or Mt. XxXxxxxx (with
the consent of the Debtors prior to the Effective Date or with the consent of
the Plan Trust following said Effective Date, which consent in either case shall
not be unreasonably withheld), the Debtors or the Plan Trust (as the case may
be) shall voluntarily reduce the amount of any final binding arbitration award,
final judgment or settlement payment that they have obtained or may obtain from
such other insurer by the amount of such other insurer's final binding
arbitration award or final judgment awarded against or settlement with Everest
and/or Mt. XxXxxxxx in connection with such contribution, subrogation,
indemnification or other similar claim and shall direct that Everest and/or Mt.
XxXxxxxx (as the case may be) 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 Everest and/or
Mt. XxXxxxxx (as the case may be).
34
9. Assignment of Subrogation, Contribution and Reimbursement Rights
Against Other Insurers
Other than claims against Mt. XxXxxxxx'x and Everest's reinsurers or
retrocessionaires, Mt. XxXxxxxx and Everest agree that they shall not pursue
subrogation, equitable indemnity, contribution, or reimbursement of the
Settlement Amount or any part thereof from any third party, including without
limitation any other primary or excess insurer of Congoleum or any other
subscriber to any of the Subject Policies. To the extent permitted by law, Mt.
XxXxxxxx and Everest hereby transfer and assign to Congoleum all such rights,
claims, and causes of action relating to subrogation, reimbursement, or
contribution that Mt. XxXxxxxx and Everest may have, arising out of the
Settlement Amount paid hereunder, provided always that if any third-party Person
asserts any claim against Mt. XxXxxxxx and Everest, Mt. XxXxxxxx and Everest
shall be permitted to pursue subrogation, equitable indemnity, contribution, or
reimbursement of the Settlement Amount or any part thereof from any such
third-party Person in any cross-claim, counter-claim or similar procedure. The
Parties expressly agree that nothing in this Section 9 or in this Agreement
shall limit the rights of Mt. XxXxxxxx and Everest to make reinsurance claims
and pursue their reinsurance recoveries (if any).
10. Cooperation
Congoleum will undertake all reasonable actions to cooperate with Mt.
XxXxxxxx and Everest in connection with their reinsurers, including (at Mt.
XxXxxxxx'x and Everest's sole expense with respect to services and/or assistance
35
provided by external Congoleum vendors, and out-of-pocket expenses incurred by
Congoleum) responding to reasonable requests for information and meeting with
representatives of reinsurers. Such cooperation shall include providing Mt.
XxXxxxxx'x and Everest's representative, upon reasonable request, access to all
claim files maintained by Congoleum, including but not limited to, all product
exposure, medical, claim status, and payment records contained in such files;
provided, however, that Mt. XxXxxxxx and Everest shall have no obligation to pay
any internal costs of Congoleum (including costs associated with time or expense
of Congoleum's employees or agents).
11. Reasonably Equivalent Value
The Parties acknowledge and agree that: (i) the Agreement was bargained
for and entered into in good faith and as the result of arms'-length
negotiations; and (ii) the Agreement is based on their respective independent
assessments, with the assistance and advice of counsel, that the payments and
other benefits to be received by the Parties pursuant to this Agreement
constitute a fair and reasonable settlement of the Parties' claims against each
other and constitute reasonably equivalent value for the releases, indemnity,
and other benefits conveyed under this Agreement.
12. Confidentiality
A. The Parties agree that all matters relating to the negotiation of this
Agreement shall be confidential and are not to be disclosed except by order of a
court of competent jurisdiction or by written agreement of the Parties except to
the extent that disclosure of matters relating to the negotiation of this matter
is necessary in connection with seeking approval of this Agreement by the Court.
36
B. In the event that a private litigant, by way of document request,
interrogatory, subpoena, or questioning at deposition, trial, or other
proceeding attempts to compel disclosure of anything protected by this Section
12, the Party from whom disclosure is sought shall decline to provide the
requested information on the ground that this Agreement prevents such
disclosure. In the event that such private litigant seeks an order from any
court or governmental body to compel such disclosure, or in the event that a
court, government official, or governmental body (other than the Internal
Revenue Service or Securities and Exchange Commission) requests or requires
disclosure of anything protected by this Section 12, the Party from whom
disclosure is sought shall immediately give written notice by facsimile or
hand-delivery to the other Parties, and shall immediately provide copies of all
notice papers, orders, requests or other documents in order to allow each Party
to take such protective steps as may be appropriate. Notice under this Section
12 shall be made to the Persons identified in Section 18 of this Agreement.
C. Material protected by this Section 12 shall be deemed to fall within
the protection afforded to compromises and offers to compromise by Rule 408 of
the Federal Rules of Evidence and similar provisions of state law or state rules
of court.
Notwithstanding anything in this Section 12, nothing in this Agreement
shall prevent any Party from disclosing or releasing information regarding the
negotiation of this Agreement in any form and at any time after the Execution
Date to:
1. reinsurers or retrocessionaires of Mt. XxXxxxxx and Everest
directly or through intermediaries;
2. outside auditors, attorneys or accountants of any Party;
37
3. to the extent required by law, including, to the extent
applicable, to the Internal Revenue Service, the Securities
and Exchange Commission, or other U.S., or other governmental
authority that properly requires disclosure by a Party hereto;
4. to the extent and in any form that such information is
required to be disclosed or released to satisfy reporting
requirements imposed by law, including any Federal securities
laws; and
5. as necessary in connection with the approval of this Agreement
by any Court.
D. Notwithstanding the foregoing provisions of this Section 12, Congoleum
may issue a press release at any time following the filing of a motion with the
Bankruptcy Court seeking approval of this Agreement; provided that Congoleum
first provides Everest and Mt. XxXxxxxx with a copy of the press release and
obtains Mt. XxXxxxxx'x and Everest's consent to said press release (such consent
to be provided promptly and not to be unreasonable withheld).
13 Non-Prejudice and Construction of Agreement
A. This Agreement is not a contract of insurance. This Agreement is not
subject to rules or construction governing contracts of insurance, including
without limitation, the doctrine of contra proferentum. This Agreement is a
compromise between the Parties and shall not be construed as an admission of
coverage under the Subject Policies, nor shall this Agreement or any provision
hereof be construed as a waiver, modification or retraction of the positions of
the Parties with respect to the interpretation and application of the Subject
Policies.
38
B. This Agreement is the product of informed negotiations and involves
compromises of the Parties' previously stated legal positions. Accordingly, this
Agreement does not reflect upon the Parties' views as to rights and obligations
with respect to matters or Persons outside the scope of this Agreement. This
Agreement is without prejudice to positions taken by Mt. XxXxxxxx and Everest
with regard to other insureds, and without prejudice to positions taken by
Congoleum with regard to other insurers.
C. This Agreement is the jointly-drafted product of arms'-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 the other Party.
14. No Modification
No change or modification of this Agreement shall be valid unless made in
writing and signed by the Parties (or their attorney-in-fact) whose interests
are affected by such change or modification.
15. Integration
This Agreement, including the Attachments hereto, constitutes the entire
agreement among the Parties with respect to the subject matter hereof, and
supersedes all discussions, agreements and understandings, both written and
oral, among the Parties with respect hereto.
16. Governing Law
This Agreement shall be governed by, and shall be construed in accordance
with, the laws of New Jersey without regard to its choice of law rules.
39
17. Execution
There will be two signed originals of this Agreement, which may be
executed in duplicate counterparts. Facsimiles or scanned versions of signatures
by the Parties shall be treated as originals.
18. Notices
Unless another person is designated, in writing, for receipt of notices
hereunder, notices to the respective Parties shall be sent to the following
Persons, provided that notices to the Plan Trust, upon its creation, shall be
sent to such Person(s) as the Plan Trust then designates in writing.
If to Congoleum: 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
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
40
With a copy to: 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
If to Mt. XxXxxxxx and Everest: Xxxxx Xxxxxxx
Associate General Counsel
Mt. XxXxxxxx Insurance Company
Westgate Corporate Center
000 Xxxxxxxxxxxx Xxxx, X.X. Xxx 000
Xxxxxxx Xxxxxx, Xxx Xxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
e-mail: xxxxx.xxxxxxx@xxxxxxxxx.xxx
With a copy to: Xxxx X. Xxxxxxx
Lord Bissell & Brook LLP
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
e-mail: xxxxxxxx@xxxxxxxxxxx.xxx
and
Xxxxx X. Xxxx
Cozen X'Xxxxxx
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxx Xxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
e-mail: e-mail: XXxxx@xxxxx.xxx
and
Xxxxx X. XxXxxxx
XxXxxxx, Xxxxxxx & Xxxxx, P.C.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
e-mail: xxxxxxx@xxxxxxxxxxxxxx.xxx
41
19. 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 te Plan Trust, subject to approval by the Bankruptcy Court.
C. Everest and Mt. XxXxxxxx represent and warrant that they have full
corporate authority to enter this Agreement as a binding and legal obligation of
Everest and Mt. XxXxxxxx. The person signing this Agreement on behalf of Everest
and Mt. XxXxxxxx represents and warrants that he or she is authorized by Everest
and Mt. XxXxxxxx to execute this Agreement as a binding and legal obligation of
Everest and Mt. XxXxxxxx.
42
D. Each Party represents and warrants that it has conducted a diligent
search for copies or other evidence of the Subject Policies and 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 Everest and/or Mt. XxXxxxxx
other than the Subject Policies listed on Attachment A hereto.
[The remainder of this page is left blank intentionally]
43
IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly
authorized representatives.
FOR CONGOLEUM CORPORATION, CONGOLEUM
SALES, INC. AND CONGOLEUM FISCAL, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------
Name: Xxxxxx X. Xxxxx
----------------
Title: CFO
----------------
Date: 9/30/05
----------------
FOR MT. XxXXXXXX INSURANCE COMPANY
By: /s/ Xxxx Xxxxxx
-------------------
Name: Xxxx Xxxxxx
----------------
Title: VP Claims, MMK
----------------
Date: Sept. 30, 2005
----------------
EVEREST REINSURANCE COMPANY
By: /s/ Xxxx Xxxxxx
-------------------
Name: Xxxx Xxxxxx
----------------
Title: VP Claims, MMK
----------------
Date: Sept. 30, 2005
----------------
44
FOR THE PLAN TRUST
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Date:
------------------------------
45
Attachment A
------------
Known Subject Policies
Policy Number Inception Termination
------------- --------- -----------
DXC 901037 January 1, 1976 January 1, 1977
DXCDX 0067 January 1, 1977 January 1, 1978
DXCDX 0588 January 1, 1978 January 1, 1979
DXCDX 0659 January 1, 1978 January 1, 1979
DXCDX 1356 January 1, 1979 January 1, 1980
DXCDX 1357 January 1, 1979 January 1, 1980
GMX 00451 January 1, 1980 January 1, 1981
GMX 00452 January 1, 1980 January 1, 1981
GMX 00856 January 1, 1981 January 1, 1982
GMX 00857 January 1, 1981 January 1, 1982
GMX 01497 January 1, 1982 January 1, 1983
GMX 01498 January 1, 1982 January 1, 1983
GMX 02027 January 1, 1983 January 1, 1984
GMX 02028 January 1, 1983 January 1, 1984
GMX 02545 January 1, 1984 January 1, 1985
GMX 02546 January 1, 1984 January 1, 1985
ATTACHMENT B
------------
-------------------------------------------
UNITED STATES 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
Case No. 03-51524 (KCF)
CONGOLEUM CORPORATION, et al., Jointly Administered
Debtors. Xxxxxxxxx Xxxxxxx X. Xxxxxxxx
-------------------------------------------
ORDER PURSUANT TO BANKRUPTCY RULE 9019 AUTHORIZING AND APPROVING INSURANCE
SETTLEMENT AGREEMENT AMONG DEBTORS, PLAN TRUST, MT. XXXXXXXX INSURANCE
COMPANY AND EVEREST REINSURANCE COMPANY
--------------------------------------------------------------------------
The relief set forth on the following pages, numbered two (2) through
sixteen (16) is hereby ORDERED.
Page 2 of 16
Debtors: Congoleum Corporation, et al.
Case No.: 03-51524 (KCF) (Jointly Administered)
Caption: Order Pursuant to Bankruptcy Rule 9019 Authorizing and Approving
Insurance Settlement Agreement Among Debtors, Plan Trust, Mt.
XxXxxxxx Insurance Company and Everest Reinsurance Company
--------------------------------------------------------------------------------
The Court has considered the "Motion for Order Pursuant to Bankruptcy Rule
9019 Authorizing and Approving Settlement Agreement Among Debtors, Plan Trust,
Mt. XxXxxxxx Insurance Company and Everest Reinsurance Company," dated September
30, 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 and 1146(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 Confidential Settlement Agreement and
Release (such agreement, including the exhibits thereto, the "Settlement
Agreement") dated as of September 30, 2005, among (a) the Debtors, along with
their predecessors, successors and assigns; (b) Mt. XxXxxxxx Insurance Company
("Mt. XxXxxxxx") and Everest Reinsurance Company ("Everest") and their
respective predecessors, successors and assigns 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, and if not defined in the Settlement Agreement, such terms shall have
the meaning ascribed in the Plan. The Settlement Agreement relates to the
Subject Policies.
----------
(1) As defined in the Sixth Modified Joint Prepackaged Plan of Reorganization
Under Chapter 11 of the Bankruptcy Code of Congoleum Corporation, et al., dated
July 22, 2005 (the "Sixth Modified Plan"), as presently constituted.
2
Page 3 of 16
Debtors: Congoleum Corporation, et al.
Case No.: 03-51524 (KCF) (Jointly Administered)
Caption: Order Pursuant to Bankruptcy Rule 9019 Authorizing and Approving
Insurance Settlement Agreement Among Debtors, Plan Trust, Mt.
XxXxxxxx Insurance Company and Everest Reinsurance Company
--------------------------------------------------------------------------------
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 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 (all references to Asbestos
Claims in this Order mean that term as it is defined in the Plan and not as it
is defined in the Settlement Agreement) 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 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.
A hearing was held on October 31, 2005 the ("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
Page 4 of 16
Debtors: Congoleum Corporation, et al.
Case No.: 03-51524 (KCF) (Jointly Administered)
Caption: Order Pursuant to Bankruptcy Rule 9019 Authorizing and Approving
Insurance Settlement Agreement Among Debtors, Plan Trust, Mt.
XxXxxxxx Insurance Company and Everest Reinsurance Company
--------------------------------------------------------------------------------
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.
----------
(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
Page 5 of 16
Debtors: Congoleum Corporation, et al.
Case No.: 03-51524 (KCF) (Jointly Administered)
Caption: Order Pursuant to Bankruptcy Rule 9019 Authorizing and Approving
Insurance Settlement Agreement Among Debtors, Plan Trust, Mt.
XxXxxxxx Insurance Company and Everest Reinsurance Company
--------------------------------------------------------------------------------
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 the Chapter
11 Case, and 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 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.
Good Faith Nature of Settlement Agreement and Reasonableness of the
Terms of the Settlement
D. The Debtors on the one hand and Everest and Mt. XxXxxxxx on the
other hand, negotiated at arm's length and in good faith to reach agreement on
the matters resolved through the Settlement Agreement.
E. 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.
5
Page 6 of 16
Debtors: Congoleum Corporation, et al.
Case No.: 03-51524 (KCF) (Jointly Administered)
Caption: Order Pursuant to Bankruptcy Rule 9019 Authorizing and Approving
Insurance Settlement Agreement Among Debtors, Plan Trust, Mt.
XxXxxxxx Insurance Company and Everest Reinsurance Company
--------------------------------------------------------------------------------
F. 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).
G. The payments by Everest and Mt. XxXxxxxx under the Subject
Policies and pursuant to the Settlement Agreement constitute reasonable and
substantial settlements and fair resolutions of the alleged liability of Everest
and Mt. XxXxxxxx under the Subject Policies for Asbestos Claims and other
Claims, and such contributions satisfy the liability of Everest and Mt.
XxXxxxxx, if any, for Asbestos Claims and other Claims under the Subject
Policies.
Authority To Enter Into Settlement Agreement And To Effect The Transactions
H. 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.
Releases And Designation Of Everest and Mt. XxXxxxxx As Settling Asbestos
Insurance Companies
6
Page 7 of 16
Debtors: Congoleum Corporation, et al.
Case No.: 03-51524 (KCF) (Jointly Administered)
Caption: Order Pursuant to Bankruptcy Rule 9019 Authorizing and Approving
Insurance Settlement Agreement Among Debtors, Plan Trust, Mt.
XxXxxxxx Insurance Company and Everest Reinsurance Company
--------------------------------------------------------------------------------
I. Pursuant and subject to the terms and conditions of the
Settlement Agreement, Everest and Mt. XxXxxxxx specifically have contracted to
receive, for themselves: (a) all of the benefits of being designated in the
Confirmation Order as a Settling Asbestos Insurance Company, including, but not
limited to, the channeling injunction and releases set forth in section 11.6 (as
presently enumerated) of the Plan, and (b) the releases contained in the
Settlement Agreement, and, pursuant and subject to the terms and conditions of
the Settlement Agreement, Everest and Mt. XxXxxxxx shall be entitled to, upon
entry of this Approval Order, the protections provided by such designation and
treatment without further order of this Court.
J. Pursuant and subject to the terms and conditions of the
Settlement Agreement, Everest and Mt. XxXxxxxx specifically have agreed not to
object to or oppose confirmation of the Plan, and Everest and Mt. XxXxxxxx have
agreed not to appeal the Confirmation Order. Everest and Mt. XxXxxxxx are,
however, permitted to object to or oppose confirmation of, and to appeal from
confirmation of, a plan of reorganization other than the Plan. A plan of
reorganization that differs from the Plan because it contains an asbestos
channeling injunction differing from that found in the Plan shall be treated as
the Plan for purposes of the preceding sentence and the Settlement Agreement
provided that such plan:
7
Page 8 of 16
Debtors: Congoleum Corporation, et al.
Case No.: 03-51524 (KCF) (Jointly Administered)
Caption: Order Pursuant to Bankruptcy Rule 9019 Authorizing and Approving
Insurance Settlement Agreement Among Debtors, Plan Trust, Mt.
XxXxxxxx Insurance Company and Everest Reinsurance Company
--------------------------------------------------------------------------------
1. Contains an injunction for the benefit of Everest and Mt.
XxXxxxxx pursuant to section 524(g) of the Bankruptcy Code that bars
any action directed against Everest and Mt. XxXxxxxx to the extent
that (a) Everest and/or Mt. XxXxxxxx are 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 Everest and/or
Mt. XxXxxxxx arises by reason of their provision of insurance to the
Debtors;
2. Grants Everest and Mt. XxXxxxxx all of the benefits of a Settling
Asbestos Insurance Company as described, and as provided for, in the
Plan;
3. Provides that any right, claim or cause of action that any Person,
including an Asbestos Insurance Company, may have been entitled to
assert against Everest and/or Mt. XxXxxxxx based on or relating to
Asbestos Claims or Demands and any other claims subject to the
injunction in favor of Everest and Mt. XxXxxxxx described in J.(1)
above shall be channeled to and become a right, claim or cause of
action against the Plan Trust and not against Everest and/or Mt.
XxXxxxxx; and
4. Does not provide injunctive protection to any other Asbestos
Insurance Company that is broader than the injunctive protection
provided to Everest and Mt. XxXxxxxx.
Objections Overruled
8
Page 9 of 16
Debtors: Congoleum Corporation, et al.
Case No.: 03-51524 (KCF) (Jointly Administered)
Caption: Order Pursuant to Bankruptcy Rule 9019 Authorizing and Approving
Insurance Settlement Agreement Among Debtors, Plan Trust, Mt.
XxXxxxxx Insurance Company and Everest Reinsurance Company
--------------------------------------------------------------------------------
K. All objections filed with respect to the Motion or the entry of
this Approval Order and not withdrawn are hereby overruled. 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.
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. To the extent that any
Finding of Fact constitutes a Conclusion of Law, the Court so concludes.
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.
9
Page 10 of 16
Debtors: Congoleum Corporation, et al.
Case No.: 03-51524 (KCF) (Jointly Administered)
Caption: Order Pursuant to Bankruptcy Rule 9019 Authorizing and Approving
Insurance Settlement Agreement Among Debtors, Plan Trust, Mt.
XxXxxxxx Insurance Company and Everest Reinsurance Company
--------------------------------------------------------------------------------
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,
Everest and Mt. XxXxxxxx, as the case may be, the Settlement Agreement shall
govern and control.
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 (c) to take all further
actions as may be reasonably requested in accordance with the Settlement
Agreement by Everest and Mt. XxXxxxxx 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
10
Page 11 of 16
Debtors: Congoleum Corporation, et al.
Case No.: 03-51524 (KCF) (Jointly Administered)
Caption: Order Pursuant to Bankruptcy Rule 9019 Authorizing and Approving
Insurance Settlement Agreement Among Debtors, Plan Trust, Mt.
XxXxxxxx Insurance Company and Everest Reinsurance Company
--------------------------------------------------------------------------------
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) 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.
6. No later than fourteen (14) days after the date that this Order
is entered: a) Congoleum shall dismiss without prejudice its Claims,
counterclaims or cross-claims (if any) against Everest and Mt. XxXxxxxx in the
Coverage Action; and b) Everest and Mt. XxXxxxxx shall dismiss without prejudice
their Claims, counterclaims or cross-claims (if any) against Congoleum in the
Coverage Action. Upon the occurrence of the Trigger Date, the Parties shall
submit a stipulation of dismissal with prejudice. The Parties shall bear their
own costs, expenses, and counsel fees in the Coverage Action. Nothing herein
shall prevent Congoleum from recovering its costs, expenses and counsel fees in
the Coverage Action from any Entity other than Everest and/or Mt. XxXxxxxx. The
Parties' stipulation of dismissal with prejudice shall state that Congoleum's
11
Page 12 of 16
Debtors: Congoleum Corporation, et al.
Case No.: 03-51524 (KCF) (Jointly Administered)
Caption: Order Pursuant to Bankruptcy Rule 9019 Authorizing and Approving
Insurance Settlement Agreement Among Debtors, Plan Trust, Mt.
XxXxxxxx Insurance Company and Everest Reinsurance Company
--------------------------------------------------------------------------------
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 Section 7 thereof, Congoleum may re-join Everest and Mt. XxXxxxxx to the
Coverage Action and re-assert all claims against Everest and Mt. XxXxxxxx 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 Everest
and Mt. XxXxxxxx in the Coverage Action or in any new action. The Parties have
agreed that in such event, each of Congoleum, Everest and Mt. XxXxxxxx will not
be bound by any rulings or decisions in the Coverage Action made after September
6, 2005.
7. Everest's and Mt. XxXxxxxx'x payment in full of the Settlement
Amount, as provided for in Paragraph 2.A of the Settlement Agreement, shall
satisfy and extinguish in full Everest's and Mt. XxXxxxxx'x obligations for
Asbestos Claims under the Subject Policies as provided in the Settlement
Agreement. Pursuant to 11 U.S.C. ss. 363(b)(1) and (f), Congoleum shall be
deemed to have sold, and Everest and Mt. XxXxxxxx shall be deemed to have
purchased, free and clear of any and encumbrances whatsoever pursuant to 11
U.S.C. ss. 363(f) of the Bankruptcy Code, all of Congoleum's rights, title and
interests in and to (a) the Subject Policies and (b) any and all claims of
12
Page 13 of 16
Debtors: Congoleum Corporation, et al.
Case No.: 03-51524 (KCF) (Jointly Administered)
Caption: Order Pursuant to Bankruptcy Rule 9019 Authorizing and Approving
Insurance Settlement Agreement Among Debtors, Plan Trust, Mt.
XxXxxxxx Insurance Company and Everest Reinsurance Company
--------------------------------------------------------------------------------
Congoleum with respect to the Subject Policies. Upon confirmation of the Plan
and deposit of the Settlement Amount in the Escrow Account by Everest and Mt.
XxXxxxxx pursuant to the terms of the Settlement Agreement, Everest and Mt.
XxXxxxxx shall be deemed to be "good faith purchasers" under 11 U.S.C. ss.
363(m) of the Bankruptcy Code of Congoleum's rights and interests in the Subject
Policies and are entitled to the protections provided by such designation
without further order of the Court.
Additional Provisions
8. 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 interested parties, 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.
9. Everest's and Mt. XxXxxxxx'x payment of the Settlement Amount
shall be made to the Escrow Agent and, after the Trigger Date, the Settlement
Amount shall be disbursed by the Escrow Agent 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
Plan Trust pursuant to the Plan and the Trust Distribution Procedures for the
Congoleum Plan Trust, as may be amended.
13
Page 14 of 16
Debtors: Congoleum Corporation, et al.
Case No.: 03-51524 (KCF) (Jointly Administered)
Caption: Order Pursuant to Bankruptcy Rule 9019 Authorizing and Approving
Insurance Settlement Agreement Among Debtors, Plan Trust, Mt.
XxXxxxxx Insurance Company and Everest Reinsurance Company
--------------------------------------------------------------------------------
10. 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.
11. 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.
12. This Approval Order shall be effective immediately upon its
entry. The ten (10) day stay provided in Bankruptcy Rule 6004(c) is hereby
waived.
13. 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.
14
Page 15 of 16
Debtors: Congoleum Corporation, et al.
Case No.: 03-51524 (KCF) (Jointly Administered)
Caption: Order Pursuant to Bankruptcy Rule 9019 Authorizing and Approving
Insurance Settlement Agreement Among Debtors, Plan Trust, Mt.
XxXxxxxx Insurance Company and Everest Reinsurance Company
--------------------------------------------------------------------------------
14. 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 8, 15 and 16 hereof, subject
to the terms of Section 7 of the Settlement Agreement, shall be null and void
and not be binding on any entity.
15. 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 the Execution Date through 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.
16. 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.
17. The provisions of this Approval Order are non-severable and
mutually dependent.
15
Page 16 of 16
Debtors: Congoleum Corporation, et al.
Case No.: 03-51524 (KCF) (Jointly Administered)
Caption: Order Pursuant to Bankruptcy Rule 9019 Authorizing and Approving
Insurance Settlement Agreement Among Debtors, Plan Trust, Mt.
XxXxxxxx Insurance Company and Everest Reinsurance Company
--------------------------------------------------------------------------------
18. 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.
16
Attachment C
------------
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of September __, 2005 (the "Escrow
Agreement") is made by, between and among Congoleum Corporation ("Congoleum").
Everest Reinsurance Company, formerly known as Prudential Reinsurance Company
("Everest") and Mt. XxXxxxxx Insurance Company, formerly known as Gibraltar
Casualty Company ("Mt. XxXxxxxx") (each as defined in the Confidential
Settlement Agreement and Release Among Congoleum Corporation, The Plan Trust and
Mt. XxXxxxxx Insurance Company and Everest Reinsurance Company, dated September
30, 2005 (the "Settlement Agreement")) and Wachovia Bank, National Association,
a national banking association, as escrow agent (the "Escrow Agent") (Congoleum,
Everest and Mt. XxXxxxxx shall be referred to herein separately as a "Party" and
collectively as the "Parties").
WITNESSETH:
WHEREAS, Everest and Mt. XxXxxxxx issued certain policies of insurance to
Congoleum (the "Subject Policies," as more fully described and defined in the
Settlement Agreement); and
WHEREAS, Persons within the definition of Congoleum have incurred and may
incur in the future certain liabilities, expenses and losses arising out of
various "Claims" (as defined in the Settlement Agreement), including
Asbestos-Related Bodily Injury Claims, other asbestos-related claims,
environmental claims and/or other types of claims; and
WHEREAS, Congoleum asserts that Everest and Mt. XxXxxxxx are obligated
under the Subject Policies to make liability payments and pay defense costs in
connection with Claims, including claims for asbestos-related bodily injury; and
WHEREAS, there are disputes between Congoleum on the one hand and Everest
and Mt. XxXxxxxx on the other hand regarding their respective rights and
obligations with respect to insurance coverage for Claims, including
Asbestos-Related Bodily Injury Claims, other asbestos-related claims,
environmental claims, and/or other types of claims (the "Coverage Dispute"); and
WHEREAS, Congoleum, Everest and Mt. XxXxxxxx have reached a settlement of
the Coverage Dispute and of all other issues relating to the Subject Policies
that is embodied in the Settlement Agreement; and
WHEREAS, Congoleum, Everest and Mt. XxXxxxxx wish to appoint an escrow
agent to hold and disburse funds in accordance with the Settlement Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties agree as
follows:
ARTICLE I
SECTION 1. Appointment of Escrow Agent. Congoleum, Everest,and Mt.
XxXxxxxx hereby appoint Wachovia Bank, National Association as the escrow agent
under this Escrow Agreement (the "Escrow Agent"), and the Escrow Agent hereby
accepts such appointment.
2
ARTICLE II
The Escrow Account
SECTION 2.1. Deposit. Congoleum, Everest and Mt. XxXxxxxx agree that
pursuant to the Settlement Agreement, Everest and Mt. XxXxxxxx shall deliver the
sum of Twenty Xxx Xxxxxxx, Xxxx Xxxxxxx Xxxxxxxx Xxxxxx Xxxxxx dollars
($21,500,000.00) (the "Settlement Amount") to the Escrow Agent, to be held,
invested and disbursed as provided in this Escrow Agreement (as said amount may
increase or decrease as a result of the investment and reinvestment thereof and
as said amount may be reduced by charges thereto and payments and setoffs
therefrom to compensate or reimburse Escrow Agent for amounts owing to it
pursuant hereto) (hereafter the "Escrow Funds") to be held by Escrow Agent in
accordance with the terms hereof. Subject to and in accordance with the terms
and conditions hereof, Escrow Agent agrees that it shall receive, hold in
escrow, invest and reinvest, and release or distribute the Escrow Funds. It is
hereby expressly stipulated and agreed that all interest and other earnings on
the Escrow Funds shall become a part of the Escrow Funds for all purposes, and
that all losses resulting from the investment or reinvestment thereof from time
to time and all amounts charged thereto to compensate or reimburse the Escrow
Agent from time to time for amounts owing to it hereunder shall from the time of
such loss or charge no longer constitute part of the Escrow Funds.
SECTION 2.2. Distribution of Escrow Funds. The Parties hereto agree
that the Escrow Agent shall hold the Escrow Funds and shall disburse the Escrow
Funds only upon the occurrence of any one or more of the following events (each,
individually, a "Disbursement Event"):
3
(a) Joint written instructions from Congoleum, Everest and Mt.
XxXxxxxx to the Escrow Agent directing the disbursement of Escrow Funds;
(b) Upon the sole instruction of Everest and Mt. XxXxxxxx, pursuant
to sub-paragraph 2.D.3 of the Settlement Agreement, unless Congoleum objects in
writing to such instruction within ten (10) "Business Days" (as defined in
Section 2.3 below) of the date on which written notice of such instruction is
provided to Congoleum. Everest and Mt. XxXxxxxx shall confirm in writing the
date on which such written notice was provided to Congoleum, pursuant to the
notice provisions set forth in Section 4.3 below.
(c) Joint written instructions from the Parties regarding any tax
payment as provided in Section 3.9 below;
(d) Order of any court of competent jurisdiction directing the
disbursement of Escrow Funds; or
(e) The decision of the arbitrator appointed pursuant to
sub-paragraph 2.D.6 of the Settlement Agreement to resolve disputes concerning
certain disbursements of Escrow Funds.
Upon the occurrence of any of the foregoing Disbursement Events, the
Escrow Agent shall disburse all or part of the Escrow Funds in accordance with
such written instruction, notice or Order.
SECTION 2.3. Investment of Escrow Funds. The Escrow Agent shall
invest and reinvest the Escrow Funds in a Wachovia Trust Money Access Corporate
Trust Money Market Account, unless otherwise instructed in writing jointly by
Congoleum, Everest and Mt. XxXxxxxx. Such written instructions, if any, referred
4
to in the foregoing sentence shall specify the type and identity of the
investments to be purchased and/or sold and shall also include the name of the
broker-dealer, if any, which Congoleum, Everest, and Mt. XxXxxxxx jointly direct
the Escrow Agent to use in respect of such investment, any particular settlement
procedures required, if any (which settlement procedures shall be consistent
with industry standards and practices), and such other information as the Escrow
Agent may require. Absent willful misconduct or gross negligence, the Escrow
Agent shall not be liable for failure to invest or reinvest funds absent
sufficient written direction. Unless the Escrow Agent is otherwise directed in
such written instructions, the Escrow Agent may use a broker-dealer of its own
selection, including a broker-dealer owned by or affiliated with Escrow Agent or
any of its affiliates. The Escrow Agent or any of its affiliates may receive
compensation with respect to any investment directed hereunder. It is expressly
agreed and understood by the Parties that the Escrow Agent shall not in any way
whatsoever be liable for losses on any investments, including, but not limited
to losses from market risks due to premature liquidation or resulting from other
actions taken pursuant to this Escrow Agreement.
Receipt, investment and reinvestment of the Escrow Funds shall be
confirmed by the Escrow Agent as soon as practicable by account statement
separately to Congoleum and to Everest and Mt. XxXxxxxx, and any discrepancies
in any such account statement shall be noted by any one or more of Congoleum,
Everest and Mt. XxXxxxxx to the Escrow Agent within thirty (30) calendar days
after receipt thereof. Failure to inform the Escrow Agent in writing of any
discrepancies in any such account statement within said 30-day period shall
conclusively be deemed confirmation of such account statement in its entirety.
For purposes of this paragraph, (a) each account statement shall be deemed to
have been received by the party to whom directed on the earlier to occur of: (i)
actual receipt thereof; and (ii) three (3) "Business Days" (hereinafter defined)
after the deposit thereof in the United States Mail, postage prepaid, and (b)
the term "Business Day" shall mean any day of the year, excluding Saturday,
Sunday and any other day on which national banks are required or authorized to
close in New York, New York.
5
SECTION 2.4. Resignation/Removal and Appointment of Successor Escrow
Agent.
The Escrow Agent may resign hereunder upon thirty (30) days' prior
written notice to Congoleum, Everest and Mt. XxXxxxxx, and the Escrow Agent may
be removed as escrow agent at any time upon thirty (30) days prior written
notice jointly from Congoleum, Everest and Mt. XxXxxxxx to the Escrow Agent. A
successor escrow agent shall be appointed by agreement between Congoleum,
Everest and Mt. XxXxxxxx if (a) there is a resignation or removal, or (b) the
Escrow Agent is dissolved, taken under the control of any public officer or
officers or if a receiver appointed by a court, or otherwise becomes incapable
of acting hereunder. If no successor agent shall have been so appointed and have
accepted appointment within thirty (30) days of (i) the giving of written notice
by the resigning Escrow Agent, (ii) the giving of written notice of removal
jointly by Congoleum, Everest and Mt. XxXxxxxx, or (iii) any Party's knowledge
of any of the events specified in clause (b) of the preceding sentence,
Congoleum, Everest and Mt. XxXxxxxx together, or the Escrow Agent may petition
the United States Bankruptcy Court for the District of New Jersey for the
appointment of a successor escrow agent. Upon the acceptance by the successor
escrow agent of such appointment, the Escrow Agent shall deliver the Escrow
Funds to the successor agent and the Escrow Agent will be released from its
obligations hereunder by written instrument, a copy of which shall be delivered
to Congoleum, Everest, Mt. XxXxxxxx, the resigning Escrow Agent and the
successor escrow agent.
6
SECTION 2.5. Term of Escrow Agreement. This Escrow Agreement shall
remain in full force and effect until such time as all the amounts in the Escrow
Account have been distributed in accordance with Sections 2.2 and 2.3 hereof;
provided, however, that in the event all fees, expenses, costs and other amounts
required to be paid to Escrow Agent hereunder are not fully and finally paid
prior to termination, the provisions of Article III hereof shall survive the
termination hereof.
SECTION 2.6. Escrow Agent Fees and Expenses. The Escrow Agent shall
be paid for its services hereunder in accordance with Escrow Agent's fee
schedule as attached as Schedule I hereto as in effect from time to time,
together with all expenses incurred by the Escrow Agent in connection with the
performance of its duties and otherwise in connection with the preparation,
operation, administration and enforcement of this Escrow Agreement, including,
without limitation, attorneys' fees, brokerage costs and related expenses
incurred by the Escrow Agent from income earned on the Escrow Funds. The Escrow
Agent's fees and expenses, as identified in the immediately preceding sentence,
shall be paid first from the income earned on the Settlement Amount, and, to the
extent such income is not sufficient to pay the Escrow Agent's fees and
expenses, then from the funds on deposit in the Escrow Account.
ARTICLE III
The Escrow Agent
SECTION 3.1. Scope of Undertaking. The Escrow Agent's duties and
responsibilities in connection with this Escrow Agreement shall be limited to
those expressly set forth in this Escrow Agreement. The Escrow Agent is not a
principal, participant or beneficiary in any transaction underlying this Escrow
Agreement, including, but not limited to, the Subject Policies or the Settlement
Agreement, and shall have no duty to inquire beyond the terms and provisions
hereof. The Escrow Agent shall have no responsibility or obligation of any kind
in connection with this Escrow Agreement or the Escrow Funds other than to
receive, hold, invest, reinvest and deliver the Escrow Funds and provided notice
and statements as herein provided. Without limiting the generality of the
7
foregoing, it is hereby expressly agreed and stipulated by the Parties hereto
that the Escrow Agent shall not be required to exercise any investment
discretion hereunder and shall have no investment or management responsibility
and, accordingly, shall have no duty to, or liability for its failure to,
provide investment recommendations or investment advice to Congoleum, Everest
and Mt. XxXxxxxx or any of them under this Escrow Agreement. The Escrow Agent
shall not be liable for any error in judgment, any act or omission, any mistake
of law or fact, or for anything it may do or refrain from doing in connection
herewith, except for its own failure to comply with sufficient written
instructions, willful misconduct or gross negligence. It is the intention of the
Parties hereto that the Escrow Agent shall never be required to use, advance or
risk its own funds in the performance of any of its duties.
SECTION 3.2. Reliance; Liability. The Escrow Agent may rely on, and
shall not be liable for acting or refraining from acting in accordance with, any
written notice, instruction or request or other paper furnished to it hereunder
or pursuant hereto and reasonably believed by it to have been signed or
presented by the proper Party or Parties. The Escrow Agent shall be responsible
for holding, investing, reinvesting and disbursing the Escrow Funds pursuant to
this Escrow Agreement; provided, however, except in circumstances involving the
Escrow Agent's failure to comply with sufficient written instructions, willful
misconduct or gross negligence, in no event shall the Escrow Agent be liable for
special, indirect or consequential loss or damage of any kind whatsoever
8
(including but not limited to lost profits), even if the Escrow Agent has been
advised of the likelihood of such loss or damage and regardless of the form of
action. The Escrow Agent is not responsible or liable in any manner whatsoever
for the sufficiency, correctness, genuineness or validity of the subject matter
of this Escrow Agreement or any part hereof, or for the transaction or
transactions requiring or underlying the execution of this Escrow Agreement, the
form or execution hereof, or for the identity or authority of any person
executing this Escrow Agreement or any part hereof, or depositing the Escrow
Funds.
SECTION 3.3. None of the provisions of this Escrow Agreement shall
require the Escrow Agent to expend or risk its own funds in the performance of
any of its duties hereunder, or in the exercise of any of its rights or powers.
SECTION 3.4. The Escrow Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, entitlement,
order, approval or other paper or document presented to the Escrow Agent by
Congoleum, Everest and Mt. XxXxxxxx.
SECTION 3.5. The Escrow Agent may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, attorneys, custodians or nominees appointed with due care, and
shall not be responsible for any willful misconduct or gross negligence on the
part of any agent, attorney, custodian or nominee acting in such capacity for
the Escrow Agent.
SECTION 3.6. In conjunction with Section 2.6 of this Escrow
Agreement, the Escrow Agent shall be entitled to the fees and expenses as shown
on Schedule I hereto. The obligations to pay or reimburse the Escrow Agent for
reasonable expenses, disbursements and advances shall survive the satisfaction
and discharge of this Escrow Agreement or the earlier resignation or removal of
the Escrow Agent. The Escrow Agent agrees to advise Congoleum, Everest and Mt.
XxXxxxxx in writing of increases in fees and expenses before they take effect
and of all new fees and expenses not agreed to prior to execution of this Escrow
Agreement.
9
SECTION 3.7. Congoleum agrees to indemnify and defend the Escrow
Agent, its officers, directors, partners, employees and agents (each herein
called an "Indemnified Party") against, and hold each Indemnified Party harmless
from, any and all losses, liabilities and expenses, including, but not limited
to, fees and expenses of in-house or outside counsel, court costs, costs,
damages and claims, costs of investigation, litigation and arbitration, tax
liability (other than for income taxes on fees earned hereunder) and loss on
investments suffered or incurred by any Indemnified Party in connection with or
arising from or out of (i) the execution, delivery or performance of this Escrow
Agreement, or (ii) the compliance or attempted compliance by any Indemnified
Party with any instruction or direction upon which the Escrow Agent is
authorized to rely under this Escrow Agreement, except to the extent that any
such loss, liability or expense may result from the willful misconduct or gross
negligence of such Indemnified Party.
SECTION 3.8. In the event that instructions to transfer funds are
given, whether in writing or facsimile, the Escrow Agent is authorized to seek
confirmation of such instructions by telephone call-back to the person or person
designated on Schedule II hereto, and the Escrow Agent may rely upon the
confirmations of anyone purporting to be the person or persons so designated.
It is understood that, absent willful misconduct or gross negligence,
in any transfer of Escrow Funds, the Escrow Agent and the beneficiary's bank may
rely solely upon any account numbers or similar identifying number provided by
either of the other Parties hereto to identify: (i) the beneficiary, (ii) the
beneficiary's bank, or (iii) an intermediary bank. The Escrow Agent may apply
any of the Escrow Funds for any payment order it executes using any such
identifying number, even where its use may result in a person other than the
beneficiary being paid, or the transfer of funds to a bank other than the
beneficiary's bank or an intermediary bank, designated.
10
SECTION 3.9. Upon execution of this Escrow Agreement, Congoleum,
Everest and Mt. XxXxxxxx shall provide the Escrow Agent with the applicable
respective taxpayer identification number documented by an appropriate Form W-8
or Form W-9. Failure so to provide such information may prevent or delay
disbursements from the initial deposit of the Settlement Amount and may also
result in the assessment of a penalty and the Escrow Agent's being required to
withhold tax on any interest or other income earned on the Escrow Funds. Any
payments of income shall be subject to applicable withholding regulations then
in force in the United States and any other applicable jurisdiction. Congoleum,
Everest and Mt. XxXxxxxx agree that any applicable international, federal or
other taxes relating to any interest or other income earned on the Escrow Funds
shall be paid from the Escrow Funds.
ARTICLE IV
Miscellaneous
SECTION 4.1. Waivers; Amendments; Benefit of Agreement.
(a) No failure or delay by any Party in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. No waiver
of any provision of this Escrow Agreement or consent to any departure there from
shall in any event be effective unless the same shall be authorized as provided
11
in paragraph (b) below, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. No notice or
demand on any party in any case shall entitle such party to any other or further
notice or demand in similar or other circumstances. Except as otherwise
expressly provided herein, all rights and remedies existing under this Escrow
Agreement are cumulative with, and not exclusive of, any rights or remedies
otherwise available.
(b) No provision of this Escrow Agreement may be waived, amended,
supplemented, or modified except pursuant to an agreement in writing entered
into by Congoleum, Everest and Mt. XxXxxxxx and the Escrow Agent.
(c) Nothing in this Escrow Agreement, expressed or implied, shall
give or be construed to give to any person other than the Parties any legal or
equitable right, remedy or claim under this Escrow Agreement, or under any
covenants and provisions of this Escrow Agreement, each covenant and provision
being for the sole benefit of the Parties.
SECTION 4.2. Legal Capacity. Congoleum, Everest and Mt. XxXxxxxx and
the Escrow Agent represent and warrant that they each have the legal capacity to
enter into this Escrow Agreement and to perform all obligations undertaken
herein as required of them.
SECTION 4.3. Notices. All communications or notices provided for
hereunder (including a notice of change of address) will be in writing, will be
addressed in accordance with the information set forth below and will be deemed
given (a) in the case of delivery by hand, when delivered by hand, (b) in the
case of delivery by a standard overnight carrier, upon the date of delivery
indicated in the records of such carrier, (c) in the case of a facsimile
transmission, when received by recipient in legible form (with telephone
confirmation), or (d) in the case of delivery by certified mail with return
receipt requested, three days after being deposited in the United States mail:
12
If to Congoleum Corporation:
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
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
With a copy to: 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
13
If to Mt. XxXxxxxx and Everest: Xxxxx Xxxxxxx
Associate General Counsel
Mt. XxXxxxxx Insurance Company
Westgate Corporate Center
000 Xxxxxxxxxxxx Xxxx, X.X. Xxx 000
Xxxxxxx Xxxxxx, Xxx Xxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
e-mail: xxxxx.xxxxxxx@xxxxxxxxx.xxx
With a copy to: Xxxx X. Xxxxxxx
Lord Bissell & Brook LLP
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
e-mail: xxxxxxxx@xxxxxxxxxxx.xxx
and
Xxxxx X. Xxxx
Cozen X'Xxxxxx
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxx Xxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
e-mail: e-mail: XXxxx@xxxxx.xxx
and
Xxxxx X. XxXxxxx
XxXxxxx, Xxxxxxx & Xxxxx, P.C.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Fax: 000 000-0000
e-mail: xxxxxxx@xxxxxxxxxxxxxx.xxx
If to the Escrow Agent: Wachovia Bank, National Association
00 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx Xxxxxx
Phone: (000) 000-0000
Fax: (000)-000-0000
E-mail: xxxx.xxxxxx@xxxxxxxx.xxx
14
With a copy to: Xxxxx, Xxxxxx & Xxxxxx. LLP
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxxxxx@xxxxxxxxxxx.xxx
or at such other addresses as any Party may designate by notice to the other
Parties hereto in accordance with this Section 4.3.
SECTION 4.4. Governing Law; Waiver of Jury Trial; Jurisdiction.
(a) This Escrow Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey including all matters of
construction, validity and performance.
(b) TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH, THIS ESCROW AGREEMENT OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTIES HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER
INTO THIS ESCROW AGREEMENT.
(c) Congoleum, Everest and Mt. XxXxxxxx and the Escrow Agent hereby
submit for purposes solely in connection with this Escrow Agreement to the
jurisdiction of the United States Bankruptcy Court for the District of New
Jersey and for no other purpose.
15
SECTION 4.5. Counterparts. This Escrow Agreement may be executed in
three or more counterparts, and by the different Parties hereto in separate
counterparts, each of which, when so executed and delivered, shall be an
original, but all of which together shall constitute one and the same
instrument. All signatures of the Parties to this Escrow Agreement may be
transmitted by facsimile, and such facsimile will, for all purposes, be deemed
to be the original signature of such Party whose signature it reproduces, and
will be binding upon such Party.
SECTION 4.6. Severability. If any term or provision of this Escrow
Agreement or the application thereof to any circumstance shall, in any
jurisdiction and to any extent, be invalid or unenforceable, such term or such
provision shall be ineffective as to such jurisdiction to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
any remaining terms or provisions of this Escrow Agreement or the application of
such term or provision to circumstances other than those as to which it is held
invalid or unenforceable. To the extent permitted by applicable law, the Parties
hereto waive any provision of law that renders any term or provision of this
Escrow Agreement invalid or unenforceable in any respect.
SECTION 4.7. Rules of Interpretation. This Escrow Agreement shall be
construed without regard to any presumption or other rule requiring construction
against the party drafting this Escrow Agreement. The headings of the Sections
and paragraphs of this Escrow Agreement have been inserted for convenience of
reference only and shall in no way restrict or otherwise modify any of the terms
or provisions hereof. All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
16
SECTION 4.8. Entire Agreement. This Escrow Agreement supersedes all
prior agreements, written or oral, between or among any of the Parties relating
to the transaction contemplated hereby or thereby and each of the Parties
represents and warrants to the others that this Escrow Agreement constitutes the
entire agreement among the Parties relating to the transactions contemplated
hereby and thereby and supersedes all prior arrangements or understandings with
respect thereto, written or oral.
SECTION 4.09. Further Cooperation. Each of the Parties hereto agrees
to cooperate with the other Parties hereto in effectuating this Escrow Agreement
and to execute and deliver such further documents or instruments and to take
such further actions as shall be reasonably requested in connection therewith.
SECTION 4.10. Assignment Binding Effect. No Party may assign this
Escrow Agreement, or any of its rights or obligations hereunder, without the
consent of the Parties hereto (which consent shall not be unreasonably
withheld). All agreements, representations, warranties and indemnities in this
Escrow Agreement and in any agreement, document or certificate delivered
concurrently with the execution of this Escrow Agreement, or from time to time
hereafter, shall bind the Party making the same and such Party's successors and
assigns, and shall inure to the benefit of each Party for whom made and for such
Party's permitted successors and assigns.
SECTION 4.11. Specific Performance. The rights of the Parties under
this Escrow Agreement are unique and each Party hereto acknowledges that the
failure of a party to perform its obligations hereunder would irreparably harm
the other Parties hereto. Accordingly, the Parties shall, in addition to such
other remedies as may be available at law or in equity, have the right to
enforce their rights hereunder by actions for specific performance to the extent
permitted by law.
[The remainder of this page is left blank intentionally.]
17
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement to be
effective as of the date first above written.
CONGOLEUM CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-------------------
Name: Xxxxxx X. Xxxxx
----------------
Title: CFO
----------------
EVEREST REINSURANCE COMPANY
By: /s/ Xxxx Xxxxxx
-------------------
Name: Xxxx Xxxxxx
----------------
Title: VP Claims, MMK
----------------
MT. XXXXXXXX INSURANCE COMPANY
By: /s/ Xxxx Xxxxxx
-------------------
Name: Xxxx Xxxxxx
----------------
Title: VP Claims, MMK
----------------
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Escrow Agent
By: /s/ Xxxx Xxxxxx
-------------------
Name: Xxxx Xxxxxx
----------------
Title: Vice President
----------------
18
--------------------------------------------------------------------------------
Tax Certification: Taxpayer ID#: 000000000
------------
NOTE: The following certification shall be used by and for a U.S. resident only.
Non-residents must use and provide Form W8-BEN
Customer is a (check one):
_X_ Corporation ___ Municipality ___ Partnership ___ Non-profit or
Charitable Org
___ Individual ___ REMIC ___ Trust ___ Other ___________________
Under the penalties of perjury, the undersigned certifies that:
(1) the entity is organized under the laws of the United States
(2) the number shown above is its correct Taxpayer Identification Number (or
it is waiting for a number to be issued to it); and
(3) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified
it that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Investors who do not supply a tax identification number will be subject to
backup withholding in accordance with IRS regulations.
--------------------------------------------------------------------------------
19
Note: The IRS does not require your consent to any provision of this document
other than the certifications required to avoid backup withholding.
By: /s/ Xxxxxx X. Xxxxx
-------------------
Name: Xxxxxx X. Xxxxx
---------------
Title: CFO
---
Congoleum Corporation
20
--------------------------------------------------------------------------------
Tax Certification: Taxpayer ID#: 00-0000000
----------
NOTE: The following certification shall be used by and for a U.S. resident only.
Non-residents must use and provide Form W8-BEN
Customer is a (check one):
___ Corporation ___ Municipality ___ Partnership ___ Non-profit
or Charitable Org
___ Individual ___ REMIC ___ Trust ___ Other _______________________
Under the penalties of perjury, the undersigned certifies that:
(4) the entity is organized under the laws of the United States
(5) the number shown above is its correct Taxpayer Identification Number (or
it is waiting for a number to be issued to it); and
(6) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified
it that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Investors who do not supply a tax identification number will be subject to
backup withholding in accordance with IRS regulations.
--------------------------------------------------------------------------------
21
Note: The IRS does not require your consent to any provision of this document
other than the certifications required to avoid backup withholding.
By:
--------------------------
Name:
------------------------
Title:
-----------------------
EVEREST REINSURANCE COMPANY
By: /s/ Xxxx Xxxxxx
---------------------
Name: Xxxx Xxxxxx
------------------
Title: VP Claims, MMK
------------------
MT. XXXXXXXX INSURANCE COMPANY
22
--------------------------------------------------------------------------------
Tax Certification: Taxpayer ID#: 00-0000000
----------
NOTE: The following certification shall be used by and for a U.S. resident only.
Non-residents must use and provide Form W8-BEN
Customer is a (check one):
___ Corporation ___ Municipality ___ Partnership ___ Non-profit
or Charitable Org
___ Individual ___ REMIC ___ Trust ___ Other ________________________
Under the penalties of perjury, the undersigned certifies that:
(7) the entity is organized under the laws of the United States
(8) the number shown above is its correct Taxpayer Identification Number (or
it is waiting for a number to be issued to it); and
(9) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified
it that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Investors who do not supply a tax identification number will be subject to
backup withholding in accordance with IRS regulations.
--------------------------------------------------------------------------------
23
Note: The IRS does not require your consent to any provision of this document
other than the certifications required to avoid backup withholding.
By: /s/ Xxxx Xxxxxx
---------------------
Name: Xxxx Xxxxxx
------------------
Title: VP Claims, MMK
------------------
EVEREST REINSURANCE COMPANY
By:
--------------------------
Name:
------------------------
Title:
-----------------------
MT. XXXXXXXX INSURANCE COMPANY
24
Schedule I
FEE SCHEDULE
WACHOVIA BANK, NATIONAL ASSOCIATION
ESCROW AGENT SERVICES
FOR
CONGOLEUM CORPORATION
AND
EVEREST REINSURANCE COMPANY
AND MT. XXXXXXXX INSURANCE COMPANY
I. Acceptance Fee $1,500
II. Annual Administration Fee $2,500
III. Counsel Fees & Expenses Billed @ Cost
The above-mentioned fees are basic charges and do not include out-of-pocket
expenses, which will be billed in addition to the regular charges as required.
Out-of-pocket expenses shall include, but are not limited to: telephone tolls,
stationery, postage expenses, and travel expenses.
In the event we are required to handle a default situation, we will charge an
hourly rate for performing extraordinary services in addition to the services
covered by our Annual Fee. The hourly rates charged will be those which are
published in the Fee Section of our Bond Administration Policy & Procedure
Manual at the time the default occurs.
The Acceptance Fee and the Annual Administration Fee are payable at the closing
of this transaction. Thereafter the Annual Administration Fee and any
out-of-pocket expenses will be billed on the anniversary date of the closing.
25
Schedule II
Telephone Number(s) for Call-backs and Person(s)
Designated to Confirm Funds Transfer Instructions
If to Congoleum Corporation:
Name Telephone Number
---- ----------------
Xxxxxx X. Xxxxx III (000) 000-0000
If to Everest Reinsurance Company and Mt. XxXxxxxx Insurance Company:
Name Telephone Number
---- ----------------
Xxxx Xxxxxx (000) 000-0000
Telephone call-backs shall be made to either Congoleum or Everest and Mt.
XxXxxxxx if joint instructions are required pursuant to the Escrow Agreement.
26
Schedule III
Deposits
$21,500,000 to be deposited within fifteen (15) Business Days of September 30,
2005.
