SUPPLEMENTAL SETTLEMENT AGREEMENT
This Supplemental Settlement Agreement is entered into as of May 25, 2005,
by and among the United States Environmental Protection Agency (the "U.S. EPA"),
the Connecticut Department of Environmental Protection (the "Conn. DEP"), and
FMC Corporation ("FMC") (collectively, the "Environmental Creditors"), the Legal
Representative for Future Claimants (the "Legal Representative"), and the
Raytech Corporation Asbestos Personal Injury Settlement Trust (the "PI Trust").
WHEREAS, the Environmental Creditors have asserted claims against Raymark
Industries, Inc. and Raymark Corporation (collectively, "Raymark") and Raytech
Corporation ("Raytech") for liability under federal and state environmental
laws; and
WHEREAS, Raymark and Raytech filed petitions under Chapter 11 of the
Bankruptcy Code, all of which cases were ultimately consolidated in the United
States Bankruptcy Court for the District of Connecticut; and
WHEREAS, an Official Committee of Unsecured Creditors (the "Committee")
and the Legal Representative, representing the interests of all present and
future holders (the "PI Creditors") of unsecured claims for death, bodily injury
or other personal damages caused, directly or indirectly, by exposure to
asbestos-containing products for which Raymark or Raytech have legal liability,
were appointed in the Raytech bankruptcy case; and
WHEREAS, on or about October 15, 1998, Xxxxxxx X. Xxxx was appointed as
trustee in the Raymark bankruptcy cases; and
WHEREAS, on August 31, 2000, the bankruptcy court approved Raytech's
Second Amended Plan of Reorganization (the "Raytech Plan"), which Plan became
effective on April 18, 2001; and
WHEREAS, the Raytech Plan provided for the formation of the PI Trust and
the assumption by the PI Trust of all liabilities of Raytech, and its
predecessors and successors in interest, in actions involving personal injury or
death claims caused by exposure to asbestos-containing products for which
Raymark or its predecessors and affiliates have legal liability; and
WHEREAS, the Raytech Plan also provided for the distribution of stock of
reorganized Raytech to the Environmental Creditors in satisfaction of their
claims against Raytech; and
WHEREAS, the Raytech Plan also incorporated an agreement (the "2000
Agreement") among the Environmental Creditors, the Committee, and the Legal
Representative, which set forth an agreement between the parties as to the
division of some of the assets of the estates of Raymark and Raytech, but not
including the proceeds of liability insurance; and
WHEREAS, pursuant to the Raytech Plan, Raytech issued shares of stock in
reorganized Raytech to the Environmental Creditors on April 19, 2001; and
WHEREAS, in October 2001, the Environmental Creditors, the Committee, and
the Legal Representative entered into a further agreement (the "2001
Agreement"), which set forth an agreement between the parties as to the
assignment by the Environmental Creditors of their interest in certain assets of
Raytech and the of estates of Raymark and Universal Friction Composites, the
division of the proceeds of Raymark liability insurance and the future transfer
by the Environmental Creditors of their Raytech stock to the PI Trust; and
WHEREAS, the Raymark estates appear to have settled all liability
insurance claims by them against their liability insurance carriers, with the
exception of ongoing litigation relating to National Union / American Home (the
"NU/AH Litigation"); and
WHEREAS, the Committee was dissolved on or about December 21, 2004, and
the Legal Representative and the PI Trust now represent the interests of the PI
Creditors formerly represented by the Committee and the Legal Representative;
and
WHEREAS, the Environmental Creditors and the PI Trust wish to consummate
some of the transactions contemplated by the 2001 Agreement, without waiting
until such time as a plan is confirmed in the Raymark bankruptcies;
NOW, THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the parties hereto agree as
follows:
1. The PI Trust will pay the Environmental Creditors the aggregate amount
of $9,457,776 in cash, which, together with the Environmental Creditors' rights
to recovery as described in paragraphs 1, 4 and 9 of the 2001 Agreement, and in
paragraphs 3 and 4 below, represents the consideration for the Environmental
Creditors' assignment to the PI Trust of assets and proceeds from the Raymark
and Universal Friction Composites estates as described in paragraph 2 of the
2001 Agreement, for the Environmental Creditors' assignment to the PI Trust of
rights to recovery on the Federal insurance claim as described in paragraph 5 of
the 2001 Agreement, for the Environmental Creditors' assignment to the PI Trust
of their rights in Raytech tax benefits as described in paragraph 10 of the 2001
Agreement, and for the Environmental Creditors' transfer to the PI Trust of
3,228,888 shares of common stock of Raytech (the "Shares") as follows: 2,300,868
shares from the U.S. EPA; 231,720 shares from the Conn. DEP; and 696,300 shares
from FMC (the "Transaction"). The Environmental Creditors hereby represent that
the Shares are all of the shares of capital stock of Raytech acquired by any of
them pursuant to the Raytech Plan. The closing of the Transaction (the
"Closing") shall take place at 10:00 a.m. at the offices of Raytech Corporation,
Four Xxxxxxxxx Xxxxx, Xxxxxxx, XX 00000 on July 15, 2005, or such other time,
place, and date as the parties hereto may mutually agree, but no later than 30
days following the satisfaction of the Closing Conditions in paragraph 2 hereof.
At the Closing, the Conn. DEP and FMC shall deliver, or will have previously
delivered, to the PI Trust (a) the certificates representing their Shares
accompanied by duly endorsed stock powers executed in blank, and (b) such other
documents reasonably required by the PI Trust and agreed to by the Environmental
Creditors as necessary to close the Transaction. The U.S. EPA shall deliver the
certificates representing their Shares in
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accordance with Schedule A, attached hereto. At the Closing, the PI Trust shall
pay the aggregate amount of $9,457,776 to the Environmental Creditors in the
following respective amounts in accordance with the instructions on Schedule A,
attached hereto: $6,739,500 to the U.S. EPA; $678,736 to the Conn. DEP; and
$2,039,540 to FMC. Upon such payment, (i) all right, title, and interest in the
Shares, free and clear of any liens, claims or encumbrances of any kind, shall
be transferred to the PI Trust and (ii) the Environmental Creditors shall
acknowledge they have no further rights to any of the shares or capital stock of
Raytech or to any of the assets, proceeds or rights assigned pursuant to
paragraphs 2, 5, and 10 of the 2001 Agreement; provided, however, that such
acknowledgement shall not affect the Environmental Creditors' rights of recovery
as described in paragraphs 1, 4 and 9 of the 2001 Agreement, and in paragraphs 3
and 4, below.
2. The PI Trust's obligation to consummate the Transaction shall be
conditioned on the satisfaction of either:
(I) (A) The PI Trust shall have received notice from the
Securities and Exchange Commission (the "SEC") indicating that it
does not intend to undertake a review of the Schedule 13E-3
Transaction Statement (the "Schedule 13E-3") filed in connection
with the acquisition of the Shares; or
(B) The PI Trust shall have resolved all comments received
from the SEC pursuant to any SEC review of the Schedule 13E-3; and
(C) The PI Trust shall have satisfied its disclosure
obligations within the time periods specified under Rule 13e-3(e)
and (f) of the Securities Exchange Act of 1934, as amended ("the
Act"); or
(II) The PI Trust shall have withdrawn the Schedule 13E-3 and
abandoned any plans for a Raytech "going private transaction" (as
defined in the Act).
The Environmental Creditors' obligation to consummate the
Transaction shall be conditioned upon final approval by the United States
Bankruptcy Court for the District of Connecticut of a motion compromising the
Environmental Creditors' claims against the Raymark estates, which motion shall
reference and incorporate this Agreement and the 2001 Agreement. Such approval
shall not be deemed final until all appeals from any such motion shall have been
resolved or until all appeal periods have run, whichever first occurs.
3. Upon completion of the Closing pursuant to paragraph 1 hereof, the
contingent payments contemplated by paragraph 9 of the 2001 Agreement shall not
be required; provided, however, that should the Environmental Creditors' 40%
share of the net proceeds of the recovery of claims against Raymark's former
insurance carriers, as described and calculated pursuant to the 2001 Agreement,
exceed $11,475,000, then the PI Trust shall pay over to the Environmental
Creditors such excess upon receipt thereof. The calculation of the Environmental
Creditors'
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40% share shall occur after the conclusion of the NU/AH Litigation and after the
final accounting of the Raymark bankruptcy estates.
4. Nothing in this Agreement, the 2001 Agreement, or the 2000 Agreement,
shall prevent the Environmental Creditors from recovering from the Raymark
estates the proceeds of the Allstate/Northbrook insurance, net of the costs
incurred by the Raymark estates to create that fund.
5. The Environmental Creditors agree not to oppose any plan of
reorganization proposed by the PI Trust or the Legal Representative in the
Raymark bankruptcies that is consistent with this Agreement, the 2001 Agreement,
and the 2000 Agreement.
6. This Agreement is intended to modify paragraphs 8 and 9 of the 2001
Agreement. To the extent this Agreement and the 2001 Agreement do not agree, the
terms of this Agreement control.
7. This Agreement shall be governed by and construed under the laws of the
State of Delaware.
8. This Agreement, to the extent it modifies and accelerates the 2000 and
2001 Agreements, constitutes the entire understanding among the parties
concerning the subject matter hereof and may not be modified or amended except
by a writing signed by all parties to this Agreement.
9. This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. Facsimile signatures shall have the same legal effect as original
signatures.
IN WITNESS WHEREOF, the parties have executed this Agreement as indicated
below.
/s/ Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx
Xxxxxxx Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Managing Trustee
Raytech Corporation Asbestos Personal Injury Trust
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/s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx
Xxxxxx & Xxxxxxxxx
Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Legal Representative for Future Claimants
/s/ Xxxxx X. Xxxxxxxx
------------------------------
Xxxxx X. Xxxxxxxx
Senior Attorney
Environmental Enforcement Section
U.S. Department of Justice
X.X. Xxx 0000
Xxxxxxxxxx, X.X. 00000
Counsel to the United States
Environmental Protection Agency
/s/ Xxx X. Xxxxxx
------------------------------
Xxx X. Xxxxxx
Assistant United States Attorney
District of Connecticut
000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Counsel to the United States
Environmental Protection Agency
/s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxx X. Xxxxxxxxx
Assistant Attorney General
00 Xxx Xxxxxx
Xxxxxxxx, XX 00000
Counsel to the Connecticut
Department of Environmental Protection
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/s/ Xxxxx X. Press
-------------------------------
Xxxxx X. Press, Esq.
Xxxxxx Xxxxxxx Xxxxxxx & Xxxxxxx, LLP
0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Counsel to FMC Corporation
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Schedule A
Payment Instructions and Escrow Agreement
(This Schedule is attached to that Supplemental Settlement Agreement dated May
25, 2005 by and among the United States Environmental Protection Agency (the
"U.S. EPA"), the Connecticut Department of Environmental Protection (the"Cont.
DEP"), and FMC Corporation ("FMC") (collectively, the "Environmental
Creditors"), the Legal Representative for Future Claimants (the "Legal
Representative"), and the Raytech Corporation Asbestos Personal Injury
Settlement Trust (the "PI Trust").)
Payment of the $9,457,776 (the "Aggregate Payment") pursuant to paragraph
1 of the foregoing Agreement shall be made in accordance with the following:
1. To the U.S. EPA:
A. At the Closing, the PI Trust shall deliver $6,739,500 (the "US
Payment") in cash or cash equivalent to the law firm of Xxxxxx &
Xxxxxxxxx, (the "Escrow Agent") as escrow agent for the PI Trust and
United States, which arm represents the portion of the Aggregate
Payment due to the United States. By executing this Schedule A, the
Escrow Agent agrees that it shall hold the US Payment in its trustee
account, or in a segregated account, for a period of ten (10)
business days or until it receives written instructions from the PI
Trust and the United States Attorney's Office directing the final
transfer of the funds to the United States, whichever is earlier. If
the Escrow Agent does not receive such written instructions
directing the final transfer of the funds to the United States
within ten (10) business days after the Closing, the Escrow Agent
hereby agrees that it shall transfer the US Payment to the Clerk of
the United States Bankruptcy Court for the District of Connecticut,
so that the parties may be commence an interpleader action to
determine the disposition of the US Payment.
B. Upon receipt of written confirmation satisfactory to the PI Trust
that the ownership of the 2,300,868 shares of Raytech stock
currently owned by the United States has been transferred on the
books and records of Raytech, as maintained by Raytech's transfer
agent, to the PI Trust, the PI Trust shall execute written
instructions to the Escrow Agent directing that the US Payment be
transferred to the United States. Payment to the United States shall
be made by Fedwire Electronic Funds Transfer to the Department of
Justice account in accordance with current electronic funds transfer
procedures. Payment shall be made in accordance with instructions
provided, upon request, to the PI Trust, by the Financial Litigation
Unit of the United States Attorney's Office for the District of
Connecticut. The United States represents, and the PI Trust
acknowledges, that Xxxxxxx Xxxxx will execute the transfer of shares
from the United States to the registered transfer agent for
Raytech, on behalf of the United
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States. Accordingly, written verification from Xxxxxxx Xxxxx that
the transfer is complete will be deemed by the PI Trust to be
satisfactory confirmation that the ownership of the 2,300,868 shares
of Raytech stock currently owned by the United States has been
transferred on the books and records of Raytech, as maintained by
Raytech's transfer agent, to the PI Trust.
C. The US Payment shall be divided by the United States as follows:
(i). $5,443,189.87 to EPA Region I on account of its claims with
respect to the Raymark Superfund Site (EPA Site number 01H3)
.This amount will either be: (a) deposited in the Raymark
Industries, Inc. Superfund Site Special Account within the
EPA Hazardous Substance Superfund to be retained and used to
conduct or finance response actions at or in connection with
the Raymark Industries, Inc. Superfund Site, or to be
transferred by EPA to the EPA Hazardous Substance Superfund;
or (b) be deposited into the EPA Hazardous Substance
Superfund;
(ii). $859,106.27 to EPA Region III on account of its claims with
respect to the Avtex Fibers Superfund Site (EPA Site number
03D1). This amount will be deposited in the Avtex Fibers
Superfund Site Special Account within the EPA Hazardous
Substance Superfund to be retained and used to conduct or
finance response actions at or in connection with the Avtex
Fibers Superfund Site, or to be transferred by EPA to the
EPA Hazardous Substance Superfund; and
(iii). $437,203.86 to the Department of Interior (ALC 14010001) and
the National Oceanographic and Atmospheric Administration on
account of their Natural Resources Damage Claims; with
respect to the Raymark Industries, Inc. Superfund Site
divided as follows: $15,000 to DOI (DOI NRDAR Account Number
14X5198) for its Site assessment costs; and $422,203.86 to
DOI and NOAA to be placed in the DOI NRDAR Account (DOI
NRDAR Account Number 14X5198) and jointly administered for
Site restoration.
II. To the Conn. DEP:
A certified or cashier's check in the amount of Six Hundred and
Seventy-Eight Thousand, Seven Hundred and Thirty-Six Dollars ($678,736) payable
to "Treasurer, State of Connecticut delivered to Assistant Attorney General
Xxxxxx X. Xxxxxxxxx for the State of Connecticut.
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III. To FMC:
A certified or cashier's check in the amount of Two Million, Thirty-Nine
Thousand, Five Hundred and Forty Dollars ($2,039,540) payable to "FMC
Corporation" delivered to Xxxxxx Xxxxxxx Xxxxxxx & Xxxxxxx, LLP, Attention:
Xxxxx X. Press, Esq.
ACKNOWLEDGED AND AGREED TO BY:
/s/ Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx
Xxxxxxx Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Managing Trustee
Raytech Corporation Asbestos Personal Injury Trust
/s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx
Xxxxxx & Xxxxxxxxx
Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Legal Representative for Future Claimants
/s/ Xxxxx X. Xxxxxxxx
------------------------------
Xxxxx X. Xxxxxxxx
Senior Attorney
Environmental Enforcement Section
U.S. Department of Justice
X.X. Xxx 0000
Xxxxxxxxxx, X.X. 00000
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Counsel to the United States
Environmental Protection Agency
/s/ Xxx X. Xxxxxx
--------------------------------
Xxx X. Xxxxxx
Assistant United States Attorney
District of Connecticut
000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Counsel to the United States
Environmental Protection Agency
/s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxxx
Assistant Attorney General
00 Xxx Xxxxxx
Xxxxxxxx, XX 00000
Counsel to the Connecticut
Department of Environmental Protection
/s/ Xxxxx X. Press
--------------------------------
Xxxxx X. Press, Esq.
Xxxxxx Xxxxxxx Xxxxxxx & Xxxxxxx, LLP
0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Counsel to FMC Corporation
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