Exhibit 99.09
DEFENSE AND INDEMNITY AGREEMENT
AGREEMENT made this 26th day of March, 1990 by and among EASTCO
INDUSTRIAL SAFETY CORP. (p/k/a "Eastco Industrial Equipment Inc.", "Glofane
Co. Inc." and "R & R Safety Equipment Corp." and a/k/a "Charkate Glove and
Specialty Company" and "Rite Glove Corp.") with offices at 130 West 10th
Street, Huntington Station, New York 11746 (hereinafter collectively referred
to as "Eastco"), THE HARTFORD INSURANCE GROUP, with offices at Hartford Plaza,
Hartford, Connecticut 06115 ("Hartford"), THE HOME INSURANCE COMPANIES, with
offices at 59 Maiden Lane, New York, New York 10038 ("Home"), PUBLIC SERVICE
MUTUAL INSURANCE COMPANIES, with offices at 132 West 31st Street, New York,
New York 10001, ("Public"), BIRMINGHAM FIRE, with offices at 50 South Clinton
Street, East Orange, New Jersey 07018 ("Birmingham") and AMERICAN CASUALTY
COMPANY OF READING, PA., with offices at c/o CNA Insurance Companies, 2
Gannett Drive, White Plains, New York 10604 ("American") and all of the said
insurance companies hereinafter being collectively referred to as "Insurance
Companies" and each of which is sometimes hereinafter referred to as an
"Insurance Company."
WHEREAS the Insurance Companies have heretofore issued various
insurance policies to Eastco covering product liability, including exposure to
asbestos related products; and
WHEREAS Eastco has heretofore manufactured, distributed and/or sold
asbestos products ("Asbestos Products"); and
WHEREAS Eastco has been made a party to actions by numerous parties
in a multitude of lawsuits in different jurisdictions alleging personal
injuries, ailments or disease of any kind, or and/or death resulting
therefrom, allegedly resulting in whole or in part from exposure to Asbestos
Products allegedly manufactured, distributed or sold by Eastco; and
WHEREAS Eastco may be made party in the future to additional lawsuits
by parties alleging personal injuries, ailments or disease of any kind, and/or
death resulting therefrom, allegedly resulting
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in whole or in part from exposure to Asbestos Products allegedly manufactured,
distributed or sold by Eastco; and
WHEREAS disputes have occurred pertaining to the Insurance Companies'
obligation to defend Eastco and to indemnify Eastco in connection with the
actions heretofore commenced and which may be commenced in the future
regarding alleged personal injuries, ailments or disease of any kind, and/or
death resulting therefrom allegedly resulting in whole or in part from
exposure to Asbestos Products allegedly manufactured, distributed or sold by
Eastco, said lawsuits being hereinafter referred to as "Asbestos Actions"; and
WHEREAS the parties have entered into this Agreement in an effort to
resolve their disputes and to establish among the Insurance Companies an
apportionment of costs for defense and indemnification of Eastco relating to
the Asbestos Actions; and
WHEREAS it is the purpose of this Agreement to establish the
procedures to be followed with respect to the administration, defense, payment
and disposition of the Asbestos Actions and to do so without altering,
amending or waiving any of the terms, conditions, exclusions or provisions of
any applicable policy of insurance and without waiving any rights against
non-parties; and
WHEREAS this Agreement is a result of a compromise accord relating to
the resolution of disputed claims, is a product of arms-length negotiations,
is not intended to nor shall it be construed as the admission of the existence
of a policy or as a policy interpretation, and shall not be used in any Court
or arbitration to create, prove, or interpret any obligations under general
liability or other liability insurance policies.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein the parties agree as follows:
FIRST: Asbestos Insurance. Coverage of Eastco by the Insurance
Companies with respect to the Asbestos Actions, for purposes of this Agreement
only, shall be in accordance with the insurance policies set forth on Schedule
"1" annexed hereto. Coverage of Eastco shall also be
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applicable to its affiliates and subsidiaries named in each scheduled
insurance policy.
SECOND: Applicability of this Agreement to Asbestos Actions.
A. Except as otherwise provided for herein, this
Agreement shall be applicable to all Asbestos Actions presently pending
against Eastco and to all Asbestos Actions instituted against Eastco
subsequent to the date of this Agreement and prior to the termination of this
Agreement.
B. Except as otherwise set forth herein, this
Agreement shall not be applicable to any Asbestos Actions heretofore
terminated and settled as to Eastco prior to the date of this Agreement
("Terminated Asbestos Actions").
C. This Agreement shall not be applicable to any
Asbestos Actions instituted against Eastco where no exposure to Asbestos
Products manufactured, distributed or sold by Eastco is alleged during the
period between 1971 to 1985 inclusive.
D. This Agreement shall not apply to any actions
instituted against Eastco with respect to Worker's Compensation.
THIRD: Defense of Claims.
A. American in New York, Public in New Jersey and
Hartford in Pennsylvania is hereby designated as the lead carrier ("Lead
Carrier") by the parties hereto and shall promptly appoint counsel to defend
Eastco with respect to all Asbestos Actions pending and subsequently
instituted against Eastco prior to the termination of this Agreement in the
jurisdictions designated for them. With respect to asbestos actions commenced
in any other jurisdiction, the Insurance Companies agree to designate a Lead
Carrier amongst themselves promptly after the institution of such Asbestos
Actions.
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B. Except as otherwise set forth herein, the cost
of the defense ("Legal Fees") of all Asbestos Actions for which this Agreement
is applicable, including attorneys' fees and all other applicable costs and
disbursements for unpaid bills rendered to date for Legal Fees for Asbestos
Actions pending and also for new Asbestos Actions, shall be paid in accordance
with the following schedule:
Hartford shall pay 41%
Home shall pay 7.5%
Public shall pay 12%
Birmingham shall pay 12%
American shall pay 15.5%
Eastco shall pay 12%
C. Counsel defending Eastco in the Asbestos Actions
pursuant to Article THIRD (B) above shall provide timely reports to Eastco and
the Insurance Companies setting forth defense and indemnification costs for
each Asbestos Action concluded. Eastco and each of the Insurance Companies
shall be billed for their respective shares for Legal Fees by such counsel and
each shall be responsible to pay their shares within thirty (30) days of
receipt of their bill.
D. After service of all new summons and complaints,
Eastco shall only be required to provide a copy of same to the Lead Carrier
and counsel defending Eastco, provided that Eastco shall provide a copy of a
letter of transmittal to each of the Insurance Companies at their addresses
herein set forth which letter shall include the name of the court where the
Asbestos Action was instituted, the period of exposure, and the approximate
number of first party plaintiffs and defendants named in such Asbestos Action
to the best information of Eastco.
FOURTH: Settlement and Payment of Judgments.
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A. All of the litigation involving the Asbestos
Actions shall be managed in the best interests of Eastco as to strategy.
Settlement and disposition of any of the Asbestos Actions may be made with the
consent of Eastco and the Lead Carrier and such settlement shall be binding
upon all parties hereto providing that no Asbestos Action, regardless of the
number of plaintiffs, shall be settled in excess of $100,000 per Asbestos
Action or $50,000 per plaintiff, whichever is greater, without the consent of
Eastco, the Lead Carrier and two other Insurance Companies. A husband and
wife, including a legal representative of such person, shall collectively be
deemed one plaintiff.
B. The cost of a settlement of an Asbestos Action
or any verdict or judgment rendered in connection therewith ("Indemnity
Costs") of all Asbestos Actions for which this Agreement is applicable shall
be paid in accordance with the following schedule:
Hartford shall pay 38.67%
Home shall pay 7.07%
Public shall pay 11.32%
Birmingham shall pay 11.32%
American shall pay 14.62%
Eastco shall pay 17.00%
C. The Indemnity Costs payable in accordance with
Section B. above shall be paid by the Lead Carrier who shall bill Eastco and
each of the Insurance Companies separately for their share and each shall
reimburse the Lead Carrier within sixty (60) days after receipt of a bill for
their share.
FIFTH: Terminated Asbestos Actions - Pro Rata Sharing of Legal and
Indemnity Expenses by Insurance Companies.
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A. Notwithstanding anything to the contrary
contained herein, Legal Fees and indemnity payments for all Terminated
Asbestos Actions shall be borne in full solely by the Insurance Companies and
in proportion to their relative liability to each other under the following
schedule:
Hartford shall pay 46.59%
Home shall pay 8.52%
Public shall pay 13.64%
Birmingham shall pay 13.64%
American shall pay 17.61%
B. The Insurance Companies shall reimburse each
other for such Legal Fees and indemnity payments within sixty (60) days of the
execution of this Agreement so that each Insurance Company shall have paid
Legal Fees and Indemnity Costs for such Terminated Asbestos Actions in
proportion to their pro rata liability under Article Fifth A above.
C. All Legal Fees heretofore paid with respect to
Asbestos Actions still pending shall also be shared in accordance with the
provisions of this Article FIFTH.
SIXTH: Exhaustion of Limits
A. Payment of indemnification costs by the
Insurance Companies shall be credited towards the exhaustion of the policy
limits of their respective policies listed on Schedule "1."
B. Upon exhaustion of policy limits through payment
of indemnification costs, or payments of claims of a policy listed on Schedule
"1," the Insurance Company's obligations of defense and indemnity under the
policy, and further payments of defense costs and indemnification costs under
this Agreement, shall terminate for that policy. Upon the exhaustion of the
policy limits
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under all the policies listed on Schedule "1" for the respective Insurance
Companies, the obligations of defense and indemnity under the policies and
payment of defense costs and indemnification costs under this Agreement shall
terminate.
C. In the event of the exhaustion of a policy limit
by one of the Insurance Companies, the contribution percentage shall be
adjusted for all pending and future Asbestos Actions and Eastco shall assume
responsibility for the decreased contribution percentage as applicable, by
treating the exhausted policy limit as a self-insured layer. In the event of
the existence of excess liability insurance over the exhausted policy limit of
the Insurance Company, as applicable, Eastco will use its best efforts to have
such excess insurer become a signatory to this Agreement and assume its pro
rata share of indemnification costs. In addition, Eastco will use its best
efforts to have such excess insurer assume its pro rata share of Legal Fees if
the policy with the excess carrier so provides.
SEVENTH: Reservation of Rights
A. This Agreement does not alter the rights or
obligations of the parties hereto under the provisions of any applicable
binder or policy of insurance.
B. All questions respecting insurance coverage or
lack of insurance coverage for Eastco including but not limited to
establishing the existence of or the terms, conditions, exclusions, provisions
or obligations of insurance coverage or binder or policies of insurance that
were or may have been issued to Eastco or respecting the liability or
non-liability of any party thereunder or respecting the breach or fulfillment
of any term, conditions, exclusions, provision or obligation thereof are
expressly reserved as between the parties to this Agreement.
C. This Agreement or performance hereunder is not
intended to and shall not be construed to operate as a waiver or modification
of any of the terms, conditions, exclusions, provisions or obligations of any
insurance policy that has been or may have been issued to Eastco.
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All parties reserve all previously held positions regarding the proper
interpretation and application of terms, conditions, exclusions, provisions or
obligations of any insurance policy or binder that has been or may have been
issued to Eastco.
EIGHTH: Waiver of Bad Faith
Notwithstanding any other provision, each party, as to each other
party, hereby waives and forever relinquishes any claim, demand, right and
cause of action for breach of insurance contracts, non-contractual damages,
bad faith, failure to provide timely notice of an Asbestos Action, insurance
code violations, exemplary or punitive damages and for any other tort or
statutory liability, whether known or unknown, based upon, arising out of or
connected in any way with any acts or omissions by such other party occurring
prior to the effective date of this Agreement.
NINTH: Termination of Agreement.
A. This Agreement may be terminated at any time
upon ninety (90) days notice in the future by any party upon notice as herein
provided and upon such termination, this Agreement shall be terminated as to
all parties. Notwithstanding anything to the contrary contained in this
Agreement, notice of termination shall not be effective as to any asbestos
action that has already been placed on a trial calendar, unless at the time
notice is given, such trial date has a then scheduled date more than twelve
(12) months from the date notice of termination is given.
B. Notice of termination shall be deemed given upon
the date same is posted by the party giving such notice.
C. Should any party file a notice to terminate,
their participation in this Agreement as per Article NINTH A, each party shall
be liable for any indemnity and defense expenses incurred prior to the
effective date of the termination.
D. This Agreement shall not constitute a waiver of
any rights that a party
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may have against the other if this Agreement is terminated and action is
instituted by any party to determine the rights and obligations of any party
under any insurance policy or binder or any claim such party may have
regarding the defense and indemnity of Eastco for Asbestos Actions instituted
against Eastco after the termination of this Agreement.
TENTH: Effective Date of Agreement
This Agreement shall be effective as of the date hereof and shall
remain in effect until terminated.
ELEVENTH: Mount Vernon Fire Insurance Company. In the event that
Eastco is able to secure the participation of Mount Vernon Fire Insurance Co.
("Mount Vernon") in this Agreement or it is determined that Mount Vernon is
required to defend and indemnify Eastco, then the parties will endeavor to
reallocate the provisions contained in paragraphs THIRD, FOURTH B and FIFTH A
of this Agreement.
TWELFTH: Excess Coverage. The terms and provisions of this Agreement
shall not preclude or prohibit Eastco from any claims, rights or coverage it
may have against its excess insurance carriers.
THIRTEENTH: Notices. All notices shall be in writing and sent by
certified or registered mail, return receipt requested to the party at its
address above set forth with a copy to all other parties. A party may change
its address provided it gives notice to all other parties in accordance with
the terms of this Agreement.
FOURTEENTH: Governing Law. This Agreement shall be governed in all
respects by the laws of the State of New York.
FIFTEENTH: Entire Agreement. This Agreement represents the entire
agreement between the parties and may not be modified except in writing signed
by the party to be charged.
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SIXTEENTH: Binding Agreement. This Agreement shall be binding upon
the successors and assigns of the parties hereto.
SEVENTEENTH: Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original and all of which taken together shall be deemed to be one and the
same instrument. This Agreement, however, shall not be binding on any party
hereto until signed by all parties.
IN WITNESS WHEREOF the parties hereto have set their hands and seals
on the day first above written.
EASTCO INDUSTRIAL SAFETY CORP.
By:
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THE HARTFORD
By:
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THE HOME INSURANCE COMPANIES
By:
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PUBLIC SERVICE MUTUAL
INSURANCE COMPANIES
By:
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BIRMINGHAM FIRE
By:
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AMERICAN CASUALTY COMPANY OF
READING, PA.
By:
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FIRST AMENDMENT to Defense and Indemnity Agreement dated March 26,
1990 by and among Eastco Industrial Safety Corp. ("Eastco"), The Hartford
Insurance Group ("Hartford"), The Home Insurance Company ("Home"), Public
Service Mutual Insurance Companies ("Public"), Birmingham Fire ("Birmingham")
and American Casualty Company of Reading, Pa. ("American").
1. Confidentiality. The parties agree that the terms of the Defense
and Indemnity Agreement dated March 26, 1990 (the "Agreement") will remain
confidential and will not be disclosed to a non-party, except as required in
the conduct of the disclosing parties' business, or to effectuate the
performance of this Agreement or as otherwise required by law, or in filings
with the Securities and Exchange Commission and communications with Eastco's
shareholders.
2. Minor Departures. The parties recognize that the implementation of
this Agreement will involve the handling of numerous claims and that minor
departures from the strict terms and conditions of the Agreement might occur
as a result. The parties intend that minor departures by one or more parties,
such as do not evince an intent to refuse to perform under the Agreement,
shall not be considered as such a material breach of this Agreement as to
confer upon the other parties the right to terminate this Agreement.
3. Counterpart. This amendment may be signed in counterpart and the
Agreement, including this amendment, shall not be binding upon any party until
each is signed by all of the parties hereto.
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Dated: May 30, 1990
EASTCO INDUSTRIAL SAFETY CORP.
By:
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THE HARTFORD
By:
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THE HOME INSURANCE COMPANIES
By:
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PUBLIC SERVICE MUTUAL
INSURANCE COMPANIES
By:
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BIRMINGHAM FIRE
By:
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AMERICAN CASUALTY COMPANY OF
READING, PA.
By:
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