EXHIBIT 28.7
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 ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇-
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereinafter collectively
referred to as "Eastco"), THE HARTFORD INSURANCE GROUP, with
offices at Hartford Plaza, Hartford, Connecticut 06115 ("▇▇▇▇-
▇▇▇▇"), THE HOME INSURANCE COMPANIES, with offices at ▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Home"), PUBLIC SERVICE MUTUAL
INSURANCE COMPANIES, with offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ("Public"), BIRMINGHAM FIRE, with offices
at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
("Birmingham") and AMERICAN CASUALTY COMPANY OF READING, PA.,
with offices at c/o CNA Insurance Companies, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("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 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 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.
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 ▇▇▇▇.
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.
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
▇▇▇▇ 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 ▇▇▇▇ for their share.
FIFTH: Terminated Asbestos Actions - Pro Rata Sharing of
Legal and Indemnity Expenses by Insurance Companies.
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 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, condi-
tions, 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. 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 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 ▇▇▇▇▇▇ Fire Insurance Company. In the event
that Eastco is able to secure the participation of Mount ▇▇▇▇▇▇
Fire Insurance Co. ("Mount ▇▇▇▇▇▇") in this Agreement or it is
determined that Mount ▇▇▇▇▇▇ 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.
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: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
THE HARTFORD
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
THE HOME INSURANCE COMPANIES
By: /s/ ▇▇▇ ▇▇▇▇▇▇
PUBLIC SERVICE MUTUAL
INSURANCE COMPANIES
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
BIRMINGHAM FIRE
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
AMERICAN CASUALTY COMPANY OF
READING, PA.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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.
Dated: May 30, 1990
EASTCO INDUSTRIAL SAFETY CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
THE HARTFORD
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
THE HOME INSURANCE COMPANIES
By: /s/ ▇▇▇ ▇▇▇▇▇▇
PUBLIC SERVICE MUTUAL INSURANCE COMPANIES
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
BIRMINGHAM FIRE
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
AMERICAN CASUALTY COMPANY OF
READING, PA.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇