Case Doc 5948 Filed 05/12/17 Entered 05/12/17 19:34:26 Desc Main Document Page 1 of 43

Transcription

1 Document Page 1 of 43 IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA Charlotte Division IN RE: GARLOCK SEALING TECHNOLOGIES LLC, et al., Debtors. 1 Case No. 10-BK Chapter 11 Jointly Administered DEBTORS MOTION FOR AN ORDER APPROVING SETTLEMENT AGREEMENT WITH ZURICH AMERICAN INSURANCE COMPANY, SPX CORPORATION AND FAIRBANKS MORSE PUMP CORPORATION Garlock Sealing Technologies LLC ( Garlock ), Garrison Litigation Management Group, Ltd. ( Garrison ), The Anchor Packing Company ( Anchor and collectively with Garlock and Garrison, the Garlock Debtors ), and OldCo, LLC, successor by merger to Coltec Industries Inc ( Coltec ), 2 debtors and debtors-in-possession in the above-captioned cases (collectively, the Debtors ), hereby move the Court for approval of the settlement by and among (a) the Debtors and EnPro Holdings, Inc. (collectively with the Debtors, the Coltec Parties ); (b) Zurich American Insurance Company, for itself and as successor-in-interest to Zurich Insurance Company, US Branch ( Zurich ); and (c) SPX Corporation ( SPX ) and Fairbanks Morse Pump Corporation ( FMPC and collectively with SPX, the SPX Parties ). The settlement is more particularly described in the agreement attached to this Motion as Exhibit 1 (the Settlement Agreement ). In support of this Motion, the Debtors respectfully state as follows: 1 The debtors in these jointly administered cases are Garlock Sealing Technologies LLC; Garrison Litigation Management Group, Ltd.; The Anchor Packing Company and OldCo, LLC, successor by merger to Coltec Industries Inc. 2 For convenience, the term Coltec in this Motion refers to OldCo, LLC s predecessor, Coltec Industries Inc, when referring to events prior to the Coltec Restructuring (as described in the Disclosure Statement filed in the Garlock Bankruptcy Case (D.E. 5444, Section 2.5.3), and refers to OldCo, LLC when referring to events subsequent to the Coltec Restructuring v

2 Document Page 2 of 43 PRELIMINARY STATEMENT Under the Comprehensive Settlement (defined below) and Section of the Joint Plan, 3 the Debtors retain ownership of all their rights respecting insurance policies, and the Debtors have the sole right to sue for and compromise claims against insurance carriers. Zurich issued six policies of insurance to predecessors of Coltec that provide primary liability insurance coverage to Coltec and FMPC (the Scheduled Zurich Policies ). 4 Coltec and FMPC have sought coverage from Zurich under the Scheduled Zurich Policies for certain Asbestos Claims. 5 SPX, which succeeded to the asbestos liabilities and insurance rights related to the Fairbanks Morse Pump business, has asserted certain claims against Zurich relating to insurance coverage for Asbestos Claims under the Scheduled Zurich Policies in the Delaware Coverage Action (defined below). Under the Joint Plan, Zurich is an Asbestos Insurance Company and the limits remaining under the Scheduled Zurich Policies are Additional Coltec Insurance. As more fully set forth in the Settlement Agreement, to resolve the disputes among the Parties, Zurich has agreed to pay the Coltec Parties $9 million (the Settlement Amount ) within twenty days of receiving notice from the Coltec Parties that the Effective Date has occurred in exchange for (a) the termination of all the Parties rights, obligations and liabilities under the Scheduled Zurich Policies, (b) the sale to Zurich of the Parties interests in the Scheduled Zurich Policies free and clear of all liens, claims, encumbrances and other interests under section 363 of 3 The term Joint Plan refers to the Modified Joint Plan of Reorganization of Garlock Sealing Technologies LLC et al. and OldCo, LLC, Proposed Successor by Merger to Coltec Industries Inc, dated May 20, 2016 (as modified June 21, 2016, July 29, 2016 and December 2, 2016). 4 The Scheduled Zurich Policies are Policy No (7/1/ ), limits of $1,000,000; Policy No (7/1/ ), limits $1,000,000; Policy No (7/1/ ), limits $2,000,000; Policy No (7/1/ ), limits $2,000,000; Policy No (7/1/ ), limits $2,000,000; and Policy No (7/1/ ), limits $2,000, Capitalized terms not otherwise defined herein have the meanings assigned to them in the Settlement Agreement and, where applicable, the Joint Plan v

3 Document Page 3 of 43 the Bankruptcy Code, and (c) a release of all claims for insurance coverage of Asbestos Claims under all of the Other Zurich Policies. JURISDICTION, VENUE AND PREDICATES FOR RELIEF 1. This matter is a core proceeding pursuant to 28 U.S.C. 157(b), and the Court has jurisdiction pursuant to 28 U.S.C. 157 and Venue of these proceedings and this Motion is proper in this district under 28 U.S.C and The statutory bases for the relief requested herein are Bankruptcy Code 105, 363, and 524(g) and Bankruptcy Rule BACKGROUND 3. On June 5, 2010, each of the Garlock Debtors filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code in this Court (collectively, the Garlock Bankruptcy Case ). On January 30, 2017, Coltec filed its voluntary petition for relief under chapter 11 of the Bankruptcy Code (the Coltec Bankruptcy Case ). Each of the Debtors is operating its business and managing its property as a debtor-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. 4. On March 17, 2016, Coltec, Garlock and Garrison entered into the Term Sheet for Permanent Resolution of All Present and Future GST Asbestos Claims and Coltec Asbestos Claims (the Comprehensive Settlement ) with the Official Committee of Asbestos Personal Injury Claimants in the Garlock Bankruptcy Case, the Future Asbestos Claimants Representative in the Garlock Bankruptcy Case, an ad hoc committee for persons holding present Coltec Asbestos Claims (as defined below), and Joseph W. Grier, III, as ad hoc representative for persons with future Coltec Asbestos Claims (collectively, the Asbestos Claimants Representatives ). The Comprehensive Settlement provides for the permanent settlement and v

4 Document Page 4 of 43 resolution of all present and future asbestos-related personal injury and wrongful death claims against Garlock and Garrison (as defined in the Joint Plan, collectively, GST Asbestos Claims ) and all present and future asbestos personal injury and wrongful death claims against Coltec (as defined in the Joint Plan, Coltec Asbestos Claims ) in accordance with its terms. 5. The Joint Plan has been overwhelmingly accepted by both the holders of GST Asbestos Claims and the holders of Coltec Asbestos Claims. Coltec Insurance 6. Coltec purchased a number of primary general liability insurance policies that cover losses associated with product liability claims against Coltec and certain of its subsidiaries, including, without limitation, the Scheduled Zurich Policies, which have effective periods from July 1, 1959 to July 1, The total aggregate products hazard limits of the Scheduled Zurich Policies are $10 million. 7. Coltec and Zurich are parties to a Settlement Agreement Concerning Asbestos Claims Between Coltec Industries Inc and Zurich Insurance Company, effective as of August 5, 2004 (the Asbestos Funding Agreement ), addressing those parties respective rights and obligations under the Scheduled Zurich Policies for certain Asbestos Claims brought against Coltec or its predecessors. Under the Asbestos Funding Agreement, Zurich pre-petition funded certain defense costs incurred in connection with Asbestos Claim brought against Coltec. 8. Coltec alleges it has rights to coverage under the Scheduled Zurich Policies for its contributions to the Asbestos Trust under the Joint Plan. The SPX Parties Claims under the Scheduled Zurich Policies 9. In 1985, FMPC purchased the assets of the former Fairbanks Morse Pump division of Coltec. FMPC is now a wholly-owned subsidiary of SPX. As more particularly v

5 Document Page 5 of 43 described in Section of the Disclosure Statement filed in the Garlock Bankruptcy Case (D.E. 5444, Section 2.5.3), SPX succeeded to the asbestos liabilities and insurance rights related to the Fairbanks Morse Pump business. 10. Upon consummation of the Joint Plan, Garlock and Coltec will be discharged of any further liability for Asbestos Claims and permanently protected from such claims by the Asbestos Channeling Injunction. FMPC, however, may not be discharged or protected under the Asbestos Channeling Injunction. Accordingly, the SPX Parties also allege rights to coverage under the Scheduled Zurich Policies for Asbestos Claims that have been, or may in the future be, asserted against the SPX Parties. 11. Zurich and SPX are parties to an action styled Century Indemnity Co. v. SPX Corporation, C.A. No. N17C EMD CCLD (Del. Super.) (the Delaware Coverage Action ), in which SPX has asserted certain claims against Zurich relating to insurance coverage for Asbestos Claims under the Scheduled Zurich Policies. In addition, FMPC has filed a motion in the Delaware Coverage Litigation seeking leave to file a complaint-in-intervention asserting similar claims against, inter alia, Zurich. 12. Coltec may have an indemnity claim against FMPC for the portion of Coltec s contribution to the Asbestos Trust that is attributable to Fairbanks Morse Pump claims. The Settlement 13. The Parties have entered into the Settlement Agreement to facilitate the resolution of Asbestos Claims that have been or may be asserted against Coltec and/or FMPC, and to terminate the current dispute among SPX, FMPC, and Zurich in the Delaware Coverage Action. 14. The primary terms of the Settlement Agreement are these: 6 6 The description of the Settlement Agreement in paragraph 14 is intended only as a summary. The Parties intend to be bound by all terms of the Settlement Agreement, even if not expressly set forth in this Motion v

6 Document Page 6 of 43 a. Zurich will pay the Settlement Amount of $9 million to the Coltec Parties within 20 days after receiving notice from the Coltec Parties that the Effective Date has occurred; b. So long as the Coltec Parties fulfill their obligations under the Settlement Agreement, Zurich will not object to the Joint Plan or Disclosure Statement and will withdraw any Claims (including proofs of claim filed) against the Coltec Parties in the Bankruptcy Cases; c. The Coltec Parties will designate Zurich as an Asbestos Protected Party entitled to the benefits of an Asbestos Channeling Injunction for Asbestos Claims under Sections and (f) of the Plan; d. Upon payment of the Settlement Amount, the Scheduled Zurich Policies, and any and all rights and interests of the Coltec Parties and the SPX Parties in the Scheduled Zurich Policies, will be deemed to have been sold back to Zurich under Sections 363(b) and (f) of the Bankruptcy Code free and clear of any liens, Claims or interests, finally extinguishing and exhausting all rights, duties and coverage under the Scheduled Zurich Policies, and, as a result, the Scheduled Zurich Policies will no longer remain in effect; e. The SPX Parties and Zurich will dismiss with prejudice their respective claims and defenses against each other asserted in the Delaware Coverage Action; and f. The Coltec Parties and the SPX Parties will release Zurich, and Zurich will release the Coltec Parties and the SPX Parties, from any and all Claims arising out of the Scheduled Zurich Policies, and any and all Asbestos Claims arising under any other liability insurance policies, known and unknown, issued by Zurich to Coltec. 15. The effectiveness of the Settlement Agreement is conditioned upon the confirmation of the Joint Plan. The Settlement Agreement becomes effective upon the occurrence of the Effective Date. BASIS FOR RELIEF The Settlement Agreement Satisfies the Requirements of Bankruptcy Rule Compromises are favored in bankruptcy. 9 Collier on Bankruptcy [1] (15th ed. 1993); see Official Comm. of Unsecured Creditors v. White Plains Joint Venture (In re Bond), No , 1994 WL 20107, at *3 (4th Cir. 1994) (quoting same) v

7 Document Page 7 of Under section 105(a) of the Bankruptcy Code, courts have expansive equitable powers to issue any order that is in the interest of preserving or protecting the value of estate assets. See, e.g., Chinichian v. Campolongo (In re Chinichian), 784 F.2d 1440, 1443 (9th Cir. 1986) ( Section 105 sets out the power of the bankruptcy court to fashion orders as necessary pursuant to the purposes of the Bankruptcy Code. ); see also Bird v. Crown Convenience (In re NWFX, Inc.), 864 F.2d 588, 590 (8th Cir. 1988) ( The overriding consideration in bankruptcy... is that equitable principles govern. ); In re Cooper Props. Liquidating Trust, Inc., 61 B.R. 531, 537 (Bankr. W.D. Tenn. 1986) ( [T]he Bankruptcy Court is one of equity and as such it has a duty to protect whatever equities a debtor may have in property for the benefit of their creditors as long as that protection is implemented in a manner consistent with the bankruptcy laws. ). 18. Bankruptcy Rule 9019(a) provides that [o]n motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement. Before approving a settlement under Bankruptcy Rule 9019, a court must determine that the proposed settlement is in the best interests of the debtor s estate. St. Paul Fire & Marine Ins. Co. v. Vaughn, 779 F.2d 1003, 1010 (4th Cir. 1985) (upholding bankruptcy court s approval of settlement because it was in the best interests of the estate as a whole ); In re Babb, Case No JRL, 2009 WL , at *3 (Bankr. E.D.N.C. Jan. 26, 2009) ( [T]he court must consider the probability of success in litigation and assess the wisdom of the proposed compromise in determining whether the compromise is fair and equitable and in the best interests of the estate. ). 19. The United States Supreme Court has stated that, in determining the fairness of a compromise, a court should: [F]orm an educated estimate of the complexity, expense and likely duration of such litigation, the possible difficulties of collecting on any judgment which might be obtained, and all other factors relevant to a full and fair assessment of the wisdom of the proposed compromise. Basic to this process in every instance, v

8 Document Page 8 of 43 of course, is the need to compare the terms of the compromise with the likely rewards of the litigation. Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, (1968). Courts within the Fourth Circuit apply the TMT Trailer case in evaluating a settlement under Bankruptcy Rule 9019(a), and have identified several factors to be considered, including: whether the settlement is fair, equitable, and in the best interest of the estate; the probability of success in litigation; the complexity, duration, and expense of the litigation; inconvenience and delay attending the litigation; and the interest of the creditors. Maloy v. Sigmon (In re Maloy), Case No , 2009 WL , at *3 (Bankr. W.D.N.C. Dec. 7, 2009); In re Babb, 2009 WL , at *3; In re Lanier, 383 B.R. 302, 307 (Bankr. E.D.N.C. 2008). 20. On the probability of success, [i]t is sufficient to present the Court with the legal positions asserted by each side and the facts relevant to those issues. The Court itself can evaluate the likelihood of the parties prevailing in that litigation to determine whether the settlement is reasonable. In re Wash. Mutual, Inc., 442 B.R. 314, 330 (Bankr. D. Del. 2011). 21. But it is not for the bankruptcy court to decide the numerous questions of law and fact [presented] but rather to canvass the issues and see whether the settlement fall[s] below the lowest point in the range of reasonableness. In re Maloy, 2009 WL , at *3 (citations omitted); see also Flinn v. FMC Corp., 528 F.2d 1169, (4th Cir. 1975); In re Capmark Fin. Grp. Inc., 438 B.R. 471, 515 (Bankr. D. Del. 2010). 22. Where a settlement is negotiated at arm s length and with no hint of collusion, the bankruptcy court s review will give deference to the exercise of each party s business judgment. In re Bond, 1994 WL 20107, at *4 ( Thus, when a proposed settlement offers benefits to the estate at the time the parties enter into the agreement, we think a bankruptcy court does not abuse v

9 Document Page 9 of 43 its discretion by deferring to the business judgment of the parties who negotiated the compromise, especially when the parties negotiated at arm s length and there is no hint of collusion. ). 23. Here, the Settlement Agreement is a product of significant arm s-length, good faith bargaining among the Coltec Parties, Zurich, and the SPX Parties and resolves significant issues and potentially costly litigation for the Debtors and the estate. The Debtors believe that the proposed compromise is fair and equitable, in the best interests of the Debtors bankruptcy estate, and avoids the administrative costs and risk of loss that would arise in connection with further litigation of the issues set forth in this Motion. Accordingly, the Settlement Agreement is well within the Debtors reasonable business judgment, and in any event, exceeds the lowest point in the range of reasonableness. 24. Section of the Joint Plan a plan overwhelmingly accepted by both the holders of GST Asbestos Claims and the holders of Coltec Asbestos Claims provides that the Debtors have the sole right to sue for and compromise claims against insurance carriers. Under this authority, the Debtors have reached a Settlement Agreement that provides significant benefits to the Debtors and the estate. First, Zurich has agreed to pay nearly the full aggregate products hazard limits under the Scheduled Zurich Policies within 20 days after the Effective Date. Zurich would pay $9,000,000 cash shortly after the Effective Date for the six Scheduled Zurich Policies with aggregate limits of $10,000,000. The discount is appropriate because Zurich would make an up-front cash payment for coverage that would otherwise be due in the future in response to Asbestos Claims paid by the Asbestos Trust that actually trigger the Scheduled Zurich Policies. Second, Zurich agrees not to object to the Joint Plan or the Disclosure Statement, to withdraw any Claims against the estate, and to release the Coltec Parties v

10 Document Page 10 of 43 for any Claims arising out of the Scheduled Zurich Policies. Third, the SPX Parties and Zurich will dismiss with prejudice their respective claims and defenses against each other asserted in the Delaware Coverage Action. 25. In exchange for these benefits, Zurich receives a buyback of the Scheduled Zurich Policies, a release from the Coltec Parties and the SPX Parties for any and all Claims arising from the Scheduled Zurich Policies, a release from the Coltec Parties and the SPX Parties for Asbestos Claims under any other liability insurance policies Zurich may have issued to Coltec or its predecessors, 7 and a designation as an Asbestos Protected Party entitled to the benefits of an Asbestos Channeling Injunction for Asbestos Claims under Sections and (f) of the Plan. These terms result in minimal detriment to the Debtors and the estate because of the size of the Settlement Amount in relation to the aggregate policy limits. The Sale of the Scheduled Zurich Policies Satisfies Section 363 of the Bankruptcy Code 26. The proposed sale to Zurich of the Scheduled Zurich Policies, including any and all rights and interests of the Coltec Parties in the Scheduled Zurich Policies, free and clear of any liens, Claims or interests under the Settlement Agreement also meets the requirements of Section 363 of the Bankruptcy Code. 27. Section 363(b)(1) of the Bankruptcy Code provides: The Trustee, after notice and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate. A proposed sale of the assets of a debtor under Section 363 of the Bankruptcy Code outside the ordinary course of business is appropriate if a court finds that the transaction represents a reasonable business judgment by the debtor-in-possession. See In re Abbotts Dairies of Pa., 788 F.2d 143 (3d Cir. 1986); In re WBQ Partnership, 189 B.R. 97, The Debtors are not aware of any such policies v

11 Document Page 11 of 43 (Bankr. E.D. Va. 1995). To approve a use, sale or lease of property other than in the ordinary course of business, the Court must find some articulated business justification. See In re Georgetown Steel Co., LLC, 306 B.R. 549, 555 (Bankr. D.S.C. 2004) ( Courts often review a debtor s use, sale or lease of property of the estate outside of the ordinary course of business pursuant to the debtor's demonstration of a sound business purpose... The factors considered under this test generally represent the business judgment test. ). Once the Debtor articulates a valid business justification, [i]t has been recognized that courts should approve the exercise of a debtor s business judgment unless it is so manifestly unreasonable that it could not be based on sound business judgment, but only on bad faith, or whim or caprice. See id. (quoting In re Aerovox, Inc., 269 B.R. 74, 80 (Bankr. D. Mass. 2001)); see also In re Phoenix Steel Corp., 82 B.R. 334, (Bankr. D. Del. 1987) (stating that the elements necessary for approval of a section 363 sale in a chapter 11 case are that the proposed sale is fair and equitable, that there is a good business reason for completing the sale and the transaction is in good faith ). 28. Section 363(f) of the Bankruptcy Code governs the sale of estate assets free and clear of liens, claims, and interests, providing: The trustee may sell property under subsection (b) or (c) of this section free and clear of any interest in such property of an entity other than the estate, only if (1) applicable nonbankruptcy law permits sale of such property free and clear of such interest; (2) such entity consents; (3) such interest is a lien and the price at which such property is to be sold is greater than the aggregate value of all liens on such property; (4) such interest is in bona fide dispute; or (5) such entity could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of such interest. 29. Here, the sale of the Scheduled Zurich Policies under the Settlement Agreement, like the Settlement Agreement itself, is a product of significant arm s-length and good faith bargaining. The Debtors believe that the proposed sale is within their sound business judgment v

12 Document Page 12 of 43 because (a) the Settlement Amount represents fair value for the Scheduled Zurich Policies, 8 and (b) the proposed sale is an integral part of the Settlement Agreement, which facilitates the resolution of Asbestos Claims that have been or may be asserted against Coltec and/or FMPC, and terminates any current dispute among SPX, FMPC, and Zurich in the Delaware Coverage Action. 30. The Debtors know of no party, other than SPX and FMPC and, potentially, the holders of Coltec Asbestos Claims, that has any lien, Claim, or interest in or to the Scheduled Zurich Policies. SPX and FMPC consent to the sale of the Scheduled Zurich Policies. The Debtors have provided the Settlement Agreement and the proposed Order allowing this Motion to the Asbestos Claimants Representatives, and the Asbestos Claimants Representatives have identified no objection to the proposed Settlement Agreement or proposed Order. Moreover, any holder of a lien, Claim, or interest in or to the Scheduled Zurich Policies that receives notice of the sale and which fails to object to the sale of the Scheduled Zurich Policies should be deemed to consent to the sale, thereby complying with section 363(f)(2) of the Bankruptcy Code. Thus, the proposed sale satisfies section 363(f) of the Bankruptcy Code. NOTICE 31. The Debtors have served notice of this Motion in accordance with the notice procedures approved by the Court [D.E. 48 in the Garlock Bankruptcy Case; D.E. 49 in the Coltec Bankruptcy Case] and submit that, given the nature of the relief requested, no other or further notice need be given. No previous application for the relief requested herein has been made by the Debtors to this or any other court. 8 The only other category of claims that conceivably could trigger the Scheduled Zurich Policies are environmental pollution claims; however, the separate aggregate limits applicable to such claims were fully exhausted by Zurich in v

13 Document Page 13 of 43 WHEREFORE, the Debtors respectfully request that the Court enter an Order, substantially in the form attached to the Settlement Agreement as Exhibit A: A. Approving the Settlement Agreement, and any agreements, documents, or instruments executed in connection with or pursuant to the Settlement Agreement, subject to all terms and conditions therein, including without limitation the condition that the Joint Plan be confirmed and consummated before the Settlement Agreement binds the Coltec Parties; B. Authorizing the parties to the Settlement Agreement to take all actions necessary to implement the terms of the Settlement Agreement; C. Approving Zurich s purchase from the Coltec Parties of any and all of the Coltec Parties rights and interests in the Scheduled Zurich Policies, free and clear of any liens, Claims or interests within the meaning of Sections 363(b)(1) and (f) of the Bankruptcy Code to the fullest extent permissible under the Bankruptcy Code and any other applicable law; D. Permanently staying, restraining, and enjoining all Entities on notice of the Motion that have held or asserted, that hold or assert, or that may in the future hold or assert any Claims or interests against any of the Scheduled Zurich Policies, from asserting any such Claim or interest against Zurich and from continuing, commencing, or otherwise proceeding or taking any action against Zurich to enforce such Claim or interest or for the purpose of directly or indirectly collecting, recovering or receiving payments from Zurich under the Scheduled Zurich Policies with respect to any such Claim or interest; E. Providing that, subject to the occurrence of the Effective Date, Zurich shall be protected from Asbestos Claims under the Plan and Asbestos Channeling Injunction as an Asbestos Protected Party; v

14 Document Page 14 of (h); and F. Waiving, to the extent applicable, the notice requirements under Bankruptcy Rule G. Providing such other and further relief as the Court deems just and proper. This 12 th day of May, Respectfully submitted, /s/ Garland S. Cassada Garland S. Cassada N.C. Bar No Jonathan C. Krisko N.C. Bar No Richard C. Worf, Jr. N.C. Bar No ROBINSON BRADSHAW & HINSON, P.A. 101 North Tryon Street, Suite 1900 Charlotte, North Carolina Telephone: (704) Facsimile: (704) Special Corporate and Litigation Counsel to the Debtors Garlock Sealing Technologies LLC, Garrison Litigation Management Group, Ltd., The Anchor Packing Company, and OldCo, LLC v

15 Document Page 15 of 43 Exhibit 1 (Settlement Agreement) v

16 Document Page 16 of 43 SETTLEMENT AGREEMENT AND RELEASE AMONG THE COLTEC PARTIES, ZURICH, SPX, AND FMPC This Settlement Agreement and Release (the "Agreement") is entered into by and among (a) OldCo, LLC f/k/a Coltec Industries Inc ("OldCo"), EnPro Holdings, Inc. ("EHl"), Oarlock Sealing Technologies LLC ("GST"), Garrison Litigation Management Group, Ltd. ("Garrison"), and The Anchor Packing Company ("Anchor" and, collectively with Garrison and GST, the "Garlock Debtors;" and the Garlock Debtors together with EHI and OldCo, the "Coltec Parties"); (b) Zurich American Insurance Company, for itself and as successor in interest to Zurich Insurance Company, US Branch ("Zurich"); and (c) SPX Corporation ("SPX") and Fairbanks Morse Pump Corporation ("FMPC" and, collectively with SPX, the "SPX Parties"). The Coltec Parties, Zurich, and the SPX Parties shall be referred to collectively herein as the "Parties." RECITALS WHEREAS, Zurich Insurance Company, US Branch issued certain policies of insurance to Fairbanks Whitney Corporation, Colt Industries, Inc., Fairbanks, Morse & Co., and/or Fairbanks Morse, Inc., which OldCo and the SPX Parties assert provide liability insurance coverage to each of them; WHEREAS, Zurich American Insurance Company represents that it is the successor-ininterest to Zurich Insurance Company, US Branch with respect to the Zurich Policies (as defined below); WHEREAS, OldCo, FMPC, and/or SPX have incurred or may in the future incur certain liabilities, costs, expenses, and losses arising out of Asbestos Claims (as defined in the "Plan" defined below); WHEREAS, OldCo, FMPC, and SPX have sought coverage from Zurich under the Zurich Policies for certain Asbestos Claims; WHEREAS, OldCo's predecessor Coltec Industries Inc ("Coltec") and Zurich are parties to a Settlement Agreement Concerning Asbestos Claims Between Coltec Industries Inc. and Zurich Insurance Company, effective as of August 5, 2004 (the "Asbestos Funding Agreement"), addressing Coltec's and Zurich's respective rights and obligations under certain Zurich Policies for certain Asbestos Claims brought against Coltec or its predecessors; WHEREAS, pursuant to the Asbestos Funding Agreement, Zurich has funded certain defense costs incurred in connection with Asbestos Claims brought against Coltec; WHEREAS, on the Petition Date, each of the Garlock Debtors filed a voluntary petition for relief under chapter 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Western District of North Carolina (the "Bankruptcy Court"), which cases are jointly administered and currently pending as Case No (the "Bankruptcy Cases");

17 Document Page 17 of 43 WHEREAS, on January 30,2017, OldCo filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code (the "OldCo Chapter 11 Case"), and on February 3, 2017, the Bankruptcy Court issued an order providing for the joint administration of the OldCo Chapter 11 Case with the Bankruptcy Cases; WHEREAS, Zurich and SPX are parties to an action styled Century Indemnity Co. v. SPX Corporation^ C.A. No, N17C EMD CCLD (Del. Super.) (the "Delaware Coverage Action"), in which SPX has asserted certain claims against Zurich relating to insurance coverage for Asbestos Claims under the Zurich Policies; WHEREAS, FMPC has sought leave to intervene in the Delaware Coverage Action to assert certain claims against Zurich relating to insurance coverage for Asbestos Claims under the Zurich Policies; WHEREAS, the Parties anticipate that the Coltec Parties' liability for Asbestos Claims will be resolved as set forth in the Plan; WHEREAS, the Parties desire to take certain steps, including as set forth in this Agreement, to facilitate the resolution of Asbestos Claims that have been or may be asserted against Coltec and/or FMPC, and to terminate any current dispute among SPX, FMPC, and Zurich in the Delaware Coverage Action; WHEREAS, pursuant to the terms of and as defined in the Plan, Zurich is an "Asbestos Insurance Company," and the limits remaining under the Zurich Policies are "Additional Coltec Insurance;" and WHEREAS, in consideration of payment of the Settlement Amount (as defined below) and other consideration as more fully set forth herein, the Parties intend to (a) adopt a full, final settlement and policy buyback that releases and terminates all rights, obligations, and liabilities of the Parties under the Scheduled Zurich Policies, (b) releases and terminates all rights, obligations, and liabilities of the Parties under any other policies issued by Zurich, known or unknown, with respect to insurance coverage for Asbestos Claims, (c) effects a sale to Zurich of the Parties' interests in the Scheduled Zurich Policies free and clear of all liens, claims, encumbrances and other interests pursuant to section 363 of the Bankruptcy Code, and (d) designates Zurich as an "Asbestos Protected Party" under the Plan, all as more fully set forth in this Agreement. NOW, THEREFORE, for good and valuable consideration, the Parties agree as follows: AGREEMENT L DEFINITIONS The following definitions apply to capitalized terms wherever those terms appear throughout this Agreement or in the schedules, attachments, and exhibits to this Agreement. Capitalized terms in the prefatory paragraph and the preceding recitals have the meanings ascribed to them in the prefatory paragraph or recitals, as applicable. Capitalized terms not defined herein have the meanings ascribed to them in the Plan. Each defined term stated in a singular form

18 Document Page 18 of 43 includes the plural form, each defined term stated in plural form includes the singular form, and each defined term stated in the masculine, feminine, or neuter form includes each of the masculine, feminine, and neuter forms. The word "including" means "including but not limited to." In construing this Agreement, the definitions set forth in this Agreement shall control in the event of any alleged inconsistency between the definitions in this Agreement and the definitions of the same or similar terms used in the Plan. A. Approval Motion means the motion to be filed by the Garlock Debtors and OldCo in the Bankruptcy Cases under Federal Rule of Bankruptcy Procedure 9019 and Sections 105(a), 524(g), and 363 of the Bankruptcy Code seeking entry of the Approval Order. B. 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, which order shall be substantially in the form of order attached as Exhibit A or otherwise in form and substance acceptable to the Parties. C. Asbestos Channeling Injunction has the meaning ascribed to it in the Plan. D. Asbestos Claim has the meaning ascribed to it in the Plan. E. Asbestos Trust has the meaning ascribed to it in the Plan. F. Claim means any and all past, present, or future, actual, alleged, or potential demand, liability, duty, obligation, claim, debt, allegation, action, damages, suit, expense, loss, cost, assertion of liability, or cause of action of any type whatsoever, whether in law, in equity, in admiralty, or otherwise, and whether or not presently known, contractual or extra-contractual (including any claims for "bad faith," unfair claims practices, or breach of any implied duty of good faith and fair dealing), and including all "claims" as defined in Section 101(5) of the Bankruptcy Code. G. Claimant means the past, present, or future holder of any Claim. H. Coltec Releasing Parties means (1) the Coltec Parties; (2) EnPro Industries, Inc.; and (3) each of the current subsidiaries and affiliates of the Coltec Parties. I. Coltec Released Parties means (1) the Coltec Parties; (2) EnPro Industries, Inc.; (3) each of the current subsidiaries and affiliates of the Coltec Parties; (4) each of the Coltec Parties' interests in any joint venture in which it participated; (5) each of the Coltec Parties' respective officers, directors, employees, agents, representatives, shareholders, and attorneys, solely in their capacity as such; and (6) the successors and assigns of any of the foregoing Persons, solely in their capacity as such. J. Confirmation Order has the meaning ascribed to it in the Plan. K. District Court has the meaning ascribed to it in the Plan. L. Effective Date has the meaning ascribed to it in the Plan.

19 Document Page 19 of 43 M. Entity means any Person or federal, state, local, or foreign government or any governmental or quasi-governmental body or political subdivision, or any agency, department, board, or instrumentality thereof of any federal, state, local, or foreign government. the Parties. N. Execution Date means the earliest date on which this Agreement is signed by all of O. Final Order has the meaning ascribed to it in the Plan. P. Other Zurich Policies means any and all liability insurance policies not listed on Schedule 1, known and unknown, alleged or confirmed, primary, umbrella, excess, or otherwise, issued to the Coltec Parties or a Coltec Party by Zurich or any of its affiliates listed in Schedule 2 to this Agreement prior to the Execution Date, but only to the extent such other liability policies provide or allegedly provide coverage for Asbestos Claims. Notwithstanding the foregoing, the term "Other Zurich Policies" shall not include any policies issued to the Coltec Parties or a Coltec Party that are not Scheduled Zurich Policies to the extent such policy(ies) provide coverage for Claims that are not Asbestos Claims. Q. Person means any individual, partnership, corporation, limited liability company, limited liability partnership, limited partnership, joint venture company, association, union, organization, or other entity or being of whatever kind, whether or not operating or existing for profit, including any "person" as such term is defined in the Bankruptcy Code, but excluding any governmental unit. R. Petition Date means June 5,2010. S. Plan means the Modified Joint Plan of Reorganization of Garlock Sealing Technologies LLC, et al. and OldCo, LLC, Proposed Successor By Merger to Coltec Industries, Inc, dated July 29, 2016, as it has been or may be amended or otherwise modified from time to time. T. Sale Injunction means an injunction issued by the Bankruptcy Court under the Approval Order pursuant to Sections 105 and 363 of the Bankruptcy Code that permanently enjoins all Entities on notice of the Approval Motion (including Entities on notice through a courtappointed representative) from continuing, commencing, or otherwise proceeding or taking any action against Zurich with respect to any Claims of such Entity, other than Asbestos Claims, against the Zurich Policies for the purpose of collecting, recovering, or receiving payments from Zurich. U. Scheduled Zurich Policies means all liability insurance policies listed on Schedule 1 to this Agreement. V. Settlement Amount means nine million United States dollars (US$9,000,000.00). W. SPX Released Parties means (1) SPX and FMPC; (2) each of the subsidiaries and affiliates of SPX and FMPC; (3) each of SPX's and FMPC's interests in any joint venture in which it participated; and (4) each of SPX's and FMPC's respective officers, directors, employees,

20 Document Page 20 of 43 agents, representatives, shareholders and attorneys, or the successors of any of them, solely in their capacity as such. X. Zurich Policies means (1) Scheduled Zurich Policies and (2) Other Zurich Policies. Y. Zurich Released Parties means (1) Zurich American Insurance Company, for itself and as successor in interest to Zurich Insurance Company, US Branch; (2) its parents and predecessors; (3) each of its subsidiaries, divisions, affiliates, successors, and assigns, solely in their capacity as such; (4) each of the companies listed on Schedule 2 to this Agreement, solely with respect to Asbestos Claims; (5) each of the officers, directors, employees, agents, representatives, shareholders, and attorneys of the entities listed in subclauses (1) and (4), solely in their capacity as such; and (6) the successors and assigns of any of the foregoing Persons, solely in their capacity as such. U. CONDITIONS TO EFFECTIVENESS This Agreement shall become effective upon the occurrence of all of the following conditions precedent: (1) execution of this Agreement by the Parties; (2) entry of the Approval Order; (3) the Approval Order having become a Final Order, and having been a Final Order for a minimum of ten Business Days; and (4) the occurrence of the Effective Date. III. SETTLEMENT PAYMENT A. Subject to all of the terms and conditions of this Agreement, Zurich will pay the Settlement Amount to the Coltec Parties within twenty (20) days after receiving notice from the Coltec Parties that both (1) the Effective Date has occurred and (2) the Approval Order has been a Final Order for a minimum of ten Business Days. Zurich will pay the Settlement Amount by check made out to OldCo, LLC and delivered to the contact for the Coltec Parties designated in Section XIII, or to such different payee and address as a Coltec Party may direct. B. Additional Provisions Relating to the Settlement Amount. 1. The Settlement Amount will be used only for the payment of Asbestos Claims, reimbursement of the Coltec Parties for their contributions to the Asbestos Trust under the Plan, or as a contribution to the Asbestos Trust. 2. Zurich will have no liability or responsibility for any allocation of the Settlement Amount among any Claimants asserting Asbestos Claims or their respective attorneys. 3. Each Party reserves the right to allocate the Settlement Amount, or any portion thereof, to any Zurich Policy as they deem appropriate; provided, however, that any such allocation will in no way be construed as an acknowledgement by any other Party that it concurs with the appropriateness or reasonableness of such allocation. 4. The Settlement Amount will not be subject to any Claims for deductions, set-offs, or charge-backs by Zurich of any kind, including Claims involving recoupment or deductibles, self-insured retentions, additional premiums, or retrospective or reinstatement premiums under the Zurich Policies.

21 Document Page 21 of Zurich may pursue reinsurance claims against any and all reinsurers or retrocessionaires of the Zurich Policies regarding consideration paid by Zurich in connection with this Agreement (as well as for other reinsured amounts such as, without limitation, Zurich's counsel fees). 6. Zurich will not seek reimbursement of any payment that Zurich is obligated to make under this Agreement, or of any other payments Zurich has made to or for the benefit of the Coltec Parties and the SPX Parties pursuant to the Asbestos Funding Agreement, whether by way of a claim for contribution, indemnity, subrogation or otherwise, from any Entity, including any other insurer of the Coltec Parties and the SPX Parties, except to the extent permitted by Section IILB.5 of this Agreement. IV. BANKRUPTCY OBLIGATIONS A. Effective upon Zurich's payment in full of the Settlement Amount, the Coltec Parties will designate Zurich and its parent corporations, divisions, assigns, predecessors and successors, and their shareholders, officers, directors, employees, attorneys, agents and representatives, as Asbestos Protected Parties entitled to the benefits of an Asbestos Channeling Injunction for Asbestos Claims under Sections , 8.2, and (f) of the Plan. B. Prior to the commencement of the Confirmation Hearing on May 15, 2017, or as soon thereafter as reasonably possible, the Coltec Parties will, at their sole cost and expense, file the Approval Motion and seek entry of the Approval Order. The Approval Order will be substantially in the form of order attached as Exhibit A or otherwise in form and substance acceptable to the Parties, and will include a Sale Injunction. C. The Parties will cooperate in good faith to ensure that the Approval Order is entered and becomes a Final Order. D. As of the Execution Date, and continuing so long as the Coltec Parties fulfill their obligations under this Agreement, Zurich (1) will not object to the Plan or Disclosure Statement, and will not file any requests for relief, reservations of rights, or similar papers with the Bankruptcy Court, including seeking discovery from the Coltec Parties; and (2) will withdraw any Claims made (including proofs of claim filed) against the Coltec Parties in the Bankruptcy Cases. Upon the Execution Date, Zurich will be deemed to have withdrawn any and all Claims made (including proofs of claim filed) against the Coltec Parties in the Bankruptcy Cases and any and all objections (including any and all pending objections to the Plan or Disclosure Statement) and other requests for relief, reservations of rights, or similar papers filed with the Bankruptcy Court, and will, upon request of the Coltec Parties and at the sole expense of Zurich, file with the Bankruptcy Court such papers as the Coltec Parties deem reasonably necessary to document and effectuate the formal withdrawal of such Claims, objections, requests for relief, or reservation of rights. V. POLICY BUY-BACK AND MUTUAL RELEASES A. Zurich's Buv-Back of Insurance Rights. Effective upon Zurich's payment in full of the Settlement Amount, and without any further action being required by any Party, the Scheduled Zurich Policies, and any and all rights and interests of the Coltec Parties, SPX, and

22 Document Page 22 of 43 FMPC in the Scheduled Zurich Policies, will be deemed to have been sold back to Zurich pursuant to Sections 363(b) and (f) of the Bankruptcy Code free and clear of any liens, Claims, or interests within the meaning of Sections 363(b)(1) and (f) of the Bankruptcy Code to the fullest extent permissible under the Bankruptcy Code and any other applicable law, finally extinguishing and exhausting all rights, duties, and coverage under the Scheduled Zurich Policies and, as a result, the Scheduled Zurich Policies will no longer remain in effect. B. Release of Zurich Released Parties bv The Coltec Releasing Parties. 1. In consideration of Zurich's payment of the Settlement Amount, and for other good and valuable consideration, and effective upon Zurich's payment in full of the Settlement Amount, the Coltec Releasing Parties will be deemed to irrevocably and forever settle, remise, release, covenant not to sue, and discharge the Zurich Released Parties from and with respect to (i) any and all Claims that the Coltec Releasing Parties ever had, now have, or hereafter may have under or arising out of the Scheduled Zurich Policies and (ii) any and all Asbestos Claims that the Coltec Releasing Parties ever had, now have, or hereafter may have under or arising out of the Other Zurich Policies, including any such: a. Claims for insurance coverage or other obligations under or arising out of the Scheduled Zurich Policies; b. Claims for insurance coverage or other obligations with respect to Asbestos Claims under or arising out of the Other Zurich Policies; c. Claims for insurance coverage or other obligations under or arising out of the Asbestos Funding Agreement; d. Claims for any act, omission, representation, or conduct of any sort of a Zurich Released Party under or arising out of the Scheduled Zurich Policies; e. Claims for any act, omission, representation, or conduct of any sort by a Zurich Released Party, solely with respect to Asbestos Claims, under or arising out of the Other Zurich Policies; f. Claims for any form of extra-contractual liability under or relating to the Scheduled Zurich Policies, including Claims for punitive or exemplary damages, antitrust or unfair competition, breach of any duty of good faith and fair dealing, bad faith or other misconduct or alleged wrongdoing, breach of statutory duties, and/or breach of common law duties, including negligent undertaking, breach of fiduciary duty, and/or any other theory of extra-contractual liability; and g. Claims for any form of extra-contractual liability with respect to Asbestos Claims under or relating to the Other Zurich Policies, including Claims for punitive or exemplary damages, antitrust or unfair competition, breach of any duty of good faith and fair dealing, bad faith or other misconduct or alleged wrongdoing, breach of statutory duties, and/or breach of common law duties, including negligent

23 Document Page 23 of 43 undertaking, breach of fiduciary duty, and/or any other theory of extra-contractual liability. 2. For the avoidance of doubt, and without limitation, effective upon Zurich's payment of the Settlement Amount in full: (a) all past, present, and future Claims of the Coltec Releasing Parties against the Zurich Released Parties under or arising out of the Scheduled Zurich Policies will be deemed to be fully and finally released and extinguished; (b) all past, present, and future Asbestos Claims of the Coltec Releasing Parties against the Zurich Released Parties under or arising out of the Other Zurich Policies will be deemed to be fully and finally released and extinguished; (c) the Zurich Released Parties will have no further obligations to the Coltec Releasing Parties under or arising out of the Scheduled Zurich Policies; (d) the Zurich Released Parties will have no further obligations to the Coltec Releasing Parties under or arising out of the Other Zurich Policies with respect to Asbestos Claims; and (e) the Zurich Released Parties will be completely released by the Coltec Releasing Parties as if Zurich had never issued any Scheduled Zurich Policy to the Coltec Releasing Parties. When effective, the releases contained in this Section V are intended to operate as if no Scheduled Zurich Policies had ever been issued to the Coltec Releasing Parties. C. Release of Zurich Released Parties bv the SPX Released Parties 1. In consideration of Zurich's payment of the Settlement Amount, and for other good and valuable consideration, and effective upon Zurich's payment in full of the Settlement Amount, the SPX Released Parties will be deemed to irrevocably and forever settle, remise, release, covenant not to sue, and discharge the Zurich Released Parties from and with respect to (i) any and all Claims that the SPX Released Parties ever had, now have, or hereafter may have under or arising out of the Scheduled Zurich Policies, and (ii) any and all Asbestos Claims that the SPX Releasing Parties ever had, now have, or hereafter may have under or arising out of the Other Zurich Policies, including any such: a. Claims for insurance coverage or other obligations under or arising out of the Scheduled Zurich Policies; b. Claims for insurance coverage or other obligations with respect to Asbestos Claims under or arising out of the Other Zurich Policies; c. Claims for insurance coverage or other obligations under or arising out of the Asbestos Funding Agreement; d. Claims for any act, omission, representation, or conduct of any sort of a Zurich Released Party under or arising out of the Scheduled Zurich Policies; e. Claims for any act, omission, representation, or conduct of any sort by a Zurich Released Party, solely with respect to Asbestos Claims, under or arising out of the Other Zurich Policies; f. Claims for any form of extra-contractual liability under or relating to the Scheduled Zurich Policies, including Claims for punitive or exemplary damages, 8

24 Document Page 24 of 43 antitrust or unfair competition, breach of any duty of good faith and fair dealing, bad faith or other misconduct or alleged wrongdoing, breach of statutory duties, and/or breach of common law duties, including negligent undertaking, breach of fiduciary duty, and/or any other theory of extra-contractual liability; and g. Claims for any form of extra-contractual liability with respect to Asbestos Claims under or relating to the Other Zurich Policies, including Claims for punitive or exemplary damages, antitrust or unfair competition, breach of any duty of good faith and fair dealing, bad faith or other misconduct or alleged wrongdoing, breach of statutory duties, and/or breach of common law duties, including negligent undertaking, breach of fiduciary duty, and/or any other theory of extra-contractual liability. 2. For the avoidance of doubt, and without limitation, effective upon Zurich's payment of the Settlement Amount in full: (a) all past, present, and future Claims of the SPX Released Parties against the Zurich Released Parties under or arising out of the Scheduled Zurich Policies will be deemed to be fully and finally released and extinguished; (b) all past, present, and future Asbestos Claims of the SPX Released Parties against the Zurich Released Parties under or arising out of the Other Zurich Policies will be deemed to be fully and finally released and extinguished; (c) the Zurich Released Parties will have no further obligations to the SPX Released Parties under or arising out of the Scheduled Zurich Policies; (d) the Zurich Released Parties will have no further obligations to the SPX Released Parties under or arising out of the Other Zurich Policies with respect to Asbestos Claims; and (e) the Zurich Released Parties will be completely released by the SPX Released Parties as if Zurich had never issued any Scheduled Zurich Policy to the Coltec Releasing Parties. 3. Effective as of the Execution Date, Zurich and the SPX Parties agree to jointly seek to stay all deadlines with respect to one another in the Delaware Coverage Action, including Zurich's deadline to respond to SPX's third-party complaint and Zurich's deadline to respond to FMPC's motion to intervene. 4. Within ten (10) days after Zurich's payment in full of the Settlement Payment, the SPX Parties and Zurich will make all appropriate filings and appearances in the Delaware Coverage Action necessary to (a) dismiss with prejudice their respective claims and defenses against each other asserted in that Action, and (b) withdraw or amend FMPC's motion to intervene, solely as it pertains to Zurich, to withdraw any claims asserted against Zurich. FMPC further covenants not to initiate any action or assert any Claim against Zurich with respect to the Claims released in this Section V.C. D. Release of the Coltec Released Parties and SPX Released Parties bv Zurich Released Parties. 1. In consideration of the releases and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and effective upon Zurich's payment in full of the Settlement Amount, the Zurich Released Parties will be deemed to irrevocably and forever settle, remise, release, covenant not to sue, and discharge the Coltec Released Parties and the SPX Released Parties (collectively, the "Insured Released Parties") from

25 Document Page 25 of 43 and with respect to (i) any and all Claims that the Zurich Released Parties ever had, now have, or hereafter may have under or arising out of the Scheduled Zurich Policies and (ii) any and all Asbestos Claims that the Zurich Released Parties ever had, now have, or hereafter may have under or arising out of the Other Zurich Policies, including any such: a. Obligations under or arising out of the Scheduled Zurich Policies, including any actual or alleged obligations of the Insured Released Parties to pay any premiums, deductibles, self-insured retentions, retrospective premiums, or other similar charges; b. Obligations under or arising out of the Other Zurich Policies solely with respect to Asbestos Claims, including any actual or alleged obligations of the Insured Released Parties to pay any premiums, deductibles, self-insured retentions, retrospective premiums, or other similar charges; c. Obligations under or arising out of the Asbestos Funding Agreement; d. Claims for any act, omission, representation, or conduct of any sort by the Insured Released Parties under or arising out of the Scheduled Zurich Policies; e. Claims for any act, omission, representation, or conduct of any sort by the Insured Released Parties, solely with respect to Asbestos Claims, under or arising out of the Other Zurich Policies; f. Claims for any form of extra-contractual liability of the Insured Released Parties under or relating to the Scheduled Zurich Policies, including Claims for punitive or exemplary damages, antitrust or unfair competition, breach of any duty of good faith and fair dealing, bad faith or other misconduct or alleged wrongdoing, breach of statutory duties, and/or breach of common law duties, and/or any other theory of extra-contractual liability; and g. Claims for any form of extra-contractual liability of the Insured Released Parties with respect to Asbestos Claims under or relating to the Other Zurich Policies, including Claims for punitive or exemplary damages, antitrust or unfair competition, breach of any duty of good faith and fair dealing, bad faith or other misconduct or alleged wrongdoing, breach of statutory duties, and/or breach of common law duties, including negligent undertaking, breach of fiduciary duty, and/or any other theory of extra-contractual liability. 2. For the avoidance of doubt, and without limitation, as of the Effective Date, all past, present, and future Claims against the Insured Released Parties under or arising out of the Scheduled Zurich Policies will be deemed to be fully and finally released and extinguished; all past, present, and future Asbestos Claims against the Insured Released Parties under or arising out of the Other Zurich Policies will be deemed to be fully and finally released and extinguished; the Insured Released Parties will have no further obligations under or arising out of the Scheduled Zurich Policies; and the Insured Released Parties will have no further obligations under or arising out of the Other Zurich Policies with respect to Asbestos Claims. 10

26 Document Page 26 of 43 E. Upon Zurich's payment in full of the Settlement Amount, the Parties intend to reserve no rights or benefits whatsoever under or arising out of the Scheduled Zurich Policies or the Asbestos Funding Agreement, and any and all rights, duties, responsibilities, and obligations of the Parties created by the Scheduled Zurich Policies or the Asbestos Funding Agreement will be fully and finally extinguished. F. The Parties understand and acknowledge that (1) Claims that have been or may be asserted against one or more of the Insured Released Parties may increase or decrease in amount or in severity over time and may include progressive, cumulative, unknown, and/or unforeseen elements, and (2) there may be hidden, unknown, and unknowable damages, defense expenses, or other costs related to such Claims. Each of the Parties acknowledges and agrees that it nevertheless willingly enters into this Agreement, including the releases set forth in this Section V. Likewise, each of the Parties expressly assumes the risk that Claims, acts, omissions, matters, causes, or other facts or events arising out of, related to, and/or in connection with the Zurich Policies may have taken place that one or more Parties do not know or do not suspect to exist, and the Parties expressly assume the risk of new or additional facts. Claims, or legal theories, or subsequent legal developments, that were not known and could not be anticipated at the Effective Date. Each of the Parties waives, with respect to the actual or potential Claims released in this Agreement, 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 under, arising out of, related to, and/or in connection with such acts, omissions, matters, causes, or events, or (ii) restricts or prohibits the releasing of such Claims. G. This Agreement and the settlement that it memorializes are explicitly acknowledged by all Parties to be complete and effective notwithstanding any facts, legal theories, alleged mistakes, alleged duties to disclose, or failures to disclose that are presently known to, or that subsequently become known to the Parties, or anyone else. This Agreement will not be subject to any claims of accident, unilateral mistake, mutual mistake, mistake of fact, estoppel, rescission, or reformation, and/or comparable claims, as the Parties intend by this Agreement permanently to resolve all present and future disputes among themselves under or arising out of the Scheduled Zurich Policies and all present and future disputes among themselves with respect to Asbestos Claims under or arising out of the Other Zurich Policies. H. The releases provided for in this Section V will not relieve the Parties of any obligations under this Agreement, and will in no way prevent or restrict the Coltec Parties from enforcing their right to payment of the Settlement Amount under this Agreement. VI. AVOIDANCE OF FUTURE LITIGATION OR CONTENTION A. The Coltec Parties, SPX, and FMPC agree, from and after Zurich's payment in full of the Settlement Amount: 1. That all outstanding tenders of Asbestos Claims by the Coltec Parties, SPX, and FMPC, if any, under the Zurich Policies for defense and indemnity will be deemed withdrawn; 2. Not to tender any further Claims under the Scheduled Zurich Policies; 11

27 Document Page 27 of Not to tender any further Asbestos Claims under the Other Zurich Policies; 4. Not to request that Zurich pay any judgments or settlements of any Claims by the Coltec Parties, SPX, or FMPC under the Scheduled Zurich Policies; 5. Not to request that Zurich pay any judgments or settlements of any Asbestos Claims by the Coltec Parties, SPX, or FMPC under the Other Zurich Policies; 6. That Zurich will have no obligation to defend, pay, handle, object to, or otherwise respond to any Claim tendered by the Coltec Parties, SPX, or FMPC under the Scheduled Zurich Policies; 7. That Zurich will have no obligation to defend, pay, handle, object to, or otherwise respond to any Asbestos Claim tendered by the Coltec Parties, SPX, or FMPC under the Other Zurich Policies; 8. Not to commence or pursue any litigation against Zurich for Claims under the Scheduled Zurich Policies, except as necessary to enforce this Agreement; and 9. Not to commence or pursue any litigation against Zurich for Asbestos Claims under the Other Zurich Policies, except as necessary to enforce this Agreement. B, The Parties shall bear, as to each other only, their own costs, expenses, and counsel, and professional fees in connection with the negotiation, execution, and performance of this Agreement. VII. COOPERATION A. Each Party will use its reasonable efforts to obtain the outcomes sought by this Agreement, and to take such steps and to execute such documents as may be reasonably necessary or proper to effectuate the purpose and intent of this Agreement and to preserve its validity and enforceability. In the event that any action or proceeding is commenced or prosecuted by any Entity to invalidate or prevent the validation, enforcement, or carrying out of all or any of the provisions of this Settlement Agreement, the Parties mutually agree to cooperate fully in opposing such action or proceeding. B. The Coltec Parties and the SPX Parties agree to cooperate with Zurich in connection with Zurich's claims to its reinsurers and retrocessionaires relating to payment of the Settlement Amount, this Agreement, and/or Asbestos Claims, including but not limited to responding to reasonable requests for information (to the extent such information is available to the Coltec Parties or the SPX Parties) and meeting with representatives of reinsurers and retrocessionaires, if requested. Zurich will reimburse the Coltec Parties and the SPX Parties for reasonable and necessary expenses related to such cooperation, including travel, lodging, and attorneys' fees. C. The Coltec Parties agree to cooperate with Zurich in obtaining relevant files, information and documents available from the Asbestos Trust, in accordance with Section of the Plan and Section 12.2 of the Settlement Facility Claims Resolution Procedures attached as Exhibit B to the Plan: (i) concerning Asbestos Claims subject to payment or potential payment 12

28 Document Page 28 of 43 with the proceeds of this Agreement, and (ii) that may be required of or necessary to Zurich in connection with any Claims, arbitrations, or litigation concerning reinsurance for the Settlement Amount or in connection with this Agreement, Zurich will reimburse the Coltec Parties for reasonable and necessary expenses related to such cooperation, including travel, lodging, and attorneys' fees. VIII. REPRESENTATION BY COUNSEL The Parties acknowledge and agree that this Agreement was bargained for and entered into in good faith and as the result of arms-length settlement negotiations, and that at all relevant times they have been represented by counsel of their own choosing concerning the rights affected by this Agreement, the form and content of it, and the advisability of executing it. This Agreement has been reviewed by counsel for each of the Parties and will not be strictly or presumptively construed against any Party, pursuant to the doctrine of contra proferentem or otherwise. IX. OTHER REPRESENTATIONS, WARRANTIES AND COVENANTS A. Each of the Parties represents that it is the owner of the rights and Claims to be compromised and released by it under this Agreement. B. Each of the Parties agrees that, upon and after the Effective Date, it will not contest the binding nature of this Agreement, including the releases set forth in Section V of this Agreement, or assert that valuable and fair consideration and reasonably equivalent value have not been exchanged pursuant to this Agreement. C. Each of the Parties agrees that, from and after the Effective Date, it will reasonably cooperate with each other Party in responding to and opposing any motion, objection. Claim, assertion, or argument by any third party that this Agreement, including the releases set forth in Section V of this Agreement, should not be approved, are not binding, or should be avoided, or that valuable and fair consideration and reasonably equivalent value have not been exchanged pursuant to this Agreement. D. Each of the Parties represents and warrants that it enters into this Agreement for the specific purpose of paying or receiving the benefit of the Settlement Amount, as applicable, and that its payment or receipt of the benefit of the Settlement Amount, as applicable, is based upon such Party's evaluation and determination of the best interests of such Party. E. Each Party represents and warrants that it has authority to execute this Agreement on behalf of itself and, as applicable, any Coltec Releasing Party, SPX Released Party, or Zurich Released Party, as their binding and legal obligation. Each Party represents and warrants that the individual signing this Agreement on its behalf is authorized by such Party to execute this Agreement and that such Party has fully reviewed and understands the terms, conditions, and effects of this Agreement. 13

29 Document Page 29 of 43 X. NON-PREJUDICE AND CONSTRUCTION OF AGREEMENT A. This Agreement represents a compromise between the Parties that settles disputed Claims. This Agreement will not be construed as an admission or concession about the Zurich Policies, nor will 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 Zurich Policies, even though all Parties will nonetheless be bound to comply with this Agreement. B. This Agreement is the product of informed, arms-length negotiations and involves compromises of the Parties' previously stated legal positions. Accordingly, this Agreement does not reflect the Parties' views as to their rights and obligations with respect to matters or Entities outside the scope of this Agreement. This Agreement is without prejudice to positions taken by Zurich with regard to other insureds or claimants, and without prejudice to positions taken by the Coltec Parties or the SPX Parties with regard to other insurers or matters. The Parties specifically disavow any intention to create rights in third parties under or in relation to this Agreement. This Agreement is the jointly-drafted product of negotiations among the Parties and will not be interpreted in favor of or against any Party notwithstanding statutes, rules, or doctrines that presumptively construe agreements or contracts against certain parties, and no provision of this Agreement will be construed against Zurich because of its status as an insurance company or as having issued the Zurich Policies. In particular, but without limitation, this Agreement is not, nor will it be construed as, an insurance policy. XII. NO WAIVER This Agreement may be amended, modified, or superseded, and any of the terms hereof may be waived, only by a written instrument that specifically states that it amends, modifies, or supersedes this Agreement, executed by or on behalf of all of the Parties or, in the case of a waiver, by or on behalf of the Party waiving compliance. The failure of a Party at any time or times to require performance of any provision of this Agreement will in no manner affect that Party's right at a later time to enforce the same or any other provision of this Agreement. No waiver by a Party of any condition, or of any breach of any term, covenant, representation, or warranty contained in this Agreement, in any one or more instances, will be deemed to be or construed as a further or continuing waiver of any such condition or breach, or a waiver of any other condition or of any breach of any other term, covenant, representation, or warranty. The consent by one Party to any act for which such consent was required will not be deemed to imply consent or waiver of the necessity of obtaining such consent for the same or similar acts in the future, and no forbearance by a Party to seek a remedy for noncompliance or breach by another Party will be construed as a waiver of any right or remedy with respect to such noncompliance or breach. xm. NOTICES A. All notices, requests, demands, and other communications required or permitted to be given under this Agreement shall be deemed to have been duly given if in writing and delivered personally, or by registered or certified mail, return receipt requested, or by Federal Express with signature required, and by , addressed as follows: 14