Exhibit 99.1


                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


                         UNITED STATES BANKRUPTCY COURT
                             DISTRICT OF NEW JERSEY

__________________________________________
IN RE:                                    )     Chapter 11
                                          )
CONGOLEUM CORPORATION,                    )
CONGOLEUM SALES, INC., and                )     Case No. 03-51524 (KCF)
CONGOLEUM FISCAL, INC.,                   )
                  Debtors.                )     Jointly Administered
__________________________________________)


 NINTH MODIFIED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 OF THE BANKRUPTCY
  CODE OF CONGOLEUM CORPORATION, ET AL., AND THE ASBESTOS CLAIMANTS' COMMITTEE,
                           DATED AS OF AUGUST 11, 2006


THIS PLAN PROVIDES, AMONG OTHER THINGS, FOR THE ISSUANCE OF INJUNCTIONS UNDER
SECTIONS 105 AND 524(g) OF THE BANKRUPTCY CODE THAT RESULT IN THE CHANNELING OF
ALL ASBESTOS-RELATED LIABILITIES OF CONGOLEUM CORPORATION AND THE PROTECTED
PARTIES SET FORTH HEREIN INTO A TRUST AS MORE FULLY DESCRIBED HEREIN.


PILLSBURY WINTHROP SHAW PITTMAN LLP
1540 Broadway
New York, NY 10036-4039

Richard L. Epling
Robin L. Spear
Kerry A. Brennan


OKIN, HOLLANDER & DELUCA, LLP
Parker Plaza
400 Kelby Street
Fort Lee, New Jersey 07024

Paul S. Hollander
James J. DeLuca

Attorneys for Congoleum Corporation, et al.


CAPLIN & DRYSDALE, CHTD.
One Thomas Circle, N.W.
Washington D.C. 20005

Peter Van N. Lockwood
Ronald Reinsel

Attorneys for the Asbestos Claimants' Committee
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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

                                  INTRODUCTION

                                    ARTICLE I

          DEFINITIONS, RULES OF INTERPRETATION, AND COMPUTATION OF TIME

   1.1  SCOPE OF DEFINITIONS.................................................1
   1.2  DEFINITIONS..........................................................1
   1.3  RULES OF INTERPRETATION:  APPLICATION OF DEFINITIONS, RULES OF
        CONSTRUCTION, AND COMPUTATION OF TIME...............................23
   1.4  EXHIBITS AND SCHEDULES..............................................23

                ARTICLE II COMPROMISES AND SETTLEMENTS OF CLAIMS

   2.1  PROPOSED SETTLEMENT BETWEEN THE DEBTORS AND QUALIFIED PRE-PETITION
        SETTLEMENT CLAIMANTS................................................23
   2.2  PROPOSED SETTLEMENT BETWEEN THE DEBTORS AND THE QUALIFIED
        PARTICIPATING CLAIMANTS.............................................25

                                   ARTICLE III

                     CLASSIFICATION OF CLAIMS AND INTERESTS

   3.1  GENERALLY...........................................................26
   3.2  UNCLASSIFIED CLAIMS.................................................26
   3.3  CLASSES.............................................................26

                                   ARTICLE IV

                           TREATMENT OF ADMINISTRATIVE
                         CLAIMS AND PRIORITY TAX CLAIMS

   4.1  ADMINISTRATIVE CLAIMS...............................................28
   4.2  PRIORITY TAX CLAIMS.................................................28
   4.3  SUBSTANTIAL CONTRIBUTION CLAIMS.....................................28

                                    ARTICLE V

                  TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS

   5.1  CLAIMS AND INTERESTS................................................28
   5.2  RESERVATION OF RIGHTS REGARDING CLAIMS..............................33
   5.3  SEPARATE LIABILITIES OF REORGANIZED DEBTORS.........................33


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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


                                   ARTICLE VI

                           IMPLEMENTATION OF THE PLAN

   6.1  THE PLAN TRUST AND THE GHR/KENESIS LITIGATION TRUST.................33
   6.2  INTERCOMPANY SETTLEMENT.............................................38
   6.3  CERTIFICATE OF INCORPORATION AND BYLAWS.............................38
   6.4  MANAGEMENT OF THE REORGANIZED DEBTORS...............................38
   6.5  AMENDED CREDIT AGREEMENT............................................38
   6.6  TRANSFER TAXES......................................................39
   6.7  SECTION 346 INJUNCTION..............................................39
   6.8  EFFECTUATING DOCUMENTS AND FURTHER TRANSACTIONS.....................39
   6.9  CORPORATE ACTION....................................................39
   6.10 ALLOCATION OF RESERVED COMMON STOCK.................................39
   6.11 TRANSFER LIMITATIONS UNDER SECTION 382(1)(5) OF THE IRC.............39

                                   ARTICLE VII

            PROVISIONS GOVERNING DISTRIBUTIONS WITH RESPECT TO CLAIMS
                      OTHER THAN PLAN TRUST ASBESTOS CLAIMS

   7.1  PLAN DISTRIBUTIONS..................................................40
   7.2  DELIVERY OF DISTRIBUTIONS...........................................40
   7.3  WITHHOLDING OF TAXES................................................40
   7.4  UNCLAIMED PROPERTY..................................................40

                                  ARTICLE VIII

                          RESOLUTION OF DISPUTED CLAIMS

   8.1  DISALLOWANCE OF IMPROPERLY FILED CLAIMS.............................41
   8.2  PROSECUTION OF OBJECTIONS TO CLAIMS.................................41
   8.3  NO DISTRIBUTIONS PENDING ALLOWANCE..................................41
   8.4  DISTRIBUTIONS AFTER ALLOWANCE.......................................42

                                   ARTICLE IX

                        TREATMENT OF EXECUTORY CONTRACTS,
                        UNEXPIRED LEASES AND SETTLEMENTS

   9.1  ASSUMPTION OF UNEXPIRED LEASES AND EXECUTORY CONTRACTS..............42
   9.2  DAMAGES UPON REJECTION..............................................43
   9.3  EXECUTORY AND OTHER SETTLEMENTS.....................................43
   9.4  INSURANCE AGREEMENTS................................................43
   9.5  COMPENSATION AND BENEFITS PROGRAMS..................................43
   9.6  RETIREE BENEFITS....................................................44
   9.7  INDEMNIFICATION OF DIRECTORS, OFFICER AND EMPLOYEES.................44


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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


                                    ARTICLE X

                       ACCEPTANCE OR REJECTION OF THE PLAN

   10.1 CLASSES ENTITLED TO VOTE............................................44
   10.2 ACCEPTANCE BY IMPAIRED CLASSES OF CLAIMS............................44
   10.3 ACCEPTANCE BY IMPAIRED CLASS OF INTERESTS...........................44
   10.4 ACCEPTANCE PURSUANT TO SECTION 524(G) OF THE BANKRUPTCY CODE........45
   10.5 PRESUMED ACCEPTANCE OF PLAN.........................................45
   10.6 RESERVATION OF RIGHTS...............................................45

                                   ARTICLE XI

                  CONDITIONS TO CONFIRMATION AND EFFECTIVENESS

   11.1 CONDITIONS TO CONFIRMATION..........................................45
   11.2 CONDITIONS TO EFFECTIVENESS.........................................47
   11.3 WAIVER OF CONDITIONS................................................48

                                   ARTICLE XII

                       INJUNCTIONS, RELEASES AND DISCHARGE

   12.1 DISCHARGE...........................................................49
   12.2 RELEASE OF REPRESENTATIVES OF THE DEBTORS...........................49
   12.3 EXCULPATION.........................................................50
   12.4 RELEASES BY HOLDERS OF CLAIMS.......................................50
   12.5 DISCHARGE INJUNCTION................................................51
   12.6 ASBESTOS CHANNELING INJUNCTION......................................51
   12.7 RESERVATION OF RIGHTS...............................................52
   12.8 RIGHTS AGAINST NON-DEBTORS UNDER SECURITIES LAWS....................53
   12.9 RIGHTS AGAINST DEBTORS UNDER ENVIRONMENTAL LAWS.....................53
   12.10 DISALLOWED CLAIMS AND DISALLOWED INTERESTS.........................53
   12.11 ANTI-SUIT INJUNCTION...............................................53
   12.12 INSURANCE NEUTRALITY...............................................54

                                  ARTICLE XIII

                      MATTERS INCIDENT TO PLAN CONFIRMATION

   13.1 TERM OF CERTAIN INJUNCTIONS AND AUTOMATIC STAY......................55
   13.2 NO SUCCESSOR LIABILITY..............................................55
   13.3 REVESTING...........................................................56
   13.4 VESTING AND ENFORCEMENT OF CAUSES OF ACTION.........................56
   13.5 PLAN TRUST BANKRUPTCY CAUSES OF ACTION..............................56
   13.6 BANKRUPTCY CAUSES OF ACTION.........................................57


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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


                                   ARTICLE XIV

                                  MISCELLANEOUS

   14.1  JURISDICTION.......................................................57
   14.2  GENERAL RETENTION..................................................57
   14.3  SPECIFIC PURPOSES..................................................57
   14.4  PAYMENT OF STATUTORY FEES..........................................59
   14.5  THE ASBESTOS CLAIMANTS' COMMITTEE AND THE FUTURES REPRESENTATIVE...59
   14.6  REVOCATION OF PLAN.................................................60
   14.7  MODIFICATION OF PLAN...............................................60
   14.8  MODIFICATION OF PAYMENT TERMS......................................60
   14.9  ENTIRE AGREEMENT...................................................60
   14.10 HEADINGS...........................................................60
   14.11 PROFESSIONAL FEE CLAIMS............................................60
   14.12 RECORDABLE ORDER...................................................61
   14.13 GOVERNING LAW......................................................61
   14.14 NO ADMISSION.......................................................61
   14.15 CONSENT TO JURISDICTION............................................61
   14.16 SETOFFS............................................................61
   14.17 SUCCESSORS AND ASSIGNS.............................................61
   14.18 NON-DEBTOR WAIVER OF RIGHTS........................................61
   14.19 FURTHER AUTHORIZATIONS.............................................62
   14.20 NOTICES............................................................62
   14.21 DUTY TO COOPERATE..................................................62


                                       iv
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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


                                       INTRODUCTION

      Congoleum Corporation, Congoleum Sales, Inc. and Congoleum Fiscal, Inc.,
the Debtors (as defined herein) in these Reorganization Cases (as defined
herein) along with the Asbestos Claimants' Committee (as defined herein) hereby
propose this joint plan of reorganization pursuant to the provisions of Chapter
11 of the United States Bankruptcy Code. Reference is made to the Disclosure
Statement (as defined herein) distributed contemporaneously herewith for a
discussion of the history, businesses, properties, results of operations,
projections for future operations of the Debtors and risks associated with the
Plan.

      All holders of Claims and Interests (each as defined herein) entitled to
vote on the Plan are encouraged to read the Plan and Disclosure Statement in
their entirety before voting to accept or reject the Plan. Subject to certain
restrictions and requirements set forth in section 1127 of the Bankruptcy Code,
Bankruptcy Rule 3019 (as defined herein), and Section 14.7 of the Plan, the
Debtors and the Asbestos Claimants' Committee reserve the right to alter, amend,
modify, revoke or withdraw the Plan prior to its substantial consummation.

                                    ARTICLE I

          DEFINITIONS, RULES OF INTERPRETATION, AND COMPUTATION OF TIME

      1.1 Scope of Definitions. All capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in Article I of the Plan. Any
term used in the Plan that is not defined herein, but is defined in the
Bankruptcy Code or the Bankruptcy Rules, shall have the meaning ascribed to that
term in the Bankruptcy Code or the Bankruptcy Rules.

      1.2 Definitions.

      "ABI" means American Biltrite Inc., a Delaware corporation, and any
successor or assign thereto whether presently existing or which may arise in the
future.

      "ABI Asbestos Claim" means any Asbestos Claim that may be asserted by ABI
now or in the future other than an ABI Asbestos Indemnity Claim.

      "ABI Asbestos Indemnity Claim" means any ABI Asbestos Personal Injury
Indemnity Claim or ABI Asbestos Property Damage Indemnity Claim.

      "ABI Asbestos Personal Injury Indemnity Claim" means any asbestos personal
injury indemnification Claim or Demand that may be asserted by ABI against
Congoleum at any time under the Joint Venture Agreement.

      "ABI Asbestos Property Damage Indemnity Claim" means any asbestos related
property damage indemnification Claim or Demand that may be asserted by ABI
against Congoleum at any time under the Joint Venture Agreement.

      "ABI Claim" means any Claim or Demand at any time that may be asserted by
ABI at any time against any Debtor, including without limitation ABI Asbestos
Claims.

<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "ABI Contribution" means $250,000 in Cash to be delivered to the Plan
Trust by and on behalf of ABI on the Effective Date pursuant to Section 6.2 of
the Plan.

      "ABI Entities" means (i) ABI; (ii) ABI's respective present, direct and
indirect, parents, subsidiaries and affiliates; (iii) the respective past and
future, direct and indirect, parents, subsidiaries and affiliates of the Persons
described in (i) and/or (ii) hereinabove only to the extent that such Persons
have the power to give the releases set forth in any Asbestos Insurance
Settlement Agreement on behalf of the Persons described in this (iii); (iv) the
respective past, present and future, direct and indirect, associated
corporations of the Persons described in (i) through (iii) hereinabove,
inclusive, but only in their capacity as such and only to the extent that any of
the Persons described in (i) and/or (ii) hereinabove have the power to give the
releases set forth in any Asbestos Insurance Settlement Agreement on behalf of
the Persons described in this (iv); (v) the direct and indirect predecessors,
successors and assigns of each of the foregoing Persons described in (i) through
(iv) hereinabove, inclusive, except, in the case of predecessors, only to the
extent that such Persons have the power to give the releases set forth in any
Asbestos Insurance Settlement Agreement on behalf of such predecessors; and (vi)
the respective officers, directors, employees, shareholders, agents, principals,
attorneys and representatives of the Persons described in (i) through (v)
hereinabove, inclusive, but only when acting in their capacity as such and only
to the extent any of such Persons have the power to the give the releases set
forth in any Asbestos Insurance Settlement Agreement on behalf of the Persons
described in this (vi). Any Person who meets the definition set forth
hereinabove shall be individually referred to as an "ABI Entity."

      "ABI Parties" means any current or former officers, directors and
employees of ABI, in their capacity as such.

      "Additional Indemnitees" has the meaning set forth in Section 2.1(c)(xiv)
of the Plan Trust Agreement.

      "Administrative Claim" means any Claim for the payment of an
Administrative Expense. The term "Administrative Claim" shall not include Plan
Trust Asbestos Claims.

      "Administrative Expense" means (a) any cost or expense of administration
of the Reorganization Cases under section 503(b) of the Bankruptcy Code
including, but not limited to (1) any actual and necessary post-petition cost or
expense of preserving the Estates or operating the Debtors' assets and
businesses, (2) any payment to be made under the Plan to cure a default on an
assumed executory contract or unexpired lease, (3) any post-petition cost,
indebtedness or contractual obligation duly and validly incurred or assumed by
the Debtors in the ordinary course of business, and (4) compensation or
reimbursement of expenses of professionals to the extent allowed by the
Bankruptcy Court under section 327, 328, 330(a), 331, 503(b) or 1103 of the
Bankruptcy Code, including, without limitation, the Futures Representative and
its Representatives and (b) any fee or charge assessed against the Estates under
28 U.S.C. ss. 1930.

      "Affiliate" shall have the meaning ascribed to such term in section 101(2)
of the Bankruptcy Code.

      "Allowed" means:


                                       2
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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


            (a) With respect to the Claims Handling Fee, the amount certified by
the Collateral Trustee pursuant to Section 6.1(i);

            (b) With respect to an Administrative Claim:

                  (i) such amount that represents a Claim of a professional
person employed under sections 327, 328, 524(g)(4)(B)(i) or 1103 of the
Bankruptcy Code who is required to apply to the Bankruptcy Court for the
allowance of compensation and reimbursement of expenses pursuant to section 330
of the Bankruptcy Code, to the extent such Claim is allowed by a Final Order of
the Bankruptcy Court under sections 330 or 331 of the Bankruptcy Code; and

                  (ii) other than with respect to a Claim described in clause
(b)(i) of this definition, such amount that represents an actual or necessary
expense of preserving the Estates or operating the business of any of the
Debtors, any such Claim to the extent that it constitutes an Allowed
Administrative Claim, or if such Claim is a Disputed Claim, any such Claim to
the extent it is allowed in whole or in part by a Final Order of the Bankruptcy
Court and only to the extent that such allowed portion is deemed, pursuant to a
Final Order of the Bankruptcy Court, to constitute a cost or expense of
administration under section 503 or 1114 of the Bankruptcy Code;

            (c) With respect to an Asbestos Property Damage Claim that is filed
prior to the expiration of the Asbestos Property Damage Claim Bar Date, such
amount as is liquidated and allowed by the Bankruptcy Court; and

            (d) With respect to any Claim other than a Plan Trust Asbestos
Claim, an Asbestos Property Damage Claim or an Administrative Claim, such Claim
or any portion thereof (i) that has been allowed in whole or in part by a Final
Order of the Bankruptcy Court; (ii) that has been expressly allowed in the Plan;
(iii) as to which, on or before the Effective Date, (A) no Proof of Claim has
been filed with the Bankruptcy Court and (B) the Claim is listed in the
Schedules (as they may be amended) and not listed as disputed, contingent, or
unliquidated; or (iv) for which a Proof of Claim in a liquidated amount has been
timely filed with the Bankruptcy Court pursuant to the Bankruptcy Code, any
Final Order of the Bankruptcy Court, or other applicable bankruptcy law, and as
to which either (A) no objection to its allowance has been filed within the
periods of limitation fixed by the Plan, the Bankruptcy Code, or any order of
the Bankruptcy Court, or (B) any objection to its allowance has been settled or
withdrawn, or has been denied by a Final Order.

      "Allowed Amount" means the sum at which a Claim is Allowed.

      "Amended Credit Agreement" means the amended credit agreement which may be
entered into on the Effective Date by Reorganized Congoleum, as borrower, and
Wachovia, as lender, which shall provide for a revolving credit loan on terms
and conditions mutually satisfactory and acceptable to Reorganized Congoleum and
Wachovia.

      "Anti-Suit Injunction" means the injunction described in Section 12.11 of
the Plan.

      "Asbestos Channeling Injunction" means the injunction described in Section
12.6 of the Plan.


                                       3
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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "Asbestos Claimant" means the holder of an Asbestos Personal Injury Claim.

      "Asbestos Claimants' Committee" means the official committee of the
representatives of holders of present unsecured Asbestos Personal Injury Claims,
solely in its capacity as such, which committee as of the date hereof consists
of the following representatives of the holders of present Asbestos Personal
Injury Claims: Perry Weitz, Esquire, Joseph Rice, Esquire, Steven Kazan,
Esquire, Russell Budd, Esquire and Robert Taylor, II, Esquire.

      "Asbestos Claims" means, collectively, Plan Trust Asbestos Claims and ABI
Asbestos Claims.

      "Asbestos Expenses" means all costs, taxes and expenses of or imposed on
the Plan Trust Assets, the Collateral Trust or the Plan Trust attributable or
allocable to Plan Trust Asbestos Claims, including, but not limited to: trustee
compensation; employee compensation; compensation to and indemnification of the
Futures Representative and the TAC and their respective Representatives;
insurance premiums; legal, accounting and other professional fees and expenses;
overhead; and disbursements, but excluding payments to holders of Plan Trust
Asbestos Claims on account of such Plan Trust Asbestos Claims; provided,
however, that Asbestos Expenses shall not include any costs or expenses incurred
or indemnification for relief granted in connection with the Avoidance Actions.

      "Asbestos In-Place Insurance Coverage" means any insurance coverage, not
reduced to Cash settlement proceeds, available for the payment or reimbursement
of liability, indemnity or defense costs arising from or related to Asbestos
Claims or Demands or Plan Trust Expenses under any Asbestos Insurance Policy or
any Asbestos Insurance Settlement Agreement.

      "Asbestos Insurance Action" means any claim, cause of action, or right of
any Debtor against any Asbestos Insurance Company, including without limitation,
the Coverage Litigation, arising from or related to: (a) any such Asbestos
Insurance Company's failure to provide or pay under Asbestos In-Place Insurance
Coverage, (b) the refusal of any Asbestos Insurance Company to compromise and
settle any Asbestos Claim under or pursuant to any Asbestos Insurance Policy, or
(c) the interpretation or enforcement of the terms of any Asbestos Insurance
Policy with respect to any Asbestos Claim.

      "Asbestos Insurance Action Recoveries" means (a) Cash derived from and
paid pursuant to Asbestos Insurance Settlement Agreements, (b) the right to
receive proceeds of Asbestos In-Place Insurance Coverage, and (c) the right to
receive the proceeds or benefits of any Asbestos Insurance Action.

      "Asbestos Insurance Assignment" means the transfer, grant and assignment
of the Asbestos Insurance Rights to the Plan Trust described in Article VI of
the Plan, which will be effectuated pursuant to the Insurance Assignment
Agreement.

      "Asbestos Insurance Company" means any insurance company, insurance
broker, guaranty association, liquidator, rehabilitator or any other Entity with
demonstrated or potential liability to any of the Debtors, the Reorganized
Debtors, the Collateral Trust or the Plan Trust under or related to an Asbestos
Insurance Policy.


                                       4
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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "Asbestos Insurance Policy" means any insurance policy issued to or for
the benefit of any of the Debtors (except for any insurance policy issued to
ABI, American Biltrite International Inc., or any of their predecessors) in
effect at any time on or before the Effective Date that may afford any of the
Debtors indemnity or insurance coverage, upon which any claim has been or may be
made with respect to any Asbestos Claim.

      "Asbestos Insurance Rights" means any and all rights, titles, privileges,
interests, claims, demands or entitlements to any proceeds, payments, initial or
supplemental dividends, scheme payments, supplemental scheme payments, causes of
action and choses in action related to Asbestos In-Place Insurance Coverage,
whether now existing or hereafter arising, accrued or unaccrued, liquidated or
unliquidated, matured or unmatured, disputed or undisputed, fixed or contingent,
including but not limited to:

                  (i) any and all rights to pursue or receive payments with
respect to Asbestos Claims under any Asbestos In-Place Insurance Coverage,
whether for liability, defense or otherwise;

                  (ii) any and all rights to pursue or receive payments related
to any Asbestos In-Place Insurance Coverage that was entered into by any
domestic or foreign insolvent insurance company, whether in receivership,
liquidation, rehabilitation, run-off, scheme of arrangement or any other form of
proceeding;

                  (iii) any and all rights to pursue or receive payments related
to any Asbestos In-Place Insurance Coverage from any state insurance guaranty
association in connection with any state insurance guaranty association statute;
provided, however, that Asbestos Insurance Rights shall not include any rights
or obligations under any insurance policy or settlement agreement to which the
Debtors are a party insofar as such insurance policy or settlement agreement
relates to Workers' Compensation Claims; and

                  (iv) any and all rights to pursue any Causes of Action
against, or to receive payments related to any Asbestos In-Place Insurance
Coverage from, any Asbestos Insurance Company.

      "Asbestos Insurance Settlement Agreement" means any settlement agreement
between or among any of the Debtors and a Settling Asbestos Insurance Company
relating to any Asbestos Claim or Asbestos Insurance Action.

      "Asbestos Insurer Coverage Defenses" means all defenses at law or in
equity that an Asbestos Insurance Company may have under any Asbestos Insurance
Policy or applicable law to provide Asbestos In-Place Insurance Coverage to or
for Asbestos Personal Injury Claims or Plan Trust Expenses that have been
channeled to or assumed by or incurred by the Plan Trust pursuant to the Plan;
provided, however, that in the event that it is finally determined in the
Bankruptcy Court that the Bankruptcy Code authorizes the Asbestos Insurance
Assignment by preempting any terms of any Asbestos Insurance Policy or
provisions of applicable non-bankruptcy law that otherwise might prohibit the
Asbestos Insurance Assignment, Asbestos Insurer Coverage Defenses shall not
include any defense that the Asbestos Insurance Assignment is prohibited by any
Asbestos Insurance Policy or applicable non-bankruptcy law.


                                        5
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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "Asbestos Personal Injury Claim" means (a) any Congoleum Derivative
Action; (b) any claim, demand or lawsuit (including, but not limited to, any
Claim or Demand), whenever and wherever arising or asserted against any of the
Debtors or their respective present or former officers, directors or employees
in their capacities as such and (c) any debt, obligation or liability (whether
or not reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, bonded, secured or
unsecured), whenever and wherever arising or asserted, of the Debtors or their
respective present or former officers, directors or employees in their
capacities as such (including, but not limited to, all thereof in the nature of
or sounding in tort, contract, warranty, or any other theory of law, equity or
admiralty); in either case (b) or (c) for, based on or arising by reason of,
directly or indirectly, physical, emotional, bodily or other personal injury,
sickness, disease, death or damages based on the foregoing (including, but not
limited to, any claim or demand for compensatory damages, loss of consortium,
proximate, consequential, general, special or punitive damages, reimbursement,
indemnity, warranty, contribution or subrogation) whether or not diagnosable or
manifested before the Confirmation of the Plan or the close of the
Reorganization Cases, (x) caused or allegedly caused, in whole or part, directly
or indirectly: (i) by exposure to asbestos or asbestos-containing products
manufactured, supplied, distributed, handled, fabricated, stored, sold,
installed, or removed by any Debtor and/or any of its Affiliates; (ii) by
services, actions, or operations provided, completed or taken by any Debtor
and/or any of its Affiliates in connection with asbestos or asbestos-containing
products or (y) caused or allegedly caused by asbestos for which any Debtor or
its predecessors, are otherwise liable under any applicable law including, but
not limited to, Indirect Asbestos Claims and Asbestos Expenses, provided that
Asbestos Personal Injury Claim shall not include Workers' Compensation Claims,
ABI Asbestos Claims or Asbestos Property Damage Claims.

      "Asbestos Personal Injury Claim Sub-Account" means that portion of the
Plan Trust Assets to be made available for payment of Plan Trust Asbestos Claims
(and related Plan Trust Expenses) other than Allowed Asbestos Property Damage
Claims.

      "Asbestos Property Damage Claim" means any Claim or remedy or liability
for damage to property (whether or not such Claim, remedy or liability is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured, and
whether or not the facts of or legal bases therefor are known or unknown, under
any theory of law, equity, admiralty or otherwise), for which the Debtors are
alleged to be or may be responsible by judgment, order or settlement and that
(1) arises from or relates to any building or other real property in which
asbestos was or is, or asbestos-containing products were or are, alleged to have
been installed prior to the Petition Date; and (2) seeks monetary or other
relief for injury to, destruction, loss of use, diminution in value, and/or
asbestos-related repair or maintenance of such property or for the cost of
inspection, encapsulation, decontamination, containment, removal, or other
abatement of the asbestos or asbestos-containing products installed or allegedly
installed in such property. Asbestos Property Damage Claim also includes any
such Claims, remedies or liabilities as described immediately above that seek
(a) compensatory damages (such as proximate, consequential, general and special
damages) and punitive damages; and/or (b) reimbursement, indemnification,
subrogation and/or contribution, including, without limitation, any Asbestos
Property Damage Contribution Claim. Notwithstanding the foregoing, Asbestos
Property Damage Claim does not include any ABI Asbestos Claim or Asbestos
Personal Injury Claim.


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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "Asbestos Property Damage Claim Bar Date" means May 3, 2004, the date
designated by the Bankruptcy Court as the last date for filing Proofs of Claim
on account of an Asbestos Property Damage Claim against the Debtors.

      "Asbestos Property Damage Claim Sub-Account" means that portion of the
Plan Trust Assets, consisting solely of the Asbestos Property Damage Insurance
Rights, to be made available for payment of Allowed Asbestos Property Damage
Claims.

      "Asbestos Property Damage Claimant" means the holder of an Asbestos
Property Damage Claim.

      "Asbestos Property Damage Contribution Claim" means any Claim or remedy or
liability for damage to property asserted against the Debtors (whether or not
such Claim, remedy or liability is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not the facts of or legal
bases therefor are known or unknown, under any theory of law, equity, admiralty
or otherwise) that is: (1) held by any Entity or assignee or transferee thereof
(other than a director or officer entitled to indemnification pursuant to
Section 9.7 of the Plan) which has been, is, or may be a defendant in an action
alleging damage to property that (i) arises from or relates to any building or
other real property in which asbestos was or is, or asbestos-containing products
were or are, alleged to have been installed prior to the Petition Date, and (ii)
seeks monetary or other relief for injury to, destruction, loss of use,
diminution in value, and/or asbestos-related repair or maintenance of such
property or for the cost of inspection, encapsulation, decontamination,
containment, removal, or other abatement of the asbestos or asbestos-containing
products installed or allegedly installed in such property; and (2) on account
of alleged liability by the Debtors for reimbursement, indemnification,
subrogation, or contribution of any portion of any damages such Entity (or
assignee or transferee thereof) has paid or may pay to the plaintiff in such
action. Notwithstanding anything herein to the contrary, Asbestos Property
Damage Contribution Claim does not include any ABI Asbestos Claims.

      "Asbestos Property Damage Insurance Rights" means all rights arising under
all insurance policies, issued to or for the benefit of any of the Debtors
(except for any insurance policy issued to ABI, American Biltrite International
Inc., or any of their predecessors) that may afford any of the Debtors indemnity
or insurance coverage solely for Asbestos Property Damage Claims, which policies
are set forth on Exhibit "A." The foregoing includes, but is not limited to,
rights under insurance policies, rights under settlement agreements made with
respect to such insurance policies, rights against the estates of insolvent
insurers that issued such policies or entered into such settlements, and rights
against state insurance guaranty associations arising out of any such insurance
policies issued by insolvent insurers.

      "Asbestos Settlement Documents" means the Security Agreement, Collateral
Trust Agreement and Claimant Agreement, collectively.

      "Avoidance Actions" means, collectively, the Omnibus Avoidance Action and
the Sealed Avoidance Action.


                                       7
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "Bankruptcy Causes of Action" means all Causes of Action other than Plan
Trust Bankruptcy Causes of Action arising under the Bankruptcy Code, including
any avoidance or recovery actions under sections 544, 545, 547, 548, 549, 550,
551 and/or 553 of the Bankruptcy Code, or under any similar state statutes,
which seek recovery of or with respect to any payment by, or transfer of any
interest in property of, any of the Debtors made in respect of any claim, cause
of action or other matter.

      "Bankruptcy Code" means title 11 of the United States Code, 11 U.S.C.
ss.ss. 101, et seq., as in effect on the Petition Date, together with all
amendments and modifications thereto that were subsequently made applicable to
the Reorganization Cases.

      "Bankruptcy Court" means the United States Bankruptcy Court having
jurisdiction over the Reorganization Cases or the District Court exercising
bankruptcy jurisdiction.

      "Bankruptcy Professional" means any Person (a) employed pursuant to an
order of the Bankruptcy Court in accordance with section 327 or 1103 of the
Bankruptcy Code and to be compensated for services pursuant to sections 327,
328, 329, 330 and/or 331 of the Bankruptcy Code, or (b) who applies to the
Bankruptcy Court for compensation and reimbursement of expenses pursuant to
section 503(b) of the Bankruptcy Code.

      "Bankruptcy Rules" means the Federal Rules of Bankruptcy Procedure and the
local rules of the Bankruptcy Court, as in effect on the Petition Date, together
with all amendments and modifications thereto that were subsequently made
applicable to the Reorganization Cases.

      "Bar Dates" means the date(s), if any, designated by the Bankruptcy Court
as the last date(s) for filing Proofs of Claim against the Debtors.

      "Bondholders' Committee" means the official committee of the
representatives of holders of Senior Notes appointed in these Reorganization
Cases on January 27, 2006, solely in its capacity as such.

      "Business Day" means any day other than a Saturday, Sunday or a legal
holiday (as such term is defined in Bankruptcy Rule 9006(a)) on which commercial
banks are open for business in New York, New York.

      "Cash" means lawful currency of the United States of America and its
equivalents.

      "Causes of Action" means, without limitation, any and all rights,
remedies, claims, causes of action, liabilities, obligations, suits, debts, sums
of money, damages, judgments, and demands whatsoever, whether known or unknown,
in law, equity, or otherwise which may be brought by or on behalf of the Debtors
and/or the Estates, arising under any provision of the Bankruptcy Code or other
applicable law.

      "Claim" means a claim against the Debtors (or any of them), whether or not
asserted, as defined in section 101(5) of the Bankruptcy Code, and further shall
include, but is not limited to, Asbestos Claims.

      "Claimant Agreement" means that certain Settlement Agreement Between
Congoleum and Various Asbestos Claimants, as amended by the first amendment
thereto, entered into by Congoleum and certain Asbestos Claimants, through their
counsel, prior to the Petition Date, as the same may be further amended from
time to time in accordance with its terms. The Claimant Agreement and the first
amendment thereto are attached to the Disclosure Statement as Exhibit "E."


                                       8
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "Claimants' Counsel" or "Claimants' Representative" means Joseph F. Rice,
Esquire and Perry Weitz, Esquire, collectively, in their capacity under the
Claimant Agreement as the representatives of certain holders of Asbestos
Personal Injury Claims.

      "Claims Handling Fee" shall have the meaning ascribed to such term in the
Collateral Trust Agreement.

      "Claims Reviewer" shall have the meaning ascribed to such term in the
Collateral Trust Agreement.

      "Class" means a category of Claims or Interests, as classified in Article
III of the Plan pursuant to section 1122(a)(1) of the Bankruptcy Code.

      "Class 2 Settlement" means the settlement agreement with the Qualified
Pre-Petition Settlement Claimants encompassing, inter alia, the compromise and
settlement contained in Section 2.1 of the Plan and the treatment afforded to
the Qualified Pre-Petition Settlement Claimants in Section 5.1(b) of the Plan.

      "Class 3 and 11 Settlement" means the settlement agreement with the
Qualified Participating Claimants encompassing, inter alia, the compromise and
settlement contained in Section 2.2 of the Plan and the treatment afforded to
the Qualified Participating Claimants in Section 5.1(c) of the Plan.

      "Collateral Trust" means the Collateral Trust established pursuant to the
Collateral Trust Agreement, the Security Agreement and the Claimant Agreement.

      "Collateral Trust Agreement" means that certain irrevocable trust
agreement entered into by Congoleum and Arthur J. Pergament and Wilmington Trust
Company, as amended by the first amendment thereto, and any further
modifications or amendments thereto. The Collateral Trust Agreement and the
first amendment thereto are attached to the Plan as Exhibit "B."

      "Collateral Trustee" means the Trustee as defined and named in the
Collateral Trust Agreement.

      "Confirmation" means the approval of the Plan by the Bankruptcy Court
pursuant to section 1129 and other applicable sections of the Bankruptcy Code.

      "Confirmation Date" means the date on which the Confirmation Order is
entered on the docket of the Bankruptcy Court.

      "Confirmation Hearing" means the hearing(s) which will be held before the
Bankruptcy Court and the District Court, as appropriate, in which the Debtors
will seek Confirmation of the Plan.


                                       9
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "Confirmation Order" means the order of the Bankruptcy Court confirming
the Plan pursuant to section 1129 and other applicable sections of the
Bankruptcy Code.

      "Congoleum" means Congoleum Corporation, a Delaware corporation.

      "Congoleum Derivative Action" means (a) any claim, demand or lawsuit
whenever and wherever arising or asserted against any of ABI or the ABI Entities
and (b) any debt, obligation or liability (whether or not reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, bonded, secured or unsecured), whenever or
wherever arising or asserted, against any of ABI or the ABI Entities; in either
case (a) or (b) for, based on, derivative of, arising out of, or caused or
allegedly caused, in whole or in part, directly or indirectly: (i) by exposure
to asbestos or asbestos-containing products manufactured, supplied, distributed,
handled, fabricated, stored, sold, installed, or removed by any Debtor; (ii) by
services, actions, or operations provided, completed or taken by any Debtor in
connection with asbestos or asbestos containing products or (iii) by asbestos
for which any Debtor or its predecessors are otherwise liable under any
applicable law, in either case (a) or (b) including, but not limited to, any
claim, demand or lawsuit for or based on the corporate relationship between the
Debtors and ABI, including, but not limited to, allegations of piercing the
corporate veil, shareholder liability, interlocking directorships, or any
similar allegations or otherwise.

      "Congoleum Interests" means, collectively, all equity interests in
Congoleum outstanding immediately prior to the Effective Date including, without
limitation, (a) shares of Class A common stock, par value $0.01 per share, and
Class B Common Stock, par value $0.01 per share, of Congoleum and (b) any
options, warrants, conversion rights, rights of first refusal, or other rights,
contractual or otherwise, to acquire or receive any stock or other equity
ownership interests in Congoleum.

      "Coverage Costs" means all reasonable costs, including reasonable
attorneys' fees, actually incurred by the Debtors and/or their Representatives
on their behalf, on or after January 1, 2003, to prosecute the Coverage
Litigation and any other Asbestos Insurance Actions and to pursue the Asbestos
Insurance Action Recoveries.

      "Coverage Litigation" means (i) that certain civil action pending in the
Superior Court of New Jersey, docket number MID-L-8908-01, as such action exists
after giving effect to the Order entered therein on October 30, 2003 that
dismissed, without prejudice, certain claims including Environmental Claims, as
referenced in such Order; and (ii) any other action which seeks to determine the
extent of insurance coverage for defense of and liability for Asbestos Claims
and related issues.

      "Debtor" means each of Congoleum, Congoleum Sales, Inc. and Congoleum
Fiscal, Inc., as debtors-in-possession in the Reorganization Cases, and
"Debtors" means all of them collectively, and when the context so requires, as
post-Confirmation entities reorganized hereunder.

      "Demand" means a demand for payment against any of the Debtors within the
meaning of section 524(g)(5) of the Bankruptcy Code, but excludes any demand in
respect of an Asbestos Property Damage Claim or an ABI Asbestos Claim.


                                       10
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "Direct Action" means any cause of action or right to bring a cause of
action possessed by an Asbestos Claimant against an Asbestos Insurance Company
on account of such Asbestos Claimant's Plan Trust Asbestos Claim, whether
arising by contract or under the laws of any jurisdiction.

      "Disallowed" means a Claim or Interest, as the case may be, that is
disallowed by the Plan, a Final Order of the Bankruptcy Court, or that is
disallowed pursuant to the TDP.

      "Disbursing Agent" means the Reorganized Debtors or any Person selected by
the Reorganized Debtors to hold and distribute the consideration to be
distributed to the holders of Allowed Claims (other than Plan Trust Asbestos
Claims) under the Plan.

      "Discharge Injunction" means the injunction described in Section 12.5 of
the Plan.

      "Disclosure Statement" means the Disclosure Statement with respect to the
Plan, including all exhibits, appendices, schedules and annexes attached
thereto, as submitted by the Debtors pursuant to section 1125 of the Bankruptcy
Code, as such Disclosure Statement may be further amended, supplemented or
modified from time to time.

      "Disputed Claim" means any Claim that has not been allowed by a Final
Order as to which (a) a Proof of Claim has been filed with the Bankruptcy Court,
and (b) an objection has been or may be timely filed or deemed filed under
applicable law and any such objection has not been (i) withdrawn, (ii) overruled
or denied by a Final Order or (iii) granted by a Final Order. For purposes of
the Plan, a Claim that has not been Allowed by a Final Order shall be considered
a Disputed Claim, whether or not an objection has been or may be timely filed,
if (A) the amount of the Claim specified in the Proof of Claim exceeds the
amount of any corresponding Claim listed in the Schedules, (B) the
classification of the Claim specified in the Proof of Claim differs from the
classification of any corresponding Claim listed in the Schedules, (C) any
corresponding Claim has been listed in the Schedules as disputed, contingent or
unliquidated, (D) no corresponding Claim has been listed in the Schedules or (E)
such Claim is reflected as unliquidated or contingent in the Proof of Claim
filed in respect thereof.

      "Distribution Date" means, when used with respect to an Allowed Claim
(other than a Plan Trust Asbestos Claim), the date which is as soon as
reasonably practicable after the latest of: (a) the Effective Date; (b) the
first Business Day of the next calendar month following the date on which the
Claim becomes an Allowed Claim; or (c) the first Business Day of the next
calendar month upon which the Claim matures and becomes due and payable
according to its own terms, unless the Claim becomes Allowed within fifteen (15)
Business Days before the first Business Day of the next calendar quarter, in
which case Distribution Date shall be the first Business Day of the next
succeeding calendar quarter.

      "District Court" means the United States District Court for the judicial
district having jurisdiction over the matter in question.

      "Effective Date" means the first Business Day after the Confirmation Date
immediately following the first day upon which all of the conditions to
occurrence of the Effective Date specified in Section 11.2 of the Plan have been
satisfied or waived pursuant to Section 11.3 of the Plan.


                                       11
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "Entity" means any Person, estate, trust, Governmental Unit or the United
States Trustee.

      "Environmental Laws" means (a) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. ss.ss. 9601, et seq., (b) the
Resource Conservation and Recovery Act, as amended by the Hazardous and Solid
Waste Amendment of 1984, 42 U.S.C. ss.ss. 6901, et seq., (c) the Clean Air Act,
42 U.S.C. ss.ss. 7401, et seq., (d) the Clean Water Act of 1977, 33 U.S.C.
ss.ss. 1251, et seq., (e) the Toxic Substances Control Act, 15 U.S.C. ss.ss.
2601, et seq., (f) all statutes or laws issued or promulgated by any
Governmental Unit, as they may be amended from time to time, relating to
environmental contamination or pollution, air pollution, water pollution, noise
control and/or the handling, discharge, existence, release, disposal or recovery
of on-site or off-site hazardous, toxic or dangerous wastes, substances,
chemicals or materials, and (g) the ordinances, rules, regulations, orders,
notices of violation, requests, demands and requirements issued or promulgated
by any Governmental Unit in connection with such statutes or laws.

      "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

      "Estate(s)" means, individually, the estate of each Debtor in the
Reorganization Cases and, collectively, the estates of all Debtors in the
Reorganization Cases, created pursuant to section 541 of the Bankruptcy Code.

      "Existing Credit Agreement" means the Loan and Security Agreement between
Congoleum, as borrower, and Wachovia, as lender, dated as of December 10, 2001,
as amended by Amendment No. 1 to Loan and Security Agreement, dated September
19, 2002, by and between Wachovia and Congoleum, and Amendment No. 2 to Loan and
Security Agreement, dated as of February 27, 2003, by and between Wachovia and
Congoleum, and as otherwise amended, restated, modified and/or supplemented as
of the Petition Date and any related documents.

      "Existing Subsidiary Guaranty" means the Limited Guaranty, dated as of
February 27, 2003, executed by Congoleum Fiscal, Inc. and Congoleum Sales, Inc.,
as amended, restated, modified or supplemented as of the Petition Date.

      "Final Order" means an order or judgment of the Bankruptcy Court, or other
court of competent jurisdiction, the implementation, operation or effect of
which has not been stayed and as to which order (or any revision, modification
or amendment thereon) the time to appeal or seek review, rehearing or writ of
certiorari has expired and as to which no appeal or petition for review,
reconsideration, rehearing or certiorari has been taken and is pending.

      "Financing Order" shall have the meaning ascribed to such term in Section
5.1(d).

      "Forbearance" means agreement, conditioned upon the occurrence of the
Effective Date, to refrain from exercising: (i) the right to enforce or exercise
any status or right as a secured party, including any rights in the Collateral
described in the Security Agreement; (ii) the right to enforce or exercise any
assignment or collateral assignment of insurance or insurance proceeds; (iii)
the right to any priority of payment arising from or related to (i) or (ii)
hereinabove; and (iv) the right to enforce or exercise any right to payment,
claim or cause of action granted or arising under the Claimant Agreement, any
Pre-Petition Settlement Agreement, the Collateral Trust Agreement, the Security
Agreement or any other agreement related thereto or contemplated thereby,
including the Class 3 and 11 Settlement Agreement.


                                       12
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "Futures Representative" means the Person appointed by the Bankruptcy
Court to represent the rights and interests of the Unknown Asbestos Claimants,
who shall be R. Scott Williams, Esquire, or such other individual appointed by
the Bankruptcy Court, pursuant to section 524(g) of the Bankruptcy Code.

      "General Unsecured Claim" means an Unsecured Claim other than an Asbestos
Claim, ABI Claim, Workers' Compensation Claim or a Senior Note Claim.

      "GHR/Kenesis Actions" means (a) any right, process, proceeding or action
to recover funds or property on account of that certain Order of the Bankruptcy
Court Granting Cross-Motion for Disgorgement of Fees Paid to Gilbert, Heintz &
Randolph LLP, dated March 27, 2006, as Amended by Order, dated March 31, 2006;
and (b) any other Causes of Action, including for malpractice, against Gilbert,
Heintz & Randolph LLP or The Kenesis Group LLC.

      "GHR/Kenesis Litigation Trust" means the trust to be established pursuant
to Section 6.1(o) of the Plan as of the Effective Date substantially in the form
attached as Exhibit "I" to the Plan.

      "GHR/Kenesis Litigation Trustee" means the Person appointed pursuant to
Section 6.1(o) of the Plan for the purpose of acting as Trustee of the
GHR/Kenesis Litigation Trust in accordance with the terms and conditions
contained in the Plan, the GHR/Kenesis Litigation Trust and the Confirmation
Order.

      "Governmental Unit" means any domestic, foreign, provincial, federal,
state, local or municipal (a) government, or (b) governmental agency,
commission, department, bureau, ministry or other governmental entity.

      "Impaired" means when used with reference to a Claim or Interest, a Claim
or Interest that is impaired within the meaning of section 1124 of the
Bankruptcy Code.

      "Indenture" means the Indenture by and between Congoleum Corporation, as
Issuer, and First Union National Bank, as Trustee, dated as of August 3, 1998,
as supplemented and amended from time to time, relating to the Senior Notes.

      "Indirect Asbestos Claim" means (i) any Claim based on a right of
contribution, reimbursement, subrogation, or indemnity (as those terms are
defined by the non-bankruptcy law of any relevant jurisdiction) arising out of
or based on an Asbestos Personal Injury Claim, another Indirect Asbestos Claim
or an Unknown Asbestos Claim, (ii) any other derivative or indirect Claim of any
kind whatsoever, whether in the nature of or sounding in contract, tort,
warranty or any other theory of law, equity or admiralty, by reason of an
Asbestos Personal Injury Claim, another Indirect Asbestos Claim or an Unknown
Asbestos Claim (including, without limitation, any Claim (A) for attorneys' fees
arising or incurred in connection with any Asbestos Personal Injury Claim,
another Indirect Direct Asbestos Claim, an Unknown Asbestos Claim or an Asbestos
Insurance Action or (B) arising out of or based on the rejection of any
executory contract related to or involving asbestos), and (iii) any Claim
arising out of Asbestos Insurance Policies or settlement agreements related
thereto, in each case other than ABI Asbestos Claims or Asbestos Property Damage
Claims.


                                       13
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "Injunctions" means the Discharge Injunction, the Asbestos Channeling
Injunction, the Anti-Suit Injunction and any other injunctions entered by Order
of the Bankruptcy Court or the District Court in the Reorganization Cases
(including but not limited to any injunction contained in any Final Order
approving any Asbestos Insurance Settlement Agreement).

      "Insurance Assignment Agreement" means the insurance assignment agreement
referenced in Section 6.1(c) of the Plan and substantially in the form attached
as Exhibit "C" to the Plan.

      "Intercompany Agreements" means the: (i) Personal Services Agreement dated
as of March 11, 1993, by and between ABI and Congoleum and all amendments
thereto; (ii) Business Relations Agreement, dated as of March 11, 1993, by and
between ABI and Congoleum and all amendments thereto; (iii) Stockholders
Agreement, dated as of March 11, 1993, by and among Hillside Industries
Incorporated, ABI, Congoleum Holdings Incorporated and Congoleum and all
amendments thereto; and (iv) Tax Sharing Agreement, dated as of November 1,
1996, by and between ABI and Congoleum.

      "Interest" means any equity interest in the Debtors existing immediately
prior to the Effective Date, including without limitation, the Congoleum
Interests and the Subsidiary Interests.

      "IRC" means the Internal Revenue Code of 1986, as amended.

      "Joint Venture Agreement" means that Joint Venture Agreement, dated as of
December 16, 1992, by and among American Biltrite Inc., Resilient Holdings
Incorporated, Congoleum, Hillside Industries Incorporated and Hillside Capital
Incorporated, as amended by the Closing Agreement, dated as of March 11, 1993,
by and among the same parties.

      "Lender Secured Claim" means any Claim of Wachovia arising under or
relating to the Existing Credit Agreement, the Existing Subsidiary Guaranty and
any related documents.

      "Lien" means, with respect to any asset or property, any properly
perfected and unavoidable mortgage, lien, pledge, charge, security interest,
encumbrance or other security device of any kind pertaining to or affecting such
asset or property.

      "New Class A Common Stock" means the 3,800,000 shares of Congoleum Class A
common stock, par value $.01 per share, to be issued by Reorganized Congoleum to
the Plan Trust on the Effective Date if the holders of the Senior Note Claims
vote to accept the Plan subject to the anti-dilution provisions set forth on
Exhibit "E" to the Plan.

      "New Convertible Security" means the convertible promissory note to be
issued by Reorganized Congoleum and contributed to the Plan Trust on the
Effective Date in satisfaction of section 524(g) of the Bankruptcy Code if the
holders of the Senior Note Claims vote to accept the Plan with the following
terms: (i) an initial aggregate principal amount of $2,738,234.75, such
principal amount being subject to increase in the amount, if any, by which 36%


                                       14
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


of Reorganized Congoleum's market capitalization based on average trading prices
for Reorganized Congoleum's Class A common stock at the close of trading for the
90 consecutive trading days beginning on the one year anniversary of the
Effective Date, exceeds such initial principal amount; (ii) an initial interest
rate equal to 9% of the principal amount per annum, payable semi-annually in
arrears, with such interest rate to reset at the rate of 5% of the principal
amount per annum on the tenth anniversary of the Effective Date and payable at
such reset interest rate per annum until maturity; (iii) redeemable for the
principal amount at the option of the Plan Trust or Reorganized Congoleum on or
anytime after the tenth anniversary of the Effective Date; (iv) a maturity date
on the fifteenth anniversary of the Effective Date if not redeemed or otherwise
paid earlier; (v) convertible into 5,700,000 shares of Class A Common Stock (on
a fully diluted basis with all Class B Common Stock converted to Class A Common
Stock) upon a specified default of the obligation to pay interest and a failure
to cure such default within any cure period, which, when combined with the New
Class A Common Stock, will result in the Plan Trust owning 51% of the voting
common shares and 51% of the total economic equity value of Reorganized
Congoleum on a fully diluted basis; and (vi) no voting rights except upon
conversion.

      "New Indenture" means the Indenture by and between Congoleum Corporation,
as Issuer, and [Bank], as Trustee, dated as of the Effective Date relating to
the New Senior Notes substantially in the form attached as Exhibit "H" to the
Plan.

      "New Senior Notes" means the $100 million principal amount of 10% Senior
Notes due August 2011 to be issued to the holders of the Senior Notes by
Reorganized Congoleum on the Effective Date if the holders of the Senior Note
Claims (as a Class) vote to accept the Plan. Interest on the New Senior Notes
will be payable semi-annually at the rate of 10% per annum. The New Senior Notes
will contain covenants, representations and warranties substantially similar to
the existing Senior Notes and will be subordinate in priority and payment to the
Plan Trust Note and the New Convertible Security.

      "Non-Compensatory Damages" means any and all damages awarded by a court of
competent jurisdiction that are penal in nature, including, without limitation,
punitive, punitory, exemplary, vindictive, imaginary or presumptive damages.

      "Not Previously Determined Unsecured Asbestos Personal Injury Claim" means
any Asbestos Personal Injury Claim other than a Secured Asbestos Claim or
Previously Determined Unsecured Asbestos Personal Injury Claim, and includes,
but is not limited to, any Unknown Asbestos Claim.

      "Omnibus Avoidance Action" means that certain Adversary Proceeding No.
05-06245 (KCF), which was filed in the Bankruptcy Court on behalf of the Debtors
on December 3, 2005, as amended by the filing of a first amended complaint on
December 30, 2005 and as it may be further amended.

      "Other Secured Claim" means a Secured Claim arising prior to the Petition
Date against any of the Debtors other than a Lender Secured Claim or a Secured
Asbestos Claim.


                                       15
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "Participating Claimant" means a holder of an Asbestos Personal Injury
Claim designated as a Participating Asbestos Claimant pursuant to the Claimant
Agreement.

      "Pension Plans" means, collectively, that certain Congoleum Corporation
Hourly Retirement Plan, that certain Congoleum Corporation Retirement Plan for
Salaried Employees and that certain Congoleum Corporation Plant 2 Retirement
Plan, in each case as the same may be amended from time to time.

      "Person" means any person, individual, partnership, corporation, limited
liability company, joint venture company, association or other entity or being
of whatever kind, whether or not operating or existing for profit, including,
but not limited to, any "person" as such term is defined in section 101(41) of
the Bankruptcy Code, but excluding any Governmental Unit.

      "Petition Date" means December 31, 2003, the date on which the Debtors
filed their petitions for relief commencing the Reorganization Cases.

      "Plan" means this Plan of Reorganization under Chapter 11 of the
Bankruptcy Code and all exhibits and schedules annexed hereto or referenced
herein, and any amendments or modifications thereto made in accordance with the
Bankruptcy Code.

      "Plan Documents" means the Plan, the Plan Trust Agreement, the TDP, the
New Convertible Security, the Plan Trust Note, the New Senior Notes, the New
Indenture and the Insurance Assignment Agreement, and all exhibits and schedules
to any of the foregoing.

      "Plan Supplement" means the compilation of documents, including any
exhibits to the Plan not included herewith, that the Debtors may file with the
Bankruptcy Court on or before the date that is five (5) Business Days prior to
the Confirmation Hearing.

      "Plan Trust" means the trust to be established pursuant to the Plan Trust
Agreement and Section 6.1(a) of the Plan as of the Effective Date.

      "Plan Trust Agreement" means that certain Congoleum Plan Trust Agreement,
effective as of the Effective Date, substantially in the form annexed hereto as
Exhibit "D," as it may be modified from time to time in accordance with the
terms thereof.

      "Plan Trust Asbestos Claims" means, collectively, Asbestos Personal Injury
Claims, Unknown Asbestos Claims and Allowed Asbestos Property Damage Claims.

      "Plan Trust Assets" means the assets to be delivered to the Plan Trust
pursuant to the Plan Documents and shall include, without limitation, the
following assets and any income, profits, and proceeds derived therefrom: (a)
the New Class A Common Stock (if the holders of the Senior Note Claims (as a
Class) vote to accept the Plan); (b) the New Convertible Security (if the
holders of the Senior Note Claims (as a Class) vote to accept the Plan); (c) the
Plan Trust Common Stock (if the holders of the Senior Note Claims (as a Class)
vote to reject the Plan); (d) the Asbestos Insurance Rights; (e) the proceeds of
the Asbestos Insurance Settlement Agreements (except for those certain proceeds
of the Asbestos Insurance Settlement Agreement with Liberty Mutual Insurance
Company, which are dedicated pursuant to the Plan to (i) reimburse the Debtors
and/or Reorganized Congoleum for the Coverage Costs and (ii) to fund the
$600,000 initial contribution to the GHR/Kenesis Actions Litigation Trust); (f)


                                       16
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


the proceeds of the Asbestos In-Place Insurance Coverage; (g) the proceeds of
the Asbestos Insurance Actions; (h) all of the assets held by the Collateral
Trust as of the Effective Date; (i) the proceeds of the Asbestos Insurance
Action Recoveries; (j) the ABI Contribution; (k) Plan Trust Bankruptcy Causes of
Action including, without limitation, the Avoidance Actions, to the extent not
already adjudicated prior to the Effective Date and to the extent not
compromised or settled under the Plan; (l) other Causes of Action, other than
Bankruptcy Causes of Action, related to Plan Trust Asbestos Claims and Plan
Trust Assets to the extent not compromised or settled under the Plan, including,
without limitation, the right to void any Asbestos Claim of a Qualified
Pre-Petition Settlement Claimant or of a Qualified Participating Claimant
whether because of failure to comply with the requirements of any applicable
settlement agreement (including, without limitation, the Claimant Agreement) or
because such Claim was not submitted in good faith or otherwise and including
the right to pursue such Causes of Action, if any, in the name of any Debtor, if
necessary; (m) distributions from the GHR/Kenesis Litigation Trust on behalf of
Reorganized Congoleum, including the proceeds of GHR/Kenesis Actions (n) the
rights granted to the Plan Trust pursuant to the Insurance Assignment Agreement;
and (o) the Asbestos Property Damage Insurance Rights.

      "Plan Trust Bankruptcy Causes of Action" means all Causes of Action
arising under the Bankruptcy Code, including any avoidance or recovery actions
under sections 544, 545, 547, 548, 549, 550, 551 and 553 of the Bankruptcy Code,
or under any similar state statutes, which seek recovery of or with respect to
any payment by, or transfer of any interest in property of, any of the Debtors
(except for any payments made on account of indemnification or reimbursement
rights under the Joint Venture Agreement), which payment or transfer was made in
respect of any claim, cause of action or other matter which constitutes or
relates to a Plan Trust Asbestos Claim, or which would have constituted or
related to a Plan Trust Asbestos Claim had such payment or transfer not been
made.

      "Plan Trust Bylaws" means the bylaws as approved by the Plan Trustees, the
Trust Advisory Committee and the Futures Representative, effective as of the
Effective Date, as may be modified from time to time with the consent and
approval of the Plan Trustees, the Trust Advisory Committee and the Futures
Representative.

      "Plan Trust Common Stock" means the Reserved Common Stock to be allocated,
pursuant to a Final Order of the Bankruptcy Court, to the Plan Trust in the
event that the Senior Note Claims (as a Class) vote to reject the Plan, which in
no event will be less than 51% of the voting common shares and total economic
equity value of Reorganized Congoleum on a fully diluted based.

      "Plan Trust Disputed Claim" means any Asbestos Claim of a Participating
Claimant or a Pre-Petition Settlement Claimant who is either (a) a party to
either of the Avoidance Actions or (b) may be joined as a party to either of the
Avoidance Actions.

      "Plan Trust Documents" means the Plan Trust Agreement, the Plan Trust
Bylaws, the TDP and the other agreements, instruments and documents governing
the establishment, administration and operation of the Plan Trust, as amended or
modified from time to time in accordance with the Plan and such documents.


                                       17
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "Plan Trust Expenses" means any of the Asbestos Expenses, and any other
liabilities, costs or expenses of, or imposed upon, assumed by, or in respect of
the Trusts (except for payments to holders of Asbestos Claims on account of such
Asbestos Claims).

      "Plan Trust Note" means the promissory note due December 31, 2011, bearing
interest at 10% per annum payable semi-annually, which shall be issued by
Reorganized Congoleum to the Plan Trust as of the Effective Date with a
principal amount in an amount so as to provide Reorganized Congoleum with
$18,000,000, when combined with cash on hand and available drawings under the
Amended Credit Agreement, of total liquidity, as of December 31, 2006. If the
Effective Date occurs after December 31, 2006, the total liquidity required by
Reorganized Congoleum and thus, the principal amount of the Plan Trust Note,
will be as mutually agreed by the Reorganized Debtors, the Asbestos Claimants'
Committee, the Futures Representative and the Claimants' Representative, each
acting in its sole discretion. The Plan Trust Note will contain appropriate
covenants, warranties and representations, as agreed among the Debtors, the
Asbestos Claimants' Committee, the Futures Representative and the Claimants'
Representative. The principal amount of Plan Trust Note, which is subject to
review and approval by the Asbestos Claimants' Committee and Futures
Representative will not exceed $14,000,000; provided however, that the Asbestos
Claimants' Committee and the Futures Representative may agree to increase such
principal amount.

      "Plan Trustees" means the Persons appointed pursuant to Article VI of the
Plan and the Plan Trust Agreement for the purpose of acting as Trustee(s) of the
Plan Trust in accordance with the terms and conditions contained in the Plan,
the Plan Trust Agreement and the Confirmation Order.

      "Postpetition Interest" means interest accruing on and after the Petition
Date on a Claim.

      "Pre-Petition Asbestos Claimants' Committee" means the unofficial
pre-petition committee of representatives of holders of present Asbestos
Personal Injury Claims, solely in its capacity as such, which committee
consisted of the following representatives of the holders of present Asbestos
Personal Injury Claims: Perry Weitz, Esquire, Joseph Rice, Esquire, Steven
Kazan, Esquire, Russell Budd, Esquire, Bryan Blevins, Esquire, John Cooney,
Esquire and Matt Bergmann, Esquire.

      "Pre-Petition Settlement Agreement" means a settlement agreement, other
than the Claimant Agreement, executed prior to the Petition Date to resolve an
Asbestos Personal Injury Claim under which some or all of the consideration due
has yet to be paid.

      "Pre-Petition Settlement Claimant" means a holder of an Asbestos Personal
Injury Claim who is a party to a Pre-Petition Settlement Agreement.

      "Previously Determined Unsecured Asbestos Personal Injury Claim" means the
unsecured portion of the liquidated claim of a Participating Claimant (as
described in the Claimant Agreement).


                                       18
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "Priority Claim" means any Claim (other than an Administrative Claim or a
Priority Tax Claim) to the extent such Claim is entitled to a priority in
payment under section 507(a) of the Bankruptcy Code.

      "Priority Tax Claim" means any Claim to the extent that such Claim is
entitled to a priority in payment under section 507(a)(8) of the Bankruptcy
Code.

      "Professional Fee Claim" means a Claim of a professional retained in the
Reorganization Cases pursuant to sections 327, 328, 330, 331, 503(b) and 1103 of
the Bankruptcy Code, or otherwise, including (i) such Claims of the Futures
Representative and its professionals, for compensation or reimbursement of costs
and expenses relating to services rendered on and after the Petition Date and
prior to and including the Effective Date, and (ii) Claims under section
503(b)(3), (4) or (5) of the Bankruptcy Code.

      "Proof of Claim" means any proof of claim filed with the Bankruptcy Court
or its duly appointed claims agent with respect to the Debtors pursuant to
Bankruptcy Rule 3001 or 3002.

      "Pro Rata" means with reference to any distribution on account of any
Claim or Interest in any Class, the proportion that the amount of such Claim or
Interest bears to the aggregate amount of all Claims (including Disputed Claims
but excluding Disallowed Claims) or Interests (including disputed Interests, but
excluding Disallowed Interests) in such Class.

      "Protected Party" means any of the following parties:

            (a) the Released Parties;

            (b) any Entity that, pursuant to the Plan or after the Confirmation
Date, becomes a direct or indirect transferee of, or successor to, the Plan
Trust or the Reorganized Debtors;

            (c) ABI, the ABI Parties and Wachovia in its capacity as Lender
under the Existing Credit Agreement to the fullest extent permitted by section
524(g)(4) of the Bankruptcy Code;

            (d) the Persons designated on Exhibit "F" (as such Exhibit may be
amended on or before the Confirmation Date) as current distributors of the
product lines currently manufactured, sold or otherwise produced by Congoleum;
or

            (e) each Settling Asbestos Insurance Company.

      "Qualified Claimant" means any Pre-Petition Settlement Claimant or
Participating Claimant entitled to receive payment from the Collateral Trust
pursuant to the provisions of the Collateral Trust Agreement.

      "Qualified Participating Claimant" means any Participating Claimant who is
a Qualified Claimant.

      "Qualified Pre-Petition Settlement Claimant" means any Pre-Petition
Settlement Claimant who is a Qualified Claimant.


                                       19
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "Reinstated" or "Reinstatement" means (a) leaving unaltered the legal,
equitable, and contractual rights to which a Claim or Interest entitles the
holder of such Claim or Interest so as to leave such Claim or Interest
Unimpaired or (b) notwithstanding any contractual provision or applicable law
that entitles the holder of such Claim or Interest to demand or receive
accelerated payment of such Claim or Interest after the occurrence of a default,
(i) curing any such default that occurred before or after the Petition Date,
other than a default of a kind specified in section 365(b)(2) of the Bankruptcy
Code; (ii) reinstating the maturity of such Claim or Interest as such maturity
existed before such default; and (iii) compensating the holder of such Claim or
Interest for any damages incurred as a result of any legal, equitable or
contractual rights to which such Claim or Interest entitles the holder of such
Claim or Interest; provided, however, that any contractual right that does not
pertain to the payment when due of principal and interest on the obligations on
which such Claim or Interest is based, including, but not limited to, financial
covenant ratios, negative pledge covenants, covenants or restrictions on merger
or consolidation, and affirmative covenants regarding corporate existence,
prohibiting certain transactions or actions contemplated by the Plan, or
conditioning such transactions or actions on certain factors, shall not be
required to be reinstated in order to accomplish Reinstatement.

      "Released Non-Debtor Parties" means (a) the Futures Representative and his
Representatives, (b) the Asbestos Claimants' Committee and its Representatives,
(c) the Bondholders' Committee and its Representatives, and (d) the Additional
Indemnitees.

      "Released Parties" means each of the Debtors, the Reorganized Debtors,
their respective Representatives and the Released Non-Debtor Parties.

      "Reorganization Cases" means the cases filed by the Debtors under Chapter
11 of the Bankruptcy Code.

      "Reorganized Congoleum" means reorganized Congoleum on and after the
Effective Date.

      "Reorganized Debtors" means the reorganized Debtors on and after the
Effective Date.

      "Representatives" means, with respect to any Entity, the present and
former directors, officers, members, employees, trustees, accountants (including
independent certified public accountants), advisors, attorneys, consultants,
experts or other agents of that Entity, or any other professionals of that
Entity, in each case in their capacity as such; provided, however, that in no
event shall "Representatives" mean Gilbert Heintz & Randolph LLP or Kenesis
Group, LLP.

      "Reserved Common Stock" means 100% of the equity interests of Reorganized
Congoleum to be allocated by a Final Order of the Bankruptcy Court between the
holders of the Senior Note Claims and the Plan Trust in the event that the
holders of the Senior Note Claims (as a Class) vote to reject the Plan.

      "Reset Date" means the date, which will occur ninety (90) trading days
after the one year anniversary of the Effective Date, that the principal amount
of the New Convertible Security resets, if applicable.


                                       20
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "Schedules" means the schedules, statements and lists filed by the Debtors
with the Bankruptcy Court pursuant to Bankruptcy Rule 1007, if such documents
are filed, as they have been and may be amended or supplemented from time to
time.

      "Sealed Avoidance Action" means that certain Adversary Proceeding No.
05-06461 (KCF), as it may be amended, which was filed under seal in the
Bankruptcy Court on behalf of the Debtors on December 29, 2005, against (a)
Arthur J. Pergament, in his capacity as Collateral Trustee; (b) Joseph F. Rice
and the law firm of Motley Rice LLC; (c) Perry Weitz and the law firm of Weitz &
Luxenberg, P.C.; and (d) all holders of Asbestos Personal Injury Claims in
Classes 15 and 16 that are Pre-Petition Settlement Claimants or Participating
Claimants.

      "Secured Asbestos Claim" means: (a) an Asbestos Personal Injury Claim held
by a Qualified Claimant to the extent that such Asbestos Personal Injury Claim
is secured according to the provisions of the Collateral Trust Agreement; and
(b) the Claims Handling Fee.

      "Secured Claim" means any Claim that is (a) secured in whole or part, as
of the Petition Date, by a Lien which is valid, perfected and enforceable under
applicable law and is not subject to avoidance under the Bankruptcy Code or
applicable non-bankruptcy law, or (b) subject to setoff under section 553 of the
Bankruptcy Code, but, with respect to both (a) and (b) above, only to the extent
of the value, net of any senior lien, of the Estates' interest in the assets or
property securing any such Claim or the amount subject to setoff, as the case
may be.

      "Security Agreement" means that certain Superseding Security Agreement
entered into by Congoleum and the Collateral Trustee, dated June 11, 2003, as
the same may be amended from time to time.

      "Senior Note Claim" means any Claim of a holder of Senior Notes based upon
the Senior Notes.

      "Senior Notes" means the 8.625% Senior Notes Due 2008 issued by Congoleum
and outstanding as of the Petition Date.

      "Settling Asbestos Insurance Company" means any Asbestos Insurance Company
that has, before the conclusion of the Confirmation Hearing before the United
States Bankruptcy Court for the District of New Jersey, entered into an Asbestos
Insurance Settlement Agreement that is sufficiently comprehensive in the
determination of the Debtors to warrant treatment under section 524(g) of the
Bankruptcy Code, which determination by the Debtors will be indicated by the
inclusion of such Asbestos Insurance Company on a schedule of Settling Asbestos
Insurance Companies filed by the Debtors with such United States Bankruptcy
Court before the conclusion of the Confirmation Hearing before such United
States Bankruptcy Court and approved by such United States Bankruptcy Court.

      "Subsidiary Debtors" means, collectively, Congoleum Sales, Inc. and
Congoleum Fiscal, Inc.

      "Subsidiary Interests" means, collectively, the issued and outstanding
shares of stock of the Subsidiary Debtors as of the Petition Date and any
options, warrants or other contractual rights to acquire any shares of stock of
the Subsidiary Debtors as of the Petition Date.


                                       21
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      "Substantial Contribution Claim" shall have the meaning ascribed thereto
in Section 4.3 of the Plan.

      "TDP" means the trust distribution procedures for the Plan Trust,
substantially in the form attached as Exhibit "G" to the Plan, as it may be
modified from time to time in accordance with the terms of the TDP and the Plan
Trust Agreement.

      "Trust Advisory Committee" or "TAC" means a Trust Advisory Committee to be
formed to represent all holders of Asbestos Personal Injury Claims to advise the
Plan Trustees and to approve and consent to certain actions as specified herein
and in the Plan Trust Agreement, solely in its capacity as such.

      "Trusts" means the Plan Trust and the Collateral Trust, collectively.

      "United States Trustee" means the United States Trustee for the judicial
district in which the Reorganization Cases are commenced.

      "Unimpaired" means, with reference to a Claim or Interest, unimpaired
within the meaning of section 1124 of the Bankruptcy Code.

      "Unknown Asbestos Claim" means any Asbestos Personal Injury Claim that,
after the Confirmation Date, may be asserted in the future, so long as such
Asbestos Personal Injury Claim has not been previously asserted.

      "Unknown Asbestos Claimant" means any Person that, after the Confirmation
Date, may in the future assert an Unknown Asbestos Claim.

      "Unsecured Asbestos Personal Injury Claim" means any Asbestos Personal
Injury Claim other than a Secured Asbestos Claim. Unsecured Asbestos Personal
Injury Claims consist of Not Previously Determined Unsecured Asbestos Personal
Injury Claims and Previously Determined Unsecured Asbestos Personal Injury
Claims.

      "Unsecured Claim" means any Claim against any Debtor arising prior to the
Petition Date (regardless of whether such Claim is covered by insurance) to the
extent that such Claim is neither secured nor entitled to priority under the
Bankruptcy Code or by a Final Order of the Bankruptcy Court, including, but not
limited to: (a) any Claim arising from the rejection of an executory contract or
unexpired lease under section 365 of the Bankruptcy Code, and (b) any portion of
a Claim to the extent the value of the holder's interest in the applicable
Estate's interest in the property securing such Claim is less than the amount of
the Claim, or to the extent that the amount of the Claim subject to setoff is
less than the amount of the Claim, as determined pursuant to section 506(a) of
the Bankruptcy Code.

      "Voting Agent" means Logan & Company, Inc.

      "Wachovia" shall have the meaning ascribed to such term in Section 5.1(d).

      "Workers' Compensation Claim" means any Claim (a) for benefits under a
state-mandated workers' compensation system, that a past, present, or future
employee of the Debtors and their predecessors is receiving, or may in the
future have a right to receive, and/or (b) reimbursement brought by any
insurance company as a result of payments made to or for the benefit of such
employees and fees and expenses incurred under any insurance policies covering
such employee claims.


                                       22
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      1.3 Rules of Interpretation: Application of Definitions, Rules of
Construction, and Computation of Time. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
both the singular and the plural, and pronouns stated in the masculine,
feminine, or neuter gender shall include the masculine, feminine and neuter. For
purposes of the Plan: (a) any reference in the Plan to a contract, instrument,
release, indenture, or other agreement or document being in a particular form or
on particular terms and conditions means that the document shall be
substantially in that form or substantially on those terms and conditions; (b)
any reference in the Plan to an existing document or exhibit filed or to be
filed means the document or exhibit as it may have been or may be amended,
modified, or supplemented; (c) unless otherwise specified, all references in the
Plan to Sections, Schedules, and Exhibits are references to sections, schedules,
and exhibits of or to the Plan. Unless otherwise specified, the words "herein,"
"hereof," "hereto," "hereunder," and other words of similar meaning refer to the
Plan as a whole and not to any particular section, subsection, or clause
contained in the Plan. The rules of construction contained in section 102 of the
Bankruptcy Code shall apply to the construction of the Plan. The headings in the
Plan are for convenience of reference only and shall not expand, limit, or
otherwise affect the provisions of the Plan. Unless otherwise indicated herein,
all references to dollars are to United States dollars. Unless otherwise
expressly provided herein, in computing any period of time prescribed or allowed
by the Plan, the provisions of Bankruptcy Rule 9006(a) shall apply.

      1.4 Exhibits and Schedules. All exhibits and schedules are incorporated
into and are a part of the Plan as if set forth in full herein.

                                   ARTICLE II

                      COMPROMISES AND SETTLEMENTS OF CLAIMS

      2.1 Proposed Settlement Between the Debtors and Qualified Pre-Petition
Settlement Claimants. The Plan shall implement a compromise and settlement with
respect to the Asbestos Claims of the Qualified Pre-Petition Settlement
Claimants if the Class 2 Settlement is approved by the Bankruptcy Court.
Pursuant to Bankruptcy Rule 9019 and section 1123(b)(3) of the Bankruptcy Code
and consistent with section 1129 of the Bankruptcy Code, the Plan shall
constitute a motion for approval of, and the Confirmation Order may authorize
and constitute Bankruptcy Court approval of, the Class 2 Settlement.

            On the Effective Date, pursuant to Bankruptcy Rule 9019 and section
1123(b)(3) of the Bankruptcy Code, in full and final satisfaction of the Secured
Asbestos Claims of the Qualified Pre-Petition Settlement Claimants, and for good
and valuable consideration including the Qualified Pre-Petition Settlement
Claimants' agreement to the treatment specified in the Plan for the Secured
Asbestos Claims of the Qualified Pre-Petition Settlement Claimants and the
Claims and Interests asserted by other parties in interest, the Class 2
Settlement shall be effectuated in accordance with the following terms if the
Class 2 Settlement is approved by the Bankruptcy Court:


                                       23
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


            (a) Each Secured Asbestos Claim of a Qualified Pre-Petition
Settlement Claimant shall be deemed allowed by the Confirmation Order as
undisputed, uncontingent and liquidated in the reduced settlement amount of
fifty percent (50%) of the amount agreed under the respective Pre-Petition
Settlement Agreement, which reduced amount, without interest, shall be paid by
the Plan Trust in accordance with the TDP as soon after the Effective Date as
possible.

            (b) Each Qualified Pre-Petition Settlement Claimant shall release
his, her or its rights, if any, to hold, exercise or enforce any lien, security
interest or payment priority under the respective Pre-Petition Settlement
Agreements and his, her or its rights, if any, to hold, exercise or enforce any
lien, security interest or payment priority under the Collateral Trust Agreement
and the Security Agreement in and to the Plan Trust Assets.

            (c) All Causes of Action pending against the Qualified Pre-Petition
Settlement Claimants, including the Avoidance Actions, shall be dismissed, as
against the Qualified Pre-Petition Settlement Claimants; provided, however, that
after the Effective Date, all such Causes of Action shall continue and shall be
transferred to the Plan Trust to the extent that any Qualified Pre-Petition
Settlement Claimant asserts a right to hold, exercise or enforce any lien,
security interest or payment priority under any Pre-Petition Settlement
Agreement or any right to hold, any lien security interest or payment priority
under the Collateral Trust Agreement and the Security Agreement in and to the
Plan Trust Assets and it is determined that such Causes of Action have not been
resolved by the Plan, the Class 2 Settlement, the Confirmation Order or
otherwise.

            (d) In the event that the Class 2 Settlement is not approved by a
Final Order of the Bankruptcy Court, agreement by the Qualified Pre-Petition
Settlement Claimants and the Debtors to the Class 2 Settlement shall not be
deemed an admission or used as evidence by any party, all Causes of Action
pending against the Qualified Pre-Petition Settlement Claimants and all defenses
thereto shall be fully reserved and transferred to the Plan Trust; and the
Bankruptcy Court shall determine the validity and priority of each such Class 2
Secured Asbestos Claim after the Effective Date.

            (e) Other than rights to the treatment provided in Article V of the
Plan or as otherwise provided in the Plan or the Plan Documents, on and after
the Effective Date, each Qualified Pre-Petition Settlement Asbestos Claimant
shall be deemed to have unconditionally released the Reorganized Debtors, the
Released Non-Debtor Parties, the Pre-Petition Asbestos Claimants' Committee, the
Asbestos Claimants' Committee, the Claimants' Representative and their current
and former Representatives from any and all Claims, obligations, rights, suits,
damages, causes of action, remedies, and liabilities whatsoever, whether known
or unknown, foreseen or unforeseen, existing or hereafter arising, in law,
equity, or otherwise, that such Entity would have been legally entitled to
assert (whether individually or collectively), based in whole or in part upon
any act or omission, transaction, agreement, event, or other occurrence taking
place on or before the Effective Date by the Debtors or the Reorganized Debtors,
the Reorganization Cases, or the negotiation, formulation, and preparation of
the Plan, the Plan Documents or any related agreements, instruments or other
documents. For the avoidance of doubt, in no event shall any such party be
released in the case of the gross negligence or willful misconduct of such
party.


                                       24
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      2.2 Proposed Settlement Between the Debtors and the Qualified
Participating Claimants. The Plan shall implement a compromise and settlement
with respect to the Asbestos Claims of the Qualified Participating Claimants if
the Class 3 and 11 Settlement is approved by the Bankruptcy Court. Pursuant to
Bankruptcy Rule 9019 and section 1123(b)(3) of the Bankruptcy Code and
consistent with section 1129 of the Bankruptcy Code, the Plan shall constitute a
motion for approval of, and the Confirmation Order may authorize and constitute
Bankruptcy Court approval of, the Class 3 and 11 Settlement.

            On the Effective Date, pursuant to Bankruptcy Rule 9019 and section
1123(b)(3) of the Bankruptcy Code, in full and final satisfaction of the
Asbestos Claims of the Qualified Participating Claimants, and for good and
valuable consideration including the Qualified Participating Claimants'
agreement to the treatment specified in the Plan for the Asbestos Claims of the
Qualified Participating Claimants and the Claims and Interests asserted by other
parties in interest, the Class 3 and 11 Settlement shall be effectuated in
accordance with the following terms if the Class 3 and 11 Settlement is approved
by the Bankruptcy Court:

            (a) Each Asbestos Claim of a Qualified Participating Claimant shall
be deemed allowed by the Confirmation Order as undisputed, uncontingent and
liquidated in the total and maximum amount of $250, which amount shall be paid
by the Plan Trust pari passu with the "Other Asbestos Disease (Level 1 - Cash
Discount Payment)" Asbestos Claims in accordance with the TDP as soon after the
Effective Date as practicable; provided, however, that each Qualified
Participating Claimant may elect to forbear from exercising its right to such
$250 amount and any and all rights under the Claimant Agreement, the Collateral
Trust Agreement and the Security Agreement, in which case such forbearing
Qualified Participating Claimant shall receive the treatment afforded to Class
10 - Not Previously Determined Unsecured Asbestos Personal Injury Claims.

            (b) Each Qualified Participating Claimant shall release his, her or
its rights, if any, to hold, exercise or enforce any lien, security interest or
payment priority under the Claimant Agreement and his, her or its rights, if
any, to hold, exercise or enforce any lien, security interest or payment
priority under the Collateral Trust Agreement and the Security Agreement in and
to the Plan Trust Assets.

            (c) All Causes of Action pending against the Qualified Participating
Claimants, including the Avoidance Actions, shall be dismissed, as against the
Qualified Participating Claimants; provided, however, that after the Effective
Date, all such Causes of Action shall continue and shall be transferred to the
Plan Trust to the extent that any Qualified Pre-Petition Settlement Claimant
asserts a right to hold, exercise or enforce any lien, security interest or
payment priority under the Claimant Agreement or any right to hold, any lien
security interest or payment priority under the Collateral Trust Agreement and
the Security Agreement in and to the Plan Trust Assets and it is determined that
such Causes of Action have not been resolved by the Plan, the Class 3 and 11
Settlement, the Confirmation Order or otherwise.

            (d) In the event that the Class 3 and 11 Settlement is not approved
by a Final Order of the Bankruptcy Court, agreement by the Qualified
Participating Claimants and the Debtors to the Class 3 and 11 Settlement shall
not be deemed an admission or used as evidence by any party, all Causes of
Action pending against the Qualified Participating Claimants and all defenses
thereto shall be fully reserved and transferred to the Plan Trust; and the
Bankruptcy Court shall determine the validity and priority of each such Class 3
Secured Asbestos Claim and Class 11 Previously Determined Unsecured Asbestos
Personal Injury Claim after the Effective Date.


                                       25
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


            (e) Other than rights to the treatment provided in Article V of the
Plan or as otherwise provided in the Plan or the Plan Documents, on and after
the Effective Date, each Qualified Participating Claimant shall be deemed to
have unconditionally released the Reorganized Debtors, the Released Non-Debtor
Parties, the Pre-Petition Asbestos Claimants' Committee, the Asbestos Claimants'
Committee, the Claimants' Representative and their current and former
Representatives from any and all Claims, obligations, rights, suits, damages,
causes of action, remedies, and liabilities whatsoever, whether known or
unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity,
or otherwise, that such Entity would have been legally entitled to assert
(whether individually or collectively), based in whole or in part upon any act
or omission, transaction, agreement, event, or other occurrence taking place on
or before the Effective Date by the Debtors or the Reorganized Debtors, the
Reorganization Cases, or the negotiation, formulation, and preparation of the
Plan, the Plan Documents or any related agreements, instruments or other
documents. For the avoidance of doubt, in no event shall any such party be
released in the case of the gross negligence or willful misconduct of such
party.

                                  ARTICLE III

                     CLASSIFICATION OF CLAIMS AND INTERESTS

      3.1 Generally. Pursuant to section 1122 of the Bankruptcy Code, set forth
below is a designation of Classes of Claims and Interests. A Claim or Interest
is classified in a particular Class only to the extent that the Claim or
Interest qualifies within the description of the Class and is classified in a
different Class to the extent the Claim or Interest qualifies within the
description of that different Class. Solely for voting purposes, Claims against
each Estate are classified as Claims against the Estates as a whole. The Plan
does not provide for substantive consolidation of the Estates. In accordance
with Section 5.3 of the Plan, the structure of the Plan shall not operate to
impose liability on any Reorganized Debtor for the Claims against any other
Debtor or the debts and obligations of any other Reorganized Debtor.

      3.2 Unclassified Claims. In accordance with section 1123(a)(1) of the
Bankruptcy Code, Administrative Claims, including Substantial Contribution
Claims, and Priority Tax Claims are not classified and are excluded from the
Classes set forth in Section 3.3 of the Plan. The treatment accorded
Administrative Claims, Substantial Contribution Claims and Priority Tax Claims
is set forth in Article IV of the Plan.

      3.3 Classes. In accordance with section 1122 of the Bankruptcy Code, the
following constitute the Classes of Claims against and Interests in the Debtors:

            (a) Class 1 - Priority Claims. Class 1 consists of all Priority
Claims. Class 1 is Unimpaired.

            (b) Class 2 - Secured Asbestos Claims of Qualified Pre-Petition
Settlement Claimants. Class 2 consists of all Secured Asbestos Claims of
Qualified Pre-Petition Settlement Claimants to the extent secured under the
terms of the Collateral Trust Agreement. Class 2 is Impaired.


                                       26
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


            (c) Class 3 - Secured Asbestos Claims of Qualified Participating
Claimants. Class 3 consists of all Secured Asbestos Claims of Qualified
Participating Claimants to the extent secured under the terms of the Collateral
Trust Agreement. Class 3 is Impaired.

            (d) Class 4 - Lender Secured Claims. Class 4 consists of the Lender
Secured Claims. Class 4 is Unimpaired.

            (e) Class 5 - Other Secured Claims. Class 5 consists of all Other
Secured Claims, each of which will be within a separate subclass, with each such
subclass to be deemed a separate Class for all purposes. Class 5 is (or these
subclasses are) Unimpaired.

            (f) Class 6 - Senior Note Claims. Class 6 consists of all Senior
Note Claims. Class 6 is Impaired.

            (g) Class 7 - General Unsecured Claims. Class 7 consists of all
General Unsecured Claims. Class 7 is Unimpaired.

            (h) Class 8 - Workers' Compensation Claims. Class 8 consists of all
Workers' Compensation Claims. Class 8 is Unimpaired.

            (i) Class 9 - ABI Claims. Class 9 consists of all ABI Claims. Class
9 is Impaired.

            (j) Class 10 - Not Previously Determined Unsecured Asbestos Personal
Injury Claims. Class 10 consists of all Not Previously Determined Unsecured
Asbestos Personal Injury Claims. Class 10 is Impaired.

            (k) Class 11 - Previously Determined Unsecured Asbestos Personal
Injury Claims. Class 11 consists of all Previously Determined Unsecured Asbestos
Personal Injury Claims. Class 11 is Impaired.

            (l) Class 12 - Asbestos Property Damage Claims. Class 12 consists of
all Asbestos Property Damage Claims. Class 12 is Impaired.

            (m) Class 13 - Congoleum Interests. Class 13 consists of all
Congoleum Interests. Class 13 is Impaired.

            (n) Class 14 - Subsidiary Interests. Class 14 consists of all
Subsidiary Interests. Class 14 is Unimpaired.


                                       27
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


                                   ARTICLE IV

                           TREATMENT OF ADMINISTRATIVE
                         CLAIMS AND PRIORITY TAX CLAIMS

      4.1 Administrative Claims. On the Distribution Date, each holder of an
Allowed Administrative Claim, except as otherwise provided for herein, and
subject to the requirements of Section 14.11 of the Plan, shall receive, in full
satisfaction, settlement, release, extinguishment, and discharge of such Allowed
Administrative Claim, (a) Cash equal to the unpaid portion of such Allowed
Administrative Claim or (b) such different treatment as to which the applicable
Debtor and such holder shall have agreed upon in writing; provided, however,
that Allowed Administrative Claims representing (i) post-petition liabilities
incurred in the ordinary course of business by the Debtors and (ii)
post-petition contractual liabilities arising under loans or advances to the
Debtors, whether or not incurred in the ordinary course of business, shall be
paid by the Reorganized Debtors in accordance with the terms and conditions of
the particular transactions relating to such liabilities and any agreements
relating thereto.

      4.2 Priority Tax Claims. On the Distribution Date, each holder of an
Allowed Priority Tax Claim shall receive, in full satisfaction, settlement,
release, and discharge of and in exchange for such Allowed Priority Tax Claim,
(a) Cash equal to the unpaid portion of such Allowed Priority Tax Claim, (b)
such different treatment as to which the applicable Debtor and such holder shall
have agreed upon in writing, or (c) at the Reorganized Debtors' sole discretion,
deferred Cash payments having a value, as of the Effective Date, equal to such
Allowed Priority Tax Claim, over a period not exceeding six (6) years after the
date of assessment of such Allowed Priority Tax Claim.

      4.3 Substantial Contribution Claims. Any Entity who requests compensation
or expense reimbursement for making a substantial contribution in the
Reorganization Cases pursuant to sections 503(b)(3), (4) and (5) of the
Bankruptcy Code ("Substantial Contribution Claim") must file an application with
the clerk of the Bankruptcy Court on or before a date that is sixty (60) days
subsequent to the Confirmation Date and serve such application on counsel for
the Debtors, counsel for the Futures Representative and counsel for the Asbestos
Claimants' Committee and on all other parties as otherwise required by the
Bankruptcy Court and the Bankruptcy Code, or be forever barred from seeking such
compensation or expense reimbursement. All Allowed Substantial Contribution
Claims shall be paid by the Reorganized Debtors within sixty (60) days of
allowance by the Bankruptcy Court.

                                   ARTICLE V

                       TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS

      5.1 Claims and Interests.

            (a) Class 1 - Priority Claims. On the Distribution Date, each holder
of an Allowed Priority Claim shall receive, in full satisfaction, settlement,
release, and discharge of and in exchange for such Allowed Priority Claim,
either (i) the Allowed Amount of its Priority Claim, in Cash, or (ii) such
different treatment as may be agreed to by such holder and the Reorganized
Debtors. Class 1 Claims are Unimpaired and the holders of Class 1 Claims are
deemed to have accepted the Plan and, accordingly, are not entitled to vote on
the Plan.


                                       28
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


            (b) Class 2 - Secured Asbestos Claims of Qualified Pre-Petition
Settlement Claimants. As of the Effective Date, all liability for all Secured
Asbestos Claims of Qualified Pre-Petition Settlement Claimants shall be assumed,
automatically and without further act or deed, by the Plan Trust and the
Reorganized Debtors shall have no liability therefor. Each such Qualified
Pre-Petition Settlement Claimant will, in respect of its Allowed Secured
Asbestos Claim, be paid by the Plan Trust, in full satisfaction, settlement,
release, and discharge of and in exchange for such Claim, in Cash in accordance
with the provisions of the Plan Documents.

            Effective as of the Effective Date and subject to entry of a Final
Order of the Bankruptcy Court approving the Class 2 Settlement, each Qualified
Pre-Petition Settlement Claimant shall have irrevocably consented or be deemed
to have irrevocably consented to (i) release his, her or its rights, if any, to
hold, exercise or enforce any lien, security interest or payment priority under
the respective Pre-Petition Settlement Agreements and his, her or its rights, if
any, to hold, exercise or enforce any lien, security interest or payment
priority under the Collateral Trust Agreement and the Security Agreement in and
to Plan Trust Assets; and (ii) reduce the amount of its Secured Asbestos Claim
to 50% of the amount agreed under the respective Pre-Petition Settlement
Agreement, which reduced amount shall be paid by the Plan Trust in accordance
with the TDP as soon after the Effective Date as practicable. In exchange
therefor, all Causes of Action pending against the Qualified Pre-Petition
Settlement Claimants shall be dismissed. In the event that the Class 2
Settlement is not approved by a Final Order of the Bankruptcy Court, agreement
by the Qualified Pre-Petition Settlement Claimants and the Debtors to the Class
2 Settlement shall not be deemed an admission or used as evidence by any party,
all Causes of Action pending against the Qualified Pre-Petition Settlement
Claimants and all defenses thereto shall be fully reserved and the Bankruptcy
Court shall determine and allow or disallow the amount and priority of each such
Class 2 Secured Asbestos Claim after the Effective Date.

            Class 2 is Impaired and holders of Class 2 Claims are entitled to
vote to accept or reject the Plan.

            (c) Class 3 - Secured Asbestos Claims of Qualified Participating
Claimants. As of the Effective Date, all liability for all Secured Asbestos
Claims of Qualified Participating Claimants shall be assumed, automatically and
without further act or deed, by the Plan Trust and the Reorganized Debtors shall
have no liability therefor. Each such Qualified Participating Claimant will, in
respect of its Allowed Secured Asbestos Claim, be paid by the Plan Trust, in
full satisfaction, settlement, release, and discharge of and in exchange for
such Claim, in Cash in accordance with the provisions of the Plan Documents.

            Effective as of the Effective Date and subject to entry of a Final
Order of the Bankruptcy Court approving the Class 3 and 11 Settlement, each
Qualified Participating Claimant shall have irrevocably consented or be deemed
to have irrevocably consented to (i) release his, her or its rights, if any, to
hold, exercise or enforce any lien, security interest or payment priority under
the Claimant Agreement and his, her or its rights, if any, to hold, exercise or
enforce any lien, security interest or payment priority under the Collateral
Trust Agreement and the Security Agreement in and to the Plan Trust Assets; and


                                       29
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


(ii) reduce the amount of its entire Asbestos Claim to the total and maximum
amount of $250, which amount shall be paid by the Plan Trust pari passu with the
"Other Asbestos Disease (Level 1 - Cash Discount Payment)" Asbestos Claims in
accordance with the TDP as soon after the Effective Date as practicable;
provided, however, that each such Qualified Participating Claimant may elect to
irrevocably consent to the Forbearance of his, her or its right to (x) such $250
amount and (y) any and all rights under the Claimant Agreement, the Collateral
Trust Agreement and the Security Agreement, in which case such forbearing
Qualified Participating Claimant shall receive the treatment afforded to Class
10 - Not Previously Determined Unsecured Asbestos Personal Injury Claims on
account of its Class 3 and Class 11 Asbestos Personal Injury Claim. In exchange
therefor, all Causes of Action pending against the Qualified Participating
Claimants shall be dismissed. In the event that the Class 3 and 11 Settlement is
not approved by a Final Order of the Bankruptcy Court, agreement by the
Qualified Participating Claimants and the Debtors to the Class 3 and 11
Settlement shall not be deemed an admission or used as evidence by any party,
all Causes of Action pending against the Qualified Participating Claimants and
all defenses thereto shall be fully reserved and the Bankruptcy Court shall
determine and allow or disallow the amount and priority of each such Class 3
Secured Asbestos Claim after the Effective Date.

            Class 3 is Impaired and holders of Class 3 Claims are entitled to
vote to accept or reject the Plan.

            (d) Class 4 - Lender Secured Claims. On the Effective Date, the
Existing Credit Agreement, as ratified, amended and approved in accordance with
the Financing Order (as hereinafter defined), will be amended and restated in
accordance with the terms of the Amended Credit Agreement and the holder of the
Allowed Lender Secured Claim shall be entitled to all the rights and benefits
under the Amended Credit Agreement and related documents. The Amended Credit
Agreement will be on terms and conditions mutually acceptable to the Debtors and
Wachovia Bank, National Association, successor by merger to Congress Financial
Corporation ("Wachovia"). Alternatively, if, as of the Confirmation Hearing, the
Debtors and the holder of the Lender Secured Claim have not agreed upon the
terms of the Amended Credit Agreement, the Lender Secured Claim shall be paid in
full indefeasibly on the Effective Date or as soon thereafter as practicable and
Wachovia shall be released from any and all liabilities and causes of action in
accordance with the Final Order (1) Authorizing Debtors' Use of Cash Collateral,
(2) Authorizing Debtors to Obtain Post-Petition Financing, (3) Granting Senior
Liens and Priority Administrative Expense Status Pursuant to 11 U.S.C. ss.ss.105
and 364(c), (4) Modifying the Automatic Stay Pursuant to 11 U.S.C. ss.362, and
(5) Authorizing Debtors to Enter into Agreements with Congress Financial
Corporation [docket no. 435](the "Financing Order"). Nothing herein requires
that Wachovia permit the use of collateral, including cash collateral, or
finance the Debtors after Confirmation other than with Wachovia's prior written
consent. Class 4 is Unimpaired and the holder of the Class 4 Claim is deemed to
have accepted the Plan and, accordingly, is not required to vote on the Plan.
Notwithstanding anything to the contrary contained in the Plan, the Confirmation
Order, or otherwise, the Obligations under and as defined in the Existing Credit
Agreement (as the same has heretofore been or may hereafter be amended,
modified, ratified, restated, extended, renewed or replaced) and all the rights,
claims, liens and priorities and other protections provided to Wachovia shall
survive the Confirmation Date and continue in full force and effect in
accordance with the terms and conditions of the Financing Order and the Existing
Credit Agreement.


                                       30
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


            (e) Class 5 - Other Secured Claims. Each holder of an Allowed Other
Secured Claim shall retain unaltered the legal, equitable and contractual rights
(including, but not limited to, any Liens that secure such Claim) to which such
Claim entitles such holder and such Allowed Other Secured Claim shall be
Reinstated on the Effective Date. Class 5 is Unimpaired and the holders of Class
5 Claims are deemed to have accepted the Plan and, accordingly, are not entitled
to vote on the Plan.

            (f) Class 6 - Senior Note Claims. On the Effective Date, provided
that the holders of the Senior Note Claims (as a Class) vote to accept the Plan
by the requisite number and amount required by the Bankruptcy Code, the Senior
Notes shall be cancelled and Reorganized Congoleum shall issue the New Senior
Notes to the holders of the Senior Note Claims; provided, however, that
Reorganized Congoleum shall receive a credit dollar for dollar against all
interest payable under the New Senior Notes for all fees and expenses of the
Bondholders' Committee incurred and paid after August 11, 2006. The New Senior
Notes shall be subordinate in priority and payment to the Amended Credit
Agreement, the New Convertible Security and the Plan Trust Note.

            In the event that the holders of the Senior Note Claims (as a Class)
do not vote to accept the Plan and the treatment afforded hereinabove by the
requisite number and amount required by the Bankruptcy Code, then the Plan shall
be confirmed in accordance with Section 10.6 of the Plan, the Senior Notes shall
be cancelled and the Senior Note Claims shall receive their pro rata share of
the Reserved Common Stock with the Plan Trust, as determined by a Final Order of
the Bankruptcy Court; provided, however, that in no event shall the amount of
Reserved Common Stock to be allocated to the holders of the Senior Notes exceed
49% of the voting common shares and total economic equity value of Reorganized
Congoleum on a fully diluted basis.

            In no event shall any distribution to the holders of the Senior Note
Claims provided for herein be on account of any accrued and unpaid interest on
account of the Senior Note Claims.

            Class 6 is Impaired and holders of Class 6 Claims are entitled to
vote to accept or reject the Plan.

            (g) Class 7 - General Unsecured Claims. Each holder of an Allowed
General Unsecured Claim shall retain unaltered the legal, equitable and
contractual rights to which such Claim entitles such holder and such Allowed
General Unsecured Claim shall be Reinstated on the Effective Date. Class 7 is
Unimpaired and the holders of Class 7 Claims are deemed to have accepted the
Plan and, accordingly, are not entitled to vote on the Plan.

            (h) Class 8 - Workers' Compensation Claims. Each holder of an
Allowed Workers' Compensation Claim shall be paid in the ordinary course
pursuant to such rights that exist under any state workers' compensation system
or laws applicable to such Claims. Class 8 is Unimpaired and the holders of
Class 8 Claims are deemed to have accepted the Plan and, accordingly, are not
entitled to vote on the Plan.

            (i) Class 9 - ABI Claims. On the Effective Date, the ABI Claims
shall receive the following treatment:


                                       31
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


                  (i) all ABI Asbestos Personal Injury Indemnity Claims, ABI
Asbestos Property Damage Indemnity Claims and ABI Asbestos Claims shall be
deemed Disallowed and expunged; and

                  (ii) all ABI Claims (other than ABI Asbestos Personal Injury
Indemnity Claims, ABI Asbestos Property Damage Indemnity Claims and ABI Asbestos
Claims) shall be Reinstated, and shall be payable by, and enforceable
obligations of, the Reorganized Debtors.

                  Class 9 is Impaired and the holder of the Class 9 Claims is
entitled to vote to accept or reject the Plan. Notwithstanding anything in the
Plan, the holder of the Class 9 Claims shall not be required to file a Proof of
Claim.

            (j) Class 10 - Not Previously Determined Unsecured Asbestos Personal
Injury Claims. As of the Effective Date, all liability for all Not Previously
Determined Unsecured Asbestos Personal Injury Claims as well as liability for
all future Demands and Unknown Asbestos Claims shall be assumed, automatically
and without further act or deed, by the Plan Trust and the Reorganized Debtors
shall have no liability therefor. Each Not Previously Determined Unsecured
Asbestos Personal Injury Claim, future Demand and Unknown Asbestos Claim shall
be determined, liquidated and treated pursuant to the Plan Trust Agreement and
the TDP. The TDP shall apply to all holders of Not Previously Determined
Unsecured Asbestos Personal Injury Claims, Unknown Asbestos Claims and Demands,
including any such holder who elects to resort to the legal system and obtains a
judgment for money damages. Class 10 is Impaired and holders of Class 10 Claims
are entitled to vote to accept or reject the Plan.

            (k) Class 11 - Previously Determined Unsecured Asbestos Personal
Injury Claims. As of the Effective Date, all liability for all Previously
Determined Unsecured Asbestos Personal Injury Claims shall be deemed satisfied
in their entirety and shall not receive any additional payment or consideration
under the Plan other than as provided in Section 5.1(c) of the Plan and the
Class 3 and 11 Settlement Agreement. Class 11 is Impaired and holders of Class
11 Claims are entitled to vote to accept or reject the Plan.

            (l) Class 12 - Asbestos Property Damage Claims. As of the Effective
Date, all liability for all Allowed Asbestos Property Damage Claims shall be
assumed, automatically and without further act or deed, by the Plan Trust and
the Reorganized Debtors shall have no liability therefor. Each Allowed Asbestos
Property Damage Claim shall be paid solely from the Asbestos Property Damage
Claim Sub-Account on account of the unpaid Allowed Amount of such Claim pursuant
to the Plan Trust Agreement. After the assets in the Asbestos Property Damage
Claim Sub-Account have been exhausted, the Plan Trust shall have no further
liability or obligation for or in respect of any Asbestos Property Damage
Claims. All Asbestos Property Damage Claims as to which a Proof of Claim was not
filed prior to the expiration of the Asbestos Property Damage Claim Bar Date
shall be deemed Disallowed. Class 12 Claims are Impaired and the holders of
Class 12 Claims are entitled to vote to accept or reject the Plan.

            (m) Class 13 - Congoleum Interests. On the Effective Date, in the
event that the holders of the Senior Note Claims (Class 6) vote to accept the
Plan by the requisite amount and number required by the Bankruptcy Code, the
holders of the Congoleum Interests shall retain such Interests; provided,
however, on the Effective Date, the New Class A Common Stock and the New
Convertible Security, which shall be contributed to the Plan Trust, shall be
issued.


                                       32
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


            In the event that the holders of the Senior Note Claims do not vote
to accept the Plan by the requisite number and amount required by the Bankruptcy
Code, the Congoleum Interests shall be cancelled, the holders of the Congoleum
Interests shall retain nothing on account of such Interests and the Reserved
Common Stock shall be issued and held in escrow pending allocation of the
Reserved Common Stock between the Plan Trust and the Senior Note Claims by a
Final Order of the Bankruptcy Court; provided, however, that in no event shall
the amount of Reserved Common Stock to be allocated to the holders of the Senior
Notes exceed 49% of the voting common shares and total economic equity value of
Reorganized Congoleum on a fully diluted basis. Class 13 is Impaired and the
holders of Class 13 Congoleum Interests are entitled to vote to accept or reject
the Plan.

            (n) Class 14 - Subsidiary Interests. On the Effective Date, the
holder of the Subsidiary Interests shall retain such Subsidiary Interests. Class
14 is Unimpaired and the holder of Class 14 Subsidiary Interests is deemed to
have accepted the Plan, and accordingly, is not entitled to vote on the Plan.

      5.2 Reservation of Rights Regarding Claims. Except as otherwise explicitly
provided in the Plan, nothing shall affect the Debtors' or the Reorganized
Debtors' rights and defenses, both legal and equitable, with respect to any
Claims, including, but not limited to, all rights with respect to legal and
equitable defenses to alleged rights of setoff or recoupment. Except as
otherwise explicitly provided in the Plan, nothing shall affect any of the Plan
Trust's rights and defenses, both legal and equitable, with respect to any
Asbestos Claims, including, but not limited to, all rights with respect to legal
and equitable defenses to alleged rights of setoff or recoupment.

      5.3 Separate Liabilities of Reorganized Debtors. The structure of the Plan
shall not operate to impose liability on any Reorganized Debtor for the Claims
against any other Debtor or the debts and obligations of any other Reorganized
Debtor. After the Effective Date, each Reorganized Debtor shall be separately
liable for its post-Confirmation debts and obligations.

                                   ARTICLE VI

                           IMPLEMENTATION OF THE PLAN

      6.1 The Plan Trust and the GHR/Kenesis Litigation Trust.

            (a) Establishment and Purpose of the Plan Trust. On the Effective
Date, the Plan Trust shall be established in accordance with the Plan Trust
Agreement. The Plan Trust shall be a "qualified settlement fund" within the
meaning of section 468B of the IRC and the Treasury Regulations promulgated
thereunder. The purpose of the Plan Trust shall be to, among other things: (i)
pay all Plan Trust Asbestos Claims in accordance with the Plan, the Plan Trust
Agreement, the TDP and the Confirmation Order; (ii) preserve, hold, manage, and
maximize the Plan Trust Assets for use in paying and satisfying Plan Trust
Asbestos Claims in accordance with the Plan Trust Agreement and the TDP; (iii)
prosecute, settle and manage the disposition of the Asbestos In-Place Insurance
Coverage; and (iv) prosecute, settle, and manage Asbestos Insurance Actions and
Direct Actions.


                                       33
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


            (b) Funding and Receipt of Plan Trust Assets. On the Effective Date,
Reorganized Congoleum shall issue the New Class A Common Stock and the New
Convertible Security (in the event that the Senior Note Claims vote to accept
the Plan) or the Reserved Common Stock (in the event that the Senior Note Claims
vote to reject the Plan) to be issued to the Plan Trust in accordance with this
Plan. All Plan Trust Assets shall be transferred to, vested in, and assumed by,
the Plan Trust free and clear of all Claims, Liens and encumbrances; provided,
however, that to the extent that certain Plan Trust Assets, because of their
nature or because they will accrue subsequent to the Effective Date, cannot be
transferred to, vested in, and assumed by the Plan Trust on the Effective Date,
such Plan Trust Assets shall be transferred to, vested in, and assumed by the
Plan Trust free and clear of Claims, Liens and encumbrances, as soon as
practicable after the Effective Date. On the Effective Date, ABI shall deliver
the ABI Contribution to the Plan Trust by wire transfer of immediately available
funds.

            (c) Insurance Assignment Agreement. On the Effective Date, the
Debtors shall deliver the Insurance Assignment Agreement attached hereto as
Exhibit "C." Such agreement shall be valid, binding and enforceable. The
Insurance Assignment Agreement shall transfer claims and rights set forth
therein as Debtors may have, subject to any and all Asbestos Insurer Coverage
Defenses.

            (d) Creation of Asbestos Property Damage Claim Sub-Account. On the
Effective Date, the Plan Trust shall cause the Asbestos Property Damage
Insurance Rights and any proceeds thereof, including $1.2 million from the
proceeds of that certain settlement agreement between the Debtors and Liberty
Mutual Insurance Company approved by the Bankruptcy Court by order, dated July
30, 2004, to be held in the Asbestos Property Damage Claim Sub-Account. In
accordance with the terms of the Plan Trust Agreement, the Plan Trustees shall
be permitted to transfer monies from the Asbestos Property Damage Claim
Sub-Account to the Asbestos Personal Injury Claim Sub-Account, from time to
time, to the extent that the funds in the Asbestos Property Damage Claim
Sub-Account exceed the aggregate amount of all unpaid Asbestos Property Damage
Claims that have been filed prior to the Asbestos Property Damage Claim Bar
Date, and a reasonable reserve for Plan Trust Expenses and indemnification costs
or expenses, in either case, related to Asbestos Property Damage Claims.

            (e) Transfer of Assets and Dissolution of the Collateral Trust. On
the Effective Date, pursuant to the terms of the Collateral Trust Agreement, all
of the Collateral Trust's right, title and interest in and to any assets or
properties then held by the Collateral Trust shall automatically be transferred
and assigned to, and vest in, the Plan Trust, free and clear of all Claims,
Liens and encumbrances, and all rights with respect to such assets and
properties shall be enforceable by the Plan Trust.

            (f) Assumption of Liabilities by the Plan Trust. On the Effective
Date, all liabilities, obligations and responsibilities relating to all Plan
Trust Asbestos Claims and Asbestos Expenses shall be transferred to the Plan
Trust as set forth herein and the Plan Trustees, on behalf of the Plan Trust,
shall expressly assume all liability for all Plan Trust Asbestos Claims, Demands
and Asbestos Expenses as set forth herein, subject to the provisions of the Plan
Trust Agreement.


                                       34
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


            (g) Discharge of Liabilities to Holders of Asbestos Claims. Except
as provided in the Plan and the Confirmation Order, the transfer to, vesting in,
and assumption by the Plan Trust of the Plan Trust Assets as contemplated by the
Plan shall, among other things, discharge the Debtors and the Reorganized
Debtors from and in respect of all Plan Trust Asbestos Claims.

            (h) TDP. From and after the Effective Date, the Plan Trust shall pay
the Plan Trust Asbestos Claims in accordance with the Plan Trust Agreement, the
TDP and, if approved by Final Order of the Bankruptcy Court, the Class 2
Settlement and the Class 3 and 11 Settlement. The Plan Trustees shall have the
power to administer, amend, supplement or modify the TDP in accordance with the
terms thereof.

            (i) Payment of Allowed Asbestos Property Damage Claims. From and
after the Effective Date, the Plan Trust shall cause the payment of Allowed
Asbestos Property Damage Claims from the Asbestos Property Damage Claim
Sub-Account in accordance with the Plan Trust Agreement, provided, however that
once the assets in the Asbestos Property Damage Claim Sub-Account have been
exhausted, the Plan Trust shall have no further liability or obligation for or
in respect of any Asbestos Property Damage Claims.

            (j) Excess Plan Trust Assets. To the extent there are any Plan Trust
Assets remaining after the payment in full of all Plan Trust Asbestos Claims and
all Plan Trust Expenses (or provision has been made therefor) in accordance with
the Plan Trust Agreement and the TDP, such excess Plan Trust Assets shall be
transferred to a tax-exempt organization qualified under section 501(c)(3) of
the IRC, which charity is to be determined by the Plan Trustees; provided,
however, that such charitable purpose, if practicable, shall be related to the
treatment of or research regarding asbestos-related disorders.

            (k) Plan Trust Expenses. The Plan Trust shall pay all Plan Trust
Expenses from the Plan Trust Assets in accordance with the Plan Trust Agreement.
Neither the Debtors, the Reorganized Debtors, ABI nor their Affiliates shall
have any obligation to pay any Plan Trust Expenses. Notwithstanding any
provision herein to the contrary, on the Effective Date, (i) the Collateral
Trustee shall provide the Plan Trust with a certification setting forth the
amount of Asbestos Expenses incurred by or on behalf of, or imposed on, the
Collateral Trust, or otherwise payable by the Collateral Trust, in each case
prior to the Effective Date and all appropriate invoices and other backup
regarding such Asbestos Expenses, including without limitation, amounts which
may be due to the Claims Reviewer (or to Congoleum to reimburse it for amounts
it paid to the Claims Reviewer) for services performed prior to the Effective
Date and (ii) the Plan Trust shall only assume Asbestos Expenses from periods
prior to the Effective Date if and to the extent set forth on such
certification. The Plan Trustees, each member of the TAC, the Futures
Representative and the Representatives of each of the foregoing will have a lien
upon the Plan Trust Assets which will be prior to any lien thereon, and the Plan
Trust will grant a security interest in the Plan Trust Assets, all proceeds
thereof and all accounts into which such proceeds or the Plan Trust Assets are
deposited or maintained to secure payment of amounts payable to them as
compensation or indemnification.


                                       35
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


            (l) Appointment of the Initial Plan Trustees. Prior to the
Confirmation Hearing, the Debtors, with the approval of the Futures
Representative and the Asbestos Claimants' Committee, shall nominate the initial
Plan Trustees. Effective as of the Effective Date, the Bankruptcy Court shall
appoint the initial Plan Trustees to serve as Plan Trustees in accordance with
the Plan Trust Agreement. For purposes of performing his or her duties and
fulfilling his or her obligations under the Plan Trust Agreement, the TDP and
the Plan, the Plan Trustees shall be deemed to be a party in interest within the
meaning of section 1109(b) of the Bankruptcy Code. The Plan Trustees shall be
the "administrator" of the Plan Trust as that term is used in Treas. Reg.
Section 1.468B-2(k)(3).

            (m) The Futures Representative. On and after the Effective Date, the
Futures Representative shall continue to serve as the Futures Representative
pursuant to the terms of the Plan Trust Agreement and shall have the functions
and rights provided in the Plan Trust Documents.

            (n) Appointment of Trust Advisory Committee Members. After the
Confirmation Date, the Asbestos Claimants' Committee shall designate the initial
members of the TAC. Effective as of the Effective Date, the Bankruptcy Court
shall appoint the initial members of the TAC (and thereupon the TAC shall be
formed) to serve as members of the TAC in accordance with the Plan Trust
Agreement.

            (o) Establishment and Purpose of the GHR/Kenesis Litigation Trust.
On the Effective Date, the GHR/Kenesis Litigation Trust shall be established in
accordance with the GHR/Kenesis Litigation Trust Agreement for the benefit of
Reorganized Congoleum and the Plan Trust. The GHR/Kenesis Litigation Trust shall
be funded on the Effective Date with $600,000 to provide for payment of the fees
and expenses of the GHR/Kenesis Litigation Trustee. The GHR/Kenesis Litigation
Trustee shall be nominated by the Debtors, with the consent of the Asbestos
Claimants' Committee and the Futures Representative, no later than fifteen (15)
days prior to the commencement of the Confirmation Hearing and the appointment
of the GHR/Kenesis Litigation Trustee shall be subject to approval by the
Bankruptcy Court. The purpose of the GHR/Kenesis Litigation Trust shall be to,
among other things (i) pursue the collection of amounts owed to the Debtors'
Estates on account of the GHR/Kenesis Actions for the benefit of Reorganized
Congoleum and the Plan Trust; (ii) investigate, pursue, prosecute, settle,
manage and resolve, as appropriate, the GHR/Kenesis Actions for the benefit of
Reorganized Congoleum and the Plan Trust; and (iii) distribute all proceeds of
the GHR/Kenesis Actions to the Plan Trust on behalf of Reorganized Congoleum
(after payment of fees and reimbursement for expenses to the GHR/Kenesis
Litigation Trustee).

            (p) Institution and Maintenance of Legal and Other Proceedings. As
of the Effective Date, the Plan Trust shall be empowered to initiate, prosecute,
defend, and resolve all legal actions and other proceedings related to any
asset, liability, or responsibility of the Plan Trust including, without
limitation, the Avoidance Actions, to the extent not adjudicated, compromised or
settled prior to the Effective Date. Further, as of the Effective Date, the
GHR/Kenesis Litigation Trust shall be empowered to initiate, prosecute, defend,
and resolve all legal actions and other proceedings related to the GHR/Kenesis
Actions, to the extent not adjudicated, compromised or settled prior to the
Effective Date. The Plan Trust and the GHR/Kenesis Litigation Trust, as
applicable, shall be empowered to initiate, prosecute, defend, and resolve all
such actions in the name of the Debtors and/or the Reorganized Debtors if deemed
necessary or appropriate by the Plan Trustees or the GHR/Kenesis Litigation


                                       36
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


Trustee; provided, however, that any compromise or settlement of any GHR/Kenesis
Action or the Avoidance Actions shall be subject to approval by the Bankruptcy
Court. Except as otherwise provided by law or agreement, the Plan Trust shall be
responsible for the payment of all damages, awards, judgments, settlements,
expenses, costs, fees, and other charges incurred subsequent to Confirmation
arising from or associated with any legal action or other proceeding brought
pursuant to this Section 6.1(p) and shall pay or reimburse all deductibles,
retrospective premium adjustments, or other charges which may arise from the
receipt of insurance proceeds by the Plan Trust. Without in any way limiting the
foregoing and subject to any Asbestos Insurer Coverage Defenses, the Plan Trust
shall be empowered to elect to (or not to), initiate, prosecute, defend, settle,
and resolve all Plan Trust Bankruptcy Causes of Action, Asbestos Insurance
Actions and Direct Actions, and to maintain, administer, preserve, or pursue the
Asbestos-In-Place Insurance Coverage, the Asbestos Insurance Action Recoveries,
Asbestos Insurance Rights and the Asbestos Insurance Policies.

            (q) Preservation of Insurance Claims. The discharge and release of
the Debtors and Released Non-Debtor Parties from all Claims as provided herein,
and the injunctive protection provided to the Debtors, Reorganized Debtors,
Released Non-Debtor Parties and Released Parties with respect to Demands as
provided herein, shall neither diminish nor impair the enforceability of any of
the Asbestos Insurance Policies by any Entity except (i) to the extent that any
such Asbestos Insurance Company is also a Settling Asbestos Insurance Company or
(ii) that all Asbestos Insurer Coverage Defenses are preserved.

            (r) Indemnification by the Plan Trust. As and to the extent provided
in the Plan Trust Agreement, the Plan Trust (and to the extent specified in
Section 4.6(c) of the Plan Trust Agreement, the Reorganized Debtors) shall
indemnify and hold harmless each of the Debtors, the Reorganized Debtors, the
Pre-Petition Asbestos Claimants' Committee, the Asbestos Claimants' Committee,
the Plan Trustees, the Claimants' Representative, the Collateral Trustee, any
officer and employee of the Plan Trust, the Futures Representative, each member
of the TAC and, with respect to each of the foregoing, their respective past,
present and future Representatives, provided, however, that in no event shall
the Pre-Petition Asbestos Claimants' Committee, the Claimants' Representative or
the Collateral Trustee be indemnified or held harmless for any relief granted or
any costs or expenses incurred in connection with the Avoidance Actions.

            (s) Coverage Costs. Notwithstanding anything in the Plan to the
contrary, Coverage Costs shall be paid to the Reorganized Debtors in accordance
with the terms of that certain settlement agreement with Liberty Mutual
Insurance Company, which was approved by the Bankruptcy Court by an Order dated
June 29, 2004.

            (t) Plan Trust Note. On the Effective Date, the Plan Trust shall
provide a loan to Reorganized Congoleum in the principal amount of the Plan
Trust Note and Reorganized Congoleum shall issue the Plan Trust Note to the Plan
Trust. The Plan Trust Note shall be in all respects pari passu in priority and
payment with the New Convertible Security; provided, however, that pursuant to
the GHR/Kenesis Litigation Trust any proceeds of the GHR/Kenesis Actions shall
be pledged to the Plan Trust by Reorganized Congoleum to secure the Plan Trust
Note and shall be used to reduce Reorganized Congoleum's obligations to the Plan
Trust by (i) first, being applied to reduce or satisfy principal and accrued
interest under the Plan Trust Note; (ii) second, being applied to reduce or


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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


satisfy principal and accrued interest under the New Convertible Security;
provided, however, that the New Convertible Security shall not be satisfied or
retired before the Reset Date and any proceeds of the GHR/Kenesis Actions that
are received by the Plan Trust prior to the Reset Date shall be held by the Plan
Trust in an interest bearing account and applied to reduce or satisfy the New
Convertible Security immediately after the Reset Date; and (iii) thereafter, be
distributed to the Plan Trust on behalf of Reorganized Congoleum.

      6.2 Intercompany Settlement. In consideration of the treatment set forth
in Section 5.1(i) with respect to the ABI Claims, the ABI Contribution, and for
other good and valuable consideration, (a) on the Effective Date, Reorganized
Congoleum, with the consent of ABI, shall assume and cure its defaults, if any,
under each of the Intercompany Agreements, pursuant to Section 9.1(d) of the
Plan; (b) on the Effective Date, Reorganized Congoleum shall assume the Joint
Venture Agreement, pursuant to Section 9.1(c) of the Plan; and (c) ABI and the
ABI Parties shall be entitled to the protections of the Asbestos Channeling
Injunction provided for in Section 12.6 of the Plan to the extent that any of
ABI and the ABI Parties is, within the meaning of section 524(g)(4)(A)(ii) of
the Bankruptcy Code, alleged to be directly or indirectly liable for the conduct
of, Claims against, or Demands on the Debtors to the extent such alleged
liability of ABI or any of the ABI Parties arises by reason of its (I) ownership
of a financial interest in any Debtor, a past or present affiliate of any
Debtor, or a predecessor in interest of any Debtor, (II) involvement in the
management of any Debtor or a predecessor in interest of any Debtor, or service
as an officer, director or employee of any Debtor or a related party, or (III)
involvement in a transaction changing the corporate structure, or in a loan or
other financial transaction affecting the financial condition, of any Debtor or
a related party, including but not limited to - - (aa) involvement in providing
financing (debt or equity), or advice to an entity involved in such transaction,
or (bb) acquiring or selling a financial interest in an entity as part of such a
transaction. For purposes of this paragraph, the term "related party" shall have
the meaning ascribed to such term in section 524(g)(4)(A)(iii) of the Bankruptcy
Code.

      6.3 Certificate of Incorporation and Bylaws. The certificates of
incorporation and bylaws of each Debtor shall, as of the Effective Date, be
amended to the extent necessary to comply with section 1123(a)(6) of the
Bankruptcy Code.

      6.4 Management of the Reorganized Debtors. On and after the Effective
Date, the business and affairs of the Reorganized Debtors will be managed by the
respective boards of directors of the Reorganized Debtors. The existing senior
officers and directors of the Debtors shall continue to serve in their same
respective capacities after the Effective Date for the Reorganized Debtors. The
Reorganized Debtors shall continue to maintain independent directors in
accordance with the listing requirements of the American Stock Exchange and
applicable law, which directors shall, from the Effective Date and continuing
until Reorganized Congoleum's obligations to the Plan Trust are fulfilled, also
have no financial interest, past or present, in ABI or its affiliates or any
business owned and controlled by Richard, Roger or William Marcus. In addition,
any transaction between the Reorganized Debtors and any affiliate, insider or
subsidiary of Reorganized Congoleum shall be approved by a standing committee of
such independent directors.

      6.5 Amended Credit Agreement. On the Effective Date, the Amended Credit
Agreement, together with a new promissory note evidencing the obligation of
Reorganized Congoleum thereunder, and all other documents, instruments and
agreements to be entered into, delivered or confirmed thereunder on the


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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


Effective Date, shall become effective. The new promissory note issued pursuant
to the Amended Credit Agreement and all obligations under the Amended Credit
Agreement and related documents shall be repaid as set forth in the Amended
Credit Agreement.

      6.6 Transfer Taxes. The issuance, transfer, or exchange of any of the
securities(.) issued under, or the transfer of any other assets or property
pursuant to or in connection with the Plan or the making or delivery of an
instrument of transfer under or in connection with the Plan shall not, pursuant
to section 1146 of the Bankruptcy Code, be taxed under any law imposing a stamp
tax, transfer tax or other similar tax.

      6.7 Section 346 Injunction. In accordance with section 346 of the
Bankruptcy Code for the purposes of any state or local law imposing a tax,
income will not be realized by the Estates, the Debtors or the Reorganized
Debtors by reason of the forgiveness or discharge of indebtedness resulting from
the consummation of the Plan. As a result, each state or local taxing authority
is permanently enjoined and restrained, after the Confirmation Date, from
commencing, continuing or taking any act to impose, collect or recover in any
manner any tax against the Debtors or the Reorganized Debtors arising by reason
of the forgiveness or discharge of indebtedness under the Plan.

      6.8 Effectuating Documents and Further Transactions. The Chief Executive
Officer, President, Chief Financial Officer or any Vice President of any Debtor
shall be authorized to execute, deliver, file or record such contracts,
instruments, releases, indentures, and other agreements or documents and take or
direct such actions as may be necessary or appropriate to effectuate and further
evidence the terms and conditions of the Plan. The Secretary or any Assistant
Secretary of any Debtor shall be authorized to certify or attest to any of the
foregoing actions.

      6.9 Corporate Action. All matters provided for under the Plan involving
the corporate structure of the Debtors or the Reorganized Debtors, or any
corporate action to be taken by, or required of the Debtors or the Reorganized
Debtors shall be deemed to have occurred and be effective as provided herein,
and shall be authorized and approved in all respects without any requirement for
further action by the stockholders or directors of any of such entities.

      6.10 Allocation of Reserved Common Stock. In the event that the holders of
the Senior Note Claims (as a Class) vote to reject the Plan, as of the Effective
Date, the Reserved Common Stock shall be issued and held in escrow pending a
Final Order of the Bankruptcy Court allocating the Reserved Common Stock between
the Plan Trust and the Senior Note Claims; provided, however, that in no event
shall less than 51% of the Reserved Common Stock, calculated in terms of voting
common shares and total economic equity value of Reorganized Congoleum, be
allocated to the Plan Trust as the Plan Trust Common Stock.

      6.11 Transfer Limitations under Section 382(1)(5) of the IRC. If
Reorganized Congoleum is eligible for and avails itself of the exception
described in Section 382(1)(5) of the IRC, Reorganized Congoleum's equity
interests, from and after the Effective Date, will be subject to such
restrictions that, in the determination of Reorganized Congoleum, are necessary
to ensure that Reorganized Congoleum will not experience another "ownership
change" as defined in Section 382(g) of the IRC within the period described in
Section 382(1)(5)(D) of the IRC.


                                       39
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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


                                   ARTICLE VII

            PROVISIONS GOVERNING DISTRIBUTIONS WITH RESPECT TO CLAIMS
                      OTHER THAN PLAN TRUST ASBESTOS CLAIMS

      7.1 Plan Distributions. The Disbursing Agent shall make all distributions
required under the Plan (other than distributions to holders of Plan Trust
Asbestos Claims). Distributions shall be made on the Distribution Date (unless
otherwise provided herein or ordered by the Bankruptcy Court) with respect to
all Claims except for Plan Trust Asbestos Claims. Distributions to be made on
the Distribution Date shall be deemed actually made on the Distribution Date if
made either (a) on the Distribution Date or (b) as soon as practicable
thereafter. With respect to Plan Trust Asbestos Claims, distributions to holders
of Plan Trust Asbestos Claims shall be made in accordance with the Plan Trust
Agreement and/or the TDP, as applicable.

      7.2 Delivery of Distributions. Distributions to holders of Allowed Claims
other than Asbestos Claims shall be made by the Disbursing Agent (a) at the
holder's last known address, or (b) at the address in any written notice of
address change delivered to the Disbursing Agent or the Plan Trustees, as
applicable. If any holder's distribution is returned as undeliverable, no
further distributions to such holder shall be made, unless and until the
Disbursing Agent is notified of such holder's then current address, at which
time all missed distributions shall be made to such holder without interest.
Amounts in respect of undeliverable distributions made through the Disbursing
Agent shall be returned to the appropriate Reorganized Debtor until such
distributions are claimed or become unclaimed property pursuant to Section 7.4
of the Plan. With respect to Plan Trust Asbestos Claims, distributions to the
holders of Plan Trust Asbestos Claims shall be made in accordance with the Plan
Trust Agreement and/or the TDP, as applicable.

      7.3 Withholding of Taxes. The Disbursing Agent shall withhold from any
assets or property distributed under the Plan any assets or property that must
be withheld pursuant to applicable law.

      7.4 Unclaimed Property. Any Cash, assets and other property to be
distributed on account of any Claim other than a Plan Trust Asbestos Claim under
the Plan that remain unclaimed (including by an Entity's failure to negotiate a
check issued to such Entity) or otherwise not deliverable to the Entity entitled
thereto before the later of (a) one year after the date of distribution or (b)
120 calendar days after an order allowing such Entity's Claim becomes a Final
Order, shall become vested in, and shall be transferred and delivered to, the
Reorganized Debtors. In such event, such Entity's Claim shall no longer be
deemed to be Allowed and such Entity shall be deemed to have waived its rights
to such payments or distributions under the Plan pursuant to section 1143 of the
Bankruptcy Code and shall have no further Claim in respect of such distribution
and shall not participate in any further distributions under the Plan with
respect to such Claim.


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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


                                  ARTICLE VIII

                          RESOLUTION OF DISPUTED CLAIMS

      8.1 Disallowance of Improperly Filed Claims. Subject to section 502(j) of
the Bankruptcy Code and Bankruptcy Rules 3008 and 9006, any Administrative
Claim, Asbestos Property Damage Claim or Claim (other than Asbestos Personal
Injury Claims and ABI Claims) for which the filing of a Proof of Claim,
application or motion with the Bankruptcy Court is required under the terms of
the Bankruptcy Code, the Bankruptcy Rules, any order of the Bankruptcy Court
(including one providing a Bar Date) or the Plan shall be Disallowed if and, to
the extent that such Proof of Claim (or other filing) is not timely and properly
made.

      8.2 Prosecution of Objections to Claims. Unless otherwise ordered by the
Bankruptcy Court after notice and a hearing, after the Effective Date the
Reorganized Debtors shall have the exclusive right to make and file objections
to Proofs of Claims, other than Proofs of Claims in respect of Asbestos Personal
Injury Claims, Unknown Asbestos Claims, Professional Fee Claims and ABI Asbestos
Claims, at any time on or before ninety (90) days after the later of (i) the
Effective Date or (ii) the date on which such Claim was filed with the
Bankruptcy Court unless no Proof of Claim is required to be filed pursuant to
Bankruptcy Rule 3002, the Plan or any order of the Bankruptcy Court; provided,
however, that (x) this deadline may be extended by the Bankruptcy Court on
motion by the Debtors or the Reorganized Debtors, as applicable, and (y) neither
the Debtors, the Reorganized Debtors nor any other Person may file an objection
to any (1) Claim that was Allowed by a Final Order entered during the
Reorganization Cases, or (2) Claim Allowed by the Plan. In addition, unless
otherwise ordered by the Bankruptcy Court after notice and a hearing, after the
Effective Date the Reorganized Debtors, subject to Sections 14.5 and 14.11 of
the Plan, shall have the exclusive right to make and file objections to
Administrative Claims and to amend the Schedules or to object to any Claim
specified on the Schedules, at any time on or before sixty (60) days after the
later of (i) the Effective Date or (ii) the date on which such Claim was filed
with the Bankruptcy Court unless no Proof of Claim is required to be filed
pursuant to Bankruptcy Rule 3002, the Plan or any order of the Bankruptcy Court;
provided, however, that (x) this deadline may be extended by the Bankruptcy
Court on motion by the Debtors or the Reorganized Debtors, as applicable, and
(y) neither the Debtors, the Reorganized Debtors nor any other Person may file
an objection to any (1) Claim that was Allowed by a Final Order entered during
the Reorganization Cases, or (2) Claim Allowed by the Plan. Without prejudice to
the right of any Asbestos Insurance Company to assert any Asbestos Insurer
Coverage Defenses, after the Effective Date, only the Plan Trustees shall have
the authority to contest Asbestos Personal Injury Claims, Unknown Asbestos
Claims and Asbestos Property Damage Claims and litigate to judgment, settle or
withdraw such objections and each Asbestos Personal Injury Claim, Unknown
Asbestos Claim and Asbestos Property Damage Claim, whether or not a Proof of
Claim was filed with the Bankruptcy Court, shall be satisfied exclusively in
accordance with the Plan Trust Documents.

      8.3 No Distributions Pending Allowance. Notwithstanding any other
provision hereof, if a Claim or any portion of a Claim is a Disputed Claim, no
payment or distribution shall be made on account of such Disputed Claim, unless
and until such Disputed Claim becomes an Allowed Claim.


                                       41
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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      8.4 Distributions After Allowance. Payments and distributions to each
holder of a Claim that is Disputed, or that is not Allowed, to the extent that
such Claim ultimately becomes Allowed, shall be made in accordance with the
provisions hereof governing the Class of Claims in which such Claim is
classified. As soon as practicable after the date that the order or judgment of
the Bankruptcy Court allowing any Disputed Claim (other than a disputed Asbestos
Claim) becomes a Final Order, the Reorganized Debtors shall distribute to the
holder of such Claim any payment or property that would have been distributed to
such holder if the Claim had been Allowed as of the Effective Date (or such
other date on which such distribution would have been made).

                                   ARTICLE IX

                        TREATMENT OF EXECUTORY CONTRACTS,
                        UNEXPIRED LEASES AND SETTLEMENTS

      9.1 Assumption of Unexpired Leases and Executory Contracts.

            (a) Assumption. Except for any unexpired lease or executory contract
that the Debtors reject or designate as being subject to rejection on or before
the Effective Date, and except for the Joint Venture Agreement, as of the
Effective Date, all executory contracts and unexpired leases not previously
assumed by the Debtors pursuant to section 365 of the Bankruptcy Code shall be
deemed to have been assumed by the Debtors, subject to Section 6.2, and the Plan
shall constitute a motion to assume such executory contracts and unexpired
leases. Subject to the occurrence of the Effective Date, entry of the
Confirmation Order by the Bankruptcy Court shall constitute approval of such
assumptions pursuant to section 365(a) of the Bankruptcy Code and a finding by
the Bankruptcy Court that each such assumption is in the best interests of the
Debtors, the Estates and all parties in interest in the Reorganization Cases.
With respect to each such executory contract or unexpired lease assumed by the
Debtors, unless otherwise determined by the Bankruptcy Court pursuant to a Final
Order or agreed to by the parties thereto on or before the Effective Date, any
defaults of the Debtors with respect to such assumed executory contracts or
leases existing as of the Effective Date shall be cured in the ordinary course
of the Reorganized Debtors' business promptly after any such default becomes
known to the Debtors and, if disputed, established pursuant to applicable law by
the Bankruptcy Court, and the assumed executory contracts or leases shall be
binding upon and enforceable upon the parties thereto, subject to any rights and
defenses existing thereunder. Subject to the occurrence of the Effective Date,
upon payment of such cure amount all defaults of the Debtors existing as of the
Confirmation Date with respect to such executory contract or unexpired lease
shall be deemed cured.

            (b) Rejection. Notwithstanding subpart (a) of this Section 9.1, the
Debtors may reject those executory contracts and unexpired leases listed on an
exhibit to be provided to the Bankruptcy Court in advance of the Confirmation
Hearing (as such list may be amended or supplemented up to and including the
Confirmation Date).

            (c) Assumption of Joint Venture Agreement. On the Effective Date,
the Joint Venture Agreement shall be deemed to have been assumed by Reorganized
Congoleum, and the obligations of Reorganized Congoleum to ABI thereunder shall
be subject to the provisions set forth in the Plan.


                                       42
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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


            (d) Assumption of Intercompany Agreements. On the Effective Date,
the Intercompany Agreements shall be deemed to have been assumed by Reorganized
Congoleum.

      9.2 Damages Upon Rejection. The Bankruptcy Court shall determine the
dollar amount, if any, of the Claim of any Entity seeking damages by reason of
the rejection of any executory contract or unexpired lease; provided, however,
that such Entity must file a Proof of Claim with the Bankruptcy Court on or
before thirty (30) calendar days following the later of the Confirmation Date or
the date of rejection of the executory contract or unexpired lease. To the
extent that any such Claim is Allowed by the Bankruptcy Court by Final Order,
such Claim shall become, and shall be treated for all purposes under the Plan
as, a Class 7 General Unsecured Claim, and the holder thereof shall receive
distributions as a holder of an Allowed Claim in such Class pursuant to the
Plan. The Debtors shall notify those Entities that may assert a Claim for
damages from the rejection of an executory contract or unexpired lease of this
bar date for filing a Proof of Claim in connection therewith.

      9.3 Executory and Other Settlements. Prior to the Effective Date, the
Debtors may seek Bankruptcy Court approval of additional settlements with
holders of Asbestos Claims. The Plan Trust, or the Reorganized Debtors, as may
be appropriate, shall make payments in accordance with the terms of any
settlement under the terms of this Section 9.3 and a Final Order approving such
settlement and the Plan Trust Agreement and/or the TDP, as applicable, with
respect to the Plan Trust Asbestos Claims.

      9.4 Insurance Agreements. Except to the extent expressly set forth in any
Asbestos Insurance Settlement Agreement, nothing contained in the Plan or any
negotiations leading up to the Plan, including this Section 9.4, shall
constitute a waiver of: (i) any claim, right, or cause of action that any of the
Debtors or the Plan Trust, as applicable, may have against any insurer,
including under any insurance agreement; or (ii) any Asbestos Insurer Coverage
Defenses that any Asbestos Insurance Company may have against the Debtors or the
Plan Trust. The discharge and release provisions contained in the Plan shall
neither diminish nor impair the duties or obligations of any Debtor or any other
Entity under any Asbestos Insurance Policy or agreement relating thereto, nor
shall the discharge and release provisions contained in the Plan diminish nor
impair the duties, obligations or the Asbestos Insurer Coverage Defenses of any
Asbestos Insurance Company under any Asbestos Insurance Policy or agreement
relating thereto.

      9.5 Compensation and Benefits Programs.

            (a) Unless otherwise agreed to by the affected parties or modified
by order of the Bankruptcy Court, all of the Debtors' obligations under
employment and severance policies, and all compensation and benefit plan,
policies, and programs shall be treated as though they are executory contracts
that are deemed assumed under the Plan.

            (b) As of the Effective Date, the Pension Plans shall be deemed to
have been assumed by Reorganized Congoleum. Reorganized Congoleum shall continue
the Pension Plans, satisfy the minimum funding standards pursuant to 26 U.S.C.
ss. 412 and 29 U.S.C. ss. 1082, and administer the Pension Plans in accordance
with their terms and the provisions of ERISA. Furthermore, nothing in the Plan
shall be construed as discharging, releasing or relieving the Debtors or any
Reorganized Debtor, or any party, in any capacity, from any liability imposed


                                       43
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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


under any law or regulatory provision with respect to the Pension Plans or the
Pension Benefit Guaranty Corporation ("PBGC"). The PBGC and the Pension Plans
shall not be enjoined or precluded from enforcing such liability as a result of
any provision of the Plan or the Confirmation Order. Notwithstanding anything in
this Section 9.5, the Plan Trust shall have no liability to any Entity with
respect to the Pension Plans.

      9.6 Retiree Benefits. Notwithstanding any other provisions of the Plan
(other than the last sentence of this Section 9.6), any payments that are due to
any individual for the purpose of providing or reimbursing payments for retired
employees and their spouses and dependents for medical, surgical, or hospital
care benefits, or benefits in the event of sickness, accident, disability, or
death under any plan, fund, or program (through the purchase of insurance or
otherwise) maintained or established in whole or in part by the Debtors prior to
the Petition Date shall be continued for the duration of the period, if any,
that the Debtors have obligated themselves to provide such benefits.
Notwithstanding the foregoing, no employee or retired employee (nor their
spouses or dependents and beneficiaries) of the Debtors or the Reorganized
Debtors shall be entitled to assert any Asbestos Claim against the Debtors or
the Reorganized Debtors.

      9.7 Indemnification of Directors, Officer and Employees. The obligations
of the Debtors to indemnify any Person serving at any time on or prior to the
Effective Date as one of their directors, officers or employees by reason of
such Person's service in such capacity, or as a director, officer or employee of
any other corporation or legal entity, to the extent provided in the Debtors'
constituent documents, or by a written agreement with the Debtors, or pursuant
to applicable general corporation law, each as applicable, shall be deemed and
treated as executory contracts that are assumed by the Reorganized Debtors
pursuant to the Plan and section 365 of the Bankruptcy Code as of the Effective
Date. Accordingly, such indemnification obligations shall be treated as General
Unsecured Claims and shall survive Unimpaired and unaffected by entry of the
Confirmation Order, irrespective of whether such indemnification is owed for an
act or event occurring before or after the Petition Date.

                                   ARTICLE X

                       ACCEPTANCE OR REJECTION OF THE PLAN

      10.1 Classes Entitled to Vote. The holders of Claims or Interests in each
Impaired Class of Claims or Interests, i.e., Classes 2, 3, 6, 9, 10, 11, 12 and
13, whose Claims or Interests are Allowed or temporarily allowed for voting
purposes, are entitled to vote to accept or reject the Plan.

      10.2 Acceptance by Impaired Classes of Claims. Pursuant to section 1126(c)
of the Bankruptcy Code, an Impaired Class of Claims shall have accepted the Plan
if (a) the holders of at least two-thirds in dollar amount of the claims
actually voting in such Class (other than Claims held by any holder designated
pursuant to section 1126(e) of the Bankruptcy Code) have voted to accept the
Plan and (b) more than one-half in number of such claims actually voting in such
Class (other than Claims held by any holder designated pursuant to section
1126(e) of the Bankruptcy Code) have voted to accept the Plan.

      10.3 Acceptance by Impaired Class of Interests. Pursuant to section
1126(d) of the Bankruptcy Code, an Impaired Class of Interests shall have
accepted the Plan if the holders of at least two-thirds in amount of the Allowed
Interests actually voting in such Class (other than Interests held by any holder
designated pursuant to section 1126(e) of the Bankruptcy Code) have voted to
accept the Plan.


                                       44
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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      10.4 Acceptance Pursuant to Section 524(g) of the Bankruptcy Code. The
Plan shall have been voted upon favorably as required by section
524(g)(2)(B)(ii)(IV)(bb) of the Bankruptcy Code.

      10.5 Presumed Acceptance of Plan. Classes 1, 4, 5, 7, 8 and 14 are
Unimpaired. Under section 1126(f) of the Bankruptcy Code, the holders of Claims
and Interests in such Classes are conclusively presumed to have voted to accept
the Plan.

      10.6 Reservation of Rights. In the event that any Impaired Class fails to
accept the Plan by the requisite numbers and amounts required by the Bankruptcy
Code, the Debtors reserve the right to seek confirmation of the Plan by means of
the fair and equitable power contained in section 1129(b) of the Bankruptcy
Code.

                                   ARTICLE XI

                  CONDITIONS TO CONFIRMATION AND EFFECTIVENESS

      11.1 Conditions to Confirmation. Confirmation of the Plan shall not occur
unless each of the following conditions has been satisfied or waived in
accordance with Section 11.3 below. These conditions to Confirmation, which are
designed, among other things, to ensure that the Injunctions, releases, and
discharges set forth in Article XII shall be effective, binding and enforceable,
are as follows:

                  (a) The Bankruptcy Court shall have made specific findings and
determinations, among others, in substantially the following form:

                  (i) The Discharge Injunction and the Asbestos Channeling
Injunction are to be implemented in connection with the Plan and the Plan Trust;

                  (ii) As of the Petition Date, Congoleum has been named as a
defendant in personal injury, wrongful death or property damage actions seeking
recovery for damages allegedly caused by the presence of, or exposure to,
asbestos or asbestos-containing products;

                  (iii) The Plan Trust, upon the Effective Date, shall assume
the liabilities of the Debtors with respect to Plan Trust Asbestos Claims and
Demands;

                  (iv) The Plan Trust is to be funded in part by securities of
Reorganized Congoleum in the form of the New Class A Common Stock and the New
Convertible Security and constitutes an obligation of Reorganized Congoleum to
make future payments to the Plan Trust;

                  (v) In the event that the holders of the Senior Note Claims
(Class 6) vote to accept the Plan, the Plan Trust, on the Effective Date, will
hold the New Class A Common Stock and the New Convertible Security, and if
certain contingencies occur, the Plan Trust will be entitled to redeem or
convert the New Convertible Security, and, in accordance with the terms of the
New Convertible Security, own a majority of the voting shares of the common
stock of Reorganized Congoleum;


                                       45
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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


                  (vi) In the event that the holders of the Senior Note Claims
(Class 6) vote to reject the Plan, then the Plan Trust shall receive its
allocable share of the Reserved Common Stock as determined by a Final Order of
the Bankruptcy Court; provided, however, that in no event shall the Plan Trust
receive less than fifty-one percent (51%) of the Reserved Common Stock.

                  (vii) The Plan Trust is to use its assets and income to pay
Plan Trust Asbestos Claims and Plan Trust Expenses;

                  (viii) Congoleum is likely to be subject to substantial future
Demands for payment arising out of the same or similar conduct or events that
gave rise to the Plan Trust Asbestos Claims, which are addressed by the Asbestos
Channeling Injunction;

                  (ix) The actual amounts, numbers and timing of future Demands
cannot be determined;

                  (x) Pursuit of Demands outside the procedures prescribed by
the Plan and the TDP is likely to threaten the Plan's purpose to deal equitably
with Plan Trust Asbestos Claims and future Demands;

                  (xi) The Plan establishes separate Classes of Asbestos
Personal Injury Claims that are to be addressed by the Plan Trust and at least
seventy-five percent (75%) of the Asbestos Claimants voting in such Classes have
accepted the Plan;

                  (xii) Pursuant to court orders or otherwise, the Plan Trust
shall operate through mechanisms such as structured, periodic or supplemental
payments, Pro Rata distributions, matrices or periodic review of estimates of
the numbers and values of Asbestos Personal Injury Claims or other comparable
mechanisms, that provide reasonable assurance that the Plan Trust shall value,
and be in a financial position to pay, Asbestos Personal Injury Claims and
Demands therefor in substantially the same manner;

                  (xiii) The Futures Representative was appointed by the
Bankruptcy Court as part of the proceedings leading to the issuance of the
Discharge Injunction and the Asbestos Channeling Injunction for the purpose of,
among other things, protecting the rights of persons that might subsequently
assert Demands of the kind that are addressed in the Discharge Injunction and
the Asbestos Channeling Injunction and transferred to the Plan Trust;

                  (xiv) In light of the benefits provided, or to be provided, to
the Plan Trust on behalf of each Protected Party, the Asbestos Channeling
Injunction is fair and equitable with respect to the persons that might
subsequently assert Demands against any Protected Party;

                  (xv) The Plan otherwise complies with section 524(g) of the
Bankruptcy Code;


                                       46
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


                  (xvi) Congoleum's contribution to the Plan Trust and ABI's
contribution of the ABI Contribution to the Plan Trust provided for herein,
together with the Asbestos Insurance Assignment, constitute substantial assets
of the Plan Trust and the reorganization;

                  (xvii) The duties and obligations of the insurers that issued
policies and their successors and assigns, or, with respect to any insolvent
insurers, their liquidators and/or the state insurance guaranty funds that bear
responsibility with respect to such rights under such policies which constitute
the Asbestos Insurance Rights and Asbestos Property Damage Insurance Rights are
not eliminated or diminished by the transfer pursuant to the Plan of the
Debtors' rights in the Asbestos Insurance Rights and Asbestos Property Damage
Insurance Rights pursuant to the Insurance Assignment Agreement;

                  (xviii) The Settling Asbestos Insurance Companies are entitled
to the benefits of the Asbestos Channeling Injunction with respect to Plan Trust
Asbestos Claims;

                  (xix) After Confirmation, each Asbestos Insurance Settlement
Agreement of a Settling Asbestos Insurance Company and each Final Order of the
Bankruptcy Court approving such Settlement Agreements shall be binding upon and
inure to the benefit of the Plan Trust and the Plan Trustees, and each of the
foregoing shall become fully bound by all of the terms and conditions of each
such Asbestos Insurance Settlement Agreement without need for further act or
documentation of any kind;

                  (xx) After Confirmation, none of the Debtors, ABI, the Futures
Representative, the Plan Trustees, the Asbestos Claimants' Committee, and the
Claimants' Representative shall seek to terminate, reduce or limit the scope of
the Asbestos Channeling Injunction or any other injunction contained in the Plan
that inures to the benefit of any Settling Asbestos Insurance Company or ABI;
and

                  (xxi) At least 95% in amount of the allowed and valid votes
with respect to the Plan for each of Classes 2 and 3 shall have accepted the
Plan.

            (b) Confirmation Order. The Bankruptcy Court shall have made such
findings and determinations regarding the Plan as shall enable the entry of the
Confirmation Order and any other order entered in conjunction therewith, each of
which shall be in form and substance acceptable to the Debtors and ABI and,
insofar as such findings and determinations affect the Financing Order or the
rights of Wachovia thereunder, Wachovia.

      11.2 Conditions to Effectiveness. Notwithstanding any other provision of
the Plan or the Confirmation Order, the Effective Date of the Plan shall not
occur unless and until each of the following conditions has been satisfied or
waived in accordance with Section 11.3 below:

            (a) Confirmation Order. The Confirmation Order shall have been
entered by the Bankruptcy Court and affirmed by the District Court or entered by
the District Court and the Confirmation Order and any order of the District
Court shall be in form and substance acceptable to the Debtors and ABI and the
Confirmation Order (and affirming order of the District Court) shall have become
a Final Order; provided, however, that the Effective Date may occur at a point
in time when the Confirmation Order is not a Final Order at the option of the
Debtors, with the written consent of ABI, unless the effectiveness of the
Confirmation Order has been stayed, reversed or vacated. The Effective Date may
occur, again at the option of the Debtors, with the written consent of ABI, on
the first Business Day immediately following the expiration or other termination
of any stay of effectiveness of the Confirmation Order.


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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


            (b) Injunctions. The Discharge Injunction, the Asbestos Channeling
Injunction and the Anti-Suit Injunction shall be in full force and effect.

            (c) Amended Credit Agreement. The Amended Credit Agreement and all
documents to be executed in connection with the Amended Credit Agreement, in
form and substance reasonably satisfactory to the Debtors, shall not restrict
Reorganized Congoleum's obligations to make scheduled interest payments on the
New Convertible Security (if applicable) except as provided in the New
Convertible Security, and shall have been executed and delivered and all
conditions precedent to effectiveness thereof shall have been satisfied or
waived by the parties thereto.

            (d) Plan Documents. The Plan Documents necessary or appropriate to
implement the Plan (which shall include without limitation, the New Convertible
Security (if applicable), the Plan Trust Note, the Plan Trust Documents and the
Insurance Assignment Agreement) shall have been executed, delivered and, where
applicable, filed with the appropriate governmental authorities; all conditions
precedent to the effectiveness of each of such Plan Documents shall have been
satisfied or waived by the respective parties thereto; and the Plan Documents
shall be in full force and effect.

            (e) Other Assurances. The Debtors shall have obtained either (i) a
private letter ruling from the Internal Revenue Service establishing that the
Plan Trust is a "qualified settlement fund" pursuant to Section 468(B) of the
IRC and the regulations issued pursuant thereto, or (ii) other decisions,
opinions or assurances regarding certain tax consequences of the Plan,
satisfactory to the Debtors, the Reorganized Debtors, the Futures Representative
and the Asbestos Claimants' Committee.

            (f) Other Approvals, Documents and Actions. All authorizations,
consents and regulatory approvals required, if any, in connection with the
consummation of the Plan shall have been obtained, and all actions, documents,
and agreements necessary to implement the Plan shall have been effected or
executed.

            (g) Insurance Settlement Protocol. The Debtors shall have obtained
the consent of the Asbestos Claimants' Committee and the Futures Representative
prior to reaching a compromise or settlement of any Asbestos Insurance Policy on
or after August 4, 2006.

      11.3 Waiver of Conditions. Each of the conditions set forth in Sections
11.1 and 11.2 above may be waived in whole or in part by the Debtors, with the
written consent of ABI and, solely with respect to Section 11.2(e) above, the
Asbestos Claimants' Committee and the Futures Representative and, solely with
respect to Section 11.1(a)(xxi) above, the Claimants' Representative, the
Asbestos Claimants' Committee and the Futures Representative, each in its sole
discretion, without any notice to other parties in interest or the Bankruptcy
Court and without a hearing. The failure of the Debtors to exercise any of the
foregoing rights shall not be deemed a waiver of any other rights, and each such
right shall be deemed an ongoing right that may be asserted at any time.


                                       48
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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


                                  ARTICLE XII

                       INJUNCTIONS, RELEASES AND DISCHARGE

      12.1 Discharge.

            (a) Except as specifically provided in the Plan, the Plan Documents
or in the Confirmation Order, as of the Effective Date, Confirmation shall
discharge the Debtors and the Reorganized Debtors pursuant to section
1141(d)(1)(A) of the Bankruptcy Code from any and all Claims of any nature
whatsoever and Demands including, without limitation, any Claims, demands and
liabilities that arose before Confirmation, and all debts of the kind specified
in section 502(g), 502(h) or 502(i) of the Bankruptcy Code, whether or not (a) a
Proof of Claim based on such Claim was filed or deemed filed under section 501
of the Bankruptcy Code, or such Claim was listed on the Schedules of the
Debtors, (b) such Claim is or was Allowed under section 502 of the Bankruptcy
Code, or (c) the holder of such Claim has voted on or accepted the Plan. Except
as specifically provided in the Plan or Plan Documents, the rights that are
provided in the Plan as of the Effective Date shall be in exchange for and in
complete satisfaction, settlement and discharge of all Claims (including without
limitation Asbestos Claims) or Demands against, Liens on, and interests in the
Debtors or the Reorganized Debtors or any of their assets or properties.
Notwithstanding anything herein to the contrary, nothing in this Section 12.1
shall affect the right of any Asbestos Insurance Company to assert any Asbestos
Insurer Coverage Defenses.

            (b) Notwithstanding any other provision of the Plan to the contrary,
Confirmation shall not discharge any pre-Petition Date or post-Petition Date,
pre-Confirmation Date liability that may be due from any of the Debtors to the
Internal Revenue Service as currently set forth in that certain Proof of Claim
filed by the Internal Revenue Service in the alleged amounts of $6,608,626.01
and $8,760,686.95 and that certain Administrative Expense Claim in the alleged
amount of $4,002,431.97. Should any pre-Petition Date or post-Petition Date,
pre-Confirmation Date tax liabilities be determined by the Internal Revenue
Service to be due from any of the Debtors for any of the tax periods reflected
by such Proof of Claim or Administrative Expense Claim, such liabilities shall
be determined administratively or in a judicial forum in the manner in which
such liabilities would have been resolved had these Reorganization Cases not
been commenced. Any resulting liabilities determined pursuant to a Final Order
or other final determination shall be paid as if these Reorganization Cases had
not been commenced.

      12.2 Release of Representatives of the Debtors. To the extent permitted by
law applicable to cases under the Bankruptcy Code in the judicial district in
which the Bankruptcy Court is located, except as otherwise specifically provided
in the Plan and the Plan Documents, for good and valuable consideration, the
receipt and sufficiency of which is acknowledged in the Plan, all current and
former Representatives of the Debtors, on and after the Effective Date, are
released from any and all Claims, obligations, rights, suits, damages, causes of
action, remedies and liabilities whatsoever, whether known or unknown, foreseen
or unforeseen, existing or hereafter arising, in law, equity or otherwise, that
any Entity would have been legally entitled to assert in its own right (whether
individually or collectively) or on behalf of the holder of any Claim or


                                       49
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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


Interest or other Entity, based in whole or in part, upon any act or omission,
transaction, agreement, event, or other occurrence taking place on or before the
Effective Date, for claims or liabilities resulting from their services as
officers or directors of the Debtors or to the extent such claims or liabilities
relate to the business, operations or management of the Debtors prior to the
Effective Date or to their conduct as professionals or advisors to any of the
Debtors. For the avoidance of doubt, in no event shall any such Representative
be released in the case of the gross negligence or willful misconduct of such
Representative.

      12.3 Exculpation. To the extent permitted by law applicable to cases under
the Bankruptcy Code in the judicial district in which the Bankruptcy Court is
located, as of the Effective Date, (a) each of the Reorganized Debtors, the
Debtors, the Futures Representative, the Pre-Petition Asbestos Claimants'
Committee, the Asbestos Claimants' Committee, the Bondholders' Committee, the
Plan Trustees, ABI and any of their respective Representatives (i) shall not
have or incur any liability to any Entity for any act or omission in connection
with or arising out of the negotiation of the Plan or any Plan Document,
negotiation of the settlement provided in the Collateral Trust, negotiation of
the settlement provided in the Claimant Agreement, the pursuit of confirmation
of the Plan, the consummation of the Plan, the Collateral Trust Agreement, the
Claimant Agreement, the Security Agreement or the administration of the Plan or
the property to be distributed under the Plan and the Class 2 and Class 3 and 11
Settlements, provided, however, that this exculpation provision shall not apply
to Asbestos Insurer Coverage Defenses; and (ii) in all respects shall be
entitled to rely upon the advice of counsel with respect to their duties and
responsibilities under the Plan and the other Plan Documents, provided, however,
that in no event shall the Pre-Petition Asbestos Claimants' Committee be
exculpated from liability under this Section 12.3 for any relief granted or any
costs or expenses incurred in connection with the Avoidance Actions and in no
event shall this Section 12.3 exculpate any party from liability for any claim
asserted in the Avoidance Actions; and (b) the Claimants' Representative shall
not have or incur any liability to any Entity in connection with or arising out
of the receipt of a two million dollars ($2,000,000) advance from the Debtors
prior to the Petition Date on account of the Claimants' Representatives' fees
and expenses, provided, however, that in no event shall the Claimants'
Representative be exculpated from liability under this Section 12.3 for any
costs or expenses incurred in connection with the Avoidance Actions. For the
avoidance of doubt, in no event shall any such party be exculpated from
liability under this Section 12.3 in the case of the gross negligence or willful
misconduct of such party.

      12.4 Releases by Holders of Claims. To the extent permitted by law
applicable to cases under the Bankruptcy Code in the judicial district in which
the Bankruptcy Court is located, other than rights to the treatment provided in
Article V of the Plan or as otherwise provided in the Plan or the Plan Documents
herein, on and after the Effective Date, each holder of a Claim who has accepted
the Plan shall be deemed to have unconditionally released the Released
Non-Debtor Parties, the Pre-Petition Asbestos Claimants' Committee, the Asbestos
Claimants' Committee, the Bondholders' Committee and their current and former
Representatives from any and all Claims, obligations, rights, suits, damages,
causes of action, remedies, and liabilities whatsoever, whether known or
unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity,
or otherwise, that such Entity would have been legally entitled to assert
(whether individually or collectively), based in whole or in part upon any act
or omission, transaction, agreement, event, or other occurrence taking place on
or before the Effective Date by the Debtors or the Reorganized Debtors, the
Reorganization Cases, or the negotiation, formulation, and preparation of the
Plan, the Plan Documents or any related agreements, instruments or other
documents, provided, however, that in no event shall the Pre-Petition Asbestos
Claimants' Committee be released from liability for any relief granted or any
costs or expenses incurred in connection with the Avoidance Actions and in no
event shall this Section 12.4 release any party from liability for any claim
asserted in the Avoidance Actions.


                                       50
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      In addition, pursuant to this Section 12.4 and the Confirmation Order,
which may include release(s) for the benefit of any Settling Asbestos Insurance
Company consistent with the terms of this Section 12.4 and the terms of the
relevant Asbestos Insurance Settlement Agreement, any holder of a Plan Trust
Asbestos Claim that receives a payment from the Plan Trust shall be deemed to
have unconditionally released the Plan Trust and each Settling Insurance Company
from any and all Claims, obligations, rights, suits, damages, causes of action,
remedies, and liabilities whatsoever, whether known or unknown, foreseen or
unforeseen, existing or hereafter arising, in law, equity, or otherwise, arising
from, relating to, or involving the manufacture, sale, distribution,
installation, formulation, marketing, transport, handling or any other activity
involving any asbestos containing products of Congoleum and any of Congoleum
entities identified in the Confirmation Order, which may incorporate the terms
of one or more Asbestos Insurance Settlement Agreement, or their premises to the
extent such Claim arises from, relates to or involves exposure to asbestos,
including without limitation, any operation claims, contribution claims, direct
action claims, and insurance coverage claims. For the avoidance of doubt, in no
event shall any such party be released under this Section 12.4 in the case of
the gross negligence or willful misconduct of such party.

      12.5 Discharge Injunction. Except as specifically provided in the Plan
Documents to the contrary, the satisfaction, release, and discharge set forth in
Section 12.1 shall also operate as an injunction, pursuant to sections 105,
524(g) and 1141 of the Bankruptcy Code, prohibiting and enjoining the
commencement or continuation of any action, the employment of process or any act
to collect, recover from, or offset (a) any Claim or Demand against or Interest
in the Debtors, the Reorganized Debtors, the Collateral Trust, or the Plan Trust
by any Entity and (b) any cause of action, whether known or unknown, against the
Released Parties based on such Claim or Interest described in subpart (a) of
this Section 12.5.

      12.6 Asbestos Channeling Injunction. The sole recourse of the holder of a
Plan Trust Asbestos Claim or Demand on account of such Claim or Demand or of a
Person that had or could have asserted an Asbestos Claim or Demand shall be to
the Plan Trust pursuant to the provisions of the Asbestos Channeling Injunction,
the Plan, the Plan Trust Agreement and the TDP, and such holder shall have no
right whatsoever at any time to assert its Plan Trust Asbestos Claim or Demand
against the Debtors, Reorganized Debtors, any other Protected Party, or any
property or interest in property of the Debtors, the Reorganized Debtors, or any
other Protected Party. Without limiting the foregoing, from and after the
Effective Date, the Asbestos Channeling Injunction shall apply to all present
and future holders of Plan Trust Asbestos Claims and Demands, and all such
holders shall be permanently and forever stayed, restrained, and enjoined from
taking any of the following actions for the purpose of, directly or indirectly,
collecting, recovering, or receiving payment of, on, or with respect to any Plan
Trust Asbestos Claims and Demands, other than from the Plan Trust in accordance
with the Asbestos Channeling Injunction and pursuant to the Plan, the Plan Trust
Agreement and the TDP:

            (a) commencing, conducting, or continuing in any manner, directly or
indirectly, any suit, action, or other proceeding (including a judicial,
arbitration, administrative, or other proceeding) in any forum against or
affecting any Protected Party or any property or interests in property of any
Protected Party;


                                       51
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


            (b) enforcing, levying, attaching (including any prejudgment
attachment), collecting, or otherwise recovering by any means or in any manner,
whether directly or indirectly, any judgment, award, decree, or other order
against any Protected Party or any property or interests in property of any
Protected Party;

            (c) creating, perfecting, or otherwise enforcing in any manner,
directly or indirectly, any encumbrance against any Protected Party, or any
property or interests in property of any Protected Party;

            (d) setting off, seeking reimbursement of, contribution from, or
subrogation against, or otherwise recouping in any manner, directly or
indirectly, any amount against any liability owed to any Protected Party or any
property or interests in property of any Protected Party; and

            (e) proceeding in any manner in any place with regard to any matter
that is subject to resolution pursuant to the Plan Trust, except in conformity
and compliance with the Plan, the Plan Trust Agreement and the TDP.

      Any right, claim or cause of action that an Asbestos Insurance Company may
have been entitled to assert against a Settling Asbestos Insurance Company based
on or relating to Asbestos Claims shall be channeled to and become a right,
claim or cause of action as an offset claim against the Plan Trust and not
against the Settling Asbestos Insurance Company in question and all persons,
including any Asbestos Insurance Company, shall be enjoined from asserting any
such right, claim or cause of action against a Settling Asbestos Insurance
Company.

      Except as otherwise expressly provided in the Plan, nothing contained in
the Plan shall constitute or be deemed a waiver of any claim, right or cause of
action that the Debtors, the Reorganized Debtors, or the Plan Trust may have
against any Entity in connection with or arising out of or related to an
Asbestos Claim; provided, however, none of the Debtors, the Reorganized Debtors,
the Plan Trust or any of their respective successors or assigns may assert
against ABI or any ABI Entity any claim, right or cause of action arising out of
or related to any Asbestos Claim. Notwithstanding any other provision in the
Plan to the contrary, nothing in the Plan shall be understood to channel,
prevent, impair or limit in any way enforcement against the Debtors, the
Reorganized Debtors, or any other Protected Party of any rights provided in
connection with any Workers' Compensation Claim.

      12.7 Reservation of Rights. Notwithstanding any other provision of the
Plan to the contrary, the satisfaction, release and discharge, and the
Injunctions set forth in Article XII, shall not serve to satisfy, discharge,
release, or enjoin (a) claims by the Plan Trust, the Reorganized Debtors, ABI,
and their Affiliates, or any other Entity, as the case may be, against (i) the
Plan Trust for payment of Plan Trust Asbestos Claims in accordance with the
Plan, the Plan Trust Agreement and the TDP, as applicable, (ii) the Plan Trust
for the payment of Plan Trust Expenses, or (iii) the Reorganized Debtors, the
Plan Trust, or any other Entity, to enforce the provisions of Section 6.2 or any
provision of the Plan or another Plan Document, or (b) the rights of any
Asbestos Insurance Company to assert any claim, debt, obligation, cause of
action or liability for payment against any other Asbestos Insurance Company
that is not a Settling Asbestos Insurance Company.


                                       52
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      12.8 Rights Against Non-Debtors under Securities Laws. Notwithstanding any
language to the contrary contained in the Disclosure Statement, Plan, and/or
Confirmation Order, no provision shall release any non-Debtor, including any
current and/or former officer and/or director of the Debtors and/or any
non-Debtor included in the Released Non-Debtor Parties, from liability to the
United States Securities and Exchange Commission, in connection with any legal
action or claim brought by such governmental unit against such Person(s).

      12.9 Rights Against Debtors Under Environmental Laws. Environmental rights
and Claims of Governmental Units under applicable Environmental Laws shall
survive the Reorganization Cases, shall not be discharged, impaired or adversely
affected by the Plan and the Reorganization Cases and shall be determined in the
manner and by the administrative or judicial tribunals in which such rights or
Claims would have been resolved or adjudicated if the Reorganization Cases had
not been commenced. Governmental Units need not file any Proofs of Claim under
Environmental Laws in the Reorganization Cases in order to preserve Claims under
Environmental Laws. Nothing in the Confirmation Order or Plan shall be construed
as releasing or relieving any Entity of any liability under any Environmental
Law.

      12.10 Disallowed Claims and Disallowed Interests. On and after the
Effective Date, the Debtors shall be fully and finally discharged from any
liability or obligation on a Disallowed Claim or a Disallowed Interest and any
order creating a Disallowed Claim or a Disallowed Interest that is not a Final
Order as of the Effective Date solely because of an Entity's right to move for
reconsideration of such order pursuant to section 502 of the Bankruptcy Code or
Bankruptcy Rule 3008 will nevertheless become and be deemed to be a Final Order
on the Effective Date. The Confirmation Order, except as otherwise provided
herein, or unless the Bankruptcy Court orders otherwise, shall constitute an
order: (a) disallowing all Claims (other than Plan Trust Asbestos Claims that
have not been previously expunged by Final Order of the Bankruptcy Court or
withdrawn) and Interests to the extent such Claims and Interests are not
allowable under any provision of section 502 of the Bankruptcy Code, including,
but not limited to, time-barred Claims, and Claims for unmatured interest, and
(b) disallowing or subordinating, as the case may be, any Claims, or portions of
Claims, for penalties or Non-Compensatory Damages.

      12.11 Anti-Suit Injunction. With respect to any Settling Asbestos
Insurance Company, this Section 12.11 and the Confirmation Order, which may
include anti-suit injunction(s) for the benefit of any Settling Asbestos
Insurance Company consistent with the terms of this Section 12.11 and the terms
of the relevant Asbestos Insurance Settlement Agreement, shall operate as an
injunction, pursuant to section 105(a) of the Bankruptcy Code, permanently and
forever prohibiting and enjoining the commencement, conduct or continuation of
any action or cause of action, whether known or unknown, the employment of
process or any act to collect, recover from or offset any non-asbestos claim,
Claim or demand against any Settling Asbestos Insurance Company arising out of,
relating to, or in connection with an Asbestos Insurance Policy or any other
insurance policy or rights under such other insurance policy issued to or
insuring the relationship of the relevant Settling Asbestos Insurance Companies
with, the relevant Congoleum entities that are insureds under such policies, but
such injunction pursuant to section 105(a) of the Bankruptcy Code shall not
affect or modify the rights of Persons insured under policies of insurance
except to the extent released in an Asbestos Insurance Settlement Agreement.


                                       53
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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      12.12 Insurance Neutrality.

            (a) Nothing in the Plan, the Plan Documents, the Confirmation Order,
or any finding of fact and/or conclusion of law with respect to the Confirmation
of the Plan or any order or opinion entered on appeal of the Confirmation Order,
shall limit the right of any Asbestos Insurance Company to assert any Asbestos
Insurer Coverage Defense.

            (b) The Plan, the Plan Documents and the Confirmation Order shall be
binding on the Debtors, the Reorganized Debtors, the Plan Trust and the
beneficiaries of the Plan Trust. The obligations, if any, of the Plan Trust to
pay holders of Asbestos Personal Injury Claims and Demands shall be determined
pursuant to the Plan and the Plan Documents. None of (I) the Bankruptcy Court's
approval of the Plan or the Plan Documents, (II) the Confirmation Order or any
finding and conclusions entered with respect to Confirmation, nor (III) any
estimation or valuation of Asbestos Personal Injury Claims, either individually
or in the aggregate (including, without limitation, any agreement as to the
valuation of Asbestos Personal Injury Claims) in the Bankruptcy Case shall, with
respect to any Asbestos Insurance Company (including on the basis of the
decisions in UNR Industries, Inc. v. Continental Casualty Co., 942 F.2d 1101
(7th Cir. 1991) or Fuller-Austin Insulation Co. v. Fireman's Fund Inc., et al.,
Case No. BC 116 835, 2002 WL 31005090 (Cal. Superior Ct. August 6, 2002)),
constitute a trial or hearing on the merits or an adjudication or judgment; or
accelerate the obligations, if any, of any Asbestos Insurance Company under its
Asbestos Insurance Policies; or be used as evidence in any forum to prove:

            (i) that any of the Debtors, the Plan Trust, or any Asbestos
      Insurance Company is liable for, or otherwise obligated to pay with
      respect to, any individual Asbestos Personal Injury Claim or Demand;

            (ii) that the procedures established by the Plan, including the
      Trust Distribution Procedures, for evaluating and paying Asbestos Personal
      Injury Claims and Demands are reasonable;

            (iii) that the procedures established by the Plan, including the
      Trust Distribution Procedures, for evaluating and paying Asbestos Personal
      Injury Claims and Demands are consistent with any procedures that were
      used to evaluate or settle Asbestos Personal Injury Claims against the
      Debtors before the Petition Date;

            (iv) that the settlement of, or the value assigned to, any
      individual Asbestos Person Injury Claim pursuant to the Asbestos Personal
      Injury Trust Distribution Procedures was reasonable and/or otherwise
      appropriate;

            (v) that any of the Asbestos Insurance Companies participated in
      and/or consented to the negotiation of the Plan or any of the Plan
      Documents;

            (vi) that any of the Debtors or the Plan Trust has suffered an
      insured loss with respect to any Asbestos Personal Injury Claim or Demand;
      or


                                       54
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                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


            (vii) as to (A) the liability of the Debtors or the Plan Trust for
      Asbestos Personal Injury Claims or Demands, whether such Claims or Demands
      are considered individually or on an aggregate basis; or (B) the value of
      such Asbestos Personal Injury Claims or Demands, individually or in the
      aggregate.

            (c) Nothing in the Plan or the Plan Documents shall affect or limit,
or be construed as affecting or limiting, the protection afforded to any
Settling Asbestos Insurance Company by the Injunctions under the Plan.

            (d) Nothing in this Section 12.12 is intended or shall be construed
to preclude otherwise applicable principles of res judicata or collateral
estoppel from being applied against any Asbestos Insurance Company with respect
to any issue that is actually litigated by such Asbestos Insurance Company as
part of its objections, if any, to Confirmation of the Plan or as part of any
contested matter or adversary proceeding filed by such Asbestos Insurance
Company in conjunction with or related to Confirmation of the Plan.

            (e) Nothing in the Plan, the Plan Documents, the Confirmation Order,
or any finding of fact and/or conclusion of law with respect to the Confirmation
or consummation of the Plan shall limit the right, if any, of (i) any Asbestos
Insurance Company, in any Asbestos Insurance Action, to assert any Asbestos
Insurance Coverage Defense, including by presenting evidence and/or argument
with respect to any of the matters specified in clauses (i) through (vii) of
this Section 12.12 or (ii) any other party in any such Asbestos Insurance Action
to assert any appropriate position. Except as provided in Section 12.12(d)
above, none of the matters specified in clauses (i) through (vii) of this
Section 12.12 shall have any res judicata or collateral estoppel effect against
any Asbestos Insurance Company.

                                  ARTICLE XIII

                      MATTERS INCIDENT TO PLAN CONFIRMATION

      13.1 Term of Certain Injunctions and Automatic Stay.

            (a) All of the injunctions and/or automatic stays provided for in or
in connection with the Reorganization Cases, whether pursuant to section 105,
362, 524(g), or any other provision of the Bankruptcy Code or other applicable
law, in existence immediately prior to Confirmation shall remain in full force
and effect until the Injunctions become effective, and thereafter if so provided
by the Plan, the Confirmation Order, or by their own terms. In addition, on and
after Confirmation, the Debtors may seek such further orders as they may deem
necessary to preserve the status quo during the time between Confirmation and
the Effective Date.

            (b) Each of the Injunctions shall become effective on the Effective
Date and shall continue in effect at all times thereafter. Notwithstanding
anything to the contrary contained in the Plan, all actions in the nature of
those to be enjoined by the Injunctions shall be enjoined during the period
between the Confirmation Date and the Effective Date.

      13.2 No Successor Liability. Except as otherwise expressly provided in the
Plan, the Debtors, the Reorganized Debtors, ABI, their Affiliates, Asbestos
Claimants' Committee, the Pre-Petition Asbestos Claimants' Committee and the
Futures Representative do not, pursuant to the Plan or otherwise, assume, agree


                                       55
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


to perform, pay, or indemnify creditors or otherwise have any responsibilities
for any liabilities or obligations of the Debtors relating to or arising out of
the operations of or assets of the Debtors, whether arising prior to, on, or
after the Confirmation Date. Neither the Debtors, the Reorganized Debtors, ABI,
their Affiliates, nor the Plan Trust is, or shall be, a successor to the Debtors
by reason of any theory of law or equity, and none shall have any successor or
transferee liability of any kind or character, except that the Reorganized
Debtors and the Plan Trust shall assume the obligations specified in the Plan
Documents and the Confirmation Order.

      13.3 Revesting. Except as otherwise expressly provided in the Plan, on the
Effective Date, each Reorganized Debtor shall be vested with all of the assets
and property of its former Estate, free and clear of all Claims, Liens, charges
and other interests of holders of Claims or Interests, and may operate its
business free of any restrictions imposed by the Bankruptcy Code or by the
Bankruptcy Court.

      13.4 Vesting and Enforcement of Causes of Action. Pursuant to section
1123(b)(3)(B) of the Bankruptcy Code, except as otherwise provided in the Plan,
the Reorganized Debtors shall be vested with and have the right to enforce
against any Entity any and all of the Debtors' Causes of Action other than
Causes of Action related to Plan Trust Asbestos Claims and Plan Trust Assets
(including the right to pursue such claims, if any, in the name of any Debtor if
necessary), with the proceeds of the recovery of any such actions to be property
of the Reorganized Debtors; provided, however, that nothing herein shall alter,
amend, or modify the injunctions (including the Injunctions), releases, or
discharges provided herein. Pursuant to section 1123(b)(3)(B) of the Bankruptcy
Code, except as otherwise provided in the Plan, the Plan Trust shall be vested
with and have the right to enforce against any Entity any and all of the
Debtors' Causes of Action relating to any Plan Trust Asbestos Claims or any Plan
Trust Assets, including, without limitation, the right to void any Asbestos
Claim of a Qualified Pre-Petition Settlement Claimant or of a Qualified
Participating Claimant whether because of failure to comply with the
requirements of any applicable settlement agreement (including the Claimant
Agreement) or because such Claim was not submitted in good faith or otherwise
and including the right to pursue such claims, if any, in the name of any
Debtor, if necessary; and for this purpose the Plan Trust shall be designated as
a representative of the Estates, with the proceeds of the recovery of any such
actions to be property of the Plan Trust; provided, however, that nothing herein
shall alter, amend, or modify the injunctions (including the Injunctions),
releases, or discharges provided herein.

      13.5 Plan Trust Bankruptcy Causes of Action. On the Effective Date, the
Debtors shall assign to the Plan Trust all Plan Trust Bankruptcy Causes of
Action; provided, however, that any Plan Trust Bankruptcy Cause of Action,
including counts VII and XVI of the Omnibus Avoidance Action, arising from the
advance of two million dollars ($2,000,000) to the Claimants' Representative
prior to the Petition Date on account of the Claimants' Representatives' fees
and expenses, shall not be assigned to the Plan Trust and shall be
unconditionally released by the Debtors and their Estates in accordance with
Section 12.3 of the Plan. All such Plan Trust Bankruptcy Causes of Action shall
constitute part of the Plan Trust Assets, and shall be transferred to and vested
in the Plan Trust as of the Effective Date, free and clear of all Claims, Liens
and encumbrances of every nature. The Plan Trust shall be deemed the appointed
representative of the Debtors' estates to, and may, enforce, pursue, litigate,
abandon, compromise and settle any such Plan Trust Bankruptcy Cause of Action,
as it deems appropriate.


                                       56
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      13.6 Bankruptcy Causes of Action. On the Effective Date, all Bankruptcy
Causes of Action shall be preserved for enforcement solely by the Reorganized
Debtors; provided, however, that the Reorganized Debtors shall not retain any
such Bankruptcy Causes of Action against any parties indemnified by the Plan
Trust pursuant to Section 4.6 of the Plan Trust Agreement.

                                  ARTICLE XIV

                                  MISCELLANEOUS

      14.1 Jurisdiction. Until the Reorganization Cases are closed, the
Bankruptcy Court shall retain the fullest and most extensive jurisdiction
permissible, including that necessary to ensure that the purposes and intent of
the Plan are carried out. Except as otherwise provided in the Plan, the
Bankruptcy Court shall retain jurisdiction to hear and determine all Claims
against and Interests in the Debtors, and to adjudicate and enforce all other
causes of action which may exist on behalf of the Debtors. Nothing contained
herein shall prevent the Debtors, the Reorganized Debtors, or the Plan Trust
from taking such action as may be necessary in the enforcement of any cause of
action which the Debtors have or may have and which may not have been enforced
or prosecuted by the Debtors, which cause of action shall survive Confirmation
of the Plan and shall not be affected thereby except as specifically provided
herein. Nothing contained herein concerning the retention of jurisdiction by the
Bankruptcy Court shall be deemed to be a retention of exclusive jurisdiction
with respect to any Asbestos Insurance Action; rather any court other than the
Bankruptcy Court which has jurisdiction over an Asbestos Insurance Action shall
have the continuing right to exercise such jurisdiction.

      14.2 General Retention. Following the Confirmation of the Plan, the
administration of the Reorganization Cases will continue at least until the
completion of the transfers contemplated to be accomplished on the Effective
Date. Moreover, the Plan Trust shall be subject to the continuing jurisdiction
of the Bankruptcy Court to the extent required by the requirements of section
468B of the IRC and the regulations issued pursuant thereto. The Bankruptcy
Court shall also retain jurisdiction for the purpose of classification of any
Claim and the re-examination of Claims that have been Allowed for purposes of
voting, and the determination of such objections as may be filed with the
Bankruptcy Court with respect to any Claim. The failure by the Debtors to object
to, or examine, any Claim for the purposes of voting, shall not be deemed a
waiver of the right of the Debtors, the Reorganized Debtors, or the Plan Trust,
as the case may be, to object to or re-examine such Claim in whole or in part.

      14.3 Specific Purposes. In addition to the foregoing, the Bankruptcy Court
shall retain jurisdiction for the following specific purposes after
Confirmation:

            (a) to modify the Plan after Confirmation, pursuant to the
provisions of the Bankruptcy Code and the Bankruptcy Rules;

            (b) to correct any defect, cure any omission, reconcile any
inconsistency, or make any other necessary changes or modifications in or to the
Plan, the Plan Documents or the Confirmation Order as may be necessary to carry
out the purposes and intent of the Plan, including the adjustment of the date(s)
of performance under the Plan Documents in the event that the Effective Date
does not occur as provided herein so that the intended effect of the Plan may be
substantially realized thereby;


                                       57
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


            (c) to assure the performance by the Disbursing Agent and the Plan
Trustees of their respective obligations to make distributions under the Plan;

            (d) to enforce and interpret the terms and conditions of the Plan
Documents;

            (e) to enter such orders or judgments, including, but not limited
to, injunctions as are necessary to (i) enforce the title, rights, and powers of
the Debtors, the Reorganized Debtors, the Plan Trust, ABI, the Futures
Representative and the Trust Advisory Committee or (ii) enable holders of Claims
to pursue their rights against any Entity that may be liable therefor pursuant
to applicable law or otherwise, including, but not limited to, Bankruptcy Court
orders;

            (f) to hear and determine any motions or contested matters involving
taxes, tax refunds, tax attributes, tax benefits, tax proceedings, and similar
or related matters with respect to the Debtors, the Reorganized Debtors, or the
Plan Trust relating to tax periods or portions thereof ending on or before the
Effective Date, arising on account of transactions contemplated by the Plan
Documents, or relating to the period of administration of the Reorganization
Cases;

            (g) to hear and determine all applications for compensation of
professionals and reimbursement of expenses under sections 330, 331, or 503(b)
of the Bankruptcy Code;

            (h) to hear and determine any causes of action arising during the
period from the Petition Date through the Effective Date;

            (i) to hear and determine any claim, causes of action, dispute or
other matter in any way related to the Plan Documents or the transactions
contemplated thereby, against the Debtors, the Reorganized Debtors, ABI, the ABI
Parties, the Trust Advisory Committee, the Plan Trust, the Collateral Trust, the
Plan Trustees, the Collateral Trustee or the Futures Representative and each of
their respective Representatives;

            (j) to hear and determine any and all motions pending as of
Confirmation for the rejection, assumption, or assignment of executory contracts
or unexpired leases and the allowance of any Claim resulting therefrom;

            (k) to hear and determine such other matters and for such other
purposes as may be provided in the Confirmation Order;

            (l) to consider and act on the compromise and settlement of any
Claim against or Interest in the Debtors or their Estates;

            (m) to hear and determine all questions and disputes regarding title
to the assets of the Debtors, their Estates, the Reorganized Debtors or the Plan
Trust;


                                       58
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


            (n) to hear and determine any other matters related hereto,
including the implementation and enforcement of all orders entered by the
Bankruptcy Court in these Reorganization Cases;

            (o) to retain continuing jurisdiction with regard to the Plan Trust
sufficient to satisfy the requirements of the Treasury Regulations promulgated
under section 468B of the IRC (including Treas. Reg. Section 1.468B-1(c)(1));

            (p) to hear and determine any and all applications brought by the
Plan Trustees to amend, modify, alter, waive, or repeal any provision of the
Plan Trust Agreement or the TDP; and

            (q) to enter such orders as are necessary to implement and enforce
the Injunctions and the other injunctions described herein, including, without
limitation, orders extending the protections afforded by section 524(g)(4) of
the Bankruptcy Code to the Protected Parties, including without limitation, ABI,
the ABI Parties and the Settling Asbestos Insurance Companies.

      Notwithstanding anything to the contrary in this Section 14.3, (i) the
allowance of Plan Trust Asbestos Claims (other than Asbestos Property Damage
Claims) and the forum in which such allowance will be governed by an in
accordance with the Plan Trust Agreement and the Trust Distribution Procedures
and (ii) the Bankruptcy Court will have concurrent rather than exclusive
jurisdiction with respect to disputes relating to rights under insurance
policies included in the Plan Trust Assets.

      14.4 Payment of Statutory Fees. All fees payable pursuant to section 1930
of title 28 of the United States Code, as determined by the Bankruptcy Court at
the Confirmation Hearing, shall be paid by the Debtors on or before the
Effective Date and thereafter by the Reorganized Debtors as due until the
Reorganization Cases are closed, converted or dismissed.

      14.5 The Asbestos Claimants' Committee and the Futures Representative. The
Asbestos Claimants' Committee shall continue in existence until the Effective
Date, with the Debtors to pay the reasonable fees and expenses of the Asbestos
Claimants' Committee and the Futures Representative through that date as well,
in accordance with any fee and expense procedures promulgated during the
Reorganization Cases. After the Effective Date, the Futures Representative shall
(a) continue in existence and the rights, duties and responsibilities of the
Futures Representative shall be as set forth in the Plan Trust Documents and (b)
have the right to prosecute and/or object to applications for Professional Fee
Claims. The Representatives retained by the Futures Representative during the
Reorganization Cases shall, as of the Effective Date, be released and discharged
of and from all further authority, duties, responsibilities and obligations
related to, or arising from, the Reorganization Cases. On the Effective Date,
any committee that may have been appointed in the Reorganization Cases other
than the TAC, but including the Bondholders' Committee, shall be dissolved
except for the purposes of: (a) prosecuting any appeal or request for
reconsideration or stay pending appeal of the Confirmation Order; (b) pending
adversary proceedings; and (c) prosecuting applications for compensation for the
professionals retained by such committee, and the members, attorneys,
accountants, and other professionals thereof shall be released and discharged of
and from all further authority, duties, responsibilities, liabilities, and
obligations related to, or arising from, the Reorganization Cases. On the
Effective Date, the Trust Advisory Committee will assume those powers, duties,
and responsibilities as provided in the Plan Trust Agreement.


                                       59
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      14.6 Revocation of Plan. The Debtors reserve the right to revoke and
withdraw the Plan before the entry of the Confirmation Order. If the Debtors
revoke or withdraw the Plan, or if Confirmation does not occur, then, with
respect to all parties in interest, the Plan shall be deemed null and void and
nothing contained herein shall be deemed to constitute a waiver or release of
any Claims by or against the Debtors or any other Entity or to prejudice in any
manner the rights of the Debtors or such Entity in any further proceedings
involving the Debtors.

      14.7 Modification of Plan. The Debtors, with the written consent of ABI,
may propose amendments to or modifications of any of the Plan Documents under
section 1127 of the Bankruptcy Code at any time prior to the Confirmation Date.
After Confirmation, the Debtors, with the written consent of the Futures
Representative, the Plan Trustees and ABI, may remedy any defects or omissions
or reconcile any inconsistencies in the Plan or the Confirmation Order or any
other order entered for the purpose of implementing the Plan in such manner as
may be necessary to carry out the purposes and intent of the Plan, provided,
however, that none of the Debtors, ABI, the Futures Representative, the Plan
Trustees, the Asbestos Claimants' Committee, the Bondholders' Committee and the
Claimants' Representative shall seek to terminate, reduce or limit the scope of
the Asbestos Channeling Injunction or any other injunction contained in the Plan
that inures to the benefit of any Settling Asbestos Insurance Company. Anything
in the Plan or in any Plan Document to the contrary notwithstanding, following
Confirmation but prior to the Effective Date, the Plan Documents shall not be
modified, supplemented, changed or amended in any material respect except with
the written consent of ABI (to the extent that any such modification,
supplementation, change, or amendment impairs or affects the rights of ABI, or
the Affiliates under the Plan), the Futures Representative and the Debtors.
Unless otherwise provided in the Confirmation Order or other order of a court of
competent jurisdiction in the event of a conflict between the terms or
provisions of the Plan and the Plan Trust Documents, the terms of the Plan shall
control.

      14.8 Modification of Payment Terms. The Reorganized Debtors reserve the
right to modify the treatment of any Allowed Claim (other than a Plan Trust
Asbestos Claim), as provided in section 1123(a)(4) of the Bankruptcy Code, at
any time after the Effective Date upon the consent of the holder of such Allowed
Claim, and solely with respect to any Allowed ABI Claim, with the additional
consent of the Futures Representative and the Plan Trustees.

      14.9 Entire Agreement. The Plan Documents and the Plan Trust Documents set
forth the entire agreement and undertakings relating to the subject matter
thereof and supersede all prior discussions and documents. No Entity shall be
bound by any terms, conditions, definitions, warranties, understandings, or
representations with respect to the subject matter hereof, other than as
expressly provided for herein or as may hereafter be agreed to by the parties in
writing.

      14.10 Headings. Headings are utilized in the Plan for convenience and
reference only and shall not constitute a part of the Plan for any other
purpose.

      14.11 Professional Fee Claims. All final requests for payment of
Professional Fee Claims must be filed and served on the Reorganized Debtors and
their counsel no later than 60 days after the Effective Date, unless otherwise
ordered by the Bankruptcy Court. Objections to any application of such


                                       60
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


Bankruptcy Professionals or other Entities for compensation or reimbursement of
expenses must be filed and served on the respective applicant and its counsel no
later than the first Business Day following 30 days (or such other period as may
be allowed by order of the Bankruptcy Court) after the date on which the
applicable application for compensation or reimbursement was received. The
Reorganized Debtors may pay charges that they incur on and after the Effective
Date for Bankruptcy Professionals' fees, disbursements, expenses or related
support services without application to the Bankruptcy Court.

      14.12 Recordable Order. Upon Confirmation of the Plan, the Confirmation
Order shall be deemed to be in recordable form, and shall be accepted by any
recording officer for filing and recording purposes without further or
additional orders, certifications, or other supporting documents.

      14.13 Governing Law. Except to the extent that federal law (including, but
not limited to, the Bankruptcy Code and the Bankruptcy Rules) is applicable or
where the Plan provides otherwise, the rights and obligations arising under the
Plan shall be governed by, and construed and enforced in accordance with, the
laws of the State of Delaware, without giving effect to the principles of
conflicts of law thereof that would require application of any other law.

      14.14 No Admission. Nothing contained in the Plan or in the Disclosure
Statement shall be deemed as an admission by the Debtors, with respect to any
matter set forth herein or therein, including, without limitation, liability on
any Claim or the propriety of any Claims classification.

      14.15 Consent to Jurisdiction. Upon default under the Plan or any Plan
Documents, the Debtors, the Reorganized Debtors, the Affiliates, ABI, the Plan
Trust, the Trust Advisory Committee, the Futures Representative, and the Plan
Trustees consent to the jurisdiction of the Bankruptcy Court, or any successor
thereto, and agree that it shall be the preferred forum for all proceedings
relating to such default.

      14.16 Setoffs. Subject to the limitations provided in section 553 of the
Bankruptcy Code, the Debtors or the Plan Trust, as applicable, may, but shall
not be required to, setoff against any Claim and the-payments or other
distributions to be made pursuant to the Plan in respect of such Claim, claims
of any nature whatsoever the Debtors may have against the holder of such Claim,
but neither the failure to do so nor the allowance of any Claim hereunder shall
constitute a waiver or release by the Debtors of any such claim that the Debtors
may have against such holder; provided that Reorganized Congoleum may not offset
any obligations under the New Convertible Security against any claim that
Reorganized Congoleum may have against the Plan Trust.

      14.17 Successors and Assigns. The rights, duties, and obligations of any
Entity named or referred to in the Plan shall be binding upon, and shall inure
to the benefit of, the successors and assigns of such Entity.

      14.18 Non-Debtor Waiver of Rights. Non-Debtor parties shall have the right
to voluntarily waive any rights, benefits or protections that are afforded to
them under the provisions of the Plan or any order issued in furtherance of the
Plan, and such waiver shall supersede such rights, benefits or protections. Any
such waiver shall only be effective if such party expressly and specifically
waives in writing one or more of such rights, benefits or protections.


                                       61
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


      14.19 Further Authorizations. The Debtors, the Reorganized Debtors, the
Plan Trust, ABI and the Futures Representative, if and to the extent necessary,
may seek with notice to the others such orders, judgments, injunctions, and
rulings that any of them deem necessary to further carry out the intentions and
purposes of, and give full effect to the provisions of, the Plan.

      14.20 Notices. All notices, requests, elections, or demands in connection
with the Plan shall be in writing and shall be mailed by registered or certified
mail, return receipt requested, to:

      14.21 Duty to Cooperate. Notwithstanding anything herein to the contrary,
nothing in the Plan, the Plan Documents or the Confirmation Order shall relieve
(by way of injunction or otherwise) any of the Debtors or Reorganized Debtors or
any other Entity which is or claims to be an insured or entitled to indemnity
under an Asbestos Insurance Policy from any duty to cooperate that may be
required by any such insurance policy under applicable law with respect to the
defense and/or settlement of any Claim for which coverage is sought under such
Asbestos Insurance Policy. To the extent that any entity incurs costs in
satisfying such duty to cooperate with respect to Asbestos Personal Injury
Claims, the Plan Trust shall reimburse such entity for all such reasonable
out-of-pocket expenses.

If to the Debtors:

Pillsbury Winthrop Shaw Pittman LLP
1540 Broadway
New York, NY 10033-4039
Attn: Richard L. Epling
      Robin L. Spear
      Kerry A. Brennan

Okin, Hollander & DeLuca, LLP
Parker Plaza
400 Kelby Street
Fort Lee, NJ 07024
Attn: Paul S. Hollander
      James J. DeLuca

If to the Futures Representative:

R. Scott Williams, Esquire
Haskell Slaughter Young & Rediker, L.L.C.
2001 Park Place North, Suite 1400
Birmingham, AL  35203

      and


                                       62
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


Orrick, Herrington & Sutcliffe LLP
3050 K Street, N.W.
Washington, DC  20007
Attn: Roger Frankel
      Richard Wyron
      Jonathon Guy

If to the Asbestos Claimants' Committee:

Caplin & Drysdale, Chtd.
One Thomas Circle, N.W.
Washington, D.C. 20005
Attn: Peter Van N. Lockwood
      Ronald Reinsel

If to the Bondholders' Committee:

Akin Gump Strauss Hauer & Feld LLP
590 Madison Avenue
New York, NY 10022
Attn: Michael S. Stamer

Akin Gump Strauss Hauer & Feld LLP
1333 New Hampshire Avenue, N.W.
Washington D.C. 20036
Attn: James R. Savin

If to the Claimants' Representative:

Stutzman, Bromberg, Esserman & Plifka
2323 Bryan Street, Suite 2200
Dallas, TX  75201
Attn: Sander Esserman

                              CONGOLEUM CORPORATION

                              By: /s/ Howard N. Feist III
                                  -----------------------
                              Name:  Howard N. Feist III
                              Title: Chief Financial Officer and Secretary


                              CONGOLEUM SALES, INC.

                              By: /s/ Howard N. Feist III
                                  -----------------------
                              Name:  Howard N. Feist III
                              Title: Vice President, Treasurer and Secretary


                                       63
<PAGE>

                                           EXHIBIT A TO THE DISCLOSURE STATEMENT


                              CONGOLEUM FISCAL, INC.

                              By: /s/ Howard N. Feist III
                                  -----------------------
                              Name:  Howard N. Feist III
                              Title: Vice President, Treasurer and Secretary


                              THE ASBESTOS CLAIMANTS' COMMITTEE

                              By: /s/ Ronald Reinsel
                                  -----------------------
                              Name:  Ronald Reinsel
                              Title:  Counsel to Asbestos Claimants' Committee


                                       64

<PAGE>
                                                           EXHIBIT A TO THE PLAN


                              Congoleum Corporation
                 Schedule of Property Damage Insurance Policies

--------------------------------------------------------------------------------
Effective Date                   Company              Policy Number
--------------------------------------------------------------------------------
01/01/55-01/01/56                Liberty              LB-24-914417-55
--------------------------------------------------------------------------------
01/01/56-01/01/57                Liberty              LP-24-692115-56
--------------------------------------------------------------------------------
01/01/57-01/01/58                Liberty              LP-6032-900078-37
--------------------------------------------------------------------------------
01/01/58-01/01/59                Liberty              LP-6032-900078-38
--------------------------------------------------------------------------------
01/01/59-01/01/60                Liberty              LP-6032-900078-39
--------------------------------------------------------------------------------
01/01/60-01/01/61                Liberty              LP-632-004138-040-93
--------------------------------------------------------------------------------
01/01/61-01/01/62                Liberty              LP-632-0041 38-041-93
--------------------------------------------------------------------------------
01/01/62-01/01/63                Liberty              LP-632-0041 38-042-93
--------------------------------------------------------------------------------
01/01/63-01/01/64                Liberty              LP-632-0041 38-043-93
--------------------------------------------------------------------------------
01/01/64-01/01/65                Liberty              LP-632-0041 38-044-93
--------------------------------------------------------------------------------
01/01/65-01/01/66                Liberty              LP-632-0041 38-045-93
--------------------------------------------------------------------------------
01/01/66-01/01/67                Liberty              LP-632-0041 38-046-93
--------------------------------------------------------------------------------
01/01/67-01/01/68                Liberty              LG1-632-0041 38-047-9
--------------------------------------------------------------------------------
01/01/68-01/01/69                Liberty              LG1-632-0041 38-048-9
--------------------------------------------------------------------------------
01/01/69-01/01/70                Liberty              LG1-632-0041 38-049-9
--------------------------------------------------------------------------------
01/01/70-01/01/71                Liberty              LGI-632-0041 38-040-9
--------------------------------------------------------------------------------
01/01/71-01/01/72                Liberty              LG1-632-0041 38-041-9
--------------------------------------------------------------------------------
01/01/72-01/01/73                Liberty              LG1-632-0041 38-042-9
--------------------------------------------------------------------------------
01/01/75-03/01/76                Wausau               0526-00-084282
--------------------------------------------------------------------------------

<PAGE>


                                                           EXHIBIT B TO THE PLAN


                              Exhibit B to the Plan
                          "Collateral Trust Agreement"
<PAGE>

                                                           EXHIBIT B TO THE PLAN


                           COLLATERAL TRUST AGREEMENT

      This irrevocable trust agreement (the "Collateral Trust Agreement") is
entered into by and between Congoleum Corporation, a Delaware Corporation
("Congoleum"), Arthur J. Pergament, solely in his capacity as the Collateral
Trustee hereunder (the "Collateral Trustee"), and Wilmington Trust Company, a
Delaware banking corporation, solely in its capacity as Delaware Trustee
hereunder ("Delaware Trustee") (the Collateral Trustee and Delaware Trustee are
sometimes referred to herein as "Trustee" or collectively as the "Trustees")
(Congoleum and the Trustees collectively, the "Parties").

                                    RECITALS

      WHEREAS, numerous individuals have asserted asbestos-related bodily injury
claims against Congoleum (each an "Asbestos Claimant" and collectively, the
"Asbestos Claimants"), each alleging exposure to an asbestos-containing product
manufactured, sold, or distributed by Congoleum or for which Congoleum otherwise
may have legal liability (the "Asbestos Claims"), and it is anticipated that
additional asbestos-related bodily injury claims will continue to be asserted
against Congoleum (collectively, the "Asbestos Actions"); and

      WHEREAS, Congoleum and certain Asbestos Claimants, contemporaneously
herewith, are executing a settlement agreement, titled Settlement Agreement
Between Congoleum Corporation and Various Asbestos Claimants (the "Claimant
Agreement"); and

      WHEREAS, Congoleum entered into settlement agreements prior to the
Claimant Agreement to resolve certain Asbestos Claims, under which some or all
of the consideration has yet to be paid (the "Pre-Existing Settlement
Agreements"); and

      WHEREAS, Congoleum may enter into additional settlement agreements to
resolve certain Asbestos Claims that are scheduled for trial prior to the
commencement of an anticipated chapter 11 reorganization case for Congoleum in
an aggregate amount not to exceed $15,000,000.00 (the "Trial-Listed Settlement
Agreements"); and


                                       2
<PAGE>

                                                           EXHIBIT B TO THE PLAN


      WHEREAS, Congoleum, contemporaneously herewith, is executing an agreement
titled Security Agreement ("Security Agreement"), granting to the Collateral
Trust (as defined below) a present and continuing security interest in certain
insurance proceeds; and

      WHEREAS, Congoleum, to the extent permissible under applicable law,
intends that the Collateral Trust be characterized as a Qualified Settlement
Fund pursuant to Section 468B of the Internal Revenue Code of 1986, as amended,
and the Treasury regulations promulgated thereunder ("QSF"); and

      WHEREAS, Congoleum has asked the Trustees to act as the Collateral Trustee
and the Delaware Trustee, as applicable, and the Trustees have agreed to accept
this appointment under the terms hereof; and

      WHEREAS, the Parties desire to enter into this Collateral Trust Agreement
to confirm their agreements with respect to (i) the establishment, maintenance,
investment and disbursement of the Trust Assets (as defined below); and (ii)
certain other matters relating to the foregoing, as hereafter provided.

      NOW, THEREFORE, the Parties hereby agree as follows:

                                        AGREEMENT

I.    ESTABLISHMENT OF THE COLLATERAL TRUST

      A. Creation and Name. The Parties hereby create a trust known as the
"Congoleum Collateral Trust," which is the "Collateral Trust" provided for and
referred to in the Claimant Agreement. The Collateral Trustee may transact the
business and affairs of the Collateral Trust in the name "Congoleum Collateral
Trust."


                                       3
<PAGE>

                                                           EXHIBIT B TO THE PLAN


      B. Purpose. The purpose of the Collateral Trust is: (i) to hold security
interests in the Collateral (as defined in the Security Agreement); (ii) to
receive Insurance Proceeds (as defined in the Security Agreement); and (3) to
pay amounts owed by Congoleum to various parties to Pre-Existing Settlement
Agreements, Trial-Listed Settlement Agreements, and Claimant Agreement, and
otherwise to meet the purposes and requirements stated in those agreements.

II.   PAYMENT OF CLAIMS AND COLLATERAL TRUST ADMINISTRATION

      A. Qualified Claims. Subject to the terms and conditions herein and in the
Claimant Agreement, the following persons and entities shall be entitled to
receive payment from the Collateral Trust in the following amounts:

            1. An Asbestos Claimant as to which Congoleum notifies the
      Collateral Trustee in writing that such Asbestos Claimant who entered into
      a Pre-Existing Settlement Agreement or a Trial-Listed Settlement Agreement
      with Congoleum has satisfied the requirements to qualify for payment under
      the terms of the applicable Pre-Existing Settlement Agreement or
      Trial-Listed Settlement Agreement (an Asbestos Claimant who has qualified
      under either a Pre-Existing Settlement Agreement or a Trial-Listed
      Settlement Agreement shall be referred to herein as a "Qualified First
      Priority Claimant"). Such Qualified First Priority Claimant shall be paid
      the applicable amount specified in the notice of satisfaction of the
      requirements for payment provided by Congoleum to the Trustee (the "First
      Priority Settlement Amount"). First Priority Settlement Amounts shall be
      paid in the order in which such Asbestos Claimants become Qualified First
      Priority Claimants. Each Qualified First Priority Claimant's First
      Priority Settlement Amount shall be fully secured, and shall be reduced by
      the amount of all payments received by the Qualified First Priority
      Claimant from Congoleum, the Collateral Trust, or any successor trust.


                                       4
<PAGE>

                                                           EXHIBIT B TO THE PLAN


            2. An Asbestos Claimant as to which the Claims Reviewer (as defined
      below) notifies the Trustee in writing that an Asbestos Claimant has
      satisfied the requirements to qualify as a Participating Asbestos Claimant
      (as defined in the Claimant Agreement). Such Participating Asbestos
      Claimant shall have a secured claim (the "Asbestos Claimant's Secured
      Claim") equal to seventy-five percent (75%) of the Participating Asbestos
      Claimant's Settlement Amount (as defined in the Claimant Agreement). Each
      Asbestos Claimant's Secured Claim shall be reduced by the amount of all
      payments received by the Participating Asbestos Claimant from the
      Collateral Trust or any successor trust.

            3. A claims-handling entity ("Claims Reviewer") as designated by
      Congoleum with the consent of Claimants' Counsel (as defined in the
      Claimant Agreement) shall be paid its fees and costs as agreed (the
      "Claims Handling Fee"). Congoleum shall be reimbursed by the Collateral
      Trust for all or part of the Claims Handling Fee paid by Congoleum.

      B. Payment of Qualified Claims. The Collateral Trustee shall make payments
from the Trust Assets (as defined below) from time to time to the extent that
the Collateral Trustee believes it is prudent in light of the funds available
for distribution, the requirements of II.B.6 and II.F. below, and other factors,
as follows:

            1. The Collateral Trustee shall pay the Settlement Amounts owed to
      the Qualified First Priority Claimants in the order in which the Qualified
      First Priority Claimants become Qualified First Priority Claimants based
      upon notice from Congoleum.


                                       5
<PAGE>

                                                           EXHIBIT B TO THE PLAN


            2. Following the payment in full of the Qualified First Priority
      Claimants, the Collateral Trustee shall pay to the Claims Reviewer and/or
      reimburse Congoleum for the Claims Handling Fee that has been paid by
      Congoleum to the Claims Reviewer.

            3. Following the payment in full of the Claims Handling Fee, the
      Collateral Trustee shall pay subsequent distributions up to $200 million
      in total distributions to Participating Asbestos Claimants on a pro-rata
      basis in accordance with Section II.C in an amount not to exceed each
      Participating Asbestos Claimants' Secured Claim.

            4. Following the payment of distributions aggregating $200 million
      to participating Asbestos Claimants, the Collateral Trustee shall pay all
      subsequent distributions as follows:

            a.    Fifty percent (50%) to Participating Asbestos Claimants on a
                  pro-rata basis in accordance with Section II.C in an amount
                  not to exceed each Participating Asbestos Claimants' Secured
                  Claim; and

            b.    The remainder to a reserve account, which the Collateral
                  Trustee shall maintain and hold until it is distributed
                  pursuant to Section II.B.5 (the "Reserve").

            5. Upon or as soon as practicable after the establishment by
      Congoleum of a trust qualified as a QSF pursuant to a confirmed plan of
      reorganization in a case commenced by Congoleum as a debtor under chapter
      11 of title 11 U.S.C., that preserves the rights of the beneficiaries
      hereunder and provides for the transfer of the Trust Assets, including the
      Reserve to a plan trust (the "Plan Trust"), the Collateral Trustee shall
      release the security interests granted by the Security Agreement and pay
      any remaining Trust Assets to the Plan Trust in accordance with the plan
      of reorganization. If no Plan Trust is established on or before the later
      of (a) three (3) years from the date of this Collateral Trust Agreement or


                                       6
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                                                           EXHIBIT B TO THE PLAN


      (b) such time as all Participating Asbestos Claimants' Secured Claims are
      paid in full, the Collateral Trustee transfer any remaining Trust Assets,
      including the Reserve, to Congoleum.

            6. Notwithstanding anything in this Collateral Trust Agreement to
      the contrary, from time to time the Collateral Trustee shall deduct from
      the Trust Assets and shall pay (a) such amounts as are reasonably
      necessary to pay Administrative Expenses (as defined below), and (b) any
      and all attorneys' fees or other professional fees, and related expenses
      and disbursements, incurred by or on behalf of Congoleum or any Congoleum
      successor in connection with the pursuit by Congoleum or any Congoleum
      successor of Congoleum's insurance coverage.

      C. Pro-Rata Distributions to Participating Asbestos Claimants. All
distributions from the Collateral Trust to Participating Asbestos Claimants
shall be allocated to individual Participating Asbestos Claimants by multiplying
the aggregate amount of the distribution to be made by a fraction, the numerator
of which is the unpaid amount of the Participating Asbestos Claimant's Secured
Claim and the denominator of which is the total of all remaining unpaid
Participating Asbestos Claimants' Secured Claims.

      D. Trust Assets.

            1. In furtherance of the purposes of the Collateral Trust, the
      Collateral Trustee, on behalf of the Collateral Trust, shall receive and
      accept from Congoleum, or directly from Congoleum's liability insurers,
      Insurance Proceeds and other assets, if any, as designated in the Claimant
      Agreement (the "Trust Assets"). To the extent that the Collateral Trustee
      receives payments or other assets that are not properly Trust Assets, the


                                       7
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                                                           EXHIBIT B TO THE PLAN


      Collateral Trustee shall promptly thereafter notify Congoleum and shall
      remit such payments or forward such assets to or as directed by Congoleum
      no later than five (5) business days after the receipt of such payments or
      assets. Interest and other investment income accrued on the Trust Assets
      shall become part of the Trust Assets.

            2. So long as the Collateral Trust exists, the Collateral Trustee
      shall, from time to time, invest and reinvest the Trust Assets in
      accordance with the investment guidelines attached hereto as Appendix A
      (the "Investment Guidelines"). The Collateral Trustee shall have the right
      to liquidate any investment held, in order to provide funds necessary to
      make distributions of the Trust Assets pursuant to this Collateral Trust
      Agreement. Absent gross negligence or willful misappropriation, the
      Collateral Trustee shall not have any liability for any loss sustained as
      a result of any investment made pursuant to this Collateral Trust
      Agreement or as a result of any liquidation of any investment prior to its
      maturity. The Collateral Trustee shall have the power to exercise all
      rights with respect to the Collateral Trust's investments consistent with
      the Collateral Trustee's fiduciary duties to the Collateral Trust and in
      accordance with the Investment Guidelines.

      E. Grant of Security Interest.

            1. Subject to the Claimant Agreement and the Security Agreement, the
      Collateral Trust shall have security interests in the Collateral (as
      defined in the Claimant Agreement and the Security Agreement). The
      Collateral Trustee shall have the power and authority to enforce the
      Collateral Trust's interest in the Collateral in accordance with the
      Collateral Trust Agreement, the Security Agreement, the Claimant
      Agreement, and applicable law.


                                       8
<PAGE>

                                                           EXHIBIT B TO THE PLAN


            2. Within ten (10) days following Congoleum's grant of the security
      interest, the Collateral Trustee shall take any and all actions that are
      necessary to establish and protect the security interest in the
      Collateral, including the filing of one or more UCC-1 financing
      statements. Congoleum agrees to execute and deliver promptly such
      financing statements and other documents, and do such other things, as the
      Collateral Trustee shall reasonably request, to effectuate the Collateral
      Trustee's actions hereunder, within three (3) business days of the
      Execution Date.

      F. Administrative Expenses.

            1. The Collateral Trustee shall have the power to appoint such
      officers and hire such employees and engage such legal, financial,
      accounting, investment, auditing, forecasting and other professionals,
      service providers or consultants as the business of the Collateral Trust
      reasonably requires, and to delegate to such persons such powers and
      authorities as the fiduciary duties of the Collateral Trustee permits and
      as the Collateral Trustee deems necessary in order to carry out the terms
      of this Collateral Trust Agreement. The Collateral Trustee shall serve
      copies of statements and invoices for fees and expenses of the Collateral
      Trustee, prior to the payment of any such statements or invoices, upon the
      parties listed (the "Notice Parties"), and in the manner set out, in
      Section IV.F. Such statements or invoices may be paid by the Collateral
      Trustee unless, within ten (10) days after such service, any of the Notice
      Parties serves upon the Collateral Trustee and the other Notice Parties
      its objection to payment of all or part of such statement or invoice. The
      portion(s) of any statement or invoice with respect to which an objection
      is served may not be paid until the objection thereto is settled or is
      resolved in accordance with Section IV.L of this Collateral Trust
      Agreement.


                                       9
<PAGE>

                                                           EXHIBIT B TO THE PLAN


            2. The Collateral Trustee shall periodically estimate the funds that
      shall be necessary to pay administrative expenses incurred or expected to
      be incurred pursuant to the execution of the Collateral Trustee's duties
      ("Administrative Expenses"). Such Administrative Expenses shall include,
      without limitation, reasonable compensation of the Trustees and any and
      all Collateral Trust employees, payment of the reasonable fees of all
      professionals and consultants reasonably engaged by the Collateral Trust,
      and the reasonable expenses of operating and administering the Collateral
      Trust. Pursuant to Section II.B.6 of this Collateral Trust Agreement, the
      Collateral Trustee shall, from time to time, set aside from the Trust
      Assets amounts sufficient to pay the estimated Administrative Expenses
      ("Administrative Funds") and shall not use Administrative Funds for any
      other purpose, except as otherwise required by this Collateral Trust
      Agreement. In the event that the Administrative Funds are insufficient to
      pay all Administrative Expenses in full, the Collateral Trustee shall pay
      any unpaid Administrative Expenses from Trust Assets.

III.  THE TRUSTEES

      A. Appointment of the Trustees.

            1. There shall be one (1) Collateral Trustee. The initial Collateral
      Trustee shall be Arthur J. Pergament.

            2. So long as required by the Delaware Act, there shall be one (1)
      Delaware Trustee who or which shall be (i) a natural person who is a
      resident of the State of Delaware or (ii) if not a natural person, an
      entity which has its principal place of business in the State of Delaware
      and otherwise meets the requirements of applicable law. The initial
      Delaware Trustee shall be Wilmington Trust Company.


                                       10
<PAGE>

                                                           EXHIBIT B TO THE PLAN


            3. In the event of a vacancy in the position of either Trustee
      pursuant to Section III.B hereto or otherwise, the vacancy shall be filled
      by agreement of Congoleum and Claimants' Counsel or by order of a court of
      competent jurisdiction. Immediately upon the appointment of such a
      successor Trustee, all rights, titles, duties, powers and authority of the
      predecessor Trustee shall be vested in, and undertaken by, the successor
      Trustee without any further act. No successor Trustee shall be liable
      personally for any act or omission of his or her predecessor Trustee.

      B. Term of Service.

            1. Each Trustee shall serve until the earlier of (a) his or her
      resignation pursuant to Section III.B.2 hereto, (b) his or her removal
      pursuant to Section III.B.3 hereto, or (c) the termination of the
      Collateral Trust pursuant to Section IV.C hereto.

            2. Each Trustee may resign at any time by written notice to
      Congoleum and the Claimants' Counsel. Such notice shall specify a date
      when such resignation shall take effect, which shall not be less than
      ninety (90) days after the date such notice is given, absent the written
      consent of Congoleum to an earlier date.

            3. Each Trustee may be removed with or without cause at any time by
      written notice signed by Congoleum and Claimants' Counsel. Upon any such
      removal, such removed Trustee shall be entitled to any reimbursement and
      indemnification set forth in this Collateral Trust Agreement which remains
      due and owing at the time of such removal. Such removal shall be effective
      when a successor Trustee is appointed pursuant to Section III.A.3 above
      and the successor Trustee has accepted the appointment in writing.


                                       11
<PAGE>

                                                           EXHIBIT B TO THE PLAN


      C. Duties and Powers of the Collateral Trustee. The Collateral Trustee is
and shall act as a fiduciary to the Collateral Trust in accordance with the
provisions of this Collateral Trust Agreement. The Collateral Trustee at all
times shall administer the Collateral Trust and the Trust Assets to provide
reasonable assurance that the Collateral Trust shall be in a financial position
to maximize payment of all Qualified Claims. Subject to the limitations set
forth in this Collateral Trust Agreement, the Collateral Trustee shall have the
power to take any and all reasonable actions that, in the Collateral Trustee's
judgment, are necessary or proper to fulfill the purposes of the Collateral
Trust, including, without limitation, each power expressly granted in this
Collateral Trust Agreement and any power reasonably incidental thereto.

      D. Liability of the Trustees. Each Trustee shall not be liable to the
Collateral Trust, to any Asbestos Claimant, or to any other person except for
such Trustee's own breach of trust committed in bad faith, or for gross
negligence or willful misappropriation.

      E. Tax Duties of the Collateral Trustee. The Collateral Trustee shall
cause a Federal Employer Identification Number ("FEIN") for the Collateral Trust
to be obtained and shall cause the annual income tax returns to be filed on the
basis of a December 31 year end. The Collateral Trustee shall take all steps
necessary to ensure that all tax obligations of the Collateral Trust are
satisfied and all tax obligations imposed upon the Collateral Trust are paid. To
the extent necessary to satisfy this objective, the Collateral Trustee is hereby
authorized, among other things, to (i) obtain a tax identification number for
the Collateral Trust, (ii) communicate with the Internal Revenue Service and
state and local taxing authorities on behalf of the Collateral Trust, (iii) make
payment of taxes on behalf of the Collateral Trust (which taxes will be paid out
of the Trust Assets), (iv) file all applicable tax returns for the Collateral
Trust to the extent permissible under applicable law, and (v) withhold taxes on
payments made pursuant to this Collateral Trust Agreement as required by


                                       12
<PAGE>

                                                           EXHIBIT B TO THE PLAN


applicable law. To the extent permissible under applicable law, the Collateral
Trustee shall jointly with Congoleum prepare and file a "relation-back election"
under Treasury Regulation ss. 1.468B-1(j)(2)(ii), and shall otherwise cooperate
with Congoleum in its efforts to cause the Collateral Trust to qualify as a QSF
for federal income tax purposes.

      F. Compensation and Expenses of the Collateral Trustee. The Collateral
Trustee shall receive compensation from the Collateral Trust for his or her
service as Collateral Trustee in the amount of $195.00 per hour devoted to
Collateral Trust business. The hourly rate of compensation payable to the
Collateral Trustee hereunder shall be subject to adjustment periodically, with
the consent of Claimants' Counsel (as defined in the Claimant Agreement) and
Congoleum. The Collateral Trust shall reimburse the Collateral Trustee for all
reasonable out-of-pocket costs and expenses incurred by the Collateral Trustee
in connection with the performance of his or her duties hereunder.

      G. Reporting Duties of the Collateral Trustee. The Collateral Trustee
shall submit to Congoleum and to Claimants' Counsel periodic reports as such
parties shall reasonably request. Congoleum or Claimants' Counsel shall have the
right to conduct from time to time a financial audit of the Collateral Trust at
such party's own expense.

      H. Power to Act on Behalf of the Collateral Trust. The Collateral Trustee
shall have the power to act on behalf of the Collateral Trust, including,
without limitation, the power to:

            1. initiate any judicial, administrative, arbitrative or other
      proceeding only with the consent of Claimant's Counsel, as representatives
      of the beneficiaries of the Trust, provided that if Claimant's Counsel
      withholds such consent, the Collateral Trustee may seek such consent from
      a court of competent jurisdiction;


                                       13
<PAGE>

                                                           EXHIBIT B TO THE PLAN


            2. be sued and participate, as a party or otherwise, in any
      judicial, administrative, arbitrative or other proceeding;

            3. execute and deliver such instruments as the Collateral Trustee
      considers proper in administering the Collateral Trust; and

            4. enter into such arrangements with third parties as is deemed by
      the Collateral Trustee to be necessary in carrying out the purposes of the
      Collateral Trust, provided such arrangements do not conflict with any
      other provision of this Collateral Trust Agreement or the Claimant
      Agreement.

      I. Delaware Trustee. Notwithstanding any other provision of this
Collateral Trust Agreement, the Delaware Trustee shall not be entitled to
exercise any powers, nor shall the Delaware Trustee have any of the duties or
responsibilities of the Collateral Trustee described in this Collateral Trust
Agreement. The Delaware Trustee shall be a Trustee for the sole and limited
purpose of fulfilling the requirements of Section 3807 of chapter 38 of Title 12
of the Delaware Code, 12 Del. C. ss.ss. 3801 et seq. (the "Delaware Act").

      J. Compensation and Expenses of the Delaware Trustee. The Delaware Trustee
shall receive compensation from the Trust for its service as Delaware Trustee at
the rates detailed in a mutually acceptable fee agreement. The fee agreement may
be modified with the prior written consent of the Claimants' Counsel and
Congoleum. The Trust shall reimburse the Delaware Trustee as a part of the
Administrative Expenses for all reasonable out-of-pocket costs and expenses
incurred by the Delaware Trustee in connection with the performance of its
duties hereunder, at the rates detailed in the fee agreement. To the extent that
Congoleum pays any fees or costs to the Delaware Trustee on behalf of the Trust,
the Trust shall promptly reimburse Congoleum for the fees and costs so paid as
monies are available in the Trust.


                                       14
<PAGE>

                                                           EXHIBIT B TO THE PLAN


IV.   GENERAL PROVISIONS

      A. Irrevocability. The Collateral Trust is irrevocable.

      B. Effective Date. This Collateral Trust Agreement shall be effective on
the date on which both Parties have signed and delivered the Collateral Trust
Agreement.

      C. Termination. The Collateral Trust shall terminate upon the earliest of:
(i) the payment in full of all of the Participating Asbestos Claimant's Secured
Claims and the distribution of all Trust Assets pursuant to the terms of this
Collateral Trust Agreement; (ii) the distribution of all Trust Assets pursuant
to the terms of this Collateral Trust Agreement and the Trustee's determination
that no further steps to recover any assets subject to the Security Interest are
commercially reasonable; (iii) the transfer of the Trust Assets to the Plan
Trust pursuant to the terms of this Collateral Trust Agreement; or (iv) the
payment of the Trust Assets to Congoleum pursuant to the terms of Section
II.B.5.

      D. Amendments. The Trustee, with the unanimous consent of Congoleum and
Claimants' Counsel, may modify and amend this Collateral Trust Agreement. Any
modification made pursuant to this Section IV.D must be made in writing.

      E. Incorporation by Reference. All terms and conditions contained in the
Claimant Agreement shall be incorporated in this Agreement by reference.
Capitalized terms not otherwise defined herein shall have the meanings accorded
to them in the Claimant Agreement.

      F. Notices. All notices hereunder shall be in writing and shall be deemed
to have been sufficiently given or served for all purposes (if mailed) three (3)
calendar days after being deposited, postage prepaid, in the United States Mail,
registered or certified mail, or (if delivered by express courier) one (1)
business day after being delivered to such courier, or (if delivered in person
or via facsimile with faxed confirmation) the same day as delivery if delivered
on a business day before 4:30 p.m. EST or EDT (as applicable) or if not so


                                       15
<PAGE>

                                                           EXHIBIT B TO THE PLAN


delivered, on the next succeeding business day, except with respect to notices
issued to the Collateral Trustee, such notices shall be deemed received on the
date actually received by the Collateral Trustee. Notice to the Claimants'
Counsel shall be deemed notice to each Asbestos Claimant. Notices shall be
addressed as follows:

Congoleum:

Roger Marcus
Congoleum Corporation
3500 Quakerbridge Road
P.O. Box 3127
Mercerville, New Jersey  08616
(609) 584-3000 - Telephone No.
(609) 584-3655 - Facsimile No.


With copies to:

Bette Orr, Esq.
Gilbert, Heintz & Randolph. LLP
1100 New York Avenue
7th Floor
Washington, DC 20005
(202) 772-2200 - Telephone No.
(202) 772-3333 - Facsimile No.

Norman L. Pernick, Esq.
Saul Ewing LLP
222 Delaware Avenue
Suite 1200
Wilmington, DE 19899
(302) 421-6800 - Telephone No.
(302) 421-6813 - Facsimile No.

Mark Chehi, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
One Rodney Square
P.O. Box 636
Wilmington, DE 19899
(302) 651-3000 - Telephone No.
(302) 651-3001 - Facsimile No.


                                       16
<PAGE>

                                                           EXHIBIT B TO THE PLAN


Collateral Trustee:

Arthur Pergament
Pergament Advisors
950 Third Avenue, 3rd Floor
New York, NY  10022
(212) 754-7913
(212) 994-6229


Delaware Trustee:

James J. McGinley
Vice President and Sales Manager
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware  19890


Claimants' Counsel:

Perry Weitz, Esq.
Weitz & Luxenberg
180 Maiden Lane
New York, NY  10038
(212) 558-5500 - Telephone No.
(212) 344-5461 - Facsimile No.

Joseph F. Rice, Esq.
28 Bridgeside Boulevard
P.O. Box 1792
Mt. Pleasant, SC  29464
(843) 216-9000 - Telephone No.
(843) 216-9290 - Facsimile No.

      G. Successors and Assigns. This Collateral Trust Agreement shall be
binding upon the Parties and their respective successors and assigns.

      H. Entire Agreement. This Collateral Trust Agreement contains the complete
and entire understanding of the Parties with respect to the subject matter
hereof, and no changes shall be recognized as valid unless they are made in
writing and signed by the parties as required by Section IV.D hereto.


                                       17
<PAGE>

                                                           EXHIBIT B TO THE PLAN


      I. Headings. The headings used in this Collateral Trust Agreement are
included for convenience only and neither constitute a portion of this
Collateral Trust Agreement nor in any manner affect the construction of the
provisions of this Collateral Trust Agreement.

      J. Invalidity; Illegality. The invalidity, illegality, or unenforceability
of any provision of this Collateral Trust Agreement pursuant to a judicial or
tribunal decree shall not affect the validity or enforceability of any other
provision of this Collateral Trust Agreement, all of which shall remain in full
force and effect.

      K. Governing Law. The Collateral Trust Agreement shall in all respects be
governed by, and construed in accordance with, the laws of the State of Delaware
(excluding conflict of law rules), including all matters of construction,
validity and performance; provided, however, that there shall not be applicable
to the Collateral Trust, the Trustees or this Collateral Trust Agreement, any
provisions of the laws (statutory or common) of the State of Delaware, other
than the Delaware Act, pertaining to trusts that relate to or regulate, in a
manner inconsistent with the terms hereof (i) the filing with any court or
governmental body or agency of trustee accounts or schedule of trustee fees and
charges, (ii) affirmative requirements to post bonds for trustees, officers,
agents, or employees of a trust, (iii) the necessity for obtaining court or
other governmental approval concerning the acquisition holding or disposition of
real personal property, (iv) fees or other sums payable to trustees, officers,
agents, or employees of a trust, (v) the allocation of receipts and expenditures
to income and principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding or investing trust assets, or
(vii) the establishment of fiduciary or other standards or responsibilities or
limitations on the acts or powers of trustees.


                                       18
<PAGE>

                                                           EXHIBIT B TO THE PLAN


      L. Dispute Resolution. Any dispute arising out of or relating to this
contract including the breach, termination or validity thereof shall be settled
by arbitration in accordance with the CPR Rules for Non-Administered Arbitration
in effect on the date of this Collateral Trust Agreement, by a sole arbitrator
who shall be drawn from the CPR judicial list of distinguished neutrals. The
arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. ss.ss.
1-16, and judgment upon the award rendered by the arbitrator may be entered by
any court having jurisdiction thereof. The place of arbitration shall be
Wilmington, Delaware. The arbitrator is not empowered to award damages in excess
of compensatory damages and each party expressly waives and foregoes any right
to punitive, exemplary or similar damages unless a statute requires that
compensatory damages be increased in specified manner. The statute of
limitations of the State of Delaware applicable to the commencement of a lawsuit
shall apply to the commencement of arbitration hereunder.

      M. Counterparts. This Collateral Trust Agreement may be executed in any
number of counterparts. Each of such counterparts for all purposes shall be
deemed to be an original, and all such counterparts together shall constitute
but one and the same Agreement.


                                       19
<PAGE>

                                                           EXHIBIT B TO THE PLAN


      IN WITNESS WHEREOF, the parties have caused this Collateral Trust
Agreement to be duly executed this 16th day of April 2003.

                                       CONGOLEUM CORPORATION



                                       By  /s/ Howard N. Feist III
                                           ------------------------------------
                                           Howard N. Feist III
                                           Chief Financial Officer


                                       COLLATERAL TRUSTEE


                                       By  /s/ Arthur J. Pergament
                                           ------------------------------------
                                           Arthur J. Pergament


                                       DELAWARE TRUSTEE


                                       By  /s/ Janet H. Havrilla
                                           ------------------------------------
                                           Janet H. Havrilla
                                           Financial Services Officer
                                           Wilmington Trust Company


                                       20
<PAGE>

                                                           EXHIBIT B TO THE PLAN


                                   APPENDIX A

                              INVESTMENT GUIDELINES

1.    United States-Direct Obligations (e.g., Treasury Bills, Notes and Bonds).
      Any United States direct obligation that has a maturity of not more than 2
      years from the date of purchase.

2.    Government Agencies and Instrumentalities-Direct or Indirect Obligations
      (e.g., notes issued by the Federal Home Loan Bank and Federal National
      Mortgage Association). Any government agency or instrumentality direct or
      indirect obligation that has a maturity of not more than 2 years from the
      date of purchase.

3.    Commercial Paper. Any commercial paper note of a foreign or domestic
      corporation that has a maturity of not more than six months and that is
      rated no lower than A-1 by S&P or P-1 by Moody's.

4.    Medium Term Notes. Any promissory note of a domestic corporation that has
      a maturity of not more than 2 years from the date of purchase and that is
      rated no lower than A by S&P or Moody's.

5.    Bank Securities. Any foreign or domestic banker's acceptance, certificate
      of deposit, time deposit or note that has a maturity of not more than 1
      year from the date of purchase and that is rated no lower than A by
      Moody's or S&P.

6.    Municipal Securities. Any issue that includes direct or indirect
      obligations of any state, county, city or other qualifying entity. A
      short-term issue may be rated no lower than MIG 1 or SP-1; a long-term
      issue may be rated no lower than A by S&P or Moody's. Issues must have a
      maturity or redemption option of not more than 2 years from the date of
      purchase.

7.    Money Market Fund. Any money market fund that has minimum net assets of
      $500 million and an average portfolio maturity of not more than 180 days.

8.    Other (e.g., U.S. dollar asset-backed securities, private placements, U.S.
      dollar obligations of foreign governments, supra-national organizations
      and domestic and foreign corporations). Any other investment that has a
      maturity of not less than 1 year from the date of purchase and that is
      rated no lower than A by Moody's or S&P.

<PAGE>

                                                           EXHIBIT B TO THE PLAN


                  FIRST AMENDMENT TO COLLATERAL TRUST AGREEMENT


      This first amendment to the Collateral Trust Agreement ("Amendment to the
Collateral Trust Agreement") is entered into by and among Congoleum Corporation,
a Delaware Corporation ("Congoleum"), Arthur J. Pergament, solely in his
capacity as the Collateral Trustee hereunder (the "Collateral Trustee") and
Wilmington Trust Company, a Delaware banking corporation, solely in its capacity
as Delaware Trustee (the "Delaware Trustee") (Congoleum, the Collateral Trustee,
and the Delaware Trustee, collectively, the "Parties"), with the consent of
Claimants' Counsel, as designated in the Settlement Agreement Between Congoleum
Corporation And Various Asbestos Claimants.

                                    RECITALS

      WHEREAS Congoleum, the Collateral Trustee and the Delaware Trustee entered
into the Collateral Trust Agreement pursuant to which a statutory trust under
the Delaware Statutory Trust Act was created on April 17, 2003; and

      WHEREAS, Congoleum and various Asbestos Claimants executed a settlement
agreement dated April 10, 2003, titled Settlement Agreement Between Congoleum
Corporation and Various Asbestos Claimants (the "Claimant Agreement"); and

      WHEREAS, Congoleum and various Asbestos Claimants contemporaneously
herewith are executing that certain first amendment to the Claimant Agreement
(the "Amendment to the Claimant Agreement"); and

      WHEREAS, on or about April 11, 2003 and April 17, 2003, respectively,
Congoleum executed agreements titled "Security Agreement" and "Second Security
Agreement" (collectively, the "Security Agreements") granting to the Collateral
Trust a present and continuing security interest in certain insurance proceeds;
and

<PAGE>

                                                           EXHIBIT B TO THE PLAN


      WHEREAS, Congoleum and the Collateral Trustee contemporaneously herewith
have terminated the Security Agreements by the means of the Termination
Agreement and entered into a subsequent security agreement ("Superceding
Security Agreement"); and

      WHEREAS, the Parties desire to enter into this Amendment to the Collateral
Trust Agreement to confirm their agreement with respect to (i) the termination
of the Security Agreements; (ii) the execution of the Superceding Security
Agreement, (iii) certain technical corrections to the Collateral Trust
Agreement; and (iv) certain other matters relating to the foregoing, as
hereafter provided; and

      WHEREAS, Section IV.D. of the Collateral Trust Agreement authorizes the
Trustee, with the unanimous consent of Congoleum and Claimants' Counsel to
modify and amend the Collateral Trust Agreement.

      NOW, THEREFORE, the Parties hereby agree that the Collateral Trust
Agreement shall be amended as follows:

                                        AGREEMENT


1. The paragraph below shall be added to the Claimant Agreement as Section I.C:

      C. Nontransferability of Beneficial Interests. The beneficial interests in
      the Collateral Trust are not transferable or assignable, except as may be
      provided under operation of law or after the death of an Asbestos Claimant
      pursuant to a will or the law applicable to decedent's estates. The
      beneficial interests in the Collateral Trust shall not be evidenced by a
      separate certificate. Nothing in this paragraph I.C shall in any way
      restrict the ability of the Collateral Trust to transfer the Trust Assets
      to any trust established pursuant to a plan of reorganization for
      Congoleum under chapter 11 of the United States Bankruptcy Code.


                                       2
<PAGE>

                                                           EXHIBIT B TO THE PLAN


2. Sections II.E.1 and 2 of the Collateral Trust Agreement shall be replaced in
their entirety with:

      E. Enforcement of Security Interest.

      The Collateral Trustee shall have the power and authority to enforce the
      Collateral Trust's interest in the Collateral in accordance with the
      Superceding Security Agreement and applicable law.

3. Sections IV.C and IV.D of the Collateral Trust Agreement shall be replaced in
their entirety with:

      C. Termination. The Collateral Trust shall terminate upon the earliest of:
      (i) the payment in full of all of the Participating Asbestos Claimant's
      Secured Claims and the distribution of all Trust Assets pursuant to the
      terms of this Collateral Trust Agreement; (ii) the distribution of all
      Trust Assets pursuant to the terms of this Collateral Trust Agreement and
      the Collateral Trustee's determination that no further steps to recover
      any assets subject to the Security Interest are commercially reasonable;
      (iii) the transfer of the Trust Assets to the Plan Trust pursuant to the
      terms of this Collateral Trust Agreement; (iv) the payment of the Trust
      Assets to Congoleum pursuant to the terms of Section II.B.5; or (v) the
      expiration of any Perpetuities Period applicable to the Collateral Trust,
      provided that, to the extent permitted by applicable law, Congoleum
      directs that the Rule Against Perpetuities shall not apply to the
      Collateral Trust and that the Collateral Trust shall not be limited by a
      Perpetuities Period. "Perpetuities Period" shall mean the period (if any)
      defined by any applicable rule against perpetuities (the "Applicable
      Rule") within which interests in the Collateral Trust must vest in order
      to be valid when created. The Perpetuities Period includes any period in
      gross permitted by the Applicable Rule, such as twenty-one (21) years. If
      the Perpetuities Period is defined with reference to a given date or the


                                       3
<PAGE>

                                                           EXHIBIT B TO THE PLAN


      death of the last survivor of a class of individuals living on a given
      date (the "Measuring Lives"), the date shall be the date prescribed by the
      Applicable Rule and the Measuring Lives shall be the members of the class
      of persons living on that date who are authorized to receive any payment
      from the Collateral Trust prior to its termination. If the Applicable Rule
      applies differently to different kinds of Trust Assets, a direction to
      terminate the Collateral Trust upon the expiration of the Perpetuities
      Period shall be applied separately to the different kinds of property. If
      Trust Assets transferred to the Collateral Trustee at different times have
      different Perpetuities Periods, a direction to terminate the Collateral
      Trust upon the expiration of the Perpetuities Period shall be applied
      separately to the different Trust Assets, provided that (i) Trust Assets
      for which no sufficient record exists to determine the date of transfer
      shall be deemed for this purpose to have been transferred on the earliest
      possible date, and (ii) an insurance policy or the proceeds of an
      insurance policy shall be deemed transferred on the date the policy is
      acquired by the Collateral Trust regardless of the dates on which premiums
      are subsequently paid. If the Collateral Trust suspends the power of
      alienation or permits accumulations within the meaning of any Applicable
      Rule limiting the period for such suspension or accumulations then this
      provision shall apply to such suspension or accumulations as if they were
      non-vested interests. Upon the termination of the Collateral Trust
      pursuant to the application of any Perpetuities Period, the Collateral
      Trustee shall pay the remaining principal to Congoleum.

      D. Amendments. The Collateral Trustee, with the unanimous consent of
      Congoleum and Claimants' Counsel, may modify and amend this Collateral
      Trust Agreement. Any modification made pursuant to this Section IV.D must
      be made in writing. The ability of the Collateral Trustee, Congoleum and


                                       4
<PAGE>

                                                           EXHIBIT B TO THE PLAN


      Claimants' Counsel to amend this Collateral Trust Agreement in accordance
      with this Section IV.D shall not be restricted by any third party not a
      party hereto, including without limitation any Asbestos Claimant.
      Notwithstanding the foregoing or any other provision of this Collateral
      Trust Agreement, no modification or amendment to this Collateral Trust
      Agreement shall be effective to alter the rights or duties of the Delaware
      Trustee unless consented to in writing by the Delaware Trustee.

4. Other than expressly provided for herein, the terms of the Collateral Trust
Agreement shall remain in full force and effect.

5. The Collateral Trust Agreement and this Amendment to the Collateral Trust
Agreement (collectively, the "Agreements") constitute a single integrated
written contract expressing the entire agreement among the parties hereto with
respect to the subject matter hereof. The Agreements supercede any prior
understandings and agreements between or among the parties with respect to the
subject matter of the Agreements. Any statements, promises or inducements,
whether made by any party or any agents of any party, that are not contained in
the Agreements shall not be valid or binding. The failure or invalidation of any
provision of the Agreements shall not in any way affect the validity or
performance of any party pursuant to any other provision of the Agreements.

6. References in the Claimant Agreement, the Superceding Security Agreement and
the Collateral Trust Agreement to the "Collateral Trust Agreement" shall be
deemed references to the Agreements.

7. This Amendment to the Collateral Trust Agreement may be executed in any
number of counterparts. Each of such counterparts for all purposes shall be
deemed to be an original, and all such counterparts together shall constitute
but one and the same Amendment to the Collateral Trust Agreement.


                                       5
<PAGE>

                                                           EXHIBIT B TO THE PLAN


      IN WITNESS WHEREOF, the Parties have caused this Amendment to the
Collateral Trust Agreement to be duly executed this 6th day of June 2003.

                                    CONGOLEUM CORPORATION


                                    By  /s/ Howard N. Feist III
                                        ----------------------------------------
                                        Howard N. Feist III
                                        Chief Financial Officer


                                    COLLATERAL TRUSTEE


                                    By  /s/ Arthur J. Pergament
                                        ----------------------------------------
                                        Arthur J. Pergament


                                    DELAWARE TRUSTEE


                                    By  /s/ Ronney Perkins
                                        ----------------------------------------
                                        Ronney Perkins
                                        Assistant Vice President
                                        Wilmington Trust Company


CONSENT:

      By their signatures below, Claimants' Counsel, as designated in the
Settlement Agreement Between Congoleum Corporation And Various Asbestos
Claimants, indicate their consent to the execution of this Amendment to the
Collateral Trust Agreement.

                                    /s/ Perry Weitz
                                    ----------------------------------------
                                        Perry Weitz, Esq.

                                    /s/ Joseph F. Rice
                                    ----------------------------------------
                                        Joseph F. Rice, Esq.


                                       6

<PAGE>

                                                           EXHIBIT C TO THE PLAN


                              Exhibit C to the Plan

                 ASBESTOS INSURANCE RIGHTS ASSIGNMENT AGREEMENT


                                       1
<PAGE>

                      ASBESTOS INSURANCE RIGHTS ASSIGNMENT AGREEMENT



      This ASBESTOS INSURANCE RIGHTS ASSIGNMENT AGREEMENT (this "Agreement") is
made as of [_____________________], 2006 by and among Congoleum Corporation,
Congoleum Sales, Inc. and Congoleum Fiscal, Inc. (collectively, the "Insurance
Contributors") and the Plan Trust. Capitalized terms used herein without
definition shall have the meanings given to such terms in the Eighth Modified
Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code of
Congoleum Corporation, et al. (as amended, modified or supplemented from time to
time in accordance with the terms thereof, the "Plan").

      WHEREAS, to protect themselves from certain risks resulting from their
businesses, the Insurance Contributors purchased liability insurance policies;

      WHEREAS, numerous individuals, business organizations, and other persons
have asserted asbestos-related personal injury claims against Congoleum and
certain affiliated entities;

      WHEREAS, on December 31, 2003, Congoleum and certain affiliated entities
filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy
Code in the United States Bankruptcy Court for the District of New Jersey;

      WHEREAS, the Plan was confirmed on [______________], and has become
effective;

      WHEREAS, the Plan provides that the Insurance Contributors will assign the
Asbestos Insurance Rights to the Plan Trust;

      WHEREAS, the Insurance Contributors wish to implement the terms of the
Plan; and

      WHEREAS, the Insurance Contributors are receiving good and valuable
consideration in exchange for the transfers, grants, assignments, and promises
made in this Agreement, including the releases and indemnification described in
the Plan and related documents, the receipt and sufficiency of which is
acknowledged and agreed;

      NOW, THEREFORE, subject to and on the terms and conditions herein set
forth, the Insurance Contributors and the Plan Trust hereby agree as follows:

I.    ASSIGNMENT TO THE PLAN TRUST

      A. Effective upon the Effective Date, the Insurance Contributors hereby
irrevocably transfer and assign to the Plan Trust any and all of their Asbestos
Insurance Rights and all rights and claims asserted in the pending Coverage
Litigation (including without limitation cash and other proceeds of all such
rights and claims received by any Insurance Contributor and/or any Debtor during
the pendency of the Reorganization Cases), free and clear of all Claims, Liens
and encumbrances, provided, however, that such transfer and assignment of the
Asbestos Insurance Rights shall be subject to the terms of the Plan and the Plan
Trust Agreement.

      B. The Plan Trust and the Insurance Contributors intend that the Asbestos
Insurance Assignment be made to the maximum extent permitted under applicable
law.

      C. The Asbestos Insurance Assignment is not an assignment of any insurance
policy.


                                       2
<PAGE>

      D. Upon request by the Plan Trust and at the cost of the Plan Trust (as
provided in Section II herein), an Insurance Contributor or Reorganized Debtor,
as applicable, shall (i), provided that the Plan Trust provides reasonable
evidence of its ability to promptly pay all costs incurred in such effort, use
its best efforts to pursue any of the Asbestos Insurance Rights for the benefit
of and to the fullest extent required by the Plan Trust, and (ii) immediately
transfer any amounts recovered under or on account of any of the Asbestos
Insurance Rights to the Plan Trust; provided, however, that while any such
amounts are held by or under the control of an Insurance Contributor or
Reorganized Debtor, such amounts (and any interest earned thereon) shall be
segregated and held in trust for the benefit of the Plan Trust.

II.   COOPERATION

      A. To the fullest extent permitted by applicable law, the Insurance
Contributors and/or Reorganized Debtors, as the case may be, shall provide the
Plan Trust with such cooperation as the Plan Trust may reasonably request in
connection with the pursuit by the Plan Trust of the Asbestos Insurance Rights.
Such cooperation shall include, but not be limited to, making their books,
records, employees, agents and professionals available to the Plan Trust. The
Plan Trust shall reimburse the Insurance Contributors and/or Reorganized
Debtors, as the case may be, for their reasonable out-of-pocket costs and
expenses (including reasonable attorneys' and consultants' fees) incurred (i) in
connection with providing the cooperation described in the preceding sentences,
and (ii) in connection with the pursuit of Asbestos Insurance Rights as provided
in Section I.D. above. Such reimbursement shall be paid promptly following
request for reimbursement accompanied by appropriate documentation.

      B. Notwithstanding anything in the Plan Documents to the contrary, the
Insurance Contributors and/or Reorganized Debtors, as the case may be, as part
of every settlement with any one or more London Market insurer(s) (including
Equitas), hereby agree that the Plan Trust, in its sole discretion, may
effectuate a complete policy buy-back of any policies subscribed by any one or
more London Market insurer(s) (following which the Insurance Contributors and/or
Reorganized Debtors shall retain no coverage with respect to such insurer(s)).
The Insurance Contributors and/or Reorganized Debtors, as the case may be,
hereby waive their rights to any proceeds of all such settlements, and all
proceeds of each such settlement (other than as reimbursement in accordance with
the Collateral Trust Agreement and the Plan Documents of Coverage Costs and/or
the Claims Handling Fee) shall be held for the benefit of Asbestos Claimants in
accordance with the Plan Documents.

      C. The Insurance Contributors and/or Reorganized Debtors, as the case may
be, upon request of the Plan Trustee, shall evaluate additional requests for
complete policy commutations. To the extent that additional complete policy
commutations do not materially impair the Insurance Contributors' and/or
Reorganized Debtors', as the case may be, ongoing need for insurance coverage
for potential non-asbestos liabilities and such additional releases are
reasonably necessary to permit the realization of asbestos-related insurance
settlements, the Insurance Contributors and/or Reorganized Debtors, as the case
may be, will cooperate with the Plan Trustee to provide additional policy
commutations. Such additional policy commutations may be conditioned upon a
reasonable allocation of policy proceeds or other provisions to protect
Congoleum from potential non-asbestos liabilities as may be agreed between the
Insurance Contributors and/or Reorganized Debtors, as the case may be, and the
Plan Trustee.

      D. The Insurance Contributors and/or Reorganized Debtors, as the case may
be, agree that their collection or use, if any, of proceeds of any Asbestos
Insurance Policy, to the extent permitted under the Plan Documents, (i) will not
reduce any aggregate, per occurrence or other policy limit of any Asbestos
Insurance Policy that is or could potentially be applicable to Asbestos Claims,
and (ii) will not in any way interfere with the Plan Trust's exercise of any
Asbestos Insurance Rights.


                                       3
<PAGE>

III.  MISCELLANEOUS

      A. Binding Effect, Assignment, Third Party Beneficiaries. This Agreement
shall be binding on each of the parties hereto and their respective successors
and assigns. This Agreement is not intended, and shall not be construed, deemed
or interpreted, to confer on any person or entity not a party hereto any rights
or remedies hereunder.

      B. Entire Agreement; Amendment; Waivers. This Agreement, the Plan and the
other Plan Documents shall constitute the entire agreement and understanding
among the parties to this Agreement with respect to the subject matter hereof
and supersede all prior agreements and understandings, oral or written, among
the parties hereto relating to the subject matter of this Agreement. This
Agreement may not be amended or modified, and no provision hereof may be waived,
except by an agreement in writing signed by the party against whom enforcement
of any such amendment, modification or waiver is sought.

      C. Governing Law. This Agreement and the rights and obligations of the
parties hereto under this Agreement shall be governed by and construed and
enforced in accordance with the substantive laws of the State of Delaware,
without regard to any conflicts of law provisions thereof that would result in
the application of the laws of any other jurisdiction.

      D. Counterparts. This Agreement may be executed in multiple counterparts,
each of which will be an original, but all of which together will constitute one
and the same agreement.

                                 [SIGNATURE PAGE FOLLOWS]


                                       4
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Asbestos Insurance
Rights Assignment Agreement to be duly executed by their respective duly
authorized representatives as of the date first above written.

                                    CONGOLEUM CORPORATION


                                    By:  ______________________
                                    Its: ______________________

                                    CONGOLEUM SALES, INC.


                                    By:  ______________________
                                    Its: ______________________

                                    CONGOLEUM FISCAL, INC.


                                    By:  ______________________
                                    Its: ______________________

                                    CONGOLEUM PLAN TRUST


                                    By:       _____________________
                                    Trustee:  _____________________

                                    By:       _____________________
                                    Trustee:  _____________________

                                    By:       _____________________
                                    Trustee:  _____________________


                                       5
<PAGE>

                                                           EXHIBIT D TO THE PLAN


                              Exhibit D to the Plan
                        "Congoleum Plan Trust Agreement"
<PAGE>

                                                           EXHIBIT D TO THE PLAN


                         CONGOLEUM PLAN TRUST AGREEMENT

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

SECTION 1 AGREEMENT OF TRUST.................................................2

   1.1   Creation and Name...................................................2

   1.2   Purpose.............................................................2

   1.3   Transfer of Assets..................................................2

   1.4   Acceptance of Assets and Assumption of Liabilities..................3

SECTION 2 POWERS AND TRUST ADMINISTRATION....................................4

   2.1   Powers..............................................................4

   2.2   General Administration..............................................6

   2.3   Claims Administration...............................................9

SECTION 3 ACCOUNTS, INVESTMENTS, AND PAYMENTS................................9

   3.1   Accounts............................................................9

   3.2   Plan Trust Disputed Claims Reserve.................................10

   3.3   Investments........................................................11

   3.4   Source of Payments.................................................12

   3.5   Payments of Allowed Asbestos Property Damage Claims................12

   3.6   Payment of Plan Trust Expenses.....................................13

   3.7   Indemnification Payments...........................................13

SECTION 4 PLAN TRUSTEES AND DELAWARE TRUSTEE................................14

   4.1   Number.............................................................14

   4.2   Term of Service....................................................14

   4.3   Appointment of Successor Plan Trustees.............................15

   4.4   Liability of Plan Trustees, Delaware Trustee, Officers and
         Employees..........................................................15

   4.5   Compensation and Expenses of Plan Trustees.........................15

   4.6   Indemnification of Plan Trustees, Additional Indemnitees,
         Claimants' Representative and Collateral Trustee...................16

   4.7   Plan Trustees' Lien................................................18

   4.8   Plan Trustees' Employment of Experts; Delaware Trustee's
         Employment of Counsel..............................................18

   4.9   Plan Trustees' Independence........................................18


                                        i
<PAGE>

                                                           EXHIBIT D TO THE PLAN


   4.10  Bond...............................................................18

   4.11  Delaware Trustee...................................................19

SECTION 5 PLAN TRUST ADVISORY COMMITTEE.....................................20

   5.1   Members............................................................20

   5.2   Duties.............................................................20

   5.3   Consent of TAC With Respect to Avoidance Actions, etc..............20

   5.4   Term of Office.....................................................20

   5.5   Appointment of Successor...........................................20

   5.6   TAC's Employment of Professionals..................................21

   5.7   Compensation and Expenses of the TAC...............................21

   5.8   Procedures for Consultation With and Obtaining the Consent
         of the TAC.........................................................22

   5.9   Copies to the TAC..................................................23

SECTION 6 THE FUTURES REPRESENTATIVE........................................23

   6.1   Duties.............................................................23

   6.2   Term of Office.....................................................23

   6.3   Appointment of Successor...........................................23

   6.4   Futures Representative's Employment of Professionals...............24

   6.5   Compensation and Expenses of the Futures Representative............24

   6.6   Procedures for Consultation with and Obtaining the Consent of the
         Futures Representative.............................................25

   6.7   Copies to Futures Representative...................................26

SECTION 7 GENERAL PROVISIONS................................................26

   7.1   Irrevocability.....................................................26

   7.2   Dissolution........................................................26

   7.3   Amendments.........................................................27

   7.4   Meetings...........................................................27

   7.5   Severability.......................................................27

   7.6   Notices............................................................28

   7.7   Successors and Assigns.............................................30

   7.8   Limitation on Claim Interests for Securities Laws Purposes.........30

   7.9   Entire Agreement; No Waiver........................................30

   7.10  Headings...........................................................30

   7.11  Governing Law......................................................30


                                       ii
<PAGE>

                                                           EXHIBIT D TO THE PLAN


   7.12  Settlor Representative and Cooperation.............................30

   7.13  Dispute Resolution.................................................30

   7.14  Enforcement and Administration.....................................31

   7.15  Effectiveness......................................................31

   7.16  Counterpart Signatures.............................................31


                                       iii
<PAGE>

                                                           EXHIBIT D TO THE PLAN


                              CONGOLEUM PLAN TRUST AGREEMENT

      This Congoleum Plan Trust Agreement (this "Plan Trust Agreement"), dated
the date set forth on the signature page hereof and effective as of the
Effective Date, is entered into by Congoleum Corporation, Congoleum Sales, Inc.,
and Congoleum Fiscal, Inc. (collectively referred to as the "Debtors,"
"Congoleum," or the "Settlors"), the debtors and debtors-in-possession in Case
No. 03-51524 in the United States Bankruptcy Court for the District of New
Jersey; the Futures Representative; the Asbestos Claimants Committee ("ACC");
the Plan Trustees, the Delaware Trustee and the members of the Trust Advisory
Committee ("TAC") identified on the signature page hereof and appointed at
Confirmation pursuant to the Confirmed Plan of Reorganization Under Chapter 11
of the Bankruptcy Code of Congoleum Corporation, et al., dated as of July 30,
2006 (the "Plan"), as such Plan may be amended, modified or supplemented from
time to time. All capitalized terms not otherwise defined herein shall have
their respective meanings as set forth in the Plan, and such definitions are
incorporated herein by reference. All capitalized terms not defined herein or
defined in the Plan, but defined in the Bankruptcy Code or Bankruptcy Rules,
shall have the meanings ascribed to them by the Bankruptcy Code and Bankruptcy
Rules, and such definitions are incorporated herein by reference.

      WHEREAS, at the time of the entry of the order for relief in the Chapter
11 case, Congoleum was named as a defendant in actions seeking recovery for
damages allegedly caused by the presence of or exposure to asbestos or
asbestos-containing products for which Congoleum, its predecessors, successors
and assigns have legal liability ("Plan Trust Asbestos Claims" as defined in the
Plan); and

      WHEREAS, Congoleum has reorganized under the provisions of Chapter 11 of
the Bankruptcy Code in a case pending in the United States Bankruptcy Court for
the District of New Jersey, known as In re Congoleum Corporation et al., Case
No. 03-51524; and

      WHEREAS, the Plan has been confirmed by the Bankruptcy Court; and

      WHEREAS, the Plan provides, inter alia, for the creation of the Plan
Trust; and

      WHEREAS, pursuant to the Plan, the Plan Trust is to use its assets and
income to satisfy all Plan Trust Asbestos Claims; and

      WHEREAS, it is the intent of Congoleum, the Plan Trustees, the ACC, the
TAC, and the Futures Representative that the Plan Trust be administered,
maintained, and operated at all times through mechanisms that provide reasonable
assurance that the Plan Trust will satisfy all Plan Trust Asbestos Claims
pursuant to this Plan Trust Agreement and the TDP that is attached hereto as
Exhibit A in substantially the same manner, and in strict compliance with the
terms of this Plan Trust Agreement; and

      WHEREAS, pursuant to the Plan, the Plan Trust is intended to qualify as a
"qualified settlement fund" within the meaning of section 1.468B-1 et seq. of
the Treasury Regulations promulgated under section 468B of the Internal Revenue
Code ("IRC"); and

<PAGE>

                                                           EXHIBIT D TO THE PLAN


      WHEREAS, the Bankruptcy Court has determined that the Plan Trust and the
Plan satisfy all the prerequisites for an injunction pursuant to section 524(g)
of the Bankruptcy Code, and such injunction has been entered in connection with
the Confirmation Order;

      NOW, THEREFORE, it is hereby agreed as follows:

                                    SECTION 1

                               AGREEMENT OF TRUST

      1.1 Creation and Name. The Debtors as Settlors hereby create a trust known
as the "Congoleum Plan Trust," which is the Plan Trust provided for and referred
to in the Plan. The Plan Trustees may transact the business and affairs of the
Plan Trust in the name of the Plan Trust.

      It is the intention of the parties hereto that the trust created hereby
constitute a statutory trust under Chapter 38 of title 12 of the Delaware Code,
12 Del. C. ss. 3801 et seq. (the "Act") and that this document, together with
the by-laws described herein, constitute the governing instruments of the Plan
Trust. The Plan Trustees and the Delaware Trustee are hereby authorized and
directed to execute and file a Certificate of Trust with the Delaware Secretary
of State in the form attached hereto.

      1.2 Purpose. The purpose of the Plan Trust is to assume the liabilities of
Congoleum, its predecessors and successors in interest, for all Plan Trust
Asbestos Claims, and to use the Plan Trust's assets and income to pay the
holders of all Plan Trust Asbestos Claims in accordance with this Plan Trust
Agreement and the TDP in such a way that such holders of Plan Trust Asbestos
Claims are treated fairly, equitably and reasonably in light of the limited
assets available to satisfy such claims, and to otherwise comply in all respects
with the requirements of a trust set forth in section 524(g)(2)(B) of the
Bankruptcy Code. All Plan Trust Asbestos Claims (other than the Asbestos
Property Damage Claims) shall be determined, liquidated, and paid pursuant to
this Plan Trust Agreement and the TDP. Asbestos Property Damage Claims shall be
determined pursuant to the Plan and paid, if Allowed, pursuant to this Plan
Trust Agreement. In addition, the Plan Trust shall prosecute, settle and manage
the disposition of the Asbestos In-Place Insurance Coverage and prosecute,
settle and manage Asbestos Insurance Actions and Direct Actions.

      1.3 Transfer of Assets. Pursuant to the Plan, the Plan Trust Assets have
been transferred and assigned to the Plan Trust to settle and discharge all Plan
Trust Asbestos Claims. Any insurance proceeds subject to the Security Agreement
and/or the Collateral Trust Agreement are transferred and assigned to and
assumed by the Plan Trust subject to any lien and/or security interests
reflected in such agreements, in the event that such Agreements are found valid,
enforceable and unavoidable by a final nonappealable order of a court of
competent jurisdiction, or by a settlement agreement approved by the Bankruptcy
Court. Pursuant to the Plan, Reorganized Congoleum and others may also transfer
and assign additional assets to the Plan Trust from time to time. In all events,
such assets will be transferred to the Plan Trust free and clear of any liens or
other claims by Congoleum, Reorganized Congoleum, any creditor, or other entity.
Congoleum, Reorganized Congoleum, and any other transferors shall also execute
and deliver such documents to the Plan Trust as the Plan Trustees reasonably
request to transfer and assign the Plan Trust Assets to the Plan Trust.


                                       2
<PAGE>

                                                           EXHIBIT D TO THE PLAN


      1.4 Acceptance of Assets and Assumption of Liabilities.

      (a) In furtherance of the purposes of the Plan Trust, the Plan Trustees,
on behalf of the Plan Trust, hereby expressly accept the transfer and assignment
to the Plan Trust of the Plan Trust Assets in the time and manner as
contemplated in the Plan Documents.

      (b) In furtherance of the purposes of the Plan Trust, the Plan Trustees,
on behalf of the Plan Trust, expressly assume all liabilities, obligations and
responsibilities relating to all Plan Trust Asbestos Claims and Asbestos
Expenses. Except as otherwise provided in this Plan Trust Agreement and the TDP,
the Plan Trust shall have all defenses, cross-claims, offsets, and recoupments,
as well as rights of indemnification, contribution, subrogation, and similar
rights, regarding such claims that Congoleum or Reorganized Congoleum has or
would have had under applicable law. Regardless of the foregoing, however, a
claimant must meet otherwise applicable federal, state and foreign statutes of
limitations and repose, except that a claimant may establish that such statutes
were tolled by operation of law or as provided in the TDP.

      (c) No provision herein or in the TDP shall be construed to mandate
distributions on any claims or other actions that would contravene the Plan
Trust's compliance with the requirements of a qualified settlement fund within
the meaning of section 1.468B-1 et seq. of the Treasury Regulations promulgated
under section 468B of the IRC.

      (d) The Plan Trust shall indemnify, defend and hold harmless each of the
Debtors, the Reorganized Debtors and their past, present and future
Representatives for any expenses, costs and fees (including reasonable
attorneys' fees and costs, but excluding any such expenses, costs and fees
incurred prior to the Effective Date), judgments, settlements or other
liabilities arising from or incurred in connection with, any Plan Trust Asbestos
Claim, including but not limited to indemnification or contribution for Plan
Trust Asbestos Claims prosecuted against the Reorganized Debtors after the
Effective Date but excluding (i) any amounts paid prior to or on the Effective
Date by the Debtors or their past or present Representatives and (ii) any
amounts paid or incurred by any Reorganized Debtor or its Representatives,
whether before or after the Effective Date, in connection with defending,
objecting to, or otherwise related to any proceedings to determine whether an
Asbestos Property Damage Claim is or should be Allowed. Notwithstanding anything
in this Section 1.4 to the contrary, the Plan Trust shall reimburse and pay
promptly the Reorganized Debtors, from the proceeds of the Asbestos Insurance
Action Recoveries, for the Claims Handling Fee and, to the extent provided under
the terms of the Asbestos Insurance Settlement Agreement with Liberty Mutual
Insurance Company, for the Coverage Costs, to the extent such Claims Handling
Fee and Coverage Costs have not been reimbursed or paid to the Debtors or
Reorganized Debtors, as applicable, from Asbestos Insurance Action Recoveries
received on or after the Petition Date.

      (e) Nothing in this Plan Trust Agreement shall be construed in any way to
limit the scope, enforceability, or effectiveness of the Injunctions issued in
connection with the Plan or the Plan Trust's assumption of all liability for
Plan Trust Asbestos Claims, subject to the provisions of Section 1.4(b) above.


                                       3
<PAGE>

                                                           EXHIBIT D TO THE PLAN


                                    SECTION 2

                         POWERS AND TRUST ADMINISTRATION

      2.1 Powers.

      (a) The Plan Trustees are and shall act as the fiduciaries to the Plan
Trust in accordance with the provisions of this Plan Trust Agreement and the
Plan. The Plan Trustees shall, at all times, administer the Plan Trust and the
Plan Trust Assets in accordance with the purposes set forth in Section 1.2
above. Subject to the limitations set forth in this Plan Trust Agreement, the
Plan Trustees shall have the power to take any and all actions that, in the
judgment of the Plan Trustees, are necessary or proper to fulfill the purposes
of the Plan Trust, including, without limitation, each power expressly granted
in this Section 2.1, any power reasonably incidental thereto, and any trust
power now or hereafter permitted under the laws of the State of New Jersey.

      (b) Except as required by applicable law or otherwise specified herein,
the Plan Trustees need not obtain the order or approval of any court in the
exercise of any power or discretion conferred hereunder.

      (c) Without limiting the generality of Section 2.1(a) above, and except as
limited below, the Plan Trustees shall have the power to:

            (i) receive and hold the Plan Trust Assets, vote the New Class A
      Common Stock (and any Reserved Common Stock), and exercise all rights with
      respect to, and sell, any securities issued by Reorganized Congoleum that
      are included in the Plan Trust Assets, subject to any restrictions set
      forth in the Amended and Restated Certificate of Incorporation of
      Reorganized Congoleum;

            (ii) invest the monies held from time to time by the Plan Trust;

            (iii) sell, transfer, or exchange any or all of the Plan Trust
      Assets at such prices and upon such terms as the Plan Trustees may
      consider proper, consistent with the other terms of this Plan Trust
      Agreement;

            (iv) enter into leasing and financing agreements with third parties
      to the extent such agreements are reasonably necessary to permit the Plan
      Trust to operate;

            (v) pay liabilities and expenses of the Plan Trust, including, but
      not limited to, Plan Trust Expenses;

            (vi) establish such funds, reserves and accounts within the Plan
      Trust estate, as deemed by the Plan Trustees to be useful in carrying out
      the purposes of the Plan Trust;

            (vii) sue and be sued and participate, as a party or otherwise, in
      any judicial, administrative, arbitrative, or other proceeding;


                                       4
<PAGE>

                                                           EXHIBIT D TO THE PLAN


            (viii) establish, supervise and administer the Plan Trust in
      accordance with the TDP and the terms thereof;

            (ix) appoint such officers and hire such employees and engage such
      legal, financial, accounting, investment, auditing and forecasting, and
      other consultants and agents as the business of the Plan Trust requires,
      and delegate to such persons such powers and authorities as the fiduciary
      duties of the Plan Trustees permit and as the Plan Trustees, in their
      discretion, deem advisable or necessary in order to carry out the terms of
      the Plan Trust;

            (x) pay employees, legal, financial, accounting, investment,
      auditing, and forecasting, and other consultants, advisors, and agents,
      including those engaged by the Plan Trust in connection with its
      alternative dispute resolution activities, reasonable compensation;

            (xi) compensate the Plan Trustees, the TAC members, the Delaware
      Trustee and the Futures Representative as provided below, and their
      employees, legal, financial, accounting, investment and other advisors,
      consultants, independent contractors, and agents, and reimburse the Plan
      Trustees, the TAC members, the Delaware Trustee and the Futures
      Representative all reasonable out-of-pocket costs and expenses incurred by
      such persons in connection with the performance of their duties hereunder;

            (xii) execute and deliver such instruments as the Plan Trustees
      consider proper in administering the Plan Trust;

            (xiii) enter into such other arrangements with third parties as are
      deemed by the Plan Trustees to be useful in carrying out the purposes of
      the Plan Trust, provided such arrangements do not conflict with any other
      provision of this Plan Trust Agreement;

            (xiv) in accordance with Section 4.6 below, defend, indemnify and
      hold harmless (and purchase insurance indemnifying) (A) the Plan Trustees
      and (B) the TAC, the Futures Representative, the officers and employees of
      the Plan Trust, and any agents, advisors and consultants of the Plan
      Trust, the TAC or the Futures Representative (the "Additional
      Indemnitees"), to the fullest extent that a corporation or statutory trust
      organized under the law of the Plan Trust's situs is from time to time
      entitled to indemnify and/or insure its directors, trustees, officers,
      employees, agents, and representatives;

            (xv) indemnify the Entities to be indemnified in accordance with
      Section 1.4 and Section 4.6 and purchase insurance or make other such
      arrangements for the Plan Trust and those Entities for whom the Plan Trust
      has an indemnification obligation hereunder;

            (xvi) delegate any or all of the authority herein conferred with
      respect to the investment of all or any portion of the Plan Trust Assets
      to any one or more reputable individuals or recognized institutional
      investment advisors or investment managers without liability for any
      action taken or omission made because of any such delegation, except as
      provided in Section 4.4 below;


                                       5
<PAGE>

                                                           EXHIBIT D TO THE PLAN


            (xvii) consult with Reorganized Congoleum, the TAC and the Futures
      Representative at such times and with respect to such issues relating to
      the conduct of the Plan Trust as the Plan Trustees may consider necessary,
      appropriate or desirable; and

            (xviii) make, pursue (by litigation or otherwise), collect,
      compromise or settle, in the name of the Plan Trust or the name of
      Reorganized Congoleum, any claim, right, action, or cause of action
      included in the Plan Trust Assets, including, but not limited to,
      insurance recoveries, before any court of competent jurisdiction; provided
      that settlement of actions before the Bankruptcy Court require the
      approval of the Bankruptcy Court after notice to Reorganized Congoleum.

      (d) The Plan Trustees shall not have the power to guarantee any debt of
other persons.

      (e) The Plan Trustees shall give the TAC, the Futures Representative and
Reorganized Congoleum prompt notice of any act performed or taken pursuant to
Sections 2.1(c)(i), (iii), (vii), or (xv) above, and any act proposed to be
performed or taken pursuant to Section 2.2(f) below.

      2.2 General Administration.

      (a) The Plan Trustees shall adopt, with the consent of the TAC and the
Futures Representative, and act in accordance with the Plan Trust Bylaws. To the
extent not inconsistent with the terms of this Plan Trust Agreement, the Plan
Trust Bylaws shall govern the affairs of the Plan Trust. In the event of an
inconsistency between the Plan Trust Bylaws and this Plan Trust Agreement, this
Plan Trust Agreement shall govern.

      (b) The Plan Trustees shall (i) timely file such income tax and other
returns and statements and shall timely pay all taxes required to be paid, (ii)
comply with all withholding obligations, as required under the applicable
provisions of the IRC and of any state law and the regulations promulgated
thereunder, (iii) meet without limitation all requirements necessary to qualify
and maintain qualification of the Plan Trust as a qualified settlement fund
within the meaning of section 1.468B-1 et seq. of the Treasury Regulations
promulgated under section 468B of the IRC, and (iv) take no action that could
cause the Plan Trust to fail to qualify as a qualified settlement fund within
the meaning of section 1.468B-1 et seq. of the Treasury Regulations promulgated
under section 468B of the IRC.

      (c) The Plan Trustees shall timely account to the Bankruptcy Court,
regardless of whether the Reorganization Cases are closed, as follows:

            (i) The Plan Trustees shall cause to be prepared and filed with the
      Bankruptcy Court, as soon as available, and in any event within one
      hundred and twenty (120) days following the end of each fiscal year, an
      annual report containing financial statements of the Plan Trust
      (including, without limitation, a balance sheet of the Plan Trust as of
      the end of such fiscal year and a statement of operations for such fiscal
      year) audited by a firm of independent certified public accountants
      selected by the Plan Trustees and accompanied by an opinion of such firm
      as to the fairness of the financial statements' presentation of the cash
      and investments available for the payment of claims and as to the


                                       6
<PAGE>

                                                           EXHIBIT D TO THE PLAN


      conformity of the financial statements with generally accepted accounting
      principles. The Plan Trustees shall provide a copy of such report to the
      TAC, the Futures Representative, and Reorganized Congoleum when such
      report is so filed with the Bankruptcy Court.

            (ii) Simultaneously with delivery of each set of financial
      statements referred to in Section 2.2(c)(i) above, the Plan Trustees shall
      cause to be prepared and filed with the Bankruptcy Court a report
      containing a summary regarding the number and type of Plan Trust Asbestos
      Claims disposed of, and the amount paid in respect of such Plan Trust
      Asbestos Claims, during the period covered by the financial statements.
      The Plan Trustees shall provide a copy of such report to the TAC, the
      Futures Representative and Reorganized Congoleum when such report is
      filed.

            (iii) All materials required to be filed with the Bankruptcy Court
      by this Section 2.2(c) shall be available for inspection by the public in
      accordance with procedures established by the Bankruptcy Court and shall
      be filed with the Office of the United States Trustee for the District of
      New Jersey.

      (d) The Plan Trustees shall cause to be prepared as soon as practicable
prior to the commencement of each fiscal year a budget and cash flow projections
covering such fiscal year and the succeeding four fiscal years. The budget and
cash flow projections shall include determining the Maximum Annual Payment
pursuant to Section 2.5 of the TDP, and the Claims Payment Ratio pursuant to
Section 2.6 of the TDP. The Plan Trustees shall provide a copy of the budget and
cash flow projections to the TAC and the Futures Representative.

      (e) The Plan Trustees shall consult with the TAC and the Futures
Representative (i) on the general implementation and administration of the Plan
Trust; (ii) on the general implementation and administration of the TDP; and
(iii) on such other matters as may be required under this Plan Trust Agreement
and the TDP.

      (f) The Plan Trustees shall be required to obtain the consent of the TAC
and the Futures Representative pursuant to the Consent Process set forth in
Section 5.8(b) and 6.6(b) below, in addition to any other instances elsewhere
enumerated, in order:

            (i) to determine and thereafter redetermine the Payment Percentage
      described in Section 2.4 of the TDP as provided in Section 5.2 of the TDP;

            (ii) to change the Claims Payment Ratio described in Section 2.6 of
      the TDP in the event that the requirements for such a change as set forth
      in said provision have been met;

            (iii) to change the Disease Levels, Scheduled Values and/or
      Medical/Exposure Criteria set forth in Section 6.2(a)(3) of the TDP,
      and/or the Average Values and/or Maximum Values set forth in Section
      6.2(b)(3) of the TDP;

            (iv) to establish and/or to change the Claims Materials to be
      provided holders of Plan Trust Asbestos Claims under Section 7.1 of the
      TDP;


                                       7
<PAGE>

                                                           EXHIBIT D TO THE PLAN


            (v) to require that claimants provide additional kinds of medical
      and/or exposure evidence pursuant to Sections 6.6(b)(3) and 8.1 of the
      TDP;

            (vi) to adopt or thereafter change the form of release to be
      provided pursuant to Section 8.8 of the TDP;

            (vii) amend any provision of the TDP in accordance with the terms
      thereof;

            (viii) to adopt the Plan Trust Bylaws in accordance with Section
      2.2, above, or thereafter to amend the Plan Trust Bylaws in accordance
      with the terms thereof;

            (ix) to terminate the Plan Trust pursuant to Section 7.2 below;

            (x) to settle the liability of any insurer under any insurance
      policy or legal action related thereto;

            (xi) subject to Section 5.3 below, to settle either of the Avoidance
      Actions or any other legal action relating to the validity, enforceability
      or voidability of any Plan Trust Disputed Claim;

            (xii) to change the compensation and/or per diem of the members of
      the TAC, the Futures Representative or Plan Trustees, other than to
      reflect cost-of-living increases or changes approved by the Bankruptcy
      Court as otherwise provided herein;

            (xiii) to take structural or other actions to minimize any tax on
      the Plan Trust Assets;

            (xiv) to vote the stock of any Reorganized Debtor for purposes of
      appointing members of the Board of Directors of such Reorganized Debtor;

            (xv) to acquire an interest in or to merge any asbestos claims
      resolution organization formed by the Plan Trust with another asbestos
      claims resolution organization that is not specifically created by this
      Plan Trust Agreement or the TDP, or to contract with another asbestos
      claims resolution organization or other entity that is not specifically
      created by this Plan Trust Agreement or the TDP, or permit any other party
      to join in any asbestos claims resolution organization that is formed by
      the Plan Trust pursuant to this Plan Trust Agreement or the TDP; provided
      that such merger, acquisition, contract or joinder shall not (a) subject
      Reorganized Congoleum, or any successors in interest thereto, to any risk
      of having any Plan Trust Asbestos Claim asserted against it or them, or
      (b) otherwise jeopardize the validity or enforceability of the section
      524(g) injunction; and provided further that the terms of such merger will
      require the surviving organization to make decisions about the
      allowability and value of claims in accordance with Section 2.1 of the TDP
      which requires that such decisions be based on the provisions of the TDP;

            (xvi) to sell, pledge, transfer or otherwise dispose of any
      securities issued by any Reorganized Debtor subject to any restrictions
      imposed by the Plan; or


                                       8
<PAGE>

                                                           EXHIBIT D TO THE PLAN


            (xvii) to settle any Plan Trust Bankruptcy Causes of Action.

      (g) The Plan Trustees shall meet with the TAC and the Futures
Representative no less often than quarterly during the first two years following
the Effective Date and thereafter at least two times per year. The Plan Trustees
shall meet in the interim with the TAC and the Futures Representative when so
requested by either at mutually convenient times and locations.

      (h) The Plan Trustees, upon notice from the Futures Representative or the
TAC requesting consideration of one or more issues, shall at their next regular
meeting, if practicable in view of pending business, or, if appropriate, at a
specifically called meeting, place on their agenda and consider such issues.

      (i) Periodically, but not less often than once a year, the Plan Trustees
shall make available to the Futures Representative, the TAC and any holder (or
the personal representative or attorney of such holder) of a Plan Trust Asbestos
Claim on file with the Plan Trust that has not been paid in accordance with, or
finally rejected pursuant to, the TDP the number of claims by disease levels
that have been resolved both by individual review and by arbitration, as well as
by trial, indicating the amounts of the awards and the averages of the awards by
jurisdiction pursuant to Section 8.10 of the TDP.

      2.3 Claims Administration. The Plan Trustees shall promptly proceed to
implement the TDP.

                                    SECTION 3

                       ACCOUNTS, INVESTMENTS, AND PAYMENTS

      3.1 Accounts.

      (a) The Plan Trustees may, from time to time, create such accounts and
reserves within the Plan Trust estate as they may deem necessary, prudent, or
useful in order to provide for the payment of Plan Trust Expenses and payment of
Plan Trust Asbestos Claims in accordance with the TDP and may, with respect to
any such account or reserve, restrict the use of monies therein. In addition,
the Plan Trustees shall establish, as soon as practicable after the Effective
Date, two separate and distinct accounts (maintained in separate banking and/or
other accounts including accounts established by book entry) to be designated
the "Asbestos Personal Injury Claim Sub-Account" and the "Asbestos Property
Damage Claim Sub-Account," and none of the assets held in the Asbestos Personal
Injury Claim Sub-Account or the Asbestos Property Damage Claim Sub-Account shall
be commingled with assets held by the Plan Trust in any other account. In
addition, separate books and records shall be kept with respect to each of the
Asbestos Personal Injury Claim Sub-Account and the Asbestos Property Damage
Claim Sub-Account.

      (b) All Plan Trust Assets and other property held by or received by the
Plan Trust (other than the Asbestos Property Damage Insurance Rights and all
proceeds thereof and earnings thereon), and all proceeds thereof and earnings
thereon, shall be held solely in the Asbestos Personal Injury Claim Sub-Account
and shall be used to pay Plan Trust PI Asbestos Claims, as well as Plan Trust
Expenses and indemnification costs or expenses, in either case related to Plan
Trust PI Asbestos Claims.


                                       9
<PAGE>

                                                           EXHIBIT D TO THE PLAN


      (c) All amounts received by the Plan Trust in respect of the Asbestos
Property Damage Insurance Rights, and all proceeds thereof and earnings thereon,
shall be held solely in the Asbestos Property Damage Claim Sub-Account and shall
be used to pay Allowed Asbestos Property Damage Claims, as well as Plan Trust
Expenses and indemnification costs or expenses, in either case related to
Asbestos Property Damage Claims. Notwithstanding the foregoing, the Plan
Trustees may transfer monies from the Asbestos Property Damage Claim Sub-Account
to the Asbestos Personal Injury Claim Sub-Account, from time to time, to the
extent that the funds in the Asbestos Property Damage Claim Sub-Account exceed
the aggregate face amount of all unpaid Asbestos Property Damage Claims filed
prior to the Asbestos Property Damage Claim Bar Date and a reasonable reserve
for Plan Trust Expenses and indemnification costs or expenses, in either case
related to Asbestos Property Damage Claims.

      3.2 Plan Trust Disputed Claims Reserve. Within six (6) months of the
Initial Claims Filing Date (as defined in the TDP), in the event that the Class
2 Settlement or the Class 3 Settlement is not approved by the Final Order of the
Bankruptcy Court, the Plan Trustees shall create a reserve of funds in the
Asbestos Personal Injury Claim Sub-Account for all Plan Trust Disputed Claims
held by holders of Plan Trust PI Asbestos Claims (the "Plan Trust Disputed
Claims Reserve"); provided, however, that such Plan Trust Disputed Claim Reserve
shall not exceed $23.25 million.

      In the event that any such Plan Trust Disputed Claims and/or any lien or
security interest with respect to such claims are determined by a final,
non-appealable order of the Bankruptcy Court, or by a final and binding
settlement agreement approved by the Bankruptcy Court, to be valid, enforceable
and unavoidable, such claims shall be entitled to treatment by the Plan Trust in
accordance with the liquidated amount of such claims and any valid lien or
security interest therefor, and shall be paid by the Plan Trust from the funds
in the Plan Trust Disputed Claims Reserve.

      In the event that any such Plan Trust Disputed Claims are determined by a
final, non-appealable order of the Bankruptcy Court, or by a final and binding
settlement agreement approved by the Bankruptcy Court, to be valid, enforceable
and unavoidable, but any lien or security interest with respect to such claims
is found to be invalid, unenforceable and avoidable, an amount equal to the
Payment Percentage times the liquidated amount of such claims shall be paid by
the Plan Trust from the Plan Trust Disputed Claims Reserve. Any additional funds
in the Plan Trust Disputed Claims Reserve attributable to such claims shall be
deposited in the Asbestos Personal Injury Claim Sub-Account and made available
for distribution by the Plan Trust in accordance with the terms of this Plan
Trust Agreement and the TDP.

      In the event that any such Plan Trust Disputed Claims are determined by a
final, non-appealable order of the Bankruptcy Court, or by a final and binding
settlement agreement approved by the Bankruptcy Court, to be to be invalid,
unenforceable or void, any funds in the Plan Trust Disputed Claims Reserve
attributable to such claims shall be deposited in the Asbestos Personal Injury
Claim Sub-Account and made available for distribution by the Plan Trust in
accordance with the terms of this Plan Trust Agreement and the TDP. The holders
of such Plan Trust Disputed Claims may file their claims with the Plan Trust for
determination and treatment under the TDP in a manner consistent with such
settlement or order.


                                       10
<PAGE>

                                                           EXHIBIT D TO THE PLAN


      3.3 Investments. Investment of monies held in the Plan Trust shall be
administered in the manner in which individuals of ordinary prudence,
discretion, and judgment would act in the management of their own affairs,
subject to the following limitations and provisions:

      (a) The Plan Trust shall not acquire, directly or indirectly, equity in
any entity (other than Reorganized Congoleum or any successor to Reorganized
Congoleum) or business enterprise if, immediately following such acquisition,
the Plan Trust would hold more than 5% of the equity in such entity or business
enterprise. The Plan Trust shall not hold, directly or indirectly, more than 10%
of the equity in any entity (other than Reorganized Congoleum or any successor
to Reorganized Congoleum) or business enterprise.

      (b) Excluding any securities issued by the Debtors or Reorganized
Congoleum, the Plan Trust shall not acquire or hold any long-term debt
securities unless (i) such securities are Plan Trust Assets under the Plan, (ii)
such securities are rated "Baa" or higher by Moody's, "BBB" or higher by
Standard & Poor's ("S&P's"), or have been given an equivalent investment grade
rating by another nationally recognized statistical rating agency, or (iii) have
been issued or fully guaranteed as to principal and interest by the United
States of America or any agency or instrumentality thereof.

      (c) The Plan Trust shall not acquire or hold for longer than ninety (90)
days any commercial paper unless such commercial paper is rated "Prime 1" or
higher by Moody's or "A 1" or higher by S&P's, or has been given an equivalent
rating by another nationally recognized statistical rating agency.

      (d) Excluding any securities issued by the Debtors or Reorganized
Congoleum, or transferred to the Plan Trust in accordance with the provisions of
the Plan, the Plan Trust shall not acquire or hold any common or preferred stock
or convertible securities unless such stock or securities are rated "A" or
higher by Moody's or "A" or higher by S&P's, or have been given an equivalent
investment grade rating by another nationally recognized statistical rating
agency.

      (e) The Plan Trust shall not acquire any debt securities or other
instruments issued by any entity (other than debt securities or other
instruments issued or fully guaranteed as to principal and interest by the
United States of America or any agency or instrumentality thereof and other than
debt securities or other instruments of Reorganized Congoleum or any successor
to Reorganized Congoleum) if, following such acquisition, the aggregate market
value of all debt securities and instruments issued by such entity held by the
Plan Trust would exceed 2% of the aggregate value of the Plan Trust's assets.
The Plan Trust shall not hold any debt securities or other instruments issued by
any entity (other than debt securities or other instruments issued or fully
guaranteed as to principal and interest by the United States of America or any
agency or instrumentality thereof and other than debt securities or other
instruments of Reorganized Congoleum or any successor to Reorganized Congoleum)
to the extent that the aggregate market value of all securities and instruments
issued by such entity held by the Plan Trust would exceed 5% of the aggregate
value of the Plan Trust's assets.


                                       11
<PAGE>

                                                           EXHIBIT D TO THE PLAN


      (f) The Plan Trust shall not acquire or hold any certificates of deposit
unless all publicly held, long-term debt securities, if any, of the financial
institution issuing the certificate of deposit and the holding company, if any,
of which such financial institution is a subsidiary, meet the standards set
forth in Section 3.3(b) above.

      (g) The Plan Trust may acquire and hold any securities or instruments
issued by Reorganized Congoleum or any successor to Reorganized Congoleum, or
obtained as proceeds of litigation or otherwise to resolve disputes, without
regard to the limitations set forth in Subsections (a)-(f) above.

      (h) The Plan Trust shall not acquire or hold any repurchase obligations
unless, in the opinion of the Plan Trustees, they are adequately collateralized.

      (i) The Plan Trust shall not acquire or hold any options.

      3.4 Source of Payments. All Plan Trust expenses and payments and all
liabilities with respect to claims shall be payable solely by the Plan Trustees
out of the Plan Trust Assets. Neither Congoleum, Reorganized Congoleum, their
subsidiaries, any successor in interest, the present or former directors,
officers, employees or agents of Congoleum, Reorganized Congoleum, nor the Plan
Trustees, the TAC or Futures Representative, or any of their officers, agents,
advisors, or employees shall be liable for the payment of any Plan Trust
Asbestos Claim, Plan Trust Expense or any other liability of the Plan Trust.

      3.5 Payments of Allowed Asbestos Property Damage Claims.

      (a) All Asbestos Property Damage Claims filed before the Asbestos Property
Damage Claim Bar Date shall be Allowed or Disallowed by a Final Order (whether
such Final Order resolves a contested matter or adversary proceeding, approves a
compromise or settlement or otherwise). The Plan Trust shall only be obligated
to pay Asbestos Property Damage Claims that (i) were filed prior to the Asbestos
Property Damage Claim Bar Date and (ii) have been Allowed (and the Plan Trust
shall only be obligated to pay such Asbestos Property Damage Claims to the
extent so Allowed) by a Final Order. The Plan Trust shall not make any
distributions with respect to Allowed Asbestos Property Damage Claims until all
Asbestos Property Damage Claims have been Allowed or Disallowed by Final Order.
Any Asbestos Property Damage Claims filed after the Asbestos Property Damage
Claim Bar Date shall, pursuant to the terms of the Plan, be automatically
Disallowed, with no further action of any Entity.

      (b) Payments to holders of Allowed Asbestos Property Damage Claims shall
be made solely from the Asbestos Property Damage Claim Sub-Account.

      (c) Subject to the terms and conditions of Section 3.5(d), with respect to
any distribution in respect of Allowed Asbestos Property Damage Claims, each
holder of an Allowed Asbestos Property Damage Claim shall be paid a pro rata
portion of such holder's Allowed Asbestos Property Damage Claim determined by
multiplying the aggregate amount of the distribution to be made by a fraction,
the numerator of which is the amount of such holder's Allowed Asbestos Property
Damage Claim and the denominator of which is the total of all Allowed Asbestos
Property Damage Claims until the assets in the Asbestos Property Damage Claim
Sub-Account are exhausted; provided that the aggregate of all distributions made
hereunder to a holder of an Allowed Asbestos Property Damage Claim shall not


                                       12
<PAGE>

                                                           EXHIBIT D TO THE PLAN


exceed the Allowed Amount of such holder's Allowed Asbestos Property Damage
Claim; and provided further that once all of the assets in the Asbestos Property
Damage Claim Sub-Account have been exhausted, the Plan Trust shall have no
further obligation or liability in respect of Allowed Asbestos Property Damage
Claims.

      (d) The Plan Trustees shall determine the timing and the appropriate
method for making payments in respect of Allowed Asbestos Property Damage
Claims, subject to the requirements and general principles of this Plan Trust
Agreement and the Plan. Methods for making payments in respect of Allowed
Asbestos Personal Damage Claims may include payment on an installment basis. In
the event that the Plan Trust faces periods of limited liquidity in the Asbestos
Property Damage Claim Sub-Account, the Plan Trustees may defer, delay, limit, or
suspend altogether, payments or a portion thereof in respect of Allowed Asbestos
Property Damage Claims.

      3.6 Payment of Plan Trust Expenses.

      (a) All Plan Trust Expenses and all liabilities of the Plan Trust with
respect to all Asbestos Personal Injury Claims and Plan Trust Assets and
proceeds thereof and earnings thereon (other than that the Asbestos Property
Damage Insurance Rights and proceeds thereof and earnings thereon), shall be
payable by the Plan Trust solely out of the Asbestos Personal Injury Claim
Sub-Account. All Plan Trust Expenses and all liabilities with respect to
Asbestos Property Damage Claims (and the Asbestos Property Damage Insurance
Rights and proceeds thereof and earnings thereon) shall be payable by the Plan
Trust solely out of the Asbestos Property Damage Claim Sub-Account. If Plan
Trust Expenses and liabilities relate to more than one of the categories
described in the preceding sentences, such Plan Trust Expenses and liabilities
shall be satisfied from one or more of the accounts as determined by the Plan
Trustees in their sole discretion. Notwithstanding any other provision of this
Plan Trust Agreement or the Plan, the Plan Trust shall have no further liability
or obligation for or in respect of Plan Trust Expenses or other liabilities
relating to Asbestos Property Damage Claims once all of the assets in the
Asbestos Property Damage Claim Sub-Account have been exhausted.

      (b) Notwithstanding anything in this Plan Trust Agreement or the TDP to
the contrary, the Plan Trustees shall deduct from the Plan Trust's assets and
shall pay such amounts as are required to pay the Plan Trust Expenses after
receipt by the Plan Trustees of evidence satisfactory to them of the applicable
Plan Trust Expense and provided that the Plan Trustees do not contest the amount
of such Plan Trust Expense.

      3.7 Indemnification Payments. Any claim for indemnification from the Plan
Trust and all costs and expenses associated therewith shall be satisfied as
follows:

      (a) If an indemnification claim relates solely to or arises solely in
connection with an Asbestos Personal Injury Claim, such claim shall be satisfied
solely from assets held in the Asbestos Personal Injury Claim Sub-Account;


                                       13
<PAGE>

                                                           EXHIBIT D TO THE PLAN


      (b) If an indemnification claim relates solely to or arises solely in
connection with an Asbestos Property Damage Claim, such claim shall be satisfied
solely from assets held in the Asbestos Property Damage Claim Sub-Account;

      (c) If an indemnification claim relates to or arises in connection with
both Asbestos Personal Injury Claims and Asbestos Property Damage Claims, or if
such indemnification claim does not clearly relate to or arise in connection
with Asbestos Personal Injury Claims or Asbestos Property Damage Claims, such
claim shall be satisfied from assets held in the Asbestos Personal Injury Claim
Sub-Account and the Asbestos Property Damage Claim Sub-Account in such relative
proportion as the Plan Trustees determine in their sole discretion.

Notwithstanding any other provision of this Plan Trust Agreement or the Plan,
the Plan Trust shall have no further liability or obligation for or in respect
of indemnification relating to or arising from Asbestos Property Damage Claims
and all costs and expenses associated therewith once all of the assets in the
Asbestos Property Damage Claim Sub-Account have been exhausted.

                                    SECTION 4

                       PLAN TRUSTEES AND DELAWARE TRUSTEE

      4.1 Number. In addition to the Delaware Trustee appointed pursuant to
Section 5.11 hereof, there shall be three (3) Plan Trustees who shall be
initially those persons named on the signature page hereof, namely ___________,
_____________ and _____________.

      4.2 Term of Service.

      (a) The initial Plan Trustees named pursuant to Section 4.1 above shall
serve staggered terms of three (3), four (4) and five (5) years, respectively,
as indicated on the signature page hereof. Thereafter each term of service shall
be five (5) years. The initial Plan Trustees shall serve from the Effective Date
until the earlier of (i) the end of his or her term, (ii) his or her death,
(iii) his or her resignation pursuant to Section 4.2(b) below, (iv) his or her
removal pursuant to Section 4.2(c) below, or (v) the termination of the Plan
Trust pursuant to Section 7.2 below.

      (b) A Plan Trustee may resign at any time by written notice to the
remaining Plan Trustees, the TAC and the Futures Representative. Such notice
shall specify a date when such resignation shall take place, which shall not be
less than ninety (90) days after the date such notice is given, where
practicable.

      (c) A Plan Trustee may be removed by unanimous vote of the remaining Plan
Trustees in the event that he or she becomes unable to discharge his or her
duties hereunder due to accident or physical or mental deterioration, or for
other good cause. Good cause shall be deemed to include, without limitation, any
substantial failure to comply with the general administration provisions of
Section 2.2 above, a consistent pattern of neglect and failure to perform or
participate in performing the duties of the Plan Trustees hereunder, or repeated
non-attendance at scheduled meetings. Such removal shall require the approval of
the Bankruptcy Court and shall take effect at such time as the Bankruptcy Court
shall determine.


                                       14
<PAGE>

                                                           EXHIBIT D TO THE PLAN


      4.3 Appointment of Successor Plan Trustees.

      (a) In the event of a vacancy in the position of a Plan Trustee, whether
by term expiration, resignation or removal, the remaining Plan Trustees shall
consult with the TAC and the Futures Representative concerning appointment of a
successor Plan Trustee. The vacancy shall be filled by the unanimous vote of the
remaining Plan Trustees unless a majority of the TAC or the Futures
Representative vetoes the appointment. In the event that the remaining Plan
Trustees cannot agree on a successor Plan Trustee, or a majority of the TAC or
the Futures Representative vetoes the appointment of a successor Plan Trustee,
the Bankruptcy Court shall make the appointment. Nothing shall prevent the
reappointment of a Plan Trustee for an additional term or terms.

      (b) Immediately upon the appointment of any successor Plan Trustee, all
rights, titles, duties, powers and authority of the predecessor Plan Trustee
hereunder shall be vested in, and undertaken by, the successor Plan Trustee
without any further act. No successor Plan Trustee shall be liable personally
for any act or omission of his or her predecessor Plan Trustees.

      (c) Each successor Plan Trustee shall serve until the earlier of (i) the
end of a full term of five (5) years if the predecessor Plan Trustee completed
his or her term, (ii) the end of the remainder of the term of the Plan Trustee
whom he or she is replacing if said predecessor Plan Trustee did not complete
said term, (iii) his or her death, (iv) his or her resignation pursuant to
Section 4.2(b) above, (v) his or her removal pursuant to Section 4.2(c) above,
or (vi) the termination of the Plan Trust pursuant to Section 7.2 below.

      4.4 Liability of Plan Trustees, Delaware Trustee, Officers and Employees.
The Plan Trustees, the Delaware Trustee, and the individuals identified as
Additional Indemnitees in Section 2.1(c)(xiv) above shall not be liable to the
Plan Trust, to any individual holding a Plan Trust Asbestos Claim, or to any
other person, except for such individual's own breach of trust committed in bad
faith or willful misappropriation. In addition, the Plan Trustees, the Delaware
Trustee and the Additional Indemnitees shall not be liable for any act or
omission of any other Plan Trustee, the Delaware Trustee or Additional
Indemnitee unless such person acted with bad faith in the selection or retention
of such other Plan Trustee, the Delaware Trustee or Additional Indemnitee.

      4.5 Compensation and Expenses of Plan Trustees.

      (a) The Plan Trustees shall receive compensation in accordance with
Section 3.6 above, from the Plan Trust for their services as Plan Trustees in
the amount of $60,000.00 per annum, plus a per diem allowance for meetings or
other Plan Trust business performed in the amount of $1,500.00. For purposes of
Section 7.4 below, the Plan Trustees shall determine the scope and duration of
activities that constitute a meeting and, if the Plan Trustees elect to provide
for payment for activities of less than a full day's duration, may provide for
partial payment of per diem amounts on a proportional basis for activities of
less than a full day's duration. The per annum and per diem compensation payable
to the Plan Trustees hereunder shall be reviewed every three (3) years and
appropriately adjusted for changes in the cost of living with the consent of the
TAC and the Futures Representative. Any other changes in compensation of the
Plan Trustees shall be made subject to the approval of the Bankruptcy Court. The
Delaware Trustee shall be paid such compensation as is agreed pursuant to a
separate fee agreement.


                                       15
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                                                           EXHIBIT D TO THE PLAN


      (b) The Plan Trust will promptly reimburse the Plan Trustees in accordance
with Section 3.6 above, for all reasonable out-of-pocket costs and expenses
incurred by the Plan Trustees in connection with the performance of their duties
hereunder following submission of appropriate documentation evidencing payment
of such costs or expenses.

      (c) The Plan Trust shall include a description of the amounts paid under
this Section 4.5 in the accounts to be filed with the Bankruptcy Court and
provided to the TAC, the Futures Representative, and Reorganized Congoleum
pursuant to Section 2.2(c)(i).

      4.6 Indemnification of Plan Trustees, Additional Indemnitees, Claimants'
Representative and Collateral Trustee.

      (a) The Plan Trust shall indemnify and defend the Plan Trustees, the
members of the TAC and the Futures Representative in the performance of their
duties hereunder to the fullest extent that a statutory trust organized under
the laws of the state of Delaware is from time to time entitled to indemnify and
defend such persons against any and all liabilities, expenses, claims, damages
or losses incurred by them in the performance of their duties hereunder or in
connection with activities undertaken by them prior to the Effective Date in
connection with the formation, establishment, or funding of the Plan Trust. The
Plan Trust may indemnify any of the Additional Indemnitees in the performance of
their duties hereunder to the fullest extent that a corporation or trust
organized under the laws of the Plan Trust's jurisdiction of organization is
from time to time entitled to indemnify and defend such persons against any and
all liabilities, expenses, claims, damages or losses incurred by them in the
performance of their duties hereunder or in connection with activities
undertaken by them prior to the Effective Date in connection with the formation,
establishment or funding of the Plan Trust. Notwithstanding the foregoing, the
Plan Trustees and the Additional Indemnitees shall not be indemnified or
defended in any way for any liability, expense, claim, damage, or loss for which
he, she or it is ultimately liable under Section 4.4 above.

      (b) Reasonable expenses, costs and fees (including attorneys' fees and
costs) incurred by or on behalf of a Plan Trustee or Additional Indemnitee in
connection with any action, suit, or proceeding, whether civil, administrative
or arbitrative, from which they are indemnified by the Plan Trust pursuant to
Section 4.6(a) above, shall be paid by the Plan Trust in advance of the final
disposition thereof upon receipt of an undertaking, by or on behalf of the Plan
Trustees or Additional Indemnitee, to repay such amount in the event that it
shall be determined ultimately by final order that such Plan Trustee or
Additional Indemnitee is not entitled to be indemnified by the Plan Trust.

      (c) Subject to the limitations set forth in this Section 4.6(c), the Plan
Trust and the Reorganized Debtors shall indemnify and hold harmless each of the
Claimants' Representative and the Collateral Trustee to the extent that such
Entity was or is a party, or is threatened to be made a party, to any threatened
or pending judicial, administrative or arbitrative action, suit or proceeding by
reason of any act or omission of such Entity with respect to the negotiation and
implementation of modifications to the Plan, the other Plan Documents and the
Collateral Trust Agreement contemplated by the Ninth Modified Joint Plan of


                                       16
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                                                           EXHIBIT D TO THE PLAN


Reorganization of the Debtors and made on or after May 30, 2006 to the fullest
extent that a trust or a corporation organized under the laws of the State of
New Jersey is from time to time entitled to indemnify and defend its officers,
directors, trustees and employees, against any and all liabilities, expenses
(including reasonable attorneys' fees and expenses), claims, damages or losses
incurred by each such Entity in connection with or resulting from such action,
suit or proceeding. To the extent that the Claimants' Representative or the
Collateral Trustee seek indemnification under this Section 4.6(c), the
Reorganized Debtors shall be responsible to pay the first one million dollars
($1,000,000) of indemnifiable liabilities, expenses, claims, damages and losses
sought under this Section 4.6(c). Thereafter, the Reorganized Debtors and the
Plan Trust shall each be responsible, severally and not jointly, to pay on a
pari passu basis one half of up to four million dollars ($4,000,000) of any
additional liabilities, expenses, claims, damages and losses indemnifiable under
this Section 4.6(c), provided that the Reorganized Debtors' maximum obligation
under this Section 4.6(c) shall in no event exceed the aggregate sum of three
million dollars ($3,000,000). Thereafter, the Plan Trust shall be solely
responsible for any additional liabilities, expenses, claims, damages and losses
indemnifiable under this Section 4.6(c). If the Claimants' Representative or
Collateral Trustee seeks indemnification under this Section 4.6(c) (each, an
"Indemnified Party"), such Indemnified Party shall give the Reorganized Debtors
and the Plan Trust prompt written notice of the basis upon which such
Indemnified Party seeks indemnification under this Section 4.6(c) (an
"Indemnification Claim Notice"). In no event shall the Plan Trust or the
Reorganized Debtors be liable for any liabilities, expenses, claims, damages or
losses that result from a delay in providing the Indemnification Claim Notice.
Each Indemnification Claim Notice shall contain a description of the action,
suit or proceeding related to the claim for indemnification and each Indemnified
Party shall furnish promptly to the Plan Trust and the Reorganized Debtors
copies of all papers and official documents received by it in respect thereof.
At their option, the Reorganized Debtors may assume the defense of any action,
suit or proceeding upon which the Indemnified Parties intend to base a request
for indemnification by giving written notice to such Indemnified Party within
fourteen (14) days after the Reorganized Debtors' receipt of an Indemnification
Claim Notice. The assumption of the defense of such action, suit or proceeding
shall not be construed as an acknowledgement that the Reorganized Debtors or the
Plan Trust are liable to indemnify any Indemnified Party in respect thereof, nor
shall it constitute a waiver by the Reorganized Debtors or the Plan Trust of any
defense any of them may assert against any Indemnified Party's claim for
indemnification. In the event that it is ultimately determined that the
Reorganized Debtors and/or the Plan Trust are not obligated to indemnify, defend
or hold harmless any Indemnified Party in respect of any action, suit or
proceeding for which indemnification is sought under this Section 4.6(c), such
Indemnified Party shall reimburse the Reorganized Debtors for any and all costs
and expenses (including attorneys' fees and costs) incurred by the Reorganized
Debtors in defense of such action, suit or proceeding. Regardless of whether the
Reorganized Debtors choose to defend or prosecute any such action, suit or
proceeding, no Indemnified Party shall admit any liability with respect to, or
settle, compromise or discharge, any such action, suit or proceeding without the
prior written consent of the Reorganized Debtors and the Plan Trust, which
consent shall not be unreasonably withheld. The Reorganized Debtors and the Plan
Trust shall not be liable for any settlement or disposition of a claim by any
Indemnified Party that is reached without the prior written consent of the
Reorganized Debtors and the Plan Trust. If the Reorganized Debtors choose to
defend or prosecute any action, suit or proceeding for which indemnification


                                       17
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                                                           EXHIBIT D TO THE PLAN


shall be requested, (i) the Indemnified Parties shall reasonably cooperate in
the defense or prosecution thereof and (ii) the Reorganized Debtors shall keep
the Plan Trust reasonably informed of the status of, and issues in, the action,
suit or proceeding and shall consult with the Plan Trust in connection with the
defense or prosecution thereof (subject to any applicable privileges). In
addition, if the Reorganized Debtors choose to defend or prosecute any action,
suit or proceeding for which indemnification shall be requested, the Reorganized
Debtors shall not settle such action, suit or proceeding without the prior
written consent of the Plan Trust, which consent shall not be unreasonably
withheld.

      (d) The Plan Trustees may purchase and maintain reasonable amounts and
types of insurance on behalf of an individual who is or was a Plan Trustee,
Additional Indemnitee, Claimants' Representative or Collateral Trustee,
including against liability asserted against or incurred by such individual in
that capacity or arising from his or her status as a Plan Trustee, TAC member,
Futures Representative, Claimants' Representative, Collateral Trustee, officer,
employee, agent or other representative.

      4.7 Plan Trustees' Lien. The Plan Trustees, the Additional Indemnitees,
the Claimants' Representative and the Collateral Trustee shall have a first
priority lien upon the Plan Trust Assets to secure the payment of any amounts
payable to them pursuant to Section 4.6 above.

      4.8 Plan Trustees' Employment of Experts; Delaware Trustee's Employment of
Counsel.

      (a) The Plan Trustees may, but shall not be required to, retain and/or
consult with counsel, accountants, appraisers, auditors and forecasters, and
other parties ("Professionals") deemed by the Plan Trustees to be qualified as
experts on the matters submitted to them, and, in the absence of gross
negligence, the written opinion of or information provided by any such party
deemed by the Plan Trustees to be an expert on the particular matter on any
matters submitted to such party by the Plan Trustees shall be full and complete
authorization and protection in respect of any action taken or not taken by the
Plan Trustees hereunder in good faith and in accordance with the written opinion
of or information provided by any such party.

      (b) The Delaware Trustee shall be permitted to retain counsel only in such
circumstances as required in the exercise of its obligations hereunder and
compliance with the advice of such counsel shall be full and complete
authorization and protection for actions taken or not taken by the Delaware
Trustee in good faith in compliance with such advice.

      4.9 Plan Trustees' Independence. The Plan Trustees shall not, during the
term of their service, hold a financial interest in, act as attorney or agent
for, or serve as any other professional for Reorganized Congoleum.
Notwithstanding the foregoing, any Plan Trustee may serve, without any
additional compensation other than the per diem compensation to be paid by the
Plan Trust pursuant to Section 4.5(a) above, as a director of Reorganized
Congoleum. No Plan Trustee shall act as an attorney for any person who holds an
asbestos claim.

      4.10 Bond. The Plan Trustees and the Delaware Trustee shall not be
required to post any bond or other form of surety or security unless otherwise
ordered by the Bankruptcy Court.


                                       18
<PAGE>

                                                           EXHIBIT D TO THE PLAN


      4.11 Delaware Trustee.

      (a) There shall at all times be a Delaware Trustee. The Delaware Trustee
shall either be (i) a natural person who is at least 21 years of age and a
resident of the State of Delaware or (ii) a legal entity that has its principal
place of business in the State of Delaware, otherwise meets the requirements of
applicable Delaware law and shall act through one or more persons authorized to
bind such entity. If at any time the Delaware Trustee shall cease to be eligible
in accordance with the provisions of this Section 5.11, it shall resign
immediately in the manner and with the effect hereinafter specified in Section
5.11(c) below. For the avoidance of doubt, the Delaware Trustee will only have
such rights and obligations as expressly provided by reference to the Delaware
Trustee hereunder.

      (b) The Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities, of the
Plan Trustees set forth herein. The Delaware Trustee shall be one of the
trustees of the Plan Trust for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Act and for taking such actions as are
required to be taken by a Delaware Trustee under the Act. The duties (including
fiduciary duties), liabilities and obligations of the Delaware Trustee shall be
limited to (i) accepting legal process served on the Plan Trust in the State of
Delaware and (ii) the execution of any certificates required to be filed with
the Secretary of State of the State of Delaware that the Delaware Trustee is
required to execute under Section 3811 of the Act and there shall be no other
duties (including fiduciary duties) or obligations, express or implied, at law
or in equity, of the Delaware Trustee.

      (c) The Delaware Trustee shall serve until such time as the Plan Trustees
remove the Delaware Trustee or the Delaware Trustee resigns and a successor
Delaware Trustee is appointed by the Plan Trustees in accordance with the terms
of Section 5.11(d) below. The Delaware Trustee may resign at any time upon the
giving of at least 60 days' advance written notice to the Plan Trustees;
provided, that such resignation shall not become effective unless and until a
successor Delaware Trustee shall have been appointed by the Plan Trustees in
accordance with Section 5.11(d) below. If the Plan Trustees do not act within
such 60-day period, the Delaware Trustee may apply to the Court of Chancery of
the State of Delaware for the appointment of a successor Delaware Trustee.

      (d) Upon the resignation or removal of the Delaware Trustee, the Plan
Trustees shall appoint a successor Delaware Trustee by delivering a written
instrument to the outgoing Delaware Trustee. Any successor Delaware Trustee must
satisfy the requirements of Section 3807 of the Act. Any resignation or removal
of the Delaware Trustee and appointment of a successor Delaware Trustee shall
not become effective until a written acceptance of appointment is delivered by
the successor Delaware Trustee to the outgoing Delaware Trustee and the Plan
Trustees and any fees and expenses due to the outgoing Delaware Trustee are
paid. Following compliance with the preceding sentence, the successor Delaware
Trustee shall become fully vested with all of the rights, powers, duties and
obligations of the outgoing Delaware Trustee under this Agreement, with like
effect as if originally named as Delaware Trustee, and the outgoing Delaware
Trustee shall be discharged of its duties and obligations under this Agreement.


                                       19
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                                                           EXHIBIT D TO THE PLAN


                                    SECTION 5

                          PLAN TRUST ADVISORY COMMITTEE

      5.1 Members. The TAC shall consist of five (5) members, who shall
initially be the persons named on the signature page hereof, namely Russell
Budd, Esq., Steven Kazan, Esq., Joseph Rice, Esq., Robert Taylor, Esq., and
Perry Weitz, Esq.

      5.2 Duties. The members of the TAC shall serve in a fiduciary capacity
representing all holders of present Plan Trust Asbestos Claims. Subject to
Section 5.3 below, the Plan Trustees must consult with the TAC on matters
identified in Section 2.2(e) above and in other provisions herein, and must
obtain the consent of the TAC on matters identified in Section 2.2(f) above.
Where provided in the TDP, certain other actions by the Plan Trustees are also
subject to the consent of the TAC.

      5.3 Consent of TAC With Respect to Avoidance Actions, etc. If the Plan
Trustees seek the consent of the TAC with respect to a matter identified in
Section 2.2(f)(ix) above, a TAC member who is a Claimants' Counsel, as defined
in the Claimant Agreement, or who is a member, employee or associate of a firm
of such Claimants' Counsel, shall not take part in the decision of the TAC as to
whether to grant such consent, or in any decision of the TAC regarding the
resolution of any dispute concerning such matter pursuant to Section 7.13 below.

      5.4 Term of Office.

      (a) The initial members of the TAC appointed in accordance with Section
5.1 above shall serve staggered terms of three-, four-, or five-year terms as
indicated on the signature page hereof. Thereafter, each term of service shall
be five (5) years. A member of the TAC shall serve until the earlier of (i) his
or her death, (ii) his or her resignation pursuant to Section 5.4(b) below,
(iii) his or her removal pursuant to Section 5.4(c) below, (iv) the end of his
or her term as provided above, or (v) the termination of the Plan Trust pursuant
to Section 7.2 below.

      (b) A member of the TAC may resign at any time by written notice to the
other members of the TAC, the Plan Trustees and the Futures Representative. Such
notice shall specify a date when such resignation shall take effect, which shall
not be less than ninety (90) days after the date such notice is given, where
practicable.

      (c) A member of the TAC may be removed in the event that he or she becomes
unable to discharge his or her duties hereunder due to accident, physical
deterioration, mental incompetence, or a consistent pattern of neglect and
failure to perform or to participate in performing the duties of such member
hereunder, such as repeated non-attendance at scheduled meetings, or for other
good cause. Such removal shall be made at the recommendation of the remaining
members of the TAC with the approval of the Bankruptcy Court.

      5.5 Appointment of Successor.

      (a) In the event of a vacancy caused by the resignation, expiration of the
term, or death of a TAC member, his or her successor shall be pre-selected by
the TAC member whose has resigned, is deceased or whose term has expired, or by
his or her law firm in the event that such member has not pre-selected a
successor. Nothing shall prevent a TAC member or his or her law firm from


                                       20
<PAGE>

                                                           EXHIBIT D TO THE PLAN


pre-selecting that TAC member to succeed himself or herself at the expiration of
his or her term, and there shall be no limit on the number of terms that a TAC
member may serve. If neither the member nor the law firm exercises the right to
make such a selection, the successor shall be chosen by a majority vote of the
remaining TAC members. If a majority of the remaining members cannot agree, the
Bankruptcy Court shall appoint the successor. In the event of a vacancy caused
by the removal of a TAC member, the remaining members of the TAC by majority
vote shall name the successor. If the majority of the remaining members of the
TAC cannot reach agreement, the Bankruptcy Court shall appoint the successor.

      (b) Each successor TAC member shall serve until the earlier of (i) his or
her death, (ii) his or her resignation pursuant to Section 5.4(b) above, (iii)
his or her removal pursuant to Section 5.4(c) above, (iv) the expiration of his
or her term pursuant to Section 5.4(a) above, or (v) the termination of the Plan
Trust pursuant to Section 7.2 below.

      5.6 TAC's Employment of Professionals.

      (a) The TAC may, but is not required to, retain and/or consult
Professionals deemed by the TAC to be qualified as experts on matters submitted
to the TAC. The TAC and its Professionals shall at all times have complete
access to the Plan Trust's officers, employees and agents, as well as to the
Professionals retained by the Plan Trust, and shall also have complete access to
all information generated by them or otherwise available to the Plan Trust or
the Plan Trustees. In the absence of gross negligence, the written opinion of or
information provided by any Professional deemed by the TAC to be qualified as an
expert on the particular matter submitted to the TAC shall be full and complete
authorization and protection in support of any action taken or not taken by the
TAC in good faith and in accordance with the written opinion of or information
provided by the Professional.

      (b) The Plan Trust shall promptly reimburse, or pay directly if so
instructed, the TAC for all reasonable fees and costs associated with the TAC's
employment of legal counsel pursuant to this provision in connection with the
TAC's performance of its duties hereunder. The Plan Trust shall also promptly
reimburse, or pay directly if so instructed, the TAC for all reasonable fees and
costs associated with the TAC's employment of any other Professional pursuant to
this provision in connection with the TAC's performance of its duties hereunder;
provided, however, that (i) the TAC has first submitted to the Plan Trust a
written request for such reimbursement setting forth the reasons (A) why the TAC
desires to employ such Professional, and (B) why the TAC cannot rely on
Professionals retained by the Plan Trust to meet the needs of the TAC for such
expertise or advice, and (ii) the Plan Trust has approved the TAC's request for
reimbursement in writing. If the Plan Trust agrees to pay for the TAC
Professional, such reimbursement shall be treated as a Plan Trust Expense. If
the Plan Trust declines to pay for the TAC Professional, it must set forth its
reasons in writing. If the TAC still desires to employ such Professional at Plan
Trust expense, the TAC and/or the Plan Trustees shall resolve their dispute
pursuant to Section 7.13 below.

      5.7 Compensation and Expenses of the TAC. The members of the TAC shall
receive compensation from the Plan Trust for their services as TAC members in
the form of a reasonable hourly rate set by the Plan Trustees for attendance at
meetings or other conduct of Plan Trust business. The members of the TAC shall


                                       21
<PAGE>

                                                           EXHIBIT D TO THE PLAN


also be reimbursed promptly for all reasonable out-of-pocket costs and expenses
incurred in connection with the performance of their duties hereunder. Such
reimbursement or direct payment shall be deemed a Plan Trust Expense. The Plan
Trust shall include a description of the amounts paid under this Section 5.7 in
the accounts to be filed with the Bankruptcy Court and provided to the Plan
Trustees, the Futures Representative, and Reorganized Congoleum pursuant to
Section 2.2(c)(i).

      5.8 Procedures for Consultation With and Obtaining the Consent of the TAC.

      (a) Consultation Process.

            (i) In the event the Plan Trustees are required to consult with the
      TAC pursuant to Section 2.2(e) above or on other matters as provided
      herein, the Plan Trustees shall provide the TAC with written advance
      notice of the matter under consideration, and with all relevant
      information concerning the matter as is reasonably practicable under the
      circumstances. The Plan Trustees shall also provide the TAC with such
      reasonable access to the Professionals and other experts retained by the
      Plan Trust and its staff (if any) as the TAC may reasonably request during
      the time that the Plan Trustees are considering such matter, and shall
      also provide the TAC the opportunity, at reasonable times and for
      reasonable periods of time, to discuss and comment on such matter with the
      Plan Trustees.

            (ii) The Plan Trustees shall take into consideration the time
      required for the TAC, if its members so wish, to engage and consult with
      its own independent financial or investment advisors as to such matter.

      (b) Consent Process.

            (i) In the event the Plan Trustees are required to obtain the
      consent of the TAC pursuant to Section 2.2(f) above, the Trustees shall
      provide the TAC with a written notice stating that their consent is being
      sought pursuant to that provision, describing in detail the nature and
      scope of the action the Plan Trustees propose to take, and explaining in
      detail the reasons why the Plan Trustees desire to take such action. The
      Plan Trustees shall provide the TAC as much relevant additional
      information concerning the proposed action as is reasonably practicable
      under the circumstances. The Plan Trustees shall also provide the TAC with
      such reasonable access to the Professionals and other experts retained by
      the Plan Trust and its staff (if any) as the TAC may reasonably request
      during the time that the Plan Trustees are considering such action, and
      shall also provide the TAC the opportunity, at reasonable times and for
      reasonable periods of time, to discuss and comment on such action with the
      Plan Trustees.

            (ii) The TAC must consider in good faith and in a timely fashion any
      request for its consent by the Plan Trustees, and must in any event advise
      the Plan Trustees in writing of its consent or its objection to the
      proposed action within 30 days of receiving the original request for
      consent from the Plan Trustees. The TAC may not withhold its consent
      unreasonably. If the TAC decides to withhold its consent, it must explain
      in detail its objections to the proposed action. If the TAC does not


                                       22
<PAGE>

                                                           EXHIBIT D TO THE PLAN


      advise the Plan Trustees in writing of its consent or its objections to
      the action within thirty (30) days of receiving notice regarding such
      request, the TAC's consent to the proposed actions shall be deemed to have
      been affirmatively granted.


            (iii) If, after following the procedures specified in this Section
      5.8(b), the TAC continues to object to the proposed action and to withhold
      its consent to the proposed action, the Plan Trustees and/or the TAC shall
      resolve their dispute pursuant to Section 7.13. However, the burden of
      proof with respect to the validity of the TAC's objection and withholding
      of its consent shall be on the TAC.

      5.9 Copies to the TAC. The Plan Trustees shall provide the TAC with copies
of all notices and other written information provided to the Futures
Representative pursuant to this Plan Trust Agreement.

                                    SECTION 6

                           THE FUTURES REPRESENTATIVE

      6.1 Duties. The initial Futures Representative shall be the individual
appointed by the Bankruptcy Court to serve in such capacity. He shall serve in a
fiduciary capacity, representing the interests of the holders of future Plan
Trust Asbestos Claims for the purpose of protecting the rights of such persons.
The Plan Trustees must consult with the Futures Representative on matters
identified in Section 2.2(e) above and on certain other matters provided herein,
and must obtain the consent of the Futures Representative on matters identified
in Section 2.2(f) above. Where provided in the TDP, certain other actions by the
Plan Trust or Plan Trustees are also subject to the consent of the Futures
Representative.

      6.2 Term of Office.

      (a) The Futures Representative shall serve until the earlier of (i) his or
her death, (ii) his or her resignation pursuant to Section 6.2(b) below, (iii)
his or her removal pursuant to Section 6.2(c) below, or (iv) the termination of
the Plan Trust pursuant to Section 7.2 below.

      (b) The Futures Representative may resign at any time by written notice to
the Plan Trustees. Such notice shall specify a date when such resignation shall
take effect, which shall not be less than ninety (90) days after the date such
notice is given, where practicable.

      (c) The Futures Representative may be removed by the Bankruptcy Court in
the event he or she becomes unable to discharge his or her duties hereunder due
to accident, physical deterioration, mental incompetence, or a consistent
pattern of neglect and failure to perform or to participate in performing the
duties hereunder, such as repeated non-attendance at scheduled meetings, or for
other good cause.

      6.3 Appointment of Successor. A vacancy caused by death or resignation
shall be filled with an individual nominated prior to the effective date of the
resignation or the death by the resigning or deceased Futures Representative,
and a vacancy caused by removal of the Futures Representative shall be filled
with an individual nominated by the Plan Trustees in consultation with the TAC,
subject to the approval of the Bankruptcy Court. In the event a majority of the
Plan Trustees cannot agree, or a nominee has not been pre-selected, the
successor shall be chosen by the Bankruptcy Court.


                                       23
<PAGE>

                                                           EXHIBIT D TO THE PLAN


      6.4 Futures Representative's Employment of Professionals.

      (a) The Futures Representative may, but is not required to, retain and/or
consult Professionals deemed by the Futures Representative to be qualified as
experts on matters submitted to the Futures Representative. The Futures
Representative and his or her Professionals shall at all times have complete
access to the Plan Trust's officers, employees and agents, as well as to the
Professionals retained by the Plan Trust, and shall also have complete access to
all information generated by them or otherwise available to the Plan Trust or
the Plan Trustees. In the absence of gross negligence, the written opinion of or
information provided by any Professional deemed by the Futures Representative to
be qualified as an expert on the particular matter submitted to the Futures
Representative shall be full and complete authorization and protection in
support of any action taken, or not taken, by the Futures Representative in good
faith and in accordance with the written opinion of or information provided by
the Professional.

      (b) The Plan Trust shall promptly reimburse, or pay directly if so
instructed, the Futures Representative for all reasonable fees and costs
associated with the Futures Representative's employment of legal counsel
pursuant to this provision in connection with the Futures Representative's
performance of his or her duties hereunder. The Plan Trust shall also promptly
reimburse, or pay directly if so instructed, the Futures Representative for all
reasonable fees and costs associated with the Futures Representative's
employment of any other Professionals pursuant to this provision in connection
with the Futures Representative's performance of his or her duties hereunder;
provided, however, that (i) the Futures Representative has first submitted to
the Plan Trust a written request for such reimbursement setting forth the
reasons (A) why the Futures Representative desires to employ the Professional,
and (B) why the Futures Representative cannot rely on Professionals retained by
the Plan Trust to meet the needs of the Futures Representative for such
expertise or advice, and (ii) the Plan Trust has approved the Futures
Representative's request for reimbursement in writing. If the Plan Trust agrees
to pay for the Futures Representative's Professional, such reimbursement shall
be treated as a Plan Trust Expense. If the Plan Trust declines to pay for the
Futures Representative's Professional, it must set forth its reasons in writing.
If the Futures Representative still desires to employ the Professional at Plan
Trust expense, the Futures Representative and/or the Plan Trustees shall resolve
their dispute pursuant to Section 7.13 below.

      6.5 Compensation and Expenses of the Futures Representative. The Futures
Representative shall receive compensation from the Plan Trust in the form of
payment at the Futures Representative's normal hourly rate for services
performed. The Plan Trust will promptly reimburse the Futures Representative for
all reasonable out-of-pocket costs and expenses incurred by the Futures
Representative in connection with the performance of his or her duties
hereunder. Such reimbursement or direct payment shall be deemed a Plan Trust
Expense. The Plan Trust shall include a description of the amounts paid under
this Section 6.5 in the accounts to be filed with the Bankruptcy Court and
provided to the Plan Trustees, the Futures Representative, and Reorganized
Congoleum pursuant to Section 2.2(c)(i).


                                       24
<PAGE>

                                                           EXHIBIT D TO THE PLAN


      6.6 Procedures for Consultation with and Obtaining the Consent of the
Futures Representative.

      (a) Consultation Process.

            (i) In the event the Plan Trustees are required to consult with the
      Futures Representative pursuant to Section 2.2(e) above or on any other
      matters specified herein, the Plan Trustees shall provide the Futures
      Representative with written advance notice of the matter under
      consideration, and with all relevant information concerning the matter as
      is reasonably practicable under the circumstances. The Plan Trustees shall
      also provide the Futures Representative with such reasonable access to
      Professionals and other experts retained by the Plan Trust and its staff
      (if any) as the Futures Representative may reasonably request during the
      time that the Plan Trustees are considering such matter, and shall also
      provide the Futures Representative the opportunity, at reasonable times
      and for reasonable periods of time, to discuss and comment on such matter
      with the Plan Trustees.

            (ii) The Plan Trustees shall take into consideration the time
      required for the Futures Representative, if he or she so wishes, to engage
      and consult with his or her own independent financial, actuarial or
      investment advisors as to such matter.

      (b) Consent Process.

            (i) In the event the Plan Trustees are required to obtain the
      consent of the Futures Representative pursuant to Section 2.2(f) above,
      the Plan Trustees shall provide the Futures Representative with a written
      notice stating that his or her consent is being sought pursuant to that
      provision, describing in detail the nature and scope of the action the
      Plan Trustees propose to take, and explaining in detail the reasons why
      the Plan Trustees desire to take such action. The Plan Trustees shall
      provide the Futures Representative as much relevant additional information
      concerning the proposed action as is reasonably practicable under the
      circumstances. The Plan Trustees shall also provide the Futures
      Representative with such reasonable access to the Professionals and other
      experts retained by the Plan Trust and its staff (if any) as the Futures
      Representative may reasonably request during the time that the Plan
      Trustees are considering such action, and shall also provide the Futures
      Representative the opportunity, at reasonable times and for reasonable
      periods of time, to discuss and comment on such action with the Plan
      Trustees.

            (ii) The Futures Representative must consider in good faith and in a
      timely fashion any request for his or her consent by the Plan Trustees,
      and must in any event advise the Plan Trustees in writing of his or her
      consent or objection to the proposed action within thirty (30) days of
      receiving the original request for consent from the Plan Trustees. The
      Futures Representative may not withhold his or her consent unreasonably.
      If the Futures Representative decides to withhold consent, he or she must
      explain in detail his or her objections to the proposed action. If the
      Futures Representative does not advise the Plan Trustees in writing of his
      or her consent or objections to the proposed action within thirty (30)
      days of receiving the notice from the Plan Trustees regarding such
      consent, the Futures Representative's consent shall be deemed to have been
      affirmatively granted.


                                       25
<PAGE>

                                                           EXHIBIT D TO THE PLAN


            (iii) If, after following the procedures specified in this Section
      6.6(b), the Futures Representative continues to object to the proposed
      action and to withhold its consent to the proposed action, the Plan
      Trustees and/or the Futures Representative shall resolve their dispute
      pursuant to Section 7.13. However, the burden of proof with respect to the
      validity of the Futures Representative's objection and withholding of his
      or her consent shall be on the Futures Representative.

      6.7 Copies to Futures Representative. The Plan Trustees shall provide the
Futures Representative with copies of all notices and other written information
provided to the TAC pursuant to this Plan Trust Agreement.

                                    SECTION 7

                               GENERAL PROVISIONS

      7.1 Irrevocability. The Plan Trust is irrevocable.

      7.2 Dissolution.

      (a) The term for which the Plan Trust is to exist shall commence on the
date of the filing of the Certificate of Trust and shall terminate pursuant to
the provisions of this Section 7.2.

      (b) The Plan Trust shall automatically dissolve on the date ninety (90)
days after the first to occur of the following events (the "Dissolution Date"):

            (i) the Plan Trustees decide to dissolve the Plan Trust because (A)
      they deem it unlikely that new asbestos claims will be filed against the
      Plan Trust, (B) all Plan Trust Asbestos Claims duly filed with the Plan
      Trust have been liquidated and paid to the extent provided in this Plan
      Trust Agreement and the TDP or have been disallowed by a final,
      non-appealable order, to the extent possible based upon the funds
      available through the Plan, and (C) twelve (12) consecutive months have
      elapsed during which no new asbestos claim has been filed with the Plan
      Trust; or

            (ii) if the Plan Trustees have procured and have in place
      irrevocable insurance policies and have established claims handling
      agreements and other necessary arrangements with suitable third parties
      adequate to discharge all expected remaining obligations and expenses of
      the Plan Trust in a manner consistent with this Plan Trust Agreement and
      the TDP, the date on which the Bankruptcy Court enters an order approving
      such insurance and other arrangements and such order becomes a final
      order; or

            (iii) to the extent that any rule against perpetuities shall be
      deemed applicable to the Plan Trust, twenty-one (21) years less ninety-one
      (91) days pass after the death of the last survivor of all of the
      descendants of the late Joseph P. Kennedy, Sr., father of the late
      President John F. Kennedy, living on the date hereof.


                                       26
<PAGE>

                                                           EXHIBIT D TO THE PLAN


      (c) On the Dissolution Date or as soon as reasonably practicable after the
wind-up of the Plan Trust's affairs by the Plan Trustees and, payment of all the
Plan Trust's liabilities has been provided for (including, without limitation,
Plan Trust Expenses) as required by applicable law including Section 3808 of the
Act, all assets remaining in the Plan Trust estate shall be given to such
organization(s) exempt from federal income tax under section 501(c)(3) of the
Internal Revenue Code, which tax-exempt organization(s) shall be selected by the
Plan Trustees using their reasonable discretion; provided, however, that (i) if
practicable, the activities of the selected tax-exempt organization(s) shall be
related to the treatment of, research on, or the relief of suffering of
individuals suffering from asbestos related lung disorders, and (ii) the
tax-exempt organization(s) shall not bear any relationship to Reorganized
Congoleum within the meaning of section 468B(d)(3) of the Internal Revenue Code.
Notwithstanding any contrary provision of the Plan and related documents, this
Section 7.2(c) cannot be modified or amended.

      (d) Following the dissolution and distribution of the assets of the Plan
Trust, the Plan Trust shall terminate and the Plan Trustees, or any one of them,
shall execute and cause a Certificate of Cancellation of the Certificate of
Trust of the Plan Trust to be filed in accordance with the Act. Notwithstanding
anything to the contrary contained in this Agreement, the existence of the Plan
Trust as a separate legal entity shall continue until the filing of such
Certificate of Cancellation.

      7.3 Amendments. Except as otherwise provided herein, the Plan Trustees,
after consultation with the TAC and the Futures Representative, and subject to
the unanimous consent of the TAC and the Futures Representative, may modify or
amend this Plan Trust Agreement and the Plan Trust Bylaws. The Plan Trustees,
after consultation with the TAC and the Futures Representative, and subject to
the consent of the TAC and the Futures Representative, may modify or amend the
TDP; provided, however, that no amendment to the TDP shall be inconsistent with
the provisions limiting amendments to that document provided therein, and in
particular the provisions limiting amendment of the Claims Payment Ratio set
forth in Section 2.6 of the TDP and of the Payment Percentage set forth in
Section 4.2 of the TDP. Any modification or amendment made pursuant to this
Section must be done in writing. Notwithstanding anything contained in this Plan
Trust Agreement to the contrary, neither this Plan Trust Agreement, the Plan
Trust Bylaws, the TDP, nor any document annexed to the foregoing shall be
modified or amended in any way that could jeopardize, impair, or modify the
applicability of section 524(g) of the Bankruptcy Code, the efficacy or
enforceability of the injunction entered thereunder, or the Plan Trust's
qualified settlement fund status under section 468B of the Internal Revenue
Code.

      7.4 Meetings. The Plan Trustees, the TAC, and the Futures Representative
shall be deemed to have attended a meeting in the event such person participates
in a substantial portion of such meeting by conferring, in person or by
telephone conference call, on Plan Trust matters with the TAC, the Futures
Representative, or Plan Trustees, as applicable. The Plan Trustees, the TAC and
the Futures Representative shall have complete discretion to determine whether a
meeting, as described herein, occurred for purposes of Sections 4.5, 5.7, and
6.5 above.

      7.5 Severability. Should any provision in this Plan Trust Agreement be
determined to be unenforceable, such determination shall in no way limit or
affect the enforceability and operative effect of any and all other provisions
of this Plan Trust Agreement.


                                       27
<PAGE>

                                                           EXHIBIT D TO THE PLAN


      7.6 Notices. Notices to persons asserting claims shall be given by first
class mail, postage prepaid, at the address of such person, or, where
applicable, such person's legal representative, in each case as provided on such
person's claim form submitted to the Plan Trust with respect to his or her Plan
Trust Asbestos Claim.

      (a) Any notices or other communications required or permitted hereunder to
the following parties shall be in writing and delivered at the addresses
designated below, or sent by electronic mail (email) or facsimile pursuant to
the instructions listed below, or mailed by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows, or to such other
address or addresses as may hereafter be furnished in writing to each of the
other parties listed below in compliance with the terms hereof.

      To the Plan Trust through the Plan Trustees:

      To the TAC:

            Russell Budd
            3102 Oak Lawn Avenue
            Suite 1100
            Dallas, TX  75219
            E-mail:  rbudd@baronbudd.com

            Steven Kazan
            Kazan, McClain, Abrams, Fernandez, Lyons & Farrise
            171 Twelfth Street, Third Floor
            Oakland, California  94607
            Facsimile:  510-835-4913
            E-mail:  skazan@kazanlaw.com

            Robert Taylor, II
            One Allen Center
            3400 Penthouse
            500 Dallas Street
            Houston Texas, 77002
            E-mail:  rebadolezal@rgtaylorlaw.com

            Joseph F. Rice
            Motley Rice LLC
            28 Bridgeside Blvd
            Post Office Box 1792
            Mt. Pleasant, SC  29465
            E-mail:  jrice@motleyrice.com

            Perry Weitz
            Weitz & Luxenberg, P.C.
            180 Maiden Lane
            New York, New York  10038-4925
            Facsimile:  212-344-5461
            E-mail:  pweitz@weitzlux.com


                                       28
<PAGE>

                                                           EXHIBIT D TO THE PLAN


      To the Futures Representative:

            R. Scott Williams
            Haskell Slaughter Young & Rediker, LLC
            1400 Park Place Tower
            2001 Park Place North
            Birmingham, AL  35203
            Fax: (205) 324-1133

      To Debtors, Settlors, or Reorganized Debtors:

            Congoleum Corporation
            3500 Quakerbridge Road
            P.O. Box 3127
            Mercerville, NJ  08619-0127
            Attention: Roger Marcus
            Fax: 609-584-3685

            Congoleum Sales, Inc.
            c/o Congoleum Corporation
            3500 Quakerbridge Road
            P.O. Box 3127
            Mercerville, NJ  08619-0127
            Attention: Roger Marcus
            Fax: 609-584-3685

            Congoleum Fiscal, Inc.
            c/o Congoleum Corporation
            3500 Quakerbridge Road
            P.O. Box 3127
            Mercerville, NJ  08619-0127
            Attention: Roger Marcus
            Fax: 609-584-3685

      With a copy to (which copy shall not constitute notice):

            Richard L. Epling, Esq.
            Pillsbury Winthrop Shaw Pittman LLP
            1540 Broadway
            New York, NY  10036-4039
            Fax: 212-858-1500


                                       29
<PAGE>

                                                           EXHIBIT D TO THE PLAN


      (b) All such notices and communications if mailed shall be effective when
physically delivered at the designated addresses or, if electronically
transmitted, when the communication is received at the designated addresses and
confirmed by the recipient by return transmission.

      7.7 Successors and Assigns. The provisions of this Plan Trust Agreement
shall be binding upon and inure to the benefit of Congoleum, the Plan Trust, the
Plan Trustees and Reorganized Congoleum, and their respective successors and
assigns, except that neither Congoleum, the Plan Trust, the Plan nor Reorganized
Congoleum may assign or otherwise transfer any of its, or their, rights or
obligations under this Plan Trust Agreement except, in the case of the Plan
Trust and the Plan Trustees, as contemplated by Section 2.1 above.

      7.8 Limitation on Claim Interests for Securities Laws Purposes. Plan Trust
Asbestos Claims, and any interests therein (a) shall not be assigned, conveyed,
hypothecated, pledged or otherwise transferred, voluntarily or involuntarily,
directly or indirectly, except by will or under the laws of descent and
distribution; (b) shall not be evidenced by a certificate or other instrument;
(c) shall not possess any voting rights; and (d) shall not be entitled to
receive any dividends or interest; provided, however, that clause (a) of this
Section 7.8 shall not apply to the holder of a claim that is subrogated to a
Plan Trust Asbestos Claim as a result of its satisfaction of such Plan Trust
Asbestos Claim.

      7.9 Entire Agreement; No Waiver. The entire agreement of the parties
relating to the subject matter of this Plan Trust Agreement is contained herein
and in the documents referred to herein, and this Plan Trust Agreement and such
documents supersede any prior oral or written agreements concerning the subject
matter hereof. No failure to exercise or delay in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any further
exercise thereof or of any other right, power or privilege. The rights and
remedies herein provided are cumulative and are not exclusive of rights under
law or in equity.

      7.10 Headings. The headings used in this Plan Trust Agreement are inserted
for convenience only and do not constitute a portion of this Plan Trust
Agreement, nor in any manner affect the construction of the provisions of this
Plan Trust Agreement.

      7.11 Governing Law. This Plan Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware without regard
to Delaware conflict of law principles.

      7.12 Settlor Representative and Cooperation. Congoleum is hereby
irrevocably designated as the Settlor, and it is hereby authorized to take any
action required of the Settlor in connection with the Plan Trust Agreement.
Congoleum agrees to cooperate in implementing the goals and objectives of this
Plan Trust.

      7.13 Dispute Resolution. Any disputes that arise under this Plan Trust
Agreement or under the TDP shall be resolved by submission of the matter to an
alternative dispute resolution ("ADR") process mutually agreeable to the parties
involved. Should any party to the ADR process be dissatisfied with the decision
of the arbitrator(s), that party may apply to the Bankruptcy Court for a
judicial determination of the matter. In either case, if the dispute arose
pursuant to the consent provision set forth in Section 5.8(b) (in the case of


                                       30
<PAGE>

                                                           EXHIBIT D TO THE PLAN


the TAC) or Section 6.6(b) (in the case of the Futures Representative), the
burden of proof shall be on the party or parties who withheld consent to show
that the objection was valid. Should the dispute not be resolved by ADR process
within thirty (30) days after submission, the parties are relieved of the
requirement to pursue ADR prior to application to the Bankruptcy Court.
Notwithstanding anything else herein contained, to the extent any provision of
this Plan Trust Agreement is inconsistent with any provision of the Plan or the
TDP, the Plan or the TDP shall control.

      7.14 Enforcement and Administration. The provisions of this Plan Trust
Agreement and the TDP attached hereto shall be enforced by the Bankruptcy Court
pursuant to the Plan. The parties hereby further acknowledge and agree that the
Bankruptcy Court shall have exclusive jurisdiction over the settlement of the
accounts of the Plan Trustees and over any disputes hereunder not resolved by
alternative dispute resolution in accordance with Section 7.13 above.

      7.15 Effectiveness. This Plan Trust Agreement shall not become effective
until it has been executed and delivered by all the parties hereto.

      7.16 Counterpart Signatures. This Plan Trust Agreement may be executed in
any number of counterparts, each of which shall constitute an original, but such
counterparts shall together constitute but one and the same instrument.

      IN WITNESS WHEREOF, the parties have executed this Plan Trust Agreement
this _____ day of ________________________, _______.


                              CONGOLEUM CORPORATION, SETTLOR, by


                              Name:  _____________________________________

                              Title: ____________________________________


                              CONGOLEUM SALES, INC., SETTLOR, by


                              Name:  _____________________________________

                              Title: _____________________________________


                                       31
<PAGE>

                                                           EXHIBIT D TO THE PLAN


                             CONGOLEUM FISCAL, INC., SETTLOR, by


                             Name:  _____________________________________

                             Title: _____________________________________


                             PLAN TRUSTEES


                             _____________________________________________
                             Name:
                             Expiration Date of Initial Term: Third Anniversary
                             of the date of this Agreement


                             _____________________________________________
                             Name:
                             Expiration Date of Initial Term: Fourth Anniversary
                             of the date of this Agreement


                             _____________________________________________
                             Name:
                             Expiration Date of Initial Term: Fifth Anniversary
                             of the date of this Agreement


                             ASBESTOS CLAIMANTS' COMMITTEE


                             _____________________________________________


                             TRUST ADVISORY COMMITTEE


                             _____________________________________________
                             Name:
                             Expiration Date of Initial Term: Third Anniversary
                             of the date of this Agreement


                                       32
<PAGE>

                                                           EXHIBIT D TO THE PLAN


                             _____________________________________________
                             Name:
                             Expiration Date of Initial Term: Third Anniversary
                             of the date of this Agreement


                             _____________________________________________
                             Name:
                             Expiration Date of Initial Term: Fourth Anniversary
                             of the date of this Agreement


                             _____________________________________________
                             Name:
                             Expiration Date of Initial Term: Fourth Anniversary
                             of the date of this Agreement


                             _____________________________________________
                             Name:
                             Expiration Date of Initial Term: Fifth Anniversary
                             of the date of this Agreement


                             FUTURES REPRESENTATIVE


                             _____________________________________________
                             R. Scott Williams, Esq.


                                       33
<PAGE>

                                                           EXHIBIT E TO THE PLAN


                              Exhibit E to the Plan
             "Anti-Dilution Provisions for New Class A Common Stock"
<PAGE>

                                                           EXHIBIT E TO THE PLAN


If at any time after the Effective Date (but subject to the last paragraph
hereof), Reorganized Congoleum shall issue (other than in an Excluded Issuance
(as defined below)) shares of Class A Common Stock (or rights, warrants or other
securities convertible into or exchangeable for shares of Class A Common Stock),
at a price per share (or having an exercise, conversion or exchange price per
share) less than the fair market value of the Class A Common Stock on the date
of issuance (a "Dilutive Issuance"), then Reorganized Congoleum shall issue
immediately following the close of trading on the tenth trading date (the
"Adjustment Date") following the date of such Dilutive Issuance (the "Dilutive
Issuance Closing Date") additional shares of Class A Common Stock to the Plan
Trust (the "Additional Shares") so that the fair market value on the Adjustment
Date of (1) the New Class A Common Stock issued pursuant to Section 6.1(b) of
this Plan on the Effective Date (the "Initial Shares") plus (2) the Additional
Shares equals the fair market value of the Initial Shares (plus any previously
issued Additional Shares) on the Dilutive Issuance Closing Date.

"Excluded Issuance" shall mean (1) issuances pursuant to Reorganized Congoleum's
stock option plans existing on the Effective Date (including any amendments
thereto after the Effective Date) or any future stock option or restricted plan
approved by the Board of Directors of Reorganized Congoleum; (2) issuances in a
public offering; (3) issuances to banks, equipment lessors or other financial
institutions, pursuant to a debt financing or equipment leasing approved by the
Board of Directors of Reorganized Congoleum; (4) issuances to suppliers or third
party service providers in connection with the provision of goods or services
approved by the Board of Directors of Reorganized Congoleum and consistent with
the past practices of Congoleum; and (5) issuances in connection with sponsored
research, collaboration, technology license, development, OEM, marketing or
other similar agreements or strategic partnerships approved by the Board of
Directors of Reorganized Congoleum and consistent with the past practices of
Congoleum.

"fair market value" shall be determined in good faith by the Board of Directors
of Reorganized Congoleum (which determination shall be conclusive); provided
that if the Class A Common Stock is traded on a securities exchange or the
Nasdaq stock market, "fair market value" shall be based on the average of the
closing prices of the Class A Common Stock thereon over the twenty trading days
(during which trades occur) ending one day prior to the date of determination,
it being understood that the Board of Directors shall apply an appropriate
discount for shares that are "restricted" pursuant to SEC rules and regulations.


                                       2
<PAGE>

                                                           EXHIBIT E TO THE PLAN


After the Effective Date (but subject to the last paragraph hereof), Reorganized
Congoleum shall not authorize or issue (i) any shares of capital stock, other
than shares of Class A Common Stock, or (ii) any rights to acquire capital
stock, other than shares of Class A Common Stock, or (iii) any securities
convertible into or exchangeable for shares of capital stock, other than shares
of Class A Common Stock, without the prior written consent of the Plan Trust,
which shall not be unreasonably withheld.

The provisions of this Exhibit E shall no longer be applicable at such time as
the Plan Trust first holds less than ten percent (10%) of the Class A Common
Stock of Reorganized Congoleum, it being understood that if the Plan Trust were
to acquire thereafter ten percent (10%) or more of such Class A Common Stock,
these provisions shall continue to no longer be applicable.


                                       3
<PAGE>

                                  Exhibit F to the Plan
                            "Congoleum's Current Distributors"

<PAGE>

                                                           EXHIBIT F TO THE PLAN


                         Congoleum Current Distributors


Mohawk Industries, Inc.
Pacific American Lumber, Inc.
Albert F. Fitzgerald, Inc.
All Tile, Inc.
Bayard Sales, Corp.
Bishop Distributing
CMH Flooring Products, Inc.
Fargo Glass & Paint Company
Floor Covering, Inc.
Rosele Heck, Co.
Tri-State Wholesale Flooring, Inc.
LaSalle Bristol, LP
W.G. McMahon Canada, Ltd.
Omni Floorcoverings, Ltd. (Ontario)
Tapis Kraus Quebec


                                        2
<PAGE>

                                                           EXHIBIT G TO THE PLAN


                              Exhibit G to the Plan
                 "Congoleum Plan Trust Distribution Procedures"
<PAGE>

                                                           EXHIBIT G TO THE PLAN


                                 CONGOLEUM PLAN
                          TRUST DISTRIBUTION PROCEDURES

SECTION I INTRODUCTION.......................................................4

SECTION II OVERVIEW..........................................................4

   2.2         Claims Liquidation Procedures.................................5
   2.3         Settled Claims................................................6
   2.4         Application of the Payment Percentage.........................6
   2.5         Plan Trust's Determination of the Maximum Annual Payment and
               Maximum Available Payment.....................................7
   2.6         Claims Payment Ratio..........................................7
   2.7         Indirect Plan Trust Asbestos Claims...........................9

SECTION III    CLAIMS HANDLING FEE, PLAN TRUST EXPENSES, AND
               COVERAGE COSTS................................................9

SECTION IV TDP ADMINISTRATION................................................9

   4.1         Plan Trust Advisory Committee and Futures Representative......9
   4.2         Consent and Consultation Procedures...........................9

SECTION V PAYMENT PERCENTAGE; PERIODIC ESTIMATES............................10

   5.1         Uncertainty of Congoleum's Personal Injury Asbestos
               Liabilities..................................................10
   5.2         Computation of Payment Percentage............................10
   5.3         Applicability of the Payment Percentage......................11

SECTION VI RESOLUTION OF SETTLED CLAIMS AND PLAN TRUST PI ASBESTOS CLAIMS...12

   6.1         Ordering, Processing and Payment of Claims...................12
               (a)  Ordering of Claims......................................12
                    (1) Settled Claims......................................12
                    (2) Effect of Statutes of Limitation and Repose.........14
               (b)  Processing of Claims....................................14
               (c)  Payment of Claims.......................................15
   6.2         Resolution of Plan Trust PI Asbestos Claims..................15
               (a)  Expedited Review Process................................16
                    (1) In General..........................................16
                    (2) Claims Processing Under Expedited Review............16
                    (3) Disease Levels, Scheduled Values and
                        Medical/Exposure Criteria...........................17
               (b)  Individual Review Process...............................20
                    (1) In General..........................................20
                        (A)  Review of Medical/Exposure Criteria............21
<PAGE>

                                                           EXHIBIT G TO THE PLAN


                        (B)  Review of Liquidated Value.....................21
                    (2) Valuation Factors to Be Considered in Individual
                        Review..............................................21
                    (3) Scheduled, Average and Maximum Values...............22
   6.3         Categorizing Claims as Extraordinary and/or Exigent Hardship.23
               (a)  Exigent Hardship Claims.................................23
   6.4         Secondary Exposure Claims....................................24
   6.5         Indirect Plan Trust Asbestos Claims..........................24
   6.6         Evidentiary Requirements.....................................25
               (a)  Medical Evidence........................................25
                    (1) In General..........................................25
                        (A)  Disease Levels I - IV..........................25
                        (B)  Disease Levels V - VIII........................26
                    (2) Credibility of Medical Evidence.....................26
               (b)  Exposure Evidence.......................................27
                    (1) In General..........................................27
                    (2) Significant Occupational Exposure...................27
   6.7         Claims Audit Program.........................................28
   6.8         Second Disease (Malignancy) Claims...........................28
   6.9         Arbitration..................................................29
               (a)  Establishment of ADR Procedures.........................29
               (b)  Claims Eligible for Arbitration.........................29
               (c)  Limitations on and Payment of Arbitration Awards........29
   6.10        Litigation...................................................30

SECTION VII CLAIMS MATERIALS................................................30

   7.1         Claims Materials.............................................30
   7.2         Content of Claims Materials..................................30
   7.3         Withdrawal or Deferral of Claims.............................30
   7.4         Filing Requirements and Fees.................................31
   7.5         Confidentiality of Claimants' Submissions....................31

SECTION VIII GENERAL GUIDELINES FOR LIQUIDATING AND PAYING CLAIMS...........31

   8.1         Showing Required.............................................31
   8.2         Costs Considered.............................................31
   8.3         Discretion to Vary the Order and Amounts of Payments in
               Event of Limited Liquidity...................................32
   8.4         Punitive Damages.............................................32
   8.5         Interest.....................................................32
               (a)  In General..............................................32
               (b)  Plan Trust PI Asbestos Claims...........................33
   8.6         Suits in the Tort System.....................................33
   8.7         Payment of Judgments for Money Damages.......................33
   8.8         Releases.....................................................34
   8.9         Third-Party Services.........................................34
   8.10        Plan Trust Disclosure of Information.........................34


                                        2
<PAGE>

                                                           EXHIBIT G TO THE PLAN


SECTION IX MISCELLANEOUS....................................................34

   9.1         Amendments...................................................34
   9.2         Severability.................................................35
   9.3         Governing Law................................................35


                                        3
<PAGE>

                                                           EXHIBIT G TO THE PLAN


      The Congoleum Plan Trust Distribution Procedures (this "TDP") contained
herein provide for resolving all asbestos-related personal injury and death
claims caused by exposure to products for which, Congoleum Corporation,
Congoleum Sales, Inc., and Congoleum Fiscal, Inc., (collectively referred to as
the "Debtors" or "Congoleum"), and their predecessors, successors, and assigns,
have legal responsibility as the result of the manufacture, distribution,
installation or use of Congoleum products containing asbestos or to asbestos or
asbestos-containing products in a Congoleum facility, which consist of Asbestos
Personal Injury Claims and Unknown Asbestos Claims, as provided in and required
by the confirmed Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy
Code for Congoleum Corporation, et al., (the "Plan") and the Congoleum Plan
Trust Agreement (the "Plan Trust Agreement"). The Plan and Plan Trust Agreement
establish the Congoleum Plan Trust ("Plan Trust"). The Plan Trustees shall
implement and administer this TDP in accordance with the Plan Trust Agreement.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in the Plan and the Plan Trust Agreement.

                                   SECTION I

                                  Introduction

      1.1 Purpose. This TDP has been adopted pursuant to the Plan Trust
Agreement. It is designed to (a) provide fair, equitable and substantially
similar treatment for all Asbestos Personal Injury Claims and Unknown Asbestos
Claims that may presently exist or may arise in the future and (b) pay or treat,
as applicable, the Asbestos Personal Injury Claims that have been settled
pursuant to the Plan under the Class 2 Settlement or the Class 3 and 11
Settlement (hereinafter for all purposes of this TDP defined as "Settled
Claims") in accordance with the Class 2 Settlement and Class 3 and 11
Settlement, as applicable, or, if the Class 2 Settlement or the Class 3 and 11
Settlement are not approved and the Asbestos Personal Injury Claims of Qualified
Claimants in Classes 2, 3 or 11, as applicable, are deemed Plan Trust Disputed
Claims, to treat such Plan Trust Disputed Claims as provided in a Final Order of
the Bankruptcy Court adjudicating such Claims.

      1.2 Interpretation. Except as may otherwise be provided below, nothing in
this TDP shall be deemed to create a substantive right for any claimant.

                                   SECTION II

                                    Overview

      2.1 Plan Trust Goals. The goal of the Plan Trust is to treat all claimants
equitably and in accordance with their legal rights. This TDP furthers that goal
by setting forth procedures for processing and paying Congoleum's several share
of the unpaid portion of the liquidated value of Asbestos Personal Injury Claims
(other than the Settled Claims and Plan Trust Disputed Claims, which are
addressed in Sections 2.3 and 6.1(a)(1) below) and Unknown Asbestos Claims
(hereinafter for all purposes of this TDP defined as "Plan Trust PI Asbestos
Claims") generally on an impartial, first-in first-out ("FIFO") basis, with the
intention of paying all claimants over time as equivalent a share as possible of
the value of their claims based on historical values for substantially similar


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claims in the tort system.(1) To this end, this TDP establishes a schedule of
eight asbestos-related diseases ("Disease Levels"), seven of which have
presumptive medical and exposure requirements ("Medical/Exposure Criteria") and
specific liquidated values ("Scheduled Values"), and eight of which have both
anticipated average values ("Average Values") and caps on their liquidated
values ("Maximum Values"). The Disease Levels, Medical/Exposure Criteria,
Scheduled Values, Average Values and Maximum Values, which are set forth in
Section 6.2 below, have all been selected and derived with the intention of
achieving a fair allocation of the Plan Trust funds as among claimants suffering
from different disease processes in light of the best available information
considering the settlement history of Congoleum and the rights claimants would
have in the tort system absent the bankruptcy.

      2.2 Claims Liquidation Procedures. Plan Trust PI Asbestos Claims shall be
processed based on their place in the FIFO Processing Queue to be established
pursuant to Section 6.1(a)(2) below. The Plan Trust shall take all reasonable
steps to resolve Plan Trust PI Asbestos Claims as efficiently and expeditiously
as possible at each stage of claims processing and arbitration, which steps may
include conducting settlement discussions with claimants' representatives with
respect to more than one claim at a time, provided that the claimants'
respective positions in the FIFO Processing Queue are maintained; and each claim
is individually evaluated pursuant to the valuation factors set forth in Section
6.2(b)(2) below. The Plan Trust shall also make every effort to resolve each
year at least that number of Plan Trust PI Asbestos Claims required to exhaust
the Maximum Annual Payment and the Maximum Available Payment for Category A and
Category B claims, as those terms are defined below.

      The Plan Trust shall liquidate all Plan Trust PI Asbestos Claims except
Foreign Claims (as defined below) that meet the presumptive Medical/Exposure
Criteria of Disease Levels I - V, VII and VIII under the Expedited Review
Process described in Section 6.2(a) below. Claims involving Disease Levels I -
V, VII and VIII that do not meet the presumptive Medical/Exposure Criteria for
the relevant Disease Level may undergo the Plan Trust's Individual Review
Process described in Section 6.2(b) below. In such a case, notwithstanding that
the claim does not meet the presumptive Medical/Exposure Criteria for the
relevant Disease Level, the Plan Trust can offer the claimant an amount up to
the Scheduled Value of that Disease Level if the Plan Trust is satisfied that
the claimant has presented a claim that would be cognizable and valid in the
tort system.

      Plan Trust PI Asbestos Claims involving Disease Levels IV - VIII tend to
raise more complex valuation issues than the Plan Trust PI Asbestos Claims in
Disease Levels I - III. Accordingly, claimants holding claims involving these
Disease Levels may in addition or alternatively seek to establish a liquidated
value for the claim that is greater than its Scheduled Value by electing the
Plan Trust's Individual Review Process. However, the liquidated value of a more
serious Disease Level IV, V, VII or VIII claim that undergoes the Individual
Review Process for valuation purposes may be determined to be less than its
Scheduled Value, and in any event shall not exceed the Maximum Value for the
relevant Disease Level set forth in Section 6.2(b)(3) below, unless the claim
qualifies as an Extraordinary Claim as defined in Section 6.3(a) below, in which
case its liquidated value cannot exceed the Maximum Value specified in that
provision for such claims. Level VI (Lung Cancer 2) claims and all Foreign
Claims may be liquidated only pursuant to the Plan Trust's Individual Review
Process.

----------
(1)   As used in this TDP, the phrase "in the tort system" shall include only
      claims asserted by way of litigation and not claims asserted against a
      trust established for the benefit of asbestos personal injury claimants
      pursuant to ection 524(g) and/or section 105 of the Bankruptcy Code or any
      other applicable law (an "Asbestos Claim Trust").


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      Based upon Congoleum's claims settlement history in light of applicable
tort law, and current projections of present and future unliquidated claims, the
Scheduled Values and Maximum Values set forth in Section 6.2(b)(3) have been
established for each of the five more serious Disease Levels that are eligible
for Individual Review of their liquidated values, with the expectation that the
combination of settlements at the Scheduled Values and those resulting from the
Individual Review Process should result in the Average Values also set forth in
that provision.

      Subject to Section 2.3, below, regarding Settled Claims, all unresolved
disputes over a claimant's medical condition, exposure history and/or the
liquidated value of the claim shall be subject to binding or non-binding
arbitration as set forth in Section 6.9 below, at the election of the claimant,
under the ADR Procedures that are provided in Attachment A hereto. Plan Trust PI
Asbestos Claims that are the subject of a dispute with the Plan Trust that
cannot be resolved by non-binding arbitration may enter the tort system as
provided in Sections 6.10 and 8.6 below. However, if and when a claimant obtains
a judgment in the tort system, the judgment shall be payable (subject to the
Payment Percentage, Maximum Available Payment, and Claims Payment Ratio
provisions set forth below) as provided in Section 8.7 below.

      2.3 Settled Claims. Under the terms of the Plan, which incorporates the
Class 2 Settlement and the Class 3 and 11 Settlement, each Qualified Claimant
has settled his, her or its Asbestos Personal Injury Claim under the Plan and
shall have his, her or its claim processed and paid pursuant to Section
6.1(a)(1) below.

      In the event that the Class 2 Settlement or the Class 3 and 11 Settlement
is not approved by the Bankruptcy Court, the Plan Trust Disputed Claims of the
Qualified Claimants shall be treated as provided in a Final Order of the
Bankruptcy Court and, if applicable, shall be paid from the Plan Trust Disputed
Claims Reserve, in accordance with Section 3.2 of the Plan Trust Agreement.

      2.4 Application of the Payment Percentage. After the liquidated value of a
Plan Trust PI Asbestos Claim other than a claim involving Other Asbestos Disease
(Disease Level I - Cash Discount Payment), as defined in Section 6.2(a)(3)
below, is determined pursuant to the procedures set forth herein for Expedited
Review, Individual Review, arbitration, or litigation in the tort system, the
claimant shall ultimately receive a pro-rata share of that value based on a
Payment Percentage described in Section 5.2 below.

      After the Plan Trust is established, an initial Payment Percentage shall
be set pursuant to Section 5.2, below, by the Plan Trustees, the TAC and the
Futures Representative (who are described in Section 4.1, below). The initial
Payment Percentage shall be calculated on the assumption that the Average Values
set forth in Section 6.2(b)(3), below, shall be achieved with respect to
existing present claims and projected future claims involving Disease Levels II
- VIII.

      The Payment Percentage may thereafter be adjusted upwards or downwards
from time to time by the Plan Trustees with the consent of the TAC and the
Futures Representative to reflect then-current estimates of the Plan Trust's
assets and its liabilities, as well as then-estimated value of then-pending and
future claims. Any adjustment to the initial Payment Percentage shall be made
only pursuant to Section 5.2 below. If the Payment Percentage is increased over
time, claimants whose claims were liquidated and paid in prior periods under the
TDP shall receive additional payments only as provided in Section 5.2 below.
Because there is uncertainty in the prediction of both the number and severity
of future Plan Trust PI Asbestos Claims, and the amount of the Plan Trust'
assets, no guarantee can be made of any Payment Percentage of a Plan Trust PI
Asbestos Claim's liquidated value.


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      2.5 Plan Trust's Determination of the Maximum Annual Payment and Maximum
Available Payment. The Plan Trust shall estimate or model the amount of cash
flow anticipated to be necessary over its entire life to ensure that funds shall
be available to treat all present and future Congoleum claimants as similarly as
possible. In each year, the Plan Trust shall be empowered to pay out all of the
income earned during the year, together with a portion of its principal,
calculated so that the application of Plan Trust funds over its life shall
correspond with the needs created by the anticipated flow of claims (the
"Maximum Annual Payment"), taking into account the Payment Percentage provisions
set forth in Sections 2.4 above and 5.2 below. The Plan Trust's distributions to
all claimants for that year shall not exceed the Maximum Annual Payment
determined for that year.

      In distributing the Maximum Annual Payment, the Plan Trust shall, after
making reservation for any Plan Trust Disputed Claims, as provided for in
Section 3.2 of the Plan Trust Agreement, if applicable, and after reimbursing
the Reorganized Debtors for the Claims Handling Fee, as provided in Section
1.4(d) of the Plan Trust Agreement, first allocate the amount in question to the
Settled Claims and then to liquidated Plan Trust PI Asbestos Claims involving
Disease Level I (Cash Discount Payment), in proportion to the aggregate value of
each group of claims. The remaining portion of the Maximum Annual Payment (the
"Maximum Available Payment"), if any, shall then be allocated and used to
satisfy all other liquidated Plan Trust PI Asbestos Claims, subject to the
Claims Payment Ratio set forth in Section 2.6 below. In the event there are
insufficient funds in any year to pay the total number of outstanding Settled
Claims and/or previously liquidated Disease Level I Claims, the available funds
allocated to that group of claims shall be paid to the maximum extent to
claimants in the particular group based on their place in their respective FIFO
Payment Queue. Claims in either group for which there are insufficient funds
shall be carried over to the next year, and placed at the head of their FIFO
Payment Queue.

      2.6 Claims Payment Ratio. Based upon Congoleum's claims settlement history
and analysis of present and future claims, a Claims Payment Ratio has been
determined which, as of the Effective Date, has been set at 75% for Category A
claims, which consist of Plan Trust PI Asbestos Claims involving severe
asbestosis and malignancies (Disease Levels IV - VIII) that were unliquidated as
of the Petition Date, and at 25% for Category B claims, which are Plan Trust PI
Asbestos Claims involving non-malignant Asbestosis or Pleural Disease (Disease
Levels II and III) that were similarly unliquidated as of the Petition Date.
However, the Claims Payment Ratio shall not apply to any Settled Claims, Plan
Trust Disputed Claims (unless so provided by a Final Order of the Bankruptcy
Court), or to any claims for Other Asbestos Disease (Disease Level I - Cash
Discount Payment).

      In each year, after the determination of the Maximum Available Payment
described in Section 2.5 above, 75% of that amount shall be available to pay
Category A claims and 25% shall be available to pay Category B claims that have
been liquidated since the Petition Date. In the event there are insufficient
funds in any year to pay the liquidated claims within either or both of the
Categories, the available funds allocated to the particular Category shall be


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paid to the maximum extent to claimants in that Category based on their place in
the FIFO Payment Queue described in Section 6.1(c) below, which shall be based
upon the date of claim liquidation. Claims for which there are insufficient
funds allocated to the relevant Category shall be carried over to the next year
where they shall be placed at the head of the FIFO Payment Queue. If there are
excess funds in either or both Categories, because there is an insufficient
amount of liquidated claims to exhaust the respective Maximum Available Payment
amount for that Category, then the excess funds for either or both Categories
shall be rolled over and remain dedicated to the respective Category to which
they were originally allocated.

      The 75%/25% Claims Payment Ratio and its rollover provision shall apply to
all Plan Trust Voting Claims except (i) Settled Claims (other than Settled
Claims held by Qualified Participating Claimants that have elected to be treated
as Plan Trust Asbestos PI Claims) and (ii) Other Asbestos Disease claims
(Disease Level I - Cash Discount Payment). The term "Plan Trust Voting
Claims346" includes (i) claims filed against Congoleum in the tort system prior
to the Petition Date of December 31, 2003, including the Claimant Agreement and
any other Pre-Petition Settlement Agreements; and all claims filed against
another defendant in the tort system prior to the Petition Date; provided,
however, that (1) either (a) the holder of a claim described in subsection (i)
or (ii) above, or his or her authorized agent, actually voted to accept or
reject the Plan pursuant to the voting procedures established by the Bankruptcy
Court, unless such holder certifies to the satisfaction of the Plan Trustees
that he or she was prevented from voting in this proceeding as a result of
circumstances resulting in a state of emergency affecting, as the case may be,
the holder's residence, principal place of business or legal representative's
place of business at which the holder or his or her legal representative
receives notice and/or maintains material records relating to his or her Plan
Trust Voting Claim or (b) the holder of a claim is deemed, pursuant to the Plan,
to have agreed to the Class 3 and 11 Settlement Agreement, as applicable; and
provided further that (2) the claim was subsequently filed with the Plan Trust
pursuant to Section 6.1 below by the Initial Claims Filing Date defined in
Section 6.1(a)(2) below. Thereafter, both the Claims Payment Ratio and its
rollover provision shall be continued absent circumstances, such as a
significant change in law or medicine, necessitating amendment to avoid a
manifest injustice. However, the accumulation, rollover and subsequent delay of
claims resulting from the application of the Claims Payment Ratio shall not, in
and of itself, constitute such circumstances. In addition, an increase in the
numbers of Category B claims beyond those predicted or expected shall not be
considered as a factor in deciding whether to reduce the percentage allocated to
Category A claims.

      In considering whether to make any amendments to the Claims Payment Ratio
and/or its rollover provisions, the Plan Trustees shall consider the reasons for
which the Claims Payment Ratio and its rollover provisions were adopted, the
settlement history that gave rise to its calculation, and the foreseeability or
lack of foreseeability of the reasons why there would be any need to make an
amendment. In that regard, the Plan Trustees should keep in mind the interplay
between the Payment Percentage and the Claims Payment Ratio as it affects the
net cash actually paid to claimants.

      In any event, no amendment to the Claims Payment Ratio to reduce the
percentage allocation to Category A claims may be made without the unanimous
consent of the TAC and the Futures Representative. The percentage allocated to
Category A claims shall be reviewed as soon as practicable after the first
anniversary of the date the Plan Trust first accepts for processing proof of
claims forms and the other materials required to file a claim with the Plan
Trust, and may be increased at any time thereafter, with the consent of the TAC


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                                                           EXHIBIT G TO THE PLAN


and the Futures Representative. In case of any amendments to the Claims Payment
Ratio, consents shall be governed by the consent process set forth in Sections
5.8(b) and 6.6(b) of the Plan Trust Agreement, however, failure to obtain
consent shall not be subject to the dispute resolution provisions of Section
7.13 thereof. The Plan Trustees, with the consent of the TAC and the Futures
Representative, may offer the option of a reduced Payment Percentage to holders
of claims in either Category A or Category B in return for prompter payment (the
"Reduced Payment Option").

      2.7 Indirect Plan Trust Asbestos Claims. As set forth in Section 6.5
below, (Indirect Asbestos Claims"), if any, shall be subject to the same
categorization, evaluation, and payment provisions of this TDP as all other Plan
Trust PI Asbestos Claims.

                                  SECTION III

           Claims Handling Fee, Plan Trust Expenses and Coverage Costs

      Notwithstanding any other provision contained in this TDP, (i) the holder
of the Claim for the Claims Handling Fee shall be paid as provided in the Plan
Trust Agreement; and (ii) distributions to Plan Trust PI Asbestos Claims shall
not be prior to the payment of or reserve for Plan Trust Expenses nor prior to
payment of or reimbursement for Coverage Costs in accordance with Section 1.4(d)
of the Plan Trust Agreement.

                                   SECTION IV

                               TDP Administration

      4.1 Plan Trust Advisory Committee and Futures Representative. Pursuant to
the Plan and the Plan Trust Agreement, the Plan Trustees shall initially consist
of three members, two of which shall be designated by the ACC and one of which
shall be designated by the Futures Representative. In addition, pursuant to the
Plan and the Plan Trust agreement, the Plan Trust and this TDP shall be
administered by the Plan Trustees in consultation with the TAC, which represents
the interests of holders of present Plan Trust PI Asbestos Claims, and the
Futures Representative, who represents the interests of holders of Plan Trust PI
Asbestos Claims that shall be asserted in the future. The Plan Trustees shall
obtain the consent of the TAC and the Futures Representative on any amendments
to this TDP pursuant to Section 9.1 below, and on such other matters as are
otherwise required below and in Section 2.2(f) of the Plan Trust Agreement. The
Plan Trustees shall also consult with the TAC and the Futures Representative on
such matters as are provided below and in Section 2.2(e) of the Plan Trust
Agreement. The initial Plan Trustees, the initial members of the TAC and the
initial Futures Representative are identified in the Plan Trust Agreement.

      4.2 Consent and Consultation Procedures. In those circumstances in which
consultation or consent is required, the Plan Trustees shall provide written
notice to the TAC and the Futures Representative of the specific amendment or
other action that is proposed. The Plan Trustees shall not implement such
amendment nor take such action unless and until the parties have engaged in the
Consultation Process described in Sections 5.8(a) and 6.6(a), or the Consent
Process described in Sections 5.8(b) and 6.6(b), of the Plan Trust Agreement,
respectively.


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                                   SECTION V

                     Payment Percentage; Periodic Estimates

      5.1 Uncertainty of Congoleum's Personal Injury Asbestos Liabilities. As
discussed above, there is inherent uncertainty regarding Congoleum's total
asbestos-related tort liabilities, as well as the total value of the assets
available to the Plan Trust to pay Plan Trust PI Asbestos Claims. Consequently,
there is inherent uncertainty regarding the amounts that holders of Plan Trust
PI Asbestos Claims shall receive. To seek to ensure substantially equivalent
treatment of all present and future Plan Trust PI Asbestos Claims, the Plan
Trustees must determine from time to time the percentage of full liquidated
value that holders of present and future Plan Trust PI Asbestos Claims shall be
likely to receive, i.e., the "Payment Percentage" described in Section 2.4 above
and Section 5.2 below.

      5.2 Computation of Payment Percentage. As provided in Section 2.4 above,
an initial Payment Percentage shall be set by the Plan Trustees with the consent
of the TAC and the Futures Representative after the Plan Trust is established
and sufficient information is available concerning the expected assets and
liabilities of the Plan Trust over its lifetime.

      The Payment Percentage shall thereafter be subject to change pursuant to
the terms of this TDP and the Plan Trust Agreement if the Plan Trustees
determine that an adjustment is required. No less frequently than once every
three years, commencing with the first day of January occurring after the Plan
is consummated, the Plan Trustees shall reconsider the then applicable Payment
Percentage to assure that it is based on accurate, current information and may,
after such reconsideration, change the Payment Percentage if necessary with the
consent of the TAC and the Futures Representative. The Plan Trustees shall also
reconsider the then applicable Payment Percentage at shorter intervals if they
deem such reconsideration to be appropriate or if requested to do so by the TAC
or the Futures Representative.

      The Plan Trustees must base their determination of the Payment Percentage
on current estimates of the number, types, and values of present and future Plan
Trust PI Asbestos Claims, the value of the assets then available to the Plan
Trust for their payment, taking into account payment of the Settled Claims, the
Plan Trust Disputed Claims Reserve established under Section 3.2 of the Plan
Trust Agreement, if applicable, all anticipated administrative and legal
expenses, and any other material matters that are reasonably likely to affect
the sufficiency of funds to pay a comparable percentage of full value to all
holders of Plan Trust PI Asbestos Claims. When making these determinations, the
Plan Trustees shall exercise common sense and flexibly evaluate all relevant
factors. The Payment Percentage applicable to Category A or Category B claims
may not be reduced to alleviate delays in payments of claims in the other
Category; both Categories of claims shall receive the same Payment Percentage,
but the payment may be deferred as needed, and a Reduced Payment Option may be
instituted as described in Section 2.6 above.


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      The uncertainty surrounding the amount of the Plan Trust's future assets
is due in significant part to the fact that the estimates of those assets do not
take into account the possibility that the Plan Trust may receive substantial
additional funds from successful recoveries of insurance proceeds that have been
assigned to the Plan Trust with respect to which the coverage is presently in
dispute or the solvency of the carrier is in doubt. In addition, as provided in
Section 3.2 of the Plan Trust Agreement, in the event that the Class 2
Settlement or the Class 3 and 11 Settlement is not approved by the Bankruptcy
Court, the Plan Trust is required to establish a Plan Trust Disputed Claim
Reserve for Plan Trust Disputed Claims; provided that such Plan Trust Disputed
Claim Reserve shall not exceed $23.25 million. There is also uncertainty
surrounding the totality of the Plan Trust PI Asbestos Claims to be paid over
time as well as the extent to which changes in existing federal and/or state law
could affect the Plan Trust's liabilities under this TDP. If the Plan Trust
successfully resolves an insurance coverage dispute or otherwise receives a
substantial recovery of insurance proceeds, and/or if the value or volume of
Plan Trust PI Asbestos Claims actually filed with the Plan Trust is
significantly lower than originally estimated, and/or if the funds reserved for
Plan Trust Disputed Claims, if applicable, are available to the Plan Trust for
payment of other claims, the Plan Trust shall use those proceeds and/or claims
savings, as the case may be, first to maintain the Payment Percentage then in
effect.

      If the Plan Trustees, with the consent of the TAC and the Futures
Representative, determine to increase the Payment Percentage, including the
initial Payment Percentage applicable to Plan Trust Voting Claims, due to a
material change in the estimates of the Plan Trust's future assets and/or
liabilities, the Plan Trustees shall also make supplemental payments to all
claimants who previously liquidated their claims against the Plan Trust and
received payments based on a lower Payment Percentage. The amount of any such
supplemental payment shall be the liquidated value of the claim in question
times the newly adjusted Payment Percentage, less all amounts previously paid to
the claimant with respect to the claim, not including the portion of such
previously paid amounts that was attributable to interest.

      The Plan Trustees' obligation to make a supplemental payment to a claimant
shall be suspended in the event the payment in question would be less than
$100.00, and the amount of the suspended payment shall be added to the amount of
any prior supplemental payment/payments that was/were also suspended because
it/they would have been less than $100.00. However, the Plan Trustees shall pay
any such aggregate supplemental payments due the claimant at such time that the
total exceeds $100.00.

      5.3 Applicability of the Payment Percentage. No holder of a Plan Trust
Voting Claim, other than a Plan Trust Voting Claim for Settled Claims (other
than Settled Claims held by Qualified Participating Claimants that have elected
to be treated as Plan Trust Asbestos PI Claims) or Other Asbestos Disease
(Disease Level I - Cash Discount Payment) as defined in Section 6.2(a)(3) below,
shall receive a payment that exceeds the initial Payment Percentage times the
liquidated value of the claim. Except as otherwise provided in Section 6.1(c)
below for Plan Trust PI Asbestos Claims involving deceased or incompetent
claimants for which approval of the Plan Trust's offer by a court or through a
probate process is required, no holder of any other Plan Trust Asbestos Claim,
other than a Plan Trust Asbestos Claim for Other Asbestos Disease (Disease Level
I - Cash Discount Payment) or a Settled Claim (other than a Settled Claim held
by a Qualified Participating Claimant that has elected to be treated as a Plan
Trust Asbestos PI Claim), shall receive a payment that exceeds the liquidated
value of the claim times the Payment Percentage in effect at the time of
payment. Plan Trust PI Asbestos Claims involving Other Asbestos Disease (Disease
Level I - Cash Discount Payment) shall not be subject to the Payment Percentage,
but shall instead be paid the full amount of their Scheduled Value as set forth
in Section 6.2(a)(3) below.


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      If a redetermination of the Payment Percentage has been proposed in
writing by the Plan Trustees to the TAC and the Futures Representative but has
not yet been adopted, the claimant shall receive the lower of the current
Payment Percentage or the proposed Payment Percentage. However, if the proposed
Payment Percentage was the lower amount but was not subsequently adopted, the
claimant shall thereafter receive the difference between the lower proposed
amount and the higher current amount. Conversely, if the proposed Payment
Percentage was the higher amount and was subsequently adopted, the claimant
shall thereafter receive the difference between the lower current amount and the
higher adopted amount.

                                   SECTION VI

         Resolution of Settled Claims and Plan Trust PI Asbestos Claims

      6.1 Ordering, Processing and Payment of Claims.

            (a) Ordering of Claims.

                  (1) Settled Claims.As soon as reasonably practicable after the
Effective Date and prior to payment of Plan Trust PI Asbestos Claims, the Plan
Trust shall pay the Settled Claims, as provided below in this Section 6.1(a)(1),
other than the Settled Claims of Qualified Participating Claimants that have
elected to irrevocably consent to the Forbearance of his, her or its right to
(a) the payment provided for in this Section 6.1(a)(1) and (b) any and all
rights under the Claimant Agreement, the Collateral Trust Agreement and the
Security Agreement, in which case such forbearing Qualified Participating
Claimant shall receive the treatment afforded to Plan Trust PI Asbestos Claims
as provided in Section 6.1(a)(2) below.

                  The Settled Claims of Qualified Pre-Petition Settlement
Claimants (Plan Class 2) shall be paid 50% of the specified amount agreed under
the respective Pre-Petition Settlement Agreement (less all amounts in respect
thereof previously received by the holder thereof from any Debtor or the
Collateral Trust) in full satisfaction of its Asbestos Personal Injury Claim.
Such payments shall be made out of the first proceeds of Asbestos Insurance
Action Recoveries, net of payment of or reserve for any Plan Trust Expenses and
any payment of or reimbursement for costs and reservation for the Plan Trust
Disputed Claims Reserve, if applicable, in accordance with Sections 3.6, 1.4(d)
and 3.2, respectively, of the Plan Trust Agreement prior to payment of all Plan
Trust PI Asbestos Claims but not prior to payment of or reimbursement for
Coverage Costs in accordance with Sections 3.6 and 1.4(d), respectively, of the
Plan Trust Agreement. The Settled Claims of Qualified Pre-Petition Settlement
Claimants shall be paid pari passu with the Settled Claims of Qualified
Participating Claimants (except for such Qualified Participating Claimants that
have elected to be treated as Plan Trust PI Asbestos Claims).

                  The Settled Claims of Qualified Participating Claimants (Plan
Classes 3 and 11) shall be paid the total and maximum amount of $250 in full
satisfaction of its Asbestos Personal Injury Claim; provided, however, that each
such Qualified Participating Claimant may elect to irrevocably consent to the
Forbearance of his, her or its right to (x) such $250 amount and (y) any and all
rights under the Claimant Agreement, the Collateral Trust Agreement and the
Security Agreement, in which case such forbearing Qualified Participating
Claimant shall receive the treatment afforded to Plan Trust PI Asbestos Claims.


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                                                           EXHIBIT G TO THE PLAN


Such payments shall be made out of the first proceeds of Asbestos Insurance
Action Recoveries, net of payment of or reserve for any Plan Trust Expenses and
any payment of or reimbursement for Coverage Costs and reservation for the Plan
Trust Disputed Claims Reserve, if applicable, in accordance with Sections 3.2,
3.6 and 1.4(d) the Plan Trust Agreement, respectively, prior to payment of all
Plan Trust PI Asbestos Claims, but not prior to payment of or reserve for Plan
Trust Expenses nor prior to payment of or reimbursement for Coverage Costs in
accordance with Sections 3.6 and 1.4(d), respectively, of the Plan Trust
Agreement. The Settled Claims of Qualified Participating Claimants (except for
such Qualified Participating Claimants that have elected to be treated as Plan
Trust PI Asbestos Claims) shall be paid pari passu with the Settled Claims of
Qualified Pre-Petition Settlement Claimants.

                  In the event that the Class 2 Settlement or the Class 3 and 11
Settlement is not approved by the Bankruptcy Court, the Plan Trust Disputed
Claims of the Qualified Claimants shall be treated as provided in a Final Order
of the Bankruptcy Court and, if applicable, shall be paid from the Plan Trust
Disputed Claims Reserve in accordance with Section 3.2 of the Plan Trust
Agreement.

                  (2) Establishment of the FIFO Processing Queue.

                  After the payment of the Settled Claims, or reservation for
the Plan Trust Disputed Claims, as applicable, the Plan Trust shall order Plan
Trust PI Asbestos Claims that are sufficiently complete to be reviewed for
processing purposes on a FIFO basis except as otherwise provided herein (the
"FIFO Processing Queue"). For all claims filed on or before the date six months
after the date that the Plan Trust first makes available the proof of claim
forms and other claims materials required to file a claim with the Plan Trust
(the "Initial Claims Filing Date"), a claimant's position in the FIFO Processing
Queue shall be determined as of the earlier of (i) the date prior to December
 31, 2003 (the "Petition Date") (if any) that the specific claim was either
filed against Congoleum in the tort system or was actually submitted to
Congoleum pursuant to an administrative settlement agreement; (ii) the date
before the Petition Date that a claim was filed against another defendant in the
tort system if at the time the claim was subject to a tolling agreement or
applicable law; (iii) the date after the Petition Date (if any) but before the
Initial Claims Filing Date that the claim was filed against another defendant in
the tort system; (iv) the date after the Petition Date but before the Effective
Date that a proof of claim was filed against Congoleum in this Chapter 11
proceeding; or (v) the date a ballot was submitted on behalf of the claimant for
purposes of voting to accept or reject the Plan pursuant to the voting
procedures approved by the Bankruptcy Court.

      Following the Initial Claims Filing Date, the claimant's position in the
FIFO Processing Queue shall be determined by the date the claim is filed with
the Plan Trust. If any claims are filed on the same date, the claimant's
position in the FIFO Processing Queue shall be determined by the date of the
diagnosis of the asbestos-related disease. If any claims are filed and diagnosed
on the same date, the claimant's position in the FIFO Processing Queue shall be
determined by the claimant's date of birth, with older claimants given priority
over younger claimants.


                                       13
<PAGE>

                                                           EXHIBIT G TO THE PLAN


      Qualified Participating Claimants that have elected to be treated as Plan
Trust PI Asbestos Claims shall be deemed to have been filed with the Plan Trust
on the Effective Date for purposes of the FIFO Processing Queue even if filed at
anytime thereafter. The FIFO Processing Queue and FIFO Payment Queue do not
apply to Plan Trust Disputed Claims, treatment of which shall be determined by a
Final Order of the Bankruptcy Court.

                  (3) Effect of Statutes of Limitation and Repose.All Plan Trust
PI Asbestos Claims must meet either (i) for claims first filed in the tort
system against Congoleum prior to the Petition Date, the applicable federal,
state or foreign statute of limitation and repose that was in effect at the time
of the filing of the claim in the tort system, or (ii) for claims not filed
against Congoleum in the tort system prior to the Petition Date, the applicable
federal, state or foreign statute of limitation that was in effect at the time
of the filing with the Plan Trust. However, the running of the relevant statute
of limitation shall be tolled as of the earliest of (A) the actual filing of the
claim against Congoleum prior to the Petition Date, whether in the tort system
or by submission of the claim to Congoleum pursuant to an administrative
settlement agreement, including the Claimant Agreement or any other disputed
Pre-Petition Settlement Agreement; (B) the filing of the claim against another
defendant in the tort system prior to the Petition Date if the claim was tolled
against Congoleum at the time by a written agreement with Congoleum; (C) the
filing of a claim against another defendant in the tort system after the
Petition Date but prior to the Initial Claims Filing Date; (D) the date after
the Petition Date but before the Effective Date that a proof of claim was filed
against Congoleum in this Chapter 11 proceeding; (E) the filing of the
claim,469or submitting a ballot on any Congoleum Plan, for voting purposes in
this Chapter 11 proceeding; or (F) the filing of a proof of claim with the
requisite supporting documentation with the Plan Trust after the Initial Claims
Filing Date.

      If a Plan Trust PI Asbestos Claim meets any of the tolling provisions
described in the preceding paragraph and the claim was not barred by the
applicable federal, state or foreign statute of limitation at the time of the
tolling event, it shall be treated as timely filed if it is actually filed with
the Plan Trust within three (3) years after the Initial Claims Filing Date;
provided, however, that if a Plan Trust Disputed Claim meets any of the tolling
provisions described in the preceding paragraph and the claim was not barred by
the applicable federal, state or foreign statute of limitation at the time of
the tolling event, it shall be treated as timely filed if it is actually filed
with the Plan Trust within six (6) months of a Final Order adjudicating such
Plan Trust Disputed Claim, and/or the liens or security interests with respect
to such claim, or within three (3) years after the Initial Claims Filing Date,
whichever occurs later. Plan Trust PI Asbestos Claims of electing Qualified
Participating Claimants shall be filed within three (3) years after the Initial
Claims Filing Date. In addition, for an asbestos-related disease that was first
diagnosed after the Petition Date, irrespective of the application of any
relevant federal, state or foreign statute of limitation or repose, any claims
may be filed with the Plan Trust within three (3) years after the date of
diagnosis or within three (3) years after the Initial Claims Filing Date,
whichever occurs later. However, the processing of any Plan Trust PI Asbestos
Claim by the Plan Trust may be deferred at the election of the claimant pursuant
to Section 7.3 below.

            (b) Processing of Claims. As a general practice, the Plan Trust
shall review its claims files on a regular basis and notify all claimants whose
claims are likely to come up in the FIFO Processing Queue in the near future.


                                       14
<PAGE>

                                                           EXHIBIT G TO THE PLAN


            (c) Payment of Claims. Plan Trust PI Asbestos Claims that have been
liquidated by the Expedited Review Process as provided in Section 6.2(a) below,
by the Individual Review Process as provided in Section 6.2(b) below, by
arbitration as provided in Section 6.9 below, or by litigation in the tort
system provided in Section 6.10 below, shall be paid in FIFO order based on the
date their liquidation became final (the "FIFO Payment Queue491"), all such
payments being subject to the applicable Payment Percentage, the Maximum
Available Payment, and the Claims Payment Ratio, except as otherwise provided
herein.

      Where the claimant is deceased or incompetent, and the settlement and
payment of his or her claim must be approved by a court of competent
jurisdiction or through a probate process prior to acceptance of the claim by
the claimant's representative, an offer made by the Plan Trust on the claim
shall remain open so long as proceedings before that court or in that probate
process remain pending, provided that the Plan Trust has been furnished with
evidence that the settlement offer has been submitted to such court or in the
probate process for approval. If the offer is ultimately approved by the court
or through the probate process and accepted by the claimant's representative,
the Plan Trust shall pay the claim in the amount so offered, multiplied by the
Payment Percentage in effect at the time the offer was first made.

      If any claims are liquidated on the same date, the claimant's position in
the FIFO Payment Queue shall be determined by the date of the diagnosis of the
claimant's asbestos-related disease. If any claims are liquidated on the same
date and the respective holders' asbestos-related diseases were diagnosed on the
same date, the position of those claims in the FIFO Payment Queue shall be
determined by the Plan Trust based on the dates of the claimants' birth, with
older claimants given priority over younger claimants.

      6.2 Resolution of Plan Trust PI Asbestos Claims

      Within six months after the establishment of the Plan Trust, the Plan
Trustees, with the consent of the TAC and the Futures Representative, shall
adopt procedures for reviewing and liquidating all Plan Trust PI Asbestos
Claims, which shall include deadlines for processing such claims. Such
procedures shall also require that claimants seeking resolution of Plan Trust PI
Asbestos Claims must first file a proof of claim form, together with the
required supporting documentation, in accordance with the provisions of Sections
7.1 and 7.2 below. It is anticipated that the Plan Trust shall provide an
initial response to the claimant within six months of receiving the proof of
claim form.

      The proof of claim form shall require the claimant to assert his or her
claim for the highest Disease Level for which the claim qualifies at the time of
filing. Irrespective of the Disease Level alleged on the proof of claim form,
all claims shall be deemed to be a claim for the highest Disease Level for which
the claim qualifies at the time of filing, and all lower Disease Levels for
which the claim may also qualify at the time of filing or in the future shall be
treated as subsumed into the higher Disease Level for both processing and
payment purposes.

      Upon filing of a valid proof of claim form with the required supporting
documentation, the claimant shall be placed in the FIFO Processing Queue in
accordance with the ordering criteria described in Section 6.1(a)(2) above. The
Plan Trust shall provide the claimant with six-months notice of the date by
which it expects to reach the claim in the FIFO Processing Queue, following


                                       15
<PAGE>

                                                           EXHIBIT G TO THE PLAN


which the claimant shall promptly (i) advise the Plan Trust whether the claim
should be liquidated under the Plan Trust's Expedited Review Process described
in Section 6.2(a) below or, in certain circumstances, under the Plan Trust's
Individual Review Process described in Section 6.2(b) below; (ii) provide the
Plan Trust with any additional medical and/or exposure evidence that was not
provided with the original claim submission; and (iii) advise the Plan Trust of
any change in the claimant's Disease Level. If a claimant fails to respond to
the Plan Trust's notice prior to the reaching of the claim in the FIFO
Processing Queue, the Plan Trust shall process and liquidate the claim under the
Expedited Review Process based upon the medical/exposure evidence previously
submitted by the claimant, although the claimant shall retain the right to
request Individual Review as described in Section 6.2(b) below.

            (a) Expedited Review Process.

                  (1) In General. The Plan Trust's Expedited Review Process is
designed primarily to provide an expeditious, efficient and consistent method
for liquidating all Plan Trust PI Asbestos Claims (except those involving Lung
Cancer 2 - Disease Level VI and all Foreign Claims (as defined below), which
shall only be liquidated pursuant to the Plan Trust's Individual Review
Process), where the claim can easily be verified by the Plan Trust as meeting
the presumptive Medical/Exposure Criteria for the relevant Disease Level.

      Thus, claims that undergo Expedited Review and meet the presumptive
Medical/Exposure Criteria for the relevant Disease Level shall be paid the
Scheduled Value for such Disease Level set forth in Section 6.2(a)(3) below.
However, except for claims involving Other Asbestos Disease (Disease Level I),
all claims liquidated by Expedited Review shall be subject to the applicable
Payment Percentage, the Maximum Available Payment, and the Claims Payment Ratio
limitations set forth above. Claimants holding claims that cannot be liquidated
by Expedited Review because they do not meet the presumptive Medical/Exposure
Criteria for the relevant Disease Level may elect the Plan Trust's Individual
Review Process set forth in Section 6.2(b) below.

      Further, the claimant's eligibility to receive the Scheduled Value for his
or her Plan Trust Asbestos Claim pursuant to the Expedited Review Process shall
be determined solely by reference to the Medical/Exposure Criteria set forth
below for each of the Disease Levels eligible for Expedited Review.

                  (2) Claims Processing Under Expedited Review. All claimants
seeking liquidation of their claims pursuant to Expedited Review shall file the
Plan Trust's proof of claim form. As a proof of claim form is reached in the
FIFO Processing Queue, the Plan Trust shall determine whether the claim
described therein meets the Medical/Exposure Criteria for one of the seven
Disease Levels eligible for Expedited Review, and shall advise the claimant of
its determination. If a Disease Level is determined, the Plan Trust shall tender
to the claimant an offer of payment of the Scheduled Value for the relevant
Disease Level multiplied by the applicable Payment Percentage, together with a
form of release approved by the Plan Trust. If the claimant accepts the
Scheduled Value and returns the release properly executed, the claim shall be
placed in the FIFO Payment Queue, following which the Plan Trust shall disburse
payment subject to the limitations of the Maximum Available Payment and Claims
Payment Ratio, if any.


                                       16
<PAGE>

                                                           EXHIBIT G TO THE PLAN


                  (3) Disease Levels, Scheduled Values and Medical/Exposure
Criteria. The eight Disease Levels covered by this TDP, together with the
Medical/Exposure Criteria for each and the Scheduled Values for the seven
Disease Levels eligible for Expedited Review, are set forth below. These Disease
Levels, Scheduled Values, and Medical/Exposure Criteria shall apply to all Plan
Trust Voting Claims filed with the Plan Trust on or before the Initial Claims
Filing Date provided in Section 6.1(a)(2 above for which the claimant elects the
Expedited Review Process. Thereafter, for purposes of administering the
Expedited Review Process and with the consent of the TAC and the Futures
Representative, the Plan Trustees may add to, change, or eliminate Disease
Levels, Scheduled Values, or Medical/Exposure Criteria; develop subcategories of
Disease Levels, Scheduled Values or Medical/Exposure Criteria; or determine that
a novel or exceptional asbestos personal injury claim is compensable even though
it does not meet the Medical/Exposure Criteria for any of the then current
Disease Levels.

<TABLE>
<CAPTION>
Disease Level                       Scheduled Value     Medical/Exposure Criteria
-------------                       ---------------     -------------------------

<S>                                     <C>             <C>
Mesothelioma (Level VIII)               $265,000        Diagnosis(2) of mesothelioma; and (2)
                                                        Congoleum Exposure prior to
                                                        December 31, 1982, as defined in
                                                        Section 6.6(b)(3).

Lung Cancer 1 (Level VII)               $45,000         (1) Diagnosis of a primary lung cancer
                                                        plus evidence of an underlying
                                                        Bilateral Asbestos-Related Nonmalignant
                                                        Disease,(3) (2) six months Congoleum
                                                        Exposure prior to December 31, 1982,

</TABLE>

----------
(2)   The requirements for a diagnosis of an asbestos-related disease that may
      be compensated under the provisions of this TDP are set forth in section
      6.6 below.

(3)   Evidence of "Bilateral Asbestos-Related Nonmalignant Disease," for
      purposes of meeting the criteria for establishing Disease Levels I, II,
      III, V and VII, means either (i) a chest X-ray read by a qualified B
      reader of 1/0 or higher on the ILO scale or (ii)(x) a chest X-ray read by
      a qualified B reader or other Qualified Physician, (y) a CT scan read by a
      Qualified Physician, or (z) pathology, in each case showing either
      bilateral interstitial fibrosis, bilateral pleural plaques, bilateral
      pleural thickening, or bilateral pleural calcification. Solely for claims
      filed against Congoleum or another asbestos defendant in the tort system
      prior to the Petition Date, if an ILO reading is not available, either (i)
      a chest X-ray or a CT scan read by a Qualified Physician, or (ii)
      pathology, in each case showing bilateral interstitial fibrosis, bilateral
      pleural plaques, bilateral pleural thickening, or bilateral pleural
      calcification consistent with or compatible with a diagnosis of
      asbestos-related disease, shall be evidence of a Bilateral
      Asbestos-Related Nonmalignant Disease for purposes of meeting the
      presumptive medical requirements of Disease Levels I, II, III, V and VII.
      Pathological proof of asbestosis may be based on the pathological grading
      system for asbestosis described in the Special Issue of the Archives of
      Pathology and Laboratory Medicine, "Asbestos-associated Diseases," Vol.
      106, No. 11, App. 3 (October 8, 1982). For all purposes of this TDP, a
      "Qualified Physician" is a physician whose is board-certified (or in the
      case of Canadian claims or Foreign Claims, a physician who is certified or
      qualified under comparable medical standards or criteria of the
      jurisdiction in question) in one or more relevant specialized fields of
      medicine such as pulmonology, radiology, internal medicine or occupational
      medicine; provided, however, subject to the provisions of Section
      6.6(a)(1)(A), that the requirement for board certification in this
      provision shall not apply to otherwise qualified physicians whose X-ray
      and/or CT scan readings are submitted for deceased holders of Plan Trust
      PI Asbestos Claims.


                                       17
<PAGE>

                                                           EXHIBIT G TO THE PLAN


<TABLE>
<CAPTION>
Disease Level                       Scheduled Value     Medical/Exposure Criteria
-------------                       ---------------     -------------------------

<S>                                    <C>              <C>

                                                        (3) Significant Occupational Exposure(4)
                                                        to asbestos, and (4) supporting medical
                                                        documentation establishing asbestos
                                                        exposure as a contributing factor in
                                                        causing the lung cancer in question.

Lung Cancer 2 (Level VI)               Individual       (1) Diagnosis of a primary lung cancer;
                                       Evaluation       (2) Congoleum Exposure prior to
                                                        December 31, 1982, and (3) supporting
                                                        medical documentation establishing
                                                        asbestos exposure as a contributing factor
                                                        in causing the lung cancer in question.

                                                        Lung Cancer 2 (Level VI) claims are
                                                        claims that do not meet the more
                                                        stringent medical and/or exposure
                                                        requirements of Lung Cancer 1 (Level VII)
                                                        claims. All claims in this Disease Level
                                                        shall be individually evaluated. The
                                                        estimated likely average of the individual
                                                        evaluation awards for this category is
                                                        $[15,000], with such awards capped at
                                                        $[24,000] unless the claim qualifies for
                                                        Extraordinary Claim treatment.

                                                        Level VI claims that show no evidence of
                                                        either an underlying Bilateral
                                                        Asbestos-Related Non-malignant Disease
                                                        or Significant Occupational Exposure may
                                                        be individually evaluated, although it is
                                                        not expected that such claims shall be
                                                        treated as having any significant value,
                                                        especially if the claimant is also a
                                                        Smoker.(5) In any event, no presumption
                                                        of validity shall be available for any
                                                        claims in this category.
</TABLE>

----------
(4)   The term "Significant Occupational Exposure" is defined in section
      6.7(b)(2) below.

(5)   There is no distinction between Non-Smokers and Smokers for either Lung
      Cancer 1 (Level VII) or Lung Cancer 2 (Level VI), although a claimant who
      meets the more stringent requirements of Lung Cancer 1 (Level VII)
      (evidence of an underlying Bilateral Asbestos-Related Nonmalignant Disease
      plus Significant Occupational Exposure), and who is also a Non-Smoker, may
      wish to have his or her claim individually evaluated by the Plan Trust. In
      such a case, absent circumstances that would otherwise reduce the value of
      the claim, it is anticipated that the liquidated value of the claim might
      well exceed the $[45,000] Scheduled Value for Lung Cancer 1 (Level VII)
      shown above. "Non-Smoker" means a claimant who either (a) never smoked or
      (b) has not smoked during any portion of the twelve (12) years immediately
      prior to the diagnosis of the lung cancer.


                                       18
<PAGE>

                                                           EXHIBIT G TO THE PLAN


<TABLE>
<CAPTION>
Disease Level                       Scheduled Value     Medical/Exposure Criteria
-------------                       ---------------     -------------------------

<S>                                     <C>             <C>
Other Cancer (Level V)                  $20,000         (1) Diagnosis of a primary colo-rectal,
                                                        laryngeal, esophageal, pharyngeal, or
                                                        stomach cancer, plus evidence of an
                                                        underlying Bilateral Asbestos-Related
                                                        Nonmalignant Disease, (2) six months
                                                        Congoleum Exposure prior to
                                                        December 31, 1982, (3) Significant
                                                        Occupational Exposure to asbestos, and
                                                        (4) supporting medical documentation
                                                        establishing asbestos exposure as a
                                                        contributing factor in causing the
                                                        other cancer in question.

Severe Asbestosis (Level IV)            $30,000         (1) Diagnosis of asbestosis with ILO of
                                                        2/1 or greater, or asbestosis
                                                        determined by pathological evidence of
                                                        asbestos, plus (a) TLC less than 65%,
                                                        or (b) FVC less than 65% and FEV1/FVC
                                                        ratio greater than 65%, (2) six months
                                                        Congoleum Exposure prior to
                                                        December 31, 1982, (3) Significant
                                                        Occupational Exposure to asbestos, and
                                                        (4) supporting medical documentation
                                                        establishing asbestos exposure as a
                                                        contributing factor in causing the
                                                        pulmonary disease in question.

Asbestosis/Pleural Disease               $3,600         (1) Diagnosis of Bilateral
(Level III)                                             Asbestos-Related Nonmalignant Disease,
                                                        plus (a) TLC less than 80%, or (b) FVC
                                                        less than 80% and FEV1/FVC
                                                        ratio greater than or equal to 65%,
                                                        and (2) six months Congoleum
                                                        Exposure prior to December 31, 1982,
                                                        (3) Significant Occupational
                                                        Exposure to asbestos, and (4) supporting
                                                        medical documentation establishing asbestos
                                                        exposure as a contributing factor in
                                                        causing the pulmonary disease in question.

Asbestosis/Pleural Disease               $1,200         (1) Diagnosis of a Bilateral
(Level II)                                              Asbestos-Related Nonmalignant Disease,
                                                        and (2) six months Congoleum Exposure prior
                                                        to December 31, 1982, and (3) five years
                                                        cumulative occupational exposure to asbestos.
</TABLE>


                                       19
<PAGE>

                                                           EXHIBIT G TO THE PLAN


<TABLE>
<CAPTION>
Disease Level                       Scheduled Value     Medical/Exposure Criteria
-------------                       ---------------     -------------------------

<S>                                    <C>              <C>
Other Asbestos Disease (Level          $250             (1) Diagnosis of a Bilateral
I - Cash Discount Payment)                              Asbestos-Related Nonmalignant Disease
                                                        or an asbestos-related malignancy other
                                                        than mesothelioma, and (2) Congoleum
                                                        Exposure prior to December 31, 1982.
</TABLE>


            (b) Individual Review Process.

                  (1) In General. Subject to the provisions set forth below, a
Congoleum claimant may elect to have his or her Plan Trust PI Asbestos Claim
reviewed for purposes of determining whether the claim would be compensable in
the tort system even though it does not meet the presumptive Medical/Exposure
Criteria for any of the Disease Levels set forth in Sections 6.2(a)(3). In
addition or alternatively, a Congoleum claimant may elect to have a claim
undergo the Individual Review Process for purposes of determining whether the
liquidated value of claim involving Disease Levels IV, V, VII or VIII exceeds
the Scheduled Value for the relevant Disease Level also set forth in said
provision. However, until such time as the Plan Trust has made an offer on a
claim pursuant to Individual Review, the claimant may change his or her
Individual Review election and have the claim liquidated pursuant to the Plan
Trust's Expedited Review Process. In the event of such a change in the
processing election, the claimant shall nevertheless retain his or her place in
the FIFO Processing Queue.

      The liquidated value of all Foreign Claims payable under this TDP shall be
established only under the Plan Trust's Individual Review Process. Because Plan
Trust PI Asbestos Claims of individuals exposed in Canada who were resident in
Canada when such claims were filed were routinely litigated and resolved in the
courts of the United States, and because the resolution history of these claims
has been included in developing the Expedited Review Process, such claims shall
not be considered Foreign Claims hereunder and shall be eligible for liquidation
under the Expedited Review Process. Accordingly, a "Foreign Claim" is a Plan
Trust PI Asbestos Claim with respect to which the claimant's exposure to an
asbestos-containing product occurred outside of the United States and its
Territories and Possessions, and outside of the Provinces and Territories of
Canada.

      In reviewing such Foreign Claims, the Plan Trust shall take into account
all relevant procedural and substantive legal rules to which the claims would be
subject in the Claimant's Jurisdiction as defined in Section 6.2(b)(2) below.
The Plan Trust shall determine the liquidated value of Foreign Claims based on
historical settlements and verdicts in the Claimant's Jurisdiction as well as
the other valuation factors set forth in Section 6.3(b)(2) below.


                                       20
<PAGE>

                                                           EXHIBIT G TO THE PLAN


      For purposes of the Individual Review Process for Foreign Claims, the Plan
Trustees, with the consent of the TAC and the Futures Representative, may
develop separate Medical/Exposure Criteria and standards, as well as separate
requirements for physician and other professional qualifications, which shall be
applicable to all Foreign Claims channeled to the Plan Trust; provided however,
that such criteria, standards or requirements shall not effectuate substantive
changes to the claims eligibility requirements under this TDP, but rather shall
be made only for the purpose of adapting those requirements to the particular
licensing provisions and/or medical customs or practices of the foreign country
in question.

      At such time as the Plan Trust has sufficient historical settlement,
verdict and other valuation data for claims from a particular foreign
jurisdiction, the Plan Trustees, with the consent of the TAC and the Futures
Representative, may also establish a separate valuation matrix for any such
Foreign Claims based on that data.

                        (A) Review of Medical/Exposure Criteria. The Plan
      Trust's Individual Review Process provides a claimant with an opportunity
      for individual consideration and evaluation of a Plan Trust PI Asbestos
      Claim that fails to meet the presumptive Medical/Exposure Criteria for
      Disease Levels I - V, VII or VIII. In such a case, the Plan Trust shall
      either deny the claim or, if the Plan Trust is satisfied that the claimant
      has presented a claim that would be cognizable and valid in the tort
      system, the Plan Trust can offer the claimant a liquidated value amount up
      to the Scheduled Value for that Disease Level.

                        (B) Review of Liquidated Value. Claimants holding claims
      in the five more serious Disease Levels IV - VIII shall also be eligible
      to seek Individual Review of the liquidated value of their claims, as well
      as of their medical exposure evidence. The Individual Review Process is
      intended to result in payments equal to the full liquidated value for each
      claim multiplied by the Payment Percentage; however, the liquidated value
      of any Plan Trust PI Asbestos Claim that undergoes Individual Review may
      be determined to be less than the Scheduled Value the claimant would have
      received under Expedited Review. Moreover, the liquidated value for a
      claim involving Disease Levels IV - VIII shall not exceed the Maximum
      Value for the relevant Disease Level set forth in Section 6.3(b)(3) below,
      unless the claim meets the requirements of an Extraordinary Claim
      described in Section 6.4(a) below, in which case its liquidated value
      cannot exceed the Maximum Value set forth in that provision for such
      claims. Because the detailed examination and valuation process pursuant to
      Individual Review requires substantial time and effort, claimants electing
      to undergo the Individual Review Process may be paid the liquidated value
      of their Plan Trust PI Asbestos Claims later than would have been the case
      had the claimant elected the Expedited Review Process. Subject to the
      provisions of Section 6.7, the Plan Trust shall devote reasonable
      resources to the review of all claims to ensure that there is a reasonable
      balance maintained in reviewing all classes of claims.

                  (2) Valuation Factors to Be Considered in Individual Review.
The Plan Trust shall liquidate the value of each Plan Trust PI Asbestos Claim
that undergoes Individual Review based on the historic liquidated values of
other similarly situated claims in the tort system for the same Disease Level.
The Plan Trust shall thus take into consideration all of the factors that affect
the severity of damages and values within the tort system including, but not
limited to, (i) the degree to which the characteristics of a claim differ from


                                       21
<PAGE>

                                                           EXHIBIT G TO THE PLAN


the presumptive Medical/Exposure Criteria for the Disease Level in question;
(ii) factors such as the claimant's age, disability, employment status,
disruption of household, family or recreational activities, dependencies,
special damages, and pain and suffering; (iii) evidence that the claimant's
damages were (or were not) caused by asbestos exposure, including exposure to an
asbestos-containing product or to conduct for which Congoleum has legal
responsibility prior to December 31, 1982 (for example, alternative causes, and
the strength of documentation of injuries); (iv) the industry of exposure; and
(v) settlements, and verdicts in the Claimant's Jurisdiction for similarly
situated claims; and (vi) settlements and verdict histories for the claimant's
law firm for similarly situated claims.

      For these purposes, the "Claimant's Jurisdiction" is the jurisdiction in
which the claim was filed (if at all) against Congoleum in the tort system prior
to the Petition Date. If the claim was not filed against Congoleum in the tort
system prior to the Petition Date, the claimant may elect as the Claimant's
Jurisdiction either (i) the jurisdiction in which the claimant resides at the
time of diagnosis or when the claim is filed with the Plan Trust; or (ii) a
jurisdiction in which the claimant experienced exposure to an
asbestos-containing product manufactured, produced or distributed by Congoleum
or in a Congoleum facility.

      With respect to the "Claimant's Jurisdiction" in the event a personal
representative or authorized agent makes a claim under this TDP for wrongful
death with respect to which the governing law of the Claimant's Jurisdiction
could only be the Alabama Wrongful Death Statute, the Claimant's Jurisdiction
for such claim shall be the State of New Jersey, and such claimant's damages
shall be determined pursuant to the statutory and common laws of the State of
New Jersey without regard to its choice of law principles. The choice of law
provision in Section 8.4 below applicable to any claim with respect to which,
but for this choice of law provision, the applicable law of the Claimant's
Jurisdiction pursuant to this Section 6.2(b)(2) is determined to be the Alabama
Wrongful Death Statute, shall only govern the rights between the Plan Trust and
the claimant, and, to the extent the Plan Trust seeks recovery from any entity
that provided insurance coverage to Congoleum, the Alabama Wrongful Death
Statute shall govern.

                  (3) Scheduled, Average and Maximum Values. The Scheduled,
Average and Maximum Values for claims involving Disease Levels I - VIII are the
following:

<TABLE>
<CAPTION>
Scheduled Disease                       Scheduled Value    Average Value    Maximum Value
-----------------                       ---------------    -------------    -------------
<S>                                        <C>               <C>              <C>
Mesothelioma (Level VIII)                  $265,000          $330,000         $530,000
Lung Cancer 1 (Level VII)                   $45,000           $56,250          $90,000
Lung Cancer 2 (Level VI)                       None           $15,000          $24,000
Other Cancer (Level V)                      $20,000           $25,000          $40,000
Severe Asbestosis (Level IV)                $30,000           $37,500          $60,000
Asbestosis/Pleural Disease                   $3,600            $3,600           $3,600
  (Level III)
Asbestosis/Pleural Disease                   $1,200            $1,200           $1,200
  (Level II)
Other Asbestos Disease--Cash                   $250              $250             $250
  Discount Payment (Level I)
</TABLE>


                                       22
<PAGE>

                                                           EXHIBIT G TO THE PLAN


      These Scheduled Values, Average Values and Maximum Values shall apply to
all Plan Trust Voting Claims other than Pre-Petition Liquidated Claims filed
with the Plan Trust on or before the Initial Claims Filing Date as provided in
Section 6.1(a)(2) above. Thereafter, the Plan Trustees, with the consent of the
TAC and the Futures Representative pursuant to Sections 5.8(b) and 6.6(b) of the
Plan Trust Agreement, may change these valuation amounts for good cause and
consistent with other restrictions on the amendment power.

      6.3 Categorizing Claims as Extraordinary and/or Exigent Hardship.

            (a) Extraordinary Claims "Extraordinary Claim" means a Plan Trust PI
Asbestos Claim that otherwise satisfies the Medical Criteria for Disease Levels
IV -VIII, and that is held by a claimant whose exposure to asbestos (i) occurred
primarily as a result of working in a manufacturing facility of Congoleum during
a period in which Congoleum was manufacturing asbestos-containing products at
that facility, or (ii) was at least 75% the result of exposure to an
asbestos-containing product, and in either case there is little likelihood of a
substantial recovery elsewhere. All such Extraordinary Claims shall be presented
for Individual Review and, if valid, shall be entitled to an award of up to a
Maximum Value of five (5) times the Scheduled Value set forth in Section
6.2(b)(3) for claims qualifying for Disease Levels IV -V, VII and VIII, and five
(5) times the Average Value for claims in Disease Level VI, multiplied by the
applicable Payment Percentage.

      Any dispute as to Extraordinary Claim status shall be submitted to a
special Extraordinary Claims Panel established by the Plan Trust with the
consent of the TAC and the Futures Representative. All decisions of the
Extraordinary Claims Panel shall be final and not subject to any further
administrative or judicial review. An Extraordinary Claim, following its
liquidation, shall be placed in the FIFO Payment Queue ahead of all other Plan
Trust PI Asbestos Claims except Disease Level I Claims and Exigent Hardship
Claims, which shall be paid first in that order in said Queue, based on its date
of liquidation, subject to the Maximum Available Payment and Claims Payment
Ratio described above.

            (b) Exigent Hardship Claims. At any time the Plan Trust may
liquidate and pay Plan Trust PI Asbestos Claims that qualify as Exigent Hardship
Claims as defined below. Such claims may be considered separately no matter what
the order of processing otherwise would have been under this TDP. An Exigent
Hardship Claim, following its liquidation, shall be placed first in the FIFO
Payment Queue ahead of all other liquidated Plan Trust PI Asbestos Claims except
Disease Level I Claims, subject to the Maximum Available Payment and Claims
Payment Ratio described above. A Plan Trust Asbestos Claim qualifies for payment


                                       23
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                                                           EXHIBIT G TO THE PLAN


as an Exigent Hardship Claim if the claim meets the Medical/Exposure Criteria
for Severe Asbestosis (Disease Level IV) or an asbestos-related malignancy
(Disease Levels V-VIII), and the Plan Trust, in its sole discretion, determines
(i) that the claimant needs financial assistance on an immediate basis based on
the claimant's expenses and all sources of available income, and (ii) that there
is a causal connection between the claimant's dire financial condition and the
claimant's asbestos-related disease.

      6.4 Secondary Exposure Claims. If a claimant alleges an asbestos-related
disease resulting solely from exposure to an occupationally exposed person, such
as a family member, the claimant may seek Individual Review of his or her claim
pursuant to Section 6.2(b) above. In such a case, the claimant must establish
that the occupationally exposed person would have met the requirements of
Congoleum Exposure under this TDP that would have been applicable had that
person filed a direct claim against the Plan Trust. In addition, the claimant
with secondary exposure must establish that he or she is suffering from one of
the eight Disease Levels described in Section 6.2(a)(3) above or an
asbestos-related disease otherwise compensable under this TDP, that his or her
own exposure to the occupationally exposed person occurred within the same time
frame as the occupationally exposed person was exposed to an asbestos-containing
product manufactured, produced or distributed by Congoleum, or in a Congoleum
facility, and that such secondary exposure was a cause of the claimed disease.
All other liquidation and payment rights and limitations under this TDP shall be
applicable to such claims.

      6.5 Indirect Plan Trust Asbestos Claims. Indirect asbestos claims asserted
against the Plan Trust based upon theories of contribution or indemnification
under applicable law "Indirect Asbestos Claims" shall be treated as
presumptively valid and paid by the Plan Trust subject to the applicable Payment
Percentage if (a) such claim satisfied the requirements of the bar date for such
claims established by the Bankruptcy Court, if applicable, and is not otherwise
disallowed by Section 502(e) of the Bankruptcy Code or subordinated under
Section 509(c) of the Bankruptcy Code, and (b) the holder of such claim (the
"Indirect Claimant") establishes to the satisfaction of the Plan Trustees that
(i) the Indirect Claimant has paid in full the liability and obligation of the
Plan Trust to the individual claimant to whom the Plan Trust would otherwise
have had a liability or obligation under these Procedures (the "Direct
Claimant"), (ii) the Direct Claimant and the Indirect Claimant have forever and
fully released the Plan Trust from all liability to the Direct Claimant, and
(iii) the claim is not otherwise barred by a statute of limitation or repose or
by other applicable law. In no event shall any Indirect Claimant have any rights
against the Plan Trust superior to the rights of the related Direct Claimant
against the Plan Trust, including any rights with respect to the timing, amount
or manner of payment. In addition, no Indirect Claim may be liquidated and paid
in an amount that exceeds what the Indirect Claimant has actually paid the
related Direct Claimant.

      To establish a presumptively valid Indirect Asbestos Claim, the Indirect
Claimant's aggregate liability for the Direct Claimant's claim must also have
been fixed, liquidated and paid fully by the Indirect Claimant by settlement
(with an appropriate full release in favor of the Plan Trust) or a Final Order
(as defined in the Plan) provided that such claim is valid under the applicable
state law. In any case where the Indirect Claimant has satisfied the claim of a
Direct Claimant against the Plan Trust under applicable law by way of a
settlement, the Indirect Claimant shall obtain for the benefit of the Plan Trust
a release in form and substance satisfactory to the Plan Trustees.


                                       24
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                                                           EXHIBIT G TO THE PLAN


      If an Indirect Claimant cannot meet the presumptive requirements set forth
above, including the requirement that the Indirect Claimant provide the Plan
Trust with a full release of the Direct Claimant's claim, the Indirect Claimant
may request that the Plan Trust review the Indirect Plan Trust Asbestos Claim
individually to determine whether the Indirect Claimant can establish under
applicable state law that the Indirect Claimant has paid all or a portion of a
liability or obligation that the Plan Trust had to the Direct Claimant as of the
Effective Date of this TDP. If the Indirect Claimant can show that it has paid
all or a portion of such a liability or obligation, the Plan Trust shall
reimburse the Indirect Claimant the amount of the liability or obligation so
paid, times the then applicable Payment Percentage. However, in no event shall
such reimbursement to the Indirect Claimant be greater than the amount to which
the Direct Claimant would have otherwise been entitled. Further, the liquidated
value of any Indirect Asbestos Claim paid by the Plan Trust to an Indirect
Claimant shall be treated as an offset to or reduction of the full liquidated
value of any Plan Trust PI Asbestos Claim that might be subsequently asserted by
the Direct Claimant against the Plan Trust.

      Any dispute between the Plan Trust and an Indirect Claimant over whether
the Indirect Claimant has a right to reimbursement for any amount paid to a
Direct Claimant shall be subject to the ADR procedures provided in Section 6.9
below and set forth in Attachment A hereto. If such dispute is not resolved by
said ADR procedures, the Indirect Claimant may litigate the dispute in the tort
system pursuant to Sections 6.10 and 8.6 below.

      The Plan Trustees may develop and approve a separate proof of claim form
for Indirect Asbestos Claims. Indirect Asbestos Claims that have not been
disallowed, discharged, or otherwise resolved by prior order of the Bankruptcy
Court shall be processed in accordance with procedures to be developed and
implemented by the Plan Trustees consistent with the provisions of this Section
6.5, which procedures (a) shall determine the validity, allowability and
enforceability of such claims; and (b) shall otherwise provide the same
liquidation and payment procedures and rights to the holders of such claims as
the Plan Trust would have afforded the holders of the underlying valid Plan
Trust PI Asbestos Claims. Nothing in this TDP is intended to preclude a trust to
which asbestos-related liabilities are channeled from asserting an Indirect
Asbestos Claim against the Plan Trust subject to the requirements set forth
herein.

      6.6 Evidentiary Requirements.

            (a) Medical Evidence.

                  (1) In General. All diagnoses of a Disease Level shall be
accompanied by either (i) a statement by the physician providing the diagnosis
that at least 10 years have elapsed between the date of first exposure to
asbestos or asbestos-containing products and the diagnosis, or (ii) a history of
the claimant's exposure sufficient to establish a 10-year latency period. A
finding by a physician after the Petition Date that a claimant's disease is
"consistent with" or "compatible with" asbestosis alone shall not be treated by
the Plan Trust as a diagnosis.

                        (A) Disease Levels I - IV. Except for claims filed
      against Congoleum or any other asbestos defendant in the tort system prior
      to the Petition Date, all diagnoses of a non-malignant asbestos-related
      disease (Disease Levels I-IV) shall be based in the case of a claimant who
      was living at the time the claim was filed, upon a physical examination of
      the claimant by the physician providing the diagnosis of the


                                       25
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                                                           EXHIBIT G TO THE PLAN


      asbestos-related disease. All living claimants must also provide (i) for
      Disease Levels I-III, evidence of Bilateral Asbestos-Related Nonmalignant
      Disease (as defined in Footnote 3 above); (ii) for Disease Level IV,(6) an
      ILO reading of 2/1 or greater or pathological evidence of asbestosis, and
      (iii) for Disease Levels III and IV, pulmonary function testing.(7)

      In the case of a claimant who was deceased at the time the claim was
filed, all diagnoses of a non-malignant asbestos-related disease (Disease Levels
I-IV) shall be based upon either (i) a physical examination of the claimant by
the physician providing the diagnosis of the asbestos-related disease; or (ii)
pathological evidence of the non-malignant asbestos-related disease; or (iii) in
the case of Disease Levels I-III, evidence of Bilateral Asbestos-Related
Nonmalignant Disease (as defined in Footnote 3 above), and for Disease Level IV,
either an ILO reading of 2/1 or greater or pathological evidence of asbestosis;
and (iv) for either Disease Level III or IV, pulmonary function testing.

                        (B) Disease Levels V - VIII. All diagnoses of an
      asbestos-related malignancy (Disease Levels V - VIII) shall be based upon
      either (i) a physical examination of the claimant by the physician
      providing the diagnosis of the asbestos-related disease, or (ii) a
      diagnosis of such a malignant Disease Level by a board-certified
      pathologist.

                        (C) Exception to the Exception for Certain Pre-Petition
      Claims. If the holder of a Plan Trust Asbestos Claim that was filed
      against Congoleum or any other defendant in the tort system prior to the
      Petition Date has available a report of a diagnosing physician engaged by
      the holder or his or her law firm who conducted a physical examination of
      the holder as described in Sections 6.6(a)(1)(A), or if the holder has
      filed such medical evidence with another asbestos-related personal injury
      settlement trust that requires such evidence without regard to whether the
      claimant or the law firm engaged the diagnosing physician, the holder
      shall provide such medical evidence to the Plan Trust notwithstanding the
      exception in Section 6.6(a)(1)(A).

                  (2) Credibility of Medical Evidence. Before making any payment
to a claimant, the Plan Trust must have reasonable confidence that the medical
evidence provided in support of the claim is competent medical evidence of an
asbestos-related injury, and consistent with recognized medical standards. The
Plan Trust may require the submission of X-rays, CT scans, detailed results of
pulmonary function tests, laboratory tests, tissue samples, results of medical

----------
(6)   All diagnoses of Asbestos/Pleural Disease (Disease Levels II and III) not
      based on pathology shall be presumed to be based on findings of bilateral
      asbestosis or pleural disease, and all diagnoses of Mesothelioma (Disease
      Level VIII) shall be presumed to be based on findings that the disease
      involves a malignancy. However, the Plan Trust may rebut such
      presumptions.

(7)   "Pulmonary Function Testing" or "PFT" shall mean testing that is in
      material compliance with the quality criteria established by the American
      Thoracic Society ("ATS") and is performed on equipment which is in
      material compliance with ATS standards for technical quality and
      calibration. PFT performed in a hospital accredited by the JCAHO, or
      performed, reviewed or supervised by a board certified pulmonologist or
      other Qualified Physician shall be presumed to comply with ATS standards,
      and the claimant may submit a summary report of the testing. If the PFT
      was not performed in an JCAHO-accredited hospital, or performed, reviewed
      or supervised by a board certified pulmonologist or other Qualified
      Physician, the claimant must submit the full report of the testing (as
      opposed to a summary report); provided however that if the PFT was
      conducted prior to the Effective Date of the Plan, and the full PFT report
      is not available, the claimant must submit a signed declaration in the
      form provided by the Plan Trust certifying that the PFT was conducted in
      material compliance with ATS standards.


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                                                           EXHIBIT G TO THE PLAN


examination or reviews of other medical evidence, and will require that any
medical evidence submitted comply with recognized medical standards regarding
equipment, testing methods and procedures to assure that such evidence is
reliable.(8)

      Medical evidence (i) that is of a kind shown to have been received in
evidence by a state or federal judge at trial, or (ii) that is a diagnosis by a
physician shown to have previously qualified as a medical expert with respect to
the asbestos-related disease in question before a state or federal judge, is
presumptively reliable, although the Plan Trust may seek to rebut the
presumption. In the event that the Plan Trust reasonably determines that any
individual or entity has engaged in a pattern or practice of providing
unreliable medical evidence to the Plan Trust, to any other Asbestos Claims
Trusts, or in connection with any court proceedings, it shall decline to accept
evidence from such provider. In addition, claimants who otherwise meet the
requirements of this TDP for payment of a Plan Trust PI Asbestos Claim shall be
paid irrespective of the results in any litigation at any time between the
claimant and any other defendant in the tort system. However, any relevant
evidence submitted in a proceeding in the tort system, other than any findings
of fact, a verdict, or a judgment, involving another defendant may be introduced
by either the claimant or the Plan Trust in any Individual Review proceeding
conducted pursuant to Section 6.2(b) or any Extraordinary Claim proceeding
conducted pursuant to Section 6.3(a).

                  (b) Exposure Evidence.

                        (1) In General. As set forth above in Section 6.2(a)(3),
to qualify for any Disease Level, the claimant must demonstrate a minimum
exposure to an asbestos-containing product manufactured, produced or distributed
by Congoleum, or to asbestos or asbestos-containing products in a Congoleum
facility. Claims based on conspiracy theories that involve no such Congoleum
exposure are not compensable under this TDP. To meet the presumptive exposure
requirements of Expedited Review set forth in Section 6.2(a)(3) above, the
claimant must show (i) for all Disease Levels, Congoleum Exposure as defined in
Section 6.6(b)(3) below prior to December 31, 1982; (ii) for Asbestosis/Pleural
Disease (Disease Level II), six months Congoleum Exposure prior to December 31,
1982, plus five years cumulative occupational exposure to asbestos; and (iii)
for Asbestosis/Pleural Disease (Disease Level III), Severe Asbestosis (Disease
Level IV), Other Cancer (Disease Level V) or Lung Cancer 1 (Disease Level VII),
the claimant must show six months Congoleum Exposure prior to December 31, 1982,
plus Significant Occupational Exposure to asbestos. If the claimant cannot meet
the relevant presumptive exposure requirements for a Disease Level eligible for
Expedited Review, the claimant may seek Individual Review pursuant to Section
6.2(b) of his or her claim based on exposure to an asbestos-containing product
or to asbestos or asbestos-containing products in a Congoleum facility.

                        (2) Significant Occupational Exposure. "Significant
Occupational Exposure" means employment for a cumulative period of at least five
years with a minimum of two years prior to December 31, 1982, in an industry and
an occupation in which the claimant (a) handled asbestos fibers on a regular
basis; (b) fabricated asbestos-containing products so that the claimant in the
fabrication process was exposed on a regular basis to asbestos fibers; (c)
altered, repaired or otherwise worked with an asbestos-containing product such
that the claimant was exposed on a regular basis to asbestos fibers; or (d) was
employed in an industry and occupation such that the claimant worked on a
regular basis in close proximity to the activities described in (a), (b) and/or
(c).

----------
(8)   Provided, however, the provisions of footnote 7, supra, regarding PFT, are
      applicable.

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                                                           EXHIBIT G TO THE PLAN


                        (3) Congoleum Exposure. The claimant must demonstrate
"Congoleum Exposure," which is defined as meaningful and credible exposure,
which occurred prior to December 31, 1982, to asbestos or asbestos-containing
products in a Congoleum facility, or to asbestos or asbestos-containing products
supplied, specified, manufactured, installed, maintained, or repaired by
Congoleum and/or any entity, including a Congoleum contracting unit, for which
Congoleum has legal responsibility (a "Congoleum Product"). The Plan Trust shall
consider meaningful and credible evidence, including an affidavit or sworn
statement of the claimant based on personal knowledge, an affidavit or sworn
statement of a co-worker, or the affidavit or sworn statement of a family member
in the case of a deceased claimant (providing the Plan Trust finds such evidence
reasonably reliable), invoices, employment, construction or similar records, or
other credible evidence. The Plan Trust can also require submission of other or
additional evidence of exposure when it deems such to be necessary. The Plan
Trust shall require other or additional evidence to demonstrate the nexus
between the exposure to a Congoleum Product and the claimant's asbestos-related
disease. The Plan Trust shall include evidence that the claimant was exposed to
asbestos fibers in a Congoleum facility or from a Congoleum Product. The
specific exposure information required by the Plan Trust to process a claim
under either Expedited or Individual Review shall be set forth on the proof of
claim form to be used by the Plan Trust. The Plan Trust can also require
submission of other or additional evidence of exposure when it deems such to be
necessary.

      6.7 Claims Audit Program. The Plan Trustees shall develop reasonable and
efficient methods for auditing the reliability of medical evidence, which may
include additional reading of X-rays, CT scans and verification of pulmonary
function tests, as well as the reliability of evidence of exposure to asbestos,
including exposure to asbestos-containing products manufactured, produced or
distributed by Congoleum prior to December 31, 1982. The Plan Trustees may
retain such persons or consultants as it deems reasonable and necessary to
perform the audit of medical and exposure evidence, subject to the consent of
the TAC and Futures Representative. In the event that the Plan Trust reasonably
determines that any individual or entity has engaged in a pattern or practice of
providing unreliable medical evidence to the Plan Trust, to any other Asbestos
Claims Trust, or in connection with any court proceeding, it shall decline to
accept evidence from such provider.

      Further, in the event that an audit reveals that fraudulent information
has been provided to the Plan Trust, the Plan Trust may penalize any claimant or
claimant's attorney by disallowing the Plan Trust PI Asbestos Claim or by other
means including, but not limited to, requiring the source of the fraudulent
information to pay the costs associated with the audit and any future audit or
audits, reordering the priority of payment of all affected claimants' Plan Trust
Asbestos Claims, raising the level of scrutiny of additional information
submitted from the same source or sources, refusing to accept additional
evidence from the same source or sources, seeking the prosecution of the
claimant or claimant's attorney for presenting a fraudulent claim in violation
of 18 U.S.C. ss.152, and seeking sanctions from the Bankruptcy Court.

      6.8 Second Disease (Malignancy) Claims. The holder of a Plan Trust PI
Asbestos Claim involving a non-malignant asbestos-related disease (Disease
Levels I through IV) may assert a new Plan Trust PI Asbestos Claim against the
Plan Trust for a malignant disease (Disease Levels V - VIII) that is
subsequently diagnosed. Any additional payments to which such claimant may be
entitled with respect to such malignant asbestos-related disease shall not be
reduced by the amount paid for the non-malignant asbestos-related disease,
provided that the malignant disease had not been diagnosed by the time the
claimant was paid with respect to the original claim involving the non-malignant
disease.


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                                                           EXHIBIT G TO THE PLAN


      6.9 Arbitration.

            (a) Establishment of ADR Procedures. The Plan Trustees, with the
consent of the TAC and the Futures Representative, shall institute binding and
non-binding arbitration procedures in accordance with the Alternative Dispute
Resolution ("ADR") Procedures included in Attachment A hereto for resolving
disputes concerning whether the Plan Trust's outright rejection or denial of a
claim was proper, or whether the claimant's medical condition or exposure
history meets the requirements of this TDP for purposes of categorizing a claim
involving Disease Levels I - VIII. Binding and non-binding arbitration shall
also be available for resolving disputes over the liquidated value of a claim
involving Disease Levels IV - VIII, as well as disputes over the validity of an
Indirect Asbestos Claim.

      In all arbitrations, the arbitrator shall consider the same medical and
exposure evidentiary requirements that are set forth in Section 6.6 above. In
the case of an arbitration involving the liquidated value of a claim involving
Disease Levels IV - VIII, the arbitrator shall consider the same valuation
factors that are set forth in Section 6.2(b)(2) above. With respect to all
claims eligible for arbitration, the claimant, but not the Plan Trust, may elect
either non-binding or binding arbitration. The ADR Procedures set forth in
Attachment A hereto may be modified by the Plan Trustees with the consent of the
TAC and the Futures Representative.

            (b) Claims Eligible for Arbitration. In order to be eligible for
arbitration, the claimant must first complete the Individual Review Process with
respect to the disputed issue as well as either the Pro Bono Evaluation or the
Mediation processes set forth in the ADR Procedures. Individual Review shall be
treated as completed for these purposes when the claim has been individually
reviewed by the Plan Trust, the Plan Trust has made an offer on the claim, the
claimant has rejected the liquidated value resulting from the Individual Review,
and the claimant has notified the Plan Trust of the rejection in writing.
Individual Review shall also be treated as completed if the Plan Trust has
rejected the claim.

            (c) Limitations on and Payment of Arbitration Awards. In the case of
a non-Extraordinary Claim involving Disease Levels I - III, the arbitrator shall
not return an award in excess of the Scheduled Value for such claim. In the case
of a non-Extraordinary Claim involving Disease Levels IV - VIII, the arbitrator
shall not return an award in excess of the Maximum Value for the appropriate
Disease Level as set forth in Section 6.2(b)(3) above, and for an Extraordinary
Claim involving one of those Disease Levels, the arbitrator shall not return an
award greater than the maximum value for such a claim as set forth in Section
6.2 above. A claimant who submits to arbitration and who accepts the arbitral
award shall receive payments in the same manner as one who accepts the Plan
Trust's original valuation of the claim.


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      6.10 Litigation. Claimants who elect non-binding arbitration and then
reject their arbitral awards retain the right to institute a lawsuit in the tort
system against the Plan Trust pursuant to Section 8.6 below. However, a claimant
shall be eligible for payment of a judgment for monetary damages obtained in the
tort system from the Plan Trust's available cash only as provided in Section 8.7
below.

                                  SECTION VII

                                Claims Materials

      7.1 Claims Materials. The Plan Trust shall prepare suitable and efficient
claims materials ("Claims Materials") for all Plan Trust PI Asbestos Claims, and
shall provide such Claims Materials upon a written request for such materials to
the Plan Trust. In addition, a separate claim form for Plan Trust PI Asbestos
Claims that constitute Indirect Asbestos Claims. The proof of claim form to be
submitted to the Plan Trust shall require the claimant to assert the highest
Disease Level for which the claim qualifies at the time of filing. The proof of
claim form shall also include a certification by the claimant or his or her
attorney sufficient to meet the requirements of Rule 11(b) of the Federal Rules
of Civil Procedure. In developing its claim filing procedures, the Plan Trust
shall make every effort to provide claimants with the opportunity to utilize
currently available technology at their discretion, including filing claims and
supporting documentation over the internet and electronically by disk or CD-rom.
The initial proof of claim form(s) (and subsequent changes thereto) shall be
adopted by the Plan Trustees, with the consent of the TAC and the Futures
Representative.

      7.2 Content of Claims Materials. The Claims Materials shall include a copy
of this TDP, such instructions as the Plan Trustees shall approve, and a
detailed proof of claim form. If feasible, the forms used by the Plan Trust to
obtain claims information shall be the same or substantially similar to those
used by other asbestos claims resolution organizations. Instead of collecting
some or all of the claims information from a claimant or the claimant's
attorney, the Plan Trust may also obtain such information from electronic data
bases maintained by any other asbestos claims resolution organization. However,
the Plan Trust shall inform the claimant that it plans to obtain information as
available from such other organizations and may do so unless the claimant
objects in writing or provides such information directly to the Plan Trust. If
requested by the claimant, the Plan Trust shall accept information provided
electronically. The claimant may, but shall not be required to, provide the Plan
Trust with evidence of recovery from other asbestos defendants and claims
resolution organizations.

      7.3 Withdrawal or Deferral of Claims. A claimant can withdraw a Plan Trust
PI Asbestos Claim at any time upon written notice to the Plan Trust and file
another claim subsequently without affecting the status of the claim for statute
of limitations purposes, but any such claim filed after withdrawal shall be
given a place in the FIFO Processing Queue based on the date of such subsequent
filing. A claimant can also request that the processing of his or her Plan Trust
PI Asbestos Claim by the Plan Trust be deferred for a period not to exceed three
(3) years without affecting the status of the claim for statute of limitation


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                                                           EXHIBIT G TO THE PLAN


purposes, in which case the claimant shall also retain his or her original place
in the FIFO Processing Queue. Except for Plan Trust PI Asbestos Claims held by
representatives of deceased or incompetent claimants for which court or probate
approval of the Plan Trust's offer is required, or a Plan Trust PI Asbestos
Claim for which deferral status has been granted, a claim shall be deemed to
have been withdrawn if the claimant neither accepts, rejects, nor initiates
arbitration within six months of the Plan Trust's offer of payment or rejection
of the claim. Upon written request and good cause, the Plan Trust may extend the
withdrawal or deferral period for an additional six months.

      7.4 Filing Requirements and Fees. The Plan Trustees shall have the
discretion to determine, with the consent of the TAC and the Futures
Representative, (a) whether a claimant must have previously filed an
asbestos-related personal injury claim in the tort system to be eligible to file
the claim with the Plan Trust and (b) whether a filing fee should be required
for any Plan Trust PI Asbestos Claims.

      7.5 Confidentiality of Claimants' Submissions. All submissions to the Plan
Trust by a holder of a Plan Trust PI Asbestos Claim of a proof of claim form and
materials related thereto shall be treated as made in the course of settlement
discussions between the holder and the Plan Trust, and intended by the parties
to be confidential and to be protected by all applicable state and federal
privileges, including but not limited to those directly applicable to settlement
discussions. The Plan Trust will preserve the confidentiality of such claimant
submissions, and shall disclose the contents thereof only, with the permission
of the holder, to another trust established for the benefit of asbestos personal
injury claimants pursuant to section 524(g) and/or section 105 of the Bankruptcy
Code or other applicable law, to such other persons as authorized by the holder,
or in response to a valid subpoena of such materials issued by the Bankruptcy
Court. Furthermore, the Plan Trust shall provide counsel for the holder a copy
of any such subpoena immediately upon being served. The Plan Trust shall on its
own initiative or upon request of the claimant in question take all necessary
and appropriate steps to preserve said privileges before the Bankruptcy Court
and before those courts having appellate jurisdiction related thereto.

                                  SECTION VIII

              General Guidelines for Liquidating and Paying Claims

      8.1 Showing Required. To establish a valid Plan Trust PI Asbestos Claim, a
claimant must meet the requirements set forth in this TDP. The Plan Trust may
require the submission of X-rays, CT scans, laboratory tests, medical
examinations or reviews, other medical evidence, or any other evidence to
support or verify the claim, and may further require that medical evidence
submitted comply with recognized medical standards regarding equipment, testing
methods, and procedures to assure that such evidence is reliable.

      8.2 Costs Considered. Notwithstanding any provisions of this TDP to the
contrary, the Plan Trustees shall always give appropriate consideration to the
cost of investigating and uncovering invalid Plan Trust PI Asbestos Claims so
that the payment of valid Plan Trust PI Asbestos Claims is not further impaired
by such processes with respect to issues related to the validity of the medical
evidence supporting a Plan Trust PI Asbestos Claim. The Plan Trustees shall also
have the latitude to make judgments regarding the amount of transaction costs to
be expended by the Plan Trust so that valid Plan Trust PI Asbestos Claims are
not unduly further impaired by the costs of additional investigation. Nothing
herein shall prevent the Plan Trustees, in appropriate circumstances, from
contesting the validity of any claim against the Plan Trust whatever the costs,
or to decline to accept medical evidence from sources that the Plan Trustees
have determined to be unreliable pursuant to the Claims Audit Program described
in Section 6.7 above.


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                                                           EXHIBIT G TO THE PLAN


      8.3 Discretion to Vary the Order and Amounts of Payments in Event of
Limited Liquidity. Consistent with the provisions hereof and subject to the FIFO
Processing and Payment Queues, the Maximum Annual Payment, the Maximum Available
Payment and the Claims Payment Ratio requirements set forth above, the Plan
Trustees shall proceed as quickly as possible to liquidate valid Plan Trust PI
Asbestos Claims, and shall make payments to holders of such claims in accordance
with this TDP promptly as funds become available and as claims are liquidated,
while maintaining sufficient resources to pay future valid claims in
substantially the same manner.

      Because the Plan Trust's income over time remains uncertain, and decisions
about payments must be based on estimates that cannot be done precisely, they
may have to be revised in light of experiences over time, and there can be no
guarantee of any specific level of payment to claimants. However, the Plan
Trustees shall use their best efforts to treat similar claims in substantially
the same manner, consistent with their duties as Plan Trustees, the purposes of
the Plan Trust, the established allocation of funds to claims in Categories A
and B, and the practical limitations imposed by the inability to predict the
future with precision.

      In the event that the Plan Trust faces temporary periods of limited
liquidity, the Plan Trustees may, with the consent of the TAC and the Futures
Representative, suspend the normal order of payment and may temporarily limit or
suspend payments altogether, and may offer a Reduced Payment Option as described
in Section 2.6 above.

      8.4 Punitive Damages. Except as provided below for claims asserted under
the Alabama Wrongful Death Statute, in determining the value of any liquidated
or unliquidated Plan Trust PI Asbestos Claim, punitive or exemplary damages,
i.e., damages other than compensatory damages, shall not be considered or
allowed, notwithstanding their availability in the tort system.

      Similarly, no punitive or exemplary damages shall be payable with respect
to any claim litigated against the Plan Trust in the tort system pursuant to
Sections 6.10 above and 8.6 below. The only damages that may be awarded pursuant
to this TDP to Alabama Claimants who are deceased and whose personal
representatives pursue their claims only under the Alabama Wrongful Death
Statute shall be compensatory damages determined pursuant to the statutory and
common law of the State of New Jersey, without regard to its choice of law
principles. The choice of law provision in this Section 8.4 applicable to any
claim with respect to which, but for this choice of law provision, the
applicable law of the Claimant's Jurisdiction pursuant to Section 6.3(b)(2) is
determined to be the Alabama Wrongful Death Statute, shall only govern the
rights between the Plan Trust and the claimant including, but not limited to,
suits in the tort system pursuant to Section 8.6, and to the extent the Plan
Trust seeks recovery from any entity that provided insurance to Congoleum, the
Alabama Wrongful Death Statute shall govern.

      8.5 Interest.

            (a) In General. Except for any Plan Trust PI Asbestos Claim
involving Other Asbestos Disease (Disease Level I - Cash Discount Payment) and
subject to the limitations set forth below, interest shall be paid on all Plan
Trust PI Asbestos Claims with respect to which the claimant has had to wait a
year or more for payment, provided, however, that no claimant shall receive
interest for a period in excess of seven (7) years. The initial interest rate
shall be six percent (6%) simple interest per annum for each of the first five
(5) years after the Effective Date; thereafter, the Plan Trustees shall have the
discretion to change the annual interest rate with the consent of the TAC and
the Futures Representative.


                                       32
<PAGE>

                                                           EXHIBIT G TO THE PLAN


            (b) Plan Trust PI Asbestos Claims. Interest shall be payable on the
Scheduled Value of any Plan Trust PI Asbestos Claim that meets the requirements
of Disease Levels II - V, VII and VIII, whether the claim is liquidated under
Expedited Review, Individual Review, or by arbitration. No interest shall be
paid on any claim involving Disease Level I or on any claim liquidated in the
tort system pursuant to Section 6.10 above and Section 8.6 below. Interest on an
unliquidated Plan Trust PI Asbestos Claim that meets the requirements of Disease
Level VI shall be based on the Average Value of such a claim. Interest on all
such unliquidated claims shall be measured from the date of payment back to the
earliest of the date that is one year after the date on which (a) the claim was
filed against Congoleum prior to the Petition Date; (b) the claim was filed
against another defendant in the tort system on or after the Petition Date but
before the Effective Date; (c) the claim was filed with the Bankruptcy Court
during the pendency of the Chapter 11 proceeding; or (d) the claim was filed
with the Plan Trust after the Effective Date. Provided, however, that interest
on any Plan Trust Disputed Claim shall be measured from the date of payment back
to one year after the date on which the claim was filed with the Plan Trust.

      8.6 Suits in the Tort System. If the holder of a disputed claim disagrees
with the Plan Trust's determination regarding the Disease Level of the claim,
the claimant's exposure history or the liquidated value of the claim, and if the
holder has first submitted the claim to non-binding arbitration as provided in
Section 6.9 above, the holder may file a lawsuit in the Claimant's Jurisdiction
as defined in Section 6.2(b)(2) above. Any such lawsuit must be filed by the
claimant in his or her own right and name and not as a member or representative
of a class, and no such lawsuit may be consolidated with any other lawsuit. All
defenses (including, with respect to the Plan Trust, all defenses which could
have been asserted by Congoleum) shall be available to both sides at trial;
however, the Plan Trust may waive any defense and/or concede any issue of fact
or law. If the claimant was alive at the time the initial pre-petition complaint
was filed or on the date the proof of claim form was filed with the Plan Trust,
the case shall be treated as a personal injury case with all personal injury
damages to be considered even if the claimant has died during the pendency of
the claim.

      8.7 Payment of Judgments for Money Damages. If and when a claimant obtains
a judgment in the tort system, the claim shall be placed in the FIFO Payment
Queue based on the date on which the judgment became final. Thereafter, the
claimant shall receive from the Plan Trust an initial payment (subject to the
applicable Payment Percentage, the Maximum Available Payment, and the Claims
Payment Ratio provisions set forth above) of an amount equal to the greater of
(i) the Plan Trust's last offer to the claimant or (ii) the award that the
claimant declined in non-binding arbitration. The claimant shall receive the
balance of the judgment, if any, in five equal installments in years six (6)
through ten (10) following the year of the initial payment (also subject to the
applicable Payment Percentage, the Maximum Available Payment and the Claims
Payment Ratio provisions above).


                                       33
<PAGE>

                                                           EXHIBIT G TO THE PLAN


      In the case of non-Extraordinary Claims involving Disease Levels I, II and
III, the total amounts paid with respect to such claims shall not exceed the
relevant Scheduled Value for such Disease Levels as set forth in Section
6.2(b)(3) above. In the case of claims involving a non-malignant
asbestos-related disease that does not attain classification under Disease
Levels I, II or III, the amount payable shall not exceed the Scheduled Value for
the Disease Level most comparable to the disease proven. In the case of
non-Extraordinary Claims involving severe asbestosis and malignancies (Disease
Levels IV - VIII), the total amounts paid with respect to such claims shall not
exceed the Maximum Values for such Disease Levels set forth in Section
6.2(b)(3). In the case of Extraordinary Claims, the total amounts paid with
respect to such claims shall not exceed the Maximum Value for such claims set
forth in Section 6.2(b)(3) above. Under no circumstances shall interest be paid
pursuant to Section 8.5 or under any statute on any judgments obtained in the
tort system.

      8.8 Releases. The Plan Trustees shall have the discretion to determine the
form and substance of the releases to be provided to the Plan Trust in order to
maximize recovery for claimants against other tortfeasors without increasing the
risk or amount of claims for indemnification or contribution from the Plan
Trust. As a condition to making any payment to a claimant, the Plan Trust shall
obtain a general, partial, or limited release as appropriate in accordance with
the applicable state or other law. If allowed by state law, the endorsing of a
check or draft for payment by or on behalf of a claimant shall constitute such a
release.

      8.9 Third-Party Services. Nothing in this TDP shall preclude the Plan
Trust from contracting with another asbestos claims resolution organization to
provide services to the Plan Trust so long as decisions about the categorization
and liquidated value of Plan Trust PI Asbestos Claims are based on the relevant
provisions of this TDP, including the Disease Levels, Scheduled Values, Average
Values, Maximum Values, and Medical/Exposure Criteria set forth above.

      8.10 Plan Trust Disclosure of Information. Periodically, but not less
often than once a year, the Plan Trust shall make available to claimants and
other interested parties, the number of claims by Disease Levels that have been
resolved both by the Individual Review Process and by arbitration as well as by
litigation in the tort system indicating the amounts of the awards and the
averages of the awards by jurisdiction.

                                   SECTION IX

                                  Miscellaneous

      9.1 Amendments. Except as otherwise provided herein, the Plan Trustees may
amend, modify, delete, or add to any provisions of this TDP (including, without
limitation, amendments to conform this TDP to advances in scientific or medical
knowledge or other changes in circumstances), provided they first obtain the
consent of the TAC and the Futures Representative pursuant to the Consent
Process set forth in Sections 5.8(b) and 6.6(b) of the Plan Trust Agreement,
except that the right to amend the Claims Payment Ratio is governed by the
restrictions in Section 2.6 above, and the right to adjust the Payment
Percentage is governed by Section 5.2 above. Nothing herein is intended to
preclude the TAC or the Futures Representative from proposing to the Plan
Trustees, in writing, amendments to the TDP. Any amendment proposed by the TAC
or the Futures Representative shall remain subject to Section 7.3 of the Plan
Trust Agreement. Notwithstanding anything herein to the contrary, no amendment
may weaken the medical or product exposure requirements of this TDP.


                                       34
<PAGE>

                                                           EXHIBIT G TO THE PLAN


      9.2 Severability. Should any provision contained in this TDP be determined
to be unenforceable, such determination shall in no way limit or affect the
enforceability and operative effect of any and all other provisions of this TDP.
Should any provision contained in this TDP be determined to be inconsistent with
or contrary to Congoleum's obligations to any insurance company providing
insurance coverage to Congoleum in respect of claims for personal injury based
on exposure to an asbestos-containing product manufactured, produced or
distributed by Congoleum, or in a Congoleum facility, the Plan Trustees with the
consent of the TAC and the Futures Representative may amend this TDP and/or the
Plan Trust Agreement to make the provisions of either or both documents
consistent with the duties and obligations of Congoleum to said insurance
company.

      9.3 Governing Law. Except for purposes of determining the liquidated value
of any Plan Trust PI Asbestos Claim, administration of this TDP shall be
governed by, and construed in accordance with, the laws of the State of New
Jersey. The law governing the liquidation of Plan Trust PI Asbestos Claims in
the case of Individual Review, arbitration or litigation in the tort system
shall be the law of the Claimant's Jurisdiction as described in Section
6.2(b)(2) above.


                                       35
<PAGE>

                              Exhibit H to the Plan
                                 "New Indenture"

                   [TO BE FILED ON OR BEFORE AUGUST 18, 2006]

<PAGE>

                                                           EXHIBIT I TO THE PLAN

                              Exhibit I to the Plan
                    "GHR/Kenesis Litigation Trust Agreement"
<PAGE>

                                                           EXHIBIT I TO THE PLAN


                           LITIGATION TRUST AGREEMENT

      This LITIGATION TRUST AGREEMENT, dated as of the date set forth on the
signature page hereof and effective as of the Effective Date (the "GHR/Kenesis
Litigation Trust"), is by and among Congoleum Corporation, Congoleum Sales, Inc.
and Congoleum Fiscal, Inc. (collectively referred to as the "Debtors,"
"Congoleum," or the "Settlors"), the debtors and debtors-in-possession in Case
No. 03-51524 in the United States Bankruptcy Court for the district of New
Jersey; the Futures Representative; the Asbestos Claimants' Committee and
[_____________], as Trustee (the "Trustee").

                                    RECITALS

      WHEREAS, on or about [_____________], the United States Bankruptcy Court
for the District of New Jersey (the "Bankruptcy Court) entered an order
confirming the Ninth Modified Joint Plan of Reorganization Under Chapter 11 of
the Bankruptcy Code of Congoleum Corporation, et al., dated August 11, 2006 (as
it may thereafter be amended, restated or otherwise modified, the "Plan"), filed
by the Debtors, the Asbestos Claimants' Representative and the Claimants'
Representative; and

      WHEREAS, pursuant to the Plan, (i) the GHR/Kenesis Actions and (ii) the
distribution of the net proceeds realized from the prosecution of the
GHR/Kenesis Actions (the "Proceeds") has been, on the date hereof, assigned to
the GHR/Kenesis Litigation Trust created by this Agreement (the "Trust"), on
behalf of and for the benefit of Reorganized Congoleum pursuant to the Plan (the
"Beneficiary"), by the Debtors in accordance with section 1123(b)(3)(B) of the
Bankruptcy Code; and

      WHEREAS, the Trust is being created pursuant to this Agreement for the
sole purpose of coordinating the prosecution, direction, settlement, collection
and enforcement of the GHR/Kenesis Actions on behalf of and for the benefit of
the Beneficiary and to distribute the Proceeds to the Plan Trust on behalf of
the Beneficiary in accordance herewith; and

      WHEREAS, pursuant to Section 6.1(o) of the Plan, the Debtors are deemed to
have granted, assigned, transferred, conveyed and delivered to the Trustee, on
behalf of and for the benefit of the Beneficiary, control of, all of the
Debtors' right, title and interest in, the GHR/Kenesis Actions and to the
Proceeds; and

      WHEREAS, pursuant to Section 6.1(o) of the Plan, the costs of the Trust
shall be funded by a one time capital contribution (the "Initial Contribution")
of $600,000 to be made from the proceeds of the Asbestos Insurance Settlement
Agreement with Liberty Mutual Insurance Company on, or as soon as practicable
after, the Effective Date; and

      WHEREAS, the Bankruptcy Court shall have original but not exclusive
jurisdiction over the GHR/Kenesis Litigation Trust, the Trustee, the GHR/Kenesis
Actions and the Trust Assets, as provided herein.


                                       2
<PAGE>

                                                           EXHIBIT I TO THE PLAN


                              DECLARATION OF TRUST

      NOW THEREFORE, in order to declare the terms and conditions hereof, and in
consideration of the Recitals, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and subject to the
terms and conditions of the Plan and this Agreement, the Debtors have executed
this Agreement and absolutely and irrevocably assign to the Trustee, and to its
successors and assigns, on behalf of and for the benefit of the Beneficiary, the
Initial Contribution and all right, title and interest of Reorganized Congoleum
in the GHR/Kenesis Actions and the Proceeds;

      TO HAVE AND TO HOLD unto the Trustee and its successors in trust;

      PROVIDED, HOWEVER, that upon termination of the Trust in accordance with
Section 4.01 hereof, this Agreement shall cease, terminate and be of no further
force and effect.

      IT IS HEREBY FURTHER COVENANTED AND DECLARED, that the GHR/Kenesis Actions
and the Proceeds, the Initial Contribution and all other property held from time
to time by the Trustee under this Agreement and any earnings thereon
(collectively, the "Trust Assets") are to be held and applied by the Trustee
solely for the benefit of the Beneficiary and for no other party, subject to the
further covenants, conditions and terms hereinafter set forth.

                                    ARTICLE I
                                   DEFINITIONS

      1.01 Certain Terms Defined. Terms defined in the Plan, and not otherwise
defined herein, shall, when used herein (including in the Recitals hereto), have
the meanings ascribed to such terms in the Plan.

      1.02 Meanings of Other Terms. Except where the context otherwise requires,
words importing the masculine gender include the feminine and the neuter, if
appropriate, words importing the singular number shall include the plural number
and vice versa and words importing persons shall include firms, associations,
corporations and other entities. All references herein to Articles, Sections and
other subdivisions, unless referring specifically to the Plan or provisions of
the Bankruptcy Code, Bankruptcy Rules or other law, statute or regulation, refer
to the corresponding Articles, Sections and other subdivisions of this
Agreement, and the words herein and words of similar import refer to this
Agreement as a whole and not to any particular Article, Section or subdivisions
of this Agreement.

                                   ARTICLE II
                              TRUSTEE'S ACCEPTANCE

      2.01 Acceptance. The Trustee accepts the Trust created by this Agreement
and the transfer and assignment to the Trust, on behalf of and for the benefit
of the Beneficiary, of the Initial Contribution, the GHR/Kenesis Actions and the
Proceeds as set forth in the Plan, and agrees to observe and perform the Trust,
upon and subject to the terms and conditions set forth herein and in the Plan.


                                        3
<PAGE>

                                                           EXHIBIT I TO THE PLAN


      2.02 Purpose of Trust. The sole purpose of this Agreement is to implement
Sections 6(o) and (p) of the Plan by providing for the vesting in the Trustee of
the ownership of and the responsibility for the protection and conservation of
the Trust Assets on behalf of and for the benefit of the Beneficiary. Such
responsibility shall be limited to the retention, prosecution, direction,
settlement, collection and enforcement of the GHR/Kenesis Actions by the Trustee
on behalf of and for the benefit of the Beneficiary, including the powers with
respect thereto set forth in Article VII hereon; the collection of the Proceeds,
the temporary investment thereof and other Trust moneys, including, but not
limited to, the Initial Contribution, as provided in Section 7.03 hereof, the
payment of the costs and expenses of the GHR/Kenesis Actions, the making of any
other payments provided to be made from the Trust as set forth in the Plan and
this Agreement and the distribution of the Proceeds, any income earned thereon
and other Trust moneys to the Beneficiary in accordance with the provisions of
the Plan and this Agreement.

      2.03 Incidents of Ownership. The Beneficiary shall be the sole beneficiary
of the Trust and the Trustee shall retain only such incidents of ownership as
are necessary to undertake the actions and transactions authorized herein on
their behalf.

                                   ARTICLE III
                                   BENEFICIARY

      3.01 Beneficial Interests. The interest of the Beneficiary in the Trust
Assets (the "Beneficial Interest") shall be 100% of the Trust Assets after the
payment of the fees and expenses of the Trustee; provided, however, that all net
Proceeds are hereby pledged to the Plan Trust by the Beneficiary and the Trustee
to secure the Plan Trust Note and the New Convertible Security as such net
Proceeds shall be used to reduce Reorganized Congoleum's obligations to the Plan
Trust (i) first, being applied to reduce or satisfy principal and accrued
interest under the Plan Trust Note; (ii) second, being applied to reduce or
satisfy principal and accrued interest under the New Convertible Security;
provided, however, that the New Convertible Security shall not be satisfied or
retired before the Reset Date and any proceeds of the GHR/Kenesis Actions that
are received by the Plan Trust prior to the Reset Date shall be held by the Plan
Trust in an interest bearing account and applied to reduce or satisfy the New
Convertible Security immediately after the Reset Date; and (iii) thereafter,
being distributed to the Plan Trust on behalf of the Beneficiary.

      3.02 Rights of Beneficiary. Except as expressly provided hereunder, the
Beneficiary shall have no title to, right to, possession of, management of or
control of the Trust or the Trust Assets. The whole title to all the Trust's
assets shall be vested in the Trustee and the sole interest of the Beneficiary
shall be the rights and benefits given under this Agreement and the Plan.

                                   ARTICLE IV
                        DURATION AND TERMINATION OF TRUST

      4.01 Duration. The existence of the Trust shall terminate on the earlier
of: (a) the date on which all of the Trust Assets have been liquidated and the
proceeds thereof distributed to or on behalf of the Beneficiary, or (b) two
years after the Effective Date; provided, however, that the Trustee may extend
the term of the Trust, provided that he receives Bankruptcy Court approval for
cause within six months after the beginning of the extended term.


                                       4
<PAGE>

                                                           EXHIBIT I TO THE PLAN


Notwithstanding anything to the contrary in this Agreement, in no event shall
the Trustee unduly prolong the duration of the Trust, and the Trustee shall at
all times endeavor to prosecute, direct, settle or compromise expeditiously the
GHR/Kenesis Actions, so as to distribute the Trust Assets to or on behalf of the
Beneficiary and terminate the Trust as soon as practicable in accordance with
this Agreement.

      4.02 Termination by Beneficiary. The Trust may not be terminated at any
time by the Beneficiary.

      4.03 Continuance of Trust for Winding Up. After the termination of the
Trust and solely for the purpose of liquidating and winding up the affairs of
the Trust, the Trustee shall continue to act as such until its duties have been
fully performed. Upon distribution of all Proceeds and any investment income
earned on Trust Assets not used to pay expenses associated with prosecution of
the GHR/Kenesis Actions (collectively, the "Distributable Proceeds") and any
remaining moneys or other assets, the Trustee shall retain the books, records
and files which shall have been delivered to or created by he Trustee. At the
Trustee's discretion, all of such records and documents may be destroyed at any
time after six years from the distribution of all Distributable Proceeds (unless
such records and documents are necessary to fulfill the Trustee's obligations
pursuant to Section. 5.06 hereunder). Except as otherwise specifically provided
herein, upon the distribution of all Distributable Proceeds, the Trustee shall
be deemed discharged and have no further duties or obligations hereunder except
to account to the GHR/Kenesis Litigation Trust Advisory Committee (the
"Litigation Trust Advisory Committee") as provided in Section 5.03 hereof and as
may be imposed on the Trustee by virtue of Section 5.06 and Article VI hereof.

                                   ARTICLE V
                         ADMINISTRATION OF TRUST ESTATE

      5.01 Payment of Claims, Expenses and Liabilities. The Trustee shall pay
from the Trust Assets all claims, expenses, charges, liabilities and obligations
of the Trust as contemplated by this Agreement and as required by law.

      5.02 Distributions. (a) The Trustee shall make distributions to or on
behalf of the Beneficiary of the Distributable Proceeds in accordance with the
provisions of this Agreement at each such time as the Trustee has available at
least $5,000 in Distributable Proceeds for distribution to the Beneficiary;
provided, however, that, notwithstanding the foregoing, the Trustee must make a
distribution of all Distributable Proceeds to or on behalf of the Beneficiary at
least once per year after taking into account any payments that must be made in
accordance with Section 5.01 hereof and after retaining such moneys as it
determines is necessary to pay the on-going costs and expenses of prosecuting
the GHR/Kenesis Actions, provided, further, that, notwithstanding the preceding
clause, the Trustee must distribute at least 50% of the Distributable Proceeds
on an annual basis to or on behalf of the Beneficiary. Notwithstanding any
provision herein to the contrary, the Trustee shall make a final, distribution
of the Distributable Proceeds to or on behalf of the Beneficiary and any
remaining trust moneys and other Trust Assets in accordance with the terms of
this Agreement prior to the termination of the Trust in accordance with Section
4.01 hereof. All Distributions shall be used to satisfy the Beneficiary's
obligations to the Plan Trust in accordance with Article III of this Agreement.


                                        5
<PAGE>

                                                           EXHIBIT I TO THE PLAN


      5.03 Reports. The Trustee shall file with the Bankruptcy Court: (a)
unaudited quarterly financial reports and an audited annual financial report
regarding the financial condition and results of operation of the Trust, and (b)
a quarterly report concerning the status of all GHR/Kenesis Actions which have
been filed with a court of competent jurisdiction. The Trustee shall provide a
copy of such reports to the members of the Litigation Trust Advisory Committee.

      5.04 Notice of Change of Address. The Beneficiary shall be responsible for
providing the Trustee with written notice of any change in address. The Trustee
is not obligated to make any effort to determine the correct address of the
Beneficiary.

      5.05 Fiscal Year. The fiscal year of the Trust shall be the calendar year.

      5.06 Books and Records. The Trustee shall maintain, in respect of the
Trust, books and records relating to the assets and the income of the Trust and
the payment of expenses of the Trust, in such detail and for such period of time
as may be necessary to enable it to make full and proper reports in respect
thereof in accordance with the provisions of Section 5.03 and Article VI hereof
and to comply with applicable provisions of law.

      5.07 Cash Payments. All payments required to be made by the Trustee to or
on behalf of the Beneficiary shall be made in Cash denominated in U.S. dollars
and, if in check form, drawn on a domestic bank selected by the Trustee.

      5.08 GHR/Litigation Trust Advisory Committee. The GHR/Litigation Trust
Advisory Committee shall consist of three (3) members; one member being
appointed by each of the Plan Trustees, the Reorganized Debtors and the Futures
Representative. The Litigation Trust Advisory Committee shall serve in a
fiduciary capacity representing the interests of the Beneficiary to carry out
the terms of this Litigation Trust Agreement and the Plan.

                                   ARTICLE VI
                                   TAX MATTERS

      6.01 For all federal income tax purposes, the Beneficiary will be treated
as the grantors and deemed owner of the Trust. The Trustee will file returns for
the Trust as a grantor trust pursuant to Section 1.671-4(a) of the Income Tax
Regulations and will issue to the Beneficiary appropriate tax forms and
statements required under the Code and Treasury Regulations to permit the
Beneficiary to report and pay tax on its share of the Trust's taxable income.

      6.02 For all federal income tax purposes, the GHR/Kenesis Actions and the
right to receive the Proceeds will be treated by the Debtors, Reorganized
Congoleum, Beneficiary and the Trustee as having had no value at the time of
their transfer to the Trusts on behalf and for the benefit of the Beneficiary.

      6.03 The Trustee will take such actions as are necessary to make certain
that all of the Trust's taxable income (including, but not limited to, all
Proceeds and earnings, if any, on Trust Assets) will be subject to federal
income tax on a current basis.


                                        6
<PAGE>

                                                           EXHIBIT I TO THE PLAN


                                  ARTICLE VII
                    POWERS OF AND LIMITATIONS ON THE TRUSTEE

      7.01 Powers of the Trustee. Without limiting, but subject to the remaining
provisions herein, the Trustee shall be expressly authorized to:

            (a) execute any documents and take any other actions related to, or
in connection with, the liquidation of the Trust Assets and the exercise of the
Trustee's powers granted herein;

            (b) hold legal title to any and all rights of the Beneficiary in or
arising from the Trust Assets;

            (c) protect and enforce the rights to the Trust Assets vested in the
Trustee by this Agreement by any method deemed appropriate including, without
limitation, by judicial proceedings or pursuant to any applicable bankruptcy,
insolvency, moratorium or similar law and general principles of equity;

            (d) have exclusive power to prosecute and enforce the GHR/Kenesis
Actions;

            (e) have exclusive power to settle or otherwise compromise the
GHR/Kenesis Actions, subject, however, to Bankruptcy Court approval;

            (f) file, if necessary, any and all tax information returns with
respect to the Trust and pay taxes properly payable by the Trust, if any, and
make distributions to or on behalf of the Beneficiary net of such taxes;

            (g) make all necessary filings in accordance with any applicable
law, statute or regulation, including, but not limited to, the Exchange Act;

            (h) determine and satisfy any and all ordinary course liabilities
created, incurred or assumed by the Trust,

            (i) pay all ordinary course expenses and make all other payment
relating to the Trust;

            (j) retain and pay professionals, including but not limited to
attorneys, necessary to carry out its obligations hereunder;

            (k) invest moneys received by the Trust or otherwise held by the
Trust in accordance with Section 7.03 hereof; and

            (l) in the event that the Trustee determines that the Beneficiary or
the Trust may, will or have become subject to adverse tax consequences, in its
sole discretion, take such actions that will, or are intended to, alleviate such
adverse tax consequences.

      7.02 Limitations on Trustee. (a) The Trustee shall not at any time, on
behalf of the Trust or the Beneficiary, enter into or engage in any trade or
business.


                                        7
<PAGE>

                                                           EXHIBIT I TO THE PLAN


            (b) No part of the Trust Assets shall be used or disposed of by the
Trustee in furtherance of any trade or business. The Trustee shall, on behalf of
the Trust, hold the Trust out as a trust in the process of liquidation and not
as an investment company. The Trustee shall be restricted to the prosecution,
enforcement and settlement on behalf of and for the benefit of the Beneficiary
of the GHR/Kenesis Actions, the payments and distribution of the Proceeds for
the purposes set forth in this Agreement and the conservation and protection of
the Trust Assets and the administration thereof in accordance with the
provisions of this Agreement.

      7.03 Investment of Trust Moneys. The Trustee shall invest the moneys
received by the Trust or otherwise held in the Trust Estate in (i) short-term
certificates of deposit or money market accounts maintained by or issued by
domestic banks having in excess of $1 billion in capital and surplus and one of
the two highest ratings given by both Moody's and Standard & Poors, (ii) insured
demand deposit accounts or certificates of deposit maintained by or issued by
any savings institution or commercial bank insured by the United States
government or any agency thereof and (iii) short-term marketable direct
obligations of, or guaranteed as to principal and interest by, the United States
government or any agency thereof provided, however, that the maturities of any
of the foregoing shall not exceed 30 days.

                                  ARTICLE VIII
                             CONCERNING THE TRUSTEE

      8.01 Generally. The Trustee accepts and undertakes to discharge the Trust
created by this Agreement upon the terms and conditions hereof. The Trustee
shall exercise such of the rights and powers vested in it by this Agreement, and
use the same degree of care and skill in its exercise as a prudent man would
exercise or use under the circumstances in the conduct of its own affairs. No
provisions of this Agreement shall be construed to relieve the Trustee from
liability for its own reckless or its own intentional or willful and wanton
misconduct resulting in personal gain, except that:

            (a) the Trustee shall not be liable for any action taken in good
faith in reliance upon the advice of professionals;

            (b) the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Agreement, and
no implied covenants or obligations shall be read into this Agreement against
the Trustee; and

            (c) the Trustee shall not be liable for any error of judgment made
in good faith.

      8.02 Reliance by Trustee. Except as otherwise provided in this Agreement:

            (a) the Trustee may rely and shall be protected in acting upon any
resolution, statement, instrument, opinion, report, notice, request, consent,
order or other paper or document reasonably believed by the Trustee to be
genuine and to have been signed or presented by the proper party or parties;

            (b) the Trustee may consult with independent legal counsel to be
selected by it and the advice or opinion of such counsel shall be full and
complete personal protection to the Trustee and agents of the Trust in respect
of any action taken or suffered by it in good faith and in reliance on, or in
accordance with, such advice or opinion; and


                                       8
<PAGE>

                                                           EXHIBIT I TO THE PLAN


            (c) persons dealing with the Trustee shall look only to the Trust
Assets to satisfy any liability incurred by the Trustee to such person in
carrying out the terms of this Agreement, and the Trustee shall have no personal
or individual obligation to satisfy any such liability.

      8.03 Liability to Third Persons. The Beneficiary shall not be subject to
any liability whatsoever, in tort, contract or otherwise, to any person in
connection with the Trust Assets or the affairs of the Trust, and no Trustee or
agent of the Trust shall be subject to any personal liability whatsoever, in
tort, contract or otherwise, to any person in connection with the Trust Assets
or the affairs of this Trust, except for its own recklessness or its own
intentional or willful and wanton misconduct resulting in personal gain; and all
such persons shall look solely to the Trust Assets for satisfaction of claims of
any nature arising in connection with affairs of the Trust.

      8.04 Nonliability of Trustee for Acts of Others. Nothing contained in this
Trust Agreement shall be deemed to be an assumption by the Trustee of say of the
liabilities, obligations or duties of any of the other parties hereto or of the
Debtors or Reorganized Congoleum; and shall not be deemed to be or contain a
covenant or agreement by the Trustee to assume or accept any such liability,
obligation or duty. Any successor Trustee may accept and rely upon any
accounting made by or on behalf of any predecessor Trustee hereunder, and any
statement or representation made as to the assets comprising the Trust Assets or
as to any other fact bearing upon the prior administration of the Trust. A
Trustee shall not be liable for having accepted and relied upon such accounting,
statement or representation if it is later proved to be incomplete, inaccurate
or untrue. A Trustee or successor Trustee shall not be liable for any act or
omission of any predecessor Trustee, nor have a duty to enforce any claims
against any predecessor Trustee on account of any such act or omission.

      8.05 Indemnity. The Trustee, its employees, officers, directors and
principals (collectively, the "Indemnified Parties") shall be indemnified by the
Trust from any losses, claims, damages, liabilities or expenses (including,
without limitation, reasonable attorneys' fees, disbursements and related
expenses) which the Indemnified Parties may incur or to which the Indemnified
Parties may become subject in connection with any action, suit, proceeding or
investigation brought by or threatened against the Indemnified Parties on
account of the acts or omissions of the Trustee in its capacity as such,
including, without limitation, the GHR/Kenesis Actions, provided, however, that
the Trust shall not be liable to indemnify the Indemnified Parties for any of
its acts or omissions constituting fraud, gross negligence or willful
misconduct, and, provided further, that nothing in this Section 8.05 shall be
deemed to restrict the Trustee's right to receive an indemnity based on acts or
omissions taken in accordance with the provisions of Sections 8.01 and 8.02
hereof. Notwithstanding any provision herein to the contrary, the Indemnified
Parties shall be entitled to obtain advances from the Trust to cover their
expenses of defending themselves in any action brought against them as a result
of the acts or omissions of the Trustee in its capacity as such, provided,
however, that the Indemnified Parties receiving such advances shall repay the
amounts so advanced to the Trust upon the entry of a Final Order finding that
such Indemnified Parties were not entitled to any indemnity under the provisions
of this Section 8.05.


                                        9
<PAGE>

                                                           EXHIBIT I TO THE PLAN


      8.06 Bond. The Trustee shall serve without bond.

                                   ARTICLE IX
                             COMPENSATION OF TRUSTEE

      9.01 Amount of Compensation. The Trustee shall receive compensation for
its services in accordance with the terms set forth in that certain letter
agreement dated as of [ ] between the Debtors and the Trustee.

      9.02 Expenses. The Trustee shall be entitled to reimburse itself from the
Trust for all reasonable out-of-pocket expenses actually incurred by it in the
performance of its duties in accordance with this Agreement.

                                   ARTICLE X
                         TRUSTEE AND SUCCESSOR TRUSTEES

      10.01 Generally. The Trustee shall initially be [ ]. The Trustee
represents that it is a [limited liability corporation] organized under the laws
of the State of Delaware. If the Trustee shall ever change its name or
reorganize, reincorporate or merge with or into or consolidate with any other
entity, such Trustee shall be deemed to be a continuing entity and shall
continue to act as a Trustee hereunder with the same liabilities, duties,
powers, rights, titles, discretion and privileges as are herein specified for a
Trustee.

      10.02 Resignation or Removal. The Trustee may resign and be discharged
from the trusts hereby created by giving at least 30 days prior written notice
thereof to the Beneficiary. Such resignation shall become effective on the later
to occur of (a) the date specified in such written notice, or (b) the effective
date of the appointment of a successor Trustee in accordance with Section 10.04
hereof and such successor's acceptance of such appointment.

      10.03 Removal. The Trustee may be removed, with or without cause, by the
vote of Litigation Trust Advisory Committee. Such resignation shall become
effective on the later to occur of (a) the date such action is taken by the
Litigation Trust Advisory Committee, or (b) the effective date of the
appointment of a successor Trustee in accordance with Section 10.04 hereof and
such successor's acceptance of such appointment, but in no event more than
thirty days after action is taken by the Litigation Trust Advisory Committee.

      10.04 Appointment of Successor. In the event of the death, resignation,
removal, incompetency, bankruptcy or insolvency of the Trustee, a vacancy shall
be deemed to exist and a successor shall be appointed by a majority vote of the
Litigation Trust Advisory Committee and such appointment shall be confirmed by
order of the Bankruptcy Court entered within sixty (60) days of such
appointment.

      10.05 Acceptance of Appointment by Successor Trustee. The death,
resignation, removal, incompetency, bankruptcy or insolvency of the Trustee
shall not operate to terminate the Trust created by this Agreement or to revoke
any existing agency created pursuant to the terms of this Agreement or
invalidate any action theretofore taken by the Trustee. Any successor Trustee
appointed hereunder shall execute an instrument accepting its appointment and
shall deliver one counterpart thereof to the Bankruptcy Court for filing, and,
in case of the Trustees resignation, to the retiring Trustee. Thereupon, such


                                       10
<PAGE>

                                                           EXHIBIT I TO THE PLAN


successor shall, without any further act, become vested with all the
liabilities, duties, power, rights, title, discretion and privileges of its
predecessor in the Trust with like effect as if originally named Trustee and
shall be deemed appointed pursuant to Section 1123(b) (3) (B) of the Bankruptcy
Code to retain and enforce the GHR/Kenesis Actions for the benefit of the
Beneficiary; provided, however, that the successor's appointment shall be
confirmed by order of the Bankruptcy Court entered within sixty (60) days of the
date of his, her or its appointment. The retiring Trustee shall duly assign,
transfer and deliver to such successor all property and money held by such
retiring Trustee hereunder and shall, as directed by the Bankruptcy Court or
reasonably requested by such successor, execute and deliver an instrument or
instruments conveying and transferring to such successor upon the trust herein
expressed, all the liabilities, duties, powers, rights, title, discretion and
privileges of such retiring Trustee.

                                   ARTICLE XI
                           CONCERNING THE BENEFICIARY

      11.01 No Suits by Beneficiary. No Beneficiary shall have any right by
virtue of any provision of this Agreement to institute any action or proceeding
at law or in equity against any party other than the Trustee upon or under or
with respect to the Trust Assets.

      11.02 Requirement of Undertaking. The Trustee may request the Bankruptcy
Court to require, in any suit for the enforcement of any right or remedy under
this Agreement, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, including reasonable attorneys' fees,
against any party litigant in such suit; provided, however, that the provisions
of this Section 11.02 shall not apply to any suit by the Trustee.

                                  ARTICLE XII
                                  JURISDICTION

      The parties agree that the Bankruptcy Court shall have jurisdiction over
the Trust, the Trustee, the GHR/Kenesis Actions and the remaining Trust Assets,
including, without limitation, jurisdiction to determine all controversies and
disputes arising under or in connection with this Agreement. Nevertheless, the
Trustee shall have power and authority to bring any action in any court of
competent jurisdiction to prosecute the GHR/Kenesis Actions.

                                  ARTICLE XIII
                            MISCELLANEOUS PROVISIONS

      13.01 Construction. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware and the United States of
America; provided that the Trust and any interpretation or enforcement of the
provisions of this Agreement shall be subject to the jurisdiction of the
Bankruptcy Court as contemplated by Article XII hereof. The Trustee's
interpretation of the provisions of this Agreement and the provisions of the
Plan as they relate to the prosecution of the GHR/Kenesis Actions shall be
deemed conclusive in the absence of a contrary interpretation of the Bankruptcy
Court.


                                       11
<PAGE>

                                                           EXHIBIT I TO THE PLAN


      13.02 Severability. In the event any provision of this Agreement or the
application thereof to any person or circumstances shall be determined by Final
Order of a court of proper jurisdiction to be invalid or unenforceable to any
extent, the remainder of this Agreement or the application of such provision to
persons or circumstances or in jurisdictions other than those as to or in which
it is held invalid or unenforceable, shall not be affected thereby, and each
provision of this Agreement shall be valid and enforced to the fullest extent
permitted by law.

      13.03 Cooperation. Reorganized Congoleum shall provide the Trustee, at no
cost to the Trustee, the Trust or the Beneficiary, with such access to its
books, records and employees as the Trustee may reasonably request for the
purpose of performing its duties and exercising its duties hereunder, including,
without limitation, to assist the Trustee in prosecuting the GHR/Kenesis
Actions.

      13.04 Notices. Any notice or other communication required or permitted to
be made in accordance with this Agreement shall be in writing and shall be
deemed to have been sufficiently given, for all purposes, if delivered
personally or by telex or other telegraphic means or mailed by first class mail:

            (i) if to the Trustee, to: [                    ].

            (ii) if to the Beneficiary, to: Howard N. Feist III, Congoleum
Corporation, 3500 Quakerbridge Road, P.O. Box 3127, Mercerville, New Jersey
08619 with a copy to Pillsbury Winthrop Shaw Pittman LLP, 1540 Broadway, New
York, New York 10036, Attn: Richard L. Epling, Esq.

            (iii) if to the Plan Trustees to: [                    ].

            (iv) if to the Futures Representative to: R. Scott Williams, Esq.,
Haskell Slaughter Young & Rediker, L.L.C., 2001 Park Place North, Suite 1400,
Birmingham, AL 35203 and Orrick, Herrington & Sutcliffe LLP, 3050 K Street,
N.W., Washington, DC 20007, Attn: Richard Wyron, Esq.

      13.05 Headings. The headings contained in this Agreement are solely for
convenience of reference and shall not affect the meaning or interpretation of
this Agreement or of any term or provision hereof.

      13.06 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.


                                       12
<PAGE>

                                                           Exhibit I to the Plan
                                                   "GHR/Kenesis Litigation Trust

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be duly executed by their respective officers and the
Trustee herein has executed this Agreement, as Trustee, effective as of the date
first above written.

                         The Trustee

                         By:  ________________________________________________
                              Name:
                              Title:


                         Congoleum Corporation

                         By:  ________________________________________________
                              Name:
                              Title:


                         Congoleum Sales, Inc.

                         By:  ________________________________________________
                              Name:
                              Title:


                         Congoleum Fiscal, Inc.

                         By:  ________________________________________________
                              Name:
                              Title:


                         The Futures Representative

                         By:  ________________________________________________
                              Name:
                              Title:


                                       13
<PAGE>

                                                           EXHIBIT I TO THE PLAN


                         The Plan Trustees

                         By:  ________________________________________________
                              Name:
                              Title:

                         By:  ________________________________________________
                              Name:
                              Title:

                         By:  ________________________________________________
                              Name:
                              Title:


                                       14