Exhibit 99.5








AMENDED
AND RESTATED


SETTLEMENT
AGREEMENT AND RELEASE




This Amended and Restated Settlement Agreement and
Release is made as of this 18th day of January, 2008, by and between CONGOLEUM
CORPORATION,on its own behalf and on
behalf of all “Persons” (as defined herein) within the definition of“Congoleum”(as defined herein), and upon its creation, the Plan
Trust, on the one part, and MT. MCKINLEY INSURANCE COMPANY and EVEREST
REINSURANCE COMPANY(“Mt.
McKinley and Everest”as defined herein),
on the other part.




WITNESSETH:




WHEREAS, Mt. McKinley and Everest issued the Subject
Policies (as defined herein) to Congoleum Corporation; and




WHEREAS, Persons within the definition of Congoleum have
incurred and may incur in the future certain liabilities, expenses and losses
arising out of various Claims (as defined herein), including asbestos-related
bodily injury claims, other asbestos-related claims, environmental claims and/or
other types of claims; and




WHEREAS, Congoleum asserts that Mt. McKinley and Everest
are obligated under the Subject Policies to make liability payments and pay
defense costs in connection with Claims, including Claims for asbestos-related
bodily injury; and




WHEREAS, there are disputes among the Parties regarding
their respective rights and obligations with respect to insurance coverage for
asbestos-related bodily injury claims and environmental claims (the“Coverage
Dispute”); and




WHEREAS, the Coverage Dispute is the subject of a
lawsuit styledCongoleum
Corporation v. ACE American Insurance Company, et al., Docket No. MID-L-8908-01







pending in the Superior Court of New Jersey, Law
Division, Middlesex County (the“Coverage
Action”); and




WHEREAS, on or about December 31, 2003, Congoleum
Corporation, Congoleum Sales, Inc. and Congoleum Fiscal, Inc. (collectively, the“Debtors”) filed petitions under Chapter 11 of the Bankruptcy
Code (collectively, the“Chapter
11 Cases”) in the United States Bankruptcy
Court for the District of New Jersey (the“Bankruptcy
Court”), and continue to operate as
debtors-in-possession; and




WHEREAS, on or about October 23, 2006, the 11th Modified
Joint Plan of Reorganization (the“11th
Modified Plan”) was filed in the Bankruptcy
Court; and




WHEREAS, in consideration of certain monetary payments
and other considerations, Congoleum, Mt. McKinley and Everest, on or about
September 30, 2005, entered into the Confidential Settlement Agreement and
Release (“Settlement
Agreement”), which was approved by a Final
Order of the Bankruptcy Court; and




WHEREAS, Congoleum, Mt. McKinley and Everest, pursuant
to the terms of the Settlement Agreement, entered into the Escrow Agreement (as
defined herein); and




WHEREAS, Mt. McKinley and Everest, pursuant to the terms
of the Settlement Agreement, paid the Settlement Amount (as defined herein) to
the Escrow Agent (as defined herein), which amount is currently being held by
the Escrow Agent pursuant to the terms of the Escrow Agreement;
and




WHEREAS, the Parties desire to amend the provisions of
the Settlement Agreement, by, among other things (i) eliminating the sunset
provision pursuant to which Congoleum, Mt. McKinley and Everest, in certain
circumstances, may terminate the Settlement Agreement; (ii) causing the Escrow
Agent to pay to Mt. McKinley and Everest all interest




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and other income earned in the Escrow Account, net of
all applicable fees, taxes and expenses; (iii) restructuring the Settlement
Agreement as a sale and buyback of the Subject Policies pursuant to Section
363(f) of the Bankruptcy Code, supplemented by a Section 105 injunction; (iv)
eliminating the condition precedent of the Confirmation Order (as defined
herein); and (v) modifying the terms of the Settlement Agreement as further set
forth herein; and




WHEREAS, the Parties intend to incorporate the desired
amendments into the Settlement Agreement by restating the Settlement Agreement
in the form and substance of this Amended and Restated Agreement (as defined
herein);




WHEREAS, the Parties intend that the Settlement
Agreement will continue in full force and effect in accordance with its terms
until the order approving this Amended and Restated Agreement becomes a Final
Order, at which time this Amended and Restated Agreement shall supersede and
replace the Settlement Agreement in its entirety; and




WHEREAS, the Asbestos Claimants’ Committee (as defined
herein) and the FCR (as defined herein) participated in the negotiations leading
to this Amended and Restated Agreement, consent to the Parties entering into
this Amended and Restated Agreement, and agree to be bound solely with respect
to those terms that relate specifically to the Asbestos Claimants’ Committee and
the FCR.




NOW, THEREFORE, in consideration of the foregoing and of
the mutual agreements contained herein, and intending to be legally bound
hereby, the undersigned hereby agree as follows:




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ARTICLE
I -- DEFINITIONS




For purposes of this Amended and Restated Agreement and
the attachments hereto, the following definitions apply to the capitalized terms
herein wherever those terms appear in this Amended and Restated Agreement,
including the prefatory paragraph, the recitals, the sections below and the
attachments hereto.  Each defined term stated in the singular shall
include the plural, and each defined term stated in the plural shall include the
singular, and each defined term stated in the masculine, feminine or neuter form
shall include the others.  The words “includes” and “including” mean
“including but not limited to.”




1.1           “Amended
and Restated Agreement”means this Amended
and Restated Settlement Agreement and Release, as it may be amended from time to
time in accordance with its terms.




1.2           “Approval
Order”means an order of the Bankruptcy
Court (or the U.S. District Court for the District of New Jersey exercising its
original bankruptcy jurisdiction) approving this Amended and Restated Agreement,
the compromise and settlement memorialized herein, and the sale and buyback of
the Subject Policies between Congoleum and Mt. McKinley and Everest, which order
shall be in the form and substance ofAttachment
Ahereto, or such other order that is in a
form and substance acceptable to Congoleum, Mt. McKinley and
Everest.




1.3           “Asbestos
Channeling Injunction”shall have the
meaning provided in Section 8.2.




1.4           “Asbestos
Claims”means any and all past, present and
future claims, demands, actions, suits, proceedings, notices of partial or total
responsibility, whether presently known or unknown, that seek compensatory,
punitive or statutory damages,




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declaratory judgment, injunctive relief, medical
monitoring, or any other form of relief whatsoever, on account of alleged bodily
injury, personal injury, fear of future injury, medical monitoring, mental
injury or anguish, emotional distress, shock, sickness, disease, or any other
illness or condition, death, property damage, loss of use of property, or
diminution in the value of property, arising from alleged, potential or actual
exposure of any type or nature whatsoever to asbestos, an asbestos-containing
product, and/or any other substance, product, matter or material in any form or
state that contains or is alleged to contain asbestos, either alone or in
combination with any other substance.  The term “Asbestos Claims” also
includes claims or suits alleging in whole or in part exposure to asbestos
and/or asbestos containing products in addition to any other substance,
chemical, pollutant, waste, or material of any nature as well as claims that
involve, in whole or in part, alleged exposure to asbestos or
asbestos-containing products relating to or arising out of or from the
installation, removal, manufacture, distribution, sale, re-sale, existence or
presence (whether on premises owned or controlled by Congoleum or otherwise) of
asbestos or an asbestos-containing product, either alone or in combination with
any other substance.




1.5           “Asbestos
Claimants’ Committee”means the Official
Committee of Unsecured Asbestos Claimants initially appointed by the United
States Trustee in the Chapter 11 Cases on or about April 21,
2004.




1.6           “Business
Day”means any day that is not a Saturday,
a Sunday or a federal holiday in the United States of
America.




1.7           “Claim”means any of the following: (i) “claim” as that term is
defined in the United States Bankruptcy Code, 11 U.S.C. § 101(5); (ii) “demand”
as that term is defined in the United States Bankruptcy Code, 11 U.S.C. §
524(g)(5); or (iii) any claim, whether




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past, present or future, known or unknown, asserted or
unasserted, foreseen or unforeseen, fixed or contingent, or direct or indirect,
and whether in law, equity, admiralty or otherwise, including an Asbestos
Claim.  The term “Claim” includes any claim (i) arising out of,
related to, or involving asbestos or any other substance, product, matter or
material in any form or state, any cumulative or other injury or damage, any
activity, operation, premises, or exposure or any alleged bad faith, unfair
claim practices, unfair trade practices, deceptive trade practices, insurance
code violations, fraud, misrepresentation, non-disclosure, breach of fiduciary
duty, conspiracy, or extra-contractual or tort liability; (ii) for any form of
damages, indemnity or defense obligations, insurance premiums (whether
retrospectively rated or otherwise), deductibles, self-insured retentions,
costs, expenses, contribution or subrogation; (iii) pursuant to or under a
contract, other agreement, promise, representation or warranty; or (iv) pursuant
to any directaction(including
any claim by any Person who is not an insured under the Subject Policies seeking
any type of relief under the laws of any jurisdiction that gives such person a
direct cause of action against an insurer) orstatutory or regulatory right of action, assertion of
right, complaint, cross-complaint, counterclaim, affirmative defense, writ,
demand, inquiry, request, suit, lawsuit, liability, action, cause of action,
administrative proceeding, governmental action, order, judgment, settlement,
lien, loss, cost or expense.




1.8           “Confirmation
Order”means an order entered by the
Bankruptcy Court in the Chapter 11 Cases confirming the Plan, together with any
order of the United States District Court issued, pursuant tothe Bankruptcy Code, confirming or affirming such
order.




1.9           “Congoleum”means:




(a)           The corporation now named Congoleum Corporation that was
incorporated in the State of Delaware in 1986;




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(b)           All present subsidiaries of Congoleum Corporation,
including Congoleum Sales, Inc., and Congoleum Fiscal, Inc., and any other
Persons in which Congoleum Corporation has an ownership interest, directly or
indirectly, of fifty percent (50%) or more, and any other Persons on whose
behalf Congoleum Corporation has the power and authority to release Claims under
the Subject Policies;




(c)           Any Persons that have been acquired by, merged into or
combined with any of the Persons identified in Sections 1.9(a) and (b)
above;




(d)           Congoleum Corporation’s predecessors, successors, past,
present and future assigns, joint ventures, affiliates other than American
Biltrite Inc., all of Congoleum Corporation’s past subsidiaries and the
predecessors, successors and past and present assigns of such past subsidiaries;provided,however, that, as to each of the foregoing, Congoleum
Corporation has the power and authority to release Claims under the Subject
Policies on their behalf;




(e)           Any and all Persons named as insureds, other insureds,
or otherwise insured or claimed to be insured under the Subject Policies;provided,however, that, as to each of the foregoing, Congoleum
Corporation has the power and authority to release Claims under the Subject
Policies on their behalf;




(f)           Congoleum Sales, Inc. and Congoleum Fiscal,
Inc.,
Debtors and Debtors-In-Possession;




(g)           American Biltrite Inc., solely to the extent that it
seeks coverage under insurance policies issued by Mt. McKinley and/or Everest to
Congoleum Corporation; and




(h)           The directors, officers, agents, employees,
representatives and attorneys of any of the foregoing Persons, solely in their
respective capacities as such.




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1.10           “Escrow
Account”means the escrow account
established pursuant to the Escrow Agreement.




1.11           “Escrow
Agent”means the Escrow Agent as defined in
the Escrow Agreement.




1.12           “Escrow
Agreement”means the escrow agreement
entered into by Congoleum, Mt. McKinley and Everest, and the Escrow
Agent.




1.13           “FCR”means the Futures Representative appointed pursuant to
the Bankruptcy Court’s February 18, 2004 Order in the Chapter 11 Cases, solely
in his capacity as such.




1.14           “Final
Order”means an order or judgment of the
Bankruptcy Court or other court of competent jurisdiction,as to whichno appeal,petition for
certiorari, orother
proceedings for reargument, rehearing or reconsideration have been sought and
are pending and the timefor such
appeal orreview,
rehearing, reconsideration, or certiorari has expired; provided,
however, that this provision may be modified by agreement of all the
Parties.




1.15           “Injunction
Claim”shall have the meaning provided in
Section 7.1.




1.16           “Interests”means all liens, Claims, encumbrances, interests and
other rights of any nature, whether at law or in equity.




1.17           “Mt.
McKinley and Everest”means both Mt.
McKinley and Everest, collectively and individually.




“Mt.
McKinley”means Mt. McKinley Insurance
Company, formerly known as Gibraltar Casualty Company, all of its corporate
predecessors, and all of their former or current corporate parents, subsidiaries
and affiliates, and their respective directors, officers, employees, agents,
partners, representatives, attorneys, joint venturers and assigns, solely in
their respective capacities as such.




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“Everest”means  Everest Reinsurance Company, formerly known
as Prudential Reinsurance Company, all of its corporate predecessors, and all of
their former or current corporate parents, subsidiaries and affiliates, and
their respective directors, officers, employees, agents, partners,
representatives, attorneys, joint venturers and assigns, solely in their
respective capacities as such.




1.18           “Parties”mean Congoleum, Mt. McKinley and Everest, and, upon the
later of its formation and the occurrence of the effective date of the Plan (as
defined herein), the Plan Trust.




1.19           “Person”means an individual, a corporation, a partnership, a
joint venture, an association, a trust, any other entity or organization, and
any federal, state or local government or any governmental or quasi-governmental
body or political subdivision, or any agency, department, board or
instrumentality thereof.




1.20           “Plan”means (i) the 11th Modified Plan, as such plan may be
further amended or modified from time to time;(ii) any plan of
reorganization or liquidation of which Congoleum is a proponent or co-proponent;
or (iii) any plan of reorganization proposed by the FCR.




1.21           “Plan
Trust”means the trust established under
the Plan, pursuant to Section 524(g) and/or 105 of the Bankruptcy Code and the
Confirmation Order, for the payment of, and into which shall be channeled, all
Asbestos Claims against Congoleum and certain of its
insurers.




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1.22           “Prior
Payments”shall have the meaning provided
in Section 2.4.




1.23           “Sale
Injunction”shall have the meaning provided
in Section 7.1.




1.24           “Settlement
Amount”means the sum of Twenty-One Million
Five Hundred Thousand United States dollars (US
$21,500,000).




1.25           “Settling
Parties”shall have the meaning provided in
Section 14.1.




1.26           “Subject
Policies”means: (i) all insurance policies
at issue in the Coverage Action, listed inAttachment
Bhereto; and (ii) all known and unknown
policies issued or allegedly issued by Mt. McKinley and Everest to
Congoleum.




1.27           “Trigger
Date”means the day on which the Approval
Order becomes a Final Order and the funds in the Escrow Account are released
pursuant to Section 2.2.




ARTICLE
II -- SETTLEMENT AMOUNT




2.1           TheSettlingParties acknowledge that Mt.
McKinley and Everest have previously paid the Settlement Amount into the Escrow
Account by wire transfer, and that the Settlement Amount is being held by the
Escrow Agent pursuant to the terms of the Escrow Agreement.




2.2           Within ten (10) Business Days after the Approval Order
becomes a Final Order, CongoleumandMt. McKinley and Everest shall jointly
direct the Escrow Agent to release the Settlement Amount and any interest or
income accrued thereon as follows:




(a)           To Congoleum Corporation (or as may be otherwise
directed by theBankruptcy Court in the
Approval Order), the Settlement Amount in full, exclusive of any interest or
income accrued thereon; and




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(b)           To Mt. McKinley and Everest, all interest or income
accrued on the Settlement Amount, less any expenses of, or incurred by, the
Escrow Agent pursuant to the Escrow Agreement, including fees, taxes and
indemnities.




2.3           Upon the release of the Settlement Amount and the
interest or income accrued thereon pursuant to Section 2.2, legal and equitable
title to the Settlement Amount shall pass irrevocably to Congoleum (or to such
other Person as is directed by the Bankruptcy Court in the Approval Order), and
legal and equitable title to the net interest or income on the Settlement Amount
shall pass irrevocably to Mt. McKinley and Everest.




2.4           The Settlement Amount is in addition to any and all
amounts paid prior to the date of the Settlement Agreement by or on behalf of
Mt. McKinley and Everest to or for the benefit of Congoleum in connection
with Asbestos Claims or otherwise (collectively, the“Prior
Payments”).  Any and all payments
by Mt. McKinley and Everest, including the Prior Payments (if any) and the
Settlement Amount are deemed final and irrevocable payments upon the occurrence
of the Trigger Date.  Mt. McKinley’s and Everest’s payment of the
Settlement Amount is in addition to any and all payments made by Mt. McKinley
and Everest to or for the benefit of Congoleum prior to the date ofthe
SettlementAgreement, including any Prior
Payments.




2.5           The
Settlement Amount shall be held by Congoleum until the earlier of confirmation
of the Plan or the dismissal or conversion of the Chapter 11 cases; and shall be
used only in connection with the payment of Asbestos Claims and/or to pay any
other amounts payable by the Plan Trust pursuant to the Plan or the Confirmation
Order.




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ARTICLE
III -- SALE AND BUYBACK OF THE SUBJECT POLICIES




3.1           Effectiveupon the Trigger Date, and without the need for any
further action, Congoleum shall be deemed to have sold, conveyed, assigned,
transferred and delivered to Mt. McKinley and Everest, and Mt. McKinley and
Everest shall be deemed to have purchased from Congoleum, all rights, title andInterestsof Congoleum in and under the Subject Policies, free
and clear of all Interests of all Persons pursuant to Section 363(f)and (h) of
the Bankruptcy Code and the Approval Order.




ARTICLE
IV -- RELEASES BY CONGOLEUM


AND
THE PLAN TRUST




4.1           Effective upon the Trigger Date, and except for the
rights and obligations created by this Amended and Restated Agreement, Congoleum
and, upon the later of its formation and the effective date of the Plan, the
Plan Trust shall be deemed to release, remise, covenant not to sue and forever
discharge Mt. McKinley and Everest from and against all manner of actions,
causes of action, suits, debts, accounts, promises, warranties, damages
(consequential or punitive), agreements, costs, expensesandInterests
whatsoever, in law or in equity, whether presently known or unknown, asserted or
unasserted, whether sounding in tort or in contract, or arising under the
statutes or administrative regulations of any jurisdiction, with respect to any
and all past, present or future Claims, of any type whatsoever, that Congoleum
ever had, now has, or hereafter may have (i) for insurance coverage, including
both defense costs and indemnification claims, under the Subject Policies;
(ii) arising out of or relating to any act, omission, representation, or
conduct of any sort in connection with any of the Subject Policies, including
the issuance of the Subject Policies and the handling of any claim thereunder;
(iii) arising out of or in connection with any agreements between or among
the Parties relating to the Subject Policies and/or the Coverage Action, other
than this Amended and Restated Agreement; and/or (iv) arising under or relating
in any way to the Subject Policies.




12


4.2           Effective on the Trigger Date, the Parties shall have
been deemed (i) to terminate any and all obligations whatsoever of
Mt. McKinley and Everesttoany Person,
including Congoleum and the Plan Trust arising under or relating to the Subject
Policies;(ii) to exhaust all limits
of liability, including all occurrence and aggregate limits of the Subject
Policies; and (iii) to constitute a “policy buyback” fully and finally
extinguishing and exhausting all rights, duties, limits and coverage under the
Subject Policies as if they were never issued.  The Parties agree that
the Subject Policies are rescinded as of the Trigger Date.  If any
Person inquires after the Trigger Date regarding exhaustion of the Subject
Policies, Congoleum, and Mt. McKinley and Everest,and, upon the later of its formation and the effective
date of the Plan, the Plan Trust, shall represent that all limits of liability
of the Subject Policies have been exhausted or are no longer
available.  It is the intention of Congoleum to reserve no rights or
benefits whatsoever under the Subject Policies or in connection with any past,
present or future Claims under the Subject Policies, and to assure Mt. McKinley
and Everest their peace and freedom from such Claims and from all assertions of
rights in connection with such Claims.




4.3           Effective upon the Trigger Date, any and all rights,
duties, responsibilities and obligations of Mt. McKinley and Everest created by
or in connection with the Subject Policies are terminated.  As of the
Trigger Date, Congoleum, and, upon the later of its formation and the effective
date of the Plan, the Plan Trust, shall no longer have any insurance coverage
from Mt. McKinley and Everest under the Subject Policies.  The
releases contained in this Article IV are intended to operate as though
Mt. McKinley and Everest had never issued the Subject
Policies.




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4.4           CONGOLEUM ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY ITS
ATTORNEYS CONCERNING, AND IS FAMILIAR WITH, THE CALIFORNIA CIVIL CODE SECTION
1542 AND EXPRESSLY WAIVES ANY AND ALL RIGHTS UNDER CALIFORNIA CIVIL CODE SECTION
1542, WHICH PROVIDES THAT “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR,” AND UNDER ANY OTHER FEDERAL OR
STATE STATUTE OR LAW OF SIMILAR EFFECT.




4.5           Congoleum expressly assumes the risk that acts,
omissions, matters, causes or things may have occurred that they do not know or
do not suspect to exist.  Congoleum hereby waives the terms and
provisions of any statute, rule or doctrine of common law that
either:  (i) narrowly construes releases purporting by their terms to
release claims in whole or in part based upon, arising from, or related to such
acts, omissions, matters, causes or things; or (ii) restricts or prohibits the
releasing of such Claims.




ARTICLE
V -- RELEASES BY MT. MCKINLEY AND EVEREST




5.1           Effective upon the Trigger Date, and except for the
rights and obligations created by this Amended and Restated Agreement, Mt.
McKinley and Everest, and any subsequently appointed trustee or representative
acting for Mt. McKinley and/or Everest, shall be deemed to release, remise,
covenant not to sue and forever discharge Congoleumfrom and against all manner of actions, causes of
action, suits, debts, accounts, promises, warranties, damages (consequential or
punitive), agreements, costs, expenses, and Interests




14


whatsoever, in law or in equity, whether presently known
or unknown, asserted or unasserted, whether sounding in tort or in contract, or
arising under the statutes or administrative regulations of any jurisdiction,
with respect to any and all past, present or future Claims, of any type
whatsoever, that either of Mt. McKinley or Everest ever had, now has, or
hereinafter may have (i) arising out of or relating to any act, omission,
representation, or conduct of any sort in connection with any of the Subject
Policies, including the issuance of the Subject Policies and the handling of any
claim thereunder; (ii) arising out of or in connection with any agreements
between or among the Parties relating to the Subject Policies and/or the
Coverage Action, other than this Amended and Restated Agreement; and/or (iii)
arising under or relating in any way to the Subject
Policies.




5.2           Effective upon the Trigger Date, any and all rights,
duties, responsibilities and obligations of Congoleum created by or in
connection with the Subject Policies are hereby terminated.  As of the
Trigger Date, Congoleum shall no longer have any insurance coverage from Mt.
McKinley and Everest under the Subject Policies.  The releases
contained in this Article V are intended to operate as though Mt. McKinley
and Everest had never issued the Subject Policies.




5.3           MT. MCKINLEY AND EVEREST ACKNOWLEDGE THAT THEY HAVE BEEN
ADVISED BY THEIR ATTORNEYS CONCERNING, AND ARE FAMILIAR WITH, THE CALIFORNIA
CIVIL CODE SECTION 1542 AND EXPRESSLY WAIVE ANY AND ALL RIGHTS UNDER CALIFORNIA
CIVIL CODE SECTION 1542, WHICH PROVIDES THAT “A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR,” AND UNDER ANY
OTHER FEDERAL OR STATE STATUTE OR LAW OF SIMILAR EFFECT.




15


5.4           Mt. McKinley and Everest expressly assume the risk that
acts, omissions, matters, causes or things may have occurred that they do not
know or do not suspect to exist.  Mt. McKinley and Everest hereby
waive the terms and provisions of any statute, rule or doctrine of common law
that either:  (i) narrowly construes releases purporting by their
terms to release Claims in whole or in part based upon, arising from, or related
to such acts, omissions, matters, causes or things; or (ii) restricts or
prohibits the releasing of such Claims.




5.5           It is the intention of Mt. McKinley and Everest to
reserve no rights or benefits whatsoever under or in connection with the Subject
Policies, with respect to any past, present or future Claims, and to assure
Congoleumpeace and freedom from all such
Claims and from all assertions of rights in connection with such
Claims.




5.6           Effective upon the Trigger Date, and except for the
rights and obligations created by this Amended and Restated Agreement, Mt.
McKinley and Everest shall be deemed to release, remise and forever discharge,
any Claims that were or could have been brought in the Chapter 11 Cases,
including any Claim for substantial contribution.




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ARTICLE
VI - ACKNOWLEDGEMENT AND CONSENT TO


RELEASES
BY FCR ANDASBESTOS CLAIMANTS’COMMITTEE




6.1           The FCR andtheAsbestos
Claimants’Committee
acknowledge andconsent to
the releases providedby Congoleumin Article
IVof this
Amended and Restated Agreement.




ARTICLE
VII -- DEFENSE OF SALE INJUNCTION




7.1           Subject to the provisions of Section 7.4 below, in the
event that any Claim is brought against Mt. McKinley and Everest that is (i)
subject to the Section 105 Injunction issued by the Bankruptcy Court in
connection with the Approval Order; or (ii) is a Claim relating to or arising
out of the Subject Policies,whichSubject Policies were sold free andclearof such
Claimspursuant to Section 363(f) of the
Bankruptcy Code (the “Injunction
Claim”), Congoleum (prior to the effective
date of the Plan) and the Plan Trust (on and after the effective date of the
Plan) shall use their reasonable best efforts to establish that such Injunction
Claim is enjoined as to Mt. McKinley and Everest by operation of the
Approval Order and/or the Section 105 Injunction (“Sale
Injunction”).  To that end,Congoleum (prior to the effective date of
the Plan) and the Plan Trust (on and after the effective date of the Plan), at
their respective expense but subject to the provisions of Section 7.4, shall
defend the application of the Sale Injunction to any Injunction Claim asserted
against Mt. McKinley and Everest.




7.2           In the event that Congoleum or the Plan Trust is
precluded by an order of any court of competent jurisdiction from defending the
application of the Sale Injunction to any Injunction Claim asserted against Mt.
McKinley and Everest,Congoleum or the Plan
Trust (as the case may be) shall reimburse Mt. McKinley and Everest, subject to
the




17


provisions of Section 7.4 below, for the reasonable
costs they incur in defending the Sale Injunction;provided,however, that Congoleum and the Plan Trust shall have no
obligation to pay any internal costs of Mt. McKinley and Everest (including
costs associated with the time or expenses of Mt. McKinley’s and Everest’s
employees).  For the avoidance of doubt, other than the obligation
provided in Section 7.1, Congoleum and the Plan Trust have no
obligation:




(a)           To defend any Claim against Mt. McKinley and Everest
with respect to any issue, including the application of any defense to insurance
coverage or to any tort liability; or




(b)           To indemnify Mt. McKinley and Everest to any extent for
any Claims, whether for defense costs, expenses, judgments, settlements, or
otherwise.




7.3           Within fifteen (15) Business Days of receipt of any
demand, notice, summons or other process received by Mt. McKinley or Everest in
connection with any Claim that Mt. McKinley or Everest believes is subject to
the Sale Injunction, Mt. McKinley or Everest (as the case may be) shall
forward such demand, notice, summons or other process to Congoleum or the Plan
Trust (as the case may be).  Congoleum or the Plan Trust (as the case
may be) shall notify Mt. McKinley or Everest in writing within fifteen (15)
Business Days of receipt of notice of such Claim from Mt. McKinley or Everest
whether it agrees that such Claim triggers the defense obligations pursuant to
Section 7.1.  In the event that there is a dispute whether a Claim
triggers the defense obligations pursuant to Section 7.1, Congoleum or the Plan
Trust (as the case may be) and Mt. McKinley or Everest (as the case may be)
shall meet and confer to attempt to resolve any such dispute.  If they
are unable to resolve such dispute by meeting and conferring, they may litigate
before the Bankruptcy




18


Court (or, if the Bankruptcy Court refuses to exercise
jurisdiction, before any court of competent jurisdiction) whether the Claim at
issue triggers the defense obligations pursuant to Section 7.1.  While
such dispute remains unresolved, Mt. McKinley or Everest has the right to defend
the Sale Injunction as they deem appropriate.  Mt. McKinley and
Everest shall cooperate reasonably with Congoleum and the Plan Trust with
respect to the obligations provided in this
Article VII.




7.4           Notwithstanding anything to the contrary in this Article
VII, the collective obligations of Congoleum and the Plan Trust under Sections
7.1 and 7.2 shall not, in any event, exceed an aggregate of Five Hundred
Thousand dollars ($500,000.00), inclusive of attorneys’ fees, expenses,
settlements and judgments incurred in connection with the defense of Injunction
Claims brought against Mt. McKinley and Everest, and/or any similar claims
brought against any other insurer with which Congoleum has obtained a settlement
pursuant to a sale and buyback of any insurance policies under Section 363(f) of
the Bankruptcy Code.




ARTICLE
VIII -- ASBESTOS CHANNELING INJUNCTION




8.1           Congoleum shall use its reasonable best efforts to
confirm the 11th Modified Plan, as such plan may be further amended or modified
from time to time, orany plan of
reorganization or liquidation of which Congoleum is a proponent or
co-proponent;provided,however, that the confirmation of the Plan is not a condition
or requirement of this Amended and Restated Agreement.




8.2           Congoleum shall use its reasonable best efforts to
include in the 11th Modified Plan, as such plan may be further amended or
modified from time to time, orany plan of
reorganization or liquidation of which Congoleum is a proponent or
co-proponent,and/or the Confirmation Order in respect of such plan an
injunction against Asbestos Claims




19


pursuant to, and to the fullest extent permitted by,
Section 524(g) of the Bankruptcy Code (the“Asbestos
Channeling Injunction”);provided,however, that the inclusion in the such plan and/or the
Confirmation Order of the Asbestos Channeling Injunction is not a condition or
requirement of this Amended and Restated Agreement.  The FCR shall use
his reasonable best efforts to include in any plan proposed by the
FCRand/or the Confirmation Order in respect of such plan
the Asbestos Channeling Injunction;provided,however, that the inclusion in such plan and/or the
Confirmation Order of the Asbestos Channeling Injunction is not a condition or
requirement of this Amended and Restated Agreement.




8.3           In the event that the Plan is confirmed and it includes
the Asbestos Channeling Injunction, Mt. McKinley and Everest, automatically and
without any further action, shall be entitled to, and shall be protected by, the
Asbestos Channeling Injunction to the same extent that other settling insurers
are protected by the Asbestos Channeling Injunction pursuant to the terms of the
Plan, and, subject to Section 8.4, the Plan Trust will use its reasonable best
efforts to ensure that Mt. McKinley and Everest are protected by the Asbestos
Channeling Injunction to the same extent that other settling insurers are
protected by the Asbestos Channeling Injunction in accordance with the terms of
the Plan.




8.4           In the event that, after the effective date of the Plan,
any Asbestos Claim is brought against Mt. McKinley or Everest that is subject to
the Asbestos Channeling Injunction, the Plan Trust shall use its reasonable best
efforts to establish that such Asbestos Claim is enjoined as to
Mt. McKinley and Everest by operation of the Asbestos Channeling
Injunction.  To that end, the Plan Trust shall defend the application
of the Asbestos




20


Channeling Injunction as to any Asbestos Claim asserted
against Mt. McKinley and Everest that is subject to the Asbestos Channeling
Injunction, subject to any limitations provided in the Plan or the Confirmation
Order;provided,however, that the obligation of the Plan Trust shall not, in
any event, exceed an aggregate of Three Million Six Hundred Thousand dollars
($3,600,000.00) incurred in connection with the defense of the Asbestos
Channeling Injunction for the benefit of all settling insurers (including Mt.
McKinley and Everest), inclusive of attorneys’ fee, expenses, settlements and
judgments.




ARTICLE
IX -- DISMISSAL OF COVERAGE ACTION




9.1           No later than three (3) Business Days after the Trigger
Date, Congoleum, Mt. McKinley and Everest shall submit a stipulation of
dismissal with prejudice with respect to the Claims, counterclaims or
cross-claims (if any) each asserted against the other in the Coverage
Action.  The Parties shall bear their own costs, expenses, and counsel
fees in the Coverage Action.  Nothing herein shall prevent Congoleum
from recovering its costs, expenses and counsel fees in the Coverage Action from
any Person other than Mt. McKinley and Everest.




ARTICLE
      X -- BANKRUPTCY OBLIGATIONS




10.1           No later than ten (10) Business Days after the date of
this Amended and Restated Agreement, Congoleum shall file a motion with the
Bankruptcy Court, pursuant to Sections 105 and 363(f) of the Bankruptcy Code,
and Federal Rule of Bankruptcy Procedure 9019, seeking entry of the ApprovalOrder, which
motion shall be in a form and substance reasonably satisfactory to Mt. McKinley
and Everest.  Mt. McKinley and
Everest shall use their reasonable best efforts to support Congoleum’s efforts
to obtain the Approval Order.




21


10.2           Congoleum, the Asbestos Claimants’ Committee and the FCR
shall not include any provision in the Plan that materially and adversely
affects the rights and obligations of Mt. McKinley and Everest under this
Amended and Restated Agreement.




10.3           On and after the Trigger Date, Mt. McKinley and Everest
shall not cooperate with any defendant in the Coverage
Action.




10.4           On and after the Trigger Date, Mt. McKinley and Everest
shall cease their participation in any and all objections they have made to the
Plan and/or to any findings or conclusions of law issued by or recommended by
the Bankruptcy Court, and any and all motions, Claims, and any appeals or
notices of appeal that they have filed or made in the Chapter 11 Cases; shall
not file any new objections to the Plan or appeal the Confirmation Order; shall
not pursue any Claims against Congoleum; shall withdraw their participation in
any and all outstanding discovery requests; and shall serve no new discovery
requests in the Chapter 11 Cases.




10.5           On and after the Trigger Date, Congoleum, the Plan
Trust, the FCR and the Asbestos Claimants’ Committee shall not serve any new
discovery in its confirmation proceeding upon Mt. McKinley and Everest; shall
not pursue any outstanding discovery against Mt. McKinley and Everest in
connection with the confirmation proceeding; and shall not seek to introduce
evidence in any way related to Mt. McKinley and Everest in either the
confirmation proceeding or the Coverage Action;provided,however, that Congoleum may seek to introduce as evidence (i)
only in the confirmation proceeding, this Amended and Restated Agreement and the
Settlement Amount to be paid hereunder; (ii) the policies of insurance
issued by Mt. McKinley and Everest to Congoleum; and (iii) such
portions of any documents or other materials that are not specific to
Mt. McKinley and




22


Everest and that do not characterize any act, decision,
obligation or position of Mt. McKinley and Everest or characterize the
terms and conditions of any of the Subject Policies.  Notwithstanding
anything to the contrary in this Section 10.5, Congoleum may seek to introduce
as evidence in the confirmation proceeding and/or the Coverage Action
communications with multiple entities that include Mt. McKinley and
Everest, but Congoleum will not characterize any act, decision, obligation or
position of Mt. McKinley and Everest.




10.6           Upon the later of its formation and the effective date
of the Plan, the Plan Trust (i) automatically and without need
for further action shall become a Party to thisAmended and
Restated Agreementwithout
limiting the obligations of Congoleum under this Agreement, and (ii)
automatically shall succeed to all the rights and be bound by all of the
obligations of the Debtors under thisAmended and
Restated Agreement without need for further action.




10.7           The Settling
Parties shall include in the Plan Trust Agreement as an obligation of the Plan
Trust, effective from its creation, that the Plan Trust shall be subject to and
bound by this Amended and Restated Agreement.




10.8           To the extent
that a Section 524(g) plan is confirmed, Congoleum and the Plan Trust shall not
seek to terminate, reduce, or limit the scope of the Asbestos Channeling
Injunction with respect to Mt. McKinley and Everest after the Confirmation Order
becomes a Final Order.




ARTICLE
XI -- EFFECTIVENESS OF


AMENDED
AND RESTATED AGREEMENT




11.1           This Amended and Restated Agreement is subject to, and
shall not become effective and binding unless and until the Approval Order
becomes a Final Order.




23


Immediately and automatically upon the Approval Order
becoming a Final Order, and without any need for further action (i) the
Settlement Agreement shall be amended and restated as provided in this Amended
and Restated Agreement; (ii) this Amended and Restated Agreement shall supersede
and replace the Settlement Agreement in its entirety; and (iii) this Amended and
Restated Agreement shall become effective and binding in accordance with its
terms.




11.2.                      This Amended and Restated Agreement shall be null and
void, and shall have no legal effect in the event that Congoleum’s motion for
the Approval Order is denied by an order of the Bankruptcy Court and such order
is not the subject of a timely appeal or timely motion for reargument, rehearing
or reconsideration,or, in the
event that an appeal, reargument, rehearing or reconsideration thereof has been
sought, such order shall have been affirmed by the highest court to which the
order was appealed, or from which reargument, rehearing or reconsideration was
sought, and the time to take any further appeal, or move for reargument,
rehearing or reconsideration shall have expired, and no such further appeal, or
motion for reargument, rehearing or reconsideration shall have been
filed.




11.3           In the event that this Amended and Restated Agreement is
null and void and has no legal effect as provided in Section 11.2, the
Settlement Agreement remains in full force and effect, and shall continue to be
valid and enforceable in accordance with its terms, and the rights and
obligations of the Parties under the Settlement Agreement, including the right
(if any) to terminate the Settlement Agreement, shall not be affected or
impaired by this Amended and Restated Agreement or by the Parties’ conduct in
entering into this Amended and Restated Agreement and seeking the Approval
Order.  In such event, it is the intention of the Parties that their
rights and obligations shall be as if this Amended and Restated Agreement had
never been formed.




24


ARTICLE
      XII -- JUDGMENT REDUCTION




12.1           In the event that another insurer of Congoleum brings a
claim for contribution, subrogation, indemnification, reimbursement or other
similar claim against Mt. McKinley and/or Everest in connection with Claims
released inthis Amended and Restated
Agreement, and such insurer obtains a final binding arbitration award or final
judgment against or a settlement with Mt. McKinley or Everest (with the consent
of Congoleum prior to the effective date of the Plan or with the consent of the
Plan Trust following said effective date, which consent in either case shall not
be unreasonably withheld), Congoleum or the Plan Trust (as the case may be)
shall voluntarily reduce the amount of any final binding arbitration award,
final judgment or settlement payment that it has obtained or may obtain from
such other insurer by the amount of such other insurer’s final binding
arbitration award or final judgment awarded against or settlement with Mt.
McKinley or Everest in connection with such contribution, subrogation,
indemnification or other similar claim, and shall direct that Mt. McKinley or
Everest (as the case may be) shall not be subject to liability for such
judgment, arbitration award or settlement.




12.2           Any reduction in judgment, arbitration award or
settlement will be accomplished by subtracting from the judgment, arbitration
award or settlement against the other insurer the share of the judgment,
arbitration award or settlement attributable to Mt. McKinley or Everest (as
the case may be).




25


ARTICLE
XIII -- SUBROGATION




13.1           Other than claims against Mt. McKinley’s and Everest’s
reinsurers or retrocessionaires, Mt. McKinley and Everest agree that they shall
not pursue subrogation, equitable indemnity, contribution, or reimbursement of
the Settlement Amount or any part thereof from any third party, including any
other primary or excess insurer of Congoleum or any other subscriber to any of
the Subject Policies.




13.2           Effective upon the Trigger Date and to the extent
permitted by law, Mt. McKinley and Everest, immediately and automatically,
and without any need for further action, hereby transfer and assign to Congoleum
all rights, claims, and causes of action relating to subrogation, reimbursement,
or contribution that Mt. McKinley and Everest may have, arising out of the
Settlement Amount paid hereunder;provided,however, that, if any third-party Person asserts any claim
against Mt. McKinley or Everest, Mt. McKinley or Everest shall be permitted to
pursue subrogation, equitable indemnity, contribution, or reimbursement of the
Settlement Amount or any part thereof from any such third-party Person in any
cross-claim, counter-claim or similar procedure.




13.3           The Parties agree that nothing in this Amended and
Restated Agreement shall limit the rights of Mt. McKinley and Everest to make
reinsurance claims and pursue their reinsurance recoveries (if
any).




ARTICLE
XIV -- CONFIDENTIALITY




14.1           Congoleum, Mt. McKinley, Everest, the FCR and the
Asbestos Claimants’ Committee (collectively, the“Settling
Parties”) each agrees that all matters
relating to the negotiation of this Amended and Restated Agreement shall be
confidential and are not to be disclosed except by order of a court of competent
jurisdiction or by written agreement of the Settling Parties except to the
extent that disclosure of matters relating to the negotiation of this matter is
necessary in connection with obtaining the Approval Order.




26


14.2           In the event that a private litigant, by way of document
request, interrogatory, subpoena, or questioning at deposition, trial, or other
proceeding attempts to compel disclosure of anything protected by Section 14.1,
the Settling Party from whom disclosure is sought shall decline to provide the
requested information on the ground that this Amended and Restated Agreement
prevents such disclosure.  In the event that such private litigant
seeks an order from any court or governmental body to compel such disclosure, or
in the event that a court, government official, or governmental body (other than
the Internal Revenue Service or the Securities and Exchange Commission) requests
or requires disclosure of anything protected by Section 14.1, the Settling Party
from whom disclosure is sought shall immediately give written notice by
facsimile or hand-delivery to the other Settling Parties, and shall immediately
provide copies of all notice papers, orders, requests or other documents in
order to allow each Settling Party to take such protective steps as may be
appropriate.  Notice shall be made to the Persons identified in
Section 15.12.




14.3           Material protected by Section 14.1 shall be deemed to
fall within the protection afforded to compromises and offers to compromise by
Rule 408 of the Federal Rules of Evidence and similar provisions of state law or
state court rules.




14.4           Nothing in this Amended and Restated Agreement shall
prevent any Settling Party from disclosing or releasing information regarding
the negotiation of this Amended and Restated Agreement in any form and at any
time after the date of said agreement to (i) reinsurers or
retrocessionaires of Mt. McKinley and Everest directly or through
intermediaries; (ii) outside auditors, attorneys or accountants of Congoleum,
Mt. McKinley and Everest; (iii) to the extent required by law, including,
to the extent applicable, to the Internal Revenue Service, the Securities and
Exchange Commission, or




27


other United States or other governmental authority that
properly requires disclosure by a Settling Party; (iv) to the extent and in any
form that such information is required to be disclosed or released to satisfy
reporting requirements imposed by law, including any Federal securities laws;
and (v) as necessary in connection with the approval of this Amended and
Restated Agreement by the Bankruptcy Court.




14.5           Notwithstanding anything to the contrary in this Article
XIV, Congoleum may issue a press release at any time following the filing of a
motion with the Bankruptcy Court seeking approval of this Amended and Restated
Agreement;provided,however, that Congoleum first provides Mt. McKinley and Everest
with a copy of the press release and obtains Mt. McKinley’s and Everest’s
consent to said press release (such consent to be provided promptly and not to
be unreasonably withheld).




ARTICLE
XV -- MISCELLANEOUS




15.1           Congoleumwill
undertake all reasonable actions to cooperate with Mt. McKinley and Everest in
connection with their reinsurers, including(at Mt.
McKinley’s and
Everest’s sole
expense with respect to services and or assistance provided by external
Congoleum vendors, and out-of-pocket expenses incurred by Congoleum) responding
to reasonable requests for information and
meeting with representatives of reinsurers.  Such cooperation shall
include providing Mt. McKinley’s and Everest’s representative, upon
reasonable request, access to all claim files maintained by Congoleum, including
all product exposure, medical, claim status, and payment records contained in
such files;provided,however, that Mt. McKinley and Everest shall have no
obligation to pay any internal costs of Congoleum (including costs associated
with time or expense of Congoleum’s employees or agents).




28


15.2           The Parties acknowledge and agree that: (i) the Amended
and Restated Agreement was bargained for and entered into in good faith and as
the result of arm’s-length negotiations; and (ii) the Amended and Restated
Agreement is based on their respective independent assessments, with the
assistance and advice of counsel, that the payments and other benefits to be
received by the Parties pursuant to this Amended and Restated Agreement
constitute a fair and reasonable settlement of the Parties’ claims against each
other and constitute reasonably equivalent value for the releases, indemnity,
and other benefits conveyed under this Amended and Restated
Agreement.




15.3           This Amended and Restated Agreement is not a contract of
insurance and is not subject to rules of construction governing contracts of
insurance, including the doctrine ofcontra
proferentem.  This Amended and
Restated Agreement is a compromise between the Parties, and shall not be
construed as an admission of coverage under the Subject Policies, nor shall it
or any provision thereof be construed as a waiver, modification or retraction of
the positions of the Parties with respect to the interpretation and application
of the Subject Policies.




15.4           This Amended and Restated Agreement is the product of
informed negotiations and involves compromises of the Parties’ previously stated
legal positions.  Accordingly, it does not reflect upon the Parties’
views as to rights and obligations with respect to matters or Persons outside
its scope.  This Amended and Restated Agreement is without prejudice
to positions taken by Mt. McKinley and Everest with regard to other insureds,
and without prejudice to positions taken by Congoleum, the FCR and the Asbestos
Claimants’ Committee with regard to other insurers.




29


15.5           This Amended and Restated Agreement is the
jointly-drafted product of arm’s-length negotiations between the Parties, the
Asbestos Claimants’ Committee and the FCR with the benefit of advice from
counsel, and the Parties, the Asbestos Claimants’ Committee and the FCR agree
that it shall be so construed.  As such, no Party will claim that any
ambiguity in this Amended and Restated Agreement shall be construed against the
other Party.




15.6           No change, amendment or modification of this Amended and
Restated Agreement shall be valid unless in writing and signed on behalf of
Congoleum, Mt. McKinley, Everest, the FCR and the Asbestos Claimants’
Committee (or their respective attorney-in-fact).




15.7           This Amended and Restated Agreement, including the
Attachments hereto, constitutes the entire agreement among the Parties with
respect to the subject matter hereof, and supersedes all discussions, agreements
and understandings, both written and oral, among the Parties with respect
hereto.




15.8           This Amended and Restated Agreement shall be governed
by, and shall be construed in accordance with, the laws of New Jersey without
regard to its choice of law rules.




15.9           There may be multiple originals of this Amended and
Restated Agreement, which may be executed in counterparts.  Facsimiles
or scanned versions of signatures of the undersigned shall be treated as
originals.




15.10         This Amended and Restated Agreement shall be binding, in
accordance with its terms, upon any subsequent trustee in the Chapter 11 Cases
and any successor to the FCR.




30


15.11         Upon the later of its formation and the occurrence of
the effective date of the Plan, the Plan Trust shall become a Party to this
Amended and Restated Agreement, automatically and without any further
action.




15.12         Unless another person is designated, in writing, for the
receipt of notices hereunder, notices to the undersigned shall be sent to the
following Persons;provided,however, that notices to the Plan Trust shall be sent to such
Person(s) as the Plan Trust designates in writing.







If to Congoleum:
            Covington & Burling LLP
              1201 Pennsylvania Avenue, N.W.
              Washington, D.C. 20004
              Attn: Mitchell F. Dolin, Esq.
              Michael
      St. Patrick Baxter, Esq.
              Phone: (202) 662-6000
              Fax: (202) 662-6291
              e-mail:mdolin@cov.com
              mbaxter@cov.com
              
              and
              
              Pillsbury Winthrop Shaw Pittman
      LLP
              1540 Broadway
              New York, NY 10036-4039
              Attn: Richard L. Epling, Esq.
              Kerry
      A. Brennan, Esq.
              Phone: (212) 858-1000
              Fax: (212) 858-1500
              e-mail:richard.epling@pillsburylaw.com
              kerry.brennan@pillsburylaw.com





31





With a copy to:
            Howard N. Feist III
              Congoleum Corporation
              57 River Street
              Wellesley, MA 02481-2097
              Phone: (781) 237-6655
              Fax: (781) 237-6880
              e-mail:sfeist@alumni.princeton.eduIf to Mt. McKinley and
    Everest:
            General Counsel
              EverestReinsurance
      Company
              Westgate Corporate Center
              477 Martinsville Road, P.O. Box
      830
              Liberty Comer, NJ 07938-0830
              Phone: (908) 604-3000
              Fax: (908) 604-3434





32





With a copy to:
            Fred L. Alvarez, Esq.
              Walker Wilcox Matousek LLP
              225 West Washington Street
              Chicago, IL  60606
              Phone: (312) 224-6748
              Fax: (312) 224-6700
              e-mail:falvarez@wwmlawyers.com
              
              and
              
              Kevin M. Haas, Esq.
              Cozen O’Connor
              1085 Raymond Boulevard, Suite
      1900
              Newark, NJ 07102
              Phone: (973) 286-1200
              Fax: (973) 242-2121
              e-mail:KHaas@cozen.com
              
              and
              
              David P. McClain, Esq.
              McClain& Patchin, P.C.
              711 Louisiana, Suite 3100
              South Tower, Pennzoil Place
              Houston, TX 77002
              Phone: (713) 654-8001
              Fax: (713) 6548818
              e-mail:mcclain@mcclainpatchin.comIf to the FCR:
            R. Scott Williams, Esq.
              Haskell / Slaughter
              1400 Park Place Tower
              2001 Park Place North
              Birmingham,
AL  35203
              Phone: 205-254-1435
              Fax: 205-324-1133
              e-mail:rsw@hsy.com


33





With a copy to:
            Orrick, Herrington & Sutcliffe,
      LLP
              Columbia Center
              1152 15th Street, NW
              Washington,
DC  20005
              Attn:  Jonathan P. Guy,
      Esq.
              Richard
      H. Wyron, Esq.
              Phone:  202-339-8516
              Fax:  202-339-8500
              email:jguy@orrick.com
              rwyron@orrick.comIf to the Asbestos Claimants’
      Committee:
            c/o Peter Van N. Lockwood,
Esq.
              Ronald E. Reinsel, Esq.
              Caplin & Drysdale, Chtd.
              One Thomas Circle, NW
              Suite 1100
              Washington, DC 20005-5802
              Phone:  202-862-7837
              Fax:  202-429-3301With a copy to:
            Ronald E. Reinsel, Esq.
              Caplin & Drysdale, Chtd.
              One Thomas Circle, NW
              Suite 1100
              Washington,
      DC  20005-5802
              Phone:  202-862-7837
              Fax:  202-429-3301
              email:rer@capdale.com





ARTICLE
XVI -- REPRESENTATIONS AND WARRANTIES





16.1           Congoleum represents and warrants that it has full
corporate authority to enter this Amended and Restated Agreement as its binding
and legal obligation, subject to approval by the Bankruptcy
Court.  The person signing this Amended and Restated Agreement on
behalf of Congoleum represents and warrants that he or she is authorized to
execute this Amended and Restated Agreement as a binding and legal obligation of
Congoleum in accordance with its terms.


34


16.2           Mt. McKinley and Everest represent and warrant that they
have full corporate authority to enter this Amended and Restated Agreement as a
binding and legal obligation of Mt. McKinley and Everest.  The person
signing this Amended and Restated Agreement on behalf of Mt. McKinley and
Everest represents and warrants that he or she is authorized by Mt. McKinley and
Everest to execute this Amended and Restated Agreement as a binding and legal
obligation of Mt. McKinley and Everest in accordance with its
terms.





16.3           The person signing this Amended and Restated Agreement
on behalf of the Asbestos Claimants’ Committee represents and warrants that he
or she is authorized by the Asbestos Claimants’ Committee to execute this
Amended and Restated Agreement as a binding and legal obligation of the Asbestos
Claimants’ Committee in accordance with its terms.





16.4           Congoleum, Mt. McKinley and Everest each represents and
warrants that it has conducted a diligent search for copies or other evidence of
the Subject Policies and that, as of the date of this Amended and Restated
Agreement, it is not aware of the existence of any liability insurance policies
issued to Congoleum and subscribed to by Mt. McKinley and Everest, other than
the Subject Policies listed onAttachment
Bhereto.





[SIGNATURES ON THE FOLLOWING
PAGES]


35


IN WITNESS WHEREOF, the undersigned have executed this
Amended and Restated Agreement by their duly authorized representatives as of
the date first above written.





CONGOLEUM CORPORATION,
              CONGOLEUM SALES, INC. AND
              CONGOLEUM FISCAL, INC.By:
            /s/ Howard N. FiestName:
            Howard N. FeistTitle:
            Chief Financial OfficerMT. McKINLEY INSURANCE
    COMPANYBy:
            /s/ Adam KenneyName:
            Adam KenneyTitle:
            Vice President, ClaimEVEREST REINSURANCE
  COMPANYBy:
            /s/ Adam KenneyName:
            Adam KenneyTitle:
            Vice President,
  Claim








36


CONSENTED TO AND AGREED


TO THE EXTENT APPLICABLE TO:









OFFICIAL COMMITTEE OF


UNSECURED ASBESTOS CLAIMANTS








By:/s/ Ronald E. Reinsel




Name:Ronald E. Reinsel




Title:its Attorney










F. SCOTT WILLIAMS


FUTURES REPRESENTATIVE


Solely in his capacity as Futures
Representative








By:/s/ F. Scott Williams




Name:F. Scott Williams




Title:Futures Representative




37


Attachment
A




Form of Approval Order




38


Attachment
B




Known Subject Policies







Policy
      Number
            Inception
            TerminationDXC 901037
            January 1, 1976
            January 1, 1977DXCDX 0067
            January 1, 1977
            January 1, 1978DXCDX 0588
            January 1, 1978
            January 1, 1979DXCDX 0659
            January 1, 1978
            January 1, 1979DXCDX 1356
            January 1, 1979
            January 1, 1980DXCDX 1357
            January 1, 1979
            January 1, 1980GMX 00451
            January 1, 1980
            January 1, 1981GMX 00452
            January 1, 1980
            January 1, 1981GMX 00856
            January 1, 1981
            January 1, 1982GMX 00857
            January 1, 1981
            January 1, 1982GMX 01497
            January 1, 1982
            January 1, 1983GMX 01498
            January 1, 1982
            January 1, 1983GMX 02027
            January 1, 1983
            January 1, 1984GMX 02028
            January 1, 1983
            January 1, 1984GMX 02545
            January 1, 1984
            January 1, 1985GMX 02546
            January 1, 1984
            January 1,
1985








39