IN RE NORTH AMERICAN REFRACTORIES COMPANY

JUDITH FITZGERALD, Chief Judge, Bankruptcy

Upon consideration of the Motion of the Debtor, North American Refractories Company, for an Order Approving a Compromise and Settlement with Howard Properties (the "Motion"), and it appearing that: (a) North American Refractories Company and its debtor-affiliates (collectively, the "Debtors"), have effectuated service of the Motion upon all parties in interest as required by the applicable Bankruptcy Rules; (b) due notice of the Motion has been given; (c) a reasonable opportunity to object, and to be heard regarding the relief requested in the Motion has been afforded to parties in interest, and other entities; (d) the Court has jurisdiction to consider the relief requested pursuant to 28 U.S.C. §§ 157 and 1334; (e) it appearing that the Debtors and Howard Properties (as defined in the Motion) have consented to the relief requested in the Motion, and such relief is in the best interest of the Debtors, their respective estates and creditors, and after due deliberation and sufficient cause appearing, it is hereby ORDERED that:

1. The Motion is GRANTED;

2. The settlement between the Debtors and Howard Properties is hereby approved as provided herein (the "Settlement Agreement").

3. The proof of claim filed by Howard Properties (the "Howard Claim"), identified as Claim No. 507, is hereby reduced and allowed as a general unsecured claim against North American Refractories Company ("NARCO") in the amount of $4,000,000, in addition to the sum of $38,337 previously paid to Howard Properties (the "Allowed Howard Claim"), provided, however, that if the sum of all distributions payable to Howard Properties on account of the Allowed Howard Claim after the date of this Order is less than $3,200,000 (the "Threshold Amount"), then Howard Properties shall have the right to rescind its consent to this settlement (the "Right to Rescind") as stated herein.

4. Howard Properties may exercise its Right to Rescind provided that: (a) it notifies Debtors' counsel of its election in writing at any time before or within 30 days after receiving the final distribution to unsecured creditors in the Debtors' bankruptcy cases; and (b) the notice is accompanied by the return of all funds previously distributed to Howard Properties on account of the Allowed Howard Claim. Upon the proper exercise of the Right to Rescind, the Court shall no longer deem the Allowed Howard Claim to be an allowed claim against NARCO. The Court will thereafter schedule a status conference for the purpose of continuing the litigation on the Howard Claim and Objection.

5. In the event that either: (a) the sum of all distributions paid to Howard Properties equals or exceeds the Threshold Amount, or (b) Howard Properties does not exercise its Right to Rescind as specified herein, then this Settlement Agreement will be deemed to a final agreement between the parties and Howard shall be precluded from filing any new or additional claims against NARCO in this bankruptcy case.

6. The Court shall have the sole and exclusive jurisdiction for the resolution of all claims, causes of action, or disputes which may in any way arise out of, or relate to, this Order and the matters addressed herein.

7. Counsel for Debtor shall immediately serve a copy of this order on all parties listed on the current service list and any other parties in interest and file a certificate of service with the Clerk of the Bankruptcy Court within ten (10) days hereof.

IT IS SO ORDERED.