Free Motion for Partial Summary Judgment - District Court of Colorado - Colorado

Case 1:04-cv-00725-RPM

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Senior District Judge Richard P. Matsch Civil Action No. 04-cv-725-RPM-OES THE QUIZNO'S MASTER LLC, a Colorado limited liability company and THE QUIZNO'S HOLDING COMPANY, a Nevada corporation, as assignee of and successor in interest to THE QUIZNO'S CORPORATION, a Colorado corporation, Plaintiffs, v. WESTCHESTER FIRE INSURANCE COMPANY, a New York corporation and ROYAL INDEMNITY COMPANY, a Delaware corporation, Defendants.

DECLARATION OF PATRICK E. MEYERS

1.

My name is Patrick E. Meyers. I am an individual over the age of eighteen (18)

years. I have personal knowledge of the matters set forth in my Declaration and would be willing and able to testify thereto if and when called upon to do so. 2. I am the Executive Vice President of Finance and General Counsel of The

Quizno's Master LLC and the Quizno's Holding Company, (collectively "Quizno's"). 3. Attached hereto at Exhibit A is a true and correct copy of the Royal Policy, Policy

No. RHP606493, effective from February 24, 1998 through June 24, 1999 ("Royal Policy") 4. Attached hereto at Exhibits B and C are true and correct copies Westchester

Policies, Policy No. DON648451 and Policy No. DONG21635662002.

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5.

Attached hereto at Exhibit D is a true and correct copy of the letter dated

December 29, 1998 from Richard F. and Richard E. Schaden to the Quizno's board of directors. 6. Attached hereto at Exhibit E is a true and correct copy of the letter dated January

5, 1999 from The Quizno's Corporation to Royal. 7. Attached hereto at Exhibit F is a true and correct copy of the letter dated January

4, 1999 from Paul Eisner to counsel for The Quizno's Corporation. 8. Attached hereto at Exhibit G is a true and correct copy of the letter dated February

11, 1999 from The Quizno's Corporation to Royal. 9. Attached hereto at Exhibit H is a true and correct copy of the letter from Royal to

The Quizno's Corporation dated February 25, 1999. 10. 1998. 11. Attached hereto at Exhibit I is a true and correct copy of the Offering The Schadens subsequently withdrew the proposal they had made in December

Memorandum wherein The Quizno's Corporation announced that it had commenced a voluntary tender offer ("Tender Offer"). 12. The Tender Offer expired on December 11, 2000 and The Quizno's Corporation

accepted the tendered shares and paid $8.00 per share for them. 13. In excess of 150 shareholders, representing approximately 779,055 shares,

responded to the Tender Offer and sold their shares to The Quizno's Corporation pursuant to the terms of the Tender Offer.

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14.

Attached hereto at Exhibit J is a true and correct copy of the Proxy Statement

from The Quizno's Corporation regarding the proposed merger with Firenze Corp. (with a copy of the December 21, 2001 Merger Agreement attached thereto). 15. Attached hereto at Exhibit K is a true and correct copy of the Complaint filed by a

minority shareholder of The Quizno's Corporation, Edward Sebesta ("Sebesta"). 16. Attached hereto at Exhibits L, M and N, respectively, are true and correct copies

of the correspondence from Quizno's to Westchester dated August 28, 2001, November 23, 2001, and December 27, 2001. 17. Attached hereto at Exhibit O are true and correct copies of the Indemnification

Agreements between individual members of The Quizno's Corporation board of directors and Quizno's. Quizno's agreed to indemnify the individual members of the board of directors named in the Sebesta Action with respect to their losses associated with the Sebesta Action pursuant to the Indemnification Agreements. 18. Attached hereto at Exhibit P is a true and correct copy of the letter dated January

4, 2002 from Westchester to Quizno's. 19. Attached hereto at Exhibit Q is a true and correct copy of correspondence dated

January 23, 2002 from Quizno's to Royal. 20. Attached hereto at Exhibit R is a true and correct copy of the correspondence

dated April 10, 2002 from Royal to Quizno's. 21. Westchester agreed to advance certain defense costs associated with the Sebesta

Action. Westchester also initially agreed to advance a certain portion of the defense costs associated with the Dissenters Action. As such, the parties entered into an Interim Funding
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Agreement pursuant to which Westchester paid just under $300,000 (after applying a $250,000 retention) of Quizno's defense costs associated with the Sebesta Action and the Dissenter's Action. Westchester made these payments in December 2002 and February 2003. Those are the only amounts Westchester has paid. A true and correct copy of the Interim Funding Agreement is attached hereto at Exhibit S. 22. Attached hereto at Exhibit T is a true and correct copy of the parties' Stipulation

of Settlement and Notice of Proposed Settlement and Final Hearing, as filed in the Sebesta Action. Attached hereto as Exhibit U is a true and correct copy of the Court Order dated April 2, 2004 in the Sebesta Action. 23. Quizno's is paying the settlement amount on behalf of the individually named

members of the board of directors pursuant to the Indemnification Agreements. 24. Attached hereto at Exhibit V is a true and correct copy of the Complaint filed by

William Nickerson ("Nickerson Action"). 25. Attached hereto at Exhibits W and X are true and correct copies of

correspondence dated January 23, 2004 and January 27, 2004 from Quizno's to Westchester. 26. Attached hereto at Exhibit Y is a true and correct copy of correspondence dated

March 12, 2004, Royal denied coverage with respect to the Nickerson action. 27. Attached hereto at Exhibits Z, AA and BB are true and correct copies of

correspondence dated March 10, 2004, April 5, 2004 and April 21, 2004 from Westchester's counsel to Quizno's counsel.

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28.

Quizno's agreed to indemnify the individual members of the board of directors

named in Nickerson with respect to their losses associated with the Sebesta Action pursuant to the Indemnification Agreements with each individual member. 29. Attached hereto at Exhibit CC is a true and correct copy the parties' Stipulation of

Settlement filed in the Nickerson Action. Attached hereto as Exhibit DD is a true and correct copy of the Court's Order in the Nickerson Action. 30. Quizno's is paying the settlement amount on behalf of the individually named

members of the board of directors pursuant to the Indemnification Agreements.

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I declare under penalty of perjury that the foregoing is true and correct. Executed on July 1, 2005. /s/ Patrick E. Meyers Patrick E. Meyers STATE OF COLORADO CITY & COUNTY OF DENVER ) ) ss )

Subscribed and sworn to before me this 1st day of July 2005 by Patrick E. Meyers. WITNESS my hand and official seal. My Commission Expires: ______________ /s/ Notary Public

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