Exhibit 2.2
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF TENNESSEE
CHATTANOOGA DIVISION
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IN RE: ) Chapter 11
)
NOXSO CORPORATION, ) Case No. 97-10709
)
Debtor. ) Judge R. Thomas Stinnett
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STIPULATION AND ORDER ALLOWING SECURED CLAIM
AND ADMINISTRATIVE CLAIM UNDER SECTION 506(C)
AND NOW come NOXSO Corporation ("Noxso"), Olin Corporation ("Olin"), and
the Official Committee of Unsecured Creditors (the "Committee") and stipulate as
follows:
Background
1. On February 6, 1997, Olin and two other creditors filed an involuntary
bankruptcy petition against Noxso.
2. On June 3, 1997, Noxso agreed to an Order for relief and converted the case
to a case under Chapter 11 of the Bankruptcy Code.
3. Olin is a creditor of Noxso with claims arising, inter alia, pursuant to a
Promissory Note, as amended, dated April 23, 1996 executed by Noxso and
delivered to Olin ("Promissory Note"), pursuant to advances of credit under a
Deed of Trust, and pursuant to post-petition expenses relative to the
preservation and maintenance of Noxso's liquid sulfur dioxide facility located
on the Olin property located in Charleston, Tennessee (the "Facility").
4. Certain disputes have arisen with regard to the nature and extent of the
Olin's bankruptcy claims against Noxso.
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5. Since the filing of the involuntary bankruptcy petition, Noxso has been
attempting to market the Facility.
6. On June 11, 1997, Olin filed a Motion for Relief from the Automatic Stay,
alleging, inter alia, a lack of adequate protection.
7. On August 15, 1997, Noxso entered into a letter of intent with Republic
Financial Corporation ("Republic") to sell the Facility to Republic for a
purchase price of $11,000,000 (the "Letter of Intent"). One of the conditions
precedent to the sale to Republic pursuant to the Letter of Intent is that the
bankruptcy claims of Olin and other related issues between Olin and Noxso must
be resolved to the satisfaction of Republic and Olin.
8. In order to allow the sale of the Facility to Republic to move forward
pursuant in the form of a Motion to be filed with the Bankruptcy Court (the
"Sale Motion"), and to provide Olin adequate protection on its secured claim,
Noxso, Olin, and the Creditors' Committee have reached agreement concerning
Olin's bankruptcy claims against Noxso under the terms and conditions outlined
below.
9. The agreement reflected herein is satisfactory to Noxso, Republic, Olin and
the Committee.
Agreement
1. The bankruptcy claims of Olin against Noxso shall be allowed as a secured
claim in the amount of $3,225,359.37(the "Secured Claim"), and an administrative
expense pursuant to 11 U.S. C. ss.506(c) in the amount of $2,480,469.47 (the
"506(c) Claim"), for a total allowed claim of $5,705,828.,84 (the "Olin Claim"),
plus any additions pursuant to paragraphs 2 and 3 below. Noxso will receive
credits against the Olin Claim pursuant to paragraphs 4 and 5 below. Olin's net
bankruptcy claim shall be paid to it out of trust at the time of closing of the
sale with Republic or other buyer.
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2. The Olin Claim includes interest on the Promissory Note through July 31,
1997. Until the Olin Claim is paid, it shall continue to accrue interest from
August 1, 1997, on the outstanding principal owed to Olin pursuant the
Promissory Note. The interest accrual from August 1, 1997, is $639.23 per day.
3. In addition to the interest accrual described in Paragraph 2, the only
allowable increase in the Olin Claim, which increase shall be secured, shall be
for direct expenses incurred in remedying any major mechanical problems at the
Facility prior to its sale. Olin and Noxso shall work together to determine what
constitutes a major mechanical problem and what repairs or replacements are
necessary, if any, to remedy the specific problem.
4. Noxso shall be entitled to the following items as credits against the claims
of Olin against the 506(c) Claim of Olin:
a. $1,299,540 for 7876 of short tons of liquid sulfur dioxide at a
price of $165.00 per ton, produced at the Facility for the period
from February 1, 1997 through July 31, 1997.
b. $110 per short ton of liquid sulfur dioxide produced, used, or
stored at the Facility for the period from August 1, 1997 through
November 1, 1997. The parties agree that the total production for
the month ending August 31, 1997, was 2,649 tons. On a bi-weekly
basis, Olin will submit to Noxso the production levels for the
previous two week period.
5. Noxso shall be entitled to credits for production of liquid sulfur dioxide
produced, used or stored by Olin until the Facility is sold. In the event that
the closing on the sale of the Facility to Republic pursuant to the Sale Motion
does not occur on or before November 1, 1997, Olin and Noxso agree to negotiate
in good faith concerning the pricing of SO2 credits for production, use, or
storage of liquid sulfur dioxide after November 1, 1997. In the event that the
credits to Noxso
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pursuant to paragraphs 4 and 5 exceed the amount of the 506(c) Claim, those
remaining credits shall be applied to the Secured Claim.
6. For the period from the date of this agreement through November 1, 1997, Olin
shall use its best efforts to achieve production levels of 2,667 tons per month
while operating within normal operating guidelines, manufacturing
specifications, environmental guidelines and safety regulations and recognizing
that the Facility will need to be shut down from time to time for repairs and
maintenance.
7. At the closing of the sale of the Facility to Republic, or to a third party
which made a higher or better offer at the hearing pursuant to the Sale Motion,
Olin and Noxso shall execute and deliver mutual releases to be negotiated in
good faith releasing any and all claims, causes of action, etc. which have been
asserted to date, or could have been asserted, specifically including, but not
limited to, claims of Noxso under the Bankruptcy Code or otherwise, and shall
dismiss with prejudice any and all lawsuits against each other.
8. In the event that the Facility is not sold to Republic or to a third party
pursuant to the Sale Motion, Noxso and Olin shall be entitled to pursue any and
all claims and lawsuits which they may have against each other. Provided,
however, that any claim of Olin in excess of the aggregate sum set forth in
paragraphs 1 and 3 and less credits pursuant to paragraphs 4 and 5 shall be
assertable defensively, by set-off, and/or counterclaim only and shall not
result in any increase in the aggregate claims of Olin payable by Noxso.
9. Neither Olin nor Noxso will disseminate a Public Relations statement
regarding this Stipulation without the approval of the other.
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10. Any objections to this Stipulation and Order must be filed within twenty
(20) days of the date hereof. If objections are filed, a hearing will be held on
the Stipulation and Order.
Respectfully submitted,
Dated: September 12, 1997 s/ Joel M. Walker
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Joel M. Walker, Esquire
PA Id No. 26515
Counsel for Noxso
Doepken Keevican & Weiss
58th Floor, USX Tower
600 Grant Street
Pittsburgh, PA 15219
(412) 355-2758
s/ F. Scott Leroy
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Gregory M. Leitner, Esquire
F. Scott LeRoy, Esquire
Counsel for Olin
Leitner, Williams, Dooley
& Napolitan, PLLC
Third Floor, Pioneer Building
Chattanooga, TN 37402
(423) 265-0214
s/ Richard C. Kennedy
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Richard C. Kennedy, Esquire
Counsel for Official Creditors
Committee
Kennedy, Fulton, Koontz & Farinash
320 N. Holtzclaw Avenue
Chattanooga, TN 37404
(423) 622-4535
SO ORDERED this 12th day of September 1997.
s/ R. Thomas Stinnett
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The Honorable R. Thomas Stinnett
United States Bankruptcy Judge
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