Exhibit 99.1
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
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:
IN RE : Chapter 11
:
SOLUTIA INC., ET AL., : Case No. 03-17949 (PCB)
:
Debtors. : (Jointly Administered)
:
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THIS PLAN APPLIES TO:
X All Debtors Axio Research Corporation
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Solutia Inc. Solutia Investments, LLC
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Solutia Business Enterprises Inc. Beamer Road Management Company
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Solutia Systems, Inc. Monchem, Inc.
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Solutia Overseas, Inc. Solutia Inter-America, Inc.
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CPFilms Inc. Solutia International Holding, LLC
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Solutia Management Company, Inc. Solutia Taiwan, Inc.
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Monchem International, Inc. Solutia Greater China, Inc.
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DEBTORS' FIRST AMENDED JOINT PLAN OF REORGANIZATION
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KIRKLAND & ELLIS LLP
Citigroup Center
153 East 53rd Street
New York, New York 10022-4611
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
Richard M. Cieri (RC 6062)
Jonathan S. Henes (JH 1979)
Colin M. Adams (CA 2913)
Attorneys for the Debtors and Debtors in
Possession
Dated: May 16, 2007
TABLE OF CONTENTS
Page
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INTRODUCTION......................................................................................................1
ARTICLE I DEFINED TERMS, RULES OF INTERPRETATION AND COMPUTATION OF TIME..........................................1
A. Defined Terms...................................................................................1
1. "2027/2037 Notes"......................................................................1
2. "Abernathy Settlement Agreement".......................................................1
3. "Ad Hoc Notes Committee"...............................................................1
4. "Ad Hoc Trade Committee"...............................................................1
5. "Administrative Expense Claim".........................................................1
6. "Administrative Expense Claim Bar Date"................................................2
7. "Affiliate"............................................................................2
8. "Allowed Claim"........................................................................2
9. "Allowed . . . Claim"..................................................................3
10. "Anniston Consent Decree"..............................................................3
11. "Anniston Global Settlement Agreement".................................................3
12. "Anniston Litigation Settlement Agreements"............................................3
13. "Anniston Side Letter Agreement".......................................................3
14. "Avoidance Actions"....................................................................3
15. "Axio Claims"..........................................................................3
16. "Axio Liquidation Sale"................................................................3
17. "Ballot"...............................................................................3
18. "Bankruptcy Code"......................................................................3
19. "Bankruptcy Court".....................................................................3
20. "Bankruptcy Rules".....................................................................3
21. "Bar Date".............................................................................3
22. "Bar Date Order".......................................................................4
23. "Business Day".........................................................................4
24. "Cash".................................................................................4
25. "Causes of Action".....................................................................4
26. "CERCLA"...............................................................................4
27. "Chapter 11 Cases".....................................................................4
28. "Chemicals Assets".....................................................................4
29. "Chemicals Liabilities"................................................................4
30. "Chocolate Bayou Agreements"...........................................................4
31. "Chocolate Bayou Settlement"...........................................................4
32. "Claim"................................................................................4
33. "Claims Objection Deadline"............................................................4
34. "Class"................................................................................4
35. "Commercial and Operating Agreements"..................................................5
36. "Confirmation".........................................................................5
37. "Confirmation Date"....................................................................5
38. "Confirmation Hearing".................................................................5
39. "Confirmation Order"...................................................................5
40. "Consummation".........................................................................5
41. "Convenience Claims"...................................................................5
42. "CPFilms Claims".......................................................................5
43. "Creditors' Committee".................................................................5
44. "Debtor Intercompany Claim"............................................................5
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45. "DIP Claims"...........................................................................5
46. "DIP Credit Facility"..................................................................5
47. "DIP Lender"...........................................................................5
48. "Directors' and Officer Indemnity Claims"..............................................5
49. "Disclosure Statement Hearing".........................................................5
50. "Disclosure Statement Order"...........................................................6
51. "Disputed Claim".......................................................................6
52. "Disputed Claims Reserve"..............................................................6
53. "Disputed General Unsecured Claims Reserve"............................................6
54. "Disputed General Unsecured Claim".....................................................6
55. "Distribution".........................................................................6
56. "Distribution Agreement"...............................................................6
57. "Distribution Date"....................................................................6
58. "Distribution Record Date".............................................................6
59. "Effective Date".......................................................................6
60. "Eligible Holder"......................................................................6
61. "Entity"...............................................................................6
62. "Environmental Liability"..............................................................6
63. "Environmental Liability Costs"........................................................6
64. "Equity Committee".....................................................................6
65. "Equity Committee Adversary Proceeding"................................................6
66. "Equity Interest"......................................................................7
67. "ERISA"................................................................................7
68. "Estate" and, collectively, "Estates"..................................................7
69. "Exchange Act".........................................................................7
70. "Executory Contract and/or Unexpired Lease"............................................7
71. "Exit Financing Facility"..............................................................7
72. "Exit Financing Facility Agent Bank"...................................................7
73. "Exit Financing Facility Commitment Letter"............................................7
74. "Final Order"..........................................................................7
75. "Formalin Purchase Agreement"..........................................................7
76. "Funding Co"...........................................................................7
77. "Funding Co Charter"...................................................................7
78. "General Unsecured Claims".............................................................7
79. "HCN Purchase Agreement"...............................................................8
80. "HMD Purchase Agreement"...............................................................8
81. "HMTA Purchase Agreement"..............................................................8
82. "Holdback Amount"......................................................................8
83. "Holdback Escrow Account"..............................................................8
84. "Holder" and, collectively, "Holders"..................................................8
85. "HSR Act"..............................................................................8
86. "Impaired".............................................................................8
87. "Impaired Claim".......................................................................8
88. "Impaired Class".......................................................................8
89. "Incentive Plan".......................................................................8
90. "Insured Claims".......................................................................8
91. "Internal Revenue Code"................................................................8
92. "IRS"..................................................................................8
93. "JPM Adversary Proceeding".............................................................9
94. "Legacy Claims"........................................................................9
95. "Legacy Sites".........................................................................9
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96. "Legacy Site Claims"...................................................................9
97. "Lien".................................................................................9
98. "Master Operating Agreement"...........................................................9
99. "Monsanto".............................................................................9
100. "Monsanto Claim".......................................................................9
101. "Monsanto Contribution"................................................................9
102. "Monsanto/Pharmacia Injunction".......................................................10
103. "Monsanto's Professionals"............................................................10
104. "Monsanto Settlement".................................................................10
105. "Monsanto Tort Management"............................................................10
106. "National Securities Exchange"........................................................10
107. "New By-laws".........................................................................10
108. "New Certificate of Incorporation"....................................................10
109. "New Common Stock"....................................................................10
110. "Nominee".............................................................................10
111. "Non-Debtor Intercompany Claim".......................................................10
112. "Noteholder Claims"...................................................................10
113. "NRD Claims"..........................................................................11
114. "NYSE"................................................................................11
115. "Ordinary Course Professionals Order".................................................11
116. "PBGC"................................................................................11
117. "PCBs"................................................................................11
118. "Pension Plan"........................................................................11
119. "Person"..............................................................................11
120. "Petition Date".......................................................................11
121. "Pharmacia"...........................................................................11
122. "Pharmacia Contribution"..............................................................11
123. "Pharmacia Claims"....................................................................11
124. "Plan Documents"......................................................................11
125. "Plan Supplement".....................................................................11
126. "Prepetition Indenture"...............................................................12
127. "Prepetition Indenture Trustee".......................................................12
128. "Priority Non-Tax Claim"..............................................................12
129. "Priority Tax Claim"..................................................................12
130. "Pro Rata"............................................................................12
131. "Professional"........................................................................12
132. "Professional Fee Claims".............................................................12
133. "Professional Fee Order"..............................................................12
134. "Quarterly Distribution Date".........................................................12
135. "Registration Rights Agreement".......................................................12
136. "Reinstated" or "Reinstatement".......................................................12
137. "Relationship Agreement"..............................................................14
138. "Reorganized . . ."...................................................................14
139. "Restructuring Transactions"..........................................................14
140. "Restructuring Transactions Agreement"................................................14
141. "Retained Sites"......................................................................14
142. "Retirees"............................................................................14
143. "Retiree Approval Order"..............................................................14
144. "Retiree Benefits"....................................................................14
145. "Retiree Claim".......................................................................14
146. "Retirees' Committee".................................................................14
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147. "Retiree Settlement Agreement"........................................................14
148. "Retiree Trust".......................................................................14
149. "Rights"..............................................................................14
150. "Rights Offering".....................................................................14
151. "Rights Offering Procedures"..........................................................14
152. "Rights Subscription Exercise Form"...................................................15
153. "Sauget Administrative Orders"........................................................15
154. "Schedules"...........................................................................15
155. "Secured Claim".......................................................................15
156. "Securities Act"......................................................................15
157. "Security Claims".....................................................................15
158. "Senior Secured Notes"................................................................15
159. "Senior Secured Note Claims"..........................................................15
160. "Senior Secured Notes Trustee"........................................................15
161. "Separation Agreement"................................................................15
162. "Settled Adversary Proceedings".......................................................15
163. "Shareholders Agreement"..............................................................15
164. "Shared Sites"........................................................................15
165. "Spinoff".............................................................................16
166. "Spinoff Indemnity Claim".............................................................16
167. "Stipulation of Amount and Nature of Claim"...........................................16
168. "Stock Pool"..........................................................................16
169. "Subsidiary" or "Subsidiaries"........................................................16
170. "Tolbert Settlement Agreement"........................................................16
171. "Tort Claims".........................................................................16
172. "Treasury Regulations"................................................................17
173. "Undeliverable Distribution"..........................................................17
174. "Uniform Commercial Code".............................................................17
175. "Unimpaired"..........................................................................17
176. "Unimpaired Claim"....................................................................17
177. "Unimpaired Class"....................................................................17
178. "United States of America"............................................................17
179. "Unsecured Claim".....................................................................17
180. "Value"...............................................................................17
181. "Voting Agent"........................................................................17
182. "Voting Deadline".....................................................................17
183. "Voting Record Date"..................................................................17
B. Rules of Interpretation and Computation of Time................................................18
1. Rules of Interpretation...............................................................18
2. Computation of Time...................................................................18
ARTICLE II CLASSES OF CLAIMS AND EQUITY INTERESTS................................................................19
ARTICLE III TREATMENT OF CLAIMS AND EQUITY INTERESTS.............................................................20
A. Unclassified Claims............................................................................20
1. Payment of Administrative Expense Claims..............................................20
2. Payment of Priority Tax Claims........................................................22
B. Unimpaired Classes of Claims...................................................................22
1. Priority Non-Tax Claims (Class 1).....................................................22
2. Secured Claims (Class 2)..............................................................22
3. Senior Secured Note Claim (Class 3)...................................................23
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4. Convenience Claims (Class 4)..........................................................23
5. CPFilms Claims (Class 5)..............................................................23
6. NRD Claims (Class 6)..................................................................24
7. Insured Claims (Class 7)..............................................................24
8. Tort Claims (Class 8).................................................................24
9. Legacy Site Claims (Class 9)..........................................................25
10. Equity Interests in all Debtors other than Solutia (Class 10).........................25
C. Impaired Classes of Claims and Equity Interests................................................25
1. Monsanto Claim (Class 11).............................................................25
2. Noteholder Claims (Class 12)..........................................................26
3. General Unsecured Claims (Class 13)...................................................26
4. Retiree Claim (Class 14)..............................................................26
5. Pharmacia Claims (Class 15)...........................................................27
6. Non-Debtor Intercompany Claims (Class 16).............................................27
7. Debtor Intercompany Claims (Class 17).................................................27
8. Axio Claims (Class 18)................................................................27
9. Security Claims (Class 19)............................................................28
10. Equity Interests in Solutia (Class 20)................................................28
ARTICLE IV ACCEPTANCE OR REJECTION OF THE PLAN...................................................................29
A. Special Provisions Governing Unimpaired Claims.................................................29
B. Classes Entitled to Vote.......................................................................29
C. Cramdown.......................................................................................29
ARTICLE V MEANS FOR IMPLEMENTATION OF THE PLAN...................................................................30
A. General Settlement of Claims...................................................................30
B. Settlement Among the Debtors, Monsanto, Pharmacia, the Retirees, the Creditors'
Committee and the Ad Hoc Trade Committee.......................................................30
1. The Distribution Agreement............................................................30
2. Relationship Agreement................................................................31
3. Commercial and Operating Agreements...................................................31
4. Monsanto Tort Management..............................................................31
5. Monsanto's Settlement of Adversary Proceedings, Contested Matters, Disputes
and Monsanto Claims...................................................................31
6. Monsanto's Professionals..............................................................31
7. Monsanto Administrative Claim.........................................................32
8. Pharmacia Contribution................................................................32
9. Settlement With Retirees..............................................................32
10. Settled Adversary Proceedings.........................................................32
11. Solutia's Assumption of Certain Environmental Liabilities.............................32
C. Restructuring Transactions.....................................................................33
D. Continued Corporate Existence and Vesting of Assets in the Reorganized Debtors.................33
E. Execution of Plan Documents....................................................................34
F. Corporate Governance, Directors and Officers and Corporate Action of the Reorganized
Debtors........................................................................................34
1. New Certificates of Incorporation and New By-Laws.....................................34
2. Directors and Officers of the Reorganized Debtors.....................................34
3. Corporate Action......................................................................34
4. The New Common Stock..................................................................35
5. Shareholders Agreement................................................................35
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G. Exit Financing Facility, Obtaining Cash for Distributions and Transfers of Funds Among
the Debtors....................................................................................35
H. The Rights Offering............................................................................35
1. Use of Rights Offering Proceeds.......................................................35
2. Rights Offering Procedures............................................................36
I. Funding Co.....................................................................................36
J. Incentive Plan.................................................................................36
K. Release of Liens and Guarantee Claims..........................................................36
L. Cancellation of Existing Securities and Agreements.............................................36
M. Effectuating Documents.........................................................................37
N. Employment and Other Benefits Programs.........................................................37
ARTICLE VI TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES.................................................38
A. Assumption and Rejection of Executory Contracts and Unexpired Leases...........................38
B. Claims Based on Rejection of Executory Contracts or Unexpired Leases...........................38
C. Cure of Defaults for Executory Contracts and Unexpired Leases Assumed..........................38
D. Insurance Policies.............................................................................39
E. Anniston Settlement............................................................................39
F. Assumption of Pension Obligations..............................................................39
G. Contracts and Leases Entered Into After the Petition Date......................................39
ARTICLE VII PROVISIONS GOVERNING DISTRIBUTIONS...................................................................40
A. Distributions for Claims Allowed as of the Effective Date......................................40
B. Delivery of Distributions......................................................................40
C. Delivery and Distributions and Undeliverable or Unclaimed Distributions........................40
1. Delivery of Distributions in General..................................................40
2. Undeliverable Distributions...........................................................40
D. Compliance with Tax Requirements/Allocations...................................................41
E. Record Date for Distribution...................................................................41
F. Distributions of Whole Shares Only.............................................................41
G. Set-offs and Recoupments.......................................................................41
H. Surrender of Cancelled Instruments or Securities...............................................41
I. Disputed Claims Reserve........................................................................42
1. Deposit of Cash on the Effective Date.................................................42
2. Distribution After Allowance..........................................................42
3. Distributions After Disallowance......................................................42
4. Property Held in the Disputed Claims Reserve..........................................42
J. The Disputed General Unsecured Claims Reserve..................................................43
1. Deposit of New Common Stock on the Effective Date.....................................43
2. Distributions After Allowance.........................................................43
3. Distributions After Disallowance......................................................43
4. Property Held in Disputed General Unsecured Claims Reserve............................44
ARTICLE VIII PROCEDURES FOR TREATING DISPUTED GENERAL UNSECURED CLAIMS...........................................45
A. Objections to Claims...........................................................................45
B. General Unsecured Claims Monitor...............................................................45
C. No Distributions Pending Allowance.............................................................46
D. Estimation of Claims...........................................................................46
ARTICLE IX CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN.....................................47
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A. Condition Precedent to Confirmation............................................................47
B. Conditions Precedent to Effective Date.........................................................48
C. Effect of Failure of Conditions................................................................49
D. Waiver of Conditions...........................................................................49
ARTICLE X INJUNCTIONS, RELEASES, EXCULPATION AND DISCHARGE.......................................................50
A. Injunctions....................................................................................50
1. DEBTORS' INJUNCTION...................................................................50
2. MONSANTO/PHARMACIA INJUNCTION.........................................................50
B. Releases.......................................................................................51
1. RELEASES BY THE DEBTORS...............................................................51
2. RELEASES BY HOLDERS OF CLAIMS AND EQUITY INTERESTS....................................52
3. RETIREE RELEASE AND INJUNCTION........................................................53
C. EXCULPATION AND LIMITATION OF LIABILITY........................................................53
D. DISCHARGE OF CLAIMS AND TERMINATION OF EQUITY INTERESTS........................................53
ARTICLE XI RETENTION OF JURISDICTION.............................................................................55
A. Retention of Jurisdiction......................................................................55
ARTICLE XII MISCELLANEOUS PROVISIONS.............................................................................57
A. Binding Effect.................................................................................57
B. Preservation of Avoidance Actions..............................................................57
C. Claims of the United States of America.........................................................57
D. Applicability of Section 1125(e) of the Bankruptcy Code........................................57
E. Dissolution of the Creditors' Committee, Retirees' Committee and Equity Committee..............57
F. Payment of Statutory Fees......................................................................58
G. Modification of the Plan.......................................................................58
H. Severability...................................................................................58
I. Revocation or Withdrawal of the Plan...........................................................58
J. Section 1145 Exemption.........................................................................59
K. Section 1146 Exemption.........................................................................59
L. Notices........................................................................................59
1. The Debtors and the Reorganized Debtors...............................................59
2. The Creditors' Committee..............................................................60
3. The Retirees' Committee...............................................................60
4. The Equity Committee..................................................................60
5. The DIP Lenders.......................................................................61
6. The United States Trustee.............................................................61
7. Monsanto..............................................................................61
8. Pharmacia.............................................................................62
M. Governing Law..................................................................................62
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TABLE OF EXHIBITS
Exhibit A Relationship Agreement(1)
Exhibit B Retiree Settlement Agreement(2)
Exhibit C Exit Financing Facility Commitment Letter
Exhibit D Form of New Bylaws
Exhibit E Form of New Certificates of Incorporation
Exhibit F Initial Directors and Officers of Each Reorganized Debtor
Exhibit G List of Executory Contracts and Unexpired Leases to be Assumed
Exhibit H Rights Offering Procedures
Exhibit I Incentive Plan
Exhibit J Registration Rights Agreement
Exhibit K Funding Co Charter
Exhibit L Shareholders Agreement
Exhibit M Restructuring Transaction Agreement
<FN>
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(1) Filed with the Bankruptcy Court on February 14, 2006.
(2) Filed with the Bankruptcy Court on February 14, 2006.
viii
INTRODUCTION
Solutia Inc. ("Solutia"), together with its direct and indirect
subsidiaries and its Affiliates Solutia Business Enterprises Inc., Solutia
Systems, Inc., Solutia Overseas, Inc., CPFilms Inc. ("CPFilms"), Solutia
Management Company, Inc., Monchem International, Inc., Axio Research
Corporation, Solutia Investments, LLC, Beamer Road Management Company,
Monchem, Inc., Solutia Inter-America, Inc., Solutia International Holding,
LLC, Solutia Taiwan, Inc. and Solutia Greater China, Inc., as debtors and
debtors in possession (collectively, the "Debtors"), propose this amended
joint plan of reorganization (the "Plan") for the resolution of the
outstanding claims against, and equity interests in, the Debtors. The Debtors
are the proponents of the Plan within the meaning of section 1129 of the
Bankruptcy Code (as defined below). Reference is made to the Debtors'
disclosure statement, which was filed with the Bankruptcy Court on May 16,
2007 (the "Disclosure Statement"), for a discussion of the Debtors' history,
businesses, results of operations, historical financial information,
accomplishments during the Chapter 11 Cases (as defined below), projections
and properties, and for a summary and analysis of this Plan and the
settlements contemplated herein and the Plan Documents. There also are other
agreements and documents, which are or will be filed with the Bankruptcy
Court, that are referenced in this Plan or the Disclosure Statement.
ARTICLE I
DEFINED TERMS, RULES OF INTERPRETATION
AND COMPUTATION OF TIME
A. DEFINED TERMS
As used in this Plan, capitalized terms have the meanings set forth
below or in the Introduction above. Any terms that are not otherwise defined
herein, but that are used in the Bankruptcy Code or the Bankruptcy Rules (each
as defined below), will have the meaning ascribed to them in the Bankruptcy
Code or the Bankruptcy Rules, as applicable.
1. "2027/2037 NOTES" means the two series of unsecured public notes
issued by Solutia: (a) $150 million in 6.72% notes due October 15, 2037 and
(b) $300 million in 7.375% notes due October 15, 2027.
2. "ABERNATHY SETTLEMENT AGREEMENT" means that certain settlement
agreement, dated September 9, 2003, resolving the lawsuit captioned Sabrina
Abernathy v. Monsanto Company, Civil Action No. CY-01-832 (Etowah County).
3. "AD HOC NOTES COMMITTEE" means the ad hoc committee of Holders of
the 2027/2037 Notes.
4. "AD HOC TRADE COMMITTEE" means the ad hoc committee of Holders of
trade claims in Solutia.
5. "ADMINISTRATIVE EXPENSE CLAIM" means a Claim for costs and
expenses of administering the Estates that is Allowed under sections 503(b),
507(b) or 1114(e)(2) of the Bankruptcy Code, including: (a) the actual and
necessary costs and expenses incurred after the Petition Date of preserving
the respective Estates and operating the businesses of the Debtors (such as
wages, salaries, commissions for services and payments for inventories, leased
equipment and premises), including DIP Claims; (b) compensation for legal,
financial advisory, accounting and other services and reimbursement of
expenses awarded or allowed under sections 330(a) or 331 of the Bankruptcy
Code, including
1
Professional Fee Claims; (c) all fees and charges assessed against the Estates
under chapter 123 of title 28, United States Code, 28 U.S.C. Sections
1911-1930; and (d) Claims for reclamation allowed in accordance with section
546(c)(2) of the Bankruptcy Code and section 2-702 of the Uniform Commercial
Code.
6. "ADMINISTRATIVE EXPENSE CLAIM BAR DATE" means the date that is the
forty-fifth (45th) day after the Effective Date.
7. "AFFILIATE" means, with respect to any Person or Entity, a Person
or Entity that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such person or
Entity; provided, however, that in no event shall any of Monsanto, Solutia,
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Reorganized Solutia or Pharmacia be considered to be Affiliates for purposes
of the Plan.
8. "ALLOWED CLAIM" means:
A. a Claim that: (i) has been listed by a particular Debtor
on its Schedules as other than disputed, contingent or unliquidated;
and (ii) is not otherwise a Disputed Claim;
B. a Claim (i) for which a proof of Claim or request for
payment of Administrative Claim has been filed by the applicable Bar
Date or otherwise been deemed timely filed under applicable law or
order of the Bankruptcy Court; (ii) as to which the Claims Objection
Deadline has passed; and (iii) that is not otherwise a Disputed
Claim; or
C. a Claim that is allowed: (i) in any Stipulation of Amount
and Nature of Claim; (ii) in any contract, instrument or other
agreement entered into in connection with the Plan and approved by
the Bankruptcy Court; (iii) in a Final Order; or (iv) pursuant to the
terms of the Plan.
2
9. "ALLOWED . . . CLAIM" means an Allowed Claim in the particular
Class or category specified. Any reference herein to a particular Allowed
Claim includes both the secured and unsecured portions of such Claim, as
applicable.
10. "ANNISTON CONSENT DECREE" means the Partial Consent Decree
entered by the District Court for the Northern District of Alabama on August
9, 2003, among the United States, Pharmacia and Solutia with respect to the
Anniston Superfund Site in Anniston, Alabama.
11. "ANNISTON GLOBAL SETTLEMENT AGREEMENT" means that certain Global
Settlement Agreement, dated September 9, 2003, among Solutia, Monsanto and
Pharmacia, which resolved certain lawsuits pending against Solutia, Monsanto
and Pharmacia in the United States District Court, Northern District of
Alabama and in the Circuit Court, Etowah County, Alabama and was approved by
those courts.
12. "ANNISTON LITIGATION SETTLEMENT AGREEMENTS" means the Abernathy
Settlement Agreement together with the Tolbert Settlement Agreement.
13. "ANNISTON SIDE LETTER AGREEMENT" means that certain agreement,
dated August 20, 2003, among Solutia, Monsanto and Pharmacia which sets forth
their respective obligations under the Anniston Litigation Settlement
Agreements.
14. "AVOIDANCE ACTIONS" means any and all actual or potential Claims
to avoid a transfer of property or an obligation incurred by the Debtor
pursuant to any applicable section of the Bankruptcy Code, including sections
544, 545, 547, 548, 549, 550, 551, 553(b) and 724(a) of the Bankruptcy Code.
15. "AXIO CLAIMS" means all Claims against Axio Research Corporation.
16. "AXIO LIQUIDATION SALE" means that certain sale of the assets of
Axio Research Corporation authorized pursuant to that certain order of the
Bankruptcy Court dated December 16, 2004.
17. "BALLOT" means the ballot forms distributed to each Holder of an
Impaired Claim on which the Holder may indicate, among other things, whether
it accepts or rejects the Plan.
18. "BANKRUPTCY CODE" means title 11 of the United States Code, as
applicable to the Chapter 11 Cases.
19. "BANKRUPTCY COURT" means the United States Bankruptcy Court for
the Southern District of New York, which has jurisdiction over the Chapter 11
Cases and, to the extent of the withdrawal of any reference under section 157
of title 28 of the United States Code, the United States District Court for
the Southern District of New York.
20. "BANKRUPTCY RULES" means, collectively, the Federal Rules of
Bankruptcy Procedure and the local rules of the Bankruptcy Court, as
applicable to the Chapter 11 Cases.
21. "BAR DATE" means, with respect to Claims against the Debtors, (a)
November 30, 2004, or (b) any other bar date for the filing of Claims
established by (i) the Bar Date Order, (ii) a separate order of the Bankruptcy
Court, (iii) a stipulation between or among the Debtors and a Holder in
connection with the Chapter 11 Cases or (iv) a supplemental bar date
established by the Debtors in accordance with the Bar Date Order.
3
22. "BAR DATE ORDER" means that certain order of the Bankruptcy Court
entered on October 1, 2004, which established a Bar Date for filing proofs of
Claims in the Chapter 11 Cases, as the same may be amended, modified or
supplemented.
23. "BUSINESS DAY" means any day, other than a Saturday, Sunday or
"legal holiday" (as defined in Bankruptcy Rule 9006(a)).
24. "CASH" means legal tender of the United States of America.
25. "CAUSES OF ACTION" means all actions, causes of action,
liabilities, obligations, rights, suits, damages, judgments, remedies,
demands, setoffs, defenses, recoupments, crossclaims, counterclaims,
third-party claims, indemnity claims, contribution claims or any other claims
whatsoever, whether known or unknown, matured or unmatured, fixed or
contingent, liquidated or unliquidated, disputed or undisputed, suspected or
unsuspected, foreseen or unforeseen, direct or indirect, choate or inchoate,
existing or hereafter arising, in law, equity or otherwise, based in whole or
in part upon any act or omission or other event occurring prior to the
Petition Date or during the course of the Chapter 11 Cases, including through
the Effective Date.
26. "CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. Sections 9601, et seq.
-- ---
27. "CHAPTER 11 CASES" means (a) when used with reference to a
particular Debtor, the chapter 11 case pending for that Debtor under Chapter
11 of the Bankruptcy Code in the Bankruptcy Court and (b) when used with
reference to all Debtors, the procedurally consolidated chapter 11 cases
pending for the Debtors in the Bankruptcy Court.
28. "CHEMICALS ASSETS" means the assets constituting "Chemicals
Assets" as defined and set forth in the Distribution Agreement.
29. "CHEMICALS LIABILITIES" means the liabilities constituting
"Chemicals Liabilities" as defined and set forth in the Distribution
Agreement.
30. "CHOCOLATE BAYOU AGREEMENTS" means the Master Operating
Agreement, the HMTA Purchase Agreement, and the HCN Purchase Agreement and the
Formalin Purchase Agreement, the agreements that define the relationship
between Monsanto and Solutia at the Alvin, Texas "Chocolate Bayou" facility.
31. "CHOCOLATE BAYOU SETTLEMENT" means the settlement between
Monsanto and Solutia to amend the Chocolate Bayou Agreements.
32. "CLAIM" means a "claim," as defined in section 101(5) of the
Bankruptcy Code, against any Debtor.
33. "CLAIMS OBJECTION DEADLINE" means, for each Claim, the later of
(a) 90 days after the Effective Date and (b) such other period of limitation
as may be specifically fixed by an order of the Bankruptcy Court for objecting
to such Claim.
34. "CLASS" means a class of Claims or Equity Interests, as described
in Article II herein.
4
35. "COMMERCIAL AND OPERATING AGREEMENTS" means the Master Operating
Agreement, the HMD Purchase Agreement, the HMTA Purchase Agreement, the HCN
Purchase Agreement and the Formalin Purchase Agreement.
36. "CONFIRMATION" means the entry of the Confirmation Order on the
docket of the Chapter 11 Cases.
37. "CONFIRMATION DATE" means the date on which the Bankruptcy Court
enters the Confirmation Order on its docket, within the meaning of Bankruptcy
Rules 5003 and 9021.
38. "CONFIRMATION HEARING" means the hearing held by the Bankruptcy
Court on Confirmation of the Plan, as such hearing may be continued from time
to time.
39. "CONFIRMATION ORDER" means the order of the Bankruptcy Court
confirming the Plan pursuant to section 1129 of the Bankruptcy Code.
40. "CONSUMMATION" means the occurrence of the Effective Date.
41. "CONVENIENCE CLAIMS" means a Claim that otherwise would be a
General Unsecured Claim included in Class 13, but (a) the amount of such Claim
is equal to or less than $2,500 or (b) the Holder of such Claim, in full
settlement of such Claim, agrees, by the applicable voting deadline as
specified in the Disclosure Statement, pursuant to an election made by such
Holder on its Ballot, to reduce such Claim to $2,500.
42. "CPFILMS CLAIMS" means all Claims, other than Non-Debtor
Intercompany Claims, Debtor Intercompany Claims and Legacy Claims, scheduled
by or filed against CPFilms.
43. "CREDITORS' COMMITTEE" means the official committee of unsecured
creditors of the Debtors appointed by the United States Trustee in the Chapter
11 Cases pursuant to section 1102 of the Bankruptcy Code, as reconstituted
from time to time.
44. "DEBTOR INTERCOMPANY CLAIM" means any Claim of one Debtor against
another Debtor.
45. "DIP CLAIMS" means all Claims arising under or pursuant to the
DIP Credit Facility.46. "DIP CREDIT FACILITY" means that certain Financing
Agreement, dated as of January 16, 2004, as amended on March 1, 2004, July 20,
2004, June 1, 2005, March 17, 2006, and January 25, 2007, among Solutia and
Solutia Business Enterprises Inc, as borrowers, all of the other Debtors, as
guarantors, Citicorp USA, Inc., as administrative, collateral and
documentation agent, and Citibank, N.A., as Issuer, and the lenders party
thereto, as the same may be amended from time to time prior to the
Confirmation Date.
47. "DIP LENDER" means, collectively, (a) those entities identified
as "Lenders" in the DIP Credit Facility and their respective successors and
assigns and (b) Citibank, N.A. (as Issuer).
48. "DIRECTORS' AND OFFICER INDEMNITY CLAIMS" means all Claims filed
by the Debtors' current and former directors, officers and employees for
indemnification or contribution.
49. "DISCLOSURE STATEMENT HEARING" means the hearing held by the
Bankruptcy Court regarding the approval of the Disclosure Statement.
5
50. "DISCLOSURE STATEMENT ORDER" means that certain order of the
Bankruptcy Court entered on ________, 2007, which is annexed as Exhibit B to
the Disclosure Statement.
51. "DISPUTED CLAIM" means any Claim which is not an Allowed Claim.
52. "DISPUTED CLAIMS RESERVE" means the reserve established and
maintained by the Reorganized Debtors to hold Cash to be distributed, as
applicable, to Holders of Allowed Claims other than Allowed General Unsecured
Claims and Allowed Noteholder Claims pending resolution of Section VII.I
hereof.
53. "DISPUTED GENERAL UNSECURED CLAIMS RESERVE" means the reserve
established and maintained by the Reorganized Debtors to hold the shares of
New Common Stock to be Distributed, as applicable, to Holders of Allowed
General Unsecured Claims and Allowed Noteholder Claims pending the resolution
of Disputed General Unsecured Claims in accordance with the terms of Section
VII.J hereof.
54. "DISPUTED GENERAL UNSECURED CLAIM" means any General Unsecured
Claim that, as of the date of determination, is a Disputed Claim.
55. "DISTRIBUTION" means any distribution made under the Plan to a
Holder of an Allowed Claim.
56. "DISTRIBUTION AGREEMENT" means that certain agreement, dated as
of September 1, 1997, as amended on July 1, 2002 and otherwise from time to
time, by and between Solutia and Pharmacia.
57. "DISTRIBUTION DATE" means any date on which a Distribution is
made.
58. "DISTRIBUTION RECORD DATE" means the date that is five Business
Days after the Confirmation Date.
59. "EFFECTIVE DATE" means the day that is the first Business Day
after all conditions to occurrence of the Effective Date have been met or
waived pursuant to Sections IX.B and IX.D.
60. "ELIGIBLE HOLDER" means the Holders of General Unsecured Claims
and the Holders of Noteholder Claims that are eligible, pursuant to the Rights
Offering Procedures, to participate in the Rights Offering.
61. "ENTITY" shall have the meaning set forth in section 101(15) of
the Bankruptcy Code.
62. "ENVIRONMENTAL LIABILITY" means any liability constituting an
"Environmental Liability" as defined and set forth in the Relationship
Agreement.
63. "ENVIRONMENTAL LIABILITY COSTS" means any costs constituting
"Environmental Liability Costs" as defined and set forth in the Relationship
Agreement.
64. "EQUITY COMMITTEE" means the official committee of equity
security holders of the Debtors appointed in the Chapter 11 Cases pursuant to
section 1102 of the Bankruptcy Code, as reconstituted from time to time.
65. "EQUITY COMMITTEE ADVERSARY PROCEEDING" means the adversary
proceeding filed on March 7, 2005 by the Equity Committee against Pharmacia
and Monsanto, Case No. 05-01202.
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66. "EQUITY INTEREST" means any share of common stock, preferred
stock or other instrument evidencing an ownership interest in any of the
Debtors, whether or not transferable, and any option, warrant or right,
contractual or otherwise, to acquire any such interest.
67. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the regulations promulgated thereunder.
68. "ESTATE" and, collectively, "ESTATES" means the estate created
for that Debtor in its Chapter 11 Case pursuant to section 541 of the
Bankruptcy Code.
69. "EXCHANGE ACT" means the Securities Exchange Act of 1934, 15
U.S.C. Sections 78a-78jj, as now in effect or hereafter amended.
70. "EXECUTORY CONTRACT AND/OR UNEXPIRED LEASE" means a contract or
lease to which one or more of the Debtors is a party and that is subject to
assumption or rejection under section 365 of the Bankruptcy Code.
71. "EXIT FINANCING FACILITY" means a senior secured credit facility
that will be entered into by the Reorganized Debtors, the Exit Financing
Facility Agent Bank and the relevant lenders on the Effective Date.
72. "EXIT FINANCING FACILITY AGENT BANK" means the agent bank under
the Exit Financing Facility.
73. "EXIT FINANCING FACILITY COMMITMENT LETTER" means a binding
commitment letter for the Exit Financing Facility.
74. "FINAL ORDER" means an order or judgment of the Bankruptcy Court,
or other court of competent jurisdiction, as entered on the docket in the
Chapter 11 Cases or the docket of any other court of competent jurisdiction,
which has not been reversed, stayed, modified or amended, and as to which the
time to appeal or seek certiorari has expired, and no appeal or petition for
certiorari has been timely taken, or as to which any appeal that has been
taken or any petition for certiorari that has been timely filed has been
resolved by the highest court to which the order or judgment was appealed or
from which certiorari was sought.
75. "FORMALIN PURCHASE AGREEMENT" means the Raw Material Purchase
Agreement for Formalin dated September 1, 1997, as amended on April 1, 1999
and on September 26, 2003, between Solutia and Monsanto (as assignee of
Pharmacia).
76. "FUNDING CO" means a newly created, special purpose,
tax-efficient, bankruptcy-remote subsidiary of Reorganized Solutia, funded
with the proceeds of the Rights Offering.
77. "FUNDING CO CHARTER" means the agreement governing Funding Co,
substantially in the form annexed hereto as Exhibit K.
78. "GENERAL UNSECURED CLAIMS" means Unsecured Claims, other than
Convenience Claims, Debtor Intercompany Claims, Insured Claims (only to the
extent that such Insured Claims are payable by any available insurance
coverage proceeds), the Noteholder Claims, the Monsanto Claim, Non-Debtor
Intercompany Claims, NRD Claims, the Pharmacia Claims, the Legacy Site Claims,
the Retiree Claim, Unsecured Claims against Axio Research Corporation, CPFilms
Claims and Tort Claims.
7
79. "HCN PURCHASE AGREEMENT" means the Raw Material Purchase
Agreement for HCN dated September 1, 1997, as amended on April 1, 1999,
between Solutia and Monsanto (as assignee of Pharmacia).
80. "HMD PURCHASE AGREEMENT" means the Raw Material Purchase
Agreement for HMD dated September 1, 1997, as amended from time to time,
between Solutia and Monsanto (as assignee of Pharmacia).
81. "HMTA PURCHASE AGREEMENT" means the Raw Material Conversion
Agreement for HMTA dated September 1, 1997, as amended on April 1, 1999,
between Solutia and Monsanto (as assignee of Pharmacia).
82. "HOLDBACK AMOUNT" means the aggregate holdback of those
Professional fees billed to the Debtors during the Chapter 11 Cases that are
held back pursuant to the Professional Fee Order or any other order of the
Bankruptcy Court, which amount is to be deposited in the Holdback Escrow
Account as of the Effective Date. The Holdback Amount shall not be considered
property of the Debtors or the Reorganized Debtors except as set forth in
Section III.A.1.d.ii.a.(iii).
83. "HOLDBACK ESCROW ACCOUNT" means the escrow account established by
Reorganized Solutia into which Cash equal to the Holdback Amount shall be
deposited on the Effective Date for the payment of Allowed Professional Fee
Claims to the extent not previously paid or disallowed.
84. "HOLDER" and, collectively, "HOLDERS" means a Person or Entity
legally holding a Claim or Equity Interest.
85. "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
86. "IMPAIRED" means, with respect to a Claim or Equity Interest (or
Class of Claims or Equity Interests), a Claim or Equity Interest (or Class of
Claims or Equity Interests) that is impaired within the meaning of section
1124 of the Bankruptcy Code.
87. "IMPAIRED CLAIM" means a Claim classified in an Impaired Class.
88. "IMPAIRED CLASS" means each of Classes 11, 12, 13, 14, 15, 16,
17, 18, 19 and 20 as set forth in Article III of the Plan.
89. "INCENTIVE PLAN" means the employee incentive plan to be
implemented in accordance with Section V.J. hereof substantially in the form
annexed hereto as Exhibit I.
90. "INSURED CLAIMS" means any Claims (other than Tort Claims and
Environmental Liabilities) that are covered under any insurance policies that
are maintained by any of the Debtors, Pharmacia or Monsanto, but only to the
extent of such coverage.
91. "INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986,
as amended from time to time, and any applicable rulings, Treasury
Regulations, judicial decisions and notices, announcements and other releases
of the United States Treasury Department or the IRS.
92. "IRS" means the Internal Revenue Service of the United States of
America.
8
93. "JPM ADVERSARY PROCEEDING" means the adversary proceeding
commenced on May 27, 2005 by the predecessor to the Prepetition Indenture
Trustee against Solutia in the Bankruptcy Court, Case No. 05-01843.
94. "LEGACY CLAIMS" means all Claims, including, but not limited to,
Tort Claims and Legacy Sites Claims, arising under or related to the
Distribution Agreement, including any and all Claims relating to or arising
out of the Spinoff, the Chemicals Liabilities and the Spinoff Indemnity
Claims.
95. "LEGACY SITES" means the "Legacy Sites" as defined and set forth
in the Relationship Agreement.
96. "LEGACY SITE CLAIMS" means all Environmental Liability Costs with
respect to the Legacy Sites.
97. "LIEN" means any lien, lease, right of first refusal, servitude,
claim, pledge, option, charge, hypothecation, easement, security interest,
right-of-way, encroachment, mortgage, deed of trust or any other encumbrance,
restriction or limitation whatsoever.
98. "MASTER OPERATING AGREEMENT" means that certain Master Operating
Agreement, dated as of September 1, 1997, as amended from time to time, by and
between Solutia and Monsanto (as assignee of Pharmacia).
99. "MONSANTO" means Monsanto Company, a Delaware corporation, and
its Affiliates.
100. "MONSANTO CLAIM" means any and all Claims of Monsanto, including
all Claims of Monsanto on account of Solutia's breach of the Distribution
Agreement. Although Monsanto believes that its Claim is in excess of $1
billion, for purposes of the Monsanto Settlement only, the Debtors and
Monsanto have agreed that the Monsanto Claim shall constitute an Allowed
Unsecured Claim comprised of the value of (a) amounts related to the
management and settlement of Legacy Claims and other expenses on the Debtors'
behalf that (i) Monsanto has spent from the Petition Date through March 31,
2007, which Solutia believes to be $180.9 million, and (ii) Monsanto likely
will spend, pursuant to the Monsanto Settlement, following such date
(discounted to present value), which amount Solutia believes to be $143.6
million, (b) the extension of the term of the Master Operating Agreement, (c)
the replacement of the Distribution Agreement with the Relationship Agreement,
(d) the settlement of litigation related to Solutia's Anniston, Alabama plant,
(e) the elimination of all Tort Claims from Solutia's General Unsecured Claims
pool, (f) the waiver of the right to file surrogate claims on behalf of legacy
claimants, (g) the waiver of various indemnity claims related to legacy
liabilities for which Monsanto has agreed to assume responsibility, (h) the
Chocolate Bayou Settlement and continuation of the Commercial and Operating
Agreements subject to the terms thereof, and (i) the resolution of all
litigation and potential litigation related to the Distribution Agreement, the
classification of Monsanto's Claim and other matters, between Solutia and
Monsanto.
101. "MONSANTO CONTRIBUTION" means, among other things, (a) the
Monsanto Tort Management, (b) Monsanto's settlement of adversary proceedings
(including the Settled Adversary Proceedings), contested matters, disputes and
the Monsanto Claim, (c) Monsanto's management, litigation and settlement of
various Legacy Claims, including Tort Claims, from the Petition Date through
the Effective Date, (d) Monsanto's agreement to take financial responsibility,
as between itself and Reorganized Solutia only, for the Legacy Site Claims and
Environmental Liability for the Shared Sites, subject to the sharing mechanism
set forth in the Relationship Agreement, and (e) Monsanto's agreement to (i)
pay certain liabilities, including certain environmental liabilities as set
forth in Section V.B herein and in the Relationship Agreement, (ii) forever
release the Debtors from any and all indemnity obligations
9
owed to Monsanto arising under the Distribution Agreement and/or any other
agreement (other than as set forth in the Relationship Agreement and the
Commercial and Operating Agreements), including any amendments to the
Distribution Agreement, related to the Legacy Claims or otherwise, (iii) enter
into the Relationship Agreement and amend the Master Operating Agreement, (iv)
waive any right to file surrogate Claims pursuant to Bankruptcy Rule 3005, (v)
grant certain indemnities to the Reorganized Debtors pursuant to the terms of
the Relationship Agreement, and (vi) enter into the Chocolate Bayou
Settlement.
102. "MONSANTO/PHARMACIA INJUNCTION" means the injunction in favor of
Monsanto and Pharmacia as set forth in Section X.A.2 herein.
103. "MONSANTO'S PROFESSIONALS" means Willkie Farr & Gallagher LLP,
Bryan Cave LLP, Boies, Schiller & Flexner LLP, Greenhill & Co., LLC, Kramer
Capital Partners, Perella Weinberg Partners LP, Groom Law Group, ARCADIS, FTI
Consulting, Dickstein Shapiro Morin & Oshinky LLP and Sonnenschein Nath &
Rosenthal LLP, Environ, William Holder, The Weinberg Group, Inc., Navigant and
BDO Seidman, LLP.
104. "MONSANTO SETTLEMENT" means, as described in more detail in
Article V.B hereof, the settlement between and among Monsanto, Solutia, the
Creditors' Committee, the Ad Hoc Trade Committee and the Retirees' Committee
whereby Monsanto has agreed to make the Monsanto Contribution in exchange for
the allowance and treatment of the Monsanto Claim described in more detail in
Article III.C.1.a hereof.
105. "MONSANTO TORT MANAGEMENT" means Monsanto's agreement to take
financial responsibility, as between itself and Reorganized Solutia only, for
the management and payment of the Tort Claims and to indemnify Reorganized
Solutia for the Tort Claims, pursuant to the terms of the Relationship
Agreement.
106. "NATIONAL SECURITIES EXCHANGE" means any exchange registered
pursuant to Section 6(a) of the Exchange Act.
107. "NEW BY-LAWS" means the form of the by-laws of each of the
Reorganized Debtors, which form is annexed hereto as Exhibit D.
108. "NEW CERTIFICATE OF INCORPORATION" means, the form of the
certificates of incorporation of each of the Reorganized Debtors, which form
is annexed hereto as Exhibit E.
109. "NEW COMMON STOCK" means the shares of common stock, par value
$.01 per share, of Reorganized Solutia, authorized pursuant to the New
Certificate of Incorporation of Reorganized Solutia.
110. "NOMINEE" means any broker, dealer, commercial bank, trust
company, savings and loan financial institution or other nominee in whose name
securities were registered or held of record on behalf of a beneficial Holder.
111. "NON-DEBTOR INTERCOMPANY CLAIM" means any Claim owed by a Debtor
to a non-Debtor Affiliate as of the Petition Date.
112. "NOTEHOLDER CLAIMS" means the Claims for principal and accrued
but unpaid interest of the Holders of the 2027/2037 Notes as of the Petition
Date.
10
113. "NRD CLAIMS" means Claims filed in the Chapter 11 Cases in
accordance with the Bar Date Order under Section 107(a)(4)(C) of CERCLA, 42
U.S.C. Section 9607(a)(4)(C), or other provision of law, for damages for
injury to, destruction of or loss of natural resources, including the
reasonable cost of assessing such damages.
114. "NYSE" means the New York Stock Exchange.
115. "ORDINARY COURSE PROFESSIONALS ORDER" means that certain order
of the Bankruptcy Court entered on January 16, 2004, as amended from time to
time, which authorized the employment and payment of Professionals by the
Debtors in the ordinary course of business.
116. "PBGC" means the Pension Benefit Guaranty Corporation.
117. "PCBS" means polychlorinated biphenyls.
118. "PENSION PLAN" means the Solutia Inc. Employees' Pension Plan,
dated September 1, 1997, as amended and restated from time to time.
119. "PERSON" shall have the meaning set forth in section 101(41) of
the Bankruptcy Code.
120. "PETITION DATE" means December 17, 2003, the date on which the
Debtors commenced the Chapter 11 Cases.
121. "PHARMACIA" means Pharmacia Corporation, formerly known as
Monsanto Company, a Delaware corporation.
122. "PHARMACIA CONTRIBUTION" means, pursuant to the provisions of
Article V hereof, Pharmacia's agreement to (a) subject to the indemnity
agreement to be provided by the Reorganized Debtors pursuant to the
Relationship Agreement, forever release the Debtors and the Reorganized
Debtors from any and all Legacy Claims, including any indemnity obligations
arising under the Distribution Agreement, or otherwise, and any other claims
or liabilities Pharmacia holds, has held or may in the future hold against the
Debtors and the Reorganized Debtors, related to the Distribution Agreement or
the Legacy Claims, and (b) waive the Pharmacia Claims in their entirety with
prejudice.
123. "PHARMACIA CLAIMS" means all Claims asserted by Pharmacia, its
parent and Affiliates, including Pfizer Inc., including Legacy Claims and any
Claims for indemnification, contribution or otherwise arising under or related
to the Distribution Agreement or any other agreement.
124. "PLAN DOCUMENTS" means (a) the Relationship Agreement, (b) the
Exit Financing Facility, (c) the Exit Financing Facility Commitment Letter,
(d) the New Certificate of Incorporation of each Reorganized Debtor, (e) the
New By-laws of each Reorganized Debtor, (f) the list of Executory Contracts
and Unexpired Leases to be assumed, (g) the Rights Offering Procedures, (h)
Commercial and Operating Agreements, (i) the Incentive Plan, (j) the
Registration Rights Agreement, (k) the Restructuring Transactions Agreement,
(l) the Retiree Settlement Agreement, (m) the Funding Co Charter, (n) the
Shareholders Agreement, and (o) any and all instruments, certificates,
agreements or other documents executed, delivered, entered into or filed in
connection with the Plan or any of the foregoing.
125. "PLAN SUPPLEMENT" means the following forms of documents: (a)
the Exit Financing Facility Commitment Letter; (b) the New Certificate of
Incorporation of each Reorganized Debtor; (c) the New By-laws of each
Reorganized Debtor; (d) the list of Executory Contracts and Unexpired Leases
to be assumed; (e) the Incentive Plan; (f) the Registration Rights Agreement;
(g) the Restructuring
11
Transactions Agreement; (h) the Funding Co Charter; (i) the identity and
affiliations of any Person proposed to serve on the initial board of directors
or be an officer of each of the Reorganized Debtors and to the extent any
director or officer of Reorganized Solutia is an "insider" under the
Bankruptcy Code, the nature and amount of any compensation to be paid to such
director or officer; and (j) the Shareholders Agreement, each in substantially
final form or final form, as applicable, each of which will be filed with the
Bankruptcy Court at least ten (10) days prior to the Confirmation Hearing.
126. "PREPETITION INDENTURE" means that certain Indenture, dated
October 1, 1997, as the same may have been subsequently modified, amended or
supplemented, together with all instruments and agreements related thereto,
between Solutia and the Prepetition Indenture Trustee, under which Solutia
issued the 2027/2037 Notes.
127. "PREPETITION INDENTURE TRUSTEE" means Wilmington Trust Company,
or any successor thereto, as indenture trustee under the Prepetition
Indenture.
128. "PRIORITY NON-TAX CLAIM" means any Claim, other than an
Administrative Expense Claim or a Priority Tax Claim, entitled to priority in
right of payment under section 507(a) of the Bankruptcy Code.
129. "PRIORITY TAX CLAIM" means any Claim of a governmental unit of
the kind specified in sections 502(i) and 507(a)(8) of the Bankruptcy Code.
130. "PRO RATA" means the ratio of the amount of an Allowed Claim in
a particular Class to the aggregate amount of all Allowed Claims in such
Class.
131. "PROFESSIONAL" means (a) any professional employed in the
Chapter 11 Cases by an order or orders of the Bankruptcy Court issued pursuant
to section 327, 328 or 1103 of the Bankruptcy Code and (b) any professional or
other Entity seeking compensation and reimbursement in connection with the
Chapter 11 Cases pursuant to section 503(b)(4) of the Bankruptcy Code.
132. "PROFESSIONAL FEE CLAIMS" means all Administrative Expense
Claims for the compensation of Professionals and the reimbursement of expenses
incurred by such Professionals (to the extent Allowed under sections 328, 330,
331, 363 or 503 of the Bankruptcy Code) through the Effective Date.
133. "PROFESSIONAL FEE ORDER" means that certain order of the
Bankruptcy Court entered on January 16, 2004, establishing procedures for
interim compensation and reimbursement of expenses of Professionals.
134. "QUARTERLY DISTRIBUTION DATE" means the last Business Day of the
month following the end of each calendar quarter after the Effective Date;
provided, however, that if the Effective Date is within 45 days before the end
- -------- -------
of a calendar quarter, the first Quarterly Distribution Date will be the last
Business Day of the month following the end of the first calendar quarter
after the calendar quarter in which the Effective Date falls.
135. "REGISTRATION RIGHTS AGREEMENT" means the agreement, a form of
which is attached hereto as Exhibit J, whereby Reorganized Solutia will be
obligated to register certain shares of New Common Stock pursuant to the terms
and conditions of such agreement.
136. "REINSTATED" or "REINSTATEMENT" means a Claim or Equity Interest
unimpaired within the meaning of section 1124 of the Bankruptcy Code. Unless
the Plan specifies a particular method of
12
Reinstatement, when the Plan provides that an Allowed Claim or Allowed Equity
Interest will be Reinstated, such Claim or Equity Interest will be Reinstated,
at the applicable Reorganized Debtor's sole discretion, in accordance with one
of the following:
a. The legal, equitable and contractual rights to which such
Claim or Equity Interest entitles the holder will be unaltered; or
b. Notwithstanding any contractual provision or applicable
law that entitles the Holder of such Claim or Equity Interest to
demand or receive accelerated payment of such Claim or Interest after
the occurrence of a default:
i. 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, will be cured;
ii. the maturity of such Claim or Equity Interest,
as such maturity existed before such default, will be
reinstated;
iii. the Holder of such Claim or Equity Interest
will be compensated for any damages incurred as a result of
any reasonable reliance by such Holder on such contractual
provision or such applicable law to the extent required by
section 1124(c) of the Bankruptcy Code; and
iv. the legal, equitable or contractual rights to
which such Claim or Equity Interest entitles the Holder of
such Claim or Equity Interest will not otherwise be altered.
13
137. "RELATIONSHIP AGREEMENT" means that certain agreement between
and among Reorganized Solutia, Monsanto and Funding Co, substantially in the
form annexed hereto as Exhibit A.
138. "REORGANIZED . . ." means, when used in reference to a
particular Debtor, such Debtor on and after the Effective Date.
139. "RESTRUCTURING TRANSACTIONS" means those mergers,
consolidations, restructurings, transfers, conversions, dispositions,
liquidations or dissolutions that the Debtors or Reorganized Debtors determine
to be necessary or appropriate to effect a restructuring of a Debtor's
business or a restructuring of the overall corporate structure of the
Reorganized Debtors, all of which shall be effected by the Restructuring
Transactions Agreement.
140. "RESTRUCTURING TRANSACTIONS AGREEMENT" means the agreement or
agreements that govern the Restructuring Transactions, annexed hereto as
Exhibit M.
141. "RETAINED SITES" means the "Retained Sites" as defined and set
forth in the Relationship Agreement.
142. "RETIREES" has the meaning set forth in the preamble to the
Retiree Settlement Agreement.
143. "RETIREE APPROVAL ORDER" means an order of the Bankruptcy Court,
approving the Retiree Settlement Agreement.
144. "RETIREE BENEFITS" means the benefits provided to the Retirees
as set forth in the Retiree Settlement Agreement.
145. "RETIREE CLAIM" means an Allowed non-priority, Unsecured Claim
on account of certain consensual benefit reductions included in the Retiree
Settlement Agreement, in the aggregate amount of $35 million, the Distribution
received on account of which, in accordance with the terms of the Retiree
Settlement Agreement and the Plan will be held in trust (or sold) for the
benefit of Retirees in accordance with the terms of the Retiree Settlement
Agreement.
146. "RETIREES' COMMITTEE" means the official committee of retirees
of the Debtors appointed by the United States Trustee in the Chapter 11 Cases
pursuant to section 1114 of the Bankruptcy Code.
147. "RETIREE SETTLEMENT AGREEMENT" means that certain agreement,
effective as of the Effective Date, between the Debtors and the Retirees'
Committee, substantially in the form of Exhibit B.
148. "RETIREE TRUST" has the meaning set forth in the Retiree
Settlement Agreement.
149. "RIGHTS" means the rights to subscribe for and to acquire, on
the Effective Date, an aggregate of 27.9% of the New Common Stock, in exchange
for $250 million in Cash in accordance with the terms and conditions of the
Rights Offering as set forth in the Rights Offering Procedures.
150. "RIGHTS OFFERING" means the offering of the Rights by the
Debtors to Eligible Holders.
151. "RIGHTS OFFERING PROCEDURES" means those certain Rights Offering
Procedures, which set forth the terms and conditions of the Rights Offering,
which shall be in substantially the form annexed hereto as Exhibit H.
14
152. "RIGHTS SUBSCRIPTION EXERCISE FORM" means that certain form
distributed to each Eligible Holder, which form such Eligible Holder may use
to exercise Rights.
153. "SAUGET ADMINISTRATIVE ORDERS" means the Administrative Orders,
relating to the Sauget, Illinois Area 1 and Area 2 sites, V-W-99-C-554,
effective January 21, 1999; V-W-99-554, issued May 31, 2000; V-W-01-C-622,
effective November 24, 2000; and V-W-C-716, issued September 30, 2002.
154. "SCHEDULES" means the schedules of assets and liabilities and
the statements of financial affairs filed by the Debtors with the Bankruptcy
Court, as required by section 521 of the Bankruptcy Code and the Official
Bankruptcy Forms, as the same may have been or may be amended, modified or
supplemented.
155. "SECURED CLAIM" means a Claim, other than a Senior Secured Note
Claim or DIP Claim, that is secured by a lien on property in which an Estate
has an interest or that is subject to setoff under section 553 of the
Bankruptcy Code, to the extent of the value of the Holder's interest in the
applicable Estate's interest in such property or to the extent of the amount
subject to setoff, as applicable, as determined pursuant to section 506(a) of
the Bankruptcy Code and, if applicable, section 1129(b) of the Bankruptcy
Code.
156. "SECURITIES ACT" means the Securities Act of 1933, 15 U.S.C.
Sections 77a-77aa, as now in effect or hereafter amended.
157. "SECURITY CLAIMS" means any Claim (a) arising from rescission of
a purchase or sale of a security of any of the Debtors, (b) for damages
arising from the purchase or sale of such security, (c) for reimbursement or
contribution allowed under section 502 of the Bankruptcy Code on account of
such Claim, or (d) otherwise subject to subordination under section 510(b) of
the Bankruptcy Code.
158. "SENIOR SECURED NOTES" means those certain 11.25% Senior Secured
Notes, due on July 15, 2009, issued pursuant to that certain Indenture, dated
July 9, 2002, as amended from time to time.
159. "SENIOR SECURED NOTE CLAIMS" means Claims for principal and
accrued and unpaid interest through the Effective Date arising from the Senior
Secured Notes.
160. "SENIOR SECURED NOTES TRUSTEE" means Bank of New York, or any
successor thereto, as indenture trustee under that certain Indenture, dated
July 9, 2002, as amended from time to time.
161. "SEPARATION AGREEMENT" means that certain agreement, dated as of
September 1, 2000, as amended, by and between Pharmacia and Monsanto.
162. "SETTLED ADVERSARY PROCEEDINGS" means the following adversary
proceedings commenced in the Bankruptcy Court: Solutia Inc. v. Pharmacia
Corp., Case No. 03-93700 (PCB), filed Dec. 17, 2003; Solutia Inc. v. Pharmacia
Corp., Case. No. 04-2969 (PCB), filed April 20, 2004; Official Committee of
Retirees v. Solutia Inc., Case No. 04-3057 (PCB), filed May 7, 2004; and
Solutia Inc. v. Monsanto Company and Pharmacia Corp., Case No. No. 05-03353
(PCB), filed on December 17, 2005.
163. "SHAREHOLDERS AGREEMENT" means that certain agreement between
Reorganized Solutia and Monsanto, substantially in the form of Exhibit L
hereto.
164. "SHARED SITES" means the "Shared Sites" as defined and set forth
in the Relationship Agreement.
15
165. "SPINOFF" means the transaction contemplated by the Distribution
Agreement, whereby Pharmacia spun-off its Chemicals Assets and Chemicals
Liabilities to Solutia.
166. "SPINOFF INDEMNITY CLAIM" means any Claim or claim against any
of the Debtors, the Subsidiaries or Solutia's Affiliates, as appropriate, for
indemnification or contribution held by Monsanto or Pharmacia, including the
Monsanto Claims and the Pharmacia Claims, that arise from or relate to the
Spinoff or the Distribution Agreement.
167. "STIPULATION OF AMOUNT AND NATURE OF CLAIM" means a stipulation
or other agreement between a Debtor or Reorganized Debtor, subject to Section
VIII.B herein, or the claims monitor, and a Holder of a Claim approved by the
Bankruptcy Court or an agreed order of the Bankruptcy Court, establishing the
allowed amount and nature of a Claim.
168. "STOCK POOL" means 50.4% of the New Common Stock to be
Distributed to the Holders of the Allowed Noteholder Claims and Allowed
General Unsecured Claims, which pool may be decreased or increased from time
to time as set forth in Section VII.J hereof.
169. "SUBSIDIARY" or "SUBSIDIARIES" means the direct and indirect
subsidiaries of Solutia.
170. "TOLBERT SETTLEMENT AGREEMENT" means that certain settlement
agreement, dated September 9, 2003, resolving the lawsuit captioned Tolbert v.
Monsanto Company, Civil Action No. 01-C-1407-S.
171. "TORT CLAIMS" means all legal, equitable or other claims,
demands, costs, causes of action and/or other liabilities arising under tort
law (including demands for indemnification or contribution relating to or
arising out of any such liability, whether arising under contract, tort law or
otherwise), whether currently asserted or asserted in the future, whether
known or unknown, (a) which constitute Chemicals Liabilities assumed by
Solutia under the Distribution Agreement, (b) for which Solutia was required
to indemnify Monsanto and Pharmacia under the Distribution Agreement, and (c)
which are for property damage, personal injury, products liability or premises
liability or other damages arising out of or related to exposure to asbestos,
PCB, dioxin, benzene, vinyl chloride, silica, butadiene, pentachlorophenol,
styrene tars, other chemical exposure or environmental contamination,
regardless of whether (i) any of the Debtors is, was or will be named as a
defendant in any action commenced by or on behalf of the holder of such Tort
Claim, or (ii) such holder has filed a proof of claim in the Chapter 11 Case.
"Tort Claims" shall not include, among other things: NRD Claims; claims for
medical or retiree benefits, including retiree medical, disability and life
insurance benefits; monitoring obligations with respect to PAB-exposed former
employees; workers compensation claims brought solely pursuant to worker
compensations statutes and not constituting or arising out of a claim, demand,
cost, cause of action and/or other liability that would otherwise be defined
as a "Tort Claim" herein; antitrust claims; commercial, business or contract
claims; Environmental Liability Costs; any other remediation obligations
covered by the Relationship Agreement; Legacy Claims for "response" as defined
under Section 101(25) of CERCLA; claims asserted in connection with any
pension or similar obligations of Solutia, including (x) claims asserted in
the actions entitled Davis v. Solutia Inc. Employees' Pension Plan, No.
3:05CV736, Scharringhausen v. Solutia Inc. Employees' Pension Plan, No.
3:06CV00099, and the administrative charge entitled Larry Probst v. Monsanto
Company and Solutia, Inc., EEOC Charge Nos. 280 A 00618 through 280 A 00652,
and any similar litigation and (y) claims asserted in the action entitled
Miller v. Pharmacia Corporation, No. 4:04CV981, or any similar litigation; or
any claims, including claims for exposure to chemicals or other substances,
arising from Solutia's operations after the Spinoff.
16
172. "TREASURY REGULATIONS" means regulations (including temporary
and proposed regulations) promulgated under the Internal Revenue Code, as
amended from time to time, by the United States Treasury Department.
173. "UNDELIVERABLE DISTRIBUTION" means a Distribution of New Common
Stock or Cash that is returned to the Reorganized Debtors as undeliverable or
is otherwise unclaimed for one year after the date such Distribution was made.
174. "UNIFORM COMMERCIAL CODE" means the uniform code of laws
governing various commercial transactions, including the sale of goods,
banking transactions, secured transactions in personal property and other
matters, as applicable in the relevant state(s).
175. "UNIMPAIRED" means, with respect to a Claim (or Class of
Claims), a Claim (or Class of Claims) that is unimpaired within the meaning of
section 1124 of the Bankruptcy Code.
176. "UNIMPAIRED CLAIM" means a Claim classified in an Unimpaired
Class.
177. "UNIMPAIRED CLASS" means each of Classes 1, 2, 3, 4, 5, 6, 7, 8,
9 and 10 as set forth in Article III of the Plan.
178. "UNITED STATES OF AMERICA" means the United States of America
and all of its agencies, subdivisions and instrumentalities.
179. "UNSECURED CLAIM" means any Claim that is neither secured nor
entitled to priority under the Bankruptcy Code or any order of the Court,
including any Claim arising from the rejection of an Executory Contract or
Unexpired Lease under section 365 of the Bankruptcy Code.
180. "VALUE" shall have the meaning set forth in Section VII.I
hereof.
181. "VOTING AGENT" means Financial Balloting Group LLC, 757 Third
Avenue, 3rd Floor, New York, New York 10017.
182. "VOTING DEADLINE" means the date set by the Bankruptcy Court by
which all Ballots for acceptance or rejection of the Plan must be received by
the Voting Agent.
183. "VOTING RECORD DATE" means the record date set by the Bankruptcy
Court, pursuant to Bankruptcy Rule 3017(d), for determining which creditors
and equity security holders are entitled to receive solicitation materials
and, when applicable, to vote on the Plan.
17
B. RULES OF INTERPRETATION AND COMPUTATION OF TIME
1. RULES OF INTERPRETATION
For purposes of the Plan, unless otherwise provided herein:
(a) whenever from the context it is appropriate, each term, whether stated in
the singular or the plural, will include both the singular and the plural; (b)
unless otherwise provided in the Plan, any reference in the Plan to a
contract, instrument, release or other agreement or document being in a
particular form or on particular terms and conditions means that such document
will be substantially in such form or substantially on such terms and
conditions; (c) any reference in the Plan to an existing document or exhibit
filed or to be filed means such document or exhibit, as it may have been or
may be amended, modified or supplemented pursuant to the Plan or Confirmation
Order; (d) any reference to an Entity as a Holder of a Claim or Equity
Interest includes that Entity's successors, assigns and, where applicable,
Affiliates; (e) all references in the Plan to sections, articles and exhibits
are references to sections, articles and exhibits of or to the Plan; (f) the
words "herein," "hereunder" and "hereto" refer to the Plan in its entirety
rather than to a particular portion of the Plan; (g) captions and headings to
articles and sections are inserted for convenience of reference only and are
not intended to be a part of or to affect the interpretation of the Plan; (h)
subject to the provisions of any contract, certificates of incorporation,
by-laws, similar constituent documents, instrument, release or other agreement
or document entered into or delivered in connection with the Plan, the rights
and obligations arising under the Plan will be governed by, and construed and
enforced in accordance with, federal law, including the Bankruptcy Code and
the Bankruptcy Rules; and (i) the rules of construction set forth in section
102 of the Bankruptcy Code will apply.
2. COMPUTATION OF TIME
In computing any period of time prescribed or allowed by the
Plan, the provisions of Bankruptcy Rule 9006(a) will apply.
18
ARTICLE II
CLASSES OF CLAIMS AND EQUITY INTERESTS
All Claims and Equity Interests, except Administrative Expense Claims
and Priority Tax Claims, are placed in the Classes described below for all
purposes, including voting and Distribution pursuant to the Plan. In
accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative
Expense Claims and Priority Tax Claims, as described in Section III.A, have
not been classified and, thus, are excluded from the Classes described below.
A Claim or Equity Interest is classified in a particular Class only to the
extent that the Claim or Equity Interest qualifies within the description of
that Class and is classified in other Classes to the extent that any remainder
of the Claim or Equity Interest qualifies within the description of such other
Classes.
CLASS DESIGNATION IMPAIRMENT ENTITLED TO VOTE
Class 1 Priority Non-Tax Claims Unimpaired No (deemed to accept)
Class 2 Secured Claims Unimpaired No (deemed to accept)
Class 3 Senior Secured Note Claims Unimpaired No (deemed to accept)
Class 4 Convenience Claims Unimpaired No (deemed to accept)
Class 5 CPFilms Claims Unimpaired No (deemed to accept)
Class 6 NRD Claims Unimpaired No (deemed to accept)
Class 7 Insured Claims Unimpaired No (deemed to accept)
Class 8 Tort Claims Unimpaired No (deemed to accept)
Class 9 Legacy Site Claims Unimpaired No (deemed to accept)
Class 10 Equity Interests in all Debtors Unimpaired No (deemed to accept)
other than Solutia
Class 11 Monsanto Claim Impaired Yes
Class 12 Noteholder Claims Impaired Yes
Class 13 General Unsecured Claims Impaired Yes
Class 14 Retiree Claim Impaired Yes
Class 15 Pharmacia Claims Impaired Yes
Class 16 Non-Debtor Intercompany Claims Impaired No (deemed to accept)
Class 17 Debtor Intercompany Claims Impaired No (deemed to accept)
Class 18 Axio Claims Impaired No (deemed to reject)
Class 19 Security Claims Impaired No (deemed to reject)
Class 20 Equity Interests in Solutia Impaired No (deemed to reject)
19
ARTICLE III
TREATMENT OF CLAIMS AND EQUITY INTERESTS
A. UNCLASSIFIED CLAIMS
1. PAYMENT OF ADMINISTRATIVE EXPENSE CLAIMS
a. ADMINISTRATIVE EXPENSE CLAIMS IN GENERAL
Except as specified in this Section III.A, and subject to the
Administrative Expense Claim Bar Date provisions herein, unless otherwise
agreed to by the Holder of an Administrative Expense Claim and the applicable
Debtor or Reorganized Debtor, each Holder of an Allowed Administrative Expense
Claim will receive, in full satisfaction of its Administrative Expense Claim,
Cash equal to the amount of such Allowed Administrative Expense Claim either
(i) on the Effective Date or as soon thereafter as reasonably practicable or
(ii) if the Administrative Expense Claim is not Allowed as of the Effective
Date, 30 days after the date on which an order allowing such Administrative
Expense Claim becomes a Final Order.
b. ORDINARY COURSE LIABILITIES
Allowed Administrative Expense Claims based on liabilities incurred
by a Debtor in the ordinary course of its business will be paid by the
applicable Reorganized Debtor pursuant to the terms and conditions of the
particular transaction giving rise to such Allowed Administrative Expense
Claims, without any further action by the Holders of such Allowed
Administrative Expense Claims.
c. DIP CLAIMS
On the Effective Date, or as soon thereafter as reasonably
practicable, unless otherwise agreed to by the DIP Lenders pursuant to the DIP
Credit Facility, Allowed DIP Claims will be paid in Cash in amounts equal to
the amount of such Allowed DIP Claims.
d. BAR DATES FOR ADMINISTRATIVE EXPENSE CLAIMS
i. GENERAL ADMINISTRATIVE EXPENSE CLAIM BAR DATE PROVISIONS
Except as otherwise provided in this Section III.A, unless a
request for the payment of an Administrative Expense Claim previously was
filed with the Bankruptcy Court, requests for payment of an Administrative
Expense Claim must be filed with the Bankruptcy Court and served on the
Reorganized Debtors, pursuant to the procedures specified in the Confirmation
Order and the notice of entry of the Confirmation Order, no later than 45 days
after the Effective Date. Any Holder of an Administrative Expense Claim that
is required to file and serve a request for payment of such Administrative
Expense Claim and that does not file and serve such a request within the time
established by this Section III.A of the Plan will be forever barred from
asserting such Administrative Expense Claim against the Debtors, the
Reorganized Debtors or their respective property and such Administrative
Expense Claim will be deemed discharged as of the Effective Date. Objections
to such requests for payment of an Administrative Expense Claim must be filed
with the Bankruptcy Court and served on the Debtors or the Reorganized
Debtors, as applicable, and the requesting party by the later of (A) 120 days
after the Effective Date or (B) 60 days after the filing of the applicable
request for payment of the Administrative Expense Claims with the Bankruptcy
Court.
20
ii. BAR DATES FOR CERTAIN ADMINISTRATIVE EXPENSE CLAIMS
a. PROFESSIONAL COMPENSATION
(i) FINAL FEE APPLICATIONS. All final requests for payment of
Professional Fee Claims must be filed with the Bankruptcy Court and served on
Reorganized Solutia no later than 45 days after the Effective Date. After
notice and a hearing in accordance with the procedures established by the
Bankruptcy Code and prior orders of the Bankruptcy Court in the Chapter 11
Cases, the allowed amounts of such Professional Fee Claims shall be determined
by the Bankruptcy Court.
(ii) PAYMENT OF INTERIM AMOUNTS. Subject to the Holdback
Amount, on the Effective Date, the Debtors or Reorganized Debtors shall pay
all amounts owing to Professionals for all outstanding amounts payable
relating to prior periods through the Effective Date. To receive payment on
the Effective Date for unbilled fees and expenses incurred through such date,
the Professionals shall reasonably estimate fees and expenses due for periods
that will not have been billed as of the Effective Date and shall deliver such
estimate to the Debtors and the United States Trustee prior to the Effective
Date. The Debtors or Reorganized Debtors, as applicable, shall pay the
Professionals' reasonably estimated amount of such fees and expenses as soon
as reasonably practicable after receiving the estimate, but in no event prior
to the Effective Date. Within forty-five (45) days after the Effective Date, a
Professional receiving payment for the estimated period shall submit a
detailed invoice covering such period in the manner and providing the detail
as set forth in the Professional Fee Order. If the estimated payment received
by any Professional exceeds the actual fees and expenses for such period, as
ultimately approved by the Bankruptcy Court in connection with the relevant
final fee application, such excess amount will be credited against the
Holdback Amount for such Professional or, if the award of the Holdback Amount
for such matter is insufficient, disgorged by such Professional within 45 days
after the issuance of the Order approving the relevant final fee application.
If the estimated payment received by any Professional is lower than the actual
fees and expenses for such period as ultimately approved by the Bankruptcy
Court in connection with the relevant final fee application, the difference
between the amount approved and the estimated payment shall promptly be paid
to such Professional.
(iii) HOLDBACK AMOUNT. On the Effective Date, the Debtors or
the Reorganized Debtors shall fund the Holdback Escrow Account with Cash equal
to the aggregate Holdback Amount for all Professionals. The Reorganized
Debtors shall maintain the Holdback Escrow Account in trust for the
Professionals with respect to whom fees have been held back pursuant to the
Professional Fee Order. Such funds shall not be considered property of the
Debtors, or the Reorganized Debtors. The remaining Holdback Amount owing to
each Professional shall be paid to such Professional by Reorganized Solutia
from the Holdback Escrow Account when such Professional's Professional Fee
Claim is finally allowed by the Bankruptcy Court. When all Professional Fee
Claims have been paid in full, amounts remaining in the Holdback Escrow
Account, if any, shall be paid to the Reorganized Debtors.
b. ORDINARY COURSE LIABILITIES
Notwithstanding the provisions of Section III.A.1.d.i above,
Holders of Administrative Expense Claims based on liabilities incurred by a
Debtor in the ordinary course of its business will not be required to file or
serve any request for payment of such Administrative Expense Claims. Such
Administrative Expense Claims will be satisfied pursuant to Section III.A.1.a.
21
2. PAYMENT OF PRIORITY TAX CLAIMS
Pursuant to section 1129(a)(9)(C) of the Bankruptcy Code, unless
otherwise agreed to by the Holder of a Priority Tax Claim and the applicable
Debtor or Reorganized Debtor, each Holder of an Allowed Priority Tax Claim
will receive, in full satisfaction of its Priority Tax Claim, deferred Cash
payments totaling 100% of the principal amount of such Allowed Priority Tax
Claim, plus interest as provided herein, over a period not exceeding 6 years
from the date of assessment of such Priority Tax Claim. Payments will be made
in equal annual installments of principal, plus simple interest accruing from
the Effective Date at the interest rate equal to the applicable federal rate
as determined in accordance with Section 1274(d) of the Internal Revenue Code.
Unless otherwise agreed to by the Holder of a Priority Tax Claim and the
applicable Debtor or Reorganized Debtor, the first payment on account of such
Priority Tax Claim will be payable 1 year after the Effective Date or, if the
Priority Tax Claim is not allowed within 1 year after the Effective Date, the
first Quarterly Distribution Date after the date on which an order allowing
such Priority Tax Claim becomes a Final Order; provided, however, that the
-------- -------
Reorganized Debtors will have the right to pay any Allowed Priority Tax Claim,
or any remaining balance of such Priority Tax Claim, in full at any time on or
after the Effective Date, without premium or penalty.
B. UNIMPAIRED CLASSES OF CLAIMS
1. PRIORITY NON-TAX CLAIMS (CLASS 1)
a. TREATMENT:
On the later of (i) the Effective Date or as soon thereafter as
reasonably practicable, (ii) the date on which a Priority Non-Tax Claim
becomes an Allowed Priority Non-Tax Claim, or as soon thereafter as reasonably
practicable or (iii) such other date as may be ordered by the Bankruptcy
Court, each Holder of an Allowed Priority Non-Tax Claim will receive payment
in full in Cash of such Allowed Priority Non-Tax Claim.
b. VOTING:
Class 1 is Unimpaired by the Plan. Pursuant to section 1126(f) of the
Bankruptcy Code, each Holder of an Allowed Priority Non-Tax Claim in Class 1
is conclusively presumed to have accepted the Plan and is not entitled to vote
to accept or reject the Plan.
2. SECURED CLAIMS (CLASS 2)
a. TREATMENT:
On the later of (i) the Effective Date or as soon thereafter as
reasonably practicable, (ii) the date on which a Secured Claim becomes an
Allowed Secured Claim, or as soon thereafter as reasonably practicable or
(iii) such other date as may be ordered by the Bankruptcy Court, each Allowed
Secured Claim shall be, at the election of the applicable Debtor (a)
Reinstated, (b) paid in full, in Cash, in full satisfaction, settlement,
release and discharge of such Allowed Secured Claim, together with accrued
post-Petition Date interest to the extent allowable under section 506 of the
Bankruptcy Code, (c) satisfied by the Debtors' surrender of the collateral
securing such Allowed Secured Claim, (d) offset against, and to the extent of,
the Debtors' claims against the Holder of such Allowed Secured Claim or (e)
otherwise rendered Unimpaired, except to the extent that the Debtors and a
Holder of an Allowed Secured Claim may agree to a different treatment. Each
Secured Claim shall be deemed to be in a separate sub-class of Class 2 for all
purposes hereunder.
22
b. VOTING:
Class 2 and each sub-class thereof is Unimpaired by the Plan.
Pursuant to section 1126(f) of the Bankruptcy Code, each Holder of an Allowed
Secured Claim in Class 2 and each sub-class thereof is conclusively presumed
to have accepted the Plan and is not entitled to vote to accept or reject the
Plan.
3. SENIOR SECURED NOTE CLAIM (CLASS 3)
a. TREATMENT:
On the Effective Date or as soon thereafter as reasonably
practicable, Reorganized Solutia shall pay to the Senior Secured Notes
Trustee, for the benefit of the Holders of the Senior Secured Note Claims,
Cash in the amount of the Allowed Senior Secured Note Claims.
b. VOTING:
Class 3 is Unimpaired by the Plan. Pursuant to 1126(f) of the
Bankruptcy Code, each Holder of an Allowed Senior Secured Note Claim in Class
3 is conclusively presumed to have accepted the Plan and is not entitled to
vote to accept or reject the Plan.
4. CONVENIENCE CLAIMS (CLASS 4)
a. TREATMENT:
On the later of (i) the Effective Date or as soon thereafter as
reasonably practicable, or (ii) such other date as may be ordered by the
Bankruptcy Court, each Holder of an Allowed Convenience Claim will receive
Cash equal to the amount of such Claim (as reduced if applicable, pursuant to
an election by the Holder thereof).
b. VOTING:
Class 4 is Unimpaired by the Plan. Pursuant to section 1126(f) of the
Bankruptcy Code, each Holder of a Convenience Claim in Class 4 is conclusively
presumed to have accepted the Plan and is not entitled to vote to accept or
reject the Plan.
5. CPFILMS CLAIMS (CLASS 5)
a. TREATMENT:
On the Effective Date, or as soon thereafter as reasonably
practicable, each Holder of an Allowed CPFilms Claim shall receive Cash in the
amount of such Holder's Allowed CPFilms Claim plus interest at a rate to be
negotiated by Solutia, the Creditors' Committee and the Ad Hoc Trade
Committee, which rate shall be disclosed prior to the disclosure statement
hearing.
b. VOTING:
Class 5 is Unimpaired by the Plan. Pursuant to section 1126(f) of the
Bankruptcy Code, each Holder of an Allowed CPFilms Claim in Class 5 is
conclusively presumed to have accepted the Plan and is not entitled to vote to
accept or reject the Plan.
23
6. NRD CLAIMS (CLASS 6)
a. TREATMENT:
On the Effective Date, the NRD Claims shall be Reinstated. After the
Effective Date, the NRD Claims shall be liquidated and paid pursuant to
applicable law and in the ordinary course of business. Payment of the NRD
Claims will be allocated between Reorganized Solutia and Monsanto pursuant to
the terms of the Relationship Agreement, provided, however, that such
-------- -------
allocations are solely as between Solutia and Monsanto and nothing in the
Relationship Agreement shall impair or adversely affect the NRD Claims.
b. VOTING:
Class 6 is Unimpaired by the Plan. Pursuant to section 1126(f) of the
Bankruptcy Code, each Holder of an Allowed NRD Claim in Class 6 is
conclusively presumed to have accepted the Plan and is not entitled to vote to
accept or reject the Plan.
7. INSURED CLAIMS (CLASS 7)
a. TREATMENT:
Each Holder of an Allowed Insured Claim shall be entitled to receive
the proceeds of any insurance policies available to cover such Insured Claim.
In the event that insurance coverage proceeds are insufficient to completely
satisfy any Allowed Claim that is partially an Insured Claim, the Holder of
such Insured Claim shall be entitled to an Allowed General Unsecured Claim (or
Claim in such other Class as may be applicable) in an amount equal to the
difference between the Allowed amount of the relevant Claim and the amount of
insurance coverage proceeds available to pay such Claim.
b. VOTING:
Class 7 is Unimpaired by the Plan. Pursuant to section 1126(f) of the
Bankruptcy Code, each Holder of an Allowed Insured Claim in Class 7 is
conclusively presumed to have accepted the Plan and is not entitled to vote to
accept or reject the Plan.
8. TORT CLAIMS (CLASS 8)
a. TREATMENT:
As of the Effective Date, in accordance with the Monsanto Tort
Management, Monsanto shall take financial responsibility, as between itself
and Reorganized Solutia only, for the management and payment of the Tort
Claims, including all costs related to the defense, mediation, arbitration,
settlement, and any judgment with respect to the Tort Claims.
b. VOTING:
Class 8 is Unimpaired by the Plan. Pursuant to section 1126(f) of the
Bankruptcy Code, each Holder of an Allowed Tort Claim in Class 8 is
conclusively presumed to have accepted the Plan and is not entitled to vote to
accept or reject the Plan.
24
9. LEGACY SITE CLAIMS (CLASS 9)
a. TREATMENT:
On the Effective Date, in accordance with the Relationship Agreement,
Monsanto shall take financial responsibility, as between itself and
Reorganized Solutia only, for the management and payment of the Legacy Site
Claims. Reorganized Solutia shall use all reasonable efforts to enforce
against Monsanto the provisions of the Relationship Agreement and other Plan
documents pertaining to the Legacy Sites. Notwithstanding any other provision
of the Plan, Relationship Agreement, Confirmation Order, or other Plan
Documents, including but not limited to Article X of the Plan, any
governmental unit holding Claims related to Environmental Liabilities with
respect to Legacy Sites may apply to any court of competent jurisdiction for
an order to require Solutia to enforce against Monsanto the provisions of the
Relationship Agreement pertaining the Legacy Site Claims subject to all
applicable defenses, counterclaims, offsets and other rights of Monsanto;
provided, however, that Reorganized Solutia's financial situation or ability
- -------- -------
to pay shall not be a defense to any such action.
b. VOTING:
Class 9 is Unimpaired by the Plan. Pursuant to section 1126(f) of the
Bankruptcy Code, each Holder of an Allowed Legacy Site Claim in Class 9 is
conclusively presumed to have accepted the Plan and is not entitled to vote to
accept or reject the Plan.
10. EQUITY INTERESTS IN ALL DEBTORS OTHER THAN SOLUTIA (CLASS 10)
a. TREATMENT:
To preserve the Debtors' corporate structure, Equity Interests in all
Debtors other than Solutia shall, subject to the Restructuring Transactions
Agreement, be Reinstated as Equity Interests in the respective Reorganized
Debtors as of the Effective Date.
b. VOTING:
Class 10 is Unimpaired by the Plan. Pursuant to section 1126(f) of
the Bankruptcy Code, Holders of Equity Interests in all Debtors other than
Solutia are conclusively presumed to have accepted the Plan and are not
entitled to vote to accept or reject the Plan.
C. IMPAIRED CLASSES OF CLAIMS AND EQUITY INTERESTS
1. MONSANTO CLAIM (CLASS 11)
a. TREATMENT:
On the Effective Date, Monsanto shall receive 20% of the New Common
Stock, which Distribution will not be subject to dilution on account of the
Rights Offering. In addition, Monsanto shall have an Allowed Administrative
Claim for all documented out of pocket Environmental Liabilities spent by
Monsanto related to the Retained Sites, and to the Shared Sites in excess of
$50 million during the Chapter 11 Cases.
25
b. VOTING:
Class 11 is Impaired by the Plan. Pursuant to section 1126(a) of the
Bankruptcy Code, the Holder of the Monsanto Claim in Class 11 is entitled to
vote to accept or reject the Plan.
2. NOTEHOLDER CLAIMS (CLASS 12)
a. TREATMENT:
On the Effective Date, or as soon as practicable after Disputed
General Unsecured Claims are resolved, each Holder of an Allowed Noteholder
Claim shall receive its Pro Rata share, inclusive of the General Unsecured
Claims, of the Stock Pool. In addition, each Holder of an Allowed Noteholder
Claim that is an Eligible Holder shall be deemed entitled to participate in
the Rights Offering pursuant to the terms of the Rights Offering Procedures.
b. VOTING:
Class 12 is Impaired by the Plan. Pursuant to section 1126(a) of the
Bankruptcy Code, Holders of Noteholder Claims in Class 12 are entitled to vote
to accept or reject the Plan.
3. GENERAL UNSECURED CLAIMS (CLASS 13)
a. TREATMENT:
On the Effective Date, or as soon as practicable after Disputed
General Unsecured Claims are resolved, each Holder of an Allowed General
Unsecured Claim shall receive its Pro Rata share, inclusive of the Noteholder
Claims, of the Stock Pool. In addition, each Holder of an Allowed General
Unsecured Claim that is an Eligible Holder shall be entitled to participate in
the Rights Offering pursuant to the terms of the Rights Offering Procedures.
b. VOTING:
Class 13 is Impaired by the Plan. Pursuant to section 1126(a) of the
Bankruptcy Code, Holders of General Unsecured Claims in Class 13 are entitled
to vote to accept or reject the Plan.
4. RETIREE CLAIM (CLASS 14)
a. TREATMENT:
Subject to the terms of the Retiree Settlement Agreement, on the
Effective Date Reorganized Solutia shall contribute 1.8% of the New Common
Stock to a trust established for the benefit of the Retirees pursuant to the
terms of the Retiree Settlement Agreement. In accordance with the terms of the
Retiree Settlement Agreement, all Claims filed by individual Retirees on
account of reductions in benefits shall be deemed to be disallowed and
expunged in their entirety. Furthermore, in accordance with the Retiree
Settlement Agreement and the Retiree Approval Order, the Retirees' Committee
is deemed to be the Holder of the Retiree Claim.
b. VOTING:
Class 14 is Impaired by the Plan. Pursuant to section 1126(a) of the
Bankruptcy Code and in accordance with the Retiree Settlement Agreement and
the Retiree Approval Order, the Retirees' Committee or its duly authorized
agent is entitled to vote to accept or reject the Plan.
26
5. PHARMACIA CLAIMS (CLASS 15)
a. TREATMENT:
Holders of Pharmacia Claims will receive Distributions in the form of
a limited indemnity and release under the Plan on account of such Claims.
b. VOTING:
Class 15 is Impaired by the Plan. Pursuant to Section 1126(a) of the
Bankruptcy Code, Holders of Pharmacia Claims in Class 15 shall be entitled to
vote to accept or reject the Plan.
6. NON-DEBTOR INTERCOMPANY CLAIMS (CLASS 16)
a. TREATMENT:
On the Effective Date or as soon thereafter as reasonably
practicable, the amount of each Allowed Non-Debtor Intercompany Claim will be
reduced by 60% and the remaining 40% of each such Claim shall be Reinstated by
virtue of book entries without a Distribution of Cash or other consideration
on account of such Claim.
b. VOTING:
Class 16 is Impaired by the Plan. Notwithstanding the foregoing, the
Holders of Non-Debtor Intercompany Claims, by virtue of their status as
non-Debtor Affiliates of Solutia, are deemed to accept the Plan.
7. DEBTOR INTERCOMPANY CLAIMS (CLASS 17)
a. TREATMENT:
On the Effective Date or as soon thereafter as reasonably
practicable, the Debtor Intercompany Claims will be (a) eliminated or waived
based on accounting entries in the Debtors' books and records and other
corporate activities by the Debtors in their discretion or (b) discharged with
no Distributions thereon. There will be no Distributions on account of any of
the Debtor Intercompany Claims.
b. VOTING:
Class 17 is Impaired by the Plan. Holders of Debtor Intercompany
Claims shall receive no Distributions under the Plan. Notwithstanding the
foregoing, the Holders of Debtor Intercompany Claims, by virtue of their
status as Debtors and their authorization to file this Plan, are deemed to
accept the Plan.
8. AXIO CLAIMS (CLASS 18)
a. TREATMENT:
Holders of Axio Claims will receive no Distributions under the Plan
on account of such Claims.
27
b. VOTING:
Class 18 is Impaired by the Plan. Holders of Axio Claims shall
receive no Distributions under the Plan. Therefore, each Holder of an Axio
Claim in Class 18 is conclusively presumed to have rejected the Plan. Pursuant
to section 1126(g) of the Bankruptcy Code, Holders of Axio Claims are not
entitled to vote to accept or reject the Plan.
9. SECURITY CLAIMS (CLASS 19)
a. TREATMENT:
The Holders of Security Claims will receive no Distributions under
the Plan on account of such Claims.
b. VOTING:
Class 19 is Impaired by the Plan. Holders of Security Claims shall
receive no Distributions under the Plan. Therefore, each Holder of a Security
Claim in Class 19 is conclusively presumed to have rejected the Plan. Pursuant
to section 1126(g) of the Bankruptcy Code, Holders of Security Claims are not
entitled to vote to accept or reject the Plan.
10. EQUITY INTERESTS IN SOLUTIA (CLASS 20)
a. TREATMENT:
The Holders of Equity Interests in Solutia will receive no
Distributions under the Plan on account of such Equity Interests in Solutia.
As of the Effective Date, all existing Equity Interests in Solutia will be
cancelled pursuant to the Plan.
b. VOTING:
Class 20 is Impaired by the Plan. Holder of Equity Interests in
Solutia shall receive no Distributions under the Plan. Therefore, each Holder
of an Equity Interest in Solutia in Class 20 is conclusively presumed to have
rejected the Plan. Pursuant to Section 1126(g) of the Bankruptcy Code, Holders
of Equity Interests in Solutia are not entitled to vote to accept or reject
the Plan.
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ARTICLE IV
ACCEPTANCE OR REJECTION OF THE PLAN
A. SPECIAL PROVISIONS GOVERNING UNIMPAIRED CLAIMS
Except as otherwise provided in the Plan, nothing shall affect the
Debtors' rights and defenses with respect to any Unimpaired Claims, including
all rights with respect to legal and equitable defenses to set-offs and
recoupments against such Unimpaired Claims.
B. CLASSES ENTITLED TO VOTE
Classes 11, 12, 13, 14 and 15 are Impaired Classes and are entitled
to vote to accept or reject the Plan. By operation of law, each Unimpaired
Class of Claims is deemed to have accepted the Plan and is not entitled to
vote to accept or reject the Plan. Classes 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10
are Unimpaired Classes and are deemed to have accepted the Plan. By operation
of law, any Class of Claims or Equity Interests that is not entitled to
receive or retain any property of the Debtors under the Plan is deemed to have
rejected the Plan. Classes 18, 19 and 20 are not entitled to receive or retain
any property of the Debtors, are not entitled to vote and are deemed to have
rejected the Plan. Classes 16 and 17 are Impaired Classes and deemed to have
accepted the Plan.
C. CRAMDOWN
The Debtors request Confirmation under section 1129(b) of the
Bankruptcy Code with respect to any Impaired Class that does not accept the
Plan pursuant to section 1126 of the Bankruptcy Code. The Debtors reserve the
right, subject to the consent of Monsanto and the Creditors' Committee, which
consent shall not be unreasonably withheld, to modify the Plan to the extent,
if any, that Confirmation pursuant to section 1129(b) of the Bankruptcy Code
requires modification.
29
ARTICLE V
MEANS FOR IMPLEMENTATION OF THE PLAN
A. GENERAL SETTLEMENT OF CLAIMS
As discussed in detail in Article VI of the Disclosure Statement and
as otherwise provided herein, pursuant to section 1123 of the Bankruptcy Code
and Bankruptcy Rule 9019, and in consideration for the classification,
Distributions, releases and other benefits provided under the Plan, upon the
Effective Date, the provisions of the Plan shall constitute a good faith
compromise and settlement of all Claims and Equity Interests and controversies
resolved pursuant to the Plan. Subject to Article VII, all Distributions made
to Holders of Allowed Claims in any Class are intended to be and shall be
final.
B. SETTLEMENT AMONG THE DEBTORS, MONSANTO, PHARMACIA, THE RETIREES, THE
CREDITORS' COMMITTEE AND THE AD HOC TRADE COMMITTEE
As discussed in detail in Article VIII of the Disclosure Statement,
as set forth in the Confirmation Order, and as otherwise provided herein,
pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019, and
in consideration for the Monsanto Contribution, the Pharmacia Contribution,
and as a result of arm's-length negotiations with the Retirees' Committee and
the Creditors' Committee, the provisions of the Plan shall constitute a good
faith compromise and settlement of all Claims and controversies between the
Estates and (a) Monsanto, including the Monsanto Claim and all causes of
action asserted in the Equity Committee Adversary Proceeding, (b) Pharmacia,
including the Pharmacia Claims and all causes of action asserted in the Equity
Committee Adversary Proceeding, and (c) the Retirees including all Claims to
post-employment and other benefits asserted by the Retirees; provided,
--------
however, that the provisions of the Plan shall not settle or resolve any
- -------
claims, obligations, suits, damages, demands, debts, rights, causes of action
or liabilities as between Monsanto and Pharmacia under the Separation
Agreement.
1. THE DISTRIBUTION AGREEMENT
The Distribution Agreement and any amendments thereto shall be deemed
to be a prepetition, non-executory contract. The Distribution Agreement and
any amendments thereto shall not survive the Chapter 11 Cases and, except as
provided herein or in the Plan Documents, any Claims, or other liabilities or
obligations of the Debtors arising thereunder or related thereto shall be (a)
discharged, (b) released and not survive the Chapter 11 Cases and (c) deemed
to be included in the Monsanto Claim and the Pharmacia Claims. Notwithstanding
any provision to the contrary herein, this Article V shall have no effect
whatsoever on the rights, defenses, obligations, or claims between Monsanto
and Pharmacia arising from or existing under the Separation Agreement, and
Solutia's assumption of debts, liabilities, guarantees, assurances,
commitments and obligations under the Distribution Agreement shall be deemed
to survive the Chapter 11 Cases solely with respect to the rights, defenses,
obligations or claims as between Monsanto and Pharmacia and their respective
Affiliates under the Separation Agreement, and those rights, defenses,
obligations or claims shall continue to exist as if the Distribution Agreement
survives the Chapter 11 Cases; notwithstanding the foregoing, but subject to
any rights under the Plan, the Relationship Agreement and the Plan Documents,
neither Monsanto, Pharmacia nor any other Person or Entity shall be entitled
to assert any claim or Claim against any of the Debtors or Reorganized Debtors
or their respective property with respect to any debts, liabilities,
guarantees, assurances, commitments or obligations assumed by Solutia under
the Distribution Agreement.
30
2. RELATIONSHIP AGREEMENT
On the Effective Date, Reorganized Solutia, Monsanto and Funding Co
shall enter into the Relationship Agreement. As an element of the Monsanto
Contribution, Monsanto shall, pursuant to the Relationship Agreement, agree to
(a) as between itself and Solutia only, fund various environmental remediation
projects and perform various environmental remediation activities related to
the Legacy Sites and the Shared Sites, (b) take financial responsibility, as
between itself and Reorganized Solutia only, for the management and payment of
the Tort Claims, all as more fully set forth in the Relationship Agreement,
and (c) take financial responsibility, as between itself and Reorganized
Solutia only, for the management and payment of the Legacy Site Claims, all as
more fully set forth in the Relationship Agreement. Subject to the terms of
the Relationship Agreement, the Relationship Agreement and the Commercial and
Operating Agreements shall constitute an integrated and unitary executory
contract. The funding allocations in the Relationship Agreement are solely as
between Solutia and Monsanto and do not impair or adversely affect any claim,
cause of action, or right of a government agency related to Environmental
Liabilities with respect to the Retained Sites or the Shared Sites.
3. COMMERCIAL AND OPERATING AGREEMENTS
On the Effective Date, the Commercial and Operating Agreements (as
amended by the Chocolate Bayou settlement) shall be assumed by Reorganized
Solutia.
On the Effective Date, the Master Operating Agreement shall be deemed
to be amended so that the "initial term" described in section 5.1 thereof
shall be extended from twenty years from the effective date of the Master
Operating Agreement to twenty-three years from such effective date, with all
other terms remaining the same.
4. MONSANTO TORT MANAGEMENT
As of the Effective Date, Monsanto shall take financial
responsibility, as between itself and Reorganized Solutia only, for the
management and payment of the Tort Claims and be solely responsible, as
between itself and Reorganized Solutia only, for all costs related to the
defense, mediation, arbitration, judgment and settlement of the Tort Claims
and shall indemnify Reorganized Solutia, pursuant to the terms of the
Relationship Agreement, with respect to such Tort Claims. In addition, since
the Petition Date, Monsanto has paid all costs arising in connection with the
Tort Claims.
5. MONSANTO'S SETTLEMENT OF ADVERSARY PROCEEDINGS, CONTESTED MATTERS,
DISPUTES AND MONSANTO CLAIMS
Subject to the terms of the Plan, the Relationship Agreement and the
Plan Documents, Monsanto and Solutia agree to (a) resolve all matters related
to the Distribution Agreement, (b) withdraw the Settled Adversary Proceedings
with prejudice, and resolve all claims asserted therein (where applicable,
with the consent of Pharmacia and the Retirees' Committee), and (c) settle the
Monsanto Claim.
6. MONSANTO'S PROFESSIONALS
Reorganized Solutia shall pay the reasonable fees and reimburse the
reasonable expenses of Monsanto's Professionals, for work substantially
related to the Chapter 11 Cases, in an amount equal to the lesser of (a)
Monsanto's actual out of pocket costs with respect to such reasonable fees and
expenses and (b) the aggregate fees of the Creditors' Committee's
professionals, as approved by the Bankruptcy Court. Monsanto shall not be
required to file any fee application or other request with the
31
Bankruptcy Court in connection with the payment of such fees and expenses;
provided, however, that if any dispute between Solutia and Monsanto or the
- -------- -------
Creditors' Committee and Monsanto regarding Monsanto's professional fees
cannot be resolved in a reasonable period of time, then the Bankruptcy Court
shall determine the amount of reasonable fees to be paid to Monsanto.
7. MONSANTO ADMINISTRATIVE CLAIM
Monsanto shall have an Allowed Administrative Claim for all
documented out of pocket Environmental Liabilities spent by Monsanto related
to the Retained Sites and to the Shared Sites in excess of $50 million during
the Chapter 11 Cases.
8. PHARMACIA CONTRIBUTION
Pursuant to the Confirmation Order, and except for the limited
indemnities in favor of Pharmacia expressly set forth in the Relationship
Agreement, Pharmacia shall be deemed to have released and shall release, the
Debtors and the Reorganized Debtors from any and all claims, Claims and
obligations of the Debtors and the Reorganized Debtors under the Distribution
Agreement, including the Legacy Claims and related indemnity obligations
arising under the Distribution Agreement or otherwise, and any other Claims or
liabilities it holds, has held or may, in the future, hold against the Debtors
and the Reorganized Debtors, related to the Distribution Agreement and the
Legacy Claims. Pharmacia's release herein shall have no effect whatsoever on
the rights, defenses, obligations or claims between Monsanto and Pharmacia
arising from or existing under the Separation Agreement. In addition,
Pharmacia agrees to waive the Pharmacia Claims in their entirety with
prejudice and such Pharmacia Claims shall be expunged with prejudice, and
Solutia's assumption of debts, liabilities, guarantees, assurances,
commitments and obligations under the Distribution Agreement shall be deemed
to survive the Chapter 11 Cases solely with respect to the rights, defenses,
obligations or claims as between Monsanto and Pharmacia and their respective
Affiliates under the Separation Agreement, and those rights, defenses,
obligations or claims shall continue to exist as if the Distribution Agreement
survives the Chapter 11 Cases; notwithstanding the foregoing, but subject to
any rights under the Plan, the Relationship Agreement and the Plan Documents,
neither Monsanto, Pharmacia nor any other Person or Entity shall be entitled
to assert any claim or Claim against any of the Debtors or Reorganized Debtors
or their respective property with respect to any debts, liabilities,
guarantees, assurances, commitments or obligations assumed by Solutia under
the Distribution Agreement.
9. SETTLEMENT WITH RETIREES
The terms of the settlement regarding modifications to post
employment and other benefits provided to Retirees are set forth in the
Retiree Settlement Agreement, attached as Exhibit B hereto.
10. SETTLED ADVERSARY PROCEEDINGS
By agreement among the various parties to the Settled Adversary
Proceedings, on the Effective Date, all of the Settled Adversary Proceedings
shall be deemed dismissed or withdrawn with prejudice.
11. SOLUTIA'S ASSUMPTION OF CERTAIN ENVIRONMENTAL LIABILITIES
Any Claim, cause of action, or right of a governmental agency related
to Environmental Liabilities with respect to the Shared Sites and the Retained
Sites, other than Claims relating to United States v. Mallinckrodt Inc. et al,
Civil Action No. 4:02CV1488-ERW, (E.D. Mo.) (Eastern Division),
32
which shall constitute and be treated as a General Unsecured Claim for all
purposes and be in Class 13, shall be reinstated and unaffected by the Chapter
11 Cases and shall be liquidated or adjudicated pursuant to applicable law and
in the ordinary course of business. Reorganized Solutia shall be receiving a
discharge from the Claims held by governmental agencies related to
Environmental Liabilities Costs with respect to the Legacy Sites. As stated
above and described in the Relationship Agreement, Monsanto, as between itself
and Reorganized Solutia only, shall be financially responsible for
Environmental Liability Costs with respect to the Legacy Sites. Pursuant to
the Relationship Agreement, Reorganized Solutia shall be financially
responsible, as between itself and Monsanto only, for Environmental Liability
Costs with respect to the Retained Sites and Reorganized Solutia and Monsanto
shall, subject to a sharing mechanism set forth in the Relationship Agreement,
be financially responsible, as between themselves, for Environmental Liability
Costs with respect to the Shared Sites. Nothing in the Relationship
Agreement's provisions for the Retained Sites or Shared Sites shall impair or
adversely affect any claim, cause of action, or right of a governmental agency
related to Environmental Liabilities with respect to the Retained Sites or the
Shared Sites.
C. RESTRUCTURING TRANSACTIONS
On the Effective Date, and pursuant to the Restructuring Transactions
Agreement, the applicable Debtors or Reorganized Debtors shall enter into the
Restructuring Transactions and shall take any actions as may be necessary or
appropriate to effect a corporate restructuring of their respective businesses
or a corporate restructuring of the overall corporate structure of the
Reorganized Debtors, as and to the extent provided therein. The Restructuring
Transactions may include one or more mergers, consolidations, restructurings,
conversions, dissolutions, transfers or liquidations as may be determined by
the Debtors or the Reorganized Debtors, with the consent of Monsanto and the
Creditors' Committee, which consent shall not be unreasonably withheld, to be
necessary or appropriate, in each case as and to the extent provided in the
Restructuring Transactions Agreement. The actions to effect the Restructuring
Transactions may include, in each case as and to the extent provided in the
Restructuring Transactions Agreement: (1) the execution and delivery of
appropriate agreements or other documents of merger, consolidation,
restructuring, conversion, disposition, transfer, dissolution or liquidation
containing terms that are consistent with the terms of the Plan and that
satisfy the applicable requirements of applicable law and any other terms to
which the applicable Entities may agree; (2) the execution and delivery of
appropriate instruments of transfer, assignment, assumption or delegation of
any asset, property, right, liability, debt or obligation on terms consistent
with the terms of the Plan and having other terms for which the applicable
parties agree; (3) the filing of appropriate certificates or articles of
incorporation, reincorporation, merger, consolidation, conversion or
dissolution pursuant to applicable state law; and (4) all other actions that
the applicable Entities determine to be necessary or appropriate, including
making filings or recordings that may be required by applicable law in
connection with the Restructuring Transactions.
D. CONTINUED CORPORATE EXISTENCE AND VESTING OF ASSETS IN THE REORGANIZED
DEBTORS
Except as otherwise provided herein, or in the Restructuring
Transactions Agreement, each Debtor will, as a Reorganized Debtor, continue to
exist after the Effective Date as a separate corporate entity, with all the
powers of a corporation under applicable law and without prejudice to any
right to alter or terminate such existence (whether by merger, dissolution or
otherwise) under applicable state law. Except as otherwise provided herein, as
of the Effective Date, all property of the respective Estates of the Debtors,
and any property acquired by a Debtor or Reorganized Debtor under the Plan,
will vest in the applicable Reorganized Debtor, free and clear of all Claims,
Liens, charges, other encumbrances and Equity Interests, except for
obligations assumed or created under the Plan or the Plan Documents. On and
after the Effective Date, each Reorganized Debtor may operate its businesses
and may use, acquire and dispose of property and compromise or settle any
claims without supervision or approval by the
33
Bankruptcy Court and free of any restrictions of the Bankruptcy Code or
Bankruptcy Rules, other than those restrictions expressly imposed by the Plan
or the Confirmation Order. Without limiting the foregoing, each Reorganized
Debtor may pay the charges that it incurs after the Effective Date for
Professionals' fees, disbursements, expenses or related support services
(including reasonable fees relating to the preparation of Professional fee
applications) without application to the Bankruptcy Court.
E. EXECUTION OF PLAN DOCUMENTS
On the Effective Date, the Reorganized Debtors and the other parties
thereto shall execute and deliver the Plan Documents, as applicable.
F. CORPORATE GOVERNANCE, DIRECTORS AND OFFICERS AND CORPORATE ACTION OF THE
REORGANIZED DEBTORS
1. NEW CERTIFICATES OF INCORPORATION AND NEW BY-LAWS
On or immediately prior to the Effective Date, the Reorganized
Debtors will file their respective New Certificates of Incorporation with the
applicable Secretaries of State and/or other applicable authorities in their
respective states of incorporation in accordance with the corporate laws of
the respective states of incorporation. After the Effective Date, the
Reorganized Debtors may amend and restate their respective New Certificates of
Incorporation and New By-laws and other constituent documents as permitted by
the laws of their respective states of incorporation and their respective New
Certificates of Incorporation and New By-laws.
2. DIRECTORS AND OFFICERS OF THE REORGANIZED DEBTORS
As of the Effective Date, the initial board of directors and the
officers of each of the Reorganized Debtors shall be appointed in accordance
with the respective New Certificates of Incorporation and New By-laws. The
initial Board of Directors of Reorganized Solutia shall consist of nine (9)
members. One (1) member shall be the Chief Executive Officer of Reorganized
Solutia, Jeffry N. Quinn, one (1) member shall be designated by Solutia from
among the members of the current Solutia Board, and one (1) member shall be
designated by Monsanto. The remaining six (6) members shall be designated by
the Creditors' Committee in consultation with Solutia and Monsanto. Solutia
will retain a nationally recognized executive search firm to assist in the
selection of members of the initial Board of Directors of Reorganized Solutia.
All members of the Reorganized Solutia Board of Directors (other than the
Chief Executive Officer) shall satisfy the independence standards that are
applicable for purposes of the securities exchange or quotation system on
which the shares of Reorganized Solutia will be listed. Pursuant to section
1129(a)(5) of the Bankruptcy Code, the Debtors will disclose in the Plan
Supplement, the identity and affiliations of any Person proposed to serve on
the initial board of directors or be an officer of each of the Reorganized
Debtors. To the extent any such director or officer of Reorganized Solutia is
an "insider" under the Bankruptcy Code, the nature and amount of any
compensation to be paid to such director or officer will also be disclosed.
Each such director and officer shall serve from and after the Effective Date
pursuant to the terms of the New Certificates of Incorporation, New By-laws
and other constituent documents of the Reorganized Debtors.
3. CORPORATE ACTION
As of the Effective Date, the adoption and filing of the New
Certificates of Incorporation, the approval of the New By-laws, the
resignation of all directors of the Debtors, the appointment of directors and
officers for Reorganized Debtors, and all actions contemplated hereby shall be
deemed to be authorized and approved in all respects (subject to the
provisions herein), without the need for any further
34
corporate, shareholder, director or other action. All matters provided for
herein involving the corporate structure of Reorganized Debtors, and any
corporate action required by the Debtors or Reorganized Debtors in connection
with the Plan, shall be deemed to have occurred and shall be in effect,
pursuant to applicable law, without any requirement of further action by the
security holders or directors of the Debtors or Reorganized Debtors. On the
Effective Date, the appropriate officers of the Reorganized Debtors and
members of the board of directors of the Reorganized Debtors are authorized
and directed to issue, execute and deliver the agreements, documents,
securities and instruments contemplated by the Plan in the name of and on
behalf of Reorganized Debtors, if no such other date is specified in such
other documents, and will be authorized and approved in all respects and for
all purposes without any requirement of further action by stockholders or
directors of any of the Debtors or Reorganized Debtors.
4. THE NEW COMMON STOCK
The New Common Stock shall represent all of the equity interests in
Reorganized Solutia as of the Effective Date, subject to dilution in
connection with the Incentive Plan. Reorganized Solutia will cause the New
Common Stock to be listed on the NYSE on or as soon as practicable after the
Effective Date; provided, however, that in the event the New Common Stock is
-------- -------
not listed on the NYSE, Reorganized Solutia shall list the New Common Stock on
another National Securities Exchange or inter-dealer quotation system. All
Persons receiving Distributions of New Common Stock or rights to purchase New
Common Stock in whatever form shall take any and all reasonable actions
necessary, as requested by the Debtors, to enable Reorganized Solutia to
comply with the listing requirements for the NYSE or any other applicable
securities exchange or quotation system.
5. SHAREHOLDERS AGREEMENT
The Shareholders Agreement between Reorganized Solutia and Monsanto,
attached as Exhibit L hereto, will govern certain of Monsanto's rights and
obligations as a shareholder of Reorganized Solutia.
G. EXIT FINANCING FACILITY, OBTAINING CASH FOR DISTRIBUTIONS AND TRANSFERS OF
FUNDS AMONG THE DEBTORS
On the Effective Date, the Reorganized Debtors are authorized to
execute and deliver those documents necessary or appropriate to obtain the
Exit Financing Facility, subject to the reasonable consent of Monsanto and the
Creditors' Committee. All Cash necessary for the Reorganized Debtors to make
payments required pursuant to the Plan will be obtained from the Reorganized
Debtors' Cash balances or the Exit Financing Facility. Cash payments to be
made pursuant to the Plan will be made by the Reorganized Debtors; provided,
--------
however, that the Debtors and the Reorganized Debtors will be entitled to
- -------
transfer funds between and among themselves as they determine to be necessary
or appropriate to enable the Reorganized Debtors to satisfy their obligations
under the Plan. Except as set forth herein, any changes in intercompany
account balances resulting from such transfers will be accounted for and
settled in accordance with the Debtors' historical intercompany account
settlement practices and will not violate the terms of the Plan.
H. THE RIGHTS OFFERING
1. USE OF RIGHTS OFFERING PROCEEDS
The proceeds of the Rights Offering will be used to provide (a) $175
million in Cash funding for the Retiree Trust (as defined in the Retiree
Settlement Agreement), and (b) $75 million in funding to Funding Co.
35
2. RIGHTS OFFERING PROCEDURES
Eligible Holders will be entitled to participate in the Rights
Offering, in accordance with the terms of the Rights Offering Procedures and
as approved by the Bankruptcy Court in the Disclosure Statement Order.
I. FUNDING CO
In accordance with the terms of the Relationship Agreement, on the
Effective Date, Reorganized Solutia will establish Funding Co with $75 million
in proceeds from the Rights Offering remaining after funding the Retiree Trust
(as defined in the Retiree Settlement Agreement). In accordance with the terms
of the Relationship Agreement, $50 million of these funds will be used to pay
for Environmental Liabilities related to the Shared Sites and $25 million will
remain in an unallocated account to be used to offset Reorganized Solutia's
legacy environmental, OPEB liabilities and other legacy liabilities.
J. INCENTIVE PLAN
As of the Effective Date, the Incentive Plan shall be adopted and
deemed adopted by Reorganized Solutia. The terms of the Incentive Plan will be
contained in the Plan Supplement.
K. RELEASE OF LIENS AND GUARANTEE CLAIMS
Except as otherwise provided herein or in any contract, instrument,
release or other agreement or document entered into or delivered in connection
with the Plan, on the Effective Date and concurrently with the applicable
Distributions made to Holders of Allowed DIP Claims, Secured Clams and Senior
Secured Note Claims pursuant to Article III herein, all Liens, other security
interests or Claims on account of guarantees of such indebtedness against the
property of any Estate related to such Claims (except for Claims that are
Reinstated) will be fully released and discharged, and all of the right, title
and interest of any holder of such Liens, other security interests or Claims
on account of guarantees of such indebtedness, including any rights to any
collateral thereunder, will revert to the applicable Reorganized Debtor and
its successors and assigns.
As a condition to the receipt of Distributions hereunder, Holders of
Allowed DIP Claims, Secured Claims and Senior Secured Note Claims shall be
required to deliver all documents necessary to effectuate the release of the
Liens securing such Claims. Pursuant to Article 9 of the Uniform Commercial
Code, all Holders of Allowed DIP Claims, Secured Clams and Senior Secured Note
Claims are deemed to have appointed the Debtors as their respective agents
with authority to make the relevant filings required by the Uniform Commercial
Code or other filings necessary to cause the release of such Liens and
security interests of record.
L. CANCELLATION OF EXISTING SECURITIES AND AGREEMENTS
Unless otherwise agreed to by the Debtors, on the Effective Date,
except to the extent otherwise provided herein, all notes, instruments,
certificates and other documents evidencing (1) the DIP Claims, (2) the
Secured Claims, (3) the Senior Secured Note Claims, (4) the Noteholder Claims
and (5) Equity Interests in Solutia and those Debtors whose stock is to be
canceled pursuant to the Restructuring Transactions, other than a Claim that
is Reinstated, shall be cancelled and the obligations of the Debtors or the
Reorganized Debtors in any way related thereto (except for obligations
provided for under this Plan) shall be discharged. On the Effective Date,
except to the extent otherwise provided herein, the Prepetition Indenture
shall be deemed to be cancelled as permitted by section 1123(a)(5)(F) of the
Bankruptcy Code and the obligations of the Debtors thereunder shall be
discharged.
36
M. EFFECTUATING DOCUMENTS
The Chief Executive Officer, President, Chief Financial Officer,
General Counsel, Senior Vice Presidents or any Vice Presidents of each Debtor
or Reorganized Debtor will be authorized to execute, deliver, file or record
such contracts, instruments, releases and other agreements or documents and
take such actions as may be necessary or appropriate to effectuate and
implement the provisions of the Plan. The Secretary or any Assistant Secretary
of each Debtor or Reorganized Debtor will be authorized to certify or attest
to any of the foregoing actions.
N. EMPLOYMENT AND OTHER BENEFITS PROGRAMS
All employment, retirement, indemnification and other agreements, or
arrangements in place as of the Effective Date with the Debtors' directors,
officers and employees who will continue in such capacities (or similar
capacities) after the Effective Date, or retirement income plans, welfare
benefit plans and other plans for such persons, shall remain in place after
the Effective Date, and the Reorganized Debtors will continue to honor such
agreements, programs, and plans as modified or amended during the Chapter 11
Cases; provided, however, that the Directors' and Officers Indemnity Claims
-------- -------
shall be waived and the Reorganized Debtors shall have no obligations with
respect thereto, as of the Effective Date. On the Effective Date, Solutia will
be authorized to elect to exercise its existing options to purchase tail
coverage in connection with its (a) directors and officers liability and (b)
fiduciary liability insurance policies.
After the Effective Date, the Reorganized Debtors shall each have the
authority, consistent with the applicable agreements, to terminate, amend or
enter into employment, retirement, indemnification and other agreements with
their respective active directors, officers and employees and to terminate,
amend or implement retirement income plans, welfare benefit plans and other
plans for active employees.
As of the Effective Date, the Retiree Benefits shall be modified in
accordance with the Retiree Settlement Agreement.
37
ARTICLE VI
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES
A. ASSUMPTION AND REJECTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
On the Effective Date, except as otherwise provided herein, all
Executory Contracts or Unexpired Leases, not previously assumed or rejected
pursuant to an order of the Bankruptcy Court, will be deemed rejected, in
accordance with the provisions and requirements of sections 365 and 1123 of
the Bankruptcy Code, other than those Executory Contracts or Unexpired Leases
that are (1) to be assumed pursuant to the terms of this Article VI, or
Section V.B.3 of the Plan, (2) listed on Exhibit G, (3) the subject of a
motion to assume Executory Contracts or Unexpired Leases that is pending on
the Effective Date or (4) subject to a motion to reject an Executory Contract
or Unexpired Lease pursuant to which the requested effective date of such
rejection is after the Effective Date. Entry of the Confirmation Order by the
Bankruptcy Court shall constitute approval of such rejections and the
assumption of the Executory Contracts or Unexpired Leases listed on Exhibit G
hereto pursuant to sections 365(a) and 1123 of the Bankruptcy Code. Any
motions to assume Executory Contracts or Unexpired Leases pending on the
Effective Date shall be subject to approval by the Bankruptcy Court on or
after the Effective Date by a Final Order. Each Executory Contract and
Unexpired Lease assumed pursuant to this Section VI.A or by any order of the
Bankruptcy Court, which has not been assigned to a third party prior to the
Effective Date, shall revest in and be fully enforceable by the Reorganized
Debtors in accordance with its terms, except as such terms are modified by the
provisions of the Plan or any order of the Bankruptcy Court authorizing and
providing for its assumption under applicable federal law.
B. CLAIMS BASED ON REJECTION OF EXECUTORY CONTRACTS OR UNEXPIRED LEASES
All proofs of Claim with respect to Claims arising from the rejection
of Executory Contracts or Unexpired Leases, pursuant to the Plan or the
Confirmation Order, if any, must be filed with the Bankruptcy Court within
thirty days after the date of entry of an order of the Bankruptcy Court
(including the Confirmation Order) approving such rejection. Any Claims
arising from the rejection of an Executory Contract or Unexpired Lease not
filed with the Bankruptcy Court within such time will be forever barred from
assertion against the Debtors or the Reorganized Debtors, their Estates,
Monsanto, Pharmacia or their property.
C. CURE OF DEFAULTS FOR EXECUTORY CONTRACTS AND UNEXPIRED LEASES ASSUMED
Any monetary defaults under each Executory Contract and Unexpired
Lease to be assumed pursuant to the Plan shall be satisfied, pursuant to
section 365(b)(1) of the Bankruptcy Code, by payment of the default amount in
Cash on the Effective Date or on such other terms as the parties to such
Executory Contracts or Unexpired Leases may otherwise agree. In the event of a
dispute regarding (1) the amount of any payments to cure such a default, (2)
the ability of the Reorganized Debtors or any assignee to provide "adequate
assurance of future performance" (within the meaning of section 365 of the
Bankruptcy Code) under the contract or lease to be assumed or (3) any other
matter pertaining to assumption, the cure payments required by section
365(b)(1) of the Bankruptcy Code shall be made following the entry of a Final
Order or orders resolving the dispute and approving the assumption. At least
20 days prior to the Confirmation Hearing, the Debtors shall provide for
notices of proposed assumption and proposed cure amounts to be sent to
applicable third parties and for procedures for objecting thereto and
resolution of disputes by the Bankruptcy Court. Any objection by a
counterparty to an Executory Contract or Unexpired Lease to a proposed
assumption or related cure amount must be
38
filed, served and actually received by the Debtors at least 10 days prior to
the Confirmation Hearing. Any counterparty to an Executory Contract and
Unexpired Lease that fails to object timely to the proposed assumption or cure
amount will be deemed to have assented to such matters.
D. INSURANCE POLICIES
All of the Debtors' insurance policies and any agreements, documents
or instruments relating thereto, are treated as Executory Contracts under the
Plan. On the Effective Date, the Debtors shall be deemed to have assumed all
insurance policies and any agreements, documents and instruments relating to
coverage of all Insured Claims. Notwithstanding the foregoing, Distributions
under the Plan to any Holder of an Allowed Insured Claim shall be in
accordance with the treatment provided under Article III of the Plan.
E. ANNISTON SETTLEMENT
Reorganized Solutia shall assume its obligations under the Anniston
Global Settlement Agreement, the Anniston Side Letter and all related
agreements, and shall continue to pay the $5 million annual installments of
the settlement amount, as set forth in the Anniston Side Letter, together with
all education fund and related obligations; provided, however, if Solutia's
-------- -------
obligations set forth in this sentence are in any way inconsistent with the
Relationship Agreement, the Relationship Agreement shall control. To the
extent provided in the Relationship Agreement, Reorganized Solutia shall
indemnify Monsanto and its Affiliates, and Pharmacia and its Affiliates
against any Reorganized Solutia default in performing its obligations under
the Anniston Global Settlement Agreement and the Anniston Side Letter.
F. ASSUMPTION OF PENSION OBLIGATIONS
Pursuant to the Plan, the Debtors shall assume and continue the
Pension Plan in accordance with its terms, satisfy the minimum funding
standards pursuant to 26 U.S.C. Section 412 and 29 U.S.C. Section 1082, and
administer the Pension Plan in accordance with its terms and the provisions of
ERISA. Furthermore, nothing in the Plan shall be construed as discharging,
releasing or relieving the Debtors or the Debtors' successors, including the
Reorganized Debtors, or any party, in any capacity, from any liability imposed
under any law or regulatory provision with respect to the Pension Plan or the
PBGC. The PBGC and the Pension Plan shall not be enjoined or precluded from
seeking to enforce such liability as a result of any provision of the Plan or
the Confirmation Order. Notwithstanding any provision of the Plan to the
contrary, the Pension Plan shall be assumed and administered in accordance
with ERISA and the Internal Revenue Code.
G. CONTRACTS AND LEASES ENTERED INTO AFTER THE PETITION DATE
Contracts and leases entered into after the Petition Date by any
Debtor, including any Executory Contracts and Unexpired Leases assumed by such
Debtor, will be performed by the Debtor or Reorganized Debtor liable
thereunder in the ordinary course of its business. Accordingly, such contracts
and leases (including any assumed Executory Contracts and Unexpired Leases)
will survive and remain unaffected by entry of the Confirmation Order.
39
ARTICLE VII
PROVISIONS GOVERNING DISTRIBUTIONS
A. DISTRIBUTIONS FOR CLAIMS ALLOWED AS OF THE EFFECTIVE DATE
Except as otherwise provided herein or as may be ordered by the
Bankruptcy Court, Distributions to be made on account of Claims that are
Allowed as of the Effective Date shall be made on the Effective Date, or as
soon as reasonably practicable thereafter. Unless otherwise specifically
provided for or contemplated in the Plan or Confirmation Order, or required by
applicable bankruptcy law, postpetition interest shall not accrue or be paid
on any Claims and no Holder of a Claim shall be entitled to interest accruing
on or after the Petition Date. For tax purposes, Distributions received in
respect of Allowed Claims shall be allocated first to the principal amount of
the Allowed Claims with any excess allocated to unpaid interest that accrued
on such Claims.
B. DELIVERY OF DISTRIBUTIONS
Reorganized Solutia shall make all Distributions required to be
distributed under the Plan. Any Distribution required to be made pursuant to
this Plan on a day other than a Business Day shall be made on the next
succeeding Business Day or as soon thereafter as reasonably practicable.
Reorganized Solutia may employ or contract with other Entities to assist in or
make the Distributions required by the Plan without further order of the
Court.
C. DELIVERY AND DISTRIBUTIONS AND UNDELIVERABLE OR UNCLAIMED DISTRIBUTIONS
1. DELIVERY OF DISTRIBUTIONS IN GENERAL
Distributions to Holders of Allowed Claims shall be made at the
address of the Holder of such Claim as indicated on the claims register
maintained by the Debtors' duly appointed claims agent, as of the Voting
Record Date (as defined in the Disclosure Statement Order). Nonetheless, if
such Holder holds such Claims through a Nominee, Distributions with respect to
such Claims will be made to such Nominee and such Nominee shall, in turn, make
appropriate Distributions and book entries to reflect such Distributions to
such Holders; provided, however, that Distributions on account of the
-------- -------
Noteholder Claims shall be made to the Prepetition Indenture Trustee for
distribution to the Holders of such Claims.
2. UNDELIVERABLE DISTRIBUTIONS
a. TREATMENT OF UNDELIVERABLE DISTRIBUTIONS
Reorganized Solutia shall distribute any Undeliverable Distribution
of New Common Stock to the Disputed Claims Reserve. Subject to Article
VII(c)(2)(b), the Reorganized Debtors shall retain any Undeliverable
Distribution of Cash and may use such Cash for general corporate purposes.
b. FAILURE TO CLAIM UNDELIVERABLE DISTRIBUTIONS
Any Holder of an Allowed Claim that does not assert a claim pursuant
to the Plan for an unclaimed or Undeliverable Distribution within one year
after the date such Distribution is due shall be deemed to have forfeited its
claim to such unclaimed or Undeliverable Distribution and shall be forever
barred from asserting any such claim against any of the Debtors, their
Estates, the Reorganized
40
Debtors, Monsanto, Pharmacia, or their property, or any party that has
received Distributions under the Plan. Nothing contained herein shall require
Reorganized Solutia, or any other party, to attempt to locate any Holder of an
Allowed Claim.
D. COMPLIANCE WITH TAX REQUIREMENTS/ALLOCATIONS
In connection with the Plan, to the extent applicable, Reorganized
Solutia shall comply with all withholding and reporting requirements imposed
by any federal, state, local or foreign taxing authority, and all
Distributions pursuant hereto shall be subject to such withholding and
reporting requirements. In addition, Reorganized Solutia will pay taxes on the
taxable net income or gain allocable to Holders of Disputed Claims on behalf
of such Holders and, when such Disputed Claims are ultimately resolved,
Holders whose Disputed Claims are determined to be Allowed Claims will receive
Distributions from Reorganized Solutia net of the taxes that Reorganized
Solutia had paid previously on their behalf.
E. RECORD DATE FOR DISTRIBUTION
At the close of business on the Distribution Record Date, the
transfer register for the Holders of any Claims shall be closed and there
shall be no further changes in the record of Holders of any Claims. Moreover,
Reorganized Solutia shall have no obligation to recognize the transfer of any
2027/2037 Notes occurring after the Distribution Record Date, and shall be
entitled for all purposes herein to recognize and deal only with those Holders
of record as of the close of business on the Distribution Record Date.
F. DISTRIBUTIONS OF WHOLE SHARES ONLY
Notwithstanding any other provision of this Plan, only whole numbers
of shares of the New Common Stock will be issued. When any Distribution on
account of an Allowed Claim would otherwise result in the issuance of a number
of shares of New Common Stock that is not a whole number, the actual
Distribution of shares of such stock will be rounded as follows: (i) fractions
equal to or greater than one half will be rounded to the next higher whole
number and (ii) fractions less than one half will be rounded to the next lower
number. The total number of shares of the New Common Stock to be distributed
to Holders of Allowed Claims will be adjusted as necessary to account for the
rounding provided for in this Section. If such rounding results in
Distributions of New Common Stock totaling less than the authorized number of
shares of New Common Stock, then any excess New Common Stock shall not be
issued. No consideration shall be provided in lieu of fractional shares that
are rounded down pursuant to this Section.
G. SET-OFFS AND RECOUPMENTS
The Debtors or Reorganized Solutia may, but shall not be required to,
set-off against or recoup from the Holder of any Allowed Claim on which
payments or Distributions are to be made pursuant to the Plan, any claims of
any nature whatsoever that the Debtors or the Reorganized Debtors may have
against the Holder of such Allowed Claim that are not released under Article X
of the Plan and the Distributions to be made pursuant hereto on account of
such Allowed 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, right of setoff or recoupment that the Debtors may have against
the Holder of such Allowed Claim.
H. SURRENDER OF CANCELLED INSTRUMENTS OR SECURITIES
Unless otherwise agreed to by the Debtors or the Reorganized Debtors,
as applicable, as a condition precedent to receiving any Distribution pursuant
to the Plan on account of an Allowed Claim, the Holder of such Claim shall
tender the applicable instruments, securities or other documentation
evidencing such Claim to Reorganized Solutia, and in the case of the DIP
Credit Facility, the agent under
41
the DIP Credit Facility shall have either (1) delivered such release documents
as requested by the Debtors (at the Debtors' expense) or (2) provided a letter
of authorization to the Debtors to execute and release any instruments,
securities or other documentation securing the DIP Credit Facility. Any
Distribution to be made pursuant to the Plan on account of any such Claim
shall, pending such surrender, be treated as an Undeliverable Distribution
pursuant to Section VII.C.2 hereof. Any Holder of such Claim that fails to (1)
surrender such instrument, security, note or other documentation evidencing
such Claim or (2) execute and deliver an affidavit of loss and/or indemnity,
before the first anniversary of the Effective Date, shall be deemed to have
forfeited all rights and Claims and may not participate in any Distribution
under the Plan, and any Distributions to which such Holder would have been
entitled shall be treated as Undeliverable Distributions.
I. DISPUTED CLAIMS RESERVE
1. DEPOSIT OF CASH ON THE EFFECTIVE DATE
On the Effective Date (or as soon thereafter as is reasonably
practicable), Reorganized Solutia shall deposit Cash in the Disputed Claim
Reserve that would have been distributed to the Holders of Disputed Claims
(other than Disputed General Unsecured Claims and Noteholder Claims) if such
Disputed Claims had been Allowed Claims on the Effective Date. This amount
will be determined based on the lesser of (a) the asserted amount of the
Disputed Claim filed with the Bankruptcy Court (if no proof of such Claim was
filed) scheduled by the Debtors, (b) the amount, if any, estimated by the
Bankruptcy Court pursuant to Section 502(c) of the Bankruptcy Code or (c) the
amount otherwise agreed to by the Debtors and the Holder of such Disputed
Claims.
2. DISTRIBUTION AFTER ALLOWANCE
Reorganized Solutia shall distribute from the Disputed Claims Reserve
to the Holder of any Disputed CP Films Claim that has become an Allowed Claim,
no later than the fifth (5th) Business Day after the end of the calendar month
in which such Disputed Claim becomes an Allowed Claim in an amount equal to
the Allowed Claim if such Claim had been an Allowed Claim on the Effective
Date.
3. DISTRIBUTIONS AFTER DISALLOWANCE
If a Disputed Claim is disallowed, in whole or in part, Reorganized
Solutia shall on a quarterly basis (and in no event later than the fifth (5th)
Business Day after the end of each calendar quarter) distribute the Cash
reserved in respect of such disallowed Disputed Claim to Reorganized Solutia
for use in the ordinary course of business without further restrictions or
limitations.
4. PROPERTY HELD IN THE DISPUTED CLAIMS RESERVE
a. DISTRIBUTIONS
Cash held in the Disputed Claim Reserve as a result of such
Distributions will (i) be deposited and held in trust pending distribution by
Reorganized Solutia for the benefit of Holders of Allowed Claims (other than
Allowed General Unsecured Claims and Allowed Noteholder Claims), (ii) be
accounted for separately and (iii) not constitute property of the Reorganized
Debtors. Reorganized Solutia will also place in the Disputed Claim Reserve,
the proceeds, net of any applicable fees, from such investment of Cash, and
Distributions to Holders of Allowed Claims who had previously held Disputed
Claims will include a proportionate share from such investment of Cash from
the Disputed Claim Reserve.
42
b. RECOURSE
Each Holder of a Disputed Claim that ultimately becomes an Allowed
Claim will have recourse only to the Cash and their proportionate share of the
proceeds from the investment of Cash, if any, held in the Disputed Claim
Reserve for satisfaction of the Distributions to which Holders of Allowed
Claims are entitled under the Plan, and not to any Reorganized Debtor,
Pharmacia, Monsanto, its property or any assets previously distributed on
account of any Allowed Claim.
J. THE DISPUTED GENERAL UNSECURED CLAIMS RESERVE
1. DEPOSIT OF NEW COMMON STOCK ON THE EFFECTIVE DATE
On the Effective Date (or as soon thereafter as is reasonably
practicable), Reorganized Solutia shall deposit from the Stock Pool in the
Disputed General Unsecured Claims Reserve the number of shares of New Common
Stock that would have been distributed to the Holders of Disputed General
Unsecured Claims if such Disputed General Unsecured Claims had been Allowed
General Unsecured Claims on the Effective Date to ensure that the Holders of
Allowed Noteholder Claims and General Unsecured Claims receive the same
percentage recovery on account of their individual Claims at all times. The
amount of New Common Stock to be deposited in the Disputed General Unsecured
Claims Reserve will be determined based on the lesser of (a) the asserted
amount of the Disputed General Unsecured Claim filed with the Bankruptcy Court
or (if no proof of such Claim was filed) scheduled by the Debtors, (b) the
amount, if any, estimated by the Bankruptcy Court pursuant to section 502(c)
of the Bankruptcy Code or (c) the amount otherwise agreed to by the Debtors
and the Holder of such Disputed General Unsecured Claims.
2. DISTRIBUTIONS AFTER ALLOWANCE
Reorganized Solutia shall distribute from the Disputed General
Unsecured Claims Reserve to the Holder of any Disputed General Unsecured Claim
that has become an Allowed General Unsecured Claim, no later than the fifth
(5th) Business Day after the end of the calendar month in which such Disputed
General Unsecured Claim becomes an Allowed General Unsecured Claim, New Common
Stock (including any Cash dividends and other Distributions earned on the New
Common Stock) in an amount equal to the New Common Stock that such Holder
would have received an account of such Claim if such Claim had been an Allowed
General Unsecured Claim on the Effective Date.
3. DISTRIBUTIONS AFTER DISALLOWANCE
If a Disputed General Unsecured Claim is disallowed, in whole or in
part, Reorganized Solutia shall on a quarterly basis (and in no event later
than the fifth (5th) Business Day after the end of each calendar quarter)
distribute the New Common Stock (including any Cash dividends and other
Distributions earned on account of the New Common Stock), reserved in respect
of such disallowed Disputed General Unsecured Claim from the Stock Pool to
Holders of Allowed Noteholder Claims and Allowed General Unsecured Claims in a
manner designed to ensure that the Holders of Allowed Noteholder Claims and
Allowed General Unsecured Claims receive the same percentage recovery on
account of their individual Claims at all times.
43
4. PROPERTY HELD IN DISPUTED GENERAL UNSECURED CLAIMS RESERVE
a. DIVIDENDS AND DISTRIBUTIONS
Cash dividends and other Distributions earned on account of the New
Common Stock to be held in the Disputed General Unsecured Claims Reserve will
be transferred to the Disputed General Unsecured Claims Reserve, concurrently
with the transfer of such dividends and other Distributions to other holders
of New Common Stock. Cash held in the Disputed General Unsecured Claims
Reserve as a result of such dividends and other Distributions will (i) be
deposited and held in trust pending distribution by Reorganized Solutia for
the benefit of Holders of Allowed General Unsecured Claims and Noteholder
Claims, (ii) be accounted for separately and (iii) not constitute property of
the Reorganized Debtors. Reorganized Solutia will invest the Cash held in the
Disputed General Unsecured Claims Reserve in a manner consistent with the
Reorganized Debtors' investment and deposit guidelines. Reorganized Solutia
also will place in the Disputed General Unsecured Claims Reserve, the
proceeds, net of any applicable fees, from such investment of Cash, and
Distributions to Holders of Allowed General Unsecured Claims and Allowed
Noteholder Claims will include a proportionate share from such investment of
Cash from the Disputed General Unsecured Claims Reserve.
b. RECOURSE
Each Holder of an Allowed General Unsecured Claim (or a Disputed
General Unsecured Claim that ultimately becomes an Allowed General Unsecured
Claim) or Noteholder Claim will have recourse only to the undistributed New
Common Stock and their proportionate share of the proceeds from the investment
of Cash and dividends, if any, held in the Disputed General Unsecured Claims
Reserve for satisfaction of the Distributions to which Holders of Allowed
General Unsecured Claims and Noteholder Claims are entitled under the Plan,
and not to any Reorganized Debtor, Pharmacia, Monsanto, its property or any
assets previously distributed on account of any Allowed Claim.
c. VOTING RIGHTS
The shares of the New Common Stock held in the Disputed General
Unsecured Claims Reserve shall be voted in accordance with, and in direct
proportion to, the votes cast by those shareholders, excluding Monsanto and
the Entity holding the New Common Stock issued on account of the Retiree
Claim, voting on any and all matters for which a vote of the shareholders of
the New Common Stock is taken or required.
44
ARTICLE VIII
PROCEDURES FOR TREATING DISPUTED GENERAL UNSECURED CLAIMS
A. OBJECTIONS TO CLAIMS
After the Effective Date and on or before the Claims Objection
Deadline, the Reorganized Debtors shall have the authority to file objections
to Claims or Equity Interests. The Reorganized Debtors may settle, compromise,
withdraw or litigate to judgment objections to Claims. The Reorganized Debtors
shall consult with the Creditors' Committee (until the Creditors' Committee is
dissolved under the terms of this Plan) in the process of reconciling,
objecting to and/or allowing General Unsecured Claims.
B. GENERAL UNSECURED CLAIMS MONITOR
Upon the Effective Date, an entity selected by the Creditors'
Committee and approved by the Bankruptcy Court shall serve as an independent
claims monitor. The claims monitor shall be paid by the Reorganized Debtors on
a monthly basis in an amount agreed to, prior to the Confirmation Hearing,
between the Debtors and the claims monitor, with the reasonable consent of the
Creditors' Committee, and approved by the Bankruptcy Court, until the General
Unsecured Claims reconciliation process is concluded. The claims monitor shall
be authorized to retain counsel of its choice and shall have standing to raise
and appear on issues concerning the General Unsecured Claims reconciliation
process. The Reorganized Debtors shall be responsible for compensating the
claim monitor's counsel for all reasonable fees and expenses incurred, in
accordance with the claim monitor's counsel's normal billing practices;
provided, however, that the total amount of the claim monitor's counsel's fees
- -------- -------
and expenses in connection with the General Unsecured Claims reconciliation
process for which the Reorganized Debtors shall be responsible shall not
exceed an amount in the aggregate agreed to, prior to the Confirmation
Hearing, between the Debtors and the claims monitor, with the reasonable
consent of the Creditors' Committee, and approved by the Bankruptcy Court. If
the claims monitor believes that the Reorganized Debtors are failing to
administer the General Unsecured Claims reconciliation process adequately and,
as a result, intends to take action, then the claims monitor shall provide the
Reorganized Debtors and the Creditors' Committee until it is dissolved in
accordance with the terms hereof within five (5) Business Days' written notice
of its intent to take such proposed action. During the notice period, the
Reorganized Debtors may either consent to the relief sought, agree to proceed
in good faith with the proposed action on their own, or petition the
Bankruptcy Court for an order declaring that such proposed action is
unreasonable. If the Reorganized Debtors do not so petition the Bankruptcy
Court or the Bankruptcy Court determines that the proposed action is
reasonable, the Reorganized Debtors shall be responsible for compensating the
claims monitor's counsel for all reasonable fees and expenses incurred in
taking the proposed action and in seeking Bankruptcy Court approval of payment
with respect to such proposed action. To the extent the Bankruptcy Court
determines that such proposed action is unreasonable, then the claim monitor's
counsel shall not be reimbursed for any fees or expenses incurred in
connection with such proposed action or its attempt to take such proposed
action. Notwithstanding the foregoing, the Reorganized Debtors reserve their
right to dispute the reasonableness of compensation sought by the claim
monitor's counsel for services performed and expenses incurred following the
Effective Date by the filing of an appropriate motion with the Bankruptcy
Court. The Reorganized Debtors will retain primary responsibility of the
General Unsecured Claims reconciliation process and will provide monthly
reports of the status of the General Unsecured Claims reconciliation process
to the claims monitor, and, if it has not been dissolved in accordance with
the terms hereof, the Creditors' Committee.
45
C. NO DISTRIBUTIONS PENDING ALLOWANCE
Notwithstanding any other provision herein, if any portion of a Claim
is a Disputed Claim, no payment or Distribution provided hereunder shall be
made on account of such Claim unless and until such Disputed Claim becomes an
Allowed Claim, in whole or in part. No interest shall accrue on such Disputed
Claim until the date that such Disputed Claim, as applicable, becomes an
Allowed Claim.
D. ESTIMATION OF CLAIMS
The Debtors (prior to the Effective Date) or Reorganized Debtors
(after the Effective Date), the Creditors' Committee, if it has not been
dissolved in accordance with the terms hereof, and the General Unsecured
Claims Monitor, if the Creditors' Committee has been dissolved at the time,
may, at any time, and from time to time, request that the Bankruptcy Court
estimate any Disputed Claim pursuant to section 502(c) of the Bankruptcy Code
regardless of whether an objection was previously filed with the Bankruptcy
Court with respect to such Claim, or whether the Bankruptcy Court has ruled on
any such objection, and the Bankruptcy Court will retain jurisdiction to
estimate any Claim at any time during litigation concerning any objection to
any Claim, including during the pendency of any appeal relating to any such
objection. In the event that the Bankruptcy Court estimates any Disputed
Claim, that estimated amount will constitute either the Allowed amount of such
Claim or a maximum limitation on such Claim against any party or Entity, as
determined by the Bankruptcy Court. If the estimated amount constitutes a
maximum limitation on such Claim, the Debtors (prior to the Effective Date) or
the Reorganized Debtors (after the Effective Date), the Creditors' Committee,
if it has not been dissolved in accordance with the terms hereof, and the
General Unsecured Claims Monitor, if the Creditors' Committee has been
dissolved at the time, may elect to pursue any supplemental proceedings to
object to any ultimate Distribution on such Claim. All of the objection,
estimation, settlement and resolution procedures set forth in the Plan are
cumulative and not necessarily exclusive of one another. Claims may be
estimated and subsequently compromised, objected to, settled, withdrawn or
resolved by any mechanism approved by the Bankruptcy Court.
46
ARTICLE IX
CONDITIONS PRECEDENT TO CONFIRMATION
AND CONSUMMATION OF THE PLAN
A. CONDITION PRECEDENT TO CONFIRMATION
The Bankruptcy Court will not enter the Confirmation Order unless and
until the following conditions have been satisfied or duly waived pursuant to
Section IX.D of this Plan:
1. The Confirmation Order shall be reasonably acceptable in form and
substance to the Debtors, Monsanto, Pharmacia (solely with respect
to provisions directly affecting Pharmacia) and the Creditors'
Committee.
2. The Confirmation Order shall:
a. authorize the Debtors and the Reorganized Debtors to take all
actions necessary or appropriate to enter into, implement and
consummate the contracts, instruments, releases, leases,
indentures and other agreements or documents created in
connection with the Plan;
b. decree that the provisions of the Confirmation Order and the
Plan are nonseverable and mutually dependent;
c. authorize the Reorganized Debtors to (a) issue the New Common
Stock and the Rights pursuant to the exemption from
"Registration" under the Securities Act provided by section
1145 of the Bankruptcy Code and (b) enter into the Plan
Documents;
d. approve the releases and injunctions, including the
Monsanto/Pharmacia Injunction, as contemplated and to the
extent set forth in Article X herein;
e. decree that the Confirmation Order shall supersede any
Bankruptcy Court orders issued prior to the Confirmation Date
that may be inconsistent with the Confirmation Order;
f. authorize the implementation of the Plan in accordance with
its terms;
g. approve the Monsanto Settlement;
h. provide that, pursuant to section 1146(c) of the Bankruptcy
Code, the assignment or surrender of any lease or sublease,
and the delivery of any deed or other instrument or transfer
order, in furtherance of, or in connection with this Plan,
including any deeds, bills of sale or assignments executed in
connection with any disposition or transfer of assets
contemplated by this Plan, shall not be subject to any stamp,
real estate transfer, mortgage recording or other similar tax
(including, without limitation, any mortgages or security
interest filing to be recorded or filed in connection with the
Exit Financing Facility);
i. provide, in accordance with the Monsanto Settlement, that the
Settled Adversary Proceedings shall be withdrawn or dismissed
with prejudice; and
j. provide that, pursuant to the settlements of claims embodied
in the Plan, the Equity Committee Adversary Proceeding is
dismissed with prejudice.
47
3. The Debtors shall have received the Exit Financing Facility
Commitment Letter, which shall be in form and substance and with a
lender reasonably acceptable to the Debtors, Monsanto and the
Creditors' Committee.
4. The Retiree Approval Order shall have been entered by the
Bankruptcy Court.
B. CONDITIONS PRECEDENT TO EFFECTIVE DATE
The Effective Date will not occur and the Plan will not be
consummated unless and until each of the following conditions have been
satisfied or duly waived pursuant to Section IX.D of this Plan:
1. The Confirmation Order shall (i) be in form and substance
reasonably acceptable to the Debtors, Monsanto, Pharmacia (solely
with respect to provisions directly affecting Pharmacia) and the
Creditors' Committee, (ii) be consistent with the terms described
in Section IX.A above, and (iii) have been entered by the
Bankruptcy Court.
2. All actions, documents, instruments, and agreements necessary to
implement and effectuate the Plan, including the New Certificates
of Incorporation, the New By-laws and the Plan Documents, shall
have been taken or executed and delivered, as the case may be, and
each agreement shall be reasonably acceptable to Monsanto and the
Creditors' Committee.
3. The Debtors shall have received all authorizations, consents,
regulatory approvals, rulings or documents that are necessary to
implement and effectuate the Plan.
4. The initial boards of directors of the Reorganized Debtors shall
have been appointed.
5. The Debtors shall have entered into the Exit Facility Financing
reasonably acceptable to the Creditors' Committee and Monsanto.
6. The Retiree Approval Order shall have become a Final Order.
7. If the issuance or Distribution of any New Common Stock to
Monsanto hereunder is subject to notification requirements under
the HSR Act, any waiting period relating to such notification
shall have expired or otherwise been terminated.
8. All unliquidated General Unsecured Claims shall have been
estimated for Distribution purposes pursuant to section 502(c) of
the Bankruptcy Code, disallowed or fixed by an agreement between
the Debtors and any relevant Holders of General Unsecured Claims,
which agreement shall have been approved by the Bankruptcy Court.
9. The Confirmation Order shall have become a Final Order.
10. The Chocolate Bayou Settlement shall have been executed and shall
have received all necessary approvals.
11. The Relationship Agreement shall have been executed and shall have
received all necessary approvals.
48
12. From the proceeds of the Rights Offering, $175 million shall be
available to fund the Retiree Trust (as defined in the Retiree
Settlement Agreement) and $75 million shall be available to fund
Funding Co.
C. EFFECT OF FAILURE OF CONDITIONS
If the Consummation of the Plan does not occur, the Plan shall be
null and void in all respects and nothing contained in the Plan or the
Disclosure Statement shall: (1) constitute a waiver or release of any Claims
by or against, or any Equity Interests in, the Debtors; (2) prejudice in any
manner the rights of the Debtors or any creditors; or (3) constitute an
admission, acknowledgment, offer or undertaking by the Debtors or any
creditors in any respect.
D. WAIVER OF CONDITIONS
Each of the Debtors, Monsanto, Pharmacia (solely with respect to
provisions directly affecting Pharmacia) and the Creditors' Committee, may
waive, with the consent of each of such other parties, one or more of the
conditions precedent to Confirmation or Consummation set forth in Sections
IX.A and IX.B of this Plan.
49
ARTICLE X
INJUNCTIONS, RELEASES, EXCULPATION AND DISCHARGE
A. INJUNCTIONS
1. DEBTORS' INJUNCTION
ALL INJUNCTIONS OR STAYS PROVIDED FOR IN THE CHAPTER 11 CASES PURSUANT TO
SECTIONS 105 AND/OR 362 OF THE BANKRUPTCY CODE OR OTHERWISE AND IN EFFECT ON
THE CONFIRMATION DATE, SHALL REMAIN IN FULL FORCE AND EFFECT UNTIL THE
EFFECTIVE DATE. SUBJECT TO THE OCCURRENCE OF THE EFFECTIVE DATE, THE
CONFIRMATION ORDER SHALL PERMANENTLY ENJOIN ALL PERSONS, INCLUDING PHARMACIA
AND MONSANTO, THAT HAVE HELD, CURRENTLY HOLD OR MAY HOLD A CLAIM, INCLUDING A
LEGACY SITE CLAIM, AGAINST OR AN EQUITY INTEREST IN THE DEBTORS FROM TAKING
ANY OF THE FOLLOWING ACTIONS BASED ON SUCH CLAIM OR EQUITY INTEREST, WHETHER
DIRECTLY, INDIRECTLY, DERIVATIVELY, CONTRACTUALLY, STATUTORILY OR OTHERWISE,
OTHER THAN PHARMACIA'S, MONSANTO'S AND OTHER PARTIES' RIGHTS TO ENFORCE THE
TERMS OF THE PLAN, THE RELATIONSHIP AGREEMENT OR THE PLAN DOCUMENTS: (a)
COMMENCING, CONDUCTING OR CONTINUING IN ANY MANNER, DIRECTLY OR INDIRECTLY,
ANY SUIT, ACTION OR OTHER PROCEEDING OF ANY KIND AGAINST ANY OR ALL OF THE
DEBTORS OR THE REORGANIZED DEBTORS, OR THEIR RESPECTIVE PROPERTY OR ASSETS;
(b) ENFORCING, LEVYING, ATTACHING, COLLECTING OR OTHERWISE RECOVERING IN ANY
MANNER OR BY ANY MEANS, WHETHER DIRECTLY OR INDIRECTLY, ANY JUDGMENT, AWARD,
DECREE OR ORDER AGAINST ANY OR ALL OF THE DEBTORS, THE REORGANIZED DEBTORS OR
THEIR RESPECTIVE PROPERTY OR ASSETS; (c) CREATING, PERFECTING OR ENFORCING IN
ANY MANNER, DIRECTLY OR INDIRECTLY, ANY LIEN AGAINST ANY OR ALL OF THE
DEBTORS, THE REORGANIZED DEBTORS OR THEIR RESPECTIVE PROPERTY OR ASSETS; (d)
EXERCISING ANY SETOFF, RIGHT OF SUBROGATION OR RECOUPMENT OF ANY KIND,
DIRECTLY OR INDIRECTLY, AGAINST ANY DEBT, LIABILITY OR OBLIGATION DUE TO THE
DEBTORS, THE REORGANIZED DEBTORS OR THEIR RESPECTIVE PROPERTY; OR (e)
PROCEEDING IN ANY MANNER IN ANY PLACE WHATSOEVER THAT DOES NOT CONFORM TO OR
COMPLY WITH OR IS INCONSISTENT WITH THE PROVISIONS OF THE PLAN; PROVIDED,
--------
HOWEVER, THAT THE TERMS OF THIS INJUNCTION SHALL NOT PREVENT THE REORGANIZED
- -------
DEBTORS, MONSANTO, PHARMACIA OR, UNLESS THE CREDITORS' COMMITTEE HAS BEEN
DISSOLVED, THE CREDITORS' COMMITTEE, FROM ENFORCING THE TERMS OF THIS PLAN AND
THE PLAN DOCUMENTS; PROVIDED, FURTHER, HOWEVER, THAT TERMS OF THE INJUNCTION
-------- ------- -------
SHALL NOT PREVENT THE HOLDERS OF TORT CLAIMS, NRD CLAIMS OR CLAIMS, CAUSES OF
ACTION, OR RIGHTS RELATING TO ENVIRONMENTAL LIABILITY ARISING FROM THE
RETAINED SITES OR THE SHARED SITES FROM EXERCISING THEIR RIGHTS AGAINST
REORGANIZED SOLUTIA WITH RESPECT THERETO.
2. MONSANTO/PHARMACIA INJUNCTION
SUBJECT TO THE OCCURRENCE OF THE EFFECTIVE DATE, AND BASED ON THE MONSANTO
CONTRIBUTION AND THE PHARMACIA CONTRIBUTION, THE CONFIRMATION ORDER SHALL
PERMANENTLY ENJOIN ALL PERSONS, INCLUDING THE PLAINTIFFS (AND ANY MEMBERS OF A
CLASS RAISING THE SAME OR SIMILAR CLAIMS) IN THE MATTERS ENTITLED DAVIS V.
SOLUTIA INC. EMPLOYEES' PENSION PLAN, NO. 3:05CV736, SCHARRINGHAUSEN V.
SOLUTIA INC. EMPLOYEES' PENSION PLAN, NO. 3:06CV00099 AND COMPLAINANTS IN
LARRY PROBST V. MONSANTO COMPANY AND SOLUTIA, INC, EEOC CHARGE NOS. 280 A
00618 THROUGH 280 A 00652, BUT NOT PHARMACIA AND MONSANTO, THAT HAVE HELD,
CURRENTLY HOLD OR MAY HOLD A CLAIM AGAINST PHARMACIA OR MONSANTO RELATING TO
ANY OF THE DEBTORS, INCLUDING A LEGACY CLAIM, WHETHER SUCH CLAIM IS REDUCED TO
JUDGMENT OR NOT, LIQUIDATED OR UNLIQUIDATED, CONTINGENT OR NONCONTINGENT,
ASSERTED OR UNASSERTED, FIXED OR NOT, MATURED OR UNMATURED, DISPUTED OR
UNDISPUTED, LEGAL OR EQUITABLE, KNOWN OR UNKNOWN, FROM TAKING ANY OF THE
FOLLOWING ACTIONS RELATED TO SUCH CLAIM, WHETHER DIRECTLY, INDIRECTLY,
DERIVATIVELY, CONTRACTUALLY, STATUTORILY OR OTHERWISE: (a) COMMENCING,
CONDUCTING OR CONTINUING IN ANY MANNER, DIRECTLY OR INDIRECTLY, ANY SUIT,
ACTION OR OTHER PROCEEDING OF ANY KIND
50
AGAINST MONSANTO OR PHARMACIA, THEIR RESPECTIVE AFFILIATES, OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, REPRESENTATIVES, PROFESSIONALS, ADVISORS,
EMPLOYEE BENEFIT PLANS, OR ANY OF THEIR RESPECTIVE PROPERTY OR ASSETS; (b)
ENFORCING, LEVYING, ATTACHING, COLLECTING OR OTHERWISE RECOVERING IN ANY
MANNER OR BY ANY MEANS, WHETHER DIRECTLY OR INDIRECTLY, ANY JUDGMENT, AWARD,
DECREE OR ORDER AGAINST MONSANTO OR PHARMACIA, THEIR RESPECTIVE AFFILIATES,
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, REPRESENTATIVES, PROFESSIONALS,
ADVISORS, EMPLOYEE BENEFIT PLANS, OR ANY OF THEIR RESPECTIVE PROPERTY OR
ASSETS; (c) CREATING, PERFECTING OR ENFORCING IN ANY MANNER, DIRECTLY OR
INDIRECTLY, ANY LIEN AGAINST MONSANTO OR PHARMACIA, THEIR RESPECTIVE
AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, REPRESENTATIVES,
PROFESSIONALS, ADVISORS, EMPLOYEE BENEFIT PLANS, OR ANY OF THEIR RESPECTIVE
PROPERTY OR ASSETS; (d) ASSERTING ANY SETOFF, RIGHT OF SUBROGATION OR
RECOUPMENT OF ANY KIND, DIRECTLY OR INDIRECTLY, AGAINST ANY DEBT, LIABILITY OR
OBLIGATION DUE TO MONSANTO OR PHARMACIA; AND (e) PROCEEDING IN ANY MANNER IN
ANY PLACE WHATSOEVER THAT DOES NOT CONFORM TO OR COMPLY WITH OR IS
INCONSISTENT WITH THE PROVISIONS OF THE PLAN; PROVIDED, HOWEVER, THAT
-------- -------
THE TERMS OF THIS INJUNCTION SHALL NOT PREVENT THE REORGANIZED DEBTORS,
MONSANTO, PHARMACIA OR, UNLESS THE CREDITORS' COMMITTEE HAS BEEN DISSOLVED,
THE CREDITORS' COMMITTEE FROM ENFORCING THE TERMS OF THIS PLAN AND THE PLAN
DOCUMENTS; PROVIDED, FURTHER, HOWEVER, THAT TERMS OF THIS INJUNCTION SHALL NOT
-------- ------- -------
PREVENT THE HOLDERS OF TORT CLAIMS, NRD CLAIMS OR CLAIMS, CAUSES OF ACTION, OR
RIGHTS RELATING TO ENVIRONMENTAL LIABILITY FROM EXERCISING THEIR RIGHTS
AGAINST MONSANTO OR PHARMACIA WITH RESPECT THERETO.
B. RELEASES
The following releases are hereby granted pursuant to the Plan and the
Confirmation Order:
1. RELEASES BY THE DEBTORS
AS OF THE EFFECTIVE DATE, FOR GOOD AND VALUABLE CONSIDERATION, THE
ADEQUACY OF WHICH IS HEREBY CONFIRMED, THE DEBTORS, THEIR ESTATES AND THE
REORGANIZED DEBTORS WILL BE DEEMED TO FOREVER RELEASE, WAIVE AND DISCHARGE ALL
CLAIMS, OBLIGATIONS, SUITS, JUDGMENTS, DAMAGES, DEMANDS, DEBTS, RIGHTS, CAUSES
OF ACTION AND LIABILITIES WHETHER DIRECT OR DERIVATIVE, LIQUIDATED OR
UNLIQUIDATED, FIXED OR CONTINGENT, MATURED OR UNMATURED, DISPUTED OR
UNDISPUTED, KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, THEN EXISTING OR
THEREAFTER ARISING, IN LAW, EQUITY OR OTHERWISE THAT ARE BASED IN WHOLE OR IN
PART ON ANY ACT, OMISSION, TRANSACTION, EVENT OR OTHER OCCURRENCE TAKING PLACE
ON OR PRIOR TO EFFECTIVE DATE IN ANY WAY RELATING TO THE DEBTORS, THE CHAPTER
11 CASES, THE PLAN, OR THE DISCLOSURE STATEMENT, INCLUDING ANY SUCH CLAIMS,
OBLIGATIONS, SUITS, JUDGMENTS, DAMAGES, DEMANDS, DEBTS, RIGHTS, CAUSES OF
ACTION AND LIABILITIES ARISING OUT OF OR IN CONNECTION WITH RELEASE OF
HAZARDOUS SUBSTANCES, OTHER TYPES OF CONTAMINATION OR OTHER ENVIRONMENTAL
MATTERS (INCLUDING CLAIMS UNDER CERCLA OR SIMILAR ENVIRONMENTAL LAWS) ARISING
OUT OF OR IN CONNECTION WITH ANY ASSETS TRANSFERRED OR DEBTS, LIABILITIES,
GUARANTEES, ASSURANCES, COMMITMENTS OR OBLIGATIONS ASSUMED PURSUANT TO THE
DISTRIBUTION AGREEMENT OR OTHER TRANSACTIONS OCCURRING IN CONNECTION WITH THE
DISTRIBUTION AGREEMENT, AND THAT COULD HAVE BEEN ASSERTED AT ANY TIME, PAST OR
PRESENT OR FUTURE BY OR ON BEHALF OF THE DEBTORS, OR THEIR ESTATES AGAINST (a)
THE CURRENT OR FORMER REPRESENTATIVES, DIRECTORS, OFFICERS AND EMPLOYEES OF
THE DEBTORS AND THE DEBTORS' AGENTS, ADVISORS AND PROFESSIONALS, IN EACH CASE
IN THEIR CAPACITY AS SUCH, (b) THE CURRENT AND FORMER MEMBERS OF THE
CREDITORS' COMMITTEE, EXCEPT FOR THE PREPETITION INDENTURE TRUSTEE, AND THE
ADVISORS AND ATTORNEYS FOR THE CREDITORS' COMMITTEE, EXCEPT FOR ADVISORS TO
THE PREPETITION INDENTURE TRUSTEE, IN EACH CASE IN THEIR CAPACITY AS SUCH, (c)
MONSANTO, (d) PHARMACIA, (e) ANY EMPLOYEE BENEFIT PLANS OF MONSANTO OR
PHARMACIA, (f) THE AD HOC TRADE COMMITTEE AND (g) THE RESPECTIVE AFFILIATES
AND CURRENT OR FORMER REPRESENTATIVES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
MEMBERS, DIRECT AND INDIRECT SHAREHOLDERS, ADVISORS, ATTORNEYS AND
PROFESSIONALS OF THE FOREGOING, IN EACH CASE IN THEIR CAPACITY AS SUCH;
PROVIDED, HOWEVER, THAT THE TERMS OF THIS RELEASE SHALL NOT PREVENT THE
- -------- -------
REORGANIZED DEBTORS FROM ENFORCING THE TERMS OF THIS PLAN AND THE PLAN
DOCUMENTS; PROVIDED, FURTHER, HOWEVER, THAT
-------- ------- -------
51
WITH RESPECT TO FORMER DIRECTORS AND OFFICERS OF THE DEBTORS, NOTHING IN THIS
PARAGRAPH SHALL BE CONSTRUED TO RELEASE SUCH FORMER DIRECTORS AND OFFICERS
FROM CLAIMS FOR FRAUD, GROSS NEGLIGENCE, WILLFUL MISCONDUCT, CRIMINAL CONDUCT,
VIOLATION OF FIDUCIARY DUTY, INCLUDING THE UNAUTHORIZED USE OF CONFIDENTIAL
INFORMATION, THAT CAUSES DAMAGES OR FOR PERSONAL GAIN, TO (AND ONLY TO) THE
EXTENT SUCH PERSONS ARE NOT EXCULPATED THEREFROM BY ANY PROVISION OF
APPLICABLE LAW OR ANY CERTIFICATE OF INCORPORATION OR SIMILAR ORGANIZATIONAL
DOCUMENT OF SOLUTIA, REORGANIZED SOLUTIA, ANY OTHER DEBTOR OR ANY OTHER
REORGANIZED DEBTOR, OR ULTRA VIRES ACTS.
2. RELEASES BY HOLDERS OF CLAIMS AND EQUITY INTERESTS
AS OF THE EFFECTIVE DATE, EACH HOLDER OF A CLAIM OR EQUITY INTEREST SHALL
BE DEEMED TO FOREVER RELEASE, WAIVE AND DISCHARGE ALL CLAIMS OR EQUITY
INTERESTS, DEMANDS, DEBTS, RIGHTS, CAUSES OF ACTION OR LIABILITIES, WHETHER
DIRECT OR DERIVATIVE, LIQUIDATED OR UNLIQUIDATED, FIXED OR CONTINGENT, MATURED
OR UNMATURED, DISPUTED OR UNDISPUTED, KNOWN OR UNKNOWN, FORESEEN OR
UNFORESEEN, THEN EXISTING OR THEREAFTER ARISING, IN LAW, EQUITY OR OTHERWISE
THAT ARE BASED IN WHOLE OR IN PART ON ANY ACT OR OMISSION, TRANSACTION, EVENT
OR OTHER OCCURRENCE TAKING PLACE ON OR PRIOR TO THE EFFECTIVE DATE RELATING TO
THE DEBTORS, THE CHAPTER 11 CASES, THE PLAN, THE DISCLOSURE STATEMENT OR ANY
EMPLOYEE BENEFIT PLANS ADMINISTERED BY OR ON BEHALF OF SOLUTIA, OR ANY LEGACY
CLAIM OR LEGACY SITE CLAIMS OR OTHER OBLIGATIONS ASSUMED BY SOLUTIA UNDER THE
DISTRIBUTION AGREEMENT, BUT NOT INCLUDING CLAIMS FOR ENVIRONMENTAL LIABILITY
WHICH ARE RELATED TO RETAINED SITES OR SHARED SITES, AGAINST (a) THE CURRENT
OR FORMER REPRESENTATIVES, DIRECTORS, OFFICERS AND EMPLOYEES OF THE DEBTORS,
(b) THE DEBTORS' AGENTS, ADVISORS AND PROFESSIONALS, IN EACH CASE IN THEIR
CAPACITY AS SUCH, (c) THE CURRENT AND FORMER MEMBERS OF THE CREDITORS'
COMMITTEE, EXCEPT FOR THE PREPETITION INDENTURE TRUSTEE, AND THE ADVISORS AND
ATTORNEYS FOR THE CREDITORS' COMMITTEE, EXCEPT FOR ADVISORS TO THE PREPETITION
INDENTURE TRUSTEE, IN EACH CASE IN THEIR CAPACITY AS SUCH, (d) MONSANTO, (e)
PHARMACIA, (f) THE AD HOC TRADE COMMITTEE AND (g) THE RESPECTIVE AFFILIATES
AND CURRENT OR FORMER REPRESENTATIVES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
MEMBERS, DIRECT AND INDIRECT SHAREHOLDERS, ADVISORS, EMPLOYEE BENEFIT PLANS,
ATTORNEYS AND PROFESSIONALS OF THE FOREGOING, IN EACH CASE IN THEIR CAPACITY
AS SUCH. NOTWITHSTANDING THE FOREGOING, THE HOLDERS OF TORT CLAIMS, AS A
RESULT OF THE MONSANTO TORT MANAGEMENT, AND THE HOLDERS OF LEGACY SITE CLAIMS,
AS A RESULT OF THE RELATIONSHIP AGREEMENT, SHALL NOT BE DEEMED TO RELEASE THE
DEBTORS, MONSANTO OR PHARMACIA ON ACCOUNT OF ANY LIABILITY ARISING FROM OR
RELATED TO THE TORT CLAIMS, OR MONSANTO OR PHARMACIA ON ACCOUNT OF THE LEGACY
SITE CLAIMS. FURTHERMORE, THE HOLDERS OF NRD CLAIMS SHALL NOT BE DEEMED TO
RELEASE THE DEBTORS, MONSANTO OR PHARMACIA ON ACCOUNT OF ANY LIABILITY ARISING
FROM OR RELATED TO THE NRD CLAIMS. IN ADDITION, AS PROVIDED IN SECTION XII.C.
HERETO, GOVERNMENTAL ENTITIES SHALL NOT BE DEEMED TO RELEASE MONSANTO OR
PHARMACIA ON ACCOUNT OF ANY CLAIMS, CAUSES OF ACTION, OR RIGHTS; PROVIDED,
--------
HOWEVER, THAT THE TERMS OF THIS RELEASE SHALL NOT PREVENT MONSANTO OR
- -------
PHARMACIA FROM ENFORCING THE TERMS OF THIS PLAN AND THE PLAN DOCUMENTS;
PROVIDED, FURTHER, HOWEVER, THAT NOTHING IN THIS PARAGRAPH SHALL AFFECT THE
- -------- ------- -------
RIGHTS, DEFENSES, OBLIGATIONS OR CLAIMS ARISING BETWEEN MONSANTO AND
PHARMACIA, INCLUDING RIGHTS, DEFENSES, OBLIGATIONS OR CLAIMS ARISING FROM OR
EXISTING UNDER THE SEPARATION AGREEMENT; PROVIDED, FURTHER STILL, HOWEVER,
-------- ------- ----- -------
THAT WITH RESPECT TO FORMER DIRECTORS AND OFFICERS OF THE DEBTORS, NOTHING IN
THIS PARAGRAPH SHALL BE CONSTRUED TO RELEASE SUCH FORMER DIRECTORS AND
OFFICERS FROM CLAIMS FOR FRAUD, GROSS NEGLIGENCE, WILLFUL MISCONDUCT, CRIMINAL
CONDUCT, VIOLATION OF FIDUCIARY DUTY, INCLUDING THE UNAUTHORIZED USE OF
CONFIDENTIAL INFORMATION, THAT CAUSES DAMAGES OR FOR PERSONAL GAIN, TO (AND
ONLY TO) THE EXTENT SUCH PERSONS ARE NOT EXCULPATED THEREFROM BY ANY PROVISION
OF APPLICABLE LAW OR ANY CERTIFICATE OF INCORPORATION OR SIMILAR
ORGANIZATIONAL DOCUMENT OF SOLUTIA, REORGANIZED SOLUTIA, ANY OTHER DEBTOR OR
ANY OTHER REORGANIZED DEBTOR, OR ULTRA VIRES ACTS.
52
3. RETIREE RELEASE AND INJUNCTION
AS OF THE EFFECTIVE DATE, THE RETIREES' COMMITTEE, ITS MEMBERS AND
PROFESSIONALS, THE RETIREES AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, HEIRS, EXECUTORS, ADMINISTRATORS SUCCESSORS AND ASSIGNS
(COLLECTIVELY, THE "RETIREE PARTIES") SHALL HEREBY BE DEEMED TO HAVE RELEASED
AND DISCHARGED THE DEBTORS, MONSANTO, PHARMACIA, ANY EMPLOYEE BENEFIT PLANS OF
MONSANTO OR PHARMACIA, AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
AFFILIATES, SUCCESSORS, ASSIGNS, REPRESENTATIVES, AGENTS, ADVISORS AND
PROFESSIONALS (COLLECTIVELY, THE "RELEASED PARTIES") FROM, AND THE
CONFIRMATION ORDER AND THE RETIREE SETTLEMENT ORDER SHALL OPERATE AS AN
INJUNCTION AGAINST, THE COMMENCEMENT OR CONTINUATION OF ANY ACTION, THE
EMPLOYMENT OF PROCESS, OR ANY ACT TO COLLECT, RECOVER OR OFFSET, ANY "CLAIM"
(AS DEFINED IN SECTION 101(5) OF THE BANKRUPTCY CODE) AND ANY "DEBT" (AS THAT
TERM IS DEFINED IN SECTION 101(12) OF THE BANKRUPTCY CODE), RELATED TO
"RETIREE BENEFITS" (AS DEFINED IN SECTION 1114(a) OF THE BANKRUPTCY CODE),
INCLUDING THE PARTIAL RESERVATION OF CLAIMS IN THE CLASS ACTION SETTLEMENT
APPROVED BY THE U.S. DISTRICT COURT FOR THE NORTHERN DISTRICT OF FLORIDA,
PENSACOLA DIVISION, IN SOLUTIA INC. V. FORSBERG, NO. 3:98CV237, WHETHER SUCH
CLAIM IS REDUCED TO JUDGMENT OR NOT, LIQUIDATED OR UNLIQUIDATED, CONTINGENT OR
NONCONTINGENT, ASSERTED OR UNASSERTED, FIXED OR NOT, MATURED OR UNMATURED,
DISPUTED OR UNDISPUTED, LEGAL OR EQUITABLE, KNOWN OR UNKNOWN THAT THE RETIREE
PARTIES HAD, HAVE OR MAY HAVE AGAINST THE RELEASED PARTIES; PROVIDED, HOWEVER,
-------- -------
THAT THE FOREGOING SHALL NOT RELEASE AND DISCHARGE (a) THE REORGANIZED DEBTORS
FROM THE PERFORMANCE OF THEIR OBLIGATIONS UNDER THE RETIREE SETTLEMENT
AGREEMENT OR (b) MONSANTO FROM THE PERFORMANCE OF ITS OBLIGATIONS UNDER THE
RETIREE SETTLEMENT AGREEMENT.
C. EXCULPATION AND LIMITATION OF LIABILITY
EXCEPT AS PROVIDED IN THE PLAN OR THE CONFIRMATION ORDER, NONE OF THE
DEBTORS, MONSANTO, PHARMACIA, THE CREDITORS' COMMITTEE NOR THE CURRENT OR
FORMER INDIVIDUAL MEMBERS THEREOF, EXCEPT FOR THE PREPETITION INDENTURE
TRUSTEE, THE RETIREES' COMMITTEE NOR THE CURRENT INDIVIDUAL MEMBERS THEREOF,
THE AD HOC TRADE COMMITTEE NOR THE CURRENT INDIVIDUAL MEMBERS THEREOF, NOR ANY
OF THEIR RESPECTIVE PRESENT MEMBERS, REPRESENTATIVES, OFFICERS, DIRECTORS,
SHAREHOLDERS, EMPLOYEES, ADVISORS, ATTORNEYS, AFFILIATES OR AGENTS ACTING IN
SUCH CAPACITY, EXCEPT FOR ADVISORS TO THE PREPETITION INDENTURE TRUSTEE, SHALL
HAVE OR INCUR ANY LIABILITY TO, OR BE SUBJECT TO ANY RIGHT OF ACTION BY, ANY
HOLDER OF A CLAIM, INCLUDING, BUT NOT LIMITED TO, A LEGACY CLAIM, OR AN EQUITY
INTEREST, OR ANY OTHER PARTY IN INTEREST, OR ANY OF THEIR RESPECTIVE AGENTS,
DIRECT OR INDIRECT SHAREHOLDERS, EMPLOYEES, REPRESENTATIVES, FINANCIAL
ADVISORS, ATTORNEYS OR AFFILIATES, OR ANY OF THEIR RESPECTIVE SUCCESSORS OR
ASSIGNS, FOR ANY ACT OR OMISSION IN CONNECTION WITH, RELATING TO, OR ARISING
OUT OF, THE CHAPTER 11 CASES, THE PURSUIT OF CONFIRMATION OF THE PLAN, THE
CONSUMMATION OF THE PLAN, OR THE ADMINISTRATION OF THE PLAN OR THE PROPERTY TO
BE DISTRIBUTED UNDER THE PLAN, EXCEPT FOR THEIR WILLFUL MISCONDUCT, CRIMINAL
CONDUCT, MISUSE OF CONFIDENTIAL INFORMATION THAT CAUSES DAMAGES, FRAUD, ULTRA
VIRES ACTS OR GROSS NEGLIGENCE, AND IN ALL RESPECTS SHALL BE ENTITLED TO RELY
REASONABLY UPON THE ADVICE OF COUNSEL WITH RESPECT TO THEIR DUTIES AND
RESPONSIBILITIES UNDER THE PLAN. NOTHING IN THIS PARAGRAPH SHALL AFFECT THE
RIGHTS, DEFENSES, OBLIGATIONS OR CLAIMS ARISING BETWEEN MONSANTO AND
PHARMACIA.
D. DISCHARGE OF CLAIMS AND TERMINATION OF EQUITY INTERESTS
EXCEPT AS PROVIDED IN THIS PLAN, THE PLAN DOCUMENTS OR THE CONFIRMATION
ORDER, PURSUANT TO SECTION 1141(d) OF THE BANKRUPTCY CODE, (1) THE RIGHTS
AFFORDED UNDER THE PLAN AND THE TREATMENT OF ALL CLAIMS, INCLUDING THE LEGACY
SITE CLAIMS, AND EQUITY INTERESTS SHALL BE IN EXCHANGE FOR AND IN COMPLETE
SATISFACTION, DISCHARGE AND RELEASE OF SUCH CLAIMS AND EQUITY INTERESTS OF ANY
NATURE WHATSOEVER, INCLUDING ANY INTEREST ACCRUED ON SUCH CLAIMS FROM AND
AFTER THE PETITION DATE, AGAINST ANY DEBTOR OR ANY OF THEIR ASSETS OR
PROPERTIES, (2) ON THE EFFECTIVE DATE, ALL SUCH CLAIMS AND
53
EQUITY INTERESTS IN, ANY DEBTOR SHALL BE SATISFIED, DISCHARGED AND RELEASED IN
FULL AND (3) ALL PERSONS AND ENTITIES SHALL BE PRECLUDED FROM ASSERTING
AGAINST THE REORGANIZED DEBTORS AND THEIR RESPECTIVE SUCCESSORS OR THEIR
ASSETS OR PROPERTIES ANY OTHER OR FURTHER SUCH CLAIMS OR EQUITY INTERESTS
BASED UPON ANY ACT OR OMISSION, TRANSACTION OR OTHER ACTIVITY OF ANY KIND OR
NATURE THAT OCCURRED PRIOR TO THE EFFECTIVE DATE; PROVIDED, HOWEVER, THAT THE
REORGANIZED DEBTORS SHALL NOT RECEIVE A DISCHARGE FROM TORT CLAIMS, NRD CLAIMS
OR ANY ENVIRONMENTAL LIABILITY OR ENVIRONMENTAL LIABILITY COSTS RELATED TO THE
RETAINED SITES OR THE SHARED SITES; PROVIDED, FURTHER, HOWEVER, THAT NOTHING
IN THE PLAN SHALL DISCHARGE ANY LIABILITIES TO A GOVERNMENTAL ENTITY OF THE
DEBTORS, OR REORGANIZED DEBTORS, AS THE CASE MAY BE, ARISING AFTER THE
CONFIRMATION DATE OR THAT IS NOT OTHERWISE A CLAIM WITHIN THE MEANING OF
SECTION 101(5) OF THE BANKRUPTCY CODE, NOR SHALL THE PLAN PRECLUDE A
GOVERNMENTAL ENTITY FROM ASSERTING ANY SUCH LIABILITIES AGAINST THE
REORGANIZED DEBTORS AND NOTHING IN THE PLAN SHALL DISCHARGE ANY LIABILITY TO A
GOVERNMENTAL ENTITY UNDER APPLICABLE ENVIRONMENTAL LAWS THAT A REORGANIZED
DEBTOR OR ANY OTHER PERSON OR ENTITY MAY HAVE AS THE OWNER OR OPERATOR OF REAL
PROPERTY ON AND AFTER THE CONFIRMATION DATE; PROVIDED, FURTHER STILL, HOWEVER,
THAT NOTHING IN THE PLAN SHALL ADVERSELY AFFECT IN ANY WAY THE RIGHTS AND
REMEDIES OF THE UNITED STATES WITH RESPECT TO THE ANNISTON PARTIAL CONSENT
DECREE (C.V. -01-PT-0749-E, EFFECTIVE AUGUST 4, 2003), NOR SHALL ANYTHING IN
THE PLAN DIVEST OR LIMIT THE JURISDICTION OF THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA OVER SUCH ANNISTON PARTIAL CONSENT
DECREE, WHICH SHALL SURVIVE THE CHAPTER 11 CASES AND MAY BE ENFORCED IN THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA AND NOTHING
IN THE PLAN SHALL ADVERSELY AFFECT IN ANY WAY THE RIGHTS AND REMEDIES OF THE
UNITED STATES WITH RESPECT TO THE ADMINISTRATIVE ORDERS RELATING TO THE
SAUGET, ILLINOIS AREA 1 AND AREA 2 SITES, V-W-99-C-554, EFFECTIVE JANUARY 21,
1999; V-W-99-C-554, ISSUED MAY 31, 2000; V-W-01-C-622, EFFECTIVE NOVEMBER 24,
2000; AND V-W-02-C-716, ISSUED SEPTEMBER 30, 2002), WHICH SHALL SURVIVE THE
BANKRUPTCY CASE AND MAY BE ENFORCED IN ANY TRIBUNAL WITH JURISDICTION.
54
ARTICLE XI
RETENTION OF JURISDICTION
A. RETENTION OF JURISDICTION
The Bankruptcy Court shall have jurisdiction of all matters arising out of,
and related to, the Chapter 11 Cases and the Plan pursuant to, and for the
purposes of, sections 105(a) and 1142 of the Bankruptcy Code and for, among
other things, the following purposes:
1. To hear and determine any applications for the assumption or rejection
of Executory Contracts or Unexpired Leases and the allowance of cure
amounts and Claims resulting therefrom;
2. To hear and determine any and all adversary proceedings, applications
and contested matters;
3. To hear and determine any objection to any Administrative Expense
Claims, or any objection to or request to estimate any Claim;
4. To estimate any Claim at any time, including during litigation
concerning any objection to such Claim or during the pendency of any
appeal relating to any such objection;
5. To enter and implement such orders as may be appropriate in the event
the Confirmation Order is for any reason stayed, revoked, modified or
vacated;
6. To issue such orders in aid of execution and consummation of the Plan,
to the extent authorized by section 1142 of the Bankruptcy Code;
7. To consider any amendments to, or modifications of, the Plan, to cure
any defect or omission or reconcile any inconsistency in any order of
the Bankruptcy Court, including the Confirmation Order or in the Plan;
8. To hear and determine all applications for compensation and
reimbursement of expenses of Professionals under sections 328, 330, 331
and 503(b) of the Bankruptcy Code;
9. To hear and determine disputes arising in connection with the
interpretation, implementation or enforcement of the Plan and the Plan
Documents, including the Relationship Agreement and the Confirmation
Order;
10. To recover all assets of the Debtors and property of the Debtors'
Estates, wherever located;
11. To hear and determine all Avoidance Actions and Causes of Action that
may be brought by Reorganized Solutia;
12. To hear and determine all disputes relating to the injunctions,
including the Monsanto/Pharmacia Injunction and the other releases
described in Article X of the Plan;
55
13. To hear and determine matters concerning state, local and federal taxes
in accordance with sections 346, 505 and 1146 of the Bankruptcy Code;
14. To examine, pursuant to Bankruptcy Rule 2004, any party whose
contribution is necessary to effectuate the Plan;
15. To hear any other matter not inconsistent with the Bankruptcy Code; and
16. To enter a final decree or decrees closing the Chapter 11 Cases.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
A. BINDING EFFECT
The Plan shall be binding upon and inure to the benefit of the Debtors, the
Reorganized Debtors, all Holders of Claims and Equity Interests and their
prospective successors and assigns, including all parties in interest in the
Chapter 11 Cases and their Professionals.
B. PRESERVATION OF AVOIDANCE ACTIONS
On and after the Effective Date, any and all Avoidance Actions (other than
the Avoidance Action against Monsanto and Pharmacia, which shall be resolved
pursuant to the terms of the settlement among Solutia, Monsanto and Pharmacia)
shall be preserved and retained by the Reorganized Debtors, which shall have
the exclusive right to enforce, settle and prosecute any such Avoidance
Actions. Reorganized Solutia may pursue, abandon, settle or release any or all
retained Avoidance Actions, as it deems appropriate, subject to the reasonable
consent of Monsanto and the Creditors' Committee and Bankruptcy Court
approval. Any recovery received on account of an Avoidance Action may be
retained by the Reorganized Debtors. Reorganized Solutia may offset any claim
supporting an Avoidance Action against any payment or Distribution due to any
Holder of a Claim under the Plan. In addition, if a Distribution is made in
error, the Reorganized Debtors can bring an action pursuant to section 502(d)
of the Bankruptcy Code to recoup such Distribution.
C. CLAIMS OF THE UNITED STATES OF AMERICA
Nothing in this Plan and the transactions approved hereby is intended to or
shall release any non-Debtor of any claims, rights or causes of action arising
in favor of the United States of America or any states thereof; provided,
--------
however, that nothing in this Plan or otherwise shall prevent any party from
- -------
asserting defenses, counterclaims or other rights against the United States of
America or any states thereof under applicable non-bankruptcy law.
D. APPLICABILITY OF SECTION 1125(e) OF THE BANKRUPTCY CODE
The protection afforded by section 1125(e) of the Bankruptcy Code with
regard to the solicitation of acceptances or rejections of the Plan and with
regard to the offer, issuance, sale or purchase of the New Common Stock, or
any other security, shall apply to the full extent provided by law, and the
entry of the Confirmation Order shall constitute the determination by the
Bankruptcy Court that the Debtors, Monsanto, the Creditors' Committee and the
Retirees' Committee and each of their respective officers, directors,
partners, employees, members, agents, attorneys, accountants, financial
advisors, investment bankers, dealer-managers, placement agents, and other
professionals, shall have acted in good faith and in compliance with the
applicable provisions of the Bankruptcy Code pursuant to section 1125(e) of
the Bankruptcy Code and that the Plan has been proposed in good faith and not
by any means forbidden by law.
E. DISSOLUTION OF THE CREDITORS' COMMITTEE, RETIREES' COMMITTEE AND EQUITY
COMMITTEE
On the Effective Date, the Creditors' Committee, the Retirees' Committee
and the Equity Committee shall be dissolved and the members thereof shall be
released and discharged of and from all further authority, duties,
responsibilities and obligations relating to and arising from and in
connection
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with the Chapter 11 Cases, and the retention and employment of their attorneys
or other Professionals shall terminate; provided, however, that the Creditors'
-------- -------
Committee, the Retirees' Committee and the Equity Committee shall continue to
exist after such date and their professional fees and expenses shall be
reimbursed by the Debtors or Reorganized Debtors, as applicable, solely with
respect to applications filed with the Bankruptcy Court pursuant to sections
328, 330 and 331 of the Bankruptcy Code seeking payment of Professional Fee
Claims and for any appeals related thereto; provided, further that (a) the
-------- -------
Creditors' Committee shall continue to exist after the Effective Date so long
as there is an appeal or other litigation pending in connection with the JPM
Adversary Proceeding, the Equity Committee Adversary Proceeding, the Plan, the
Confirmation Order or any proceeding that may materially affect recoveries to
unsecured creditors, and (b) the professional fees and expenses of the
Creditors' Committee in connection with (a) above shall be reimbursed by the
Debtors or Reorganized Debtors without application to the Bankruptcy Court
consistent with Article V.D hereof.
F. PAYMENT OF STATUTORY FEES
All fees payable pursuant to section 1930 of title 28 of the United States
Code, shall be paid, by the Debtors or the Reorganized Debtors, as applicable,
for each quarter (including any fraction thereof) until the Chapter 11 Cases
are converted, dismissed or closed, whichever occurs first.
G. MODIFICATION OF THE PLAN
Subject to the limitations contained in the Plan, (1) the Debtors reserve
the right, in accordance with the Bankruptcy Code and the Bankruptcy Rules, to
alter, amend or modify the Plan prior to the entry of the Confirmation Order,
provided, however, that any material alteration, amendment or modification of
- -------- -------
the Plan shall be subject to the consent of Monsanto, Pharmacia (if such
provision directly affects Pharmacia) and the Creditors' Committee, which
shall not be unreasonably withheld, and (2) after the entry of the
Confirmation Order, the Debtors and the Reorganized Debtors may, upon order of
the Bankruptcy Court and with the consent of Monsanto and, unless the
Creditors' Committee has been dissolved, the Creditors' Committee, which
consent shall not be unreasonably withheld, amend or modify the Plan, in
accordance with section 1127(b) of the Bankruptcy Code, or remedy any defect
or omission or reconcile any inconsistency in the Plan in such manner as may
be necessary to carry out the purpose and intent of the Plan. A Holder of a
Claim that has accepted the Plan shall be deemed to have accepted the Plan as
altered, amended or modified, if the proposed alteration, amendment or
modification does not materially and adversely change the treatment of the
Claim of such Holder.
H. SEVERABILITY
In the event that the Bankruptcy Court determines that any provision of the
Plan is invalid, void or unenforceable, such provision shall be invalid, void
or unenforceable with respect to the Holder or Holders of such Claims or
Equity Interests as to which the provision is determined to be invalid, void
or unenforceable. The invalidity, voidness or unenforceability of any such
provision shall, with the consent of the Debtors, Monsanto and the Creditors'
Committee, which such consent shall not be unreasonably withheld, in no way
limit or affect the enforceability and operative effect of any other provision
of the Plan.
I. REVOCATION OR WITHDRAWAL OF THE PLAN
The Debtors reserve the right to revoke or withdraw the Plan prior to the
Confirmation Date; provided, however, that any such revocation or withdrawal
-------- -------
shall be subject to the consent of Monsanto and the Creditors' Committee,
which consent shall not be unreasonably withheld. If the Debtors revoke or
withdraw the Plan prior to the Confirmation Date, then the Plan shall be
deemed null and void. In such
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event, nothing contained in the Plan shall constitute or be deemed a waiver or
release of any Claims by or against the Debtors or any other Person or Entity
or to prejudice in any manner the rights of the Debtors or any Person or
Entity in any further proceedings involving the Debtors.
J. SECTION 1145 EXEMPTION
Section 1145(a) of the Bankruptcy Code provides that, subject to certain
limitations, certain federal, state and local requirements regarding
registration of securities do not apply to securities that are offered or sold
under a plan of reorganization. The New Common Stock and the Rights issued
pursuant to the Plan will be issued without "Registration" under the
Securities Act to the extent permitted by section 1145 of the Bankruptcy Code,
and may not be offered or sold except in compliance with the Securities Act.
The Debtors have not obtained, and do not intend to obtain, a "no-action"
letter from the Securities and Exchange Commission to the effect that the
Securities and Exchange Commission will not take enforcement action if the New
Common Stock is issued in accordance with the provisions of the Plan without
registration under the Securities Act.
K. SECTION 1146 EXEMPTION
Pursuant to section 1146(c) of the Bankruptcy Code, any transfers of
property pursuant hereto shall not be subject to any document recording tax,
stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, stamp
act, real estate transfer tax, mortgage recording tax or other similar tax or
governmental assessment, and the Confirmation Order shall direct the
appropriate state or local governmental officials or agents to forgo the
collection of any such tax or governmental assessment and to accept for filing
and recordation any of the foregoing instruments or other documents without
the payment of any such tax, recordation fee or governmental assessment.
L. NOTICES
All notices, requests and demands to or upon the Debtors or, on and after
the Effective Date, the Reorganized Debtors, the Creditors' Committee, the
Retirees' Committee, the Equity Committee, the DIP Lenders, the Office of the
United States Trustee, Monsanto and Pharmacia to be effective shall be in
writing and, unless otherwise expressly provided in the Plan, shall be deemed
to have been duly given or made when actually delivered by messenger or
overnight courier service or, in the case of notice by facsimile transmission,
when received and telephonically confirmed, addressed as follows:
1. THE DEBTORS AND THE REORGANIZED DEBTORS
Rosemary L. Klein, Esq. (General Counsel)
Solutia Inc.
575 Maryville Centre Dr.
St. Louis, MO 63141
Richard M. Cieri, Esq.
Jonathan S. Henes, Esq.
Kirkland & Ellis LLP
Citigroup Center
153 East 53rd Street
New York, NY 10022-4611
Fax: (212) 446-4900
(Counsel to the Debtors and Reorganized Debtors)
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2. THE CREDITORS' COMMITTEE
Daniel H. Golden, Esq.
Ira S. Dizengoff, Esq.
Akin Gump Strauss Hauer & Feld LLP
590 Madison Avenue
New York, NY 10022
Fax: (212) 872-1002
James R. Savin, Esq.
Akin Gump Strauss Hauer & Feld LLP
1333 New Hampshire Avenue N.W.
Washington, D.C. 20036
Fax: (202) 887-4288
(Counsel to the Creditors' Committee)
3. THE RETIREES' COMMITTEE
Daniel D. Doyle, Esq.
Nicholas A. Franke, Esq.
David M. Brown, Esq.
Spencer Fane Britt & Browne LLP
1 North Brentwood Boulevard, 10th Floor
St. Louis, MO 63105
Fax: (314) 862-4656
R. Scott Williams, Esq.
Haskell Slaughter Young & Rediker, LLC
400 Park Place Tower
2001 Park Place
North Birmingham, AL 35203
Fax: (205) 324-1133
(Counsel to the Retirees' Committee)
4. THE EQUITY COMMITTEE
Craig A. Barbarosh, Esq.
Pillsbury Winthrop Shaw Pittman LLP
650 Town Center Drive, 7th Floor
Costa Mesa, CA 92626
Fax: (714) 436-2800
(Counsel to the Equity Committee)
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5. THE DIP LENDERS
David Jaffe
Citicorp USA, Inc.
390 Greenwich Street
New York, NY 10013
Fax: (212) 816-2613
Seth Jacobson, Esq.
Timothy R. Pohl, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
333 West Wacker Drive, Suite 2100
Chicago, IL 60606-1285
Fax: (312) 407-0411
(Counsel to the DIP Lenders)
6. THE UNITED STATES TRUSTEE
Greg M. Zipes, Esq.
OFFICE OF THE UNITED STATES TRUSTEE
33 Whitehall Street, 21st Floor
New York, NY 10004
Fax: (212) 668-2255
7. MONSANTO
David Snively, Esq. (General Counsel)
Monsanto Company
800 North Lindbergh Boulevard
St. Louis, MO 63167
John C. Longmire, Esq.
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
Fax: (212) 728-8111
George T. Frampton, Jr., Esq.
Boies, Schiller & Flexner LLP
570 Lexington Avenue, 16th Floor
New York, NY 10022
Fax: 212-446-2350
Lloyd A. Palans, Esq.
Bryan Cave LLP
One Metropolitan Square
211 N. Broadway
St. Louis, MO 63102-2750
Fax: 314-259-2020
(Counsel to Monsanto)
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8. PHARMACIA
Bruce R. Zirinsky, Esq.
John H. Bae, Esq.
Cadwalader, Wickersham & Taft LLP
One World Financial Center
New York, NY 10281
Fax: 212-504-6666
(Counsel to Pharmacia)
M. GOVERNING LAW
Except to the extent the Bankruptcy Code, the Bankruptcy Rules or other
federal law is applicable, or to the extent an exhibit to 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
New York, without giving effect to the principles of conflicts of law of such
jurisdiction.
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Dated: New York, New York Respectfully submitted,
May 16, 2007 SOLUTIA INC., on behalf of itself and
all of the Debtors
By: /s/ Jeffry N. Quinn
-------------------
Name: Jeffry N. Quinn
Title: President & Chief Executive Officer
63