Exhibit 99.2
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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SOLUTIA'S FIFTH AMENDED JOINT PLAN OF REORGANIZATION
----------------------------------------------------
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: October 19, 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 Notes"...........................................................................1
2. "2037 Notes"...........................................................................1
3. "Abernathy Settlement Agreement".......................................................1
4. "Ad Hoc Notes Committee"...............................................................1
5. "Ad Hoc Trade Committee"...............................................................1
6. "ACE Companies"........................................................................1
7. "ACE Insurance Program"................................................................2
8. "ACE Settlement Agreement".............................................................2
9. "Administrative Expense Claim".........................................................2
10. "Administrative Expense Claim Bar Date"................................................2
11. "Affiliate"............................................................................2
12. "Allowed Claim"........................................................................2
13. "Allowed . . . Claim"..................................................................3
14. "Anniston Consent Decree"..............................................................3
15. "Anniston Global Settlement Agreement".................................................3
16. "Anniston Litigation Settlement Agreements"............................................3
17. "Anniston Side Letter Agreement".......................................................3
18. "Avoidance Actions"....................................................................3
19. "Axio Claims"..........................................................................3
20. "Axio Liquidation Sale"................................................................3
21. "Backstop Approval Order"..............................................................3
22. "Backstop Commitment Agreement"........................................................3
23. "Backstop Investors"...................................................................3
24. "Backstop Pool"........................................................................3
25. "Ballot"...............................................................................3
26. "Bankruptcy Code"......................................................................3
27. "Bankruptcy Court".....................................................................3
28. "Bankruptcy Rules".....................................................................4
29. "Bar Date".............................................................................4
30. "Bar Date Order".......................................................................4
31. "Business Day".........................................................................4
32. "Cash".................................................................................4
33. "Causes of Action".....................................................................4
34. "CERCLA"...............................................................................4
35. "Chapter 11 Cases".....................................................................4
36. "Chemicals Assets".....................................................................4
37. "Chemicals Liabilities"................................................................4
38. "Chocolate Bayou Agreements"...........................................................4
39. "Chocolate Bayou Settlement"...........................................................4
40. "Claim"................................................................................5
41. "Claim Transfer Option"................................................................5
42. "Claim Transfer Procedures"............................................................5
43. "Claim Transfer Rights"................................................................5
44. "Claims Objection Deadline"............................................................5
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45. "Class"................................................................................5
46. "Commercial and Operating Agreements"..................................................5
47. "Confirmation".........................................................................5
48. "Confirmation Date"....................................................................5
49. "Confirmation Hearing".................................................................5
50. "Confirmation Order"...................................................................5
51. "Consummation".........................................................................5
52. "Convenience Claims"...................................................................5
53. "CPFilms Claims".......................................................................5
54. "Creditors' Committee".................................................................6
55. "Debtor Intercompany Claim"............................................................6
56. "DIP Claims"...........................................................................6
57. "DIP Credit Facility"..................................................................6
58. "DIP Lender"...........................................................................6
59. "Directors' and Officer Indemnity Claims"..............................................6
60. "Disclosure Statement Hearing".........................................................6
61. "Disclosure Statement Order"...........................................................6
62. "Disputed Claim".......................................................................6
63. "Disputed Claims Reserve"..............................................................6
64. "Disputed General Unsecured Claims Reserve"............................................6
65. "Disputed General Unsecured Claim".....................................................6
66. "Distribution".........................................................................6
67. "Distribution Agreement"...............................................................6
68. "Distribution Date"....................................................................6
69. "Distribution Record Date".............................................................7
70. "Effective Date".......................................................................7
71. "Eligible Claim Transfer Shareholders".................................................7
72. "Eligible Holders".....................................................................7
73. "Eligible Claim Transfer Holders"......................................................7
74. "Eligible Shareholders"................................................................7
75. "Entity"...............................................................................7
76. "Environmental Liability"..............................................................7
77. "Environmental Liability Costs"........................................................7
78. "Equity Committee".....................................................................7
79. "Equity Committee Adversary Proceeding"................................................7
80. "Equity Interest"......................................................................7
81. "Equity Purchase"......................................................................7
82. "Equity Purchase Procedures"...........................................................7
83. "Equity Purchase Rights"...............................................................7
84. "ERISA"................................................................................8
85. "Estate" and, collectively, "Estates"..................................................8
86. "Exchange Act".........................................................................8
87. "Executory Contract and/or Unexpired Lease"............................................8
88. "Exit Financing Facility"..............................................................8
89. "Exit Financing Facility Agent Bank"...................................................8
90. "Exit Financing Facility Commitment Letter"............................................8
91. "Final Order"..........................................................................8
92. "Formalin Purchase Agreement"..........................................................8
93. "Funding Co"...........................................................................8
94. "General Unsecured Claims".............................................................8
95. "Global Settlement"....................................................................8
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96. "HCN Purchase Agreement"...............................................................9
97. "HMD Purchase Agreement"...............................................................9
98. "HMTA Purchase Agreement"..............................................................9
99. "Holdback Amount"......................................................................9
100. "Holdback Escrow Account"..............................................................9
101. "Holder" and, collectively, "Holders"..................................................9
102. "HSR Act"..............................................................................9
103. "Impaired".............................................................................9
104. "Impaired Claim".......................................................................9
105. "Impaired Class".......................................................................9
106. "Incentive Plan".......................................................................9
107. "Insured Claims".......................................................................9
108. "Internal Revenue Code"................................................................9
109. "IRS"..................................................................................9
110. "Legacy Claims".......................................................................10
111. "Legacy Sites"........................................................................10
112. "Legacy Site Claims"..................................................................10
113. "Legacy Tort Claims"..................................................................10
114. "Lien"................................................................................11
115. "Master Operating Agreement"..........................................................11
116. "Monsanto"............................................................................11
117. "Monsanto Claim"......................................................................11
118. "Monsanto Contribution"...............................................................11
119. "Monsanto/Pharmacia Injunction".......................................................12
120. "Monsanto's Professionals"............................................................12
121. "Monsanto Settlement Agreement".......................................................12
122. "Monsanto Tort Management"............................................................12
123. "National Securities Exchange"........................................................12
124. "New By-laws".........................................................................12
125. "New Certificate of Incorporation"....................................................12
126. "New Common Stock"....................................................................12
127. "Nominee".............................................................................12
128. "Non-Debtor Intercompany Claim".......................................................12
129. "Noteholder Claims"...................................................................12
130. "NRD Claims"..........................................................................13
131. "NYSE"................................................................................13
132. "Ordinary Course Professionals Order".................................................13
133. "PBGC"................................................................................13
134. "PCBs"................................................................................13
135. "Pension Plan"........................................................................13
136. "Person"..............................................................................13
137. "Petition Date".......................................................................13
138. "Pharmacia"...........................................................................13
139. "Pharmacia Contribution"..............................................................13
140. "Pharmacia Claims"....................................................................13
141. "Plan Documents"......................................................................13
142. "Plan Support Agreement"..............................................................13
143. "Plan Supplement".....................................................................14
144. "Prepetition Indenture"...............................................................14
145. "Prepetition Indenture Charging Lien".................................................14
146. "Prepetition Indenture Trustee".......................................................14
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147. "Prepetition Indenture Trustee Adversary Proceeding"..................................14
148. "Priority Non-Tax Claim"..............................................................14
149. "Priority Tax Claim"..................................................................14
150. "Pro Rata"............................................................................14
151. "Professional"........................................................................14
152. "Professional Fee Claims".............................................................14
153. "Professional Fee Order"..............................................................15
154. "Quarterly Distribution Date".........................................................15
155. "Registration Rights Agreement".......................................................15
156. "Reinstated" or "Reinstatement".......................................................15
157. "Reorganized . . ."...................................................................15
158. "Restructuring Transactions"..........................................................15
159. "Restructuring Transactions Agreement"................................................16
160. "Retained Sites"......................................................................16
161. "Retirees"............................................................................16
162. "Retiree Approval Order"..............................................................16
163. "Retiree Benefits"....................................................................16
164. "Retiree Claim".......................................................................16
165. "Retirees' Committee".................................................................16
166. "Retiree Settlement Agreement"........................................................16
167. "Retiree Trust".......................................................................16
168. "Rights"..............................................................................16
169. "Rights Offering".....................................................................16
170. "Rights Offering Procedures"..........................................................16
171. "Rights Subscription Exercise Form"...................................................16
172. "Sauget Administrative Orders"........................................................16
173. "Schedules"...........................................................................17
174. "Secured Claim".......................................................................17
175. "Securities Act"......................................................................17
176. "Security Claims".....................................................................17
177. "Senior Secured Notes"................................................................17
178. "Senior Secured Note Claims"..........................................................17
179. "Senior Secured Notes Guarantors".....................................................17
180. "Senior Secured Notes Indenture"......................................................17
181. "Senior Secured Notes Indenture Charging Lien"........................................17
182. "Senior Secured Notes Trustee"........................................................17
183. "Separation Agreement"................................................................17
184. "Settled Adversary Proceedings".......................................................17
185. "Shared Sites"........................................................................17
186. "SIP Plan"............................................................................17
187. "Solutia Tort Claims".................................................................17
188. "Spinoff".............................................................................18
189. "Spinoff Indemnity Claim".............................................................18
190. "Stipulation of Amount and Nature of Claim"...........................................18
191. "Stock Pool"..........................................................................18
192. "Subsidiary" or "Subsidiaries"........................................................18
193. "Tolbert Settlement Agreement"........................................................18
194. "Tort Claims".........................................................................18
195. "Treasury Regulations"................................................................18
196. "Undeliverable Distribution"..........................................................18
197. "Uniform Commercial Code".............................................................18
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198. "Unimpaired"..........................................................................18
199. "Unimpaired Claim"....................................................................18
200. "Unimpaired Class"....................................................................18
201. "United States of America"............................................................19
202. "Unsecured Claim".....................................................................19
203. "Voting Agent"........................................................................19
204. "Voting Deadline".....................................................................19
205. "Voting Record Date"..................................................................19
206. "Warrants"............................................................................19
207. "Warrant Agreement"...................................................................19
B. Rules of Interpretation and Computation of Time................................................20
1. Rules of Interpretation...............................................................20
2. Computation of Time...................................................................20
ARTICLE II CLASSES OF CLAIMS AND EQUITY INTERESTS................................................................21
ARTICLE III TREATMENT OF CLAIMS AND EQUITY INTERESTS.............................................................22
A. Unclassified Claims............................................................................22
1. Payment of Administrative Expense Claims..............................................22
2. Payment of Priority Tax Claims........................................................24
B. Classes of Claims..............................................................................24
1. Priority Non-Tax Claims (Class 1).....................................................24
2. Secured Claims (Class 2)..............................................................24
3. Senior Secured Note Claims (Class 3)..................................................25
4. Convenience Claims (Class 4)..........................................................25
5. CPFilms Claims (Class 5)..............................................................25
6. NRD Claims (Class 6)..................................................................26
7. Insured Claims (Class 7)..............................................................26
8. Tort Claims (Class 8).................................................................26
9. Legacy Site Claims (Class 9)..........................................................27
10. Equity Interests in all Debtors other than Solutia (Class 10).........................27
11. Monsanto Claim (Class 11).............................................................28
12. Noteholder Claims (Class 12)..........................................................28
13. General Unsecured Claims (Class 13)...................................................28
14. Retiree Claim (Class 14)..............................................................29
15. Pharmacia Claims (Class 15)...........................................................29
16. Non-Debtor Intercompany Claims (Class 16).............................................29
17. Debtor Intercompany Claims (Class 17).................................................30
18. Axio Claims (Class 18)................................................................30
19. Security Claims (Class 19)............................................................30
20. Equity Interests in Solutia (Class 20)................................................30
ARTICLE IV ACCEPTANCE OR REJECTION OF THE PLAN...................................................................32
A. Special Provisions Governing Unimpaired Claims.................................................32
B. Classes Entitled to Vote.......................................................................32
C. Cramdown.......................................................................................32
ARTICLE V MEANS FOR IMPLEMENTATION OF THE PLAN...................................................................33
A. General Settlement of Claims...................................................................33
B. The Global Settlement..........................................................................33
1. The Distribution Agreement............................................................33
2. Monsanto Settlement Agreement.........................................................34
3. Commercial and Operating Agreements...................................................34
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4. Monsanto Tort Management..............................................................34
5. Monsanto's Settlement of Adversary Proceedings, Contested Matters, Disputes
and Monsanto Claims...................................................................34
6. Monsanto's Professionals..............................................................34
7. Monsanto Administrative Claim.........................................................35
8. Pharmacia Contribution................................................................35
9. Settlement With Retirees..............................................................35
10. Settled Adversary Proceedings.........................................................35
11. Settlement of the Prepetition Trustee Adversary Proceeding............................36
12. Settlement of the Equity Committee Adversary Proceeding...............................36
13. Payment of Professional Fees..........................................................36
14. Solutia's Assumption of Certain Environmental Liabilities.............................37
C. Restructuring Transactions.....................................................................38
D. Continued Corporate Existence and Vesting of Assets in the Reorganized Debtors.................38
E. Execution of Plan Documents....................................................................38
F. Corporate Governance, Directors and Officers and Corporate Action of the Reorganized
Debtors........................................................................................38
1. New Certificates of Incorporation and New By-Laws.....................................38
2. Directors and Officers of the Reorganized Debtors.....................................39
3. Corporate Action......................................................................39
4. The New Common Stock..................................................................40
G. Exit Financing Facility, Obtaining Cash for Distributions and Transfers of Funds Among
the Debtors....................................................................................40
H. The Rights Offering............................................................................40
1. Use of Rights Offering Proceeds.......................................................40
2. Rights Offering Procedures............................................................40
3. Rights Offering Backstop..............................................................40
I. Funding Co.....................................................................................41
J. Incentive Plan.................................................................................41
K. Release of Liens and Guarantee Claims..........................................................41
L. Cancellation of Existing Securities and Agreements.............................................41
M. Limitations on Transfers of Equity Interests in Solutia During the Chapter 11 Cases............42
N. Effectuating Documents.........................................................................42
O. Employment and Other Benefits Programs.........................................................42
ARTICLE VI TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES.................................................44
A. Assumption and Rejection of Executory Contracts and Unexpired Leases...........................44
B. Claims Based on Rejection of Executory Contracts or Unexpired Leases...........................44
C. Cure of Defaults for Executory Contracts and Unexpired Leases Assumed..........................44
D. Insurance Policies.............................................................................45
1. ACE Settlement........................................................................45
E. Anniston Settlement............................................................................45
F. Assumption of Pension Obligations..............................................................45
G. Contracts and Leases Entered Into After the Petition Date......................................46
ARTICLE VII PROVISIONS GOVERNING DISTRIBUTIONS...................................................................47
A. Allowed Noteholder Claims......................................................................47
B. Distributions for Claims Allowed as of the Effective Date......................................47
C. Distributions for Holders of Equity Interests in Solutia.......................................47
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D. Delivery of Distributions......................................................................47
E. Delivery and Distributions and Undeliverable or Unclaimed Distributions........................47
1. Delivery of Distributions in General..................................................47
2. Undeliverable Distributions...........................................................48
F. Compliance with Tax Requirements/Allocations...................................................48
G. Record Date for Distribution to Holders of Claims..............................................48
H. Record Date for Distribution to Holders of Equity Interests in Solutia.........................49
I. Distributions of Whole Shares, Warrants, Equity Purchase Rights and Claim Transfer
Rights Only....................................................................................49
J. Set-offs and Recoupments.......................................................................49
K. Surrender of Cancelled Instruments or Securities...............................................49
L. Disputed Claims Reserve........................................................................50
1. Deposit of Cash on the Effective Date.................................................50
2. Distribution After Allowance..........................................................50
3. Distributions After Disallowance......................................................50
4. Property Held in the Disputed Claims Reserve..........................................50
M. Disputed General Unsecured Claims Reserve......................................................51
1. Deposit of New Common Stock on the Effective Date.....................................51
2. Distributions After Allowance.........................................................51
3. Distributions After Disallowance......................................................51
4. Property Held in Disputed General Unsecured Claims Reserve............................52
ARTICLE VIII PROCEDURES FOR TREATING DISPUTED GENERAL UNSECURED CLAIMS...........................................53
A. Objections to Claims...........................................................................53
B. General Unsecured Claims Monitor...............................................................53
C. No Distributions Pending Allowance.............................................................54
D. Estimation of Claims...........................................................................54
ARTICLE IX CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN.....................................55
A. Condition Precedent to Confirmation............................................................55
B. Conditions Precedent to Effective Date.........................................................56
C. Effect of Failure of Conditions................................................................57
D. Waiver of Conditions...........................................................................57
ARTICLE X INJUNCTIONS, RELEASES, EXCULPATION AND DISCHARGE.......................................................58
A. Injunctions....................................................................................58
1. DEBTORS' INJUNCTION...................................................................58
2. MONSANTO/PHARMACIA INJUNCTION.........................................................58
B. Releases.......................................................................................59
1. RELEASES BY THE DEBTORS...............................................................59
2. RELEASES BY HOLDERS OF CLAIMS AND EQUITY INTERESTS....................................60
3. RETIREE RELEASE AND INJUNCTION........................................................61
C. EXCULPATION AND LIMITATION OF LIABILITY........................................................62
D. DISCHARGE OF CLAIMS AND TERMINATION OF EQUITY INTERESTS........................................62
ARTICLE XI RETENTION OF JURISDICTION.............................................................................64
A. Retention of Jurisdiction......................................................................64
ARTICLE XII MISCELLANEOUS PROVISIONS.............................................................................66
A. Binding Effect.................................................................................66
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B. Preservation of Avoidance Actions..............................................................66
C. Claims of the United States of America.........................................................66
D. Applicability of Section 1125(e) of the Bankruptcy Code........................................66
E. Dissolution of the Creditors' Committee, Retirees' Committee and Equity Committee..............66
F. Payment of Statutory Fees......................................................................67
G. Modification of the Plan.......................................................................67
H. Severability...................................................................................67
I. Revocation or Withdrawal of the Plan...........................................................68
J. Section 1145 Exemption.........................................................................68
K. Section 1146 Exemption.........................................................................68
L. Notices........................................................................................68
1. The Debtors and the Reorganized Debtors...............................................68
2. The Creditors' Committee..............................................................69
3. The Retirees' Committee...............................................................69
4. The Equity Committee..................................................................69
5. The DIP Lenders.......................................................................70
6. The United States Trustee.............................................................70
7. Monsanto..............................................................................70
8. Pharmacia.............................................................................71
M. Governing Law..................................................................................71
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TABLE OF EXHIBITS
Exhibit A Monsanto Settlement Agreement
Exhibit B Retiree Settlement Agreement
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 Plan Support Agreement
Exhibit L Claim Transfer Procedures
Exhibit M Restructuring Transactions Agreement
Exhibit N Warrant Agreement
Exhibit O Equity Purchase Procedures
Exhibit P Backstop Commitment Agreement
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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 approved by the Bankruptcy Court on October
19, 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 NOTES" means the $300 million in 7.375% unsecured public
notes due October 15, 2027, issued by Solutia.
2. "2037 NOTES" means the $150 million in 6.72% unsecured public
notes due October 15, 2037, issued by Solutia.
3. "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).
4. "AD HOC NOTES COMMITTEE" means the ad hoc committee of Holders of
the 2027Notes and the 2037 Notes.
5. "AD HOC TRADE COMMITTEE" means the ad hoc committee of Holders of
trade claims in Solutia.
6. "ACE COMPANIES" means, collectively, ACE American Insurance
Company, Indemnity Insurance Company of North America, ACE Insurance Company
of Puerto Rico, Pacific Employers Insurance Company, Insurance Company of
North America, ESIS, Inc. ("ESIS") and their respective affiliates.
1
7. "ACE INSURANCE PROGRAM" means all insurance policies and all
agreements, documents or instruments relating thereto that have been issued or
entered into by the ACE Companies (or any of them) to or with one or more of
the Debtors, their respective predecessors and/or affiliates including, but
not limited to, Monsanto. The ACE Insurance Program includes, without
limitation: (i) Consent and Agreement regarding Assumption of Insurance
Obligations, effective September 1, 1997, by and among Monsanto, Solutia and
INA on behalf of the ACE Companies, (ii) that certain OCIP/Wrap-Up Casualty
Insurance Program Agreement effective August 1, 1998 between Solutia and
certain of the ACE Companies ("OCIP Agreement") and (iii) those certain
service agreements with ESIS ("ESIS Agreements") under which ESIS provides the
Debtors with certain claims administration services.
8. "ACE SETTLEMENT AGREEMENT" means the settlement agreement to be
executed by and among the ACE Companies and the Debtors pursuant to which the
Debtors will assume the ACE Insurance Program in its entirety and pay the cure
costs related thereto.
9. "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 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; (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; (e) the fees and expenses payable pursuant to Section V.B.13
hereof; and (f) the administrative claims and professional fees and expenses
payable to Monsanto pursuant to Sections V.B.6 and V.B.7 hereof.
10. "ADMINISTRATIVE EXPENSE CLAIM BAR DATE" means the date that is
the forty-fifth (45th) day after the Effective Date.
11. "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.
12. "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
13. "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.
14. "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.
15. "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.
16. "ANNISTON LITIGATION SETTLEMENT AGREEMENTS" means the Abernathy
Settlement Agreement together with the Tolbert Settlement Agreement.
17. "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.
18. "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.
19. "AXIO CLAIMS" means all Claims against Axio Research Corporation.
20. "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.
21. "BACKSTOP APPROVAL ORDER" means that certain order of the
Bankruptcy Court approving the Backstop Commitment Agreement.
22. "BACKSTOP COMMITMENT AGREEMENT" means that certain agreement,
dated October 15, 2007, among Solutia and the members of the Backstop Investors
annexed hereto as Exhibit P.
23. "BACKSTOP INVESTORS" means, collectively, Highland Crusader
Holding Corporation, a Delaware corporation, Longacre Fund Management, L.L.C.,
a Delaware limited liability company, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, a Delaware corporation, GMAM Investment Funds Trust II, a trust
organized under the laws of New Hampshire, ReCap International (Master) Ltd.,
a company organized under the laws of the British Virgin Islands,
Institutional Benchmarks Series (Master Feeder) Ltd., a Bermuda segregated
accounts company, solely with respect to the Muscida series, Southpaw Asset
Management LP, a Delaware limited partnership and UBS Securities LLC, a
Delaware limited liability company, each of which has agreed to backstop the
Rights Offering pursuant to the terms of the Backstop Commitment Agreement.
24. "BACKSTOP POOL" means 15% of the Rights.
25. "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.
26. "BANKRUPTCY CODE" means title 11 of the United States Code, as
applicable to the Chapter 11 Cases.
27. "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
3
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.
28. "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.
29. "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.
30. "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.
31. "BUSINESS DAY" means any day, other than a Saturday, Sunday or
"legal holiday" (as defined in Bankruptcy Rule 9006(a)).
32. "CASH" means legal tender of the United States of America.
33. "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.
34. "CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. Sections 9601, et seq.
-- ---
35. "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.
36. "CHEMICALS ASSETS" means the assets constituting "Chemicals
Assets" as defined and set forth in the Distribution Agreement.
37. "CHEMICALS LIABILITIES" means the liabilities constituting
"Chemicals Liabilities" as defined and set forth in the Distribution
Agreement.
38. "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.
39. "CHOCOLATE BAYOU SETTLEMENT" means the settlement between
Monsanto and Solutia to amend the Chocolate Bayou Agreements.
4
40. "CLAIM" means a "claim," as defined in section 101(5) of the
Bankruptcy Code, against any Debtor.
41. "CLAIM TRANSFER OPTION" means the right of an Eligible Claim
Transfer Holder to elect to transfer its Allowed General Unsecured Claim of
less than $100,000 but more than $2,500, pursuant to the Claim Transfer
Procedures, for Cash in an amount equal to 52.35% of the Allowed amount of
such General Unsecured Claim to Eligible Claim Transfer Shareholders.
42. "CLAIM TRANSFER PROCEDURES" means those certain Claim Transfer
Procedures setting forth the terms and conditions of the Claim Transfer Rights
and the Claim Transfer Option, in substantially the form annexed hereto as
Exhibit L.
43. "CLAIM TRANSFER RIGHTS" means the right, subject to the Claim
Transfer Option, of Eligible Claim Transfer Shareholders to purchase Allowed
General Unsecured Claims of less than $100,000 but greater than $2,500
(including the Rights related to such Allowed General Unsecured Claims) for
Cash pursuant to the Claim Transfer Procedures.
44. "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.
45. "CLASS" means a class of Claims or Equity Interests, as described
in Article II herein.
46. "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.
47. "CONFIRMATION" means the entry of the Confirmation Order on the
docket of the Chapter 11 Cases.
48. "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.
49. "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.
50. "CONFIRMATION ORDER" means the order of the Bankruptcy Court
confirming the Plan pursuant to section 1129 of the Bankruptcy Code.
51. "CONSUMMATION" means the occurrence of the Effective Date.
52. "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.
53. "CPFILMS CLAIMS" means all Claims, other than Non-Debtor
Intercompany Claims, Debtor Intercompany Claims and Legacy Claims, scheduled
by or filed against CPFilms.
5
54. "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.
55. "DEBTOR INTERCOMPANY CLAIM" means any Claim of one Debtor against
another Debtor.
56. "DIP CLAIMS" means all Claims arising under or pursuant to the
DIP Credit Facility.
57. "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.
58. "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).
59. "DIRECTORS' AND OFFICER INDEMNITY CLAIMS" means all Claims filed
by the Debtors' current and former directors, officers and employees for
indemnification or contribution.
60. "DISCLOSURE STATEMENT HEARING" means the hearing held by the
Bankruptcy Court regarding the approval of the Disclosure Statement.
61. "DISCLOSURE STATEMENT ORDER" means that certain order of the
Bankruptcy Court entered on October 19, 2007, which is annexed as Exhibit B
to the Disclosure Statement.
62. "DISPUTED CLAIM" means any Claim which is not an Allowed Claim.
63. "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 Disputed Claims
(other than Disputed General Unsecured Claims and Disputed Noteholder Claims)
in accordance with the terms of Section VII.L hereof.
64. "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.L hereof.
65. "DISPUTED GENERAL UNSECURED CLAIM" means any General Unsecured
Claim that, as of the date of determination, is a Disputed Claim.
66. "DISTRIBUTION" means any distribution made under the Plan to a
Holder of an Allowed Claim.
67. "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.
68. "DISTRIBUTION DATE" means any date on which a Distribution is
made.
6
69. "DISTRIBUTION RECORD DATE" means the date that is five Business
Days after the Confirmation Date.
70. "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 hereof.
71. "ELIGIBLE CLAIM TRANSFER SHAREHOLDERS" means the Holders of
Equity Interests in Solutia who are eligible, pursuant to the Claim Transfer
Procedures, to receive Claim Transfer Rights.
72. "ELIGIBLE HOLDERS" means the Holders of General Unsecured Claims
(including Eligible Claim Transfer Shareholders who have purchased Allowed
General Unsecured Claims pursuant to the Claim Transfer Option) and the
Holders of Noteholder Claims who are eligible, pursuant to the Rights Offering
Procedures, to participate in the Rights Offering.
73. "ELIGIBLE CLAIM TRANSFER HOLDERS" means the Holders of Allowed
General Unsecured Claims who are eligible, pursuant to the Claim Transfer
Procedures, to participate in the Claim Transfer Option.
74. "ELIGIBLE SHAREHOLDERS" means the Holders of common stock of
Solutia who are eligible, pursuant to the Equity Purchase Procedures, to
participate in the Equity Purchase.
75. "ENTITY" shall have the meaning set forth in section 101(15) of
the Bankruptcy Code.
76. "ENVIRONMENTAL LIABILITY" means any liability constituting an
"Environmental Liability" as defined and set forth in the Monsanto Settlement
Agreement.
77. "ENVIRONMENTAL LIABILITY COSTS" means any costs constituting
"Environmental Liability Costs" as defined and set forth in the Monsanto
Settlement Agreement.
78. "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.
79. "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.
80. "EQUITY INTEREST" means any share of common stock, preferred
stock or other instrument evidencing an ownership interest in any of the
Debtors, including any and all shares of treasury stock, whether or not
transferable, and any option, warrant or right, contractual or otherwise, to
acquire any such interest.
81. "EQUITY PURCHASE" means the offering of up to 17% of the New
Common Stock by the Debtors to Eligible Shareholders pursuant to the terms and
conditions set forth in the Equity Purchase Procedures.
82. "EQUITY PURCHASE PROCEDURES" means those certain Equity Purchase
Procedures, setting forth the terms and conditions of the Equity Purchase, in
substantially the form annexed hereto as Exhibit O.
83. "EQUITY PURCHASE RIGHTS" means the rights of Eligible
Shareholders to participate in the Equity Purchase pursuant to the Equity
Purchase Procedures.
7
84. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the regulations promulgated thereunder.
85. "ESTATE" and, collectively, "ESTATES" means the estate created
for that Debtor in its Chapter 11 Case pursuant to section 541 of the
Bankruptcy Code.
86. "EXCHANGE ACT" means the Securities Exchange Act of 1934, 15
U.S.C. Sections 78a-78jj, as now in effect or hereafter amended.
87. "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.
88. "EXIT FINANCING FACILITY" means one or more senior secured credit
facilities or arrangements that will be entered into by the Reorganized
Debtors, the Exit Financing Facility Agent Bank and the relevant lenders on
the Effective Date.
89. "EXIT FINANCING FACILITY AGENT BANK" means the agent bank under
the Exit Financing Facility.
90. "EXIT FINANCING FACILITY COMMITMENT LETTER" means one or more
binding commitment letters that set forth a commitment to fund the Exit
Financing Facility.
91. "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.
92. "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).
93. "FUNDING CO" means a newly created, special purpose,
tax-efficient, bankruptcy-remote subsidiary of Reorganized Solutia, funded
with certain proceeds of the Rights Offering.
94. "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, Senior Secured Note Claims and Tort Claims.
95. "GLOBAL SETTLEMENT" means, as described in more detail in Section
V.B hereof, the settlement between and among Monsanto, Solutia, the Creditors'
Committee, the Ad Hoc Trade Committee, the Retirees' Committee, the
Prepetition Indenture Trustee, the Ad Hoc Notes Committee and the Equity
Committee.
8
96. "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).
97. "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).
98. "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).
99. "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) hereof.
100. "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.
101. "HOLDER" and, collectively, "HOLDERS" means a Person or Entity
legally holding a Claim or Equity Interest.
102. "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
103. "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.
104. "IMPAIRED CLAIM" means a Claim classified in an Impaired Class.
105. "IMPAIRED CLASS" means each of Classes 5, 11, 12, 13, 14, 15,
16, 17, 18, 19 and 20 as set forth in Article III hereof.
106. "INCENTIVE PLAN" means the employee incentive plan to be
implemented in accordance with Section V.K. hereof, in substantially the form
annexed hereto as Exhibit I.
107. "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.
108. "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.
109. "IRS" means the Internal Revenue Service of the United States of
America.
9
110. "LEGACY CLAIMS" means all Claims, including, but not limited to,
Legacy 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.
111. "LEGACY SITES" means the "Legacy Sites" as defined and set forth
in the Monsanto Settlement Agreement.
112. "LEGACY SITE CLAIMS" means all Environmental Liability Costs
with respect to the Legacy Sites.
113. "LEGACY 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 Legacy Tort Claim,
ii. such holder has filed a proof of claim in the
Chapter 11 Case, or
iii. the alleged exposure occurred before or after the
Spinoff.
"LEGACY TORT CLAIMS" also includes legal, equitable or other claims,
demands, costs, causes of action and/or other liabilities arising against
Solutia 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, in circumstances where:
(u) the claims in question reflect the description contained in
clause (c) of the first sentence of this definition;
(v) the property from which such chemical exposure or environmental
contamination arose was previously owned by Pharmacia and transferred to
Solutia in connection with the Spinoff;
(w) the claims arise from Solutia's conduct after the Spinoff;
10
(x) such conduct constituted the remediation, or non-remediation, of
conditions which existed as of the Spinoff and were subject to Solutia's
assumption of remediation obligations under the Distribution Agreement; and
(y) such conduct by Solutia was in accordance with federal or state
environmental law or orders or was a continuation of activities conducted, or
inactivity, by Pharmacia at the time of the Spinoff, provided, however, that
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in the case of non-remediation, such non-remediation must not have been in
violation of federal or state environmental laws or orders,
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 Legacy Tort Claim, or
ii. such holder has filed a proof of claim in the
Chapter 11 Case.
"LEGACY 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 "Legacy Tort Claim" herein; antitrust claims;
commercial, business or contract claims; Environmental Liability Costs; any
other remediation obligations covered by the terms of the Monsanto Settlement
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 Walker v.
Monsanto Company Pension Plan, No. 04-cv-436-DRH, 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 (other than as may be provided in the
second sentence of this definition) any claims, including claims for exposure
to chemicals or other substances, arising from Solutia's conduct after the
Spinoff.
114. "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.
115. "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).
116. "MONSANTO" means Monsanto Company, a Delaware corporation, and
its Affiliates.
117. "MONSANTO CLAIM" means any and all Claims of Monsanto, including
all Claims of Monsanto on account of Solutia's breach of the Distribution
Agreement.
118. "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 Legacy 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
11
Sites, subject to the sharing mechanism set forth in the Monsanto Settlement
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 Monsanto Settlement Agreement, (ii) forever release the Debtors
from any and all indemnity obligations owed to Monsanto arising under the
Distribution Agreement and/or any other agreement (other than as set forth in
the Monsanto Settlement 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 Monsanto Settlement
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 Monsanto
Settlement Agreement, and (vi) enter into the Chocolate Bayou Settlement.
119. "MONSANTO/PHARMACIA INJUNCTION" means the injunction in favor of
Monsanto and Pharmacia as set forth in Section X.A.2 hereof.
120. "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.
121. "MONSANTO SETTLEMENT AGREEMENT" means that certain Settlement
Agreement, dated October 15, 2007, between and among Reorganized Solutia,
Monsanto and Funding Co, annexed hereto as Exhibit A.
122. "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 Legacy Tort Claims and to indemnify
Reorganized Solutia for the Legacy Tort Claims, pursuant to the terms of the
Monsanto Settlement Agreement.
123. "NATIONAL SECURITIES EXCHANGE" means any exchange registered
pursuant to Section 6(a) of the Exchange Act.
124. "NEW BY-LAWS" means the form of the by-laws of each of the
Reorganized Debtors, which form is annexed hereto as Exhibit D.
125. "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.
126. "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.
127. "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.
128. "NON-DEBTOR INTERCOMPANY CLAIM" means any Claim owed by a Debtor
to a non-Debtor Affiliate as of the Petition Date.
129. "NOTEHOLDER CLAIMS" means the Claims of the Holders of the 2027
Notes and/or 2037 Notes for principal and accrued but unpaid interest as of
the Petition Date.
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130. "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.
131. "NYSE" means the New York Stock Exchange.
132. "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.
133. "PBGC" means the Pension Benefit Guaranty Corporation.
134. "PCBS" means polychlorinated biphenyls.
135. "PENSION PLAN" means the Solutia Inc. Employees' Pension Plan,
dated September 1, 1997, as amended and restated from time to time.
136. "PERSON" shall have the meaning set forth in section 101(41) of
the Bankruptcy Code.
137. "PETITION DATE" means December 17, 2003, the date on which the
Debtors commenced the Chapter 11 Cases.
138. "PHARMACIA" means Pharmacia Corporation, formerly known as
Monsanto Company, a Delaware corporation.
139. "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 Monsanto
Settlement 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.
140. "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.
141. "PLAN DOCUMENTS" means (a) the Monsanto Settlement 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) the Equity Purchase Procedures, (i) the Claim Transfer
Procedures, (j) the Commercial and Operating Agreements, (k) the Incentive
Plan, (l) the Registration Rights Agreement, (m) the Restructuring
Transactions Agreement, (n) the Retiree Settlement Agreement, (o) the Warrant
Agreement, (p) the Backstop Commitment Agreement and (q) 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.
142. "PLAN SUPPORT AGREEMENT" means the agreement annexed hereto as
Exhibit K.
13
143. "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 Restructuring Transactions
Agreement; and (g) 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; 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.
144. "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 Notes and the 2037 Notes.
145. "PREPETITION INDENTURE CHARGING LIEN" means any lien of the
Prepetition Indenture Trustee, arising under the Prepetition Indenture,
against Distributions on account of Noteholder Claims, securing payment of the
fees and expenses of the Prepetition Indenture Trustee, including fees and
expenses of counsel and other professionals engaged by or on behalf of or for
the benefit of the Prepetition Indenture Trustee.
146. "PREPETITION INDENTURE TRUSTEE" means Wilmington Trust Company,
or any predecessor (including JPMorgan Chase Bank) or successor thereto, as
indenture trustee under the Prepetition Indenture.
147. "PREPETITION INDENTURE TRUSTEE ADVERSARY PROCEEDING" means the
adversary proceeding commenced on May 27, 2005 by JPMorgan Chase Bank against
Solutia in the Bankruptcy Court, Case No. 05-01843.
148. "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.
149. "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.
150. "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.
151. "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.
152. "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 section 328, 330,
331, 363 or 503 of the Bankruptcy Code) through the Effective Date.
14
153. "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.
154. "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.
155. "REGISTRATION RIGHTS AGREEMENT" means the agreement 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.
156. "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 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:
iii. 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;
iv. the maturity of such Claim or Equity Interest,
as such maturity existed before such default, will be
reinstated;
v. 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
vi. 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.
157. "REORGANIZED . . ." means, when used in reference to a
particular Debtor, such Debtor on and after the Effective Date.
158. "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.
15
159. "RESTRUCTURING TRANSACTIONS AGREEMENT" means the agreement or
agreements that govern the Restructuring Transactions, annexed hereto as
Exhibit M.
160. "RETAINED SITES" means the "Retained Sites" as defined and set
forth in the Monsanto Settlement Agreement.
161. "RETIREES" has the meaning set forth in the preamble to the
Retiree Settlement Agreement.
162. "RETIREE APPROVAL ORDER" means that certain order of the
Bankruptcy Court approving the Retiree Settlement Agreement.
163. "RETIREE BENEFITS" means the benefits provided to the Retirees
as set forth in the Retiree Settlement Agreement.
164. "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.
165. "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.
166. "RETIREE SETTLEMENT AGREEMENT" means that certain agreement, as
amended, between the Debtors and the Retirees' Committee, effective as of the
Effective Date, in substantially the form of Exhibit B.
167. "RETIREE TRUST" has the meaning set forth in the Retiree
Settlement Agreement.
168. "RIGHTS" means the rights to subscribe for and to acquire on the
Effective Date an aggregate of 31.4% 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 and the
Backstop Commitment Agreement.
169. "RIGHTS OFFERING" means the offering of the Rights by the
Debtors to Eligible Holders and members of the Backstop Investors.
170. "RIGHTS OFFERING PROCEDURES" means those certain Rights Offering
Procedures, setting forth the terms and conditions of the Rights Offering, in
substantially the form annexed hereto as Exhibit H.
171. "RIGHTS SUBSCRIPTION EXERCISE FORM" means that certain form
distributed to each Eligible Holder, which form such Eligible Holder may use
to exercise Rights.
172. "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.
16
173. "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.
174. "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.
175. "SECURITIES ACT" means the Securities Act of 1933, 15 U.S.C.
Sections 77a-77aa, as now in effect or hereafter amended.
176. "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.
177. "SENIOR SECURED NOTES" means those certain 11.25% Senior Secured
Notes, due on July 15, 2009, issued pursuant to the Senior Secured Notes
Indenture.
178. "SENIOR SECURED NOTE CLAIMS" means any and all Allowed Claims of
the Senior Secured Notes Trustee and the Holders of the Senior Secured Notes
against Solutia and the Senior Secured Notes Guarantors arising under the
Senior Secured Notes Indenture, which claim amount will be determined by the
Bankruptcy Court (whether secured or unsecured).
179. "SENIOR SECURED NOTES GUARANTORS" means CPFilms, Inc., Monchem,
Inc., Monchem International, Inc., Solutia Systems, Inc., Solutia Business
Enterprises, Inc. and Solutia Investments, LLC., each of which is a guarantor
of the Senior Secured Notes.
180. "SENIOR SECURED NOTES INDENTURE" means that certain Indenture,
dated July 9, 2002, between Solutia and The Bank of New York, as successor
indenture trustee, as amended from time to time.
181. "SENIOR SECURED NOTES INDENTURE CHARGING LIEN" means any lien of
the Senior Secured Notes Trustee, arising under the Senior Secured Notes
Indenture, against Distributions on account of Senior Secured Note Claims,
securing payment of the fees and expenses of the Senior Secured Notes Trustee,
including fees and expenses of counsel and other professionals engaged by or
on behalf of or for the benefit of the Senior Secured Notes Trustee.
182. "SENIOR SECURED NOTES TRUSTEE" means The Bank of New York, or
any predecessor or successor thereto, as indenture trustee under the Senior
Secured Notes Indenture.
183. "SEPARATION AGREEMENT" means that certain agreement, dated as of
September 1, 2000, as amended, by and between Pharmacia and Monsanto.
184. "SETTLED ADVERSARY PROCEEDINGS" means the following adversary
proceedings commenced in the Bankruptcy Court: Solutia Inc. v. Pharmacia
Corp., Case No. 03-93700 (PCB), filed December 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.
185. "SHARED SITES" means the "Shared Sites" as defined and set forth
in the Monsanto Settlement Agreement.
186. "SIP PLAN" means the Solutia Inc. Savings and Investment Plan,
dated September 1, 1997, as amended and restated from time to time.
187. "SOLUTIA TORT CLAIMS" means all Tort Claims other than Legacy
Tort Claims.
17
188. "SPINOFF" means the transaction contemplated by the Distribution
Agreement, whereby Pharmacia spun-off its Chemicals Assets and Chemicals
Liabilities to Solutia.
189. "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.
190. "STIPULATION OF AMOUNT AND NATURE OF CLAIM" means a stipulation
or other agreement between a Debtor or Reorganized Debtor, subject to Section
VIII.B hereof, 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.
191. "STOCK POOL" means 46.6% of the New Common Stock to be
Distributed to the Holders of 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.M hereof.
192. "SUBSIDIARY" or "SUBSIDIARIES" means the direct and indirect
subsidiaries of Solutia.
193. "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.
194. "TORT CLAIMS" means all Claims, whether currently asserted or
asserted in the future, whether known or unknown, arising under tort law for
personal injury or property damage arising from exposure to chemicals or other
substances regardless of whether: (a) 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; (b) such holder has filed a proof of claim in the Chapter 11
Case; or (c) the alleged exposure occurred before or after the Spinoff.
195. "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.
196. "UNDELIVERABLE DISTRIBUTION" means a Distribution of New Common
Stock, Warrants 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.
197. "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).
198. "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.
199. "UNIMPAIRED CLAIM" means a Claim classified in an Unimpaired
Class.
200. "UNIMPAIRED CLASS" means each of Classes 1, 2, 3, 4, 6, 7, 8, 9
and 10 as set forth in Article III of the Plan.
18
201. "UNITED STATES OF AMERICA" means the United States of America
and all of its agencies, subdivisions and instrumentalities.
202. "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.
203. "VOTING AGENT" means Financial Balloting Group LLC, 757 Third
Avenue, 3rd Floor, New York, New York 10017.
204. "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.
205. "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.
206. "WARRANTS" means the warrants to be issued on the Effective Date
pursuant to the terms of the Warrant Agreement to purchase up to 7.5% of the
New Common Stock at a strike price of $29.70.
207. "WARRANT AGREEMENT" means that certain warrant agreement, dated
as of the Effective Date, governing the Warrants to be issued by Reorganized
Solutia, in substantially the form annexed hereto as Exhibit N.
19
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.
20
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 hereof,
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 Impaired Yes
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 Yes
Class 20 Equity Interests in Solutia Impaired Yes
21
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 or in
Sections V.B.6, V.B.7 or V.B.13 hereof, 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 or in Sections V.B.6, V.B.7 or V.B.13 hereof, 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.
22
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 hereof, 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 hereof.
23
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. 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.
24
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 CLAIMS (CLASS 3)
A. TREATMENT:
On the Effective Date or on the date that the
Allowed amount of the Senior Secured Note Claims is determined pursuant to a
Final Order, whichever is later, Reorganized Solutia shall pay to the Senior
Secured Notes Trustee for Distribution in accordance with the Senior Secured
Notes Indenture to Holders of Allowed Senior Secured Note Claims, the Allowed
amount of the Senior Secured Note Claims in Cash in full; provided, however,
that if the Senior Secured Note Claims are not Allowed by Final Order on the
Effective Date, Reorganized Solutia shall pay in Cash the undisputed portion
of the Senior Secured Note Claims on the Effective Date for Distribution
hereunder in partial or full satisfaction (as applicable) of the treatment
provided herein for Allowed Senior Secured Note Claims. Any Distribution to
Holders of Allowed Senior Secured Note Claims shall, however, be reduced,
after transmission to the Senior Secured Notes Trustee, on account of the
Senior Secured Notes Indenture Charging Lien, because, and to the extent that
the fees and expenses of the Senior Secured Notes Trustee will not be paid in
full by the Debtors.
B. VOTING:
Class 3 is deemed Unimpaired by the Plan; provided,
however, that if Class 3 is determined by the Bankruptcy Court to be Impaired,
then it shall be entitled to vote on the Plan and such vote shall apply as to
Solutia and each of the Senior Secured Notes Guarantors. Subject to the
foregoing, pursuant to section 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 simple interest
at a rate of 8% per annum, which interest shall accrue from the Petition Date
through the Effective Date.
25
B. VOTING:
Class 5 is Impaired by the Plan. Pursuant to
section 1126(a) of the Bankruptcy Code, each Holder of an Allowed CPFilms
Claim in Class 5 is entitled to vote to accept or reject the Plan.
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 Monsanto Settlement Agreement, provided,
--------
however, that such allocations are solely as between Solutia and Monsanto and
- -------
nothing in the Monsanto Settlement 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:
The Tort Claims shall be unaffected by the Chapter
11 Cases, this Plan or the Plan Documents. After the Effective Date, the Tort
Claims shall be resolved pursuant to applicable law and in the ordinary course
of business. Payment of the Tort Claims, in accordance with the Monsanto Tort
Management, will be allocated between Reorganized Solutia and Monsanto
pursuant to the terms of the Monsanto Settlement Agreement, provided, however,
-------- -------
that such allocations are solely as between Solutia and Monsanto and nothing
in the Monsanto Settlement Agreement shall impair or adversely affect the Tort
Claims. For the sake of clarity, pursuant to the Monsanto Settlement
Agreement, Monsanto shall
26
take financial responsibility, as between itself and Reorganized Solutia only,
for the management and payment of the Legacy Tort Claims, including all costs
related to the defense, mediation, arbitration, settlement, and any judgment
with respect to the Legacy Tort Claims and Reorganized Solutia shall be
financially responsible for the Solutia Tort Claims, if any.
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.
9. LEGACY SITE CLAIMS (CLASS 9)
A. TREATMENT:
On the Effective Date, in accordance with the
Monsanto Settlement 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 Monsanto Settlement
Agreement and other Plan documents pertaining to the Legacy Sites.
Notwithstanding any other provision of the Plan, Monsanto Settlement
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 Monsanto Settlement 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.
27
11. MONSANTO CLAIM (CLASS 11)
A. TREATMENT:
On the Effective Date, Monsanto shall receive $175
million in Cash from the Debtors; provided, however, that if the Cash proceeds
-------- -------
received by the Debtors from the Equity Purchase are less than $175 million,
then Monsanto shall receive, from the Debtors, on the Effective Date: (i) an
amount of Cash equal to the aggregate amount of Cash proceeds received by the
Debtors from the Equity Purchase; and (ii) a number of shares of New Common
Stock equal to the difference between (A) 17% of New Common Stock and (B) the
number of shares of New Common Stock issued to Holders of Equity Interests in
Solutia in connection with the Equity Purchase. 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.
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.
12. NOTEHOLDER CLAIMS (CLASS 12)
A. TREATMENT:
On the Effective Date, and, subsequently, after
Disputed General Unsecured Claims are resolved, in accordance with Section
VII.E.1 hereof, 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, on the Effective Date, each Holder of an Allowed Noteholder Claim
shall receive its Pro Rata share of 2% of the New Common Stock. Each Holder of
a Noteholder Claim that is an Eligible Holder also shall be deemed entitled to
participate in the Rights Offering pursuant to the terms of the Rights
Offering Procedures. Any Distribution to Holders of Allowed Noteholder Claims
shall, however, be reduced, after transmission to the Prepetition Indenture
Trustee, on account of the Prepetition Indenture Charging Lien, because, and
to the extent that the fees and expenses of the Prepetition Indenture Trustee
will not be paid in full by the Debtors (as set forth in Section V.B.13
hereof), provided, however, that any such reduction by reason of the
-------- -------
Prepetition Indenture Charging Lien shall not be reflected in determining the
Pro Rata shares of the Stock Pool designated for Allowed General Unsecured
Claims and Allowed Noteholder Claims.
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.
13. GENERAL UNSECURED CLAIMS (CLASS 13)
A. TREATMENT:
On the Effective Date and, subsequently, 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
28
is an Eligible Holder shall be entitled to participate in the Rights Offering
pursuant to the terms of the Rights Offering Procedures. Furthermore, each
Holder of a General Unsecured Claim that is an Eligible Claim Transfer Holder
shall be entitled to elect the Claim Transfer Option pursuant to the terms of
the Claim Transfer 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.
14. RETIREE CLAIM (CLASS 14)
A. TREATMENT:
Subject to the terms of the Retiree Settlement
Agreement, on the Effective Date Reorganized Solutia shall contribute the
number of shares of New Common Stock required to be contributed to a trust
established for the benefit of the Retirees pursuant to and in accordance with
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.
15. 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.
16. 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.
29
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.
17. DEBTOR INTERCOMPANY CLAIMS (CLASS 17)
A. TREATMENT:
On the Effective Date or as soon thereafter as
reasonably practicable, the Debtor Intercompany Claims will be (i) eliminated
or waived based on accounting entries in the Debtors' books and records and
other corporate activities by the Debtors in their discretion or (ii)
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.
18. AXIO CLAIMS (CLASS 18)
A. TREATMENT:
Holders of Axio Claims will receive no
Distributions under the Plan on account of such Claims.
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.
19. SECURITY CLAIMS (CLASS 19)
A. TREATMENT:
Holders of Security Claims will receive their Pro
Rata share of the Distributions provided to Holders of Equity Interests in
Solutia in Class 20.
B. VOTING:
Class 19 is Impaired by the Plan. Pursuant to
section 1126(a) of the Bankruptcy Code, Holders of Security Claims in Class 19
shall be entitled to vote to accept or reject the Plan.
20. EQUITY INTERESTS IN SOLUTIA (CLASS 20)
30
A. TREATMENT:
On the Effective Date or as soon thereafter as
reasonably practicable, each Holder of common stock of Solutia will receive
its Pro Rata share of: (i) 1% of New Common Stock, provided that such Holder
--------
owns at least 175 shares of common stock in Solutia, which would entitle the
Holder to receive one whole share of New Common Stock; (ii) Warrants, provided
--------
that such Holder owns at least 24 shares of common stock in Solutia, which
would entitle the Holder to receive a Warrant; (iii) Equity Purchase Rights,
provided that such Holder owns at least 11 shares of common stock in Solutia,
- --------
which would entitle the Holder to receive an Equity Purchase Right to acquire
one share of New Common Stock; and (iv) Claim Transfer Rights, provided that
--------
such Holder owns at least 107 shares of common stock in Solutia, which would
entitle the Holder to receive a Claim Transfer Right. Holders of Equity
Interests (other than Holders of common stock in Solutia) must convert their
Equity Interests into common stock to participate in the Distributions
provided hereunder. 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. Pursuant to
section 1126(a) of the Bankruptcy Code, Holders of common stock of Solutia,
whose ownership interest would entitle them to receive Distributions under
this subsection of the Plan, shall be entitled to vote to accept or reject the
Plan.
31
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 5, 11, 12, 13, 14, 15, 19 and 20 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, 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. Class 18 is 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.
32
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. THE GLOBAL SETTLEMENT
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 the agreements set forth in the Plan Support Agreement, and as a result of
arm's-length negotiations with the Retirees' Committee, the Creditors'
Committee, the Ad Hoc Notes Committee, the Prepetition Indenture Trustee, the
Ad Hoc Trade Committee and the Equity 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, (c) the Retirees
including all Claims to post-employment and other benefits asserted by the
Retirees, (d) the Prepetition Indenture Trustee, including the Prepetition
Indenture Trustee Adversary Proceeding, (e) the Ad Hoc Notes Committee,
including the Prepetition Indenture Trustee Adversary Proceeding and the
Equity Committee Adversary Proceeding and (f) the Equity Committee, including
the Equity Committee Adversary Proceeding; 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 Monsanto Settlement
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
33
Reorganized Debtors or their respective property with respect to any debts,
liabilities, guarantees, assurances, commitments or obligations assumed by
Solutia under the Distribution Agreement.
2. MONSANTO SETTLEMENT AGREEMENT
Subject to the conditions contained therein, the Monsanto
Settlement Agreement will become effective and binding on the Effective Date.
As an element of the Monsanto Contribution, Monsanto shall, pursuant to the
Monsanto Settlement 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 Legacy Tort
Claims, all as more fully set forth in the Monsanto Settlement 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 Monsanto Settlement Agreement. Subject to the terms of
the Monsanto Settlement Agreement, the Monsanto Settlement Agreement and the
Commercial and Operating Agreements (as modified by the Chocolate Bayou
Settlement) shall constitute an integrated and unitary executory contract. The
funding allocations in the Monsanto Settlement 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 modified 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 Legacy 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 Legacy Tort
Claims and shall indemnify Reorganized Solutia, pursuant to the terms of the
Monsanto Settlement Agreement, with respect to such Legacy Tort Claims. In
addition, since the Petition Date, Monsanto has paid all costs arising in
connection with the Legacy Tort Claims.
5. MONSANTO'S SETTLEMENT OF ADVERSARY PROCEEDINGS, CONTESTED MATTERS,
DISPUTES AND MONSANTO CLAIMS
Subject to the terms of the Plan, the Monsanto Settlement
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
34
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
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 Monsanto
Settlement 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 Monsanto Settlement 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
On the Effective Date, by agreement among the various
parties to the Settled Adversary Proceedings, all of the Settled Adversary
Proceedings shall be deemed dismissed or withdrawn with prejudice.
35
11. SETTLEMENT OF THE PREPETITION TRUSTEE ADVERSARY PROCEEDING
On the Effective Date, by agreement among the various
parties to the Prepetition Trustee Adversary Proceeding as reflected in the
Plan Support Agreement, the Prepetition Trustee Adversary Proceeding shall be
deemed dismissed or withdrawn with prejudice and the Prepetition Indenture
Trustee and the Ad Hoc Notes Committee shall be deemed to have waived and
released any and all adversary proceedings, suits, claims, objections or
causes of action, including any appeals related thereto, against Solutia,
Reorganized Solutia, Monsanto and Pharmacia.
12. SETTLEMENT OF THE EQUITY COMMITTEE ADVERSARY PROCEEDING
On the Effective Date, by agreement among the various
parties to the Equity Committee Adversary Proceeding as reflected in the Plan
Support Agreement, the Equity Committee Adversary Proceeding shall be deemed
dismissed or withdrawn with prejudice and the Equity Committee shall be deemed
to have waived and released any and all adversary proceedings, suits, claims,
objections or causes of action, including any appeals related thereto, against
Solutia, Reorganized Solutia, Monsanto and Pharmacia.
13. PAYMENT OF PROFESSIONAL FEES
Notwithstanding the requirements of Sections III.A.1.d,
V.B.6 and V.B.7 hereof, which shall not apply to payments made under this
Section, on the Effective Date, Reorganized Solutia shall pay, as Allowed
Administrative Expense Claims, upon the presentation of invoices to the
Debtors and the Creditors' Committee by no later than five (5) days after the
Confirmation Date, the reasonable fees and expenses incurred on or prior to
August 14, 2007 by (a) the professionals who provided services to the
Prepetition Indenture Trustee and to the Ad Hoc Notes Committee, in an amount
up to $8 million in the aggregate, to be allocated between such professionals
as directed by the Ad Hoc Notes Committee, (b) Brown Rudnick Berlack Israels
LLP, counsel to the Ad Hoc Trade Committee, in an amount up to $2 million and
(c) Haynes and Boone, LLP, counsel to Highland Capital Management, LP. Such
professionals shall not be required to file any fee applications or other
requests with the Bankruptcy Court for the payment of such fees; provided,
--------
however, that if any objection is raised by either the Debtors or the
- -------
Creditors' Committee (the only parties entitled to object) as to whether the
amount to be paid by the Estates on account of the fees and/or expenses is
reasonable in light of the services rendered that cannot be resolved within
twenty (20) days of service of the invoices, then the party objecting to the
payment of such fees and/or expenses shall file and serve upon the relevant
professional firm(s), within twenty (20) days of service of the invoices, an
objection with the Bankruptcy Court requesting that the Bankruptcy Court
determine whether the amount to be paid by the Estates on account of the fees
and/or expenses is reasonable in light of the services rendered; provided,
--------
further, however, that no fees shall be paid until the later of (i) the twenty
- ------- -------
(20) day period having lapsed with no objections having been filed with
respect to such fees and/or expenses and (ii) a Final Order resolving any such
objection filed with respect to such fees and/or expenses having been entered
by the Bankruptcy Court.
Notwithstanding the forgoing, nothing herein modifies or
limits the Prepetition Indenture Charging Lien. To the extent that
professional fees and expenses are paid by the Debtors under the Plan on
account of the fees and expenses of the Prepetition Indenture Trustee,
including but not limited to the fees and expenses of the professionals
engaged by or on behalf of the Prepetition Indenture Trustee under the
Prepetition Indenture, then such amount paid shall reduce any amount due under
or subject to the Prepetition Indenture Charging Lien. To the extent that the
professional fees and expenses allocated to be paid by the Debtors under the
Plan on account of the fees and expenses of the Prepetition Indenture Trustee,
including but not limited to the fees and expenses of the professionals
engaged by or on behalf of the Prepetition Indenture Trustee under the
Prepetition Indenture, are subject to an objection as authorized in the
preceding paragraph, then the Prepetition Indenture Trustee may withhold such
amounts from
36
Distributions to Holders of Noteholder Claims until such time as the objection
is resolved, thereby insuring that the Prepetition Indenture Charging Lien
claim is paid in full; provided, however, that any such reduction by reason of
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the Prepetition Indenture Charging Lien shall not be reflected in determining
the Pro Rata shares of the Stock Pool designated for Allowed General Unsecured
Claims and Allowed Noteholder Claims.
As soon as reasonably practicable after the Effective Date,
and subject to the terms of this paragraph, Reorganized Solutia shall pay, as
Allowed Administrative Expense Claims upon the presentation of invoices to
Reorganized Solutia, Monsanto, the Creditors' Committee, the Retirees'
Committee, the Ad Hoc Notes Committee, the Ad Hoc Trade Committee, the Equity
Committee, the Prepetition Indenture Trustee and the Bankruptcy Court: (a) the
reasonable hourly and monthly fees and documented out of pocket expenses
incurred by the following professionals during the period from August 15, 2007
through the Effective Date: Hennigan, Bennett & Dorman LLP, counsel to the Ad
Hoc Notes Committee; The Blackstone Group, financial advisor to the Ad Hoc
Notes Committee; Reed Smith LLP, counsel to the Prepetition Indenture Trustee;
Haynes and Boone LLP, counsel to Highland Capital Management; and Brown
Rudnick Berlack Israels LLP, counsel to the Ad Hoc Trade Committee; and (b)
the documented out of pocket expenses incurred by the Prepetition Indenture
Trustee during the period from August 15, 2007 through the Effective Date. The
foregoing professionals shall not be required to file any fee applications or
other requests with the Bankruptcy Court in connection with the payment of
such fees and expenses; provided, however, that if any dispute between any of
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Reorganized Solutia, Monsanto, the Creditors' Committee, the Retirees'
Committee, the Ad Hoc Notes Committee, the Ad Hoc Trade Committee, the Equity
Committee and the Prepetition Indenture Trustee and any of the foregoing
professionals regarding such professional fees cannot be resolved within
twenty (20) days of service of the statements, then the party objecting to the
payment of such fees and/or expenses shall, within twenty (20) days of service
of the statements, file an objection with the Bankruptcy Court requesting that
the Bankruptcy Court determine the reasonable amount of fees to be paid to
such professional. No fees shall be paid until the later of (i) the twenty
(20) day period having lapsed with no objections having been filed with
respect to such fees and/or expenses and (ii) a Final Order resolving any
objection filed with respect to such fees and/or expenses having been entered
by the Bankruptcy Court. Any such objection will be heard at the hearing
before the Bankruptcy Court to consider the final fee applications of the
Professionals.
14. 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), 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 Monsanto Settlement 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 Monsanto Settlement 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 Monsanto Settlement
Agreement, be financially responsible, as between themselves, for
Environmental Liability Costs with respect to the Shared Sites. Nothing in the
Monsanto Settlement 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.
37
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 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
38
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 member shall be the Chief Executive Officer of
Reorganized Solutia, Jeffry N. Quinn. One member shall be designated by each
of the following: Monsanto; the Creditors' Committee; and the Ad Hoc Notes
Committee. One member shall be designated by Solutia from among the members of
the current Solutia Board. With respect to the remaining four members of the
initial Board of Directors of Reorganized Solutia, Solutia will work with SSI
(U.S.), Inc. d/b/a Spencer Stuart, a nationally recognized executive search
firm that will assist in the selection of these members. These members will be
selected by a majority vote of a five-member committee, subject to Monsanto's
consent, which shall not be unreasonably withheld, that consists of the
following: one representative of Solutia; one representative of the Creditors'
Committee; one representative of the Ad Hoc Trade Committee; and two
representatives of the Ad Hoc Notes Committee. In addition, for so long as
Monsanto continues to hold at least 5% of New Common Stock, Monsanto shall
have the right to nominate a candidate to be included on the slate of
directors to be submitted to shareholders for election to subsequent Boards of
Directors of Reorganized Solutia pursuant to the terms of the New Certificates
of Incorporation, New By-laws and other constituent documents 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 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
39
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
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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.
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.
2. RIGHTS OFFERING PROCEDURES
Eligible Holders will be entitled to subscribe for and to
acquire 85% of the Rights being offered pursuant to the Rights Offering plus
any of the Rights in the Backstop Pool not acquired by the members of the
Backstop Investors, subject to the Backstop Commitment Agreement and in
accordance with the terms of the Rights Offering Procedures.
3. RIGHTS OFFERING BACKSTOP
The Backstop Investors has agreed to backstop the Rights
Offering in accordance with the terms of the Backstop Commitment Agreement in
exchange for a $6.25 million backstop fee and the right
40
to subscribe for and to acquire up to 100% of the Backstop Pool, in accordance
with the terms of the Rights Offering Procedures and the Backstop Commitment
Agreement.
I. FUNDING CO
In accordance with the terms of the Monsanto Settlement 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 Monsanto Settlement 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 hereof, 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; provided, however, that nothing herein shall
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release the charging Lien of the Senior Secured Notes Trustee against
Distributions to be made hereunder to Holders of Senior Secured Note Claims.
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,
as permitted by section 1123(a)(5)(F) of the Bankruptcy Code, 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; provided, however, that any such agreement
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that governs the rights of the Holder of a Noteholder Claim will continue in
effect solely for purposes of (a) allowing the Prepetition Indenture Trustee,
pursuant and
41
subject to the Prepetition Indenture, to make the Distributions to be made on
account of such Noteholder Claims under the Plan; (b) permitting the
Prepetition Indenture Trustee to maintain and enforce its Prepetition
Indenture Charging Lien against property distributed on account of Noteholder
Claims pursuant to the Plan or any property other than the Reorganized
Debtors' property for fees, costs, and expenses under such Prepetition
Indenture or any other agreement, and (c) governing the rights and obligations
of non-Reorganized Debtor parties to such agreements, vis-a-vis each other;
provided, further, however, that the Senior Secured Notes and the Senior
- -------- ------- -------
Secured Indenture shall continue in effect solely for the purposes of (x)
allowing the Holders of the Senior Secured Notes to receive their
Distributions hereunder, (y) allowing the Senior Secured Notes Trustee to make
the Distributions, if any, to be made on account of the Senior Secured Notes
and (z) permitting the Senior Secured Notes Trustee to assert its charging
Lien against such Distributions for payment of the Senior Secured Notes
Trustee's fees and expenses. Upon completion of all such Distributions under
this Plan and actions set forth pursuant to this Section IV.L, the 2027 Notes
and the 2037 Notes, the Prepetition Indenture, the Senior Secured Notes and
the Senior Secured Notes Indenture shall terminate completely.
M. LIMITATIONS ON TRANSFERS OF EQUITY INTERESTS IN SOLUTIA DURING THE CHAPTER
11 CASES
Nothing contained herein shall alter the terms of, or requirement
that Holders of Equity Interests in Solutia comply with, that certain Order
Pursuant to Sections 105(a), 362(a)(3) and 541 of the Bankruptcy Code (A)
Limiting Certain Transfers of Equity Interests in Solutia Inc. and (B)
Approving Related Notice Procedures, dated February 21, 2006.
N. 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.
O. 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. Notwithstanding any provision of this
Plan to the contrary, the Debtors and Reorganized Solutia will indemnify the
current and former officers and members of Solutia's board of directors
against any liabilities arising out of or related to the offering or
registration of New Common Stock hereunder.
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.
42
As of the Effective Date, the Retiree Benefits shall be modified in
accordance with the Retiree Settlement Agreement.
43
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 hereof, (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
44
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.
Notwithstanding any other provision contained herein, the Plan shall not
affect the rights, if any, to insurance coverage for breaches of fiduciary
duties related to the SIP Plan.
1. ACE SETTLEMENT
Notwithstanding anything to the contrary in the Plan or the
Confirmation Order: (a) on the Effective Date, the Debtors and the Reorganized
Debtors shall assume the ACE Insurance Program; and within 15 days of the
Effective Date, the Debtors and the Reorganized Debtors shall pay the cure
costs related to such assumption, as set forth in the ACE Settlement
Agreement; (b) subject to entry of an order by the Bankruptcy Court approving
the ACE Settlement Agreement, (i) the ACE Insurance Program will survive and
shall not be amended, modified, waived or impaired in any respect by the Plan,
the Confirmation Order, the Monsanto Settlement Agreement or otherwise without
the prior written agreement of the ACE Companies; (ii) the claims of the ACE
Companies arising under the ACE Insurance Program shall be Allowed
Administrative Expense Claims, which are payable in the ordinary course of
business, and shall not be discharged or released by the Plan or the
Confirmation Order; (iii) the ACE Companies shall not be required to file or
serve a request for payment of any Administrative Expense Claim and shall not
be subject to the Administrative Expense Claim Bar Date; and (iv) to the
extent of any inconsistency between the ACE Settlement Agreement and the Plan,
the Disclosure Statement, the Confirmation Order or any other document,
agreement or order, the terms of the ACE Settlement Agreement will control;
and (c) nothing in the Plan or the Confirmation Order shall be construed as,
or is, a determination as to coverage under the ACE Insurance Program.
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
Monsanto Settlement Agreement, the Monsanto Settlement Agreement shall
control. To the extent provided in the Monsanto Settlement 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'
45
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.
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ARTICLE VII
PROVISIONS GOVERNING DISTRIBUTIONS
A. ALLOWED NOTEHOLDER CLAIMS
The Noteholder Claims shall be deemed Allowed in the aggregate amount
of $455.4 million, allocated as follows: (a) $303.7 million on account of the
2027 Notes; and (b) $151.7 million on account of the 2037 Notes.
B. 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.
C. DISTRIBUTIONS FOR HOLDERS OF EQUITY INTERESTS IN SOLUTIA
Except as otherwise provided herein or as may be ordered by the
Bankruptcy Court, Distributions to be made on account of Equity Interests in
Solutia shall be made on the Effective Date, or as soon as reasonably
practicable thereafter.
D. 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.
E. DELIVERY AND DISTRIBUTIONS AND UNDELIVERABLE OR UNCLAIMED DISTRIBUTIONS
1. DELIVERY OF DISTRIBUTIONS IN GENERAL
Distributions to Holders of Allowed Claims or Equity
Interests in Solutia shall be made at the address of the Holder of such Claim
or Equity Interest as indicated on the claims register maintained by the
Debtors' duly appointed claims agent or the stock register maintained by the
Debtors' stock transfer agent. Nonetheless, if such Holder holds such Claims
or Equity Interests through a Nominee, Distributions with respect to such
Claims or Equity Interests 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, subject to the terms
and conditions of the Prepetition Indenture, including the Prepetition
Indenture Charging Lien, provided, further, however, that Distributions on
-------- ------- -------
account of the Senior Secured Note Claims shall be made to the Senior Secured
Notes Trustee for distribution to the Holders of such Claims, subject to the
terms and
47
conditions of the Senior Secured Notes Indenture, including the charging Lien
of the Senior Secured Notes Trustee.
To the extent that the Senior Secured Notes Trustee and/or
the Prepetition Indenture Trustee provides services to implement Distributions
pursuant to the Plan, the Senior Secured Notes Trustee and/or the Prepetition
Indenture Trustee will receive from the Reorganized Debtors, without further
Bankruptcy Court approval, reasonable compensation for such services and
reimbursement of reasonable expenses incurred in connection with such
services.
2. UNDELIVERABLE DISTRIBUTIONS
A. TREATMENT OF UNDELIVERABLE DISTRIBUTIONS
Reorganized Solutia shall distribute any
Undeliverable Distribution of New Common Stock required to be distributed to
Holders of Allowed General Unsecured Claims to the Disputed Claims Reserve.
Any Undeliverable Distribution of New Common Stock required to be distributed
to Holders of Equity Interests in Solutia shall become treasury stock of
Reorganized Solutia. Subject to Section VII.E.2.b hereof, 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 or Equity Interest
in Solutia 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 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 or Equity Interest in Solutia.
F. 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 with respect to dividends on or gains in respect of
shares held in the Disputed Claims Reserve 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.
G. RECORD DATE FOR DISTRIBUTION TO HOLDERS OF CLAIMS
At 4:30 p.m. (Eastern Time) 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 (other than
address changes). Moreover, Reorganized Solutia, the Prepetition Indenture
Trustee and the Senior Secured Notes Trustee shall have no obligation to
recognize the transfer of any of the 2027 Notes, the 2037 Notes or Senior
Secured 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.
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H. RECORD DATE FOR DISTRIBUTION TO HOLDERS OF EQUITY INTERESTS IN SOLUTIA
At 4:30 p.m. (Eastern Time) on the Distribution Record Date, the
stock register for the Holders of any Equity Interests in Solutia shall be
closed and there shall be no further changes in the record of Holders of any
Equity Interests in Solutia (other than address changes).
I. DISTRIBUTIONS OF WHOLE SHARES, WARRANTS, EQUITY PURCHASE RIGHTS AND CLAIM
TRANSFER RIGHTS ONLY
Notwithstanding any other provision of this Plan, only whole numbers
of shares of the New Common Stock, whole numbers of Warrants, whole numbers of
Equity Purchase Rights and whole numbers of Claim Transfer Rights will be
issued. When any Distribution on account of an Allowed Claim or Equity
Interests in Solutia would otherwise result in the issuance of a number of
shares of New Common Stock, Warrants, Equity Purchase Rights or Claim Transfer
Rights that is not a whole number, the actual Distribution of shares of such
stock, Warrants, Equity Purchase Rights or Claim Transfer Rights will be
rounded as follows: (1) fractions equal to or greater than one half will be
rounded to the next higher whole number and (2) fractions less than one half
will be rounded to the next lower number. The total number of shares of the
New Common Stock, Warrants, Equity Purchase Rights and Claim Transfer Rights
to be distributed to Holders of Allowed Claims or Equity Interests in Solutia
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,
Warrants, Equity Purchase Rights or Claim Transfer Rights totaling less than
the authorized number of shares of New Common Stock, Warrants or Equity
Purchase Rights, then any excess New Common Stock, Warrants, Equity Purchase
Rights or Claim Transfer Rights shall not be issued. No consideration shall be
provided in lieu of fractional shares, Warrants, Equity Purchase Rights or
Claim Transfer Rights that are rounded down pursuant to this Section.
J. 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.
K. 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 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.E.2 hereof.
All payments to Holders of Senior Secured Note Claims shall only be
made to such Holders after the surrender by each such Holder of the Senior
Secured Notes certificates representing such Senior Secured Note Claims, or in
the event such certificate is lost, stolen, mutilated or destroyed, upon the
49
Holder's compliance with the requirements set forth below. Upon surrender of
such Senior Secured Notes certificates, the Senior Secured Notes Trustee shall
cancel and destroy such Senior Secured Notes. As soon as practicable after
surrender of the Senior Secured Notes certificates evidencing the Senior
Secured Notes Claims, the Senior Secured Notes Trustee shall distribute to the
Holder thereof such Holder's Pro Rata share of the Distribution, but subject
to the rights of the Senior Secured Notes Trustee to assert its charging Lien
against such Distribution. Any Holder of an Allowed Senior Secured Note Claim
evidenced by a certificate that has been lost, stolen, mutilated or destroyed
shall, in lieu of surrendering such certificate, deliver to the Senior Secured
Notes Trustee an affidavit of loss acceptable to the Senior Secured Notes
Trustee setting forth the unavailability of the certificate, and such
additional indemnity as may be required reasonably by the Senior Secured Notes
Trustee to hold the trustee harmless from any damages, liabilities or costs
incurred in treating such Holder as a Holder of an Allowed Claim. Upon
compliance with this procedure by a Holder of an Allowed Senior Secured Notes
Claim evidenced by such a lost, stolen, mutilated or destroyed certificate
such Holder shall, for purposes pursuant to the Plan, be deemed to have
surrendered such certificate.
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.
L. 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 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
50
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.
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.
M. 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 from the Stock Pool on account of their individual
Claims at all times (without giving effect to any reduction of the percentage
recovery on account of Allowed Noteholder Claims resulting from the imposition
of the Prepetition Indenture Charging Lien). 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.
51
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 Pro Rata share of
the Stock Pool without giving effect to any reduction of the percentage
recovery on account of Allowed Noteholder Claims resulting from the imposition
of the Prepetition Indenture Trustee Charging Lien.
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.
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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.
53
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.
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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 hereof:
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), the Prepetition Indenture Trustee (solely with
respect to provisions directly affecting the Prepetition
Indenture Trustee, the 2027 Notes or the 2037 Notes) 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, the Rights and the Warrants pursuant to the exemption from
"Registration" under the Securities Act provided by section 1145 of the
Bankruptcy Code or pursuant to one or more registration statements 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; and
g. 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).
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.
55
4. The Retiree Approval Order shall have been entered by the
Bankruptcy Court.
5. The Bankruptcy Court shall have approved the Global
Settlement, and the order of the Bankruptcy Court approving
the Global Settlement, which may be included in the
Confirmation Order, shall provide, among other things, that
the Settled Adversary Proceedings, the Prepetition Adversary
Proceeding and the Equity Committee Adversary Proceeding
shall be withdrawn or dismissed with prejudice.
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 hereof:
1. The Confirmation Order shall (a) be in form and substance
reasonably acceptable to the Debtors, Monsanto, Pharmacia
(solely with respect to provisions directly affecting
Pharmacia), the Prepetition Indenture Trustee and the Ad Hoc
Notes Committee (solely with respect to provisions directly
affecting the Prepetition Indenture Trustee, the 2027 Notes
or the 2037 Notes), the Equity Committee (solely with
respect to provisions directly affecting Holders of Equity
Interests) and the Creditors' Committee, (b) be consistent
with the terms described in Section IX.A hereof, and (c)
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. The Disputed General Unsecured Claims Reserve shall have
been established and 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.
56
10. The Chocolate Bayou Settlement shall have been executed and
shall have received all necessary approvals.
11. The Monsanto Settlement Agreement shall have received all
necessary approvals.
12. The Rights Offering shall have been fully funded, and from
the proceeds of the Rights Offering, $175 million shall have
been used to fund the Retiree Trust (as defined in the
Retiree Settlement Agreement) and $75 million shall have
been used to fund Funding Co.
13. The order of the Bankruptcy Court, which may be included in
the Confirmation Order, approving the Global Settlement
shall have become a Final Order.
14. The Equity Committee Adversary Proceeding, including any
appeals related thereto, shall have been dismissed or
withdrawn with prejudice.
15. The Prepetition Indenture Trustee Adversary Proceeding,
including any appeals related thereto, shall have been
dismissed or withdrawn with prejudice.
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), the Prepetition Indenture Trustee
(solely with respect to provisions directly affecting the Prepetition
Indenture Trustee, the 2027 Notes or the 2037 Notes), the Creditors'
Committee, and the Retirees' Committee (solely with respect to Section IX.B.12
hereof), 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 hereof.
57
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 MONSANTO SETTLEMENT 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, THE PREPETITION INDENTURE TRUSTEE, HOLDERS OF
ALLOWED CLAIMS, OR, UNTIL DISSOLVED, THE CREDITORS' COMMITTEE, THE RETIREES'
COMMITTEE AND THE EQUITY COMMITTEE FROM ENFORCING THE TERMS OF THIS PLAN AND
TO THE EXTENT THAT SUCH PARTIES ARE PARTIES TO, OR ARE BENEFICIARIES OF, THE
PLAN DOCUMENTS, THE PLAN DOCUMENTS (OTHER THAN WITH RESPECT TO THE MONSANTO
SETTLEMENT AGREEMENT), NOTWITHSTANDING THE FOREGOING, THE REORGANIZED DEBTORS,
MONSANTO AND PHARMACIA SHALL NOT BE ENJOINED FROM ENFORCING THE TERMS OF THE
MONSANTO SETTLEMENT AGREEMENT; 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
WALKER V. MONSANTO COMPANY PENSION PLAN, NO. 04-CV-436-DRH, 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
58
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 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, THE PREPETITION INDENTURE TRUSTEE, HOLDERS OF ALLOWED
CLAIMS, OR, UNTIL DISSOLVED, THE CREDITORS' COMMITTEE, THE RETIREES' COMMITTEE
AND THE EQUITY COMMITTEE FROM ENFORCING THE TERMS OF THIS PLAN AND TO THE
EXTENT THAT SUCH PARTIES ARE PARTIES TO, OR ARE BENEFICIARIES OF, THE PLAN
DOCUMENTS, THE PLAN DOCUMENTS (OTHER THAN WITH RESPECT TO THE MONSANTO
SETTLEMENT AGREEMENT), NOTWITHSTANDING THE FOREGOING, THE REORGANIZED DEBTORS,
MONSANTO AND PHARMACIA SHALL NOT BE ENJOINED FROM ENFORCING THE TERMS OF THE
MONSANTO SETTLEMENT AGREEMENT; PROVIDED, FURTHER, HOWEVER, THAT TERMS OF THIS
-------- ------- -------
INJUNCTION SHALL NOT PREVENT (X) THE HOLDERS OF TORT CLAIMS, NRD CLAIMS,
CLAIMS, CAUSES OF ACTION, OR RIGHTS RELATING TO ENVIRONMENTAL LIABILITY FROM
EXERCISING THEIR RIGHTS AGAINST MONSANTO, PHARMACIA OR ANY OF THEIR RESPECTIVE
AFFILIATES WITH RESPECT THERETO, OR (Y) ANY PARTY FROM ASSERTING ANY CAUSE OF
ACTION AGAINST MONSANTO OR PHARMACIA OR ANY OF THEIR RESPECTIVE AFFILIATES
ARISING IN TORT FOR PERSONAL INJURY OR PROPERTY DAMAGE ARISING FROM THE
EXPOSURE TO CHEMICALS OR OTHER SUBSTANCES.
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
59
FUTURE BY OR ON BEHALF OF THE DEBTORS, OR THEIR ESTATES AGAINST (A) THE
CURRENT OR FORMER REPRESENTATIVES, DIRECTORS, AND OFFICERS 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 AND THE ADVISORS AND ATTORNEYS FOR THE CREDITORS' COMMITTEE, IN EACH
CASE IN THEIR CAPACITY AS SUCH, (C) THE CURRENT AND FORMER MEMBERS OF THE AD
HOC TRADE COMMITTEE AND THE ADVISORS AND ATTORNEYS FOR THE AD HOC TRADE
COMMITTEE, IN EACH CASE IN THEIR CAPACITY AS SUCH, (D) THE CURRENT AND FORMER
MEMBERS OF THE AD HOC NOTES COMMITTEE AND THE ADVISORS AND ATTORNEYS FOR THE
AD HOC NOTES COMMITTEE, IN EACH CASE IN THEIR CAPACITY AS SUCH, (E) THE
CURRENT AND FORMER MEMBERS OF THE EQUITY COMMITTEE AND THE ADVISORS AND
ATTORNEYS FOR THE EQUITY COMMITTEE, IN EACH CASE IN THEIR CAPACITY AS SUCH,
(F) THE CURRENT AND FORMER MEMBERS OF THE RETIREES' COMMITTEE AND THE ADVISORS
AND ATTORNEYS FOR THE RETIREES' COMMITTEE, IN EACH CASE IN THEIR CAPACITY AS
SUCH, (G) THE BACKSTOP INVESTORS, THEIR AFFILIATES, REPRESENTATIVES AND
ADVISORS, IN EACH CASE IN THEIR CAPACITY AS SUCH, PROVIDED THAT SUCH RELEASE
SHALL NOT PROHIBIT OR IMPEDE THE DEBTORS' ABILITY TO ENFORCE OR ASSERT
DEFENSES OR COUNTERCLAIMS IN CONNECTION WITH OR RELATING TO THE BACKSTOP
COMMITMENT AGREEMENT, (H) THE PREPETITION INDENTURE TRUSTEE AND THE ADVISORS
AND ATTORNEYS FOR THE PREPETITION INDENTURE TRUSTEE, IN EACH CASE IN THEIR
CAPACITY AS SUCH, (I) MONSANTO, (J) PHARMACIA, (K) ANY EMPLOYEE BENEFIT PLANS
OF MONSANTO OR PHARMACIA, AND (L) 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 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 AND THE ADVISORS AND ATTORNEYS FOR THE CREDITORS' COMMITTEE, IN EACH
CASE IN THEIR CAPACITY AS SUCH, (D) THE CURRENT AND FORMER MEMBERS OF THE AD
HOC TRADE COMMITTEE AND THE ADVISORS AND ATTORNEYS FOR THE AD HOC TRADE
COMMITTEE, IN EACH CASE IN THEIR CAPACITY AS SUCH, (E) THE CURRENT AND FORMER
MEMBERS OF THE AD HOC NOTES COMMITTEE AND THE ADVISORS AND ATTORNEYS FOR THE
AD HOC NOTES COMMITTEE, IN EACH CASE IN THEIR CAPACITY AS SUCH, (F) THE
CURRENT AND FORMER MEMBERS OF THE EQUITY COMMITTEE AND THE ADVISORS AND
ATTORNEYS FOR THE EQUITY COMMITTEE, IN EACH CASE IN THEIR CAPACITY AS SUCH,
(G) THE CURRENT AND FORMER MEMBERS OF THE RETIREES' COMMITTEE AND THE ADVISORS
AND ATTORNEYS FOR THE RETIREES' COMMITTEE, IN EACH CASE IN THEIR CAPACITY AS
SUCH, (H) THE BACKSTOP INVESTORS, THEIR AFFILIATES, REPRESENTATIVES AND
ADVISORS, IN EACH CASE IN THEIR CAPACITY AS SUCH, PROVIDED THAT SUCH RELEASE
SHALL NOT PROHIBIT OR IMPEDE THE DEBTORS' ABILITY TO ENFORCE OR ASSERT
DEFENSES OR COUNTERCLAIMS IN CONNECTION WITH OR RELATING TO THE BACKSTOP
COMMITMENT AGREEMENT, (I) THE PREPETITION INDENTURE TRUSTEE AND THE ADVISORS
AND ATTORNEYS FOR THE PREPETITION INDENTURE TRUSTEE, IN EACH CASE IN THEIR
CAPACITY AS SUCH, (J) MONSANTO, (K) PHARMACIA, AND (L) THE RESPECTIVE
AFFILIATES AND CURRENT OR FORMER REPRESENTATIVES,
60
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, (I) THE HOLDERS OF TORT CLAIMS SHALL NOT BE DEEMED TO RELEASE THE
DEBTORS OR ANY OF THEIR RESPECTIVE AFFILIATES ON ACCOUNT OF ANY LIABILITY
ARISING FROM OR RELATED TO THE TORT CLAIMS AND (II) THE HOLDERS OF TORT CLAIMS
AND THE HOLDERS OF LEGACY SITE CLAIMS, AS A RESULT OF THE MONSANTO SETTLEMENT
AGREEMENT, SHALL NOT BE DEEMED TO RELEASE MONSANTO OR PHARMACIA OR ANY OF
THEIR RESPECTIVE AFFILIATES 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; AND PROVIDED, EVEN FURTHER
-------- ---- -------
STILL, HOWEVER, THAT THE TERMS OF THIS RELEASE SHALL NOT APPLY TO CLAIMS FOR
- ----- -------
BREACHES OF FIDUCIARY DUTY, AS SUCH TERM IS DEFINED UNDER ERISA, WITH RESPECT
TO THE SIP PLAN AGAINST ANY ERISA FIDUCIARIES.
3. RETIREE RELEASE AND INJUNCTION
61
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, THE RETIREES' COMMITTEE NOR THE CURRENT
INDIVIDUAL MEMBERS THEREOF, THE AD HOC TRADE COMMITTEE NOR THE CURRENT
INDIVIDUAL MEMBERS THEREOF, THE AD HOC NOTES COMMITTEE NOR THE CURRENT
INDIVIDUAL MEMBERS THEREOF, THE PREPETITION INDENTURE TRUSTEE, THE BACKSTOP
INVESTORS, THEIR AFFILIATES, REPRESENTATIVES AND ADVISORS, PROVIDED, THAT SUCH
EXCULPATION SHALL NOT PROHIBIT OR IMPEDE THE DEBTOR'S ABILITY TO ENFORCE OR
ASSERT DEFENSES OR COUNTERCLAIMS IN CONNECTION WITH OR RELATING TO THE
BACKSTOP COMMITMENT AGREEMENT, THE EQUITY 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, 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;
PROVIDED, HOWEVER, THAT NOTHING IN THIS PARAGRAPH SHALL AFFECT THE RIGHTS,
- -------- -------
DEFENSES, BLIGATIONS OR CLAIMS ARISING BETWEEN MONSANTO AND PHARMACIA; AND
PROVIDED, FURTHER, HOWEVER, THAT THE TERMS OF THIS EXCULPATION SHALL NOT APPLY
- -------- ------- -------
TO CLAIMS FOR BREACHES OF FIDUCIARY DUTY, AS SUCH TERM IS DEFINED UNDER ERISA,
WITH RESPECT TO THE SIP PLAN AGAINST ANY ERISA FIDUCIARIES.
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
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ANY DEBTOR OR ANY OF THEIR ASSETS OR PROPERTIES, (2) ON THE EFFECTIVE DATE,
ALL SUCH CLAIMS AND 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, RELEASE
- -------
OR SATISFACTION 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,
-------- ------- -------
RELEASE OR SATISFY 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, RELEASE OR SATISFY 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 CHAPTER
11 CASES AND MAY BE ENFORCED IN ANY TRIBUNAL WITH JURISDICTION.
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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 Monsanto
Settlement 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 hereof;
64
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 all 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, if still in
existence, 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, including all federal
agencies, 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, the
Retirees' Committee, the Prepetition Indenture Trustee, the Equity Committee,
the Ad Hoc Trade Committee and the Ad Hoc Notes 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
66
further authority, duties, responsibilities and obligations relating to and
arising from and in connection 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 (1) the Creditors' Committee shall
-------- -------
continue to exist after the Effective Date so long as there is (a) an appeal
or other litigation pending in connection with the Prepetition Indenture
Trustee Adversary Proceeding, the Equity Committee Adversary Proceeding, the
Plan, the Confirmation Order or any proceeding that may materially affect
recoveries to unsecured creditors or (b) any objection pending in connection
with the payment of the professional fees and/or expenses in accordance with
Section V.B.13 of Hennigan, Bennett & Dorman LLP, counsel to the Ad Hoc Notes
Committee; The Blackstone Group, financial advisor to the Ad Hoc Notes
Committee; Reed Smith LLP, counsel to the Prepetition Indenture Trustee;
Haynes and Boone LLP, counsel to Highland Capital Management; or Brown Rudnick
Berlack Israels LLP, counsel to the Ad Hoc Trade Committee; or the expenses
incurred by the Prepetition Indenture Trustee; and (2) the professional fees
and expenses of the Creditors' Committee in connection with (1) above shall be
reimbursed by the Debtors or Reorganized Debtors without application to the
Bankruptcy Court consistent with Section 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), the Prepetition
Indenture Trustee (if such provision directly affects the Prepetition
Indenture Trustee, the 2027 Notes or the 2037 Notes) 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, the
Prepetition Indenture Trustee (if such provision directly affects the
67
Prepetition Indenture Trustee, the 2027 Notes or the 2037 Notes), the Equity
Committee (if such provision directly affects the Holders of Equity Interests)
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 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, the Rights and the
Warrants issued pursuant to the Plan on account of Allowed Claims and common
stock in Solutia may 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 such 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
68
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)
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
69
David A. Crichlow, Esq.
Karen B. Dine, Esq.
Pillsbury Winthrop Shaw Pittman LLP
1540 Broadway
New York, NY 10036
Fax: (212) 858-1500
(Counsel to the Equity Committee)
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
70
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)
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.
71
Dated: New York, New York Respectfully submitted,
October 19, 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
72