Sli Inc · 8-K · For 4/17/03 · EX-99

Filed On 5/2/03 3:37pm ET   ·   SEC File 1-14033   ·   Accession Number 950172-3-1414

Current Report   ·   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         3     15K 
 2: EX-99       Exhibit 99.1 - Plan of Reorganization                 54±   247K 
 3: EX-99       Exhibit 99..2 - Disclosure Statement                 101±   503K 

EX-99   ·   Exhibit 99.1 - Plan of Reorganization
Exhibit Table of Contents

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                                                                Exhibit 99.1

IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE DISTRICT OF DELAWARE  

- - - - - - - - - - - - - - - - - - - - - - -- x                                
               :
In re:                                         :   Chapter 11                   
               :
SLI, INC.,                                     :   Case No. 02-12608 (MFW)      
CHICAGO MINIATURE OPTOELECTRONIC               :                                
TECHNOLOGIES, INC.,                          :   Jointly Administered       
ELECTRO-MAG INTERNATIONAL, INC.,               :                                
CHICAGO-MINIATURE LAMP-SYLVANIA                :                                
LIGHTING INTERNATIONAL, INC.,                :                              
SLI LIGHTING PRODUCTS, INC.,                   :                                
SLI LIGHTING COMPANY,                          :                                
SLI LIGHTING SOLUTIONS, INC., AND              :                                
CML AIR, INC.,                                 :                                
               :
Debtors.       :
- - - - - - - - - - - - - - - - - - - - - - -- x                                
-                                                                               

JOINT CHAPTER 11 PLAN OF REORGANIZATION OF THE DEBTORS IN POSSESSION
 AND THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS

                                        SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

                           Gregg M. Galardi (No. 2991)
                          Robert A. Weber (No. 4013)
                            Megan E. Cleghorn (No. 4080)
                 One Rodney Square
            P.O. Box 636
                                Wilmington, Delaware  19899-0636
              (302) 651-3000

                                Attorneys for SLI, Inc., et al.,
                                 Debtors and Debtors-in-Possession

                   PEPPER HAMILTON LLP
                       David M. Fournier, Esq.
                              1201 Market Street, Suite 1600
             P.O. Box 1709
                         Wilmington, DE 19899-1709

               - and -

                   PEPPER HAMILTON LLP
                        Robert S. Hertzberg, Esq
                                   100 Renaissance Center,  36th Floor
                      Detroit, MI 48243-1157

                                    Attorneys for the Official Committee
                      of Unsecured Creditors

Dated:    Wilmington, Delaware                                                  
April 17, 2003                                              

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                                TABLE OF CONTENTS                                                      
                                -----------------                                                      

                                                                                                 Page  
                                                                                                 ----  

                                                                                                       
INTRODUCTION...................................................................................PLAN-1  

                                    ARTICLE I                                                          

                      DEFINITIONS, RULES OF INTERPRETATION,                                            
                          AND COMPUTATION OF TIME PLAN-1                                               
A.   Rules of Construction.....................................................................PLAN-1  
B.   Definitions...............................................................................PLAN-1  
C.   Rules of Interpretation..................................................................PLAN-14  
D.   Computation of Time......................................................................PLAN-15  
E.   Governing Law............................................................................PLAN-15  

                                   ARTICLE II                                                          

                  CLASSIFICATION OF CLAIMS AND INTERESTS PLAN-15                                       
A.   Introduction.............................................................................PLAN-15  
B.   Unclassified Claims .....................................................................PLAN-15  
         1.   DIP Facility Claims.............................................................PLAN-15  
         2.   Administrative Claims...........................................................PLAN-16  
         3.   Priority Tax Claims.............................................................PLAN-16  
         4.   Intercompany Claims.............................................................PLAN-16  
C.   Unimpaired Classes of Claims.............................................................PLAN-16  
         1.   Class 1:  Other Priority Claims.................................................PLAN-16  
         2.   Class 2:  Other Secured Claims..................................................PLAN-16  
D.   Impaired Classes of Claims...............................................................PLAN-16  
         1.   Class 3:  Secured Lender Claims.................................................PLAN-16  
         2.   Class 4:  General Unsecured Claims..............................................PLAN-16  
E.   Impaired Classes of Claims...............................................................PLAN-16  
         1.   Class 5: Subordinated Claims....................................................PLAN-16  
F.   Impaired Classes of Interests............................................................PLAN-16  
         1.   Class 6:  Interests ............................................................PLAN-16  

                                   ARTICLE III                                                         

                    TREATMENT OF CLAIMS AND INTERESTS PLAN-16                                          
A.   Unclassified Claims......................................................................PLAN-16  
         1.   DIP Facility Claims.............................................................PLAN-16  
         2.   Administrative Claims...........................................................PLAN-17  
         3.   Priority Tax Claims.............................................................PLAN-17  
         4.   Intercompany Claims.............................................................PLAN-18  
B.   Unimpaired Claims........................................................................PLAN-18  
         1.   Class 1:  Other Priority Claims.................................................PLAN-18  
         2.   Class 2:  Other Secured Claims..................................................PLAN-18  
C.   Impaired Claims..........................................................................PLAN-18  
         1.   Class 3:  Secured Lender Claims.................................................PLAN-18  
         2.   Class 4:  General Unsecured Claims..............................................PLAN-19  
         3.   Class 5: Subordinated Claims....................................................PLAN-19  
D.   Interests................................................................................PLAN-19  
         Class 6:  Interests..................................................................PLAN-19  
E.   Special Provision Regarding Unimpaired Claims............................................PLAN-20  
F.   Allowed Claims...........................................................................PLAN-20  

                                   ARTICLE IV                                                          

                   ACCEPTANCE OR REJECTION OF THE PLAN PLAN-20                                         
A.   Impaired Classes of Claims and Interests Entitled to Vote................................PLAN-20  
B.   Acceptance by an Impaired Class..........................................................PLAN-20  
C.   Presumed Acceptances by Unimpaired Classes...............................................PLAN-20  
D.   Classes Deemed to Reject Plan............................................................PLAN-20  
E.   Summary of Classes Voting on the Plan....................................................PLAN-21  
F.   Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code..........................PLAN-21  

                                    ARTICLE V                                                          

                   MEANS FOR IMPLEMENTATION OF THE PLAN PLAN-21                                        
A.   Substantive Consolidation................................................................PLAN-21  
         1.   Consolidation of the Chapter 11 Estates.........................................PLAN-21  
         2.   Substantive Consolidation Order.................................................PLAN-22  
B.   Corporate Action.........................................................................PLAN-22  
     1.  Continued Corporate Existence........................................................PLAN-22  
     2.  Cancellation of Old Common Shares....................................................PLAN-22  
     3.  Certificates of Incorporation and By-laws............................................PLAN-22  
     4.  Issuance of New Common Shares........................................................PLAN-22  
C.   Revolving Credit Facility................................................................PLAN-23  
D.   Directors and Officers...................................................................PLAN-23  
         1.   Board of Directors of Reorganized SLI and its Subsidiaries and Affiliates.......PLAN-23  
         2.   Officers of Reorganized SLI and its Subsidiaries and Affiliates.................PLAN-23  
E.   Employee Retirement and Stock Option Plans; Employee Group Health                                 
     Plans; Etc...............................................................................PLAN-23  
F.   Revesting Of Assets; Releases of Liens...................................................PLAN-24  
G.   Effectuating Documents; Further Transactions.............................................PLAN-24  
H.   Preservation of Rights of Action.........................................................PLAN-24  
I.   Special Provisions Regarding Claims Covered by Insurance.................................PLAN-25  
J.   Exemption from Certain Transfer Taxes....................................................PLAN-25  
K.   Professionals............................................................................PLAN-25  
L.   .........................................................................................PLAN-25  

                                   ARTICLE VI                                                          

                    DESCRIPTION OF SECURITIES AND INSTRUMENTS                                          
                 TO BE ISSUED IN CONNECTION WITH THE PLAN PLAN-26                                      
A.   New Common Shares........................................................................PLAN-26  
B.   Rights Offering..........................................................................PLAN-27  

                                   ARTICLE VII                                                         

                    PROVISIONS GOVERNING DISTRIBUTIONS PLAN-27                                         
A.   Distributions for Claims Allowed as of the Effective Date................................PLAN-27  
B.   Disbursing Agent.........................................................................PLAN-27  
C.   Delivery of Distributions and Undeliverable or Unclaimed Distributions...................PLAN-28  
         1.   Delivery of Distributions in General............................................PLAN-28  
         2.   Undeliverable and Unclaimed Distributions ......................................PLAN-28  
D.   Calculation of Distribution Amounts of New Common Shares; Minimum                                 
     Distributions............................................................................PLAN-28  
E.   Record Date For Distributions To Holders Of Secured Lender Claims........................PLAN-29  
F.   Prepayment...............................................................................PLAN-29  
G.   Means of Cash Payment....................................................................PLAN-29  
H.   Interest on Claims.......................................................................PLAN-29  
I.   Cancellation of Existing Securities and Agreements.......................................PLAN-29  
J.   Withholding and Reporting Requirements...................................................PLAN-30  
K.   Setoffs..................................................................................PLAN-30  

                                  ARTICLE VIII                                                         

                             LITIGATION TRUST PLAN-30                                                  
A.   The Litigation Trust.....................................................................PLAN-30  
B.   Transfer of Trust Assets to the Litigation Trust.........................................PLAN-31  
C.   The Litigation Trust Agreement...........................................................PLAN-31  
D.   Funding of the Litigation Trust..........................................................PLAN-31  
E.   Reimbursement Obligations................................................................PLAN-32  
F.   Distributions of Trust Assets............................................................PLAN-32  

                                   ARTICLE IX                                                          

                        TREATMENT OF EXECUTORY CONTRACTS                                               
                           AND UNEXPIRED LEASES PLAN-33                                                
A.   Assumed and Rejected Contracts and Leases................................................PLAN-33  
B.   Payments Related to Assumption of Executory Contracts and Unexpired Leases...............PLAN-33  
C.   Rejection Damages Bar Date...............................................................PLAN-33  

                                    ARTICLE X                                                          

                       PROCEDURES FOR RESOLVING DISPUTED,                                              
                   CONTINGENT, AND UNLIQUIDATED CLAIMS PLAN-34                                         
A.   Objection Deadline; Prosecution of Objections............................................PLAN-34  
B.   No Distributions Pending Allowance.......................................................PLAN-34  
C.   Disputed Claims Reserves.................................................................PLAN-35  

                                   ARTICLE XI                                                          

                      CONDITIONS PRECEDENT TO CONFIRMATION                                             
                       AND CONSUMMATION OF THE PLAN PLAN-35                                            
A.   Conditions to Confirmation...............................................................PLAN-35  
B.   Conditions to Effective Date.............................................................PLAN-35  
C.   Waiver of Conditions.....................................................................PLAN-37  

                                   ARTICLE XII                                                         

                        RETENTION OF JURISDICTION PLAN-37                                              

                                  ARTICLE XIII                                                         

                         EFFECTS OF CONFIRMATION PLAN-39                                               
A.   Binding Effect...........................................................................PLAN-39  
B.   Discharge of the Debtors.................................................................PLAN-39  
C.   Injunction...............................................................................PLAN-39  
D.   Releases And Satisfaction Of Subordination Rights........................................PLAN-40  
E.   Debtor Releases..........................................................................PLAN-40  
F.   Other Releases - M Capital, LLC and Affiliates...........................................PLAN-41  
G.   Indemnification Obligations..............................................................PLAN-41  
         1.   Prepetition Indemnification Obligations - Third Parties.........................PLAN-41  
         2.   Indemnification of Debtors' Directors and Officers..............................PLAN-41  
H.   Exculpation and Limitation of Liability..................................................PLAN-42  

                                   ARTICLE XIV                                                         

                         MISCELLANEOUS PROVISIONS PLAN-42                                              
A.   Bar Dates for Certain Claims.............................................................PLAN-42  
         1.   Administrative Claims...........................................................PLAN-42  
         2.   Professional Fee Claims.........................................................PLAN-43  
B.   Modifications and Amendments.............................................................PLAN-43  
C.   Non-Severability of Plan Provisions......................................................PLAN-43  
D.   Successors and Assigns...................................................................PLAN-43  
E.   Settlement Authority.....................................................................PLAN-43  
F.   Payment of Statutory Fees................................................................PLAN-44  
G.   Revocation, Withdrawal, or Non-Consummation..............................................PLAN-44  
H.   Service of Documents.....................................................................PLAN-44  
I.   Plan Supplement(s).......................................................................PLAN-46  
J.   Term of Injunctions or Stays.............................................................PLAN-46  
K.   Creditors' Committee.....................................................................PLAN-46  


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 TABLE OF EXHIBITS
 -----------------

Exhibit               Title                                                     
-------               -----                                                     

A            Schedule of Officers and Directors                       

B            Identification of Rejected Contracts and Rejected Leases 

C            Form of Certificate of Incorporation of Reorganized SLI  

D            Form of By-laws of Reorganized SLI                       

E            Form of Shareholder Agreement                            

F            Form of Litigation Trust Agreement                       

G            Term Sheet for New Common Shares                         

H            Term Sheet for Rights Offering                           

I            Term Sheet for Revolving Credit Facility                 

J            Non-Exclusive List of Litigation Rights                  

K            Equity Subscription Commitment Letter                    

L            Administrative Claims Escrow Agreement                   

M            Professional Fee  Escrow Agreement                       

Note: To the extent that the foregoing Exhibits are not annexed to this Plan,   
such Exhibits will be filed with the Court in Plan Supplement(s) filed on or    
before the date(s) set for the filing of such documents and forms of documents. 

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INTRODUCTION

       SLI, Inc. ("SLI") with its above-captioned United States subsidiaries
and affiliates (together with SLI, the "Debtors"), as debtors-in-possession in  
the above-captioned Chapter 11 cases, and their co- proponents, the Official    
Committee of Unsecured Creditors (the "Committee" and together with the Debtors,
the "Plan Proponents"), together propose the following Joint Chapter 11 Plan of 
Reorganization (the "Plan") to resolve the outstanding Claims and Interests.    
Please refer to the Disclosure Statement, distributed herewith, for a discussion
of the Debtors' history and businesses, the background, a summary and analysis  
of the Plan, and certain related matters. The Debtors and the Committee are the 
proponents of the Plan within the meaning of section 1129 of the Bankruptcy     
Code.                                                                           

      All holders of Claims are encouraged to read the Plan and Disclosure
Statement in their entireties before voting to accept or reject the Plan.       
Subject to certain restrictions and requirements set forth in section 1127 of   
the Bankruptcy Code and Fed. R. Bankr. P. 3019 and Articles XII.C and XIV.B of  
this Plan, the Debtors and the Committee reserve the right to alter, amend,     
modify, revoke or withdraw this Plan prior to its substantial consummation.     

 ARTICLE I

 DEFINITIONS, RULES OF INTERPRETATION,
 AND COMPUTATION OF TIME

A.       Rules of Construction                                                  

   For purposes of this Plan, except as expressly provided herein or
unless the context otherwise requires, all capitalized terms not otherwise      
defined shall have the meanings ascribed to them in Article I of this Plan or   
any Exhibit hereto. Any term used in this Plan that is not defined herein, but  
is defined in the Bankruptcy Code or the Bankruptcy Rules, shall have the       
meaning ascribed to that term in the Bankruptcy Code or the Bankruptcy Rules, as
applicable. Whenever the context requires, such terms shall include the plural  
as well as the singular number, the masculine gender shall include the feminine,
and the feminine gender shall include the masculine.                            

B.       Definitions                                                            

               1.1 "Administrative Claim" means a Claim against any Debtor
for payment of an administrative expense of a kind specified in section 503(b)  
or 1114(e)(2) of the Bankruptcy Code and entitled to priority under section     
507(a)(1) of the Bankruptcy Code, including, but not limited to, (a) the actual,
necessary costs and expenses, incurred after the Petition Date, of preserving   
the Estates of any of the Debtors and operating the businesses of any of the    
Debtors, including wages, salaries, or commissions for services rendered after  
the Petition Date, and amounts payable pursuant to the Severance/Retention      
Program, (b) Professional Fee Claims, (c) all fees and charges assessed against 
the Estates under 28 U. S. C. ss.1930, (d) all Allowed Claims that are entitled 
to be treated as Administrative Claims pursuant to a Final Order under section  
546(c)(2)(A) of the Bankruptcy Code, and (e) the Claim of the Investors for all 
fees and expenses (including without limitation attorneys fees and expenses)    
incurred in connection with the New Securities, the Revolving Credit Facility,  
the Rights Offering, any transactions pursuant to the Equity Subscription       
Commitment Letter, or otherwise in connection with their respective obligations 
under the Plan, which is an Allowed Claim pursuant to and upon confirmation of  
the Plan.                                                                       

               1.2 "Administrative Claims Bar Date" means the last date by
which a request for payment of an Administrative Claim may be filed, which date 
is sixty (60) calender days after the Confirmation Date.                        

                  1.3 "Administrative Claims Escrow" means the escrow account to
be established and funded on the Effective Date for the payment of Allowed      
Administrative Claims (other than Professional Fee Claims) in accordance with   
Article Vof the Plan.                                                           

                 1.4 "Administrative Claims Escrow Agreement" means the escrow
agreement attached to the Plan as Exhibit L pursuant to which the Administrative
Claims Escrow shall be administered.                                            

               1.5 "Administrative Claims Estimate"means (i) the aggregate
estimated amount of known Administrative Claims as of the Effective Date,       
exclusive of Professional Fee Claims and Administrative Claims expected to be   
paid in the ordinary course of business in accordance with the terms and        
conditions of any agreements relating thereto, and (ii) the reasonable fees and 
expenses of the Escrow Agent under the Administrative Claims Escrow Agreement,  
all as estimated by the Debtors prior to the Effective Date of the Plan.        

            1.6 "Administrative Claims Objection Deadline" means the
deadline for filing objections to requests for payment of Administrative Claims 
filed on or before the Administrative Claims Bar Date, which shall be sixty (60)
Business Days after the Administrative Claims Bar Date.                         

                 1.7 "Allowed" means, when used in reference to a Claim within
a particular Class, an Allowed Claim in the specified Class or of a specified   
type.                                                                           

                1.8 "Allowed Claim" means a Claim or any portion thereof (a)
that has been allowed by a Final Order, (b) that either (x) has been Scheduled  
as a liquidated, non-contingent, and undisputed Claim in an amount greater than 
zero on the Schedules, or (y) is the subject of a timely filed proof of claim as
to which either (i) no objection to its allowance has been filed (either by way 
of objection or amendment to the Schedules) within the periods of limitation    
fixed by the Bankruptcy Code or by any order of the Court or (ii) any objection 
to its allowance has been settled, waived through payment, or withdrawn, or has 
been denied by a Final Order, or (c) that is expressly allowed in a liquidated  
amount in the Plan; provided, however, that with respect to an Administrative   
Claim, "Allowed Claim" means an Administrative Claim as to which a timely       
written request for payment has been made in accordance with applicable bar     
dates for such requests set by the Court (if such written request is required)  
in each case as to which the Debtors, or any other party-in-interest (x) has not
interposed a timely objection or (y) has interposed a timely objection and such 
objection has been settled, waived through payment, or withdrawn, or has been   
denied by a Final Order.                                                        

     1.9 "Avoidance Action(s)" means, individually and
collectively, all avoidance or recovery actions under sections 542, 544, 545,   
547, 548, 549, 550, 551, and/or 553 of the Bankruptcy Code, or under similar or 
related state or federal statutes and common law, including, without limitation,
fraudulent transfer or conveyance laws.                                         

                 1.10 "Ballot" means each of the ballot forms distributed with
the Disclosure Statement to holders of Impaired Claims entitled to vote under   
Article II hereof in connection with the solicitation of acceptances of the     
Plan.                                                                           

             1.11 "Bankruptcy Code" means the Bankruptcy Reform Act of
1978, as codified in title 11 of the United States Code, 11 U.S.C. ss.ss.       
101-1330, as now in effect or hereafter amended prior to the Confirmation of the
Plan.                                                                           

                  1.12 "Bankruptcy Rules" means, collectively, the Federal Rules
of Bankruptcy Procedure and the Official Bankruptcy Forms, as amended, the      
Federal Rules of Civil Procedure, as amended, as applicable to the Chapter 11   
Cases or proceedings therein, and the Local Rules of the Court, as applicable to
the Chapter 11 Cases or proceedings therein, as the case may be.                

                1.13 "Bar Date" means March 31, 2003, the date designated by
the Court as the last date for filing Proofs of Claim in the Chapter 11 Cases.  

           1.14 "Business Day" means any day, excluding Saturdays,
Sundays or "legal holidays" (as defined in Fed. R. Bankr. P. 9006(a)), on which 
commercial banks are open for business in New York, New York.                   

             1.15 "Case Interest Rate" means the federal judgment rate
provided in 28 U.S.C. ss. 1961 in effect on the Petition Date, which is 3.82%.  

            1.16     "Cash" means legal tender of the United States.

                 1.17 "Chapter 11 Case(s)" means, individually, the Chapter 11
case of any Debtor, and collectively, the Chapter 11 cases of the Debtors       
jointly administered under Case No. 02-12608 (MFW).                             

                 1.18 "Claim" means a claim against any Debtor, whether or not
asserted, as defined in section 101(5) of the Bankruptcy Code.                  

                  1.19 "Claims Objection Deadline" means the deadline for filing
objections to Claims filed on or before the Bar Date, which shall be the date   
that is 180 days after the Confirmation Date and which date shall be subject to 
extension by Court order.                                                       

         1.20 "Class" means a category of holders of Claims or
Interests, as described in Article II hereof.                                   

                 1.21 "Class 4 Fund" means the sum of $1,225,000 to be paid on
the Effective Date from Effective Date Cash to the Litigation Trust pursuant to 
Article VIII of the Plan.                                                       

                1.22 "Collateral" means any property or interest in property
of a Debtor's Estate subject to a Lien to secure the payment or performance of a
Claim, which Lien is not subject to avoidance under the Bankruptcy Code or      
otherwise invalid under the Bankruptcy Code or applicable state law.            

          1.23 "Company" means, collectively, SLI and all of its
Subsidiary Debtors and Non- Debtor Subsidiaries.                                

                  1.24 "Confirmation" means entry by the Bankruptcy Court of the
Confirmation Order.                                                             

           1.25 "Confirmation Date" means the date of entry of the
Confirmation Order by the clerk of the Court.                                   

             1.26 "Confirmation Hearing" means the hearing to consider
confirmation of the Plan under section 1128 of the Bankruptcy Code.             

                  1.27 "Confirmation Order" means the order entered by the Court
confirming the Plan under section 1129 of the Bankruptcy Code.                  

               1.28 "Contingent" means, with reference to a Claim, a Claim
that has not accrued or is not otherwise payable and the accrual of which, or   
the obligation to make payment on which, is dependent upon a future event that  
may or may not occur.                                                           

                 1.29 "Court" means the United States Bankruptcy Court for the
District of Delaware or such other court as may have jurisdiction over the      
Chapter 11 Cases.                                                               

                  1.30 "Creditor" means any Person who holds a Claim against any
or all of the Debtors.                                                          

               1.31 "Creditors' Committee" means the official committee of
unsecured creditors for the Debtors, appointed by the United States Trustee in  
the Chapter 11 Cases under section 1102(a) of the Bankruptcy Code, and          
co-proponents of the Plan.                                                      

             1.32 "Cure" means the payment of Cash by a Debtor, or the
distribution of other property (as the parties may agree or the Court may       
order), in each case as necessary to cure defaults under an executory contract  
or an unexpired lease existing as of the Petition Date, which is necessary to   
permit that Debtor to assume such contract or lease under section 365(b) of the 
Bankruptcy Code.                                                                

                 1.33 "Debtor(s)" shall have the meaning ascribed to such term
in the Introduction to the Plan.                                                

                1.34 "DIP Facility" means the debtor-in-possession financing
facility provided by M Mini Funding LLC as documentation agent and Fleet        
National Bank as administrative agent for the Postpetition Lenders and          
authorized by the Final DIP Order.                                              

            1.35 "DIP Facility Agreement" means the Revolving Credit
Agreement, dated as of February 21, 2003, as the same may be modified from time 
to time, between the Debtors, M Mini Funding LLC as documentation agent and     
Fleet National Bank as administrative agent for the Postpetition Lenders.       

             1.36 "DIP Facility Claim" means a Claim of a Postpetition
Lender arising under or as a result of the DIP Facility Agreement.              

                 1.37 "Disallowed" with reference to a Claim means a Claim, or
any portion thereof, that (a) has been disallowed by a Final Order, (b) is      
scheduled at zero or as contingent, disputed, or unliquidated and as to which no
Proof of Claim has been filed by the Bar Date or deemed timely filed with the   
Court pursuant to either the Bankruptcy Code or any Final Order, or otherwise   
deemed timely filed with the Court pursuant to either the Bankruptcy Code or any
Final Order or under applicable law, or (c) is not Scheduled and as to which (i)
no Proof of Claim has been filed by the Bar Date or deemed timely filed with the
Court pursuant to either the Bankruptcy Code or any Final Order or under        
applicable law, or (ii) no request for payment of an Administrative Claim has   
been filed by the Administrative Claims Bar Date or deemed timely filed with the
Court pursuant to either the Bankruptcy Code or any Final Order or under        
applicable law.                                                                 

           1.38 "Disbursing Agent" means Reorganized SLI, the Plan
Administrator, or the person or persons identified by either Reorganized SLI or 
the Plan Administrator pursuant to Article VII of the Plan..                    

            1.39 "Disclosure Statement" means the written disclosure
statement that relates to the Plan, as approved by the Court under section 1125 
of the Bankruptcy Code and Fed. R. Bankr. P. 3017, as such disclosure statement 
may be amended, modified, or supplemented from time to time.                    

               1.40 "Disputed" with reference to a Claim means a Claim, or
any portion thereof, that has not been Allowed pursuant to the Plan or a Final  
Order, and:                                                                     

                (a) if no Claim has been, or deemed to have been filed, by
the applicable Bar Date, which has been or hereafter is listed on the Schedules 
as unliquidated, contingent, or disputed, and which has not been resolved by    
written agreement of the parties or an order of the Court;                      

                  (b) if a Claim has been filed, or deemed to have been filed,
by the applicable Bar Date (i) a Claim for which a corresponding Claim has been 
listed on the Schedules as unliquidated, contingent or disputed; (ii) a Claim   
for which a corresponding Claim has been listed on the Schedules as other than  
unliquidated, contingent or disputed, but the amount of such Claim as asserted  
in the Claim varies from the amount of such Claim as listed in the Schedules; or
(iii) a Claim as to which a Debtor has timely filed an objection or request for 
estimation in accordance with the Plan, the Bankruptcy Code, the Bankruptcy     
Rules, and any orders of the Court, or which is otherwise disputed by a Debtor  
in accordance with applicable law, which objection, request for estimation or   
dispute has not been withdrawn, or determined by a Final Order;                 

               (c) if a request for payment of an Administrative Claim has
been filed or deemed to have been filed by the Administrative Claims Bar Date,  
an Administrative Claim as to which a Debtor has timely filed an objection or   
request for estimation in accordance with the Plan, the Bankruptcy Code, the    
Bankruptcy Rules, and any orders of the Court, or which is otherwise disputed by
a Debtor in accordance with applicable law, which objection, request for        
estimation or dispute has not been withdrawn, or determined by a Final Order;   

                (d) for which a claim was required to be filed by order of
the Court, but as to which a Claim was not timely or properly filed; or         

                  (e) that is disputed in accordance with the provisions of this
Plan.                                                                           

                 1.41 "Disputed Claim Amount" means (a) if a liquidated amount
is set forth in the Proof of Claim relating to a Disputed Claim, (i) the        
liquidated amount set forth in the Proof of Claim relating to the Disputed      
Claim; (ii) an amount agreed to by the Debtors, the Reorganized Debtors or Plan 
Administrator, as applicable, and the holder of such Disputed Claim; or (iii) if
a request for estimation is filed by any party, the amount at which such Claim  
is estimated by the Bankruptcy Court; (b) if no liquidated amount is set forth  
in the Proof of Claim relating to a Disputed Claim, (i) an amount agreed to by  
the Debtors, Reorganized Debtors or Plan Administrator, as applicable, and the  
holder of such Disputed Claim or (ii) the amount estimated by the Bankruptcy    
Court with respect to such Disputed Claim; or (c) if the Claim was listed on the
Schedules as unliquidated, contingent or disputed and no Proof of Claim was     
filed, or deemed to have been filed, by the applicable Bar Date and the Claim   
has not been resolved by written agreement of the parties or an order of the    
Bankruptcy Court, zero.                                                         

                  1.42 "Disputed Claims Reserve" means a reserve established and
maintained by the Disbursing Agent in accordance with Article X.C hereof.       

                 1.43 "Distribution Date" means the date, occurring as soon as
practicable after the Effective Date, upon which initial distributions are made 
by the Disbursing Agent to holders of Allowed Claims entitled to receive        
distributions under the Plan.                                                   

             1.44 "Distribution Record Date" means the record date for
purposes of making distributions under the Plan on account of Allowed Claims,   
which date shall be the Confirmation Date or such other date designated in the  
Confirmation Order or any subsequent Court order.                               

               1.45 "Effective Date" means the first Business Day on which
all conditions to the consummation of the Plan set forth in Article X.B hereof  
have been satisfied or waived.                                                  

                 1.46 "Effective Date Cash" means Cash that is (i) property of
the Debtors' Estates available to pay Allowed Claims, and (ii) the Investor     
Contribution.                                                                   

                 1.47 "Equity Subscription Commitment Letter" means the letter
attached as Exhibit K to the Plan pursuant to which the Investors have committed
to purchase up to 21% of the New Common Shares, to the extent not otherwise     
sold, in exchange for the payment of the Investor Contribution on the Effective 
Date in an amount sufficient (i) to fully fund the Administrative Claims Escrow 
and the Professional Fee Escrow, and (ii) to pay in full the DIP Facility Claims
and the Litigation Trust Funds to be transferred to the Litigation Trust.       

                  1.48 "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended, 29 U.S.C. ss.ss. 1301-1461 (2000).                         

        1.49 "Escrow Agent" means the escrow agent under the
Administrative Claims Escrow Agreement and the Professional Fee Escrow          
Agreement.                                                                      

                  1.50 "Estate(s)" means, individually, the estate of any Debtor
in these Chapter 11 Cases, and, collectively, the estates of the Debtors created
under section 541 of the Bankruptcy Code.                                       

            1.51 "Face Amount" means (i) when used in reference to a
Disputed or Disallowed Claim, either the full stated amount claimed by the      
holder of such Claim in any proof of claim timely filed with the Court or       
otherwise deemed timely filed by any Final Order of the Court or other          
applicable bankruptcy law, or the amount of such Claim as estimated by the Court
under section 502(c) of the Bankruptcy Code, and (ii) when used in reference to 
an Allowed Claim, the allowed amount of such Claim.                             

         1.52 "Final DIP Order" means the order entered by the
Bankruptcy Court on or about March 13, 2003, authorizing and approving the DIP  
Facility and the agreements related thereto.                                    

                  1.53 "Final Order" means an order or judgment of the Court, as
entered on the docket in the Chapter 11 Cases, the operation or effect of which 
has not been stayed, reversed, or amended and as to which order or judgment (or 
any revision, modification, or amendment thereof) the time to appeal or seek    
review or rehearing has expired and as to which no appeal or petition for review
or rehearing was filed or, if filed, remains pending.                           

               1.54 "General Unsecured Claim" means a Claim against any or
all of the Debtors, that is not an Administrative Claim, Priority Tax Claim, DIP
Facility Claim, Other Priority Claim, Secured Lender Claim, Other Secured Claim,
Intercompany Claim, Insured Claim, or Subordinated Claim.                       

               1.55 "Identified Directors and Officers" means the officers
and directors identified on Exhibit A hereto.                                   

                1.56 "Impaired"when used with reference to a Claim, Interest
or a Class, means a Claim, Interest or a Class that is impaired within the      
meaning of section 1124 of the Bankruptcy Code.                                 

                 1.57 "Indemnification Obligation" means any obligation of any
of the Debtors to indemnify, reimburse or provide contribution to any present or
former officer, director or employee, or any present or former professionals,   
advisors or representatives of the Debtors, pursuant to by-laws, articles of    
incorporation, contract or otherwise as may be in existence immediately prior to
the Petition Date.                                                              

              1.58 "Insured Claim" means any Claim or portion of a Claim
that is insured under the Debtors' insurance policies, but only to the extent of
such coverage.                                                                  

                  1.59 "Intercompany Claim" means (i) any Claim held by a Debtor
against another Debtor, including, without limitation: (a) any account          
reflecting intercompany book entries by a Debtor with respect to another Debtor,
(b) any Claim not reflected in such book entries that is held by a Debtor       
against another Debtor, and (c) any derivative Claim asserted by or on behalf of
one Debtor against another Debtor; (ii) any Claim held by a Non-Debtor          
Subsidiary against a Debtor, including, without limitation: (a) any account     
reflecting intercompany book entries by a Non-Debtor Subsidiary with respect to 
any Debtor, (b) any Claim not reflected in such book entries that is held by a  
Non-Debtor Subsidiary against any Debtor, and (c) any derivative Claim asserted 
by or on behalf of one Non-Debtor Subsidiary against any Debtor; and (iii) any  
interest in a Subsidiary.                                                       

               1.60 "Interest" means the legal, equitable, and contractual
rights of any Person with respect to any of the Old Common Shares.              

                1.61 "Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended.                                                            

                 1.62 "Investors" means, collectively, DDJ Capital Management,
LLC, Cerberus Capital Management, LLC, and JPMorgan Securities, Inc., in their  
respective capacities under the Plan.                                           

                 1.63 "Investor Contribution" means all Cash to be paid by the
Investors pursuant to the Equity Subscription Commitment Letter.                

      1.64     "IRS" means the Internal Revenue Service.

                 1.65 "Lien" means a charge against or interest in property to
secure payment of a debt or performance of an obligation.                       

                1.66 "Litigation Rights" means all claims, rights of action,
suits, and proceedings, whether in law or equity, whether known or unknown, that
any Estate or Debtor may hold against any Person.                               

                 1.67 "Litigation Trust" means the trust that is to be created
pursuant to Article VIII hereof to be administered by the Plan Administrator.   

                  1.68 "Litigation Trust Funds" means the Cash to be paid to the
Litigation Trust on the Effective Date pursuant to Article VIII.D of the Plan.  

        1.69 "Litigation Trust Agreement" means that certain
Agreement, substantially in the form attached hereto as Exhibit F, pursuant to  
which, among other things, the Plan Administrator shall investigate and pursue  
the Preference Litigation Trust Assets and the Other Litigation Trust Assets and
make distributions to Allowed Class 4 General Unsecured Claims, and which will, 
among other things, set forth a mechanism by which, and the conditions on which,
the Reorganized Debtors may designate claims that will not be pursued.          

                  1.70 "Management Incentive Option Reserve" means up to ten per
cent (10%) of the authorized capital stock of any Reorganized Subsidiary Debtor 
that is an operating company, as a reserve for the issuance of management       
incentive stock options, to be determined and directed by the board of directors
of the related Reorganized Subsidiary Debtor.                                   

                1.71 "ML Sale" means the proposed sale by the Debtors of the
Miniature Lighting business to M Capital, LLC or an affiliate, as described in  
the ML Sale Motion.                                                             

             1.72 "ML Sale Documents" means (i) that certain letter of
intent agreement dated December 4, 2002 among SLI, VCH International Limited,   
and M Capital, LLC; and (ii) that certain asset purchase agreement between SLI, 
Chicago Minature Optoelectronic Technologies, Inc., and M-Lite LLC dated March  
1, 2003, and attached as an exhibit to the ML Sale Motion.                      

                  1.73 "ML Sale Motion" means the Debtors' motion dated March 1,
2003, Docket No. 437.                                                           

                  1.74 "Net Other Litigation Proceeds" means the total amount of
proceeds received by the Litigation Trust on account of Other Litigation Trust  
Assets minus the amount of the Other Litigation Reimbursement Obligation and the
Other Litigation Trust Expenses.                                                

             1.75 "Net Preference Litigation Proceeds" means the total
amount of proceeds received by the Litigation Trust on account of Preference    
Litigation Trust Assets minus the amount of the Preference Litigation           
Reimbursement Obligation and the Preference Litigation Trust Expenses.          

               1.76 "New Common Shares" means the _____ million New Common
Shares to be issued by Reorganized SLI in connection with the Plan.             

                  1.77 "Non-Debtor Subsidiaries" means, collectively, the direct
and indirect subsidiaries of SLI that did not commence Chapter 11 Cases,        
including without limitation those listed on Exhibit C to the Disclosure        
Statement.                                                                      

          1.78     "New Securities" means the New Common Shares.

              1.79 "Old Common Shares" means the class of shares of SLI,
Inc., designated as its common shares, that were issued and outstanding as of   
the Petition Date.                                                              

              1.80 "Other Litigation Expense Advance" means the $150,000
which shall be advanced by the Debtors' Estates to the Litigation Trust on the  
Effective Date to fund the investigation, and to the extent available,          
prosecution and administration, of the Other Litigation Trust Assets.           

              1.81 "Other Litigation Reimbursement Obligation" means the
obligation of the Litigation Trust to repay to the Reorganized Debtors or the   
Secured Lenders the Other Litigation Expense Advance from the first proceeds    
received from the Other Litigation Trust Assets.                                

                 1.82 "Other Litigation Trust Assets" means those assets owned
by the Litigation Trust, including without limitation, the Other Litigation     
Expense Advance to be paid to the Litigation Trust pursuant to the Plan, all    
causes of action of the Debtors other than those arising under sections 547 or  
550 of the Bankruptcy Code, and any and all proceeds of the foregoing and       
interest accruing with respect thereto, but excluding any and all Claims        
released under the Plan; provided, however, that such term shall not include (i)
trade accounts receivable incurred in the ordinary course of the Debtors'       
business, or (ii) causes of action against any Non-Debtor Subsidiary.           

               1.83 "Other Litigation Trust Expenses" means all reasonable
costs, expenses and fees incurred by the Plan Administrator in the              
administration of its duties in respect of Other Litigation Trust Assets under  
the Litigation Trust Agreement.                                                 

                1.84 "Other Priority Claim" means a Claim against any Debtor
entitled to priority under section 507(a) of the Bankruptcy Code, other than an 
Administrative Claim or a Priority Tax Claim.                                   

              1.85 "Other Secured Claim" means a Secured Claim against a
Debtor other than a Secured Lender Claim.                                       

                  1.86 "Ordinary Course Professionals" means those professionals
authorized to be paid by the Debtors pursuant to the Ordinary Course            
Professional s Order.                                                           

                1.87 " Ordinary Course Professional s Order" means the order
entered by the Bankruptcy Court on December 9, 2002, Docket No. 279, as         
supplemented or modified.                                                       

               1.88 "Person" means Person as defined in section 101(41) of
the Bankruptcy Code.                                                            

             1.89 "Petition Date" means September 9, 2002, the date on
which the Debtors filed their petitions for relief commencing the Chapter 11    
Cases.                                                                          

            1.90 "Plan" means this plan proposed by the Debtors, the
Committee and the Investors for the resolution of the outstanding Claims and    
Interests in the Chapter 11 Cases, as such plan may be amended from time to time
in accordance with the Bankruptcy Code and the Bankruptcy Rules.                

          1.91 "Plan Administrator" means such party as shall be
designated as such by the Investors and the Creditors' Committee in the Plan    
Supplement and mutually acceptable thereto.                                     

               1.92 "Plan Proponents" means the Debtors and the Committee.

         1.93 "Plan Supplement(s)" means the compilation(s) of
documents and forms of documents, specified in the Plan, that the Debtors will  
file with the Court on or before the date that is (a) ten (10) days prior to the
date of the hearing on confirmation of this Plan, or (b) set by the Court for   
the filing of such documents and forms of documents.                            

               1.94 "Postpetition Lenders" means the Lenders as defined in
the DIP Facility Agreement.                                                     

              1.95 "Pre-Effective Period" shall mean the period from the
Confirmation Date to the Effective Date.                                        

                  1.96 "Preference Litigation Expense Advance" means the $75,000
which shall be advanced by the Debtors' Estates to the Litigation Trust on the  
Effective Date to fund the investigation, prosecution and administration of the 
Preference Litigation Trust Assets.                                             

               1.97 "Preference Litigation Reimbursement Obligation" means
the obligation of the Litigation Trust to repay to the Reorganized Debtors or   
the Secured Lenders the Preference Litigation Expense Advance from the first    
proceeds received on account of Preference Litigation Trust Assets pursued by   
the Litigation Trust.                                                           

                1.98 "Preference Litigation Trust Assets" means those assets
owned by the Litigation Trust, including without limitation, the Preference     
Litigation Expense Advance to be paid to the Litigation Trust pursuant to the   
Plan, all causes of action of the Debtors under sections 547 or 550 of the      
Bankruptcy Code, except such causes of action against any Non-Debtor Subsidiary,
and any and all proceeds of the foregoing and interest accruing with respect    
thereto, but excluding any and all Claims released under the Plan.              

         1.99 "Preference Litigation Trust Expenses" means all
reasonable costs, expenses and fees incurred by the Plan Administrator in the   
administration of its duties in respect of Preference Litigation Trust Assets   
under the Litigation Trust Agreement.                                           

                 1.100 "Prepetition Credit Agreement" means the Second Amended
and Restated Credit Agreement, dated as of October 29, 1999 (as amended,        
supplemented or otherwise modified) among SLI and the Secured Lenders, among    
others.                                                                         

                 1.101 "Prepetition Credit Facility" means the credit facility
provided to SLI, as borrower, by the Secured Lenders pursuant to the Prepetition
Credit Agreement.                                                               

                1.102 "Priority Tax Claim" means a Claim that is entitled to
priority under section 507(a)(8) of the Bankruptcy Code.                        

               1.103 "Professional" means any professional employed in the
Chapter 11 Cases pursuant to sections 327, 363 or 1103 of the Bankruptcy Code or
otherwise and any professionals seeking compensation or reimbursement of        
expenses in connection with the Chapter 11 Cases pursuant to section 503(b)(4)  
of the Bankruptcy Code, other than Ordinary Course Professionals.               

                  1.104 "Professional Fee Claim" means a Claim of a Professional
pursuant to sections 327, 328, 330, 331, 503(b), or 1103 of the Bankruptcy Code 
for compensation or reimbursement of costs and expenses relating to services    
performed after the Petition Date and prior to and including the Effective Date.

               1.105 "Professional Fee Estimate" means (i) with respect to
any Professional, a good- faith estimate of such Professional's accrued unpaid  
Professional Fees (other than any Success Fees) to be provided by each          
Professional in writing to the Debtors prior to the commencement of the         
Confirmation Hearing, or in the absence of such a writing, to be prepared by the
Debtors, and (ii) collectively, the sum of all individual Professional Fee      
Estimates, plus the Debtors' estimate of the accrued unpaid fees and expenses of
the Escrow Agent under the Professional Fee Escrow Agreement.                   

                1.106 "Professional Fee Escrow " means the escrow account to
be established and funded on the Effective Date for the payment of Allowed      
Professional Fee Claims in accordance with Article V of the Plan.               

              1.107 "Professional Fee Escrow Agreement" means the escrow
agreement attached to the Plan as Exhibit M pursuant to which the Professional  
Fee Escrow shall be administered.                                               

                1.108 "Proof of Claim" means the proof of claim that must be
filed on or before the Bar Date.                                                

                1.109 "Pro Rata" means, at any time, the proportion that the
Face Amount of a Claim in a particular Class bears to the aggregate Face Amount 
of all Claims (including Disputed Claims, but excluding Disallowed Claims) in   
such Class, unless the Plan provides otherwise.                                 

               1.110 "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 30 days of 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.                         

           1.111 "Reinstated" or "Reinstatement" means (i) leaving
unaltered the legal, equitable, and contractual rights to which a Claim entitles
the holder of such Claim or Interest so as to leave such Claim or Interest      
unimpaired in accordance with section 1124 of the Bankruptcy Code or (ii)       
notwithstanding any contractual provision or applicable law that entitles the   
holder of such Claim to demand or receive accelerated payment of such Claim or  
Interest after the occurrence of a default (a) curing 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; (b) reinstating the      
maturity of such Claim or Interest as such maturity existed before such default;
(c) compensating the holder of such Claim or Interest for any damages incurred  
as a result of any reasonable reliance by such holder on such contractual       
provision or such applicable law; and (d) not otherwise altering the legal,     
equitable, or contractual rights to which such Claim or Interest entitles the   
holder of such Claim or Interest; provided, however, that any contractual right 
that does not pertain to the payment when due of principal and interest on the  
obligation on which such Claim or Interest is based, including, but not limited 
to, financial covenant ratios, negative pledge covenants, covenants or          
restrictions on merger or consolidation, and affirmative covenants regarding    
corporate existence prohibiting certain transactions or actions contemplated by 
the Plan, or conditioning such transactions or actions on certain factors, shall
not be required to be reinstated in order to accomplish Reinstatement.          

          1.112 "Reorganized Debtor(s)" means, individually, any
reorganized Debtor, and, collectively, Reorganized SLI and the Reorganized      
Subsidiary Debtors on or after the Effective Date.                              

         1.113 "Reorganized SLI" means reorganized SLI, or its
successor, on and after the Effective Date.                                     

                1.114 "Reorganized Subsidiary Debtors" means the reorganized
Subsidiary Debtors, or their successors, on and after the Effective Date.       

           1.115 "Revolving Credit Facility" means the new secured
revolving credit facility with a maximum availability of $15.0 million, to be   
entered into on the Effective Date by the Reorganized Debtors and the lenders   
party thereto on the terms and conditions set forth on Exhibit I to the Plan.   

                1.116 "Revolving Credit Facility Agreement" means the credit
agreement governing the Revolving Credit Facility to be entered into by the     
Reorganized Debtors and the lenders party thereto on the Effective Date.        

                  1.117 "Rights Offering" means the offering of up to ______ New
Common Shares to holders of Allowed Class 3 Secured Lender Claims on the terms  
and conditions set forth on Exhibit H to the Plan.                              

                  1.118 "Scheduled" means, with respect to any Claim, the status
and amount, if any, of that Claim as set forth in the Schedules.                

       1.119 "Schedules" means the schedules of assets and
liabilities and the statements of financial affairs filed in the Court by the   
Debtors on or about October 24, 2002, as such schedules or statements have been 
or may be further amended or supplemented from time to time in accordance with  
Fed. R. Bankr. P. 1009 or orders of the Court.                                  

                 1.120 "Secured Claim" means a Claim that is secured by a Lien
upon Collateral to the extent of the value of the Collateral and a Claim of a   
holder that has a valid right of setoff enforceable under section 553 of the    
Bankruptcy Code.                                                                

               1.121 "Secured Lenders" means the holders of secured claims
arising under the Prepetition Credit Agreement and the other Loan Documents (as 
defined therein).                                                               

                 1.122 "Secured Lender Claims" means the Claims of the Secured
Lenders secured by the Secured Lender Collateral, including any deficiency claim
with respect thereto.                                                           

              1.123 "Secured Lender Collateral" means (i) the Collateral
described in the Prepetition Credit Agreement, to the extent that such          
Collateral, as of the Effective Date, remains encumbered by valid, enforceable  
and perfected Liens of the Secured Lenders in the Debtors' interest in such     
property that are not avoidable under the Bankruptcy Code or applicable         
non-bankruptcy law, and (ii) the Replacement Liens (as defined in the Final DIP 
Order).                                                                         

               1.124 "Securities Act" means the Securities Act of 1933, 15
U.S.C. ss.ss. 77a-77aa, as now in effect or hereafter amended.                  

                  1.125 "Severance/Retention Program" means the postpetition key
employee severance/retention program approved by orders dated October 23, 2002, 
Docket No. 199, and December 10, 2002, Docket No. 278.                          

                  1.126 "Shareholder Agreement" means an agreement to be entered
into among shareholders of Reorganized SLI and Reorganized SLI in substantially 
the form set forth in Exhibit E to the Plan.                                    

                1.127 "SLI" means SLI, Inc., an Oklahoma corporation with an
office at 500 Chapman Street, Canton, Massachusetts 02021, and the direct or    
indirect parent company of each Subsidiary Debtor and each Non-Debtor           
Subsidiary.                                                                     

           1.128 "Solicitation" means the solicitation by the Plan
Proponents of acceptances of the Plan.                                          

               1.129 "Subordinated Claim" means any Claim (i) subordinated
pursuant to section 510(b) or 510(c) of the Bankruptcy Code, which shall include
any Claim arising from the rescission of a purchase or sale of any Old Common   
Shares, any Claim for damages arising from the purchase or sale of any Old      
Common Shares, or any Claim for reimbursement, contribution or indemnification  
on account of any such Claim; or (ii) for punitive or exemplary damages or for a
fine or penalty.                                                                

            1.130 "Subsidiaries" means, collectively, the Subsidiary
Debtors and the Non-Debtor Subsidiaries.                                        

            1.131 "Subsidiary Debtors" means the direct and indirect
subsidiaries of SLI listed on Exhibit B to the Disclosure Statement, each of    
which is a Debtor.                                                              

                1.132 "Subsidiary Interests" means, collectively, the issued
and outstanding shares of stock of the Subsidiary Debtors directly or indirectly
owned by SLI as of the Petition Date.                                           

               1.133 "Substantial Contribution Claim" means a Claim, under
section 503(b)(3), (4), or (5) of the Bankruptcy Code, for compensation or      
reimbursement of expenses incurred in making a substantial contribution in the  
Chapter 11 Cases.                                                               

                  1.134 "Substantive Consolidation Order" means the order of the
Court, which may be the Confirmation Order, authorizing substantive             
consolidation of the Estates pursuant to Article V.A. hereof.                   

                1.135 "Success Fees" means any Claim by a Professional for a
success fee or incentive fee calculated or payable based upon the consummation  
of a major transaction, such as the confirmation of the Plan or the sale of all 
or substantially all of the assets of a Debtor, and does not mean hourly fees,  
monthly allowances, or other periodic fees based upon time actually spent by a  
Porfessional rendering services, or expenses incurred.                          

              1.136 "Trust Advisory Board" means the board that is to be
created pursuant to Article VIII hereof for the purpose of advising the Plan    
Administrator with respect to decisions affecting the Litigation Trust.         

                 1.137 "Unimpaired" with reference to a Claim or Class means a
Claim or Class that is not impaired within the meaning of section 1124 of the   
Bankruptcy Code.                                                                

                1.138 "Voting Deadline" means the date and time, as fixed by
an order of the Court and set forth in the Disclosure Statement, by which all   
Ballots to accept or reject the Plan must be received in order to be counted.   

C.       Rules of Interpretation                                                

       For purposes of the Plan (a) any reference in the Plan to a contract,
instrument, release, indenture, or other agreement or document being in a       
particular form or on particular terms and conditions means that such document  
shall be substantially in such form or substantially on such terms and          
conditions, (b) 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, (c) unless otherwise specified, all      
references in the Plan to Sections, Articles, Schedules, and Exhibits are       
references to Sections, Articles, Schedules, and Exhibits of or to the Plan, (d)
the words "herein" and "hereto" refer to the Plan in its entirety rather than to
a particular portion of the Plan, (e) 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, and (f) the rules of  
construction set forth in section 102 of the Bankruptcy Code and in the         
Bankruptcy Rules shall apply.                                                   

D.       Computation of Time                                                    

    In computing any period of time prescribed or allowed by the Plan,
the provisions of Fed. R. Bankr. P. 9006(a) shall apply.                        

E.       Governing Law                                                          

         Unless a rule of law or procedure is supplied by federal law (including
the Bankruptcy Code and Bankruptcy Rules) and except as otherwise provided      
herein or therein, the laws of (i) the State of Delaware shall govern the       
construction and implementation of the Plan and any agreements, documents, and  
instruments executed in connection with the Plan and (ii) the laws of the state 
of incorporation of each Debtor shall govern corporate governance matters with  
respect to such Debtor, in either case without giving effect to the principles  
of conflicts of law thereof.                                                    

ARTICLE II

CLASSIFICATION OF CLAIMS AND INTERESTS

A.       Introduction                                                           

      All Claims and Interests, except DIP Facility Claims, Administrative
Claims, Priority Tax Claims, and Intercompany Claims, are placed in the Classes 
set forth below. In accordance with section 1123(a)(1) of the Bankruptcy Code,  
DIP Facility Claims, Administrative Claims, Priority Tax Claims, and            
Intercompany Claims, as described below, have not been classified.              

        A Claim or Interest is placed in a particular Class only to the extent
that the Claim or Interest falls within the description of that Class, and is   
classified in other Classes to the extent that any portion of the Claim or      
Interest falls within the description of such other Classes. A Claim is also    
placed in a particular Class for the purpose of receiving distributions pursuant
to the Plan only to the extent that such Claim is an Allowed Claim in that Class
and such Claim has not been paid, released, or otherwise settled prior to the   
Effective Date. Except and to the extent otherwise specified in the Plan, all   
Allowed Claims shall be paid from Effective Date Cash.                          

B. Unclassified Claims (not entitled to vote on the Plan)                       

1.       DIP Facility Claims                                  

2.       Administrative Claims                                

3.       Priority Tax Claims                                  

4.       Intercompany Claims                                  

C.       Unimpaired Classes of Claims (deemed to have accepted the Plan and not 
entitled to vote on the Plan)                                 

1.       Class 1:  Other Priority Claims                      

  Class 1 consists of all Other Priority Claims.

2.       Class 2:  Other Secured Claims                       

                 Class 2 consists of all Secured Claims other than the Secured
Lender Claims.                                                                  

D. Impaired Classes of Claims (entitled to vote on the Plan)                    

1.       Class 3:  Secured Lender Claims                      

  Class 3 consists of all Secured Lender Claims.

2.       Class 4:  General Unsecured Claims                   

     Class 4 consists of all General Unsecured Claims.

E. Impaired Classes of Claims (not entitled to vote on the Plan)                

1.       Class 5: Subordinated Claims                         

Class 5 consists of all Subordinated Claims.

F. Impaired Classes of Interests (not entitled to vote on the Plan)             

1.       Class 6:  Interests                                  

Class 6 consists of all Interests.          

 ARTICLE III

 TREATMENT OF CLAIMS AND INTERESTS

A.       Unclassified Claims                                                    

1.       DIP Facility Claims                                  

      On the Effective Date, or as soon thereafter as is practicable, each
holder of an Allowed DIP Facility Claim shall receive in full satisfaction,     
settlement, release and discharge of, and in exchange for such Allowed DIP      
Facility Claim, (i) Effective Date Cash equal to the unpaid portion of such     
Allowed DIP Facility Claim, or (ii) such other treatment as to which such holder
and the Debtors or the Reorganized Debtors shall have agreed upon in writing.   

2.       Administrative Claims                                

         Except as otherwise provided herein, and subject to the requirements of
this Plan, on, or as soon as reasonably practicable after the later of (i) the  
Distribution Date or (ii) the date such Administrative Claim becomes an Allowed 
Administrative Claim, a holder of an Allowed Administrative Claim shall receive 
from the Administrative Claims Escrow, in full satisfaction, settlement,        
release, and discharge of and in exchange for such Allowed Administrative Claim,
(i) Effective Date Cash equal to the unpaid portion of the Face Amount of such  
Allowed Administrative Claim, or (ii) such other treatment as to which such     
holder and the Debtors or the Reorganized Debtors shall have agreed upon in     
writing; provided, however, that Allowed Administrative Claims with respect to  
liabilities incurred by a Debtor in the ordinary course of business during the  
Chapter 11 Cases shall be paid in the ordinary course of business in accordance 
with the terms and conditions of any agreements relating thereto (x) prior to   
the Effective Date, by the Debtors, and (y) subsequent to the Effective Date, by
the Reorganized Debtors. Allowed Professional Fee Claims shall be paid from the 
Professional Fee Escrow pursuant to Article V. Except as otherwise provided     
herein, and subject to the requirements of this Plan, on, or as soon as         
reasonably practicable after the date a Success Fee becomes and Allowed Claim,  
the Reorganized Debtors shall pay Cash to the holder of such Allowed Success Fee
Claim in an amount equal to the amount of such Allowed Success Fee Claim.       

3.       Priority Tax Claims                                  

       Except to the extent that an Allowed Priority Tax Claim has been paid
by the Debtors prior to the Distribution Date, a holder of an Allowed Priority  
Tax Claim shall be entitled to receive from the Reorganized Debtors, in full    
satisfaction, settlement, release, and discharge of and in exchange for such    
Allowed Priority Tax Claim, (i) deferred Cash payments over a period not        
exceeding six years after the date of assessment of such Allowed Priority Tax   
Claim in an aggregate principal amount equal to the Face Amount of such Allowed 
Priority Tax Claim, plus interest on the unpaid portion thereof at the Case     
Interest Rate from the Effective Date through the date of payment thereof, or   
(ii) such other treatment as to which such holder and the Debtors or the        
Reorganized Debtors shall have agreed upon in writing. If deferred Cash payments
are made to a holder of an Allowed Priority Tax Claim, payments of principal    
shall be made in annual installments, each such installment amount being equal  
to ten percent (10%) of such Allowed Priority Tax Claim plus accrued and unpaid 
interest, with the first payment to be due on the first anniversary of the      
Distribution Date, or as soon thereafter as is practicable, and subsequent      
payments to be due on the anniversary of the first payment date or as soon      
thereafter as is practicable; provided, however, that any installments remaining
unpaid on the date that is six years after the date of assessment of the tax    
that is the basis for the Allowed Priority Tax Claim shall be paid on the first 
Business Day following such date, or as soon as practicable thereafter, together
with any accrued and unpaid interest to the date of payment; and provided,      
further, that the Reorganized Debtors shall have the right to pay any Allowed   
Priority Tax Claim, or any remaining balance of any Allowed Priority Tax Claim, 
in full at any time on or after the Effective Date without premium or penalty;  
and provided, further, that any Claim or demand for payment of a penalty (other 
than a penalty of the type specified in section 507(a)(8)(G) of the Bankruptcy  
Code) shall be disallowed pursuant to this Plan, and the holder of an Allowed   
Priority Tax claim shall not assess or attempt to collect such penalty from the 
Debtors, the Estates, the Reorganized Debtors or any officer, director or       
affiliate of any thereof, or any of them.                                       

4.       Intercompany Claims                                  

        On the Effective Date, all Intercompany Claims shall be Reinstated and
reaffirmed to the extent not otherwise paid in the ordinary course of business  
in accordance with the terms of any agreement relating thereto, and all         
Litigation Rights with respect thereto shall vest in the Reorganized Debtors    

B.       Unimpaired Claims                                                      

1.       Class 1:  Other Priority Claims                      

     On or as soon as reasonably practicable after, the later of (i) the
Distribution Date or (ii) the Quarterly Distribution Date immediately following 
the date such Other Priority Claim becomes an Allowed Other Priority Claim, a   
holder of an Allowed Other Priority Claim shall receive from the Reorganized    
Debtors, in full satisfaction, settlement, release, and discharge of, and in    
exchange for such Allowed Other Priority Claim, (i) Cash equal to the unpaid    
portion of the Face Amount of such Allowed Other Priority Claim, or (ii) such   
other treatment as to which such holder and the Debtors or the Reorganized      
Debtors shall have agreed upon in writing.                                      

2.       Class 2:  Other Secured Claims                       

     On the Distribution Date or as soon thereafter as is practicable, a
holder of an Other Secured Claim shall, in full satisfaction, settlement,       
release, and discharge of, and in exchange for, such Allowed Other Secured      
Claim, in the sole discretion of the Reorganized Debtors or the Debtors, with   
the prior written consent of the Investors, (i) have its Allowed Other Secured  
Claim Reinstated or (ii) receive such other treatment as to which such holder   
and the Debtors (with the prior written consent of the Investors from and after 
the date of this Plan) or the Reorganized Debtors shall have agreed upon in     
writing.                                                                        

C.       Impaired Claims                                                        

1.       Class 3:  Secured Lender Claims                      

         On the Distribution Date, or as soon thereafter as is
practicable, each holder of a Secured Lender Claim shall, in full satisfaction, 
settlement, release, and discharge of, and in exchange for, such Allowed Secured
Lender Claim, receive (i) from the Debtors, its Pro Rata share of one hundred   
percent (100%) of the New Common Shares, subject to dilution, pursuant to the   
Rights Offering and the Equity Subscription Commitment Letter, to not less than 
seventy-nine percent (79%) of the New Common Shares, (ii) from the Litigation   
Trust, its Pro Rata beneficial interest in the Litigation Trust and right to    
distribution in respect of fifty percent (50%) of the Net Preference Litigation 
Proceeds, and (iii) from the Litigation Trust, its Pro Rata beneficial interest 
in the Litigation Trust and right to distribution in respect of seventy-five    
percent (75%) of the Net Other Litigation Proceeds upon the terms and conditions
set forth in Articles VIII and IX hereto and in the Litigation Trust Agreement. 
Upon the Effective Date, the proofs of claim filed in respect of the Secured    
Lender Claims are Allowed as set forth therein. Upon the Effective Date, the    
holders of Class 3 Claims voting in favor of the Plan shall (i) be deemed to be 
released by all parties from any potential Avoidance Action in respect of such  
holder's Secured Lender Claims, and (ii) shall be deemed to have elected secured
treatment as set forth herein in accordance with Bankruptcy Code section        
1111(b). The binding effect of such deemed election on Class 3 shall be         
determined in accordance with Bankruptcy Code section 1111(b). In the event that
Class 3 is determined not to have elected secured treatment in accordance with  
Bankruptcy Code section 1111(b), each holder of a Secured Lender Claim shall be 
deemed to have waived the right to receive a distribution on account of any     
unsecured portion of such Secured Lender Claim. As set forth in Exhibit H to the
Plan, on the Subscription Commencement Date (as defined therein), each holder of
an Allowed Class 3 Secured Lender Claim shall have the right to participate in  
the Rights Offering on the terms and conditions set forth in such exhibit.      

2.       Class 4:  General Unsecured Claims                   

      On, or as soon as reasonably practicable after, the later of (i) the
Distribution Date, or (ii) the Quarterly Distribution Date immediately following
the date such General Unsecured Claim becomes an Allowed General Unsecured      
Claim, each holder of an Allowed General Unsecured Claim (except as set forth in
the following paragraph) shall, in full satisfaction, settlement, release, and  
discharge of, and in exchange for such Allowed General Unsecured Claim, receive 
from the Plan Administrator (i) its Pro Rata share of the Class 4 Fund, and from
the Litigation Trust, (ii) its Pro Rata beneficial interest in the Litigation   
Trust and right to distribution in respect of fifty percent (50%) of the Net    
Preference Litigation Proceeds, and (iii) its Pro Rata beneficial interest in   
the Litigation Trust and right to distribution in respect of twenty-five percent
(25%) of the Net Other Litigation Proceeds upon the terms and conditions set    
forth in Article VIII of the Plan and in the Litigation Trust Agreement. Until  
distribution to holders of Allowed Class 4 General Unsecured Claims, all Class 4
Funds shall be held by the Plan Administrator in a separate interest-bearing    
account solely for the benefit of such holders and shall not be commingled with 
the funds of any other Person or the Litigation Trust. Neither the Debtors nor  
the Reorganized Debtors shall have any interest in any Class 4 Funds.           

3.       Class 5: Subordinated Claims                         

On the Effective Date, all Subordinated Claims shall be deemed
cancelled and extinguished and each holder thereof shall not be entitled to, and
shall not receive or retain any property under the Plan on account of such      
Subordinated Claims. Class 5 is deemed to have rejected the Plan and, therefore,
holders of Subordinated Claims are not entitled to vote to accept or reject the 
Plan.                                                                           

D.       Interests                                                              

Class 6:  Interests                                           

        On the Effective Date, the Interests shall be canceled and each holder
thereof shall not be entitled to, and shall not receive or retain any property  
or interest in property on account of, such Interests. Class 9 is deemed to have
rejected the Plan, and, therefore, holders of Interests are not entitled to vote
to accept or reject the Plan.                                                   

E.       Special Provision Regarding Unimpaired Claims                          

    Except as otherwise provided in the Plan, nothing shall affect the
Debtors', the Reorganized Debtors' or the Disbursing Agent's rights and         
defenses, both legal and equitable, with respect to any Unimpaired Claims,      
including, but not limited to, all rights with respect to legal and equitable   
defenses to setoffs or recoupments against Unimpaired Claims.                   

F.       Allowed Claims                                                         

      Notwithstanding any provision herein to the contrary, the Disbursing
Agent shall only make distributions to holders of Allowed Claims. No holder of a
Disputed Claim will receive any distribution on account thereof until (and then 
only to the extent) that its Disputed Claim becomes an Allowed Claim. The       
Disbursing Agent may, in its discretion, withhold distributions otherwise due   
hereunder to the holder of a Claim until the Claims Objection Deadline, to      
enable it to file a timely objection thereto. Any holder of a Claim that becomes
an Allowed Claim after the Effective Date will receive its distribution in      
accordance with Article VII.A and Article XI of the Plan.                       

ARTICLE IV

 ACCEPTANCE OR REJECTION OF THE PLAN

A.       Impaired Classes of Claims and Interests Entitled to Vote              

         Subject to Article IV.D of the Plan, Claim and Interest holders in each
Impaired Class of Claims or Interests are entitled to vote as a class to accept 
or reject the Plan.                                                             

B.       Acceptance by an Impaired Class                                        

         In accordance with section 1126(c) of the Bankruptcy Code and except as
provided in section 1126(e) of the Bankruptcy Code, an Impaired Class of Claims 
shall have accepted the Plan if the Plan is accepted by the holders of at least 
two-thirds (2/3) in dollar amount and more than one-half (1/2) in number of the 
Allowed Claims of such Class that have timely and properly voted to accept or   
reject the Plan.                                                                

C.       Presumed Acceptances by Unimpaired Classes                             

        Classes 1 and 2 are Unimpaired by the Plan. Under section 1126(f) of
the Bankruptcy Code, such Claim holders are conclusively presumed to accept the 
Plan, and the votes of such Claim holders will not be solicited.                

D.       Classes Deemed to Reject Plan                                          

      Holders of Claims in Class 5 and holders of Interests in Class 6 are
not entitled to receive or retain any property under the Plan. Under section    
1126(g) of the Bankruptcy Code, holders of Claims in Class 5 and holders of     
Interests in Class 6 are deemed to reject the Plan, and the votes of such Claim 
or Interest holders will not be solicited.                                      

E.       Summary of Classes Voting on the Plan                                  

       As a result of the provisions of Articles IV.A, IV.C and IV.D of this
Plan, the votes of holders of Claims in Classes 3 and 4 will be solicited with  
respect to the Plan.                                                            

F.       Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code        

        To the extent that any Impaired Class rejects the Plan or is deemed to
have rejected the Plan, the Plan Proponents will request confirmation of the    
Plan, as it may be modified from time to time, under section 1129(b) of the     
Bankruptcy Code. The Plan Proponents reserve the right to alter, amend, modify, 
revoke or withdraw the Plan or any Plan Exhibit or Schedule, including to amend 
or modify it to satisfy the requirements of section 1129(b) of the Bankruptcy   
Code, if necessary. Notwithstanding the foregoing, the Creditors' Committee     
shall have the right to participate in decisions of the Plan Proponents only in 
matters affecting holders of Class 4 General Unsecured Claims, the Litigation   
Trust, the Disbursing Agent and the Plan Administrator; any such consent to any 
such matter not to be unreasonably withheld. Notwithstanding any other provision
of the Plan to the contrary, all decisions of the Plan Proponents from and after
the Confirmation Date in respect of or under the Plan shall be subject to the   
prior written consent of the Investors.                                         

 ARTICLE V

MEANS FOR IMPLEMENTATION OF THE PLAN

A.       Substantive Consolidation                                              

1.       Consolidation of the Chapter 11 Estates              

             On the Effective Date, and for the purposes of voting and
making distributions to holders of Allowed Class 4 General Unsecured Claims     
only, the Estates shall be substantively consolidated as follows: (i) any       
obligation of a Debtor and all guarantees by one or more of the Debtors of any  
obligation of a Debtor or a non-Debtor shall be deemed to be one obligation of  
the Debtors collectively, and (ii) each claim filed or to be filed against any  
Debtor shall be deemed a single claim against, and a single obligation of, the  
Debtors collectively. The foregoing (x) shall be solely for the purposes of     
voting and making distributions under the Plan, (y) shall not affect the rights 
of any holder of a Secured Claim, a Secured Lender Claim or a DIP Facility Claim
with respect to the Collateral securing its Claim, or the terms and             
implementation of any settlement, and the rights and obligations of the parties 
thereto, entered into in connection with the confirmation of the Plan and (z)   
shall not, and shall not be deemed to, prejudice the Litigation Rights and the  
Avoidance Actions (subject to the release in favor of the Secured Lenders set   
forth in Article III.C.1 of the Plan), which shall survive entry of the         
Substantive Consolidation Order for the benefit of the Debtors and their        
Estates, as if there had been no substantive consolidation.                     

During the Pre-Effective Period, the Debtors shall remain     
debtors-in-possession and shall remain subject to the jurisdiction and          
supervision of the Court. Any obligation incurred by the Debtors during the     
Pre-Effective Period in the ordinary course of business shall constitute an     
Administrative Claim. The Debtors are authorized and directed to take such      
action during the Pre- Effective Period as may be necessary and consistent with 
the Plan to prepare to effectuate and/or implement the Plan upon the expiration 
of such period; all other action during such period shall be taken only with the
prior written consent of the Investors.                                         

2.       Substantive Consolidation Order                      

    Unless the Court has approved the substantive consolidation of the
Chapter 11 Cases by a prior order, this Plan shall serve as, and shall be deemed
to be, a motion for entry of an order substantively consolidating the Debtors'  
Chapter 11 Cases for distribution purposes only.                                

B.       Corporate Action                                                       

1.       Continued Corporate Existence                        

         On and after the Effective Date, the Reorganized Debtors shall continue
to exist as separate corporate entities, in accordance with the applicable law  
in the respective jurisdictions in which they are incorporated and pursuant to  
their respective certificates or articles of incorporation and by-laws in effect
prior to the Effective Date, except to the extent such certificates or articles 
of incorporation and by-laws are amended by the Plan; provided, however, that on
or before the Effective Date, the Investors shall have the right to designate   
for dissolution and/or liquidation any of the Debtors, and each Debtor so       
designated shall be dissolved and/or liquidated, as applicable, effective as of 
the Effective Date, without further order the Court, and shall not be           
reorganized without further order of the Court. After the Effective Date, one or
more of the Reorganized Debtors may reincorporate in another jurisdiction in    
accordance with applicable law.                                                 

2.       Cancellation of Old Common Shares                    

        As of the Effective Date, by virtue of the Plan and without any action
necessary on the part of the holders thereof, except as specified herein, all   
Old Common Shares issued and outstanding or held in treasury shall be cancelled 
and retired, the obligations of the Debtors under any agreements governing the  
Old Common Shares shall be discharged and released, and no consideration will be
paid or delivered with respect thereto. Notwithstanding anything in this Plan to
the contrary, holders of Old Common Shares shall not be required to surrender   
their Old Common Shares to the Debtors.                                         

3.       Certificates of Incorporation and By-laws            

         The certificate or articles of incorporation and by-laws of each Debtor
shall be amended as necessary to satisfy the provisions of the Plan and the     
Bankruptcy Code and shall include, among other things, pursuant to section      
1123(a)(6) of the Bankruptcy Code, a provision prohibiting the issuance of      
non-voting equity securities, but only to the extent required by section        
1123(a)(6) of the Bankruptcy Code. The amended Certificate of Incorporation and 
By-laws of Reorganized SLI shall be in substantially the forms attached to the  
Plan as Exhibits C and D, respectively.                                         

4.       Issuance of New Common Shares                        

        On the Effective Date, Reorganized SLI shall issue, in accordance with
the terms of the Plan, (a) the New Common Shares for distribution to holders of 
Allowed Class 3 Secured Lender Claims in accordance with the first sentence of  
Article III.C.1 of the Plan, and (b) the New Common Shares for sale to the      
Investors or holders of Allowed Class 3 Secured Lender Claims, pursuant to the  
Rights Offering or the Equity Subscription Commitment Letter, in the amount of  
up to twenty-one percent (21%) of the New Common Shares on a fully diluted      
basis. Each recipient of any of the New Common Shares under the Plan shall be   
deemed to be, and shall be, a party to the Shareholder Agreement and bound by   
the terms thereof as of the Effective Date.                                     

      The issuance and distribution of the New Common Shares to holders of
Allowed Secured Lender Claims and the issuance and distribution of beneficial   
interests in the Litigation Trust shall be exempt from registration under       
applicable securities laws pursuant to section 1145 of the Bankruptcy Code.     

C.       Revolving Credit Facility                                              

     On the Effective Date, the Reorganized Debtors shall enter into the
Revolving Credit Facility Agreement with the lenders party thereto on the terms 
and conditions set forth in Exhibit I to the Plan. The Revolving Credit Facility
shall be a senior secured obligation of the Reorganized Debtors.                

D.       Directors and Officers                                                 

   1. Board of Directors of Reorganized SLI and its Subsidiaries and
Affiliates                                                                      

   On the Effective Date, the term of the current directors of the
Debtors shall expire. The initial board of directors of Reorganized SLI shall   
consist of seven (7) directors, and the initial board of directors of each of   
the Reorganized Subsidiary Debtors shall consist of [__] directors, each of whom
shall be designated by the Investors on a date that is not less than six (6)    
Business Days prior to the Confirmation Hearing. The Debtors shall file with the
Bankruptcy Court notice of the identities of such members on a date that is not 
less than five (5) Business Days prior to the Confirmation Hearing.             

    2. Officers of Reorganized SLI and its Subsidiaries and Affiliates

    The officers of the Reorganized Debtors shall be designated by the
Investors on a date that is not less than six (6) Business Days prior to the    
Confirmation Hearing. The Debtors shall file with the Bankruptcy Court notice of
the identities of such members on a date that is not less than five (5) Business
Days prior to the Confirmation Hearing.                                         

E.       Employee Retirement and Stock Option Plans; Employee Group Health      
Plans; Etc.                                                   

        All employee retirement programs, employee benefit plans, compensation
plans, bonus plans, incentive plans, employee stock purchase plans, employee    
stock option plans and other such plans, programs and arrangements of the       
Debtors, including programs subject to sections 1114 and 1129(a)(13) of the     
Bankruptcy Code, entered into before the Petition Date and not since terminated,
shall be deemed to be, and shall be treated as though they are, executory       
contracts that are rejected under Article IX of the Plan, except and to the     
extent that such plans, programs and arrangements (i) have been previously      
assumed by an order of the Bankruptcy Court on or before the Confirmation Date, 
(ii) constitute "employee pension benefit plans" as defined in Section 3(2)(A)  
of ERISA which are intended to be qualified under Section 401 of the Internal   
Revenue Code, or (iii) constitute "employee welfare benefit plans" as defined in
Section 3(1) of ERISA.                                                          

F.       Revesting Of Assets; Releases of Liens                                 

 Except as otherwise specified in the Plan, the property of each
Debtor's Estate, together with any property of each Debtor that is not property 
of its Estate and that is not specifically disposed of pursuant to the Plan,    
excluding Effective Date Cash, shall vest in the applicable Reorganized Debtor  
on the Effective Date. Thereafter, each Reorganized Debtor may operate its      
business and may use, acquire, and dispose of property free of any restrictions 
of the Bankruptcy Code, the Bankruptcy Rules, and the Bankruptcy Court.         

        Except as otherwise provided in the Plan, the Confirmation Order or in
any contract, instrument, release, or other agreement or document created or    
assumed in connection with the Plan, on the Effective Date, all mortgages, deeds
of trust, Liens, pledges, or other security interests against the property of   
any Estate shall be fully released and discharged, and all of the right, title, 
and interest of any holder of such mortgages, deeds of trust, Liens, pledges, or
other security interests shall transfer to the Reorganized Debtors and their    
successors and assigns. Without limiting the generality of the foregoing, each  
Debtor or Reorganized Debtor may, without application to or approval by the     
Bankruptcy Court, pay fees that it incurs after the Effective Date for          
reasonable professional fees and expenses.                                      

G.       Effectuating Documents; Further Transactions                           

         The Chief Restructuring Officer or any other appropriate officer of SLI
or any applicable Debtor, as the case may be, shall be authorized to execute,   
deliver, file, or record such contracts, instruments, releases, indentures, and 
other agreements or documents, and take such actions as may be necessary or     
appropriate to effectuate and further evidence the terms and conditions of the  
Plan. The secretary or assistant secretary of SLI or any applicable Debtor, as  
the case may be, shall be authorized to certify or attest to any of the         
foregoing actions.                                                              

H.       Preservation of Rights of Action                                       

         Except as otherwise provided in this Plan or the Confirmation Order, or
in any contract, instrument, release, or other agreement entered into in        
connection with the Plan, in accordance with section 1123(b) of the Bankruptcy  
Code, the Debtors shall retain the Litigation Rights and transfer certain       
Litigation Rights on the Effective Date to the Litigation Trust in accordance   
with Articles VIII and IX hereof, including the rights to enforce, sue on,      
settle, or compromise (or decline to do any of the foregoing) such Litigation   
Rights. The substantive consolidation of the Debtors and their Estates pursuant 
to the Substantive Consolidation Order and Article V hereof shall not, and shall
not be deemed to, prejudice the Litigation Rights, which shall survive entry of 
the Substantive Consolidation Order for the benefit of the Debtors and their    
Estates, and, upon the occurrence of the Effective Date, for the benefit of the 
Litigation Trust, as if there had been no substantive consolidation. A non-     
exclusive list of the Litigation Rights to be transferred to the Litigation     
Trust will be filed as Exhibit J to the Plan on or before the Confirmation Date.
The Proponents have not conducted an investigation into the Litigation Rights.  

I.       Special Provisions Regarding Claims Covered by Insurance               

         Distributions under the Plan to each holder of an Allowed Insured Claim
shall be in accordance with the treatment provided under the Plan for the Class 
in which such Allowed Insured Claim is classified, but solely to the extent that
such Allowed Insured Claim is not satisfied from proceeds payable to the holder 
under the relevant insurance policy and applicable law. Nothing in this Article 
V.I (a) shall constitute a waiver of any claim, obligation, suit, judgment,     
damage, debt, right, cause of action or liability that (i) non-Debtor entity may
hold against any other entity, including the Debtors' insurance carriers, or    
(ii) the Debtors may hold against any Person, including the Debtors' insurance  
carriers or (b) is intended to, shall, or shall be deemed to preclude any holder
of an Allowed Insured Claim from seeking and/or obtaining a distribution or     
other recovery from any insurer of the Debtors in addition to any distribution  
such holder may receive pursuant to the Plan; provided, however, that the       
Debtors do not waive, and expressly reserve their rights to assert that any     
insurance coverage is property of the estate to which they are entitled.        

         This Plan shall not expand the scope of, or alter in any other way, the
insurers' obligations under their policies, and the insurers shall retain any   
and all defenses to coverage that they may have. The Plan shall not operate as a
waiver of any other Claims the insurers have asserted or may assert in Proofs of
Claim filed in the Debtors' bankruptcy cases or the Debtors' rights as to those 
Claims.                                                                         

J.       Exemption from Certain Transfer Taxes                                  

        Pursuant to section 1146(c) of the Bankruptcy Code, any transfers from
a Debtor to a Reorganized Debtor or any other Person or entity pursuant to the  
Plan in the United States 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 forego 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 or governmental assessment.                                                 

K.       Professionals                                                          

         On the Effective Date, the Professionals employed by the Debtors during
the Chapter 11 Cases may, but shall have no further responsibility or obligation
to, act on behalf of, be employed by, or render services to, the Debtors, the   
Reorganized Debtors or any other party-in-interest in the Chapter 11 Cases,     
except that Ordinary Course Professionals shall continue to be retained by the  
Reorganized Debtors.                                                            

L.       Escrows                                                                

1.       Administrative Claims Escrow                         

         On the Effective Date, there shall be created and funded with Effective
Date Cash the Administrative Claims Escrow in the amount of the aggregate       
Administrative Claims Estimate. The Escrow Agent shall (i) segregate and shall  
not commingle the Cash held therein, (ii) administer the same in accordance with
the terms of the Administrative Claims Escrow Agreement, and (iii) pay each     
Allowed Administrative Claim upon entry of a Final Order allowing such Claim. In
the event that the Administrative Claims Escrow lacks sufficient Cash to pay    
Allowed Administrative Claims and any unpaid reasonable fees and expenses of the
Escrow Agent incurred under the Administrative Claims Escrow Agreement, the     
Investors shall pay to the Escrow Agent within ten (10) days of a written       
request from the Escrow Agent Cash in the amount necessary to permit the Escrow 
Agent to do so. In the event that Cash remains in the Administrative Claims     
Escrow after payment of all Allowed Administrative Claims and any unpaid        
reasonable fees and expenses of the Escrow Agent incurred under the             
Administrative Claims Escrow Agreement, such Cash shall be paid to the          
Investors.                                                                      

2.       Professional Fee Escrow                              

                 On the Effective Date, there shall be created and funded with
Effective Date Cash the Professional Fee Escrow in the amount of the aggregate  
Professional Fee Estimate. The Escrow Agent shall (i) segregate and shall not   
commingle the Cash held therein, (ii) administer the same in accordance with the
terms of the Professional Fee Escrow Agreement, and (iii) pay each Allowed      
Professional Fee Claim upon entry of a Final Order allowing such Claim. In the  
event that the Professional Fee Escrow lacks sufficient Cash to pay Allowed     
Professional Fee Claims and any unpaid reasonable fees and expenses of the      
Escrow Agent incurred under the Professional Fee Escrow Agreement, the Investors
shall pay to the Escrow Agent within ten (10) days of a written request from the
Escrow Agent Cash in the amount necessary to permit the Escrow Agent to do so.  
In the event that Cash remains in the Professional Fee Escrow after payment of  
all Allowed Professional Fee Claims and any unpaid reasonable fees and expenses 
of the Escrow Agent incurred under the Professional Fee Escrow Agreement, such  
Cash shall be paid to the Investors.                                            

ARTICLE VI

 DESCRIPTION OF SECURITIES AND INSTRUMENTS
TO BE ISSUED IN CONNECTION WITH THE PLAN

       On the Effective Date, Reorganized SLI or the Reorganized Debtors, as
the case may be, shall issue or reserve for issuance the New Common Shares. A   
description of the terms of such securities is set forth below.                 

A.       New Common Shares                                                      

   The principal terms of the New Common Shares to be authorized and
issued or reserved for issuance by Reorganized SLI pursuant to Article V.B.4 of 
the Plan shall be as follows:                                                   

Issuer                             Reorganized SLI            

Authorization                      [x] million shares         

Initial Issuance                   [x] million shares         

Par Value                          US$.01 per share           

Voting Rights                      One vote per share         

Conversion Rights                  None                       

A more complete description of the terms of the New Common Shares appears on    
Exhibit G hereto.                                                               

B.       Rights Offering                                                        

       The principal terms of the Rights Offering are set forth on Exhibit H
to the Plan.                                                                    

 ARTICLE VII

PROVISIONS GOVERNING DISTRIBUTIONS

A.       Distributions for Claims Allowed as of the Effective Date              

  Except as otherwise provided herein, including the provisions of
Article VIII of the Plan, or as ordered by the Court, all distributions to be   
made on account of Claims that are Allowed Claims as of the Effective Date shall
be made on the Distribution Date by the Reorganized Debtors. Distributions on   
account of Claims that first become Allowed Claims after the Effective Date     
shall be made pursuant to the terms and conditions of Article X of this Plan.   
Notwithstanding any other provision of the Plan to the contrary, no distribution
shall be made on account of any Allowed Claim or portion thereof that (i) has   
been satisfied after the Petition Date pursuant to an order of the Bankruptcy   
Court; (ii) is listed in the schedules as contingent, unliquidated, disputed, or
in a zero amount, and for which a proof of claim has not been timely filed; or  
(iii) is evidenced by a Proof of Claim that has been amended by a subsequently  
filed Proof of Claim that purports to amend the previously filed Proof of Claim.
Regardless of the date on which any distribution of New Common Shares is        
actually made to a holder of a Claim that becomes an Allowed Claim, such holder 
shall be deemed to have the rights of a holder as of the Effective Date.        

B.       Disbursing Agent                                                       

       The Disbursing Agent shall make all distributions required under this
Plan, subject to the provisions of Article VIII hereof. If the Disbursing Agent 
is an independent third party designated to serve in such capacity, such        
Disbursing Agent shall receive, without further Bankruptcy Court approval,      
reasonable compensation for distribution services rendered pursuant to the Plan 
and reimbursement of reasonable out-of-pocket expenses incurred in connection   
with such services from the entity so designating it as Disbursing Agent. No    
Disbursing Agent shall be required to give any bond or surety or other security 
for the performance of its duties unless otherwise ordered by the Bankruptcy    
Court. The Disbursing Agent shall be authorized and directed to rely upon the   
Debtors' books and records and the Plan Administrator's or Reorganized Debtors' 
(as applicable) representatives and professionals in determining Allowed Claims 
not entitled to distribution under the Plan in accordance with the preceding    
Article VII.A.                                                                  

C.       Delivery of Distributions and Undeliverable or Unclaimed Distributions 

1.       Delivery of Distributions in General                 

 Distributions to holders of Allowed Claims shall be made by the
Disbursing Agent (a) at the addresses set forth on the Proofs of Claim filed by 
such holders (or at the last known addresses of such holders if no Proof of     
Claim is filed or if the Debtors have been notified of a change of address), (b)
at the addresses set forth in any written notices of address changes delivered  
to the Disbursing Agent after the date of any related Proof of Claim, (c) at the
addresses reflected in the Schedules if no Proof of Claim has been filed and the
Disbursing Agent has not received a written notice of a change of address, (d)  
at the addresses set forth in the other records of the Debtors or the Disbursing
Agent at the time of the distribution, or (e) in the case of the holder of a    
Claim that is governed by an agreement and is administered by an agent or       
servicer, at the addresses contained in the official records of such agent or   
servicer.                                                                       

2.       Undeliverable and Unclaimed Distributions            

      If the distribution to any holder of an Allowed Claim is returned to
the Disbursing Agent as undeliverable or is otherwise unclaimed, no further     
distributions shall be made to such holder unless and until the Disbursing Agent
is notified in writing of such holder's then-current address, at which time all 
missed distributions shall be made to such holder without interest. Amounts in  
respect of undeliverable distributions made by the Disbursing Agent, shall be   
returned to the Disbursing Agent until such distributions are claimed. All      
claims for undeliverable or unclaimed distributions made by the Disbursing Agent
must be made on or before the first (1st) anniversary of the Effective Date,    
after which date (a) all unclaimed property constituting Class 4 distributions  
shall be paid to the holders of the remaining Allowed Class 4 General Unsecured 
Claim and (b) all unclaimed property constituting Class 3 distributions shall be
distributed to the holders of the remaining Allowed Class 3 Secured Lender      
Claims, in either case free of any restrictions thereon and the claims of any   
holder or successor to such holder with respect to such property shall be       
discharged and forever barred, notwithstanding any federal or state escheat laws
to the contrary. Nothing contained in the Plan shall require the Debtors,       
Reorganized Debtors or any Disbursing Agent to attempt to locate any holder of  
an Allowed Claim.                                                               

D.       Calculation of Distribution Amounts of New Common Shares; Minimum      
Distributions                                                 

No fractional shares of New Common Shares shall be issued or  
distributed under the Plan or by Reorganized SLI or the Disbursing Agent. Each  
Person entitled to receive New Common Shares will receive the total number of   
whole shares to which such Person is entitled. Whenever any distribution to a   
particular Person would otherwise call for distribution of a fraction of a share
of New Common Shares, the actual distribution of shares of such stock shall be  
rounded to the next higher or lower whole number as follows: (a) fractions      
one-half (1/2) or greater shall be rounded to the next higher whole number, and 
(b) fractions of less than one-half (1/2) shall be rounded to the next lower    
whole number. No consideration shall be provided in lieu of fractional shares   
that are rounded down.                                                          

   The Disbursing Agent shall not make any Cash payment of less than
thirty dollars ($30.00) with respect to any Claim, unless prior to the Effective
Date a request therefor is made in writing to the Disbursing Agent.             

E.       Record Date For Distributions To Holders Of Secured Lender Claims      

        At the close of business on the Distribution Record Date, the transfer
records for the Secured Lender Claims shall be closed, and there shall be no    
further changes in the record holders of the Secured Lender Claims. None of     
Reorganized SLI, the Disbursing Agent, nor the administrative agent for the     
Secured Lenders shall have any obligation to recognize any transfer of such     
Secured Lender Claims occurring after the Distribution Record Date and shall be 
entitled instead to recognize and deal for all purposes hereunder with only     
those record holders as of the close of business on the Distribution Record     
Date.                                                                           

F.       Prepayment                                                             

         Except as otherwise provided in this Plan or in the Confirmation Order,
the Debtors or the Disbursing Agent, as the case may be, shall have the right to
prepay, without penalty, all or any portion of an Allowed Claim at any time;    
provided, however, that any such prepayment shall not be violative of, or       
otherwise prejudice, the relative priorities and parities among the Classes of  
Claims.                                                                         

G.       Means of Cash Payment                                                  

       Cash payments made pursuant to this Plan shall be in U.S. dollars and
shall be made at the option and in the sole discretion of the Reorganized       
Debtors or the Disbursing Agent, as the case may be, by (i) checks drawn on or  
(ii) wire transfers from a domestic bank selected by the Reorganized Debtors or 
the Disbursing Agent, as the case may be. In the case of foreign creditors, Cash
payments may be made, at the option of the Reorganized Debtors or the Disbursing
Agent, as the case may be, in such funds and by such means as are necessary or  
customary in a particular jurisdiction.                                         

H.       Interest on Claims                                                     

        Unless otherwise specifically provided for 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 on any Claim. Interest shall not
accrue or be paid upon any Disputed Claim in respect of the period from the     
Petition Date to the date a final distribution is made thereon if and after such
Disputed Claim becomes an Allowed Claim.                                        

I.       Cancellation of Existing Securities and Agreements                     

         On the Effective Date, the promissory notes, share certificates and any
other instruments or documents evidencing any Claim or Interest, other than a   
Claim that is being Reinstated and rendered unimpaired, shall be deemed         
cancelled without further act or action under any applicable agreement, law,    
regulation, order or rule and the obligations of the Debtors under the          
agreements, indentures and certificates of designation governing such Claims and
Interests, as the case may be, shall be discharged.                             

J.       Withholding and Reporting Requirements                                 

  In connection with the Plan and all distributions hereunder, the
Disbursing Agent shall, to the extent applicable, comply with all withholding   
and reporting requirements imposed by any federal, state, provincial, local, or 
foreign taxing authority. All distributions hereunder shall be subject to the   
withholding and reporting requirements, and the Disbursing Agent shall be       
authorized to take all actions as may be necessary or appropriate to comply with
such requirements.                                                              

        Notwithstanding any other provision of the Plan, (i) each holder of an
Allowed Claim that is to receive a distribution of New Common Shares pursuant to
the Plan shall have sole and exclusive responsibility for the satisfaction and  
payment of any tax obligation imposed by any governmental unit, including       
income, withholding and other tax obligations on account of such distribution,  
and (ii) no distribution shall be made to, or on behalf of, such holder pursuant
to the Plan unless and until such holder has made arrangements satisfactory to  
the Disbursing Agent for the payment and satisfaction of such tax obligations.  
Any New Common Shares to be distributed pursuant to the Plan shall, pending the 
implementation of such arrangements, be treated as an undeliverable distribution
pursuant to Article VII.C.2 hereof.                                             

K.       Setoffs                                                                

    The Reorganized Debtors may, but shall not be required to, set off
against any Claim and the payments or other distributions to be made under the  
Plan on account of the Claim, claims of any nature whatsoever that the Debtors  
or Reorganized Debtors may have against the holder thereof, provided, that any  
such right of setoff that is exercised shall be allocated, first, to the        
principal amount of the related Claim, and thereafter to any interest portion   
thereof, but neither the failure to do so nor the allowance of any Claim        
hereunder shall constitute a waiver or release by the Reorganized Debtors of any
such claim that the Debtors or the Reorganized Debtors may have against such    
holder.                                                                         

ARTICLE VIII

LITIGATION TRUST

A.       The Litigation Trust                                                   

    The prosecution of claims and causes of action of the Estates, the
management of the assets contributed to the Litigation Trust, including without 
limitation the Class 4 Fund, and the distribution made in respect of the same   
shall be conducted by the Plan Administrator pursuant to the terms of the       
Litigation Plan Administrator Agreement. The Trust Advisory Board shall oversee 
the actions of the Plan Administrator. The Plan Administrator shall act as      
trustee and a fiduciary in respect of the Litigation Trust and shall have the   
rights and duties described herein and in the Litigation Trust Agreement. To the
extent of any conflict between the provisions of the Plan and the terms of the  
Litigation Trust Agreement, the terms of the Plan shall govern.                 

B.       Transfer of Trust Assets to the Litigation Trust                       

       On the Effective Date, the Debtors shall transfer and shall be deemed
to have irrevocably transferred to the Litigation Trust, for and on behalf of   
the beneficiaries of the Litigation Trust, the Preference Litigation Trust      
Assets and the Other Litigation Trust Assets, subject to the obligation of the  
Litigation Trust to pay the Preference Litigation Reimbursement Obligation and  
the Other Litigation Reimbursement Obligation as set forth in Article VIII.E    
below. On the Effective Date, the Plan Administrator shall succeed to all of the
rights and privileges of the Debtors in respect of the Preference Litigation    
Trust Assets and the Other Litigation Trust Assets, shall be deemed to be a     
successor of the Debtors for such purposes and shall enter into such joint      
defense/prosecution agreements with the Reorganized Debtors as shall be mutually
agreed.                                                                         

C.       The Litigation Trust Agreement                                         

    Without any further action of the directors or shareholders of the
Debtors, on the Effective Date, the Litigation Trust Agreement, substantially in
the form of Exhibit F hereto, shall become effective. The Plan Administrator    
shall have full authority to take any steps necessary to administer the         
Litigation Trust Agreement, including, without limitation, the duty and         
obligation to liquidate Preference Litigation Trust Assets and Other Litigation 
Trust Assets, to investigate, pursue and settle all causes of action of the     
Debtors' estates for recovery of preferences under 11 U.S.C. ss.ss. 547 and/or  
550 and to make distributions therefrom to the holders of Allowed Claims in     
accordance with the Plan.                                                       

     The Plan Administrator may retain such law firms, accounting firms,
experts, advisors, consultants, investigators, appraisers, auctioneers or other 
professionals as it may deem necessary, which professionals may include the     
Creditors' Committee's professionals (collectively, the "Litigation Trust       
Professionals"), subject to the reasonable acceptance by the Creditors'         
Committee, to aid in the performance of its responsibilities pursuant to the    
terms of this Plan including, without limitation, the investigation and pursuit 
of preference actions and the liquidation and distribution of Preference        
Litigation Trust Assets and Other Litigation Trust Assets. The Plan             
Administrator shall be authorized to appoint the Disbursing Agent, subject to   
the reasonable acceptance by the Creditors' Committee, and delegate to the      
Disbursing Agent the duty to make distributions to Allowed Claims under the     
Plan, in each case with the prior written consent of the Investors.             

D.       Funding of the Litigation Trust                                        

  On the Effective Date, the Litigation Trust shall be funded from
Effective Date Cash with (i) the Preference Litigation Expense Advance by       
delivery to the Plan Administrator of $75,000 to be used by the Plan            
Administrator in respect of Preference Litigation Trust Assets consistent with  
the purpose of the Litigation Trust and subject to the terms and conditions of  
this Plan and the Litigation Trust Agreement; (ii) the Other Litigation Expense 
Advance by delivery to the Plan Administrator of $150,000 to be used by the Plan
Administrator in respect of Other Litigation Trust Assets consistent with the   
purpose of the Litigation Trust and subject to the terms and conditions of this 
Plan and the Litigation Trust Agreement; and (iii) the Class 4 Fund by delivery 
to the Plan Administrator of the Class 4 Fund.                                  

E.       Reimbursement Obligations                                              

1.       Preference Litigation Reimbursement Obligation       

         Immediately upon receipt of the first proceeds on account of Preference
Litigation Trust Assets by the Litigation Trust, the Plan Administrator shall   
pay the Preference Litigation Reimbursement Obligation to the Reorganized       
Debtors or the Secured Lenders, as the case may be, until such time as the      
Preference Litigation Reimbursement Obligation is paid in full.                 

2.       Other Litigation Reimbursement Obligation            

    Immediately upon receipt of the first proceeds on account of Other
Litigation Trust Assets by the Litigation Trust, the Plan Administrator shall   
pay the Other Litigation Reimbursement Obligation to the Reorganized Debtors or 
the Secured Lenders, as the case may be, until such time as the Other Litigation
Reimbursement Obligation is paid in full.                                       

F.       Distributions of Trust Assets                                          

1.       Preference Litigation Trust Assets                   

       The Plan Administrator or Disbursing Agent, as the case may be, shall
make distributions of the proceeds received by the Litigation Trust on account  
of Preference Litigation Trust Assets as follows: first, to pay the Preference  
Litigation Reimbursement Obligation, second, to pay the Preference Litigation   
Trust Expenses, and third, fifty percent (50%) to the holders of Allowed Class 4
General Unsecured Claims on a Pro Rata basis and fifty percent (50%) to the     
holders of Allowed Class 3 Secured Lender Claims on a Pro Rata basis. Such      
distributions shall be made at the times and in the manner set forth in the     
Litigation Trust Agreement.                                                     

2.       Other Litigation Trust Assets                        

       The Plan Administrator or Disbursing Agent, as the case may be, shall
make distributions of the proceeds received by the Litigation Trust on account  
of Other Litigation Trust Assets as follows: first, to pay the Other Litigation 
Reimbursement Obligation, second, to pay the Other Litigation Trust Expenses,   
and third, twenty-five percent (25%) to the holders of Allowed Class 4 General  
Unsecured Claims on a Pro Rata basis and seventy-five percent (75%) to the      
holders of Allowed Class 3 Secured Lender Claims on a Pro Rata basis. Such      
distributions shall be made at the times and in the manner set forth in the     
Litigation Trust Agreement.                                                     

ARTICLE IX

TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES

A.       Assumed and Rejected Contracts and Leases                              

Except as otherwise provided in the Plan, or in any contract, 
instrument, release, or other agreement or document entered into in connection  
with the Plan, each of the executory contracts and unexpired leases to which any
Debtor is a party shall be deemed automatically assumed by the applicable Debtor
as of the Effective Date, unless such contract or lease (i) previously has been 
assumed or rejected by the Debtors, (ii) expired or terminated pursuant to its  
own terms,(iii) is the subject of a motion to assume or reject pending before   
the Bankruptcy Court as of the Confirmation Date, or (iv) is identified in the  
Plan or in Exhibit B hereto as executory contracts or unexpired leases to be    
rejected under the Plan; provided, however, that nothing contained in this Plan 
shall constitute an admission by any Debtor that any such contract or lease is  
an executory contract or unexpired lease or that any Debtor or its successors   
and assigns has any liability thereunder; and, provided further, that the       
Debtors reserve their right, at any time before the Confirmation Date, to amend 
Exhibit B to add thereto or delete therefrom an executory contract or unexpired 
lease. The Confirmation Order shall constitute an order of the Court approving  
the assumptions and rejections described in this Article IX, pursuant to section
365 of the Bankruptcy Code, as of the Effective Date.                           

B.       Payments Related to Assumption of Executory Contracts and Unexpired    
Leases                                                        

     Any monetary amounts by which each executory contract and unexpired
lease to be assumed under the Plan may be in default shall be satisfied, under  
section 365(b)(1) of the Bankruptcy Code, at the option of the Debtor party to  
the contract or lease or the assignee of such Debtor party assuming such        
contract or lease, by Cure. In the event of a dispute regarding (i) the nature  
or the amount of any Cure, (ii) the ability of any Reorganized Debtor or any    
assignee, as the case may be, 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 (iii) any other matter pertaining to    
assumption, Cure shall occur following the entry of a Final Order of the Court  
resolving the dispute and approving the assumption and, as the case may be,     
assignment.                                                                     

C.       Rejection Damages Bar Date                                             

       If the rejection of an executory contract or unexpired lease pursuant
to Article IX.A above gives rise to a Claim by the other party or parties to    
such contract or lease, such Claim shall be forever barred and shall not be     
enforceable against the applicable Debtor or Reorganized Debtor or their        
respective successors or properties unless a proof of claim is filed with the   
Bankruptcy Court and served on counsel for the Plan Proponents within thirty    
(30) days after service of the earlier of (a) notice of entry of the            
Confirmation Order, or (b) other notice that the executory contract or unexpired
lease has been rejected.                                                        

 ARTICLE X

PROCEDURES FOR RESOLVING DISPUTED,
 CONTINGENT, AND UNLIQUIDATED CLAIMS

A.       Objection Deadline; Prosecution of Objections                          

         Except as set forth in the Plan with respect to Professional Fee Claims
and Administrative Claims, all objections to Claims must be filed and served on 
the holders of such Claims by the Claims Objection Deadline. If an objection has
not been filed to a Proof of Claim or a scheduled Claim by the Claims Objection 
Deadline, as the same may be extended by order of the Court, the Claim to which 
the Proof of Claim or scheduled Claim relates will be treated as an Allowed     
Claim if such Claim has not been allowed earlier. Notice of any motion for an   
order extending the Claims Objection Deadline shall be required to be given only
to those persons or entities that have requested notice in the Chapter 11 Cases.

    After the Confirmation Date, the Reorganized Debtors will have the
exclusive authority to file objections, settle, compromise, withdraw or litigate
to judgment objections to Claims. From and after the Effective Date, the        
Reorganized Debtors may settle or compromise any Disputed Claim without approval
of the Bankruptcy Court. Nothing contained herein, however, shall limit the     
Reorganized Debtors' right to object to Claims, if any, filed or amended after  
the Effective Date.                                                             

B.       No Distributions Pending Allowance                                     

         Notwithstanding any other provision of the Plan or the Litigation Trust
Agreement, no payments or distributions shall be made with respect to all or any
portion of a Disputed Claim unless and until all objections to such Disputed    
Claim have been settled or withdrawn or have been determined by Final Order, and
the Disputed Claim, or some portion thereof, has become an Allowed Claim. To the
extent that a Claim is not a Disputed Claim but is held by a holder that is or  
may be liable to the Litigation Trust on account of a Preference Litigation     
Trust Asset or Other Litigation Trust Asset, no payments or distributions shall 
be made with respect to all or any portion of such Claim unless and until such  
Claim and liability have been settled or withdrawn or have been determined by   
Final Order.                                                                    

         On each Quarterly Distribution Date, the applicable Disbursing Agent on
behalf of the Reorganized Debtors or, as to Class 4 General Unsecured Claims    
only, the Plan Administrator will make distributions (a) on account of any      
Disputed Claim that has become an Allowed Claim during the preceding calendar   
quarter and (b) on account of previously Allowed Claims, from the Disputed Claim
reserves, of property that would have been distributed to such Claim holders on 
the dates distributions previously were made to holders of Allowed Claims had   
the Disputed Claims that have become Allowed Claims been Allowed on such dates. 
Such distributions will be made pursuant to the provisions of the Plan governing
the applicable Class.                                                           

C.       Disputed Claims Reserves                                               

         Prior to making any distributions to holders of Allowed Class 4 Claims,
the Plan Administrator shall establish appropriate reserves for Disputed Claims 
in Class 4, to withhold from any such distributions 100% of distributions to    
which holders of Disputed Claims in Class 4 would be entitled under the Plan as 
of such date if such Disputed Claims in Class 4 were Allowed Claims in their    
Disputed Claim Amount. The amount fixed for the reserve for a Disputed Claim    
shall be not less than 25% and not more than 75% of the Pro Rata Share of the   
Face Amount to which the holder of a Disputed Claim would be entitled under the 
Plan if such holder's Disputed Claim were an Allowed Claim; provided, however,  
that the Plan Administrator shall have the right to seek and obtain a Court     
order estimating Disputed Claims or approving proposed reserve amounts on       
account of Disputed Claims. The Plan Administrator shall have the right to      
periodically adjust the amount fixed for reserves on account of Disputed Claims 
to the lesser of (i) the Face Amount of such Disputed Claims, or (ii) the unpaid
portion thereof.                                                                

ARTICLE XI

CONDITIONS PRECEDENT TO CONFIRMATION
AND CONSUMMATION OF THE PLAN

A.       Conditions to Confirmation                                             

     The following are conditions precedent to confirmation of the Plan:

   1. The Court shall have entered an order approving the Disclosure
Statement as containing adequate information within the meaning of section 1125 
of the Bankruptcy Code.                                                         

       2. The Substantive Consolidation Order, which may be the Confirmation
Order, shall be in form and substance reasonably acceptable to the Debtors, the 
Creditors' Committee and the Investors and shall have been entered by the Court 
prior to or contemporaneously with the Confirmation Order.                      

   3. The proposed Confirmation Order shall be in form and substance
acceptable to the the Plan Proponents and the Investors.                        

B.       Conditions to Effective Date                                           

 The following are conditions precedent to the occurrence of the
Effective Date, each of which must be satisfied or waived in accordance with    
Article XI.C hereof:                                                            

        1. The Confirmation Order shall have been entered on the docket in the
Chapter 11 Cases, its operation and effect shall not have been stayed, reversed 
or amended, and it shall be in form and substance satisfactory to the Plan      
Proponents and the Investors.                                                   

2. The Confirmation Order shall have become a Final Order.    

3. The Confirmation Order shall:                              

     (a) provide that the Debtors (with the prior written consent of the
Investors) and the Reorganized Debtors are authorized and directed to (i) take  
all actions and (ii) enter into, implement and consummate all contracts,        
instruments, releases, agreements or other documents, in each case necessary or 
appropriate to implement the Plan or effectuate, achieve or further the purposes
thereof;                                                                        

(b) provide that the discharge, releases, exculpations,       
indemnifications and injunctions described in Article XIII of the Plan are      
approved;                                                                       

(c) authorize the issuance of the New Common Shares; and      

        (d) provide that the New Common Shares and the beneficial interests in
the Litigation Trust issued and distributed under the Plan in exchange for      
Claims against the Debtors are exempt from registration under the Securities Act
of 1933 pursuant to section 1145 of the Bankruptcy Code.                        

4. All Plan exhibits shall be in form and substance reasonably
acceptable to the Debtors, the Creditors' Committee and the Investors, and the  
Shareholder Agreement and the Litigation Trust Agreement shall have been        
executed or deemed to be executed and delivered.                                

         5. The Reorganized Debtors shall have entered into the Revolving Credit
Facility Agreement, and the conditions precedent thereto shall have been        
satisfied or waived.                                                            

        6. The New Common Shares shall have been issued in accordance with the
Plan.                                                                           

        7. The Certificate of Incorporation of Reorganized SLI shall have been
(i) adopted substantially in the form set forth on Exhibit C hereto, and (ii)   
filed with the appropriate state governmental office or agency in which SLI is  
incorporated.                                                                   

         8. The By-laws of Reorganized SLI shall have been adopted substantially
in the form set forth on Exhibit D hereto.                                      

     9. All actions, documents and agreements necessary to implement the
Plan shall have been effected or executed.                                      

10. All fees and expenses of the Investors referred to in the 
definition of "Administrative Claim" in Section 1.1 of Article I.B of the Plan  
shall have been paid in Cash in full.                                           

11. The Class 4 Fund, the $75,000 and $150,000 payments to the
Litigation Trust described in Articles III.C.2 and VIII.D of the Plan shall have
been paid or funded in Cash in full.                                            

      12. The Administrative Claims Escrow and the Professional Fee Escrow
shall have been funded in Cash in full.                                         

   13. The DIP Facility Claims shall have been paid in Cash in full.

C.       Waiver of Conditions                                                   

         Each of the conditions to the Effective Date, set forth in Article XI.B
of the Plan, except the conditions stated in Article XI.B.1, B.11, B.12 and     
B.13, may be waived in whole or in part jointly by the Investors, the Creditors'
Committee and the Debtors without any other notice to parties-in-interest or the
Bankruptcy Court. The failure to satisfy or waive any condition to the Effective
Date may be asserted jointly by the Investors, the Creditors' Committee and the 
Debtors regardless of the circumstances giving rise to the failure of such      
condition to be satisfied (including any action or inaction by the Investors,   
the Creditors' Committee or the Debtors). The failure of the Investors, the     
Creditors' Committee and the Debtors to exercise any of the foregoing rights    
shall not be deemed a waiver of any other rights, and each such right shall be  
deemed an ongoing right that may be asserted at any time.                       

 ARTICLE XII

 RETENTION OF JURISDICTION

Under sections 105(a) and 1142 of the Bankruptcy Code, and    
notwithstanding entry of the Confirmation Order, substantial consummation of the
Plan and occurrence of the Effective Date, the Court shall retain exclusive     
jurisdiction over all matters arising out of, and related to, the Chapter 11    
Cases and the Plan to the fullest extent permitted by law, including, among     
other things, jurisdiction to:                                                  

  A. Allow, disallow, determine, liquidate, classify, estimate, or
establish the priority or secured or unsecured status of any Claim or Interest, 
including the resolution of any request for payment of any Administrative Claim 
and the resolution of any objections to the allowance or priority of Claims or  
Interests;                                                                      

B. Hear and determine all applications for compensation and   
reimbursement of expenses of Professionals under the Plan or under sections 330,
331, 503(b), 1103, and 1129(a)(4) of the Bankruptcy Code; provided, however,    
that from and after the Effective Date the payment of the fees and expenses of  
the retained Professionals of the Debtors or Reorganized Debtors shall be made  
in the ordinary course of business and shall not be subject to the approval of  
the Court;                                                                      

     C. Hear and determine all matters with respect to the assumption or
rejection of any executory contract or unexpired lease to which a Debtor is a   
party or with respect to which a Debtor may be liable, including, if necessary, 
the nature or amount of any Cure or the liquidation or allowance of any Claims  
arising therefrom;                                                              

       D. Effectuate performance of and payments under the provisions of the
Plan;                                                                           

   E. Hear and determine any and all adversary proceedings, motions,
applications, and contested or litigated matters arising out of, under, or      
related to, the Chapter 11 Cases, the Plan, or the Litigation Trust Agreement;  

     F. Enter such orders as may be necessary or appropriate to execute,
implement, or consummate the provisions of the Plan and all contracts,          
instruments, releases, and other agreements or documents created in connection  
with the Plan, the Disclosure Statement, or the Confirmation Order;             

G. Hear and determine disputes arising in connection with the 
interpretation, implementation, consummation, or enforcement of the Plan,       
including disputes arising under agreements, documents, or instruments executed 
in connection with the Plan;                                                    

         H. Consider any modifications of the Plan, cure any defect or omission,
or reconcile any inconsistency in any order of the Court, including, without    
limitation, the Confirmation Order;                                             

      I. Issue injunctions, enter and implement other orders, or take such
other actions as may be necessary or appropriate to restrain interference by any
entity with implementation, consummation, or enforcement of the Plan or the     
Confirmation Order;                                                             

       J. Enter and implement such orders as may be necessary or appropriate
if the Confirmation Order is for any reason reversed, stayed, revoked, modified,
or vacated;                                                                     

 K. Hear and determine any matters arising in connection with or
relating to the Plan, the Disclosure Statement, the Confirmation Order, or any  
contract, instrument, release, or other agreement or document created in        
connection with the Plan, the Disclosure Statement, or the Confirmation Order;  

        L. Enforce all orders, judgments, injunctions, releases, exculpations,
indemnifications, and rulings entered in connection with the Chapter 11 Cases;  

  M. Except as otherwise limited herein, recover all assets of the
Debtors and property of the Estates, wherever located;                          

         N Hear and determine matters concerning state, local, and federal taxes
in accordance with sections 346, 505, and 1146 of the Bankruptcy Code;          

  O. Hear and determine all matters related to the property of the
Estates from and after the Confirmation Date;                                   

      P. Hear and determine any causes of action constituting a Preference
Litigation Trust Asset, and non-exclusive jurisdiction to hear and determine any
cause of action constituting an Other Litigation Trust Asset or Other Litigation
Right;                                                                          

        Q. To hear and determine all disputes involving the existence, nature,
or scope of the Debtors' discharge;                                             

    R. Hear and determine such other matters as may be provided in the
Confirmation Order or as may be authorized under, or not inconsistent with,     
provisions of the Bankruptcy Code; and                                          

S. Enter a final decree closing the Chapter 11 Cases.         

ARTICLE XIII

 EFFECTS OF CONFIRMATION

A.       Binding Effect                                                         

         The Plan shall be binding upon and inure to the benefit of the Debtors,
all present and former holders of Claims and Interests, whether or not such     
holders will receive or retain any property or interest in property under the   
Plan, and their respective successors and assigns, including, but not limited   
to, the Reorganized Debtors and all other parties-in-interest in the Chapter 11 
Cases.                                                                          

B.       Discharge of the Debtors                                               

       Except as otherwise provided herein or in the Confirmation Order, all
consideration distributed under the Plan shall be in exchange for, and in       
complete satisfaction, settlement, discharge, and release of, all Claims of any 
nature whatsoever against the Debtors or any of their assets or properties, and 
regardless of whether any property shall have been distributed or retained      
pursuant to the Plan on account of such Claims, upon the Effective Date, the    
Debtors, and each of them, shall (i) be deemed discharged and released under    
section 1141(d)(1)(A) of the Bankruptcy Code from any and all Claims, including,
but not limited to, demands and liabilities that arose before the Confirmation  
Date, and all debts of the kind specified in sections 502(g), 502(h) or 502(i)  
of the Bankruptcy Code, whether or not (a) a Proof of Claim based upon such debt
is filed or deemed filed under section 501 of the Bankruptcy Code, (b) a Claim  
based upon such debt is Allowed under section 502 of the Bankruptcy Code, or (c)
the holder of a Claim based upon such debt accepted the Plan, and (ii) terminate
all Interests.                                                                  

    As of the Confirmation Date, except as provided in the Plan or the
Confirmation Order, all entities shall be precluded from asserting against the  
Debtors or the Reorganized Debtors, any other or further claims, debts, rights, 
causes of action, liabilities or equity interests relating to the Debtors based 
upon any act, omission, transaction or other activity of any nature that        
occurred prior to the Confirmation Date. In accordance with the foregoing,      
except as provided in the Plan or the Confirmation Order, the Confirmation Order
shall be a judicial determination of discharge of all such Claims and other     
debts and liabilities against the Debtors and termination of all Interests,     
pursuant to sections 524 and 1141 of the Bankruptcy Code, and such discharge    
shall void any judgment obtained against the Debtors at any time, to the extent 
that such judgment relates to a discharged Claim or terminated Interest.        

C.       Injunction                                                             

     Except as provided in the Plan or the Confirmation Order, as of the
Confirmation Date, all entities that have held, currently hold, or may hold a   
Claim or other debt or liability that is discharged, or an Interest or other    
right of an equity security holder that is terminated pursuant to the terms of  
the Plan, are permanently enjoined from taking any of the following actions     
against the Debtors, Reorganized Debtors or their property on account of any    
such discharged Claims, debts or liabilities or terminated Interests or rights: 
(i) commencing or continuing, in any manner or in any place, any action or other
proceeding; (ii) enforcing, attaching, collecting or recovering in any manner   
any judgment, award, decree or order; (iii) creating, perfecting or enforcing   
any lien or encumbrance; (iv) asserting a setoff, right of subrogation or       
recoupment of any kind against any debt, liability or obligation due to the     
Debtors, except as provided in Article VII.K of the Plan; and (v) commencing or 
continuing any action, in any manner, in any place that does not comply with or 
is inconsistent with the provisions of the Plan.                                

       As of the Effective Date, all entities that have held, currently hold
or may hold a Claim, demand, debt, right, cause of action or liability that is  
released pursuant to Article XIII of this Plan are permanently enjoined from    
taking any of the following actions on account of such released Claims,         
obligations, suits, judgments, damages, demands, debts, rights, causes of action
or liabilities: (i) commencing or continuing in any manner any action or other  
proceeding; (ii) enforcing, attaching, collecting or recovering in any manner   
any judgment, award, decree or order; (iii) creating, perfecting or enforcing   
any lien or encumbrance: (iv) asserting a setoff, right of subrogation or       
recoupment of any kind against any debt, liability or obligation due to any     
released entity; and (v) commencing or continuing any action, in any manner, in 
any place that does not comply with or is inconsistent with the provisions of   
the Plan.                                                                       

   By accepting distribution pursuant to the Plan, each holder of an
Allowed Claim or Allowed Interest receiving distributions pursuant to the Plan  
will be deemed to have specifically consented to the injunctions set forth in   
this Article XIII.C.                                                            

D.       Releases And Satisfaction Of Subordination Rights                      

     All Claims against the Debtors and all rights and claims between or
among Claim holders relating in any manner whatsoever to Claims against the     
Debtors, based upon any claimed subordination rights, shall be deemed satisfied 
by the distributions under, described in, contemplated by, and/or implemented   
under the Plan to Claim holders having such subordination rights, and such      
subordination rights shall be deemed waived, released, discharged and terminated
as of the Effective Date. Distributions under, described in, contemplated by,   
and/or implemented by this Plan to the various Classes of Claims hereunder shall
not be subject to levy, garnishment, attachment, or like legal process by any   
Claim holder by reason of any claimed subordination rights or otherwise, so that
each Claim holder shall have and receive the benefit of the distributions in the
manner set forth in the Plan.                                                   

E.       Debtor Releases                                                        

    As of the Effective Date, for good and valuable consideration, the
adequacy of which is hereby confirmed, the Debtors and 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 whatsoever in connection with or related to the Debtors and the     
Subsidiaries, the Chapter 11 Case or the Plan (other than the rights of the     
Debtors or Reorganized Debtors to enforce the Plan and the contracts,           
instruments, releases, indentures, and other agreements or documents delivered  
thereunder) whether liquidated or unliquidated, fixed or contingent, matured or 
unmatured, known or unknown, foreseen or unforseen, then existing or thereafter 
arising, in law, equity or otherwise that are based in whole or part on any act,
omission, transaction, event or other occurrence taking place on or prior to the
Effective Date in any way relating to the Debtors, the Reorganized Debtors or   
their Subsidiaries, the Chapter 11 Cases or the Plan, and that may be asserted  
by or on behalf of the Debtors or their Estates or the Reorganized Debtors      
against (i) those persons serving as directors, officers, employees, agents and 
professionals of the Debtors or their Subsidiaries on or after the Petition     
Date, (ii) the Creditors' Committee, its members or professionals, in such      
capacities, or (iii) the Investors, or their directors, officers, employees,    
agents or professionals; provided, however, that such release, waiver or        
discharge shall not extend to actions or omissions that (w) are the result of   
fraud, self-dealing, gross negligence or willful misconduct, (x) constitute     
claims or causes of action covered by applicable insurance, but only to the     
extent of such insurance, (y) constitute claims or causes of action for which   
such persons would not be entitled to indemnity, contribution or reimbursement  
from the Debtors, the Reorganized Debtors, or any non-Debtor subsidiary, or (z) 
constitute claims or causes of action against such persons arising under or     
which may be asserted pursuant to Bankruptcy Code sections 544, 547, 548 or 550.
Nothing herein shall however preclude the Debtors or their successors from      
asserting any claims or causes of action, including claims or causes of action  
released under this section, for the purposes of reducing or otherwise          
offsetting any claim asserted by a party released hereunder.                    

F.       Other Releases - M Capital, LLC and Affiliates                         

        As of the Effective Date, the Debtors and Reorganized Debtors shall be
deemed to forever release, waive and discharge M Capital, LLC and M-Lite, LLC   
and their respective affiliates and partners, of and from any and all claims    
arising out of or in connection with the ML Sale and the ML Sale Documents.     

G.       Indemnification Obligations                                            

  1.       Prepetition Indemnification Obligations - Third Parties

         Indemnification Obligations owed to any present or former professionals
or advisors of the Debtors arising out of acts that occurred prior to the       
Petition Date, including, without limitation, accountants, auditors, financial  
consultants, underwriters, or attorneys, shall be deemed to be, and shall be    
treated as though they are, executory obligations or contracts with the Debtors 
that are deemed rejected pursuant to Bankruptcy Code section 365 under this Plan
on the Effective Date.                                                          

2.       Indemnification of Debtors' Directors and Officers   

Indemnification obligations to present and former officers and
directors arising out of acts that occurred prior to the Petition Date shall be 
deemed to be, and shall be treated as though they are, executory obligations or 
contracts with the Debtors that are deemed rejected pursuant to Bankruptcy Code 
section 365 under this Plan on the Effective Date. Indemnification obligations  
to present and former officers and directors arising out of acts that occurred  
from or after the Petition Date through the Effective Date shall not be assumed 
by the Reorganized Debtors and the Claims arising from such obligations shall   
have such status, Administrative or otherwise, as determined by the Court. The  
Reorganized Debtors shall provide standard and customary indemnification for all
officers and directors who are employed or serve, as the case may be, after the 
Effective Date for all actions or events occurring after the Petition Date.     

H.       Exculpation and Limitation of Liability                                

         Neither the Debtors, the Reorganized Debtors, the Creditors' Committee,
the Investors, nor any of their respective present or former members, officers, 
directors, employees, advisors, attorneys, affiliates or agents, who served in  
such capacities after the Petition Date, shall have or incur any liability to   
any holder of a Claim or an Interest, or any other party in interest, or any of 
their respective agents, employees, representatives, financial advisors,        
attorneys, or affiliates, or any of their successors or assigns, for any        
post-Petition Date 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 an act or omission that constitutes   
fraud, breach of duty of loyalty, willful misconduct or gross negligence;       
provided, however, that nothing herein shall affect any Person's obligations    
under the Plan nor shall anything herein preclude any party in interest from    
enforcing the terms of the Plan.                                                

        Notwithstanding any other provision of this Plan, no holder of a Claim
or Interest, no other party in interest, none of their respective agents,       
employees, representatives, financial advisors, attorneys, or affiliates, and no
successors or assigns of the foregoing, shall have any right of action against  
the Debtors, the Reorganized Debtors, the Creditors' Committee, the Investors,  
or any of their respective present or former members, officers, directors,      
employees, advisors, attorneys, affiliates or agents, who served in such        
capacities after the Petition Date, for any post-Petition Date 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 an act or omission that constitutes fraud, breach of duty of loyalty,
willful misconduct or gross negligence; provided, however, that nothing herein  
shall affect any Person's obligations under the Plan nor shall anything herein  
preclude any party in interest from enforcing the terms of the Plan.            

 ARTICLE XIV

MISCELLANEOUS PROVISIONS

A.       Bar Dates for Certain Claims                                           

1.       Administrative Claims                                

        All requests for payment of an Administrative Claim (other than as
set forth in Article XIV.A.2 of this Plan) must be filed with the Court and     
served on counsel for the Debtors and counsel for the Creditors' Committee by   
the Administrative Claims Bar Date, which shall be no later than sixty (60)     
calender days after the Confirmation Date. Unless the Plan Administrator objects
to an Administrative Claim by the Administrative Claims Objection Deadline,     
which shall be no later than sixty (60) Business Days from the Administrative   
Claims Bar Date, such Administrative Claim shall be deemed allowed in the amount
requested. Notwithstanding the foregoing, no request for payment of an          
Administrative Claim need be filed with respect to an Administrative Claim which
is paid or payable by a Debtor in the ordinary course of business. From and     
after the Effective Date, the Plan Administrator shall have the authority to    
file objections, settle, compromise, withdraw or litigate to judgment objections
to requests for payment of Administrative Claims without approval of the        
Bankruptcy Court.                                                               

2.       Professional Fee Claims                              

      All final requests for compensation or reimbursement of Professional
Fees pursuant to sections 327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy  
Code for services rendered to the Debtors or the Creditors' Committee prior to  
the Effective Date and Substantial Contribution Claims under section 503(b)(4)  
of the Bankruptcy Code must be filed and served on the Reorganized Debtors and  
their counsel no later than sixty (60) days after the Confirmation Date, unless 
otherwise ordered by the Court. Objections to applications of such Professionals
or other entities for compensation or reimbursement of expenses must be filed   
and served only on the Reorganized Debtors and their counsel, the Office of the 
United States Trustee, those parties that have filed notices of appearance or   
requests for notices in these cases, and the requesting Professional or other   
entity no later than sixty (60) days (or such longer period as may be allowed by
order of the Court) after the date on which the applicable application for      
compensation or reimbursement was served.                                       

B.       Modifications and Amendments                                           

      With the prior written consent of the Investors, the Plan Proponents
may alter, amend, or modify the Plan or any Exhibits thereto under section      
1127(a) of the Bankruptcy Code at any time prior to the Confirmation Date. After
the Confirmation Date and prior to substantial consummation of the Plan as      
defined in section 1101(2) of the Bankruptcy Code, the Debtors may, with the    
prior written consent of the Investors, under section 1127(b) of the Bankruptcy 
Code, institute proceedings in the Court to remedy any defect or omission or    
reconcile any inconsistencies in the Plan, the Disclosure Statement, or the     
Confirmation Order, and such matters as may be necessary to carry out the       
purpose and effect of the Plan so long as such proceedings do not adversely     
affect the treatment of holders of Claims under the Plan; provided, however,    
that prior notice of such proceedings shall be served in accordance with the    
Bankruptcy Rules or order of the Court. Notwithstanding the foregoing, any      
modification or amendment of the Plan that affects Class 4 General Unsecured    
Claims, the Plan Administrator or the Litigation Trust shall require the prior  
written consent of the Creditors' Committee, which consent shall not            
unreasonably be withheld.                                                       

C.       Non-Severability of Plan Provisions                                    

         If, prior to Confirmation, any term or provision of the Plan is held by
the Court to be invalid, void or unenforceable, then this Plan shall be invalid 
and unenforceable in its entirety, and no term or provision of the Plan shall be
valid or enforceable.                                                           

D.       Successors and Assigns                                                 

       The rights, benefits, and obligations of any Person named or referred
to in the Plan shall be binding on, and shall inure to the benefit of, any heir,
executor, administrator, successor or assign of that Person.                    

E.       Settlement Authority                                                   

 Pursuant to Fed. R. Bankr. P. 9019(a), the Debtors, Reorganized
Debtors, or Plan Administrator may compromise and settle various Claims (i)     
against them and (ii) that they have against other Persons. After the Effective 
Date, the Reorganized Debtors expressly reserve the right (with Court approval, 
following appropriate notice and opportunity for a hearing) to compromise and   
settle Claims against them that would result in any new Allowed Class or Claim  
and claims that they may have against other Persons up to and including the     
Effective Date and, with the consent of the Plan Administrator in the case of   
any such compromise or settlement that would result in any new Allowed Class or 
Claim constituting a Class 4 General Unsecured Claim.                           

F.       Payment of Statutory Fees                                              

       All fees payable under 28 U.S.C. ss. 1930, as determined by the Court
at the Confirmation Hearing, shall be paid on or before the Effective Date.     

G.       Revocation, Withdrawal, or Non-Consummation                            

       Each Plan Proponent reserves the right to revoke or withdraw the Plan
as to any or all of the Debtors prior to the Confirmation Date and to file      
subsequent plans. If any Plan Proponent revokes or withdraws the Plan as to any 
or all of the Debtors, or if Confirmation or consummation of the Plan as to any 
or all of the Debtors does not occur, then, with respect to such Debtors, (a)   
the Plan shall be null and void in all respects, (b) any settlement or          
compromise embodied in the Plan (including the fixing or limiting to an amount  
certain any Claim or Class of Claims), assumption or rejection of executory     
contracts or leases effected by the Plan, and any document or agreement executed
pursuant to the Plan, shall be deemed null and void, and (c) nothing contained  
in the Plan, and no acts taken in preparation for consummation of the Plan,     
shall (i) constitute or be deemed to constitute a waiver or release of any      
Claims by or against, or any Interests in, such Debtors or any other Person,    
(ii) prejudice in any manner the rights of such Debtors or any other Person, or 
(iii) constitute an admission of any sort by such Debtors or any other Person.  

H.       Service of Documents                                                   

    Any notice, request, or demand required or permitted to be made or
provided to or upon a Debtor or Reorganized Debtor under the Plan shall be (a)  
in writing, (b) served by (i) certified mail, return receipt requested, (ii)    
hand delivery, (iii) overnight delivery service, (iv) first class mail, or (v)  
facsimile transmission, (c) deemed to have been duly given or made when actually
delivered or, in the case of notice by facsimile transmission, when received and
telephonically confirmed, and (d) addressed as follows:                         

The Debtors                                                                     

SLI, Inc.                                                                       
500 Chapman Street                                                              
Canton, Massachusetts 02021                                                     
Att'n:    Raymond E. Dombrowski, Jr.                                            
Chief Restructuring Officer                                 
Telephone:  (781) 828-2948                                                      
Facsimile:  (781) 828-2012                                                      

with a copy to:                                                                 

SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP                                        
One Rodney Square                                                               
P.O. Box 636                                                                    
Wilmington, Delaware  19899-0636                                                
Att'n:     Gregg M. Galardi, Esq.                                               
Robert A. Weber, Esq.                                     
Megan E. Cleghorn, Esq.                                   
Telephone:  (302) 651-3000                                                      
Facsimile:  (302) 651-3001                                                      

The Creditors' Committee:                                                       

Pepper Hamilton, LLP                                                            
100 Renaissance Center                                                          
36th Floor                                                                      
Detroit, Michigan  48243-1157                                                   
Attn:    Robert S. Hertzberg, Esq.                                              
Telephone: (313) 259-7110                                                       
Facsimile (313) 259-7926                                                        

-  and  -                                                     

Pepper Hamilton, LLP                                                            
1201 Market Street                                                              
Suite 1600                                                                      
P.O. Box 1709                                                                   
Wilmington, Delaware  19899-1709                                                
Attn:    David M. Fournier, Esq.                                                
Telephone: (302) 777-6500                                                       
Facsimile: (302) 656-8865                                                       

The Investors                                                                   

Milbank, Tweed, Hadley & McCloy LLP                                             
1 Chase Manhattan Plaza                                                         
New York, New York  10005                                                       
Attn:    Dennis F. Dunne, Esq.                                                  
Risa M. Rosenberg, Esq.                                       
Telephone: (212) 530-5000                                                       
Facsimile: (212) 822-5287                                                       

- and -                                                       

Morris Nichols Arsht & Tunnell                                                  
1201 North Market Street                                                        
P.O. Box 1347 Wilmington, Delaware 19899-1347                                   
Attn:    Robert J. Dehney, Esq.                                                 
Daniel Butz, Esq.                                             
Telephone: (302) 575-7353                                                       
Facsimile: (302) 658-3989                                                       

I.       Plan Supplement(s)                                                     

         Any Plan Supplement (and amendments thereto) filed by the Debtors shall
be deemed an integral part of the Plan and shall be incorporated by reference as
if fully set forth herein.                                                      

J.       Term of Injunctions or Stays                                           

        Unless otherwise provided herein, in the Confirmation Order, or in any
other order of the Court, all injunctions or stays provided for in the Chapter  
11 Cases under sections 105 or 362 of the Bankruptcy Code, or otherwise, and    
extant on the Confirmation Date (excluding any injunctions or stays contained in
the Plan or the Confirmation Order), shall remain in full force and effect until
the Effective Date.                                                             

K.       Creditors' Committee                                                   

     On the Effective Date, the duties of the Creditors' Committee shall
terminate, except with respect to (a) any request for modification of the Plan  
or any appeal of orders entered in the Chapter 11 Cases, but only to the extent 
the foregoing shall relate (i) to the treatment of or matters otherwise         
affecting Class 4 General Unsecured Claims under the Plan, (ii) to the duties of
the Plan Administrator or Disbursing Agent under the Plan, or (iii) to the      
Litigation Trust, and (b) any applications for interim or final award of        
compensation and reimbursement of expenses to the members of the Creditors'     
Committee and professionals retained by the Creditors' Committee in the Chapter 
11 Cases.                                                                       

Dated:  Wilmington, Delaware                                                    
April 17, 2003                                        
     SLI, INC. et al.,
                     Debtors and Debtors-in-Possession

By:         
                                     ---------------------------------------
                        Name:     Raymond E. Dombrowski, Jr.
                             Title:    Chief  Restructuring Officer of
                                         Debtors and Debtors-in-Possession

SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP                                        

By:                                                                             
--------------------------------------                                    
Gregg M. Galardi (No. 2991)                                         
Robert A. Weber (No. 4013)                                          
Megan E. Cleghorn (No. 4080)                                        
One Rodney Square                                                   
P.O. Box 636                                                        
Wilmington, Delaware 19899-0636                                     
(302) 651-3000                                                      

Attorneys for Debtors and Debtors-in-Possession                                 

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                                             THE OFFICIAL COMMITTEE OF
                                       UNSECURED CREDITORS

                       By:
                                                       -------------------------
                         Name:
                          Title:

PEPPER HAMILTON, LLP                                                            

By:                                                                             
--------------------------------------------------------------------      
David M. Fournier (No. 2812)                                                    
1201 Market Street                                                              
Suite 1600                                                                      
P.O. Box 1709                                                                   
Wilmington, Delaware  19899-1709                                                

- and -                                                                         

Robert S. Hertzberg                                                             
100 Renaissance Center                                                          
36th Floor                                                                      
Detroit, Michigan  48243-1157                                                   

Attorneys for the Official Committee of                                         
Unsecured Creditors                                                             

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 EXHIBIT A
 TO JOINT CHAPTER 11 PLAN OF REORGANIZATION OF
 THE DEBTORS IN POSSESSION AND THE OFFICIAL COMMITTEE OF UNSECURED
 CREDITORS FOR SLI, INC. AND ITS UNITED STATES SUBSIDIARIES AND AFFILIATES

SCHEDULE OF OFFICERS AND DIRECTORS

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 EXHIBIT B
 TO JOINT CHAPTER 11 PLAN OF REORGANIZATION OF
 THE DEBTORS IN POSSESSION AND THE OFFICIAL COMMITTEE OF UNSECURED
 CREDITORS FOR SLI, INC. AND ITS UNITED STATES SUBSIDIARIES AND AFFILIATES

IDENTIFICATION OF REJECTED CONTRACTS AND REJECTED LEASES

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EXHIBIT C 
TO JOINT CHAPTER 11 PLAN OF REORGANIZATION OF 
THE DEBTORS IN POSSESSION AND THE OFFICIAL COMMITTEE OF UNSECURED 
CREDITORS FOR SLI, INC. AND ITS UNITED STATES SUBSIDIARIES AND AFFILIATES 

FORM OF CERTIFICATE OF INCORPORATION OF REORGANIZED SLI 

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EXHIBIT D 
TO JOINT CHAPTER 11 PLAN OF REORGANIZATION OF 
THE DEBTORS IN POSSESSION AND THE OFFICIAL COMMITTEE OF UNSECURED 
CREDITORS FOR SLI, INC. AND ITS UNITED STATES SUBSIDIARIES AND AFFILIATES 

FORM OF BY-LAWS OF REORGANIZED SLI  

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EXHIBIT E 
TO JOINT CHAPTER 11 PLAN OF REORGANIZATION OF 
THE DEBTORS IN POSSESSION AND THE OFFICIAL COMMITTEE OF UNSECURED 
CREDITORS FOR SLI, INC. AND ITS UNITED STATES SUBSIDIARIES AND AFFILIATES 

FORM OF SHAREHOLDER AGREEMENT 

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EXHIBIT F 
TO JOINT CHAPTER 11 PLAN OF REORGANIZATION OF 
THE DEBTORS IN POSSESSION AND THE OFFICIAL COMMITTEE OF UNSECURED 
CREDITORS FOR SLI, INC. AND ITS UNITED STATES SUBSIDIARIES AND AFFILIATES 

FORM OF LITIGATION TRUST AGREEMENT  

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EXHIBIT G 
TO JOINT CHAPTER 11 PLAN OF REORGANIZATION OF 
THE DEBTORS IN POSSESSION AND THE OFFICIAL COMMITTEE OF UNSECURED 
CREDITORS FOR SLI, INC. AND ITS UNITED STATES SUBSIDIARIES AND AFFILIATES 

TERM SHEET FOR NEW COMMON SHARES  

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EXHIBIT H 
TO JOINT CHAPTER 11 PLAN OF REORGANIZATION OF 
THE DEBTORS IN POSSESSION AND THE OFFICIAL COMMITTEE OF UNSECURED 
CREDITORS FOR SLI, INC. AND ITS UNITED STATES SUBSIDIARIES AND AFFILIATES 

TERM SHEET FOR RIGHTS OFFERING  

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EXHIBIT I 
TO JOINT CHAPTER 11 PLAN OF REORGANIZATION OF 
THE DEBTORS IN POSSESSION AND THE OFFICIAL COMMITTEE OF UNSECURED 
CREDITORS FOR SLI, INC. AND ITS UNITED STATES SUBSIDIARIES AND AFFILIATES 

TERM SHEET FOR REVOLVING CREDIT FACILITY  

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EXHIBIT J 
TO JOINT CHAPTER 11 PLAN OF REORGANIZATION OF 
THE DEBTORS IN POSSESSION AND THE OFFICIAL COMMITTEE OF UNSECURED 
CREDITORS FOR SLI, INC. AND ITS UNITED STATES SUBSIDIARIES AND AFFILIATES 

NON-EXCLUSIVE LIST OF LITIGATION RIGHTS 

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EXHIBIT K 
TO JOINT CHAPTER 11 PLAN OF REORGANIZATION OF 
THE DEBTORS IN POSSESSION AND THE OFFICIAL COMMITTEE OF UNSECURED 
CREDITORS FOR SLI, INC. AND ITS UNITED STATES SUBSIDIARIES AND AFFILIATES 

EQUITY SUBSCRIPTION COMMITMENT LETTER 

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 EXHIBIT L
 TO JOINT CHAPTER 11 PLAN OF REORGANIZATION OF
 THE DEBTORS IN POSSESSION AND THE OFFICIAL COMMITTEE OF UNSECURED
 CREDITORS FOR SLI, INC. AND ITS UNITED STATES SUBSIDIARIES AND AFFILIATES

ADMINISTRATIVE CLAIMS ESCROW AGREEMENT

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 EXHIBIT M
 TO JOINT CHAPTER 11 PLAN OF REORGANIZATION OF
 THE DEBTORS IN POSSESSION AND THE OFFICIAL COMMITTEE OF UNSECURED
 CREDITORS FOR SLI, INC. AND ITS UNITED STATES SUBSIDIARIES AND AFFILIATES

 PROFESSIONAL FEE ESCROW AGREEMENT

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 8-K Filing		Date		First		Last			Other Filings
		10/29/99		4
		9/9/02		4					8-K
		10/23/02		4					8-K
		10/24/02		4
		12/4/02		4
		12/9/02		4
		12/10/02		4
		2/21/03		4					8-K
		3/1/03		4
		3/13/03		4
		3/31/03		4
For The Period Ended		4/17/03		1		4
Filed On / Filed As Of		5/2/03
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