Filed On 11/26/02 5:20pm ET · SEC Files 1-10059, 333-04343-01 · Accession Number 950129-2-5923
As Of Filer Filing As/For/On Docs:Pgs Issuer Agent
11/26/02 Sterling Chemicals Holdin..Inc/TX 8-K{3,7} 11/20/02 8:688 Bowne of Houston...01/FA
Sterling Chemical Inc
Document/Exhibit Description Pages Size
1: 8-K Sterling Chemicals Holdings, Inc. - Dated 11/20/02 10 46K
2: EX-2.1 Joint Plan of Reorganization 51 320K
3: EX-2.2 First Modification to Joint Plan of Reorganization 7 38K
4: EX-2.3 Plan Supplement Pursuant to Section 12.15 586 2,099K
5: EX-2.4 Notice of Designation of Board of Directors 4 25K
6: EX-2.5 Order Confirming the Joint Plan of Reorganization 24 71K
7: EX-99.1 Unaudited Consolidated Balance Sheet 4± 26K
8: EX-99.2 Press Release Issued on 11/20/2002 2 15K
EXHIBIT 2.1
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
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:
: Chapter 11
In re: :
: Case No. 01-37805-H4-11
STERLING CHEMICALS HOLDINGS, INC., et al., :
-- ---
: Jointly Administered
Debtors. :
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JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11, TITLE 11, UNITED STATES CODE
OF STERLING CHEMICALS HOLDINGS, INC., ET AL., DEBTORS
D. J. Baker
(Texas Bar No. 01566500)
Rosalie Walker Gray
(Texas Bar No. 20729020)
Alexandra Margolis
(Texas Bar No. 12978500)
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
Telephone: (212) 735-3000
Fax: (212) 735-2000
Jeffrey E. Spiers
(Texas Bar No. 18933950)
Timothy A. Davidson II
(Texas Bar No. 24012503)
Andrews & Kurth L.L.P.
600 Travis Street, Suite 4200
Houston, Texas 77002-2910
Telephone: (713) 220-4200
Fax: (713) 220-4285
Dated: October 14, 2002 Attorneys for Sterling Chemicals Holdings, Inc.,
Houston, Texas et al., Debtors
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS............................................................................................1
1.1 "Administrative Claim"..................................................................................1
1.2 "Administrative Claims Special Bar Date"................................................................1
1.3 "Allowed"...............................................................................................1
1.4 "Bankruptcy Code".......................................................................................2
1.5 "Bankruptcy Court"......................................................................................2
1.6 "Bankruptcy Rules"......................................................................................2
1.7 "Bar Date(s)"...........................................................................................2
1.8 "Business Day"..........................................................................................2
1.9 "Cash"..................................................................................................2
1.10 "Chapter 11 Case".......................................................................................2
1.11 "Claim".................................................................................................2
1.12 "Claims Objection Deadline".............................................................................2
1.13 "Class".................................................................................................2
1.14 "Class 5 Excess Proceeds"...............................................................................2
1.15 "Class 5 Proceeds"......................................................................................2
1.16 "Committed Common Shares Investment"....................................................................2
1.17 "Committed Preferred Shares Investment".................................................................2
1.18 "Confirmation"..........................................................................................2
1.19 "Confirmation Date".....................................................................................2
1.20 "Confirmation Deposit"..................................................................................2
1.21 "Confirmation Hearing"..................................................................................2
1.22 "Confirmation Order"....................................................................................2
1.23 "Convenience Claim".....................................................................................3
1.24 "Creditor"..............................................................................................3
1.25 "Creditors Committee"...................................................................................3
1.26 "Creditors Committee Majority"..........................................................................3
1.27 "Cure"..................................................................................................3
1.28 "Debtor(s)".............................................................................................3
1.29 "Designated Director(s), Officer(s), and Employee(s)"...................................................3
1.30 "Dilution"..............................................................................................3
1.31 "DIP Facility Claim"....................................................................................3
1.32 "Disbursing Agent"......................................................................................3
1.33 "Disclosure Statement"..................................................................................3
1.34 "Disclosure Statement Order"............................................................................3
1.35 "Disputed"..............................................................................................3
1.36 "Disputed Claims Reserve"...............................................................................4
1.37 "Distribution Date".....................................................................................4
1.38 "Distribution Record Date"..............................................................................4
1.39 "Effective Date"........................................................................................4
1.40 "Estate(s)".............................................................................................4
1.41 "Face Amount"...........................................................................................4
1.42 "Fibers Buyout Agreement"...............................................................................4
1.43 "Final Order"...........................................................................................4
1.44 "General Unsecured Claim"...............................................................................4
1.45 "Holdings General Unsecured Claim"......................................................................4
1.46 "Impaired"..............................................................................................4
1.47 "Implementation Date"...................................................................................4
1.48 "Indemnification Obligation"............................................................................5
1.49 "Indenture Trustees"....................................................................................5
1.50 "Intercompany Claim"....................................................................................5
1.51 "Interests".............................................................................................5
1.52 "Investment Agreement"..................................................................................5
1.53 "Investor"..............................................................................................5
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Appendix A
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1.54 "Lender Claim"..........................................................................................5
1.55 "Lien"..................................................................................................5
1.56 "Litigation Rights".....................................................................................5
1.57 "Merger"................................................................................................5
1.58 "Merger Agreement"......................................................................................5
1.59 "Merger Consideration"..................................................................................5
1.60 "New Credit Agreement"..................................................................................5
1.61 "New Indentures"........................................................................................5
1.62 "New SCI Common Shares".................................................................................5
1.63 "New SCI Notes".........................................................................................5
1.64 "New SCI Preferred Shares"..............................................................................5
1.65 "New SCI Warrants"......................................................................................6
1.66 "New Securities"........................................................................................6
1.67 "New UC Notes"..........................................................................................6
1.68 "Non-Compensatory Damages Claim"........................................................................6
1.69 "Old Chemicals Common Shares"...........................................................................6
1.70 "Old Discount Note Claim"...............................................................................6
1.71 "Old Discount Notes"....................................................................................6
1.72 "Old Discount Notes Indenture Trustee"..................................................................6
1.73 "Old 11-1/4% Notes".....................................................................................6
1.74 "Old 11-3/4% Notes".....................................................................................6
1.75 "Old Holdings Common Shares"............................................................................6
1.76 "Old Holdings Preferred Shares".........................................................................6
1.77 "Old Holdings Stock Options"............................................................................6
1.78 "Old Indentures"........................................................................................6
1.79 "Old Note Claim"........................................................................................7
1.80 "Old Notes".............................................................................................7
1.81 "Old Securities"........................................................................................7
1.82 "Old 12-3/8% Secured Note Claim.........................................................................7
1.83 "Old 12-3/8% Secured Notes".............................................................................7
1.84 "Old 12-3/8% Secured Notes Indenture Trustee"...........................................................7
1.85 "Old Unsecured Note Claim"..............................................................................7
1.86 "Old Unsecured Notes Indenture Trustee".................................................................7
1.87 "Other Priority Claim"..................................................................................7
1.88 "Other Secured Claim"...................................................................................7
1.89 "Person"................................................................................................7
1.90 "Petition Date".........................................................................................7
1.91 "Plan"..................................................................................................7
1.92 "Plan Supplement".......................................................................................7
1.93 "Pre-Petition Credit Facility Agreements"...............................................................7
1.94 "Priority Tax Claim"....................................................................................7
1.95 "Pro Rata"..............................................................................................7
1.96 "Proceeds"..............................................................................................7
1.97 "Professional"..........................................................................................8
1.98 "Professional Fee Claim"................................................................................8
1.99 "Proof of Claim"........................................................................................8
1.100 "PulpCo Business".......................................................................................8
1.101 "PulpCo Sale"...........................................................................................8
1.102 "Purchase Agreement"....................................................................................8
1.103 "Registration Rights Agreement".........................................................................8
1.104 "Reinstated"............................................................................................8
1.105 "Reorganized Debtor(s)".................................................................................8
1.106 "Reorganized Sterling Canada"...........................................................................8
1.107 "Reorganized Sterling Chemicals"........................................................................8
1.108 "Reorganized Subsidiary Debtor(s)"......................................................................8
1.109 "Restructuring Transactions"............................................................................8
1.110 "Resurgence"............................................................................................9
1.111 "Rights Offering".......................................................................................9
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Appendix A
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1.112 "Rights Offering Commencement Date".................................................................... 9
1.113 "Rights Offering Pro Rata Share"....................................................................... 9
1.114 "Rights Offering Record Date".......................................................................... 9
1.115 "Schedules"............................................................................................ 9
1.116 "SCI Management Incentive Plan"........................................................................ 9
1.117 "Secured Claim"........................................................................................ 9
1.118 "Secured Noteholder Claim Amount"...................................................................... 9
1.119 "Self-Insured Tort Claim".............................................................................. 9
1.120 "Sterling Canada"...................................................................................... 9
1.121 "Sterling Chemicals"................................................................................... 9
1.122 "Sterling Chemicals Interests"......................................................................... 9
1.123 "Sterling Holdings".................................................................................... 9
1.124 "Sterling Holdings Interests".......................................................................... 9
1.125 "Sterling Interests"...................................................................................10
1.126 "Sterling NRO".........................................................................................10
1.127 "Sterling NRO Claim"...................................................................................10
1.128 "Sterling Pulp"........................................................................................10
1.129 "Subordinated Claim"...................................................................................10
1.130 "Subscription Rights"..................................................................................10
1.131 "Subsidiary Debtors"...................................................................................10
1.132 "Subsidiary Interests".................................................................................10
1.133 "Substantial Contribution Claim".......................................................................10
1.134 "Tag Along Agreement"..................................................................................10
1.135 "Term Sheet"...........................................................................................10
1.136 "Tort Claim"...........................................................................................10
1.137 "Unimpaired"...........................................................................................10
1.138 "Unofficial Secured Noteholders Committee".............................................................10
1.139 "Unofficial Secured Noteholders Committee Majority"....................................................10
1.140 "Unsecured Distribution"...............................................................................10
1.141 "Unsecured Proceeds"...................................................................................11
ARTICLE II COMPROMISE AND SETTLEMENT OF DISPUTES................................................................11
2.1 Proposed Compromise and Settlement.....................................................................11
2.2 Effect of Compromise and Settlement....................................................................12
2.3 Approval of Compromise and Settlement..................................................................12
ARTICLE III CLASSIFICATION OF CLAIMS AND INTERESTS..............................................................12
3.1 Introduction...........................................................................................12
3.2 Unimpaired Claims......................................................................................12
3.3 Impaired Claims........................................................................................12
3.4 Unimpaired Interests...................................................................................13
3.5 Impaired Interests.....................................................................................13
ARTICLE IV TREATMENT OF CLAIMS AND INTERESTS....................................................................13
4.1 Unclassified Claims....................................................................................13
4.2 Unimpaired Classes of Claims...........................................................................14
4.3 Impaired Classes of Claims.............................................................................14
4.4 Unimpaired Classes of Interests........................................................................16
4.5 Impaired Classes of Interests..........................................................................16
4.6 Reservation of Rights Regarding Claims.................................................................17
4.7 Separate Liabilities of Reorganized Debtors............................................................17
ARTICLE V ACCEPTANCE OR REJECTION OF THE PLAN...................................................................17
5.1 Impaired Classes of Claims and Interests Entitled to Vote..............................................17
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Appendix A
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5.2 Acceptance by an Impaired Class........................................................................17
5.3 Presumed Acceptances by Unimpaired Classes.............................................................17
5.4 Classes Deemed to Reject Plan..........................................................................17
5.5 Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code........................................17
ARTICLE VI MEANS FOR IMPLEMENTATION OF THE PLAN.................................................................17
6.1 Continued Corporate Existence..........................................................................17
6.2 Cancellation of Old Securities and Agreements..........................................................18
6.3 Certificates of Incorporation and Bylaws...............................................................18
6.4 Merger.................................................................................................18
6.5 Intercompany Transactions..............................................................................18
6.6 Fibers Management Buyout; PulpCo Sale..................................................................19
6.7 Funding................................................................................................19
6.8 Implementing Actions...................................................................................19
6.9 Authorization and Issuance of New Securities...........................................................20
6.10 SCI Management Incentive Plan..........................................................................20
6.11 Directors and Officers of Reorganized Debtors..........................................................21
6.12 Revesting of Assets; Releases of Liens; Effective Date Restructurings..................................21
6.13 Preservation of Rights of Action.......................................................................21
6.14 Effectuating Documents; Further Transactions...........................................................21
6.15 Exemption From Certain Transfer Taxes..................................................................22
6.16 Indenture Trustees.....................................................................................22
ARTICLE VII TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES...............................................22
7.1 Assumed Contracts and Leases...........................................................................22
7.2 Payments Related to Assumption of Contracts and Leases.................................................22
7.3 Rejected Contracts and Leases..........................................................................22
7.4 Rejection Damages Bar Date.............................................................................23
7.5 Compensation and Benefit Programs......................................................................23
7.6 Indemnification Obligations............................................................................23
ARTICLE VIII PROVISIONS GOVERNING DISTRIBUTIONS.................................................................24
8.1 Distributions for Claims Allowed as of Effective Date..................................................24
8.2 Interest on Claims.....................................................................................24
8.3 Distributions by Disbursing Agent......................................................................24
8.4 Means of Cash Payment..................................................................................24
8.5 Calculation of Distribution Amounts of New Securities..................................................24
8.6 Delivery of Distributions..............................................................................24
8.7 Distribution Record Date for Holders of Old Notes......................................................25
8.8 Surrender of Old Notes.................................................................................25
8.9 Withholding and Reporting Requirements.................................................................25
8.10 Setoffs................................................................................................26
8.11 Prepayment.............................................................................................26
8.12 No Distribution in Excess of Allowed Amount of Claim...................................................26
8.13 Allocation of Distributions............................................................................26
ARTICLE IX PROCEDURES FOR RESOLVING DISPUTED, CONTINGENT, AND
UNLIQUIDATED CLAIMS AND DISTRIBUTIONS WITH RESPECT THERETO.....................................................26
9.1 Prosecution of Objections to Claims....................................................................26
9.2 Treatment of Disputed Claims; Disputed Claims Reserve..................................................27
9.3 Distributions on Account of Disputed Claims Once They Are Allowed......................................27
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Appendix A
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ARTICLE X CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN....................................27
10.1 Conditions to Confirmation.............................................................................27
10.2 Conditions to Implementation Date......................................................................28
10.3 Conditions to Effective Date...........................................................................28
10.4 Waiver of Conditions...................................................................................29
ARTICLE XI RETENTION OF JURISDICTION............................................................................29
ARTICLE XII MISCELLANEOUS PROVISIONS............................................................................30
12.1 Professional Fee Claims; Expense Reimbursements........................................................30
12.2 Administrative Claims..................................................................................32
12.3 Payment of Statutory Fees..............................................................................32
12.4 Modifications and Amendments...........................................................................32
12.5 Severability of Plan Provisions........................................................................32
12.6 Successors and Assigns.................................................................................32
12.7 Compromises and Settlements............................................................................32
12.8 Releases and Satisfaction of Subordination Rights......................................................32
12.9 Releases and Related Matters...........................................................................33
12.10 Discharge of the Debtors...............................................................................33
12.11 Injunction.............................................................................................33
12.12 Exculpation and Limitation of Liability................................................................34
12.13 Binding Effect.........................................................................................34
12.14 Revocation, Withdrawal, or Non-Consummation............................................................34
12.15 Plan Supplement........................................................................................35
12.16 Notices................................................................................................35
12.17 Indemnification of Debtors' Directors, Officers, and Employees.........................................35
12.18 Dissolution of Creditors Committee.....................................................................35
12.19 Term of Injunctions or Stays...........................................................................36
12.20 Computation of Time....................................................................................36
12.21 Governing Law..........................................................................................36
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Appendix A
EXHIBITS
Exhibit A Summary of Terms of New SCI Notes
Exhibit B Summary of Terms of New UC Notes
Exhibit C Summary of Terms of New SCI Preferred Shares
Exhibit D Summary of Terms of New SCI Common Shares
Exhibit E Summary of Terms of New SCI Warrants
Exhibit F Summary of Terms of Rights Offering
vi
Appendix A
JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11, TITLE 11, UNITED STATES CODE
OF STERLING CHEMICALS HOLDINGS, INC., ET AL., DEBTORS
INTRODUCTION
Sterling Chemicals Holdings, Inc., its subsidiary Sterling
Chemicals, Inc., and its direct and indirect subsidiaries Sterling Chemicals
Energy, Inc., Sterling Fibers, Inc., Sterling Chemicals International, Inc.,
Sterling Canada, Inc., Sterling Pulp Chemicals US, Inc., and Sterling Pulp
Chemicals, Inc., hereby propose the following joint plan of reorganization for
the resolution of their outstanding Claims (as defined herein) and Interests (as
defined herein). Reference is made to the Disclosure Statement (as defined
herein) distributed contemporaneously herewith for a discussion of the history,
businesses, properties, results of operations, projections for future
operations, and risk factors of the Debtors (as defined herein), a summary and
analysis of the Plan (as defined herein), and certain related matters, including
the New Securities (as defined herein) to be issued under the Plan. The Debtors
are the proponents of the Plan within the meaning of Section 1129 of the
Bankruptcy Code (as defined herein).
All holders of Claims are encouraged to read the Plan and the
Disclosure Statement in their entirety before voting to accept or reject the
Plan. Subject to certain restrictions and requirements set forth in Section 1127
of the Bankruptcy Code, Rule 3019 of the Bankruptcy Rules (as defined herein),
and Article XII of the Plan, the Debtors reserve the right to alter, amend,
modify, revoke, or withdraw the Plan prior to its substantial consummation.
ARTICLE I
DEFINITIONS
For purposes of the Plan, except as expressly provided or
unless the context otherwise requires, all capitalized terms not otherwise
defined in the Plan shall have the meanings ascribed to them in Article I of the
Plan. Any term used in the 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. 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.
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
means such document or exhibit as it may be amended, modified, or supplemented
from time to time, (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,"
"hereof," 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.
1.1 "ADMINISTRATIVE CLAIM" means a Claim, other than a DIP Facility Claim, 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 pursuant to 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 and operating the businesses of the Debtors, including wages, salaries,
bonuses, or commissions for services rendered after the commencement of the
Chapter 11 Case, (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 of the
Bankruptcy Court under Section 546(c)(2)(A) of the Bankruptcy Code, (e) Cure
payments for executory contracts and unexpired leases that are entitled to be
treated as Administrative Claims pursuant to a Final Order of the Bankruptcy
Court under Section 365 of the Bankruptcy Code, and (f) all fees and expenses
payable under Section 12.1(c) or 12.1(e) of the Plan.
1.2 "ADMINISTRATIVE CLAIMS SPECIAL BAR DATE" means the date designated by the
Bankruptcy Court as the last date for asserting certain Administrative Claims
that arose between the Petition Date and such bar date or that arise after such
bar date and before the Effective Date to the extent that such Administrative
Claim was known or reasonably should have been known to the holder thereof as of
such bar date.
1.3 "ALLOWED" means, with respect to any Claim, such Claim or any portion
thereof (a) that has been allowed by a Final Order, (b) as to which, on or by
the Effective Date, (i) no Proof of Claim has been filed with the Bankruptcy
Court and (ii) the liquidated and noncontingent amount of which is included in
the Schedules, other than a Claim that is included in the Schedules at zero, in
an unknown amount, or as Disputed, (c) for which a Proof of Claim in a
liquidated amount has been timely filed with the Bankruptcy Court pursuant to
the Bankruptcy Code, any Final Order of the Bankruptcy Court, or other
applicable bankruptcy law, and as to which
Appendix A
either (i) no objection to its allowance has been filed within the periods of
limitation fixed by the Plan, the Bankruptcy Code, or any order of the
Bankruptcy Court, or (ii) any objection to its allowance has been settled or
withdrawn, or has been denied by a Final Order, or (d) that is expressly allowed
in a liquidated amount in the Plan.
1.4 "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.
1.5 "BANKRUPTCY COURT" means the United States Bankruptcy Court for the Southern
District of Texas or such other court as may have jurisdiction over the Chapter
11 Case.
1.6 "BANKRUPTCY RULES" means the Federal Rules of Bankruptcy Procedure.
1.7 "BAR DATE(S)" means the date(s) designated by the Bankruptcy Court as the
last date(s) for filing Proofs of Claim against the Debtors.
1.8 "BUSINESS DAY" means any day, excluding Saturdays, Sundays, or "legal
holidays" (as defined in Bankruptcy Rule 9006(a)), on which commercial banks are
open for business in New York, New York.
1.9 "CASH" means legal tender of the United States or equivalents thereof.
1.10 "CHAPTER 11 CASE" means the jointly administered Chapter 11 cases of the
Debtors.
1.11 "CLAIM" means (a) the right to payment, whether or not such right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, or (b)
the right to an equitable remedy for breach of performance if such breach gives
rise to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured, or unsecured.
1.12 "CLAIMS OBJECTION DEADLINE" means the last day for filing objections to
Disputed Claims, which day shall be the later of (a) the Effective Date or (b)
sixty (60) days after the applicable Proof of Claim is filed.
1.13 "CLASS" means a category of holders of Claims or Interests, as described in
Article III of the Plan.
1.14 "CLASS 5 EXCESS PROCEEDS" means the amount, if any, by which the Class 5
Proceeds distributed to holders of Allowed Old 12-3/8% Secured Note Claims
exceed an amount equal to (a) the Secured Noteholder Claim Amount minus (b) $80
million.
1.15 "CLASS 5 PROCEEDS" means a portion of the Proceeds equal to the lesser of
(a) the Proceeds minus $80 million and (b) the Secured Noteholder Claim Amount.
1.16 "COMMITTED COMMON SHARES INVESTMENT" means the agreement of certain holders
of General Unsecured Claims, certain holders of Old Unsecured Note Claims,
certain holders of Self-Insured Tort Claims, and Investor to purchase New SCI
Common Shares for an aggregate amount equal to $30 million, in accordance with
the terms of the Plan and the Rights Offering or the Investment Agreement, as
applicable.
1.17 "COMMITTED PREFERRED SHARES INVESTMENT" means the agreement of Investor to
purchase New SCI Preferred Shares for an aggregate amount equal to $30 million,
in accordance with the terms of the Plan and the Investment Agreement.
1.18 "CONFIRMATION" means entry by the Bankruptcy Court of the Confirmation
Order.
1.19 "CONFIRMATION DATE" means the date of entry by the clerk of the Bankruptcy
Court of the Confirmation Order.
1.20 "CONFIRMATION DEPOSIT" means funds in the aggregate amount of $60 million
that will be deposited by certain holders of General Unsecured Claims, certain
holders of Old Unsecured Note Claims, certain holders of Self-Insured Tort
Claims, and Investor to fund the Committed Common Shares Investment and the
Committed Preferred Shares Investment, in accordance with the terms of the Plan
and the Rights Offering or the Investment Agreement, as applicable.
1.21 "CONFIRMATION HEARING" means the hearing to consider Confirmation of the
Plan under Section 1128 of the Bankruptcy Code.
1.22 "CONFIRMATION ORDER" means the order entered by the Bankruptcy Court
confirming the Plan.
2
Appendix A
1.23 "CONVENIENCE CLAIM" means any unsecured Claim against the Debtors in an
amount equal to or less than $500.
1.24 "CREDITOR" means any Person who holds a Claim against any of the Debtors.
1.25 "CREDITORS COMMITTEE" means the official committee of unsecured Creditors
appointed pursuant to Section 1102(a) of the Bankruptcy Code in the Chapter 11
Case.
1.26 "CREDITORS COMMITTEE MAJORITY" means a majority of the members of the
Creditors Committee.
1.27 "CURE" means (a) the distribution of Cash, or the distribution of such
other property as may be agreed upon by the parties or ordered by the Bankruptcy
Court, in an amount equal to all unpaid monetary obligations, without interest,
or such other amount as may be agreed upon by the parties under an executory
contract or unexpired lease, to the extent such obligations are enforceable
under the Bankruptcy Code and applicable bankruptcy law, or (b) the taking of
such other actions as may be agreed upon by the parties or ordered by the
Bankruptcy Court, in either case, with respect to the assumption of an executory
contract or unexpired lease pursuant to Section 365(b) of the Bankruptcy Code.
1.28 "DEBTOR(S)" means, individually, Sterling Holdings, Sterling Chemicals, or
any of the Subsidiary Debtors, and collectively, Sterling Holdings, Sterling
Chemicals, and the Subsidiary Debtors, including in their capacity as
debtors-in-possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code.
1.29 "DESIGNATED DIRECTOR(S), OFFICER(S), AND EMPLOYEE(S)" means, individually,
(a) each director, officer, and employee of each of the Debtors that served in
such capacity at any time on or after October 7, 2002, and (b) each director,
officer, or employee of each of the Debtors that served as a fiduciary of any
employee benefit plan or program of any of the Debtors at any time after October
7, 2002, and, collectively, all of the foregoing Persons.
1.30 "DILUTION" means, with respect to any holder of New SCI Common Shares, and
assuming the conversion of all New SCI Preferred Shares into New SCI Common
Shares as of the Effective Date, a reduction subsequent to the Effective Date in
the percentage of outstanding New SCI Common Shares in Reorganized Sterling
Chemicals represented by the New SCI Common Shares previously issued to such
holder (a) to the extent necessary to give effect to the issuance of stock or
the exercise of stock options pursuant to the SCI Management Incentive Plan, (b)
to the extent necessary to give effect to the issuance of stock pursuant to the
exercise of any New SCI Warrants, (c) to the extent necessary to give effect to
the issuance of New SCI Preferred Shares issued as paid in kind dividends on
outstanding New SCI Preferred Shares, or (d) otherwise as a result of the
issuance of common shares or the implementation of other management incentive
programs by Reorganized Sterling Chemicals after the Effective Date.
1.31 "DIP FACILITY CLAIM" means any Claim arising under that certain Revolving
Credit Agreement, dated as of July 19, 2001, among Sterling Chemicals, the
Subsidiary Debtors, The CIT Group/Business Credit, Inc., as Administrative
Agent, and various financial institutions, as lenders thereunder, and any
related documents, agreements, and instruments, including, without limitation,
any entitlement to postpetition interest thereunder.
1.32 "DISBURSING AGENT" means Reorganized Sterling Chemicals or any party
designated by Reorganized Sterling Chemicals, in its sole discretion, to serve
as disbursing agent under the Plan.
1.33 "DISCLOSURE STATEMENT" means the written disclosure statement that relates
to the Plan, as amended, supplemented, or modified from time to time, and that
is prepared and distributed in accordance with Section 1125 of the Bankruptcy
Code and Bankruptcy Rule 3018.
1.34 "DISCLOSURE STATEMENT ORDER" means the order entered by the Bankruptcy
Court approving the Disclosure Statement.
1.35 "DISPUTED" means, with respect to any Claim, that such Claim has not been
Allowed pursuant to the Plan or a Final Order of the Bankruptcy Court, and:
(a) if no Proof of Claim has been filed, 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 Bankruptcy
Court;
(b) if a Proof of Claim has been filed, or deemed to have been filed, by
the applicable Bar Date, (i) for which a corresponding Claim has been
listed on the Schedules as unliquidated, contingent, or disputed, (ii) 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 Proof of Claim exceeds the amount of such Claim as listed
in the Schedules, or (iii) as to which a Debtor has
3
Appendix A
timely filed an objection or request for estimation in accordance with the
Plan, the Bankruptcy Code, the Bankruptcy Rules, and any orders of the
Bankruptcy 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) for which a Proof of Claim was required to be filed by the Bankruptcy
Code, the Bankruptcy Rules, or an order of the Bankruptcy Court, but as to
which a Proof of Claim was not timely or properly filed;
(d) is a Claim for damages based upon the rejection by the Debtors of an
executory contract or unexpired lease under Section 365 of the Bankruptcy
Code and as to which the applicable Bar Date has not passed; or
(e) is disputed in accordance with the provisions of the Plan.
1.36 "DISPUTED CLAIMS RESERVE" means the reserve of Cash, New SCI Common Shares,
New UC Notes, and New SCI Warrants established and maintained by the Disbursing
Agent on account of Disputed Claims.
1.37 "DISTRIBUTION DATE" means the date on which initial distributions are made
under the Plan, such date to occur on or as soon as practicable after the
Effective Date, but in any case no later than five (5) Business Days after the
Effective Date.
1.38 "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 third (3rd) Business Day after the Confirmation Date at 5:00 p.m. prevailing
Eastern time.
1.39 "EFFECTIVE DATE" means the first Business Day after which all conditions to
the consummation of the Plan as set forth in Section 10.3 of the Plan have been
satisfied or waived as provided in Section 10.4 of the Plan, and is the date on
which the Plan becomes effective.
1.40 "ESTATE(S)" means, individually, the estate of each Debtor in the Chapter
11 Case and, collectively, the estates of all Debtors in the Chapter 11 Case,
created pursuant to Section 541 of the Bankruptcy Code.
1.41 "FACE AMOUNT" means (a) when used with reference to a Disputed Claim, the
full stated amount claimed by the holder of such Claim in any Proof of Claim
timely filed with the Bankruptcy Court or otherwise deemed timely filed by any
Final Order of the Bankruptcy Court or other applicable bankruptcy law, and (b)
when used with reference to an Allowed Claim, the Allowed amount of such Claim.
1.42 "FIBERS BUYOUT AGREEMENT" means the purchase agreement between Sterling
Chemicals and members of local senior management of Sterling Fibers, Inc.
setting forth the terms and conditions of the management buyout of Sterling
Fibers, Inc. and Sterling Chemicals International, Inc., substantially in the
form of the document included in the Plan Supplement.
1.43 "FINAL ORDER" means an order or judgment of the Bankruptcy Court, or other
court of competent jurisdiction, as entered on the docket in the Chapter 11
Case, 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.
1.44 "GENERAL UNSECURED CLAIM" means a Claim arising prior to the Petition Date
against any Debtor other than Sterling Holdings that is not a Priority Tax
Claim, Other Priority Claim, Lender Claim, Secured Claim, Other Secured Claim,
Old 12-3/8% Secured Note Claim, Tort Claim, Self-Insured Tort Claim,
Intercompany Claim, Old Unsecured Note Claim, Non-Compensatory Damages Claim,
Subordinated Claim, or Convenience Claim.
1.45 "HOLDINGS GENERAL UNSECURED CLAIM" means a Claim arising prior to the
Petition Date against Sterling Holdings that is not a Priority Tax Claim, Other
Priority Claim, Lender Claim, Secured Claim, Other Secured Claim, Old 12-3/8%
Secured Note Claim, Tort Claim, Self-Insured Tort Claim, Intercompany Claim, Old
Discount Note Claim, Old Unsecured Note Claim, Non-Compensatory Damages Claim,
Subordinated Claim, or Convenience Claim.
1.46 "IMPAIRED" means, with respect to any Claim or Interest, that such Claim or
Interest is impaired within the meaning of Section 1124 of the Bankruptcy Code.
1.47 "IMPLEMENTATION DATE" means the date on which the Merger is consummated,
which date is anticipated to be at least ten (10) days but not more than thirty
(30) days before the Effective Date.
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1.48 "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 professional, advisor, or
representative of the Debtors, pursuant to bylaws, articles or certificate of
incorporation, contract, or otherwise, as may be in existence immediately prior
to the Petition Date.
1.49 "INDENTURE TRUSTEES" means, collectively, the Old 12-3/8% Secured Notes
Indenture Trustee, the Old Unsecured Notes Indenture Trustee, and the Old
Discount Notes Indenture Trustee.
1.50 "INTERCOMPANY CLAIM" means any Claim arising prior to the Petition Date
against a Debtor by another Debtor or by a non-Debtor subsidiary or affiliate of
a Debtor.
1.51 "INTERESTS" means (a) the legal, equitable, contractual, or other rights of
any Person (including any 401K plan or plan participant) with respect to
Sterling Interests, (b) the legal, equitable, contractual, or other rights of
any Person with respect to the Subsidiary Interests, and (c) the legal,
equitable, contractual, or other rights of any Person to acquire or receive any
of the foregoing.
1.52 "INVESTMENT AGREEMENT" means the Investment Agreement among Sterling
Holdings, Sterling Chemicals and Investor, substantially in the form of such
document included in the Plan Supplement.
1.53 "INVESTOR" means either (i) (A) Resurgence on behalf of its Affiliates'
managed funds and accounts or (B) the managed funds and accounts of Resurgence
and its Affiliates, as appropriate for the context, or (ii) such other party or
parties identified by the Debtors as Investor in accordance with the process
described in Section II.D of the Disclosure Statement.
1.54 "LENDER CLAIM" means any Claim arising under or relating to the
Pre-Petition Credit Facility Agreements.
1.55 "LIEN" means a charge against or interest in property to secure payment of
a debt or performance of an obligation.
1.56 "LITIGATION RIGHTS" means the claims, rights of action, suits, or
proceedings, whether in law or in equity, whether known or unknown, that the
Debtors or their Estates may hold against any Person, which are to be
transferred to Reorganized Sterling Chemicals on the Effective Date and retained
by Reorganized Sterling Chemicals pursuant to Section 6.13 of the Plan.
1.57 "MERGER" has the meaning ascribed thereto in Section 6.4 of the Plan.
1.58 "MERGER AGREEMENT" means the Merger Agreement between Sterling Holdings and
Sterling Chemicals setting forth the terms and conditions of the Merger,
substantially in the form of such document included in the Plan Supplement.
1.59 "MERGER CONSIDERATION" means the 65,000 New SCI Common Shares to be
authorized and issued by Reorganized Sterling Chemicals on the Implementation
Date pursuant to the Merger and the Plan and which constitute 1.3% of the New
SCI Common Shares to be initially issued under the Plan (assuming the conversion
of all New SCI Preferred Shares into New SCI Common Shares).
1.60 "NEW CREDIT AGREEMENT" means the revolving credit agreement to be entered
into by Reorganized Sterling Chemicals on or before the Effective Date as a
condition to consummation of the Plan, substantially in the form of such
document included in the Plan Supplement, to provide a portion of the funds
necessary to make payments required to be made on the Effective Date, as well as
funds for working capital and other general corporate purposes after the
Effective Date.
1.61 "NEW INDENTURES" means, collectively, the Indentures to be dated as of the
Effective Date between the respective indenture trustees specified therein and
Reorganized Sterling Chemicals, governing the New SCI Notes and the New UC
Notes, respectively, substantially in the forms of such documents included in
the Plan Supplement.
1.62 "NEW SCI COMMON SHARES" means the common shares of Reorganized Sterling
Chemicals to be authorized under Section 6.9(a) of the Plan as of the
Implementation Date, as described on Exhibit D to the Plan.
1.63 "NEW SCI NOTES" means the senior secured notes to be issued by Reorganized
Sterling Chemicals to the holders of Old 12-3/8% Secured Note Claims if, and in
an aggregate principal amount equal to the amount by which, the Secured
Noteholder Claim Amount exceeds the amount of Class 5 Proceeds distributed to
the holders of Old 12-3/8% Secured Note Claims, to be authorized under Section
6.9(b) of the Plan as of the Effective Date, as described on Exhibit A to the
Plan and substantially in the form included in the Plan Supplement.
1.64 "NEW SCI PREFERRED SHARES" means the convertible preferred shares of
Reorganized Sterling Chemicals, liquidation value $13.80 per share, to be
authorized under Section 6.9(b) of the Plan as of the Effective Date, as
described on Exhibit C to the Plan.
5
Appendix A
1.65 "NEW SCI WARRANTS" means the warrants to acquire New SCI Common Shares to
be authorized under Section 6.9(b) of the Plan as of the Effective Date,
substantially in the form of such document included in the Plan Supplement, as
described on Exhibit E to the Plan.
1.66 "NEW SECURITIES" means, collectively, the New SCI Notes, the New UC Notes,
the New SCI Preferred Shares, the New SCI Common Shares, the New SCI Warrants,
and the Subscription Rights.
1.67 "NEW UC NOTES" means the secured notes to be issued by Reorganized Sterling
Chemicals to the holders of Allowed General Unsecured Claims, Allowed
Self-Insured Tort Claims, and Allowed Old Unsecured Note Claims if, and in an
aggregate principal amount equal to the amount of, any Class 5 Excess Proceeds
distributed to holders of Allowed Old 12-3/8% Secured Note Claims, to be
authorized under Section 6.9(b) of the Plan as of the Effective Date, as
described on Exhibit B to the Plan and substantially in the form included in the
Plan Supplement.
1.68 "NON-COMPENSATORY DAMAGES CLAIM" means any Claim against any of the Debtors
for any fine, penalty, forfeiture, attorneys' fees (to the extent such
attorneys' fees are punitive in nature), or multiple, exemplary, or punitive
damages, to the extent that such fine, penalty, forfeiture, attorneys' fees, or
damage is not compensation for actual pecuniary loss suffered by the holder of
such Claim, including any Claim based upon, arising from, or relating to any
cause of action whatsoever (including, without limitation, violation of law,
personal injury, or wrongful death, whether secured or unsecured, liquidated or
unliquidated, fixed or contingent, matured or unmatured, known or unknown,
foreseen or unforeseen, then existing or thereafter arising in law, equity or
otherwise); provided, however, that such term shall not include any Claim that
might otherwise constitute a Non-Compensatory Damages Claim but for a Final
Order determining such Claim to be classified and treated as an Administrative
Claim, DIP Facility Claim, Priority Tax Claim, Other Priority Claim, Lender
Claim, Secured Claim, Other Secured Claim, Old 12-?% Secured Note Claim, General
Unsecured Claim, Tort Claim, Holdings General Unsecured Claim, Intercompany
Claim, Old Discount Note Claim, Old Unsecured Note Claim, Subordinated Claim, or
Convenience Claim.
1.69 "OLD CHEMICALS COMMON SHARES" means shares of the common stock, par value
$0.01 per share, of Sterling Chemicals issued and outstanding as of the Petition
Date.
1.70 "OLD DISCOUNT NOTE CLAIM" means any Claim arising from or relating to the
Old Discount Notes.
1.71 "OLD DISCOUNT NOTES" means the 13-1/2% Senior Secured Discount Notes due
2008 issued by Sterling Holdings and outstanding as of the Petition Date.
1.72 "OLD DISCOUNT NOTES INDENTURE TRUSTEE" means State Street Bank and Trust
Company, as Indenture Trustee under the Indenture governing the Old Discount
Notes.
1.73 "OLD 11-1/4% NOTES" means the 11 1/4% Senior Subordinated Notes due 2007
issued by Sterling Chemicals and outstanding as of the Petition Date.
1.74 "OLD 11-3/4% NOTES" means the 11 3/4% Senior Subordinated Notes due 2006
issued by Sterling Chemicals and outstanding as of the Petition Date.
1.75 "OLD HOLDINGS COMMON SHARES" means shares of the common stock, par value
$0.01 per share, of Sterling Holdings issued and outstanding as of the Petition
Date.
1.76 "OLD HOLDINGS PREFERRED SHARES" means shares of the preferred stock of
Sterling Holdings issued and outstanding as of the Petition Date, including (a)
shares of Holdings' non-voting redeemable Series A Preferred Stock, liquidation
value $100 per share, and (b) shares of Holdings' non-voting Cumulative
Redeemable Preferred Stock, Series B, liquidation value $1,000 per share.
1.77 "OLD HOLDINGS STOCK OPTIONS" means options to purchase Old Holdings Common
Shares outstanding as of the Petition Date.
1.78 "OLD INDENTURES" means, collectively, (a) the Indenture dated August 15,
1996, between Fleet National Bank, as trustee, and Sterling Holdings, pursuant
to which the Old Discount Notes were issued, (b) the Indenture dated July 23,
1999, between Harris Trust Company of New York, as trustee, and Sterling
Chemicals, pursuant to which the Old 12-3/8% Secured Notes were issued, (c) the
Indenture dated August 15, 1996, between Fleet National Bank, as trustee, and
Sterling Chemicals, pursuant to which the Old 11-3/4% Notes were issued, and (d)
the Indenture dated April 7, 1997, between Fleet National Bank, as trustee, and
Sterling Chemicals, pursuant to which the Old 11-1/4% Notes were issued.
6
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1.79 "OLD NOTE CLAIM" means any Claim arising from or relating to the Old Notes.
1.80 "OLD NOTES" means, collectively, (a) the Old Discount Notes, (b) the Old
12-3/8% Secured Notes, (c) the Old 11-3/4% Notes, and (d) the Old 11-1/4% Notes.
1.81 "OLD SECURITIES" means, collectively, the Old Holdings Common Shares, the
Old Holdings Preferred Shares, the Old Holdings Stock Options, the Old Chemicals
Common Shares, and the Old Notes.
1.82 "OLD 12-3/8% SECURED NOTE CLAIM" means any Claim based upon the Old 12-3/8%
Secured Notes.
1.83 "OLD 12-3/8% SECURED NOTES" means the 12-3/8% Senior Secured Notes due 2006
issued by Sterling Chemicals and outstanding as of the Petition Date.
1.84 "OLD 12-3/8% SECURED NOTES INDENTURE TRUSTEE" means The Bank of New York,
as Indenture Trustee under the Indenture governing the Old 12-3/8% Secured
Notes.
1.85 "OLD UNSECURED NOTE CLAIM" means any Claim based upon the Old 11-1/4% Notes
or the Old 11-3/4% Notes.
1.86 "OLD UNSECURED NOTES INDENTURE TRUSTEE" means HSBC Bank USA, as Indenture
Trustee under the Indenture governing the Old 11-1/4% Notes and the Indenture
governing the Old 11-3/4% Notes.
1.87 "OTHER PRIORITY CLAIM" means a Claim entitled to priority pursuant to
Section 507(a) of the Bankruptcy Code other than a Priority Tax Claim or an
Administrative Claim.
1.88 "OTHER SECURED CLAIM" means a Secured Claim arising prior to the Petition
Date against any of the Debtors, other than a Lender Claim, an Intercompany
Claim, an Old Discount Note Claim, or an Old 12-3/8% Secured Note Claim.
1.89 "PERSON" means any individual, firm, partnership, corporation, trust,
association, company, limited liability company, joint stock company, joint
venture, governmental unit, or other entity or enterprise.
1.90 "PETITION DATE" means July 16, 2001, the date on which the Debtors filed
their petitions for relief commencing the Chapter 11 Case.
1.91 "PLAN" means this joint plan of reorganization under Chapter 11 of the
Bankruptcy Code and all exhibits annexed hereto or referenced herein, as the
same may be amended, modified, or supplemented from time to time.
1.92 "PLAN SUPPLEMENT" means the supplement to the Plan containing the forms of
the Certificate of Incorporation of Reorganized Sterling Chemicals, the Bylaws
of Reorganized Sterling Chemicals, the New Credit Agreement, the Merger
Agreement, the SCI Management Incentive Plan, the Purchase Agreement, the New
Indentures, the New SCI Warrants, the Registration Rights Agreement, the Tag
Along Agreement, the Fibers Buyout Agreement, and the Investment Agreement.
1.93 "PRE-PETITION CREDIT FACILITY AGREEMENTS" means, collectively, the
$155,000,000 Revolving Credit Agreement, dated as of July 23, 1999, among
Sterling Chemicals and the Subsidiary Debtors, as the borrowers, various
financial institutions as the lenders, DLJ Capital Funding, Inc., as the
syndication agent, Credit Suisse First Boston, as the documentation agent, and
The CIT Group/Business Credit, Inc., as the administrative agent, as amended,
and all other documents, agreements, and instruments related thereto.
1.94 "PRIORITY TAX CLAIM" means a Claim that is entitled to priority pursuant to
Section 507(a)(8) of the Bankruptcy Code.
1.95 "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) in such Class, unless the Plan provides otherwise.
1.96 "PROCEEDS" means the Cash (and the fair market value of any other type of
consideration acceptable to the Unofficial Secured Noteholders Committee
Majority or its advisors) received from the PulpCo Sale, net of (a) all funds
used to extinguish any of the funded indebtedness of the PulpCo Business at the
time of the sale, (b) any and all fees, costs, and expenses paid or incurred in
connection with the sale, including, without limitation, any breakup or
termination fees and expense reimbursements paid or incurred in connection with
the PulpCo Sale, and (c) a provision for taxes or alternative minimum taxes, if
any.
7
Appendix A
1.97 "PROFESSIONAL" means any professional employed in the Chapter 11 Case
pursuant to Sections 327 or 1103 of the Bankruptcy Code or otherwise and any
professional seeking compensation or reimbursement of expenses in connection
with the Chapter 11 Case pursuant to Section 503(b) of the Bankruptcy Code.
1.98 "PROFESSIONAL FEE CLAIM" means a Claim of a Professional for compensation
or reimbursement of costs and expenses relating to services rendered after the
Petition Date and prior to and including the Effective Date.
1.99 "PROOF OF CLAIM" means a Proof of Claim filed with the Bankruptcy Court in
connection with the Chapter 11 Case.
1.100 "PULPCO BUSINESS" means the operations engaged in by the Debtors related
to the production of chemicals used primarily in the pulp and paper and water
treatment industries and the licensing, engineering, and construction of
chlorine dioxide generators that are conducted through (a) Subsidiary Debtors
Sterling Canada, Sterling Pulp Chemicals US, Inc., and Sterling Pulp Chemicals,
Inc. and (b) the Debtors' nondebtor subsidiaries and affiliates Sterling Pulp
Chemicals, Ltd., Sterling Pulp Chemicals (Australia) Pty Limited, Sterling NRO,
Ltd., Sterling Chemicals Acquisitions, Inc., Sterling Australia Holdings, Inc.,
Sterling Pulp Chemicals Fuzhou Ltd., Sterling (Sask) Holdings, Ltd., Sterling
Pulp Chemicals (Sask) Ltd., and 619220 Saskatchewan Ltd.
1.101 "PULPCO SALE" means the sale of the PulpCo Business to be consummated on
the Effective Date in accordance with the terms and conditions set forth in the
Purchase Agreement.
1.102 "PURCHASE AGREEMENT" means the Asset and Stock Purchase Agreement entered
into by Sterling Chemicals, Sterling Canada, Sterling Pulp Chemicals US, Inc.,
Sterling Pulp Chemicals, Inc., and the Debtors' nondebtor affiliate Sterling
Chemicals Acquisitions, Inc., as sellers, and the purchaser thereunder, setting
forth the terms and conditions of the PulpCo Sale, substantially in the form of
such document included in the Plan Supplement.
1.103 "REGISTRATION RIGHTS AGREEMENT" means the agreement between Reorganized
Sterling Chemicals, Investor, and any recipient of a distribution from the
Unsecured Distribution or purchaser under the Rights Offering receiving at least
5% of the fully diluted New SCI Common Shares on the Effective Date,
substantially in the form of such document included in the Plan Supplement,
providing for normal and customary demand registration rights for Investor and
normal and customary piggyback rights for such recipient.
1.104 "REINSTATED" means (a) leaving unaltered the legal, equitable, and
contractual rights to which the holder of a Claim is entitled so as to leave
such Claim unimpaired in accordance with Section 1124 of the Bankruptcy Code, or
(b) notwithstanding any contractual provision or applicable law that entitles
the holder of such Claim to demand or receive accelerated payment of such Claim
after the occurrence of a default, (i) 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, (ii) reinstating the maturity of such
Claim as such maturity existed before such default, (iii) compensating the
holder of such Claim for any damages incurred as a result of any reasonable
reliance by such holder on such contractual provision or such applicable law,
and (iv) not otherwise altering the legal, equitable, or contractual rights to
which the holder of such Claim is entitled; 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 is based, including, but not
limited to, financial covenant ratios, negative pledge covenants, covenants or
restrictions on merger or consolidation, covenants regarding corporate
existence, or covenants 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 for a Claim to be considered
Reinstated.
1.105 "REORGANIZED DEBTOR(S)" means, individually, any reorganized Debtor or its
successor and, collectively, all reorganized Debtors or their successors, on or
after the Effective Date, in each case, after giving effect to the Restructuring
Transactions.
1.106 "REORGANIZED STERLING CANADA"means reorganized Sterling Canada or its
successor, on and after the Effective Date and after giving effect to the
Restructuring Transactions.
1.107 "REORGANIZED STERLING CHEMICALS" means reorganized Sterling Chemicals or
its successor, on and after the Effective Date and after giving effect to the
Restructuring Transactions.
1.108 "REORGANIZED SUBSIDIARY DEBTOR(S)" means, individually, a reorganized
Subsidiary Debtor or its successor and, collectively, all reorganized Subsidiary
Debtors or their successors, on or after the Effective Date, in each case, after
giving effect to the Restructuring Transactions.
1.109 "RESTRUCTURING TRANSACTIONS" means the restructurings, mergers,
consolidations, and dispositions described in Sections 6.4, 6.5, 6.6, 6.8, and
6.12, including, without limitation, the Merger, the PulpCo Sale, and the sale
of Sterling Fibers, Inc. and Sterling Chemicals International, Inc. to a newly
formed entity owned by members of local senior management of Sterling Fibers,
Inc.
8
Appendix A
1.110 "RESURGENCE" means Resurgence Asset Management, L.L.C.
1.111 "RIGHTS OFFERING" means the issuance of the Subscription Rights by
Sterling Chemicals to holders of Allowed or Disputed General Unsecured Claims,
Allowed or Disputed Self-Insured Tort Claims, and Allowed Old Unsecured Note
Claims on the Rights Offering Commencement Date, described in Exhibit F to the
Plan.
1.112 "RIGHTS OFFERING COMMENCEMENT DATE" means the date on which Sterling
Chemicals commences the Rights Offering by mailing to holders of Allowed or
Disputed General Unsecured Claims, Allowed or Disputed Self-Insured Tort Claims,
and Allowed Old Unsecured Note Claims as of the Rights Offering Record Date a
description of the Subscription Rights and instructions for the exercise
thereof, which date shall be established by the Bankruptcy Court.
1.113 "RIGHTS OFFERING PRO RATA SHARE" means, with respect to any Allowed or
Disputed General Unsecured Claim, Allowed or Disputed Self-Insured Tort Claim,
or Allowed Old Unsecured Note Claim, a fraction, (a) the numerator of which is
the Face Amount of such Claim as of the Rights Offering Record Date and (b) the
denominator of which is the aggregate Face Amount of all Allowed General
Unsecured Claims, Allowed Old Unsecured Note Claims, and Allowed Self-Insured
Tort Claims as of the Rights Offering Record Date. A Rights Offering Pro Rata
Share is subject to recalculation as described in Exhibit F hereto.
1.114 "RIGHTS OFFERING RECORD DATE" means the date that is the record date to
determine which holders of Claims are entitled to receive Subscription Rights,
which date shall be established by the Bankruptcy Court.
1.115 "SCHEDULES" means the schedules of assets and liabilities and the
statements of financial affairs filed in the Bankruptcy Court by the Debtors, as
such schedules or statements may be amended or supplemented from time to time in
accordance with Bankruptcy Rule 1009 or orders of the Bankruptcy Court.
1.116 "SCI MANAGEMENT INCENTIVE PLAN" means the management incentive plan to be
adopted by Reorganized Sterling Chemicals pursuant to Section 6.10 of the Plan,
substantially in the form of such document included in the Plan Supplement.
1.117 "SECURED CLAIM" means a Claim that is secured by a Lien which is not
subject to avoidance under the Bankruptcy Code or otherwise invalid under the
Bankruptcy Code or applicable state law, on property in which an Estate has an
interest or that is subject to setoff under Section 553 of the Bankruptcy Code,
to the extent of the value of the Claim holder's interest in the Estate's
interest in such property or to the extent of the amount subject to setoff, as
applicable, as determined by a Final Order pursuant to Section 506(a) of the
Bankruptcy Code, or in the case of setoff, pursuant to Section 553 of the
Bankruptcy Code, or as otherwise agreed upon in writing by the Debtors or the
Reorganized Debtors and the holder of such Claim.
1.118 "SECURED NOTEHOLDER CLAIM AMOUNT" means an amount equal to the sum of (a)
the aggregate principal outstanding on the Old 12-3/8% Secured Notes as of the
Petition Date ($295,000,000), plus (b) interest thereon accrued and unpaid as of
the Petition Date ($18,253,125), plus (c) accrued and unpaid interest on the Old
12-3/8% Secured Notes (including interest on accrued and unpaid interest
calculated in accordance with the indenture governing the Old 12-3/8% Secured
Notes) accruing from the Petition Date until (but not including) the Effective
Date at a rate equal to 12-3/8% per annum.
1.119 "SELF-INSURED TORT CLAIM" has the meaning ascribed to such term in Section
4.3(f) of the Plan.
1.120 "STERLING CANADA" means Sterling Canada, Inc., a Delaware corporation.
1.121 "STERLING CHEMICALS" means Sterling Chemicals, Inc., a Delaware
corporation.
1.122 "STERLING CHEMICALS INTERESTS" means, collectively, all equity interests
in Sterling Chemicals, including, without limitation, the Old Chemicals Common
Shares, together with any options, warrants, conversion rights, rights of first
refusal, or other rights, contractual or otherwise, to acquire or receive any
stock or other equity ownership interests in Sterling Chemicals, and any
contracts, subscriptions, commitments, or agreements pursuant to which a party
was or could have been entitled to receive shares, securities, or other
ownership interests in Sterling Chemicals as of the Petition Date.
1.123 "STERLING HOLDINGS" means Sterling Chemicals Holdings, Inc., a Delaware
corporation.
1.124 "STERLING HOLDINGS INTERESTS" means, collectively, all equity interests in
Sterling Holdings, including, without limitation, the Old Holdings Common
Shares, the Old Holdings Preferred Shares, and the Old Holdings Stock Options,
together with any other options, warrants, conversion rights, rights of first
refusal, or other rights, contractual or otherwise, to acquire or receive any
Old Holdings Common Shares, Old Holdings Preferred Shares, Old Holdings Stock
Options, or other equity ownership interests in
9
Appendix A
Sterling Holdings, and any contracts, subscriptions, commitments, or agreements
pursuant to which a party was or could have been entitled to receive shares,
securities, or other ownership interests in Sterling Holdings as of the Petition
Date.
1.125 "STERLING INTERESTS" means, collectively, the Sterling Holdings Interests
and the Sterling Chemicals Interests.
1.126 "STERLING NRO" means Sterling NRO, Ltd., an Ontario corporation and
nondebtor subsidiary of the Debtors.
1.127 "STERLING NRO CLAIM" means the Administrative Claim of Sterling NRO
against Sterling Canada pursuant to the intercompany note dated as of July 19,
2001.
1.128 "STERLING PULP" means Sterling Pulp Chemicals, Ltd., an Ontario
corporation and nondebtor subsidiary of the Debtors.
1.129 "SUBORDINATED CLAIM" means any Claim subordinated pursuant to Sections
510(b) or (c) of the Bankruptcy Code, which shall include any Claim arising from
the rescission of a purchase or sale of any Old Security, any Claim for damages
arising from the purchase or sale of an Old Security, or any Claim for
reimbursement, contribution, or indemnification on account of any such Claim.
1.130 "SUBSCRIPTION RIGHTS" means the subscription rights issued by Reorganized
Sterling Chemicals to holders of Allowed or Disputed General Unsecured Claims,
Allowed or Disputed Self-Insured Tort Claims, and Allowed Old Unsecured Note
Claims to subscribe for New SCI Common Shares pursuant to the Committed Common
Shares Investment, the exercise of which subscription rights shall entitle the
holder of any such Claim to purchase New SCI Common Shares pursuant thereto only
to the extent provided for in the Plan and in the procedures governing the
Rights Offering.
1.131 "SUBSIDIARY DEBTORS" means, collectively, Sterling Chemicals Energy, Inc.,
Sterling Fibers, Inc., Sterling Canada, Sterling Chemicals International, Inc.,
Sterling Pulp Chemicals US, Inc., and Sterling Pulp Chemicals, Inc., 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
Sterling Holdings or Sterling Chemicals as of the Petition Date.
1.133 "SUBSTANTIAL CONTRIBUTION CLAIM" means a claim for compensation or
reimbursement of costs and expenses relating to services rendered in making a
substantial contribution in the Chapter 11 Case pursuant to Section 503(b)(3),
(4), or (5) of the Bankruptcy Code.
1.134 "TAG ALONG AGREEMENT" means the agreement between Reorganized Sterling
Chemicals, Investor, and any recipient of a distribution from the Unsecured
Distribution or purchaser under the Rights Offering, substantially in the form
of such document included in the Plan Supplement, providing for certain tag
along rights for such recipients and purchasers as described on Exhibit D to the
Plan.
1.135 "TERM SHEET" means that certain term sheet dated as of September 4, 2002,
among Sterling Chemicals, Sterling Holdings, Resurgence, the Creditors
Committee, and the Unofficial Secured Noteholders Committee, a copy of which is
annexed as Appendix C to the Disclosure Statement.
1.136 "TORT CLAIM" means any Claim other than a Non-Compensatory Damages Claim
against any Debtor (other than Holdings) based upon, arising from, or relating
to any cause of action based upon personal injury, property damage, or wrongful
death.
1.137 "UNIMPAIRED" means, with respect to any Claim, that such Claim is not
impaired within the meaning of Section 1124 of the Bankruptcy Code.
1.138 "UNOFFICIAL SECURED NOTEHOLDERS COMMITTEE" means the unofficial ad hoc
committee of certain holders of Old 12-3/8% Secured Notes, as such committee may
be reconstituted from time to time.
1.139 "UNOFFICIAL SECURED NOTEHOLDERS COMMITTEE MAJORITY" means holders of a
majority in aggregate outstanding principal amount of the Old 12-3/8% Secured
Notes held by the members of the Unofficial Secured Noteholders Committee that
have executed the Term Sheet.
1.140 "UNSECURED DISTRIBUTION" means (a) 585,000 New SCI Common Shares to be
authorized and issued by Reorganized Sterling Chemicals as of the Effective Date
pursuant to the Plan, which constitute 11.7% of the New SCI Common Shares to be
initially issued pursuant to the Plan (assuming the conversion of all New SCI
Preferred Shares into New SCI Common Shares), (b) the New SCI Warrants, (c) if
Class 5 Excess Proceeds are distributed to holders of Allowed Old 12-3/8%
Secured Note Claims, the New UC Notes, and (d) if Unsecured Proceeds are
available, the Unsecured Proceeds.
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1.141 "UNSECURED PROCEEDS" means the amount, if any, by which the Proceeds
exceed the sum of (a) the Secured Noteholder Claim Amount plus (b) $80 million.
ARTICLE II
COMPROMISE AND SETTLEMENT OF DISPUTES
2.1 PROPOSED COMPROMISE AND SETTLEMENT
The Plan incorporates a proposed compromise and settlement of certain
issues among the Debtors, the Creditors Committee, the holders of DIP Facility
Claims, the Old 12-3/8% Secured Notes Indenture Trustee, and the Unofficial
Secured Noteholders Committee. These issues relate primarily to the following:
(a) the treatment of the Pre-Petition Credit Facility Agreements and
the Lender Claims under the orders of the Bankruptcy Court approving the
Debtors' postpetition financing facility;
(b) the nature and amount of exit financing required by the Debtors to
emerge from Chapter 11;
(c) the value of the Debtors' Estates on an individual and a
consolidated basis, and the proper method of determining such value;
(d) whether the Estate of each Debtor should be treated separately for
purposes of making payments to holders of Claims;
(e) whether and to what extent the Old 12-3/8% Secured Note Claims are
substantially oversecured, fully secured, or undersecured, considering potential
challenges to their alleged Liens, and thus whether the holders of such Claims
are entitled to be treated as holders of only Secured Claims or are entitled to
be treated as holders of both Secured Claims and unsecured, deficiency Claims;
(f) if the Old 12-3/8% Secured Note Claims are undersecured, whether
the deficiency amounts constitute senior obligations vis-a-vis any other Old
Note Claims or other unsecured Claims and are thus entitled to enforce
subordination rights against any such Claims;
(g) the right of holders of the Old 12-3/8% Secured Notes to receive
postpetition interest on their Claims pursuant to Section 506(b) of the
Bankruptcy Code;
(h) whether there is any value at any of the Subsidiary Debtors for any
holder of unsecured Claims if the guarantees supporting the Old 12-3/8% Secured
Note Claims are enforced against each of such Subsidiary Debtors, and whether
and to what extent such guarantees are entitled to be enforced against each of
such Subsidiary Debtors;
(i) whether and to what extent the Old Discount Note Claims are secured
or undersecured, the extent of any value in the collateral that secures such
Claims, and whether holders of such Claims are entitled to be treated as holders
of both Secured Claims and unsecured, deficiency Claims;
(j) whether the Holdings General Unsecured Claims are entitled to share
in any recovery under the Plan given that there are no unencumbered assets at
Sterling Holdings with which to pay them;
(k) the amount and priority of Intercompany Claims and the voidability
of certain intercompany transfers;
(l) entitlement to payment, on the Effective Date, as a deemed Allowed
Administrative Claim, of the (i) professional fees and reasonable expenses
incurred by the Unofficial Secured Noteholders Committee for its professional
advisors consistent with the terms of the engagement letters of such
professionals executed by the members of the Unofficial Secured Noteholders
Committee and (ii) the professional fees, expenses, and costs of the Old 12-3/8%
Secured Notes Indenture Trustee, in each case without further action by such
parties; and
(m) other issues having to do with the rights of certain Estates,
Claims, or Classes of Claims vis-a-vis other Estates, Claims, or Classes of
Claims.
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2.2 EFFECT OF COMPROMISE AND SETTLEMENT
As a result of the compromise and settlement contained in the Plan, and
only for purposes of distributions under the Plan, (a) Claims against each
Estate (other than Holdings) shall be deemed to be Claims against the Estates as
a whole, any Proof of Claim filed against one or more of the Debtors (other than
Holdings) shall be deemed to be a single Claim filed against the Estates as a
whole, and all duplicate Proofs of Claim for the same Claim filed against more
than one Debtor shall be deemed expunged; (b) all guarantees by one Debtor in
favor of any other Debtor shall be eliminated, and no distributions under the
Plan shall be made on account of Claims based upon such guarantees; and (c) for
purposes of determining the availability of the right of setoff under Section
553 of the Bankruptcy Code, subject to the other provisions of Section 553,
debts due to any Debtor may be set off against the debts of any other Debtor.
The Plan does not provide for substantive consolidation of the Debtors' Estates.
In accordance with Section 4.7 of the Plan, the structure of the Plan shall not
operate to impose liability on any Reorganized Debtor for the Claims against any
other Debtor or the debts and obligations of any other Reorganized Debtor.
2.3 APPROVAL OF COMPROMISE AND SETTLEMENT
The Plan constitutes a motion for approval of the compromise and
settlement, and the Confirmation Order, subject to the occurrence of the
Effective Date, shall constitute an order of the Bankruptcy Court approving the
compromise and settlement as fair and equitable and within the bounds of
reasonableness.
ARTICLE III
CLASSIFICATION OF CLAIMS AND INTERESTS
3.1 INTRODUCTION
In accordance with Section 1123(a)(1) of the Bankruptcy Code,
Administrative Claims and Priority Tax Claims have not been classified, and the
respective treatment of such unclassified claims is set forth in Section 4.1 of
the Plan.
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 such
Claim or Interest has not been paid, released, or otherwise settled prior to the
Effective Date. A Claim or Interest may be 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.
3.2 UNIMPAIRED CLAIMS
Class 1: Other Priority Claims
Class 1 consists of all Other Priority Claims.
Class 2: Lender Claims
Class 2 consists of all Lender Claims.
Class 3: Convenience Claims
Class 3 consists of all Convenience Claims.
3.3 IMPAIRED CLAIMS
Class 4: Other Secured Claims
Class 4 consists of separate sub-Classes for each Other
Secured Claim against any of the Debtors. Each sub-Class is deemed to
be a separate Class for all purposes under the Bankruptcy Code,
including for voting purposes.
Class 5: Old 12-3/8% Secured Note Claims
Class 5 consists of all Old 12-3/8% Secured Note Claims.
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Class 6: Old Discount Note Claims
Class 6 consists of all Old Discount Note Claims.
Class 7: General Unsecured Claims
Class 7 consists of all General Unsecured Claims.
Class 8: Old Unsecured Note Claims
Class 8 consists of all Old Unsecured Note Claims.
Class 9: Tort Claims
Class 9 consists of all Tort Claims.
Class 10: Intercompany Claims
Class 10 consists of all Intercompany Claims.
Class 11: Non-Compensatory Damages Claims
Class 11 consists of all Non-Compensatory Damages Claims.
Class 12: Subordinated Claims
Class 12 consists of all Subordinated Claims.
Class 13: Holdings General Unsecured Claims
Class 13 consists of all Holdings General Unsecured Claims.
3.4 UNIMPAIRED INTERESTS
Class 14: Subsidiary Interests
Class 14 consists of all Subsidiary Interests.
3.5 IMPAIRED INTERESTS
Class 15: Sterling Interests
Class 15 consists of all Sterling Interests.
ARTICLE IV
TREATMENT OF CLAIMS AND INTERESTS
4.1 UNCLASSIFIED CLAIMS
(A) ADMINISTRATIVE CLAIMS
With respect to each Allowed Administrative Claim, except as
otherwise provided for herein, and subject to the requirements of Sections 12.1
through 12.3 of the Plan, on, or as soon as reasonably practicable after, the
latest of (i) the Distribution Date, (ii) the date such Administrative Claim
becomes an Allowed Administrative Claim, or (iii) the date such Administrative
Claim becomes payable pursuant to any agreement between a Debtor and the holder
of such Administrative Claim, the holder of each such Allowed Administrative
Claim shall receive in full satisfaction, settlement, release, and discharge of
and in exchange for such Allowed Administrative Claim, (A) Cash equal to the
unpaid portion of such Allowed Administrative Claim or (B) such other less
favorable treatment as to which the applicable Debtor and such holder shall have
agreed upon in writing; provided, however, that
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Allowed Administrative Claims with respect to liabilities incurred by a Debtor
in the ordinary course of business during the Chapter 11 Case shall be paid in
the ordinary course of business in accordance with the terms and conditions of
any agreements relating thereto.
On the Effective Date, any and all Administrative Claims,
other than the Sterling NRO Claim, against a Debtor held by any of the Debtors
or by any nondebtor subsidiary or affiliate of the Debtors, shall be cancelled
and disallowed by agreement of the parties. On the Effective Date, the Sterling
NRO Claim shall be cancelled as a result of the intercompany transactions
described in Sections 6.5(b) and (c).
(B) DIP FACILITY CLAIMS
The DIP Facility Claims shall be deemed Allowed in their
entirety for all purposes of the Plan and the Chapter 11 Case. Each holder of an
Allowed DIP Facility Claim shall receive on the later of the Effective Date or
the date on which such DIP Facility Claim becomes payable pursuant to any
agreement between the Debtors and the holder of such DIP Facility Claim, in full
satisfaction, settlement, release, and discharge of and in exchange for such
Allowed DIP Facility Claim, (i) Cash equal to the full amount of such Allowed
DIP Facility Claim, or (ii) such other less favorable treatment as to which the
Debtors and such holder shall have agreed upon in writing.
(C) PRIORITY TAX CLAIMS
Each holder of an Allowed Priority Tax Claim shall receive on
the later of the Distribution Date or the date on which such Claim becomes an
Allowed Claim, in full satisfaction, settlement, release, and discharge of and
in exchange for such Allowed Priority Tax Claim, (i) Cash equal to the unpaid
portion of such Allowed Priority Tax Claim, (ii) such other less favorable
treatment as to which the applicable Debtor and such holder shall have agreed
upon in writing, or (iii) at the Reorganized Debtors' sole discretion, deferred
Cash payments having a value, as of the Effective Date, equal to such Allowed
Priority Tax Claim, over a period not exceeding six (6) years after the date of
assessment of such Allowed Priority Tax Claim.
4.2 UNIMPAIRED CLASSES OF CLAIMS
(A) CLASS 1: OTHER PRIORITY CLAIMS
On, or as soon as reasonably practicable after, the latest of
(i) the Distribution Date, (ii) the date on which such Claim becomes an Allowed
Other Priority Claim, or (iii) the date on which such Other Priority Claim
becomes payable pursuant to any agreement between a Debtor and the holder of
such Other Priority Claim, each holder of an Allowed Other Priority Claim shall
receive, in full satisfaction, settlement, release, discharge of, in exchange
for, and on account of such Allowed Other Priority Claim, either (A) Cash equal
to the unpaid portion of such Allowed Other Priority Claim or (B) such other
less favorable treatment as to which the applicable Debtor and such holder shall
have agreed upon in writing.
(B) CLASS 2: LENDER CLAIMS
Each holder of a Lender Claim, in full satisfaction,
settlement, release, discharge of, in exchange for, and on account of such
Lender Claim, has been paid in full prior to the Confirmation Date and such
payment is hereby ratified. The rights alleged by any holder of a Lender Claim
in a Proof of Claim, including, without limitation, Proof of Claim number 1773
filed by The CIT Group/Business Credit, Inc., are hereby deemed conformed to and
limited by the foregoing treatment; and such Lender Claims as hereby conformed
and limited are hereby deemed Allowed and satisfied.
(C) CLASS 3: CONVENIENCE CLAIMS
On the Distribution Date, each holder of an Allowed
Convenience Claim shall receive Cash in an amount equal to the lesser of (i) the
Face Amount of such Claim and (ii) $500.
4.3 IMPAIRED CLASSES OF CLAIMS
(A) CLASS 4: OTHER SECURED CLAIMS
On the Effective Date, at the option of the Debtors, either
(i) the legal, equitable, and contractual rights of each holder of an Allowed
Other Secured Claim shall be Reinstated; (ii) (A) each holder of an Allowed
Other Secured Claim shall retain the Liens securing such Allowed Other Secured
Claim, whether the property subject to such Liens is retained by the Debtors or
transferred to another entity, to the extent of such Allowed Other Secured
Claim, and (B) each holder of an Allowed Other Secured
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Claim shall receive deferred Cash payments totaling at least the amount of such
Allowed Other Secured Claim, of a value, as of the Effective Date, of at least
the value of such holder's interest in the Estate's interest in such property;
or (iii) the collateral securing such Allowed Other Secured Claim shall be
surrendered to the holder of such Allowed Other Secured Claim. The Debtors'
failure to object to any Other Secured Claim in the Chapter 11 Case shall be
without prejudice to the Debtors' or the Reorganized Debtors' right to contest
or otherwise defend against such Claim in the appropriate forum when and if such
Claim is sought to be enforced by the Other Secured Claim holder.
Notwithstanding Section 1141(c) or any other provision of the Bankruptcy Code,
all pre-petition Liens on property of any Debtor held by or on behalf of the
Other Secured Claim holders with respect to such Claims shall survive the
Effective Date and continue in accordance with the contractual terms of the
underlying agreements with such Claim holders until, as to each such Claim
holder, the Allowed Claims of such Other Secured Claim holder are paid in full.
Nothing in this Section 4.3(a) or elsewhere in the Plan shall preclude the
Debtors or the Reorganized Debtors from challenging the validity of any alleged
Lien on any asset of a Debtor or the value of the property that secures any
alleged Lien.
(B) CLASS 5: OLD 12-3/8% SECURED NOTE CLAIMS
The Old 12-3/8% Secured Note Claims shall be deemed Allowed
in their entirety for all purposes of the Plan and the Chapter 11 Case. On the
Effective Date, all Old 12-3/8% Secured Notes shall be deemed cancelled and
extinguished. On the Distribution Date, each holder of an Old 12-3/8% Secured
Note Claim, in full satisfaction, settlement, release, discharge of, in
exchange for, and on account of such Old 12-3/8% Secured Note Claim, shall
receive, subject to compliance by such holder with Section 8.8:
(i) its Pro Rata share of the Class 5 Proceeds; and
(ii) if the Secured Noteholder Claim Amount exceeds the amount
of the Class 5 Proceeds, its Pro Rata share of the New SCI Notes.
To the extent that the Class 5 Proceeds and the New SCI Notes have not been
distributed to the Old 12-3/8% Secured Notes Indenture Trustee on the Effective
Date, each holder of an Old 12-3/8% Secured Note Claim shall receive its Pro
Rata share of interest that shall accrue on the Class 5 Proceeds and the New
SCI Notes at a rate of 10% per annum from the Effective Date through and
including the date on which such Class 5 Proceeds and New SCI Notes are
distributed to the Old 12-3/8% Secured Notes Indenture Trustee, to be paid in
Cash on such distribution date; provided, however, that interest on the New
SCI Notes shall not be paid pursuant to this Section 4.3(b) for any time period
during which interest is accruing on the New SCI Notes.
(C) CLASS 6: OLD DISCOUNT NOTE CLAIMS
The Old Discount Note Claims shall be deemed Allowed in their
entirety for all purposes of the Plan and the Chapter 11 Case. On the
Implementation Date, all Old Discount Notes shall be deemed cancelled and
extinguished. Each holder of an Allowed Old Discount Note Claim, in full
satisfaction, settlement, release, discharge of, in exchange for, and on account
of such Allowed Old Discount Note Claim, shall receive, on the Implementation
Date, its Pro Rata share of the Merger Consideration, subject to Dilution.
(D) CLASS 7: GENERAL UNSECURED CLAIMS
Each holder of an Allowed General Unsecured Claim, in full
satisfaction, settlement, release, discharge of, in exchange for, and on account
of such Allowed General Unsecured Claim, shall receive (i) on the Distribution
Date, its Pro Rata share (together with all other holders of Allowed General
Unsecured Claims, all holders of Allowed Old Unsecured Note Claims, and all
holders of Allowed Self-Insured Tort Claims) of the Unsecured Distribution,
subject to Dilution, and (ii) on the Rights Offering Commencement Date, its
Rights Offering Pro Rata Share of the Subscription Rights. Each holder of a
General Unsecured Claim that is Disputed as of the Rights Offering Record Date
shall also receive, on the Rights Offering Commencement Date, its Rights
Offering Pro Rata Share of the Subscription Rights; provided, however, that New
SCI Common Shares may be purchased pursuant to the exercise of such Subscription
Rights only if and to the extent that such holder's General Unsecured Claim
becomes an Allowed General Unsecured Claim.
(E) CLASS 8: OLD UNSECURED NOTE CLAIMS
The Old Unsecured Note Claims shall be deemed Allowed in an
aggregate amount not to exceed $443,500,000 for all purposes of the Plan and the
Chapter 11 Case. Each holder of an Allowed Old Unsecured Note Claim, in full
satisfaction, settlement, release, discharge of, in exchange for, and on account
of such Allowed Old Unsecured Note Claim, shall receive (i) subject to
compliance by such holder with Section 8.8, on the Distribution Date, its Pro
Rata share (together with all other holders of Allowed Old Unsecured Note
Claims, all holders of Allowed General Unsecured Claims, and all holders of
Allowed Self-Insured Tort Claims)
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Appendix A
of the Unsecured Distribution, subject to Dilution; and (ii) on the Rights
Offering Commencement Date, its Rights Offering Pro Rata Share of the
Subscription Rights.
(F) CLASS 9: TORT CLAIMS
To the extent that any Tort Claim is not estimated pursuant to
Section 502(c) of the Bankruptcy Code at zero, each holder of an Allowed Tort
Claim, in full satisfaction, settlement, release, discharge of, in exchange for,
and on account of such Allowed Tort Claim, shall receive (i) on the Effective
Date, the right to pursue Cash proceeds that may thereafter be recoverable by
such holder from any liability insurance policy under which any Debtor is an
insured party in an amount up to the amount of such holder's Allowed Tort Claim,
(ii) to the extent of any deductible portion of any liability insurance coverage
or self-insured portion of such Tort Claim (a "Self-Insured Tort Claim"), on the
Distribution Date, its Pro Rata share (together with all holders of Allowed
General Unsecured Claims, all holders of Allowed Old Unsecured Note Claims, and
all other holders of Allowed Self-Insured Tort Claims) of the Unsecured
Distribution (based upon the amount of such Allowed Self-Insured Tort Claim),
subject to Dilution, and (iii) on the Rights Offering Commencement Date, its
Rights Offering Pro Rata Share of the Subscription Rights. Each holder of a
Self-Insured Tort Claim that is Disputed as of the Rights Offering Record Date
shall also receive, on the Rights Offering Commencement Date, its Rights
Offering Pro Rata Share of the Subscription Rights; provided, however, that New
SCI Common Shares may be purchased pursuant to the exercise of such Subscription
Rights only if and to the extent that such holder's Disputed Self-Insured Tort
Claim becomes an Allowed Self-Insured Tort Claim, based upon the amount of such
Allowed Self-Insured Tort Claim.
Nothing contained herein shall affect the validity of any
insurance coverage with respect to any Allowed Tort Claim.
(G) CLASS 10: INTERCOMPANY CLAIMS
The holders of Intercompany Claims shall not receive or retain
any property under the Plan on account of such Claims, and all Intercompany
Claims shall be discharged as of the Effective Date. The Schedules are hereby
deemed amended to reduce to zero any Intercompany Claims evidenced therein; and
all Proofs of Claim alleging Intercompany Claims, including, without limitation,
Proof of Claim number 302 filed by Sterling Pulp Chemicals US, Inc. and Proof of
Claim number 1746 filed by Sterling Pulp Chemicals, Inc., are hereby expunged
without the necessity of objection.
(H) CLASS 11: NON-COMPENSATORY DAMAGES CLAIMS
The holders of Non-Compensatory Damages Claims shall not
receive or retain any property under the Plan on account of such Claims and all
Non-Compensatory Damages Claims shall be discharged as of the Effective Date.
(I) CLASS 12: SUBORDINATED CLAIMS
The holders of Subordinated Claims shall not receive or retain
any property under the Plan on account of such Claims and all Subordinated
Claims shall be discharged as of the Effective Date.
(J) CLASS 13: HOLDINGS GENERAL UNSECURED CLAIMS
The holders of Holdings General Unsecured Claims shall not
receive or retain any property under the Plan on account of such Claims, and all
Holdings General Unsecured Claims shall be discharged as of the Effective Date.
4.4 UNIMPAIRED CLASSES OF INTERESTS
CLASS 14: SUBSIDIARY INTERESTS
On the Effective Date, except as otherwise contemplated by the
Restructuring Transactions, the holders of Subsidiary Interests shall retain
such Subsidiary Interests under the Plan.
4.5 IMPAIRED CLASSES OF INTERESTS
CLASS 15: STERLING INTERESTS
On the Implementation Date, all Sterling Interests shall be
deemed cancelled and extinguished. The holders of Sterling Interests shall not
receive or retain any property under the Plan on account of such Interests.
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4.6 RESERVATION OF RIGHTS REGARDING CLAIMS
Except as otherwise explicitly provided in the Plan, nothing shall
affect the Debtors' or the Reorganized Debtors' rights and defenses, both legal
and equitable, with respect to any Claims, including, but not limited to, all
rights with respect to legal and equitable defenses to alleged rights of setoff
or recoupment.
4.7 SEPARATE LIABILITIES OF REORGANIZED DEBTORS
The structure of the Plan shall not operate to impose liability on any
Reorganized Debtor for the Claims against any other Debtor or the debts and
obligations of any other Reorganized Debtor. After the Effective Date, each
Reorganized Debtor, subject to the Restructuring Transactions, shall be
separately liable for its own debts and obligations.
ARTICLE V
ACCEPTANCE OR REJECTION OF THE PLAN
5.1 IMPAIRED CLASSES OF CLAIMS AND INTERESTS ENTITLED TO VOTE
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.
Accordingly, the votes of holders of Claims in Classes 4, 5, 6, 7, 8, and 9
shall be solicited with respect to the Plan. Although Claims in Classes 7, 8,
and 9 have been separately classified for organizational and logistical
purposes, notwithstanding any other provision of the Plan, Classes 7, 8, and 9
shall be deemed to be one Class solely for voting purposes.
5.2 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. The votes of holders of Allowed Claims in Classes 7,
8, and 9 shall be aggregated and acceptance or rejection of the Plan by such
Classes shall be determined as if Classes 7, 8, and 9 were one Class.
5.3 PRESUMED ACCEPTANCES BY UNIMPAIRED CLASSES
Classes 1, 2, 3, and 14 are Unimpaired under the Plan. Under Section
1126(f) of the Bankruptcy Code, such Unimpaired Claim holders are conclusively
presumed to have accepted the Plan, and the votes of such Unimpaired Claim
holders shall not be solicited.
5.4 CLASSES DEEMED TO REJECT PLAN
Holders of Claims and Interests in Classes 10, 11, 12, 13, and 15 are
not entitled to receive or retain any property under the Plan. Under Section
1126(g) of the Bankruptcy Code, Classes 10, 11, 12, 13, and 15 Claim or Interest
holders are deemed to have rejected the Plan, and the votes of such Claim or
Interest holders shall not be solicited.
5.5 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 Debtors shall request Confirmation of the Plan, as
it may be modified from time to time, under Section 1129(b) of the Bankruptcy
Code. The Debtors reserve the right to alter, amend, modify, revoke, or withdraw
the Plan, the Plan Supplement, or any Exhibit, including to amend or modify it
to satisfy the requirements of Section 1129(b) of the Bankruptcy Code, if
necessary.
ARTICLE VI
MEANS FOR IMPLEMENTATION OF THE PLAN
6.1 CONTINUED CORPORATE EXISTENCE
Subject to the Restructuring Transactions described in Sections 6.4,
6.5, 6.6, 6.8, and 6.12 of the Plan, the Reorganized Debtors shall continue to
exist after the Effective Date as separate corporate entities, in accordance
with the applicable laws in the respective jurisdictions in which they are
incorporated and pursuant to their respective certificates or articles of
incorporation and
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Appendix A
bylaws in effect prior to the Effective Date, except to the extent such
certificates or articles of incorporation and bylaws are amended pursuant to
Section 6.3 of the Plan. On and after the Effective Date, each Reorganized
Debtor shall pay any and all unpaid Allowed Administrative Claims against such
Reorganized Debtor and any and all of its obligations arising after the
Effective Date.
6.2 CANCELLATION OF OLD SECURITIES AND AGREEMENTS
On the Effective Date, except as otherwise provided for herein, (a) the
Old Securities and any other note, bond, or indenture evidencing or creating any
indebtedness or obligation of any Debtor shall be canceled, and (b) the
obligations of the Debtors under any agreements, indentures, or certificates of
designations governing the Old Securities and any other note, bond, or indenture
evidencing or creating any indebtedness or obligation of any Debtor shall be
discharged.
6.3 CERTIFICATES OF INCORPORATION AND BYLAWS
The certificate or articles of incorporation and bylaws 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 Certificate of Incorporation and Bylaws
of Reorganized Sterling Chemicals shall be in substantially the forms of such
documents included in the Plan Supplement, which will be filed with the Clerk of
the Bankruptcy Court at least five (5) Business Days prior to the commencement
of the Confirmation Hearing in accordance with Section 12.15 of the Plan.
6.4 MERGER
On the Implementation Date, Sterling Holdings will merge with and into
Sterling Chemicals, with Sterling Chemicals being the surviving corporation (the
"Merger"). As a result of the Merger, on the Implementation Date, (a) the
surviving corporation shall have all of the rights, privileges, immunities, and
powers of a corporation under applicable state law, and shall be subject to all
of the duties and liabilities of a corporation under applicable state law, (b)
except as otherwise provided in the Plan, the surviving corporation shall
possess all of the rights, privileges, immunities, licenses, and franchises,
whether of a public or private nature, of Sterling Holdings and Sterling
Chemicals; and all property, real, personal, and mixed, and all debts due on
whatever account, including subscriptions to shares, and all other choses in
action, and all and every other interest of or belonging to or due to Sterling
Holdings or Sterling Chemicals shall be taken and deemed to be transferred to
and vested in the surviving corporation without further act or deed, (c) except
as otherwise provided in the Plan, the surviving corporation shall thenceforth
be responsible for and liable for all liabilities and obligations of each of
Sterling Holdings and Sterling Chemicals, all executory contracts assumed by
Sterling Holdings shall be deemed to be assigned to and assumed by Sterling
Chemicals, and, with respect to any claim existing or action or proceeding
pending by or against either of the merging Debtors, the surviving corporation
shall be deemed substituted for such Debtor for all such purposes, (d) the Old
Discount Notes shall be deemed cancelled and extinguished, and (e) Sterling
Chemicals shall authorize the New SCI Common Shares as set forth in Section
6.9(a) and issue the Merger Consideration to the holders of Allowed Old Discount
Note Claims pursuant to Articles IV, VI, and VIII of the Plan. With respect to
the Merger, all requirements of applicable state law relating to mergers,
including the requirement of approval by the board of directors and by the
stockholders, shall be deemed satisfied; and the Debtors or the Reorganized
Debtors may file articles of merger with the appropriate governmental units,
which shall entitle the surviving corporation to receive a certificate of
merger; provided, however, that in no event may the issuance of a certificate of
merger be conditioned on the payment of any prepetition fees or franchise taxes
on terms other than those specifically set forth in the Plan, and such issuance
shall not be delayed pending the satisfaction of the obligations of Reorganized
Sterling Chemicals or the Disbursing Agent under the Plan. Except as otherwise
provided with respect to the Old Discount Note Claims, the Merger shall in no
way modify in any way the rights of holders of Claims and Interests under the
Plan; nor shall the Merger create any liabilities against any of the Debtors
that did not exist prior to the Implementation Date or operate to create in
favor of any Person any right against any of the Debtors that such Person did
not have prior to the Implementation Date.
6.5 INTERCOMPANY TRANSACTIONS
(a) On the Effective Date, Sterling NRO shall reduce its stated capital
and declare as a distribution in return of paid-up capital an amount payable to
Sterling Canada equal to all intercompany amounts owed by Sterling Canada to
Sterling NRO.
(b) On the Effective Date, Sterling Canada shall repay all intercompany
amounts due to Sterling NRO by setting off against such obligations the amount
due from Sterling NRO to Sterling Canada as a consequence of the reduction of
stated capital.
(c) On the Effective Date, Sterling Canada and Sterling NRO shall
execute a repayment agreement acknowledging the setoff of their mutual
indebtedness.
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Appendix A
(d) On the Effective Date, Sterling Canada and Sterling Pulp shall
execute a transfer agreement providing for Sterling Canada to transfer the stock
of Sterling NRO to Sterling Pulp by a share for share exchange or by
contribution of the stock of Sterling NRO to Sterling Pulp, followed in either
case by the combination of the assets and liabilities of Sterling Pulp and
Sterling NRO, an amalgamation of Sterling Pulp and Sterling NRO, or a winding
up, liquidation, or voluntary dissolution of Sterling NRO into Sterling Pulp.
6.6 FIBERS MANAGEMENT BUYOUT; PULPCO SALE
(a) On the Effective Date, in accordance with the terms and conditions
of the Fibers Buyout Agreement, Sterling Chemicals or Reorganized Sterling
Chemicals shall transfer, for little or no monetary consideration, its equity
ownership interests in Sterling Fibers, Inc. and Sterling Chemicals
International, Inc. to a newly formed corporation that will be owned by the
members of local senior management of Sterling Fibers, Inc. Immediately before
the consummation of such transfer, all intercompany receivables or payables of
Sterling Fibers, Inc. and Sterling Chemicals International, Inc. shall be
cancelled. Upon the consummation of such transfer, except as expressly agreed
otherwise in writing by Reorganized Sterling Chemicals, Reorganized Sterling
Chemicals shall not have any liability for any debts or obligations of Sterling
Fibers, Inc. or Sterling Chemicals International, Inc.
(b) On the Effective Date, the PulpCo Sale shall be consummated. On and
after the Effective Date, except as expressly provided otherwise in the Purchase
Agreement, the Reorganized Debtors shall not have any liability for any debts or
obligations relating to, arising from, or in connection with the PulpCo
Business.
(c) On the Effective Date, after consummation of the PulpCo Sale
pursuant to Section 6.6(b), Sterling Canada, Sterling Chemicals Acquisitions,
Inc., Sterling Pulp Chemicals US, Inc., Sterling Pulp Chemicals, Inc., and
Sterling Australia Holdings, Inc. shall each enter into a plan of liquidation
and distribute any Proceeds received from the PulpCo Sale and any Proceeds
received as a distribution from a lower-tier subsidiary to its parent pursuant
to its plan of liquidation.
(d) On the Effective Date, after occurrence of the actions described in
Section 6.6(c), Reorganized Sterling Chemicals shall receive the Proceeds from
the PulpCo Sale, either directly or through Cash distributions paid by Sterling
Canada and Sterling Chemicals Acquisitions, Inc. from the Proceeds of the PulpCo
Sale. Reorganized Sterling Chemicals shall retain $80 million of the Proceeds
and transfer on the Effective Date all remaining Proceeds to the Disbursing
Agent for distribution pursuant to the Plan.
(e) On the Effective Date, after occurrence of the actions described in
Sections 6.6(c) and 6.6(d), Sterling Chemicals Acquisitions, Inc., Sterling Pulp
Chemicals US, Inc., Sterling Pulp Chemicals, Inc., and Sterling Australia
Holdings, Inc. shall each be dissolved pursuant to its respective plan of
liquidation.
(f) Sterling Canada shall be dissolved after the Effective Date
pursuant to its plan of liquidation.
6.7 FUNDING
(a) At least five (5) days prior to the Effective Date, the
Confirmation Deposit shall be received and the Committed Common Shares
Investment and the Committed Preferred Shares Investment shall be fully
subscribed pursuant to the Plan, the Rights Offering, and the Investment
Agreement. Investor shall underwrite the Rights Offering and the Committed
Common Shares Investment.
(b) On the Effective Date, the New Credit Agreement, together with new
promissory notes evidencing obligations of Reorganized Sterling Chemicals
thereunder, and all other documents, instruments, and agreements to be entered
into, delivered, or confirmed thereunder on the Effective Date, shall become
effective. The new promissory notes issued pursuant to the New Credit Agreement
and all obligations under the New Credit Agreement and related documents shall
be repaid as set forth in the New Credit Agreement and related documents.
6.8 IMPLEMENTING ACTIONS
The Plan shall be implemented and the following actions shall occur
in the following order:
(a) On the Implementation Date, the Merger shall be consummated
pursuant to Section 6.4 of the Plan and the Merger Agreement and Sterling
Chemicals shall issue the Merger Consideration pursuant to Section 6.9(a).
(b) At least five (5) days prior to the Effective Date, the equity
investments described in Section 6.7(a) shall be received by the Debtors.
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Appendix A
(c) On the Effective Date, Sterling Chemicals or Reorganized Sterling
Chemicals shall transfer its equity ownership interests in Sterling Fibers, Inc.
and Sterling Chemicals International, Inc. and the parties shall consummate the
transactions described in Section 6.6(a).
(d) On the Effective Date, the actions to be taken by Sterling Canada,
Sterling NRO, and Sterling Pulp described in Section 6.5 shall occur in the
order set forth therein.
(e) On the Effective Date, the actions described in Sections 6.6(b),
6.6(c), 6.6(d), and 6.6(e) shall occur in the order set forth therein.
(f) On the Effective Date, the actions and transactions described in
Sections 6.2, 6.7(b), 6.9(b), 6.9(e), 6.10, and 6.12 shall occur and be deemed
to occur contemporaneously.
(g) After the Effective Date, as described in Section 6.6(f), Sterling
Canada shall be dissolved in accordance with its plan of liquidation.
6.9 AUTHORIZATION AND ISSUANCE OF NEW SECURITIES
(a) On the Implementation Date, Sterling Chemicals shall authorize, for
issuance and distribution in accordance with the terms of the Plan, 2,825,000
New SCI Common Shares and shall issue 65,000 New SCI Common Shares to the
holders of Allowed Old Discount Note Claims.
(b) On the Effective Date, Reorganized Sterling Chemicals shall
authorize, for issuance and distribution in accordance with the terms of the
Plan, the New SCI Notes, the New UC Notes, the New SCI Preferred Shares, and the
New SCI Warrants. On the Effective Date, Reorganized Sterling Chemicals shall
reserve New SCI Common Shares for issuance after the Effective Date under the
SCI Management Incentive Plan, upon conversion of the New SCI Preferred Shares
into New SCI Common Shares, and upon exercise of the New SCI Warrants, in an
amount equal to 2,175,000 plus the number of shares issuable pursuant to the
exercise of the New SCI Warrants plus the maximum number of shares issuable
under, including pursuant to options issued under, the SCI Management Incentive
Plan, without further act or action under applicable law, regulation, order, or
rule.
(c) The New Securities to be issued and distributed pursuant to
distributions under the Plan to Classes 5, 6, 7, 8, and 9 shall be issued in
exchange for or principally in exchange for Allowed Claims in such Classes and
shall be exempt from registration under applicable securities laws pursuant to
Section 1145 of the Bankruptcy Code.
(d) At all times during the period ending eighteen (18) months after
the Effective Date, Reorganized Sterling Chemicals will cause the New SCI Common
Shares to be registered under Section 12(g) of, and will timely file with the
SEC all reports required to be filed pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended.
(e) Reorganized Sterling Chemicals, Investor, and any recipient of the
Unsecured Distribution receiving at least 5% of the fully diluted New SCI Common
Shares on the Effective Date (including New SCI Common Shares issued upon
exercise of Subscription Rights) will execute and deliver the Registration
Rights Agreement on the Effective Date.
6.10 SCI MANAGEMENT INCENTIVE PLAN
On the Effective Date, Reorganized Sterling Chemicals shall be
authorized and directed to establish and implement the SCI Management Incentive
Plan, substantially in the form included in the Plan Supplement, which will be
filed with the Clerk of the Bankruptcy Court at least five (5) Business Days
prior to the commencement of the Confirmation Hearing, in accordance with
Section 12.15 of the Plan. On or about the Effective Date, such members of
management and employees of Reorganized Sterling Chemicals and the other
Reorganized Debtors as are designated by the board of directors of Reorganized
Sterling Chemicals as recipients of awards under the SCI Management Incentive
Plan shall be issued stock or stock options in accordance with the terms of such
designations, subject to such terms as are more specifically described in the
SCI Management Incentive Plan. The SCI Management Incentive Plan may be amended
or modified from time to time by the board of directors of Reorganized Sterling
Chemicals in accordance with its terms and any such amendment or modification
shall not require an amendment of the Plan. Without any further act or
authorization, Confirmation of the Plan and entry of the Confirmation Order
shall be deemed to satisfy all requirements of applicable state and federal law
and all listing standards of any securities exchange for approval by the board
of directors and the shareholders of Reorganized Sterling Chemicals of the SCI
Management Incentive Plan.
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Appendix A
6.11 DIRECTORS AND OFFICERS OF REORGANIZED DEBTORS
(a) The existing senior officers of Sterling Chemicals shall serve
initially in the same capacities after the Effective Date for Reorganized
Sterling Chemicals. The initial board of directors of Reorganized Sterling
Chemicals shall consist of eight (8) directors, to be designated as follows: (i)
Investor shall be entitled to designate six (6) directors; (ii) the Creditors
Committee shall be entitled to designate one director; and (iii) the Unofficial
Secured Noteholders Committee shall be entitled to designate one director. From
and after the Effective Date, Investor shall continue to be entitled to
designate a number of directors of Reorganized Sterling Chemicals in proportion
to its equity ownership of Reorganized Sterling Chemicals (assuming the
conversion of all New SCI Preferred Shares into New SCI Common Shares), but in
any event not less than a majority of such directors for so long as Investor
holds at least 35% of the common stock of Reorganized Sterling Chemicals (on a
fully diluted basis). The directors designated by Investor may only be removed
(other than for cause) by, and any vacancy resulting from the death,
resignation, or removal of any such director may only be filled by, the majority
vote of those New SCI Common Shares that are owned by Investor. The director
designated by the Unofficial Secured Noteholders Committee shall serve only
while the New SCI Notes are outstanding, and may only be removed (other than for
cause) by, and any vacancy resulting from the death, resignation, or removal of
such director may only be filled by, the holders of the New SCI Notes. The
director designated by the Creditors Committee shall serve for a period of two
(2) years after the Effective Date, and may only be removed (other than for
cause) by, and any vacancy resulting from the death, resignation, or removal of
such director may only be filled by, the Creditors Committee. The Persons
designating board members of Reorganized Sterling Chemicals shall file with the
Bankruptcy Court and give to the Debtors written notice of the identities of
such members on a date that is not less than five (5) days prior to the
Confirmation Hearing; provided, however, that if and to the extent that any such
Person fails to file and give such notice, the Debtors shall designate, after
consultation with such Person, the members of the board of directors of
Reorganized Sterling Chemicals which such Person is entitled to designate by
announcing their identities at the Confirmation Hearing.
(b) The existing senior officers and directors of the Subsidiary
Debtors shall continue to serve in their same respective capacities after the
Effective Date for the Reorganized Subsidiary Debtors.
6.12 REVESTING OF ASSETS; RELEASES OF LIENS; EFFECTIVE DATE RESTRUCTURINGS
Except as otherwise provided in Sections 6.4, 6.5, 6.6, and 6.8, 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, shall revest in the applicable 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. As of the Effective Date,
all property of each Reorganized Debtor shall be free and clear of all Claims
and Interests, except as specifically provided in the Plan or the Confirmation
Order. On or as of the Effective Date, each of the Reorganized Debtors and their
nondebtor subsidiaries and affiliates, in accordance with applicable state law,
may enter into such transactions and may take such actions as may be necessary
or appropriate to effect a corporate restructuring of their respective
businesses, to otherwise simplify the overall corporate structure of the
Reorganized Debtors, or to reincorporate certain of the Subsidiary Debtors under
the laws of jurisdictions other than the laws of which the applicable Subsidiary
Debtors are presently incorporated; provided, however, that such restructurings
are not otherwise inconsistent with the Plan, the distributions to be made under
the Plan, or the New Indentures. Such restructurings may include such mergers,
consolidations, restructurings, dispositions, liquidations, or dissolutions, as
may be determined by the Reorganized Debtors to be necessary or appropriate.
6.13 PRESERVATION OF RIGHTS OF ACTION
Except as otherwise provided in the Plan or the Confirmation Order, or
in any contract, instrument, release, indenture, or other agreement entered into
in connection with the Plan, in accordance with Section 1123(b) of the
Bankruptcy Code, on the Effective Date, each Debtor or Reorganized Debtor shall
transfer to Reorganized Sterling Chemicals all Litigation Rights that such
Debtor or Reorganized Debtor may hold against any Person. Reorganized Sterling
Chemicals shall retain and may enforce, sue on, settle, or compromise (or
decline to do any of the foregoing) all such Litigation Rights. Reorganized
Sterling Chemicals or its successor(s) may pursue such retained Litigation
Rights as appropriate, in accordance with the best interests of Reorganized
Sterling Chemicals or its successor(s) who hold such rights in accordance with
applicable state and federal law and consistent with the terms of the Plan.
6.14 EFFECTUATING DOCUMENTS; FURTHER TRANSACTIONS
Either co-chief executive officer, the president, the chief financial
officer, or any other appropriate officer of Sterling Chemicals, 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 Sterling Chemicals, or any
applicable Debtor, as the case may be, shall be authorized to certify or attest
to any of the foregoing actions.
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Appendix A
6.15 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 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.
6.16 INDENTURE TRUSTEES
Notwithstanding the foregoing, the provisions of the Old Indentures
governing the relationships of each of the Indenture Trustees and their
respective holders of Old Notes, including, without limitation, those provisions
relating to distributions, the Indenture Trustees' rights to payment, Liens on
property to be distributed to holders of Old Notes, and the Indenture Trustees'
rights of indemnity, if any, shall not be affected by the Plan, Confirmation or
the occurrence of the Effective Date.
Nothing herein affects the Indenture Trustees' rights pursuant to their
respective Old Indentures and applicable non-bankruptcy law to assert Liens on
any distributions hereunder to the holders of the Old Notes issued pursuant to
the Old Indentures, to secure payment of its fees and expenses. If any Indenture
Trustee does not serve as Disbursing Agent with respect to distributions to its
respective holders, then the funds distributed to any such Disbursing Agent
shall be subject to the Lien of the Indenture Trustee under its respective Old
Indenture.
ARTICLE VII
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES
7.1 ASSUMED CONTRACTS AND LEASES
(a) Except as otherwise provided in the Plan, or in any contract,
instrument, release, indenture, or other agreement or document entered into in
connection with the Plan, as of the Effective Date, each Debtor shall be deemed
to have assumed each executory contract and unexpired lease to which it is a
party unless such contract or lease (i) was previously assumed or rejected by
such Debtor, (ii) previously expired or terminated pursuant to its own terms, or
(iii) is the subject of a pending motion to reject filed by a Debtor on or
before the Confirmation Date. The Confirmation Order shall constitute an order
of the Bankruptcy Court under Section 365(a) of the Bankruptcy Code approving
the contract and lease assumptions described above, as of the Effective Date.
(b) Each executory contract and unexpired lease that is assumed and
relates to the use, ability to acquire, or occupancy of real property shall
include (i) all modifications, amendments, supplements, restatements, or other
agreements made directly or indirectly by any agreement, instrument, or other
document that in any manner affects such executory contract or unexpired lease
and (ii) all executory contracts or unexpired leases appurtenant to the
premises, including all easements, licenses, permits, rights, privileges,
immunities, options, rights of first refusal, powers, uses, reciprocal easement
agreements, vaults, tunnel or bridge agreements or franchises, and any other
interests in real estate or rights in rem related to such premises, unless any
of the foregoing agreements has been rejected pursuant to an order of the
Bankruptcy Court.
7.2 PAYMENTS RELATED TO ASSUMPTION OF CONTRACTS AND LEASES
Any monetary amounts by which each executory contract and unexpired
lease to be assumed pursuant to the Plan is 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. If there is a dispute regarding (a) the nature or
amount of any Cure, (b) the ability of any Reorganized Debtor or any assignee to
provide "adequate assurance of future performance" (within the meaning of
Section 365 of the Bankruptcy Code) under the contract or lease to be assumed,
or (c) any other matter pertaining to assumption, Cure shall occur following the
entry of a Final Order resolving the dispute and approving the assumption or
assumption and assignment, as the case may be.
7.3 REJECTED CONTRACTS AND LEASES
Except as otherwise provided in the Plan, in any contract, instrument,
release, indenture, or other agreement or document entered into in connection
with the Plan, or in an order of the Bankruptcy Court, none of the executory
contracts or unexpired leases to
22
Appendix A
which a Debtor is a party shall be rejected under the Plan; provided, however,
that the Debtors reserve the right, at any time prior to the Effective Date, to
seek to reject any executory contract or unexpired lease to which any Debtor is
a party and to file a motion requesting authorization for the rejection of any
such executory contract or unexpired lease.
7.4 REJECTION DAMAGES BAR DATE
If the rejection by a Debtor, pursuant to the Plan or otherwise, of an
executory contract or unexpired lease results in a Claim, then such Claim shall
be forever barred and shall not be enforceable against any Debtor or Reorganized
Debtor or the properties of any of them unless a Proof of Claim is filed with
the clerk of the Bankruptcy Court and served upon counsel to the Debtors and
counsel to the Creditors Committee, within thirty (30) days after entry of the
order authorizing the rejection of such executory contract or unexpired lease.
7.5 COMPENSATION AND BENEFIT PROGRAMS
As of the Effective Date, any and all stock based employee incentive
plans and employee stock ownership plans of the Debtors entered into before or
after the Petition Date shall be rejected by the Debtors under Section 365 of
the Bankruptcy Code. Except to the extent (a) previously assumed or rejected by
an order of the Bankruptcy Court on or before the Confirmation Date, or (b) the
subject of a pending motion to reject filed by a Debtor on or before the
Effective Date, all other employee compensation and benefit programs of the
Debtors, including all pension plans and including all programs subject to
Sections 1114 and 1129(a)(13) of the Bankruptcy Code, entered into before or
after the Petition Date and not since terminated, shall be deemed to be, and
shall be treated as though they are, executory contracts that are assumed under
the Plan. All pension plans shall continue in effect on and after the Effective
Date. Nothing contained herein shall be deemed to modify the existing terms of
such employee compensation and benefit programs, including, without limitation,
the Debtors' rights of termination thereunder. Any compensation or benefit
rights alleged by a current or former employee, or his or her spouse, in a
timely filed Proof of Claim that is not the subject of an objection filed by the
Debtors, are hereby deemed to be conformed to and limited by the terms of the
Debtors' compensation and benefit programs. As so conformed and limited, such
alleged rights are hereby deemed to be satisfied by the foregoing assumption,
and the Proof of Claim of any such employee or spouse is hereby deemed to be
expunged without the necessity of an objection, in reliance on such
satisfaction.
7.6 INDEMNIFICATION OBLIGATIONS
(a) Indemnification Obligations owed to any present or former
professionals or advisors of the Debtors, including, without limitation,
accountants, auditors, financial consultants, underwriters, or outside
attorneys, arising under contracts that applied, in whole or in part, to any
period occurring on or after the Petition Date shall be deemed to be, and shall
be treated as though they are, executory contracts that are assumed pursuant to
Section 365 of the Bankruptcy Code under the Plan.
(b) All other Indemnification Obligations owed to any professionals or
advisors of the Debtors, including, without limitation, accountants, auditors,
financial consultants, underwriters, and outside attorneys, shall be deemed to
be, and shall be treated as though they are, executory contracts that are
rejected pursuant to Section 365 of the Bankruptcy Code under the Plan pursuant
to the Confirmation Order (unless earlier rejected by Final Order).
(c) Except as limited hereinafter, Indemnification Obligations owed to
Designated Directors, Officers, and Employees pursuant to charter, bylaws,
contract, or applicable state law shall be deemed to be, and shall be treated as
though they are, executory contracts that are assumed pursuant to Section 365 of
the Bankruptcy Code under the Plan, and such obligations (subject to any
defenses thereto) shall survive Confirmation of the Plan and remain unaffected
thereby, irrespective of whether indemnification is owed in connection with a
pre-Petition Date or post-Petition Date occurrence; provided however, that the
foregoing assumption shall not affect any release of such obligations given to
the Debtors before the Effective Date or to the Reorganized Debtors on or after
the Effective Date. The Indemnification Obligations alleged by any of the
Designated Directors, Officers, and Employees in a timely filed Proof of Claim
that is not the subject of an objection filed by the Debtors or the Creditors
Committee, are hereby deemed to be conformed to and limited by the terms of the
applicable charter, bylaws, contract, or state law. As so conformed and limited,
such Indemnification Obligations are hereby deemed to be satisfied by the
foregoing assumption, and the Proof of Claim of any such Designated Director,
Officer, or Employee is hereby deemed to be expunged without the necessity of
objection, in reliance on such satisfaction.
(d) All other Indemnification Obligations owed to any of the Debtors'
former directors, officers, and employees shall be deemed to be, and shall be
treated as though they are, executory contracts that are rejected pursuant to
Section 365 of the Bankruptcy Code under the Plan pursuant to the Confirmation
Order (unless earlier rejected by Final Order).
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Appendix A
ARTICLE VIII
PROVISIONS GOVERNING DISTRIBUTIONS
8.1 DISTRIBUTIONS FOR CLAIMS ALLOWED AS OF EFFECTIVE DATE
Except as otherwise provided herein or as ordered by the Bankruptcy
Court, all distributions to holders of Allowed Claims as of the Effective Date
shall be made on or as soon as practicable after the Distribution Date.
Distributions on account of Claims that first become Allowed Claims after the
Effective Date shall be made pursuant to Section 9.3 of the Plan.
Notwithstanding the date on which any distribution of New Securities is actually
made to a holder of a Claim that becomes an Allowed Claim after the Effective
Date, as of the date of the distribution of such New Securities such holder
shall be deemed to have the rights of a holder as of the Effective Date.
8.2 INTEREST ON CLAIMS
Unless otherwise specifically provided for in the Plan or the
Confirmation Order, or required by applicable bankruptcy law, postpetition
interest shall not accrue or be paid on 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.
8.3 DISTRIBUTIONS BY DISBURSING AGENT
(a) The Disbursing Agent shall make all distributions required to be
made on the Distribution Date under the Plan.
(b) If the Disbursing Agent is an independent third party designated by
Reorganized Sterling Chemicals 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 Reorganized Sterling Chemicals on terms acceptable to
Reorganized Sterling Chemicals. 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.
8.4 MEANS OF CASH PAYMENT
Cash payments made pursuant to the Plan shall be in U.S. funds, by the
means agreed to by the payor and the payee, including by check or wire transfer
or, in the absence of an agreement, such commercially reasonable manner as the
payor shall determine in its sole discretion.
8.5 CALCULATION OF DISTRIBUTION AMOUNTS OF NEW SECURITIES
No fractional New SCI Common Shares or New SCI Preferred Shares shall
be issued or distributed under the Plan. Each Person entitled to receive New SCI
Common Shares or New SCI Preferred Shares shall receive the total number of
whole New SCI Common Shares or New SCI Preferred Shares to which such Person is
entitled. Whenever any distribution to a particular Person would otherwise call
for distribution of a fraction of a New SCI Common Share or New SCI Preferred
Share, 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. If two
or more Persons are entitled to equal fractional entitlements and the aggregate
amount of New SCI Common Shares that would otherwise be issued to such Persons
with respect to such fractional entitlements as a result of such rounding
exceeds the number of whole shares which remain to be allocated, the Disbursing
Agent shall allocate the remaining whole shares to such holders by random lot or
such other impartial method as the Disbursing Agent deems fair. Upon the
allocation of all of the whole shares authorized under the Plan, all remaining
fractional portions of the entitlements shall be canceled and shall be of no
further force and effect.
8.6 DELIVERY OF DISTRIBUTIONS
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, or
(d) in the case of the holder of an Old Note
24
Appendix A
Claim, distributions shall be sent to the pertinent Indenture Trustee.
Distributions on account of Old Note Claims shall be deemed complete upon
delivery of such distributions to the respective Indenture Trustee. If any
holder's distribution is returned as undeliverable, no further distributions to
such holder shall be made unless and until the Disbursing Agent is notified 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 Reorganized
Debtors until such distributions are claimed. All claims for undeliverable
distributions must be made on or before the second (2nd) anniversary of the
Distribution Date, after which date all unclaimed property shall revert to the
Reorganized Debtors 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. The Reorganized Debtors shall deliver all such unclaimed
property to the Disbursing Agent for distribution in accordance with the
applicable provisions of the Plan. On the first (1st) anniversary of the
Distribution Date and again at least three (3) months prior to the second (2nd)
anniversary of the Distribution Date, the Debtors will file with the Bankruptcy
Court a list of holders of unclaimed property, provided, however, nothing
contained in the Plan shall require any Debtor, any Reorganized Debtor, any
Disbursing Agent, or any Indenture Trustee to attempt to locate any holder of an
Allowed Claim.
8.7 DISTRIBUTION RECORD DATE FOR HOLDERS OF OLD NOTES
At the close of business on the Distribution Record Date, the transfer
ledgers for the Old Notes shall be closed, and there shall be no further changes
in the record holders of such securities. The Reorganized Debtors, the
Disbursing Agent, the Indenture Trustees, and each of their respective agents,
successors, and assigns shall have no obligation to recognize any transfer of
Old Notes occurring after the Distribution Record Date and shall be entitled
instead to recognize and deal for all purposes hereunder with only those record
holders stated on the transfer ledgers as of the close of business on the
Distribution Record Date irrespective of the number of distributions to be made
under the Plan to such Persons or the date of such distributions.
8.8 SURRENDER OF OLD NOTES
(A) OLD NOTES
Except as provided in Section 8.8(b) of the Plan for lost,
stolen, mutilated, or destroyed Old Notes, each holder of an Allowed Claim
evidenced by an Old Note shall tender such Old Note to the Indenture Trustee for
such Old Notes in accordance with written instructions to be provided in a
letter of transmittal to such holders by such Indenture Trustee as promptly as
practicable following the Effective Date. Such letter of transmittal shall
specify that delivery of such Old Notes shall be effected, and risk of loss and
title thereto shall pass, only upon the proper delivery of such Old Notes with
the letter of transmittal in accordance with such instructions. Such letter of
transmittal shall also include, among other provisions, customary provisions
with respect to the authority of the holder of the applicable Old Note to act
and the authenticity of any signatures required on the letter of transmittal and
such other provisions, if any, as shall be deemed reasonably necessary or
appropriate in the judgment of the Debtors, the Indenture Trustees, the
Disbursing Agent, or any securities clearing agency or depositary in which the
Old Notes are deposited or through which Old Notes are tendered and delivered.
All surrendered notes and Old Notes shall be marked as canceled and shall be
delivered by the Indenture Trustee for such Old Notes to Reorganized Sterling
Chemicals.
(B) LOST, STOLEN, MUTILATED, OR DESTROYED OLD NOTES
In addition to any requirements under the applicable
certificate of incorporation or bylaws of the applicable Debtor, any holder of a
Claim evidenced by an Old Note that has been lost, stolen, mutilated, or
destroyed shall, in lieu of surrendering such Old Note, deliver to the Indenture
Trustee for such Old Note (i) evidence satisfactory to such Indenture Trustee of
the loss, theft, mutilation, or destruction and (ii) such indemnity as may be
required by such Indenture Trustee to hold such Indenture Trustee and the
Reorganized Debtors harmless from any damages, liabilities, or costs incurred in
treating such individual as a holder of an Old Note that has been lost, stolen,
mutilated, or destroyed. Upon compliance with this Section 8.8(b) by a holder of
a Claim evidenced by an Old Note, such holder shall, for all purposes under the
Plan, be deemed to have surrendered its Old Note.
(C) FAILURE TO SURRENDER CANCELED OLD NOTES
Any holder of an Old Note that fails to surrender or be deemed
to have surrendered such Old Note before the second (2nd) anniversary of the
Distribution Date shall have its Claim for a distribution on account of such Old
Note discharged and shall be forever barred from asserting any such Claim
against any Reorganized Debtor or their respective property.
8.9 WITHHOLDING AND REPORTING REQUIREMENTS
In connection with the Plan and all distributions hereunder, the
Disbursing Agent shall, to the extent applicable, comply with all tax
withholding and reporting requirements imposed by any federal, state,
provincial, local, or foreign taxing authority, and all
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distributions hereunder shall be subject to any such withholding and reporting
requirements. The Disbursing Agent shall be authorized to take any and all
actions that may be necessary or appropriate to comply with such withholding and
reporting requirements. Notwithstanding any other provision of the Plan, (a)
each holder of an Allowed Claim that is to receive a distribution of New
Securities pursuant to the Plan shall have sole and exclusive responsibility for
the satisfaction and payment of any tax obligations imposed by any governmental
unit, including income, withholding, and other tax obligations, on account of
such distribution, and (b) 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 Securities to be distributed pursuant to the Plan
shall, pending the implementation of such arrangements, be treated as an
undeliverable distribution pursuant to Section 8.6 of the Plan.
8.10 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 pursuant
to the Plan in respect of such Claim, claims of any nature whatsoever that the
Debtors or the Reorganized Debtors may have against the holder of such Claim;
provided, however, that 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.
8.11 PREPAYMENT
Except as otherwise provided in the Plan, any ancillary documents
entered into in connection herewith, or the Confirmation Order, the Debtors
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.
8.12 NO DISTRIBUTION IN EXCESS OF ALLOWED AMOUNT OF CLAIM
Notwithstanding anything to the contrary herein, no holder of an
Allowed Claim shall receive in respect of such Claim any distribution of a value
in excess of the Allowed amount of such Claim (excluding payments on account of
interest due and payable from and after the Effective Date pursuant to the
Plan).
8.13 ALLOCATION OF DISTRIBUTIONS
All distributions received under the Plan by holders of Claims shall be
deemed to be allocated first to the principal amount of such Claim as determined
for United States federal income tax purposes and then to accrued interest, if
any, with respect to such Claim.
ARTICLE IX
PROCEDURES FOR RESOLVING DISPUTED,
CONTINGENT, AND UNLIQUIDATED CLAIMS AND
DISTRIBUTIONS WITH RESPECT THERETO
9.1 PROSECUTION OF OBJECTIONS TO CLAIMS
(A) OBJECTIONS TO 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, the Claim to which the Proof of Claim or scheduled Claim relates shall
be treated as an Allowed Claim if such Claim has not been allowed earlier. The
Debtors may, at any time, request that the Bankruptcy Court estimate any
contingent or unliquidated Claim pursuant to Section 502(c) of the Bankruptcy
Code regardless of whether such Debtor has previously objected to such Claim or
whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy
Court will retain jurisdiction to estimate any Claim at any time during
litigation concerning any objection to any Claim, including during the pendency
of any appeal relating to any such objection. In the event the Bankruptcy Court
estimates any contingent or unliquidated Claim, that estimated amount will
constitute either the Allowed amount of such Claim or a maximum limitation on
such Claim, as determined by the Bankruptcy Court. If the estimated amount
constitutes a maximum limitation on such Claim, the Debtors may elect to pursue
any supplemental proceedings to object to any ultimate payment on such Claim.
All of the aforementioned Claims objection, estimation, and resolution
procedures are cumulative and are not necessarily exclusive of one another.
Claims may be estimated and thereafter resolved by any permitted mechanisms.
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(B) AUTHORITY TO PROSECUTE OBJECTIONS
After the Confirmation Date, only the Reorganized Debtors and
the Creditors Committee shall have the authority to file objections, settle,
compromise, withdraw, or litigate to judgment objections to Claims, including
Claims for reclamation under Section 546(c) of the Bankruptcy Code. From and
after the Effective Date, the Reorganized Debtors may settle or compromise any
Disputed Claim without approval of the Bankruptcy Court provided that, for so
long as the Creditors Committee shall continue to exist, the Creditors Committee
shall have the right to object to any settlements and compromises involving a
payment obligation by the Estates in excess of $50,000, and any such objections
shall be resolved by the Bankruptcy Court.
9.2 TREATMENT OF DISPUTED CLAIMS; DISPUTED CLAIMS RESERVE
(A) DISPUTED CLAIMS
Notwithstanding any other provisions of the Plan, no payments
or distributions shall be made on account of a Disputed Claim or, if less than
the entire Claim is a Disputed Claim, the portion of a Claim that is Disputed,
until such Claim becomes an Allowed Claim.
(B) RESERVES FOR DISPUTED CLAIMS
On the Effective Date or as soon as practicable thereafter,
the Disbursing Agent shall establish the Disputed Claims Reserve by withholding
from the initial Unsecured Distribution an amount of Cash, New SCI Common
Shares, New UC Notes, and New SCI Warrants calculated as if all Disputed General
Unsecured Claims were Allowed Claims in an amount equal to one hundred percent
(100%) of the distributions to which holders of such Claims would be entitled if
their Claims were Allowed in their entirety; provided, however, that Reorganized
Sterling Chemicals, the Disbursing Agent, or the Creditors Committee shall have
the right to file a motion seeking to reduce or modify the amount of Cash, New
SCI Common Shares, New UC Notes, or New SCI Warrants so reserved with respect to
any such Disputed Claims.
9.3 DISTRIBUTIONS ON ACCOUNT OF DISPUTED CLAIMS ONCE THEY ARE ALLOWED
Reorganized Sterling Chemicals shall make distributions on account of
any Disputed Claim that has become an Allowed Claim as soon as practicable after
the date on which such Disputed Claim becomes an Allowed Claim. Such
distributions shall be made pursuant to the provisions of the Plan governing the
applicable Class. Such distributions shall be based upon the cumulative
distributions that would have been made to the holder of such Claim under the
Plan if the Disputed Claim had been Allowed on the Effective Date in the amount
ultimately Allowed, without regard to the amounts previously reserved with
respect to such Disputed Claim but only to the extent that such additional
amounts have not yet been distributed to holders of Allowed Claims. After a
Final Order has been entered, or other final resolution has been reached, with
respect to each Disputed Claim, any Cash, New SCI Common Shares, New UC Notes,
or New SCI Warrants that remain in the Disputed Claims Reserve that were
initially reserved in connection with such Disputed Claim shall be distributed
or allocated to the Disputed Claims Reserve, as applicable, Pro Rata in
accordance with Articles IV, VIII, and IX of the Plan to holders of Allowed
Claims and holders of the remaining Disputed Claims. Notwithstanding the
foregoing, the Disbursing Agent shall not be required to make distributions more
frequently than once every 180 days or to make any individual payments in an
amount less than $25.00.
ARTICLE X
CONDITIONS PRECEDENT TO CONFIRMATION
AND CONSUMMATION OF THE PLAN
10.1 CONDITIONS TO CONFIRMATION
The following are conditions precedent to the occurrence of the
Confirmation Date, each of which must be satisfied or waived in accordance with
Section 10.4 of the Plan:
(a) an order finding that the Disclosure Statement contains adequate
information pursuant to Section 1125 of the Bankruptcy Code shall have been
entered;
(b) the proposed Confirmation Order shall be in form and substance
reasonably satisfactory to the Debtors, Investor, Resurgence, the Creditors
Committee Majority (or its advisors), and the Unofficial Secured Noteholders
Committee Majority (or its advisors);
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(c) Investor shall be satisfied with the amount of unpaid Allowed
Administrative Claims that shall be paid pursuant to the Plan; provided,
however, that if such unpaid Allowed Administrative Claims (other than
Administrative Claims based upon normal postpetition trade payables, the
Sterling NRO Claim (which will be cancelled on the Effective Date pursuant to
the intercompany transactions described in Section 6.5), and any amounts payable
pursuant to Section 12.1(e)) do not exceed $40 million in the aggregate,
Investor shall be deemed to be satisfied with the amount of such unpaid Allowed
Administrative Claims; and
(d) there shall not have occurred during the period from September 4,
2002 to the Confirmation Date any material adverse change in the business or
financial condition of Sterling Chemicals (excluding the PulpCo Business),
excluding any change (i) resulting from general economic conditions or the
execution of the Term Sheet or the Investment Agreement or (ii) that affects the
chemicals industry as a whole.
10.2 CONDITIONS TO IMPLEMENTATION DATE
The following are conditions precedent to the occurrence of the
Implementation Date, each of which must be satisfied or waived in accordance
with Section 10.4 of the Plan:
(a) the Confirmation Order shall have been entered in form and
substance reasonably satisfactory to the Debtors, Investor, Resurgence, the
Creditors Committee Majority (or its advisors), and the Unofficial Secured
Noteholders Committee Majority (or its advisors), and shall, among other things:
(i) provide that the Debtors and the Reorganized Debtors are
authorized and directed to take all actions necessary or appropriate to enter
into, implement, and consummate the contracts, instruments, releases, leases,
indentures, and other agreements or documents created in connection with the
Plan and the Restructuring Transactions;
(ii) authorize the issuance of the New Securities; and
(iii) provide that notwithstanding Bankruptcy Rule 3020(e), the
Confirmation Order shall be immediately effective, subject to the terms and
conditions of the Plan;
(b) the Confirmation Order shall not have been stayed, vacated, or
reversed; and
(c) the Merger Agreement, the Certificate of Incorporation of
Reorganized Sterling Chemicals, and the Bylaws of Reorganized Sterling Chemicals
shall be in form and substance reasonably acceptable to the Debtors, Investor,
Resurgence, the Creditors Committee Majority (or its advisors), and the
Unofficial Secured Noteholders Committee Majority (or its advisors) and, to the
extent any of such documents contemplates execution by one or more persons, any
such document shall have been executed and delivered.
10.3 CONDITIONS TO EFFECTIVE DATE
The following conditions precedent must be satisfied or waived on or
prior to the Effective Date in accordance with Section 10.4 of the Plan:
(a) the Merger shall have been consummated as of the Implementation
Date;
(b) the Confirmation Order shall not have been stayed, vacated, or
reversed;
(c) the Old 12-3/8% Secured Notes Indenture Trustee, the Creditors
Committee, and the Unofficial Secured Noteholders Committee, through their
respective counsel, shall each have delivered to the Debtors an executed
stipulation of dismissal with prejudice of all actions, appeals, and proceedings
filed by or on behalf of the Old 12-3/8% Secured Notes Indenture Trustee, the
Creditors Committee, and the Unofficial Secured Noteholders Committee in
connection with the Chapter 11 Case, in form and substance satisfactory to the
Debtors, such stipulation to be filed by the Debtors and to become effective as
of the Effective Date;
(d) the New Credit Agreement, the Purchase Agreement, the New SCI
Warrants, the New Indentures, the Registration Rights Agreement, the Tag Along
Agreement, the SCI Management Incentive Plan, the Fibers Buyout Agreement, and
the Investment Agreement shall be in form and substance reasonably acceptable to
the Debtors, Investor, Resurgence, the Creditors Committee Majority (or its
advisors), and the Unofficial Secured Noteholders Committee Majority (or its
advisors), and, to the extent any of such documents contemplates execution by
one or more Persons, any such document shall have been executed and delivered by
the respective parties thereto, and all conditions precedent to the
effectiveness of each such document shall have been satisfied or waived;
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Appendix A
(e) the Reorganized Debtors shall have arranged for credit availability
under the New Credit Agreement in amount, form, and substance acceptable to the
Debtors, Investor, Resurgence, the Creditors Committee Majority (or its
advisors), and the Unofficial Secured Noteholders Committee Majority (or its
advisors);
(f) all conditions precedent to the consummation of the transactions
contemplated by the Purchase Agreement shall have been satisfied or waived by
the parties thereto and the PulpCo Sale shall be consummated on the Effective
Date;
(g) Reorganized Sterling Chemicals shall have been provided with or
otherwise retained $80 million from the Proceeds;
(h) Investor shall have complied with its obligation to fund the
Committed Common Shares Investment (to the extent the Rights Offering is not
subscribed in full or any Person subscribing for any Rights fails or is not
eligible to purchase the Subscription Shares pursuant thereto) and the Committed
Preferred Shares Investment;
(i) the Confirmation Deposit shall have been made;
(j) as of the Effective Date, the aggregate net funded indebtedness of
the Subsidiary Debtors and their nondebtor subsidiaries and affiliates engaged
in the operations of the PulpCo Business shall not exceed $25 million;
(k) the professional fees and reasonable expenses incurred by the
Unofficial Secured Noteholders Committee for its professional advisors
consistent with the terms of the engagement letters of such professionals
executed by the members of the Unofficial Secured Noteholders Committee shall be
paid in full as deemed Allowed Administrative Claims on the Effective Date, and
(ii) if Confirmation of the Plan is consensual and the Effective Date occurs on
or before March 1, 2003, the professional fees, expenses, and costs of the Old
12-3/8% Secured Notes Indenture Trustee (or any successor indenture trustee) in
an amount not to exceed $1,400,000 shall be paid in full as deemed Allowed
Administrative Claims on the Effective Date;
(l) all authorizations, consents, and regulatory approvals required, if
any, in connection with consummation of the Plan shall have been obtained; and
(m) all actions, documents, and agreements necessary to implement the
Plan shall have been effected or executed.
10.4 WAIVER OF CONDITIONS
Each of the conditions set forth in Sections 10.1 (other than Section
10.1(a)), 10.2 (other than Section 10.2(b)), and 10.3 (other than Section
10.3(b)) of the Plan may, with the consent of Investor, be waived in whole or in
part by the Debtors without any notice to parties in interest or the Bankruptcy
Court and without a hearing, provided, however, that Sections 10.1(b), 10.2(a),
10.2(c), 10.3(a), 10.3(c), 10.3(d), 10.3(e), 10.3(f), 10.3(g), 10.3(h), 10.3(i),
10.3(j), 10.3(k), 10.3(l), and 10.3(m) may be waived only with the consent of
Investor, Resurgence, the Creditors Committee Majority (or its advisors), and
the Unofficial Secured Noteholders Committee Majority (or its advisors);
provided, however, that if Resurgence is not the Investor, in the event that the
Debtors have determined to waive any of such conditions and each of Investor,
the Creditors Committee Majority (or its advisors) and the Unofficial Secured
Noteholders Committee Majority (or its advisors) have consented to such waiver,
and Resurgence has not consented to such waiver, the performance of such
condition shall nonetheless be deemed waived in the event that either (a)
Resurgence files a motion on an expedited basis to require performance of such
condition and such motion is denied by the Bankruptcy Court, or (b) Resurgence
has failed to file such motion within two (2) Business Days after receiving
notice of the consent to such waiver by each of the other parties. The failure
of a Debtor 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 XI
RETENTION OF JURISDICTION
Under Sections 105(a) and 1142 of the Bankruptcy Code, and
notwithstanding entry of the Confirmation Order and occurrence of the Effective
Date, the Bankruptcy Court shall retain exclusive jurisdiction over all matters
arising out of, and related to, the Chapter 11 Case 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
not otherwise Allowed under the Plan (other than personal injury or wrongful
death Claims, unless agreed by the holder), 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;
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Appendix A
(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 Reorganized Debtors shall be made in the
ordinary course of business and shall not be subject to the approval of the
Bankruptcy 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 required 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 Case or the Litigation Rights;
(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 Bankruptcy 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 the 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 Plan Supplement, the Disclosure Statement, the
Confirmation Order, or any contract, instrument, release, or other agreement or
document created in connection with the Plan, the Plan Supplement, 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 Case;
(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 disputes involving the existence, nature, or
scope of the Debtors' discharge;
(p) 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
(q) enter a final decree closing the Chapter 11 Case.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 PROFESSIONAL FEE CLAIMS; EXPENSE REIMBURSEMENTS
(a) All final requests for payment of Professional Fee Claims pursuant
to Sections 327, 328, 330, 331, 503(b), or 1103 of the Bankruptcy Code and
Substantial Contribution Claims under Section 503(b)(3), (4), or (5) of the
Bankruptcy Code must be filed and served on the Reorganized Debtors, their
counsel, and other necessary parties in interest no later than sixty (60) days
after the
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Appendix A
Effective Date, unless otherwise ordered by the Bankruptcy Court. Objections to
such requests for payment must be filed and served on the Reorganized Debtors,
their counsel, 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
Bankruptcy Court) after the date on which the applicable request for payment was
served.
(b) Each Reorganized Debtor may, without application to or approval by
the Bankruptcy Court, pay reasonable professional fees and expenses in
connection with services rendered to it after the Effective Date; provided,
however, that all requests for payment of professional fees and expenses
incurred by the Creditors Committee after the Effective Date shall be filed and
served on the Reorganized Debtors and Investor and any objection thereto by any
Reorganized Debtor or Investor shall be resolved by the Bankruptcy Court. Each
Reorganized Debtor may, without application to or approval by the Bankruptcy
Court, pay reasonable professional fees and expenses of Kramer Levin Naftalis &
Frankel LLP incurred by the Unofficial Secured Noteholders Committee for
services rendered after the Effective Date associated with the implementation of
distributions to holders of Old 12-3/8% Secured Note Claims under the Plan.
(c) Notwithstanding the provisions of Section 12.1(a), (i) the
Unofficial Secured Noteholders Committee shall have Allowed Administrative
Claims for the professional fees and reasonable expenses of Houlihan Lokey
Howard & Zukin, Kramer Levin Naftalis & Frankel LLP, and Floyd, Isgur, Rios &
Warhlich P.C. under the engagement letters between the Unofficial Secured
Noteholders Committee and each such firm; (ii) the Old 12-3/8% Secured Notes
Indenture Trustee shall have an Allowed Administrative Claim for fees and
expenses of the Old 12-3/8% Secured Notes Indenture Trustee and for the
reasonable and necessary professional fees, expenses, and costs incurred by the
Old 12-3/8% Secured Notes Indenture Trustee in an aggregate amount not to exceed
$1,400,000; provided, however, that if the Plan is non-consensual or the
Effective Date occurs later than March 1, 2003, the Old 12-3/8% Secured Notes
Indenture Trustee reserves the right to request payment by the Estates of
additional fees, expenses, and costs, and the Debtors and all other parties in
interest reserve the right to object to any and all fees, expenses, and costs
requested by the Old 12-3/8% Secured Notes Indenture Trustee, including, without
limitation, amounts aggregating less than $1,400,000; and (iii) the Old Discount
Notes Indenture Trustee and the Old Unsecured Notes Indenture Trustee shall have
Allowed Administrative Claims for reasonable and necessary professional fees and
expenses incurred in an aggregate amount up to $325,000; provided, however, such
aggregate amount set forth in this subclause (iii) may be increased if the Plan
is non-consensual or the Effective Date occurs later than March 1, 2003. The
Allowed Administrative Claims described in the preceding sentence shall not be
subject to the Administrative Claims Special Bar Date and shall be paid in full
on the Effective Date (other than the fees, expenses, and costs of the Old
12-3/8% Secured Notes Indenture Trustee if the Plan is non-consensual or the
Effective Date occurs later than March 1, 2003). On or before the Effective
Date, Kramer Levin Naftalis & Frankel LLP, Floyd, Isgur, Rios & Wahrlich P.C.,
the professionals for the Old 12-3/8% Secured Notes Indenture Trustee, the Old
Discount Notes Indenture Trustee, and the Old Unsecured Notes Indenture Trustee
shall each file and serve on the Reorganized Debtors, the Unofficial Secured
Noteholders Committee, the Creditors Committee, and Investor reasonably
substantiating documents to support the Administrative Claims attributable to
each.
(d) Subject to the respective limitations on fees and expenses of
Section 12.1(c), the reasonable fees and expenses of the Indenture Trustees
(which includes the reasonable fees and expenses of any professionals retained
by the Indenture Trustees), will be paid in accordance with the procedures
established in this Section 12.1(d). To the extent such fees and expenses are
paid in Cash in full by the Reorganized Debtors, distributions received by
holders of Old Note Claims pursuant to the Plan will not be reduced on account
of the payment of any Indenture Trustee's fees and expenses. On or before the
Effective Date, each Indenture Trustee will file and serve on the Reorganized
Debtors, the Unofficial Secured Noteholders Committee, the Creditors Committee,
and Investor reasonably substantiating documents in support of the fees and
expenses incurred to date by such Indenture Trustee, whether incurred prior or
subsequent to the Petition Date, together with a detailed, reasonable estimate
of any fees and expenses to be incurred through the Effective Date. Such
estimate may include, without limitation, projected fees and expenses relating
to surrender and cancellation of Old Notes, distribution of New Securities, and
in respect of any challenge to the claims asserted by the Indenture Trustee,
whether based on the Old Notes or the claimed amount of such fees and expenses.
On or as soon as reasonably practicable after the Effective Date, subject to
Section 12.1(c), the Reorganized Debtors will pay the undisputed amount of each
Indenture Trustee's fees and expenses. If, prior to the Effective Date, the
Reorganized Debtors timely object in writing to all or a portion of such fees,
(i) the Reorganized Debtors shall pay the undisputed portion of the fees and
expenses and (ii) such Indenture Trustee may either, at its option, submit the
disputed portion to the Bankruptcy Court for resolution or exercise its rights
under its respective Old Indenture. The allowance of the fees and expenses of
the Indenture Trustees shall be determined under a `reasonableness' standard,
but the Indenture Trustees will not be required to file fee applications or
comply with guidelines and rules applicable to fee applications, and will not be
subject to Sections 330 or 503(b) of the Bankruptcy Code. Nothing herein shall
be deemed to impair, waive or discharge the Indenture Trustees' charging Liens
for any fees and expenses not paid by the Reorganized Debtors.
(e) Subject to the terms of the Investment Agreement and as ordered by
the Bankruptcy Court, Resurgence shall have an Allowed Administrative Claim for
all reasonable out-of-pocket expenses incurred by Resurgence in connection with
its due diligence relating to the transactions contemplated by the Investment
Agreement (including up to $250,000 as provided for in that certain letter from
Sterling Chemicals to Resurgence dated May 13, 2002) and for out-of-pocket fees
(including any fees owed to Renard Strautman) incurred by Resurgence in
connection with the PulpCo Sale as provided in the Investment Agreement.
31
Appendix A
12.2 ADMINISTRATIVE CLAIMS
Except with respect to Administrative Claims that are subject to the
Administrative Claims Special Bar Date, all requests for payment of an
Administrative Claim (other than as set forth in Sections 4.1(a) and 12.1 and
this Section 12.2 of the Plan) must be filed with the Bankruptcy Court and
served on counsel for the Debtors no later than forty-five (45) days after the
Effective Date. Unless the Debtors object to an Administrative Claim within
forty-five (45) days after receipt, such Administrative Claim shall be deemed
Allowed in the amount requested. In the event that the Debtors object to an
Administrative Claim, the Bankruptcy Court shall determine the Allowed amount of
such Administrative Claim. 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.
12.3 PAYMENT OF STATUTORY FEES
All fees payable pursuant to Section 1930 of Title 28 of the United
States Code, as determined by the Bankruptcy Court at the Confirmation Hearing,
shall be paid on or before the Effective Date. All such fees that arise after
the Effective Date but before the closing of the Chapter 11 Case shall be paid
by the Reorganized Debtors.
12.4 MODIFICATIONS AND AMENDMENTS
The Debtors may alter, amend, or modify the Plan, the Plan Supplement,
or any Exhibit 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, under Section 1127(b) of the Bankruptcy Code, institute
proceedings in the Bankruptcy Court to remedy any defect or omission or
reconcile any inconsistencies in the Plan, the Plan Supplement, any Exhibit, or
the Confirmation Order, provided, however, that prior notice of such proceedings
shall be served in accordance with the Bankruptcy Rules or order of the
Bankruptcy Court.
12.5 SEVERABILITY OF PLAN PROVISIONS
If, prior to Confirmation, any term or provision of the Plan is held by
the Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy
Court, at the request of any Debtor, with the consent of the Creditors Committee
Majority (or its advisors), the Unofficial Secured Noteholders Committee
Majority (or its advisors), and Investor, shall have the power to alter and
interpret such term or provision to make it valid or enforceable to the maximum
extent practicable, consistent with the original purpose of the term or
provision held to be invalid, void, or unenforceable, and such term or provision
shall then be applicable as altered or interpreted. Notwithstanding any such
holding, alteration, or interpretation, the remainder of the terms and
provisions of the Plan shall remain in full force and effect and shall in no way
be affected, impaired, or invalidated by such holding, alteration, or
interpretation. The Confirmation Order shall constitute a judicial determination
and shall provide that each term and provision of the Plan, as it may have been
altered or interpreted in accordance with the foregoing, is valid and
enforceable pursuant to its terms.
12.6 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, personal representative, successor, or assign of such
entity.
12.7 COMPROMISES AND SETTLEMENTS
From and after the Effective Date, the Reorganized Debtors may
compromise and settle various Claims against them (with the consent of the
Creditors Committee (if still in existence) with respect to settlement amounts
greater than $200,000) and/or Litigation Rights and other claims that they may
have against other Persons without any further approval by the Bankruptcy Court.
The Debtors expressly reserve the right to compromise and settle (subject to the
approval of the Bankruptcy Court) Claims against them and Litigation Rights or
other claims that they may have against other Persons up to and including the
Effective Date.
12.8 RELEASES AND SATISFACTION OF SUBORDINATION RIGHTS
All Old Note Claims against the Debtors and all rights and claims
between or among the holders of Old Note Claims relating in any manner
whatsoever to any claimed subordination rights shall be deemed satisfied by the
distributions under, described in, contemplated by, and/or implemented in
Section 4.3 of the Plan. Distributions under, described in, contemplated by,
and/or implemented by the Plan to the various Classes of Claims hereunder shall
not be subject to levy, garnishment, attachment, or like legal process by any
holder of a Claim, including, but not limited to, holders of Old Note Claims, by
reason of any claimed subordination
32
Appendix A
rights or otherwise, so that each holder of a Claim shall have and receive the
benefit of the distributions in the manner set forth in the Plan.
12.9 RELEASES AND RELATED MATTERS
(A) RELEASES BY DEBTORS
As of the Effective Date, for good and valuable consideration,
the adequacy of which is hereby confirmed, the Debtors and the Reorganized
Debtors shall 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,
the Chapter 11 Case, or the Plan (other than the rights of the Debtors and the
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 unforeseen, 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,
the Chapter 11 Case, or the Plan, and that may be asserted by or on behalf of
the Debtors, the Estates, or the Reorganized Debtors against any of the
Designated Directors, Officers, and Employees as of the Effective Date
excluding, in each case, any Person who has, on or before the Effective Date,
asserted any claim (other than a Proof of Claim as to which the Debtors have not
made any objection on or before the Effective Date) or initiated any suit,
action or similar proceeding against the Debtors that has not been waived by
such Person in its entirety on or prior to the Effective Date.
(B) RELEASES OF SENIOR LIEN CLAIMS
As of the Effective Date, the Debtors, the Reorganized
Debtors, and the Creditors Committee shall be prohibited from commencing or
continuing, and shall release, waive, and discharge, any claims, causes of
action, actions, avoidance actions, motions, or proceedings, whether matured or
unmatured, known or unknown, foreseen or unforeseen, then existing or hereafter
arising in law, equity, or otherwise, that in whole or in part challenge (i) the
validity, perfection, or priority of the Liens of the holders of Old 12-3/8%
Secured Notes or (ii) the priority and allowability of any Old 12-3/8% Secured
Note Claims.
12.10 DISCHARGE OF THE DEBTORS
(a) Except as otherwise provided herein or in the Confirmation Order,
all consideration distributed under the Plan (including, but not limited to, the
Merger Consideration) 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 Effective 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 Sterling
Interests.
(b) As of the Effective Date, except as provided in the Plan or in the
Confirmation Order, all Persons 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 Effective 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 Sterling 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.
12.11 INJUNCTION
(a) Except as provided in the Plan or in the Confirmation Order, as of
the Effective Date, all Persons 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, the 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
33
Appendix A
due to the Debtors or the Reorganized Debtors; or (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.
(b) As of the Effective Date, all Persons that have held, currently
hold, or may hold, a Claim, obligation, suit, judgment, damage, demand, debt,
right, cause of action, or liability that is released pursuant to Section 12.8,
12.9, or 12.12 of the 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 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 any
released Person; or (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.
(c) By accepting distributions pursuant to the Plan, each holder of an
Allowed Claim receiving distributions pursuant to the Plan shall be deemed to
have specifically consented to the injunctions set forth in this Section 12.11.
12.12 EXCULPATION AND LIMITATION OF LIABILITY
(a) Neither the Debtors, the Reorganized Debtors, Investor, Resurgence,
the Creditors Committee, the Unofficial Secured Noteholders Committee, nor any
of their respective present or former members, officers, directors, or employees
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, advisors, attorneys, or affiliates, or any of their successors
or assigns, for any act or omission in connection with, relating to, or arising
out of, the Chapter 11 Case, the formulation, negotiation, or implementation of
the Plan, the solicitation of acceptances of the Plan, the pursuit of
Confirmation of the Plan, the 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 acts or omissions which are the result of fraud, gross
negligence, or willful misconduct or willful violation of federal or state
securities laws or the Internal Revenue Code, and in all respects shall be
entitled to reasonably rely upon the advice of counsel with respect to their
duties and responsibilities under the Plan.
(b) Notwithstanding any other provision of the Plan, no holder of a
Claim or an Interest, no other party in interest, none of their respective
agents, employees, representatives, advisors, attorneys, or affiliates, and none
of their respective successors or assigns shall have any right of action against
any Debtor, any Reorganized Debtor, Investor, Resurgence, the Creditors
Committee, or the Unofficial Secured Noteholders Committee, or any of their
respective present or former members, officers, directors, or employees for any
act or omission in connection with, relating to, or arising out of, the Chapter
11 Case, the formulation, negotiation, or implementation of the Plan,
solicitation of acceptances of the Plan, the pursuit of Confirmation of the
Plan, the 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 acts or omissions which are the result of fraud, gross negligence, or
willful misconduct or willful violation of federal or state securities laws or
the Internal Revenue Code.
(c) The foregoing exculpation and limitation on liability shall not,
however, limit, abridge, or otherwise affect the rights, if any, of the
Reorganized Debtors to enforce, sue on, settle, or compromise the Litigation
Rights retained pursuant to Section 6.13 of the Plan.
12.13 BINDING EFFECT
The Plan shall be binding upon and inure to the benefit of the Debtors,
all present and former holders of Claims against and Interests in the Debtors,
and their respective successors and assigns, including, but not limited to, the
Reorganized Debtors, and all other parties-in-interest in the Chapter 11 Case.
12.14 REVOCATION, WITHDRAWAL, OR NON-CONSUMMATION
The Debtors reserve the right to revoke or withdraw the Plan at any
time prior to the Confirmation Date and to file subsequent plans of
reorganization. If the Debtors revoke or withdraw the Plan, or if Confirmation
or the Effective Date does not occur, then (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, any Debtor or any other Person, (ii) prejudice in any manner the rights of
any Debtor or any Person in any further proceedings involving a Debtor, or (iii)
constitute an admission of any sort by any Debtor or any other Person.
34
Appendix A
12.15 PLAN SUPPLEMENT
The Plan Supplement shall be filed with the Clerk of the Bankruptcy
Court at least five (5) Business Days prior to the date of the commencement of
the Confirmation Hearing. Upon such filing, all documents included in the Plan
Supplement may be inspected in the office of the Clerk of the Bankruptcy Court
during normal court hours. Holders of Claims or Interests may obtain a copy of
any document included in the Plan Supplement upon written request to the Debtors
in accordance with Section 12.16 of the Plan.
12.16 NOTICES
Any notice, request, or demand required or permitted to be made or
provided to or upon a Debtor or a 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, and (b) 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, addressed as follows:
Sterling Chemicals, Inc., et al.
1200 Smith Street, Suite 1900
Houston, Texas 77002
Attn: Kenneth M. Hale, Esq.
Telephone: (713) 654-9502
Facsimile: (713) 654-9577
with copies to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
Attn: D. J. Baker, Esq.
Telephone: (212) 735-3000
Facsimile: (212) 735-2000
and
Andrews & Kurth L.L.P.
600 Travis Street, Suite 4200
Houston, Texas 77002-2910
Attn: Jeffrey E. Spiers, Esq.
Telephone: (713) 220-4200
Facsimile: (713) 220-4285
12.17 INDEMNIFICATION OF DEBTORS' DIRECTORS, OFFICERS, AND EMPLOYEES
(a) Upon, and at all times after the Effective Date, the Certificate of
Incorporation and Bylaws of Reorganized Sterling Chemicals and each Reorganized
Subsidiary Debtor shall contain provisions which (i) eliminate the personal
liability of the Debtors' former, present, and future directors for monetary
damages resulting from breaches of their fiduciary duties to the fullest extent
permitted by applicable law and (ii) require such Reorganized Debtor, subject to
appropriate procedures, to indemnify the Designated Directors, Officers, and
Employees and the Debtors' present and future directors, officers, and other key
employees to the fullest extent permitted by applicable law, including, without
limitation, for pre-Effective Date acts and occurrences.
(b) On or as of the Effective Date, each Reorganized Debtor shall enter
into written agreements with each person who is a director, officer, or member
of management of such Reorganized Debtor as of the Effective Date providing for
similar indemnification of such person and providing that no recourse or
liability whatsoever with respect to the Plan, the Investment Agreement, or the
consummation of the transactions contemplated hereby or thereby shall be had,
directly or indirectly, by or in the right of any Debtor or any Reorganized
Debtor against such person.
12.18 DISSOLUTION OF CREDITORS COMMITTEE
On the date that is eighteen (18) months after the Effective Date, the
Creditors Committee shall dissolve and its members shall be released and
discharged from all duties and obligations arising from or related to the
Chapter 11 Case. The Professionals retained by the Creditors Committee and the
members thereof will not be entitled to compensation or reimbursement of
expenses for any services rendered after the date that is eighteen (18) months
after the Effective Date.
35
Appendix A
12.19 TERM OF INJUNCTIONS OR STAYS
Unless otherwise provided herein or in the Confirmation Order, all
injunctions or stays provided for in the Chapter 11 Case 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.
12.20 COMPUTATION OF TIME
In computing any period of time prescribed or allowed by the Plan, the
provisions of Bankruptcy Rule 9006(a) shall apply.
12.21 GOVERNING LAW
Unless a rule of law or procedure is supplied by federal law (including
the Bankruptcy Code and Bankruptcy Rules), the laws of (a) the State of Texas
shall govern the construction and implementation of the Plan and (except as may
be provided otherwise in any such agreements, documents, or instruments) any
agreements, documents, and instruments executed in connection with the Plan and
(b) the laws of the state of incorporation of each Debtor shall govern corporate
governance matters with respect to such Debtor; in each case without giving
effect to the principles of conflicts of law thereof.
Dated: October 14, 2002
[Download Table]
Sterling Chemicals Holdings, Inc.
(for itself and on behalf of Sterling Chemicals, Inc.
and the Subsidiary Debtors)
By: /s/ David G. Elkins
------------------------------------------------
Name: David G. Elkins
Title: President and Co-Chief Executive Officer
By: /s/ Richard K. Crump
---------------------------------------
Name: Richard K. Crump
Title: Co-Chief Executive Officer
Kenneth M. Hale
Vice President and General Counsel
Sterling Chemicals Holdings, Inc., et al.
1200 Smith Street, Suite 1900
Houston, Texas 77002
Telephone: (713) 650-3700
Fax: (713) 654-9577
D. J. Baker
(Texas Bar No. 01566500)
Rosalie Walker Gray
(Texas Bar No. 20729020)
Alexandra Margolis
(Texas Bar No. 12978500)
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
Telephone: (212) 735-3000
Fax: (212) 735-2000
Jeffrey E. Spiers
(Texas Bar No. 18933950)
Timothy A. Davidson II
(Texas Bar No. 24012503)
Andrews & Kurth L.L.P.
600 Travis Street, Suite 4200
Houston, Texas 77002-2910
Telephone: (713) 220-4200
Fax: (713) 220-4285
Attorneys for Sterling Chemicals Holdings, Inc., et al.
36
Appendix A
EXHIBIT A
TO
JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11, TITLE 11, UNITED STATES CODE
OF STERLING CHEMICALS HOLDINGS, INC., ET AL., DEBTORS
NEW SCI NOTES
Summary of Terms
Issue: Senior Secured Notes Series A
Issuer: Reorganized Sterling Chemicals
Initial Principal Amount: An aggregate principal amount equal to
the amount by which the Secured
Noteholder Claim Amount exceeds the
amount of Class 5 Proceeds distributed to
holders of Old 12-3/8% Secured Note
Claims under the Plan.
Interest Rate: 10% per annum, if paid in cash, 13-3/8%
per annum if paid in kind, payable
semi-annually in arrears.
Payment of Interest: At the sole option of Reorganized
Sterling Chemicals, interest will be
payable for the initial 24-month period
from the date of issuance through the
issuance of additional New SCI Notes of
like tenor in an aggregate principal
amount equal to the interest then due and
payable at the rate per annum applicable
to in kind payments of interest;
provided, however, interest will be paid
in cash if after giving effect to such
payment Reorganized Sterling Chemicals
would have excess cash of more than $15
million beyond its budgeted requirements.
Maturity: Five years from the date of original
issuance.
Ranking: The New SCI Notes will be senior
obligations of the Company but will be
subordinate in right of payment to
obligations under the New Credit
Agreement.
Security: The New SCI Notes will be secured by
first priority liens on the fixed assets
of Reorganized Sterling Chemicals,
subordinate and junior only to scheduled
liens securing indebtedness existing as
of the Effective Date, certain other
liens existing as of the Effective Date,
and customary ordinary course liens, as
specified in the Indenture pursuant to
which the New SCI Notes are issued.
Redemption: The New SCI Notes will be redeemable in
whole at any time, and in part from time
to time, at a price of 100% of the
principal amount, plus accrued and unpaid
interest to the repurchase date. In the
event of a change of control of
Reorganized Sterling Chemicals,
Reorganized Sterling Chemicals shall be
required to redeem the New SCI Notes at
101% of their face value, plus accrued
and unpaid interest.
Events of Default: Customary for securities of this type.
Negative Covenants: Customary for securities of this type,
including, without limitation, a
prohibition on payment of dividends,
restrictions on capital expenditures
(which will not be inconsistent with
Reorganized Sterling Chemicals' business
plan), and restrictions on use of asset
sale proceeds.
A-i
Appendix A
EXHIBIT B
TO
JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11, TITLE 11, UNITED STATES CODE
OF STERLING CHEMICALS HOLDINGS, INC., ET AL., DEBTORS
NEW UC NOTES
Summary of Terms
Issue: Secured Notes Series B
Issuer: Reorganized Sterling Chemicals
Initial Principal Amount: An aggregate principal amount equal to
the amount of Class 5 Excess Proceeds
distributed to holders of Old 12-3/8%
Secured Note Claims.
Interest Rate: 10% per annum, if paid in cash, 13-3/8%
per annum if paid in kind, payable
semi-annually in arrears.
Payment of Interest: At the sole option of Reorganized
Sterling Chemicals, interest will be
payable for the initial 24-month period
from the date of issuance through the
issuance of additional New UC Notes of
like tenor in an aggregate principal
amount equal to the interest then due and
payable at the rate per annum applicable
to in kind payments of interest;
provided, however, interest will be paid
in cash only if interest on the New SCI
Notes has been paid in cash and after
giving effect to such payment,
Reorganized Sterling Chemicals would have
excess cash of more than $15 million
beyond its budgeted requirements. After
the initial 24-month period, interest
shall be payable solely in cash.
Maturity: Five years from date of original
issuance.
Ranking: The New UC Notes will be senior
obligations of the Company but will be
subordinate in right of payment to
obligations under the New Credit
Agreement and New SCI Notes.
Security: The New UC Notes will be secured by
second priority liens on the fixed assets
of Reorganized Sterling Chemicals,
subordinate and junior to the liens
securing obligations under the New SCI
Notes, scheduled liens securing
indebtedness existing as of the Effective
Date, certain other existing liens as of
the Effective Date, and customary
ordinary course liens, as specified in
the Indenture pursuant to which the New
UC Notes are issued.
Redemption: Provided that no New SCI Notes are
outstanding, the New UC Notes will be
redeemable in whole at any time, and in
part from time to time, at a price of
100% of the principal amount, plus
accrued and unpaid interest to the
repurchase date. In the event of a change
of control of Reorganized Sterling
Chemicals, Reorganized Sterling Chemicals
shall be required to redeem the New UC
Notes at 101% of their face value, plus
accrued and unpaid interest.
Events of Default: Customary for securities of this type.
Negative Covenants: Customary for securities of this type,
including, without limitation, a
prohibition on payment of dividends,
restrictions on capital expenditures
(which will not be inconsistent with
Reorganized Sterling Chemicals' business
plan), and restrictions on use of asset
sale proceeds.
B-i
Appendix A
EXHIBIT C
TO
JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11, TITLE 11, UNITED STATES CODE
OF STERLING CHEMICALS HOLDINGS, INC., ET AL., DEBTORS
NEW SCI PREFERRED SHARES
Summary of Terms
Issue: Convertible Preferred Stock, par value
$0.01 per share (the "Convertible
Preferred Stock")
Issuer: Reorganized Sterling Chemicals
Authorized Shares: 25,000
Initial Issuance: 2,175
Dividends: Dividends at the rate of 4% per quarter
of the liquidation amount of the
Convertible Preferred Stock will be paid
in kind quarterly (unless the declaration
or payment of such dividend is prohibited
by law). Dividends will be paid through
the issuance of additional shares of
Convertible Preferred Stock of equal
tenor having an aggregate liquidation
amount equal to the amount of the
dividend then payable.
Conversion Rights: Each share of the Convertible Preferred
Stock will be convertible at any time
into 1,000 New SCI Common Shares.
Voting Rights: The holder of each share of Convertible
Preferred Stock will have the right to
one vote for each New SCI Common Share
into which such Convertible Preferred
Stock could then be converted, and with
respect to such vote, such holder will
have full voting rights and powers equal
to the voting rights and powers of the
holders of New SCI Common Shares. The
Convertible Preferred Stock will vote
together with the New SCI Common Shares
as a single class on any matters
presented to a vote of stockholders.
Liquidation Value: $13,793.11 per share.
C-i
Appendix A
EXHIBIT D
TO
JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11, TITLE 11, UNITED STATES CODE
OF STERLING CHEMICALS HOLDINGS, INC., ET AL., DEBTORS
NEW SCI COMMON SHARES
Summary of Terms
Issue: Common stock, par value $0.01 per share
Issuer: Reorganized Sterling Chemicals
Authorized Shares: 10,000,000
Initial Issuance: 2,825,000
Dividends: Payable at the discretion of the Board of
Directors, subject to applicable law and
the terms of the New Credit Agreement and
the New Indentures.
Voting Rights: One vote per share
Tag-Along Rights: Pursuant to the Investment Agreement, the
Certificate of Incorporation of
Reorganized Sterling Chemicals and a
tag-along agreement to be executed by
Investor on the Effective Date shall
include provisions for the benefit of all
holders of New SCI Common Shares and
holders of New SCI Warrants (other than
Investor and other Affiliates of
Resurgence), prohibiting Resurgence and
Investor (and its Affiliates) from
selling, in a single transaction or
related series of transactions (a
"Proposed Transfer"), New SCI Common
Shares, New SCI Preferred Shares and/or
New SCI Warrants representing, in the
aggregate, 50% or more of all Equity
Securities (as defined below) of
Reorganized Sterling Chemicals unless all
other holders of New SCI Common Shares
and New SCI Warrants (other than Investor
and its Affiliates) shall have been given
a reasonable opportunity to participate
therein on a pro rata basis and at the
same price per share and on the same
economic terms and conditions applicable
to such sale; provided, however, that
neither Resurgence nor Investor (or any
of its Affiliates) shall be required to
provide the holders of New SCI Warrants
an opportunity to participate in such
Proposed Transfer and Resurgence, on
behalf of Investor, shall not be
prohibited from selling New SCI Warrants,
if the value of the aggregate per share
consideration offered for New SCI Common
Shares in such Proposed Transfer
(including in such per share computation
the consideration being paid for any New
SCI Preferred Shares to be sold on the
basis of the number of New SCI Common
Shares into which such New SCI Preferred
Shares are convertible) is less than the
Minimum Consideration (as defined below).
For purposes of this Exhibit D, "Equity
Securities" shall mean (i) all New SCI
Common Shares then outstanding assuming
the conversion of all New SCI Preferred
Shares and, in the event the value of the
aggregate per share consideration offered
for New SCI Common Shares in the Proposed
Transfer (including in such per share
computation the consideration being paid
for any New SCI Preferred Shares to be
sold on the basis of the number of New
SCI Common Shares into which such New SCI
Preferred Shares are convertible) is
equal to or exceeds the exercise price of
the New SCI Warrants, the exercise of all
New SCI Warrants (including New SCI
Warrants held by Investor) or (ii) in the
event the value of the aggregate per
share consideration offered for New SCI
Common Shares in the Proposed Transfer
(including in such per share computation
the consideration being paid for any New
SCI Preferred Shares to be sold on the
basis of the number of New SCI Common
Shares into which such New SCI Preferred
Shares are convertible) is less than the
exercise price of the
D-i
Appendix A
New SCI Warrants, all New SCI Common
Shares outstanding assuming the
conversion only of all New SCI Preferred
Shares. For purposes of this Exhibit D,
"Minimum Consideration" shall mean an
amount equal to the exercise price of the
New SCI Warrants. Notwithstanding the
foregoing, no sale, transfer or other
disposition of New SCI Common Shares, New
SCI Preferred Shares or New SCI Warrants
by an Investor to any Affiliate of
Resurgence shall constitute a Proposed
Transfer subject to tag-along rights;
provided, however, that the Tag-Along
Agreement shall contain an acknowledgment
by Resurgence, on behalf of any such
proposed transferee that, upon any such
sale, transfer, or other disposition,
such transferee shall be bound by the
terms of the Tag-Along Agreement.
D-ii
Appendix A
EXHIBIT E
TO
JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11, TITLE 11, UNITED STATES CODE
OF STERLING CHEMICALS HOLDINGS, INC., ET AL., DEBTORS
NEW SCI WARRANTS
Summary of Terms
Issue: Warrants to purchase shares of common stock,
par value $0.01 per share, of Reorganized
Sterling Chemicals.
Issuer: Reorganized Sterling Chemicals
Amount Issued: Such number of warrants as will, as of the
Effective Date, entitle the holders thereof to
purchase in the aggregate 15% of the
outstanding number of common shares of
Reorganized Sterling Chemicals, on a
fully-diluted basis as of the Effective Date
(assuming the conversion of all New SCI
Preferred Shares into New SCI Common Shares and
the issuance of all shares available for
issuance under the SCI Management Incentive
Plan and upon exercise of the warrants). Each
warrant will initially represent the right to
purchase one New SCI Common Share.
Term: The warrants will expire six years from the
Effective Date.
Exercise Price: The initial exercise price will be $52 per
warrant.
Anti-Dilution Adjustment: Customary for securities of this type.
E-i
Appendix A
EXHIBIT F
TO
JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11, TITLE 11, UNITED STATES CODE
OF STERLING CHEMICALS HOLDINGS, INC., ET AL., DEBTORS
RIGHTS OFFERING
Summary of Terms
Issue: Nontransferable Subscription Rights to
subscribe for 2,175,000 New SCI Common
Shares.
Distribution: Subject to the terms of the Plan, holders
of Allowed or Disputed General Unsecured
Claims, Allowed or Disputed Self-Insured
Tort Claims, and Allowed Old Unsecured
Note Claims shall each receive rights to
subscribe for New SCI Common Shares
(subject to the terms set forth below
under "Exercise of Subscription Rights")
on a pro rata basis in the same
proportion that the Face Amount of each
such holder's Claims of the appropriate
Classes bears to the aggregate Face
Amount of all Allowed Claims in such
Classes.
Exercise of Subscription Rights: Subscription Rights will be exercisable
only by holders of Allowed or Disputed
General Unsecured Claims, Allowed or
Disputed Self-Insured Tort Claims, and
Allowed Old Unsecured Note Claims who
exercise such Subscription Rights in
full. In the event that a holder of
Subscription Rights subscribes to
exercise the Subscription Rights and
deposits funds required to exercise the
Subscription Rights, and such holder's
Claim is a Disputed Claim which is
disallowed by Final Order of the
Bankruptcy Court, such holder's
subscription will be cancelled and any
monies received by the Debtors from such
holder in connection with the Rights
Offering will promptly be returned,
without interest, to such electing
holder.
Each holder of an Allowed or Disputed
General Unsecured Claim, Allowed or
Disputed Self-Insured Tort Claim, or
Allowed Old Unsecured Note Claim will
receive one Subscription Right for each
Eligible Claim Amount held by such
holder, rounded down to the nearest
Eligible Claim Amount. The "Eligible
Claim Amount" is currently estimated at
$15,849.98. On account of such rounding,
holders of Allowed or Disputed General
Unsecured Claims, Allowed or Disputed
Self-Insured Tort Claims, or Allowed Old
Unsecured Note Claims in amounts less
than the Eligible Claim Amount will not
receive Subscription Rights. The Eligible
Claim Amount will be finally calculated
on the exercise deadline provided for in
the rights offering procedures, at which
time the Debtors shall return, without
interest, the resulting excess, if any,
of a holder's payment on account of the
exercise of its Subscription Rights (the
"Subscription Payment"). The Subscription
Rights corresponding to the amount of an
underpayment, if any, of a Subscription
Payment resulting from such recalculation
of the Eligible Claim Amount shall be
exercised by Investor.
Pro Rata Allocation of Subscription The Subscription Rights, in the
Rights: aggregate, will consist of the right to
receive up to 43.5% of the issued and
outstanding New SCI Common Shares (as of
the Effective Date, assuming conversion
of all New SCI Preferred Shares into
common equity, but subject to Dilution as
provided in the Plan) (the "Subscription
Shares"). "Pro Rata Share" means with
respect to any Allowed or Disputed
General Unsecured Claim, Allowed or
Disputed Self-Insured Tort Claim, or
Allowed Old Unsecured Note Claim, a
fraction, (a) the numerator of which is
the Face Amount of such Claim as of the
Rights Offering Record Date and (b) the
denominator of which is the aggregate
Face Amount of all Allowed General
Unsecured Claims, Allowed Old Unsecured
Note Claims, and Allowed Self-
F-i
Appendix A
Insured Tort Claims as of the Rights
Offering Record Date. In the event of an
exercise of Subscription Rights by any
holder of a Disputed Claim, the Rights
Offering Pro Rata Share will be
recalculated to reflect the addition of
such Disputed Claim amount to the
denominator.
Subscription Price: Each Subscription Right will entitle the
holder to acquire 72.5 New SCI Common
Shares for $1,000 in cash ($13.7931 per
New SCI Common Share). The New SCI Common
Shares shall be distributed principally
in exchange for the Claims of such
holders and partly for the cash
subscription price of $1,000 per 72.5 New
SCI Common Shares.
Underwriter: Investor will underwrite the Rights
Offering and the Committed Common Shares
Investment.
Rescission: In the event that the Bankruptcy Court
does not confirm the Plan or the
Effective Date does not occur, the Rights
Offering will be automatically rescinded
without notice and will be of no further
force and effect, and any monies received
by the Debtors in connection with the
Rights Offering will promptly be returned
to the respective electing holders.
F-ii
Appendix A
Dates Referenced Herein and Documents Incorporated By Reference
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