<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
DECEMBER 14, 1999 (NOVEMBER 30, 1999)
Date of Report (Date of earliest event reported)
PHILIP SERVICES CORP.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
ONTARIO 0-20854 NOT APPLICABLE
(State or other jurisdiction (Commission File Number) (IRS Employer Identification No.)
of incorporation)
</TABLE>
100 KING STREET WEST, P.O. BOX 2440, LCD1, HAMILTON, ONTARIO, CANADA L8N 4J6
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (905) 521-1600
NOT APPLICABLE
(Former name or former address, if changed since last report.)
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<PAGE> 2
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
On November 30, 1999, the United States Bankruptcy Court for the District
of Delaware (the "U.S. Bankruptcy Court") confirmed the first amended joint plan
of reorganization (the "U.S. Plan") of Philip Services (Delaware), Inc. ("PSI"),
Philip Services Corp. (the "Company"), and certain other entities (collectively,
the U.S. Applicants), pursuant to the U.S. Bankruptcy Code. The plan of
arrangement and compromise of the Company and certain of its Canadian
subsidiaries (the "Canadian Applicants") as amended, restated and supplemented
on October 27, 1999 (the "CCAA Plan") under the Companies' Creditors Arrangement
Act (the "CCAA") had been sanctioned by the Ontario Superior Court of Justice on
November 26, 1999. A copy of the press release announcing the confirmation of
the U.S. Plan is attached hereto as Exhibit 1. A copy of the U.S. confirmation
order, which includes the U.S. Plan and the CCAA Plan is attached hereto as
Exhibit 2.
Pursuant to the U.S. Plan, existing secured debt of US$1 billion will be
converted into US$350 million of secured debt, US$100 million of which being
convertible into PSI common shares. Approximately US$140 million in existing
unsecured obligations will be converted into US$48 million in payment-in-kind
notes and US$18 million in convertible payment-in-kind notes. Implementation of
the U.S Plan will include the distribution of 24 million PSI common shares on a
pro rata basis to secured lenders (91%), unsecured creditors (5%), class action
claimants (1.5%), other equity claimants (0.5%) and existing shareholders (2%).
Shareholders of record of the Company on a date to be set in advance of the date
of implementation will receive their pro rata share of 480,000 common shares of
PSI or approximately one share for every 273 shares held.
Pursuant to the CCAA Plan, the businesses of the Canadian Applicants will
be transferred to two new Canadian subsidiaries, Philip Services Inc. and Philip
Analytical Services Inc. Upon implementation of the U.S. Plan, such companies
will be wholly-owned subsidiaries of PSI and will no longer be subsidiaries of
any of the Canadian Applicants.
A summary of the U.S. Plan and the CCAA Plan is included in the disclosure
statement prepared in connection with the U.S. and Canadian bankruptcy
proceedings and filed with the applicable Canadian and U.S. securities
regulatory authorities pursuant to a report on Form 8-K dated September 27, 1999
as amended by a Form 8-K/A dated October 5, 1999, and is incorporated herein by
reference.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
1 Press release issued by Philip Services Corp. on November
30, 1999.
2 Confirmation order of the United States Bankruptcy Court for
the District of Delaware dated November 30, 1999 confirming
the first amended joint plan of reorganization of Philip
Services (Delaware), Inc., Philip Services Corp. and certain
other entities pursuant to the U.S. Bankruptcy Code.
</TABLE>
3
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PHILIP SERVICES CORP.
By: /s/ COLIN SOULE
------------------------------------
Colin Soule
Executive Vice President,
General Counsel and Corporate
Secretary
Date: December 14, 1999
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- ------- ----------- ----
<C> <S> <C>
1 Press release issued by Philip Services Corp. on November
30, 1999....................................................
2 Confirmation order of the United States Bankruptcy Court for
the District of Delaware dated November 30, 1999 confirming
the first amended joint plan of reorganization of Philip
Services (Delaware), Inc., Philip Services Corp. and certain
other entities pursuant to the U.S. Bankruptcy Code.........
</TABLE>
<PAGE> 1
EXHIBIT 1
NEWS RELEASE
PHILIP SERVICES U.S. PLAN OF REORGANIZATION APPROVED UNDER CHAPTER 11
Hamilton, Ontario, November 30, 1999: Philip Services Corp. (TSE/ME: PHV) today
announced that its U.S. Plan of Reorganization has been confirmed under Chapter
11 of the U.S. Bankruptcy Code. The Company has already received approval under
the Companies Creditors' Arrangement Act ("CCAA") for its Canadian Amended and
Restated Plan of Compromise and Arrangement. With confirmation in both the
Canadian and U.S. Courts, Philip will undertake the legal and administrative
steps necessary over the next month to implement its Plan of Reorganization.
The Company has received a commitment from Foothill Capital Corporation to
provide a US$175 million exit working capital facility. The commitment is
subject to customary closing conditions and completion of documentation. The
facility will support Philip's ongoing working capital requirements over the
next thirty months. Obtaining the exit working capital commitment was the last
step necessary for Philip to seek final confirmation under Chapter 11.
"This final U.S. Court approval is a milestone event for Philip Services," said
Anthony Fernandes, President and Chief Executive Officer. "We have conquered
many challenges and we are a stronger, more unified company because of it. Now
we are going to tap this collective talent so that we can realize our potential.
With the approval of both Courts our management team and all our employees can
now focus their energy on building a profitable company."
As part of final Plan implementation, Philip will convert existing secured debt
of US$1 billion into US$250 million in secured debt and US$100 million in
convertible payment-in-kind notes. Over US$140 million in existing unsecured
debt will be converted into US$48 million in payment-in-kind notes and US$18
million in convertible payment-in-kind notes. Upon final Plan implementation, 24
million shares will be issued by Philip Services (Delaware), Inc. on a pro rata
basis to its secured lenders (91%), unsecured creditors (5%), class action
claimants (1.5%), other equity claimants (0.5%) and existing shareholders (2%).
Shareholders of record on the date of Plan implementation will receive their pro
rata share of 480,000 common shares of the restructured Company, or one share
for every 273 shares held.
Philip Services is an integrated metals recovery and industrial services company
with operations throughout the United States, Canada and Europe. Philip provides
diversified metals services, together with by-products management and industrial
outsourcing services, to all major industry sectors.
# # #
Contact: Lynda Kuhn
VP Public Affairs
(905) 540-6658
<PAGE> 1
EXHIBIT 2
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
- - - - - - - - - - - - - - - - X
:
In re: : Chapter 11
:
PHILIP SERVICES (DELAWARE), : Case No. 99-02385(MFW)
INC., et al., :
: Jointly Administered
Debtors. :
:
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FINDINGS OF FACT, CONCLUSIONS OF LAW, AND
ORDER UNDER 11 U.S.C. SECTIONS 1129(a) AND (b) AND
FED. R. BANKR. P. 3020 CONFIRMING THE FIRST
AMENDED JOINT PLAN OF REORGANIZATION OF PHILIP
SERVICES (DELAWARE), INC., ET AL., AS MODIFIED
RECITALS
WHEREAS, on November 3, 1999, the Court commenced a hearing with respect to
confirmation of the First Amended Joint Plan of Reorganization of Philip
Services (Delaware), Inc., et al. (such plan, as further amended by the
technical modifications approved in and attached to the Court's Order dated
November 3, 1999, the "Plan"),(1) at the
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(1) Unless otherwise defined, capitalized terms used herein shall have the
meanings ascribed to them in the Plan. Any term used in the Plan or this
Confirmation Order that is not defined in the Plan or this Confirmation
<PAGE> 2
conclusion of which, the Court signed an Order (the "November 3, 1999 Order")
making certain findings of fact and conclusions of law with respect to the Plan
and approving technical modifications, overruling objections to confirmation of
the Plan and scheduling a continued hearing for November 30, 1999 at 3:30 p.m.
(the "Continued Confirmation Hearing," and together with the November 3, 1999
hearing, the "Confirmation Hearing").
NOW, THEREFORE, based upon (i) the evidence proffered or adduced at and
arguments of counsel made at the Confirmation Hearing, (ii) all documents filed
in connection with, evidence proffered or adduced at, objections filed in
connection with, and arguments of counsel made at, the Confirmation Hearing
(including admitted trial
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Order, but that is used in the United States Bankruptcy Code, 11 U.S.C.
Sections 101-1330, as amended (the "Bankruptcy Code"), or the Federal Rules
of Bankruptcy Procedure (the "Bankruptcy Rules"), shall have the meaning
ascribed to that term in the Bankruptcy Code or the Bankruptcy Rules.
2
<PAGE> 3
exhibits, the live and proffered testimony of witnesses and the statements of
counsel on behalf of the Debtors, the Unsecured Creditors' Committee, the
Lenders, the Indenture Trustee and members of the informal committee of Allwaste
debentureholders), and (iii) the entire record of these Chapter 11 Cases,
including the findings made during the November 3, 1999 hearing and contained in
the November 3, 1999 Order; and after due deliberation thereon and good cause
appearing therefor,
FINDINGS OF FACT AND CONCLUSIONS OF LAW
IT IS HEREBY FOUND AND DETERMINED THAT(2)
A. Feasibility (11 U.S.C. Section 1129(a)(11)). The evidence offered at the
Confirmation Hearing demonstrates that the Debtors have obtained a commitment
for exit financing in the amount of up to $175 million (the "Exit Facility").
The Court finds that upon closing the Exit Facility, the Reorganized Debtors
will have adequate capital to meet their ongoing obligations. Accordingly, the
Debtors, as proponents of the Plan, have met their
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(2) Findings of fact shall be construed as conclusions of law and conclusions
of law shall be construed as findings of fact when appropriate. See Fed. R.
Bankr. P. 7052.
3
<PAGE> 4
burden of proving, by a preponderance of the evidence, that the Plan is
feasible.
B. The Reorganized Debtors Will Not Be Insolvent Nor Left with Unreasonably
Small Capital. As of the occurrence of the Effective Date, except as otherwise
provided in the Plan with respect to the Alternate Canadian Transactions, the
Reorganized Debtors will not be insolvent and will not reasonably be expected to
be rendered insolvent or left with unreasonably small capital to operate their
businesses as a result of the Plan or any other transactions contemplated by the
Plan.
C. Satisfaction of Confirmation Requirements. The Plan satisfies the
requirements for confirmation set forth in section 1129(a)(11) of the Bankruptcy
Code.
D. Satisfaction of Conditions to Confirmation. The conditions to
confirmation set forth in Article X.A of the Plan have been satisfied, waived or
will be satisfied by entry of this Confirmation Order.
E. Exit Financing. The exit financing required under the Plan, in the form
of the Exit Facility substantially consistent with the terms as presented to the
Court at the Continued Confirmation Hearing, is in the best
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interests of the Debtors, their Estates, and the Reorganized Debtors.
F. Retention of Jurisdiction. The Court properly may retain jurisdiction
over the matters set forth in Article XII of the Plan and paragraph 22 below.
DECREES
NOW THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT,
1. Confirmation. The Plan, as modified by the Court's November 3, 1999
Order, is approved and confirmed under section 1129 of the Bankruptcy Code.
Attached to this Confirmation Order as Exhibit A is a conformed copy of the Plan
incorporating the technical amendments approved in the November 3, 1999 Order.
The terms of the Plan and the exhibits thereto are incorporated by reference
into and are an integral part of this Confirmation Order.
2. Provisions of Plan and Confirmation Order Nonseverable and Mutually
Dependent. The provisions of the Plan and this Confirmation Order, including the
findings of fact and conclusions of law set forth herein, are nonseverable and
mutually dependent.
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3. Plan Classification Controlling. The classification of Claims for
purposes of the distributions to be made under the Plan shall be governed solely
by the terms of the Plan. The classifications set forth on the Ballots tendered
to and/or returned by the Claimholders in connection with voting on the Plan (a)
were set forth on the Ballots solely for purposes of voting to accept or reject
the Plan, (b) do not necessarily represent, and in no event shall be deemed to
modify or otherwise affect, the actual classification of such Claims under the
Plan for distribution purposes, and (c) may not be relied upon by any
Claimholder as representing the actual classification of such Claims under the
Plan for distribution purposes.
4. Proofs of Claim. Proofs of Claim submitted for classes 1, 2, 3, 4, 5,
and 9, and Canadian Proof of Claim and Election forms filed by creditors not (i)
scheduled on Exhibit C to the Plan or (ii) listed on Schedule I to Schedule B to
the Supplement to the Amended and Restated Plan of Compromise and Arrangement
Dated September 24, 1999 (the "Canadian Plan")(3) have no effect and the
Debtors' failure to object to such Proofs of Claim or Canadian Proof
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(3) The Canadian Plan is Exhibit D to the Plan, attached hereto as Exhibit A.
6
<PAGE> 7
of Claim and Election forms shall not be deemed an admission in this or any
other proceeding.
5. Binding Effect. Pursuant to section 1141 of the Bankruptcy Code,
effective as of the Confirmation Date, but subject to consummation of the Plan,
and except as otherwise expressly provided in the Plan or this Confirmation
Order, the provisions of the Plan (including the exhibits to, and all documents
and agreements executed pursuant to, the Plan) and this Confirmation Order shall
be binding upon and inure to the benefit of: (a) the Debtors, (b) the
Reorganized Debtors, (c) all present and former holders of Claims against and
Interests in the Debtors, whether or not impaired under the Plan and whether or
not, if impaired, such holders accepted the Plan, (d) each Person acquiring
property under the Plan, (e) any other party in interest, (f) any Person making
an appearance in the Chapter 11 Cases, and (g) each of the foregoing's
respective heirs, successors, assigns, trustees, executors, administrators,
affiliates, officers, directors, agents, representatives, attorneys,
beneficiaries, or guardians.
6. Revesting of Assets. As provided in Article IV.E of the Plan, and except
as otherwise specifically
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provided in the Plan or this Confirmation Order, 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 Reorganized Debtor on the Effective Date. 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 Court.
7. Discharge, Releases, Limitations of Liability and Indemnification. The
discharge of the Debtors and Reorganized Debtors and any of their assets or
properties provided in Article XIV.F.1 of the Plan, the releases set forth in
Articles IV.I(1), IV.I(2)(a), IV.I(2)(b) (to the extent the holders of the
Claims or Interests have accepted the Plan), and XIV.E of the Plan, and the
exculpation and limitation of liability provisions set forth in Article XIV.H of
the Plan are deemed incorporated in this Confirmation Order as if set forth in
full and are hereby approved.
8. Injunction. Except as otherwise specifically provided in the Plan or
Confirmation Order and except as may be necessary to enforce or remedy a breach
of the
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Plan and/or the Confirmation Order or to effectuate the Alternate Canadian
Transactions, as of the Confirmation Date, all entities that have held,
currently hold or may hold a Claim or other debt or liability that is discharged
or an Interest or other right of an equity security holder that is Impaired or
terminated pursuant to the terms of the Plan are permanently enjoined from
taking any of the following actions against the Debtors, Reorganized Debtors or
their property on account of any such discharged Claims, debts or liabilities or
terminated interests or rights: (a) commencing or continuing, in any manner or
in any place, any action or other proceeding, (b) enforcing, attaching,
collecting or recovering in any manner any judgment, award, decree or order, (c)
creating, perfecting or enforcing any lien or encumbrance, (d) asserting a
setoff, right of subrogation or recoupment of any kind against any debt,
liability or obligation due to the Debtors, and (e) 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 or of this Confirmation Order.
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9. Injunction; Released Claims. Except as otherwise specifically provided
in the Plan or Confirmation Order and except as may be necessary to enforce or
remedy a breach of the Plan and/or the Confirmation Order or to effectuate the
Alternate Canadian Transactions, as of the Confirmation Date, all entities that
have held, currently hold or may hold a claim, demand, debt, right, cause of
action or liability that is released or discharged pursuant to the terms of the
Plan are permanently enjoined from taking any of the following actions on
account of any such released claims, obligations, suits, judgments, damages,
demands, debts, rights, causes of action or liabilities: (a) commencing or
continuing, in any manner or in any place, any action or other proceeding, (b)
enforcing, attaching, collecting or recovering in any manner any judgment,
award, decree or order, (c) creating, perfecting or enforcing any lien or
encumbrance, (d) asserting a setoff, right of subrogation or recoupment of any
kind against any debt, liability or obligation due to any released entity, and
(e) commencing or continuing any action in any manner, in any place that does
not comply with or is
10
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inconsistent with the provisions of the Plan or this Confirmation Order.
10. Automatic Stay. The stay in effect in the Chapter 11 Cases pursuant to
Section 362(a) of the Bankruptcy Code shall continue to be in effect until the
Effective Date and at that time shall be dissolved and of no further force or
effect, subject to the injunction set forth in the preceding paragraphs and/or
Sections 524 and 1141 of the Bankruptcy Code, except that nothing herein shall
bar the filing of financing documents or the taking of such other actions as are
necessary to effectuate the transactions specifically contemplated by the Plan
or by this Confirmation Order.
11. Retention of Lender Claims; Relief from Stay. Notwithstanding anything
in the Plan or this Confirmation Order to the contrary, in accordance with the
Plan, the holders of Allowed Class 6 Secured Lender Claims shall retain such
claims against PSC and the other Canadian Debtors and security interests in the
assets of PSC and the other Canadian Debtors retained and not transferred in
connection with the Alternate Canadian Transactions and such claims shall
continue to be governed by the Pre-Peti-
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<PAGE> 12
tion Credit Facility Agreements and shall not be affected by this Confirmation
Order. The stay in effect in the Chapter 11 Cases pursuant to Section 362(a) of
the Bankruptcy Code and continued until the Effective Date pursuant to this
Order is hereby modified to permit the Lenders and the Account Intermediaries to
take the steps necessary to accomplish the Alternate Canadian Transactions.
12. Assumed Contracts and Leases. Except as otherwise provided in the Plan
or the Alternate Canadian Transactions, this Confirmation Order, or in any
contract, instrument, release, indenture or other agreement or document entered
into in connection with the Plan, as of the Effective Date all of the executory
contracts and unexpired leases of each Debtor shall be deemed to have been
assumed, unless such contract or lease was previously assumed or rejected by
such Debtor or previously expired or terminated pursuant to its own terms. Any
monetary amounts by which an executory contract or unexpired lease may be in
default shall be satisfied in accordance with Section 365(b)(1) of the
Bankruptcy Code and any disputes with respect thereto shall be resolved in
accordance with Article VIII.B of the Plan. On the Effective Date or such later
date as the
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Restructuring Transactions may be implemented, those executory contracts and
unexpired leases that are assumed herein with respect to one or more of the
Debtors that are implicated in such Restructuring Transactions shall be deemed
assigned to the appropriate affiliated successor entity.
13. Rejected Contracts and Leases. Except as otherwise provided in the Plan
or the Alternate Canadian Transactions, this Confirmation Order, or in any
contract, instrument, release, indenture or other agreement or document entered
into in connection with the Plan, unless previously rejected or subject to a
pending motion filed seeking rejection, none of the executory contracts and
unexpired leases to which the Debtors, or any of them, are a party shall be
rejected under the Plan.
14. General Authorizations. As of the date hereof, (a) the Debtors,
generally, and PSI specifically, are authorized and empowered to execute,
deliver, modify (to the extent such modification does not materially and
adversely affect the rights of another Person unless the Debtors obtain the
written consent of such Person) and/or file all exhibits to the Plan, documents
and agreements introduced into evidence by the Debtors at the Confirmation
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Hearing (including all exhibits and attachments thereto) and any and all other
documents and agreements necessary to consummate and implement the Plan and (b)
the Debtors and those parties to the documents referenced herein are authorized
and directed to perform any and all corporate acts and/or actions in
implementing the Plan, including but not limited to the following:
a. Exit Facility. To execute and deliver any of the documents and to
perform any and all actions related to the Exit Facility, including the
payment of any required commitment fees or related fees or expenses,
without further corporate act or action under applicable law and without
any requirement of further action by the stockholders or directors of the
Debtors or Reorganized Debtors.
b. Common Shares. To execute and deliver any and all documents and
perform any and all actions relating to issuance and distribution of the
Reorganized PSI Common Shares, as well as all other matters involving
undertakings and commitments relating to such securities as contemplated by
the Plan, including but not limited to, the execution and delivery of the
Management Option Plan, the listing of the securities for trading and the
registration of the offer and sale of the securities, all of which shall be
deemed effective and authorized without further corporate act or action
under applicable law and without any requirement of further action by the
stockholders or directors of the Debtors.
c. New Senior Secured Debt. To execute and deliver any of the
documents, including but not limited to the New Guaranties, and to perform
any and all actions related to the New Senior Secured Debt without further
corporate act
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or action under applicable law and without any requirement of further
action by the stockholders or directors of the Debtors or Reorganized
Debtors.
d. New Secured PIK Debt. To execute and deliver any of the documents,
including but not limited to the New Guaranties, and to perform any and all
actions related to the New Secured PIK Debt without further corporate act
or action under applicable law and without any requirement of further
action by the stockholders or directors of the Debtors or Reorganized
Debtors.
e. New Unsecured PIK Notes. To issue the New Unsecured PIK Notes,
enter into the New Unsecured PIK Notes Indenture substantially in the form
of that filed with the Plan Supplement, as well as all other matters
involving undertakings and commitments relating to such securities as
contemplated by the Plan.
f. New Unsecured Convertible Notes. To issue the New Unsecured
Convertible Notes, enter into the New Convertible Notes Indenture
substantially in the form as that filed with the Plan Supplement, as well
as all other matters involving undertakings and commitments relating to
such securities as contemplated by the Plan.
g. Registration Rights Agreement. To execute, deliver and perform any
and all of the documents or acts related to the Registration Rights
Agreement.
h. Bonds. To execute and deliver from time to time any and all
documents (including without limitation financing statements under the
Uniform Commercial Code in the applicable jurisdictions) and perform any
and all actions relating to the Bonds, the Bonding Lien Order, the
Indemnity Agreement and the Intercreditor Agreements, without further
corporate act or action under applicable law and without any requirement of
further action by the stockholders or directors of the Debtors or the
Reorganized Debtors.
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<PAGE> 16
i. Restructuring Transactions. To enter into such transactions and
take such actions as may be necessary or appropriate to effect a corporate
restructuring of their respective businesses, to 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,
including, without limitation, one or more mergers, consolidations,
restructures, dispositions, liquidations, or dissolutions as may be
determined by the Reorganized Debtors to be necessary or appropriate.
15. Exemption From Certain Taxes. Pursuant to section 1146(c) of the
Bankruptcy Code, the issuance, transfer, or exchange of any security, or the
making, delivery, filing, or recording of any instrument of transfer or
mortgages under the Plan including, without limitation, in connection with the
Alternate Canadian Transactions and the Restructuring Transactions, shall not be
taxed under any law imposing a recording tax, stamp tax, transfer tax, or
similar tax. All filing or recording
16
<PAGE> 17
officers, wherever located and by whomever appointed, are hereby directed to
comply with the foregoing and this Court specifically retains jurisdiction to
enforce the foregoing direction, by contempt or otherwise. This Confirmation
Order, without further action by the Debtors or Reorganized Debtors is and shall
be binding upon and shall govern the acts of all entities including without
limitation, all filing agents, filing officers, title agents, title companies,
recorders of mortgages, recorders of deeds, registrars of deeds, administrative
agencies, governmental departments, secretaries of state, federal, state and
local officials, and all other persons and entities who may be required, by
operation of law, the duties of their office, or contract, to accept, file,
register or otherwise record or release any document or instruments.
16. Substantive Consolidation for the Purposes of Treating Impaired Claims.
On the Effective Date: (a) all guaranties of any Debtor of the payment,
performance or collection of another Debtor with respect to Class 6, 7 or 8
Claims shall be deemed eliminated and cancelled; (b) any obligation of any
Debtor and all guaranties with respect to
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Class 6, 7 or 8 Claims thereof executed by one or more of the other Debtors
shall be treated as a single obligation and any obligation of two or more
Debtors, and all multiple Impaired Claims against such entities on account of
such joint obligations, shall be treated and Allowed only as a single Impaired
Claim against the consolidated Debtors; and (c) each Class 6, 7 or 8 Claim filed
in the Chapter 11 Cases of any debtor shall be deemed filed against the
consolidated Debtors and shall be deemed one Class 6, 7 or 8 Claim against and
obligation of the consolidated Debtors. Except as set forth in Article IV.J of
the Plan, such substantive consolidation shall not (other than for purposes
related to the Plan) (a) affect the legal and corporate structures of the
Reorganized Debtors, subject to the right of the Debtors or Reorganized Debtors
to effect the Restructuring Transactions as provided in Article IV.B.3 of the
Plan, (b) cause any Debtor to be liable for any impaired Claim or Unimpaired
Claim under the Plan, or any liability or obligation for which it otherwise is
not liable, and the liability of any Debtor for any such Claim shall not be
affected by such substantive consolidation,
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(c) affect Intercompany Claims of Debtors against Debtors, and (d) affect
Interests in the Subsidiary Debtors.
17. Bar Date for Administrative Claims. Pursuant to Article XIV.A of the
Plan and unless otherwise ordered by this Court, all holders of an asserted
Administrative Claim including Substantial Contribution Claims (but not
including claims for professional fees or the expenses of the members of any
creditors' committee) not paid prior to the Confirmation Date must file with the
Court and serve on counsel for the Debtors on or before 30 days after the
Effective Date (the "Administrative Claims Bar Date") a request for payment of
such Administrative Claims or forever be barred from seeking payment from the
Estates or the Reorganized Debtors. The Debtors or Reorganized Debtors, as the
case may be, shall have 30 days (or such longer period as may be allowed by
order of the Bankruptcy Court) following the Administrative Claims Bar Date to
review and object to any such Administrative Claims. All final requests for
compensation or reimbursement of Professional Fees pursuant to section 327, 328,
330, 331, 503(b) or 1103 of the Bankruptcy Code for services rendered to the
Debtors or any creditors' committee prior to the
19
<PAGE> 20
Effective Date (other than Substantial Contribution Claims under section
503(b)(4) of the Bankruptcy Code) must be filed and served on the Reorganized
Debtors and their counsel no later than 45 days after the Effective Date.
Objections to applications of such Professionals or other entities for
compensation or reimbursement of expenses must be filed and served on the
Reorganized Debtors and their counsel and the requesting Professional or other
entity no later than 30 days (or such longer period as may be allowed by order
of the Bankruptcy Court) after the date on which the applicable application for
compensation or reimbursement was served.
18. Distribution Record Date. In accordance with Article VII.D of the Plan,
at the close of business on the Confirmation Date (the "Distribution Record
Date"), the transfer records for the Old Debentures and Lender Claims shall be
closed, and there shall be no further changes in the record holders of the Old
Debentures or Lender Claims. The Reorganized Debtors, the Disbursing Agent, and
the Administrative Agent for the Lenders shall have no obligation to recognize
any transfer of such Old Debentures or Lender Claims occurring after the
Distribution Record Date
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<PAGE> 21
and shall be entitled instead to recognize and deal for all purposes hereunder
with only those record holders as of the close of business on the Distribution
Record Date. In accordance with Article VII.D. of the Plan, the register for the
Old Common Shares shall be closed as of the close of business on December 16,
1999 (the "Old Common Shares Record Date") for the purposes of determining those
persons entitled to receive a distribution with respect to Class 8A Interests.
The Reorganized Debtors and the Disbursing Agent shall have no obligation to
recognize any transfer of such Old Common Shares after the Old Common Shares
Record Date.
19. Exemption from Securities Laws. The provisions of Section 1145 of the
Bankruptcy Code shall be applicable to the issuance and distribution of the
Reorganized PSI Common Shares, New Secured PIK Debt, New Unsecured PIK Notes,
New Unsecured Convertible Notes and any other securities issuable pursuant to
the Plan or issuable upon conversion of any instruments issued pursuant to the
Plan. Pursuant to section 1145(a)(1), the offering, issuance and distribution of
the Reorganized PSI Common Shares, New Secured PIK Debt, New Unsecured PIK
Notes, New Unse-
21
<PAGE> 22
cured Convertible Notes and any other securities issuable pursuant to the Plan
or issuable upon conversion of any instruments issued pursuant to the Plan shall
be exempt from section 5 of the Securities Act and any state or local law
requiring registration prior to the offering, issuance, distribution or sale of
securities.
20. Payment of Fees. All fees payable by the Debtor under 28 U.S.C.
Section 1930 shall be paid on or before the Effective Date.
21. Failure To Consummate Plan. If consummation of the Plan does not occur,
then the Plan, 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 null and
void in all respects. In such event, nothing contained in the Plan or this
Confirmation Order, and no acts taken in preparation for consummation of the
Plan, shall (a) constitute or be deemed a waiver or release of any Claims by or
against, or any Interests in, any Debtors or any other Person in any proceeding
involving a Debtor, (b) prejudice in any manner
22
<PAGE> 23
the rights of any Debtor or any other Person, (c) constitute an admission of any
sort by any Debtor or any other Person, or (d) be construed as a finding of fact
or conclusion of law with respect thereto.
22. Retention of Jurisdiction. Pursuant to sections 105(a) and 1142 of the
Bankruptcy Code, and notwithstanding the entry of this Confirmation Order or the
occurrence of the Effective Date, this Court shall retain exclusive jurisdiction
over all matters arising out of, and related to, the Chapter 11 Cases and the
Plan to the fullest extent permitted by law, including, among other things,
jurisdiction over those items and matters set forth in Article XII of the Plan.
23. Authorization To Consummate Plan. The Court authorizes the Debtors to
consummate the Plan after entry of this Confirmation Order and to take such
steps as may be necessary to effectuate the Alternate Canadian Transactions.
24. Notice of Occurrence of Effective Date. On or before the tenth (10th)
Business Day following the occurrence of the Effective Date, the Debtors shall
serve notice of entry of the Confirmation Order and occurrence of
23
<PAGE> 24
the Effective Date pursuant to Fed. R. Bankr. P. 2002(f)(7), 2002(k), and
3020(c), on all Claimholders, the United States Trustee and other parties in
interest, by causing a notice substantially the form of the notice annexed
hereto as Exhibit B, which form is hereby approved (the "Notice of Effective
Date"), to be delivered to such parties by first class mail, postage prepaid;
provided, however, that notice need not be given or served under the Bankruptcy
Code, the Bankruptcy Rules, or this Confirmation Order to any Person to whom the
Debtors mailed a notice of the Initial Confirmation Hearing, but received such
notice returned marked "undeliverable as addressed," "moved - left no forwarding
address" or "forwarding order expired," or similar reason, unless the Debtors
have been informed in writing by such Person of that Person's new address. The
Notice of Effective Date is adequate under the particular circumstances of the
Chapter 11 Cases, and no other or further notice is necessary.
25. Publication/Notice. Within ten Business Days after the occurrence of
the Effective Date, or as soon thereafter as is practical, the Reorganized
Debtors shall cause to be published one time in either The New York
24
<PAGE> 25
Times, The Wall Street Journal or The Globe and Mail the Notice of Effective
Date in substantially the same form as that attached as Exhibit B hereto. The
Reorganized Debtors may, but are not required to, publish in such other papers
or publications as they deem appropriate.
26. Effective Date. Upon the occurrence of the Effective Date all of the
existing shares of Philip Services (Delaware), Inc. shall be deemed cancelled
and extinguished, issuance of the Reorganized PSI Common Shares shall be
authorized and the Plan shall be deemed substantially consummated.
27. References to Plan Provisions. The failure specifically to include or
reference any particular provision of the Plan in this Confirmation Order shall
not diminish or impair the effectiveness of such provision, it being the intent
of the Court that the Plan be confirmed in its entirety.
28. Confirmation Order Controlling. The provisions of the Plan and of this
Confirmation Order shall be construed in a manner consistent with each other so
as to effect the purposes of each; provided, however, that if there is
determined to be any inconsistency between any
25
<PAGE> 26
Plan provision and any provision of this Confirmation Order that cannot be so
reconciled, then, solely to the extent of such inconsistency, the provisions
of this Confirmation Order shall govern and any such provision of this
Confirmation Order shall be deemed a modification of the Plan and shall control
and take precedence.
29. Separate Confirmation Orders. This Confirmation Order is and shall be
deemed a separate Confirmation Order with respect to each of the Debtors in each
Debtors' separate Chapter 11 Case for all purposes. The Clerk of the Court is
directed to file and docket this Confirmation Order in the Chapter 11 Case of
each of the Debtors.
30. Appointment of Board of Directors of Reorganized PSI. As of the
Effective Date, each of the directors of PSI shall be deemed to have resigned
and each of the persons designated in the Plan and disclosed at or prior to the
Confirmation Hearing, or selected prior to the Effective Date in the manner
described in the Plan, shall be deemed to be elected as a member of the Board of
Directors of Reorganized PSI.
31. Immediate Effect. Notwithstanding Bankruptcy Rule 3020(e), this Order
shall take effect immedi-
26
<PAGE> 27
ately upon its entry. The provisions of Bankruptcy Rules 9014 and 7062, and
Rule 62 of the Federal Rules of Civil Procedure, are inapplicable, but to the
extent applicable, are hereby waived with respect to this Confirmation Order and
all actions to be taken pursuant to this Confirmation Order, the Plan, the
Disclosure Statement or any documents connected herewith or therewith, and the
Debtors are hereby authorized and directed immediately to take all steps
required to consummate the Plan.
32. Environmental Laws and Regulations of the United States.
Notwithstanding anything contained in the Plan or the Confirmation Order to the
contrary, regulatory rights and claims of the United States under Environmental
Laws or regulations shall not be discharged, impaired or adversely affected by
the Plan and the bankruptcy cases, shall survive the bankruptcy cases as if the
cases had not been commenced and shall be determined in the manner and by the
administrative or judicial tribunals in which such rights or claims would have
been resolved or adjudicated if the bankruptcy cases had not been commenced.
33. Federal Claims. Notwithstanding any provision in the Plan, Confirmation
Order or any bar date order
27
<PAGE> 28
to the contrary, there will be no bar date with respect to claims of the
United States, and all rights and claims of the United States shall not be
discharged, impaired or otherwise adversely affected by the Plan and the
bankruptcy cases, shall survive the bankruptcy cases as if the cases had not
been commenced, and shall be determined in the manner and by the administrative
or judicial tribunals in which such rights or claims would have been resolved or
adjudicated if the bankruptcy case had not been commenced, provided, however,
that with respect to any claims of the United States Internal Revenue Service
that are Priority Tax Claims such claims: (i) shall not be discharged, impaired
or adversely affected by the Plan, (ii) shall survive the bankruptcy cases as if
the cases had not been commenced, (iii) shall be determined in the manner and by
the administrative or judicial tribunals in which such rights or claims would
have been resolved or adjudicated if the bankruptcy cases had not been
commenced, (iv) shall be paid in full no later than six (6) years from the
assessment date in equal quarterly installments with interest accruing at the
rate specified in 26 U.S.C. Section 6621 and (v) neither the bankruptcy cases
nor the confirmation of the
28
<PAGE> 29
Plan shall affect any setoff rights of the Internal Revenue Service with respect
to such Priority Tax Claims.
34. Bonding Liens. Notwithstanding any provision of the Plan or this
Confirmation Order, nothing in the Plan or this Confirmation Order shall affect
the rights, obligations, security or the priority or perfection thereof, of any
person under or in connection with the Bonding Lien Order or the Indemnity
Agreements, the Intercreditor Agreements and the other agreements referred to
therein, all of which are specifically preserved and shall continue after the
confirmation of the Plan and any amendment thereto; provided, however, that with
respect to any Bonds issued subsequent to the Effective Date, the claims and
liens of the New Lenders (as defined below) shall only be subordinated to
validly perfected and unavoidable secured claims and liens of the Surety
Participants (as defined in the Bonding Lien Order). Without limiting the
generality of the foregoing, except as otherwise provided herein: (i) the Exit
Lenders and the Lenders/Creditors under the New Secured PIK Debt and the New
Senior Secured Term Debt (collectively, the "New Lenders") and each of
29
<PAGE> 30
them shall be bound by the terms of the Bonding Lien Order, the Indemnity
Agreement and the Lenders' Intercreditor Agreement, all in the same manner and
effect as the Pre-petition Lenders and the DIP Lenders and the respective
rights, claims and obligations and the priority thereof of the New Lenders and
each of them on the one hand and the Surety Participants on the other hand, will
be as set out in the Lenders' Intercreditor Agreement as if the New Lenders and
each of them were originally parties to that agreement so that all of the
references to the Lenders, the Lenders Obligations and the Lender Security shall
refer to the claims and liens of the New Lenders; (ii) the Reorganized Debtors
shall assume all obligations of the Debtors under or in connection with the
Bonding Lien Order, the Indemnity Agreement and the Intercreditor Agreements and
the other agreements and arrangements referred to therein or contemplated
thereby; and (iii) the assets of the Debtors shall revest in the Reorganized
Debtors subject to the rights and obligations under or in connection with the
Bonding Lien Order, the Indemnity Agreement and the Intercreditor Agreements and
the other agreements and arrangements referred to therein or contemplated
thereby.
30
<PAGE> 31
35. Account Intermediary Liens. Notwithstanding any provision of the Plan
and this Confirmation Order, but subject to the next following sentence, nothing
in the Plan or this Confirmation Order shall affect the rights or obligations or
the liens and security interests or the priority or perfection thereof, of any
person under or in connection with the Intercreditor Agreement dated as of June
25, 1999 among Canadian Imperial Bank of Commerce, in its capacity as Canadian
Account Intermediary, Canadian Imperial Bank of Commerce in its capacity as
Account Intermediary Security Agent, Comerica Bank, as United States Account
Intermediary, and London Guarantee Insurance Company, for and on behalf of
itself and the other Surety Participants, and Philip Services Corp. and each of
its affiliates (the "Intercreditor Agreement"), the Security Sharing Agreement
dated as of November 30, 1998 among Canadian Imperial Bank of Commerce, in its
capacity as Canadian Account Intermediary, Comerica Bank, as United States
Account Intermediary, Canadian Imperial Bank of Commerce in its capacity as
Account Intermediary Security Agent, and Philip Services Corp. and certain of
its subsid-
31
<PAGE> 32
iaries (the "Security Sharing Agreement"), and the Priority and Subordination
Agreement dated as of December 4, 1998 among Canadian Imperial Bank of Commerce,
in its capacity as security agent, Canadian Imperial Bank of Commerce, in its
capacity as administrative agent, Canadian Imperial Bank of Commerce, in its
capacity as a letter of credit issuer, Canadian Imperial Bank of Commerce and
Comerica Bank, in their respective capacities as bank account service providers,
Canadian Imperial Bank of Commerce in its capacity as Account Intermediary
Security Agent, and Philip Services Corp. on behalf of itself and its
subsidiaries (the "Subordination Agreement"), and the other agreements and
arrangements referred to therein or contemplated thereby, all which are
specifically preserved and shall continue after the confirmation and
consummation of the Plan and any amendment thereto. In addition and without
limiting the generality of the foregoing: (i) the New Lenders and each of them
shall be bound by the terms of the Intercreditor Agreement, the Security Sharing
Agreement and the Subordination Agreement, all in the same manner and effect as
the Prepetition Lenders and the DIP Lenders, and the respective rights, claims
and obligations, and the
32
<PAGE> 33
priority thereof, of the New Lenders and each of them, on the one hand, and the
other parties thereto on the other hand, will be as set out in the Intercreditor
Agreement, the Security Sharing Agreement, and the Subordination Agreement as if
the New Lenders and each of them were originally parties to that agreement so
that all of the references to the Lenders, the Lenders' Security and the Credit
Agreement Liabilities shall refer to the claims and liens of the New Lenders;
(ii) the Reorganized Debtors shall assume all obligations of the Debtors under
or in connection with the Intercreditor Agreement, the Security Sharing
Agreement and the Subordination Agreement and the other agreements and
arrangements referred to therein or contemplated thereby; and (iii) the assets
of the Debtors shall revest in the Reorganized Debtors subject to the rights and
obligations under or in connection with the Intercreditor Agreement, the
Security Sharing Agreement and the Subordination Agreement and the other
agreements and arrangements referred to therein or contemplated thereby. To the
extent that the granting of the Bonding Liens or the use of Cash Collateral
during the Cases resulted in a decrease in the value of the holders of the
Account Inter-
33
<PAGE> 34
mediary Receivable Liens' interests in such Cash Collateral, the Account
Intermediary Replacement Liens granted in favor of the Account Intermediaries
(as each of the foregoing capitalized terms is defined in the Cash Collateral
Order) pursuant to the Cash Collateral Order shall be preserved and continue
unaffected after the Effective Date and shall be assumed by the Reorganized
Debtors, provided that such Account Intermediary Replacement Liens shall be
junior and subordinate to the (i) liens granted in favor of the Exit Lenders to
secure an amount of up to $175 million or (ii) liens and security interests
validly perfected pursuant to Court order or otherwise as of the Confirmation
Date and preserved as senior to those of the Exit Facility.
36. Pension Plans. Notwithstanding anything in the Plan or this
Confirmation Order to the contrary, nothing in the Plan or this Confirmation
Order shall operate as a discharge or release of the Debtors or any other Person
with respect to any "withdrawal liability," pursuant to 29 U.S.C. Sections 1383
and 1385, or any pension contribution history, to the Central States, Southwest
and Southeast Areas Pension Fund (the "Fund"). Upon the Effective Date of the
34
<PAGE> 35
Plan, the Debtors' obligations to the Fund shall be assumed by the
applicable Reorganized Debtors in accordance with Article VIII(D) of the Plan
and claims of the Fund against the Debtors, including obligations that may be
based on the contribution history of the Debtors, shall pass through the
Debtors' bankruptcy cases unaffected, will survive confirmation and consummation
of the Plan, and shall be fully excepted from the discharge provisions of the
Bankruptcy Code, as set forth in 11 U.S.C. Section 1141, to the extent they
would otherwise apply. Neither the Plan, the Confirmation Order or section 1141
of the Bankruptcy Code shall, or shall be construed to, discharge, release, or
relieve the Debtors or any other party, in any capacity, from any liability with
respect to (1) Luntz Corporation Pension Plan for Mansfield Collective
Bargaining Employees, (2) Philip Metals, Inc. Luria Brothers Division Hourly
Union Pension plan, (3) Luntz Corporation Pension Plan for Warren Collective
Bargaining Employees, (4) Luntz Corporation Pension Plan for Canton Hourly
Employees and (5) Luntz Corporation Pension Plan - Columbus Collective
Bargaining Employees (the "Pension Plans"), under any law, governmental policy
or regulatory provision and neither the Pension
35
<PAGE> 36
Benefit Guaranty Corporation nor the Pension Plans shall be enjoined from
enforcing such liability as a result of the Plan's provisions for satisfaction,
release and discharge of Claims.
37. Caterpillar Financial Services Corporation. Nothing herein or in the
Plan is intended to affect any right of setoff the Debtors may have under
applicable non-bankruptcy law against amounts that may be owed to Caterpillar
Financial Services Corporation and the Debtors may exercise such setoff rights
only to the extent permitted under applicable non-bankruptcy law. Additionally,
except as otherwise permitted under applicable non-bankruptcy law, the Debtors
will not setoff against Caterpillar Financial Services Corporation any claim
that the Debtors have against any affiliate of Caterpillar Financial Services
Corporation.
36
<PAGE> 37
38. Great Plains Defendants. Any and all rights of the directors and
officers, including but not limited to the officers and directors who are
defendants in the Great Plains Action, to the proceeds of the Debtors' relevant
directors and officers insurance policies, whether for Excluded Indemnification
Obligations or Assumed Indemnification Obligations will be unaffected by and
survive the Chapter 11 Cases.
Dated: Wilmington, Delaware
November ___, 1999
____________________________________
Honorable Mary F. Walrath
United States Bankruptcy Judge
<PAGE> 38
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
- - - - - - - - - - - - - - - - - - - - - - - X
:
IN RE :
: CHAPTER 11
PHILIP SERVICES (DELAWARE), INC., ET AL. : CASE NO. 99-02385 (MFW)
: (JOINTLY ADMINISTERED)
DEBTORS. :
:
- - - - - - - - - - - - - - - - - - - - - - - X
FIRST AMENDED JOINT PLAN OF REORGANIZATION
OF PHILIP SERVICES (DELAWARE), INC., ET AL.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)
David S. Kurtz
Jeffrey W. Linstrom
J. Gregory St. Clair
Timothy R. Pohl
333 W. Wacker Drive
Chicago, Illinois 60606-1285
(312) 407-0700
-and-
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Gregg M. Galardi (I.D.#2991)
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899-0636
(302) 651-3000
Attorneys for Philip Services (Delaware), Inc.,
et al.
Dated: September 21, 1999
<PAGE> 39
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
TABLE OF EXHIBITS.........................................................................................................v
INTRODUCTION..............................................................................................................1
ARTICLE I. DEFINITIONS, RULES OF INTERPRETATION,COMPUTATION OF TIME AND GOVERNING LAW.....................................1
A. Scope of Definitions; Rules of Construction 1
B. Definitions 1
C. Rules of Interpretation 14
D. Computation of Time 14
ARTICLE II. CLASSIFICATION OF CLAIMS AND INTERESTS.......................................................................15
A. Introduction 15
B. Unclassified Claims 15
1. DIP Facility Claims................................................................................15
2. Administrative Claims..............................................................................15
3. Priority Tax Claims................................................................................15
C. Summary of Classified Claims and Interests 15
D. Classification of Unimpaired Classes of Claims and Interests 16
1. Class 1: Other Priority Claims....................................................................16
2. Class 2: Other Secured Claims.....................................................................16
3. Class 3: General Unsecured Claims.................................................................16
4. Class 4: Intercompany Claims of Non-Debtors.......................................................16
5. Class 5: Subsidiary Interests.....................................................................16
E. Classification of Impaired Classes of Claims and Interests. 16
1. Class 6: Secured Lender Claims....................................................................16
2. Class 7: All Impaired Unsecured Claims............................................................16
3. Class 8A: Old Common Shares........................................................................16
4. Class 8B: Securities Claims in the Securities Actions..............................................16
5. Class 8C: Other Securities Claims..................................................................16
6. Class 9: Other Equity Securities..................................................................16
ARTICLE III. TREATMENT OF CLAIMS AND INTERESTS...........................................................................17
A. Unclassified Claims 17
1. DIP Facility Claims................................................................................17
2. Administrative Claims..............................................................................17
3. Priority Tax Claims................................................................................17
B. Unimpaired Classes of Claims and Interests 17
1. Class 1: Other Priority Claims....................................................................17
2. Class 2: Other Secured Claims.....................................................................18
3. Class 3: General Unsecured Claims.................................................................18
4. Class 4: Intercompany Claims of Non-Debtors.......................................................18
5. Class 5: Subsidiary Interests.....................................................................18
C. Impaired Classes of Claims and Interests 18
1. Class 6: Secured Lender Claims....................................................................18
2. Class 7: Impaired Unsecured Claims................................................................20
3. Class 8A: Old Common Shares........................................................................21
4. Class 8B: Securities Claims in the Securities Actions..............................................21
5. Class 8C: Other Securities Claims..................................................................22
6. Class 9: Other Equity Securities...................................................................22
D. Special Provision Regarding Unimpaired Claims 22
E. Special Provision Regarding Canadian Class 8B and Class 8C Holders 22
</TABLE>
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<TABLE>
<S> <C>
F. Distributions to Certain Holders of Canadian Impaired Unsecured Claims and Canadian Class 8B
and 8C Holders 22
G. Distributions to Classes 6, 7, 8B and 8C if Canadian Plan Condition Is Waived 23
H. Accrual Of Post-Petition Interest 23
ARTICLE IV. MEANS FOR IMPLEMENTATION OF THE PLAN.........................................................................23
A. Continued Corporate Existence 23
B. Corporate Action 24
1. Asset Transfer Pursuant to the Alternate Canadian Transactions.....................................24
2. Cancellation of Old Securities and Agreements......................................................24
3. Certificate of Incorporation and Bylaws............................................................24
4. Restructuring Transactions.........................................................................24
5. Shareholder Rights Plan............................................................................25
6. Reverse Stock Split................................................................................25
7. Shareholder Approval...............................................................................25
C. Plan Transactions 25
1. New Securities.....................................................................................25
2. New Senior Secured Debt............................................................................26
3. New Guaranties.....................................................................................26
4. Exit Facility......................................................................................26
5. Tax Related Transactions...........................................................................26
D. Directors and Officers 26
E. Revesting of Assets; Releases of Liens 27
F. Preservation of Rights of Action 27
G. Effectuating Documents; Further Transactions 27
H. Exemption from Certain Transfer Taxes 27
I. Releases and Related Matters 27
1. Releases by Debtors................................................................................27
2. Releases by Holders of Lender Claims, Claims and Interests.........................................28
3. Injunction Related to Releases.....................................................................30
4. Reinstatement of Certain Releases..................................................................30
J. Substantive Consolidation for Purposes of Treating Impaired Claims 30
K. Contribution and Indemnity Claims Other Than Assumed Indemnification Obligations 30
L. Assumed Indemnification Obligations 30
ARTICLE V. ACCEPTANCE OR REJECTION OF THE PLAN...........................................................................31
A. Classes Entitled to Vote 31
B. Acceptance by Impaired Classes 31
C. Cramdown 31
ARTICLE VI. SECURITIES TO BE ISSUED IN CONNECTION WITH THE PLAN..........................................................31
ARTICLE VII. PROVISIONS GOVERNING DISTRIBUTIONS..........................................................................31
A. Distributions for Claims Allowed as of the Effective Date 31
B. Interest on Claims 32
C. Distributions by Disbursing Agent and the Indenture Trustee 32
D. Record Date for Distributions to Holders of Lender Claims and Old Debentures 32
E. Means of Cash Payment 32
F. Calculation of Distribution Amounts 32
1. New Common Shares..................................................................................32
2. New Debt Securities................................................................................33
3. Conversion Rate....................................................................................33
</TABLE>
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<TABLE>
<S> <C>
G. Delivery of Distribution 33
H. Surrender of Securities and Instruments 33
1. Notes and Old Debentures.......................................................................... 33
2. Lost, Mutilated or Destroyed Notes or Old Debentures.............................................. 33
3. Failure to Surrender Canceled Note or Old Debentures.............................................. 34
I. Withholding and Reporting Requirements 34
J. Setoffs 34
ARTICLE VIII. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES..................................................... 34
A. Assumed Contracts and Leases 34
B. Payments Related to Assumption of Contracts and Leases 35
C. Rejected Contracts and Leases 35
D. Compensation and Benefit Programs 35
ARTICLE IX. PROCEDURES FOR RESOLVING DISPUTED, CONTINGENT, AND UNLIQUIDATED CLAIMS AND DISPUTED INTERESTS............... 35
A. Prosecution of Objections 35
B. No Distributions Pending Allowance 36
C. Disputed Distribution Reserve; Reserve for Subsequent Distributions to Qualifying Class 7
Creditors 36
D. Distributions After Allowance of Class 7 Claims and Canadian Impaired Unsecured Claims 36
E. Distribution Procedures for Class 8 Claims and Interests 36
ARTICLE X. CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN............................................ 37
A. Conditions to Confirmation 37
B. Conditions to Effective Date 37
C. Waiver of Conditions 38
ARTICLE XI. MODIFICATIONS AND AMENDMENTS................................................................................ 38
ARTICLE XII. RETENTION OF JURISDICTION.................................................................................. 39
ARTICLE XIII. COMPROMISES AND SETTLEMENTS............................................................................... 40
ARTICLE XIV. MISCELLANEOUS PROVISIONS................................................................................... 40
A. Bar Dates For Certain Post-Petition Claims 40
1. Administrative Claims; Substantial Contribution Claims............................................ 40
2. Professional Fee Claims............................................................................ 41
B. Payment of Statutory Fees 41
C. Severability of Plan Provisions 41
D. Successors and Assigns 41
E. Releases and Satisfaction of Subordination Rights 41
F. Discharge of the Debtors; Injunction 42
1. Discharge......................................................................................... 42
2. Injunction........................................................................................ 42
G. Committees 43
H. Exculpation and Limitation of Liability; Indemnity 43
I. Binding Effect 44
J. Revocation, Withdrawal or Non-Consummation 45
K. Plan Supplement 45
L. Notices 45
</TABLE>
xli
<PAGE> 42
<TABLE>
<S> <C>
M. Payment of Certain Fees and Expenses 45
N. Prepayment 46
O. Term of Injunctions or Stays 46
P. Governing Law 46
</TABLE>
xlii
<PAGE> 43
TABLE OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NAME
<C> <S>
A List of Subsidiary Debtors
B List of Impaired Unsecured Claims
C List of Canadian Impaired Unsecured Claims
D Canadian Reorganization Plan
</TABLE>
xliii
<PAGE> 44
INTRODUCTION
Philip Services (Delaware), Inc., a Delaware corporation ("PSI"), Philip
Services Corp., an Ontario corporation ("PSC"), and those entities listed on
Exhibit A hereto (the "Subsidiary Debtors") hereby propose the following joint
plan of reorganization (the "Plan") for the resolution of their outstanding
creditor Claims and equity Interests. The Debtors are the proponents of this
Plan within the meaning of section 1129 of the Bankruptcy Code. All capitalized
terms not defined in this Introduction have the meanings ascribed in Article I
of this Plan. Reference is made to the Disclosure Statement, distributed
contemporaneously herewith, for a discussion of the Debtors' history,
businesses, properties, results of operations, projections for future
operations, risk factors, a summary and analysis of the Plan, and certain
related matters, including the New Securities to be issued under the Plan.
As explained in the Disclosure Statement, the precise treatment of certain
classes of Claims and Interests under the Plan differs depending on which of two
alternative restructurings are implemented in the Canadian CCAA proceedings of
PSC and the other Canadian Debtors: the Canadian Reorganization Plan or the
Alternate Canadian Transactions. If the Canadian Reorganization Plan is
sanctioned, PSC and the other Canadian Debtors will reorganize and PSC, as
reorganized, will emerge from chapter 11 and its CCAA proceedings as the
ultimate parent company of the Reorganized Debtors and the Canadian Debtors.
Alternatively, if the Alternate Canadian Transactions are implemented, the
reorganization of the Canadian Debtors will be accomplished through the transfer
of the businesses of the Canadian Debtors as going concerns to one or more
direct or indirect subsidiaries of Reorganized PSI, with certain claims and
causes of action and other assets being retained by PSC and the other Canadian
Debtors, subject to the Lenders' security interests and Reorganized PSI will
emerge from chapter 11 as the ultimate parent company of the Reorganized
Debtors. In addition, the precise treatment of certain classes of Claims and
Interests under the Plan may differ if the Debtors waive the condition to the
Effective Date of this Plan that either the Canadian Reorganization Plan has
been sanctioned or the Alternate Canadian Transactions have been implemented and
thus this Plan becomes effective before the outcome of the Canadian Debtors'
CCAA proceedings has been determined. The Debtors believe that there will not be
a material economic impact on the nature or value of the distributions to be
made under this Plan as a result of which of these alternatives are implemented.
All holders of Claims and all holders of Interests are encouraged to read
this Plan and the Disclosure Statement in their entirety before voting to accept
or reject this Plan. Subject to certain restrictions and requirements set forth
in section 1127 of the Bankruptcy Code and Fed. R. Bankr. P. 3019 and Article XI
of this Plan, the Debtors reserve the right to alter, amend, modify, revoke or
withdraw this Plan prior to its substantial consummation.
ARTICLE I.
DEFINITIONS, RULES OF INTERPRETATION,
COMPUTATION OF TIME AND GOVERNING LAW
A. SCOPE OF DEFINITIONS; RULES OF CONSTRUCTION
For purposes of this Plan, except as expressly provided or unless the
context otherwise requires, all capitalized terms not otherwise defined shall
have the meanings ascribed to them in Article I of this Plan. Any term used in
this Plan that is not defined herein, but is defined in the Bankruptcy Code or
the Bankruptcy Rules, shall have the meaning ascribed to that term in the
Bankruptcy Code or the Bankruptcy Rules. Whenever the context requires, such
terms shall include the plural as well as the singular number, the masculine
gender shall include the feminine, and the feminine gender shall include the
masculine.
B. DEFINITIONS
I.1 "Account Intermediaries" means (a) CIBC in its capacity as the provider
of the CIBC Bank Account Services, (b) Comerica and its affiliates in their
respective capacities as the providers of Comerica Bank Account Services and (c)
for purposes of Articles IV.I.1 and IV.I.2, includes Royal Bank of Canada in its
capacity as the former provider of bank account services to one or more of the
Canadian Debtors.
I.2 "Administrative Agent" means CIBC or its successor as administrative
agent for the Lenders under the Pre-Petition Credit Agreement.
I.3 "Administrative Claim" means a 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
<PAGE> 45
and operating the businesses of the Debtors, including wages, salaries or
commissions for services rendered after the commencement of the Chapter 11
Cases, (b) Professional Fee Claims, (c) all fees and charges assessed against
the Estates under 28 U.S.C. Section 1930 and (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.
I.4 "Agreed LC Claim" means $20 million.
I.5 "Allowed Canadian Impaired Unsecured Claim" means (a) with respect to a
Canadian Impaired Unsecured Claims the holder of which has made the U.S. Plan
Election, if the Alternate Canadian Transactions are implemented, (1) a claim as
to which no objection to allowance or request for estimation has been interposed
on or before the Effective Date or the expiration of such other applicable
period of limitation fixed by the Bankruptcy Code, the Bankruptcy Rules or the
Bankruptcy Court, (2) as to which any objection to its allowance has been
settled, waived through payment, or withdrawn, or has been denied by a Final
Order, and (3) that has been allowed by a Final Order and (b) with respect to a
Canadian Impaired Unsecured Claim if the Canadian Reorganization Plan is
sanctioned, a claim that has been allowed pursuant to the Canadian
Reorganization Plan.
I.6 "Allowed Claim" means a Claim (a) as to which no objection to allowance
or request for estimation has been interposed on or before the Effective Date or
the expiration of such other applicable period of limitation fixed by the
Bankruptcy Code, the Bankruptcy Rules or the Bankruptcy Court, (b) as to which
any objection to its allowance has been settled, waived through payment, or
withdrawn, or has been denied by a Final Order, (c) that has been allowed by a
Final Order or (d) that is expressly allowed in a liquidated amount in the Plan;
provided, however, that, with respect to an Administrative Claim, "Allowed
Claim" means an Administrative Claim allowed in accordance with Article XIV.A of
this Plan; provided further, however, that all Class 1, 2, 3 and 4 Claims, if
any, shall, except as otherwise provided herein or in Orders of the Bankruptcy
Court, be treated for all purposes as if the Chapter 11 Cases were not filed,
and the determination of whether any such Claims shall be allowed and/or the
amount of any such Claims (as to which no proof of Claim need be filed) shall be
determined, resolved or adjudicated, as the case may be, in the manner in which
such Claim would have been determined, resolved or adjudicated if the Chapter 11
Cases had not been commenced.
I.7 "Allowed" means, when used in reference to a Claim or Interest within a
particular Class, an Allowed Claim or Allowed Interest of the type described in
such Class.
I.8 "Allowed Class . . . Claim" means an Allowed Claim in the particular
Class described.
I.9 "Allowed Class . . . Interest" means an Interest in the particular
Class described (a) that has been allowed by a Final Order, (b) for which (i) no
objection to its allowance has been filed within the periods of limitation fixed
by the Bankruptcy Code or by any Final Order of the Bankruptcy Court or (ii) any
objection to its allowance has been settled or withdrawn, or (c) that is
expressly allowed in the Plan.
I.10 "Allwaste Lock-up Agreement" means the Term Sheet executed as of July
8, 1999 by Kornitzer Capital Management, Inc. and Great Plains Trust Company.
I.11 "Alternate Canadian Transactions" means, if the Canadian
Reorganization Plan is not sanctioned, the series of transactions pursuant to
which the Lenders will enforce the remedies available to them under Canadian law
against one or more of PSC or the other Canadian Debtors; the businesses of the
Canadian Debtors will be transferred as going concerns to one or more direct or
indirect subsidiaries of Reorganized PSI; and the proceeds of such transfers
will be distributed in accordance with the priorities under Canadian law of the
claims against the transferred assets.
I.12 "Amended and Restated Term Credit Agreement" means collectively, the
agreement, together with ancillary documents, to be entered into among
Reorganized PSC and/or Reorganized PSI and holders of Secured Lender Claims as
of the Effective Date, pursuant to which the New Senior Secured Term Debt and
New Secured PIK Debt will be governed, which agreement shall be substantially in
the form included in the Plan Supplement, and which shall be incorporated into
the Exit Facility if the Alternate Canadian Transactions are implemented.
I.13 "Amended Certificates of Incorporation and Bylaws" means the
Reorganized Debtors' certificates of incorporation and bylaws, as amended by the
Plan.
I.14 "Assumed Indemnification Obligations" means (a) the obligations of PSC
pursuant to section 7.02 of its bylaws to indemnify current and former directors
and officers, on the terms and subject to the limitations described therein, if
and to the extent that such indemnification is permissible under the Ontario
Business Corporations Act or such other applicable governing corporate statute
and (b) the obligations of the Debtors other than PSC to indemnify current and
former directors and officers
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<PAGE> 46
under their respective bylaws to the extent such indemnification obligations are
not more expansive than those of PSC under section 7.02 of its bylaws if and to
the extent such indemnification is permissible under the applicable governing
corporate statute of the applicable Debtor, in each case, including any
affirmative obligation of the Debtors to indemnify current and former directors
and officers in connection with any governmental, regulatory or enforcement
investigation or action and in each case solely with respect to such officer or
director actions subsequent to becoming an officer or director of PSC or of a
direct or indirect subsidiary or affiliate of PSC. Notwithstanding anything
herein to the contrary, Assumed Indemnification Obligations shall not include
any Excluded Indemnification Obligations.
I.15 "Ballots" means each of the ballot forms distributed with the
Disclosure Statement to holders of Impaired Claims and/or Interests entitled to
vote under Article II hereof in connection with the solicitation of acceptances
of the Plan.
I.16 "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as codified
in title 11 of the United States Code, 11 U.S.C. Sections 101-1330, as now in
effect or hereafter amended.
I.17 "Bankruptcy Court" means the United States Bankruptcy Court for the
District of Delaware or such other court as may have jurisdiction over the
Chapter 11 Cases.
I.18 "Bankruptcy Rules" means collectively the Federal Rules of Bankruptcy
Procedure and the Official Bankruptcy Forms, as amended, the Federal Rules of
Civil Procedure, as amended, as applicable to the Chapter 11 Cases or
proceedings therein, and the Local Rules of the Bankruptcy Court, as applicable
to the Chapter 11 Cases or proceedings therein, as the case may be.
I.19 "BTCo" means Bankers Trust Company.
I.20 "Bar Date(s)" means the date(s), if any, designated by the Bankruptcy
Court as the last dates for filing Proofs of Claim or Interest against the
Debtors.
I.21 "Bonding Lien Order" means the Stipulation and Order Authorizing
Debtors to Obtain Post-Petition Surety Bonds and to Enter into Indemnity
Agreement and Intercreditor Agreement, dated June 28, 1999.
I.22 "Business Day" means any day, excluding Saturdays, Sundays or "legal
holidays" (as defined in Fed. R. Bankr. P. 9006(a)), on which commercial banks
are open for business in New York, New York.
I.23 "Canadian Bankruptcy Court" means the Ontario Superior Court of
Justice.
I.24 "Canadian Claim" means (a) a claim of a Canadian resident against a
Canadian Debtor that has not also been asserted against a United States Debtor
and (b) a claim of a United States resident against a Canadian Debtor other than
PSC that has not also been asserted against a United States Debtor.
I.25 "Canadian Class Action" means the putative class action entitled
Menegon v. Philip Services Corp., et al., File No. 4166 CP 98 (Ontario Court,
General Division).
I.26 "Canadian Class 8B Holder" means a Canadian resident that is a holder
of a claim that would be classified in Class 8B if such holder was not a
Canadian resident.
I.27 "Canadian Class 8C Holder" means a Canadian resident that is a holder
of a claim that would be classified in Class 8C if such holder was not a
Canadian resident.
I.28 "Canadian Debtors" means PSC and the Subsidiaries that have commenced
proceedings in the Canadian Bankruptcy Court under the CCAA.
I.29 "Canadian Impaired Unsecured Claims" means those Canadian Claims
listed on Exhibit C hereto, as amended or supplemented from time to time.
I.30 "Canadian Plan Condition" means the condition to the Effective Date
contained in Article X.B.6.
I.31 "Canadian Proof of Claim and Election" means the form to be received
by Logan & Company Inc. by the Voting Deadline by a holder of a Canadian
Impaired Unsecured Claim or Canadian Class 8C Holder (a) voluntarily and
irrevocably electing to submit to the personal and subject matter jurisdiction
of the Bankruptcy Court for purposes of participating in distributions under
this Plan, (b) voluntarily and irrevocably consenting to have the allowance and
priority of such holder's claim
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<PAGE> 47
determined in accordance with the provisions of the Bankruptcy Code, (c)
voluntarily and irrevocably agreeing to be bound by the provisions of the Plan
in all respects and (d) asserting the amount of such holder's claim, a copy of
which shall be included in the solicitation materials distributed to holders of
Canadian Impaired Unsecured Claims and Canadian Class 8C Holders.
I.32 "Canadian Reorganization Plan" means the Plan of Compromise and
Arrangement proposed by the Canadian Debtors in their CCAA proceedings providing
for the reorganization of PSC and the other Canadian Debtors, as may be amended
from time to time.
I.33 "Cash" means legal tender of the United States or equivalents thereof.
I.34 "Cash Collateral Order" means the Amended Final Stipulation and Order
Authorizing and Restricting Use of Cash Collateral and Granting Adequate
Protection of Secured Claims, dated July 29, 1999.
I.35 "CCAA" means the Companies' Creditors Arrangement Act (Canada).
I.36 "Chapter 11 Cases" means the jointly administered Chapter 11 cases of
the Debtors.
I.37 "Chazen Actions" means the actions filed by a group of former
shareholders of the Southern-Foundry Supply group of companies captioned Gary D.
Chazen, Robert G. Chazen, Julius L. Chazen and Ruth E. Chazen v. Philip Metals
Inc., et al., Case No:99 Civ. 2797 (MBM) (dismissed); and Stephen M. Chazen v.
Philip Metals Inc., previously known as Philip Metals (Ohio) Inc., Philip
Services Corp., Allen Fracassi, and Robert Waxman, No: CV9801642, in the Circuit
Court of Jefferson County, Alabama (subsequently dismissed in favor of
arbitration), and any and all actions that could be asserted by such Plaintiffs
based upon the facts that have been or could be alleged in these actions or any
other facts arising out of the acquisition by PSC of the Southern-Foundry Supply
group of companies.
I.38 "Chazen Claims" means any Claims arising out of the Chazen Actions.
I.39 "CIBC" means Canadian Imperial Bank of Commerce.
I.40 "CIBC Bank Account Services" means "CIBC Bank Account Services" as
defined in the Pre-Petition Credit Agreement.
I.41 "Claim" means a claim, as such term is defined by section 101(5) of
the Bankruptcy Code, against the Debtors, or any of them, whether or not
asserted.
I.42 "Claims Objection Deadline" means the last day for filing objections
to Claims (other than Claims set forth in Article 1.82), which day shall be
established by an order of the Bankruptcy Court.
I.43 "Claims Estimation Deadline" means the last day for filing a request
for estimation of a Disputed Class 7 Claim (and if the Alternate Canadian
Transactions are implemented, a Disputed Canadian Impaired Unsecured Claim the
holder of which has made the U.S. Plan Election if the Alternate Canadian
Transactions are implemented), for the purpose of establishing the Disputed
Claims Reserve, which day shall be 15 days after the Confirmation Date.
I.44 "Class" means a category of holders of Claims or Interests, as
described in Article II below.
I.45 "Class 6 Additional Distribution" means, if the Alternate Canadian
Transactions are implemented (a) an amount of Reorganized PSI Common Shares
equivalent to the aggregate amount of New Common Shares after the Reverse Stock
Split to which holders of Canadian Impaired Unsecured Claims that do not make
the U.S. Plan Election would have been entitled if the Canadian Reorganization
Plan had been sanctioned as of the Effective Date (based on the Debtors'
estimate of the Allowed amount of such claims) and (b) an amount of New
Unsecured PIK Notes equal to the aggregate amount to which holders of Canadian
Impaired Unsecured Claims that do not make the U.S. Plan Election would have
been entitled if they had each made the U.S. Plan Election (based on the
Debtors' estimate of the Allowed amount of such claims).
I.46 "Class 7 Election" means that election to be made by Qualifying Class
7 Creditors on the Ballot to be submitted on or before the Voting Deadline as to
a distribution of New Unsecured PIK Notes or New Unsecured Convertible Notes
pursuant to Article III.C.2.
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<PAGE> 48
I.47 "Class 8 Solicitation Order" means a Final Order of the Bankruptcy
Court or other court of competent jurisdiction in form and substance
satisfactory to PSC providing that Class 8 is not entitled to vote on the Plan
and Class 8 is deemed to have rejected the Plan.
I.48 "Collateral" means any property or interest in the property of a
Debtor's Estate subject to a Lien to secure the payment or performance of a
Claim, which Lien is not subject to avoidance under the Bankruptcy Code or
otherwise invalid under the Bankruptcy Code or applicable state law.
I.49 "Comerica Bank Account Services" means "Comerica Bank Account
Services" as defined in the Pre-Petition Credit Agreement.
I.50 "Confirmation" means entry by the Bankruptcy Court of the Confirmation
Order.
I.51 "Confirmation Date" means the date of entry by the clerk of the
Bankruptcy Court of the Confirmation Order.
I.52 "Confirmation Hearing" means the hearing to consider confirmation of
the Plan under section 1128 of the Bankruptcy Code.
I.53 "Confirmation Order" means the order entered by the Bankruptcy Court
confirming the Plan.
I.54 "Credit Documents" means the "Credit Documents" as defined in the
Pre-Petition Credit Agreement.
I.55 "Creditor" means any Person who holds a Claim against any of the
Debtors.
I.56 "Creditors' Committee" means the committee of unsecured creditors
appointed pursuant to section 1102(a) of the Bankruptcy Code in the Chapter 11
Cases.
I.57 "Cure" means the distribution of Cash, or such other property as may
be agreed upon by the parties or ordered by the Bankruptcy Court, with respect
to the assumption of an executory contract or unexpired lease, pursuant to
section 365(b) of the Bankruptcy Code, in an amount equal to all unpaid monetary
obligations, without interest, or such other amount as may be agreed upon by the
parties, under such executory contract or unexpired lease, to the extent such
obligations are enforceable under the Bankruptcy Code and applicable
nonbankruptcy law.
I.58 "Debtor(s)" means individually PSI, PSC and each of the Subsidiary
Debtors, and collectively, PSI, PSC and the Subsidiary Debtors, including in
their capacity as debtors-in-possession pursuant to sections 1107 and 1108 of
the Bankruptcy Code, and as reorganized hereunder.
I.59 "Deloitte & Touche" means Deloitte & Touche, its successors and
affiliates.
I.60 "Dilution" means dilution subsequent to the Effective Date (a) to the
extent necessary to give effect to the convertibility of the New Secured PIK
Debt, the New Unsecured Convertible Notes and the exercise of the Management
Options or (b) otherwise as a result of the issuance of common shares,
implementation of other management incentive programs or other action taken by
the board of directors of Reorganized PSC (if the Canadian Reorganization Plan
is sanctioned) or Reorganized PSI (if the Alternate Canadian Transactions are
implemented or the Canadian Plan Condition is waived).
I.61 "DIP Agent" means BTCo, in its capacity as administrative agent under
the DIP Facility Agreement.
I.62 "DIP Co-Arrangers" means BTCo and CIBC, in their capacities as
co-arrangers of the DIP Facility.
I.63 "DIP Facility" means the debtor-in-possession credit facility provided
to the Debtors during the Chapter 11 Cases in the principal amount of $100
million of available credit, pursuant to the DIP Facility Agreement.
I.64 "DIP Facility Agreement" means the Credit Agreement between PSC and
PSI as borrowers, the Subsidiary Debtors as guarantors, certain other
Subsidiaries as guarantors, the DIP Agent, and the DIP Co-Arrangers, and the
other lender signatories thereto.
I.65 "DIP Facility Claim" means a Claim arising under or as a result of the
DIP Facility.
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I.66 "DIP Order" means the Interim Order Authorizing Debtors to Obtain
Post-Petition Financing Pursuant to 11 U.S.C. Sections 364(c) and 364(d), dated
July 27, 1999.
I.67 "Disbursing Agent" means Reorganized PSC (if the Canadian
Reorganization Plan is sanctioned) or Reorganized PSI (if the Alternate Canadian
Transactions are implemented or the Canadian Plan Condition is waived) or any
party designated by Reorganized PSC or PSI as applicable, to serve as a
disbursing agent under the Plan and, with respect to the Old Debentures, shall
mean the indenture trustee under the Old Indenture.
I.68 "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 Fed. R. Bankr. P. 3018.
I.69 "Disputed Canadian Impaired Unsecured Claim" means a Canadian Impaired
Unsecured Claim that has not become an Allowed Canadian Impaired Unsecured Claim
or been estimated pursuant to the Plan, the Confirmation Order, Stipulation or a
Final Order of the Bankruptcy Court.
I.70 "Disputed Class 7 Claim" means any Impaired Unsecured Claim which has
not become an Allowed Claim, or been estimated pursuant to the Plan, the
Confirmation Order, Stipulation or a Final Order of the Bankruptcy Court.
I.71 "Disputed Class 7 and Canadian Impaired Unsecured Claim Amount" means
(a) if a liquidated amount is set forth in the Proof of Claim relating to a
Disputed Class 7 Claim (or a Disputed Canadian Impaired Unsecured Claim the
holder of which has made the U.S. Plan Election if the Alternate Canadian
Transactions are implemented), (i) the liquidated amount set forth in such Proof
of Claim; (ii) an amount agreed to by the Debtors and the holder of such Claim
or Disputed Canadian Impaired Unsecured Claim; or (iii) if a request for
estimation is filed by the Debtors or other parties in interest by the Claims
Estimation Deadline, the amount at which such Claim or Canadian Impaired
Unsecured Claim is estimated by the Bankruptcy Court; (b) if no liquidated
amount is set forth in the Proof of Claim relating to a Disputed Class 7 Claim
(or a Disputed Canadian Impaired Unsecured Claim the holder of which has made
the U.S. Plan Election if the Alternate Canadian Transactions are implemented),
(i) an amount agreed to by the Debtors and the holder of such Disputed Class 7
Claim or Disputed Canadian Impaired Unsecured Claim or (ii) the amount estimated
by the Bankruptcy Court with respect to such Disputed Class 7 Claim or Disputed
Canadian Impaired Unsecured Claim, provided, however, that the Debtors, the
claimant or other parties in interest must file a request for estimation of such
Disputed Class 7 Claim or Disputed Canadian Impaired Unsecured Claim no later
than the Claims Estimation Deadline; (c) if the Claim was listed on the Impaired
Unsecured Claims List as unliquidated, contingent or disputed and no Proof of
Claim was filed, or deemed to have been filed, by the applicable Bar Date and
the Claim has not been resolved by written agreement of the parties or an order
of the Bankruptcy Court, zero; (d) if the Alternate Canadian Transactions are
implemented the Debtors' estimate of the maximum aggregate liability for
Disputed Canadian Impaired Unsecured Claims the holders of which have not made
the U.S. Plan Election or (e) if the Canadian Reorganization Plan is sanctioned,
the maximum aggregate liability for Canadian Impaired Unsecured Claims as
determined under the Canadian Reorganization Plan.
I.72 "Disputed Distribution Reserve" means the reserve, if any, established
and maintained by the Disbursing Agent, into which the Reorganized Debtors shall
deposit the amount of New Unsecured PIK Notes and New Common Shares (or
Reorganized PSI Common Shares if applicable) determined pursuant to Article IX.C
hereof.
I.73 "Distribution Date" means the date, occurring as soon as practicable
after the Effective Date, upon which distributions are made by the Reorganized
Debtors, provided that (a) distributions to holders of Allowed DIP Facility,
Allowed Administrative, Allowed Priority Tax and Allowed Class 6 Claims shall be
made within thirty (30) Business Days after the Effective Date and (b)
distributions to holders of (i) Allowed Class 7 Claims and (ii) if the Alternate
Canadian Transactions are implemented, on account of Canadian Impaired Unsecured
Claims that make the U.S. Plan Election and with respect to the Class 6
Additional Distribution, shall not occur prior to the estimation of Disputed
Class 7 Claims and Disputed Canadian Impaired Unsecured Claims for the purpose
of establishing the Disputed Distribution Reserve as set forth in Article IX.C.
I.74 "Distribution Record Date" means the record date for purposes of
making distributions under the Plan on account of Allowed Claims or Interests,
which date shall be the Confirmation Date or such other date designated in the
Confirmation Order.
I.75 "Effective Date" means the Business Day on which all conditions to the
consummation of the Plan as set forth in Article X.B hereof have been satisfied
or waived as provided in Article X.C hereof and is the effective date of the
Plan.
I.76 "Estate(s)" means individually the estate of each Debtor in the
Chapter 11 Cases, and, collectively, the estates of all Debtors in the Chapter
11 Cases, created pursuant to section 541 of the Bankruptcy Code.
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<PAGE> 50
I.77 "Excess Proceeds Account" means a separate interest-bearing account
established by the DIP Agent into which Net Asset Sale Proceeds of all asset
sales of PSC and the Subsidiaries consummated on or after the Petition Date are
deposited and into which all proceeds at any time deposited into the
Pre-Petition Proceeds Account (without giving effect to any disbursements from
the Pre-Petition Proceeds Account prior to the Petition Date) in excess of
$93,000,000 (after post-closing adjustments of no greater than $4,000,000
deposited into the Pre-Petition Proceeds Account with respect to the sale of
certain assets of PSC's aluminum division prior to the Petition Date) shall also
be deposited, which funds shall be held by the DIP Agent to be distributed in
accordance with this Plan on the Effective Date.
I.78 "Excluded Indemnification Obligations" means (i) the obligations of
the Debtors to indemnify any current or former officers, directors or employees
solely as to claims actually asserted as of the Petition Date, or claims
asserted after the Petition Date in the following actions or in actions
initiated after the Petition Date, in each case arising out of or related to the
same nucleus of operative facts alleged in the following actions as of the
Petition Date or when such actions were filed: (A) the consolidated, putative
class action entitled In re Philip Services, Corp Securities Litigation, 98 CV
835 (MBM), previously pending against PSC in the United States District Court
for the Southern District of New York, and the putative class action entitled
Menegon v. Philip Services Corp., et al., File No. 4166 CP 98 (Ontario Court,
General Division), (B) the action filed by a group of former shareholders of the
Steiner-Liff Metals group of companies on October 6, 1998, with the American
Arbitration Association captioned In re Liff Arbitration, Case No. 39 Y 1680012
98 and the litigation styled Liff v. Chodos, Case No. 99 Civ. 1322 (dismissed
and pending appeal), (C) the actions filed by a group of former shareholders of
the Southern-Foundry Supply group of companies captioned Gary D. Chazen, Robert
G. Chazen, Julius L. Chazen and Ruth E. Chazen v. Philip Metals Inc., et al.,
Case No:99 Civ. 2797 (MBM) (S.D.N.Y.) (dismissed); and Stephen M. Chazen v.
Philip Metals Inc., previously known as Philip Metals (Ohio) Inc., Philip
Services Corp., Allen Fracassi, and Robert Waxman, No: CV9801642, in the Circuit
Court of Jefferson County, Alabama (subsequently dismissed in favor of
arbitration) and (D) the action captioned Great Plains Trust Company and
Kornitzer Capital Management, Inc. v. Robert M. Christe, R.L. Nelson, Jr., T.
Wayne Wren, Jr., Michael W. Ramirez, David E. Fanta, James E. Rief, William L.
Fiedler, Michael A. Baker, John U. Clarke, Frank A. Rossi, Thomas J. Tierney and
T. Michael Young, No. 1999-38771, in the District Court of Harris County, Texas;
(ii) any claims for reimbursement, contribution or indemnity that may be
asserted by Robert Waxman, Greg Madesker, Rik Barrese, Drew Luntz, Andrew Luntz
and John Luntz; (iii) any claims for reimbursement, contribution or indemnity
asserted by present or former professionals or advisors of the Debtors or
Subsidiaries, including, without limitation, Deloitte & Touche, any insurance
brokers retained by the Debtors, accountants, auditors, financial consultants,
underwriters or attorneys as to claims arising out of the matters alleged in the
Securities Actions, the Chazen Actions, the Liff Actions, the Great Plains
Action, or in any action initiated after the Petition Date based upon similar
factual allegations or alleging similar causes of action, including, but not
limited to, any third party complaint or claim by Deloitte & Touche in
connection with any action commenced after the Petition Date by or on behalf of
the Debtors, the Reorganized Debtors or the Lenders relating to accounting or
audit work performed by Deloitte & Touche for the Debtors, and any
indemnification obligation of such professionals or advisors (including, without
limitation, obligations and claims described above) of the kind described in
section 510(b) of the Bankruptcy Code or subject to subordination pursuant to
section 510(c) of the Bankruptcy Code and (iv) any reimbursement, contribution
or indemnity obligations to current or former directors or officers of any
Debtor that are more expansive than those contained in section 7.02 of PSC's
bylaws or which are not permissible under the applicable governing corporate
statute of the applicable Debtor; provided, however, that "Excluded
Indemnification Obligations" shall not impact the setoff rights, if any, of any
party, and shall not include Assumed Indemnification Obligations in connection
with any governmental, regulatory or enforcement investigation or action or
Assumed Indemnification Obligations to pay the reasonable defense costs of any
individual who was a director, officer or employee of a Debtor as of the
Petition Date in connection with any third party complaint or claim by Deloitte
& Touche and/or Robert Waxman against such officer, director or employee in
connection with any action commenced by the Debtors, the Reorganized Debtors or
the Lenders against Deloitte & Touche arising out of the same nucleus of
operative facts alleged in the Securities Actions, the Chazen Actions or the
Liff Actions.
I.79 "Exit Facility" means the new senior secured credit facility in an
aggregate principal amount of approximately $125 million, which the Reorganized
Debtors anticipate entering into as a condition to the consummation of the Plan.
I.80 "Exit Lender(s)" means the lender(s) under the Exit Facility.
I.81 "Final Order" means an order or judgment of the Bankruptcy Court, as
entered on the docket in the Chapter 11 Cases, or the order or judgment of any
other court of competent jurisdiction, 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.
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I.82 "General Unsecured Claim" means a Claim against the Debtors, that is
not a DIP Facility Claim, Administrative Claim, Priority Tax Claim, Other
Priority Claim, Other Secured Claim, Intercompany Claim of a Non-Debtor, Secured
Lender Claim, Unsecured Lender Claim, Impaired Unsecured Claim, Securities
Claim, Other Securities Claim or Excluded Indemnification Obligation.
I.83 "Great Plains Action" means the action captioned Great Plains Trust
Company and Kornitzer Capital Management, Inc. v. Robert M. Christe, R.L.
Nelson, Jr., T. Wayne Wren, Jr., Michael W. Ramirez, David E. Fanta, James E.
Rief, William L. Fiedler, Michael A. Baker, John U. Clarke, Frank A. Rossi,
Thomas J. Tierney and T. Michael Young, No. 1999-38771, in the District Court of
Harris County, Texas.
I.84 "Impaired" means, when used with reference to a Claim or Interest, a
Claim or Interest that is impaired within the meaning of section 1124 of the
Bankruptcy Code.
I.85 "Impaired Trade Claims" means Claims in excess of $50,000 of trade
vendors who do not agree to continue to provide trade credit to the Debtors in
accordance with terms provided prior to the Petition Date or who have not
actually provided such terms during the Chapter 11 Cases.
I.86 "Impaired Unsecured Claims" means collectively the Claims listed on
the Impaired Unsecured Claims List, the Unsecured Lender Claims, the Old
Debenture Claims, Impaired Trade Claims and Claims of parties to executory
contracts and leases that are rejected in the Chapter 11 Cases.
I.87 "Impaired Unsecured Claims List" means the list of Impaired Unsecured
Claims attached hereto as Exhibit B as amended or supplemented from time to
time.
I.88 "Indenture Trustee" means First Union National Bank or its successor,
in either case in its capacity as indenture trustee for the Old Debentures.
I.89 "Intercompany Claim" means, as the case may be, any Claim of (a) any
Subsidiary against a Debtor, (b) any Subsidiary against any other Subsidiary, or
(c) PSC against any Subsidiary.
I.90 "Interest" means (a) the legal, equitable, contractual and other
rights of any Person (including any 401K plan or plan participant) with respect
to Old Common Shares, Old Stock Options or any Other Equity Securities of any
Debtor and (b) the legal, equitable, contractual or other rights of any Person
to acquire or receive any of the foregoing.
I.91 "LC Lenders" means the "LC Lenders" as defined in the Pre-Petition
Credit Agreement.
I.92 "Lender" means a "Lender" as defined in the Pre-Petition Credit
Agreement, CIBC as Administrative Agent, BTCo as syndication agent, CIBC and
BTCo as co-arrangers, and their individual successors and assigns.
I.93 "Lender Claim" means a Claim of a Lender arising under or as a result
of the Pre-Petition Credit Facility Agreements.
I.94 "Lender Lock-up Agreement" means the letter agreement dated as of
April 5, 1999, as amended and restated as of June 21, 1999, and as may be
amended further subsequent to the date hereof, among PSC and the lenders
signatories thereto with respect to the principal terms and conditions of this
Plan.
I.95 "Lien" means a charge against or interest in property to secure
payment of a debt or performance of an obligation.
I.96 "Liff Actions" means the action filed by a group of former
shareholders of the Steiner-Liff Metals group of companies on October 6, 1998,
with the American Arbitration Association captioned In re Liff Arbitration, Case
No. 39 Y 168 00112 98, the litigation styled Liff v. Chodos, Case No. 99 Civ.
1322 (MBM) (S.D.N.Y.) (dismissed and pending appeal) and any and all actions
that could be asserted by such Plaintiffs based upon the facts that have been or
could be alleged in this action or any other facts arising out of the
acquisition by PSC of the Steiner-Liff Metals group of companies.
I.97 "Liff Claims" means any Claims arising out of the Liff Actions.
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I.98 "Litigation Claims" 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 retained
by the Reorganized Debtors pursuant to Article IV.F of this Plan.
I.99 "Management Option Agreement(s)" means the stock option agreement(s)
to be entered into by Reorganized PSC (if the Canadian Reorganization Plan is
sanctioned) or Reorganized PSI (if the Alternate Canadian Transactions are
implemented or the Canadian Plan Condition is waived) and the Management Option
Plan Participants, pursuant to which the Management Options will be granted.
I.100 "Management Option Plan" means a stock option plan to be adopted by
the Board of Directors of Reorganized PSC (if the Canadian Reorganization Plan
is sanctioned) or Reorganized PSI (if the Alternate Canadian Transactions are
implemented or the Canadian Plan Condition is waived) on or after the Effective
Date.
I.101 "Management Option Plan Participants" means the employees of
Reorganized PSC (if the Canadian Reorganization Plan is sanctioned) or
Reorganized PSI (if the Alternate Canadian Transactions are implemented or the
Canadian Plan Condition is waived) entitled to participate in the Management
Option Plan.
I.102 "Management Options" means the options to be issued by Reorganized
PSC or PSI, as applicable, to the Management Option Plan Participants to
purchase PSC Common Shares (if the Canadian Reorganization Plan is sanctioned)
or Reorganized PSI Common Shares (if the Alternate Canadian Transactions are
implemented or the Canadian Plan Condition is waived) pursuant to the provisions
of the Management Option Agreement to be entered into under the Management
Option Plan, subject to Dilution.
I.103 "Net Asset Sale Proceeds" means the cash proceeds of asset sales of
PSC and the Subsidiaries net only of reasonable costs and expenses and the
payment of Other Secured Claims (excluding the Secured Claims of the Account
Intermediaries) secured by Liens on such assets senior to the Liens securing the
Secured Lender Claims on such assets.
I.104 "Net Asset Sale Proceeds Pool" means the amount of cash in the Excess
Proceeds Account equal to sixty-six and two-thirds percent (66-2/3%) of the
first $200,000,000 of any Net Asset Sale Proceeds of the U.S. Ferrous division,
if the US Ferrous division is sold, plus seventy-five percent (75%) of all other
Net Asset Sale Proceeds in the Excess Proceeds Account.
I.105 "New Common Shares" means common shares of Reorganized PSC to be
authorized under Article IV.C.1 of the Plan (if the Canadian Reorganization Plan
is sanctioned), and for the purposes of the Reverse Stock Split, shall include
the common shares of Reorganized PSC, if any, to be retained by holders of
Allowed Class 8A Interests under the Plan.
I.106 "New Debt Securities" means collectively the New Secured PIK Debt,
the New Unsecured PIK Notes and the New Unsecured Convertible Notes.
I.107 "New Guaranties" means collectively the secured guaranties of the
Reorganized Subsidiary Debtors (in existence after giving effect to the
Restructuring Transactions) and the other Restricted Subsidiaries to be entered
into as of the Effective Date to guaranty and secure the New Senior Secured Term
Debt and the New Secured PIK Debt.
I.108 "New Securities" means collectively the New Common Shares (if the
Canadian Reorganization Plan is sanctioned) or Reorganized PSI Common Shares (if
the Alternate Canadian Transactions are implemented or the Canadian Plan
Condition is waived), New Secured PIK Debt, New Unsecured PIK Notes, New
Unsecured Convertible Notes and Management Options.
I.109 "New Secured PIK Debt" means the 10% Secured Convertible PIK Debt due
2004 of Reorganized PSC (if the Canadian Reorganization Plan is sanctioned) or
Reorganized PSI (if the Alternate Canadian Transactions are implemented or the
Canadian Plan Condition is waived) in the aggregate principal amount of $100
million, to be issued and distributed pursuant to the Plan on the Distribution
Date and governed by the terms of the Amended and Restated Term Credit
Agreement, the original face amount of which are convertible until maturity at
the option of the holders into twenty-five percent (25%) of (i) the PSC Common
Shares (if the Canadian Reorganization Plan is sanctioned) or (ii) Reorganized
PSI Common Shares (if the Alternate Canadian Transactions are implemented or the
Canadian Plan Condition is waived), in the aggregate, not subject to Dilution,
as of the Effective Date and having usual anti-dilution provisions applicable in
a public offering of convertible debt, including giving effect to the issuance
of any New Common Shares, PSC Common Shares or Reorganized PSI Common Shares
under the Shareholder Rights Plan.
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I.110 "New Senior Secured Term Debt" means the secured term debt of
Reorganized PSI due 2004, to be governed by the terms of the Amended and
Restated Term Credit Agreement, to be distributed under the Plan on the
Distribution Date in the aggregate principal amount of $250 million minus an
amount equal to the portion of the Net Asset Sale Proceeds Pool distributed to
the holders of the Class 6 Secured Lender Claims on the Effective Date.
I.111 "New Unsecured Convertible Notes" means the 3% Unsecured Convertible
Notes due 2019 of Reorganized PSC (if the Canadian Reorganization Plan is
sanctioned) or Reorganized PSI (if the Alternate Canadian Transactions are
implemented or the Canadian Plan Condition is waived), to be governed by the
terms of the New Unsecured Convertible Notes Indenture, in an aggregate face
amount not to exceed $18 million, to be issued and distributed pursuant to the
Plan on the Class 7 Distribution Date and governed by the terms of the New
Unsecured Convertible Notes Indenture; provided, however, that no New Unsecured
Convertible Notes will be issued if Class 7 votes to reject the Plan.
I.112 "New Unsecured Convertible Notes Indenture" means the indenture to be
entered into between Reorganized PSC (if the Canadian Reorganization Plan is
sanctioned) or Reorganized PSI (if the Alternate Canadian Transactions are
implemented or the Canadian Plan Condition is waived) and an entity to be
selected prior to the Effective Date, as indenture trustee, under which the New
Unsecured Convertible Notes shall be issued, which indenture shall be
substantially in the form included in the Plan Supplement.
I.113 "New Unsecured PIK Notes Indenture" means the indenture to be entered
into between Reorganized PSC (if the Canadian Reorganization Plan is sanctioned)
or Reorganized PSI (if the Alternate Canadian Transactions are implemented or
the Canadian Plan Condition is waived) and an entity to be selected prior to the
Effective Date, as indenture trustee, under which the New Unsecured PIK Notes
shall be issued, which indenture shall be substantially in the form included in
the Plan Supplement.
I.114 "New Unsecured PIK Notes" means the 6% Unsecured PIK Notes due 2009
of Reorganized PSC (if the Canadian Reorganization Plan is sanctioned) or
Reorganized PSI (if the Alternate Canadian Transactions are implemented or the
Canadian Plan Condition is waived) in the aggregate principal amount not to
exceed $60 million, to be issued and distributed pursuant to the Plan on the
Class 7 Distribution Date and governed by the terms of the New Unsecured PIK
Notes Indenture; provided, however, that no New Unsecured PIK Notes will be
issued (i) if the Canadian Reorganization Plan is sanctioned, and Class 7 votes
to reject the Plan and the class of holders of Canadian Impaired Unsecured
Claims votes to reject the Canadian Reorganization Plan or (ii) if the Alternate
Canadian Transactions are implemented and Class 7 votes to reject the Plan.
I.115 "Old Common Shares" means the common shares of PSC issued and
outstanding as of the Petition Date.
I.116 "Old Debentures" means the 73% Convertible Subordinated Debentures
due 2014, issued and outstanding under the Old Indenture.
I.117 "Old Indenture" means the Indenture, dated June 1, 1989, between
Allwaste, Inc. and TCT, as trustee, as modified by the First Supplemental
Indenture, dated as of July 30, 1997, between Allwaste, Inc., PSC and TCT, as
trustee, pursuant to which the Old Debentures were issued and are outstanding.
I.118 "Old Securities" means collectively the Old Common Shares, the Other
Equity Securities and the Old Debentures.
I.119 "Old Stock Options" means the outstanding options to purchase Old
Common Shares, as of the Petition Date.
I.120 "Ordinary Course Professionals' Order" means an order entered by the
Bankruptcy Court authorizing the Debtors, or any of them, to retain, employ and
pay certain professionals, as specified in the order, which are not involved in
the administration of the Chapter 11 Cases, in the ordinary course of business,
without further order of the Bankruptcy Court.
I.121 "Other Equity Securities" means collectively the Old 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
Common Shares or other ownership interests in any Debtor or of an affiliate of
any Debtor, and any contracts, subscriptions, commitments or agreements pursuant
to which the non-debtor party was or could have been entitled to receive shares,
securities or other ownership interests in any Debtor, excluding Subsidiary
Interests.
I.122 "Other Priority Claim" means a Claim entitled to priority pursuant to
section 507(a) of the Bankruptcy Code other than a DIP Facility Claim, a
Priority Tax Claim or an Administrative Claim.
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I.123 "Other Secured Claims" means collectively the Secured Claims of the
Account Intermediaries, the issuers of letters of credit issued under the
Permitted LC Facility established pursuant to Amending Agreement No. 3 to the
Pre-Petition Credit Agreement and all other Secured Claims against the Debtors,
as the case may be, other than the Secured Lender Claims included in Class 6.
I.124 "Other Securities Claims" means (a) the Chazen Claims, Liff Claims,
Claims arising out of the Great Plains Action and any and all Claims arising
from the recission or right of recission of a purchase or sale of a security or
Interest of any Debtor or of an affiliate of any Debtor, or for damages arising
from the purchase or sale of such a security or Interest (excluding the
Securities Claims classified in Class 8B); (b) claims for reimbursement,
indemnification or contribution allowed under section 502 of the Bankruptcy Code
on account of (i) such Claims, (ii) the Securities Actions, (iii) any actions
initiated after the Petition Date that may be subordinated pursuant to section
510(b) or 510(c) of the Bankruptcy Code or (iv) any actions associated with or
arising out of the facts or alleged facts relating to any of the aforementioned
claims or actions in each case that may be subordinated pursuant to section
510(b) or 510(c) of the Bankruptcy Code; and (c) claims relating to Excluded
Indemnification Obligations, in each case to the extent not disallowed pursuant
to Article IV.K; provided, however, that "Other Securities Claims" shall not
include Assumed Indemnification Obligations or Claims against PSC held by
Canadian residents.
I.125 "Person" means Person as defined in section 101 (41) of the
Bankruptcy Code.
I.126 "Petition Date" means the dates on which the Debtors filed their
petitions for relief commencing the Chapter 11 Cases.
I.127 "Phencorp" means Phencorp International Finance Inc.
I.128 "Plan" means this chapter 11 reorganization plan and all exhibits
annexed hereto or referenced herein, as the same may be amended, modified or
supplemented from time to time with the consent of the Required Lenders, and to
the extent of any modification to the treatment of the Account Intermediaries as
holders of Other Secured Claims, the consent of the Account Intermediaries.
I.129 "Plan Supplement" means the compilation of documents and forms of
documents specified in the Plan which will be filed with the Bankruptcy Court
not later than five (5) Business Days prior to date of the commencement of the
Confirmation Hearing.
I.130 "Pre-Petition Credit Agreement" means the Credit Agreement dated as
of August 11, 1997, among PSC, as borrower in Canada, PSI, as borrower in the
United States, the Lenders, CIBC, as administrative agent for the Lenders, BTCo,
as syndication agent, and CIBC and BTCo, as co-arrangers, as amended by amending
agreements dated as of October 31, 1997, February 19, 1998, June 24, 1998,
October 20, 1998, and December 4, 1998.
I.131 "Pre-Petition Credit Facility Agreements" mean the Pre-Petition
Credit Agreement, the Credit Documents and the Lender Lock-up Agreement.
I.132 "Pre-Petition Proceeds Account" means the account established under
the Proceeds Agreement into which proceeds of certain asset sales were deposited
prior to the Petition Date.
I.133 "Priority Tax Claim" means a Claim that is entitled to priority
pursuant to section 507(a)(8) of the Bankruptcy Code.
I.134 "Proceeds Agreement" means the Proceeds Agreement dated April 5,
1999, as amended, made by and among PSC, the Subsidiaries and the Lenders.
I.135 "Professional" means any professional employed in the Chapter 11
Cases pursuant to section 327 or 1103 of the Bankruptcy Code or otherwise and
any professionals seeking compensation or reimbursement of expenses in
connection with the Chapter 11 Cases pursuant to section 503(b)(4) of the
Bankruptcy Code.
I.136 "Professional Fee Claim" means a Claim of a Professional for
compensation or reimbursement of costs and expenses relating to services
incurred after the Petition Date and prior to and including the Effective Date.
I.137 "Proof of Claim" means collectively (i) the proof of claim that must
be filed by certain holders of Impaired Unsecured Claims pursuant to an Order of
the Bankruptcy Court entered on June 28, 1999, and (ii) any other proof of claim
filed in the Chapter 11 Cases as required by the Plan, the Bankruptcy Code, the
Bankruptcy Rules or any order of the Bankruptcy Court.
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I.138 "Protocol" means the Cross-Border Insolvency Protocol entered in the
Chapter 11 Cases and the CCAA cases of the Canadian Debtors.
I.139 "PSC Common Shares" means (if the Canadian Reorganization Plan is
sanctioned) the common shares of Reorganized PSC outstanding after giving effect
to the issuance of the New Common Shares and the Reverse Stock Split, if
applicable.
I.140 "Qualifying Class 7 Creditors" means the holders of Class 7 Impaired
Unsecured Claims that as of the Voting Record Date are holders of Allowed
Impaired Unsecured Claims (or a portion of a Disputed Class 7 Claim the portion
of which is not disputed) entitled to a distribution.
I.141 "Registration Rights Agreement" means an agreement to be entered into
between Reorganized PSC (if the Canadian Reorganization Plan is sanctioned) or
Reorganized PSI (if the Alternate Canadian Transactions are implemented or the
Canadian Plan Condition is waived) and certain holders of Allowed Lender Claims
with respect to rights of registration as to the New Common Shares or
Reorganized PSI Common Shares in substantially the form included in the Plan
Supplement.
I.142 "Reinstated" or "Reinstatement" means (i) leaving unaltered the
legal, equitable and contractual rights to which a Claim or Interest entitles
the holder of such Claim or Interest so as to leave such Claim or Interest
unimpaired in accordance with section 1124 of the Bankruptcy Code or (ii)
notwithstanding any contractual provision or applicable law that entitles the
holder of such Claim or Interest to demand or receive accelerated payment of
such Claim or Interest after the occurrence of a default (a) curing any such
default that occurred before or after the Petition Date, other than a default of
a kind specified in section 365(b)(2) of the Bankruptcy Code; (b) reinstating
the maturity of such Claim or Interest as such maturity existed before such
default; (c) compensating the holder of such Claim or Interest for any damages
incurred as a result of any reasonable reliance by such holder on such
contractual provision or such applicable law; or (d) not otherwise altering the
legal, equitable or contractual rights to which such Claim or Interest entitles
the holder of such Claim or Interest; provided, however, that, except as to the
Other Secured Claims of the Account Intermediaries, any contractual right that
does not pertain to the payment when due of principal and interest on the
obligation on which such Claim or Interest is based, including, but not limited
to, financial covenant ratios, negative pledge covenants, covenants or
restrictions on merger or consolidation, and affirmative covenants regarding
corporate existence prohibiting certain transactions or actions contemplated by
the Plan, or conditioning such transactions or actions on certain factors, shall
not be required to be reinstated in order to accomplish Reinstatement.
I.143 "Reorganized PSC" means PSC or its successor, on and after the
Effective Date.
I.144 "Reorganized PSI" means PSI, on and after the Effective Date.
I.145 "Reorganized PSI Common Shares" means shares of common stock of
Reorganized PSI to be authorized under Article IV.C.1 of the Plan (if the
Alternate Canadian Transactions are implemented or the Canadian Plan Condition
is waived).
I.146 "Reorganized Debtor(s)" means individually any Debtor and
collectively all Debtors, on or after the Effective Date.
I.147 "Reorganized Subsidiary Debtor(s)" means individually any Debtor and
collectively all Debtors, on or after the Effective Date.
I.148 "Required Lenders" means the "Required Lenders" as defined in the
Pre-Petition Credit Agreement.
I.149 "Restricted Subsidiaries" means "Restricted Subsidiaries" as defined
in the Pre-Petition Credit Agreement.
I.150 "Restructuring Transactions" has the meaning ascribed thereto in
Article IV.B.4 hereof.
I.151 "Reverse Stock Split" means (if the Canadian Reorganization Plan is
sanctioned by the Effective Date) the reverse stock split of Reorganized PSC to
be implemented only if Class 7 votes to accept the Plan, which if so implemented
shall be done simultaneously with the Effective Date pursuant to which each 273
New Common Shares shall be consolidated into one PSC Common Share and as a
result 24,000,000 shares of PSC Common Shares will be issued and outstanding.
I.152 "Schedules" means the schedules of assets and liabilities and the
statements of financial affairs, if any, filed in the Bankruptcy Court by the
Debtors as such schedules or statements as may be amended or supplemented from
time to time in accordance with Fed. R. Bankr. P. 1009 or orders of the
Bankruptcy Court.
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I.153 "Secured Claim" means a Claim that is secured by a Lien on property
in which an Estate has an interest or that is subject to setoff under section
553 of the Bankruptcy Code, to the extent of the value of the 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 pursuant to section
506(a) of the Bankruptcy Code.
I.154 "Secured Lender Claim" means a Secured Claim of a Lender arising
under or as a result of the Pre-Petition Credit Facility Agreements other than
any Other Secured Claims.
I.155 "Securities Act" means the Securities Act of 1933, 15 U.S.C. Sections
77a-77aa, as now in effect or hereafter amended.
I.156 "Securities Actions" means collectively (i) the U.S. Class Action and
(ii) the Canadian Class Action.
I.157 "Securities Claim" means a Claim of any Person (other than a Claim
against PSC held by a Canadian resident) as to causes of action asserted in the
Securities Actions or Claims arising out of the ownership of Old Common Shares,
excluding the Other Securities Claims.
I.158 "Security Agent" means the "Security Agent" as defined in the
Pre-Petition Credit Agreement.
I.159 "Shareholder Rights Plan" means the Shareholder Rights Plan to be
implemented on the Effective Date for Reorganized PSC (if the Canadian
Reorganization Plan is sanctioned) or Reorganized PSI (if the Alternate Canadian
Transactions are implemented or the Canadian Plan Condition is waived)
substantially in the forms included in the Plan Supplement.
I.160 "Subsidiaries" means collectively all of the direct and indirect
subsidiaries of PSC, Reorganized PSC and/or Reorganized PSI, whether organized
prior to, on, or after the Effective Date.
I.161 "Subsidiary Debtors" means the direct and indirect subsidiaries of
PSC listed on Exhibit A.
I.162 "Subsidiary Interests" means collectively the issued and outstanding
shares of stock of the Subsidiaries as of the Petition Date.
I.163 "Substantial Contribution Claim" means a claim for compensation or
reimbursement of expenses incurred in making a substantial contribution in the
Chapter 11 Cases pursuant to section 503(b)(3),(4) or (5) of the Bankruptcy
Code.
I.164 "TCT" means Texas Commerce Trust Company of New York.
I.165 "Unfunded LC Claim" means the amount, if any, by which the Agreed LC
Claim exceeds the amount actually drawn from the Petition Date through the
Effective Date (or, if the Canadian Plan Condition is waived, through the date
that the Alternate Canadian Transactions are implemented) on letters of credit
issued pursuant to the Pre-Petition Credit Agreement, which for greater
certainty do not include letters of credit issued under the Permitted LC
Facility established pursuant to Amending Agreement No. 3 to the Pre-Petition
Credit Agreement.
I.166 "Unimpaired" means, when used with reference to a Claim or Interest,
a Claim or Interest that is not impaired within the meaning of section 1124 of
the Bankruptcy Code.
I.167 "Unimpaired Claim" means a Claim that is not an Impaired Claim.
I.168 "United States Debtors" means the Debtors in these jointly
administered Chapter 11 proceedings, other than PSC.
I.169 "Unsecured Lender Claim" means a Claim of a Lender arising under or
as a result of the Pre-Petition Credit Facility Agreements that is not a Secured
Lender Claim, other than Lender Claims in respect of letters of credit issued
pursuant to the Pre-Petition Credit Agreement that are contingent as of the
Effective Date.
I.170 "U.S. Class Action" means the consolidated, putative class action
entitled In re Philip Services, Corp Securities Litigation, 98 CV 835 (MBM),
previously pending against PSC in the United States District Court for the
Southern District of New York.
I.171 "U.S. Plan Election" means (a) the election to receive distributions
under this Plan by holders of Canadian Impaired Unsecured Claims or Canadian
Class 8C Holders made by filing by the Voting Deadline the Canadian Proof of
Claim
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<PAGE> 57
and Election and (b) the election to receive distributions under this Plan by
Canadian Class 8B Holders (i) that have opted out of the Canadian Class Action
class if the settlement of the Canadian Class Action is approved and implemented
or (ii) by filing by a date to be determined by the Debtors prior to the
Effective Date a form substantially similar to the Canadian Proof of Claim and
Election if the settlement of the Canadian Class Action is not approved and
implemented, provided that such elections shall only become effective if the
Alternate Canadian Transactions are implemented.
I.172 "Voting Deadline" means the voting deadline on the Plan as set by an
order of the Bankruptcy Court.
I.173 "Voting Record Date" means the voting record date as to the Plan as
set by an order of the Bankruptcy Court.
C. RULES OF INTERPRETATION
For purposes of the Plan (a) any reference in the Plan to a contract,
instrument, release, indenture, or other agreement or document's being in a
particular form or on particular terms and conditions means that such document
shall be substantially in such form or substantially on such terms and
conditions; (b) any reference in the Plan to an existing document or exhibit
filed or to be filed means such document or exhibit as it may have been or may
be amended, modified, or supplemented; (c) unless otherwise specified, all
references in the Plan to Sections, Articles, Schedules, and Exhibits are
references to Sections, Articles, Schedules and Exhibits of or to the Plan; (d)
the words "herein" and "hereto" refer to the Plan in its entirety rather than to
a particular portion of the Plan; (e) captions and headings to Articles and
Sections are inserted for convenience of reference only and are not intended to
be a part of or to affect the interpretation of the Plan; and (f) the rules of
construction set forth in section 102 of the Bankruptcy Code and in the
Bankruptcy Rules shall apply.
D. COMPUTATION OF TIME
In computing any period of time prescribed or allowed by the Plan, the
provisions of Fed. R. Bankr. P. 9006(a) shall apply.
ARTICLE II.
CLASSIFICATION OF CLAIMS AND INTERESTS
A. INTRODUCTION
The Plan is premised on the substantive consolidation of the Debtors only
with respect to the treatment of Class 6, 7 and 8 Claims, as provided in Article
IV.J. The Plan does not contemplate the substantive consolidation of the Debtors
with respect to the other Classes of Claims or Interests. All Claims and
Interests, except DIP Facility Claims, Administrative Claims and Priority Tax
Claims, are placed in the Classes set forth below. In accordance with section
1123(a)(1) of the Bankruptcy Code, DIP Facility Claims, Administrative Claims
and Priority Tax Claims, as described below, have not been classified.
A Claim or Interest is placed in a particular Class only to the extent that
the Claim or Interest falls within the description of that Class and is
classified in other Classes to the extent that any portion of the Claim or
Interest falls within the description of such other Classes. A Claim is also
placed in a particular Class for the purpose of receiving distributions pursuant
to the Plan only to the extent that such Claim is an Allowed Claim in that Class
and such Claim has not been paid, released, or otherwise settled prior to the
Effective Date.
B. UNCLASSIFIED CLAIMS (NOT ENTITLED TO VOTE ON THE PLAN)
1. DIP Facility Claims
2. Administrative Claims
3. Priority Tax Claims
C. SUMMARY OF CLASSIFIED CLAIMS AND INTERESTS
<TABLE>
<CAPTION>
Class Status
----- ------
<C> <S>
Class 1 - Other Priority Claims Unimpaired - not entitled to vote
</TABLE>
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<PAGE> 58
<TABLE>
<C> <S>
Class 2 - Other Secured Claims Unimpaired - not entitled to vote
Class 3 - General Unsecured Claims Unimpaired - not entitled to vote
Class 4 - Intercompany Claims of Non-Debtors Unimpaired (except for Intercompany Claims of
Phencorp against PSI, Luntz Acquisition (Delaware)
Corporation, RESI Acquisition (Delaware)
Corporation and Industrial Services Technology,
Inc.) - not entitled to vote (Phencorp deemed
to accept)
Class 5 - Subsidiary Interests Unimpaired - not entitled to vote
Class 6 - Secured Lender Claims Impaired - entitled to vote
Class 7 - Impaired Unsecured Claims Impaired - entitled to vote
Class 8A - Old Common Shares Impaired - entitled to vote, unless the Class 8 Solicitation
Order is entered, in which case deemed to reject
Class 8B - Securities Claims in the Securities Actions Impaired - entitled to vote, unless the Class 8 Solicitation
Order is entered, in which case deemed to reject
Class 8C - Other Securities Claims Impaired - entitled to vote unless the Class 8
Solicitation Order is entered, in which case
deemed to reject
Class 9 - Other Equity Securities Impaired - deemed to reject
</TABLE>
D. CLASSIFICATION OF UNIMPAIRED CLASSES OF CLAIMS AND INTERESTS (DEEMED TO
HAVE ACCEPTED THE PLAN AND THEREFORE NOT ENTITLED TO VOTE)
1. Class 1: Other Priority Claims
Class 1 consists of all Other Priority Claims.
2. Class 2: Other Secured Claims
Class 2 consists of separate subclasses for each Other Secured Claim
secured by a Lien upon property in which an Estate has an interest. Each
subclass is deemed to be a separate Class for all purposes under the Bankruptcy
Code.
3. Class 3: General Unsecured Claims
Class 3 consists of all General Unsecured Claims.
4. Class 4: Intercompany Claims of Non-Debtors
Class 4 consists of all Intercompany Claims of all Non-Debtors against
Debtors.
5. Class 5: Subsidiary Interests
Class 5 consists of the Subsidiary Interests.
E. CLASSIFICATION OF IMPAIRED CLASSES OF CLAIMS AND INTERESTS. (Classes 6 and
7 are entitled to vote on the Plan. If the Class 8 Solicitation Order is
entered, then Classes 8A, 8B and 8C will be deemed to have rejected the Plan
and, therefore, will not be entitled to vote. If the Class 8 Solicitation Order
is not entered, then Classes 8A, 8B and 8C will be entitled to vote.)
1. Class 6: Secured Lender Claims
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Class 6 consists of all Secured Lender Claims. Notwithstanding anything
contained in this Plan to the contrary, the Secured Lender Claims shall be
deemed Allowed Class 6 Claims in an amount to be determined by the Bankruptcy
Court.
2. Class 7: All Impaired Unsecured Claims
Class 7 consists of all Impaired Unsecured Claims.
3. Class 8A: Old Common Shares
Class 8A consists of the Interests of holders of Old Common Shares.
4. Class 8B: Securities Claims in the Securities Actions
Class 8B consists of all the Securities Claims of the putative plaintiffs
in the Securities Actions.
5. Class 8C: Other Securities Claims
Class 8C consists of all Other Securities Claims.
6. Class 9: Other Equity Securities
Class 9 consists of the Interests of holders of Other Equity Securities.
ARTICLE III.
TREATMENT OF CLAIMS AND INTERESTS
A. UNCLASSIFIED CLAIMS
1. DIP Facility Claims
On the Effective Date or the date such DIP Facility Claim becomes payable
pursuant to any agreement between the Debtors and the holder of such DIP
Facility Claim, each holder of an Allowed DIP Facility Claim shall receive in
full satisfaction, settlement, release and discharge of and in exchange for such
Allowed DIP Facility Claim (a) Cash equal to the unpaid portion of such Allowed
DIP Facility Claim or (b) such other treatment as to which the Debtors, with the
consent of the Required Lenders and the Account Intermediaries, and such holder
shall have agreed upon in writing.
2. Administrative Claims
Except as otherwise provided for herein, and subject to the requirements of
Article XIV.A hereof, 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, each holder of an 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 treatment as to
which the applicable Debtor, with the consent of the Required Lenders, and such
holder shall have agreed upon in writing; provided, however, that Administrative
Claims with respect to liabilities incurred by a Debtor in the ordinary course
of business during the Chapter 11 Cases shall be paid in the ordinary course of
business in accordance with the terms and conditions of any agreements relating
thereto.
3. Priority Tax Claims
On, or as soon as reasonably practicable after, the later of (i) the
Distribution Date or (ii) the date such Priority Tax Claim becomes an Allowed
Priority Tax Claim, each holder of an Allowed Priority Tax Claim shall receive
in full satisfaction, settlement, release and discharge of and in exchange for
such Allowed Priority Tax Claim (a) with the consent of the Required Lenders,
Cash equal to the unpaid portion of such Allowed Priority Tax Claim, (b) Cash
payments over time in an aggregate principal amount equal to the amount of such
Allowed Priority Tax Claim plus simple interest on the unpaid portion thereof at
the rate of seven percent (7%) per annum from the Effective Date through the
date of payment thereof, or
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(c) such other treatment as to which a Debtor, with the consent of the Required
Lenders, and such holder shall have agreed upon in writing. Cash payments of
principal shall be made in annual installments, each such installment amount
being equal to ten percent (10%) of such Allowed Priority Tax Claim plus accrued
and unpaid interest, with the first payment to be due on or before the first
anniversary of the Effective Date, or as soon thereafter as is practicable, and
subsequent payments to be due on the anniversary of the first payment date or as
soon thereafter as is practicable; provided, however, that any installments
remaining unpaid on the date that is six years after the date of assessment of
the tax that is the basis for the Allowed Priority Tax Claim shall be paid on
the first Business Day following such date, or as soon thereafter as is
practicable, together with any accrued and unpaid interest to the date of
payment; and provided further that the Debtors reserve the right to pay any
Allowed Priority Tax Claim, or any remaining balance of any Allowed Priority Tax
Claim, in full at any time on or after the Distribution Date without premium or
penalty; and provided further that no holder of an Allowed Priority Tax Claim
shall be entitled to any payments on account of any pre-Effective Date interest
accrued on or penalty arising after the Petition Date with respect to or in
connection with such Allowed Priority Tax Claim.
B. UNIMPAIRED CLASSES OF CLAIMS AND INTERESTS
1. Class 1: Other Priority Claims
On, or as soon as reasonably practicable after, the latest of (i) the
Distribution Date, (ii) the date such Class 1 Other Priority Claim becomes an
Allowed Class 1 Other Priority Claim, or (iii) the date such Class 1 Other
Priority Claim becomes payable pursuant to any agreement between a Debtor and
the holder of such Class 1 Other Priority Claim, each holder of an Allowed Class
1 Other Priority Claim shall receive in full satisfaction, settlement, release
and discharge of and in exchange for such Allowed Class 1 Other Priority Claim
(a) Cash equal to the unpaid portion of such Allowed Class 1 Other Priority
Claim or (b) such other treatment as to which a Debtor, with the consent of the
Required Lenders, and such holder shall have agreed upon in writing.
2. Class 2: Other Secured Claims
Each holder of a Class 2 Other Secured Claim shall be treated as a separate
class for all purposes under this Plan, and each holder of an Allowed Class 2
Other Secured Claim shall receive the treatment set forth below in Option A or
B. Except as to the Liens and security interests of the Account Intermediaries,
the Debtors specifically reserve all rights to challenge the validity, nature
and perfection of any purported Liens and security interests of the holders of
Other Secured Claims.
Option A: Allowed Class 2 Other Secured Claims with respect to which the
applicable Debtor or the applicable Reorganized Debtor selects Option A will,
subject to the consent of the Required Lenders, be paid in cash, in full, by the
Reorganized Debtors, unless the holder of such Claim agrees to less favorable
treatment.
Option B: Allowed Class 2 Other Secured Claims with respect to which the
applicable Debtor or Reorganized Debtor selects Option B will be Reinstated.
The applicable Debtor or Reorganized Debtor will be deemed to have elected
Option B in respect of the Other Secured Claims of the Account Intermediaries
and all other Allowed Class 2 Other Secured Claims except those with respect to
those other Allowed Class 2 Other Secured Claims which the applicable Debtor,
with the consent of the Required Lenders, elects Option A in writing prior to
the Confirmation Hearing.
3. Class 3: General Unsecured Claims
Each holder of an Allowed Class 3 General Unsecured Claim shall, at the
option of the Debtors, (a) have its Claim Reinstated or (b) receive such other
treatment as to which the applicable Debtor or Reorganized Debtor, with the
consent of the Required Lenders, and such holder shall have agreed upon in
writing.
4. Class 4: Intercompany Claims of Non-Debtors
Except as provided herein, each holder of an Allowed Class 4 Intercompany
Claim, in full satisfaction, settlement, release and discharge of and in
exchange for such Allowed Class 4 Intercompany Claim, shall, in the sole
discretion of the applicable Debtor or Reorganized Debtor, (a) have its Claim
Reinstated or (b) receive such other treatment as the applicable Debtor or
Reorganized Debtor, with the consent of the Required Lenders, and such holder
have agreed upon in writing.
5. Class 5: Subsidiary Interests
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Subject to the Restructuring Transactions, all Class 5 Subsidiary Interests
will be deemed Allowed Interests and Reinstated on the Effective Date, but the
holders of the Class 5 Subsidiary Interests shall receive no distribution under
the Plan on account of such Interests; provided, however, if the Alternate
Canadian Transactions are implemented or the Canadian Plan Condition is waived,
then the Interests in PSI and Luntz Corporation owned by Philip Enterprises,
Inc. shall be deemed cancelled and extinguished as of the Effective Date.
C. IMPAIRED CLASSES OF CLAIMS AND INTERESTS
1. Class 6: Secured Lender Claims
(a) Treatment if the Canadian Reorganization Plan Is Sanctioned. On
the Effective Date, the Pre-Petition Credit Facility Agreements shall be amended
and restated by the Amended and Restated Term Credit Agreement without any
further action by any party. Subject to the adjustment described in the
immediately succeeding paragraph, each holder of an Allowed Class 6 Secured
Lender Claim, in full satisfaction, settlement, release and discharge of and in
exchange for such Allowed Class 6 Secured Lender Claim, shall receive on or as
soon as practicable after the Distribution Date its pro rata share of (A) the
Net Asset Sale Proceeds Pool, (B) the New Secured PIK Debt, (C) the New Senior
Secured Term Debt and (D) (i) if Class 7 votes to accept the Plan, 5,967,052,592
shares of the New Common Shares which shall be ninety-one percent (91%) of the
PSC Common Shares issued and outstanding as of the Effective Date (which shall
equal 21,840,000 PSC Common Shares after giving effect to the Reverse Stock
Split), subject to Dilution or (ii) if Class 7 votes to reject the Plan,
22,800,000 shares of the PSC Common Shares which shall be ninety-five percent
(95%) of the PSC Common Shares issued and outstanding as of the Effective Date
plus an amount of PSC Common Shares equal to the aggregate number of New Common
Shares that would have been available for distribution to Class 7 had Class 7
voted to accept the Plan (based on the Debtors' estimate of the aggregate amount
of Allowed Class 7 Claims), subject to Dilution, and an amount of New Unsecured
PIK Notes equal to the amount that would have been distributed to Class 7 had
Class 7 voted to accept the Plan (based on the Debtors' estimate of the
aggregate amount of Allowed Class 7 Claims).
Except as provided below, each LC Lender will fund its pro rata share
of the Unfunded LC Claim (a) in Cash, or (b) by forgoing distributions that it
would otherwise receive in respect of a Claim in the amount of its pro rata
share of the Unfunded LC Claim. If the distributions that would otherwise be
received by an LC Lender are insufficient to fund its pro rata share of the
Unfunded LC Claim, such deficiency may be paid by forgoing distributions to the
extent necessary by any Lender that is an Affiliate of such LC Lender.
Furthermore, any LC Lender that holds only contingent Class 6 Secured Lender
Claims in respect of undrawn letters of credit issued under the Pre-Petition
Credit Agreement may satisfy its obligations in respect of its Unfunded LC Claim
by paying Cash in an amount equal to 50% of its Unfunded LC Claim and foregoing
all distributions in respect of its claims under the Pre-Petition Credit
Agreement. Any such Cash paid or distributions forgone shall be reallocated pro
rata among the holders of Allowed Class 6 Secured Lender Claims.
On the Effective Date, Reorganized PSC shall record such holders of
Allowed Class 6 Lender Claims as holders of record of such New Common Shares.
Each holder of an Allowed Class 6 Secured Lender Claim shall vote the New Common
Shares distributed to it under the Plan in favor of each of the matters set
forth in Article IV.B.7 hereof.
(b) Treatment if the Alternate Canadian Transactions Are Implemented.
On the Effective Date, the Pre-Petition Credit Facility Agreements shall be
amended and restated by the Amended and Restated Term Credit Agreement, except
as provided in the last sentence of this paragraph, without any further action
by any party. Subject to the adjustments described in the next two succeeding
paragraphs, each holder of an Allowed Class 6 Secured Lender Claim, in full
satisfaction, settlement, release and discharge of and in exchange for such
Allowed Class 6 Secured Lender Claim against the Debtors other than PSC and in
exchange for the assignment to PSI of certain claims against the Canadian
Debtors, shall receive on or as soon as practicable after the Distribution Date
its pro rata share of (A) that portion of the Net Asset Sale Proceeds Pool not
otherwise reserved by PSC, with the consent of and upon terms approved by the
Required Lenders, for purposes of realizing on the assets of PSC and the other
Canadian Debtors retained and not transferred in connection with the Alternate
Canadian Transactions, (B) the New Secured PIK Debt, (C) the New Senior Secured
Term Debt and (D) (i) if Class 7 votes to accept the Plan, ninety-one percent
(91%) which shall equal 21,840,000 Reorganized PSI Common Shares as of the
Effective Date, plus the Class 6 Additional Distribution or (ii) if Class 7
votes to reject the Plan, one hundred percent (100%) which shall equal
24,000,000 shares of the Reorganized PSI Common Shares as of the Effective Date,
subject to Dilution. The claims assigned by the holders of Allowed Class 6
Secured Lender Claims to PSI will be the portion of their claims against the
Canadian Debtors that will be repaid from the proceeds of the Alternate Canadian
Transactions. Such assignment shall be deemed to occur immediately prior to the
distribution of the proceeds of the Alternate Canadian Transactions to which the
Lenders are entitled. The holders of Allowed Class 6 Secured Lender Claims shall
retain such claims against PSC and the other Canadian Debtors and security
interests in assets of PSC and the other Canadian Debtors retained and not
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transferred in connection with the Alternate Canadian Transactions and such
claims shall continue to be governed by the Pre-Petition Credit Facility
Agreements.
Except as provided for below, each LC Lender will fund its pro rata
share of the Unfunded LC Claim (a) in Cash, or (b) by forgoing distributions
that it would otherwise receive in respect of a Claim in the amount of its pro
rata share of the Unfunded LC Claim. If the distributions that would otherwise
be received by an LC Lender are insufficient to fund its pro rata share of the
Unfunded LC Claim, such deficiency may be paid by forgoing distributions to the
extent necessary by any Lender that is an Affiliate of such LC Lender.
Furthermore, any LC Lender that holds only contingent Class 6 Secured Lender
Claims in respect of undrawn letters of credit issued under the Pre-Petition
Credit Agreement may satisfy its obligations in respect of its Unfunded LC Claim
by paying Cash in an amount equal to 50% of its Unfunded LC Claim and foregoing
all distributions in respect of its Claims under the Pre-Petition Credit
Agreement. Any such Cash paid or distributions forgone shall be reallocated pro
rata among the holders of Allowed Class 6 Secured Lender Claims.
If the Canadian Plan Condition is waived, there shall be reserved from
the Effective Date distribution in respect of the Allowed Class 6 Secured Lender
Claims consideration equivalent to the distribution that would have been made in
respect of undrawn letters of credit issued under the Pre-Petition Credit
Agreement to support obligations of the Canadian Debtors if such letters of
credit had been drawn on or before the Effective Date. Subject to the
immediately preceding paragraph, on the date that the Alternate Canadian
Transactions are implemented, such reserve shall be distributed first, to the LC
Lenders in respect of any such letters of credit drawn subsequent to the
Effective Date until such LC Lenders shall have received distributions in
respect of such Claims equivalent to the distributions made on the Effective
Date in respect of the Claims of the holders of Allowed Class 6 Secured Lender
Claims (other than LC Lenders), and thereafter, pro rata to the holders of
Allowed Class 6 Secured Lender Claims (including Claims in respect of letters of
credit issued under the Pre-Petition Credit Agreement on account of the Canadian
Debtors which were drawn subsequent to the Effective Date).
2. Class 7: Impaired Unsecured Claims
On, or as soon as reasonably practicable after, the later of (i) the
Distribution Date or (ii) the date such Class 7 Claim becomes an Allowed Class 7
Claim:
(a) Treatment if the Canadian Reorganization Plan Is Sanctioned.
(i) If the holders of Allowed Class 7 Claims vote to accept the
Plan then each holder of an Allowed Class 7 Claim shall receive in full
satisfaction, settlement, release and discharge of and in exchange for such
Allowed Class 7 Claim, its pro rata share of (a) subject to the Class 7
Election, $60 million of New Unsecured PIK Notes to be issued pursuant to
Article IV.C.1 of the Plan and (b) 327,860,033 New Common Shares which shall be
five percent (5%) of the PSC Common Shares issued and outstanding as of the
Effective Date, (which shall equal 1,200,000 PSC Common Shares after giving
effect to the Reverse Stock Split), subject to Dilution, in each case which
distribution shall be shared pro rata with the holders of allowed Canadian
Impaired Unsecured Claims under the Canadian Reorganization Plan. The holders of
Unsecured Lender Claims shall be deemed to have waived any and all distributions
to which they would be entitled under the Plan as holders of Unsecured Lender
Claims, including the benefits of any and all contractual subordination
provisions in respect of the Old Debentures and shall receive no distributions
on account of such Unsecured Lender Claims; or
(ii) if the holders of Allowed Class 7 Claims vote to reject the
Plan, then the holders of such Claims shall not receive or retain any property
on account of such Claims.
(b) Treatment if the Alternate Canadian Transactions Are Implemented.
(i) If the holders of Allowed Class 7 Claims vote to accept the
Plan then each holder of an Allowed Class 7 Claim shall receive in full
satisfaction, settlement, release and discharge of and in exchange for such
Allowed Class 7 Claim, its pro rata share of (a) subject to the Class 7
Election, $60 million of New Unsecured PIK Notes to be issued pursuant to
Article IV.C.1 of the Plan and (b) five percent (5%) which shall equal 1,200,000
Reorganized PSI Common Shares as of the Effective Date, subject to Dilution and
to the provisions of Article III.F. The holders of Unsecured Lender Claims shall
be deemed to have waived any and all distributions to which they would be
entitled under the Plan as holders of Unsecured Lender Claims, including the
benefits of any and all contractual subordination provisions in respect of the
Old Debentures and shall receive no distributions on account of such Unsecured
Lender Claims; provided, however, that the holders of the Allowed Unsecured
Lender Claims shall retain such Claims against PSC and the Subsidiaries other
than the Debtors in the assets retained and not transferred in connection with
the Alternate Canadian Transactions and such claims shall continue to be
governed by the Pre-Petition Credit Facility Agreement; or
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(ii) if the holders of Allowed Class 7 Claims vote to reject the
Plan, then the holders of such Claims shall not receive or retain any property
on account of such Claims.
(c) Other Provisions Applicable to Class 7.
Qualifying Class 7 Creditors shall have the right to make the Class 7
Election if Class 7 votes to accept the Plan. The Class 7 Election shall entitle
Qualifying Class 7 Creditors to elect to forgo their pro rata distribution of
New Unsecured PIK Notes and instead receive New Unsecured Convertible Notes. If
Class 7 votes to accept the Plan, Qualifying Class 7 Creditors electing New
Unsecured Convertible Notes shall receive, in exchange for every $1.00 in face
amount of New Unsecured PIK Notes that such Qualifying Class 7 Creditor would
have received under the Plan, $1.50 in face amount of New Unsecured Convertible
Notes. The aggregate of New Unsecured Convertible Notes shall not exceed $18
million. Holders of Old Debentures that do not make an affirmative Class 7
Election or that do not vote on the Plan shall be deemed to have elected to
receive the New Unsecured Convertible Notes. All other Qualifying Class 7
Creditors that do not make an affirmative Class 7 Election or that do not vote
on the Plan shall be deemed to have elected to receive the New Unsecured PIK
Notes.
If Qualifying Class 7 Creditors elect to convert more than $12 million
in aggregate face amount of New Unsecured PIK Notes into New Unsecured
Convertible Notes, then each Qualifying Class 7 Creditor shall be entitled to
its pro rata share of $18 million in face amount of New Unsecured Convertible
Notes (with such pro rata determination to include only Claims of the Qualifying
Class 7 Creditors electing or that have been deemed to have elected the New
Unsecured Convertible Notes), and such holders shall be deemed not to have made
the Class 7 Election with respect to the balance of their Class 7 Claims.
On the Effective Date, the Old Debentures, the Old Indenture and any
agreement with respect to Impaired Unsecured Claims shall be terminated
automatically without any further action by any party and shall no longer be of
any force or effect, except that, as between the Indenture Trustee and the
holders of the Old Debentures, provisions relating to any indemnification of the
Indenture Trustee by the holders of Old Debentures, any payment of the Indenture
Trustee's compensation, expenses (including, but no limited to, the Indenture
Trustee's professional fees and expenses), disbursements and advances, and for
any lien prior to the claims of holders of Old Debentures to secure such
compensation, fees, expenses, disbursements and advances, shall remain in full
force and effect.
3. Class 8A: Old Common Shares
On the Effective Date, in full satisfaction, settlement, release and
discharge of and in exchange for Class 8A Interests, holders of Allowed Class 8A
Interests shall be entitled to (a) if the Canadian Reorganization Plan is
sanctioned, retain their Old Common Shares, which after giving effect to the
issuance of New Common Shares shall be two percent (2.0%) of the PSC Common
Shares issued and outstanding as of the Effective Date (which shall equal
480,000 of the PSC Common Shares after giving effect to the Reverse Stock Split)
subject to Dilution or (b) if the Alternate Canadian Transactions are
implemented or the Canadian Plan Condition is waived, receive two percent (2.0%)
which shall equal 480,000 Reorganized PSI Common Shares as of the Effective
Date, subject to Dilution.
Notwithstanding any provision contained herein to the contrary, if Class 7
votes to reject the Plan, then the holders of Class 8A Interests shall not
receive or retain any property on account of such Interests. In such case, the
Reorganized Debtors will take all such corporate actions as are necessary or
required on and after the Effective Date to cancel such Interests.
4. Class 8B: Securities Claims in the Securities Actions
(a) Treatment if the Canadian Reorganization Plan Is Sanctioned.
On or as soon as reasonably practicable after the later of the
Distribution Date or the date such Class 8B Claim becomes an Allowed Class 8B
Claim, in full satisfaction, settlement, release and discharge and in exchange
for Class 8B Claims, each holder of an Allowed Class 8B Claim will receive its
(a) pro rata share of 98,358,010 shares of the New Common Shares, which shall be
in the aggregate, one and one-half percent (1.5%) of the PSC Common Shares
issued and outstanding as of the Effective Date (which shall equal 360,000 PSC
Common Shares after giving effect to the Reverse Stock Split) subject to
Dilution, which distributions shall be shared with members of the Canadian Class
Action class if the settlement of the Canadian Class Action is approved and
implemented.
(b) Treatment if the Alternate Canadian Transactions Are Implemented.
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On or as soon as reasonably practicable after the later of the
Distribution Date or the date such Class 8B Claim becomes an Allowed Class 8B
Claim, in full satisfaction, settlement, release and discharge and in exchange
for Class 8B Claims, each holder of an Allowed Class 8B Claim will receive its
pro rata share of one and one-half percent (1.5%) which shall equal 360,000
Reorganized PSI Common Shares as of the Effective Date, subject to Dilution and
to the provisions of Article III.F, which distributions shall be shared with
members of the Canadian Class Action class if the settlement of the Canadian
Class Action is approved and implemented.
(c) Other Provisions Applicable to Class 8B.
Notwithstanding any provision contained herein to the contrary, if
Class 7 votes to reject the Plan, then the holders of Class 8B Claims shall not
receive or retain any property on account of such Claims.
5. Class 8C: Other Securities Claims
(a) Treatment if the Canadian Reorganization Plan Is Sanctioned.
On the Effective Date, in full satisfaction, settlement, release and
discharge of and in exchange for Class 8C Claims, each holder of an Allowed
Class 8C Claim shall receive its pro rata share of 32,786,003 shares of the New
Common Shares, which shall be one-half of one percent (0.5%) of the PSC Common
Shares issued and outstanding as of the Effective Date (which shall equal
120,000 shares of the PSC Common Shares after giving effect to the Reverse Stock
Split) subject to Dilution.
(b) Treatment if the Alternate Canadian Transactions Are Implemented.
On the Effective Date, in full satisfaction, settlement, release and
discharge of and in exchange for Class 8C Claims, each holder of an Allowed
Class 8C Claim shall receive its pro rata share of one-half of one percent
(0.5%) which shall equal 120,000 Reorganized PSI Common Shares issued and
outstanding as of the Effective Date, subject to Dilution and to the provisions
of Article III.F.
(c) Other Provisions Applicable to Class 8C.
Notwithstanding any provision contained herein to the contrary, if
Class 7 votes to reject the Plan, then the holders of Class 8C Claims shall not
receive or retain any property on account of such Claims.
6. Class 9: Other Equity Securities
The holders of Other Equity Securities shall not receive or retain any
property under the Plan on account of such Interests. On the Effective Date, all
of the Other Equity Securities shall be deemed cancelled and extinguished.
D. SPECIAL PROVISION REGARDING UNIMPAIRED CLAIMS
Except as otherwise provided in the Plan, the Cash Collateral Order, the
DIP Order or the Bonding Lien Order, nothing shall affect the Debtors' or
Reorganized Debtors' rights and defenses, both legal and equitable, with respect
to any Unimpaired Claims, including, but not limited to, all rights with respect
to legal and equitable defenses to setoffs or recoupments against Unimpaired
Claims. Notwithstanding the substantive consolidation of the Debtors, the
Unimpaired Claims of any particular Debtor shall remain the obligations solely
of such Debtor and shall not become obligations of any other Debtor or
Reorganized Debtor. Letters of credit issued pursuant to the Pre-Petition Credit
Agreement that remain outstanding and undrawn on the Effective Date shall be
replaced or, with the consent of the issuers of such letters of credit,
supported by letters of credit issued under the Exit Facility. The terms and
provisions of the Bonding Lien Order shall continue in full force and effect
post-Confirmation with respect to any surety bonds issued and outstanding
pursuant thereto.
E. SPECIAL PROVISION REGARDING CANADIAN CLASS 8B AND CLASS 8C HOLDERS
If the Alternate Canadian Transactions are implemented, and in the event
that a Canadian Class 8B or 8C Holder that makes the U.S. Plan Election obtains
an order of the Bankruptcy Court determining that such claim is improperly
classified or that such claim is not subject to subordination pursuant to
section 510(b) or 510(c) of the Bankruptcy Code or disallowance pursuant to
section 502(e)(1)(B) of the Bankruptcy Code, such claim shall be deemed to be a
Canadian Impaired Unsecured Claim that has filed the Canadian Proof of Claim and
Election. The Debtors shall have 30 days to file objections to the proof
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of Claim, if any. Only if no objection to the Proof of Claim is filed within the
required time period, including any extensions granted by the Bankruptcy Court
or agreed to by the Debtors and the holder, or if the Bankruptcy Court enters an
order allowing such a claim as other than a subordinated claim, shall such claim
be deemed an Allowed Canadian Impaired Unsecured Claim that has filed the U.S.
Plan Election. In no event shall the holder of such Claim be a Qualifying Class
7 Creditor.
F. DISTRIBUTIONS TO CERTAIN HOLDERS OF CANADIAN IMPAIRED UNSECURED CLAIMS AND
CANADIAN CLASS 8B AND 8C HOLDERS
Each holder of a Canadian Impaired Unsecured Claim and each Canadian Class
8B or 8C Holder may make the U.S. Plan Election, entitling such holder to
receive distributions as provided in this Article III.F if the Alternate
Canadian Transactions are implemented. If the Alternate Canadian Transactions
are implemented, any holder of an Allowed Canadian Impaired Unsecured Claim that
makes the U.S. Plan Election shall receive a distribution of New Unsecured PIK
Notes and Reorganized PSI Common Shares identical to that which a holder of an
Allowed Class 7 Claim of equal amount would be entitled. If the Alternate
Canadian Transactions are implemented, any Canadian Class 8B or 8C Holder that
make the U.S. Plan Election shall receive the distribution to which such holder
would be entitled pursuant to Article III.C.4 or III.C.5, as applicable, if such
holder's claim were a Class 8B or 8C Claim, respectively. Any distribution to
which a holder of a Canadian Impaired Unsecured Claim or a Canadian Class 8B or
8C Holder is entitled under this Article III.F is subject to the application of
the provisions of this Plan governing distributions generally and application of
the provisions of this Plan, the Bankruptcy Code and other laws of the United
States regarding the determination of allowance and priority of such claims.
If the Alternate Canadian Transactions are implemented, the Lenders will
enforce remedies available to them against PSC and the other Canadian Debtors.
The proceeds paid on the transfer of the assets of PSC and the other Canadian
Debtors will be distributed pursuant to the priorities under Canadian law of the
claims against such assets. Canadian Impaired Unsecured Claims will not be
compromised pursuant to the Alternate Canadian Transactions, but it is expected
that no distributions will be made to the holders of such claims. The
distributions that would have been made available under the Canadian
Reorganization Plan, if the Canadian Reorganization Plan had been sanctioned,
for distribution to the holders of Canadian Impaired Unsecured Claims that do
not make the U.S. Plan Election, will instead comprise the Class 6 Additional
Distribution and be distributed to the holders of Class 6 Lender Claims pursuant
to Article III.C.1.
Holders of Canadian Impaired Unsecured Claims entitled to receive a
distribution pursuant to this Article III.F shall not be entitled to vote on the
Plan.
G. DISTRIBUTIONS TO CLASSES 6, 7, 8B AND 8C IF CANADIAN PLAN CONDITION
IS WAIVED
If the Canadian Plan Condition is waived, distributions to holders of
Claims in Classes 6 and 7 shall initially be made pursuant to the provisions of
Articles III.C.1.(b) and III.C.2.(b), respectively. If the Canadian Plan
Condition is waived, an amount of New Unsecured PIK Notes and the amount of
Reorganized PSI Common Shares equivalent to the amount of New Common Shares that
would be distributed to the holders of Canadian Impaired Unsecured Claims under
the Canadian Reorganization Plan (assuming all such Claims will be allowed)
shall be held by the Disbursing Agent pending the implementation of the Canadian
Reorganization Plan or the Alternate Canadian Transactions. If the Canadian
Reorganization Plan is implemented, such securities shall be deposited into the
Disputed Distribution Reserve and shall be distributed to holders of Allowed
Class 7 Claims under this Plan and Allowed Canadian Impaired Unsecured Claims in
accordance with the Canadian Reorganization Plan. If the Alternate Canadian
Transactions are implemented, such securities shall be distributed pursuant to
Articles III.F and III.C.1.(b) respectively, subject to the provisions of the
Plan governing distributions generally. The time, nature and amount of
distributions to holders of Claims in Classes 8B and 8C and Canadian Class 8B
and 8C Holders that make the U.S. Plan Election shall be determined upon the
approval of the Canadian Reorganization Plan or the Alternate Canadian
Transactions, respectively.
H. ACCRUAL OF POST-PETITION INTEREST
Interest on and fees and expenses, if any, with respect to Allowed Class 2
Other Secured Claims, shall be paid when due under the contract, agreement, or
other instrument governing the terms and conditions of the obligation comprising
such Allowed Claim, together with any additional amounts required to be paid
with respect to Unimpaired Claims pursuant to section 1124 of the Bankruptcy
Code. Except as otherwise provided above, elsewhere in this Plan, or in an order
of the Bankruptcy Court, no holder of an Allowed Claim that is not an Other
Secured Claim shall be entitled to the accrual of post-petition interest or the
payment by the Debtors or Reorganized Debtors of post-petition interest on
account of such Claim for any purpose.
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ARTICLE IV.
MEANS FOR IMPLEMENTATION OF THE PLAN
A. CONTINUED CORPORATE EXISTENCE
Subject to the Restructuring Transactions, the Reorganized Debtors shall
continue to exist after the Effective Date as separate corporate entities, in
accordance with the applicable law in the respective jurisdictions in which they
are incorporated and pursuant to their respective certificates or articles of
incorporation and bylaws in effect prior to the Effective Date, except (i) to
the extent such certificates or articles of incorporation and bylaws are amended
by this Plan or (ii) if the Canadian Reorganization Plan is sanctioned,
Reorganized PSC, with the consent of the Required Lenders, continues under the
laws of the Province of New Brunswick, which continuance is hereby expressly
authorized by this Plan. Notwithstanding anything to the contrary in this Plan,
including Article IV.J hereof as to substantive consolidation, subject to the
Restructuring Transactions, the Unimpaired Claims of a particular Debtor or
Reorganized Debtor shall remain the obligations solely of such Debtor or
Reorganized Debtor and shall not become obligations of any other Debtor or
Reorganized Debtor by virtue of the Plan, the Chapter 11 Cases or otherwise.
B. CORPORATE ACTION
1. Asset Transfer Pursuant to the Alternate Canadian Transactions
On the Effective Date, if the Alternate Canadian Transactions are
implemented, PSC, the other Canadian Debtors and PSI shall take any and all
steps necessary on their part to implement the Alternate Canadian Transactions.
PSC, PSI and the Reorganized Debtors are expressly authorized to take any and
all steps necessary to implement the Alternate Canadian Transactions, including
without limitation, PSC obtaining approval of the Alternate Canadian
Transactions by the Canadian Bankruptcy Court, entering into any and all
agreements necessary on their part to effectuate the Alternate Canadian
Transactions, and directing the other Canadian Debtors to obtain approval of the
Alternate Canadian Transactions by the Canadian Bankruptcy Court and to enter
into any and all agreements necessary to effectuate the Alternate Canadian
Transactions. The automatic stay of section 362(a) of the Bankruptcy Code shall
be deemed lifted on the Effective Date so that the Alternate Canadian
Transactions may be effectuated and shall be deemed lifted on or prior to the
Effective Date to the extent necessary to permit any required notices to be
issued or proceedings to be taken which may be necessary prior to the Effective
Date so that the transfer of assets pursuant to the Alternate Canadian
Transactions on or after the Effective Date may be made in compliance with
applicable law.
2. Cancellation of Old Securities and Agreements
On the Effective Date, except as otherwise provided for herein, (i) the Old
Debentures, Other Equity Securities, any other note, bond (with the exception of
surety bonds outstanding), indenture or other instrument or document evidencing
or creating any indebtedness or obligation of a Debtor (except as provided in
Article III.C.2.(c)), except such notes or other instruments evidencing
indebtedness or obligations of a Debtor that are Reinstated or amended and
restated under the Plan, shall be canceled, and (ii) the obligations of the
Debtors under any agreements, indentures or certificates of designations
governing the Old Debentures and Other Equity Securities and any other note,
bond, indenture or other instrument or document evidencing or creating any
indebtedness or obligation of a Debtor, except such notes or other instruments
evidencing indebtedness or obligations of a Debtor that are Reinstated or
amended and restated under the Plan, as the case may be, shall be discharged. As
of the Effective Date, all Old Common Shares that have been authorized to be
issued but that have not been issued shall be deemed cancelled and extinguished
without any further action of any party.
3. Certificate 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
nonvoting equity securities, but only to the extent required by section
1123(a)(6) of the Bankruptcy Code.
4. Restructuring Transactions
On or after the Effective Date, the applicable Reorganized Debtors with the
consent of the Required Lenders (to the extent such actions are taken on the
Effective Date) may enter into such transactions and may take such actions as
may be
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necessary or appropriate to effect a corporate restructuring of their respective
businesses, to simplify otherwise 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. Such restructuring is contemplated to
include one or more mergers, consolidations, restructures, dispositions,
liquidations, or dissolutions, as may be determined by the Debtors or
Reorganized Debtors to be necessary or appropriate (collectively, the
"Restructuring Transactions"). The actions to effect the Restructuring
Transactions may include: (i) the execution and delivery of appropriate
agreements or other documents of merger, consolidation, restructuring,
disposition, liquidation or dissolution containing terms that are consistent
with the terms of the Plan and that satisfy the applicable requirements of
applicable state law and such other terms to which the applicable entities may
agree; (ii) the execution and delivery of appropriate instruments of transfer,
assignment, assumption or delegation of any asset, property, right, liability,
duty or obligation on terms consistent with the terms of the Plan and having
such other terms to which the applicable entities may agree; (iii) the filing of
appropriate certificates or articles of merger, consolidation or dissolution
pursuant to applicable state law; and (iv) all other actions that the applicable
entities determine to be necessary or appropriate, including making filings or
recordings that may be required by applicable state law in connection with such
transactions. The Restructuring Transactions may include one or more mergers,
consolidations, restructurings, dispositions, liquidations or dissolutions, as
may be determined by the Reorganized Debtors to be necessary or appropriate to
result in substantially all of the respective assets, properties, rights,
liabilities, duties and obligations of certain of the Reorganized Debtors
vesting in one or more surviving, resulting, or acquiring corporations. In each
case in which the surviving, resulting or acquiring corporation in any such
transaction is a successor to a Reorganized Debtor, such surviving, resulting or
acquiring corporation will perform the obligations of the applicable Reorganized
Debtor pursuant to the Plan to pay or otherwise satisfy the Allowed Claims
against such Reorganized Debtor, except as provided in any contract, instrument
or other agreement or document effecting a disposition to such surviving,
resulting or acquiring corporation, which may provide that another Reorganized
Debtor will perform such obligations.
5. Shareholder Rights Plan
On the Effective Date, Reorganized PSC (if the Canadian Reorganization Plan
is sanctioned) or Reorganized PSI (if the Alternate Canadian Transactions are
implemented or if the Canadian Plan Condition is waived) shall implement the
Shareholder Rights Plan.
6. Reverse Stock Split
If the Canadian Reorganization Plan is sanctioned, and if Class 7 has voted
to accept the Plan, on the Effective Date Reorganized PSC shall take all steps
necessary to implement the Reverse Stock Split.
7. Shareholder Approval
If the Canadian Reorganization Plan is sanctioned, on or immediately after
the Effective Date and the distribution of New Common Shares to the holders of
Allowed Class 6 Secured Lender Claims, Reorganized PSC shall hold a meeting of
its shareholders for the purposes of: (i) ratifying and approving the
Shareholder Rights Plan; (ii) electing the directors of Reorganized PSC set out
in the Plan Supplement; (iii) amending the articles of incorporation of
Reorganized PSC to allow for the implementation of the Reverse Stock Split; (iv)
authorizing the continuance of Reorganized PSC under the laws of New Brunswick;
and (v) if Class 7 votes to reject the Plan, canceling the Old Common Shares.
C. PLAN TRANSACTIONS
1. New Securities
(a) Authorization
If the Canadian Reorganization Plan is sanctioned, the issuance by
Reorganized PSC of $100 million in principal amount of New Secured PIK Debt, up
to $60 million in principal amount of New Unsecured PIK Notes, up to $18 million
in principal amount of New Unsecured Convertible Notes, up to 6,426,056,637
shares of New Common Shares, and Management Options to purchase the PSC Common
Shares according to the terms of the Management Option Plan to be adopted by the
Board of Directors of Reorganized PSC on or after the Effective Date, subject to
Dilution (except with respect to the New Secured PIK Debt) as of the Effective
Date, is hereby authorized without further act or action under applicable law,
regulation, order or rule.
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If the Alternate Canadian Transactions are implemented or the Canadian
Plan Condition is waived, as of the Effective Date, the issuance by Reorganized
PSI of $100 million in principal amount of New Secured PIK Debt, up to $60
million in principal amount of New Unsecured PIK Notes, up to $18 million in
principal amount of New Unsecured Convertible Notes, up to 24,000,000 shares of
Reorganized PSI Common Shares, and Management Options to purchase Reorganized
PSI Common Shares according to the terms of the Management Option Plan to be
adopted by the Board of Directors of Reorganized PSI on or after the Effective
Date, as of the Effective Date, is hereby authorized without further act or
action under applicable law, regulation, order or rule.
(b) Issuance
The New Securities authorized pursuant to Article IV.C.1 hereof shall
be issued pursuant to the Plan without further act or action under applicable
law, regulation, order or rule other than the application for and receipt of
discretionary rulings of certain of the applicable Canadian provincial
securities regulatory authorities for the issuance of New Securities.
Reorganized PSC (if the Canadian Reorganization Plan is sanctioned) or
Reorganized PSI (if the Alternate Canadian Transactions are implemented or if
the Canadian Plan Condition is waived) shall use its reasonable best efforts to
list the New Unsecured PIK Notes and the New Unsecured Convertible Notes on an
American stock exchange.
2. New Senior Secured Debt
On the Effective Date, Reorganized PSC and Reorganized PSI (if the Canadian
Reorganization Plan is sanctioned) or Reorganized PSI (if the Alternate Canadian
Transactions are implemented or if the Canadian Plan Condition is waived) shall
execute and deliver the Amended and Restated Term Credit Agreement to govern the
New Senior Secured Term Debt and the New Secured PIK Debt.
3. New Guaranties
On the Effective Date, the Reorganized Subsidiary Debtors (in existence
after giving effect to the Restructuring Transactions) and the other Restricted
Subsidiaries shall enter into the New Guaranties and related security documents.
4. Exit Facility
The Debtors, together with the Subsidiaries, expect to enter into a
post-confirmation loan facility, the Exit Facility, in order to (a) refinance
amounts outstanding on the Effective Date under the DIP Facility, (b) make other
payments required to be made on the Effective Date or the Distribution Date, and
(c) provide the additional borrowing capacity required by the Reorganized
Debtors and the Subsidiaries following the Effective Date to maintain their
operations.
5. Tax Related Transactions
Immediately prior to implementation of the Plan, each holder of a Claim
under the Pre-Petition Credit Agreement shall be deemed to have exchanged such
Claim for an undivided co-ownership interest in all of the Claims under the
Pre-Petition Credit Agreement in the same aggregate principal amount as the
Claim so exchanged.
D. DIRECTORS AND OFFICERS
Subject to the requirements of section 1129(a)(5) of the Bankruptcy Code,
the Debtors intend to announce prior to the Confirmation Date the identities of
the individuals proposed to serve as officers of the Reorganized Debtors and the
directors of Reorganized PSC (if the Canadian Reorganization Plan is sanctioned)
or Reorganized PSI (if the Alternate Canadian Transactions are implemented or
the Canadian Plan Condition is waived). To the extent possible, the identities
of such individuals will be announced by inclusion of a list of proposed
directors and/or officers in the Plan Supplement, which will be filed with the
Bankruptcy Court at least five (5) Business Days prior to the commencement of
the Confirmation Hearing. The new board of directors for Reorganized PSC (if the
Canadian Reorganization Plan is sanctioned) or Reorganized PSI (if the Alternate
Canadian Transactions are implemented or if the Canadian Plan Condition is
waived) will consist of nine (9) directors, who will be nominated by holders of
Lender Claims. The nominees of the holders of Lender Claims shall include two
(2) members of the existing PSC board of directors and will include two (2)
members nominated by High River Limited Partnership ("High River") provided that
High River and any holders of Lender Claims acting in concert with it
beneficially own at least twenty-five percent (25%) of the Lender Claims. If one
or both of the nominees from the existing board is a nominee on that board of
High River or persons acting in concert with it, that person will be counted as
a High River nominee on the slate for the new board of directors. The boards of
directors of the Reorganized Debtors shall have the responsibility for the
management, control, and operation of the Reorganized Debtors on and after the
Effective
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Date; provided, however, (i) if the Alternate Canadian Transactions are
implemented, then PSC shall be governed pursuant to the terms of the Alternate
Canadian Transactions or as otherwise determined by the Canadian Bankruptcy
Court and (ii) if the Canadian Plan Condition is waived, PSC shall continue to
be governed in accordance with its existing bylaws and by its existing board of
directors.
E. REVESTING OF ASSETS; RELEASES OF LIENS
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 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 Debtor shall be free and clear of all Liens, Claims and
Interests, except as specifically provided in the Plan or the Confirmation
Order. Without limiting the generality of the foregoing, each Debtor may,
without application to or approval by the Bankruptcy Court, pay fees that it
incurs after the Effective Date for professional fees and expenses.
Notwithstanding anything to the contrary set forth in the foregoing
paragraph, if the Alternate Canadian Transactions are implemented then the
vesting of the property of PSC shall occur pursuant to the Alternate Canadian
Transactions and any order of the Canadian Bankruptcy Court or other applicable
Canadian Court.
F. PRESERVATION OF RIGHTS OF ACTION
Except as otherwise provided in this Plan (including this Article IV.F and
Article IV.I.1) 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, the Reorganized
Debtors shall retain and may enforce, sue on, settle or compromise (or decline
to do any of the foregoing) all claims, rights or causes of action, suits and
proceedings, whether in law or in equity, whether known or unknown, that the
Debtors or the Estates may hold against any Person or entity. Each Debtor or its
successor(s) may pursue such retained claims, rights or causes of action, suits
or proceedings as appropriate, in accordance with the best interests of the
Reorganized Debtor or its successor(s) who hold such rights.
Notwithstanding anything to the contrary in this Plan and without limiting
the right of PSC or any other Canadian Debtor in respect of any other claim, if
the Alternate Canadian Transactions are implemented, then any claim, rights or
causes of action, suits and proceedings, whether in law or in equity, whether
known or unknown, that PSC and/or the Canadian Debtors may hold against Deloitte
& Touche, Robert Waxman, Greg Madesker and/or Rik Barrese shall remain property
of such entities and shall remain subject to the Lenders' Claims to the extent
such claims have not been satisfied in full as a result of distributions
pursuant to the Plan.
G. EFFECTUATING DOCUMENTS; FURTHER TRANSACTIONS
The chairman of the board of directors, president, chief financial officer,
or any other appropriate officer of PSC, PSI 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 PSC, PSI or any applicable Debtor, as the case may be,
shall be authorized to certify or attest to any of the foregoing actions.
H. EXEMPTION FROM CERTAIN TRANSFER TAXES
Pursuant to section 1146(c) of the Bankruptcy Code, any transfers from a
Debtor to a Reorganized Debtor or any other Person or entity pursuant to the
Plan in the United States shall not be subject to any document recording tax,
stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, stamp act,
real estate transfer tax, mortgage recording tax or other similar tax or
governmental assessment, and the Confirmation Order shall direct the appropriate
state or local governmental officials or agents to forgo the collection of any
such tax or governmental assessment and to accept for filing and recordation any
of the foregoing instruments or other documents without the payment of any such
tax or governmental assessment.
I. RELEASES AND RELATED MATTERS
1. Releases by Debtors
As of the Effective Date, for good and valuable consideration, the
adequacy of which is hereby confirmed, the Debtors and Reorganized Debtors in
their individual capacities and as debtors in possession and the Subsidiaries
will be
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deemed to release forever, waive and discharge all claims, obligations, suits,
judgments, damages, demands, debts, rights, causes of action and liabilities
(other than the rights of the Debtors or Reorganized Debtors to enforce the Plan
and the contracts, instruments, releases, indentures and other agreements or
documents delivered thereunder) whether liquidated or unliquidated, fixed or
contingent, matured or unmatured, known or unknown, foreseen or 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 or their Subsidiaries, the parties released
pursuant to this Article IV.I.1, the Chapter 11 Cases, the Lender Lock-up
Agreement or the Plan, and that could have been asserted by or on behalf of the
Debtors or their Estates, the Reorganized Debtors or their Subsidiaries against
(i) the directors, officers and employees of the Debtors or the Subsidiaries in
each case as of the Petition Date or that have become officers and/or directors
thereafter but prior to the Effective Date (other than for indebtedness owed by
any such directors, officers or employees to any of the Debtors or their
Subsidiaries) and the Debtors' or Subsidiaries' agents and professionals
(excluding Deloitte & Touche and any insurance brokers retained by the Debtors),
(ii) the Lenders (other than any entity specifically excluded from the releases
granted in this Article IV.I.1 that has become a Lender), (iii) the ad hoc
steering committee and any other committee of holders of Lender Claims, (iv)
CIBC, as Administrative Agent and co-arranger under the Pre-Petition Credit
Agreement, (v) BTCo as Syndication Agent and co-arranger under the Pre-Petition
Credit Agreement, (vi) any official committees appointed in the Chapter 11
Cases, (vii) the DIP Agent, the DIP Co-Arrangers and the holders of DIP Facility
Claims (other than any entity specifically excluded from the releases granted in
this Article IV.I.1 that has become a holder of a DIP Facility Claim), (viii)
the Security Agent, (ix) the Account Intermediaries (and their professionals,
current and former officers, directors, employees, agents and shareholders), (x)
any individual, corporation or other entity that was at any time formerly one of
the foregoing released parties identified in subclauses (ii) - (viii) of this
Article IV.I.1, and (xi) the respective affiliates, current and former officers,
directors, employees, agents, shareholders and professionals (excluding Deloitte
& Touche, Robert Waxman, Greg Madesker, Rik Barrese and any insurance brokers
retained by the Debtors) (including the current and former officers, directors,
employees, agents, shareholders and professionals of the released professionals)
of the entities released in subclauses (ii) - (viii) of this Article IV.I.1
acting in such capacity; provided, however, that the releases provided to any
director, officer or employee of the Debtors described in clause (i) of this
Article IV.I.1 may be revoked by the Reorganized Debtors if the Canadian
Reorganization Plan is sanctioned or by the Administrative Agent if the
Alternate Canadian Transactions are implemented, by written notice to such
director, officer or employee in the event that the Reorganized Debtors
reasonably determine that such director, officer or employee has failed to
provide factual information as reasonably requested by the Reorganized Debtors
or by the Administrative Agent in connection with any claim against Deloitte &
Touche, Robert Waxman, Greg Madesker and/or Rik Barrese arising out of or
related to the same nucleus of operative facts alleged as of the Petition Date
in the Securities Actions, the Chazen Actions or the Liff Actions, including,
without limitation, providing information and documents, attendance at meetings
and interviews, assisting counsel, attendance at discoveries, if required,
assistance in pre-trial preparation and attendance at trial, including as a
witness, but subject in the case of any person who is at the relevant time no
longer a director, officer or employee of any of the Reorganized Debtors, to
reimbursement of that person's foregone income and reasonable expenses.
2. Releases by Holders of Lender Claims, Claims and Interests
(a) Holders of Lender Claims. As of the Effective Date, in
consideration for the obligations of the Debtors, the Reorganized Debtors and
the Subsidiaries under the Plan and the Lender Lock-up Agreement and the Cash,
securities, contracts, instruments, releases and other agreements or documents
to be delivered in connection with the Plan, each of the holders of Lender
Claims, the ad hoc steering committee and any other committee of holders of
Lender Claims, CIBC as Administrative Agent and co-arranger under the
Pre-Petition Credit Agreement, BTCo as Syndication Agent and co-arranger under
the Pre-Petition Credit Agreement, the DIP Agent, the DIP Co-Arrangers, the
holders of DIP Facility Claims, the Security Agent, the Account Intermediaries,
and any individual, corporation or other entity that was at any time formerly
one of the foregoing releasing parties will be deemed to forever release, waive
and discharge all claims, obligations, suits, judgments, damages, demands,
debts, rights, causes of action and liabilities (other than the rights to
enforce the Debtors' or the Reorganized Debtors' obligations under the Plan and
the securities, contracts, instruments, releases and other agreements and
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 in 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 or Subsidiaries, the Reorganized Debtors, the Chapter 11 Cases, the
Lender Lock-up Agreement or the Plan against (i) the Debtors, the Subsidiaries
and the Reorganized Debtors; provided, however, if the Canadian Reorganization
Plan is not sanctioned, the holders of Allowed Secured Lender Claims and Allowed
Unsecured Lender Claims shall not be deemed to have released PSC or any
Subsidiary other than the Debtors from such claims or their security interests
against any assets of PSC or any Subsidiary other than the Debtors retained and
not transferred in connection with the Alternate Canadian Transactions, provided
further, however, any such claims the Lenders hold shall be reduced by the value
of any distributions the Lenders receive by the Lenders pursuant to the Plan,
provided, further, that this release in this clause (i) shall not be given by
any Account Intermediary who is a current Bank Account Service Provider, (ii)
the directors, officers
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and employees of the Debtors or the Subsidiaries in each case as of the Petition
Date (and in addition, those who become officers and/or directors thereafter
prior to the Effective Date), excluding, however, Allen Fracassi, (iii) the
Lenders (other than any entity specifically excluded from the releases granted
in this Article IV.I.2.(a) that has become a Lender), (iv) the ad hoc steering
committee and any other committee of holders of Lender Claims, (v) CIBC, as
Administrative Agent and co-arranger under the Pre-Petition Credit Agreement,
(vi) BTCo as Syndication Agent and co-arranger under the Pre-Petition Credit
Agreement, (vii) any official committees appointed in the Chapter 11 Cases,
(viii) the DIP Agent, the DIP Co-Arrangers and the holders of DIP Facility
Claims (other than any entity specifically excluded from the releases granted in
this Article IV.I.2.(a) that has become a holder of a DIP Facility Claim), (ix)
the Security Agent, (x) the Account Intermediaries (and their professionals),
(xi) any individual, corporation or other entity that was at any time formerly
one of the foregoing released parties identified in subclauses (iii) - (ix) of
this Article IV.I.2.(a) and (xii) the respective current and former
professionals of the entities in subclauses (i) - (ix) of this Article
IV.I.2.(a) (excluding Deloitte & Touche and any insurance brokers retained by
the Debtors) (including the current and former officers, directors, employees,
shareholders and professionals of the released professionals), acting in such
capacity; provided, however, that the releases provided to any director, officer
or employee of the Debtors described in clause (ii) of this Article IV.I.2(a)
may be revoked by the Administrative Agent, or its successor, by written notice
to such director, officer or employee, in the event that the Administrative
Agent or its successor reasonably determines that any such director, officer or
employee has failed to provide factual information reasonably requested by the
Administrative Agent or its successor in connection with any claim against
Deloitte & Touche, Robert Waxman, Greg Madesker and/or Rik Barrese arising out
of or related to the same nucleus of operative facts alleged as of the Petition
Date in the Securities Actions, the Chazen Actions or the Liff Actions,
including, without limitation, providing information and documents, attendance
at meetings and interviews, assisting counsel, attendance at discoveries, if
required, assistance at pre-trial preparation and attendance at trial, including
as a witness, but subject in the case of any person who is at the relevant time
no longer a director, officer or employee of any of the Reorganized Debtors, to
reimbursement of that person's foregone income and reasonable expenses, provided
further, that nothing contained herein shall affect the rights and obligations
of the parties designated in clauses (iii), (v), (vi), (ix) and (x) of this
Article IV.I.2.(a) under the Priority and Subordination Agreement, dated as of
December 4, 1998, the Security Sharing Agreement, dated as of November 30, 1998
and the Intercreditor Agreement, dated as of June 25, 1999.
(b) Holders of Claims and Interests. As of the Effective Date, to the
fullest extent permitted under applicable law, in consideration for the
obligations of the Debtors and the Reorganized Debtors under the Plan and the
Cash, securities, contracts, instruments, releases and other agreements or
documents to be delivered in connection with the Plan, and the benefits provided
by the Lenders and the Account Intermediaries under the Plan, each present and
former holder of a Claim or Interest (other than the releasing parties
identified in Article IV.I.2(a) above or any individual, corporation or other
entity that was at any time formerly one of the foregoing releasing parties)
will be deemed to release forever, waive and discharge all claims, obligations,
suits, judgments, damages, demands, debts, rights, causes of action and
liabilities (other than the rights to enforce the Debtors' or the Reorganized
Debtors' obligations under the Plan and the securities, contracts, instruments,
releases and other agreements and 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 in 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 or Subsidiaries, the parties released
pursuant to this Article IV.I.2(b), the Reorganized Debtors the Chapter 11
Cases, the Lender Lock-up Agreement or the Plan against (i) the Debtors, the
Subsidiaries and the Reorganized Debtors, (ii) the Lenders as of September 15,
1999 or an entity that subsequently becomes a Lender subject to the Debtors'
consent, the ad hoc steering committee or any other committee of holders of
Lender Claims, CIBC as Administrative Agent and co-arranger under the
Pre-Petition Credit Agreement, BTCo as Syndication Agent and co-arranger under
the Pre-Petition Credit Agreement, any official committees appointed in the
Chapter 11 Cases, the DIP Agent, the DIP Co-Arrangers and the holders of DIP
Facility Claims as of September 15, 1999 or an entity that subsequently becomes
a holder of a DIP Facility Claim subject to the Debtors' consent, and the
Security Agent, (iii) the Account Intermediaries (and their professionals,
current and former officers, directors, employees, agents and shareholders),
(iv) any individual, corporation or other entity that was at any time formerly
one of the foregoing released parties identified in subclause (ii) of this
Article IV.I.2(b) and (v) the respective affiliates, current and former
officers, directors, employees, agents, shareholders and professionals of the
entities listed in subclause (ii) of this Article IV.I.2.(b) (excluding Deloitte
& Touche and any insurance brokers retained by the Debtors) acting in such
capacity. Under the Plan, holders of Claims (other than the Lenders) and
Interests are not deemed to have released any non-Debtor third party other than
the Lenders and those parties explicitly listed in subsections (ii), (iii), (iv)
and (v) above.
3. Injunction Related to Releases
As further provided in Article XIV.F, the Confirmation Order will enjoin
the prosecution, whether directly, derivatively or otherwise, of any claim,
obligation, suit, judgment, damage, demand, debt, right, cause of action,
liability or interest released, discharged or terminated pursuant to the Plan.
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4. Reinstatement of Certain Releases
The revocation of any release of any director, officer or employee pursuant
to Articles IV.I.1 or 2(a) hereof shall be void ab initio to the extent that a
court of competent jurisdiction, including, but not limited to the Bankruptcy
Court, determines that such director, officer or employee has provided the
factual information reasonably requested by the Reorganized Debtors if the
Canadian Reorganization Plan is sanctioned or by the Administrative Agent or its
successor if the Alternate Canadian Transactions are implemented.
J. SUBSTANTIVE CONSOLIDATION FOR PURPOSES OF TREATING IMPAIRED CLAIMS
The Plan is premised upon the substantive consolidation of the Debtors only
for purposes of treating Class 6, 7 or 8 Claims under the Plan, including for
voting, confirmation and distribution purposes. The Plan does not contemplate
the substantive consolidation of the Debtors with respect to the other Classes
of Claims or Interests set forth in the Plan. On the Effective Date, (a) all
guaranties of any Debtor of the payment, performance or collection of another
Debtor with respect to Class 6, 7 or 8 Claims shall be deemed eliminated and
cancelled; (b) any obligation of any Debtor and all guaranties with respect to
Class 6, 7 or 8 Claims thereof executed by one or more of the other Debtors
shall be treated as a single obligation and any obligation of two or more
Debtors, and all multiple Impaired Claims against such entities on account of
such joint obligations, shall be treated and Allowed only as a single Impaired
Claim against the consolidated Debtors; and (c) each Class 6, 7 or 8 Claim filed
in the Chapter 11 Cases of any Debtor shall be deemed filed against the
consolidated Debtors and shall be deemed one Class 6, 7 or 8 Claim against and
obligation of the consolidated Debtors. Except as set forth in this Article
IV.J, such substantive consolidation shall not (other than for purposes related
to the Plan) (a) affect the legal and corporate structures of the Reorganized
Debtors, subject to the right of the Debtors or Reorganized Debtors to effect
the Restructuring Transactions as provided in Article IV.B.3 hereof, (b) cause
any Debtor to be liable for any Impaired Claim or Unimpaired Claim under the
Plan, for which it otherwise is not liable, and the liability of any Debtor for
any such Claim shall not be affected by such substantive consolidation, (c)
affect Intercompany Claims of Debtors against Debtors, and (d) affect Interests
in the Subsidiary Debtors. On the Effective Date, the Intercompany Claims of
Debtors against Debtors shall be Reinstated or discharged and satisfied, at the
option of the Reorganized Debtors with the consent of the Required Lenders, by
contributions, distributions or otherwise as determined by the Reorganized
Debtors. On the Effective Date, to the extent a Subsidiary Debtor is not
dissolved or merged as part of the Restructuring Transactions or except as
otherwise expressly provided for in the Plan, the Interests in such Subsidiary
Debtor shall remain outstanding.
K. CONTRIBUTION AND INDEMNITY CLAIMS OTHER THAN ASSUMED INDEMNIFICATION
OBLIGATIONS
Any Claim other than the Assumed Indemnification Obligations against any
Debtor for reimbursement, contribution, indemnity or setoff that is subject to
section 510(b) and/or 510(c) of the Bankruptcy Code or related to or arising
from the facts surrounding, allegations or actions resulting in a Claim that is
subject to section 510(b) and/or 510(c) of the Bankruptcy Code or arising out of
such facts or alleged facts, and any Excluded Indemnification Obligation, shall
be deemed rejected for all purposes under the Plan and shall be deemed
disallowed under the Plan upon entry of the Confirmation Order pursuant to
section 502(e)(1)(B) of the Bankruptcy Code to the fullest extent permitted by
law; provided, however, to the extent that any such Claim is not so disallowed
and becomes an Allowed Claim against any Debtor, then such Allowed Claim shall
be treated as an Allowed Class 8C Claim pursuant to sections 510(b) and/or
510(c) of the Bankruptcy Code.
L. ASSUMED INDEMNIFICATION OBLIGATIONS
The Assumed Indemnification Obligations shall be deemed assumed by the
Reorganized Debtors as of the Effective Date without any further action by any
party and in the event the Alternate Canadian Transactions are implemented or
the Canadian Plan Condition is waived, the Assumed Indemnification Obligations
of PSC shall be deemed assumed by Reorganized PSI.
ARTICLE V.
ACCEPTANCE OR REJECTION OF THE PLAN
A. CLASSES ENTITLED TO VOTE
Classes 6 and 7 are entitled to vote to accept or reject the Plan. If the
Class 8 Solicitation Order is entered, Classes 8A, 8B and 8C will be deemed to
have rejected the Plan and therefore will not be entitled to vote. If the Class
8 Solicitation
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Order is not entered, then Classes 8A, 8B and 8C will be entitled to vote to
accept or reject the Plan. By operation of law, each Unimpaired Class of Claims
is deemed to have accepted the Plan and, therefore, is not entitled to vote to
accept or reject the Plan. By operation of law, Class 9 is deemed to have
rejected the Plan and therefore is not entitled to vote to accept or reject the
Plan.
B. ACCEPTANCE BY IMPAIRED CLASSES
An Impaired Class of Claims shall have accepted the Plan if (i) the holders
(other than any holder designated under section 1126(e) of the Bankruptcy Code)
of at least two-thirds in amount of the Allowed Claims actually voting in such
Class have voted to accept the Plan and (ii) the holders (other than any holder
designated under section 1126(e) of the Bankruptcy Code) of more than one-half
in number of the Allowed Claims actually voting in such Class have voted to
accept the Plan. An Impaired Class of Interests shall have accepted the Plan if
the holders (other than any holder designated under section 1126(e) of the
Bankruptcy Code) of at least two-thirds in amount of the Allowed Interests
actually voting in such Class have voted to accept the Plan.
C. CRAMDOWN
The Debtors will seek confirmation of the Plan under section 1129(b) of
the Bankruptcy Code in view of the deemed rejection by Class 9. Subject to
Article XI hereof, the Debtors reserve the right to modify the Plan to the
extent, if any, that Confirmation pursuant to section 1129(b) of the Bankruptcy
Code requires modification.
ARTICLE VI.
SECURITIES TO BE ISSUED IN CONNECTION WITH THE PLAN
On the Effective Date, Reorganized PSC and Reorganized PSI (if the Canadian
Reorganization Plan is sanctioned) or Reorganized PSI (if the Alternate Canadian
Transactions are implemented or if the Canadian Plan Condition is waived) shall
issue for distribution in accordance with the provisions of the Plan all of the
New Secured PIK Debt, New Unsecured PIK Notes, New Unsecured Convertible Notes
and New Common Shares (if the Canadian Reorganization Plan is sanctioned) or
Reorganized PSI Common Shares (if the Alternate Canadian Transactions are
implemented or if the Canadian Plan Condition is waived), pursuant to the
provisions of the Plan. All securities to be issued will be deemed issued as of
the Effective Date regardless of the date on which they are actually
distributed. The form of the Amended and Restated Credit Agreement governing the
New Secured PIK Debt shall be in substantially the form attached in the Plan
Supplement. The form of indenture governing the New Unsecured PIK Notes shall be
in substantially the form attached to the Plan Supplement. The form of the New
Convertible Notes Indenture governing the New Unsecured Convertible Notes shall
be substantially in the form attached to the Plan Supplement.
ARTICLE VII.
PROVISIONS GOVERNING DISTRIBUTIONS
A. DISTRIBUTIONS FOR CLAIMS ALLOWED AS OF THE EFFECTIVE DATE
Except as otherwise provided herein or as ordered by the Bankruptcy Court,
distributions to be made on account of Claims that are Allowed Claims as of the
Effective Date shall be made not later than the Distribution Date. Distributions
on account of Claims that first become Allowed Claims after the Effective Date
shall be made pursuant to Articles III, VII and IX of this Plan. Notwithstanding
the date on which any distribution of securities is actually made to a holder of
a Claim or Interest that is an Allowed Claim or Allowed Interest on the
Effective Date, as of the date of the distribution such holder shall be deemed
to have the rights of a holder of such securities distributed as of the
Effective Date.
B. INTEREST ON CLAIMS
Unless otherwise specifically provided for in this Plan or the Confirmation
Order, or required by applicable bankruptcy law, post-petition 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.
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C. DISTRIBUTIONS BY DISBURSING AGENT AND THE INDENTURE TRUSTEE
The Disbursing Agent shall make all distributions required under this Plan
(subject to the provisions of Articles III, VII and IX hereof). Distributions
provided for in the Plan on account of Allowed Old Debenture Claims shall be
made to the Indenture Trustee, as Disbursing Agent for Old Debenture Claims, for
further distribution to holders of Allowed Old Debenture Claims. Any such
further distributions shall be made pursuant to the Old Indenture and the Plan,
particularly to the Indenture Trustee (i) to itself as Indenture Trustee for
application of any unpaid fees, compensation, expenses (including the Indenture
Trustee's professional fees and expenses) disbursements and advances; (ii) to
itself as escrow agent holding an expense fund of approximately $92,000 for the
Great Plains Action (the determination of such amount, the valuation and
allocation of New Unsecured PIK Notes, New Unsecured Convertible Notes, and New
Common Shares to create such expense fund in an amount of approximately $92,000,
the allocation of responsibility for such amount among the class represented by
the plaintiffs in such action, and the funding of such amount from the
distributions otherwise to be made to the class represented by the plaintiffs in
such action shall all be done exclusively by and at the sole discretion of the
Indenture Trustee), and thereafter (iii) on account of Allowed Claims of holders
of Old Debentures.
If the Disbursing Agent is an independent third party designated by the
Reorganized Debtors to serve in such capacity, such Disbursing Agent shall
receive, without further Bankruptcy Court approval, reasonable compensation for
distribution services rendered pursuant to the Plan and reimbursement of
reasonable out-of-pocket expenses incurred in connection with such services from
the Reorganized Debtors on terms acceptable to the Reorganized Debtors. 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.
D. RECORD DATE FOR DISTRIBUTIONS TO HOLDERS OF LENDER CLAIMS AND
OLD DEBENTURES
At the close of business on the Distribution Record Date, the transfer
records for the Old Debentures and Lender Claims shall be closed, and there
shall be no further changes in the record holders of the Old Debentures or
Lender Claims. The Reorganized Debtors, the Disbursing Agent, and the
Administrative Agent for the Lenders shall have no obligation to recognize any
transfer of such Old Debentures or Lender Claims occurring after the
Distribution Record Date and shall be entitled instead to recognize and deal for
all purposes hereunder with only those record holders as of the close of
business on the Distribution Record Date.
E. MEANS OF CASH PAYMENT
Cash payments made pursuant to this Plan shall be in U.S. funds for
creditors located in the United States and in Canadian funds for creditors
located in Canada, unless such creditors in Canada have previously agreed, or
contracted for, payment 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.
F. CALCULATION OF DISTRIBUTION AMOUNTS
1. New Common Shares
No fractional shares of New Common Shares or Reorganized PSI Common Shares
shall be issued or distributed under the Plan. Each Person entitled to receive
New Common Shares will receive the total number of whole shares of New Common
Shares or Reorganized PSI Common Shares to which such Person is entitled.
Whenever any distribution to a particular Person would otherwise call for
distribution of a fraction of a share of New Common Shares or Reorganized PSI
Common Shares, the actual distribution of shares of such stock shall be rounded
to the next higher or lower whole number as follows: (a) fractions 2 or greater
shall be rounded to the next higher whole number, and (b) fractions of less than
2 shall be rounded to the next lower whole number. The total number of shares of
New Common Shares to be distributed to a Class of Claims or Interests shall be
adjusted as necessary to account for the rounding provided for in this Article
VII.F. No consideration shall be provided in lieu of fractional shares that are
rounded down.
2. New Debt Securities
New Debt Securities will be issued in denominations of $1,000 and such
fractions thereof as is necessary.
3. Conversion Rate
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Canadian dollar ("CDN") Claims will be converted to United States dollars
for purposes of distributions by applying the June 25, 1999 Dow Jones Canadian
to United States exchange rate of .68254855.
G. 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, (d)
in the case of the holder of an Allowed Old Debenture Claim, at the addresses
contained in the official records of the indenture trustee under the Old
Indenture, or (e) at the addresses set forth in a properly completed letter of
transmittal accompanying securities properly remitted to the Debtors. 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. No undeliverable distributions will go
back to the Reorganized Debtors. All claims for undeliverable distributions in
respect of Allowed Class 7 Claims (or Canadian Impaired Unsecured Claims for
which the U.S. Plan Election is made if the Alternate Canadian Transactions are
implemented) must be made on or before the expiration of the eighteenth (18th)
month following the Effective Date, after which date all unclaimed property
shall be distributed pro rata to the holders of the other Allowed Class 7 Claims
(and Canadian Impaired Unsecured Claims for which the U.S. Plan Election is made
if the Alternate Canadian Transactions are implemented) and the claim of any
holder or successor to such holder with respect to such property shall be
discharged and forever barred, notwithstanding any federal or state escheat laws
to the contrary. Nothing contained in the Plan shall require the Debtors,
Reorganized Debtors, any Disbursing Agent or the indenture trustee to attempt to
locate any holder of an Allowed Claim or Allowed Interest. All distributions
pursuant to the Plan shall be at the Reorganized Debtors' expense.
H. SURRENDER OF SECURITIES AND INSTRUMENTS
1. Notes and Old Debentures
Except as provided in Article VII.H.2 for lost, stolen, mutilated or
destroyed Old Debentures, each holder of an Allowed Claim evidenced by a note or
Old Debenture shall tender such note or Old Debenture to the Disbursing Agent in
accordance with written instructions to be provided in a letter of transmittal
to such holders by the Disbursing Agent as promptly as practicable following the
Effective Date. Such letter of transmittal shall specify that delivery of such
notes or Old Debentures will be effected, and risk of loss and title thereto
will pass, only upon the proper delivery of such notes or Old Debentures 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 note or Old
Debenture to act and the authenticity of any signatures required on the letter
of transmittal. All surrendered notes and Old Debentures shall be marked as
canceled and delivered to the Reorganized Debtors.
2. Lost, Mutilated or Destroyed Notes or Old Debentures
In addition to any requirements under the applicable certificate or
articles of incorporation or bylaws of the applicable Debtor, any holder of a
Claim or an Interest evidenced by a note or Old Debenture that has been lost,
stolen, mutilated or destroyed shall, in lieu of surrendering such note or Old
Debenture, deliver to the Disbursing Agent (a) evidence satisfactory to the
Disbursing Agent of the loss, theft, mutilation or destruction; and (b) such
indemnity as may be required by the Disbursing Agent to hold the Disbursing
Agent harmless from any damages, liabilities or costs incurred in treating such
individual as a holder of a note or Old Debenture. Upon compliance with this
Article VII.H.2 by a holder of a Claim or an Interest evidenced by a note or Old
Debenture, such holder shall, for all purposes under the Plan, be deemed to have
surrendered a note or Old Debenture, as applicable.
3. Failure to Surrender Canceled Note or Old Debentures
Any note or Old Debenture holder that fails to surrender or be deemed to
have surrendered such note or Old Debenture within the second anniversary after
the Effective Date shall have its claim for a distribution pursuant to the Plan
on account of such note or Old Debenture discharged and shall be forever barred
from asserting any such claim against any Reorganized Debtor or its respective
property.
I. WITHHOLDING AND REPORTING REQUIREMENTS
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In connection with this 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 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 (i) each holder of
an Allowed Claim or Interest 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 (ii) no distribution shall be made to or on behalf of
such holder pursuant to the Plan unless and until such holder has made
arrangements satisfactory to the Disbursing Agent for the payment and
satisfaction of such tax obligations. Any New Securities to be distributed
pursuant to the Plan shall, pending the implementation of such arrangements, be
treated as an undeliverable distribution pursuant to Article VII.G. It is the
Debtors' intent that distributions under the Plan to holders of Claims are in
respect of, and to be applied to principal first and then interest.
J. SETOFFS
The Reorganized Debtors may, but shall not be required to, set off against
any Claim (or Canadian Impaired Unsecured Claim the holder of which has made the
U.S. Plan Election if the Alternate Canadian Transactions are implemented), 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 Reorganized
Debtors may have against the holder of such Claim (or Canadian Impaired
Unsecured Claim the holder of which has made the U.S. Plan Election if the
Alternate Canadian Transactions are implemented); provided, however, that
neither the failure to do so nor the allowance of any Claim (or Canadian
Impaired Unsecured Claim the holder of which has made the U.S. Plan Election if
the Alternate Canadian Transactions are implemented) hereunder shall constitute
a waiver or release by the Reorganized Debtors of any such claim that the
Debtors or Reorganized Debtors may have against such holder. Notwithstanding
anything to the contrary, the Debtors and Reorganized Debtors will not exercise
any right of setoff against any Lender, any agents under the Pre-Petition Credit
Agreement or the DIP Facility Agreement, the Account Intermediaries or the DIP
Lenders.
ARTICLE VIII.
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES
A. ASSUMED CONTRACTS AND LEASES
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 otherwise set forth in the schedule to be filed in the Plan Supplement
as being an executory contract or unexpired lease to be rejected, provided,
however, that the Debtors reserve their right, at any time prior to the
Confirmation Date, to amend the schedule to be filed in the Plan Supplement to
delete any unexpired lease or executory contract therefrom or add any unexpired
lease or executory contract thereto. The Confirmation Order shall constitute an
order of the Bankruptcy Court under section 365 of the Bankruptcy Code approving
the contract and lease assumptions described above, as of the Effective Date.
Each executory contract and unexpired lease that is assumed and relates to
the use, ability to acquire or occupancy of real property shall include (a) all
modifications, amendments, supplements, restatements or other agreements made
directly or indirectly by any agreement, instrument or other document that in
any manner affect such executory contract or unexpired lease and (b) 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, usufructs, 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.
B. 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
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or lease or the assignee of such Debtor party assuming such contract or lease,
by Cure. If there is a dispute regarding (i) the nature or amount of any Cure,
(ii) 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 (iii) 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.
C. REJECTED CONTRACTS AND LEASES
Except as otherwise provided in the Plan and subject to Article VIII.A
hereof or as otherwise provided in any contract, instrument, release, indenture
or other agreement or document entered into in connection with the Plan, none of
the executory contracts and unexpired leases to which the Debtors, or any of
them, are a party shall be rejected under the Plan.
D. COMPENSATION AND BENEFIT PROGRAMS
Except and to the extent previously assumed or rejected by an order of the
Bankruptcy Court on or before the Confirmation Date, all employment agreements
and employee compensation and benefit programs of the Debtors, including
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 Article VIII.A of the Plan and in the event the Alternate
Canadian Transactions are implemented or the Canadian Plan Condition is waived,
assumed and assigned to PSI, except for (i) executory contracts or plans
specifically rejected pursuant to the Plan (to the extent such rejection does
not violate sections 1114 and 1129(a)(13) of the Bankruptcy Code) and (ii)
executory contracts or plans as have previously been rejected, are the subject
of a motion to reject, or have been specifically waived by the beneficiaries of
any plans or contracts; provided, however, that the Debtors' obligations, if
any, to pay all "retiree benefits" as defined in section 1114(a) of the
Bankruptcy Code shall continue.
ARTICLE IX.
PROCEDURES FOR RESOLVING DISPUTED,
CONTINGENT, AND UNLIQUIDATED CLAIMS AND DISPUTED INTERESTS
A. PROSECUTION OF OBJECTIONS
After the Confirmation Date, only the Debtors, the Reorganized Debtors
(subject to Article XIV.G), the Creditors' Committee and the Indenture Trustee
shall have the authority to file objections, settle, compromise, withdraw or
litigate to judgment objections to Claims (and Canadian Impaired Unsecured
Claims the holders of which have made the U.S. Plan Election if the Alternate
Canadian Transactions are implemented) and Interests and, from and after the
Effective Date, may settle or compromise, withdraw or litigate to judgment
objections to any Disputed Class 7 Claim, Disputed Canadian Impaired Unsecured
Claim the holder of which has made the U.S. Plan Election if the Alternate
Canadian Transactions are implemented or Disputed Interest, without approval of
the Bankruptcy Court.
B. NO DISTRIBUTIONS PENDING ALLOWANCE
Notwithstanding any other provision of the Plan, no payments or
distributions shall be made with respect to all or any portion of a Disputed
Class 7 Claim or Disputed Canadian Impaired Unsecured Claim unless and until
some portion thereof has become an Allowed Claim or Allowed Canadian Impaired
Unsecured Claim, respectively.
C. DISPUTED DISTRIBUTION RESERVE; RESERVE FOR SUBSEQUENT DISTRIBUTIONS TO
QUALIFYING CLASS 7 CREDITORS
On the Effective Date (or as soon thereafter as is practicable) if holders
of Allowed Class 7 Claims are to receive distributions in accordance with
Article III.C, the Disbursing Agent shall establish the Disputed Distribution
Reserve by withholding from the initial distribution on account of Allowed Class
7 Claims, Allowed Canadian Impaired Unsecured Claims and the Class 6 Additional
Distribution (as applicable) an amount of New Unsecured PIK Notes and New Common
Shares (or Reorganized PSI Common Shares as applicable) calculated as if all
Class 7 Claims and Canadian Impaired Unsecured Claims were Allowed Class 7
Claims and Allowed Canadian Impaired Unsecured Claims as of such date, in an
amount equal to one hundred percent (100%) of their Disputed Class 7 and
Disputed Canadian Impaired Unsecured Claim Amount. The Disbursing Agent shall
also establish a reserve for subsequent distributions to Qualifying Class 7
Creditors containing the maximum amount of New Unsecured Convertible Notes
distributable under the Plan, if necessary, less the amount of New Unsecured
Convertible Notes distributed to Qualifying Class 7 Creditors on the
Distribution Date.
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D. DISTRIBUTIONS AFTER ALLOWANCE OF CLASS 7 CLAIMS AND CANADIAN IMPAIRED
UNSECURED CLAIMS
The Disbursing Agent shall make payments and distributions from the
Disputed Distribution Reserve to each holder of a Disputed Class 7 Claim that
has become an Allowed Class 7 Claim and each holder of a Disputed Canadian
Impaired Unsecured Claim that has become an Allowed Canadian Impaired Unsecured
Claim, in each case in accordance with the provisions of this Plan or the
Canadian Reorganization Plan, respectively. On the next succeeding interim
distribution date after the date that the order or judgment of the Bankruptcy
Court or the Canadian Bankruptcy Court allowing such Claim or claim becomes a
Final Order, the Disbursing Agent shall distribute to the holder of such Claim
or claim any New Unsecured PIK Notes and New Common Shares (or Reorganized PSI
Common Shares, as applicable) in the Disputed Distribution Reserve that would
have been distributed on the Distribution Date had such Claim been an Allowed
Class 7 Claim or an Allowed Canadian Impaired Unsecured Claim on the
Distribution Date. After a Final Order has been entered, or other final
resolution has been reached, with respect to each of the Disputed Class 7 Claims
and Disputed Canadian Impaired Unsecured Claims, any New Unsecured PIK Notes,
New Unsecured Convertible Notes, and New Common Shares or Reorganized PSI Common
Shares that remain in the Disputed Distribution Reserve and the reserve for
subsequent distributions to Qualifying Class 7 Creditors shall be distributed,
as applicable, pro rata to holders of (i) Allowed Claims in Class 7, (ii)
Allowed Canadian Impaired Unsecured Claims and (iii) holders of the Class 6
Secured Lender Claims on account of the Class 6 Additional Distribution, if
applicable (based on an estimate of the allowed Canadian Impaired Unsecured
Claims of holders who did not make the U.S. Plan Election); provided however,
that only Qualifying Class 7 Creditors shall be entitled to receive
distributions of New Unsecured Convertible Notes from the reserve for subsequent
distributions to Qualifying Class 7 Creditors. All distributions made under this
Article IX.D of the Plan on account of an Allowed Class 7 Claim and Allowed
Canadian Impaired Unsecured Claim, shall be made together with any payments or
other distributions made on account of, as well as any obligations arising from,
the distributed property, as if such Allowed Class 7 Claim or Allowed Canadian
Impaired Unsecured Claim had been an Allowed Class 7 Claim or Allowed Canadian
Impaired Unsecured Claim on the Distribution Date. Notwithstanding the
foregoing, the Disbursing Agent shall not be required to make distributions
under Article IX.D more frequently than once every 180 days or to make any
individual payments in an amount less than $25.00. Notwithstanding anything
herein to the contrary, if the Canadian Reorganization Plan is sanctioned,
disbursements to holders of Canadian Impaired Unsecured Claims shall be made in
compliance with the Canadian Reorganization Plan.
E. DISTRIBUTION PROCEDURES FOR CLASS 8 CLAIMS AND INTERESTS
A description of the procedure for the distribution to holders of Class 8
Claims and Interests, as well as the procedure for the establishment of a
reserve for the benefit of holders of Class 8 Claims and Interests on account of
Class 8 Claims and Interests that have not become Allowed, if any, and the
procedure for distribution to holders of Class 8 Claims and Interests that have
not become Allowed, if any, after such Claims or Interests, become Allowed
Claims or Interests will be included in the Plan Supplement.
ARTICLE X.
CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN
A. CONDITIONS TO CONFIRMATION
The following are conditions precedent to the occurrence of the
Confirmation Date: (i) the entry of an order finding that the Disclosure
Statement contains adequate information pursuant to section 1125 of the
Bankruptcy Code and (ii) the proposed Confirmation Order shall be in form and
substance acceptable to the Debtors and the Required Lenders.
B. CONDITIONS TO EFFECTIVE DATE
The following are conditions precedent to the occurrence of the Effective
Date, each of which must be (i) satisfied or (ii) waived in accordance with
Article X.C below:
1. The Confirmation Order confirming the Plan, as such Plan may have
been modified, shall have been entered in form and substance reasonably
satisfactory to the Debtors and the Required Lenders, shall not have been stayed
and shall provide that:
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(a) the Debtors and 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 or the Restructuring
Transactions;
(b) the provisions of the Confirmation Order are nonseverable and
mutually dependent;
(c) Reorganized PSC or Reorganized PSI, or both, as applicable is
authorized to issue the New Unsecured PIK Notes, New Unsecured
Convertible Notes, New Common Shares, Reorganized PSI Common
Shares and Management Options and incur the New Senior Secured
Term Debt and New Secured PIK Debt; and
(d) the New Secured PIK Debt, New Unsecured PIK Notes, New
Unsecured Convertible Notes and New Common Shares (or
Reorganized PSI Common Shares, as applicable) issued under the
Plan in exchange for Claims against the Debtors are exempt
from registration under the Securities Act of 1933 pursuant to
section 1145 of the Bankruptcy Code, except to the extent that
holders of the New Secured PIK Debt, New Unsecured PIK Notes,
New Unsecured Convertible Notes and New Common Shares (or
Reorganized PSI Common Shares, as applicable) are
"underwriters," as that term is defined in section 1145 of the
Bankruptcy Code.
2. The Reorganized Debtors shall have credit availability under the
Exit Facility, in amount, form and substance acceptable to the Reorganized
Debtors and the Required Lenders, to provide the Reorganized Debtors and the
Subsidiaries with sufficient working capital to meet ordinary and peak
requirements and additional borrowings to support future projects.
3. The following agreements, in form and substance satisfactory to the
Reorganized Debtors and the Required Lenders (and, in addition, the Creditors'
Committee and the Indenture Trustee shall retain the authority to approve the
specific agreements in subclauses (b) and (c)), shall have been executed and
delivered, and all conditions precedent thereto shall have been satisfied:
(a) Amended Certificates of Incorporation and Bylaws of the
Reorganized Debtors and the other Restricted Subsidiaries;
(b) New Unsecured PIK Notes Indenture;
(c) New Unsecured Convertible Notes Indenture;
(d) Amended and Restated Term Credit Agreement;
(e) New Guaranties and related security documents;
(f) Registration Rights Agreement;
(g) Exit Facility;
(h) Shareholder Rights Plan; and
(i) Agreements evidencing sufficient bonding to meet the Debtors'
projected bonding requirements.
4. The Amended Certificates of Incorporation and Bylaws of the
Reorganized Debtors, as necessary, shall have been filed with the applicable
authority of each entity's jurisdiction of incorporation in accordance with such
jurisdiction's corporation laws.
5. All actions, documents and agreements necessary to implement the
Plan shall have been effected or executed.
6. (a) The Canadian Bankruptcy Court shall have entered an order under
the CCAA sanctioning the Canadian Reorganization Plan and all conditions to the
effectiveness of the Canadian Reorganization Plan shall have been
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satisfied other than the condition that this Plan shall have become effective or
(b) the Alternate Canadian Transactions shall have been authorized to be
implemented in accordance with Canadian law and all conditions to the
implementation of the Alternate Canadian Transactions shall have been satisfied
or waived by the Required Lenders other than the condition that this Plan shall
have become effective, and the Alternate Canadian Transactions shall be capable
of being implemented on the Effective Date and the only unsatisfied condition to
the transactions shall be the effectiveness of this Plan.
7. The new Board of Directors of Reorganized PSC (if the Canadian
Reorganization Plan is sanctioned) or Reorganized PSI (if the Alternate Canadian
Transactions are implemented or if the Canadian Plan Condition is waived) shall
have been appointed.
C. WAIVER OF CONDITIONS
1. Each of the conditions set forth in Article X.B above may be waived
in whole or in part by the Debtors with the written consent of the Required
Lenders, without any other notice to parties in interest or the Bankruptcy Court
and without a hearing. The failure to satisfy or waive any condition to the
Effective Date may be asserted by the Debtors or Reorganized Debtors regardless
of the circumstances giving rise to the failure of such condition to be
satisfied (including any action or inaction by a Debtor or Reorganized Debtor).
The failure of a Debtor or Reorganized 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.
2. If the Canadian Plan Condition is waived, (a) all New Securities
shall be issued by Reorganized PSI, (b) PSC and the other Canadian Debtors will
continue to be managed by PSC's current Board of Directors and current
management and (c) until either the Canadian Reorganization Plan is sanctioned
or the Alternate Canadian Transactions are implemented, all assets of PSC and
the other Canadian Debtors will continue to be owned and operated by PSC and the
other Canadian Debtors, respectively. If the Canadian Plan Condition is waived,
it is contemplated that substantially all equity interests and/or assets of PSC
and the other Canadian Debtors ultimately will be transferred as going concerns
to Reorganized PSI and/or a newly formed or existing direct or indirect
subsidiary or subsidiaries of Reorganized PSI.
ARTICLE XI.
MODIFICATIONS AND AMENDMENTS
Subject to the consent of the Required Lenders, after giving notice to the
Creditors' Committee and the Indenture Trustee, and to the extent of any
modification to the treatment of the Account Intermediaries as holders of Other
Secured Claims, the consent of the Account Intermediaries, the Debtors may
alter, amend or modify the Plan or any Exhibits thereto under section 1127(a) of
the Bankruptcy Code at any time prior to the Confirmation Date. After the
Confirmation Date and prior to substantial consummation of the Plan, as defined
in section 1101(2) of the Bankruptcy Code, the Debtors may, 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
Disclosure Statement or the Confirmation Order, and such matters as may be
necessary to carry out the purposes and effects of the Plan so long as they have
obtained the prior approval of the Required Lenders and such proceedings do not
materially adversely affect the treatment of holders of Claims or Interests
under the Plan (it being specifically understood that any settlement of a claim
of the Estates against any party specifically excluded from the releases
provided in Article IV.I shall be deemed to have a material adverse affect on
the treatment of holders of Claims and Interests); provided, however, that prior
notice of such proceedings shall be served in accordance with the Bankruptcy
Rules or order of the Bankruptcy Court.
ARTICLE XII.
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, subject to
the Protocol, the Bankruptcy Court shall retain exclusive jurisdiction over all
matters arising out of, and related to, the Chapter 11 Cases and the Plan to the
fullest extent permitted by law, including, among other things, jurisdiction to:
(i) 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 (or any Canadian Impaired Unsecured Claim
or claim
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held by a Canadian Class 8B or 8C Holder that has made the U.S. Plan Election),
resolve any counterclaim with respect thereto, 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;
(ii) 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;
(iii) 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;
(iv) Effectuate performance of and payments under the provisions of the
Plan;
(v) Hear and determine any and all adversary proceedings, motions,
applications and contested or litigated matters arising out of, under, or
related to, the Chapter 11 Cases;
(vi) 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;
(vii) 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;
(viii) 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;
(ix) Issue injunctions, enter and implement other orders, or take such
other actions as may be necessary or appropriate to restrain interference by any
entity with implementation, consummation or enforcement of the Plan or the
Confirmation Order;
(x) 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;
(xi) Hear and determine any matters arising in connection with or
relating to the Plan, the Disclosure Statement, the Confirmation Order or any
contract, instrument, release or other agreement or document created in
connection with the Plan, the Disclosure Statement or the Confirmation Order;
(xii) Enforce all orders, judgments, injunctions, releases,
exculpations, indemnifications and rulings entered in connection with the
Chapter 11 Cases;
(xiii) Except as otherwise limited herein, recover all assets of the
Debtors and property of the Debtors' Estates, wherever located;
(xiv) Hear and determine matters concerning state, local and federal
taxes in accordance with sections 346, 505, and 1146 of the Bankruptcy Code;
(xv) Hear and determine all disputes involving the existence, nature or
scope of the Debtors' discharge;
(xvi) 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
(xvii) Enter a final decree closing the Chapter 11 Cases.
Notwithstanding the jurisdiction retained in this Article XII, from and
after the Confirmation Date, the Bankruptcy Court shall not have the power to
issue any order in the Chapter 11 Cases which modifies the provisions of the
Amended and
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Restated Term Credit Agreement or the rights of holders of the New Senior
Secured Term Debt, the New Secured PIK Debt or the New Common Shares (if the
Canadian Reorganization Plan is sanctioned) or Reorganized PSI Common Shares (if
the Alternate Canadian Transactions are implemented).
ARTICLE XIII.
COMPROMISES AND SETTLEMENTS
Pursuant to Fed. R. Bankr. P. 9019(a), the Debtors may compromise and
settle various Claims against them and/or claims that they may have against
other Persons. The Debtors, subject to the prior approval of the Required
Lenders, expressly reserve the right (with Bankruptcy Court approval, following
appropriate notice and opportunity for a hearing) to compromise and settle
Claims against the Debtors and claims that they may have against other Persons
up to and including the Effective Date. After the Effective Date, such right
shall pass to the Reorganized Debtors pursuant to Articles IV.E and IV.F of the
Plan.
ARTICLE XIV.
MISCELLANEOUS PROVISIONS
A. BAR DATES FOR CERTAIN POST-PETITION CLAIMS
1. Administrative Claims; Substantial Contribution Claims
The Confirmation Order will establish an Administrative Claims Bar Date
for filing of Administrative Claims that have not been paid, released or
otherwise settled (excluding Administrative Claims arising from the sale of
goods or services to a Debtor, after the Petition Date, in the ordinary course
of business), including Substantial Contribution Claims (but not including
claims for Professional Fees or the expenses of the members of any creditors'
committee), which date will be 30 days after the Effective Date. Holders of
asserted Administrative Claims, other than claims for Professional Fees or the
expenses of the members of any creditors' committee, not paid prior to the
Confirmation Date must submit proofs of Administrative Claim on or before such
Administrative Claims Bar Date or forever be barred from doing so. The notice of
Effective Date to be delivered pursuant to Fed. R. Bankr. P. 3020(c) and 2002(f)
will set forth such date and constitute notice of this Administrative Claims Bar
Date. The Debtors or Reorganized Debtors, as the case may be, shall have 30 days
(or such longer period as may be allowed by order of the Bankruptcy Court)
following the Administrative Claims Bar Date to review and object to such
Administrative Claims before a hearing for determination of allowance of such
Administrative Claims.
2. Professional Fee Claims
All final requests for compensation or reimbursement of Professional Fees
pursuant to section 327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy Code
for services rendered to the Debtors or any creditors' committee prior to the
Effective Date (other than Substantial Contribution Claims under section
503(b)(4) of the Bankruptcy Code) must be filed and served on the Reorganized
Debtors and their counsel no later than 45 days after the Effective Date, unless
otherwise ordered by the Bankruptcy Court. Objections to applications of such
Professionals or other entities for compensation or reimbursement of expenses
must be filed and served on the Reorganized Debtors and their counsel and the
requesting Professional or other entity no later than 30 days (or such longer
period as may be allowed by order of the Bankruptcy Court) after the date on
which the applicable application for compensation or reimbursement was served.
B. 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, shall be paid
on or before the Effective Date.
C. SEVERABILITY OF PLAN PROVISIONS
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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 Required Lenders, and to the
extent of any modification to the treatment of the Account Intermediaries as
holders of Other Secured Claims, the consent of the Account Intermediaries,
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.
D. SUCCESSORS AND ASSIGNS
The rights, benefits and obligations of any entity named or referred to in
the Plan shall be binding on, and shall inure to the benefit of, any heir,
executor, administrator, successor or assign of such entity.
E. RELEASES AND SATISFACTION OF SUBORDINATION RIGHTS
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All Claims of the holders of the Lender Claims and the Old Debentures
against the Debtors and all rights and claims between or among such holders
relating in any manner whatsoever to any claimed subordination rights or
otherwise shall be deemed satisfied by the distributions under, described in,
contemplated by and/or implemented in Article III.C of this Plan. All other
claimed subordination rights against the holders of Old Debentures, other than
the subordination of the claims of holders of Old Debentures to the claims of or
payments to the Indenture Trustee under the Old Indenture, are deemed satisfied
by this Plan. Distributions under, described in, contemplated by and/or
implemented by this Plan to the various Classes of Claims hereunder shall not be
subject to levy, garnishment, attachment or like legal process by any holder of
a Claim, including, but not limited to, holders of Lender Claims and Old
Debenture Claims, by reason of any claimed subordination 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.
F. DISCHARGE OF THE DEBTORS; INJUNCTION
1. Discharge
Except as otherwise provided herein or in the Confirmation Order, all
consideration distributed under the Plan shall be in exchange for, and in
complete satisfaction, settlement, discharge, and release of, all Claims (other
than those Reinstated under the Plan) of any nature whatsoever against the
Debtors or any of their assets or properties, and regardless of whether any
property shall have been distributed or retained pursuant to the Plan on account
of such Claims, upon the Effective Date, the Debtors, and each of them, shall
(i) be deemed discharged and released under section 1141(d)(1)(A) of the
Bankruptcy Code from any and all Claims, including, but not limited to, demands
and liabilities that arose before the Confirmation Date, and all debts of the
kind specified in section 502(g), 502(h) or 502(i) of the Bankruptcy Code,
whether or not (a) a proof of Claim based upon such debt is filed or deemed
filed under section 501 of the Bankruptcy Code, (b) a Claim based upon such debt
is Allowed under section 502 of the Bankruptcy Code, or (c) the holder of a
Claim based upon such debt accepted the Plan, and (ii) terminate all Interests
of the holders of (A) Other Equity Securities and (B) if Class 7 votes to reject
the Plan, Old Common Shares.
As of the Confirmation Date, except as provided in the Plan or the
Confirmation Order, all entities shall be precluded from asserting against the
Debtors or the Reorganized Debtors, their successors or their property any other
or further claims, debts, rights, causes of action, liabilities or equity
interests relating to the Debtors based upon any act, omission, transaction or
other activity of any nature that occurred prior to the Confirmation Date;
provided however, that nothing in this Plan shall be deemed to preclude any
third party (other than the releasing parties in Article IV.I.2.(a) to the
extent provided therein) from asserting claims, debts, rights, causes of action,
liabilities or equity interests that are not property of the Estates under
section 541 of the Bankruptcy Code against any current or former officers,
directors or employees of the Debtors or Reorganized Debtors; provided further,
that notwithstanding anything contained in the Plan to the contrary, rights and
claims of the United States under environmental laws or regulations shall not be
discharged, impaired or otherwise affected by the Plan and the Chapter 11 Cases,
shall survive the Chapter 11 Cases as if the Chapter 11 Cases had not been
commenced and shall be determined in the manner and by the administrative or
judicial tribunals in which such rights or claims would have been resolved or
adjudicated if the bankruptcy cases had not been commenced. In accordance with
the foregoing, except as provided in the Plan or the Confirmation Order, the
Confirmation Order shall be a judicial determination of discharge of all such
Claims and other debts and liabilities against the Debtors and termination of
all Interests of the holders of (i) Other Equity Securities and (ii) if Class 7
votes to reject the Plan, Old Common Shares, 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.
2. Injunction
(a) Injunction Related to Discharged Claims and Terminated Interests
Except as provided in the Plan or the Confirmation Order, as of the
Confirmation Date, all entities that have held, currently hold or may hold a
Claim or other debt or liability that is discharged or an Interest or other
right of an equity security holder that is Impaired or terminated pursuant to
the terms of the Plan are permanently enjoined from taking any of the following
actions against the Debtors, Reorganized Debtors or their property on account of
any such discharged Claims, debts or liabilities or terminated interests or
rights: (a) commencing or continuing, in any manner or in any place, any action
or other proceeding; (b) enforcing, attaching, collecting or recovering in any
manner any judgment, award, decree or order; (c) creating, perfecting or
enforcing any lien or encumbrance; (d) asserting a setoff, right of subrogation
or recoupment of any
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kind against any debt, liability or obligation due to the Debtors and (e)
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) Released Claims
As of the Effective Date, all entities that have held, currently hold
or may hold a claim, demand, debt, right, cause of action or liability that is
released pursuant to Article IV.I or XIV.H 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: (a) commencing or continuing in any manner any action or other
proceeding; (b) enforcing, attaching, collecting or recovering in any manner any
judgment, award, decree or order; (c) creating, perfecting or enforcing any lien
or encumbrance: (d) asserting a setoff, right of subrogation or recoupment of
any kind against any debt, liability or obligation due to any released entity;
and (e) 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) Consent of Injunction
By accepting a distribution pursuant to the Plan, each holder of an
Allowed Claim or Allowed Interest receiving distributions pursuant to the Plan
will be deemed to have specifically consented to the injunctions set forth in
this Article XIV.F.
G. COMMITTEES
After the Confirmation Date, the Creditors' Committee shall continue to
exist as provided in this paragraph and shall be an active participant in the
Claims review process. The Creditors' Committee shall have the right to file
objections to Class 7 Claims (and Canadian Impaired Unsecured Claims that have
made the U.S. Plan Election) and, if the Canadian Reorganization Plan is
sanctioned, Canadian Impaired Unsecured Claims. The Creditors' Committee shall
be reduced to three members as they shall select and be represented by counsel
and other professionals retained by the Committee prior to the Effective Date
("Committee Professional"). Until all Distributions to Class 7 Claims have been
made pursuant to Plan, the Creditors' Committee will continue to exist and may:
(i) file such pleadings with the Bankruptcy Court as it deems appropriate or
necessary concerning implementation of the Plan; (ii) consult with the
Reorganized Debtors concerning objections to, settlements of or litigation over
Disputed Class 7 Claims; (iii) monitor, analyze and reconcile the Distributions
to holders of Class 7 Claims; and (iv) provide such other services that the
Creditors' Committee deems reasonably necessary to protect and enforce the
rights and interests of the holders of Class 7 Claims consistent with the
provisions of this Plan. Following the Effective Date, the reasonable out of
pocket fees and expenses of all Committee Professionals, and the expenses of
Committee members, shall be paid by the Reorganized Debtors within ten days
after receipt of monthly invoices from such Committee Professionals, provided,
however, that the Reorganized Debtors shall be entitled to dispute the
reasonableness of any such fees and expenses and further provided that the
Reorganized Debtors' aggregate liability for post-Confirmation fees and expenses
of the Creditors' Committee and the Creditors' Committee professionals shall not
exceed $50,000 in the event the Canadian Reorganization Plan is sanctioned, and
$75,000 in the event the Alternate Canadian Transactions are implemented. Any
unresolved, disputed fees and expenses shall be presented to the Bankruptcy
Court for resolution. If the Canadian Reorganization Plan is sanctioned, the
Canadian Counsel retained by the Creditors' Committee may incur
post-confirmation fees and expenses payable by the Reorganized Debtors up to an
aggregate $50,000.
H. EXCULPATION AND LIMITATION OF LIABILITY; INDEMNITY
Neither the Debtors, the Subsidiaries, the Reorganized Debtors, the
Lenders, any individual, corporation or other entity that was at any time
formerly a Lender, the ad hoc steering committee or any other committee of
holders of Lender Claims, CIBC as Administrative Agent and co-arranger under the
Pre-Petition Credit Agreement, BTCo as Syndication Agent and co-arranger under
the Pre-Petition Credit Agreement, any official committees appointed in the
Chapter 11 Cases, the DIP Agent, the DIP Co-Arrangers and the holders of DIP
Facility Claims, the Security Agent, and the Account Intermediaries, or any of
their respective present or former members, officers, directors, employees,
advisors, attorneys, or agents, shall have or incur any liability to any holder
of a Claim or an Interest, or any other party in interest, or any of their
respective agents, employees, representatives, financial advisors, attorneys, or
affiliates, or any of their successors or assigns, for any act or omission in
connection with, relating to, or arising out of, the Chapter 11 Cases,
formulating, negotiating or implementing the Plan, the Lender Lock-up Agreement
or the Allwaste Lock-up Agreement, the solicitation of acceptances of the Plan
or the Lender Lock-up Agreement, the pursuit of confirmation of the Plan, the
confirmation of the Plan, the consummation of the
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Plan, or the administration of the Plan or the property to be distributed under
the Plan, except for their willful misconduct, and in all respects shall be
entitled to rely reasonably upon the advice of counsel with respect to their
duties and responsibilities under the Plan.
Notwithstanding any other provision of this Plan, no holder of a Claim or
Interest, no other party in interest, none of their respective agents,
employees, representatives, financial advisors, attorneys, or affiliates, and no
successors or assigns of the foregoing, shall have any right of action against
any Debtor, Subsidiary or Reorganized Debtor, any Lender or any individual,
corporation or other entity that was at any time formerly a Lender, the ad hoc
steering committee or any other committee of holders of Lender Claims, CIBC as
Administrative Agent and co-arranger under the Pre-Petition Credit Agreement,
BTCo as Syndication Agent and co-arranger under the Pre-Petition Credit
Agreement, any official committees appointed in the Chapter 11 Cases, the DIP
Agent, the DIP Co-Arrangers and the holders of DIP Facility Claims, the Security
Agent, and the Account Intermediaries, or any of their respective present or
former members, officers, directors, employees, advisors, attorneys, affiliates,
or agents, for any act or omission in connection with, relating to, or arising
out of, the Chapter 11 Cases, formulating, negotiating or implementing the Plan,
the Lender Lock-up Agreement or the Allwaste Lock-up Agreement, the solicitation
of acceptances of the Plan, the Lender Lock-up Agreement or the Allwaste Lock-up
Agreement, the pursuit of confirmation of the Plan, the consummation of the
Plan, the confirmation of the Plan, or the administration of the Plan or the
property to be distributed under the Plan, except for their willful misconduct.
The Debtors, the Reorganized Debtors and the Subsidiaries hereby jointly
and severally fully indemnify each of the Lenders, any individual, corporation
or other entity that was at any time a Lender, a member of the ad hoc steering
committee or any other committee of holders of Lender Claims, CIBC as
Administrative Agent and co-arranger under the Pre-Petition Credit Agreement,
BTCo as Syndication Agent and co-arranger under the Pre-Petition Credit
Agreement, the DIP Agent, the DIP Co-Arrangers and the holders of DIP Facility
Claims, the Security Agent, and the Account Intermediaries, and their respective
agents, affiliates, directors, officers, employees, and representatives,
including counsel (collectively, the "Indemnitees") against any manner of
actions, causes of action, suits, proceedings, liabilities and claims of any
nature, costs and expenses (including reasonable legal fees) which may be
incurred by such Indemnitee or asserted against such Indemnitee arising out of
or during the course of, or otherwise in connection with or in any way related
to, the negotiation, preparation, formulation, solicitation, dissemination,
implementation, confirmation and consummation of the Plan, other than any
liabilities to the extent arising from the gross negligence or willful or
intentional misconduct of any Indemnitee as determined by a final judgment of a
court of competent jurisdiction. If any claim, action or proceeding is brought
or asserted against an Indemnitee in respect of which indemnity may be sought
from any of the Reorganized Debtors or any of the Subsidiaries, the Indemnitee
shall promptly notify the Reorganized Debtors in writing, and the Reorganized
Debtors may assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnitee, and the payment of all costs and
expenses. The Indemnitee shall have the right to employ separate counsel in any
such claim, action or proceeding and to consult with the Reorganized Debtors in
the defense thereof and the fees and expenses of such counsel shall be at the
expense of the Reorganized Debtors unless and until the Reorganized Debtors
shall have assumed the defense of such claim, action or proceeding. If the named
parties to any such claim, action or proceeding (including any impleaded
parties) include both the Indemnitee and any of the Reorganized Debtors or
Subsidiaries, and the Indemnitee reasonably believes that the joint
representation of such entity and the Indemnitee may result in a conflict of
interest, the Indemnitee may notify the Reorganized Debtors in writing that it
elects to employ separate counsel at the expense of the Reorganized Debtors, and
the Reorganized Debtors shall not have the right to assume the defense of such
action or proceeding on behalf of the Indemnitee. In addition, the Reorganized
Debtors shall not effect any settlement or release from liability in connection
with any matter for which the Indemnitee would have the right to indemnification
from the Reorganized Debtors, unless such settlement contains a full and
unconditional release of the Indemnitee, or a release of the Indemnitee
satisfactory in form and substance to the Indemnitee.
I. 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, their
respective successors and assigns, including, but not limited to, the
Reorganized Debtors and all other parties-in-interest in these Chapter 11 Cases.
J. REVOCATION, WITHDRAWAL OR NON-CONSUMMATION
Subject to the approval of the Required Lenders, 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
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Plan, or if Confirmation or Consummation does not occur, then (i) the Plan shall
be null and void in all respects, (ii) 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 (iii) nothing contained in the Plan, and
no acts taken in preparation for consummation of the Plan, shall (a) 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, (b) 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.
K. PLAN SUPPLEMENT
Any and all exhibits, lists or schedules not filed with the Plan shall be
contained in the Plan Supplement and filed with the Clerk of the Bankruptcy
Court at least five (5) Business Days prior to date of the commencement of the
Confirmation Hearing. Upon its filing with the Bankruptcy Court, 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
the Plan Supplement upon written request to the Debtors in accordance with
Article XIV.K of the Plan.
L. NOTICES
Any notice, request, or demand required or permitted to be made or provided
to or upon a Debtor or Reorganized Debtor under the Plan shall be (i) in
writing, (ii) served by (a) certified mail, return receipt requested, (b) hand
delivery, (c) overnight delivery service, (d) first class mail, or (e) facsimile
transmission, and (iii) 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:
PHILIP SERVICES (DELAWARE), INC., et al.
100 King St. W.
P. O. Box 2440, LCD #1
Hamilton, Ontario L8N4J6
Att'n: Colin Soule, Esq.
Telephone: (905) 521-1600
Facsimile: (905) 521-9160
with a copy to:
SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)
333 West Wacker Drive
Chicago, Illinois 60606-1285
Att'n: David S. Kurtz, Esq.
Telephone: (312) 407-0700
Facsimile: (312) 407-0411
M. PAYMENT OF CERTAIN FEES AND EXPENSES
On the Effective Date, so long as the signatories to the Allwaste Lock-up
Agreement have performed their obligations thereunder, the Reorganized Debtors
shall reimburse (a) First Union National Bank for its reasonable legal fees
(determined on an hourly basis) and expenses in connection with the Debtors'
restructuring and the Chapter 11 Cases, (b) the Indenture Trustee's reasonable
fees and expenses as trustee, paying agent, registrar and authentication agent
as to the Old Debentures, (c) the reasonable fees of Chanin, Kirkland & Messina
(i) not to exceed $75,000 per month plus expenses for the two-month period
commencing on April 25, 1999, and then (ii) not to exceed $37,500 per month for
the period commencing on June 25, 1999 and ending on the earliest of (1) October
25, 1999, (2) the date on which Chanin, Kirkland & Messina is retained as
financial advisor to the Creditors' Committee and (3) the occurrence of a
"Termination Event" as defined in the Lender Lock-up Agreement and (d)
unreimbursed travel expenses of the holders of Old Debentures serving on the
ad-hoc committee of holders of Old Debentures not to exceed $2,500 prior to June
25, 1999 and $2,500 subsequent to June 25, 1999.
N. PREPAYMENT
44
<PAGE> 88
Except as otherwise provided in this Plan, any ancillary documents entered
into in connection herewith, or the Confirmation Order, the Debtors, with the
consent of the Required Lenders, 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.
O. TERM OF INJUNCTIONS OR STAYS
Unless otherwise provided herein or in the Confirmation Order, all
injunctions or stays provided for in the Chapter 11 Cases under sections 105 or
362 of the Bankruptcy Code or otherwise, and extant on the Confirmation Date
(excluding any injunctions or stays contained in this Plan or the Confirmation
Order), shall remain in full force and effect until the Effective Date.
P. GOVERNING LAW
Unless a rule of law or procedure is supplied by federal law (including the
Bankruptcy Code and Bankruptcy Rules), the laws of (i) the State of Delaware
shall govern the construction and implementation of the Plan and any agreements,
documents and instruments executed in connection with the Plan and (ii) the laws
of the state of incorporation of each Debtor shall govern corporate governance
matters with respect to such Debtor, in either case without giving effect to the
principles of conflicts of law thereof.
Dated: September 21, 1999
PHILIP SERVICES CORP.
(for itself and on behalf of the Debtors)
By: /s/ Phillip C. Widman
-----------------------------------
Name: Phillip C. Widman
Title: Chief Financial Officer
45
<PAGE> 89
SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)
David S. Kurtz
Jeffrey W. Linstrom
J. Gregory St. Clair
Timothy R. Pohl
333 W. Wacker Drive
Chicago, Illinois 60606-1285
(312) 407-0700
-and-
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
By: /s/ Gregg M. Galardi
-----------------------------
Gregg M. Galardi (I.D. #2991)
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899-0636
(302) 651-3000
Attorneys for Philip Services (Delaware), Inc., et al.
46
<PAGE> 90
EXHIBIT A
LIST OF SUBSIDIARY DEBTORS
EXHIBIT A
LIST OF SUBSIDIARY DEBTORS
RESI Acquisition (Delaware) Corporation
Philip Services (Delaware), Inc.
21st Century Environmental Management, Inc. of Nevada
21st Century Environmental Management, Inc. of Puerto Rico
21st Century Environmental Management, Inc. of Rhode Island
21st Century Environmental Management, Inc.
Ace/Allwaste Environmental Services of Indiana, Inc.
Advanced Environmental Systems, Inc.
Advanced Energy Corporation
All Safety and Supply, Inc.
Allies Staffing, Inc.
Allquest Capital, Inc.
AllScaff, Inc.
Allwaste Asbestos Abatement, Inc.
Allwaste Tank Cleaning, Inc.
Allwaste Services of El Paso, Inc.
Allwaste Asbestos Abatement Holdings, Inc.
Allwaste Asbestos Abatement of New England, Inc.
Allwaste Environmental Services/North Central, Inc.
Allwaste Railcar Cleaning, Inc.
Allwaste Recovery Systems, Inc.
Allwaste Texquisition Inc.
Allworth Inc.
ALRC, Inc.
APLC, Inc.
BEC/Philip, Inc.
Burlington Environmental Inc.
Burlington Environmental Inc.
Butco Inc.
Cappco Tubular Products USA, Inc.
Chem-Fab, Inc.
Chem-Freight, Inc.
Chemical Pollution Control, Inc. of Florida
Chemical Pollution Control, Inc. of New York
Chemical Reclamation Service, Inc.
Cousins Waste Control Corporation
CyanoKEM, Inc.
Deep Clean, Inc.
DM Acquisition Corporation
Gasoline Tank Service Company Inc.
Georgia Recovery Systems
GRS/Lake Charles, Ltd.
Hartney Corporation
Hydro-Engineering & Service, Inc.
Industrial Construction Services Co., Inc.
Industrial Services Technologies, Inc.
Intermetco US Inc.
Intermetco USA Ltd.
IST Holding Corp.
James & Luther Services, Inc.
Jesco Industrial Service, Inc.
Luntz Acquisition (Delaware) Corporation
Luntz Corporation
Mac-Tech, Inc.
Northland Environmental Inc.
Nortru, Inc.
Oneida Asbestos Removal, Inc.
Oneida Asbestos Abatement, Inc.
Philip Automotive, Ltd.
Philip Chemi-Solv, Inc.
Philip Chemisolv Holdings, Inc.
Philip Corrosion Services, Inc.
Philip Enterprise Service Corporation
Philip Environmental of Idaho Corporation
Philip Environmental Services Corporation
Philip Environmental Services, Inc.
Philip Environmental Washington Inc.
Philip Industrial Services (Delaware), Inc.
Philip Industrial Services (USA), Inc.
Philip Industrial Services Group, Inc.
Philip Industrial Services of Texas, Inc.
Philip/J.D. Meagher, Inc.
<PAGE> 91
Philip Mechanical Services of Louisiana, Inc.
Philip Metals (New York) Inc.
Philip Metals (USA), Inc.
Philip Metals Inc.
Philip Metals Recovery (Delaware), Inc.
Philip Metals Recovery (USA) Inc.
Philip Mid-Atlantic, Inc.
Philip Oil Recycling, Inc.
48
<PAGE> 92
Philip Petro Recovery Systems, Inc.
Philip Plant Services, Inc.
Philip Reclamation Services, Houston, Inc.
Philip Refractory and Corrosion Corporation
Philip Refractory Services, Inc.
Philip Scaffold Corporation
Philip/SECO Industries, Inc.
Philip Services (Pennsylvania), Inc.
Philip Services/Atlanta, Inc.
Philip Services Corp.
Philip Services Hawaii, Ltd.
Philip Services/Louisiana, Inc.
Philip Services/Missouri, Inc.
Philip Services/Mobile, Inc.
Philip Services/North Atlantic, Inc.
Philip Services/North Central, Inc.
Philip Services/Ohio, Inc.
Philip Services/Oklahoma, Inc.
Philip Services South Central, Inc.
Philip Services/Southwest, Inc.
Philip ST, Inc.
Philip ST Piping, Inc.
Philip Technical Services, Inc.
Philip Transportation and Remediation, Inc.
Philip West Industrial Services, Inc.
Philip/Whiting, Inc.
Piping Holdings Corp.
Piping Mechanical Corp.
Piping Companies, Inc.
PRS Holding, Inc.
PSC Enterprises, Inc.
Republic Environmental Systems (Pennsylvania), Inc.
Republic Environmental Recycling (New Jersey), Inc.
Republic Environmental Systems (Transportation Group), Inc.
Republic Environmental Systems (Technical Services Group) Inc.
Resource Recovery Corporation
Rho-Chem Corporation
RMF Global, Inc.
RMF Industrial Contracting, Inc.
RMF Environmental, Inc.
Serv-Tech Construction and Maintenance, Inc.
Serv-Tech Engineers, Inc.
Serv-Tech EPC, Inc.
Serv-Tech International Sales, Inc.
Serv-Tech of New Mexico, Inc.
Serv-Tech Services, Inc.
Solvent Recovery Corporation
Southeast Environmental Services, Inc.
Termco Corporation
Terminal Technologies, Inc.
ThermalKEM, Inc.
TIPCO Acquisition Corp.
Total Refractory Systems, Inc.
United Industrial Materials, Inc.
United Drain Oil Service, Inc.
<PAGE> 93
EXHIBIT B
LIST OF IMPAIRED UNSECURED CLAIMS
EXHIBIT B
LIST OF IMPAIRED UNSECURED CLAIMS
<TABLE>
SCHEDULED
CREDITOR AMOUNT
-------- ----------
<S> <C>
II-VI, Inc., Transit Manufacturing, Inc., $0
Carrier Corporation, Cytec Industries,
Inc., Environmental Services of America,
Inc., and Solvents & Petroleum Service
62 Land, Inc. 0
Aalborg Keystone, Inc. 0
ABN Amro Bank 0
Advanta Business Services Corp. 26,808
Allen, Leslie 0
Allwaste Debentures 27,500,000
Alonzo, San Juanita, et al. 0
AMBAC International Corporation 0
Arroyo, Krystela Yasmeen, et al. 0
Bader, Alfred 126,000
Barnes, Donald 25,000
Big "R" Towing 25,000
Bloomberg, L.P. 25,000
Blue Box of Building and Construction 12,000
Bramblatt, Jennifer 25,000
Bryan, J.J. 139,000
BTM Capital Corporation 1,497,000
Buck, Sam 42,000
C&S Associates, VIII 64,000
Cadence Environmental Energy, Inc. 180,000
</TABLE>
<PAGE> 94
<TABLE>
SCHEDULED
CREDITOR AMOUNT
-------- ----------
<S> <C>
Caven Point Realty, Inc. 0
Chazen, Gary 503,000
Chazen, Bob 201,000
Chiste, Robert 771,000
Chiste, Robert 435,000
Comdisco, Inc. 0
Commercial Portfolio Management 21,000
Corporation
Cormier, Carl. B. 0
Credit Suisse First Boston Corporation 0
DA Consulting Group Inc. 50,000
Daerr, Richard 250,000
Dalton G., Karen A., Glen E., Nancy, 25,000
Kirby., and Barbara Jane Rinehart et al.
Daniels, et al., Williams, Marty, et al., 0
and Adams, Virgie and Charles, et al.
Driver, James 140,000
Electric Systems, Inc. 250,000
Emtech 9,000
Envetech Inc. 25,000
F.C. Schaffer, Geralyn Graphia, Marian 0
Schaffer-Whitaker, Jose de Spinoso,
Marlan J. Mitch, Robert Miller, and
Harold Birkett
F.C. Schaffer, Geralyn Graphia, Marian 0
Schaffer-Whitaker, Jose de Spinoso,
Marlan J. Mitch, Robert Miller, and
Harold Birkett
Fanta, David 109,000
FC Schaffer Shareholders 0
Ferreira, Fred 151,000
Fifth Third Leasing Company 250,000
Fillmore Partnership 222,000
</TABLE>
<PAGE> 95
<TABLE>
SCHEDULED
CREDITOR AMOUNT
-------- ----------
<S> <C>
Fleet Business Credit Corporation 1,139,000
Foster, Norman 1,400,000
Franklin Iron and Metal Recycling, Inc. 25,000
Ginsky, Victor 437,000
Gooden, Howard P. 97,750
Group Dekko International, Inc. 0
Group Dekko International, Inc. 397,000
Hanson, Stefani 30,000
Harbison-Walker Refractories Company 1,000,000
(Newminco Joint Venture)
Hernandez, Elias 25,000
Hixson, Dale 353,000
Horlacher, Dale 300,000
IBS Incorporated 0
Industrial Finishing Service, Inc. 230,000
Ivey, Cecil 562,000
Jadoobirisingh, Wayne 0
Jay Alix and Associates 0
John Adams Transportation 150,000
Jones, Dean 25,000
Jones, Henry L. 20,000
Kelly, Oliver H. 0
Kilntech Environmental Services Inc; Rick 500,000
W. Davenport(4)
Kleingueti, Edward 20,000
Lee, Dwayne 0
</TABLE>
- ---------------
(4) Pursuant to an agreement between the Debtors and Kilntech Environmental
Services Inc. and Rick W. Davenport (collectively, "Kilntech"), Kilntech
has withdrawn its claims in these bankruptcy cases.
<PAGE> 96
<TABLE>
SCHEDULED
CREDITOR AMOUNT
-------- ----------
<S> <C>
Lentz, Allen D., as successor trustee of 0
the August 31, 1990 Liff Irrevocable Life
Insurance Trust
Liberty Mutual Insurance Company/Liberty 316,000
Mutual Fire Insurance
Liff, Noah; Liff, Adam; Liff, Daniel; 0
Liff, Jan; Liff, Terence D.; Liff,
Zachary; Wilson, Robert H.; Gellman,
Herman; Gellman, Robert; Shapiro, Daniel;
Bierman, Leonard; Baisley, Albert;
Baisley, Elizabeth
Ludwig Bauch; TMT Industries 0
Luntz, Greg 0
Luntz, Michelle 0
Luntz, Greg (Shareholders' Representative) 0
Luntz, Drew (Andrew) 0
Mains Sr., Gilbert 150,000
Mains Jr., Gilbert 600,000
Mallen, Michael 353,000
McCombs, Ernest 500,000
MDS Reading, Inc. 544,000
Meier, Frank 100,000
Meltzer, Morton 254,000
Mertz, Forrest 18,000
Metals USA, Inc. 0
National City Leasing 0
Nelson, Pamela 25,000
Nelson, Raymond 1,498,000
New Par d/b/a Airtouch Cellular 0
Nicholson, Mrs. 42,000
P.A. Pipe, Inc. 0
Pardo, Felix 984,000
</TABLE>
<PAGE> 97
<TABLE>
SCHEDULED
CREDITOR AMOUNT
-------- ----------
<S> <C>
Pitney Bowes Credit Corp. 8,000
Plasma Processing Corporation/Chem First, 2,417,000
Inc.
PNC Leasing Corp. 1,050,000
Powell, Randell F. 30,000
Ramirez, Michael 4,000
Randazzo, Thomas 63,000
Recra Environmental, Inc. 200,000
Reliable Uniform Services Inc. 0
Renton Office V Realty, Inc. 362,000
Republic Environmental Systems 7,650,000
(Brantford) Ltd.
Republic Environmental Systems Inc. 4,533,000
Rief, James 648,000
Roth, Eli 148,000
Roth, Larry 100,000
Rothschild, Sidney 130,000
Shonte Trumbo 25,000
Siemens Westinghouse, Inc./ Siemens 1,500,000
Westinghouse Power Corporation
St. Paul Properties, Inc. 160,000
Strata Corporation 0
Strategic Holdings, Inc.; Equus II 0
Incorporated; ARTI Partners I, Ltd.; ARTI
Partners II, LLC; ARI Glass Newco, Inc.;
and Strategic Materials, Inc.
Straton, Jeff 303,000
Tennessee Valley Steel Corp, Bankruptcy 25,000
Trustee
Theodore M. Luntz, William L. Luntz, 0
Robert A. Luntz, and Joan Luntz Goulder
</TABLE>
<PAGE> 98
<TABLE>
SCHEDULED
CREDITOR AMOUNT
-------- ----------
<S> <C>
Theresa Adams, et al. 240,000
Traylor, Walter J. 0
Unifirst Corporation 20,000
Wallace, Becky 50,000
Wells, Frederick A. 249,000
Westlake PetroChemicals Corp. 400,000
Wheeler, Vikki 20,000
Yanarella 0
==========
65,528,558
</TABLE>
<PAGE> 99
EXHIBIT C
LIST OF CANADIAN IMPAIRED UNSECURED CLAIMS
EXHIBIT C
LIST OF CANADIAN IMPAIRED UNSECURED CLAIMS
<TABLE>
SCHEDULED
CREDITOR AMOUNT
-------- ----------
<S> <C>
1066424 Ontario, Inc. 389,640
1348040 Ontario Inc. 1,650,000
2418711 Canada Inc. 0
2819635 Canada Inc. 15,000
759082 Ontario Inc. 26,000
963767 Ontario, Ltd. 0
Ablack, Krish 50,000
Agglo Venture Inc., Agglo, Inc. 340,000
Alexander Brown, Inc. 340,000
B.A.C.C. Capital Corporation 1,580,828
Bell Canada Inc. 176,800
Bernadin, Gilles 27,000
Boughton, Marvin 27,000
Canadian Imperial Bank of Commerce 15,000,000
Canadian Imperial Bank of Commerce, 0
Ontario Teachers' Pension Plan Board,
1067892 Ontario, Ltd., C.D.P.Q. Venture
Capital Inc.
Chesterton Investments Limited & 683,000
Morris Investments Limited
Chodos, Peter 476,000
CIBC Equipment Finance Limited 665,000
CIBC Equipment Finance Limited 51,000
Cinicorp Holdings Limited 212,000
City of Toronto Economic Development 1,016,000
Corporation
</TABLE>
<PAGE> 100
<TABLE>
SCHEDULED
CREDITOR AMOUNT
-------- ----------
<S> <C>
Clark, Brad 1,360
Close Quarters Inc. 110,666
Close Quarters Inc. / Tom Close 506,813
Comdisco Canada, Ltd. 0
Compagnie de Gestion, M.P.F., Inc. / c/o 1,650,000
Chaurette Levesque
Coristine, Bruce 563,000
Coristine, Bruce 249,000
Coristine, Bruce 42,000
Coristine, Bruce / Close Quarters Inc. 155,789
Crawford, Kevin 61,000
D'Allessandro, Gino 0
Enterprises Delcapitale Limitee 0
FP Commodity Master Trust 16,897,483
Fracassi, Philip 52,000
Gallagher, John 13,600
Goldblatt, Marvin 827,000
Gore, Reginald J., Gore, Alma P., Gore, 870,400
Larry R., Sebele, Sandra P., and Sebele,
Terry C.
Green, John, Green, Lilla, Stasiuk, John, 23,800
Dynamic Industrial Services, Inc.
GUSO Ltd. 21,553
Hamilton Harbour Commissioners 561,000
Hilson, Michael 6,800
Hoey, Graham 20,000
Imperial Oil, a partnership of Imperial 0
Oil Limited and McColl-Frontenac
Petroleum Inc.
Kimco Steel Sales Limited 4,000
Kumer, Sheldon 348,000
Leasing Solutions (Canada), Inc. 0
Lethbridge, Thomas 20,000
</TABLE>
<PAGE> 101
<TABLE>
SCHEDULED
CREDITOR AMOUNT
-------- ----------
<S> <C>
Lions Wrecking Ltd.; Lions Disposal and 0
Excavation; Lions Disposal Excavation &
Demolition Ltd.; Jose Nunes; Honorina
Nunes; Olivio Ricardo; Maria Ricardo
Liquid Cargo Lines Limited 0
McQuillan, Peter 21,000
MD Realty Canada Inc., Abrim 11 Inc., & 42,000
132001 Canada Inc, Sitq Inc.
MDS Environmental Services Limited 816,000
MTC Leasing Inc. 16,000
Myrtle Eva Harrington; Harrington 170,000
Acquisition Corporation; Nancy Hamilton;
Myrtle Eva Harrington as Trustee for the
estate of Frederick John Harrington;
Bruce Hamilton
Newcourt Credit Group, Inc./Newcourt 507,000
Financial Ltd.
Nortel Networks Corporation 692,000
OE Leasing, a division of OE Financial 898
Services Inc.
Ontario Paving Inc.; Carmen Alfano 0
Palango, Paul 0
Paletta International Corporation 1,383,800
PDQ Mechanical 9,000
Perron, Victor 21,000
Poplack, Bernard 82,000
Port of Quebec Authority 67,206
Royal Bank of Canada 2,500,000
Teperman and Sons Inc. 0
Utter, Christopher 0
Woodcroft, John 716,000
Woodstock Sufferance Warehouse Ltd. 184,611
Xerox Canada Ltd. 5,862
==========
52,964,909
</TABLE>
<PAGE> 102
EXHIBIT D
CANADIAN REORGANIZATION PLAN
PLAN SUPPLEMENT
This Plan Supplement amends and restates the Amended and Restated Plan of
Compromise and Arrangement dated September 24, 1999 of Philip Services Corp. and
its Canadian subsidiaries listed on Schedule "A" hereto pursuant to the
Companies' Creditors Arrangement Act, R.S.C. 1995, c. C-36, as amended.
ARTICLE 1
INTERPRETATION
SECTION 1.1 DEFINITIONS
In this Amended Plan (including the Schedules hereto), unless otherwise
stated or the context otherwise requires:
"ACCOUNT INTERMEDIARIES" means (a) CIBC in its capacity as the provider of
the CIBC Bank Account Services, and (b) Comerica Bank and its affiliates in
their respective capacities as the providers of the Comerica Bank Account
Services;
"ADMINISTRATIVE AGENT" means CIBC or its successor as administrative agent
for the Lenders under the Credit Agreement;
"AFFECTED CLAIM" means an Affected Secured Lender Claim;
"AFFECTED CREDITOR" means a holder of an Affected Claim;
"AFFECTED SECURED LENDER CLAIM" means a Secured Claim of a Lender against
the Applicants arising under or as a result of the Credit Facility
Agreements other than any Other Secured Claims;
"AFFECTED SECURED CREDITOR" means a holder of an Affected Secured Lender
Claim;
"APPLICANTS" means PSC and each of the Canadian Subsidiaries and
"APPLICANT" means any one of the Applicants;
"ASSUMED INDEMNIFICATION OBLIGATIONS" means (a) the obligations of PSC
pursuant to section 7.02 of its bylaws to indemnify current and former
directors and officers, on the terms and subject to the limitations
described therein, if and to the extent that such indemnification is
permissable under the Business Corporations Act (Ontario) or such other
applicable governing corporate statute and (b) the obligations of the
Applicants other than PSC to indemnify current and former directors and
officers under their respective bylaws to the extent such indemnification
obligations are not more expansive
<PAGE> 103
- 2 -
than those of PSC under section 7.02 of its bylaws if and to the extent
such indemnification is permissible under the applicable governing
corporate statute of the applicable Applicant; in each case, including any
affirmative obligation of the Applicants to indemnify current and former
directors and officers in connection with any governmental, regulatory or
enforcement investigation or action and in each case solely with respect to
such officer's or director's actions subsequent to becoming an officer or
director of PSC or of a director or indirect subsidiary or affiliate of
PSC; provided, however, that Assumed Indemnification Obligations shall not
include Excluded Indemnification Obligations;
"BTCO" means Bankers Trust Company;
"BUSINESS DAY" means a day which is not (i) a Saturday or a Sunday; or (ii)
a day observed as a holiday under the laws of the Province of Ontario or
the applicable federal laws of Canada;
"CANADIAN SUBSIDIARIES" means, collectively, the direct and indirect
subsidiaries of PSC listed on Schedule "A" hereto;
"CCAA" means the Companies' Creditors Arrangement Act, R.S.C. 1985, c.
C-36, as amended;
"CCAA PROCEEDINGS" means the CCAA cases of PSC and the Canadian
Subsidiaries before the Court pursuant to the CCAA;
"CHAPTER 11 CASES" means the jointly administered Chapter 11 cases of PSI,
PSC and the U.S. Subsidiaries before the United States Bankruptcy Court
pursuant to the provisions of Chapter 11 of the United States Bankruptcy
Code;
"CIBC" means Canadian Imperial Bank of Commerce;
"CIBC BANK ACCOUNT SERVICES" means "CIBC Bank Account Services" as defined
in the Credit Agreement;
"CLAIM" means any right of any Person against any Applicant in connection
with any indebtedness, liability or obligation of any kind of any Applicant
whether or not reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, unsecured, present, future, known, unknown, by guarantee, by
surety or otherwise and whether or not such a right is executory in nature,
including, without limitation, the right or ability of any person to
advance a claim for contribution or indemnity or otherwise with respect to
any matter, action, cause or chose in action whether existing at present or
commenced in the future based in whole or in part on facts which exist
prior to or at the time of the first Creditors' Meeting other than (i) a
claim of a United States resident against PSC, or (ii) a claim of a
Canadian resident against PSC which the holder of the claim has voluntarily
agreed is to be subject to and bound by the provisions of the U.S. Plan,
and has consented to have the allowance and
<PAGE> 104
- 3 -
priority of such claim determined in accordance with the provisions of the
U.S. Bankruptcy Code;
"CLASS" means the Class consisting of all holders of Affected Secured
Lender Claims;
"COMERICA BANK ACCOUNT SERVICES" means "Comerica Bank Account Services" as
defined in the Credit Agreement;
"COMMON SHARES" means common shares in the capital of PSC;
"CONFIRMATION DATE" means the date that the Confirmation Order is made;
"CONFIRMATION ORDER" means the order of the Court sanctioning and approving
the Amended Plan appointing the Receiver as of the Effective Date and
authorizing and directing the Selling Applicants and the Receiver to enter
into and perform the Sale Agreement;
"COURT" means the Ontario Superior Court of Justice;
"CREDIT AGREEMENT" means the Credit Agreement dated as of August 11, 1997
among PSC, as borrower in Canada, PSI, as borrower in the United States,
the Lenders, CIBC, as administrative agent for the Lenders, BTCo, as
syndication agent, and CIBC and BTCo, as co-arrangers, as amended by
amending agreements dated as of October 31, 1997, February 19, 1998, June
24, 1998, October 20, 1998 and December 4, 1998;
"CREDIT DOCUMENTS" means the "Credit Documents" as defined in the Credit
Agreement;
"CREDIT FACILITY AGREEMENTS" means the Credit Agreement, the Credit
Documents and the Lender Lock-Up Agreement;
"CREDITOR" means any Person having a Claim and may, if the context
requires, mean a trustee, receiver, receiver manager or other Person acting
on behalf of such Persons, but a Creditor shall not include a Person having
a Claim in respect of an Unaffected Obligation;
"CREDITORS' MEETING" means the meeting of the Affected Secured Creditors
called for the purpose of considering and voting upon this Amended Plan and
includes any adjournment of such meeting;
"CREDITORS' MEETINGS ORDER" means the Order of the Court dated September
23, 1999 establishing procedures for proving Claims and setting the date
for the Creditors' Meetings, as amended or supplemented from time to time;
"DATE OF FILING" means June 25, 1999;
"DIP AGENT" means BTCo, in its capacity as administrative agent under the
DIP Facility
<PAGE> 105
- 4 -
Agreement;
"DIP CO-ARRANGERS" means BTCo and CIBC, in their capacities as co-arrangers
of the DIP Facility;
"DIP FACILITY AGREEMENT" means the Credit Agreement between PSC and PSI as
borrowers, the Canadian Subsidiaries and U.S. Subsidiaries as guarantors,
certain other Subsidiaries as guarantors, the DIP Agent, and the DIP
Co-Arrangers, and the other lender signatories thereto;
"DIP FACILITY" means the debtor-in-possession credit facility to be
provided to PSC, PSI, the Canadian Subsidiaries and the U.S. Subsidiaries
during the CCAA Proceedings and Chapter 11 Cases in the principal amount of
US$100 million of available credit pursuant to the DIP Facility Agreement;
"DIP FACILITY CLAIM" means a Claim arising under or as a result of the DIP
Facility;
"DIRECTORS AND OFFICERS" means the current and former directors and
officers of the Applicants resident in Canada;
"DISCLOSURE STATEMENTS" means the written disclosure statements that relate
to the Plan or the U.S. Plan, as such documents may be amended,
supplemented or modified from time to time and "DISCLOSURE STATEMENT" means
any one of them;
"DOLLARS" or "$" means lawful money of Canada unless otherwise indicated;
"EFFECTIVE DATE" means the Business Day on which all conditions to
implementation of the Plan as set forth in Section 5.4 have been satisfied
or waived as provided in Section 5.5 and is the effective date of this
Amended Plan;
"EXCLUDED INDEMNIFICATION OBLIGATIONS" means, in the case of PSC, "Excluded
Indemnification Obligations" (as defined in the U.S. Plan) of PSC to any
Canadian resident and, in the case of any of the Canadian Subsidiaries,
means Claims of any Canadian residents against any of the Canadian
Subsidiaries that would be "Excluded Indemnification Obligations" under the
U.S. Plan if such Canadian Subsidiaries were U.S. Plan Applicants and in
each case includes Claims of any Canadian residents against any of the
Applicants that are not Assumed Indemnification Obligations. For greater
certainty, "Excluded Indemnification Obligations" shall not affect the
set-off rights, if any, of any Person;
"EXIT FACILITY" means the new senior secured credit facility in an
aggregate principal amount of approximately US$125 million, which PSI and
the Subsidiaries anticipate entering into as a condition to the
consummation of the U.S. Plan;
"INITIAL ORDER" means the Order of the Court dated June 25, 1999, as
amended from time to time, pursuant to which, among other things, the
Applicants were granted certain relief pursuant to the CCAA;
<PAGE> 106
- 5 -
"INTERCOMPANY CLAIMS" means, as the case may be, any Claim of (a) any
Subsidiary against an Applicant, (b) any Subsidiary against a Subsidiary,
or (c) PSC against any Subsidiary;
"LENDER" means a "Lender" as defined in the Credit Agreement, CIBC as
administrative agent, BTCo as syndication agent, CIBC and BTCo as
co-arrangers, and their individual successors and assigns;
"LENDER CLAIM" means a Claim of a Lender arising under or as a result of
the Credit Facility Agreements;
"LENDER LOCK-UP AGREEMENT" means the letter agreement dated as of April 5,
1999, as amended and restated as of June 21, 1999, as may be further
amended subsequent to the Date of Filing, among PSC and the Lenders
signatories thereto with respect to the principal terms and conditions of
this Amended Plan and the U.S. Plan;
"LENDERS' SECURITY" means the security granted by the Applicants in favour
of the Security Agent or the Administrative Agent on behalf of the Lenders;
"LIEN" means a charge against or interest in property to secure payment of
debt or performance of an obligation;
"MONITOR" means Ernst & Young Inc. and any successor the reto appointed in
accordance with the Initial Order or any further Order; "NEW GUARANTEES"
means, collectively, the secured guarantees of the Subsidiaries to be
entered into as of the Effective Date to guarantee and secure the New
Senior Secured Term Debt and the New Secured PIK Debt (as defined in the
U.S. Plan);
"ORDER" means any order of the Court in these proceedings;
"OTHER SECURED CLAIMS" means, collectively, the Secured Claims of the
Account Intermediaries, the issuers of letters of credit issued under the
Permitted LC Facility established pursuant to Amending Agreement No. 3 to
the Credit Agreement and all other Secured Claims against the Applicants,
other than the Affected Secured Lender Claims;
"PERSON" means any individual, partnership, joint venture, trust,
corporation, unincorporated organization, government or any agency or
instrumentality thereof, or any other juridical entity howsoever designated
or constituted;
"PLAN" means the amended and restated plan of compromise and arrangement
dated September 24, 1999 of all of the Applicants under the CCAA;
"PROTOCOL" means the Cross-Border Insolvency Protocol entered into by the
U.S. Bankruptcy Court in the Chapter 11 Cases and by the Court in respect
of the CCAA Proceedings;
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"PROVEN ..... CLAIM" of a Creditor means the amount of the Claim of such
Creditor as finally determined in accordance with the provisions of the
CCAA, any applicable Order or this Plan;
"PSC" means Philip Services Corp. or its successor;
"PSI" means Philip Services (Delaware), Inc.;
"RECEIVER" has the meaning set forth in Section 4.1;
"REQUIRED LENDERS" means the "Required Lenders" as defined in the Credit
Agreement;
"REQUIRED MAJORITY" means, in respect of the Class, an affirmative vote of
two-thirds in value of all Proven Claims of the Class voted in accordance
with the voting procedures established hereunder (whether in person or by
proxy) and a majority in number of all voting Creditors of the Class;
"SALE AGREEMENT" has the meaning set forth in Section 4.1;
"SECURED CLAIM" means a Claim that is secured by a Lien or other interest
on property in which an Applicant has an interest, whether the Person with
such Claim has a security interest by way of a mortgage, lease, chattel
mortgage, conditional sale agreement, debenture, security agreement or
other security instrument, to the extent of the value of the Claim holder's
interest in the Applicant's interests in such property;
"SECURITY AGENT" means the "Security Agent" as defined in the Credit
Agreement;
"SELLING APPLICANTS" has the meaning set forth in Section 4.1;
"SUBSIDIARIES" means, collectively, all of the direct and indirect
subsidiaries of PSC and following completion of the Sale Transactions (as
defined in Section 4.1) means, collectively, all of the direct and indirect
subsidiaries of PSI;
"SUBSIDIARY INTERESTS" means, collectively, the issued and outstanding
shares in the stock of the Subsidiaries as of the Date of Filing;
"TRANSFERRED ASSETS" means the assets and shares sold under the Sale
Agreement;
"TRANSFERRED SUBSIDIARIES" means the corporations whose shares are included
in the Transferred Assets;
"UNAFFECTED OBLIGATIONS" means Claims that are not Affected Claims;
"U.S. BANKRUPTCY COURT" means the United States Bankruptcy Court having
jurisdiction over the Chapter 11 Cases;
"U.S. PLAN" means the joint plan of reorganization of the U.S. Plan
Applicants as filed
<PAGE> 108
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with the U.S. Bankruptcy Court, as the same may be amended, modified or
supplemented from time to time with the consent of the Required Lenders;
"U.S. PLAN APPLICANTS" means PSC, PSI and each of the U.S. Subsidiaries;
and
"U.S. SUBSIDIARIES" means PSI and the direct and indirect subsidiaries of
PSC set forth in the U.S. Plan.
SECTION 1.2 INTERPRETATION, ETC.
For purposes of the Amended Plan:
(a) any reference in the Amended Plan to a contract, instrument, release,
indenture, or other agreement or document's 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 Amended Plan to an existing document or exhibit
filed or to be filed means such document or exhibit as it may have
been or may be amended, modified, or supplemented;
(c) unless otherwise specified, all references in the Amended Plan to
Sections, Articles and Schedules are references to Sections, Articles
and Schedules of or to the Amended Plan;
(d) the words "herein" and "hereto" refer to the Amended Plan in its
entirety rather than to a particular portion of the Amended 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 Amended Plan;
(f) where the context requires, a word or words importing the singular
shall include the plural and vice versa;
(g) the words "includes" and "including" are not limiting;
(h) the phrase "may not' is prohibitive and not permissive; and
(i) the word "or" is not exclusive.
SECTION 1.3 DATE FOR ANY ACTION
In the event that any date on which any action is required to be taken
under this Plan by any of the parties is not a Business Day, that action shall
be required to be taken on the next succeeding day which is a Business Day.
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SECTION 1.4 TIME
All times expressed in this Amended Plan are local time Toronto, Ontario,
Canada unless otherwise stipulated.
SECTION 1.5 STATUTORY REFERENCES
Any reference in this Amended Plan to a statute includes all regulations
made thereunder and all amendments to such statute or regulations in force from
time to time.
SECTION 1.6 SUCCESSORS AND ASSIGNS
This Amended Plan shall be binding upon and shall enure to the benefit of
the heirs, administrators, executors, legal personal representatives, successors
and assigns of any Person named or referred to in this Amended Plan.
SECTION 1.7 SCHEDULES
The following are the Schedules to this Amended Plan, which are
incorporated by reference into this Amended Plan and form part of it:
Schedule "A" - Canadian Subsidiaries
Schedule "B" - Sale Agreement
ARTICLE 2
PURPOSE AND EFFECT OF THE PLAN
SECTION 2.1 BACKGROUND
The circumstances and events leading up to the Plan and the U.S. Plan are
summarized in the Disclosure Statement that was circulated to Affected Creditors
in connection with the Plan and distributed in accordance with the U.S.
Bankruptcy Code in connection with the U.S. Plan.
SECTION 2.2 PERSONS AFFECTED
This Amended Plan and the U.S. Plan provide for a coordinated restructuring
of claims and interests against PSC, PSI, the Canadian Subsidiaries and the U.S.
Subsidiaries. This Amended Plan will become effective on the Effective Date and
shall be binding on and enure to the benefit of the Applicants and the holders
of Affected Secured Lender Claims.
SECTION 2.3 PERSONS NOT AFFECTED
For greater certainty this Amended Plan does not affect the holders of
Unaffected Obligations. Nothing shall affect any Applicant's rights and
defences, both legal and equitable, with respect to any Unaffected Obligations
including, but not limited to, all rights with respect to legal and equitable
defenses to setoffs or recoupments against such Claims. Notwithstanding the
substantive consolidation of
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Claims against the Applicants for certain purposes under this Amended Plan,
Claims which are not Affected Claims of any particular Applicant remain the
obligations solely of such Applicant and shall not become obligations of any
other Applicant.
ARTICLE 3
CLASSIFICATION OF CREDITORS, VALUATION OF CLAIMS AND RELATED MATTERS
SECTION 3.1 CLASSES OF CLAIMS
The only classes of Creditors for the purpose of considering and voting on
the Amended Plan shall be Creditors holding Affected Secured Lender Claims.
SECTION 3.2 AFFECTED CLAIMS
Creditors holding Affected Secured Lender Claims shall prove their Claims,
vote in respect of the Amended Plan and receive the rights provided for under
and pursuant to this Amended Plan.
SECTION 3.3 CREDITORS' MEETING
The Creditors' Meeting of holders of Affected Secured Lender Claims shall
be held in accordance with this Amended Plan, the Creditors' Meetings Order and
any further Order. The only persons entitled to attend the Creditors' Meeting
are those persons, including the holders of proxies, entitled to vote at the
Creditors' Meeting, their legal counsel and advisors and the officers, directors
and legal counsel of the Applicants. Any other Person may be admitted on
invitation of the chair of the Creditors' Meeting.
SECTION 3.4 APPROVAL BY CREDITORS
In order to be approved, the Amended Plan must receive the affirmative vote
of the Required Majority of the holders of Affected Secured Lender Claims.
SECTION 3.5 VOTING CLAIMS
The Claim of the holders of Affected Secured Lender Claims has been
accepted as filed.
SECTION 3.6 CLAIMS FOR VOTING PURPOSES
Each Creditor having an Affected Secured Lender Claim shall be entitled to
attend and to vote at the Creditors' Meeting. Each Creditor who is entitled to
vote shall be entitled to that number of votes at the Creditors' Meeting as is
equal to the dollar value of its Claim for voting purposes as determined in
accordance with this Article 3 and the provisions of the Creditors' Meetings
Order.
<PAGE> 111
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ARTICLE 4
TREATMENT OF AFFECTED CREDITORS
SECTION 4.1 AFFECTED SECURED LENDER CLAIMS
Subject to approval by the Required Majority of holders of Affected Secured
Lender Claims,
(a) The Applicants listed as vendors ("Selling Applicants") in the form of
agreement of purchase and sale (the "Sale Agreement") attached as
Schedule "B" to this Amended Plan will enter into an agreement to sell
their businesses as a going concern to the parties (the "Purchasers")
substantially on the terms set out in the Sale Agreement, subject to
such amendments as do not materially adversely affect the financial
arrangements set out in the Sale Agreement and are approved in the
Confirmation Order or other Order (collectively in this section 4.1,
the "Order");
(b) On the Effective Date, the Sale Agreement will be assumed and
completed by a receiver and manager or interim receiver (the
"Receiver") appointed as of the Effective Date by the Order to convey
the assets of the Applicants other than such assets as may be excluded
by the terms of the Order. The proceeds of sale will be distributed by
the Receiver on the Effective Date in accordance with the legal
priorities of the claims against the assets that are to be sold under
the Sale Agreement (the "Transferred Assets");
(c) The holders of Affected Secured Lender Claims consent to the sale of
the Transferred Assets substantially on the terms set forth in the
Sale Agreement and this Section 4.1 (the "Sale Transactions"),
provided that the net proceeds of sale remain subject to the Lenders'
Security;
(d) All assets of the Applicants that are excluded from the Sale
Transactions will remain the property of the relevant Applicant. All
such assets and the assets of the Applicants other than the Selling
Applicants will remain subject to the Lenders' Security;
(e) The indebtedness of the Applicants to the Lenders will be reduced;
(i) on completion of the distribution of proceeds of the Sale
Transactions to holders of Affected Secured Lender Claims, by an
amount equal to the Purchase Price less the Assumed Senior
Liabilities, both as defined under the Sale Agreement;
(ii) on the first distribution date under the U.S. Plan, by the value
of the debt and equity to be distributed to the holders of
Class 6
<PAGE> 112
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Claims (as defined in the U.S. Plan) on the implementation of
the U.S. Plan), and on each subsequent distribution date under
the U.S. Plan, by an amount equal to the value of the Class 6
Additional Distribution, if any, on such date,
but, in each case, without duplication (ie. the reduction of
indebtedness on account of distributions in one country will only be
to the extent that the distributions in such country are not already
taken into account in the calculation of the distributions in the
other country).
The balance of the indebtedness of the Applicants to the Lenders will
remain outstanding and will continue to be subject to the terms of the
Credit Agreement and secured by the Lenders' Security, which will remain in
full force and effect. The Lenders will not be deemed to have waived any
Default or Event of Default under the Credit Agreement or under the
Lenders' Security or any remedies thereunder and following the Effective
Date may exercise any remedies they may have under the Credit Agreement or
the Lenders' Security.
(f) The following transactions shall occur immediately prior to
implementation of the Amended Plan;
(i) Each holder of a Claim under the Credit Agreement shall be deemed
to have exchanged such Claim for an undivided co-ownership
interest in all of the Claims under the Credit Agreement in the
same aggregate amount as the Claim so exchanged; and
(ii) Each holder of an Affected Secured Lender Claim will assign to
PSI the portion of its Affected Secured Lender Claim which will
be repaid from the proceeds of the Sale Transactions to which the
holders of Affected Secured Lender Claims are entitled. This
assignment will be part of the exchange of debt and other rights
with PSI under the U.S. Plan for the debt and equity to be issued
by PSI to the holders of Class 6 Claims in the U.S. Plan, and
will be on the terms set out in the U.S. Plan, effective after
the step described in clause (f)(i) and immediately prior to the
distribution of the proceeds of the Sale Transactions to which
the holders of Affected Secured Lender Claims are entitled. From
and after the assignment, PSI will be entitled to receive all
proceeds from the Sale Transactions that would otherwise be
distributed to holders of Affected Secured Lender Claims.
SECTION 4.2 OTHER CLAIMS
Claims that would have been Affected Unsecured Claims (as defined in the
Amended and Restated Plan of Compromise and Arrangement of the Applicants dated
<PAGE> 113
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September 24, 1999) will not be compromised. The holders of Affected Unsecured
Claims will have the right, but will not be required, to elect to participate in
distributions under the U.S. Plan as provided for therein.
SECTION 4.3 SUBSTANTIVE CONSOLIDATION FOR PURPOSES OF TREATING AFFECTED CLAIMS
The Amended Plan is premised upon the substantive consolidation of the
Applicants only for purposes of treating Affected Secured Lender Claims under
the Amended Plan, including for voting, sanction and distribution purposes. This
Amended Plan does not contemplate substantive consolidation of the Applicants
with respect to Unaffected Obligations. Except as set forth in this Section 4.3,
such substantive consolidation shall not (other than for purposes related to the
Amended Plan) (a) affect the legal and corporate structures of the Applicants,
(b) cause any Applicant to be liable for any Claim under the Amended Plan, for
which it otherwise is not liable and the liability of any Applicant for any such
Claim shall not be affected by such substantive consolidation, (c) affect
Intercompany Claims of Applicants against Applicants, or (d) affect Subsidiary
Interests.
ARTICLE 5
MISCELLANEOUS
SECTION 5.1 CONFIRMATION OF PLAN
(a) Provided that the Amended Plan is approved by the Required Majority of
holders of Affected Secured Lender Claims, the Applicants will seek
the Confirmation Order (which as proposed shall be in form and
substance acceptable to the Applicants and the Required Lenders) for
the sanction and approval of the Amended Plan; and
(b) subject only to the Confirmation Order being granted in form and
substance reasonably acceptable to the Applicants and the Required
Lenders and the satisfaction of those conditions precedent to
implementation of the Amended Plan described in Section 5.4, the
Amended Plan will be implemented by the Applicants and will be binding
upon the Applicants and all holders of Affected Secured Lender Claims.
SECTION 5.2 PARTICIPATION IN DIFFERENT CAPACITIES
Creditors whose Claims are affected by this Amended Plan are affected only
in their capacities as holders of such Claims.
SECTION 5.3 DEEMING PROVISIONS
In this Amended Plan, the deeming provisions are not rebuttable and are
conclusive and irrevocable.
<PAGE> 114
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SECTION 5.4 CONDITIONS PRECEDENT TO IMPLEMENTATION OF PLAN
The implementation of the Amended Plan is subject to the following
conditions precedent which may not be waived by the Applicants without the
consent of the Required Lenders:
(a) the Confirmation Order sanctioning the Amended Plan, as such Amended
Plan may have been modified, in form and substance reasonably
satisfactory to the Applicants and the Required Lenders, shall have
been entered and the operation and effect of the Confirmation Order
shall not have been stayed, reversed or amended, and shall:
(i) approve the Sale Transactions and authorize and direct the
Applicants 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 Amended Plan;
(ii) declare that the provisions of the Confirmation Order are
nonseverable and mutually dependent;
(iii) appoint the Receiver as of the Effective Date and authorize and
direct the Receiver to enter into the Sale Agreement and complete
the transactions contemplated thereby; and
(iv) authorize and direct the Receiver to distribute the shares of the
Purchasers to PSI on the Effective Date.
(b) the following agreements, in form and substance satisfactory to the
Applicants, the Purchasers and the Required Lenders shall have been
executed and delivered by the Purchasers and the Transferred
Subsidiaries, and all conditions precedent thereto shall have been
satisfied:
(i) New Guarantees and related security documents;
(ii) If necessary, the Exit Facility;
(iii) Agreements evidencing sufficient bonding to meet the projected
bonding requirements of the Purchasers and the Transferred
Subsidiaries;
(iv) Such other documents and agreements as are required to be
executed and delivered by subsidiaries of PSI pursuant to the
terms of the U.S. Plan; and
<PAGE> 115
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(c) all actions, documents and agreements necessary to implement the
Amended Plan and the Sale Agreement shall have been effected or
executed; and
(d) either (i) the U.S. Bankruptcy Court shall have issued a final order
under the U.S. Bankruptcy Code confirming the U.S. Plan and all
conditions to the effectiveness of the U.S. Plan shall have been
satisfied other than the condition that the Alternate Canadian
Transactions shall have been authorized to be implemented in
accordance with Canadian law and all conditions to the implementation
of the Alternate Canadian Transactions (as defined in the U.S. Plan)
shall have been satisfied or waived by the Required Lenders other than
the conditions that the Plan shall have become effective, and the
Alternate Canadian Transactions shall be capable of being implemented
on the Effective Date and the only unsatisfied condition to the
transactions shall be the effectiveness of the U.S. Plan or (ii) if
the Canadian Plan Condition (as defined in the U.S. Plan) has been
waived, the U.S. Plan shall have become effective.
SECTION 5.5 WAIVER OF CONDITIONS
Each of the conditions set forth in Section 5.4 above, may be waived in
whole or in part by the Applicants with the written consent of the Required
Lenders, without any other notice to parties in interest or the Court and
without a hearing. The failure to satisfy or waive any condition to the
Effective Date may be asserted by the Applicants regardless of the circumstances
giving rise to the failure of such condition to be satisfied (including any
action or inaction by an Applicant). The failure of an Applicant 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.
SECTION 5.6 NOTICES
Any notices or communication to be made or given hereunder shall be in
writing and shall refer to this Amended Plan and may, subject as hereinafter
provided, be made or given by personal delivery, by courier, by prepaid mail or
by telecopier addressed to the respective parties as follows:
(a) if to the Applicants:
Philip Services Corp.
100 King Street West
Hamilton, Ontario
L8N 4J6
Attention: Colin Soule
Executive Vice-President, General Counsel and
Corporate Secretary
Telecopier: (905) 521-9160
<PAGE> 116
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(b) if to a Creditor:
to the address for such Creditor specified in the Proof of
Claim filed by a Creditor or, if no Proof of Claim has been
filed, to such other address at which the notifying party may
reasonably believe that the Creditor may be contacted.
(c) if to the Monitor:
P.O. Box 251
Ernst & Young Tower
222 Bay Street, 21st Floor
Toronto-Dominion Centre
Toronto, Ontario
M5K 1J7
Attention: Murray McDonald
President
Telecopier: (416) 943-3300
or to such other address as any party may from time to time notify the others in
accordance with this Section 5.6. In the event of any strike, lock-out or other
event which interrupts postal service in any part of Canada, all notices and
communications during such interruption may only be given or made by personal
delivery or by telecopier and any notice or other communication given or made by
prepaid mail within the five (5) Business Day period immediately preceding the
commencement of such interruption, unless actually received, shall be deemed not
to have been given or made. All such notices and communications shall be deemed
to have been received, in the case of notice by telecopier or by delivery prior
to 5:00 p.m. (local time) on a Business Day, when received or if received after
5:00 p.m. (local time) on a Business Day or at any time on a non-Business Day,
on the next following Business Day and, in the case of notice mailed as
aforesaid, on the fifth Business Day following the date on which such notice or
other communication is mailed. The unintentional failure by the Applicants to
give notice contemplated hereunder to any particular Creditor shall not
invalidate this Amended Plan or any action taken by any Person pursuant to this
Amended Plan.
SECTION 5.7 SEVERABILITY OF PLAN PROVISIONS
If, prior to the Confirmation Date, any term or provision of the Amended
Plan is held by the Court to be invalid, void or unenforceable, the Court, at
the request of any Applicant, with the consent of the Required Lenders, and to
the extent of any modification to the treatment of the Account Intermediaries as
holders of Other Secured Claims, the consent of the Account Intermediaries,
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 Amended Plan shall remain in full
force and effect and shall in no way be affected, impaired or invalidated by
such
<PAGE> 117
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holding, alteration or interpretation. The Confirmation Order shall constitute a
judicial determination and shall provide that each term and provision of the
Amended Plan, as it may have been altered or interpreted in accordance with the
foregoing, is valid and enforceable pursuant to its terms.
SECTION 5.8 SUCCESSORS AND ASSIGNS
The rights, benefits and obligations of any entity named or referred to in
the Amended Plan shall be binding on, and shall inure to the benefit of, any
heir, executor, administrator, successor or assign of such entity.
SECTION 5.9 EXCULPATION AND LIMITATION OF LIABILITY
Neither the Applicants, the Subsidiaries, the Lenders, any individual,
corporation or other entity that was at any time formerly a Lender, the ad hoc
steering committee or any other committee of holders of Lender Claims, CIBC as
Administrative Agent and co-arranger under the Credit Agreement, BTCo as
Syndication Agent and co-arranger under the Credit Agreement, any official
committees appointed in the CCAA Proceedings, the DIP Agent, the DIP
Co-Arrangers and the holders of DIP Facility Claims, the Security Agent, and the
Account Intermediaries, or any of their respective present or former members,
officers, directors, employees, advisors, attorneys, or agents, shall have or
incur any liability to any holder of an Affected Secured Lender Claim or any
other party in interest, or any of their respective agents, employees,
representatives, financial advisors, attorneys, or affiliates, or any of their
successors or assigns, for any act or omission in connection with, relating to,
or arising out of, the CCAA Proceedings or the Chapter 11 Cases, formulating,
negotiating or implementing the Amended Plan or the Lender Lock-up Agreement,
the solicitation of acceptances of the Amended Plan or the Lender Lock-up
Agreement, the pursuit of confirmation of the Amended Plan, the confirmation of
the Amended Plan, the consummation of the Amended Plan, or the administration of
the Amended Plan or the property to be distributed under the Amended Plan,
except for their willful misconduct, and in all respects shall be entitled to
rely reasonably upon the advice of counsel with respect to their duties and
responsibilities under the Amended Plan.
The Applicants and the Subsidiaries hereby jointly and severally fully
indemnify each of the Lenders, any individual, corporation or other entity that
was at any time a Lender, the ad hoc steering committee or any other committee
of holders of Lender Claims, CIBC as Administrative Agent and co-arranger under
the Credit Agreement, BTCo as Syndication Agent and co-arranger under the Credit
Agreement, the DIP Agent, the DIP Co-Arrangers and the holders of DIP Facility
Claims, the Security Agent, and the Account Intermediaries, and their respective
agents, affiliates, directors, officers, employees, and representatives,
including counsel (collectively, the "Indemnitees") against any manner of
actions, causes of action, suits, proceedings, liabilities and claims of any
nature, costs and expenses (including reasonable legal fees) which may be
incurred by such Indemnitee or asserted against such Indemnitee arising
<PAGE> 118
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out of or during the course of, or otherwise in connection with or in any way
related to, the negotiation, preparation, formulation, solicitation,
dissemination, implementation, confirmation and consummation of the Amended
Plan, other than any liabilities to the extent arising from the gross negligence
or willful or intentional misconduct of any Indemnitee as determined by a final
judgment of a court of competent jurisdiction. If any claim, action or
proceeding is brought or asserted against an Indemnitee in respect of which
indemnity may be sought from any of the Applicants or any of the Subsidiaries,
the Indemnitee shall promptly notify the Applicants in writing, and the
Applicants may assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnitee, and the payment of all costs and
expenses. The Indemnitee shall have the right to employ separate counsel in any
such claim, action or proceeding and to consult with the Applicants in the
defense thereof and the fees and expenses of such counsel shall be at the
expense of the Applicants unless and until the Applicants shall have assumed the
defense of such claim, action or proceeding. If the named parties to any such
claim, action or proceeding (including any impleaded parties) include both the
Indemnitee and any of the Applicants or Subsidiaries, and the Indemnitee
reasonably believes that the joint representation of such entity and the
Indemnitee may result in a conflict of interest, the Indemnitee may notify the
Applicants in writing that it elects to employ separate counsel at the expense
of the Applicants, and the Applicants shall not have the right to assume the
defense of such action or proceeding on behalf of the Indemnitee. In addition,
the Applicants shall not effect any settlement or release from liability in
connection with any matter for which the Indemnitee would have the right to
indemnification from the Applicants, unless such settlement contains a full and
unconditional release of the Indemnitee, or a release of the Indemnitee
satisfactory in form and substance to the Indemnitee.
SECTION 5.10 BINDING EFFECT
The Amended Plan shall be binding upon and inure to the benefit of the
Applicants and all present and former holders of Affected Secured Lender Claims.
SECTION 5.11 GOVERNING LAW
This Amended Plan shall be governed by and construed in accordance with the
laws of the Province of Ontario and the federal laws of Canada applicable
therein. Subject to the Protocol, any questions as to the interpretation or
application of this Amended Plan and all proceedings taken in connection with
this Amended Plan and its provisions shall be subject to the exclusive
jurisdiction of the Court.
<PAGE> 119
SCHEDULE "A"
CANADIAN SUBSIDIARIES
2766906 Canada Inc. ServTech Canada, Inc.
721646 Alberta Ltd. ST Delta Canada, Inc.
Allwaste of Canada Ltd. Sablix Inc.
Caligo Reclamation Ltd. Philip Analytical Services Corporation
Philip Enterprises Inc./ Philip Environmental (Atlantic) Limited
Les Entreprises Philip Inc.
1195613 Ontario Inc. Philip Environmental (Elmira) Inc.
1233793 Ontario Inc. Philip Environmental Services Limited
2842-7979 Quebec Inc. Delsan Demolition Limited
800151 Ontario Inc. Philip Investment Corp.
842578 Ontario Limited Philip Plasma Metals Inc.
912613 Ontario Ltd. PSC/IML Acquisition Corp.
Nortru, Ltd. Recyclage d'Aluminium Quebec Inc./Quebec
Aluminium Recycling Inc.
Allies Staffing Ltd.
SCHEDULE "B"
SALE AGREEMENT
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE is made as of the 30th day of
November, 1999
B E T W E E N:
The corporations listed in Schedule "A" which are
incorporated under the laws of the jurisdictions set out in
Schedule "A"
(collectively, the "VENDORS")
- and -
1381648 ONTARIO INC., a corporation incorporated under the
laws of Ontario
<PAGE> 120
- 2 -
(the "CANADIAN PURCHASER")
- and -
1381649 ONTARIO INC., a corporation incorporated under the
laws of Ontario
(the "ANALYTICAL SERVICES PURCHASER")
- and -
PHILIP SERVICES INTERNATIONAL INC., a corporation
incorporated under the laws of the State of Delaware
(the "U.S. PURCHASER")
(collectively, the "PURCHASERS")
WHEREAS:
A. The Vendors commenced proceedings under the Companies Creditors Arrangement
Act on June 25, 1999, and Philip Services Corp., Philip Services
(Delaware), Inc. and certain of their subsidiaries commenced proceedings
under Chapter 11 of the United States Bankruptcy Code on the same date;
B. The Vendors wish to sell the Purchased Assets to complete the
reorganization transactions contemplated in the US Plan (as defined below);
C. The Purchasers wish to purchase the Purchased Assets and to assume the
liabilities to be assumed hereunder;
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Parties, the Parties hereto
covenant and agree with each other as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS. In this Agreement, unless the subject matter or context is
inconsistent therewith, the following terms shall have the following meanings:
"ACCOUNT INTERMEDIARIES" means the "Account Intermediaries" as defined in
the Plan Supplement;
"ACCOUNT INTERMEDIARY LIENS" means Liens held by an Account Intermediary;
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"ACCOUNTS RECEIVABLE" means all accounts receivable, bills receivable,
trade accounts, book debts and insurance claims of the Vendors together
with any unpaid interest accrued on such items and any security or
collateral for such items, including recoverable deposits;
"ADMINISTRATIVE AGENT" means Canadian Imperial Bank of Commerce or its
successor as administrative agent for the Lenders under the Credit
Agreement;
"AFFECTED UNSECURED CLAIM" has the meaning set out in the Plan;
"AGREEMENT" means this Agreement, including the Schedules to this
Agreement, as it or they may be amended, modified, supplemented or restated
from time to time, and the expressions "hereof", "herein", "hereto",
"hereunder", "hereby" and similar expressions refer to this Agreement and
not to any particular section or other portion of this Agreement;
"ANALYTICAL SERVICES PURCHASED ASSETS" means all the property, assets and
undertaking of PASC;
"APPLICABLE LAW" means, with respect to any Person, property, transaction,
event or other matter, any law, rule, statute, regulation, order, judgment,
decree, treaty, guidelines having the force of law or other requirement
having the force of law (collectively, the "LAW") relating or applicable to
such Person, property, transaction, event or other matter;
"APPROVAL ORDER" means an order of the Court in form and substance
satisfactory to the Vendors, the Purchasers, the Receiver and the Required
Lenders approving the transactions contemplated by this Agreement,
appointing the Receiver as of the Effective Date and authorizing and
directing the Vendors and the Receiver to enter into and perform this
Agreement;
"ASSUMED SENIOR LIABILITIES" means all of the liabilities of a Vendor
secured by a Lien which ranks in priority to the Lenders' Security
including Account Intermediary Liens and Bonding Security but for greater
certainty shall not include the Unassumed Liabilities;
"BENEFIT PLANS" means the benefit plans of the Vendors listed on
Schedule "B";
"BIA" means the Bankruptcy and Insolvency Act (Canada);
"BONDING SECURITY" means the Bonding Security as defined in the Initial
Order;
"BOOKS AND RECORDS" means all books, records, files and papers of the
Vendors including drawings, engineering information, computer programs
(including source code), software programs, manuals and data, sales and
advertising materials, sales and purchase correspondence, trade association
files, research and development records, lists of present and former
customers and suppliers, personnel, employment and other records, and the
minute and share certificate books of the Vendors and all copies and
recordings of
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the foregoing;
"BUSINESS DAY" means any day other than a Saturday, Sunday or statutory
holiday on which financial institutions in Toronto, Ontario or New York,
New York are required or authorized by law to remain closed;
"CANADIAN DOLLAR EQUIVALENT" of an amount stated in US Dollars means the
Equivalent Amount thereof, expressed in Canadian Dollars on the Effective
Date;
"CANADIAN DOLLARS" means lawful currency of Canada;
"CHOSES IN ACTION" means all claims and choses in action of the Vendors
except those included as part of the Excluded Assets;
"CIBC" means Canadian Imperial Bank of Commerce;
"CONTRACTS" means all contracts and agreements entered into by the Vendors
other than Unassumed Liabilities;
"COURT" means the Ontario Superior Court of Justice;
"CREDIT AGREEMENT" means the credit agreement dated as of August 11, 1997,
among Philip Services Corp., as borrower in Canada, PSI, as borrower in the
United States, the Lenders, CIBC, as administrative agent for the Lenders,
Bankers Trust Company, as syndication agent, and CIBC and Bankers Trust
Company, as co-arrangers, as amended by amending agreements dated October
31, 1997, February 19, 1998, June 24, 1998, October 20, 1998 and December
4, 1998;
"EFFECTIVE DATE" means the date on which the transactions contemplated in
this Agreement will be completed which shall be the Effective Date as
defined in the US Plan or such other date as may be agreed upon in writing
by the Vendors and the Purchasers;
"EMPLOYEES" means the employees of the Vendors on the Effective Date;
"EQUIPMENT" means all equipment, machinery, spare parts, tools, furniture,
fixtures and fittings and vehicles of the Vendors;
"EQUIVALENT AMOUNT" shall mean, with respect to any two currencies, the
amount obtained in one such currency when an amount in the other currency
is translated into the first currency using the spot wholesale transactions
buying rate of the Bank of Canada for the purchase of the applicable amount
of the first currency with the other currency in effect as of 12:00 noon on
the Business Day with respect to which such computation is required for the
purpose of this Agreement or, in the absence of such a buying rate on such
date, using such other rate as the Administrative Agent may reasonably
select;
"EXCLUDED ASSETS" means (i) any claim, rights of action, causes of action,
suits and proceedings, whether in law or in equity, whether known or
unknown, that any of the
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Vendors may hold against Deloitte & Touche, its successors or affiliates,
Robert Waxman, Greg Madesker, Rik Barrese, Monopol Commodities Inc.,
Parametal Trading Co. LLC, MIT International LLC, Henry Feder, Fedmax Metal
Trading Inc., Mark Schmidt-Fellner, Debra Waxman, any of the directors,
officers, employees, agents, advisors or professionals of any of the
Vendors to the extent not released under the US Plan or to the extent any
release under the US Plan is revoked as provided therein, or against any
insurer, any insurance broker (ii) any claim, rights of action, causes of
action suits and proceeding whether in law or in equity whether known or
unknown that any of the Vendors may hold against any other Person arising
out of or related to the same nucleus of operative facts as any of the
clauses in (i); (iii) the shares of the Corporations listed in Schedule "A"
and Schedule "C" and the partnership interests of the Caligo partnership;
(iv) unless otherwise agreed between the Vendors, the Required Lenders and
the holders of such a claim, assets subject to security which ranks in
priority to the Lenders' Security and which secures an obligation where the
deficiency would have been an Affected Unsecured Claim; (v) cash collateral
held by CIBC until such time as, and only to the extent that, CIBC has
agreed to release such cash collateral; (vi) one redeemable Series A
preference share of the Canadian Purchaser; (vii) one redeemable Series A
preference share of the Analytical Services Purchaser; (viii) any assets of
any Vendor in the Province of Newfoundland and (ix) all amounts owing from
one Vendor to another Vendor;
"FOREIGN SUBSIDIARY SHARES" means all shares held by the Vendors in the
foreign subsidiaries listed in Schedule "D";
"INCLUDING" means including without limitation, and "includes" means
includes, without limitation;
"INITIAL ORDER" means the order of the Court dated June 25, 1999 as amended
by orders of the Court dated July 12, 1999 and August 5, 1999;
"INTELLECTUAL PROPERTY" means
(i) the registered trademarks listed in Schedule "E";
(ii) business names, trade names, corporate names, brand names and
slogans;
(iii) any inventions, patents, patent rights, patent applications
(including all reissues, divisions, continuations,
continuations-in-part and extensions of any patent or patent
application), industrial designs and applications for
registration of industrial designs;
(iv) any copyrights and trade-marks (whether used with wares or
services and including the goodwill attaching to such
trade-marks), registrations and applications for trade-marks and
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copyrights (and all future income from such trade-marks and
copyrights);
(v) any rights and interests in and to processes, lab journals,
notebooks, data, trade secrets, designs, know-how, product
formulae and information, manufacturing, engineering and other
drawings and manuals, technology, blue prints, research and
development reports, agency agreements, technical information,
technical assistance, engineering data, design and engineering
specifications, and similar materials recording or evidencing
expertise or information; and
(vi) any other intellectual and industrial property rights throughout
the world;
"INVENTORY" means all inventories of stock-in-trade including materials,
supplies, work-in-progress and finished goods of the Vendors (including
those in possession of suppliers, customers and other third parties.);
"LENDERS" means the "Lenders" as defined in the Credit Agreement;
"LENDERS' SECURITY" means the security granted by the Vendors in favour of
the Administrative Agent or the Security Agent on behalf of the Lenders;
"LIEN" means any lien, mortgage, charge, hypothec, pledge, security
interest, encumbrance or deemed trust;
"OTHER ASSUMED LIABILITIES" means (i) all trade debt of the Vendors; (ii)
employee liabilities provided for in Article 3; (iii) obligations under
Contracts, Personal Property Leases and Real Property Leases included in
the Purchased Assets where any required consent to assignment has been
obtained; (iv) the Assumed Indemnification Obligations (as defined in the
Plan), but for greater certainty paragraphs (i) to (iii) shall not include
the Unassumed Liabilities; and (v) any liabilities which any of the
Applicants is required to pay pursuant to the Initial Order or is permitted
to pay pursuant to paragraphs 12(a), (b), (c), (f) and (g) of the Initial
Order which have not been paid by the Time of Closing;
"PARTY" means a party to this Agreement and any reference to a Party
includes its successors and permitted assigns; "PARTIES" means every Party;
"PASC" means Philip Analytical Services Corporation;
"PENSION PLANS" means the pension plans of the Vendors listed in
Schedule "F";
"PERMITS AND LICENCES" means all permits, licences and certificates of
approval of the Vendors;
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"PERMITTED ENCUMBRANCES" means the Liens securing the Assumed Senior
Liabilities and rights of way and easements registered against the Real
Property prior to the Lenders' Security;
"PERSON" means an individual, a partnership, a corporation, a trust, an
unincorporated organization, a government or any department or agency
thereof or any other entity whatsoever and the heirs, executors,
administrators or other legal representatives of an individual;
"PERSONAL PROPERTY LEASES" means all leases of personal property by a
Vendor, other than Unassumed Liabilities;
"PLAN" means the Amended and Restated Plan of Compromise and Arrangement
dated September 24, 1999;
"PLAN SUPPLEMENT" means the plan supplement dated October 27, 1999 amending
and restating the Plan;
"PSI" means Philip Services (Delaware), Inc.;
"PURCHASED ASSETS" means (i) all of the property, assets and undertaking of
the Vendors, including all cash, goodwill, Inventories, Accounts
Receivable, Intellectual Property, Choses in Action, Contracts, Equipment,
Real Property Leases, Personal Property Leases, Real Property and Books and
Records and all proceeds thereof, and (ii) the shares of the corporations
listed on Schedule "G"; and (iii) cash collateral held by CIBC which CIBC
has agreed to release as contemplated in paragraph (iv) of the definition
of "Excluded Assets", but shall not include the Excluded Assets;
"REAL PROPERTY" means all real and immovable property of the Vendors,
including those listed in Schedule "J";
"REAL PROPERTY LEASES" means all leases of real property of the Vendors
other than Unassumed Liabilities;
"RECEIVER" means any party which is appointed as a receiver or receiver and
manager or interim receiver of the Purchased Assets by the Court pursuant
to the BIA or the Courts of Justice Act (Ontario), in its capacity as a
receiver or receiver and manager or interim receiver and not in any
personal capacity;
"REQUIRED LENDERS" has the meaning set out in the Credit Agreement;
"RIGHTS" has the meaning set out in Section 4.7(1);
"SECURITY AGENT" means CIBC or its successor as security agent for the
Lenders under the Security Agency Agreement dated March 16, 1998 between
CIBC, as Administrative Agent, CIBC, as Security Agent, Philip Services
Corp. and PSI et al;
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"TAXES" means all taxes, charges, fees, levies, imposts and other
assessments, including all income, sales, use, goods and services, value
added, capital, capital gains, alternative, net worth, transfer, profits,
withholding, payroll, employer health, excise, franchise, real property and
personal property taxes, and any other taxes, customs duties, fees,
assessments or similar charges in the nature of a tax including Canada
Pension Plan and provincial pension plan contributions, unemployment
insurance payments and workers compensation premiums, together with any
instalments with respect thereto, and any interest, fines and penalties,
imposed by any governmental authority (including federal, state,
provincial, municipal and foreign governmental authorities), and whether
disputed or not;
"TAX PROVISIONS" has the meaning set out in Section 2.7(4);
"TIME OF CLOSING" means 1:00 p.m. (Toronto time) on the Effective Date, or
such other time on the Effective Date as the Vendors and the Purchasers may
mutually determine;
"UNASSUMED LIABILITIES" means (i) liabilities to the Lenders; (ii)
liabilities for Affected Unsecured Claims (including, for greater
certainty, Excluded Indemnification Obligations) (as defined in the Plan)
or as set out in Schedule "I"; (iii) liabilities of the Vendors for Taxes
which are not secured by a Lien that ranks in priority to the Lenders'
Security or which are not liabilities which any of the Vendors is required
to pay pursuant to the Initial Order or is permitted to pay pursuant to
paragraphs 12(a), (b), (c), (f) and (g) of the Initial Order which have not
been paid by the Time of Closing; (iv) amounts owing from one Vendor to
another Vendor; (v) real property leases of premises which have been
abandoned prior to the Time of Closing ; and (vi) claims or contingent
claims against any of the Vendors which have not been disclosed to the
Lenders;
"US DOLLAR EQUIVALENT" of an amount stated in Canadian Dollars means the
Equivalent Amount expressed in US Dollars on the Effective Date;
"US DOLLARS" means lawful currency of the United States of America;
"US PLAN" means the joint plan of reorganization of Philip Services Corp.,
PSI, and certain of their subsidiaries as set forth in the US Plan, as
filed with the United States Bankruptcy Court for the District of Delaware,
as the same may be amended, modified or supplemented from time to time with
the consent of the Lenders; and
"VESTING ORDER" means an order of the Court vesting title to the Purchased
Assets in the Purchasers free and clear of any Lien other than Permitted
Encumbrances.
1.2 HEADINGS. The division of this Agreement into articles and sections and the
insertion of headings are for convenience of reference only and will not affect
the construction or interpretation of this Agreement. The terms "hereof",
"hereunder" and similar expressions refer to this Agreement and not to any
particular article, section or other portion hereof and include any agreement
supplemental hereto unless something in the subject matter or context is
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inconsistent therewith, references herein to articles and sections are to
articles and sections of this Agreement.
1.3 NUMBER, GENDER AND PERSONS. In this Agreement, words importing the singular
number only shall include the plural and vice versa, words importing gender
shall include all genders and words importing persons shall include individuals,
corporations, partnerships, associations, trusts, unincorporated organizations,
governmental bodies and other legal or business entities of any kind whatsoever.
1.4 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether written or
oral. There are no conditions, covenants, agreements, representations,
warranties or other provisions, express or implied, collateral, statutory or
otherwise, relating to the subject matter hereof except as herein provided.
1.5 TIME OF ESSENCE. Time shall be of the essence of this Agreement.
1.6 APPLICABLE LAW. This Agreement shall be construed, interpreted and enforced
in accordance with, and the respective rights and obligations of the parties
shall be governed by, the laws of the Province of Ontario and the federal laws
of Canada applicable therein, and each party irrevocably and unconditionally
submits to the non-exclusive jurisdiction of the courts of such province and all
courts competent to hear appeals therefrom.
1.7 SEVERABILITY. If any provision of this Agreement is determined by a court
of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, such determination shall not impair or affect any other provisions of
this Agreement which are hereby declared to be separate, severable and distinct.
1.8 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of this
Agreement shall be binding on any Party unless consented to in writing by such
Party. No waiver of any provisions of this Agreement shall constitute a waiver
of any other provision of this Agreement nor shall any waiver constitute a
continuing waiver unless otherwise provided.
1.9 SCHEDULES. The following Schedules are attached to and form part of this
Agreement:
Schedule "A" - Vendors
Schedule "B" - Benefit Plans
Schedule "C" - Excluded Assets - Shares of Corporations
Schedule "D" - Foreign Subsidiary Shares
Schedule "E" - Registered Trademarks
Schedule "F" - Pension Plans
Schedule "G" - Shares of Corporations Being Purchased
Schedule "H" - Real Property
Schedule "I" - Affected Unsecured Claims
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ARTICLE 2
PURCHASE AND SALE
2.1 ASSETS TO BE PURCHASED AND SOLD. Subject to the terms and conditions
hereof, and by way of Vesting Order, the Vendors hereby agree to sell, assign
and transfer to the Purchasers at the Time of Closing all of the right, title
and interest of the Vendors, if any, in and to the Purchased Assets as follows:
(1) CANADIAN PURCHASER - all Purchased Assets except the Analytical
Services Purchased Assets and the Foreign Subsidiary Shares.
(2) ANALYTICAL SERVICES PURCHASER - all Analytical Services Purchased
Assets.
(3) US PURCHASER - all Foreign Subsidiary Shares.
2.2 PURCHASE PRICE. The purchase price payable to the Vendors shall be an
amount equal to US Dollars $132 million, which the Parties agree is the
enterprise fair market value of the business (the "PURCHASE PRICE").
2.3 ALLOCATION OF PURCHASE PRICE. The Purchase Price payable by the Purchasers
shall be allocated among the Purchased Assets by the Purchasers, acting
reasonably, based on the fair market value of the Purchased Assets.
2.4 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid by the
Purchasers to the Vendors as follows:
(1) BY THE CANADIAN PURCHASER
(a) as to an amount equal to the US Dollar Equivalent of the Assumed
Senior Liabilities of the Vendors, other than PASC, by the
assumption of the Assumed Senior Liabilities of the Vendors other
than the Assumed Senior Liabilities of PASC; and
(b) as to the balance of the purchase price allocable to the
Purchased Assets, other than the Analytical Services Purchased
Assets and the Foreign Subsidiary Shares, by the issuance to each
Vendor or as the Receiver may direct of one common share of the
Canadian Purchaser and that number of redeemable, retractable,
voting preference shares of a separate series having an aggregate
redemption and retraction price equal to the Canadian Dollar
equivalent of an amount equal to the fair market value of such
Purchased Assets computed in US Dollars being purchased from such
Vendor, less the aggregate of (i) the US Dollar Equivalent of the
Assumed Senior Liabilities and the Other Assumed Liabilities of
such Vendor; and (ii) the US Dollar Equivalent of $1.00 Canadian
Dollar for each Vendor.
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(2) BY THE ANALYTICAL SERVICES PURCHASER
(a) as to an amount equal to the US Dollar Equivalent of the Assumed
Senior Liabilities of PASC, by the assumption of the Assumed
Senior Liabilities of PASC; and
(b) as to the balance of the purchase price allocable to the
Analytical Services Purchased Assets, by the issuance to PASC or
as the Receiver may direct of 100,000 common shares of the
Analytical Services Purchaser having an aggregate issue price
equal to the Canadian Dollar Equivalent of an amount equal to the
fair market value of the Analytical Services Purchased Assets
computed in US Dollars, less the aggregate of the US Dollar
Equivalent of the Assumed Senior Liabilities and Other Assumed
Liabilities of PASC; and
(3) U.S. PURCHASER - As to an amount equal to the purchase price allocable
to the Foreign Subsidiary Shares by the issuance to each such Vendor or as the
Receiver may direct of one common share of the U.S. Purchaser and that number of
redeemable, retractable, voting preference shares of a separate series having an
aggregate redemption and retraction price equal to the fair market value of the
Foreign Subsidiary Shares being purchased from such Vendor computed in U.S.
Dollars minus $1.00 US Dollar for each Vendor.
2.5 OTHER ASSUMED LIABILITIES. From and after the Effective Date, the
applicable Purchasers will assume, satisfy, pay and perform the Assumed Senior
Liabilities and the Other Assumed Liabilities.
2.6 TAXES.
(1) Subject to paragraph (2), the Purchasers will be liable for and shall
pay all taxes, duties and fees whatsoever which are required to be paid by a
Purchaser in connection with the transaction contemplated herein, together with
all duties, registration fees or other charges properly payable by the
Purchasers upon or in connection with the conveyance or transfer of the
Purchased Assets, including, without limitation, all taxes payable pursuant to
the Excise Tax Act (Canada), and An act respecting the Quebec sales tax and
amending various fiscal legislation, Ontario retail sales tax and any other tax,
duty, levy or fee payable in any other jurisdiction.
(2) The Vendors and the Purchasers shall not be liable for and shall not be
required to pay any taxes, duties or fees either of them is exempted from paying
under the US Plan.
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2.7 ELECTIONS.
(1) The Vendors and the Canadian Purchaser and the Analytical Services
Purchaser will, on or before the Time of Closing, jointly execute an election,
in prescribed form and containing the prescribed information, to have subsection
167(1) of the Excise Tax Act (Canada) apply to the sale and purchase of the
Purchased Assets hereunder so that no tax is payable in respect of such sale and
purchase under Part IX of the Excise Tax Act (Canada). The Canadian Purchaser
and the Analytical Services Purchaser will file such election with the Minister
of National Revenue within the time prescribed by the Excise Tax Act (Canada).
(2) The Vendors and the Canadian Purchaser and the Analytical Services
Purchaser will if necessary, on or before the Time of Closing, jointly execute
an election, in prescribed form and containing the prescribed information, to
have section 75 of an Act respecting the Quebec sales tax and amending various
fiscal legislation apply to the sale and purchase of the assets hereunder so
that no tax is payable in respect of such sale and purchase under section 75 of
an Act respecting the Quebec sales tax and amending various fiscal legislation.
The Canadian Purchaser and the Analytical Services Purchaser will file such
election with the Minister of Finance (Quebec) within the time prescribed by
such act.
(3) The Vendors and the Canadian Purchaser and the Analytical Services
Purchaser will jointly complete and execute an election under section 22 of the
Income Tax Act (Canada) and under any applicable, analogous provincial
legislative provision as to the sale of Accounts Receivable to the Canadian
Purchaser and the Analytical Services Purchaser hereunder as soon as practicable
following the Effective Date but in any event no later than 30 days prior to the
earliest time that either party is required to file its tax return under the
Income Tax Act (Canada) or provincial taxing legislation for the taxation year
in which the closing of the transactions contemplated in this Agreement occurs.
Such elections will designate therein the applicable portion of the Purchase
Price as the consideration paid by the Canadian Purchaser and the Analytical
Services Purchaser therefor in accordance with the allocation made in Section
2.4 and the Vendors and the Canadian Purchaser and the Analytical Services
Purchaser will each file such election with Revenue Canada within the time
prescribed in the Income Tax Act (Canada).
(4) Each Vendor and the Canadian Purchaser and the Analytical Services
Purchaser shall, if so requested by the applicable Purchaser, file in mutually
agreeable form an election (the "20(24) ELECTION") under subsection 20(24) of
the Income Tax Act (Canada) and any analogous legislation of any province of
Canada (the "TAX PROVISIONS") in the form and manner and within the time
prescribed by the Tax Provisions, with respect to the assumption by the
applicable Purchaser of such portion of the Assumed Liabilities as may be
specified by the applicable Purchaser in its sole discretion. Notwithstanding
the above, (i) the applicable Purchaser shall have the sole responsibility for
preparing and filing in a timely fashion the 20(24) Election, and for paying any
penalties or interest which may be payable in connection with the 20(24)
Election; and (ii) each Vendor's sole obligation under this section shall be to
execute any 20(24) Election prepared by the applicable Purchaser.
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ARTICLE 3
EMPLOYEES
3.1 OFFERS TO EMPLOYEES. On or before the Effective Date, subject to the
closing of the transactions set forth herein, the applicable Purchaser shall
offer employment to the Employees to be employed by such Purchaser at the same
rate of wages and benefits currently received by each of the Employees and upon
other terms and conditions the same as those of his or her current employment
with the applicable Vendor, including fixed termination dates included in
written agreements with the Vendors, which employment shall commence as at the
Effective Date. The Purchaser making the offer of employment shall recognize the
seniority and years of service with the applicable Vendor of such Employee.
3.2 REMUNERATION, BENEFITS AND DEDUCTIONS. Until the Effective Date, the
Vendors shall be responsible for all wages, statutory deductions, remittances,
assessments, bonuses, vacation pay, sick leave, severance pay and other
remuneration, benefits and deductions for all of the Employees. Thereafter, the
applicable Purchaser shall be responsible for all such remuneration, benefits
and deductions of the Employees who accept the offer of employment with such
Purchaser. On the Effective Date, the applicable Purchaser shall assume the
Vendors' responsibility for all wages, statutory deductions, remittances,
assessments, bonuses, vacation pay, sick leave, severance pay and other
remuneration, benefits and deductions accrued prior to Closing in respect of all
Employees employed by such Purchaser. The Purchaser consents to the payment by
the Vendors at the Time of Closing of outstanding severance pay obligations to
former employees of the Vendors (other than for severance pay claims which are
Affected Unsecured Claims or Class 7 claims under the US Plan) to the extent
provided for in the Vendors' severance pay policy as at June 25, 1999.
3.3 ASSUMPTION OF RIGHTS AND OBLIGATIONS. From and after the Effective Date,
the applicable Purchaser shall assume all of the rights and obligations of the
Vendors:
(a) under any collective agreements with trade unions or associations
that represent Employees which have accepted such Purchaser's
offer of employment; and
(b) under applicable labour relations legislation in respect of those
Employees represented by a trade union or association certified
under such legislation to bargain exclusively on their behalf for
a collective agreement.
3.4 PENSION AND BENEFIT PLANS. Effective as of the Effective Date, the
applicable Purchasers shall assume the obligations of the Vendors under the
Benefit Plans and the Pension Plans and all of the Vendors' obligations,
liabilities and responsibilities as sponsor and administrator of the Pension
Plans and in respect of any funding medium related thereto, provided that any
required approvals of trade unions or associations that represent Employees have
been obtained. As soon as practicable after the Effective Date, and in any event
within 60 days following the Effective Date, the Purchasers shall take, or shall
have taken, all such actions as may be required under the terms of the Pension
Plans, any funding medium related thereto and Applicable Law, including,
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without limitation, the completion of any regulatory filings, in order to become
the sponsor and administrator of the Pension Plans. The Vendors shall cooperate
with the Purchasers and provide the Purchasers with whatever assistance they may
reasonably require in order to give effect to their obligations pursuant to this
Section 3.4. Prior to and following the Effective Date, the Vendors shall use
their best efforts to provide the Purchasers with such books, records and other
relevant data within their control or access relating to the Pension Plans or
the Benefit Plans as the Purchasers shall reasonably request.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS
4.1 VENDORS' REPRESENTATIONS AND WARRANTIES. The Vendors represent and warrant
to the Purchasers as of the Time of Closing, and acknowledge and confirm that
the Purchasers will be relying on such representations and warranties in
connection with the purchase of the Purchased Assets, that:
(a) each Vendor is a corporation duly incorporated, amalgamated or
continued, as applicable, and organized and subsisting under its
jurisdiction of incorporation, amalgamation or continuance, as
applicable;
(b) subject to the approval of the Court, each Vendor has good and
sufficient power, authority and right to enter into and deliver
this Agreement and to complete the transactions to be completed
by the Vendors contemplated hereunder;
(c) except as disclosed in Schedule "A" hereto, each Vendor is
registered under Part IX of the Excise Tax Act (Canada) with its
registration number being set out in Schedule A; and
(d) each Vendor is not, and as at the Time of Closing, will not be, a
non-resident of Canada within the meaning of Section 116 of the
Income Tax Act (Canada).
4.2 RECEIVER'S REPRESENTATIONS AND WARRANTIES. The Receiver will represent and
warrant to the Purchasers as of the Time of Closing, and will acknowledge and
confirm that the Purchasers will be relying on such representations and
warranties in connection with the purchase of the Purchased Assets, that:
(a) the Receiver has been appointed as receiver and manager or
interim receiver (as the case may be) of the Purchased Assets
with, upon the granting of the Approval Order and Vesting Order,
the full right, power and authority to enter into this Agreement,
perform its obligations hereunder and convey all the right, title
and interest of the Vendors and Receiver in and to the Purchased
Assets to the Purchasers;
<PAGE> 133
- 15 -
(b) the Receiver is not, and as at the Time of Closing, the Receiver
will not be, a non-resident of Canada within the meaning of
Section 116 of the Income Tax Act (Canada); and
(c) the Receiver has not done any act to encumber the Purchased
Assets.
4.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
(1) The representations, warranties and covenants set forth in this
Agreement will merge on Closing.
(2) The Purchasers acknowledges that, if the Receiver becomes a party to
this Agreement, the Receiver will be acting solely in its capacity as receiver
and manager of the property, assets and undertaking of the Vendors and any
liability of the Receiver to the Purchasers is limited to the amount of the
Purchase Price and the Receiver shall have no personal liability in respect of
this Agreement or the transactions contemplated hereby.
4.4 PURCHASERS' REPRESENTATIONS AND WARRANTIES. The Purchasers represent and
warrant to the Vendors, and hereby acknowledge and confirm that the Vendors are
relying on such representations and warranties in connection with the sale of
the Purchased Assets, that:
(a) each Purchaser is a corporation duly incorporated, organized and
subsisting under its jurisdiction of incorporation; and
(b) each Purchaser has good and sufficient power, authority and right
to enter into and deliver this Agreement and to complete the
transactions to be completed by the Purchaser contemplated
hereunder and the Purchaser has taken all necessary corporate
action to authorize the entering into and performance of this
Agreement.
4.5 SURVIVAL OF PURCHASER'S REPRESENTATIONS AND WARRANTIES.
The representations, warranties and covenants of the Purchasers set forth
in this Agreement will merge on Closing.
4.6 "AS IS, WHERE IS". The Purchasers acknowledge that the Vendors are selling
and the Purchasers are purchasing the Purchased Assets on an "as is, where is"
basis as they shall exist on the Effective Date. The Purchasers further
acknowledge that they have entered into this Agreement on the basis that none of
the Vendors or the Receiver has guaranteed or will guarantee title to the
Purchased Assets. No representation, warranty or condition is expressed or can
be implied as to title, encumbrance, description, fitness for purpose,
environmental compliance, merchantability, condition or quality, or in respect
of any other matter or thing whatsoever concerning the Purchased Assets, or the
right of the Vendors to sell or assign same save and except as expressly
provided for in this Agreement.
4.7 THIRD PARTY CONSENTS.
<PAGE> 134
- 16 -
(1) Nothing in this Agreement shall constitute an assignment or attempted
assignment of any Contracts or Personal Property Leases of the Vendors which are
not assignable without the consent of another person if such consent has not
been obtained (the "RIGHTS"). The Vendors shall use their best efforts both
prior to and after the Effective Date to obtain the consent of any third party
to the Rights where such consent is required. To the extent that all such
required consents are not obtained by the Time of Closing the Rights shall be
held in trust by the Vendors for the applicable Purchaser. All benefits to be
derived thereunder shall be for the account of the applicable Purchaser and the
Vendors shall, at the expense of the applicable Purchaser, take or cause to be
taken all such action in its name or otherwise as the applicable Purchaser may
reasonably require so as to provide to the applicable Purchaser the benefits of
such Rights. The Vendors shall promptly pay over to the applicable Purchaser all
monies collected by or paid to the Vendors in respect of such Rights. Effective
from and after the Time of Closing, the Vendors authorize the applicable
Purchaser, at the Purchaser's expense, to perform all of the obligations in
respect of the Rights, and the applicable Purchaser covenants and agrees to
perform all of such obligations. Any such Rights shall be assigned to the
applicable Purchaser as soon as the required consent to assignment has been
obtained. Nothing contained herein shall be construed to negate or diminish, as
between the Vendors and the applicable Purchaser, the Purchaser's covenants and
obligations to perform and fulfil all of the Vendors' obligations and duties
under the Rights from and after the Time of Closing.
(2) Nothing in this Agreement shall constitute an assignment or attempted
assignment of any Real Property Lease of the Vendors which is not assignable
without the consent of another person if such consent has not been obtained (the
"LEASE RIGHTS" ). The Vendors shall use their best efforts both prior to and
after the Effective Date to obtain the consent of any third party to the Lease
Rights where such consent is required. To the extent that all such required
consents are not obtained by the Time of Closing, the applicable Purchaser shall
enter into an occupancy agreement with the Receiver in respect of the premises
leased pursuant to the Lease Rights on terms and conditions reasonably
acceptable to the Receiver. Any such Lease Rights shall be assigned to the
applicable Purchaser as soon as the required consent to assignment has been
obtained.
(3) Notwithstanding any other provision of this Agreement: (a) the shares
of Phencorp Reinsurance Company Inc. and Philip International Development Inc.
shall not be transferred to the applicable Purchaser until all regulatory
consents to the transfer of the shares of this corporation required under
applicable law have been obtained; and (b) the shares of Fercyco & Partners,
Fercyco Incorporated, Fers et Meteaux Recyclees Ltee., K-Scrap Resources Inc.
and R&R Trucking Inc. shall not be transferred to the applicable Purchaser until
all required consents of other shareholders of these corporations have been
obtained. Any such shares shall be transferred to the applicable Purchaser as
soon as the required consent to transfer has been obtained.
The Vendors shall use their best efforts both prior to and after the Effective
Date to obtain the regulatory and third party consents referred to in this
paragraph.
4.8 PLANNING ACT. This Agreement shall be effective to create an interest in
the Real Property only if the subdivision control provisions of the Planning Act
(Ontario) are complied
<PAGE> 135
- 17 -
with. The Vendors shall forthwith apply for and diligently pursue any required
consent under the Planning Act (Ontario).
ARTICLE 5
CONDITIONS
5.1 CONDITIONS FOR THE BENEFIT OF THE PURCHASERS.
(1) The sale by the Vendors and the purchase by the Purchasers of the
Purchased Assets are subject to the following conditions, which are for the
exclusive benefit of the Purchasers and which are to be performed or complied
with at or prior to the Time of Closing:
(a) the representations and warranties of the Vendors or Receiver, as
applicable, set forth in Section 4.1 or 4.2, as applicable, will
be true and correct at the Time of Closing with the same force
and effect as if made at and as of such time;
(b) the Vendors will have performed or complied with all of the
terms, covenants and conditions of this Agreement to be performed
or complied with by them at or prior to the Time of Closing;
(c) the Approval Order and the Vesting Order shall have been made,
and the operation and effect of the Approval Order and the
Vesting Order shall not have been stayed, reversed or amended and
the Receiver shall have executed and delivered to the Purchasers
an acknowledgement that it is bound by this Agreement;
(d) either (i) the US Bankruptcy Court shall have issued a final
order under the US Bankruptcy Code confirming the US Plan and all
conditions to the effectiveness of the US Plan shall have been
satisfied other than the condition that the Alternate Canadian
Transactions (as defined in the US Plan) have become effective,
or (ii) if the Canadian Plan Condition (as defined in the US
Plan) has been waived, the US Plan has become effective;
(e) all amounts required to be paid under paragraph 21 of the Initial
Order will have been paid; and
(f) agreements shall be in place evidencing sufficient bonding to
meet the projected bonding requirements of the Purchasers and
their subsidiaries and for the provisions of bank account
services for the Purchasers and their subsidiaries.
(2) In case any term or covenant of the Vendors or condition to be
performed or complied with for the benefit of the Purchasers at or prior to the
Time of Closing has not been performed
<PAGE> 136
- 18 -
or complied with at or prior to the Time of Closing, the Purchasers, without
limiting any other right that the Purchasers have, may at their option with the
consent of the Required Lenders, either:
(a) rescind this Agreement by notice to the Vendors, and in such
event the Purchasers will be released from all obligations
hereunder; or
(b) waive compliance in writing with any such terms, covenant or
condition in whole or in part on such terms as may be agreed upon
without prejudice to any of its rights of rescission in the event
of non-performance of any other term, covenant or condition in
whole or in part, and, if the Purchasers rescind this Agreement
pursuant to Section 5.1, the Vendors will also be released from
all obligations hereunder.
5.2 CONDITIONS FOR THE BENEFIT OF THE VENDORS.
(1) The sale by the Vendors and the purchase by the Purchasers of the
Purchased Assets are subject to the following conditions, which are the
exclusive benefit of the Vendors and which are to be performed or complied with
at or prior to the Time of Closing:
(a) the representations and warranties of the Purchasers set forth in
Section 4.4 will be true and correct at the Time of Closing with
the same force and effect as if made at and as of such time;
(b) the Purchasers will have performed or complied with all the
terms, covenants and conditions of this Agreement to be performed
or complied with by the Purchasers at or prior to the Time of
Closing;
(c) the Approval Order and the Vesting Order shall have been made,
and the operation and effect of the Approval Order and the
Vesting Order shall not have been stayed, reversed or amended;
(d) either (i) the US Bankruptcy Court shall have issued a final
order under the US Bankruptcy Code confirming the US Plan and all
conditions to the effectiveness of the US Plan shall have been
satisfied other than the condition that the Alternate Canadian
Transactions (as defined in the US Plan) have become effective,
or (ii) if the Canadian Plan Condition (as defined in the US
Plan) has been waived, the US Plan has become effective;
(e) the Purchasers and each of the subsidiaries whose shares are
included in the Purchased Assets shall have executed and
delivered all documents which are required from subsidiaries of
PSI under the US Plan or under any agreement to be entered into
pursuant thereto, including the New Guarantees (as defined in the
US Plan) and related security documents and the Exit Facility (as
defined in the US Plan); and
<PAGE> 137
- 19 -
(f) each of the Canadian Purchaser and the Analytical Services
Purchaser shall be registered under Part IX of the Excise Tax
Act.
(2) In the case any term or covenant of the Purchasers or condition to be
performed or complied with for the benefit of the Vendor at or prior to the Time
of Closing has not been performed or complied with at or prior to the Time of
Closing, the Vendor, without limiting any other right that the Vendor has, may
at its option, either:
(a) with leave of the Court, rescind this Agreement by notice to the
Purchaser, and in such event the Vendor will be released from all
obligations hereunder; or
(b) waive compliance in writing with any such term, covenant or
condition in whole or in part on such terms as may be agreed
upon, and in the case of the conditions in Sections 5.2(d) and
(e) with the consent of the Lenders, without prejudice to any of
their rights of rescission in the event of non-performance of any
other term, covenant or condition in whole or in part, and, if
the Vendors rescind this Agreement pursuant to Section 5.2, the
Purchasers will also be released from all obligations hereunder.
5.3 TIME OF CLOSING. If the transactions contemplated hereby are not completed
by the Time of Closing, this Agreement shall be null and void and each of the
Purchasers and the Vendors shall be released from their obligations hereunder
and shall have no further liability to each other.
ARTICLE 6
CLOSING ARRANGEMENTS
6.1 CLOSING. The sale and purchase of the Purchased Assets will be completed at
the Time of Closing at the offices of Stikeman, Elliott, Toronto, or such other
place as the Vendors and the Purchasers may agree. At the Time of Closing, the
Vendors will deliver to the Purchasers such bills of sale, assignments,
conveyances, documents and other instruments as may be reasonably required by
the Purchasers to complete the transactions provided for in this Agreement.
ARTICLE 7
GENERAL
7.1 FURTHER ASSURANCES. Each of the Vendors and the Purchasers will from time
to time execute and deliver all such further documents and instruments and do
all acts and things as any other party may, either before or after the Effective
Date, reasonably require to effectively carry out or better evidence or perfect
the full intent and meaning of this Agreement.
7.2 TIME OF THE ESSENCE. Time is of the essence of this Agreement.
<PAGE> 138
- 20 -
7.3 COST. Each of the Parties hereto will pay their respective legal and
accounting costs and expenses incurred in connection with the preparation,
execution and delivery of this Agreement and all documents and instruments
executed pursuant hereto and any other costs and expenses whatsoever and
howsoever incurred.
7.4 PUBLIC ANNOUNCEMENTS. Subject to Applicable Law, no press release, public
announcement or other similar notice concerning the sale and purchase of the
Purchased Assets may be made to the general public by either of the Vendors or
the Purchasers without the prior consent and approval of the Vendors and the
Purchasers. The Vendors will consult with the Purchasers with respect to the
text of any press release required by Applicable Law.
7.5 NOTICES. Any demand, notice or other communication to be given in
connection with this Agreement will be given in writing and will be given by
personal delivery by registered mail or by electronic means of communication
addressed to the recipient as follows:
(a) if to the Vendors:
c/o: Philip Services Corp.
100 King Street West
Hamilton, Ontario
L8N 4J6
ATTENTION: COLIN SOULE
Facsimile: (905) 521-9160
and to:
Stikeman, Elliott
199 Bay Street
Suite 5300
Toronto, Ontario
M5L 1B9
ATTENTION: PETER HAMILTON
Facsimile: (416) 947-0866
<PAGE> 139
- 21 -
and to:
Blake, Cassels & Graydon
Box 25, Commerce Court West
Toronto, Ontario
M5L 1A9
ATTENTION: SUSAN GRUNDY
Facsimile: (416) 863-2653
(b) if to the Purchasers:
c/o: Philip Services (Delaware), Inc.
100 King Street West
Hamilton, Ontario
L8N 4J6
ATTENTION: COLIN SOULE
Facsimile: (905) 521-9160
with a copy to:
Stikeman, Elliott
Commerce Court West
Suite 5300
Toronto, Ontario
M5L 1B9
ATTENTION: PETER HAMILTON
Facsimile: (416) 947-0866
<PAGE> 140
- 22 -
(c) if to the Receiver:
Ernst & Young Inc.
Ernst & Young Tower
222 Bay Street, 22nd Floor
P.O. Box 251, Toronto Dominion Centre
Toronto, Ontario
M5K 1J7
ATTENTION: MURRAY MCDONALD
Facsimile: (416) 943-3300
with a copy to:
Tory Tory DesLauriers & Binnington
Barristers & Solicitors
Suite 3000, Aetna Tower
79 Wellington Street West
Toronto, Ontario
M5K 1N2
ATTENTION: MARIO FORTE
Facsimile: (416) 865-7380
or to such other address, individual or electronic communication number as
may be designated by notice given by a party to the others. Any demand, notice
or other communication given by personal delivery will be conclusively deemed to
have been given on the day of actual delivery thereof and, if given by
registered mail, on the third Business Day following the deposit thereof in the
mail and, if given by electronic communication, on the day of transmittal
thereof if given during the normal business hours of the recipient and on the
Business Day during which such normal business hours next occur if not given
during such hours on any day. If the party giving any demand, notice or other
communication knows or ought reasonably to know of any difficulties with the
postal system that might affect the delivery of mail, any such demand, notice or
other communication may not be mailed but must be given by personal delivery or
by electronic communication.
7.6 SUCCESSORS AND ASSIGNS. This Agreement shall enure to the benefit of and
shall be binding on and enforceable by the Parties and, where the context so
permits, their respective successors and permitted assigns. Except as explicitly
provided herein, neither the Vendors nor the Purchasers may assign any of their
respective rights or obligations hereunder without the prior written consent of
the other Parties. The Purchasers acknowledge that following the appointment of
a Receiver, they will continue to be bound by this Agreement and that such
<PAGE> 141
- 23 -
Receiver shall be entitled to the benefit and subject to the obligations of this
Agreement in the place and stead of the Vendors.
7.7 CAPACITY OF VENDORS. The Purchasers acknowledge that any Receiver which
executes or assumes this Agreement does so solely in its capacity as Receiver
and not in its personal capacity.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.
VENDORS:
PHILIP SERVICES CORP.
By:
----------------------------------------------------
By:
----------------------------------------------------
PHILIP ENTERPRISES INC.
By:
----------------------------------------------------
By:
----------------------------------------------------
1195613 ONTARIO INC.
By:
----------------------------------------------------
By:
----------------------------------------------------
1233793 ONTARIO INC.
By:
----------------------------------------------------
By:
----------------------------------------------------
<PAGE> 142
- 24 -
912613 ONTARIO LTD.
By:
----------------------------------------------------
By:
----------------------------------------------------
ALLWASTE OF CANADA LTD.
By:
----------------------------------------------------
By:
----------------------------------------------------
CALIGO RECLAMATION LTD.
By:
----------------------------------------------------
By:
----------------------------------------------------
CALIGO (PARTNERSHIP)
By:
----------------------------------------------------
By:
----------------------------------------------------
PHILIP ENVIRONMENTAL (ATLANTIC) LIMITED
By:
----------------------------------------------------
By:
----------------------------------------------------
<PAGE> 143
- 25 -
PHILIP ENVIRONMENTAL SERVICES LIMITED
By:
----------------------------------------------------
By:
----------------------------------------------------
PHILIP ANALYTICAL SERVICES CORPORATION
By:
----------------------------------------------------
By:
----------------------------------------------------
PHILIP ENVIRONMENTAL (ELMIRA) INC.
By:
----------------------------------------------------
By:
----------------------------------------------------
DELSAN DEMOLITION LIMITED
By:
----------------------------------------------------
By:
----------------------------------------------------
2766906 CANADA INC.
By:
----------------------------------------------------
By:
----------------------------------------------------
<PAGE> 144
- 26 -
PURCHASERS:
1381648 ONTARIO INC.
By:
----------------------------------------------------
1381649 ONTARIO INC.
By:
----------------------------------------------------
PHILIP SERVICES INTERNATIONAL INC.
By:
----------------------------------------------------
<PAGE> 145
SCHEDULE "A"
VENDORS
<TABLE>
<CAPTION>
VENDOR JURISDICTION GST NUMBER
- ------ ------------ ----------
<S> <C> <C>
Philip Services Corp. Ontario 122987175RT0001
Philip Enterprises Inc. Ontario 872544390RT0001
1195613 Ontario Inc. Ontario 894590470RT0001
1233793 Ontario Inc. Ontario 887996130RT0001
912613 Ontario Ltd. Ontario Closed per Revenue Canada
Allwaste of Canada Ltd. Ontario 895417079RT0001
Caligo Reclamation Ltd. Ontario 892205477RT0001
Caligo (Partnership) Ontario 119448082RT0001
Philip Environmental (Atlantic) Limited Nova Scotia 898-396-577
Philip Environmental Services Limited Ontario 899742878RT0001
Philip Analytical Services Corporation Ontario 886299288RT0001
Philip Environmental (Elmira) Inc. Ontario 134522507RT0001
Delsan Demolition Limited Ontario CLOSED
2766906 Canada Inc. Canada 886882034RT0001
</TABLE>
<PAGE> 146
SCHEDULE "B"
BENEFIT PLANS
The Philip Services Corp. Group Benefit Plan consisting of:
Life Insurance (including dependent life insurance and optional life insurance),
and Long Term Disability Insurance provided under Great-West Life Assurance
Company Policy No. 325341 (previously provided under Metropolitan Life
Insurance Company Policy No. 62266-38);
Accidental Death and Dismemberment Insurance provided under Hartford Fire
Insurance Company Policy No. 6510-38;
Extended Health Care Benefits, Dental Benefits, and Vision Benefits provided
under Great-West Life Assurance Company Policy No. 55591 (previously
provided under London Life Insurance Company Policy No. 71775-38); and
Travel Assistance Benefits provided under Great-West Life Assurance Company
Policy No. 325341 (previously provided under London Life Insurance Company
Policy No. 71775-38).
Salary Continuance Benefits funded by Philip Services Corp. and described in
Approved Company Policy and Procedure No. S-001.
Philip Services Corp. Educational Assistance Program.
<PAGE> 147
SCHEDULE "C"
EXCLUDED ASSETS
SHARES OF CORPORATIONS
2842-7979 Quebec Inc.
Sablix Inc.
Philip Gore Landfill Inc.
721646 Alberta Inc.
2884216 Canada Inc.
1125443 Ontario Inc.
Societe d'Elimination Environmentale Selenco Inc.
Philip Plasma Metals Inc.
PSC/IML Acquisition Corp.
Nortru, Ltd.
Allies Staffing Ltd.
Servtech Canada, Inc.
ST Delta Canada, Inc.
Services Environmenteaux Delsan Cleveland Inc.
York Thomas Decommissioning Inc.
Cecatur Holdings
Philip Services (Delaware), Inc. (shares cancelled)
Phencorp International Finance Inc.
Philip Chembrex Environmental (Mercosur) Inc.
Phencorp International BV
<PAGE> 148
SCHEDULE "D"
FOREIGN SUBSIDIARY SHARES
<TABLE>
<CAPTION>
COMPANY JURISDICTION VENDOR/SHAREHOLDER
- ------- ------------ ------------------
<S> <C> <C>
Philip International Development Inc. Barbados Philip Services Corp.
Phencorp Reinsurance Company Inc. Barbados Philip Services Corp.
Arc Dust Processing (Barbados) Limited Barbados Philip Services Corp.
Luntz Corporation Delaware Philip Services Corp.
Philip Industries (Europe) Limited Europe Philip Services Corp.
Philip Industrial Services (Europe) Limited Europe Philip Services Corp.
PSC (Europe) Limited Europe Philip Services Corp.
Philip Services (Europe) Limited Europe Philip Enterprises Inc.
</TABLE>
<PAGE> 149
SCHEDULE "E"
REGISTERED TRADEMARKS
PHILIP ENTERPRISES INC.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
COUNTRY TRADE-MARK REGISTRATION NO.
- --------------------------------------------------------------------------------
<S> <C> <C>
Canada ECOSAFE TMA-338,520
- --------------------------------------------------------------------------------
</TABLE>
PHILIP SERVICES CORP.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
COUNTRY TRADE-MARK REGISTRATION NO.
- --------------------------------------------------------------------------------
<S> <C> <C>
Canada PHILIP & DESIGN TMA-475,422
- --------------------------------------------------------------------------------
Canada PHILIP ENVIRONMENTAL TMA-431,169
- --------------------------------------------------------------------------------
Canada PHILIP SERVICES TMA-514,919
- --------------------------------------------------------------------------------
Canada PHILIP SERVICES CORP. TMA-501,028
- --------------------------------------------------------------------------------
Canada PSC TMA-501,181
- --------------------------------------------------------------------------------
United States PHILIP ENVIRONMENTAL 2,102,936
- --------------------------------------------------------------------------------
United States PHILIP ENVIRONMENTAL 2,059,355
- --------------------------------------------------------------------------------
United States PHILIP SERVICES Pending
- --------------------------------------------------------------------------------
United States PSC Pending
- --------------------------------------------------------------------------------
United States PSC PHILIP SERVICES CORP. Pending
- --------------------------------------------------------------------------------
</TABLE>
<PAGE> 150
SCHEDULE "F"
1. Pension Plan for Philip Services Corp., registered with Revenue Canada,
Taxation and the Financial Services Commission of Ontario under
Registration No. 0697110 and maintained under Flexible Investment Defined
Contribution Pension Plan Investment Contract No. GE 11286-RP issued by
London Life Insurance Company.
Flexible Investment Retirement Savings Plan for Employees of Philip Services
Corp., maintained under Flexible Investment Retirement Savings Plan Investment
Contract No. GE 11286-RS issued by London Life Insurance Company.
Group Retirement Savings Plan for Executives of Philip Services Corp.,
maintained under Flexible Investment Retirement Savings Plan Investment Contract
No. GE11308 issued by London Life Insurance Company.
Philip Services Corp. Pension Plan for Intermetco Senior Management Employees,
registered with Revenue Canada, Taxation and the Financial Services Commission
of Ontario under Registration No. 0687608.
Intermetco Limited Retirement Pension Plan for Members of United Steelworkers of
America Local 6098, registered with Revenue Canada, Taxation and the Financial
Services Commission of Ontario under Registration No. 0347047.
Intermetco Limited Salaried Employees' Pension Plan, registered with Revenue
Canada, Taxation and the Financial Services Commission of Ontario under
Registration No. 0347021.
The Employees' Pension Plan of Philip Enterprises Inc. - Resource Recovery
Group, registered with Revenue Canada, Taxation and the Financial Services
Commission of Ontario under Registration No. 0377150.
The Hourly Employees' Pension Plan of I.W.&S. Ferrous Limited, registered with
Revenue Canada, Taxation and the Financial Services Commission of Ontario under
Registration No. 0474932.
The I.W.&S. Ferrous Limited Pension Plan for Salaried Employees, registered with
Revenue Canada, Taxation and the Financial Services Commission of Ontario under
Registration No. 0481937.
<PAGE> 151
SCHEDULE "G"
SHARES OF CORPORATIONS BEING PURCHASED
800151 Ontario Inc.
842578 Ontario Limited
Fercyco & Partners
Fercyco Incorporated
Fers et Meteaux Recycles Ltee
K-Scrap Resources
R & R Trucking Inc.
Philip Investment Corp.
Recyclage d'Aluminium Quebec Inc.
1242204 Ontario Inc. (Braemar Acres)
Delsan A.I.M. Environmental Services Inc./Les Services Environmenteaux
Delsan-A.I.M. Inc.
Arc Dust Processing (Barbados) Limited
Luntz Corporation
Phencorp Reinsurance Company Inc.
Philip Industries (Europe) Limited
Philip Industrial Services (Europe) Limited
Philip International Development Inc.
PSC (Europe) Limited
Philip Services (Europe) Limited
<PAGE> 152
SCHEDULE "H"
REAL PROPERTY
PHILIP ENTERPRISES INC.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
ITEM LEASED OR OWNED ADDRESS (CANADA)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S>
B. Owned 519 Parkdale Avenue, Hamilton, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 519 Parkdale Avenue, Hamilton, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 799-800 Parkdale Avenue North, Hamilton, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 52 Imperial Street, Hamilton, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 799-800 Parkdale Avenue North, Hamilton, Ontario
- -----------------------------------------------------------------------------------------------------
Owned Snow Valley Road, R.R. #3, Barrie, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 670 Strathearne Avenue North, Hamilton, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 1683 Brampton Street East, Hamilton, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 4505 Fourth Street, Windsor, Ontario
- -----------------------------------------------------------------------------------------------------
Owned Green Mountain Road, Stoney Creek, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 425 Parkdale Avenue North/1640 Brampton Street,
Hamilton, Ontario [OR 424 PARKDALE AVE. N.]
- -----------------------------------------------------------------------------------------------------
Owned 112 Adams Blvd., Brantford, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 1731 Petit Road, Fort Erie, Ontario
- -----------------------------------------------------------------------------------------------------
Owned Industrial Road, Smithville, Ontario
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 153
- 2 -
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
ITEM LEASED OR OWNED ADDRESS (CANADA)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S>
Owned 29 Industrial Drive, R.R. #2, Caledonia, Ontario
(REGISTERED OWNER IS (TOGETHER WITH 842578 ONTARIO LIMITED, ITEM (D))
842578 ONTARIO LIMITED)
- -----------------------------------------------------------------------------------------------------
Owned 555 Parkdale Avenue & 28 Burland Crescent, Hamilton, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 54 Burland Avenue, Hamilton, Ontario
[42 BURLAND CRES.] (same as P above)
- -----------------------------------------------------------------------------------------------------
Owned 1720-1740 Brampton Street East, Hamilton, Ontario
(same as P and Q above)
- -----------------------------------------------------------------------------------------------------
Owned 33 Mud Street West, Stoney Creek, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 49 Mud Street West & 53 Mud Street West,
Stoney Creek, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 37 Mud Street West, Stoney Creek, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 413 Hwy 20 South, Stoney Creek, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 341 First Road West, Stoney Creek, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 175 Stuart Street, Hamilton, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 417-421 Sherman Avenue, Hamilton, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 17 Mud Street West, Stoney Creek, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 53 Mud Street West, Stoney Creek, Ontario
(see T above)
- -----------------------------------------------------------------------------------------------------
Owned 3 Green Mountain Road, Stoney Creek, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 430 First Road West, Stoney Creek, Ontario
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 154
- 3 -
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
ITEM LEASED OR OWNED ADDRESS (CANADA)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S>
Owned 42 Burland Crescent, Hamilton, Ontario
(same as P, Q and R above)
- -----------------------------------------------------------------------------------------------------
Owned 171 Brant Street, Hamilton, Ontario
- -----------------------------------------------------------------------------------------------------
Owned 55 Vulcan Street, Rexdale, Ontario
(REGISTERED OWNER IS
842578 ONTARIO LIMITED)
- -----------------------------------------------------------------------------------------------------
Owned 31 Industrial Drive, Caledonia, Ontario
(REGISTERED OWNER IS (see O above)
842578 ONTARIO LIMITED)
- -----------------------------------------------------------------------------------------------------
Owned 297-363 Hwy #20 (Taro East Quarry), Stoney Creek, Ontario
(REGISTERED OWNER IS
842578 ONTARIO LIMITED)
- -----------------------------------------------------------------------------------------------------
</TABLE>
CALIGO RECLAMATION LTD.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
ITEM LEASED OR OWNED ADDRESS (CANADA)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S>
C. Owned 7143 Mallard Line, Grand Pointe, Ontario
- -----------------------------------------------------------------------------------------------------
D.
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 155
- 4 -
912613 ONTARIO LTD.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
ITEM OWNED OR LEASED ADDRESS (CANADA)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S>
E. Owned 1579 Burlington Street East, Hamilton, Ontario
(REGISTERED OWNER IS
842578 ONTARIO LIMITED)
- -----------------------------------------------------------------------------------------------------
Owned 1579 Burlington Street East, Hamilton, Ontario
- -----------------------------------------------------------------------------------------------------
</TABLE>
1233793 ONTARIO INC.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
ITEM OWNED OR LEASED ADDRESS (CANADA)
- -----------------------------------------------------------------------------------------------------
<C> <C> <S>
Owned 222 First Road West, Stoney Creek, Ontario
- -----------------------------------------------------------------------------------------------------
</TABLE>
1195613 ONTARIO INC.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
ITEM PROPERTY # OWNED OR LEASED ADDRESS (CANADA)
- ---------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S>
F. 505 Owned 4 Green Mountain Road, Stoney Creek, Ontario
- ---------------------------------------------------------------------------------------------------------------------
507 Owned 13 Mud Street West, Stoney Creek, Ontario
- ---------------------------------------------------------------------------------------------------------------------
526 Owned 272 First Road West, Stoney Creek, Ontario
- ---------------------------------------------------------------------------------------------------------------------
528 Owned 4 Green Mountain Road, Stoney Creek, Ontario (same as (a)
above)
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 156
- 5 -
PHILIP ENVIRONMENTAL (ELMIRA) INC.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
ITEM PROPERTY # OWNED OR LEASED ADDRESS (CANADA)
- ---------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S>
G. 464 Owned 62 Union Road, Elmira, Ontario and 72/84 Howard Avenue
- ---------------------------------------------------------------------------------------------------------------------
519 Owned First Street East, Elmira, Ontario
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
CO-OWNED PROPERTY
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
ITEM PROPERTY # OWNED OR LEASED ADDRESS (CANADA)
<C> <C> <C> <S>
- ---------------------------------------------------------------------------------------------------------------------
H. 465 Owned 237 Brant Street, Hamilton, Ontario
1/3 each by Philip
Enterprises Inc.,
Philip Environmental
(Elmira) Inc. and
2766906 Canada Inc.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 157
SCHEDULE "I"
AFFECTED UNSECURED CLAIMS
<TABLE>
<CAPTION>
CREDITOR CREDITOR'S ADDRESS AMOUNT (CDN$)
- -------- ------------------ -------------
<S> <C> <C>
Ministry of Labour 1 Jarvis Street 20,000
Hamilton, Ontario
L8R 3J2
Larry Stasiuk c/o Weir & Foulds 15,000
130 King Street West
Suite 1600, P.O. Box 480
Toronto, Ontario
M5X 1J5
Nortel Networks Corporation 8200 Dixie Road 0
Brampton, Ontario
L6G 5P6
Hitachi Credit Canada Inc. c/o Borden & Elliott 0
Scotia Plaza,
40 King Street West
Toronto, Ontario
M5H 3Y4
Robix Financial Corporation c/o Stockwood Spies 0
The Sun Life Tower
2512-150 King Street
Toronto, Ontario
M5H 1J9
Circuitel Canada Inc. c/o Stockwood Spies 0
The Sun Life Tower
2512-150 King Street
Toronto, Ontario
M5H 1J9
</TABLE>
<PAGE> 158
- 2 -
ARTICLE 1 INTERPRETATION 2
1.1 Definitions 2
1.2 Headings 7
1.3 Number, Gender and Persons 8
1.4 Entire Agreement 8
1.5 Time of Essence 8
1.6 Applicable Law 8
1.7 Severability 8
1.8 Amendments and Waivers 8
1.9 Schedules 8
ARTICLE 2 PURCHASE AND SALE 9
2.1 Assets to be Purchased and Sold 9
2.2 Purchase Price 9
2.3 Allocation of Purchase Price 9
2.4 Payment of Purchase Price 9
2.5 Other Assumed Liabilities 10
2.6 Taxes 10
2.7 Elections 10
ARTICLE 3 EMPLOYEES 11
3.1 Offers to Employees 11
3.2 Remuneration, Benefits and Deductions 12
3.3 Assumption of Rights and Obligations 12
3.4 Pension and Benefit Plans 12
ARTICLE 4 REPRESENTATIONS, WARRANTIES AND COVENANTS 12
4.1 Vendors' Representations and Warranties 12
4.2 Receiver's Representations and Warranties 13
4.3 Survival of Representations and Warranties 13
4.4 Purchasers' Representations and Warranties 14
4.5 Survival of Purchaser's Representations and Warranties 14
4.6 "As Is, Where Is" 14
4.7 Third Party Consents 14
4.8 Planning Act 15
ARTICLE 5 CONDITIONS 15
5.1 Conditions for the Benefit of the Purchasers 15
5.2 Conditions for the Benefit of the Vendors 16
5.3 Time of Closing 18
<PAGE> 159
- 3 -
ARTICLE 6 CLOSING ARRANGEMENTS 18
6.1 Closing 18
ARTICLE 7 GENERAL 18
7.1 Further Assurances 18
7.2 Time of the Essence 18
7.3 Cost 18
7.4 Public Announcements 18
7.5 Notices 18
7.6 Successors and Assigns 21
7.7 Capacity of Vendors 21
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