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EXHIBIT 10.18
Court File No.: 99-CL-3442
SUPERIOR COURT OF JUSTICE
(Commercial List)
IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C.
1985, c. C-36., AS AMENDED
AND IN THE MATTER OF THE COURTS OF JUSTICE ACT, R.S.O. 1990, c. C-43, AS AMENDED
AND IN THE MATTER OF A PLAN OF COMPROMISE AND ARRANGEMENT OF PHILIP
SERVICES CORP. AND THE APPLICANTS LISTED ON SCHEDULE "A".
APPLICATION UNDER THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C.
1985, c. C.-36, AS AMENDED.
AMENDED AND RESTATED PLAN OF COMPROMISE
AND ARRANGEMENT
September 24, 1999
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AMENDED AND RESTATED PLAN OF COMPROMISE
AND ARRANGEMENT
Amended and Restated Plan of Compromise and Arrangement 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 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, and (c) for the purposes of Section 6.3
includes Royal Bank of Canada in its capacity as the former provider of
bank account services to one or more of the Applicants;
"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 or an Affected
Unsecured 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;
"AFFECTED TRADE CLAIMS" means Claims in excess of $75,000 of trade
vendors who do not agree to continue to provide trade credit to the
Applicants in accordance with terms provided prior to the Date of Filing
or who have not actually provided such terms during the CCAA Proceedings;
"AFFECTED UNSECURED CLAIMS" means collectively, Affected Unsecured Lender
Claims, those Claims set forth on the Affected Unsecured Claims List,
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Affected Trade Claims, Contribution and Indemnity Claims and Claims of
parties to executory contracts and leases that are repudiated or
terminated pursuant to Article 8 hereof, and, for greater certainty, does
not include the Unaffected Obligations;
"AFFECTED UNSECURED CLAIMS LIST" means the list of Affected Unsecured
Claims attached hereto as Schedule "B", as amended or supplemented from
time to time;
"AFFECTED UNSECURED CREDITOR" means a holder of an Affected Unsecured
Claim;
"AFFECTED UNSECURED LENDER CLAIM" means a Claim of a Lender arising under
or as a result of the Credit Facility Agreements that is not an Affected
Secured Lender Claim, other than Lender Claims in respect of letters of
credit issued pursuant to the Credit Agreement that are contingent as of
the Effective Date;
"AGREED LC CLAIM" means US$20 million;
"AMENDED AND RESTATED TERM CREDIT AGREEMENT" means collectively, the
Amended and Restated Term Credit Agreement, together with ancillary
documents, to be entered into among PSC, 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 to be included as a
supplement to the U.S. Plan;
"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 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
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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;
"BAR DATE" means the date designated by the Court as the last date for
filing Proofs of Claim;
"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 SECURITIES ACTION" means the class action claim entitled
Menegon v. Philip Services Corp. et al, File No. 4166 CP 98 (Ontario
Superior Court of Justice);
"CANADIAN SUBSIDIARIES" means, collectively, the direct and indirect
subsidiaries of PSC listed on Schedule "A" hereto;
"CANADIAN UNDERWRITERS" means Merrill Lynch Canada Inc., Midland Walwyn
Capital Inc., First Marathon Securities Limited, Gordon Capital
Corporation, Salomon Brothers Canada Inc., CIBC Wood Gundy Securities
Inc., RBC Dominion Securities Inc. and TD Securities Inc., and their
respective successors;
"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;
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"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 priority of such claim determined in accordance with the
provisions of the U.S. Bankruptcy Code;
"CLAIMS OFFICER" means the claims officer designated by PSC and approved
by the Court;
"CLASS" means the Class consisting of all holders of Affected Secured
Lender Claims or holders of Affected Unsecured Claims, as the case may
be;
"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 Plan;
"CONTRIBUTION AND INDEMNITY CLAIMS" means any Claims of Deloitte &
Touche, any of the Canadian Underwriters or any of the Directors and
Officers against any of the Applicants for contribution and indemnity.
"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;
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"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' MEETINGS" means the meetings of the Creditors called for the
purpose of considering and voting upon this Plan and includes any
adjournment of such meeting;
"CREDITORS' MEETINGS DATES" means the dates fixed for the Creditors'
Meetings under the Creditors' Meetings Order;
"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;
"DELOITTE & TOUCHE" means Deloitte & Touche, its successors and
affiliates;
"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 (as defined in the U.S.
Plan) 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 new board of
directors of PSC referred to in Section 6.1(2)(d).
"DIP AGENT" means BTCo, in its capacity as administrative agent under the
DIP Facility 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;
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"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$100 million of available credit pursuant to the DIP Facility
Agreement;
"DIP FACILITY CLAIM" means a Claim arising under or as a result of the
DIP Facility;
"DIRECTORS AND OFFICERS" means the current and former directors and
officers of the Applicants resident in Canada;
"DISBURSING AGENT" means PSC or any party designated by PSC, in its sole
discretion, to serve as disbursing agent under the Plan;
"DISCLOSURE STATEMENTS" means the written disclosure statements that
relate to this Plan or the U.S. Plan, as such documents may be amended,
supplemented or modified from time to time and "DISCLOSURE STATEMENT"
means any one of them;
"DISPUTED CLAIM AMOUNT" means the amount of a Disputed Unsecured Claim;
"DISPUTED CLAIMS RESERVE" means the reserve, if any, established and
maintained by the Disbursing Agent, into which the Applicants shall
deposit the amount of New Unsecured PIK Notes and New Common Shares that
would have been distributed on the Distribution Date to holders of
Disputed Unsecured Claims if such Claims had been Proven Claims on the
Distribution Date, pending the allowance of such Claims;
"DISPUTED UNSECURED CLAIM" means a Claim that is the subject of a
Distribution Dispute Notice;
"DISTRIBUTION DATE" means a date occurring as soon as practicable after
the Effective Date upon which distributions are made to holders of Proven
Claims under the Plan provided, however, that in no event shall the
Distribution Date occur later than thirty (30) Business Days after the
Effective Date;
"DISTRIBUTION DISPUTE NOTICE" means an "Applicants' Distribution Dispute
Notice" or a "Creditor Distribution Dispute Notice" as such terms are
defined in the Creditors' Meetings Order;
"DISTRIBUTION RECORD DATE" means the record date for the purposes of
making distributions under this Plan on account of Proven Claims, which
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shall be the Confirmation Date or such other date designated in the
Confirmation Order;
"DOLLARS" or "$" 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 9.8 have been
satisfied or waived as provided in Section 9.9 and is the effective date
of the Plan;
"EMPLOYEES" means those Persons who are or were employed by any Applicant
or retained by any Applicant to perform services exclusively for such
Applicant;
"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 Date
of Filing are deposited and into which all proceeds at any time deposited
into the Proceeds Account (without giving effect to any disbursements
from the Proceeds Account prior to the Date of Filing) in excess of
US$93,000,000 (after post-closing adjustments of no greater than
US$4,000,000 deposited into the Proceeds Account with respect to the sale
of certain assets of PSC's aluminium division prior to the Date of
Filing) shall also be deposited, which funds shall be held by the DIP
Agent to be distributed in accordance with this Plan and the U.S. Plan on
the Effective Date;
"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 PSC,
PSI and the Subsidiaries anticipate entering into as a condition to the
consummation of the Plan;
"FACE AMOUNT" means (a) when used in reference to a Disputed Unsecured
Claim, the full stated amount claimed by the holder of such Claim in any
Proof of Claim or Distribution Dispute Notice timely filed with the Court
in
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accordance with this Plan or otherwise deemed timely filed by any Final
Order of the Court or other applicable bankruptcy law, and (b) when used
in reference to a Proven Claim, the as proven amount of such Claim;
"FINAL ORDER" means an order or judgment of the Court relating to the
Plan, 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;
"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;
"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;
"LC LENDERS" means the "LC Lenders" as defined in the Credit Agreement;
"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 Plan and the U.S. Plan;
"LIEN" means a charge against or interest in property to secure payment
of debt or performance of an obligation;
"MANAGEMENT OPTION AGREEMENT(S)" means stock option agreement(s) to be
entered into by PSC and the Management Option Plan Participants, pursuant
to which the Management Options will be granted;
"MANAGEMENT OPTION PLAN" means a stock option plan to be adopted by the
new board of directors of PSC referred to in Section 6.1(2)(d) on or
after the Effective Date;
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"MANAGEMENT OPTION PLAN PARTICIPANTS" means the employees of PSC entitled
to participate in the Management Option Plan;
"MANAGEMENT OPTIONS" means the options to be issued by PSC pursuant to
the Management Option Plan to Management Option Plan Participants to
purchase Common Shares pursuant to the provisions of the Management
Option Agreements, subject to Dilution;
"MONITOR" means Ernst & Young Inc. and any successor thereto appointed in
accordance with the Initial Order or any further Order;
"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 Affected Secured Lender Claims on such assets;
"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 US$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;
"NEW COMMON SHARES" means the common shares of PSC to be issued pursuant
to this Plan and the U.S. Plan;
"NEW GUARANTEES" means, collectively, the secured guarantees of the
Canadian Subsidiaries and the other Restricted 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;
"NEW SECURED PIK DEBT" means the ten percent (10%) Secured Convertible
PIK Debt due 2004 of PSC, in the aggregate principal amount of US$100
million, to be issued and distributed pursuant to this Plan and the U.S.
Plan on the Distribution Date and governed by the terms of the Amended
and Restated Term Credit Agreement, the original face amount of which
will be convertible until maturity at the option of the holders into
twenty-five percent (25%) of the PSC Common Shares, in the aggregate, on
a fully diluted basis as of the Effective Date and having the usual
anti-dilution provisions applicable in a public offering of convertible
debt, including giving effect to the issuance of any Common Shares under
the Shareholder Rights Plan;
"NEW SENIOR SECURED TERM DEBT" means the secured term debt of PSI due
2004, to be governed by the terms of the Amended and Restated Term Credit
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Agreement, to be distributed under the Plan on the Distribution Date in
the aggregate principal amount of US$250 million minus an amount equal to
the Net Asset Sale Proceeds Pool;
"NEW UNSECURED PIK NOTES INDENTURE" means the indenture to be entered
into between PSC and an entity to be selected prior to the Effective
Date, as indenture trustee, under which the New Unsecured PIK Notes shall
be issued;
"NEW UNSECURED PIK NOTES" means the six percent (6%) unsecured
payment-in-kind notes due 2009 of PSC, in the aggregate principal amount
not to exceed US$60 million, to be issued and distributed pursuant to the
Plan and the U.S. Plan on the Distribution Date and governed by the terms
of the New Unsecured PIK Notes Indenture;
"ORDER" means any order of the Court in these proceedings;
"OTHER EQUITY SECURITIES" means, collectively, the outstanding options to
purchase Common Shares, as of the Date of Filing, together with any other
options, warrants, conversion rights, rights of first refusal or other
rights, contractual or otherwise, to acquire or receive any Common Shares
or other ownership interests in any Applicant, or of an affiliate of any
Applicant and any contracts, subscriptions, commitments or agreements
pursuant to which the non-Applicant party was or could have been entitled
to receive shares, securities or other ownership interests in any
Applicant, excluding Subsidiary Interests;
"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 this amended and restated plan of compromise and arrangement
dated September 24, 1999 of all of the Applicants under the CCAA, as same
may be amended 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 Secured Claims, the consent
of the Account Intermediaries;
"PLAN SUPPLEMENT" has the meaning ascribed thereto in Section 6.2;
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"PROCEEDS ACCOUNT" means the account established under the Proceeds
Agreement into which proceeds of certain asset sales were deposited prior
to the Date of Filing;
"PROCEEDS AGREEMENT" means the Proceeds Agreement dated April 5, 1999, as
amended, made among PSC, the Subsidiaries and the Lenders;
"PROOF OF CLAIM" means a proof of claim in the form prescribed by the
Creditors' Meetings Order;
"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;
"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;
"PSC COMMON SHARES" means the Common Shares of PSC outstanding after
giving effect to the issuance of New Common Shares and the Stock
Consolidation;
"PSI" means Philip Services (Delaware), Inc.;
"REGISTRATION RIGHTS AGREEMENT" means an agreement to be entered into
between PSC and certain Affected Secured Creditors with respect to rights
of registration as to the Common Shares, substantially in the form to be
included in a supplement to the U.S. Plan;
"REQUIRED LENDERS" means the "Required Lenders" as defined in the Credit
Agreement;
"REQUIRED MAJORITY" means, in respect of each Class of Creditor, an
affirmative vote of two-thirds in value of all Proven Claims of such
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 such Class;
"RESTRICTED SUBSIDIARIES" means "Restricted Subsidiaries" as defined in
the Credit Agreement;
"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
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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;
"SECURITIES ACTIONS" means, collectively, (i) 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 (ii) the
Canadian Securities Action;
"SECURITY AGENT" means the "Security Agent" as defined in the Credit
Agreement;
"SHAREHOLDERS' MEETING" means the meeting of shareholders of PSC referred
to in Section 6.1(2);
"SHAREHOLDER RIGHTS PLAN" means the shareholder rights plan to be
implemented on the Effective Date by PSC substantially in the form to be
included as a supplement to the U.S. Plan;
"STOCK CONSOLIDATION" means the consolidation of PSC's outstanding Common
Shares to be implemented simultaneously with the Effective Date pursuant
to which each 273 New Common Shares (including the Common Shares
outstanding prior to the Effective Date) shall be consolidated into one
PSC Common Share and as a result 24,000,000 PSC Common Shares will be
issued and outstanding;
"SUBSIDIARIES" means, collectively, all of the direct and indirect
subsidiaries of PSC;
"SUBSIDIARY INTERESTS" means, collectively, the issued and outstanding
shares in the stock of the Subsidiaries as of the Date of Filing;
"UNAFFECTED OBLIGATIONS" means Claims that are not Affected Claims;
"UNFUNDED LC CLAIM" means the amount, if any, by which the Agreed LC
Claim exceeds the amount actually drawn from the Date of Filing through
the Effective Date on letters of credit issued pursuant to the Credit
Agreement, which for greater certainty do not include letters of credit
issued under the Permitted LC Facility established in Amendment No. 3 to
the Credit Agreement;
"U.S. BANKRUPTCY COURT" means the United States Bankruptcy Court having
jurisdiction over the Chapter 11 Cases;
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"U.S. IMPAIRED UNSECURED CLAIM" means a "Class 7 Claim" under the U.S.
Plan;
"U.S. PLAN" means the joint plan of reorganization of the U.S. Plan
Applicants as filed 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 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 and Schedules are references to Sections,
Articles and Schedules 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;
(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.
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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.
SECTION 1.4 TIME
All times expressed in this Plan are local time Toronto, Ontario, Canada
unless otherwise stipulated.
SECTION 1.5 STATUTORY REFERENCES
Any reference in this 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 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 Plan.
SECTION 1.7 SCHEDULES
The following are the Schedules to this Plan, which are incorporated by
reference into this Plan and form part of it:
Schedule "A" - Canadian Subsidiaries
Schedule "B" - Affected Unsecured Claims List
ARTICLE 2
PURPOSE AND EFFECT OF THE PLAN
SECTION 2.1 BACKGROUND
The circumstances and events leading up to this Plan and the U.S. Plan are
summarized in the Disclosure Statement to be circulated to Affected Creditors
in connection with this Plan and to be distributed in accordance with the U.S.
Bankruptcy Code in connection with the U.S. Plan.
SECTION 2.2 PERSONS AFFECTED
This 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 Plan will become effective on the Effective Date and shall
be binding on and enure to the benefit of the Applicants and the Creditors.
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SECTION 2.3 PERSONS NOT AFFECTED
For greater certainty this 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 Claims against the Applicants for certain purposes under this
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 classes of Creditors for the purpose of considering and voting on the
Plan shall be Creditors holding Affected Secured Lender Claims and Affected
Unsecured Claims.
SECTION 3.2 AFFECTED CLAIMS
Creditors holding Affected Claims shall prove their Claims, vote in
respect of the Plan and receive the rights provided for under and pursuant to
this Plan.
SECTION 3.3 CREDITORS' MEETINGS
The Creditors' Meetings shall be held in accordance with this Plan, the
Creditors' Meetings Order and any further Order. The only persons entitled to
attend a 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 relevant
Creditors' Meeting.
SECTION 3.4 APPROVAL BY CREDITORS
In order to be approved, the Plan must receive the affirmative vote of the
Required Majority of each Class of Creditors.
SECTION 3.5 ORDER TO ESTABLISH PROCEDURE FOR VALUING CLAIMS
The procedure for valuing Claims and resolving disputes is set forth in
the Creditors' Meetings Order. The Applicants reserve the right to seek the
assistance of the Court in valuing the Claim of any Affected Creditor, if
required, or to ascertain the result of any vote on the Plan or the amount
payable or to be distributed to such Affected Creditor under the Plan, as the
case may be.
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SECTION 3.6 CLAIMS FOR VOTING PURPOSES
Each Creditor having a Claim in a Class entitled to vote shall be entitled
to attend and to vote at the Creditors' Meeting for such Class. Each Creditor
of a Class who is entitled to vote shall be entitled to that number of votes at
the Creditors' Meeting for such Class 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.
ARTICLE 4
PROCEDURE FOR RESOLVING DISPUTED CLAIMS
SECTION 4.1 PROSECUTION OF OBJECTIONS
After the Confirmation Date, only the Applicants shall have the authority
to file objections, settle, compromise, withdraw or litigate to judgment
objections to Claims. From and after the Effective Date, the Applicants may
settle or compromise any Disputed Unsecured Claim without approval of the
Court.
SECTION 4.2 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
Unsecured Claim unless and until some portion thereof, has become a Proven
Unsecured Claim.
SECTION 4.3 DISPUTED CLAIMS RESERVE
On the Effective Date (or as soon thereafter as is practicable) the
Disbursing Agent shall establish the Disputed Claims Reserve by withholding
from the initial distribution on account of Proven Unsecured Claims an amount
of New Unsecured PIK Notes and New Common Shares calculated as if all Affected
Unsecured Claims and U.S. Impaired Unsecured Claims were Proven Unsecured
Claims and allowed U.S. Impaired Unsecured Claims under the U.S. Plan as of
such date, in an amount equal to one hundred percent (100%) of their Disputed
Claim Amount and disputed U.S. Impaired Unsecured Claim amount under the U.S.
Plan.
SECTION 4.4 DISTRIBUTIONS AFTER DISPUTED CLAIMS RESOLVED
The Disbursing Agent shall make payments and distributions from the
Disputed Claims Reserve to each holder of a Disputed Unsecured Claim that has
become a Proven Unsecured Claim in accordance with the provisions of the Plan,
and to each holder of a disputed U.S. Impaired Unsecured Claim that has become
an allowed claim under the U.S. Plan. On the next succeeding interim
distribution date after the date that the value of a Proven Unsecured Claim has
been determined in accordance with this Plan, the Disbursing Agent shall
distribute to the holder of such Claim any New Unsecured PIK Notes and PSC
Common Shares in the
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Disputed Claims Reserve that would have been distributed on the Distribution
Date had such Claim been a Proven Unsecured Claim on the Distribution Date
(after giving effect to the Stock Consolidation). After a Final Order has been
entered, or other final resolution has been reached, with respect to each
Disputed Unsecured Claim and each disputed U.S. Impaired Unsecured Claim (i)
any New Unsecured PIK Notes and PSC Common Shares that remain in the Disputed
Claims Reserve shall be distributed pro rata to holders of Proven Unsecured
Claims and holders of U.S. Impaired Unsecured Claims allowed under the U.S.
Plan. All distributions made under this Article 4 on account of a Proven
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 Proven Unsecured Claim had been a Proven Unsecured Claim
on the Distribution Date. Notwithstanding the foregoing, the Disbursing Agent
shall not be required to make distributions under this Article 4 more
frequently than once every 180 days.
ARTICLE 5
TREATMENT OF AFFECTED CREDITORS
SECTION 5.1 AFFECTED CLASSES
(1) Affected Secured Lender Claims
(a) On the Effective Date, the Credit Facility Agreements shall
be amended and restated by the Amended and Restated Term Credit
Agreement without any further action by any party. Each holder of a
Proven Secured Lender Claim, in full satisfaction, settlement,
release and discharge of and in exchange for such Proven Secured
Lender Claim and its allowed Class 6 Claim in the U.S. Plan, 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 the holders of U.S. Impaired Unsecured Claims vote to accept the
U.S. Plan and the holders of Proven Unsecured Claims vote to accept
the Plan, 5,967,052,592 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 Stock Consolidation) subject to Dilution,
or (ii) if the holders of U.S. Impaired Unsecured Claims vote to
reject the U.S. Plan, but the holders of Proven Unsecured Claims
vote to accept the Plan, 22,800,000 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 PSC Common Shares that would
have been available for distribution to holders of U.S. Impaired
Unsecured
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Claims under the U.S. Plan had such holders voted to accept the
U.S. Plan (based on the Applicants' estimate of the aggregate
allowed amount of such claims), subject to Dilution, and an amount
of New Unsecured PIK Notes equal to the amount that would have been
distributed to holders of U.S. Impaired Unsecured Claims under the
U.S. Plan had such holders voted to accept the U.S. Plan (based on
the Applicants' estimate of the aggregate allowed amount of such
claims).
(b) Each LC Lender will fund its pro rata share of the Unfunded
LC Claim (i) in cash, or (ii) by foregoing 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
funded by foregoing distributions to the extent necessary by the
Lender that is an affiliate of such LC Lender. Any such cash paid
or distributions foregone shall be reallocated pro rata among the
holders of Proven Secured Lender Claims. Letters of credit issued
pursuant to the 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.
(c) On the Effective Date, PSC shall record the holders of Proven
Secured Lender Claims as holders of record of such New Common
Shares. Each holder of a Secured Lender Claim shall vote the New
Common Shares distributed to it under the Plan in favour of each of
the matters set forth in Section 6.1(2)(c) hereof.
(2) Affected Unsecured Claims
Subject to Section 5.2, on or as soon as reasonably practicable after, the
later of (i) the Distribution Date or (ii) the date such Affected Unsecured
Claim becomes a Proven Unsecured Claim,
(a) if the holders of Proven Unsecured Claims vote to accept the
Plan then each holder of a Proven Unsecured Claim shall receive in
full satisfaction, settlement, release and discharge of and in
exchange for such Proven Unsecured Claim, its pro rata share
(determined as described below) of (i) US$60 million of New
Unsecured PIK Notes to be issued pursuant to Article 7 of this Plan
and the U.S. Plan (subject to certain election rights of holders of
U.S. Impaired Unsecured Claims) and (ii) 327,860,033 New Common
Shares which shall be five percent (5%) of the PSC Common Shares
issued and outstanding as of the Effective Date (which shall equal
1,200,000 PSC Common Shares, after
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giving effect to the Stock Consolidation), subject to Dilution (in
each case, such distribution shall be shared pro rata with the
holders of U.S. Impaired Unsecured Claims under the U.S. Plan) and
the holders of Affected Unsecured Lender Claims shall be deemed to
have waived any and all distributions to which they would be
entitled under the Plan as holders of Affected Unsecured Lender
Claims, including the benefit of any and all contractual
subordination provisions in respect of their Unsecured Lender
Claims; or
(b) if the holders of Proven Unsecured Claims vote to reject the
Plan, then the holders of such Claims shall not receive anything on
account of such Claims.
For purposes of distributions to holders of Proven Unsecured Claims, the
pro rata calculations shall include in the determination of the Face Amount of
all Proven Unsecured Claims (i) if the class of holders of U.S. Impaired
Unsecured Claims under the U.S. Plan votes to accept the U.S. Plan, the
aggregate amount of all allowed U.S. Impaired Unsecured Claims or (ii) if the
class of holders of U.S. Impaired Unsecured Claims under the U.S. Plan votes to
reject the U.S. Plan, the Applicant's estimate of the aggregate amount of all
allowed U.S. Impaired Unsecured Claims. Claims under the Canadian Plan will be
converted to United States' dollars ("US$") for purposes of distributions at a
rate of CDN$1.465097244 per US$1.00.
SECTION 5.2 SETTLEMENT OF CERTAIN CLAIMS
The proposed treatment of Affected Creditors set forth in Section 5.1 is
subject to the satisfaction of the following conditions prior to October 27,
1999:
(a) (i) the claims of the Applicants and the Lenders against
Deloitte & Touche, the Securities Actions, and all Contribution
and Indemnity Claims shall have been settled among all parties
on mutually acceptable terms, including as to the amount and
voting of the Contribution and Indemnity Claims; or
(ii) the amounts of the Contribution and Indemnity
Claims shall have been agreed to by the holders of such
Claims, the Applicants and the Lenders and the holders of the
Contribution and Indemnity Claims shall have agreed to vote
such Claims in favour of this Plan, and
(b) the Canadian Securities Action shall have been settled
between PSC and the plaintiffs and the settlement shall have been
approved by the Court.
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ARTICLE 6
MEANS FOR IMPLEMENTATION OF THE PLAN
SECTION 6.1 PLAN IMPLEMENTATION
Subject to Section 5.2, if the Required Majority of each Class of
Creditors vote to accept the Plan, the transactions described in Section 6.1(1)
and the corporate actions described in Section 6.1(2) shall occur.
(1) Plan Transactions
(a) New Securities. As of the Effective Date the issuance by PSC
of US$100 million in principal amount of New Secured PIK Debt, up to
US$60 million in principal amount of New Unsecured PIK Notes, up to
6,426,056,637 New Common Shares, and Management Options to purchase
PSC Common Shares pursuant to the terms of the Management Option
Plan to be adopted by the new board of directors of PSC referred to
in Section 6.1(2)(d) on or after the Effective Date, subject to
Dilution (except with respect to the New Secured PIK Debt), is
hereby authorized without further act or action under applicable
law, regulation, order or rule.
(b) New Senior Secured Term Debt. On the Effective Date, PSC and
PSI shall execute and deliver the Amended and Restated Term Credit
Agreement to govern the New Secured PIK Debt and the New Senior
Secured Term Debt.
(c) New Guarantees. On the Effective Date, the Canadian
Subsidiaries shall enter into the New Guarantees and the related
security.
(d) Exit Facility. PSC and PSI, 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 PSC,
PSI and the Subsidiaries following the Effective Date to maintain
their operations.
(e) Tax Related Transactions. The following transactions shall
occur immediately prior to implementation of the Plan: (a) 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
principal amount as the Claim so exchanged, and (b) each holder of a
Claim against one or more of the Applicants which becomes a Proven
Unsecured Claim
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shall be deemed to have exchanged such Claim for an undivided
co-ownership interest in all Proven Unsecured Claims in the same
aggregate amount.
(2) Corporate Action
(a) Shareholder Rights Plan. On the Effective Date, PSC shall
implement the Shareholder Rights Plan.
(b) Stock Consolidation. On the Effective Date, if the holders
of U.S. Impaired Unsecured Claims under the U.S. Plan have voted to
accept the U.S. Plan and the holders of Affected Unsecured Claims
under this Plan have voted to accept this Plan, PSC shall take all
steps necessary to implement the Stock Consolidation.
(c) Shareholder Approval. On or immediately after the Effective
Date and the distribution of New Common Shares to holders of
Affected Secured Lender Claims, PSC shall hold a meeting of its
shareholders for the purposes of: (i) approving and ratifying the
Shareholder Rights Plan; (ii) electing the new board of directors
referred to in Section 6.1(2)(d); (iii) amending the articles of
incorporation of PSC to allow for the implementation of the Stock
Consolidation; (iv) authorizing the continuance of PSC under the
laws of New Brunswick; and (v) if the holders of U.S. Impaired
Unsecured Claims reject the U.S. Plan, cancelling the Common Shares
outstanding immediately prior to the Effective Date.
(d) Directors and Officers. On the Effective Date, the new board
of directors for PSC 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 (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.
SECTION 6.2 ASSET TRANSFERS
If the conditions set forth in Section 5.2 are not met, or if the holders
of Proven Unsecured Claims vote to reject this Plan, the reorganization of the
Applicants will be effected through the transfer of the business of the
Applicants as
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a going concern to one or more direct or indirect subsidiaries of PSI. This
transfer will occur in conjunction with the implementation of the U.S. Plan
through the enforcement of remedies available to the Lenders, and will be more
fully described in a supplement to this Plan (the "Plan Supplement") that will
be filed prior to the meeting of the holders of Affected Secured Lender Claims.
The transferee(s) will assume the Claims which would have been Unaffected
Obligations if the arrangement described in Section 5.1 had been implemented.
The proceeds paid on the transfers will be distributed in accordance with the
legal priority of the claims against the transferred assets. In that case, the
Affected Unsecured Claims will not be compromised, but it is expected that no
distributions will be made to the holders of such Claims. 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 in that
plan.
SECTION 6.3 PLAN RELEASES
Subject to Section 5.2 and to the approval of the Plan by the Required
Majority of each Class of Creditors, the following releases will become
effective on the Effective Date:
(1) Releases by Applicants
As of the Effective Date, for good and valuable consideration, the
adequacy of which is hereby confirmed, the Applicants and the Subsidiaries 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 of the Applicants 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
Applicants or the Subsidiaries, the parties released pursuant to this Section
6.3(1), the CCAA Proceedings, the Lender Lock-Up Agreement or the Plan, and
that could have been asserted by or on behalf of the Applicants or their
Subsidiaries against (i) directors, officers and employees of the Applicants or
the Subsidiaries in each case, as of the Date of Filing 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 Applicants or their Subsidiaries) and the Applicants' or Subsidiaries'
agents and professionals (including, for greater certainty, the Monitor but
excluding Deloitte & Touche and any insurance brokers retained by the
Applicants), (ii) the Lenders (other than any person excluded from the releases
in this Plan which has become a Lender), (iii) the ad hoc steering committee
and any other committee of holders of Lender Claims, (iv) CIBC, as
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administrative agent and co-arranger under the Credit Agreement, (v) BTCo as
Syndication Agent and co-arranger under the Credit Agreement, (vi) any official
committees appointed by the Court in connection with the CCAA Proceedings or
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 in this Plan which has become a holder of a DIP Facility Claim),
(viii) the Security Agent, (ix) the Account Intermediaries, (x) any individual,
corporation or other entity that was at any time formerly one of the released
parties identified in subclauses (ii) - (viii) of this Section 6.3(1), and (xi)
the respective affiliates, current and former officers, directors, employees,
agents, shareholders and professionals (including, for greater certainty, the
Monitor but excluding Deloitte & Touche, Robert Waxman, Greg Madesker, Rik
Barrese and any insurance brokers retained by the Applicants) (including the
current and former directors, officers, employees, agents, shareholders and
professionals of the released professionals) of the entities released in
subclauses (ii)-(viii) of this Section 6.3(1) acting in such capacity;
provided, however, that the releases provided to any director, officer or
employee of the Applicants described in clause (i) of this Section 6.3(1) may
be revoked by the Applicants by written notice to such director, officer or
employee, in the event that the Applicants reasonably determine that any such
director, officer or employee has failed to provide factual information as
reasonably requested by the Applicants or any successor to the Applicants with
authority to direct such claim, 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 Date of Filing in the Securities Actions, the Chazen Actions
or the Liff Actions (as defined in the U.S. Plan), 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 Applicants, to
reimbursement of that person's foregone income and reasonable expenses.
(2) Releases by Holders of Lender Claims
As of the Effective Date, in consideration for the obligations of the
Applicants 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 Credit Agreement, BTCo as Syndication Agent and
co-arranger under the 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
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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 Applicants' 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 Applicants
and Subsidiaries, the CCAA Proceedings, the Lender Lock-up Agreement or the
Plan against (i) the Applicants and Subsidiaries; provided, however that this
release in clause (i) shall not be given by any Account Intermediary who is a
current Bank Account Services Provider, (ii) the directors, officers and
employees of the Applicants or Subsidiaries in each case as of the Date of
Filing (and in addition, those who become officers and/or directors thereafter
but prior to the Effective Date), (iii) the Lenders (other than any person
excluded from the releases in this Plan 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 Credit Agreement, (vi)
BTCo as Syndication Agent and co-arranger under the Credit Agreement, (vii) any
official committees appointed in the CCAA Proceedings or the Chapter 11 Cases,
(viii) the DIP Agent, the DIP Co-Arrangers and the holders of DIP Facility
Claim (other than any entity specifically excluded from the releases granted in
this Section 6.3(2) that has become a holder of a DIP Facility Claim, (ix) the
Security Agent, (x) the Account Intermediaries, (xi) any individual,
corporation or other entity that was at any time formerly one of the released
parties identified in subclauses (iii)-(ix) of this Section 6.3(2), or (xii)
the respective current and former professionals of the entities in subclauses
(i)-(ix) of this Section 6.3(2) (including, for greater certainty, the Monitor
but excluding Deloitte & Touche and any insurance brokers retained by the
Applicants) (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 Applicants described in clause (ii) of this Section
6.3(2) 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 relating to the same nucleus of operative facts
alleged as of the Date of Filing 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
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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 Applicants, 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 Section 6.3(2) 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.
(3) Holders of Claims
As of the Effective Date, to the fullest extent permitted under applicable
law, in consideration for the obligations of the Applicants under the Plan and
the 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 (other than the parties referred to in
Section 6.3(2) 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 Applicants' 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 Applicants
or Subsidiaries, the parties released pursuant to this Section 6.3(3), the CCAA
Proceedings, the Lender Lock-up Agreement or the Plan against (i) the
Applicants and Subsidiaries, (ii) the Lenders as of September 15, 1999 or an
entity that subsequently becomes a Lender subject to the Applicants' consent,
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 or 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 Applicants' consent, the
Monitor and the Security Agent, (iii) the Account Intermediaries, (iv) any
individual, corporation or other entity that was formerly one of the foregoing
released parties identified in subclause (ii) of this Section 6.3(3) and (v)
the respective affiliates, current and former officers, directors, employees,
agents, shareholders and professionals of the entities referred to in subclause
(ii) of this Section 6.3(3) (excluding Deloitte & Touche and any insurance
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brokers retained by the Applicants) acting in such capacity. Under the Plan,
holders of Claims (other than the Lenders) are not deemed to have released any
non-Applicant third party other than the Lenders and those parties explicitly
listed in clauses (ii), (iii), (iv) and (v) above.
SECTION 6.4 INJUNCTION RELATED TO RELEASES
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.
SECTION 6.5 REVOCATION OF CERTAIN RELEASES
The revocation of any release of any director, officer or employee
pursuant to Section 6.3 hereof shall be void ab initio to the extent that a
court of competent jurisdiction, including, but not limited to the Court,
determines that such director, officer or employee has provided the factual
information reasonably requested by the Applicants or any successor pursuant to
Section 6.3(1) or the Administrative Agent or its successor pursuant to Section
6.3(2).
SECTION 6.6 SUBSTANTIVE CONSOLIDATION FOR PURPOSES OF TREATING AFFECTED CLAIMS
The Plan is premised upon the substantive consolidation of the Applicants
only for purposes of treating Affected Secured Lender Claims and Affected
Unsecured Claims under the Plan, including for voting, Plan sanction and
distribution purposes. This Plan does not contemplate substantive
consolidation of the Applicants with respect to Unaffected Obligations.
Subject to Section 5.2 and the approval of the Plan by the Required Majority of
each Class of Creditors, on the Effective Date, (a) all guarantees of any
Applicants of the payment, performance or collection of another Applicant with
respect to Affected Claims shall be deemed eliminated and cancelled; (b) any
obligation of any Applicant and all guarantees with respect to Affected Claims
thereof executed by one or more of the other Applicants shall be treated as a
single obligation and any obligation of two or more Applicants, and all
multiple Affected Claims against such entities on account of such joint
obligations, shall be treated and allowed only as a single Affected Unsecured
Claim against the consolidated Applicants; and (c) each Affected Claim of any
Applicant shall be deemed filed against the consolidated Applicants and shall
be deemed one Affected Claim against and obligation of the consolidated
Applicants. Except as set forth in this Section 6.6, such substantive
consolidation shall not (other than for purposes related to the Plan) (a)
affect the legal and corporate structures of the Applicants, (b) cause any
Applicant to be liable for any Claim under the 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.
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SECTION 6.7 ASSUMED INDEMNIFICATION OBLIGATIONS
The Assumed Indemnification Obligations (other than Excluded
Indemnification Obligations) shall be deemed effective as of the Effective Date
without any further action by any party.
ARTICLE 7
PROVISIONS GOVERNING DISTRIBUTIONS
SECTION 7.1 DISTRIBUTIONS FOR CLAIMS ALLOWED AS OF THE EFFECTIVE DATE
Except as otherwise provided herein or as ordered by the Court,
distributions to be made on account of Claims that are Proven Unsecured Claims
and Proven Secured Lender Claims as of the Effective Date shall be made not
later than the Distribution Date. Distributions on account of Claims that
first become Proven Unsecured Claims or a Proven Secured Lender Claim after the
Effective Date shall be made pursuant to Articles 4, 5 and 7 of this Plan.
Notwithstanding the date on which any distribution of securities is actually
made to a holder of a Claim that is a Proven Unsecured Claim or a Proven
Secured Lender Claim 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.
SECTION 7.2 INTEREST ON CLAIMS
Unless otherwise specifically provided for in this Plan or the
Confirmation Order, interest shall not accrue or be paid on Claims after the
Date of Filing, and no holder of a Claim shall be entitled to interest accruing
on or after the Date of Filing on any Claim. Interest shall not accrue or be
paid upon any Disputed Unsecured Claim in respect of the period from the Date
of Filing to the date a final distribution is made thereon if and after such
Disputed Unsecured Claim becomes a Proven Unsecured Claim.
SECTION 7.3 DISTRIBUTIONS BY DISBURSING AGENT
(a) The Disbursing Agent shall make all distributions required
under this Plan (subject to the provisions of Articles 4, 5 and 7
hereof). If the Disbursing Agent is an independent third party
designated by the Applicants to serve in such capacity, such
Disbursing Agent shall receive, without further 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 Applicants on
terms acceptable to the Applicants. 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 Court.
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- 28 -
(b) At the close of business on the Distribution Record Date, the
transfer records for the Lender Claims shall be closed, and there
shall be no further changes in the record holders of Lender Claims.
The Applicants, the Disbursing Agent and the Administrative Agent
for the Lenders shall have no obligation to recognize any transfer
of Lender Claims 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.
SECTION 7.4 CALCULATION OF DISTRIBUTION AMOUNTS
(1) Common Shares
No fractional New Common Shares shall be issued or distributed under the
Plan or by PSC or the Disbursing Agent. Each Person entitled to receive New
Common Shares will receive the total number of whole New 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 New Common Share, the
actual distribution of shares shall be rounded to the next higher or lower
whole number as follows: (a) fractions ? or greater shall be rounded to the
next higher whole number, and (b) fractions of less than ? shall be rounded to
the next lower whole number. The total number of New Common Shares to be
distributed to a Class of Claims shall be adjusted as necessary to account for
the rounding provided for in this Section 7.4. No consideration shall be
provided in lieu of fractional shares that are rounded down.
(2) New Unsecured PIK Notes
New Unsecured PIK Notes will be issued in denominations of US$1,000 and
such fractions thereof as is necessary.
SECTION 7.5 DELIVERY OF DISTRIBUTIONS
Distributions to holders of Proven Unsecured Claims shall be made by the
Disbursing Agent (a) at the last known address of such persons or at the
addresses set forth on the Proofs of Claim filed by such holders (b) at the
addresses reflected in the Affected Unsecured Creditors List, or (c) 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. 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 Applicants. All claims for undeliverable distributions in respect
of Proven Unsecured Claims must be made on or before the
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expiration of the eighteenth (18th) month following the Effective Date, after
which date all unclaimed property shall be distributed pro rata to the other
holders of Proven Unsecured Claims and the Claim of any holder or successor of
such holder with respect to such property shall be discharged, and forever
barred, notwithstanding any federal or provincial laws to the contrary.
Nothing contained in the Plan shall require the Applicants or any Disbursing
Agent to attempt to locate any holder of a Proven Unsecured Claim.
SECTION 7.6 WITHHOLDING AND REPORTING REQUIREMENTS
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 a Proven Claim that is to receive a distribution 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
distributions to be distributed pursuant to the Plan shall, pending the
implementation of such arrangements, be treated as an undeliverable
distribution pursuant to Section 7.5. It is the Applicants' intent that
distributions under the Plan to holders of Claims are in respect of, and to be
applied to, principal first and then interest.
SECTION 7.7 SET-OFF TO APPLY
The Applicants may, but shall not be required to, set off against any
Claim, and the payments or other distributions to be made pursuant to the Plan
in respect of such Claims, claims of any nature whatsoever that the Applicants
may have against the holder of such Claim, provided, however, that neither the
failure to do so nor the allowance of any Claim hereunder shall constitute a
waiver or release by the Applicants of any such claim that the Applicants may
have against such holder. Notwithstanding anything to the contrary, the
Applicants will not exercise any right of setoff against any Lender, any agents
under the Credit Agreements or the DIP Facility Agreement, the Account
Intermediaries or the DIP Lenders.
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ARTICLE 8
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES
SECTION 8.1 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 Applicant shall be deemed to have
ratified each executory contract and unexpired lease to which it is a party,
unless such contract or lease (i) was previously repudiated or terminated by
such Applicant, (ii) previously expired or terminated pursuant to its own
terms, or (iii) as otherwise set forth in an amendment to the Affected
Unsecured Claims List as being an executory contract or unexpired lease to
repudiate or terminate. Without limiting the foregoing, all obligations of the
Applicants with respect to Other Equity Securities and Excluded Indemnification
Obligation shall be terminated and cancelled.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 CONFIRMATION OF PLAN
(a) Provided that the conditions in Section 5.2 are satisfied by
the deadline set forth therein and the Plan is approved by the
Required Majority of each Class of Creditors, 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 Plan as provided in Sections 5.1
and 6.1; and
(b) subject only to the Confirmation Order being granted and
becoming a Final Order in form and substance reasonably acceptable
to the Applicants and the Required Lenders and the satisfaction of
those conditions precedent to implementation of the Plan described
in Section 9.8, the Plan will be implemented by the Applicants and
will be binding upon the Applicants and all Creditors.
SECTION 9.2 PARAMOUNTCY
Subject to the obligations of the Applicants pursuant to the Exit Facility
or the Amended and Restated Term Credit Agreement, from and after the Effective
Date, any conflict between the Plan and the covenants, warranties,
representations, terms, conditions, provisions or obligations, expressed or
implied, of any contract, mortgage, security agreement, indenture, trust
indenture, loan agreement, commitment letter, agreement for sale, by-laws of
the Applicants, lease or other agreement, written or oral and any and all
amendments or supplements thereto existing between one or more of the Creditors
and the Applicants as at the Effective
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Date will be deemed to be governed by the terms, conditions and provisions of
the Plan and the Confirmation Order, which shall take precedence and priority.
SECTION 9.3 WAIVER OF DEFAULTS
Other than in relation to the Exit Facility or the Amended and Restated
Term Credit Agreement, from and after the Effective Date, each Creditor shall
be deemed to have waived any and all defaults then existing or previously
committed by the Applicants in any covenant, warranty, representation, term,
provision, condition or obligation, expressed or implied, in any contract,
agreement, mortgage, security agreement, indenture, trust indenture, loan
agreement, commitment letter, agreement for sale, lease or other agreement,
written or oral and any and all amendments or supplements thereto, existing
between such Creditor and the Applicants and any and all notices of default and
demands for payment under any instrument, including, without limitation any
guarantee, shall be deemed to have been rescinded.
SECTION 9.4 COMPROMISE EFFECTIVE FOR ALL PURPOSES
The payment, compromise or other satisfaction of any Claim under the Plan,
if sanctioned and approved by the Court shall be binding upon such Creditor,
its heirs, executors, administrators, successors and assigns, for all purposes.
SECTION 9.5 PARTICIPATION IN DIFFERENT CAPACITIES
Creditors whose Claims are affected by this Plan may be affected in more
than one capacity. Each such Creditor shall be entitled to participate
hereunder in each such capacity. Any action taken by a Creditor in any one
capacity shall not affect the Creditor in any other capacity unless the
Creditor agrees in writing.
SECTION 9.6 MODIFICATION OF PLAN
Subject to the consent of the Required Lenders, the Applicants reserve the
right to file any modification of, amendment or supplement to the Plan by way
of a supplementary plan or plans of compromise or arrangement or both filed
with the Court at any time or from time to time prior to the Creditors'
Meetings Dates, in which case any such supplementary plan or plans of
compromise or arrangement or both shall, for all purposes, be and be deemed to
be a part of and incorporated into the Plan. The Applicants shall give notice
by publication or otherwise to all Creditors in an affected Class of the
details of any modifications or amendments prior to the vote being taken to
approve the Plan. Subject to the consent of the Required Lenders, the
Applicants may propose an alteration or modification to the Plan at any
Creditors' Meeting. After such Creditors' Meetings (and both prior to and
subsequent to the Confirmation Order) and subject to the consent of the
Required Lenders, the Applicants may at any time and from time to time vary,
amend, modify or supplement the Plan if the Court determines that such
variation, amendment, modification or supplement is of a minor, immaterial or
technical
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nature that would not be materially prejudicial to the interests of any of the
Creditors under the Plan or the Confirmation Order and is necessary in order to
give effect to the substance of the Plan or the Confirmation Order.
SECTION 9.7 DEEMING PROVISIONS
In this Plan, the deeming provisions are not rebuttable and are
conclusive and irrevocable.
SECTION 9.8 CONDITIONS PRECEDENT TO IMPLEMENTATION OF PLAN
The implementation of the 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 Plan, as such 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 provide that:
(i) the Applicants 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;
(ii) the provisions of the Confirmation Order are
nonseverable and mutually dependent;
(iii) PSC is authorized to issue the New Unsecured PIK
Notes, New Common Shares, and Management Options and incur the
New Senior Secured Term Debt and New Secured PIK Debt; and
(iv) the New Secured PIK Debt, New Unsecured PIK
Notes, and the New Common Shares issued under the Plan in
exchange for Claims against the Applicants and the first trade
of such securities are exempt from the dealer registration and
prospectus requirements of applicable Canadian securities laws
except to the extent that holders of New Secured PIK Debt, New
Unsecured PIK Notes and New Common Shares are control block
holders for the purposes of applicable Canadian securities
laws.
(b) the Applicants shall have credit availability under the Exit
Facility in an amount, form and substance acceptable to the
Applicants and the
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Required Lenders, to provide the Applicants and the Subsidiaries
with working capital to meet ordinary and peak requirements and
additional borrowings to support further projects;
(c) the following agreements, in form and substance satisfactory
to the Applicants and the Required Lenders shall have been executed
and delivered, and all conditions precedent thereto shall have been
satisfied:
(i) New Unsecured PIK Notes Indenture;
(ii) Amended and Restated Term Credit Agreement;
(iii) New Guarantees and related security documents;
(iv) Registration Rights Agreement;
(v) Exit Facility;
(vi) Shareholder Rights Plan; and
(vii) Agreements evidencing sufficient bonding to meet
the Applicants' projected bonding requirements;
(d) all actions, documents and agreements necessary to implement
the Plan shall have been effected or executed;
(e) 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 this Plan shall have become
effective; and
(f) the new board of directors of PSC referred to in Section
6.1(2)(d) shall have been appointed.
SECTION 9.9 WAIVER OF CONDITIONS
Each of the conditions set forth in Section 5.2 and 9.8 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.
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SECTION 9.10 DISCLOSURE STATEMENT
Copies of the Plan and the applicable Disclosure Statement will be mailed
in accordance with the procedures approved by the Court.
SECTION 9.11 NOTICES
Any notices or communication to be made or given hereunder shall be in
writing and shall refer to this 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
(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
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or to such other address as any party may from time to time notify the others
in accordance with this Section 9.11. 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 Plan or any action taken by any
Person pursuant to this Plan.
SECTION 9.12 SEVERABILITY OF PLAN PROVISIONS
If, prior to the Confirmation Date, any term or provision of the 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 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.
SECTION 9.13 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.
SECTION 9.14 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
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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 a 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 Plan or the Lender 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
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, 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 Applicant, Subsidiary, any Lender, 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
CCAA Proceedings or 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 CCAA
Proceedings, formulating, negotiating or implementing the Plan or the Lender
Lock-up Agreement, the solicitation of acceptances of the Plan or the Lender
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 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
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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 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 9.15 BINDING EFFECT
The Plan shall be binding upon and inure to the benefit of the Applicants
and all present and former holders of Claims.
SECTION 9.16 REVOCATION, WITHDRAWAL, OR NON-CONSUMMATION
Subject to the approval of the Required Lenders, the Applicants reserve
the right to revoke or withdraw the Plan at any time prior to the Confirmation
Date and to file subsequent plans of reorganization or arrangement. If the
Applicants revoke or withdraw the Plan, or if the Confirmation does not occur,
(i) the Plan shall be null and void in all respects, (ii) any settlement or
compromise embodied in the Plan
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(including the fixing or limiting to an amount certain any Claim or Class of
Claims), assumption or termination, repudiation 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 any Applicant or any other Person; (b) prejudice in any manner the
rights of any Applicant or any Person in any further proceedings involving an
Applicant; or (c) constitute an admission of any sort by any Applicant or any
other Person.
SECTION 9.17 GOVERNING LAW
This 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 Plan and all proceedings taken in connection with this Plan and its
provisions shall be subject to the exclusive jurisdiction of the Court.
41
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.
42
SCHEDULE "B"
AFFECTED UNSECURED CLAIMS LIST
AMOUNT
---------
CREDITOR CREDITOR'S ADDRESS (CDN$)
- -------------------- ----------------------------------------------- ---------
1066424 Ontario Ltd. 39 Anne Street South, Barrie, ON L4N 2C7, 573,000
attention Brian D. Smith, President
1348040 Ontario Ltd. Mr. Rod Hudson, 48 Moorehead Crescent, 1,743,693
Brampton, ON L6Z 4K4
2418711 Canada Inc. 1100 Boulevard Cremazie est, bureau 805, 0
Montreal, Quebec H2P 2X2, attention Mr. Paul
Boyer
2819635 Canada Inc. 1100 Boulevard Cremazie est, bureau 805, 22,000
Montreal, Quebec H2P 2X2, attention Mr. Paul
Boyer
759082 Ontario Inc. 220 John St., Barrie, ON L4N 2L3, attention 38,000
Mary Kitchener
963767 Ontario Inc. c/o William R. Gilmour, Prouse, Dasht & 0
Crouch, 201-37 George Street West, Brampton,
Ontario L6X 1R5
Ablack, Krish 53 Challenger Cres., Scarborough, Ontario, 74,000
MIC 4Z4
Agglo Venture Inc., c/o William Black, McCarthy Tetrault,
Agglo Inc., Suite 4700, Toronto Dominion Bank Tower, Toronto
Dominion Centre, Toronto, Ontario, M5K 1E6 500,000
43
- 2 -
AMOUNT
----------
CREDITOR CREDITOR'S ADDRESS (CDN$)
- ------------------------------------- ----------------------------- ----------
Alexander Brown Inc. c/o David Wires of McCague, 500,000
Wires, Peacock, Borlack,
McInnis & Lloyd, Suite 2700,
P.O. Box 136, The Exchange
Tower, 2 First Canadian
Place, Toronto, Ontario,
M5X 1C7
B.A.C.C. Capital Corporation 250 University Avenue, 2nd. 2,324,747
Floor, Toronto, ON M5H 3E5,
attention Mr. Terry
Jaszkowski, Regional Manager
Bell Canada Inc. 2265 Roland Therrien Blvd., 260,000
Longueil, QC J4N 1C5,
attention M. Corbeil
Corporate Purchasing
Bernadin, Gilles 26 Rue du Coteau, Vaudreuil 40,000
Sur-le-Lac, Quebec, J7V 8P3
Boughton, Marvin 2023 Cheviot Cr., 40,000
Burlington, Ontario, L7P 1N7
Canadian Imperial Bank of Commerce 199 Bay St., 6th Floor, 22,058,824
Commerce Court West,
Toronto, Ontario M5L 1A2,
attention Mr. Wim Faassen
44
- 3 -
AMOUNT
---------
CREDITOR CREDITOR'S ADDRESS (CDN$)
- -------------------------------------- ---------------------------- ---------
Canadian Imperial Bank of CIBC Wood Gundy Capital, a 0
Commerce/Ontario division of Canadian
Teachers' Pension Plan Board/1067892 Imperial Bank of Commerce,
Ontario Limited/C.D.P.Q. Venture BCE Place, 161 Bay Street,
Capital Inc. 6th. Floor, Toronto, ON,
M5J 2S8; Ontario Teachers'
Pension Plan Board, 5650
Yonge Street, North York,
ON, M2M 4H5, attention
Portfolio Manager, Special
Situations and Legal
Counsel, Investments;
1067892 Ontario Limited, 1
Toronto Street, Suite 806,
Toronto, ON, M5C 2V6,
attention Derrick Rolf;
and, C.D.P.Q. Venture
Capital Inc., 1981 McGill
College, Montreal, QC,
H3A 3C7, attention
Vice-President, National
Corporate Investments
Chesterton Investments Limited & C/o Cassels Brock & 1,004,000
Morris Investments Limited Blackwell, Barristers &
Chodos, Peter Solicitors, Scotia Plaza,
Suite 2100, Toronto, ON M5H
3C2, attention Lorne S.
Silver
157 Beechwood Avenue, 700,000
Willowdale, Ontario,
M2L l1J9
CIBC Equipment Finance Limited C/o Newcourt Credit Group 75,000
Inc., Newcourt Centre, 207
Queens Quay West, Suite
700, Toronto, ON, Canada,
M5J 1A7, attention Dan
Billard
CIBC Equipment Finance Limited C/o Newcourt Credit Group 621,726
Inc., Newcourt Centre, 207
Queens Quay West, Suite
700, Toronto, ON, Canada,
M5J 1A7, attention Dan
Billard
45
- 4 -
AMOUNT
---------
CREDITOR CREDITOR'S ADDRESS (CDN$)
- ---------------------------------------- --------------------------- ---------
Cinicorp Holdings Limited C/o Feigt Nawrocki & Baker 312,000
Company, Suite 3300, 130
Adelaide Street West,
Toronto, Ontario M5H 3P5
City of Toronto Economic Development C/o Conway Kleinman 1,494,000
Corporation Kornhauser & Gotlieb, 390
Clark, Brad Bay Street, 5th. Floor,
Toronto, ON M5H 2Y2,
attention Michael A.
Kleinman
c/o Mr. Shane M. Watson, 2,000
Barrister and Solicitor,
760 Brant Street,
Suite 407B, Burlington,
ON L7R 4B7
Close Quarters Inc. PO Box 520, Alliston, ON 162,744
L9R 1V9
Close Quarters Inc. / Tom Close PO Box 520, Alliston, ON 745,313
L9R 1V9
Comdisco Canada Ltd. Royal Bank Plaza, South 0
Tower, 200 Bay Street,
Suite 2200, Toronto, ON
M5J 2J3
Compagnie de Gestion, M.P.F. Inc. C/o Chaurette Levesque, 2,426,000
410 Saint-Nicholas, Bureau
006, Montreal, QC,
H2Y 2P5, attention Alida
Gualtieri
Coristine, Bruce 257 Lakeview Road, Bell 366,176
River, Ontario N0R 1A0
Coristine, Bruce 257 Lakeview Road, Bell 61,765
River, Ontario N0R 1A0
Coristine, Bruce 257 Lakeview Road, Bell 745,313
River, Ontario N0R 1A0
46
- 5 -
AMOUNT
----------
CREDITOR CREDITOR'S ADDRESS (CDN$)
- ------------------------------------------ ------------------------ ----------
Coristine, Bruce / Close Quarters Inc. 257 Lakeview Road, Bell 229,102
River, Ontario N0R 1A0
Crawford, Kevin 213 Chebucto Dr., 90,000
Oakville, Ontario
L6J 5R1
D'Allessandro, Gino c/o Corrent & Macri, 0
Barristers and
Solicitors,
110 Tecumseh Road East,
Windsor, ON N8X 2P8,
attention John L. Rossi
Enterprises Delcapitale Limitee c/o Koskie Minsky, 0
20 Queen Street West,
Suite 900, Box 52,
Toronto, Ontario M5H
3R5, attention Larry
Banack
FP Commodity Master Trust c/o Canadian Imperial 24,849,240
Bank of Commerce,
199 Bay St., 6th Floor,
Commerce Court West,
Toronto, Ontario
M5L 1A2, attention Mr. Wim
Faassen
Fracassi, Philip RR#1, 1087 Old Mohawk 76,000
Road, Ancaster,
Ontario, L9G 3K9
Gallagher, John c/o Findlay & McCarthy, 20,000
Barristers and
Solicitors, 66 James
Street North, Hamilton,
ON L8R 2K5, attention
Mr. John Findlay
Goldblatt, Marvin 45 St. James Place, 1,216,000
Hamilton, Ontario
L8P 2N4
Gore, Reginald J., Gore, Alma P., Gore, c/o McCarthy Tetrault, 1,280,000
Larry R., Sebele, Sandra P., and Sebele, Barristers and
Terry C. Solicitors, Suite 2000,
One London Place, 255
Queens Avenue, London,
ON N6A 5R8, attention
Ms. Alissa K. Mitchell
47
- 6 -
AMOUNT
-------
CREDITOR CREDITOR'S ADDRESS (CDN$)
- ---------------------------------------- ----------------------------- -------
Green, John/Green, Lilla/Stasiuk, c/o Weir & Foulds, 35,000
John/Dynamic Industrial Services Inc. Barristers and Solicitors,
Exchange Tower, Suite 1600,
130 King Street West,
Toronto, ON M5X 1J5,
attention Mr. Gary M. Caplan
GUSO Ltd. c/o Re-Tech Products 31,695
Limited, 582 Bowes Rd.,
Concord, Ontario L4K 1K2,
attention Gary Grant
Hamilton Harbour Commissioners 605 James Street North, 825,000
Hamilton, Ontario L8L 1K1
Hilson, Michael c/o Findlay & McCarthy, 10,000
Barristers and Solicitors,
66 James Street North,
Hamilton, ON L8R 2K5,
attention Mr. John Findlay
Hoey, Graham 2005 Woodglen Crescent, 29,000
Gloucester, Ontario, K1J 6G7
c/o Imperial Oil Limited,
237 Fourth Avenue, Station 0
"M", Calgary, Alberta, T2P
Imperial Oil Limited/McColl Frontenac 3M9, attention Mr. D. J.
Petroleum Inc. Saretzky, Contracts Manager
Kimco Steel Sales Limited c/o Willoughby, MacLeod, 734 6,000
Arlington Park Place,
Kingston, Ontario K7M 8H9
Kumer, Sheldon 41 Terrace Drive, Dundas, 512,000
Ontario L9H 3X1
Leasing Solutions (Canada) Inc. 151 Yonge Street, Suite 1710 0
Toronto, Ontario M5C 2W7
Attention: Rick Morrison
48
- 7 -
AMOUNT
---------
CREDITOR CREDITOR'S ADDRESS (CDN$)
- ------------------------------------ ------------------------------ ---------
Lethbridge, Thomas c/o of Elliot, Porter, 29,000
McFayden & McFayden, Kendall
Street. Point Edwards,
Ontario, N7V 4G6, attention
George F. McFayden
Lions Wrecking Ltd.; Lions Disposal
and Excavation; Lions Disposal C/o Polsinelli and DaRe, 3700 0
Excavation & Demolition Ltd.; Jose Steeles Ave. West, Suite 502,
Nunes; Honorina Nunes; Olivio Woodbridge, Ontario, L4L 8K8,
Ricardo; Maria Ricardo attention John DaRe
Liquid Cargo Lines Limited C/o Armstrong, Meakings, 0
Barristers, Solicitors,
Notaries, 111 Toronto Street,
Barrie, ON L4N 1V1, attention
Gordon V. Meakings Esq.
McQuillan, Peter 34 Davidson Blvd., Dundas, 31,000
Ontario, L9H 6X9
c/o SITQ Inc. / Division 62,000
Industrielle, 3300 Blvd. Cote
MD Realty Canada Inc. Vertu, Suite 400, Ville Saint
Abrim 11 Inc. & 132001 Canada Inc., Laurent, QC H4R 2B7,
Sitq Inc. attention Charles Bourgeois
MDS Environmental Services Limited MDS Inc. 100 International 1,200,000
Blvd., Etobicoke, ON M9W
6J6, attention Peter E.
Brent, Vice-President, Legal
Affairs and Corporate
Secretary
MTC Leasing Inc. 3310 South Service Road, PO 24,000
Box 906, Burlington, ON, L7R
3Y7, attention Kelly Peters,
Collections Department
49
- 8 -
AMOUNT
---------
CREDITOR CREDITOR'S ADDRESS (CDN$)
- ---------------------------------------- -------------------------- ---------
Myrtle Eva Harrington; Harrington c/o Winchie, Lamont, 250,000
Acquisition Corporation; Nancy Paquette, 105 Main Street
Hamilton; Myrtle Eva Harrington as East, Suite 1001,
Trustee for the estate of Frederick Hamilton, ON L8N 1G6,
John Harrington; Bruce Hamilton attention Terry Winchie
Newcourt Credit Group Inc./Newcourt Newcourt Centre, 207 746,000
Financial Ltd. Queens Quay West, Suite
Nortel Networks Corporation 700, Toronto, ON, Canada,
M5J 1A7, attention
Gunther Boenisch
8200 Dixie Road, 1,018,000
Brampton, ON L6T 5P6
OE Leasing, a division of OE Financial P.O. Box 5027, 4145 North 1,320
Service Inc. Service Road, #401,
Burlington, Ontario,
L7R 3Y8
Ontario Paving Inc.; Carmen Alfano c/o of Piersanti & 0
Company Royal Centre,
3300 Highway Number 7,
Suite #800, Vaughan,
Ontario, L4K 4M3,
attention David D'Angela
Palango, Paul c/o Weir & Foulds, 0
Barristers and
Solicitors, Exchange
Tower, Suite 1600, 130
King Street West,
Toronto, ON M5X 1J5,
attention Mr. Barnet H.
Kussner
Paletta International Corporation 4480 Paletta Court, 2,035,000
Burlington, ON L7L 5R2
PDQ Mechanical c/o Bishop & McKenzie, 13,000
2500, 10104-103rd Ave.,
Edmonton, Alberta T5J
1V3, attention Robert A.
Fariner
Perron, Victor 1494 Powerline Rd. West, 31,000
RR#2 Lynden, Ontario, L0R
1T0
50
- 9 -
AMOUNT
-----------
CREDITOR CREDITOR'S ADDRESS (CDN$)
- ---------------------------------------- ------------------------ -----------
Poplack, Bernard 65 Wembley Road, 121,000
Toronto, Ontario, M6C
2G1
Port of Quebec Authority c/o Boily Morency, 98,832
Advocates, 70
Dalhousie, bureau 230,
Quebec City, QC G1K
4B2, attention
Jean-Paul Boily
Royal Bank of Canada 20 King Street West, 3,676,471
9th. Floor, Toronto, ON
M5H 1C4, attention
Bernie A. A, LaCroix,
Vice-President,
Business Banking
Teperman and Sons Inc. Suite 1500, 151 Yonge 0
Street, Toronto,
Ontario, M5C 2W7
Utter, Christopher/ Buleychuk, Susan 22 Green Mountain Rd. 0
W., Stoney Creek,
Ontario L8J 2W4,
attention Susan
Buleychuk
Woodcroft, John 88 Highland Park Drive, 1,053,000
Dundas, Ontario L9H
6G8
Woodstock Sufferance Warehouse Ltd. 430 Springbank Avenue 271,487
South, Woodstock, ON
N4V 1B2, attention Bill
Hamilton
Xerox Canada Ltd. 33 Bloor Street East, 8,621
Toronto, ON M4W 3H1
TOTAL $76,769,069