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EXHIBIT 10.19
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.
SUPPLEMENT TO THE AMENDED AND RESTATED PLAN OF COMPROMISE AND ARRANGEMENT DATED
SEPTEMBER 24, 1999
October 27, 1999
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PLAN SUPPLEMENT
This Plan Supplement amends and restates the Amended and Restated Plan of
Compromise and Arrangement dated September 24, 1999 of Philip Services Corp.
and its Canadian subsidiaries listed on Schedule "A" hereto pursuant to the
Companies' Creditors Arrangement Act, R.S.C. 1995, c. C-36, as amended.
ARTICLE 1
INTERPRETATION
SECTION 1.1 DEFINITIONS
In this Amended Plan (including the Schedules hereto), unless otherwise
stated or the context otherwise requires:
"ACCOUNT INTERMEDIARIES" means (a) CIBC in its capacity as the provider
of the CIBC Bank Account Services, and (b) Comerica Bank and its
affiliates in their respective capacities as the providers of the
Comerica Bank Account Services;
"ADMINISTRATIVE AGENT" means CIBC or its successor as administrative
agent for the Lenders under the Credit Agreement;
"AFFECTED CLAIM" means an Affected Secured Lender Claim;
"AFFECTED CREDITOR" means a holder of an Affected Claim;
"AFFECTED SECURED LENDER CLAIM" means a Secured Claim of a Lender against
the Applicants arising under or as a result of the Credit Facility
Agreements other than any Other Secured Claims;
"AFFECTED SECURED CREDITOR" means a holder of an Affected Secured Lender
Claim;
"APPLICANTS" means PSC and each of the Canadian Subsidiaries and
"APPLICANT" means any one of the Applicants;
"BTCO" means Bankers Trust Company;
"BUSINESS DAY" means a day which is not (i) a Saturday or a Sunday; or
(ii) a day observed as a holiday under the laws of the Province of
Ontario or the applicable federal laws of Canada;
"CANADIAN SUBSIDIARIES" means, collectively, the direct and indirect
subsidiaries of PSC listed on Schedule "A" hereto;
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"CCAA" means the Companies' Creditors Arrangement Act, R.S.C. 1985, c.
C-36, as amended;
"CCAA PROCEEDINGS" means the CCAA cases of PSC and the Canadian
Subsidiaries before the Court pursuant to the CCAA;
"CHAPTER 11 CASES" means the jointly administered Chapter 11 cases of
PSI, PSC and the U.S. Subsidiaries before the United States Bankruptcy
Court pursuant to the provisions of Chapter 11 of the United States
Bankruptcy Code;
"CIBC" means Canadian Imperial Bank of Commerce;
"CIBC BANK ACCOUNT SERVICES" means "CIBC Bank Account Services" as
defined in the Credit Agreement;
"CLAIM" means any right of any Person against any Applicant in connection
with any indebtedness, liability or obligation of any kind of any
Applicant whether or not reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal,
equitable, secured, unsecured, present, future, known, unknown, by
guarantee, by surety or otherwise and whether or not such a right is
executory in nature, including, without limitation, the right or ability
of any person to advance a claim for contribution or indemnity or
otherwise with respect to any matter, action, cause or chose in action
whether existing at present or commenced in the future based in whole or
in part on facts which exist prior to or at the time of the first
Creditors' Meeting other than (i) a claim of a United States resident
against PSC, or (ii) a claim of a Canadian resident against PSC which the
holder of the claim has voluntarily agreed is to be subject to and bound
by the provisions of the U.S. Plan, and has consented to have the
allowance and priority of such claim determined in accordance with the
provisions of the U.S. Bankruptcy Code;
"CLASS" means the Class consisting of all holders of Affected Secured
Lender Claims;
"COMERICA BANK ACCOUNT SERVICES" means "Comerica Bank Account Services"
as defined in the Credit Agreement;
"COMMON SHARES" means common shares in the capital of PSC;
"CONFIRMATION DATE" means the date that the Confirmation Order is made;
"CONFIRMATION ORDER" means the order of the Court sanctioning and
approving the Amended Plan appointing the Receiver as of the Effective
Date
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and authorizing and directing the Selling Applicants and the Receiver to
enter into and perform the Sale Agreement;
"COURT" means the Ontario Superior Court of Justice;
"CREDIT AGREEMENT" means the Credit Agreement dated as of August 11, 1997
among PSC, as borrower in Canada, PSI, as borrower in the United States,
the Lenders, CIBC, as administrative agent for the Lenders, BTCo, as
syndication agent, and CIBC and BTCo, as co-arrangers, as amended by
amending agreements dated as of October 31, 1997, February 19, 1998, June
24, 1998, October 20, 1998 and December 4, 1998;
"CREDIT DOCUMENTS" means the "Credit Documents" as defined in the Credit
Agreement;
"CREDIT FACILITY AGREEMENTS" means the Credit Agreement, the Credit
Documents and the Lender Lock-Up Agreement;
"CREDITOR" means any Person having a Claim and may, if the context
requires, mean a trustee, receiver, receiver manager or other Person
acting on behalf of such Persons, but a Creditor shall not include a
Person having a Claim in respect of an Unaffected Obligation;
"CREDITORS' MEETING" means the meeting of the Affected Secured Creditors
called for the purpose of considering and voting upon this Amended Plan
and includes any adjournment of such meeting;
"CREDITORS' MEETINGS ORDER" means the Order of the Court dated September
23, 1999 establishing procedures for proving Claims and setting the date
for the Creditors' Meetings, as amended or supplemented from time to
time;
"DATE OF FILING" means June 25, 1999;
"DIP AGENT" means BTCo, in its capacity as administrative agent under the
DIP Facility 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$100 million of available credit pursuant to the DIP Facility
Agreement;
"DIP FACILITY CLAIM" means a Claim arising under or as a result of the
DIP Facility;
"DIRECTORS AND OFFICERS" means the current and former directors and
officers of the Applicants resident in Canada;
"DISCLOSURE STATEMENTS" means the written disclosure statements that
relate to the Plan or the U.S. Plan, as such documents may be amended,
supplemented or modified from time to time and "DISCLOSURE STATEMENT"
means any one of them;
"DOLLARS" or "$" means lawful money of Canada unless otherwise indicated;
"EFFECTIVE DATE" means the Business Day on which all conditions to
implementation of the Plan as set forth in Section 5.4 have been
satisfied or waived as provided in Section 5.5 and is the effective date
of this Amended Plan;
"EXCLUDED INDEMNIFICATION OBLIGATIONS" means, in the case of PSC,
"Excluded Indemnification Obligations" (as defined in the U.S. Plan) of
PSC to any Canadian resident and, in the case of any of the Canadian
Subsidiaries, means Claims of any Canadian residents against any of the
Canadian Subsidiaries that would be "Excluded Indemnification
Obligations" under the U.S. Plan if such Canadian Subsidiaries were U.S.
Plan Applicants and in each case includes Claims of any Canadian
residents against any of the Applicants that are not Assumed
Indemnification Obligations. For greater certainty, "Excluded
Indemnification Obligations" shall not affect the set-off rights, if any,
of any Person;
"EXIT FACILITY" means the new senior secured credit facility in an
aggregate principal amount of approximately US$125 million, which PSI and
the Subsidiaries anticipate entering into as a condition to the
consummation of the U.S. Plan;
"INITIAL ORDER" means the Order of the Court dated June 25, 1999, as
amended from time to time, pursuant to which, among other things, the
Applicants were granted certain relief pursuant to the CCAA;
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"INTERCOMPANY CLAIMS" means, as the case may be, any Claim of (a) any
Subsidiary against an Applicant, (b) any Subsidiary against a Subsidiary,
or (c) PSC against any Subsidiary;
"LENDER" means a "Lender" as defined in the Credit Agreement, CIBC as
administrative agent, BTCo as syndication agent, CIBC and BTCo as
co-arrangers, and their individual successors and assigns;
"LENDER CLAIM" means a Claim of a Lender arising under or as a result of
the Credit Facility Agreements;
"LENDER LOCK-UP AGREEMENT" means the letter agreement dated as of April
5, 1999, as amended and restated as of June 21, 1999, as may be further
amended subsequent to the Date of Filing, among PSC and the Lenders
signatories thereto with respect to the principal terms and conditions of
this Amended Plan and the U.S. Plan;
"LENDERS' SECURITY" means the security granted by the Applicants in
favour of the Security Agent or the Administrative Agent on behalf of the
Lenders;
"LIEN" means a charge against or interest in property to secure payment
of debt or performance of an obligation;
"MONITOR" means Ernst & Young Inc. and any successor thereto appointed in
accordance with the Initial Order or any further Order;
"NEW GUARANTEES" means, collectively, the secured guarantees of the
Subsidiaries to be entered into as of the Effective Date to guarantee and
secure the New Senior Secured Term Debt and the New Secured PIK Debt (as
defined in the U.S. Plan);
"ORDER" means any order of the Court in these proceedings;
"OTHER SECURED CLAIMS" means, collectively, the Secured Claims of the
Account Intermediaries, the issuers of letters of credit issued under the
Permitted LC Facility established pursuant to Amending Agreement No. 3 to
the Credit Agreement and all other Secured Claims against the Applicants,
other than the Affected Secured Lender Claims;
"PERSON" means any individual, partnership, joint venture, trust,
corporation, unincorporated organization, government or any agency or
instrumentality thereof, or any other juridical entity howsoever
designated or constituted;
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"PLAN" means the amended and restated plan of compromise and arrangement
dated September 24, 1999 of all of the Applicants under the CCAA;
"PROTOCOL" means the Cross-Border Insolvency Protocol entered into by the
U.S. Bankruptcy Court in the Chapter 11 Cases and by the Court in respect
of the CCAA Proceedings;
"PROVEN ..... CLAIM" of a Creditor means the amount of the Claim of such
Creditor as finally determined in accordance with the provisions of the
CCAA, any applicable Order or this Plan;
"PSC" means Philip Services Corp. or its successor;
"PSI" means Philip Services (Delaware), Inc.;
"RECEIVER" has the meaning set forth in Section 4.1;
"REQUIRED LENDERS" means the "Required Lenders" as defined in the Credit
Agreement;
"REQUIRED MAJORITY" means, in respect of the Class, an affirmative vote
of two-thirds in value of all Proven Claims of the Class voted in
accordance with the voting procedures established hereunder (whether in
person or by proxy) and a majority in number of all voting Creditors of
the Class;
"SALE AGREEMENT" has the meaning set forth in Section 4.1;
"SECURED CLAIM" means a Claim that is secured by a Lien or other interest
on property in which an Applicant has an interest, whether the Person
with such Claim has a security interest by way of a mortgage, lease,
chattel mortgage, conditional sale agreement, debenture, security
agreement or other security instrument, to the extent of the value of the
Claim holder's interest in the Applicant's interests in such property;
"SECURITY AGENT" means the "Security Agent" as defined in the Credit
Agreement;
"SELLING APPLICANTS" has the meaning set forth in Section 4.1;
"SUBSIDIARIES" means, collectively, all of the direct and indirect
subsidiaries of PSC and following completion of the Sale Transactions (as
defined in Section 4.1) means, collectively, all of the direct and
indirect subsidiaries of PSI;
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"SUBSIDIARY INTERESTS" means, collectively, the issued and outstanding
shares in the stock of the Subsidiaries as of the Date of Filing;
"TRANSFERRED ASSETS" means the assets and shares sold under the Sale
Agreement;
"TRANSFERRED SUBSIDIARIES" means the corporations whose shares are
included in the Transferred Assets;
"UNAFFECTED OBLIGATIONS" means Claims that are not Affected Claims;
"U.S. BANKRUPTCY COURT" means the United States Bankruptcy Court having
jurisdiction over the Chapter 11 Cases;
"U.S. PLAN" means the joint plan of reorganization of the U.S. Plan
Applicants as filed with the U.S. Bankruptcy Court, as the same may be
amended, modified or supplemented from time to time with the consent of
the Required Lenders;
"U.S. PLAN APPLICANTS" means PSC, PSI and each of the U.S. Subsidiaries;
and
"U.S. SUBSIDIARIES" means PSI and the direct and indirect subsidiaries of
PSC set forth in the U.S. Plan.
SECTION 1.2 INTERPRETATION, ETC.
For purposes of the Amended Plan:
(a) any reference in the Amended Plan to a contract, instrument,
release, indenture, or other agreement or document's being in a
particular form or on particular terms and conditions means that
such document shall be substantially in such form or substantially
on such terms and conditions;
(b) any reference in the Amended Plan to an existing document or
exhibit filed or to be filed means such document or exhibit as it
may have been or may be amended, modified, or supplemented;
(c) unless otherwise specified, all references in the Amended
Plan to Sections, Articles and Schedules are references to Sections,
Articles and Schedules of or to the Amended Plan;
(d) the words "herein" and "hereto" refer to the Amended Plan in
its entirety rather than to a particular portion of the Amended
Plan;
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(e) captions and headings to Articles and Sections are inserted
for convenience of reference only and are not intended to be a part
of or to affect the interpretation of the Amended Plan;
(f) where the context requires, a word or words importing the
singular shall include the plural and vice versa;
(g) the words "includes" and "including" are not limiting;
(h) the phrase "may not" is prohibitive and not permissive; and
(i) the word "or" is not exclusive.
SECTION 1.3 DATE FOR ANY ACTION
In the event that any date on which any action is required to be taken
under this Plan by any of the parties is not a Business Day, that action shall
be required to be taken on the next succeeding day which is a Business Day.
SECTION 1.4 TIME
All times expressed in this Amended Plan are local time Toronto, Ontario,
Canada unless otherwise stipulated.
SECTION 1.5 STATUTORY REFERENCES
Any reference in this Amended Plan to a statute includes all regulations
made thereunder and all amendments to such statute or regulations in force from
time to time.
SECTION 1.6 SUCCESSORS AND ASSIGNS
This Amended Plan shall be binding upon and shall enure to the benefit of
the heirs, administrators, executors, legal personal representatives,
successors and assigns of any Person named or referred to in this Amended Plan.
SECTION 1.7 SCHEDULES
The following are the Schedules to this Amended Plan, which are
incorporated by reference into this Amended Plan and form part of it:
Schedule "A" - Canadian Subsidiaries
Schedule "B" - Sale Agreement
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ARTICLE 2
PURPOSE AND EFFECT OF THE PLAN
SECTION 2.1 BACKGROUND
The circumstances and events leading up to the Plan and the U.S. Plan are
summarized in the Disclosure Statement that was circulated to Affected
Creditors in connection with the Plan and distributed in accordance with the
U.S. Bankruptcy Code in connection with the U.S. Plan.
SECTION 2.2 PERSONS AFFECTED
This Amended Plan and the U.S. Plan provide for a coordinated
restructuring of claims and interests against PSC, PSI, the Canadian
Subsidiaries and the U.S. Subsidiaries. This Amended Plan will become
effective on the Effective Date and shall be binding on and enure to the
benefit of the Applicants and the holders of Affected Secured Lender Claims.
SECTION 2.3 PERSONS NOT AFFECTED
For greater certainty this Amended Plan does not affect the holders of
Unaffected Obligations. Nothing shall affect any Applicant's rights and
defences, both legal and equitable, with respect to any Unaffected Obligations
including, but not limited to, all rights with respect to legal and equitable
defenses to setoffs or recoupments against such Claims. Notwithstanding the
substantive consolidation of Claims against the Applicants for certain purposes
under this Amended Plan, Claims which are not Affected Claims of any particular
Applicant remain the obligations solely of such Applicant and shall not become
obligations of any other Applicant.
ARTICLE 3
CLASSIFICATION OF CREDITORS, VALUATION OF CLAIMS AND
RELATED MATTERS
SECTION 3.1 CLASSES OF CLAIMS
The only classes of Creditors for the purpose of considering and voting on
the Amended Plan shall be Creditors holding Affected Secured Lender Claims.
SECTION 3.2 AFFECTED CLAIMS
Creditors holding Affected Secured Lender Claims shall prove their Claims,
vote in respect of the Amended Plan and receive the rights provided for under
and pursuant to this Amended Plan.
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SECTION 3.3 CREDITORS' MEETING
The Creditors' Meeting of holders of Affected Secured Lender Claims shall
be held in accordance with this Amended Plan, the Creditors' Meetings Order and
any further Order. The only persons entitled to attend the Creditors' Meeting
are those persons, including the holders of proxies, entitled to vote at the
Creditors' Meeting, their legal counsel and advisors and the officers,
directors and legal counsel of the Applicants. Any other Person may be
admitted on invitation of the chair of the Creditors' Meeting.
SECTION 3.4 APPROVAL BY CREDITORS
In order to be approved, the Amended Plan must receive the affirmative
vote of the Required Majority of the holders of Affected Secured Lender Claims.
SECTION 3.5 VOTING CLAIMS
The Claim of the holders of Affected Secured Lender Claims has been
accepted as filed.
SECTION 3.6 CLAIMS FOR VOTING PURPOSES
Each Creditor having an Affected Secured Lender Claim shall be entitled to
attend and to vote at the Creditors' Meeting. Each Creditor who is entitled to
vote shall be entitled to that number of votes at the Creditors' Meeting as is
equal to the dollar value of its Claim for voting purposes as determined in
accordance with this Article 3 and the provisions of the Creditors' Meetings
Order.
ARTICLE 4
TREATMENT OF AFFECTED CREDITORS
SECTION 4.1 AFFECTED SECURED LENDER CLAIMS
Subject to approval by the Required Majority of holders of Affected
Secured Lender Claims,
(a) The Applicants listed as vendors ("Selling Applicants") in
the form of agreement of purchase and sale (the "Sale Agreement")
attached as Schedule "B" to this Amended Plan will enter into an
agreement to sell their businesses as a going concern to the parties
(the "Purchasers") substantially on the terms set out in the Sale
Agreement, subject to such amendments as do not materially adversely
affect the financial arrangements set out in the Sale Agreement and
are approved in the Confirmation Order or other Order (collectively
in this section 4.1, the "Order");
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(b) On the Effective Date, the Sale Agreement will be assumed and
completed by a receiver and manager or interim receiver (the
"Receiver") appointed as of the Effective Date by the Order to
convey the assets of the Applicants other than such assets as may be
excluded by the terms of the Order. The proceeds of sale will be
distributed by the Receiver on the Effective Date in accordance with
the legal priorities of the claims against the assets that are to be
sold under the Sale Agreement (the "Transferred Assets");
(c) The holders of Affected Secured Lender Claims consent to the
sale of the Transferred Assets substantially on the terms set forth
in the Sale Agreement and this Section 4.1 (the "Sale
Transactions"), provided that the net proceeds of sale remain
subject to the Lenders' Security;
(d) All assets of the Applicants that are excluded from the Sale
Transactions will remain the property of the relevant Applicant.
All such assets and the assets of the Applicants other than the
Selling Applicants will remain subject to the Lenders' Security;
(e) The indebtedness of the Applicants to the Lenders will be
reduced;
(i) on completion of the distribution of proceeds of the Sale
Transactions to holders of Affected Secured Lender Claims, by
an amount equal to the Purchase Price less the Assumed Senior
Liabilities, both as defined under the Sale Agreement;
(ii) on the first distribution date under the U.S. Plan, by the
value of the debt and equity to be distributed to the holders
of Class 6 Claims (as defined in the U.S. Plan) on the
implementation of the U.S. Plan), and on each subsequent
distribution date under the U.S. Plan, by an amount equal to
the value of the Class 6 Additional Distribution, if any, on
such date,
but, in each case, without duplication (ie. the reduction of
indebtedness on account of distributions in one country will only
be to the extent that the distributions in such country are not
already taken into account in the calculation of the distributions
in the other country).
The balance of the indebtedness of the Applicants to the Lenders will
remain outstanding and will continue to be subject to the terms of the
Credit Agreement and secured by the Lenders' Security, which will remain
in full force and effect. The Lenders will not be deemed to have waived
any Default or Event of Default under the Credit Agreement or under the
Lenders'
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Security or any remedies thereunder and following the Effective Date may
exercise any remedies they may have under the Credit Agreement or the
Lenders' Security.
(f) The following transactions shall occur immediately prior to
implementation of the Amended Plan;
(i) Each holder of a Claim under the Credit Agreement
shall be deemed to have exchanged such Claim for an undivided
co-ownership interest in all of the Claims under the Credit
Agreement in the same aggregate amount as the Claim so
exchanged; and
(ii) Each holder of an Affected Secured Lender Claim
will assign to PSI the portion of its Affected Secured Lender
Claim which will be repaid from the proceeds of the Sale
Transactions to which the holders of Affected Secured Lender
Claims are entitled. This assignment will be part of the
exchange of debt and other rights with PSI under the U.S. Plan
for the debt and equity to be issued by PSI to the holders of
Class 6 Claims in the U.S. Plan, and will be on the terms set
out in the U.S. Plan, effective after the step described in
clause (f)(i) and immediately prior to the distribution of the
proceeds of the Sale Transactions to which the holders of
Affected Secured Lender Claims are entitled. From and after
the assignment, PSI will be entitled to receive all proceeds
from the Sale Transactions that would otherwise be distributed
to holders of Affected Secured Lender Claims.
SECTION 4.2 OTHER CLAIMS
Claims that would have been Affected Unsecured Claims (as defined in the
Amended and Restated Plan of Compromise and Arrangement of the Applicants dated
September 24, 1999) will not be compromised. The holders of Affected Unsecured
Claims will have the right, but will not be required, to elect to participate
in distributions under the U.S. Plan as provided for therein.
SECTION 4.3 SUBSTANTIVE CONSOLIDATION FOR PURPOSES OF TREATING AFFECTED CLAIMS
The Amended Plan is premised upon the substantive consolidation of the
Applicants only for purposes of treating Affected Secured Lender Claims under
the Amended Plan, including for voting, sanction and distribution purposes.
This Amended Plan does not contemplate substantive consolidation of the
Applicants with respect to Unaffected Obligations. Except as set forth in this
Section 4.3, such substantive consolidation shall not (other than for purposes
related to the Amended
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Plan) (a) affect the legal and corporate structures of the Applicants, (b)
cause any Applicant to be liable for any Claim under the Amended Plan, for
which it otherwise is not liable and the liability of any Applicant for any
such Claim shall not be affected by such substantive consolidation, (c) affect
Intercompany Claims of Applicants against Applicants, or (d) affect Subsidiary
Interests.
ARTICLE 5
MISCELLANEOUS
SECTION 5.1 CONFIRMATION OF PLAN
(a) Provided that the Amended Plan is approved by the Required
Majority of holders of Affected Secured Lender Claims, the
Applicants will seek the Confirmation Order (which as proposed shall
be in form and substance acceptable to the Applicants and the
Required Lenders) for the sanction and approval of the Amended Plan;
and
(b) subject only to the Confirmation Order being granted in form
and substance reasonably acceptable to the Applicants and the
Required Lenders and the satisfaction of those conditions precedent
to implementation of the Amended Plan described in Section 5.3, the
Amended Plan will be implemented by the Applicants and will be
binding upon the Applicants and all holders of Affected Secured
Lender Claims.
SECTION 5.2 PARTICIPATION IN DIFFERENT CAPACITIES
Creditors whose Claims are affected by this Amended Plan are affected only
in their capacities as holders of such Claims.
SECTION 5.3 DEEMING PROVISIONS
In this Amended Plan, the deeming provisions are not rebuttable and are
conclusive and irrevocable.
SECTION 5.4 CONDITIONS PRECEDENT TO IMPLEMENTATION OF PLAN
The implementation of the Amended Plan is subject to the following
conditions precedent which may not be waived by the Applicants without the
consent of the Required Lenders:
(a) the Confirmation Order sanctioning the Amended Plan, as such
Amended Plan may have been modified, in form and substance
reasonably satisfactory to the Applicants and the Required Lenders,
shall have been entered and the operation and effect of the
Confirmation Order shall not have been stayed, reversed or amended,
and shall:
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(i) approve the Sale Transactions and authorize and
direct the Applicants to take all actions necessary or
appropriate to enter into, implement and consummate the
contracts, instruments, releases, leases, indentures and other
agreements or documents created in connection with the Amended
Plan;
(ii) declare that the provisions of the Confirmation
Order are nonseverable and mutually dependent;
(iii) appoint the Receiver as of the Effective Date
and authorize and direct the Receiver to enter into the Sale
Agreement and complete the transactions contemplated thereby;
and
(iv) authorize and direct the Receiver to distribute
the shares of the Purchasers to PSI on the Effective Date.
(b) the following agreements, in form and substance satisfactory
to the Applicants, the Purchasers and the Required Lenders shall
have been executed and delivered by the Purchasers and the
Transferred Subsidiaries, and all conditions precedent thereto shall
have been satisfied:
(i) New Guarantees and related security documents;
(ii) If necessary, the Exit Facility;
(iii) Agreements evidencing sufficient bonding to meet
the projected bonding requirements of the Purchasers and the
Transferred Subsidiaries;
(iv) Such other documents and agreements as are
required to be executed and delivered by subsidiaries of PSI
pursuant to the terms of the U.S. Plan; and
(c) all actions, documents and agreements necessary to implement
the Amended Plan and the Sale Agreement shall have been effected or
executed; and
(d) either (i) the U.S. Bankruptcy Court shall have issued a
final order under the U.S. Bankruptcy Code confirming the U.S. Plan
and all conditions to the effectiveness of the U.S. Plan shall have
been satisfied other than the condition that the Alternate Canadian
Transactions shall have been authorized to be implemented in
accordance with Canadian law and all conditions to the
implementation of the Alternate Canadian Transactions (as defined in
the U.S. Plan) shall have been
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satisfied or waived by the Required Lenders other than the
conditions that the Plan shall have become effective, and the
Alternate Canadian Transactions shall be capable of being
implemented on the Effective Date and the only unsatisfied
condition to the transactions shall be the effectiveness of the
U.S. Plan or (ii) if the Canadian Plan Condition (as defined in the
U.S. Plan) has been waived, the U.S. Plan shall have become
effective.
SECTION 5.5 WAIVER OF CONDITIONS
Each of the conditions set forth in Section 5.4 above, may be waived in
whole or in part by the Applicants with the written consent of the Required
Lenders, without any other notice to parties in interest or the Court and
without a hearing. The failure to satisfy or waive any condition to the
Effective Date may be asserted by the Applicants regardless of the
circumstances giving rise to the failure of such condition to be satisfied
(including any action or inaction by an Applicant). The failure of an
Applicant to exercise any of the foregoing rights shall not be deemed a waiver
of any other rights, and each such right shall be deemed an ongoing right that
may be asserted at any time.
SECTION 5.6 NOTICES
Any notices or communication to be made or given hereunder shall be in
writing and shall refer to this Amended Plan and may, subject as hereinafter
provided, be made or given by personal delivery, by courier, by prepaid mail or
by telecopier addressed to the respective parties as follows:
(a) if to the Applicants:
Philip Services Corp.
100 King Street West
Hamilton, Ontario
L8N 4J6
Attention: Colin Soule
Executive Vice-President, General Counsel and
Corporate Secretary
Telecopier: (905) 521-9160
(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.
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(c) if to the Monitor:
P.O. Box 251
Ernst & Young Tower
222 Bay Street, 21st Floor
Toronto-Dominion Centre
Toronto, Ontario
M5K 1J7
Attention: Murray McDonald
President
Telecopier: (416) 943-3300
or to such other address as any party may from time to time notify the others
in accordance with this Section 5.6. In the event of any strike, lock-out or
other event which interrupts postal service in any part of Canada, all notices
and communications during such interruption may only be given or made by
personal delivery or by telecopier and any notice or other communication given
or made by prepaid mail within the five (5) Business Day period immediately
preceding the commencement of such interruption, unless actually received,
shall be deemed not to have been given or made. All such notices and
communications shall be deemed to have been received, in the case of notice by
telecopier or by delivery prior to 5:00 p.m. (local time) on a Business Day,
when received or if received after 5:00 p.m. (local time) on a Business Day or
at any time on a non-Business Day, on the next following Business Day and, in
the case of notice mailed as aforesaid, on the fifth Business Day following the
date on which such notice or other communication is mailed. The unintentional
failure by the Applicants to give notice contemplated hereunder to any
particular Creditor shall not invalidate this Amended Plan or any action taken
by any Person pursuant to this Amended Plan.
SECTION 5.7 SEVERABILITY OF PLAN PROVISIONS
If, prior to the Confirmation Date, any term or provision of the Amended
Plan is held by the Court to be invalid, void or unenforceable, the Court, at
the request of any Applicant, with the consent of the Required Lenders, and to
the extent of any modification to the treatment of the Account Intermediaries
as holders of Other Secured Claims, the consent of the Account Intermediaries,
shall have the power to alter and interpret such term or provision to make it
valid or enforceable to the maximum extent practicable, consistent with the
original purpose of the term or provision held to be invalid, void or
unenforceable, and such term or provision shall then be applicable as altered
or interpreted. Notwithstanding any such holding, alteration or
interpretation, the remainder of the terms and provisions of the Amended Plan
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated by such holding, alteration or interpretation. The
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Confirmation Order shall constitute a judicial determination and shall provide
that each term and provision of the Amended Plan, as it may have been altered
or interpreted in accordance with the foregoing, is valid and enforceable
pursuant to its terms.
SECTION 5.8 SUCCESSORS AND ASSIGNS
The rights, benefits and obligations of any entity named or referred to in
the Amended Plan shall be binding on, and shall inure to the benefit of, any
heir, executor, administrator, successor or assign of such entity.
SECTION 5.9 EXCULPATION AND LIMITATION OF LIABILITY
Neither the Applicants, the Subsidiaries, the Lenders, any individual,
corporation or other entity that was at any time formerly a Lender, the ad hoc
steering committee or any other committee of holders of Lender Claims, CIBC as
Administrative Agent and co-arranger under the Credit Agreement, BTCo as
Syndication Agent and co-arranger under the Credit Agreement, any official
committees appointed in the CCAA Proceedings, the DIP Agent, the DIP
Co-Arrangers and the holders of DIP Facility Claims, the Security Agent, and
the Account Intermediaries, or any of their respective present or former
members, officers, directors, employees, advisors, attorneys, or agents, shall
have or incur any liability to any holder of an Affected Secured Lender Claim
or any other party in interest, or any of their respective agents, employees,
representatives, financial advisors, attorneys, or affiliates, or any of their
successors or assigns, for any act or omission in connection with, relating to,
or arising out of, the CCAA Proceedings or the Chapter 11 Cases, formulating,
negotiating or implementing the Amended Plan or the Lender Lock-up Agreement,
the solicitation of acceptances of the Amended Plan or the Lender Lock-up
Agreement, the pursuit of confirmation of the Amended Plan, the confirmation of
the Amended Plan, the consummation of the Amended Plan, or the administration
of the Amended Plan or the property to be distributed under the Amended Plan,
except for their willful misconduct, and in all respects shall be entitled to
rely reasonably upon the advice of counsel with respect to their duties and
responsibilities under the Amended Plan.
The Applicants and the Subsidiaries hereby jointly and severally fully
indemnify each of the Lenders, any individual, corporation or other entity that
was at any time a Lender, the ad hoc steering committee or any other committee
of holders of Lender Claims, CIBC as Administrative Agent and co-arranger under
the Credit Agreement, BTCo as Syndication Agent and co-arranger under the
Credit Agreement, the DIP Agent, the DIP Co-Arrangers and the holders of DIP
Facility Claims, the Security Agent, and the Account Intermediaries, and their
respective agents, affiliates, directors, officers, employees, and
representatives, including counsel (collectively, the "Indemnitees") against
any manner of actions, causes of action, suits, proceedings, liabilities and
claims of any nature, costs and expenses
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(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 Amended Plan, other than any liabilities
to the extent arising from the gross negligence or willful or intentional
misconduct of any Indemnitee as determined by a final judgment of a court of
competent jurisdiction. If any claim, action or proceeding is brought or
asserted against an Indemnitee in respect of which indemnity may be sought from
any of the Applicants or any of the Subsidiaries, the Indemnitee shall promptly
notify the Applicants in writing, and the Applicants may assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnitee, and the payment of all costs and expenses. The Indemnitee shall
have the right to employ separate counsel in any such claim, action or
proceeding and to consult with the Applicants in the defense thereof and the
fees and expenses of such counsel shall be at the expense of the Applicants
unless and until the Applicants shall have assumed the defense of such claim,
action or proceeding. If the named parties to any such claim, action or
proceeding (including any impleaded parties) include both the Indemnitee and
any of the Applicants or Subsidiaries, and the Indemnitee reasonably believes
that the joint representation of such entity and the Indemnitee may result in a
conflict of interest, the Indemnitee may notify the Applicants in writing that
it elects to employ separate counsel at the expense of the Applicants, and the
Applicants shall not have the right to assume the defense of such action or
proceeding on behalf of the Indemnitee. In addition, the Applicants shall not
effect any settlement or release from liability in connection with any matter
for which the Indemnitee would have the right to indemnification from the
Applicants, unless such settlement contains a full and unconditional release of
the Indemnitee, or a release of the Indemnitee satisfactory in form and
substance to the Indemnitee.
SECTION 5.10 BINDING EFFECT
The Amended Plan shall be binding upon and inure to the benefit of the
Applicants and all present and former holders of Affected Secured Lender
Claims.
SECTION 5.11 GOVERNING LAW
This Amended Plan shall be governed by and construed in accordance with
the laws of the Province of Ontario and the federal laws of Canada applicable
therein. Subject to the Protocol, any questions as to the interpretation or
application of this Amended Plan and all proceedings taken in connection with
this Amended Plan and its provisions shall be subject to the exclusive
jurisdiction of the Court.
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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.
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SCHEDULE "B"
SALE AGREEMENT