Document:

<PAGE>   1

                                                                    EXHIBIT 10.9
                                SECOND AMENDMENT

         SECOND AMENDMENT (this "Amendment"), dated as of March 28, 2001 among
PHILIP SERVICES CORPORATION, a Delaware corporation (the "Borrower"), CANADIAN
IMPERIAL BANK OF COMMERCE, as administrative agent for the Lenders (the
"Administrative Agent"), and the lenders from time to time parties to the
Secured PIK/Term Credit Agreement referred to below (the "Lenders"). All
capitalized terms used herein and not otherwise defined herein shall have the
respective meanings provided such terms in the Secured PIK/Term Credit Agreement
referred to below.

                              W I T N E S S E T H:

         WHEREAS, the Borrower, the Lenders and the Administrative Agent are
parties to a Credit Agreement, dated as of March 31, 2000 among the Borrower,
the Administrative Agent and the Lenders (as amended, modified or supplemented
through, but not including, the date hereof, the "Secured PIK/Term Credit
Agreement");

         WHEREAS, the Borrower has requested certain amendments to the Credit
Agreement; and

         WHEREAS, subject to the terms and conditions of this Amendment, the
Lenders are willing to grant such amendments.

         NOW, THEREFORE, it is agreed:

         1. Section 5.08 of the Credit Agreement is hereby amended by inserting
the following sentence at the end thereof:

         "Notwithstanding the foregoing provisions of this Section 5.08, the
Borrower may keep Inventory at locations other than those identified on Schedule
VI, so long as such Inventory is kept at such locations pursuant to a
consignment agreement permitted under Section 6.09 hereof."

         2. Section 6.09 of the Credit Agreement is hereby amended by inserting
the following proviso immediately before the period appearing at the end of said
section:

         "provided, however, that the Borrower or any of the other Obligors (as
consignor) may enter into agreements for the consignment of Inventory so long as
(i) the aggregate value of the Inventory held by any one consignee does not
exceed $5,000,000 at any time and (ii) the aggregate value of all Inventory
subject to such consignment agreements does not exceed $20,000,000 at any time."

         3 Section 6.17(a) of the Credit Agreement is hereby amended by deleting
the chart contained therein in its entirety and inserting the following chart in
lieu thereof:

<PAGE>   2

<TABLE>
<CAPTION>
Fiscal Quarter Ending                                     Minimum EBITDA
---------------------                                     --------------
<S>                                                       <C>
For the 12 months ended March 31, 2001                    $48,500,000
For the 12 months ended June 30, 2001                     $57,550,000
For the 12 months ended September 30, 2001                $67,100,000
For the 12 months ended December 31, 2001                 $75,400,000
For the 12 months ended March 31, 2002                    $80,100,000
For the 12 months ended June 30, 2002                     $85,200,000
For the 12 months ended September 30, 2002                $86,000,000
For the 12 months ended December 31, 2002, and for the    $86,400,000"
12 months ended as of the end of each Fiscal Quarter
thereafter
</TABLE>

         4. Section 6.17(b) of the Credit Agreement is hereby amended by
deleting the chart contained therein in its entirety and inserting the following
chart in lieu thereof:

<TABLE>
<CAPTION>
Fiscal Quarter Ending              Minimum Interest Coverage Ratio
---------------------              -------------------------------
<S>                                <C>
for the 12 months ended            1.49:1.00
March 31, 2001
for the 12 months ended            1.74:1.00
June 30, 2001
for the 12 months ended            1.88:1.00
September 30, 2001
for the 12 months ended            1.96:1.00
December 31, 2001
for the 12 months ended            2.09:1.00
March 31, 2002
for the 12 months ended            2.22:1.00
June 30, 2002
for the 12 months ended            2.24:1.00
September 30, 2002
</TABLE>

<PAGE>   3

<TABLE>
<CAPTION>
Fiscal Quarter Ending              Minimum Interest Coverage Ratio
---------------------              -------------------------------
<S>                                          <C>
for the 12 months ended December              2.25:1.00"
31, 2002, and for the 12 months
ended as of the end of each
Fiscal Quarter thereafter
</TABLE>

         5. The definition of the term "Permitted Investments" contained in
Section 8 of the Credit Agreement is hereby amended by (x) deleting the word
"and" immediately preceding subclause (h) and inserting a comma in lieu thereof
and (y) inserting the following text immediately before the period appearing at
the end of said definition:

                  "and (i) so long as no Default or Event of Default then exists
         or would result therefrom, the Borrower and any of the Obligors may
         make Investments not otherwise permitted by immediately preceding
         clauses (a) through (h) of this definition of Permitted Investments in
         an aggregate amount not to exceed $1,000,000 in any twelve month
         period."

         6. Section 10.13 of the Credit Agreement is hereby amended by inserting
the following subclause (c):

                  "(c) The Lenders are aware of the provisions of the Exchange
         Act and particularly Rule 10b-5 promulgated by the SEC thereunder with
         regard to material non-public information. Lenders acknowledge that
         some information received from Borrower will be material non-public
         information."

         7. The Borrower hereby represents and warrants that both before and
after giving effect to this Amendment (x) no Default or Event of Default exists
on the Second Amendment Effective Date (as defined below) and (y) all of the
representations and warranties contained in the Secured PIK/Term Credit
Agreement or the other Credit Documents shall be true and correct in all
material respects on and before the Second Amendment Effective Date with the
same effect as though such representations and warranties had been made on and
as of such date (it being understood that any representation or warranty made as
of a specific date shall be true and correct in all material respects as of such
specific date).

         8. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Secured
PIK/Term Credit Agreement or any other Credit Document. All capitalized terms
not defined herein shall have the meaning given to them in the Secured PIK/Term
Credit Agreement.

         9. This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Borrower and the Administrative Agent.

<PAGE>   4

         10. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.

         11. This Amendment shall become effective on the date (the "Second
Amendment Effective Date") when each of the Borrower and the Required Lenders
shall have signed a copy hereof (whether the same or different copies) and, in
each case, shall have delivered (including by way of telecopier) the same to the
Administrative Agent at the Notice Office.

                                      * * *

<PAGE>   5

         IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Amendment to be duly executed and delivered as of the date first above
written.

                                 PHILIP SERVICES CORPORATION

                                 By:_______________________________
                                    Title:

                                 CANADIAN IMPERIAL BANK OF
                                    COMMERCE,
                                    As Administrative Agent and
                                    Individually

                                 By:_______________________________
                                    Title:

<PAGE>   6

                                 ABN AMRO BANK CANADA

                                 By:_______________________________
                                    Title:

                                 By:_______________________________
                                    Title:

<PAGE>   7

                                 AMERICAN REAL ESTATE HOLDINGS L.P.

                                 By:_______________________________
                                    Title:

<PAGE>   8

                                 ACCORD FINANCIAL CORP.

                                 By:_______________________________
                                    Title:

<PAGE>   9

                                 THE BANK OF EAST ASIA (CANADA)

                                 By:_______________________________
                                    Title:

<PAGE>   10

                                 BEAR, STEARNS & CO. INC.

                                 By:_______________________________
                                    Title:

<PAGE>   11

                                 CHASE BANK OF TEXAS N.A.

                                 By:_______________________________
                                    Title:

<PAGE>   12

                                 THE CHASE MANHATTAN BANK

                                 By:_______________________________
                                    Title:

<PAGE>   13

                                 THE CHASE MANHATTAN BANK OF
                                    CANADA

                                 By:_______________________________
                                    Title:

<PAGE>   14

                                 CITIBANK, N.A.

                                 By:_______________________________
                                    Title:

<PAGE>   15

                                 CLARICA LIFE INSURANCE COMPANY
                                    (f/k/a Mutual Life Assurance Company
                                    of Canada)

                                 By:_______________________________
                                    Title:

<PAGE>   16

                                 COMERICA BANK

                                 By:_______________________________
                                    Title:

<PAGE>   17

                                 CREDIT SUISSE FIRST BOSTON

                                 By:_______________________________
                                    Title:

<PAGE>   18

                                 MIZUHO BANK (CANADA)

                                 By:_______________________________
                                    Title:

<PAGE>   19

                                 DAI-ICHI KANGYO BANK, LTD.,
                                      New York Branch

                                 By:_______________________________
                                      Title:

<PAGE>   20

                                 DEUTSCHE BANK CANADA

                                 By:_______________________________
                                    Title:

<PAGE>   21

                                 EATON VANCE MANAGEMENT

                                 By:_______________________________
                                    Title:

<PAGE>   22

                                 FERNWOOD ASSOCIATES L.P.

                                 By:_______________________________
                                    Title:

<PAGE>   23

                                 FOOTHILL CAPITAL CORPORATION

                                 By:_______________________________
                                    Title:

<PAGE>   24

                                 HIGH RIVER LIMITED PARTNERSHIP

                                 By:_______________________________
                                    Title:

<PAGE>   25

                                 KEY BANK, N.A.

                                 By:_______________________________
                                    Title:

<PAGE>   26

                                 MADELEINE CORP.

                                 By:_______________________________
                                    Title:

<PAGE>   27

                                  MADELEINE LLC

                                 By:_______________________________
                                    Title:

<PAGE>   28

                                 MUTUAL SHARES FUND, A SERIES OF
                                    FRANKLIN MUTUAL SERIES FUND,
                                    INC.

                                 By:_______________________________
                                    Title:

<PAGE>   29

                                 BNP PARIBAS

                                 By:_______________________________
                                    Title:

                                 By:_______________________________
                                    Title:

<PAGE>   30

                                 ROYAL BANK OF SCOTLAND PLC

                                 By:_______________________________
                                    Title:

<PAGE>   31

                                 SAKURA BANK (CANADA)

                                 By:_______________________________
                                    Title:

<PAGE>   32

                                 SOCIETE GENERALE (CANADA)

                                 By:_______________________________
                                    Title:

<PAGE>   33

                                 TORONTO DOMINION (NEW YORK),
                                    INC.

                                 By:_______________________________
                                    Title:

<PAGE>   34

                                 WACHOVIA BANK, N.A.

                                 By:_______________________________
                                    Title:<PAGE>   1

                                                                   EXHIBIT 10.10

                     AMENDMENT NUMBER ONE TO LOAN AGREEMENT

         THIS AMENDMENT NUMBER ONE TO LOAN AGREEMENT (this "Amendment"), dated
as of March 28, 2001, is entered into by and among PHILIP SERVICES CORPORATION,
a Delaware corporation ("Parent"), each of Parent's Subsidiaries identified on
the signature pages hereof (such Subsidiaries, together with Parent, each a
"Borrower" and collectively, jointly and severally, the "Borrowers"), each of
the lenders that is a signatory to this Amendment (together with its successors
and permitted assigns, individually, "Lender" and, collectively, "Lenders"), and
FOOTHILL CAPITAL CORPORATION, a California corporation, as the arranger and
administrative agent for the Lenders (in such capacity, together with its
successors, if any, in such capacity, "Agent" and together with the Lenders,
collectively, the "Lender Group"), in light of the following:

                               W I T N E S S E T H

         WHEREAS, the Borrowers and the Lender Group are parties to that certain
Loan Agreement, dated as of March 31, 2000 (as amended, restated, supplemented,
or modified from time to time, the "Loan Agreement");

         WHEREAS, the Borrowers have requested that the Lender Group consent to
the amendment of the Loan Agreement to, among other things, amend the financial
covenants and provide for certain discretionary investments; and

         WHEREAS, subject to the satisfaction of the conditions set forth
herein, the Lender Group is willing to so consent to the amendment of the Loan
Agreement.

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree to amend the
Loan Agreement as follows:

1.       DEFINITIONS. Capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to them in the Loan Agreement, as
amended hereby.

2.       AMENDMENTS TO LOAN AGREEMENT.

         (a) Section 1.1 of the Loan Agreement hereby is amended by adding the
following defined terms in proper alphabetical order:

                  "First Amendment" means that certain Amendment Number One to
         Loan Agreement, dated as of March 28, 2001, among the Borrowers and the
         Lender Group.

<PAGE>   2

                  "First Amendment Closing Date" means the date, if ever, that
         all of the conditions set forth in Section 3 of the First Amendment
         shall be satisfied.

         (b) The definition of "Permitted Investment" set forth in Section 1.1
of the Loan Agreement hereby is amended by deleting the word "and" appearing
immediately prior to clause (h) appearing in said definition and inserting the
following text immediately after clause (h) appearing therein:

                  ", and (i) so long as (i) no Event of Default has occurred and
         is continuing or would result therefrom, (ii) the average Combined
         Availability for the 30 day period immediately preceding the date of
         the consummation of the proposed investment and after giving effect
         thereto is not less than $25,000,000, and (iii) Administrative Borrower
         provides Agent with not less than 10 Business Days prior written notice
         of the proposed investment and, in connection therewith, provides Agent
         with such supplemental information as Agent may reasonably request
         describing the nature and amount of the proposed investment,
         discretionary investments by one or more of the Obligors in non-Obligor
         third Persons in an aggregate amount not to exceed $1,000,000 in any 12
         month period."

         (c) Section 7.10 of the Loan Agreement hereby is amended and restated
in its entirety as follows:

                  "7.10 CONSIGNMENTS. Consign any Inventory or sell any
         Inventory on bill and hold, sale or return, sale on approval, or other
         conditional terms of sale, or, except in connection with the businesses
         of brokering, or entering into tolling agreements regarding, scrap
         metal, have possession of any property on consignment to an Obligor;
         provided, however, that the foregoing shall not prevent the Obligors
         from consigning Inventory to third Persons, so long as (a)
         Administrative Borrower shall have given 10 days prior written notice
         to Agent of the proposed consignee, (b) on or prior to any such
         consignment, Administrative Borrower shall have provided such evidence
         as Collateral Agent may reasonably request demonstrating that the
         applicable Obligor shall have taken such steps as may be necessary so
         as to ensure that such consigned Inventory is not subject to the claims
         of the applicable consignee's creditors, including without limitation,
         segregating the consigned Inventory and filing such financing
         statements or other filings reflecting the applicable Obligor, as
         consignor, and the applicable third Person, as consignee, as may be
         appropriate, (c) prior to delivering any Inventory to the proposed
         consignee, the applicable Obligor provides any financing statements or
         other filings necessary to perfect and continue perfected the
         Collateral Agent's Liens on such consigned Inventory, (d) the aggregate
         amount of consigned Inventory does not exceed $20,000,000 at any one
         time outstanding, and (e) the aggregate amount of consigned Inventory
         held by any individual consignee does not exceed $5,000,000 at any one
         time outstanding."

                                       2

<PAGE>   3

         (d) Section 7.19(a) of the Loan Agreement hereby is amended by deleting
the table appearing in said Section and inserting the following table in lieu
thereof:

<TABLE>
<CAPTION>
      FISCAL QUARTER ENDING                                MINIMUM EBITDA
      ---------------------                                --------------
     <S>                                                   <C>
     for the 12 months ended                                $55,000,000
         March 31, 2001
     for the 12 months ended                                $65,500,000
          June 30, 2001
     for the 12 months ended                                $76,000,000
       September 30, 2001
     for the 12 months ended                                $85,000,000
        December 31, 2001
     for the 12 months ended                                $89,700,000
         March 31, 2002
     for the 12 months ended                                $94,800,000
          June 30, 2002
     for the 12 months ended                                $95,500,000
       September 30, 2002
</TABLE>

         (e) Section 7.19(b) of the Loan Agreement hereby is amended by deleting
the table appearing in said Section and inserting the following table in lieu
thereof:

<TABLE>
<CAPTION>
      FISCAL QUARTER ENDING             MINIMUM INTEREST COVERAGE RATIO
      ---------------------             -------------------------------
     <S>                                          <C>
     for the 12 months ended                       1.69:1.00
         March 31, 2001
     for the 12 months ended                       1.98:1.00
          June 30, 2001
     for the 12 months ended                       2.13:1.00
       September 30, 2001
</TABLE>

                                       3
<PAGE>   4

<TABLE>
<CAPTION>
      FISCAL QUARTER ENDING             MINIMUM INTEREST COVERAGE RATIO
      ---------------------             -------------------------------
     <S>                                          <C>
     for the 12 months ended                      2.21:1.00
        December 31, 2001
     for the 12 months ended                      2.34:1.00
         March 31, 2002
     for the 12 months ended                      2.47:1.00
          June 30, 2002
     for the 12 months ended                      2.49:1.00
       September 30, 2002
</TABLE>

         (f) Section 16.17(d) of the Loan Agreement hereby is amended and
restated in its entirety as follows:

         "(d) acknowledges that such Lender is aware of the provisions of the
Exchange Act and particularly Rule 10b-5 promulgated by the SEC thereunder with
regard to material non-public information; such Lender acknowledges that some
information received from Parent will be material non-public information; such
Lender agrees to keep all Reports and other material, non-public information
regarding Borrowers and their Subsidiaries and their operations, assets, and
existing and contemplated business plans in a confidential manner; it being
understood and agreed by Borrowers that in any event such Lender may make
disclosures (a) to counsel for and other advisors, accountants, and auditors to
such Lender, (b) reasonably required by any bona fide potential or actual
Assignee, transferee, or Participant in connection with any contemplated or
actual assignment or transfer by such Lender of an interest herein or any
participation interest in such Lender's rights hereunder, (c) of information
that has become public by disclosures made by Persons other than such Lender,
its Affiliates, assignees, transferees, or participants, or (d) as required or
requested by any court, governmental or administrative agency, pursuant to any
subpoena or other legal process, or by any law, statute, regulation, or court
order; provided, however, that, unless prohibited by applicable law, statute,
regulation, or court order, such Lender shall notify Borrowers of any request by
any court, governmental or administrative agency, or pursuant to any subpoena or
other legal process for disclosure of any such non-public material information
concurrent with, or where practicable, prior to the disclosure thereof; and"

         (g) Schedule 5.8 of the Loan Agreement hereby is amended and restated
in its entirety in the form of Amended and Restated Schedule 5.8 attached
hereto.

         (h) Schedule 6.11 of the Loan Agreement hereby is amended to include
the locations set forth on the Addendum to Schedule 6.11 attached hereto.

                                       4

<PAGE>   5

3.       CONDITIONS PRECEDENT TO AMENDMENT. The satisfaction of each of the
following shall constitute conditions precedent to the effectiveness of this
Amendment and each and every provision hereof:

         (a) The representations and warranties in the Loan Agreement and the
other Loan Documents shall be true and correct in all respects on and as of the
date hereof, as though made on such date (except to the extent that such
representations and warranties relate solely to an earlier date).

         (b) Agent shall have received a fee, for the ratable benefit of the
Lender Group, of $200,000 in cash or by wire transfer of immediately available
funds.

         (c) Agent shall have received the reaffirmation and consent of each
Guarantor attached hereto as Exhibit B, duly executed and delivered by an
authorized official of each Guarantor.

         (d) The Junior Secured Debt Documents shall have been amended in form
and substance satisfactory to Agent and Parent shall have delivered a copy of
such amendments to Agent certified by the Secretary of Parent as being a true,
correct, and complete copy thereof.

         (e) No Default or Event of Default shall have occurred and be
continuing on the date hereof or as of the date of the effectiveness of this
Amendment.

         (f) No injunction, writ, restraining order, or other order of any
nature prohibiting, directly or indirectly, the consummation of the transactions
contemplated herein shall have been issued and remain in force by any
Governmental Authority against the Borrowers, Guarantors, or the Lender Group.

4.       CONSTRUCTION. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK.

5.       ENTIRE AMENDMENT; EFFECT OF AMENDMENT. This Amendment, and terms and
provisions hereof, constitute the entire agreement among the parties pertaining
to the subject matter hereof and supersedes any and all prior or contemporaneous
amendments relating to the subject matter hereof. Except for the amendments to
the Loan Agreement expressly set forth in Section 2 hereof, the Loan Agreement
and other Loan Documents shall remain unchanged and in full force and effect. To
the extent any terms or provisions of this Amendment conflict with those of the
Loan Agreement or other Loan Documents, the terms and provisions of this
Amendment shall control. This Amendment is a Loan Document.

                                       5

<PAGE>   6

6.       COUNTERPARTS; TELEFACSIMILE EXECUTION. This Amendment may be executed
in any number of counterparts, all of which taken together shall constitute one
and the same instrument and any of the parties hereto may execute this Amendment
by signing any such counterpart. Delivery of an executed counterpart of this
Amendment by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Amendment. Any party delivering an
executed counterpart of this Amendment by telefacsimile also shall deliver an
original executed counterpart of this Amendment, but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Amendment.

7.       MISCELLANEOUS.

         (a) Upon the effectiveness of this Amendment, each reference in the
Loan Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of
like import referring to the Loan Agreement shall mean and refer to the Loan
Agreement as amended by this Amendment.

         (b) Upon the effectiveness of this Amendment, each reference in the
Loan Documents to the "Loan Agreement", "thereunder", "therein", "thereof" or
words of like import referring to the Loan Agreement shall mean and refer to the
Loan Agreement as amended by this Amendment.

         (c) Upon the effectiveness of this Amendment, each reference in the
Loan Agreement to "Schedule 5.8" shall mean and refer to "Amended and Restated
Schedule 5.8" attached hereto.

         (d) Upon the effectiveness of this Amendment, each reference in the
Loan Agreement to "Schedule 6.11" shall be mean and refer to "Schedule 6.11" as
amended by "Addendum to Schedule 6.11" attached hereto.

                            [Signature page follows.]

                                       6

<PAGE>   7

     IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
and delivered as of the date first written above.

                                   PHILIP SERVICES CORPORATION,
                                   a Delaware corporation

                                   PSC BY-PRODUCTS SERVICES, INC.,
                                   a Delaware corporation

                                   PSC INDUSTRIAL OUTSOURCING, INC.
                                   a Delaware corporation

                                   PSC METALS, INC. (1)
                                   an Ohio corporation

                                   PHILIP INDUSTRIAL SERVICES (USA), INC.,
                                   a Delaware corporation

                                   REPUBLIC ENVIRONMENTAL RECYCLING
                                   (NEW JERSEY), INC.,
                                   a Delaware corporation

                                   NORTHLAND ENVIRONMENTAL, INC.,
                                   a Delaware corporation

                                   SOLVENT RECOVERY CORPORATION,
                                   a Missouri corporation

                                   PHILIP ENVIRONMENTAL SERVICES CORPORATION,
                                   a Missouri corporation

                                   COUSINS WASTE CONTROL CORPORATION,
                                   an Ohio corporation

                                   21ST CENTURY ENVIRONMENTAL MANAGEMENT, INC.
                                   OF NEVADA,
                                   a Nevada corporation

                                   21ST CENTURY ENVIRONMENTAL MANAGEMENT, INC.
                                   OF RHODE ISLAND
                                   a Rhode Island corporation

------
(1) Mr. Brindley is Treasurer of this Corporation.

                                      S-1
<PAGE>   8

                                   CHEMICAL POLLUTION CONTROL, INC. OF NEW YORK
                                   - A 21ST CENTURY ENVIRONMENTAL MANAGEMENT
                                   COMPANY
                                   a New York corporation

                                   BURLINGTON ENVIRONMENTAL INC.,
                                   a Washington corporation

                                   REPUBLIC ENVIRONMENTAL SYSTEMS
                                   (PENNSYLVANIA), INC.
                                   a Pennsylvania corporation

                                   CHEMICAL POLLUTION CONTROL, INC. OF FLORIDA
                                   - A 21ST CENTURY ENVIRONMENTAL
                                   MANAGEMENT COMPANY,
                                   a Florida corporation

                                   RESOURCE RECOVERY CORPORATION,
                                   a Washington corporation

                                   REPUBLIC ENVIRONMENTAL SYSTEMS
                                   (TRANSPORTATION GROUP), INC.,
                                   a Pennsylvania corporation

                                   CHEM FREIGHT, INC.,
                                   an Ohio corporation

                                   NORTRU, INC.,
                                   a Michigan corporation

                                   CHEMICAL RECLAMATION SERVICES, INC.,
                                   a Texas corporation

                                   PHILIP RECLAMATION SERVICES, HOUSTON, INC.,
                                   a Texas corporation

                                   THERMALKEM INC.,
                                   a Delaware corporation

                                   ALLWORTH, INC.,
                                   an Alabama corporation

                                      S-2
<PAGE>   9

                                   RHO-CHEM CORPORATION,
                                   a California corporation

                                   CYANOKEM INC.,
                                   a Michigan corporation

                                   INTERNATIONAL CATALYST, INC.,
                                   a Nevada corporation

                                   ALLWASTE TANK CLEANING, INC.,
                                   a Georgia corporation

                                   CAPPCO TUBULAR PRODUCTS USA, INC.,
                                   a Georgia corporation

                                   PHILIP METALS (NEW YORK), INC.,
                                   a New York corporation

                                   TOTAL REFRACTORY SYSTEMS, INC.,
                                   a Nevada corporation

                                   PHILIP SERVICES/NORTH CENTRAL, INC.
                                   an Iowa corporation

                                   RMF GLOBAL, INC.
                                   an Ohio corporation

                                   JESCO INDUSTRIAL SERVICE, INC.,
                                   a Kentucky corporation

                                   PHILIP METALS (USA), INC.,
                                   an Ohio corporation

                                   PHILIP METALS RECOVERY (USA) INC., (2)
                                   an Arizona corporation

                                   ACE/ALLWASTE ENVIRONMENTAL SERVICES
                                   OF INDIANA, INC.,
                                   an Illinois corporation

                                   LUNTZ ACQUISITION (DELAWARE) CORPORATION,
                                   a Delaware corporation

                                   SERV-TECH EPC, INC.,
                                   a Nevada corporation

--------
{2}  We draw your attention to the fact this Corporation is not currently in
     good standing. Immediate steps have been taken to resolve this.

                                      S-3

<PAGE>   10

                                   PSC INDUSTRIAL SERVICES, INC.,
                                   a Delaware corporation

                                   PHILIP SERVICES PHENCORP
                                   INTERNATIONAL INC.
                                   a Delaware corporation

                                   PHILIP TRANSPORTATION AND
                                   REMEDIATION, INC.
                                   a California corporation

                                   DELTA MAINTENANCE, INC.
                                   a Louisiana corporation

                                   PHILIP SERVICES CECATUR HOLDINGS LLC,
                                   a Delaware Limited Liability Company

                                   PHILIP SERVICES CECATUR INC.
                                   a Delaware corporation

                                   PHILIP SERVICES (PHENCORP) LLC
                                   a Delaware Limited Liability Company

                                   PSC RECOVERY SYSTEMS, INC.
                                   a Georgia corporation

                                   REPUBLIC ENVIRONMENTAL SYSTEMS
                                   (TECHNICAL SERVICES GROUP), INC.
                                   a New Jersey corporation

                                   GEORGIA RECOVERY SYSTEMS, (3)
                                   a Georgia partnership

                                   GRS/LAKE CHARLES, LTD. (3)
                                   a Louisiana limited partnership

                                   PHILIP INDUSTRIAL SERVICES, INC.
                                   a Delaware corporation
                                   a successor in interest to Philip
                                   Industrial Services (USA), Inc.

                                   RMF INDUSTRIAL CONTRACTING, INC.
                                   a Michigan corporation

                                   BY:  _________________________________
                                        Kevin F. Brindley
                                        Vice President and Treasurer

-----------------

(3)  The general partner is Allwaste Recovery Systems, Inc. n/k/a PSC Recovery
     Systems, Inc., a Georgia corporation.

                                      S-4

<PAGE>   11

                                   FOOTHILL CAPITAL CORPORATION,
                                   a California corporation, as Agent and
                                   as a Lender

                                   By:    _______________________________

                                   Name:  _______________________________

                                   Title: _______________________________

                                      S-5
<PAGE>   12

                                   FOOTHILL INCOME TRUST L.P.,
                                   a Delaware limited partnership, as a Lender

                                   By:   FIT GP, LLC, its general partner

                                   By: ___________________________
                                   Its: Managing Member

                                   FOOTHILL PARTNERS III, L.P.,
                                   a Delaware limited partnership, as a Lender

                                   By: _______________________________
                                   Its: Managing General Partner

                                      S-6
<PAGE>   13

                                   ABLECO FINANCE LLC,
                                   a Delaware limited liability company,
                                   as a Lender

                                   By:    _______________________________

                                   Name:  _______________________________

                                   Title: _______________________________

                                       S-7
<PAGE>   14

                                   MADELEINE LLC,
                                   a New York limited liability company,
                                   as a Lender

                                   By:    _______________________________

                                   Name:  _______________________________

                                   Title: _______________________________

                                       S-8
<PAGE>   15

                                   ARNOS CORPORATION,
                                   a Nevada corporation, as a Lender

                                   By:    _______________________________

                                   Name:  _______________________________

                                   Title: _______________________________

                                       S-9
<PAGE>   16

                                    EXHIBIT B

                            REAFFIRMATION AND CONSENT

     All capitalized terms used herein but not otherwise defined herein shall
have the meanings ascribed to them in the Loan Agreement or in Amendment Number
One to Loan Agreement, dated as of March __, 2001 (the "Amendment"), among the
Borrowers and Lender Group. The undersigned hereby (a) represent and warrant to
the Lender Group that the execution, delivery, and performance of this
Reaffirmation and Consent are within its powers, have been duly authorized by
all necessary action, and are not in contravention of any law, rule, or
regulation, or any order, judgment, decree, writ, injunction, or award of any
arbitrator, court, or governmental authority, or of the terms of its charter or
bylaws, or of any contract or undertaking to which it is a party or by which any
of its properties may be bound or affected; (b) consents to the transactions
contemplated by the Amendment; (c) acknowledges and reaffirms its obligations
owing to the Lender Group under any Loan Documents to which it is a party; and
(d) agrees that each of the Loan Documents to which it is a party is and shall
remain in full force and effect. Although the undersigned has been informed of
the matters set forth herein and has acknowledged and agreed to same, it
understands that the Lender Group has no obligations to inform it of such
matters in the future or to seek its acknowledgement or agreement to future
amendments, and nothing herein shall create such a duty. Delivery of an executed
counterpart of this Reaffirmation and Consent by telefacsimile shall be equally
as effective as delivery of an original executed counterpart of this
Reaffirmation and Consent. Any party delivering an executed counterpart of this
Reaffirmation and Consent by telefacsimile also shall deliver an original
executed counterpart of this Reaffirmation and Consent but the failure to
deliver an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Reaffirmation and Consent. This
Reaffirmation and Consent shall be governed by the laws of the State of New
York.

                            [signature page follows]

                                      A-1
<PAGE>   17

                  IN WITNESS WHEREOF, the undersigned have each executed this
Reaffirmation and Consent as of the date of the Letter Agreement.

                                        Philip Services Inc.,
                                        an Ontario corporation

                                        By:
                                           -------------------------------------
                                           Name:  Anthony G. Fernandes
                                           Title: President

                                        Philip Analytical Services Inc.,
                                        an Ontario corporation

                                        By:
                                           -------------------------------------
                                           Name:  Anthony G. Fernandes
                                           Title: President

                                        Philip Investment Corp.,
                                        an Ontario corporation

                                        By:
                                           -------------------------------------
                                           Name:  Anthony G. Fernandes
                                           Title: President

                                        Recyclage d' Aluminium Inc.,
                                        a Canadian corporation

                                        By:
                                           -------------------------------------
                                           Name:  Anthony G. Fernandes
                                           Title: President

                                       A-2
<PAGE>   18

                                        ST Delta Canada, Inc.,
                                        an Ontario corporation

                                        By:
                                           -------------------------------------
                                           Name:  Anthony G. Fernandes
                                           Title: President

                                        Nortru, Ltd.,
                                        an Ontario corporation

                                        By:
                                           -------------------------------------
                                           Name:  Anthony G. Fernandes
                                           Title: President

                                        Allies Staffing Ltd.,
                                        an Ontario corporation

                                        By:
                                           -------------------------------------
                                           Name:  Anthony G. Fernandes
                                           Title: President

                                        Servtech Canada, Inc.,
                                        a Canadian corporation

                                        By:
                                           -------------------------------------
                                           Name:  Anthony G. Fernandes
                                           Title: President

                                      A-3
<PAGE>   19

                                        Arc Dust Processing (Barbados) Limited,
                                        a Barbados corporation

                                        By:
                                           -------------------------------------
                                           Name:  Thomas J. Olsen
                                           Title: Director

                                        Philip International Development Inc.,
                                        a Barbados corporation

                                        By:
                                           -------------------------------------
                                           Name:  Thomas J. Olsen
                                           Title: Director

                                      A-4

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