As filed with the Securities and Exchange Commission on March 21,
1997
Registration Nos. 333- and 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE LOEWEN GROUP INC. LOEWEN GROUP INTERNATIONAL, INC.
(Exact name of registrant as (Exact name of registrant as
specified in its charter) specified in its charter)
BRITISH COLUMBIA DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
98-0121376 61-1264590
(I.R.S. Employer Identification Number)
4126 NORLAND AVENUE 50 EAST RIVERCENTER BOULEVARD
BURNABY, BRITISH COLUMBIA SUITE 800
CANADA V5G 3S8 COVINGTON, KENTUCKY 41011
(604) 299-9321 (606) 431-6663
(Address, including postal or zip code, and telephone number,
including area code, of registrants' principal executive offices)
TIMOTHY R. HOGENKAMP CT CORPORATION SYSTEM
LOEWEN GROUP INTERNATIONAL, INC. 1209 ORANGE STREET
50 EAST RIVERCENTER, SUITE 800 WILMINGTON, DELAWARE 16601
COVINGTON, KENTUCKY 41011 (302) 658-7581
(606) 431-6663
(Name, address, including zip code, and telephone number, including
area code, of Agent for Service)
with copies to:
DWIGHT K. HAWES MICHELLE L. JOHNSON
VICE-PRESIDENT, FINANCE THELEN, MARRIN, JOHNSON & BRIDGES
THE LOEWEN GROUP INC. LLP
4126 NORLAND AVENUE TWO EMBARCADERO CENTER, SUITE 2100
BURNABY, BRITISH COLUMBIA SAN FRANCISCO, CALIFORNIA
CANADA V5G 3S8 94111-3995
Approximate date of commencement of proposed sale to the public:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION
STATEMENT.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following box. []
If any of the securities being registered on this form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered
solely in connection with dividend or interest reinvestment
plans, check the following box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. []
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.[]
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. []
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Title of Each Amount to be Offering Aggregate Amount of
Class of Registered (1) Price Offering Price Registration
Securities Per Unit (2)(3) Fee
to be Registered (2)(3)
Common shares
without par value
of The Loewen
Group Inc. (4)(5)
Preferred shares
without par value
of The Loewen
Group Inc. (6)
Debt securities
of The Loewen
Group Inc. (7)
Warrants to
purchase Common
shares, preferred
shares or debt
securities (8)
Guarantees of debt
securities of
Loewen Group $500,000,000 $151,515.15
International,
Inc. (9)
Debt securities
of Loewen Group
International, $500,000.00 $500,000,000 $151,515.15
Inc. (7)
Guarantees of
debt securities
of The Loewen
Group Inc. (10)
Total $1,000,000,000 100% $1,000,000,000 $303,030.30
(1) Such indeterminate number or amount of Common shares,
preferred shares, debt securities, warrants and guarantees
as may from time to time be issued at indeterminate prices.
The amount registered is in United States dollars or the
equivalent thereof in any other currency, currency unit or
units or composite currency or currencies.
(2) Estimated solely for the purpose of determining the
registration fee in accordance with Rule 457 under the
Securities Act of 1933, as amended. The aggregate offering
price of the Common shares, preferred shares debt securities
and warrants, and the exercise price of any warrants
registered hereby will not exceed $1,000,000,000.
(3) Exclusive of accrued interest and distributions, if any.
(4) Each Common share includes one Right to be issued under The
Loewen Group Inc.'s Shareholder Protection Rights Plan
Agreement.
(5) Also includes such indeterminate number of Common shares as
may be issued upon conversion of and/or exchange for any
debt securities or preferred shares of The Loewen Group Inc.
No separate consideration will be received for the Common
shares issuable upon conversion of and/or in exchange for
debt securities or preferred shares.
(6) Also includes such indeterminate number of preferred shares
as may be issued upon conversion of or exchange for any debt
securities of The Loewen Group Inc. No separate
consideration will be received for the preferred shares
issuable upon conversion of or in exchange for debt
securities.
(7) If any debt securities of The Loewen Group Inc. or Loewen
Group International, Inc. are issued at an original issue
discount, the principal amount thereof will be increased so
that the aggregate proceeds, together with proceeds from the
sale of other Securities (as defined herein), will not
exceed $1,000,000,000.
(8) Warrants may be offered and sold separately or together with
other Securities.
(9) In connection with the sale of debt securities of Loewen
Group International, Inc., The Loewen Group Inc. may issue
guarantees and back-up undertakings to pay and be
responsible for, and provide certain indemnities in respect
of, certain expenses, costs, liabilities and debts of Loewen
Group International, Inc., as set forth in an indenture and
any applicable supplemental indentures thereto, as further
described in the Registration Statement. No separate
consideration will be received for the guarantees or back-up
undertakings.
(10) In connection with the sale of debt securities of The Loewen
Group Inc., Loewen Group International, Inc. may issue
guarantees and back-up undertakings to pay and be
responsible for, and provide certain indemnities in respect
of, certain expenses, costs, liabilities and debts of The
Loewen Group Inc., as set forth in an indenture and any
applicable supplemental indentures thereto, as further
described in the Registration Statement. No separate
consideration will be received for the guarantees or back-up
undertakings.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
EXPLANATORY NOTE
This Registration Statement consists of two
separate Prospectuses covering securities to be
registered as follows:
(1) Common shares without par value, preferred
shares without par value, debt securities and
warrants to purchase Common shares, preferred shares
or debt securities of The Loewen Group Inc., and
guarantees of debt securities of The Loewen Group
Inc. by Loewen Group International, Inc.
(2) Debt securities of Loewen Group
International, Inc. and guarantees of such debt
securities by The Loewen Group Inc.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE
ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE
OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MARCH 21, 1997
PROSPECTUS
$500,000,000
THE LOEWEN GROUP INC.
COMMON SHARES, PREFERRED SHARES, DEBT SECURITIES AND WARRANTS
[LOGO] LOEWEN GROUP INTERNATIONAL, INC.
GUARANTEES OF DEBT SECURITIES
The Loewen Group Inc., a corporation under the laws of
British Columbia, Canada ("Loewen" and, together with its
subsidiaries and associated entities, the "Company"), may offer
and sell from time to time, in one or more series, (a) Common
shares without par value ("Common Shares"), (b) preferred shares
without par value ("Preferred Shares"), which may be convertible
into Common Shares, (c) debt securities consisting of notes,
debentures and/or other evidences of indebtedness representing
secured or unsecured obligations of Loewen ("Debt Securities"),
which may be convertible into or exchangeable for Common Shares
or Preferred Shares and which may be guaranteed by Loewen Group
International, Inc. ("Guarantees"), and (d) warrants to purchase
Common Shares, Preferred Shares or Debt Securities ("Warrants").
Common Shares, Preferred Shares, Debt Securities, Guarantees and
Warrants are herein collectively referred to as "Securities."
The specific terms of the particular Securities in respect
of which this Prospectus is being delivered will be set forth in
an accompanying supplement to this Prospectus ("Prospectus
Supplement"), which will describe, without limitation and where
applicable, the following: (a) in the case of Common Shares, the
number of shares offered, the initial offering price and market
price and dividend information, (b) in the case of Preferred
Shares, the specific designation, number of shares offered, the
initial offering price, liquidation preference, stated value per
share, dividend rate (which may be fixed or variable), place or
places where dividends on such Preferred Shares will be payable,
terms of conversion, sinking fund provisions, redemption
provisions, voting rights, preemption rights, restrictions on
transferability, listing or application for listing on a
securities exchange or interdealer quotation system, and any
other rights, preferences, privileges, limitations or
restrictions relating to the Preferred Shares; (c) in the case of
Debt Securities, the specific designation and denomination, the
aggregate principal amount being offered, whether such Debt
Securities are secured, whether such Debt Securities are
guaranteed by LGII, maturity, interest rate (which may be fixed
or variable), place or places where interest on such Debt
Securities will be payable, terms of conversion, sinking fund
provisions, redemption provisions, voting rights, restrictions on
transferability, listing or application for listing on a
securities exchange or interdealer quotation system, any right of
Loewen to defer payment of interest on the Debt Securities and
the maximum length of such deferral period, and any other rights,
privileges, limitations or restrictions relating to the Debt
Securities; and (d) in the case of Warrants, the title, series or
designation, the type and aggregate amount of Securities that may
be acquired on exercise of the Warrants, initial offering price
of the Warrants, whether the Warrants are offered attached to or
separate from other Securities, period during which the Warrants
are exercisable, exercise terms and price, listing or application
for listing on a securities exchange or interdealer quotation
system, and any other rights, privileges, limitations or
restrictions relating to the Warrants.
The aggregate offering price to the public of the Securities
will be limited to $500,000,000 (or its equivalent, based on the
applicable exchange rate at the time of issue, if Securities are
offered for consideration denominated in one or more foreign
currencies as shall be designated by the Company). Debt
Securities may be denominated in United States dollars or, at the
option of Loewen, if so specified in the applicable Prospectus
Supplement, in one or more foreign currencies. Debt Securities
may be issued in registered form or bearer form, or both. If so
specified in the applicable Prospectus Supplement, Debt
Securities of a series may be issued, in whole or in part, in the
form of one or more temporary or permanent global securities.
The Securities may be sold to or through underwriters,
through dealers or agents or directly to purchasers. See "Plan
of Distribution." The names of any underwriters, dealers or
agents involved in the sale of the Securities in respect of which
this Prospectus is being delivered and any applicable fee,
commission or discount arrangements with them will be set forth
in a Prospectus Supplement. See "Plan of Distribution" for
possible indemnification arrangements for dealers, underwriters
and agents.
This Prospectus may not be used to consummate sales of
Securities unless accompanied by a Prospectus Supplement.
NO SECURITIES COMMISSION OR SIMILAR AUTHORITY IN CANADA HAS IN
ANY WAY PASSED UPON THE MERITS OF THE SECURITIES OFFERED
HEREUNDER AND ANY REPRESENTATION TO THE CONTRARY IS AN OFFENSE.
THE SECURITIES OFFERED HEREUNDER HAVE NOT BEEN AND WILL NOT BE
QUALIFIED FOR SALE UNDER THE SECURITIES LAWS OF CANADA AND MAY
NOT BE OFFERED OR SOLD IN CANADA OR TO OR FOR THE ACCOUNT OF A
CANADIAN PERSON.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is _________________, 1997.
<PAGE>
AVAILABLE INFORMATION
Loewen and Loewen Group International, Inc., a Delaware
corporation and a wholly owned subsidiary of Loewen, have filed
with the Securities and Exchange Commission (the "Commission") a
Registration Statement on Form S-3 (together with any amendments,
exhibits, annexes and schedules thereto, the "Registration
Statement") pursuant to the Securities Act of 1933, as amended
(the "Securities Act"), and the rules and regulations thereunder,
with respect to the Securities. This Prospectus does not include
all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules
and regulations of the Commission. Statements made in the
Prospectus as to the contents of any contract, agreement or other
document referred to in the Registration Statement are not
necessarily complete. With respect to each such contract,
agreement or other document filed as an exhibit to the
Registration Statement, reference is made to the exhibit for a
more complete description of the matter involved, and each such
statement shall be deemed qualified in its entirety by such
reference.
Loewen is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and, in accordance therewith, files reports, proxy statements and
other information with the Commission. Such reports, proxy
statements and other information filed by Loewen may be inspected
and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices
located at Seven World Trade Center, Suite 1300, New York, New
York 10048, and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511. Copies of such material can
be obtained by mail from the Public Reference section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition,
reports, proxy statements and other information that Loewen files
with the Commission electronically are contained in the Internet
Web site maintained by the Commission. The Commission's Web site
address is http://www.sec.gov. The Common Shares are traded on
the New York Stock Exchange, The Toronto Stock Exchange and The
Montreal Exchange. Reports, proxy statements and other
information filed by Loewen may be inspected at the offices of
the New York Stock Exchange at 20 Broad Street, New York, New
York 10005, at the offices of The Toronto Stock Exchange at The
Exchange Tower, 2 First Canadian Place, Toronto, Ontario, Canada
M5X IJ2 and at the offices of The Montreal Exchange at 800
Victoria Square, Montreal, Quebec, Canada H4Z 1A9.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents heretofore filed by Loewen with the
Commission pursuant to Section 13(a) or 15(d) of the Exchange Act
(File No. 0-18429 for filings prior to September 27, 1996; File
No. 1-12163 for filings on or subsequent to September 27, 1996)
are hereby incorporated herein by reference: (a) Loewen's (i)
Annual Report on Form 10-K for the year ended December 31, 1995,
filed March 28, 1996 (as amended on Form 10-K/A filed June 20,
1996), (ii) Quarterly Reports for the quarters ended March 31,
1996 (filed May 15, 1996), June 30, 1996 (filed August 14, 1996)
and September 30, 1996 (filed November 14, 1996), and (iii)
Current Reports on Form 8-K dated January 3, 1996, January 17,
1996, January 24, 1996, January 26, 1996, February 6, 1996,
February 12, 1996, February 27, 1996, March 4, 1996, March 13,
1996, March 20, 1996, March 26, 1996 (as amended on Forms 8-K/A,
filed June 11, 1996 and July 6, 1996), March 31, 1996, May 1,
1996, May 8, 1996, May 24, 1996, June 4, 1996, June 6, 1996, June
17, 1996, June 30, 1996, August 7, 1996, August 26, 1996 (as
amended on Form 8-K/A, filed October 30, 1996), August 29, 1996,
September 5, 1996, September 17, 1996, September 20, 1996,
September 24, 1996, September 26, 1996, October 1, 1996, October
10, 1996, October 14, 1996, October 17, 1996, November 1, 1996,
November 3, 1996, November 7, 1996, November 19, 1996, November
20, 1996, December 1, 1996, December 5, 1996, December 10, 1996,
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<PAGE>
December 11, 1996, December 16, 1996, January 7, 1997, January 8,
1997 and March 5, 1997; and (b) the description of the Common
Shares contained in the Registration Statement on Form 20-F filed
by Loewen on March 30, 1990 (File No. 0-18429), including any
amendment or report filed for the purpose of updating such
description. All documents filed by Loewen pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of the offering of
the Securities shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing
of such documents.
Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other
subsequently filed document which also is incorporated or deemed
to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
LOEWEN WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM
THIS PROSPECTUS IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF
SUCH PERSON, A COPY OF ANY OR ALL OF THE FOREGOING DOCUMENTS
INCORPORATED BY REFERENCE HEREIN (OTHER THAN EXHIBITS TO ANY SUCH
DOCUMENT UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE INTO SUCH DOCUMENT). REQUESTS FOR SUCH COPIES SHOULD
BE DIRECTED TO THE CORPORATE SECRETARY OF LOEWEN, 4126 NORLAND
AVENUE, BURNABY, BRITISH COLUMBIA, CANADA V5G 3S8; TELEPHONE
NUMBER (604) 299-9321.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
The Prospectus, as amended and supplemented, and certain
documents incorporated by reference herein contain or may contain
both statements of historical fact and "forward-looking
statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Examples of forward-
looking statements include: (i) projections of revenue,
earnings, capital structure and other financial items,
(ii) statements of the plans and objectives of the Company or its
management, (iii) statements of future economic performance and
(iv) assumptions underlying statements regarding the Company or
its business. Important factors, risks and uncertainties that
could cause actual results to differ materially from any forward-
looking statements ("Cautionary Statements") are disclosed in the
Prospectus, as amended and supplemented, and in certain documents
incorporated by reference herein. All subsequent written and
oral forward-looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their
entirety by the Cautionary Statements.
FINANCIAL INFORMATION
All dollar amounts in financial statements incorporated by
reference into this Prospectus are in United States dollars
("U.S.$" or "$") unless otherwise indicated. References to
"Cdn.$" are to Canadian dollars.
The consolidated financial statements of the Company
included in Loewen's reports filed pursuant to the Exchange Act
are prepared in accordance with accounting principles generally
accepted in Canada ("Canadian GAAP"). Differences between
Canadian GAAP and accounting principles generally accepted in the
United States ("U.S. GAAP"), as applicable to the Company, are
explained in Note 21 to the consolidated financial statements
included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1995 (the "1995 Consolidated Financial
Statements").
3
<PAGE>
The consolidated financial statements of the Company for the
year ended December 31, 1993, and for prior years, were published
in Canadian dollars. Effective January 1, 1994, the Company
adopted the United States dollar as its reporting currency and,
accordingly, has published its consolidated financial statements
for the year ended December 31, 1994 and subsequent periods in
United States dollars. Financial information relating to periods
prior to January 1, 1994 has been translated from Canadian
dollars into United States dollars as required by Canadian GAAP
at the December 31, 1993 rate of U.S.$1.00=Cdn.$1.3217.
THE COMPANY
The Company operates the second-largest number of funeral
homes and cemeteries in North America and the largest number of
funeral homes in Canada. The Company also engages in the pre-
need selling of funeral, cemetery and cremation merchandise and
services. As at December 31, 1996, the Company operated 956
funeral homes and 313 cemeteries throughout North America. This
included 837 funeral homes and 307 cemeteries in the United
States (including locations in Puerto Rico).
Loewen was incorporated in 1985 under the laws of British
Columbia, Canada. Loewen's principal executive offices are
located at 4126 Norland Avenue, Burnaby, British Columbia,
Canada, V5G 3S8; telephone (604) 299-9321.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus
Supplement, the net proceeds received by the Company from the
sale of any Securities offered hereby will be used for working
capital and general corporate purposes, including acquisitions
and interest and principal payments on indebtedness. Any
specific allocation of the proceeds to a particular purpose that
has been made at the date of any Prospectus Supplement will be
described therein.
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<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of
earnings to fixed charges, presented on a Canadian GAAP and U.S.
GAAP basis, for each of the years in the five-year period ending
December 31, 1995 and for each of the nine-month periods ended
September 30, 1995 and 1996. No preferred share dividends were
paid or declared during such period.
Nine
Months Year ended December 31,
ended
September
30,
1996 1995 1995 1994 1993 1992 1991
CANADIAN GAAP
Ratio of earnings to 2.0x 2.2x --(1) 2.5x 2.9x 2.6x 2.6x
fixed charges
U.S. GAAP
Ratio of earnings to 2.0x 2.2x --(2) 2.4x 2.9x 2.6x 2.5x
fixed charges
(1) The 1995 loss is not sufficient to cover fixed charges by a
total of approximately $126.6 million and as such the ratio
of earnings to fixed charges has not been computed.
Reference is made to the Statement re Computation of
Earnings to Fixed Charges Ratio (Canadian GAAP), which is an
exhibit to the Registration Statement of which this
Prospectus forms a part.
(2) The 1995 loss is not sufficient to cover fixed charges by a
total of approximately $128.3 million and as such the ratio
of earnings to fixed charges has not been computed.
Reference is made to the Statement re Computation of
Earnings to Fixed Charges Ratio (U.S. GAAP), which is an
exhibit to the Registration Statement of which this
Prospectus forms a part.
5
<PAGE>
DESCRIPTION OF DEBT SECURITIES
Debt Securities offered hereby, which may consist of notes,
debentures and other evidences of indebtedness, may be issued in
one or more series and may be guaranteed by LGII. Each series of
debt securities will be issued under an indenture by and among
Loewen, LGII, as guarantor (if applicable), and the trustee
identified therein (the "Trustee"). A form of the indenture to
be entered into with respect to each series of Debt Securities
(each, an "Indenture") has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part.
The statements herein relating to the Debt Securities,
LGII's guarantees of the Debt Securities ("Guarantees"), if
applicable, and the Indentures are summaries and do not purport
to be complete. Such summaries are subject to the detailed
provisions of the applicable Indenture, to which reference is
hereby made for a full description of such provisions, including
the definitions therein of certain terms capitalized in this
Prospectus. Whenever defined terms of the Indentures are
referred to herein or in a Prospectus Supplement, such defined
terms are incorporated herein or therein by reference as part of
the statement made and such statement shall be qualified in its
entirety by such reference.
GENERAL
A series of Debt Securities may be offered contemporaneously
with an offering of Warrants to purchase an additional portion of
such or another series of Debt Securities. Warrants to purchase a
series of Debt Securities may also be offered independently of
any offering of Debt Securities. See "Description of Warrants."
Reference is made to the Prospectus Supplement which
accompanies this Prospectus for a description of the specific
series of Debt Securities being offered thereby or, if Warrants
are being offered thereby, the Debt Securities to be issued upon
exercise of such Warrants, including as applicable: (1) the
specific designation of such Debt Securities; (2) any limit upon
the aggregate principal amount of such Debt Securities; (3) the
date or dates on which the principal of such Debt Securities will
mature or the method of determining such date or dates; (4) the
interest rate or rates (which may be fixed or variable) or the
method of calculating such rate or rates; (5) the date or dates
from which interest will accrue or the method by which such date
or dates will be determined; (6) the date or dates on which
interest will be payable and the record date or dates therefor;
(7) whether such Debt Securities are secured or unsecured and
whether such Debt Securities are guaranteed by LGII, (8) the
place or places where principal of, premium, if any, and
interest, if any, on such Debt Securities will be payable; (9)
the period or periods within which, the price or prices at which,
the currency or currencies (including currency units) in which,
and the terms and conditions upon which, such Debt Securities may
be redeemed, in whole or in part, at the option of Loewen; (10)
any obligation of Loewen to redeem or purchase such Debt
Securities pursuant to any sinking fund or analogous provisions,
upon the happening of specified events, or at the option of a
holder thereof and the period or periods within which, the price
or prices at which and the terms and conditions upon which, such
Debt Securities shall be redeemed or purchased, in whole or in
part, pursuant to such obligations; (11) the denominations in
which such Debt Securities are authorized to be issued; (12) the
currency or currency units for which Debt Securities may be
purchased or in which Debt Securities may be denominated and/or
the currency or currency units in which principal of, premium, if
any, and/or interest, if any, on such Debt Securities will be
payable or redeemable and whether Loewen or the holders of any
such Debt Securities may elect to receive payments in respect of
such Debt Securities in a currency or currency units other than
that in which such Debt Securities are stated to be payable or
redeemable; (13) if other than the principal amount thereof, the
portion of the principal amount of such Debt Securities which
will be payable upon declaration of the acceleration of the
maturity thereof or the method by which such portion shall be
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<PAGE>
determined; (14) the person to whom any interest on any such Debt
Security shall be payable if other than the person in whose name
such Debt Security is registered on the applicable record date;
(15) any addition to, or modification or deletion of, any Event
of Default or any covenant of Loewen specified in the Indenture
with respect to such Debt Securities; (16) the application of any
means of defeasance or covenant defeasance that may be specified
for such Debt Securities; (17) the terms and conditions relating
to Warrants issued by Loewen in connection with or for the
purchase of such Debt Securities; (18) any provisions relating
to the exchange or conversion of such Debt Securities; and (19)
any other special terms pertaining to such Debt Securities.
Unless otherwise specified in the applicable Prospectus
Supplement, the Debt Securities will not be listed on any
securities exchange or interdealer quotation system.
Unless otherwise specified in the applicable Prospectus
Supplement, Debt Securities will be issued in fully registered
form without coupons. If Debt Securities of any series are
issued in bearer form, any special restrictions and
considerations, including any offering restrictions and United
States federal income tax considerations, applicable to such Debt
Securities and to payment on and transfer and exchange of such
Debt Securities will be described in the applicable Prospectus
Supplement.
Debt Securities may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at
a rate which at the time of issuance is below market rates.
Certain United States federal income tax consequences and special
considerations applicable to any such Debt Securities will be
described in the applicable Prospectus Supplement.
If the purchase price of any Debt Securities is payable in
one or more foreign currencies or currency units of if any Debt
Securities are denominated in one or more foreign currencies or
currency units or if the principal of, premium, if any, or
interest, if any, on any Debt Securities is payable in one or
more foreign currencies or currency units, the restrictions,
elections, certain United States federal income tax
considerations, specific terms and other information with respect
to such series of Debt Securities and such foreign currency or
currency units will be set forth in the applicable Prospectus
Supplement.
DENOMINATIONS, PAYMENT, REGISTRATION, TRANSFER AND EXCHANGE
Debt Securities generally will be issued in registered form
and in denominations of $1,000 and integral multiples of $1,000.
Unless otherwise provided in the applicable Prospectus
Supplement, payments in respect of Debt Securities will be made,
subject to any applicable laws and regulations, in the designated
currency at the office or agency of Loewen maintained for that
purpose as Loewen may designate from time to time, except that,
at the option of Loewen, interest payments, if any, on Debt
Securities in registered form may be made (i) by checks mailed by
the Trustee to the holders of Debt Securities entitled thereto at
their registered addresses or (ii) by wire transfer to an account
maintained by the person entitled thereto, as specified in the
Register. Unless otherwise indicated in an applicable Prospectus
Supplement, payment of any installment of interest on Debt
Securities in registered form will be made to the person in whose
name such Debt Security is registered at the close of business on
the regular record date for such interest.
Unless otherwise provided in the applicable Prospectus
Supplement, Debt Securities in registered form will be
transferable or exchangeable at the office or agency of Loewen
maintained for such purpose as Loewen may designate from time to
time. Debt Securities may be transferred or exchanged without
service charge, other than any tax or other governmental charge
imposed in connection therewith.
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REDEMPTION
A series of Debt Securities may be subject to redemption at
the option of Loewen, in whole or in part, or may not be
redeemable prior to maturity. In addition, Loewen may be
obligated upon the occurrence of specified events or at the
option of a holder of Debt Securities, to redeem or repurchase
all or part of a series of Debt Securities. Any such provisions
will be set forth in the applicable Prospectus Supplement.
CONVERSION AND EXCHANGE
The terms on which a series of Debt Securities may be
convertible into or exchangeable for Preferred Shares or Common
Shares, if at all, will be set forth in the applicable Prospectus
Supplement. Such terms shall include as applicable (i) the type
and amount of Preferred Shares or Common Shares into or for which
the Debt Securities are convertible or exchangeable, and (ii) the
period or periods during which, or the circumstances under which,
Debt Securities may be converted or exchanged. The applicable
Prospectus Supplement may also include market price and dividend
information with respect to the Preferred Shares or Common Shares
that may be acquired on conversion or exchange of the Debt
Securities and other information with respect to such Securities,
including in the case of Preferred Shares, the designation and
denomination, any dividend, conversion, sinking fund, redemption,
voting, liquidation and preemption rights, any restrictions on
transferability by the holders or on repurchase or redemption by
Loewen, and any other special terms pertaining to such Preferred
Shares.
RANKING
Each series of Debt Securities and the related Guarantees
(if any) will rank equally and pari passu as to the right of
payment of principal and interest, if any, with each other series
of Debt Securities and Guarantees (if any) and with all other
Senior Debt (defined herein) of Loewen and LGII, respectively.
Loewen and LGII are parties to a collateral trust arrangement,
described below (the "Collateral Agreement"), pursuant to which,
so long as the Indebtedness (defined herein) subject to the
Collateral Agreement is secured, the Debt Securities will be
secured as described herein. However, unless the applicable
Prospectus Supplement provides otherwise, the holders of Debt
Securities of a series will not have an independent right to
require the Lien secured by the Collateral (defined herein) to
remain in place or to require any other security for the Debt
Securities of such series. As at December 31, 1996, the
aggregate amount of outstanding Pari Passu Indebtedness (defined
herein) was approximately $1.3 billion. See "--Collateral Trust
Arrangement."
Debt Securities and related Guarantees (if any) will be
effectively subordinated in right of payment to all existing and
future liabilities, including trade payables, of the subsidiaries
of Loewen and LGII, respectively.
"Indebtedness" means, with respect to any person, without
duplication (a) all liabilities of such person for borrowed money
or for the deferred purchase price of property or services,
excluding any trade payables and other accrued current
liabilities incurred in the ordinary course of business and which
are not overdue by more than 90 days, but excluding, without
limitation, all obligations, contingent or otherwise, of such
person in connection with any undrawn letters of credit, banker's
acceptance or other similar credit transaction, (b) all
obligations of such person evidenced by bonds, notes, debentures
or other similar instruments, (c) all indebtedness created or
arising under any conditional sale or other title retention
agreement with respect to property acquired by such person (even
if the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or
sale of
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such property), but excluding trade accounts payable
arising in the ordinary course of business, (d) all Capitalized
Lease Obligations of such person, (e) all Indebtedness referred
to in the preceding clauses of other persons and all dividends of
other persons, the payment of which is secured by (or for which
the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon property
(including, without limitation, accounts and contract rights)
owned by such person, even though such person has not assumed or
become liable for the payment of such Indebtedness (the amount of
such obligation being deemed to be the lesser of the value of
such property or asset or the amount of the obligation so
secured), (f) all guarantees of Indebtedness referred to in this
definition by such person, (g) all Redeemable Capital Stock of
such person valued at the greater of its voluntary or involuntary
maximum fixed repurchase price plus accrued dividends, (h) all
obligations under or in respect of Currency Agreements and
Interest Rate Protection Obligations of such person, (i) any
Preferred Stock of any Restricted Subsidiary of such person
valued at the sum of (without duplication) (A) the liquidation
preference thereof, (B) any mandatory redemption payment
obligations in respect thereof and (C) accrued dividends thereon,
and (j) any amendment, supplement, modification, deferral,
renewal, extension or refunding of any liability of the types
referred to in clauses (a) through (i) above. For purposes
hereof, the "maximum fixed repurchase price" of any Redeemable
Capital Stock which does not have a fixed repurchase price shall
be calculated in accordance with the terms of such Redeemable
Capital Stock as if such Redeemable Capital Stock were purchased
on any date on which Indebtedness shall be required to be
determined pursuant to the provisions hereof, and if such price
is based upon, or measured by, the fair market value of such
Redeemable Capital Stock, such fair market value shall be
determined in good faith by the board of directors of the issuer
of such Redeemable Capital Stock. For purposes of this
definition, the term "Indebtedness" shall not include (i)
Indebtedness of a Wholly-Owned Subsidiary owed to and held by
Loewen, LGII or another Wholly-Owned Subsidiary, in each case
which is not subordinate in right of payment to any Indebtedness
of such Subsidiary, except that (a) any transfer of such
Indebtedness by Loewen, LGII or a Wholly-Owned Subsidiary (other
than to Loewen, LGII or to a Wholly-Owned Subsidiary) and (b) the
sale, transfer or other disposition by Loewen, LGII or any
Restricted Subsidiary of Loewen or LGII of Capital Stock of a
Wholly-Owned Subsidiary which is owed Indebtedness of another
Wholly-Owned Subsidiary such that it ceases to be a Wholly-Owned
Subsidiary of Loewen or LGII shall, in each case, be an
incurrence of Indebtedness by such Restricted Subsidiary subject
to the other provisions hereof; and (ii) Indebtedness of Loewen
or LGII owed to and held by a Wholly-Owned Subsidiary of Loewen
or LGII which is unsecured and subordinate in right of payment to
the payment and performance of Loewen's or LGII's obligations
under the provisions of the applicable Indenture and the Debt
Securities except that (a) any transfer of such Indebtedness by a
Wholly-Owned Subsidiary of Loewen or LGII (other than to another
Wholly-Owned Subsidiary of Loewen or LGII) and (b) the sale,
transfer or other disposition by Loewen or LGII or any Restricted
Subsidiary of Loewen or LGII of Capital Stock of a Wholly-Owned
Subsidiary which holds Indebtedness of Loewen or LGII such that
it ceases to be a Wholly-Owned Subsidiary shall, in each case, be
an incurrence of Indebtedness by Loewen or LGII, as the case may
be, subject to the other provisions hereof.
"Pari Passu Indebtedness" means Indebtedness of Loewen or
LGII which ranks pari passu in right of payment with the Debt
Securities.
"Senior Debt" means Indebtedness which is not (i)
Indebtedness of Loewen to any Subsidiary, or (ii) Indebtedness of
Loewen which by its terms is subordinate or junior in any respect
to any other Indebtedness or other obligation of Loewen.
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COLLATERAL TRUST ARRANGEMENT
On May 31, 1996, Loewen, LGII and their senior lenders (the
"Senior Lenders") entered into the Collateral Agreement, pursuant
to which the Senior Lenders share, on a pari passu basis, a
pledge by Loewen and LGII of (i) the shares of capital stock held
by Loewen of substantially all of the subsidiaries in which
Loewen directly or indirectly holds more than a 50% voting or
economic interest, and (ii) all of the financial assets of LGII
(including shares of capital stock held by LGII of various
subsidiaries) (collectively, the "Collateral"). The Collateral
is held by a trustee for the equal and ratable benefit of the
various holders of such Indebtedness.
MERGER, SALE OF ASSETS, ETC.
Each Indenture will provide that Loewen shall not, in any
transaction or series of transactions, merge or consolidate with
or into, or sell, assign, convey, transfer, lease or otherwise
dispose of all or substantially all of its properties and assets
as an entirety to, any person or persons, and Loewen shall not
permit any of its Restricted Subsidiaries (defined herein) to
enter into any such transaction or series of transactions if such
transaction or series of transactions, in the aggregate, would
result in a sale, assignment, conveyance, transfer, lease or
other disposition of all or substantially all of the properties
and assets of Loewen or of Loewen and its Restricted Subsidiaries
taken as a whole, to any other person or persons, unless at the
time of and after giving effect thereto (a) either (i) if the
transaction or series of transactions is a merger or
consolidation, Loewen or LGII or the Restricted Subsidiary, as
the case may be, shall be the surviving person of such merger or
consolidation, or (ii) the person formed by such consolidation or
into which Loewen or such Restricted Subsidiary, as the case may
be, is merged or to which the properties and assets of Loewen or
such Restricted Subsidiary, as the case may be, are transferred
(any such surviving person or transferee being the "Surviving
Entity") shall be a corporation organized and existing under the
laws of the United States, any state thereof, the District of
Columbia, Canada or any province thereof and shall expressly
assume by a supplemental indenture executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, all of
the obligations of Loewen under the Debt Securities and, in each
case the Indenture shall remain in full force and effect; (b)
immediately before and immediately after giving effect to such
transaction or series of transaction on a pro forma basis
(including without limitation any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of
such transaction or series of transactions), no Default (defined
herein) or Event of Default (defined herein) shall have occurred
and be continuing and Loewen, the Restricted Subsidiary or the
Surviving Entity, as the case may be, after giving effect to
such transaction or series of transaction on a pro forma basis
(including without limitation any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of
such transaction or series of transaction), could incur $1.00 of
additional Indebtedness pursuant to the covenants regarding
limitations on Indebtedness contained in the Indentures; and (c)
immediately after giving effect to such transaction or series of
transactions on a pro forma basis (including without limitation
any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of
transactions), the Consolidated Net Worth (defined herein) of
Loewen or the Surviving Entity, as the case maybe, is at least
equal to the Consolidated Net Worth of Loewen immediately before
such transaction or series of transactions.
In connection with any consolidation, merger, transfer,
lease, assignment or other disposition contemplated hereby,
Loewen shall deliver or cause to be delivered to the Trustee, in
form and substance reasonably satisfactory to the Trustee, an
officers' certificate and an opinion of counsel, each stating
that such consolidation, merger, transfer, lease, assignment or
other disposition and the supplemental indenture in respect
thereof comply with the requirements under the Indentures.
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Upon any consolidation or merger or any transfer of all or
substantially all of the assets of Loewen in accordance with the
foregoing, in which Loewen is not the continuing corporation, the
successor corporation formed by such consolidation or into which
Loewen is merged or to which such transfer is made shall succeed
to, and be substituted for, and may exercise every right and
power of, Loewen under the Indentures with the same effect as if
such successor corporation had been named therein.
"Consolidated Net Worth" means, with respect to any person
at any date, the consolidated stockholders' equity of such person
less the amount of such stockholders' equity attributable to
Redeemable Capital Stock of such person and its Restricted
Subsidiaries, as determined in accordance with Canadian GAAP. As
used above, "Redeemable Capital Stock" means any shares of any
class or series of Capital Stock that, either by the terms
thereof, by the terms of any security into which it is
convertible or exchangeable or by contract or otherwise, is or
upon the happening of an event or passage of time would be,
required to be redeemed prior to the Stated Maturity with respect
to the principal of any Security or is redeemable at the option
of the holder thereof at any time prior to any such Stated
Maturity, or is convertible into or exchangeable for debt
securities at any time prior to any such Stated Maturity.
"Default" means any event that is, or after notice or
passage of time or both would be, an Event of Default. See
"--Events of Default."
"Restricted Subsidiary" means any Subsidiary of Loewen other
than (i) First Capital Life Insurance Company of Louisiana,
National Capital Life Insurance Company, Security Industrial
Insurance Company, Security Industrial Fire Insurance Company or
any successors to such Subsidiaries or (ii) a Subsidiary of
Loewen declared by the Board of Directors of Loewen to be an
Unrestricted Subsidiary; provided, that no such Subsidiary shall
be declared to be an Unrestricted Subsidiary unless (x) none of
its properties or assets were owned by Loewen or any of its
Subsidiaries prior to the Issue Date, other than any such assets
as are transferred to such Unrestricted Subsidiary in accordance
with the covenant described under "--Limitation on Restricted
Payments," (y) its properties and assets, to the extent that they
secure Indebtedness, secure only Non-Recourse Indebtedness and
(z) it has no Indebtedness other than Non-Recourse Indebtedness.
As used above, "Non-Recourse Indebtedness" means Indebtedness as
to which (i) neither Loewen nor any of its Subsidiaries (other
than the relevant Unrestricted Subsidiary or another Unrestricted
Subsidiary) (1) provides credit support (including any
undertaking, agreement or instrument which would constitute
Indebtedness), (2) guarantees or is otherwise directly or
indirectly liable or (3) constitutes the lender (in each case,
other than pursuant to and in compliance with the covenant
described under "--Limitation on Restricted Payments") and (ii) no
default with respect to such Indebtedness (including any rights
which the holders thereof may have to take enforcement action
against the relevant Unrestricted Subsidiary or its assets) would
permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of Loewen or its Subsidiaries (other than
Unrestricted Subsidiaries) to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity.
CERTAIN COVENANTS
Loewen and LGII (if applicable) make the following
covenants, among others, in the Indentures:
LIMITATION ON INDEBTEDNESS. Loewen will not, and will not
permit any of its Restricted Subsidiaries (including, without
limitation, LGII) to, directly or indirectly, create, incur,
issue, assume, guarantee or in any manner become directly or
indirectly liable, contingently or otherwise, for the
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payment of
(collectively, to "incur") any Indebtedness (including, without
limitation, any Acquired Indebtedness, defined herein), other
than Permitted Indebtedness (defined herein). Notwithstanding the
foregoing limitations, Loewen and LGII (and any Wholly-Owned
Subsidiary with respect to Seller Financing Indebtedness, defined
herein) will be permitted to incur Indebtedness (including,
without limitation, Acquired Indebtedness) if at the time of such
incurrence, and after giving pro forma effect thereto, the
Consolidated Fixed Charge Coverage Ratio (defined herein) of
Loewen is at least equal to 2.25 : 1.
"Acquired Indebtedness" means Indebtedness of a person (a)
assumed or created in connection with an Asset Acquisition from
such person or (b) existing at the time such person becomes a
Restricted Subsidiary of any other person.
"Consolidated Fixed Charge Coverage Ratio" means with
respect to any person, the ratio of the aggregate amount of
Consolidated Cash Flow Available for Fixed Charges of such person
for the full fiscal quarter immediately preceding the date of the
transaction (the "Transaction Date") giving rise to the need to
calculate the Consolidated Fixed Charge Coverage Ratio (such full
fiscal quarter period being referred to herein as the "Prior
Quarter") to the aggregate amount of Consolidated Fixed Charges
of such person for the Prior Quarter. In addition to and without
limitation of the foregoing, for purposes of this definition,
"Consolidated Cash Flow Available for Fixed Charges" and
"Consolidated Fixed Charges" shall be calculated after giving
effect on a pro forma basis for the period of such calculation
to, without duplication, (a) the incurrence of any Indebtedness
of such person or any of its Restricted Subsidiaries (and the
application of the net proceeds thereof) during the period
commencing on the first day of the Prior Quarter to and including
the Transaction Date (the "Reference Period"), including, without
limitation, the incurrence of the Indebtedness giving rise to the
need to make such calculation (and the application of the net
proceeds thereof), as if such incurrence (and application)
occurred on the first day of the Reference Period, and (b) any
Material Asset Sales or Material Asset Acquisitions (including,
without limitation, any Material Asset Acquisition giving rise to
the need to make such calculation as a result of such person or
one of its Restricted Subsidiaries (including any person who
becomes a Restricted Subsidiary as a result of the Material Asset
Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness) occurring during the Reference Period, as
if such Material Asset Sale or Material Asset Acquisition
occurred on the first day of the Reference Period. Furthermore,
in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this
"Consolidated Fixed Charge Coverage Ratio," (i) interest on
outstanding Indebtedness determined on a fluctuating basis as at
the Transaction Date and which will continue to be so determined
thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness in
effect on the Transaction Date; and (ii) if interest on any
Indebtedness actually incurred on the Transaction Date may
optionally be determined at an interest rate based upon a factor
of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the
Transaction Date will be deemed to have been in effect during the
Reference Period. If such person or any of its Restricted
Subsidiaries directly or indirectly guarantees Indebtedness of a
third person, the above clause shall give effect to the
incurrence of such guaranteed Indebtedness as if such person or
such Restricted Subsidiary had directly incurred or otherwise
assumed such guaranteed Indebtedness. For purposes of this
calculation, a "Material Asset Acquisition" is an Asset
Acquisition which is deemed by such person to be material for
such purposes or which has a purchase price of $30,000,000 or
more and a "Material Asset Sale" is one or more Asset Sales which
relate to assets with an aggregate value of more than
$30,000,000. For purposes of this definition, "Consolidated Cash
Flow Available for Fixed Charges" means, with respect to any
person for any period, (A) the sum of, without duplication, the
amounts for such period, taken as a single accounting period, of
(a) Consolidated Net Income,
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(b) Consolidated Non-cash Charges,
(c) Consolidated Interest Expense and (d) Consolidated Income Tax
Expense less (B) any non-cash items increasing Consolidated Net
Income for such period.
"Permitted Indebtedness" means, without duplication, each of
the following: (a) the Debt Securities and Indebtedness of LGII
evidenced by the Guarantees; (b) Indebtedness of Loewen and its
Restricted Subsidiaries (including, without limitation, LGII)
outstanding on the Issue Date (other than Indebtedness under the
Credit Agreements); (c) Indebtedness of Loewen or LGII, as the
case may be, under the Credit Agreements in an aggregate
principal amount at any one time outstanding not to exceed
$750,000,000 less the Net Proceeds of any Asset Sale that are
applied to repay, and permanently reduce the commitments under,
the Credit Agreements (as required by the terms thereof); (d) (i)
Interest Rate Protection Obligations of Loewen covering
Indebtedness of Loewen and its Restricted Subsidiaries
(including, without limitation, LGII); (ii) Interest Rate
Protection Obligations of any Restricted Subsidiary of Loewen
covering Indebtedness of such Restricted Subsidiary; provided,
however, that, in the case of either clause (i) or (ii), (x) any
Indebtedness to which any such Interest Rate Protection
Obligations relate bears interest at fluctuating interest rates
and is otherwise permitted to be incurred under this covenant and
(y) the notional principal amount of any such Interest Rate
Protection Obligations does not exceed the principal amount of
the Indebtedness to which such Interest Rate Protection
Obligations relate; (e) Indebtedness under Currency Agreements;
provided, however, that in the case of Currency Agreements which
relate to Indebtedness, such Currency Agreements do not increase
the Indebtedness of Loewen and its Restricted Subsidiaries
(including, without limitation, LGII) outstanding other than as a
result of fluctuations in foreign currency exchange rates or by
reason of fees, indemnities and compensation payable thereunder;
(f) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn
against insufficient funds in the ordinary course of business;
provided, however, that such Indebtedness is extinguished within
two business days of incurrence; (g) Indebtedness incurred in
respect of performance bonds or letters of credit in lieu thereof
provided in the ordinary course of business; (h) Indebtedness of
Loewen and its Restricted Subsidiaries (including, without
limitation, LGII) represented by letters of credit for the
account of Loewen and its Restricted Subsidiaries in order to
provide security for workers' compensation claims, payment
obligations in connection with self-insurance or similar
requirements in the ordinary course of business; (i) Indebtedness
of Loewen and its Restricted Subsidiaries (including, without
limitation, LGII) in addition to that described in clauses (a)
through (h) above, in an aggregate principal amount outstanding
at any time not exceeding $5,000,000; and (j) (i) Indebtedness of
Loewen the proceeds of which are used solely to refinance
(whether by amendment, renewal, extension or refunding)
Indebtedness of Loewen and its Restricted Subsidiaries
(including, without limitation, LGII) and (ii) Indebtedness of
any Restricted Subsidiary of Loewen the proceeds of which are
used solely to refinance (whether by amendment, renewal,
extension or refunding) Indebtedness of such Restricted
Subsidiary, in each case other than the Indebtedness refinanced,
redeemed or retired on the Issue Date or Indebtedness incurred
under clause (c), (d), (e), (f), (g), (h), or (i) of this
covenant; provided, however, that (x) the principal amount of
Indebtedness incurred pursuant to this clause (j) (or, if such
Indebtedness provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof, the original issue price of
such Indebtedness) shall not exceed the sum of the principal
amount of Indebtedness so refinanced, plus the amount of any
premium required to be paid in connection with such refinancing
pursuant to the terms of such Indebtedness or the amount of any
premium reasonably determined by the Board of Directors of Loewen
as necessary to accomplish such refinancing by means of a tender
offer or privately negotiated purchase, plus the amount of
expenses in connection therewith, (y) in the case of Indebtedness
incurred by Loewen pursuant to this clause (j) to refinance Pari
Passu Indebtedness, such Indebtedness constitutes Pari Passu
Indebtedness.
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"Seller Financing Indebtedness" means a purchase money
Indebtedness issued to the seller of a business or other assets
for, and not in excess of, the purchase price thereof.
LIMITATION ON RESTRICTED PAYMENTS. Loewen will not, and
will not permit any of its Restricted Subsidiaries (including,
without limitation, LGII) to, directly or indirectly:
(a) declare or pay any dividend or make any other
distribution or payment on or in respect of Capital Stock of
Loewen or any of its Restricted Subsidiaries or any payment made
to the direct or indirect holders (in their capacities as such)
of Capital Stock of Loewen or any of its Restricted Subsidiaries
(other than (x) dividends or distributions payable solely in
Capital Stock of Loewen (other than Redeemable Capital Stock) or
in options, warrants or other rights to purchase Capital Stock of
Loewen (other than Redeemable Capital Stock) and (y) dividends or
other distributions to the extent declared or paid to Loewen or
any Wholly-Owned Subsidiary of Loewen),
(b) purchase, redeem, defease or otherwise acquire or
retire for value any Capital Stock of Loewen or any of its
Restricted Subsidiaries (other than any such Capital Stock of a
Wholly-Owned Subsidiary of Loewen),
(c) make any principal payment on, or purchase, defease,
repurchase, redeem or otherwise acquire or retire for value,
prior to any scheduled maturity, scheduled repayment, scheduled
sinking fund payment or other Stated Maturity, any Indebtedness
that is subordinate or junior in right of payment to the Debt
Securities or Pari Passu Indebtedness (other than any such
subordinated or Pari Passu Indebtedness owned by Loewen or a
Wholly-Owned Subsidiary of Loewen), or
(d) make any Investment (other than any Permitted
Investment, defined herein) in any person (such payments or
Investments described in the preceding clauses (a), (b), (c) and
(d) are collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to the proposed
Restricted Payment (the amount of any such Restricted Payment, if
other than cash, shall be the Fair Market Value on the date of
such Restricted Payment of the asset(s) proposed to be
transferred by Loewen or such Restricted Subsidiary, as the case
may be, pursuant to such Restricted Payment), (A) no Default or
Event of Default shall have occurred and be continuing, (B)
immediately prior to and after giving effect to such Restricted
Payment, Loewen would be able to incur $1.00 of additional
Indebtedness pursuant to the covenant described under
"--Limitation on Indebtedness" (assuming a market rate of interest
with respect to such additional Indebtedness) and (C) the
aggregate amount of all Restricted Payments declared or made from
and after the Measurement Date would not exceed the sum of (1)
50% of the aggregate Consolidated Net Income (defined herein) of
Loewen accrued on a cumulative basis during the period beginning
on the first day of the fiscal quarter of Loewen during which the
Measurement Date occurs and ending on the last day of the fiscal
quarter of Loewen immediately preceding the date of such proposed
Restricted Payment, which period shall be treated as a single
accounting period (or, if such aggregate cumulative Consolidated
Net Income of Loewen for such period shall be a deficit, minus
100% of such deficit) plus (2) the aggregate net cash proceeds
received by Loewen or LGII (without duplication) either (x) as
capital contributions to Loewen or LGII (without duplication)
after the Measurement Date from any person (other than Loewen,
LGII or a Restricted Subsidiary of Loewen or LGII, as the case
may be) or (y) from the issuance or sale of Capital Stock
(excluding Redeemable Capital Stock, but including Capital Stock
issued upon the conversion of convertible Indebtedness or from
the exercise of options, warrants or rights to purchase Capital
Stock (other than Redeemable Capital Stock)) of Loewen or LGII
(without duplication) to any person (other than to Loewen, LGII
or a Restricted Subsidiary of Loewen or LGII, as the case may be)
after the Measurement Date plus (3) in the case of the
disposition or repayment of any Investment constituting a
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Restricted Payment made after the Measurement Date (excluding any
Investment described in clause (v) of the following paragraph),
an amount equal to the lesser of the return of capital with
respect to such Investment and the cost of such Investment less,
in either case, the cost of the disposition of such Investment
plus (4) the sum of $15,000,000. For purposes of the preceding
clause (C)(2), the value of the aggregate net proceeds received
by Loewen or LGII (without duplication) upon the issuance of
Capital Stock upon the conversion of convertible Indebtedness or
upon the exercise of options, warrants or rights will be the net
cash proceeds received upon the issuance of such Indebtedness,
options, warrants or rights plus the incremental cash amount
received by Loewen or LGII (without duplication) upon the
conversion or exercise thereof.
None of the foregoing provisions will prohibit (i) the
payment of any dividend within 60 days after the date of its
declaration, if at the date of declaration such payment would be
permitted by the foregoing paragraph; (ii) so long as no Default
or Event of Default shall have occurred and be continuing, the
redemption, repurchase or other acquisition or retirement of any
shares of any class of Capital Stock of Loewen, LGII or any
Restricted Subsidiary of Loewen or LGII in exchange for, or out
of the net cash proceeds of, a substantially concurrent (x)
capital contribution to Loewen or LGII from any person (other
than a Related Obligor, as defined below) or (y) issue and sale
of other shares of Capital Stock (other than Redeemable Capital
Stock) of Loewen or LGII to any person (other than to a Related
Obligor); (iii) so long as no Default or Event of Default shall
have occurred and be continuing, any redemption, repurchase or
other acquisition or retirement of Indebtedness that is
subordinate or junior in right of payment to the Debt Securities
and the Guarantees, if applicable, by exchange for, or out of the
net cash proceeds of, a substantially concurrent (x) capital
contribution to Loewen or LGII from any person (other than a
Related Obligor) or (y) issue and sale of (1) Capital Stock
(other than Redeemable Capital Stock) of Loewen or LGII to any
person (other than a Related Obligor); provided, however, that
the amount of any such net proceeds that are utilized for any
such redemption, repurchase or other acquisition or retirement
shall be excluded from clause (C)(2) of the preceding paragraph;
or (2) Indebtedness of Loewen or LGII issued to any person (other
than a Related Obligor), so long as such Indebtedness is Pari
Passu Indebtedness or Indebtedness that is subordinate or junior
in right of payment to the Debt Securities and the Guarantees, if
applicable, in the same manner and at least to the same extent as
the Indebtedness so purchased, exchanged, redeemed, acquired or
retired; (iv) so long as no Default or Event of Default shall
have occurred and be continuing, any redemption, repurchase or
other acquisition or retirement of Pari Passu Indebtedness by
exchange for, or out of the net cash proceeds of, a substantially
concurrent (x) capital contribution to Loewen or LGII from any
person (other than a Related Obligor) or (y) issue and sale of
(1) Capital Stock (other than Redeemable Capital Stock) of Loewen
or LGII to any person (other than a Related Obligor); provided,
however, that the amount of any such net proceeds that are
utilized for any such redemption, repurchase or other acquisition
or retirement shall be excluded from clause (C)(2) of the
preceding paragraph; or (2) Indebtedness of Loewen or LGII issued
to any person (other than a Related Obligor), so long as such
Indebtedness is Pari Passu Indebtedness or Indebtedness that is
subordinate or junior in right of payment to the Debt Securities
and the Guarantees in the same manner and at least to the same
extent as the Indebtedness so purchased, exchanged, redeemed,
acquired or retired; (v) Investments constituting Restricted
Payments made as a result of the receipt of consideration that
consists of cash or Cash Equivalents from any Asset Sale made
pursuant to and in compliance with the covenant described under
"--Disposition of Proceeds of Asset Sales"; (vi) so long as no
Default or Event of Default has occurred and is continuing,
repurchases by Loewen of Common Stock of Loewen from employees of
Loewen or their authorized representatives upon the death,
disability or termination of employment of such employees, in an
aggregate amount not exceeding $10,000,000 in any calendar year;
(vii) Investments constituting Restricted Payments that are
permitted by subparagraphs (iv) and (v) of the proviso to the
covenant described under "--Limitation on Transactions with
Interested Persons"; and (viii) the declaration or the payment of
dividends on, or the scheduled purchase or
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redemption of, the
Preferred Securities of a Special Finance Subsidiary or the
Series C Preferred Shares, of Loewen. In computing the amount of
Restricted Payments previously made for purposes of clause (C) of
the preceding paragraph, Restricted Payments made under the
preceding clauses (v), (vi) and (vii) shall be included and those
under clauses (i), (ii), (iii), (iv) and (viii) shall not be so
included.
"Consolidated Net Income" means, with respect to any person,
for any period, the consolidated net income (or loss) of such
person and its Restricted Subsidiaries for such period as
determined in accordance with GAAP, adjusted, to the extent
included in calculating such net income, by excluding, without
duplication, (i) all extraordinary gains or losses, (ii) the
portion of net income (but not losses) of such person and its
Restricted Subsidiaries allocable to minority interests in
unconsolidated persons to the extent that cash dividends or
distributions have not actually been received by such person or
one of its Restricted Subsidiaries, (iii) net income (or loss) of
any person combined with such person or one of its Restricted
Subsidiaries on a "pooling of interests" basis attributable to
any period prior to the date of combination, (iv) any gain or
loss realized upon the termination of any employee pension
benefit plan, on an after-tax basis, (v) gains or losses in
respect of any Asset Sales by such person or one of its
Restricted Subsidiaries, and (vi) the net income of any
Restricted Subsidiary of such person to the extent that the
declaration of dividends or similar distributions by that
Restricted Subsidiary of that income is not at the time
permitted, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to
that Restricted Subsidiary or its stockholders.
"Permitted Investments" means any of the following:
(i) Investments in any Wholly-Owned Subsidiary of Loewen
(including (a) LGII and (b) any person that pursuant to such
Investment becomes a Wholly-Owned Subsidiary of Loewen) and any
person that is merged or consolidated with or into, or transfers
or conveys all or substantially all of its assets to, Loewen or
any Wholly-Owned Subsidiary of Loewen at the time such Investment
is made; (ii) Investments in Cash Equivalents; (iii) Investments
in Currency Agreements on commercially reasonable terms entered
into by Loewen or any of its Restricted Subsidiaries in the
ordinary course of business in connection with the operations of
the business of Loewen or its Restricted Subsidiaries to hedge
against fluctuations in foreign exchange rates; (iv) loans or
advances to officers, employees or consultants of Loewen and its
Restricted Subsidiaries for travel and moving expenses in the
ordinary course of business for bona fide business purposes of
Loewen and its Restricted Subsidiaries; (v) other loans or
advances to officers, employees or consultants of Loewen and its
Restricted Subsidiaries in the ordinary course of business for
bona fide business purposes of Loewen and its Restricted
Subsidiaries not in excess of $10,000,000 in the aggregate at any
one time outstanding; (vi) Investments in evidences of
Indebtedness, securities or other property received from another
person by Loewen or any of its Restricted Subsidiaries in
connection with any bankruptcy proceeding or by reason of a
composition or readjustment of debt or a reorganization of such
person or as a result of foreclosure, perfection or enforcement
of any Lien in exchange for evidences of Indebtedness, securities
or other property of such person held by Loewen or any of its
Restricted Subsidiaries, or for other liabilities or obligations
of such other person to Loewen or any of its Restricted
Subsidiaries that were created, in accordance with the terms of
the Indenture; (vii) Investments in Interest Rate Protection
Agreements on commercially reasonable terms entered into by
Loewen or any of its Restricted Subsidiaries in the ordinary
course of business in connection with the operations of Loewen
and its Restricted Subsidiaries to hedge against fluctuations in
interest rates; and (viii) Investments of funds received by
Loewen or its Restricted Subsidiaries (including, without
limitation, LGII) in the ordinary course of business, which funds
are required to be held in trust for the benefit of others by
Loewen or such Restricted Subsidiary, as the case may be, and
which funds do not constitute assets or liabilities of Loewen or
such Restricted Subsidiary; (ix) Investments not in excess of
$50,000,000 in the aggregate in other Unrestricted Subsidiaries
which are engaged in the insurance business; and (x) Investments
not in
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excess of $50,000,000 in persons (other than Wholly-Owned
Subsidiaries) engaged in businesses incidental to the funeral
home, cemetery and cremation businesses of Loewen and its
Restricted Subsidiaries.
"Related Obligor" means Loewen, LGII or a Restricted
Subsidiary of Loewen or LGII.
LIMITATION ON ISSUANCES AND SALE OF PREFERRED STOCK BY
RESTRICTED SUBSIDIARIES. Loewen (a) will not permit any of its
Restricted Subsidiaries (including, without limitation, LGII) to
issue any Preferred Stock (other than (i) Preferred Stock issued
to Loewen or a Wholly-Owned Subsidiary of Loewen and (ii)
Preferred Securities of a Special Finance Subsidiary, defined
herein); and (b) will not permit any person to own any Preferred
Stock of any Restricted Subsidiary of Loewen (other than (i)
Preferred Stock owned by Loewen or a Wholly-Owned Subsidiary of
Loewen and (ii) Preferred Securities of a Special Finance
Subsidiary); provided, however, that this covenant shall not
prohibit the issuance and sale of (x) all, but not less than all,
of the issued and outstanding Capital Stock of any Restricted
Subsidiary of Loewen owned by Loewen or any of its Restricted
Subsidiaries in compliance with the other provisions of the
Indenture or (y) directors' qualifying shares or investments by
foreign nationals mandated by applicable law.
"Special Finance Subsidiary" means a Restricted Subsidiary
whose sole assets are debt obligations of LGII or Loewen and
whose sole liabilities are Preferred Securities, the proceeds
from the sale of which are or have been advanced to LGII or
Loewen.
LIMITATION ON LIENS. Loewen will not, and will not permit
any of its Restricted Subsidiaries (including, without
limitation, LGII) to, create, incur, assume or suffer to exist
any Liens of any kind against or upon any of its property or
assets, or any proceeds therefrom where the aggregate amount of
Indebtedness secured by any such Liens, together with the
aggregate amount of property subject to any Sale-Leaseback
Transactions of Loewen and its Restricted Subsidiaries (other
than Permitted Sale-Leaseback Transactions, defined herein),
exceeds 10% of Loewen's Consolidated Net Worth, unless (x) in the
case of Liens securing Indebtedness that is subordinate or junior
in right of payment to the Debt Securities, the Debt Securities
are secured by a Lien on such property, assets or proceeds that
is senior in priority to such Liens and (y) in all other cases,
the Debt Securities are equally and ratably secured except for
(a) Liens existing as at the Measurement Date; (b) Liens securing
the Debt Securities or the Guarantees, if applicable; (c) Liens
in favor of Loewen, LGII or any Wholly-Owned Subsidiary;
(d) Liens securing Indebtedness which is incurred to refinance
Indebtedness which has been secured by a Lien permitted under the
provisions of this Indenture and which has been incurred in
accordance with the provisions of the Indenture; provided,
however, that such Liens do not extend to or cover any property
or assets of Loewen or any of its Restricted Subsidiaries not
securing the Indebtedness so refinanced; and (e) Permitted Liens.
"Permitted Liens" means the following types of Liens: (a)
Liens for taxes, assessments or governmental charges or claims
either (i) not delinquent or (ii) contested in good faith by
appropriate proceedings and as to which Loewen or any of its
Restricted Subsidiaries (including, without limitation, LGII)
shall have set aside on its books such reserves as may be
required pursuant to Canadian GAAP; (b) statutory Liens of
landlords and Liens of carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or
other appropriate provision, if any, as shall be required by
Canadian GAAP shall have been made in respect thereof; (c) Liens
incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and
other types of social security, or to secure the performance of
tenders, statutory obligations,
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surety and appeal bonds, bids,
leases, governmental contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for
the payment of borrowed money); (d) judgment Liens not giving
rise to an Event of Default so long as such Lien is adequately
bonded and any appropriate legal proceedings which may have been
duly initiated for the review of such judgment shall not have
been finally terminated or the period within which such
proceedings may be initiated shall not have expired; (e)
easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not
interfering in any material respect with the ordinary conduct of
the business of Loewen or any of its Restricted Subsidiaries
(including, without limitation, LGII); (f) any interest or title
of a lessor under any Capitalized Lease Obligation or operating
lease; (g) any Lien existing on any asset of any corporation at
the time such corporation becomes a Restricted Subsidiary and not
created in contemplation of such event; (h) any Lien on any asset
securing Indebtedness incurred or assumed for the purpose of
financing all or any part of the cost of acquiring or
constructing such asset; provided, that such Lien attaches to
such asset concurrently with or within 18 months after the
acquisition or completion thereof; (i) any Lien on any asset of
any corporation existing at the time such corporation is merged
or consolidated with or into Loewen or a Restricted Subsidiary
and not created in contemplation of such event; (j) any Lien
existing on any asset prior to the acquisition thereof by Loewen
or a Restricted Subsidiary and not created in contemplation of
such acquisition; (k) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods; and
(l) any extension, renewal or replacement of any Lien permitted
by the preceding clauses (g), (h), (i) or (j) hereof in respect
of the same property or assets theretofore subject to such Lien
in connection with the extension, renewal or refunding of the
Indebtedness secured thereby; provided that (i) such Lien shall
attach solely to the same property or assets and (ii) such
extension, renewal or refunding of such Indebtedness shall be
without increase in the principal remaining unpaid as at the date
of such extension, renewal or refunding.
"Permitted Sale-Leaseback Transactions" means any Sale-
Leaseback Transaction with respect to property acquired or
constructed after the Issue Date; provided that (a) the
Attributable Value of such Sale-Leaseback Transaction shall be
deemed to be Indebtedness of Loewen or such Restricted
Subsidiary, as the case may be, and (b) after giving pro forma
effect to any such Sale-Leaseback Transaction and the foregoing
clause (a), Loewen would be able to incur $1.00 of additional
Indebtedness pursuant to the covenant described under "--
Limitation on Indebtedness" (assuming a market rate of interest
with respect to such additional Indebtedness). For purposes of
the foregoing, "Attributable Value" means, as to any lease other
than a Capitalized Lease Obligation and at any date as of which
the amount thereof is to be determined, the total net amount of
rent required to be paid by such person under a lease during the
initial term thereof as determined in accordance with Canadian
GAAP, discounted from the last date of such initial term to the
date of determination at a rate per annum equal to the discount
rate which would be applicable to a Capitalized Lease Obligation
with a like term in accordance with Canadian GAAP. The net
amount of rent required to be paid under any such lease for any
such period shall be the aggregate amount of rent payable by the
lessee with respect to such period after excluding amounts
required to be paid on account of insurance, taxes, assessments,
utility, operating and labor costs and similar charges. In the
case of any lease which is terminable by the lessee upon the
payment of a penalty, such net amount shall also include the
amount of such penalty, but no rent shall be considered as
required to be paid under such lease subsequent to the first date
upon which it may be so terminated. "Attributable Value" means,
as to a Capitalized Lease Obligation under which any person is at
the time liable and at any date as of which the amount thereof is
to be determined, the capitalized amount thereof that would
appear on the face of a balance sheet of such person in
accordance with Canadian GAAP.
CHANGE OF CONTROL. Upon the occurrence of a Change of
Control (defined herein), Loewen or LGII (if applicable) will be
obligated to make an offer to purchase (a "Change of Control
Offer"), and
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shall purchase, on a Business Day (the "Change of
Control Purchase Date") not more than 60 nor less than 30 days
following the occurrence of the Change of Control, all of the
then outstanding Debt Securities of each series properly tendered
and not withdrawn at a purchase price (the "Change of Control
Purchase Price") equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, to the Change of
Control Purchase Date. The Change of Control Offer is required
to remain open for at least 20 Business Days and until the close
of business on the Change of Control Purchase Date.
If a Change of Control occurs and Loewen fails to pay the
Purchase Price for all Debt Securities properly tendered and not
withdrawn, LGII will be obligated to purchase all such Debt
Securities at the Change of Control Purchase Price on the Change
of Control Purchase Date in compliance with the requirements
applicable to a Change of Control Offer made by Loewen.
In order to effect such Change of Control Offer, Loewen or
LGII, as the case may be, shall not later than the 30th day after
the occurrence of a Change of Control, mail to each holder of
Debt Securities notice of the Change of Control Offer, which
notice shall govern the terms of the Change of Control Offer and
shall state, among other things, the procedures that holders of
Debt Securities must follow to accept the Change of Control
Offer.
If a Change of Control were to occur, there can be no
assurance that Loewen or LGII would have sufficient funds to pay
the purchase price for all Debt Securities that Loewen or LGII
might to required to purchase. In the event that Loewen or LGII
is required to purchase Debt Securities pursuant to a Change of
Control Offer, each of Loewen and LGII expect that they would
need to seek third-party financing to the extent they may not
have available funds to meet their purchase obligations.
However, there can be no assurance that Loewen or LGII will be
able to obtain such financing on favorable terms, if at all.
Neither Loewen nor LGII shall be required to make a Change
of Control Offer upon a Change of Control if a third party makes
the Change of Control Offer in a manner, at the times and
otherwise in compliance with the requirements applicable to a
Change of Control Offer made by Loewen and purchases all Debt
Securities validly tendered and not withdrawn under such Change
of Control Offer.
Loewen and LGII will comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act, and any
other securities laws or regulations in connection with the
repurchase of Debt Securities pursuant to a Change of Control
Offer.
"Change of Control" means the occurrence on or after the
Measurement Date of any of the following events: (a) any
"person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), excluding Permitted Holders, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-
5 under the Exchange Act, except that a person shall be deemed to
have "beneficial ownership" of all securities that such person
has the right to acquire, whether such right is exercisable
immediately or only after the passage of time, upon the happening
of an event or otherwise), directly or indirectly, of more than
35% of the total Voting Stock of Loewen or LGII, under
circumstances where the Permitted Holders (i) "beneficially own"
(as so defined) a lower percentage of the Voting Stock than such
other "person" or "group" and (ii) do not have the right or
ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of
Loewen or LGII; (b) Loewen or LGII consolidates with, or merges
with or into, another person or sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially
all of its assets to another person, or another person
consolidates with, or merges with or into, Loewen or LGII, in any
such event pursuant to a transaction in which the outstanding
Voting Stock
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of Loewen or LGII is converted into or exchanged for
cash, securities or other property, other than any such
transaction where (i) the outstanding Voting Stock of Loewen or
LGII is converted into or exchanged for (1) Voting Stock (other
than Redeemable Capital Stock) of the surviving or transferee
corporation or (2) cash, securities and other property in an
amount which could then be paid by Loewen or LGII as a Restricted
Payment under the provisions hereof, and (ii) immediately after
such transaction no "person" or "group" (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act), excluding
Permitted Holders, is the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a person
shall be deemed to have "beneficial ownership" of all securities
that such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time, upon
the happening of an event or otherwise), directly or indirectly,
of more than 50% of the total Voting Stock of the surviving or
transferee corporation; (c) at any time during any consecutive
two-year period, individuals who at the beginning of such period
constituted the Board of Directors of Loewen or LGII (together
with any new directors whose election by such Board of Directors
or whose nomination for election by the shareholders or
stockholders of Loewen or LGII was approved by a vote of 66-2/3%
of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason
(including the failure of such individuals to be elected in a
proxy contest involving a solicitation of proxies) to constitute
a majority of the Board of Directors of Loewen or LGII then in
office; or (d) Loewen or LGII is liquidated or dissolved or
adopts a plan of liquidation other than a liquidation of LGII
into Loewen. With respect to the sale of assets referred to
above, the meaning of the phrase "all or substantially all" shall
vary according to the facts and circumstances of the subject
transaction.
DISPOSITION OF PROCEEDS OF ASSET SALES. Loewen will not,
and will not permit any of its Restricted Subsidiaries
(including, without limitation, LGII) or First Capital Life
Insurance Company of Louisiana, National Capital Life Insurance
Company, Security Industrial Insurance Company, Security
Industrial Fire Insurance Company or any successors to such
Subsidiaries to, make any Asset Sale (defined herein) unless
(a) Loewen or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the shares or assets sold or
otherwise disposed of and (b) at least 75% of such consideration
consists of cash or Cash Equivalents. To the extent the Net Cash
Proceeds (defined herein) of any Asset Sale are not required to
be applied to repay, and permanently reduce the commitments
under, the Credit Agreements (as required by the terms thereof)
or any other Pari Passu Indebtedness, or are not so applied,
Loewen or such Restricted Subsidiary, as the case may be, may,
within 180 days of such Asset Sale, apply such Net Cash Proceeds
to an investment in properties and assets that replace the
properties and assets that were the subject of such Asset Sale or
in properties and assets that will be used in the business of
Loewen and its Restricted Subsidiaries existing on the Issue Date
or in businesses reasonably related thereto ("Replacement
Assets"). Any Net Cash Proceeds from any Asset Sale that are
neither used to repay, and permanently reduce the commitments
under, the Credit Agreements nor invested in Replacement Assets
within the 180-day period described above constitute "Excess
Proceeds" subject to disposition as provided below.
When the aggregate amount of Excess Proceeds equals or
exceeds $10,000,000, Loewen shall make an offer to purchase (an
"Asset Sale Offer"), from all holders of each series of Debt
Securities, not more than 40 Business Days thereafter, an
aggregate principal amount of Debt Securities equal to such
Excess Proceeds, at a price in cash equal to 100% of the
outstanding principal amount thereof plus accrued and unpaid
interest, if any, to the purchase date (the "Asset Sale Offer
Price"). To the extent that the aggregate principal amount of
Debt Securities tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds, Loewen may use such deficiency for
general corporate purposes. If the aggregate principal amount of
Debt Securities validly tendered and not withdrawn by holders
thereof exceeds the
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Excess Proceeds, Debt Securities to be
purchased will be selected on a pro rata basis. Upon completion
of an Asset Sale Offer, the amount of Excess Proceeds shall be
reset to zero.
Loewen and LGII will comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act, and any
other securities laws or regulations in connection with the
repurchase of Debt Securities pursuant to any Asset Sale Offer.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease or other disposition to any person
other than Loewen or a Restricted Subsidiary of Loewen
(including, without limitation, LGII), in one or a series of
related transactions, of (a) any Capital Stock of any Restricted
Subsidiary of Loewen (other than in respect of directors'
qualifying shares or investments by foreign nationals mandated by
applicable law) or of First Capital Life Insurance Company of
Louisiana, National Capitol Life Insurance Company, Security
Industrial Insurance Company, Security Industrial Fire Insurance
Company or any successors to such Subsidiaries; (b) all or
substantially all of the properties and assets of any division or
line of business of Loewen or any Restricted Subsidiary of
Loewen; or (c) any other properties or assets of Loewen or any
Restricted Subsidiary of Loewen other than properties and assets
sold in the ordinary course of business. For the purposes of
this definition, the term "Asset Sale" shall not include (i) any
sale, transfer or other disposition of equipment, tools or other
assets (including Capital Stock of any Restricted Subsidiary of
Loewen) by Loewen or any of its Restricted Subsidiaries in one or
a series of related transactions in respect of which Loewen or
such Restricted Subsidiary receives cash or property with an
aggregate Fair Market Value of $2,000,000 or less; and (ii) any
sale, issuance, conveyance, transfer, lease or other disposition
of properties or assets that is governed by the provisions of the
applicable Indenture.
"Net Cash Proceeds" means with respect to any Asset Sale,
the proceeds thereof in the form of cash or Cash Equivalents
including payments in respect of deferred payment obligations
when received in the form of cash or Cash Equivalents (except to
the extent that such obligations are financed or sold with
recourse to Loewen or any Restricted Subsidiary of Loewen
(including, without limitation, LGII) net of (i) brokerage
commissions and other fees and expenses (including, without
limitation, fees and expenses of legal counsel and investment
bankers) related to such Asset Sale, (ii) provisions for all
taxes payable as a result of such Asset Sale, (iii) amounts
required to be paid to any person (other than Loewen or any
Restricted Subsidiary of Loewen) owning a beneficial interest in
the assets subject to the Asset Sale and (iv) appropriate amounts
to be provided by Loewen or any Restricted Subsidiary of Loewen,
as the case may be, as a reserve required in accordance with
Canadian GAAP against any liabilities associated with such Asset
Sale and retained by Loewen or any Restricted Subsidiary of
Loewen, as the case may be, after such Asset Sale, including,
without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with
such Asset Sale, all as reflected in an officers' certificate
delivered to the Trustee.
LIMITATION ON TRANSACTIONS WITH INTERESTED PERSONS. Loewen
will not, and will not permit any of its Restricted Subsidiaries
(including, without limitation, LGII) to, directly or indirectly,
enter into or suffer to exist any transaction or series of
related transactions (including, without limitation, the sale,
transfer, disposition, purchase, exchange or lease of assets,
property or services) with, or for the benefit of, any Affiliate
of Loewen or any beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such
person has the right to acquire, whether such right is
exercisable immediately, after the passage of time or upon the
happening of an event) of 5% or more of the Common Shares at any
time outstanding ("Interested Persons"), unless (a) such
transaction or series of related transactions are on terms that
are no
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less favorable to Loewen or such Restricted Subsidiary, as
the case may be, than those which could have been obtained in a
comparable transaction at such time from persons who are not
Affiliates of Loewen or Interested Persons, (b) with respect to a
transaction or series of transactions involving aggregate
payments or value equal to or greater than $10,000,000, Loewen
has obtained a written opinion from an Independent Financial
Advisor stating that the terms of such transaction or series of
transactions are fair to Loewen or its Restricted Subsidiary, as
the case may be, from a financial point of view and (c) with
respect to a transaction or series of transactions involving
aggregate payments or value equal to or greater than $2,500,000,
Loewen shall have delivered an Officer's Certificate to the
Trustee certifying that such transaction or series of
transactions comply with the preceding clause (a) and, if
applicable, certifying that the opinion referred to in the
preceding clause (b) has been delivered and that such transaction
or series of transactions has been approved by a majority of the
Board of Directors of Loewen (including a majority of the
disinterested directors); provided, however, that this covenant
will not restrict Loewen from (i) paying dividends in respect of
its Capital Stock permitted under the covenant described under "--
Limitation on Restricted Payments," (ii) paying reasonable and
customary fees to directors of Loewen or any Restricted
Subsidiary who are not employees of Loewen or any Restricted
Subsidiary, (iii) entering into transactions with its Wholly-
Owned Subsidiaries or permitting its Wholly-Owned Subsidiaries
from entering into transactions with other Wholly- Owned
Subsidiaries of Loewen, (iv) making loans or advances to senior
officers and directors of Loewen or any Restricted Subsidiary not
in excess of $6,000,000 in the aggregate at any one time
outstanding, (v) guaranteeing loans made to officers and other
employees of Loewen or any Restricted Subsidiaries in connection
with Loewen's 1994 Management Equity Investment Plan not in
excess of $6,000,000 in the aggregate at any one time
outstanding, (vi) making loans or advances to officers, employees
or consultants of Loewen and its Restricted Subsidiaries for
travel and moving expenses in the ordinary course of business for
bona fide business purposes of Loewen and its Restricted
Subsidiaries, (vii) making other loans or advances to officers,
employees or consultants of Loewen and its Restricted
Subsidiaries in the ordinary course of business for bona fide
business purposes of Loewen and its Restricted Subsidiaries not
in excess of $10,000,000 in the aggregate at any one time
outstanding, (viii) making payments to officers or employees of
Loewen or its Restricted Subsidiaries pursuant to obligations
undertaken, at a time when such persons were not officers or
employees of Loewen or its Restricted Subsidiaries, in connection
with arms' length Asset Acquisitions or (ix) declaring or paying
dividends on, or purchasing or redeeming, the Preferred
Securities of a Special Finance Subsidiary.
LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES. Loewen will not, and will not permit any
of its Restricted Subsidiaries (including, without limitation,
LGII) to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or
restriction on the ability of any Restricted Subsidiary of Loewen
to (a) pay dividends, in cash or otherwise, or make any other
distributions on or in respect of its Capital Stock or any other
interest or participation in, or measured by, its profits, (b)
pay any Indebtedness owed to Loewen or any other Restricted
Subsidiary of Loewen, (c) make loans or advances to, or any
Investment in, Loewen or any other Restricted Subsidiary of
Loewen, (d) transfer any of its properties or assets to Loewen or
any other Restricted Subsidiary of Loewen or (e) guarantee any
Indebtedness of Loewen or any other Restricted Subsidiary of
Loewen, except for such encumbrances or restrictions existing
under or by reason of (i) applicable law, (ii) customary
non-assignment provisions of any contract or any lease governing
a leasehold interest of Loewen or any Restricted Subsidiary of
Loewen, (iii) customary restrictions on transfers of property
subject to a Lien permitted under the provisions of this
Indenture which could not materially adversely affect Loewen's
ability to satisfy its obligations under the provisions of the
applicable Indenture and the Debt Securities, (iv) any agreement
or other instrument of a person acquired by Loewen or any
Restricted Subsidiary of Loewen (or a Restricted Subsidiary of
such person) in existence at the time of such acquisition (but
not created in contemplation thereof), which encumbrance
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or
restriction is not applicable to any person, or the properties or
assets of any person, other than the person, or the properties or
assets of the person, so acquired, (v) provisions contained in
any agreement or instrument relating to Indebtedness which
prohibit the transfer of all or substantially all of the assets
of the obligor thereunder unless the transferee shall assume the
obligations of the obligor under such agreement or instrument and
(vi) encumbrances and restrictions under Indebtedness in effect
on the Issue Date (including under the Debt Securities) and
encumbrances and restrictions in permitted refinancings or
replacements thereof which are no less favorable to the holders
of the Debt Securities than those contained in the Indebtedness
so refinanced or replaced.
LIMITATIONS ON SALE-LEASEBACK TRANSACTIONS. Loewen will
not, and will not permit any of its Restricted Subsidiaries
(including, without limitation, LGII) to, enter into any
Sale-Leaseback Transaction, other than Permitted Sale-Leaseback
Transactions, with respect to any property of Loewen or any of
its Restricted Subsidiaries where the aggregate amount of
property subject to such Sale-Leaseback Transactions, together
with the aggregate amount of Liens securing Indebtedness of
Loewen and its Restricted Subsidiaries (other than Permitted
Liens), exceeds 10% of Loewen's Consolidated Net Worth.
LIMITATION ON APPLICABILITY OF CERTAIN COVENANTS. During
any period of time that (i) the ratings assigned to any series of
Debt Securities by each of S&P and Moody's (collectively, the
"Rating Agencies") are no less than BBB-and Baa3, respectively
(the "Investment Grade Ratings"), and (ii) no Default or Event of
Default has occurred and is continuing with respect to such
series of Debt Securities, Loewen and its Restricted Subsidiaries
(including, without limitation, LGII) will not be subject to the
covenants entitled "Limitation on Indebtedness," "Limitation on
Restricted Payments," "Disposition of Proceeds of Asset Sales,"
"Limitation on Issuances and Sale of Preferred Stock by
Restricted Subsidiaries," "Limitations on Transactions with
Interested Persons" and "Limitation on Dividends and Other
Payment Restrictions Affecting Restricted Subsidiaries"
(collectively, the "Suspended Covenants") with respect to such
series of Debt Securities. If one or both Rating Agencies
withdraws its rating or downgrades its Investment Grade Rating,
then thereafter Loewen and its Restricted Subsidiaries will be
subject, on a prospective basis, to the Suspended Covenants
(until the Rating Agencies have again assigned Investment Grade
Ratings to the Debt Securities) and compliance with the Suspended
Covenants with respect to Restricted Payments made after the time
of such withdrawal or downgrade will be calculated in accordance
with the covenant described under "Limitations on Indebtedness,"
as if such covenant had been in effect at all times after the
Measurement Date.
REPORTING REQUIREMENTS
Loewen shall file with the Commission, or if not permitted
or required to so file will deliver to the Trustee, the annual
reports, quarterly reports and the information, documents and
other reports required to be filed with the Commission pursuant
to Sections 13 and 15 of the Exchange Act, whether or not Loewen
has a class of securities registered under the Exchange Act.
Loewen shall file with the Trustee and provide to each holder of
Debt Securities, within 15 days after it files them with the
Commission (or if such filing is not permitted under the Exchange
Act, 15 Days after Loewen would have been required to make such
filing), copies of such reports.
EVENTS OF DEFAULT
The following will be "Events of Default" with respect to
each series of Debt Securities:
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(a) default in the payment of the principal of or premium,
if any, on the Debt Securities of such series as and when the
same shall become due and payable (upon maturity, acceleration,
optional redemption, required purchase, scheduled principal
payment, by declaration or otherwise); or
(b) default in the payment of any installment of interest
upon any of the Debt Securities of such series, as and when the
same shall become due and payable, and continuance of such
default for a period of 30 days; or
(c) failure on the part of Loewen or LGII (if applicable)
duly to observe or perform any other term, covenant or agreement
contained in the Debt Securities of such series or pursuant to
the provisions of this Indenture (other than Defaults specified
in clause (a) or (b) above) and such Default continues for a
period of 60 days after the date on which written notice of such
Default requiring Loewen to remedy the same shall have been given
(i) to the Issuer by the Trustee by registered mail, or (ii) to
Loewen and the Trustee by holders of at least 25% in aggregate
principal amount of the Debt Securities of such series then
outstanding; or
(d) default or defaults under one or more agreements,
instruments, mortgages, bonds, debentures or other evidences of
Indebtedness under which Loewen or any Restricted Subsidiary
(including, without limitation, LGII) then has outstanding
Indebtedness in excess of $20,000,000 (including Securities of
another series), individually or in the aggregate, and either
(i) such Indebtedness is already due and payable in full or
(ii) such default or defaults have resulted in the acceleration
of the maturity of such Indebtedness; or
(e) one or more judgments, orders or decrees of any court
or regulatory or administrative agency of competent jurisdiction
for the payment of money in excess of $20,000,000, either
individually or in the aggregate, shall be entered against Loewen
or any Restricted Subsidiary (including without limitation LGII)
or any of their respective properties and shall not be discharged
or bonded against or stayed and there shall have been a period of
60 days after the date on which any period for appeal has expired
and during which a stay of enforcement of such judgment, order or
decree, shall not be in effect; or
(f) either (i) the collateral agent under the Collateral
Agreement or (ii) any holder of at least $20,000,000 in aggregate
principal amount of Indebtedness of Loewen or any of its
Restricted Subsidiaries (including, without limitation, LGII)
shall commence judicial proceedings to foreclose upon assets of
Loewen or any of its Restricted Subsidiaries having an aggregate
Fair Market Value, individually or in the aggregate, in excess of
$20,000,000 or shall have exercised any right under applicable
law or applicable security documents to take ownership of any
such assets in lieu of foreclosure; or
(g) certain events of bankruptcy, insolvency or
reorganization with respect to Loewen or any Significant
Subsidiary of Loewen (including without limitation LGII) shall
have occurred; or
(h) the Guarantees with respect to such series of Debt
Securities, if any, cease to be in full force and effect or are
declared null and void, or LGII denies that it has any further
liability under the Guarantees with respect to such series, or
gives notice to such effect and such condition shall have
continued for a period of 60 days after written notice of such
failure (which notice shall specify the Default, demand that it
be remedied and state that it is a "Notice of Default") requiring
Loewen and LGII to remedy the same shall have been given (i) to
Loewen and LGII by the Trustee, or (ii) to Loewen, LGII
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and the
Trustee by holders of at least 25% in aggregate principal amount
of the Debt Securities of such series then outstanding.
NOTICE OF DEFAULT
Within 90 days after the occurrence of a Default or an Event
of Default with respect to Debt Securities of any series, the
Trustee shall mail to all holders of Debt Securities of such
series notice of the Default or Event of Default known to the
Trustee with respect to such series, unless such default shall
have been cured before the giving of such notice. Except in the
case of a Default in the payment of the principal of, premium, if
any, or interest on any Debt Securities, or in the payment or
satisfaction of any sinking fund or other purchase obligation,
the Trustee may withhold such notice if and so long as the board
of directors, the executive committee of the board of directors
or a committee of the directors of the Trustee and/or Trust
Officers in good faith determine that the withholding of such
notice is in the interest of the holders of the Debt Securities
of such series.
ACCELERATION
If an Event of Default (other than as specified in clause
(g) above) occurs and is continuing with respect to the Debt
Securities of any series then outstanding, (a) the Trustee, by
written notice to Loewen, or (b) the holders of at least 25% in
aggregate principal amount of the Debt Securities of such series
then outstanding, by written notice to the Trustee and Loewen,
may declare the principal amount (or, if the Debt Securities of
such series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of such
series) of all the Debt Securities of such series, premium, if
any, and accrued and unpaid interest, if any, on all of the Debt
Securities of such series to be due and payable immediately, upon
which declaration, all amounts payable in respect of the Debt
Securities of such series shall be immediately due and payable.
If an Event of Default specified in clause (g) above occurs and
is continuing, then the unpaid principal amount (or, if the Debt
Securities of any series then outstanding are Original Issue
Discount Securities, such portion of the principal amounts as may
be specified in the terms of each such series), premium, if any,
and accrued and unpaid interest on all Debt Securities of each
series then outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act
by the Trustee or any holder of Debt Securities of such series.
After a declaration of acceleration hereunder with respect
to Debt Securities of any series, but before a judgment or decree
for payment of the money due has been obtained by the Trustee,
the holders of a majority in aggregate principal amount of the
outstanding Debt Securities of such series, by written notice to
Loewen and the Trustee, may rescind and annul such declaration
and its consequences if (a) Loewen has paid or deposited with the
Trustee a sum sufficient to pay (i) all amounts due the Trustee
under the respective Indenture and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents
and counsel, (ii) all overdue interest on all Debt Securities of
such series, (iii) the principal of and premium, if any, on any
Debt Securities of such series which have become due otherwise
than by such declaration of acceleration and interest thereon at
the rate borne by the Debt Securities of such series, and (iv) to
the extent that payment of such interest is lawful, interest upon
overdue interest and overdue principal which has become due
otherwise than by such declaration of acceleration at the rate
borne by the Debt Securities of such series; (b) the rescission
would not conflict with any judgment or decree of a court of
competent jurisdiction; and (c) all Events of Default, other than
the non-payment of principal of, premium, if any, and interest on
the Debt Securities of such series that has become due solely by
such declaration of acceleration, have been cured or waived; but
no such rescission and annulment shall extend to or shall affect
any subsequent default, or shall impair any right
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<PAGE>
consequent
thereon. No such rescission shall affect any subsequent Default
or Event of Default or impair any right subsequent thereon.
WAIVER
The holders of a majority in aggregate principal amount of
the outstanding Debt Securities of a series by notice to the
Trustee may, on behalf of the holders of all the Debt Securities
of such series, waive any existing Default or Event of Default
and its consequences, except a Default or Event of Default
specified in clause (a) or (b) above, or in respect of any
provision of the Indenture which cannot be modified or amended
without the consent of the holder so affected. When a Default or
Event of Default is so waived, it shall be deemed cured and shall
cease to exist.
LIMITATION ON SUITS
No holder of any Debt Securities of any series shall have
any right to institute any suit, action or proceeding with
respect to an Indenture or the Debt Securities of such series, or
for the appointment of a receiver or trustee or similar official,
or for any other remedy hereunder or thereunder, unless: (1) the
holder gives written notice to the Trustee of a continuing Event
of Default; (2) the holders of at least 25% in aggregate
principal amount of the Debt Securities of such series then
outstanding shall have made written request to the Trustee to
institute such action, suit or proceeding in its own name as
Trustee hereunder; (3) such holder or holders offer and, if
requested, provide to the Trustee reasonable indemnity as it may
require against the costs, expenses and liabilities to be
incurred therein or thereby; (4) the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or
proceeding; and (5) during such 60-day period the holders of a
majority in aggregate principal amount of the Debt Securities of
such series then outstanding do not give the Trustee a direction
which is inconsistent with the request; it being understood and
intended, and being expressly covenanted by the holder of every
Debt Security of such series with every other taker and holder
and the Trustee, that no one or more holders of Debt Securities
of such series shall have any right in any manner whatever by
virtue of or by availing of any provision of an Indenture or of
the Debt Securities to affect, disturb or prejudice the rights of
any other holder of Debt Securities of such series, or to obtain
or seek to obtain priority over or preference as to any other
such holder, or to enforce any right under an Indenture or the
Debt Securities of any series, except in the manner herein
provided and for the equal, ratable and common benefit of all
holders of Debt Securities of such series.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity
to collect the payment of principal of, premium, if any, or
interest on the Debt Securities of any series or to enforce the
performance of any provision of the applicable Debt Securities or
Indenture.
CERTIFICATES OF COMPLIANCE
Loewen shall furnish to the Trustee annual and quarterly
statements as to the performance by Loewen of its obligations
under the Indenture and as to any default in such performance.
Loewen is also required to notify the Trustee within 10 days of
any event which is, or after notice or lapse of time or both
would become, an Event of Default.
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DEFEASANCE OR COVENANT DEFEASANCE
Each of Loewen and LGII, if applicable, may, at its option
and at any time, terminate its respective obligations with
respect to an outstanding series of Debt Securities
("defeasance"). Such defeasance means that Loewen and LGII shall
be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Debt Securities of such series,
except for (i) the rights of holders of outstanding Debt
Securities of such series to receive payment in respect of the
principal of, premium, if any, and interest on such Debt
Securities when such payments are due, (ii) Loewen's obligations
to issue temporary Debt Securities of such series, register the
transfer or exchange of any Debt Securities of such series,
replace mutilated, destroyed, lost or stolen Debt Securities of
such series and maintain an office or agency for payments in
respect of the Debt Securities of such series, (iii) the rights,
powers, trusts, duties and immunities of the Trustee, and (iv)
the defeasance provisions of the Indenture. In addition, each of
Loewen and LGII may, at its option and at any time, elect to
terminate its obligations with respect to certain covenants that
are set forth in the Indenture, some of which are described
above, and any subsequent failure to comply with such obligations
shall not constitute a Default or Event of Default with respect
to the Debt Securities of such series ("covenant defeasance").
In order to exercise either defeasance or covenant
defeasance, (i) Loewen must irrevocably deposit with the Trustee,
in trust, for the benefit of the holders of the Debt Securities
of such series, cash in United States dollars, U.S. Government
Obligations, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium,
if any, and interest on the outstanding Debt Securities of such
series to maturity (except lost, stolen or destroyed Debt
Securities of such series which have been replaced or paid); (ii)
Loewen or LGII shall have delivered to the Trustee an opinion of
counsel to the effect that the holders of the outstanding Debt
Securities of such series will not recognize income, gain or loss
for federal income tax purposes as a result of such defeasance or
covenant defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as
would have been the case if such defeasance or covenant
defeasance had not occurred (in the case of defeasance, such
opinion must refer to and be based upon a ruling of the Internal
Revenue Service or a change in applicable federal income tax
laws); (iii) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit; (iv) such
defeasance or covenant defeasance shall not cause the Trustee to
have a conflicting interest with respect to any securities of
Loewen; (v) such defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a default
under, any material agreement or instrument to which Loewen or
LGII is a party or by which it is bound; (vi) Loewen or LGII
shall have delivered to the Trustee an opinion of counsel to the
effect that after the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar law affecting
creditors' rights generally; and (vii) Loewen or LGII shall have
delivered to the Trustee an officers' certificate and an opinion
of counsel, each stating that all conditions precedent under the
Indenture to either defeasance or covenant defeasance, as the
case may be, have been complied with.
SATISFACTION AND DISCHARGE
The Indenture with respect to a series of Debt Securities
will be discharged and will cease to be of further effect (except
as to surviving rights or registration of transfer or exchange of
the Debt Securities, as expressly provided for in the Indenture)
as to all outstanding Debt Securities of such series when (i)
either (a) all of the Debt Securities of such series theretofore
authenticated and delivered (except lost, stolen or destroyed
Debt Securities of such series which have been replaced or repaid
and Debt Securities of such series for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by Loewen and thereafter repaid to Loewen or discharged
from such trust) have been
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delivered to the Trustee for
cancellation or (b) all Debt Securities of such series have been
called for redemption or otherwise become due and payable and
Loewen or LGII has irrevocably deposited or caused to be
deposited with the Trustee funds in an amount sufficient to pay
and discharge the entire Indebtedness on the Debt Securities of
such series not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and interest on
the Debt Securities of such series to the date of deposit
together with irrevocable instructions from Loewen or LGII
directing the Trustee to apply such funds to the payment thereof
at maturity; (ii) Loewen and LGII have paid all other sums
payable by Loewen under the Indenture; (iii) there exists no
Default or Event of Default under the Indenture; and (iv) Loewen
or LGII has delivered to the Trustee an officers' certificate and
an opinion of counsel stating that all conditions precedent under
the Indenture relating to the satisfaction and discharge of the
Indenture have been complied with.
AMENDMENTS AND WAIVERS
Loewen and the Trustee may from time to time and at any time
amend or supplement an Indenture (a) to cure any ambiguity,
defect or inconsistency or to correct or supplement any provision
contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained
herein or in any supplemental indenture, or to make any other
provisions as to Loewen may deem necessary or desirable, provided
that no such action shall adversely affect the interests of the
holders of any series of Debt Securities; (b) to evidence the
succession of another corporation to Loewen, or successive
successions, and the assumption by the successor corporation of
the covenants, agreements and obligations of Loewen; (c) to
establish the form or terms of Debt Securities of any series and
to provide for adjustment of conversion rights; (d) to comply
with any requirements of the Commission in order to effect or
maintain the qualification of any Indenture under the Trust
Indenture Act of 1939, as amended (the "TIA"); (e) to evidence
and provide for the acceptance of appointment by a successor
trustee with respect to the Debt Securities of one or more series
and to add to or change any of the provisions of an Indenture as
shall be necessary to provide for or facilitate the
administration of trusts by more than one trustee; and (f) to add
to the covenants of Loewen such further covenants, restrictions,
conditions or provisions as Loewen and the Trustee shall consider
to be for the protection of the holders of all or any series of
Debt Securities (and if such covenants, restrictions, conditions
or provisions are to be for the protection of less than all
series of Debt Securities, stating that the same are expressly
being included solely for the protection of such series), and to
make the occurrence, or the occurrence and continuance, of a
default in any such additional covenants, restrictions,
conditions or provisions an Event of Default; provided, that in
respect of any such additional covenant, restriction, condition
or provision a supplemental indenture may provide for a
particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other
defaults) or may provide for an immediate enforcement upon such
an Event of Default or may limit the remedies available to the
Trustee upon such an Event of Default or may limit the right of
the holders of a majority in aggregate principal amount of the
Debt Securities of such series to waive such Event of Default.
Any supplemental indenture authorized by an Indenture may be
executed without the consent of the holders of any of the Debt
Securities then outstanding. Notwithstanding the foregoing, the
Trustee and Loewen may not make any change to an Indenture that
adversely affects the rights of any holders of outstanding Debt
Securities. Loewen shall be required to deliver to the Trustee
an Opinion of Counsel stating that any such change does not
adversely affect the rights of any holder.
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GLOBAL DEBT SECURITIES
Debt Securities of a series may be issued in whole or in
part in the form of one or more fully registered global
securities (a "Registered Global Security") that may be deposited
with a depositary ("Depositary") or with a nominee for the
Depositary identified in the applicable Prospectus Supplement.
In such case, one or more Registered Global Securities will be
issued in a denomination or aggregate denominations equal to the
portion of the aggregate principal amount of Debt Securities of
the series to be represented by such Registered Global Security
or Securities. Unless and until it is exchanged in whole or in
part for Debt Securities in definitive certificated form, a
Registered Global Security may not be registered for transfer or
exchange except as a whole by the Depositary for such Registered
Global Security to a nominee of such Depositary or by a nominee
of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary to any such nominee to a
successor Depositary for such series or a nominee of such
successor Depositary and except in the circumstances described in
the applicable Prospectus Supplement.
The specific terms of the depositary arrangement with
respect to a portion of a series of Debt Securities to be
represented by a Registered Global Security will be described in
the applicable Prospectus Supplement. Loewen expects that the
following provisions will apply to any such depositary
arrangements.
Upon the issuance of any Global Registered Securities, the
Depositary will credit, on its internal book-entry system, the
principal amount of Debt Securities of the individual beneficial
interest represented by such Global Registered Securities to the
respective accounts of institutions ("participants") that have
accounts with the Depositary or its nominee. The accounts to be
credited will be designated by the underwriters or agents
engaging in the distribution of such Debt Securities or by Loewen
if such Debt Securities are offered and sold directly by Loewen.
Ownership of beneficial interests by participants in such
Registered Global Security will be shown on, and the transfer of
that ownership interest will be effected only through, records
maintained by the Depositary for such Registered Global Security
or by its nominee. Ownership of beneficial interests in such
Registered Global Security by persons that hold such interests
through a participant will be shown on, and the transfer of such
ownership interests will be effected only through, records
maintained by such participant. The laws of some jurisdictions
require that certain purchasers of securities take physical
delivery of such securities in certificated form. The foregoing
limitations and such laws may impair the ability to transfer
beneficial interest in such Registered Global Securities.
So long as the Depositary for a Registered Global Security,
or its nominee, is the registered owner of such Registered Global
Security, such Depositary or such nominee, as the case may be,
will be considered the sole owner or holder of the Debt
Securities represented thereby for all purposes under the
Indentures. Unless otherwise specified in the applicable
Prospectus Supplement and except as specified below, owners of
beneficial interests in such Registered Global Security will not
be entitled to have Debt Securities of the series represented by
such Registered Global Security registered in their names, will
not receive or be entitled to receive physical delivery of Debt
Securities of such series in certificated form and will not be
considered the holders thereof for any purposes under the
Indentures. Accordingly, each person owning a beneficial
interest in such Registered Global Security will be required to
rely on the procedures of the Depositary and, if such person is
not a participant, on the procedures of the participant through
which such person owns its interest., to exercise the rights of a
holder under the Indentures. The Depositary may grant proxies
and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or
other action which a holder is entitled to give or take under the
applicable Indenture. Loewen understands that, under existing
industry practices, if Loewen
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requests any action of holders or
an owner of a beneficial interest in a Registered Global Security
desires to give any notice or take any action a holder is
entitled to give or take under the applicable Indenture, the
Depositary would authorize the participants to give such notice
or take such action, and participants would authorize beneficial
owners owning through such participants to give such notice or
take such action or would otherwise act upon the instructions of
beneficial owners owning through them.
Unless otherwise specified in the applicable Prospectus
Supplement, payments with respect to principal of, premium, if
any and interest, if any, on Debt Securities represented by a
Registered Global Security registered in the name of a Depositary
or its nominee will be made to such Depositary or its nominee, as
the case may be, as the registered owners of such Registered
Global Security.
Loewen expects that the Depositary for any Debt Securities
represented by a Registered Global Security, upon receipt of any
payment of principal, premium or interest will immediately credit
participants' accounts with payment in amounts proportionate to
their respective beneficial interest in the principal amount of
such Registered Global Security as shown on the records of such
Depositary. Loewen also expects that payments by participants to
owners of beneficial interests in such Registered Global Security
held through such participants will be governed by standing
instructions and customary practices, as is now the case with the
securities held for the accounts of customers registered in
"street names" and will be the responsibility of such
participants. None of Loewen, the Trustee or any agent of Loewen
shall have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial
ownership interests in a Registered Global Security, or for
maintaining, supervising, or reviewing any records relating to
such beneficial ownership interests.
Unless otherwise specified in the applicable Prospectus
Supplement, if the Depositary for any Debt Securities represented
by a Registered Global Security is at any time unwilling or
unable to continue as Depositary and a successor Depositary is
not appointed by Loewen within 90 days, Loewen will issue such
Debt Securities in definitive certificated form in exchange for
such Registered Global Security. In addition, Loewen may at any
time and in its sole discretion determine not to have any o the
Debt Securities of a series represented by one or more Registered
Global Securities and, in such event, will issue Debt Securities
of such series in definitive certificated form in exchange for
all of the Registered Global Securities representing such Debt
Securities. Further, if Loewen so specifies with respect to Debt
Securities of any series an owner of a beneficial interest in a
Registered Global Security representing Debt Securities of such
series may, on terms acceptable to Loewen and the Depositary,
receive Debt Securities of such series in definitive form
registered in the name of such beneficial owner or its designee.
THE TRUSTEE
Unless otherwise specified in the applicable Prospectus
Supplement, Fleet National Bank, or its successor, shall be the
Trustee under each Indenture. The Indentures provide that,
except during the continuance of an Event of Default, the Trustee
will perform only such duties as are specifically set forth in
the Indenture. If any Event of Default has occurred and is
continuing the Trustee will exercise such rights and powers
vested in it under the applicable Indenture and use the same
degree of care and skill in its exercise as a prudent person
would exercise under the circumstances in the conduct of such
person's own affairs.
The Indentures, including provisions of the TIA incorporated
by reference therein, will contain limitations on the rights of
the Trustee should it become a creditor of Loewen, to obtain
payment of
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claims in certain cases or to realize on certain
property received by it in respect of any such claims, as
security or otherwise.
In addition to serving as Trustee under the Indentures,
Fleet National Bank also serves as trustee under (a) the
Indenture dated as of March 20, 1996, as amended (the "March 1996
Indenture"), among LGII, Loewen, as Guarantor, and Fleet National
Bank, as trustee, and (b) the Indenture dated as of October 1,
1996, as amended (the "October 1996 Indenture") among LGII,
Loewen, as Guarantor, and Fleet National Bank, as trustee. In
March 1996, LGII issued $225,000,000 7 1/2% Series 1 Senior
Guaranteed Notes due 2001 and $125,000,000 8 1/4% Series 2 Senior
Guaranteed Notes due 2003 under the March 1996 Indenture, and in
October 1996, LGII issued $125,000,000 7 3/4% Series 3 Senior
Guaranteed Notes due 2001 and $225,000,000 8 1/4% Series 4 Senior
Guaranteed Notes due 2003 under the October 1996 Indenture.
Pursuant to the TIA, in certain circumstances, if an event of
default were to occur under the March 1996 Indenture, the October
1996 Indenture and/or any Indenture relating to Debt Securities,
Fleet National Bank could be required to resign as trustee under
one or more of such indentures. If Fleet National Bank were to
resign as trustee, Loewen or LGII would be required to take
prompt steps to have a successor trustee or trustees appointed in
the manner provided in the indenture or indentures from which
Fleet National Bank has resigned.
DESCRIPTION OF SHARE CAPITAL
The authorized capital of Loewen consists of 990,000,000
shares without par value divided into 750,000,000 Common Shares,
40,000,000 Class A shares without par value ("Class A Shares"),
and 200,000,000 First Preferred Shares without par value ("First
Preferred Shares").
The following description of the capital stock of Loewen
does not purport to be complete and is qualified in its entirety
by reference to Loewen's Altered Memorandum and Articles, as
amended, and the Shareholder Protection Rights Plan Agreement, as
amended, each of which is filed as an Exhibit to the Registration
Statement of which this Prospectus forms a part.
GENERAL
If Common Shares or Preferred Shares are offered hereby,
reference is made to the Prospectus Supplement which accompanies
this Prospectus for a description of such Securities, including
(a) with respect to Common Shares, the number of shares or the
aggregate market value of the shares being offered, the initial
offering price, and market price and dividend information, and
(b) with respect to Preferred Shares, as applicable, the specific
designation, number of shares offered, the initial offering
price, liquidation preference, stated value per share, dividend
rate (which may be fixed or variable), place or places where
dividends on such Preferred Shares will be payable, terms of
conversion, sinking fund provisions, redemption provisions,
voting rights, preemption rights, restrictions on
transferability, listing or application for listing on a
securities exchange or interdealer quotation system, restrictions
on the repurchase or redemption of such Preferred Shares by
Loewen if there is any arrearage in the payment of dividends or
sinking fund installments, and any other rights, preferences,
privileges, limitations or restrictions relating to such
Preferred Shares.
COMMON SHARES
Each Common Share carries one vote on a poll (ballot) at all
meetings of shareholders, participates equally in any dividend
declared by the Board of Directors on such shares (subject to the
dividend priority of any First Preferred Shares) and carries the
right to receive (after the return of capital
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and accrued but
unpaid dividends on the outstanding First Preferred Shares, if
any) a proportionate share of the assets of Loewen available for
distribution in the event of the liquidation, dissolution or
winding up of Loewen, whether voluntary or involuntary, or in the
event of any other distribution of assets of Loewen among its
shareholders for the purpose of winding up its affairs (a
"Liquidation"). The Common Shares and the Class A Shares rank
equally as to dividends and distribution on winding up. See
"--Class A Shares."
CLASS A SHARES
The Class A Shares, which rank pari passu with the Common
Shares, were created in connection with the issuance of warrants
to the purchasers of certain subordinated debentures issued by
Loewen. All of the warrants to acquire Class A Shares were
exercised by the debenture holders when Loewen made its initial
public offering, and all of the issued Class A Shares have been
converted into Common Shares.
FIRST PREFERRED SHARES
First Preferred Shares may be issued from time to time in
one or more series and in such numbers and with such special
rights and restrictions attached to each series as the Board of
Directors of Loewen determines. The First Preferred Shares, as a
class, are entitled to preference over the Common Shares and
shares of any other class ranking junior to the Preferred Shares
with respect to the payment of dividends or the distribution of
assets in the event of a Liquidation. In the event of non-
payment of the full amount of dividends payable or any other
amount payable on winding up or other return of capital, the
First Preferred Shares of each series will participate ratably
with the First Preferred Shares of every other series in
accordance with the respective amounts payable.
SERIES A PREFERRED SHARES
In March 1988, the Board of Directors of Loewen designated
1,000,000 First Preferred Shares as 7.75% Cumulative Redeemable
Convertible First Preferred Shares, Series A ("Series A Preferred
Shares"), all of which shares were issued on March 30, 1988. All
of the Series A Preferred Shares were converted to Common Shares
on or prior to May 29, 1990.
SERIES B PREFERRED SHARES
In June 1994, in connection with the MEIP, the Board of
Directors of Loewen designated 425,000 First Preferred Shares as
Series B Preferred Shares. As of the date hereof, no Series B
Preferred Shares have been issued. Each Series B Preferred Share
will be convertible into 10 Common Shares at any time before July
15, 2011. As and when cash dividends are declared on the Common
Shares, the holders of Series B Preferred Shares are entitled to
equivalent cash dividends in proportion to the conversion basis.
The Series B Preferred Shares are non-voting.
Participants in the MEIP were issued investment options
("Investment Options") to acquire debentures of LGII ("MEIP
Debentures"). In connection therewith, Loewen entered into an
exchange acknowledgment dated as of June 14, 1994, pursuant to
which Loewen will issue Series B Preferred Shares to participants
in the MEIP in exchange for their MEIP Debentures. Participants
in the MEIP have undertaken that, immediately upon exercising
their Investment Options, they will exchange the MEIP Debentures
acquired thereby for Series B Preferred Shares. Canadian
participants have further undertaken that, immediately upon such
exchange, they will convert their Series B Preferred Shares into
Common Shares. Pursuant to the MEIP, Raymond L. Loewen has
entered into a binding commitment to
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purchase MEIP Debentures.
At his option, Mr. Loewen may hold the Series B Preferred Shares
that he acquires on exchange of such MEIP Debentures. It is
unlikely that any participants in the MEIP will be entitled to
purchase MEIP Debentures, and exchange them for Series B
Preferred Shares, before June 15, 1999.
SERIES C PREFERRED SHARES
In December 1995, the Loewen Board of Directors designated
880,000 First Preferred Shares as Series C Preferred Shares. In
May 1996, each Series C Preferred Share was subdivided into ten
Series C Preferred Shares; accordingly, currently 8,800,000 First
Preferred Shares are designated as Series C Preferred Shares.
In January 1996, Loewen completed a public offering in
Canada and a simultaneous private placement in the United States
of an aggregate of 8,800,000 Convertible First Preferred Shares
Series C Receipts ("Series C Receipts"), each representing
entitlement to 1/10 of a Series C Preferred Share. Following the
subdivision of the Series C Preferred Shares in May 1996, the
Series C Receipts were replaced with Series C Preferred Shares.
For purposes of certain determinations in connection with
redemption or conversion of Series C Preferred Shares described
below, "Current Market Price" at a particular date means the
weighted average price at which the Common Shares have traded
during the 20 consecutive trading days ending on the third day
before such date on The Toronto Stock Exchange or, if the Common
Shares are not then listed on The Toronto Stock Exchange, on such
stock exchange or interdealer quotation system on which the
Common Shares are listed, as may be selected for such purpose by
the Board of Directors of Loewen.
Holders of Series C Preferred Shares are entitled to
cumulative dividends at an annual rate of 6.00%, payable
quarterly in arrears on the first business day in January, April,
July and October in each year.
Holders of Series C Preferred Shares have the right at any
time before January 1, 2003, to convert each Series C Preferred
Share into the number of Common Shares as is determined by
dividing Cdn.$25.00 by Cdn.$38.125, as it may be adjusted from
time to time. Thereafter, holders of Series C Preferred Shares
will have the right on January 1, 2003 and on the first business
day of each quarter thereafter, to convert each Series C
Preferred Share into the number of Common shares as is determined
by dividing Cdn.$25.00 plus accrued and unpaid dividends thereon
by the greater of Cdn.$3.00 and 95% of the Current Market Price
on the date of conversion.
Series C Preferred Shares are not redeemable prior to July
1, 1999. Beginning on July 1, 1999, the Series C Preferred
Shares will be redeemable by Loewen, upon giving not less than 30
days' notice, at a redemption price equal to Cdn.$25.00 per share
plus accrued and unpaid dividends thereon (the "Redemption
Price"). Prior to July 1, 2001, a redemption may only be
effected by the issuance of Common Shares, determined by dividing
the Redemption Price by the greater of Cdn.$3.00 and 95% of the
Current Market Price at the date of redemption. On and after
July 1, 2001, the Redemption Price may be paid in cash or Common
Shares. Loewen may not redeem the Series C Preferred Shares
unless the arrearage, if any, of dividends, is paid in full.
In the event of a Liquidation, holders of the Series C
Preferred Shares will be entitled to receive an amount equal to
the Redemption Price before any amounts are paid to the holders
of Common Shares or any other class of shares ranking junior to
the Series C Preferred Shares.
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Holders of Series C Preferred Shares generally are not
entitled to attend or vote at any meeting of the holders of
Common Shares, except as otherwise required by law. In the event
that Loewen shall have failed to pay six quarterly dividends (or
the initial dividend payable on July 1, 1996 and any four other
quarterly dividends) and so long as such dividends remain in
arrears, holders of Series C Preferred Shares shall be entitled
to receive notice of, and to attend all meetings of the holders
of Common Shares and, at such meetings, shall be entitled to one
vote per Series C Preferred Share then held.
SHAREHOLDER PROTECTION RIGHTS PLAN
On April 20, 1990, the Board of Directors of Loewen approved
a Shareholder Protection Rights Plan Agreement (the "Rights
Plan"), which was confirmed by Loewen's shareholders in
accordance with the provisions of the Rights Plan at the annual
general meeting of Shareholders on May 24, 1990 and re-confirmed
for an additional five year period at the annual general meeting
of Shareholders on May 17, l995. The Rights Plan is currently
set to expire on April 20, 2000. This summary of the Rights Plan
does not purport to be complete and is qualified in its entirety
by reference to the text of the Rights Plan, which is
incorporated herein by reference. Certain capitalized terms used
below without definition are used as defined in the Rights Plan.
The Rights Plan is intended to discourage unfair takeover
bid tactics and to give the Board of Directors time, if there is
an unsolicited bid, to pursue alternatives to maximize
shareholder value. To preserve the shareholders' right to
consider take-over bids on a fully-informed basis, the Rights
Plan provides that a bidder's position may be substantially
diluted if it does not either make a "Permitted Bid" directly to
all shareholders or negotiate with the Board for a waiver of the
Rights Plan's provisions.
Unless and until the Rights "separate", each Common Share
carries one Right, which is evidenced by the share certificate
and is transferable only along with the Common Share.
The Rights would separate upon:
(1) the tenth day after the date of first public
announcement of a Take-over Bid or the intention of any one
(other than the Company or a subsidiary of the Company) to make a
Take-over Bid, other than a Permitted Bid;
(2) the tenth day after the date of first public
announcement of facts indicating that any person has become the
Beneficial Owner of 20% or more of the outstanding Common Shares
(unless otherwise exempt under the Rights Plan);
(3) a Flip-over Transaction or Event, which is generally
either
a. a business combination whereby the Common Shares
would be changed; or
b. a sale of more than 50% of the consolidated assets
of the Company; or
(4) such earlier or later date as may be determined by the
Board of Directors, acting in good faith; provided that, if the
foregoing results in the Separation Time being prior to the
Record Time, the Separation Time shall be the Record Time.
In the case of a Take-over Bid (so long as a Flip-in Event
has not occurred), each Right would entitle the holder (other
than the bidder) to acquire one Common Share for the Exercise
Price; in the other cases described above, each Right would
entitle the holder (other than the bidder) to acquire for the
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Exercise Price, Common Shares (in the case of a Flip-in Event) or
common shares of the combined entity or purchaser (in the case of
a Flip-over Transaction or Event) having an aggregate Market
Price of two times the Exercise Price. The Exercise Price is
currently Cdn. S125 and is subject to anti-dilution provisions.
Under the Rights Plan, a Flip-in Event will occur ten days
after the acquisition of Beneficial Ownership of more than 20% of
the Common Shares except:
a. by way of a Permitted Bid (as defined herein);
b. by an acquirer who obtains a waiver from the Board;
c. as a result of the death of a Beneficial Owner of
Common Shares;
d. by a person who held more than 20% of the Common Shares
on April 20, 1990, who is "grandfathered" subject to a number of
restrictions (a "Grandfathered Person"); or
e. by registered pension plans whose governing legislation
does not permit them to hold more than 30% of Common Shares and
who acquire shares independently for investment.
A "Permitted Bid" is a take-over bid that complies with all
applicable securities laws and is:
(1) for all Common Shares and to all holders, wherever
resident;
(2) made by a bidder who (with related parties) does not
own more than 5% of the Common Shares (unless the bidder owned at
least that percentage on April 20, 1990); and
(3) conditioned upon approval by a majority of the votes
cast by "Independent Shareholders" (those other than certain
shareholders who have acquired more than 20% of the Common Shares
or who have made a Takeover-Bid, their Associates, Affiliate or
persons acting jointly or in concert with them), and expire no
earlier than five business days after the shareholders' meeting
called to consider it.
To Loewen's knowledge, the only "Grandfathered Persons" are
Raymond L. Loewen and Anne Loewen. The holdings of a
Grandfathered Person can be increased by up to 2% of the Common
Shares without causing a Flip-in Event to occur. A person who
acquires Common Shares as a result of the death of a
Grandfathered Person or who buys all of the Common Shares
beneficially owned by a Grandfathered Person would also be a
Grandfathered Person, but to make a Permitted Bid such a buyer
would have to offer the other holders of Common Shares
consideration at least equal to that paid to the selling
Grandfathered Person.
DESCRIPTION OF WARRANTS
Loewen may issue Warrants to purchase Common Shares,
Preferred Shares or Debt Securities, or any combination thereof.
Warrants may be issued independently or together with other
Securities and may be attached to or separate from such
Securities. Each series of Warrants will be issued under a
separate warrant agreement (a "Warrant Agreement") to be entered
into between Loewen and a warrant agent ("Warrant Agent"). Forms
of Warrant Agreements are filed as exhibits to the Registration
Statement of which this Prospectus forms a part. The Warrant
Agent will act solely as an agent of Loewen in connection with
the Warrants for each such series and will not assume any
obligation or relationship of agency for or with holders or
beneficial owners or Warrants.
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GENERAL
The following sets forth certain general terms and
provisions of the Warrants. Further terms of the Warrants and
the respective Warrant Agreement will be set forth in the
applicable Prospectus Supplement, including as applicable: (i)
the title, series or designation of the Warrants, (ii) the type
and amount of Securities that may be acquired on exercise of the
Warrants, (iii) the offering price of the Warrants, including the
currency or currencies, including composite currencies, in which
the Warrants may be purchased, (iv) whether the Warrants are
offered attached to or separate from other Securities, (v) the
period during which the Warrants are exercisable, (iv) the
exercise price of the Warrants, including the currency or
currencies in which the exercise price is payable, and any
provisions for changes to or adjustments in the exercise price,
(v) any limitations on exercise of the Warrants, (vi) the amount
of other Warrants outstanding, (vi) whether the Warrants will be
issued in registered or bearer form, (vii) information with
respect to book entry procedures, and (viii) any other material
terms of the Warrants.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase such number
of Common Shares or Preferred Shares at such exercise price, for
such consideration and during such period or periods, or under
such circumstances, as shall in each case be set forth in, or
calculable from, the applicable Prospectus Supplement.
Warrants shall be exercisable by delivery to the Warrant
Agent of payment of the exercise price along with properly
completed and endorsed certificates representing the Warrants
being exercised ("Warrant Certificates"), as provided in the
applicable Prospectus Supplement. Unless otherwise provided in
the Warrant Agreement, as soon as practicable following receipt
of the exercise price and the requisite Warrant Certificates,
Loewen shall issue and deliver the Securities purchased pursuant
to exercise of the Warrants as soon as practicable. If fewer
than all of the Warrants represented by a Warrant Certificate are
exercised, a new Warrant Certificate shall be issued for the
amount of unexercised Warrants.
MODIFICATION OF WARRANT AGREEMENTS
The Warrant Agreement will contain a provision permitting
Loewen and the Warrant Agent, without the consent of any Warrant
holder, to supplement or amend the Warrant Agreement in order to
cure any ambiguity and to correct or supplement any provision
contained therein which may be defective or inconsistent with
other provisions, or to make other provisions in regard to
matters or questions arising thereunder which Loewen and the
Warrant Agent deem necessary or desirable and which do not
adversely affect the interests of the Warrant holders.
PLAN OF DISTRIBUTION
Loewen may offer and sell any of the Securities from time to
time through agents, to or through underwriters, through dealers
or directly to purchasers. The Prospectus Supplement with
respect to the Securities to be offered will set forth the terms
of the offering of the Securities, including (i) the name or
names of any underwriters, dealers or agents, (ii) the offering
price of the Securities, (iii) the proceeds to the Company from
such sale, (iv) any underwriting discounts and commissions or
other amounts constituting underwriters' or agents' compensation,
and (v) any securities exchange or automated
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quotation system on
which the Securities may be listed. Any initial public offering
price, discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
The distribution of the Securities may be effected from time
to time in one or more transactions at a fixed price or prices,
which may be changed, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at
negotiated prices.
Offers to purchase Securities may be solicited by agents
designated by Loewen from time to time. Any such agent involved
in the offer or sale of the Securities will be named, and any
commissions payable by Loewen to such agent will be set forth, in
the applicable Prospectus Supplement. Any such agent may be
deemed to be an underwriter (as that term is defined in the
Securities Act) of the Securities so offered and sold.
If Securities are sold by means of an underwritten offering,
Loewen will execute an underwriting agreement with one or more
underwriters at the time an agreement for such sale is reached.
The names of the specific managing underwriter or underwriters,
as well as any other underwriters, and the terms of the
transaction, including commissions, discounts and any other
compensation of the underwriters and dealers, if any, will be set
forth in the Prospectus Supplement which will be used by the
underwriters to make resales of the Securities. If underwriters
are utilized in the sale of Securities, the Securities will be
acquired by the underwriters for their own account and may be
resold from time to time in one or more transactions, including
negotiated transactions, at fixed public offering prices or at
varying prices determined by the underwriter at the time of sale.
Securities may be offered to the public either through
underwriting syndicates represented by managing underwriters or
directly by the managing underwriters. If any underwriter or
underwriters are utilized in the sale of the Securities, unless
otherwise indicated in the Prospectus Supplement, the
underwriting agreement will provide that the obligations of the
underwriters are subject to certain conditions precedent and that
the underwriters with respect to a sale of Securities will be
obligated to purchase all of such series of Securities if any are
purchased.
If a dealer is utilized in the sale of Securities, Loewen
will sell such Securities to the dealer as principal. The dealer
may then resell such Securities to the public at varying prices
to be determined by such dealer at the time of resale. Any such
dealer may be deemed to be an underwriter (as that term is
defined in the Securities Act) of the Securities so offered and
sold. The name of the dealer and the terms of the transaction
will be set forth in the Prospectus Supplement relating thereto.
Offers to purchase Securities may be solicited by Loewen
directly to institutional investors and others who may be deemed
to be underwriters (as that term is defined in the Securities
Act) with respect to any resale thereof. The terms of any such
sales will be described in the Prospectus Supplement relating
thereto.
Agents, underwriters and dealers may be entitled under
relevant agreements to indemnification or contribution by Loewen
against certain liabilities, including liabilities under the
Securities Act.
Agents, underwriters and dealers may be customers of, engage
in transactions with or perform services for the Company in the
ordinary course of business.
Securities may also be offered and sold, if so indicated in
the applicable Prospectus Supplement, in connection with a
remarketing upon their purchase, in accordance with a redemption
or repayment pursuant to their terms, or otherwise, by one or
more firms ("remarketing firms"), acting as principals for their
own accounts or as agents of Loewen. Any remarketing firm will
be identified and the terms of its
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agreement, if any, with its
compensation will be described in the applicable Prospectus
Supplement. Remarketing firms may be deemed to be underwriters
(as such term is defined in the Securities Act) in connection
with the Securities remarketed thereby. Remarketing firms may be
entitled under agreements which may be entered into with the
Company to indemnification or contribution by Loewen against
certain liabilities, including liabilities under the Securities
Act, and may be customers of, engage in transactions with or
perform services for the Company in the ordinary course of
business.
If so indicated in the applicable Prospectus Supplement,
Loewen may authorize agents, underwriters or dealers to solicit
offers by certain types of institutions to purchase Securities
from Loewen at the public offering prices set forth in the
applicable Prospectus Supplement pursuant to delayed delivery
contracts ("Contracts") providing for payment and delivery on a
specified date or dates in the future. A commission indicated in
the applicable Prospectus Supplement will be paid to
underwriters, dealers and agents soliciting purchases of
Securities pursuant to Contracts accepted by Loewen.
LEGAL MATTERS
The validity of the Guarantees and certain matters of New
York law relating to the validity of the Debt Securities and the
Warrants will be passed upon for Loewen and LGII by Thelen,
Marrin, Johnson & Bridges LLP, San Francisco, California. The
validity of the Common Shares and the Preferred Shares, and
certain statements as to enforceability of certain civil
liabilities against Loewen in the Prospectus, will be passed upon
for Loewen by Russell & DuMoulin, Vancouver, British Columbia,
Canada.
EXPERTS
The consolidated financial statements of Loewen incorporated
by reference in this Prospectus have been audited by KPMG,
Chartered Accountants, for the periods indicated in its report
thereon, which is incorporated herein by reference. Such
consolidated financial statements have been so incorporated in
reliance on such report given on the authority of KPMG as experts
in accounting and auditing.
ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES AGAINST LOEWEN
Loewen is a corporation organized under and governed by the
laws of the Province of British Columbia, Canada. Certain of its
directors, controlling persons, and officers are residents of
Canada, and all or a portion of the assets of such persons and of
Loewen are located outside the United States. As a result, it
may be difficult or impossible for United States holders of the
Common Shares to effect service within the United States upon
Loewen (although it may be possible to effect service upon direct
or indirect United States subsidiaries of Loewen) and those
directors or officers who are not residents of the United States,
or to realize in the United States upon judgments of courts of
the United States predicated upon the civil liability of such
persons under the Securities Act or the Exchange Act, to the
extent such judgments exceed such person's United States assets.
Loewen has been advised by Russell & DuMoulin, its Canadian
counsel, that there is doubt as to the enforceability in Canada
against any of these persons, in original actions or in actions
for enforcement of judgments of United States courts, of
liabilities predicated solely on the Securities Act or the
Exchange Act.
38
<PAGE>
No dealer, salesperson or other
person has been authorized to give any
information or to make any
representations other than those
contained in this Prospectus in
connection with the offer and sale of
securities made hereby, and if given or
made, such information or
representations must not be relied upon
as having been authorized by the THE LOEWEN GROUP INC.
Company. This Prospectus does not
constitute an offer of any securities
other than those to which it relates or COMMON SHARES
an offer or a solicitation in any
jurisdiction to any person to whom it PREFERRED SHARES
is not lawful to make such offer or
solicitation in such jurisdiction. DEBT SECURITIES
Neither the delivery of this
Prospectus, nor any distribution of WARRANTS
securities made hereunder shall, under
any circumstances, create any
implication that there has not been a
change in the facts set forth in this LOEWEN GROUP
Prospectus or in the affairs of the INTERNATIONAL, INC.
Company since the date hereof or that
the information contained herein is
correct as of any time subsequent to GUARANTEES OF DEBT
the date hereof. SECURITIES
TABLE OF CONTENTS
Page
Available Information 2
Incorporation of Certain Information
by Reference 2
Disclosure Regarding Forward-Looking
Statements 3 PROSPECTUS
Financial Information 3
The Company 4
Use of Proceeds 4
Ratio of Earnings to Fixed Charges 5
Description of Debt Securities 6
Description of Share Capital 31
Description of Warrants 35
Plan of Distribution 36
Legal Matters 38 , 1997
Experts 38
Enforceability of Certain Civil
Liabilities Against Loewen 38
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE
ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE
OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MARCH 21, 1997
PROSPECTUS
$500,000,000
LOEWEN GROUP INTERNATIONAL, INC.
DEBT SECURITIES
[LOGO]
GUARANTEED BY
THE LOEWEN GROUP INC.
Loewen Group International, Inc., a Delaware corporation
("LGII") may offer and sell from time to time, in one or more
series, debt securities consisting of notes, debentures and/or
other evidences of indebtedness representing secured or unsecured
obligations of LGII ("Debt Securities"). Debt Securities may be
guaranteed ("Guarantees") by The Loewen Group Inc., a corporation
under the laws of British Columbia, Canada ("Loewen" and,
together with its subsidiaries and associated entities, the
"Company"). LGII is a wholly owned subsidiary of Loewen.
Certain specific terms of the particular Debt Securities in
respect of which this Prospectus is being delivered will be set
forth in an accompanying supplement to this Prospectus (a
"Prospectus Supplement"), which will describe, without limitation
and where applicable, the specific designation and denomination,
the aggregate principal amount being offered, whether such Debt
Securities are secured, whether such Debt Securities are
guaranteed by Loewen, maturity, interest rate (which may be fixed
or variable), place or places where interest on such Debt
Securities will be payable, terms of conversion, sinking fund
provisions, redemption provisions, voting rights, restrictions on
transferability, listing or application for listing on a
securities exchange or interdealer quotation system, any right of
LGII to defer payment of interest on the Debt Securities and the
maximum length of such deferral period, and any other rights,
privileges, limitations or restrictions relating to the Debt
Securities.
The aggregate offering price to the public of the Securities
will be limited to $500,000,000 (or its equivalent, based on the
applicable exchange rate at the time of issue, if Debt Securities
are offered for consideration denominated in one or more foreign
currencies as shall be designated by LGII). The Debt Securities
may be denominated in United States dollars or, at the option of
LGII if so specified in the applicable Prospectus Supplement, in
one or more foreign currencies. The Debt Securities may be
issued in registered form or bearer form, or both. If so
specified in the applicable Prospectus Supplement, Debt
Securities of a series may be issued in whole or in part in the
form of one or more temporary or permanent global securities.
The Debt Securities may be sold to or through underwriters,
through dealers or agents or directly to purchasers. See "Plan
of Distribution." The names of any underwriters, dealers or
agents involved in the sale of the Securities in respect of which
this Prospectus is being delivered and any applicable fee,
commission or discount arrangements with them will be set forth
in a Prospectus Supplement. See "Plan of Distribution" for
possible indemnification arrangements for dealers, underwriters
and agents.
This Prospectus may not be used to consummate sales of Debt
Securities unless accompanied by a Prospectus Supplement.
NO SECURITIES COMMISSION OR SIMILAR AUTHORITY IN CANADA HAS IN
ANY WAY PASSED UPON THE MERITS OF THE SECURITIES OFFERED
HEREUNDER AND ANY REPRESENTATION TO THE CONTRARY IS AN OFFENSE.
THE SECURITIES OFFERED HEREUNDER HAVE NOT BEEN AND WILL NOT BE
QUALIFIED FOR SALE UNDER THE SECURITIES LAWS OF CANADA AND MAY
NOT BE OFFERED OR SOLD IN CANADA OR TO OR FOR THE ACCOUNT OF A
CANADIAN PERSON.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is _________________, 1997
<PAGE>
AVAILABLE INFORMATION
Loewen and LGII have filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-
3 (together with any amendments, exhibits, annexes and schedules
thereto, the "Registration Statement") pursuant to the Securities
Act of 1933, as amended (the "Securities Act"), and the rules and
regulations thereunder, with respect to the Debt Securities and
the Guarantees. This Prospectus does not include all of the
information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and
regulations of the Commission. Statements made in the Prospectus
as to the contents of any contract, agreement or other document
referred to in the Registration Statement are not necessarily
complete. With respect to each such contract, agreement or other
document filed as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description
of the matter involved, and each such statement shall be deemed
qualified in its entirety by such reference.
Loewen is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and, in accordance therewith, files reports, proxy statements and
other information with the Commission. Such reports, proxy
statements and other information filed by Loewen may be inspected
and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices
located at Seven World Trade Center, Suite 1300, New York, New
York 10048, and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511. Copies of such material can
be obtained by mail from the Public Reference section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition,
reports, proxy statements and other information that Loewen files
with the Commission electronically are contained in the Internet
Web site maintained by the Commission. The Commission's Web site
address is http://www.sec.gov. The Common Shares are traded on
the New York Stock Exchange, The Toronto Stock Exchange and The
Montreal Exchange. Reports, proxy statements and other
information filed by Loewen may be inspected at the offices of
the New York Stock Exchange at 20 Broad Street, New York, New
York 10005, at the offices of The Toronto Stock Exchange at The
Exchange Tower, 2 First Canadian Place, Toronto, Ontario, Canada
M5X IJ2 and at the offices of The Montreal Exchange at 800
Victoria Square, Montreal, Quebec, Canada H4Z 1A9.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents heretofore filed by Loewen with the
Commission pursuant to Section 13(a) or 15(d) of the Exchange Act
(File No. 0-18429 for filings prior to September 27, 1996; File
No. 1-12163 for filings on or subsequent to September 27, 1996)
are hereby incorporated herein by reference: (a) Loewen's (i)
Annual Report on Form 10-K for the year ended December 31, 1995,
filed March 28, 1996 (as amended on Form 10-K/A filed June 20,
1996), (ii) Quarterly Reports for the quarters ended March 31,
1996 (filed May 15, 1996), June 30, 1996 (filed August 14, 1996)
and September 30, 1996 (filed November 14, 1996), and (ii)
Current Reports on Form 8-K dated January 3, 1996, January 17,
1996, January 24, 1996, January 26, 1996, February 6, 1996,
February 12, 1996, February 27, 1996, March 4, 1996, March 13,
1996, March 20, 1996, March 26, 1996 (as amended on Forms 8-K/A,
filed June 11, 1996 and July 6, 1996), March 31, 1996, May 1,
1996, May 8, 1996, May 24, 1996, June 4, 1996, June 6, 1996, June
17, 1996, June 30, 1996, August 7, 1996, August 26, 1996 (as
amended on Form 8-K/A, filed October 30, 1996), August 29, 1996,
September 5, 1996, September 17, 1996, September 20, 1996,
September 24, 1996, September 26, 1996, October 1, 1996, October
10, 1996, October 14, 1996, October 17, 1996, November 1, 1996,
November 3, 1996, November 7, 1996, November 19, 1996, November
20, 1996, December 1, 1996, December 5, 1996, December 10, 1996,
2
<PAGE>
December 11, 1996, December 16, 1996, January 7, 1997, January 8,
1997 and March 5, 1997; and (b) the description of the Common
Shares contained in the Registration Statement on Form 20-F filed
by Loewen on March 30, 1990 (File No. 0-18429), including any
amendment or report filed for the purpose of updating such
description. All documents filed by Loewen pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of the offering of
the Debt Securities shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other
subsequently filed document which also is incorporated or deemed
to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
LOEWEN WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM
THIS PROSPECTUS IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF
SUCH PERSON, A COPY OF ANY OR ALL OF THE FOREGOING DOCUMENTS
INCORPORATED BY REFERENCE HEREIN (OTHER THAN EXHIBITS TO ANY SUCH
DOCUMENT UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE INTO SUCH DOCUMENT). REQUESTS FOR SUCH COPIES SHOULD
BE DIRECTED TO THE CORPORATE SECRETARY OF LOEWEN, 4126 NORLAND
AVENUE, BURNABY, BRITISH COLUMBIA, CANADA V5G 3S8; TELEPHONE
NUMBER (604) 299-9321.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
The Prospectus, as amended and supplemented, and certain
documents incorporated by reference herein contain or may contain
both statements of historical fact and "forward-looking
statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Examples of forward-
looking statements include: (i) projections of revenue,
earnings, capital structure and other financial items,
(ii) statements of the plans and objectives of the Company or its
management, (iii) statements of future economic performance and
(iv) assumptions underlying statements regarding the Company or
its business. Important factors, risks and uncertainties that
could cause actual results to differ materially from any forward-
looking statements ("Cautionary Statements") are disclosed herein
and in certain documents incorporated by reference herein. All
subsequent written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by the Cautionary
Statements.
FINANCIAL INFORMATION
All dollar amounts in financial statements incorporated by
reference into this Prospectus are in United States dollars
("U.S.$" or "$") unless otherwise indicated. References to
"Cdn.$" are to Canadian dollars.
The consolidated financial statements of Loewen, its
subsidiaries and associated entities (the "Company") included in
Loewen's reports filed pursuant to the Exchange Act are prepared
in accordance with accounting principles generally accepted in
Canada ("Canadian GAAP"). Differences between Canadian GAAP and
accounting principles generally accepted in the United States
("U.S. GAAP"), as applicable to the Company, are explained in
Note 21 to the consolidated financial statements included in the
Company's Annual Report on Form 10-K for the year ended December
31, 1995.
3
<PAGE>
The consolidated financial statements of the Company for the
year ended December 31, 1993, and for prior years, were published
in Canadian dollars. Effective January 1, 1994, the Company
adopted the United States dollar as its reporting currency and,
accordingly, has published its consolidated financial statements
for the year ended December 31, 1994 and subsequent periods in
United States dollars. Financial information relating to periods
prior to January 1, 1994 has been translated from Canadian
dollars into United States dollars as required by Canadian GAAP
at the December 31, 1993 rate of U.S.$1.00=Cdn$1.3217.
THE COMPANY
The Company operates the second-largest number of funeral
homes and cemeteries in North America and the largest number of
funeral homes in Canada. The Company also engages in the pre-
need selling of funeral, cemetery and cremation merchandise and
services. As at December 31, 1996, the Company operated 956
funeral homes and 313 cemeteries throughout North America. This
included 837 funeral homes and 307 cemeteries in the United
States (including locations in Puerto Rico). LGII serves as the
holding company for the United States assets and operations of
the Company (other than assets and operations in Puerto Rico).
At December 31, 1996, LGII's operations consisted of 833 funeral
homes, 301 cemeteries and four insurance companies.
LGII was incorporated in 1987 under the laws of the State of
Delaware. LGII's principal executive officers are located at 50
East RiverCenter Boulevard, Covington, Kentucky 41011; telephone
(606) 431-6663. Loewen was incorporated in 1985 under the laws
of British Columbia, Canada. Loewen's principal executive
offices are located at 4126 Norland Avenue, Burnaby, British
Columbia, Canada, V5G 3S8; telephone (604) 299-9321.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus
Supplement, the net proceeds received by the Company from the
sale of any Securities offered hereby will be used for working
capital and general corporate purposes, including acquisitions
and interest and principal payments on indebtedness. Any
specific allocation of the proceeds to a particular purpose that
has been made at the date of any Prospectus Supplement will be
described therein.
4
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of
earnings to fixed charges, presented on a Canadian GAAP and U.S.
GAAP basis, for each of the years in the five-year period ending
December 31, 1995 and for each of the nine-month periods ended
September 30, 1995 and 1996. No preferred share dividends were
paid or declared during such period.
Nine
Months Year ended December 31,
ended
September
30,
1996 1995 1995 1994 1993 1992 1991
CANADIAN GAAP
Ratio of earnings to 2.0x 2.2x --(1) 2.5x 2.9x 2.6x 2.6x
fixed charges
U.S. GAAP
Ratio of earnings to 2.0x 2.2x --(2) 2.4x 2.9x 2.6x 2.5x
fixed charges
(1) The 1995 loss is not sufficient to cover fixed charges by a
total of approximately $126.6 million and as such the ratio
of earnings to fixed charges has not been computed.
Reference is made to the Statement re Computation of
Earnings to Fixed Charges Ratio (Canadian GAAP), which is an
exhibit to the Registration Statement of which this
Prospectus forms a part.
(2) The 1995 loss is not sufficient to cover fixed charges by a
total of approximately $128.3 million and as such the ratio
of earnings to fixed charges has not been computed.
Reference is made to the Statement re Computation of
Earnings to Fixed Charges Ratio (U.S. GAAP), which is an
exhibit to the Registration Statement of which this
Prospectus forms a part.
DESCRIPTION OF DEBT SECURITIES
Debt Securities offered hereby, which may consist of notes,
debentures and other evidences of indebtedness, may be issued in
one or more series and may be guaranteed by Loewen. Each series
of debt securities will be issued under an indenture by and among
LGII, Loewen as guarantor (if applicable), and the trustee
identified therein (the "Trustee"). A form of the indenture to
be entered into with respect to a series of Debt Securities
(each, an "Indenture") has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part.
The statements herein relating to the Debt Securities,
Loewen's guarantees of the Debt Securities ("Guarantees"), if
applicable, and the Indenture are summaries and do not purport to
be complete. Such summaries are subject to the detailed
provisions of the applicable Indenture, to which reference is
hereby made for a full description of such provisions, including
the definitions therein of certain terms capitalized in this
Prospectus. Whenever defined terms of the Indenture are referred
to herein or in a Prospectus Supplement, such defined terms are
incorporated herein or therein by reference as part of the
statement made and such statement shall be qualified in its
entirety by such reference.
GENERAL
Reference is made to the Prospectus Supplement which
accompanies this Prospectus for a description of the specific
series of Debt Securities being offered thereby, including as
applicable: (1) the specific designation of such Debt Securities;
(2) any limit upon the aggregate principal amount of such Debt
Securities; (3) the date or dates on which the principal of such
Debt Securities will mature or the
5
<PAGE>
method of determining such
date or dates; (4) the interest rate or rates (which may be fixed
or variable) or the method of calculating such rate or rates; (5)
the date or dates from which interest will accrue or the method
by which such date or dates will be determined; (6) the date or
dates on which interest will be payable and the record date or
dates therefor; (7) whether such Debt Securities are secured or
unsecured and whether such Debt Securities are guaranteed
by Loewen, (8) the place or places where principal of, premium,
if any, and interest, if any, on such Debt Securities will be
payable; (9) the period or periods within which, the price or
prices at which, the currency or currencies (including currency
units) in which, and the terms and conditions upon which, such
Debt Securities may be redeemed, in whole or in part, at the
option of LGII; (10) any obligation of LGII to redeem or purchase
such Debt Securities pursuant to any sinking fund or analogous
provisions, upon the happening of specified events, or at the
option of a holder thereof and the period or periods within
which, the price or prices at which and the terms and conditions
upon which, such Debt Securities shall be redeemed or purchased,
in whole or in part, pursuant to such obligations; (11) the
denominations in which such Debt Securities are authorized to be
issued; (12) the currency or currency units for which Debt
Securities may be purchased or in which Debt Securities may be
denominated and/or the currency or currency units in which
principal of, premium, if any, and/or interest, if any, on such
Debt Securities will be payable or redeemable and whether LGII or
the holders of any such Debt Securities may elect to receive
payments in respect of such Debt Securities in a currency or
currency units other than that in which such Debt Securities are
stated to be payable or redeemable; (13) if other than the
principal amount thereof, the portion of the principal amount of
such Debt Securities which will be payable upon declaration of
the acceleration of the maturity thereof or the method by which
such portion shall be determined; (14) the person to whom any
interest on any such Debt Security shall be payable if other than
the person in whose name such Debt Security is registered on the
applicable record date; (15) any addition to, or modification or
deletion of, any Event of Default or any covenant of Loewen
specified in the Indenture with respect to such Debt Securities;
(16) the application of any means of defeasance or covenant
defeasance that may be specified for such Debt Securities;
(17) any provisions relating to the exchange or conversion of
such Debt Securities; and (18) any other special terms pertaining
to such Debt Securities. Unless otherwise specified in the
applicable Prospectus Supplement, the Debt Securities will not be
listed on any securities exchange or interdealer quotation
system.
Unless otherwise specified in the applicable Prospectus
Supplement, Debt Securities will be issued in fully registered
form without coupons. If Debt Securities of any series are
issued in bearer form, any special restrictions and
considerations, including any offering restrictions and United
States federal income tax considerations, applicable to such Debt
Securities and to payment on and transfer and exchange of such
Debt Securities will be described in the applicable Prospectus
Supplement.
Debt Securities may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at
a rate which at the time of issuance is below market rates.
Certain United States federal income tax consequences and special
considerations applicable to any such Debt Securities will be
described in the applicable Prospectus Supplement.
If the purchase price of any Debt Securities is payable in
one or more foreign currencies or currency units of if any Debt
Securities are denominated in one or more foreign currencies or
currency units or if the principal of, premium, if any, or
interest, if any, on any Debt Securities is payable in one or
more foreign currencies or currency units, the restrictions,
elections, certain United States federal income tax
considerations, specific terms and other information with respect
to such issue of Debt Securities and such foreign currency or
currency units will be set forth in the applicable Prospectus
Supplement.
Unless otherwise specified in the applicable Prospectus
Supplement, Debt Securities will not be convertible or
exchangeable into any other securities. If any series of Debt
Securities is convertible or
6
<PAGE>
exchangeable into other securities,
the applicable Prospectus Supplement will include a description
of such securities, including as applicable (a) the title,
designation, maturity and denomination, (b) any dividend,
conversion, sinking fund, redemption, voting, liquidation and
preemption rights, (c) any restrictions on transferability by the
holders or on repurchase or redemption by the issuer, and (d) any
other special terms pertaining to such securities.
DENOMINATIONS, PAYMENT, REGISTRATION, TRANSFER AND EXCHANGE
Debt Securities generally will be issued in registered form
and in denominations of $1,000 and integral multiples of $1,000.
Unless otherwise provided in the applicable Prospectus
Supplement, payments in respect of Debt Securities will be made,
subject to any applicable laws and regulations, in the designated
currency at the office or agency of LGII maintained for that
purpose as Loewen may designate from time to time, except that,
at the option of LGII, interest payments, if any, on Debt
Securities in registered form may be made (i) by checks mailed by
the Trustee to the holders of Debt Securities entitled thereto at
their registered addresses or (ii) by wire transfer to an account
maintained by the person entitled thereto, as specified in the
Register. Unless otherwise indicated in an applicable Prospectus
Supplement, payment of any installment of interest on Debt
Securities in registered form will be made to the person in whose
name such Debt Security is registered at the close of business on
the regular record date for such interest.
Unless otherwise provided in the applicable Prospectus
Supplement, Debt Securities in registered form will be
transferable or exchangeable at the office or agency of Loewen
maintained for such purpose as Loewen may designate from time to
time. Debt Securities may be transferred or exchanged without
service charge, other than any tax or other governmental charge
imposed in connection therewith.
REDEMPTION
A series of Debt Securities may be subject to redemption at
the option of LGII, in whole or in part, or may not be redeemable
prior to maturity. In addition, LGII may be obligated upon the
occurrence of specified events or at the option of a holder of
Debt Securities, to redeem or repurchase all or part of a series
of Debt Securities. Any such provisions will be set forth in the
applicable Prospectus Supplement.
RANKING
Each series of Debt Securities and the related Guarantees
(if any) will rank equally and pari passu as to the right of
payment of principal and interest, if any, with each other series
of the Debt Securities and Guarantees (if any) and with all other
Senior Debt (defined herein) of LGII and Loewen, respectively.
LGII and Loewen are parties to a collateral trust arrangement,
described below (the "Collateral Agreement"), pursuant to which,
so long as the Indebtedness (defined herein) subject to the
Collateral Agreement is secured, the Debt Securities of a series
will be secured as described herein. However, unless the
applicable Prospectus Supplement provides otherwise, the holders
of Debt Securities will not have an independent right to require
the Lien secured by the Collateral (defined herein) to remain in
place or to require any other security for the Debt Securities.
As at December 31, 1996, the aggregate amount of outstanding Pari
Passu Indebtedness (defined herein) was approximately $1.3
billion. See "--Collateral Trust Arrangement."
Debt Securities will be effectively subordinated in right of
payment to all existing and future liabilities, including trade
payables, of the subsidiaries of LGII.
7
<PAGE>
"Indebtedness" means, with respect to any person, without
duplication (a) all liabilities of such person for borrowed money
or for the deferred purchase price of property or services,
excluding any trade payables and other accrued current
liabilities incurred in the ordinary course of business and which
are not overdue by more than 90 days, but excluding, without
limitation, all obligations, contingent or otherwise, of such
person in connection with any undrawn letters of credit, banker's
acceptance or other similar credit transaction, (b) all
obligations of such person evidenced by bonds, notes, debentures
or other similar instruments, (c) all indebtedness created or
arising under any conditional sale or other title retention
agreement with respect to property acquired by such person (even
if the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or
sale of such property), but excluding trade accounts payable
arising in the ordinary course of business, (d) all Capitalized
Lease Obligations of such person, (e) all Indebtedness referred
to in the preceding clauses of other persons and all dividends of
other persons, the payment of which is secured by (or for which
the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon property
(including, without limitation, accounts and contract rights)
owned by such person, even though such person has not assumed or
become liable for the payment of such Indebtedness (the amount of
such obligation being deemed to be the lesser of the value of
such property or asset or the amount of the obligation so
secured), (f) all guarantees of Indebtedness referred to in this
definition by such person, (g) all Redeemable Capital Stock of
such person valued at the greater of its voluntary or involuntary
maximum fixed repurchase price plus accrued dividends, (h) all
obligations under or in respect of Currency Agreements and
Interest Rate Protection Obligations of such person, (i) any
Preferred Stock of any Restricted Subsidiary of such person
valued at the sum of (without duplication) (A) the liquidation
preference thereof, (B) any mandatory redemption payment
obligations in respect thereof and (C) accrued dividends thereon,
and (j) any amendment, supplement, modification, deferral,
renewal, extension or refunding of any liability of the types
referred to in clauses (a) through (i) above. For purposes
hereof, the "maximum fixed repurchase price" of any Redeemable
Capital Stock which does not have a fixed repurchase price shall
be calculated in accordance with the terms of such Redeemable
Capital Stock as if such Redeemable Capital Stock were purchased
on any date on which Indebtedness shall be required to be
determined pursuant to the provisions hereof, and if such price
is based upon, or measured by, the fair market value of such
Redeemable Capital Stock, such fair market value shall be
determined in good faith by the board of directors of the issuer
of such Redeemable Capital Stock. For purposes of this
definition, the term "Indebtedness" shall not include (i)
Indebtedness of a Wholly-Owned Subsidiary owed to and held by
Loewen, LGII or another Wholly-Owned Subsidiary, in each case
which is not subordinate in right of payment to any Indebtedness
of such Subsidiary, except that (a) any transfer of such
Indebtedness by Loewen, LGII or a Wholly-Owned Subsidiary (other
than to Loewen, LGII or to a Wholly-Owned Subsidiary) and (b) the
sale, transfer or other disposition by Loewen, LGII or any
Restricted Subsidiary of Loewen or LGII of Capital Stock of a
Wholly-Owned Subsidiary which is owed Indebtedness of another
Wholly-Owned Subsidiary such that it ceases to be a Wholly-Owned
Subsidiary of Loewen or LGII shall, in each case, be an
incurrence of Indebtedness by such Restricted Subsidiary subject
to the other provisions hereof; and (ii) Indebtedness of Loewen
or LGII owed to and held by a Wholly-Owned Subsidiary of Loewen
or LGII which is unsecured and subordinate in right of payment to
the payment and performance of Loewen's or LGII's obligations
under the provisions of the applicable Indenture and the Debt
Securities except that (a) any transfer of such Indebtedness by a
Wholly-Owned Subsidiary of Loewen or LGII (other than to another
Wholly-Owned Subsidiary of Loewen or LGII) and (b) the sale,
transfer or other disposition by Loewen or LGII or any Restricted
Subsidiary of Loewen or LGII of Capital Stock of a Wholly-Owned
Subsidiary which holds Indebtedness of Loewen or LGII such that
it ceases to be a Wholly-Owned Subsidiary shall, in each case, be
an incurrence of Indebtedness by Loewen or LGII, as the case may
be, subject to the other provisions hereof.
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"Pari Passu Indebtedness" means Indebtedness of Loewen or
LGII which ranks pari passu in right of payment with the Debt
Securities.
"Senior Debt" means Indebtedness which is not (i)
Indebtedness of Loewen to any Subsidiary or (ii) Indebtedness of
Loewen which by its terms is subordinate or junior in any respect
to any other Indebtedness or other obligation of Loewen.
COLLATERAL TRUST ARRANGEMENT
On May 31, 1996, Loewen, LGII and their senior lenders (the
"Senior Lenders") entered into the Collateral Agreement, pursuant
to which the Senior Lenders share, on a pari passu basis, a
pledge by Loewen and LGII of (i) the shares of capital stock held
by Loewen of substantially all of the subsidiaries in which
Loewen directly or indirectly holds more than a 50% voting or
economic interest, and (ii) all of the financial assets of LGII
(including shares of capital stock held by LGII of various
subsidiaries) (collectively, the "Collateral"). The Collateral
is held by a trustee for the equal and ratable benefit of the
various holders of such Indebtedness.
MERGER, SALE OF ASSETS, ETC.
Each Indenture will provide that Loewen shall not, in any
transaction or series of transactions, merge or consolidate with
or into, or sell, assign, convey, transfer, lease or otherwise
dispose of all or substantially all of its properties and assets
as an entirety to, any person or persons, and Loewen shall not
permit any of its Restricted Subsidiaries (defined herein) to
enter into any such transaction or series of transactions if such
transaction or series of transactions, in the aggregate, would
result in a sale, assignment, conveyance, transfer, lease or
other disposition of all or substantially all of the properties
and assets of Loewen or of Loewen and its Restricted Subsidiaries
taken as a whole, to any other person or persons, unless at the
time of and after giving effect thereto (a) either (i) if the
transaction or series of transactions is a merger or
consolidation, Loewen or LGII or the Restricted Subsidiary, as
the case may be, shall be the surviving person of such merger or
consolidation, or (ii) the person formed by such consolidation or
into which Loewen or such Restricted Subsidiary, as the case may
be, is merged or to which the properties and assets of Loewen or
such Restricted Subsidiary, as the case may be, are transferred
(any such surviving person or transferee being the "Surviving
Entity") shall be a corporation organized and existing under the
laws of the United States, any state thereof, the District of
Columbia, Canada or any province thereof and shall expressly
assume by a supplemental indenture executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, all of
the obligations of Loewen under the Debt Securities and, in each
case the Indenture shall remain in full force and effect; (b)
immediately before and immediately after giving effect to such
transaction or series of transaction on a pro forma basis
(including without limitation any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of
such transaction or series of transactions), no Default (defined
herein) or Event of Default (defined herein) shall have occurred
and be continuing and Loewen, the Restricted Subsidiary or the
Surviving Entity, as the case may be, after giving effect to
such transaction or series of transaction on a pro forma basis
(including without limitation any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of
such transaction or series of transaction), could incur $1.00 of
additional Indebtedness pursuant to the covenants regarding
limitations on Indebtedness contained in the Indentures; and (c)
immediately after giving effect to such transaction or series of
transactions on a pro forma basis (including without limitation
any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of
transactions), the Consolidated Net Worth (defined herein) of
Loewen or the Surviving Entity, as the case maybe, is at
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least
equal to the Consolidated Net Worth of Loewen immediately before
such transaction or series of transactions.
In connection with any consolidation, merger, transfer,
lease, assignment or other disposition contemplated hereby,
Loewen shall deliver or cause to be delivered to the Trustee, in
form and substance reasonably satisfactory to the Trustee, an
officers' certificate and an opinion of counsel, each stating
that such consolidation, merger, transfer, lease, assignment or
other disposition and the supplemental indenture in respect
thereof comply with the requirements under the Indentures.
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of Loewen in accordance with the
foregoing, in which Loewen is not the continuing corporation, the
successor corporation formed by such consolidation or into which
Loewen is merged or to which such transfer is made shall succeed
to, and be substituted for, and may exercise every right and
power of, Loewen under the Indentures with the same effect as if
such successor corporation had been named therein.
"Consolidated Net Worth" means, with respect to any person
at any date, the consolidated stockholders' equity of such person
less the amount of such stockholders' equity attributable to
Redeemable Capital Stock of such person and its Restricted
Subsidiaries, as determined in accordance with Canadian GAAP. As
used above, "Redeemable Capital Stock" means any shares of any
class or series of Capital Stock that, either by the terms
thereof, by the terms of any security into which it is
convertible or exchangeable or by contract or otherwise, is or
upon the happening of an event or passage of time would be,
required to be redeemed prior to the Stated Maturity with respect
to the principal of any Security or is redeemable at the option
of the holder thereof at any time prior to any such Stated
Maturity, or is convertible into or exchangeable for debt
securities at any time prior to any such Stated Maturity.
"Default" means any event that is, or after notice or
passage of time or both would be, an Event of Default. See
"--Events of Default."
"Restricted Subsidiary" means any Subsidiary of Loewen other
than (i) First Capital Life Insurance Company of Louisiana,
National Capital Life Insurance Company, Security Industrial
Insurance Company, Security Industrial Fire Insurance Company or
any successors to such Subsidiaries or (ii) a Subsidiary of
Loewen declared by the Board of Directors of Loewen to be an
Unrestricted Subsidiary; provided, that no such Subsidiary shall
be declared to be an Unrestricted Subsidiary unless (x) none of
its properties or assets were owned by Loewen or any of its
Subsidiaries prior to the Issue Date, other than any such assets
as are transferred to such Unrestricted Subsidiary in accordance
with the covenant described under "-Limitation on Restricted
Payments," (y) its properties and assets, to the extent that they
secure Indebtedness, secure only Non-Recourse Indebtedness and
(z) it has no Indebtedness other than Non-Recourse Indebtedness.
As used above, "Non-Recourse Indebtedness" means Indebtedness as
to which (i) neither Loewen nor any of its Subsidiaries (other
than the relevant Unrestricted Subsidiary or another Unrestricted
Subsidiary) (1) provides credit support (including any
undertaking, agreement or instrument which would constitute
Indebtedness), (2) guarantees or is otherwise directly or
indirectly liable or (3) constitutes the lender (in each case,
other than pursuant to and in compliance with the covenant
described under "--Limitation on Restricted Payments") and (ii) no
default with respect to such Indebtedness (including any rights
which the holders thereof may have to take enforcement action
against the relevant Unrestricted Subsidiary or its assets) would
permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of Loewen or its Subsidiaries (other
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than
Unrestricted Subsidiaries) to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity.
CERTAIN COVENANTS
LGII and Loewen (if applicable) make the following
covenants, among others, in the Indentures:
LIMITATION ON INDEBTEDNESS. Loewen will not, and will not
permit any of its Restricted Subsidiaries (including, without
limitation, LGII) to, directly or indirectly, create, incur,
issue, assume, guarantee or in any manner become directly or
indirectly liable, contingently or otherwise, for the payment of
(collectively, to "incur") any Indebtedness (including, without
limitation, any Acquired Indebtedness, defined herein) other than
Permitted Indebtedness. Notwithstanding the foregoing
limitations, Loewen and LGII (and any Wholly-Owned Subsidiary
with respect to Seller Financing Indebtedness, defined herein)
will be permitted to incur Indebtedness (including, without
limitation, Acquired Indebtedness) if at the time of such
incurrence, and after giving pro forma effect thereto, the
Consolidated Fixed Charge Coverage Ratio (defined herein) of
Loewen is at least equal to 2.25 : 1.
"Acquired Indebtedness" means Indebtedness of a person (a)
assumed or created in connection with an Asset Acquisition from
such person or (b) existing at the time such person becomes a
Restricted Subsidiary of any other person.
"Consolidated Fixed Charge Coverage Ratio" means, with
respect to any person, the ratio of the aggregate amount of
Consolidated Cash Flow Available for Fixed Charges of such person
for the full fiscal quarter immediately preceding the date of the
transaction (the "Transaction Date") giving rise to the need to
calculate the Consolidated Fixed Charge Coverage Ratio (such full
fiscal quarter period being referred to herein as the "Prior
Quarter") to the aggregate amount of Consolidated Fixed Charges
of such person for the Prior Quarter. In addition to and without
limitation of the foregoing, for purposes of this definition,
"Consolidated Cash Flow Available for Fixed Charges" and
"Consolidated Fixed Charges" shall be calculated after giving
effect on a pro forma basis for the period of such calculation
to, without duplication, (a) the incurrence of any Indebtedness
of such person or any of its Restricted Subsidiaries (and the
application of the net proceeds thereof) during the period
commencing on the first day of the Prior Quarter to and including
the Transaction Date (the "Reference Period"), including, without
limitation, the incurrence of the Indebtedness giving rise to the
need to make such calculation (and the application of the net
proceeds thereof), as if such incurrence (and application)
occurred on the first day of the Reference Period, and (b) any
Material Asset Sales or Material Asset Acquisitions (including,
without limitation, any Material Asset Acquisition giving rise to
the need to make such calculation as a result of such person or
one of its Restricted Subsidiaries (including any person who
becomes a Restricted Subsidiary as a result of the Material Asset
Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness) occurring during the Reference Period, as
if such Material Asset Sale or Material Asset Acquisition
occurred on the first day of the Reference Period. Furthermore,
in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this
"Consolidated Fixed Charge Coverage Ratio," (i) interest on
outstanding Indebtedness determined on a fluctuating basis as at
the Transaction Date and which will continue to be so determined
thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness in
effect on the Transaction Date; and (ii) if interest on any
Indebtedness actually incurred on the Transaction Date may
optionally be determined at an interest rate based upon a factor
of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the
Transaction Date will be deemed to have been in effect during the
Reference Period. If such person or any of its Restricted
Subsidiaries directly or indirectly guarantees Indebtedness of a
third person, the
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above clause shall give effect to the
incurrence of such guaranteed Indebtedness as if such person or
such Restricted Subsidiary had directly incurred or otherwise
assumed such guaranteed Indebtedness. For purposes of this
calculation, a "Material Asset Acquisition" is an Asset
Acquisition which is deemed by such person to be material for
such purposes or which has a purchase price of $30,000,000 or
more and a "Material Asset Sale" is one or more Asset Sales which
relate to assets with an aggregate value of more than
$30,000,000. For purposes of this definition, "Consolidated Cash
Flow Available for Fixed Charges" means, with respect to any
person for any period, (A) the sum of, without duplication, the
amounts for such period, taken as a single accounting period, of
(a) Consolidated Net Income, (b) Consolidated Non-cash Charges,
(c) Consolidated Interest Expense and (d) Consolidated Income Tax
Expense less (B) any non-cash items increasing Consolidated Net
Income for such period.
"Permitted Indebtedness" means, without duplication, each of
the following: (a) the Debt Securities and Indebtedness of Loewen
evidenced by the Guarantees; (b) Indebtedness of Loewen and its
Restricted Subsidiaries (including, without limitation, LGII)
outstanding on the Issue Date (other than Indebtedness under the
Credit Agreements); (c) Indebtedness of Loewen or LGII, as the
case may be, under the Credit Agreements in an aggregate
principal amount at any one time outstanding not to exceed
$750,000,000 less the Net Proceeds of any Asset Sale that are
applied to repay, and permanently reduce the commitments under,
the Credit Agreements (as required by the terms thereof); (d) (i)
Interest Rate Protection Obligations of Loewen covering
Indebtedness of Loewen and its Restricted Subsidiaries
(including, without limitation, LGII); (ii) Interest Rate
Protection Obligations of any Restricted Subsidiary of Loewen
covering Indebtedness of such Restricted Subsidiary; provided,
however, that, in the case of either clause (i) or (ii), (x) any
Indebtedness to which any such Interest Rate Protection
Obligations relate bears interest at fluctuating interest rates
and is otherwise permitted to be incurred under this covenant and
(y) the notional principal amount of any such Interest Rate
Protection Obligations does not exceed the principal amount of
the Indebtedness to which such Interest Rate Protection
Obligations relate; (e) Indebtedness under Currency Agreements;
provided, however, that in the case of Currency Agreements which
relate to Indebtedness, such Currency Agreements do not increase
the Indebtedness of Loewen and its Restricted Subsidiaries
(including, without limitation, LGII) outstanding other than as a
result of fluctuations in foreign currency exchange rates or by
reason of fees, indemnities and compensation payable thereunder;
(f) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn
against insufficient funds in the ordinary course of business;
provided, however, that such Indebtedness is extinguished within
two business days of incurrence; (g) Indebtedness incurred in
respect of performance bonds or letters of credit in lieu thereof
provided in the ordinary course of business; (h) Indebtedness of
Loewen and its Restricted Subsidiaries (including, without
limitation, LGII) represented by letters of credit for the
account of Loewen and its Restricted Subsidiaries in order to
provide security for workers' compensation claims, payment
obligations in connection with self-insurance or similar
requirements in the ordinary course of business; (i) Indebtedness
of Loewen and its Restricted Subsidiaries (including, without
limitation, LGII) in addition to that described in clauses (a)
through (h) above, in an aggregate principal amount outstanding
at any time not exceeding $5,000,000; and (j) (i) Indebtedness of
Loewen the proceeds of which are used solely to refinance
(whether by amendment, renewal, extension or refunding)
Indebtedness of Loewen and its Restricted Subsidiaries
(including, without limitation, LGII) and (ii) Indebtedness of
any Restricted Subsidiary of Loewen the proceeds of which are
used solely to refinance (whether by amendment, renewal,
extension or refunding) Indebtedness of such Restricted
Subsidiary, in each case other than the Indebtedness refinanced,
redeemed or retired on the Issue Date or Indebtedness incurred
under clause (c), (d), (e), (f), (g), (h), or (i) of this
covenant; provided, however, that (x) the principal amount of
Indebtedness incurred pursuant to this clause (j) (or, if such
Indebtedness provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof, the original issue price of
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<PAGE>
such Indebtedness) shall not exceed the sum of the principal
amount of Indebtedness so refinanced, plus the amount of any
premium required to be paid in connection with such refinancing
pursuant to the terms of such Indebtedness or the amount of any
premium reasonably determined by the Board of Directors of Loewen
as necessary to accomplish such refinancing by means of a tender
offer or privately negotiated purchase, plus the amount of
expenses in connection therewith, (y) in the case of Indebtedness
incurred by Loewen pursuant to this clause (j) to refinance Pari
Passu Indebtedness, such Indebtedness constitutes Pari Passu
Indebtedness.
"Seller Financing Indebtedness" means a purchase money
Indebtedness issued to the seller of a business or other assets
for, and not in excess of, the purchase price thereof.
LIMITATION ON RESTRICTED PAYMENTS. Loewen will not, and
will not permit any of its Restricted Subsidiaries (including,
without limitation, LGII) to, directly or indirectly:
(a) declare or pay any dividend or make any other
distribution or payment on or in respect of Capital Stock of
Loewen or any of its Restricted Subsidiaries or any payment made
to the direct or indirect holders (in their capacities as such)
of Capital Stock of Loewen or any of its Restricted Subsidiaries
(other than (x) dividends or distributions payable solely in
Capital Stock of Loewen (other than Redeemable Capital Stock) or
in options, warrants or other rights to purchase Capital Stock of
Loewen (other than Redeemable Capital Stock) and (y) dividends or
other distributions to the extent declared or paid to Loewen or
any Wholly-Owned Subsidiary of Loewen),
(b) purchase, redeem, defease or otherwise acquire or
retire for value any Capital Stock of Loewen or any of its
Restricted Subsidiaries (other than any such Capital Stock of a
Wholly-Owned Subsidiary of Loewen),
(c) make any principal payment on, or purchase, defease,
repurchase, redeem or otherwise acquire or retire for value,
prior to any scheduled maturity, scheduled repayment, scheduled
sinking fund payment or other Stated Maturity, any Indebtedness
that is subordinate or junior in right of payment to the Debt
Securities or Pari Passu Indebtedness (other than any such
subordinated or Pari Passu Indebtedness owned by Loewen or a
Wholly-Owned Subsidiary of Loewen), or
(d) make any Investment (other than any Permitted
Investment, defined herein) in any person
(such payments or Investments described in the preceding clauses
(a), (b), (c) and (d) are collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to the
proposed Restricted Payment (the amount of any such Restricted
Payment, if other than cash, shall be the Fair Market Value on
the date of such Restricted Payment of the asset(s) proposed to
be transferred by Loewen or such Restricted Subsidiary, as the
case may be, pursuant to such Restricted Payment), (A) no Default
or Event of Default shall have occurred and be continuing, (B)
immediately prior to and after giving effect to such Restricted
Payment, Loewen would be able to incur $1.00 of additional
Indebtedness pursuant to the covenant described under
"--Limitation on Indebtedness" (assuming a market rate of interest
with respect to such additional Indebtedness) and (C) the
aggregate amount of all Restricted Payments declared or made from
and after the Measurement Date would not exceed the sum of (1)
50% of the aggregate Consolidated Net Income (defined herein) of
Loewen accrued on a cumulative basis during the period beginning
on the first day of the fiscal quarter of Loewen during which the
Measurement Date occurs and ending on the last day of the fiscal
quarter of Loewen immediately preceding the date of such proposed
Restricted Payment, which period shall be treated as a single
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<PAGE>
accounting period (or, if such aggregate cumulative Consolidated
Net Income of Loewen for such period shall be a deficit, minus
100% of such deficit) plus (2) the aggregate net cash proceeds
received by Loewen or LGII (without duplication) either (x) as
capital contributions to Loewen or LGII (without duplication)
after the Measurement Date from any person (other than Loewen,
LGII or a Restricted Subsidiary of Loewen or LGII, as the case
may be) or (y) from the issuance or sale of Capital Stock
(excluding Redeemable Capital Stock, but including Capital Stock
issued upon the conversion of convertible Indebtedness or from
the exercise of options, warrants or rights to purchase Capital
Stock (other than Redeemable Capital Stock)) of Loewen or LGII
(without duplication) to any person (other than to Loewen, LGII
or a Restricted Subsidiary of Loewen or LGII, as the case may be)
after the Measurement Date plus (3) in the case of the
disposition or repayment of any Investment constituting a
Restricted Payment made after the Measurement Date (excluding any
Investment described in clause (v) of the following paragraph),
an amount equal to the lesser of the return of capital with
respect to such Investment and the cost of such Investment less,
in either case, the cost of the disposition of such Investment
plus (4) the sum of $15,000,000. For purposes of the preceding
clause (C)(2), the value of the aggregate net proceeds received
by Loewen or LGII (without duplication) upon the issuance of
Capital Stock upon the conversion of convertible Indebtedness or
upon the exercise of options, warrants or rights will be the net
cash proceeds received upon the issuance of such Indebtedness,
options, warrants or rights plus the incremental cash amount
received by Loewen or LGII (without duplication) upon the
conversion or exercise thereof.
None of the foregoing provisions will prohibit (i) the
payment of any dividend within 60 days after the date of its
declaration, if at the date of declaration such payment would be
permitted by the foregoing paragraph; (ii) so long as no Default
or Event of Default shall have occurred and be continuing, the
redemption, repurchase or other acquisition or retirement of any
shares of any class of Capital Stock of Loewen, LGII or any
Restricted Subsidiary of Loewen or LGII in exchange for, or out
of the net cash proceeds of, a substantially concurrent (x)
capital contribution to Loewen or LGII from any person (other
than a Related Obligor, as defined below) or (y) issue and sale
of other shares of Capital Stock (other than Redeemable Capital
Stock) of Loewen or LGII to any person (other than to a Related
Obligor); (iii) so long as no Default or Event of Default shall
have occurred and be continuing, any redemption, repurchase or
other acquisition or retirement of Indebtedness that is
subordinate or junior in right of payment to the Debt Securities
and the Guarantees, if applicable, by exchange for, or out of the
net cash proceeds of, a substantially concurrent (x) capital
contribution to Loewen or LGII from any person (other than a
Related Obligor) or (y) issue and sale of (1) Capital Stock
(other than Redeemable Capital Stock) of Loewen or LGII to any
person (other than a Related Obligor); provided, however, that
the amount of any such net proceeds that are utilized for any
such redemption, repurchase or other acquisition or retirement
shall be excluded from clause (C)(2) of the preceding paragraph;
or (2) Indebtedness of Loewen or LGII issued to any person (other
than a Related Obligor), so long as such Indebtedness is Pari
Passu Indebtedness or Indebtedness that is subordinate or junior
in right of payment to the Debt Securities and the Guarantees, if
applicable, in the same manner and at least to the same extent as
the Indebtedness so purchased, exchanged, redeemed, acquired or
retired; (iv) so long as no Default or Event of Default shall
have occurred and be continuing, any redemption, repurchase or
other acquisition or retirement of Pari Passu Indebtedness by
exchange for, or out of the net cash proceeds of, a substantially
concurrent (x) capital contribution to Loewen or LGII from any
person (other than a Related Obligor) or (y) issue and sale of
(1) Capital Stock (other than Redeemable Capital Stock) of Loewen
or LGII to any person (other than a Related Obligor); provided,
however, that the amount of any such net proceeds that are
utilized for any such redemption, repurchase or other acquisition
or retirement shall be excluded from clause (C)(2) of the
preceding paragraph; or (2) Indebtedness of Loewen or LGII issued
to any person (other than a Related Obligor), so long as such
Indebtedness is Pari Passu Indebtedness or Indebtedness that is
subordinate or junior in right of payment to the Debt Securities
and the Guarantees in the same
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<PAGE>
manner and at least to the same
extent as the Indebtedness so purchased, exchanged, redeemed,
acquired or retired; (v) Investments constituting Restricted
Payments made as a result of the receipt of consideration that
consists of cash or Cash Equivalents from any Asset Sale made
pursuant to and in compliance with the covenant described under
"--Disposition of Proceeds of Asset Sales"; (vi) so long as no
Default or Event of Default has occurred and is continuing,
repurchases by Loewen of Common Stock of Loewen from employees of
Loewen or their authorized representatives upon the death,
disability or termination of employment of such employees, in an
aggregate amount not exceeding $10,000,000 in any calendar year;
(vii) Investments constituting Restricted Payments that are
permitted by subparagraphs (iv) and (v) of the proviso to the
covenant described under "--Limitation on Transactions with
Interested Persons"; and (viii) the declaration or the payment of
dividends on, or the scheduled purchase or redemption of, the
Preferred Securities of a Special Finance Subsidiary or the
Series C Preferred Shares, of Loewen. In computing the amount of
Restricted Payments previously made for purposes of clause (C) of
the preceding paragraph, Restricted Payments made under the
preceding clauses (v), (vi) and (vii) shall be included and those
under clauses (i), (ii), (iii), (iv) and (viii) shall not be so
included.
"Consolidated Net Income" means, with respect to any person,
for any period, the consolidated net income (or loss) of such
person and its Restricted Subsidiaries for such period as
determined in accordance with GAAP, adjusted, to the extent
included in calculating such net income, by excluding, without
duplication, (i) all extraordinary gains or losses, (ii) the
portion of net income (but not losses) of such person and its
Restricted Subsidiaries allocable to minority interests in
unconsolidated persons to the extent that cash dividends or
distributions have not actually been received by such person or
one of its Restricted Subsidiaries, (iii) net income (or loss) of
any person combined with such person or one of its Restricted
Subsidiaries on a "pooling of interests" basis attributable to
any period prior to the date of combination, (iv) any gain or
loss realized upon the termination of any employee pension
benefit plan, on an after-tax basis, (v) gains or losses in
respect of any Asset Sales by such person or one of its
Restricted Subsidiaries, and (vi) the net income of any
Restricted Subsidiary of such person to the extent that the
declaration of dividends or similar distributions by that
Restricted Subsidiary of that income is not at the time
permitted, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to
that Restricted Subsidiary or its stockholders.
"Permitted Investments" means any of the following:
(i) Investments in any Wholly-Owned Subsidiary of Loewen
(including (a) LGII and (b) any person that pursuant to such
Investment becomes a Wholly-Owned Subsidiary of Loewen) and any
person that is merged or consolidated with or into, or transfers
or conveys all or substantially all of its assets to, Loewen or
any Wholly-Owned Subsidiary of Loewen at the time such Investment
is made; (ii) Investments in Cash Equivalents; (iii) Investments
in Currency Agreements on commercially reasonable terms entered
into by Loewen or any of its Restricted Subsidiaries in the
ordinary course of business in connection with the operations of
the business of Loewen or its Restricted Subsidiaries to hedge
against fluctuations in foreign exchange rates; (iv) loans or
advances to officers, employees or consultants of Loewen and its
Restricted Subsidiaries for travel and moving expenses in the
ordinary course of business for bona fide business purposes of
Loewen and its Restricted Subsidiaries; (v) other loans or
advances to officers, employees or consultants of Loewen and its
Restricted Subsidiaries in the ordinary course of business for
bona fide business purposes of Loewen and its Restricted
Subsidiaries not in excess of $10,000,000 in the aggregate at any
one time outstanding; (vi) Investments in evidences of
Indebtedness, securities or other property received from another
person by Loewen or any of its Restricted Subsidiaries in
connection with any bankruptcy proceeding or by reason of a
composition or readjustment of debt or a reorganization of such
person or as a result of foreclosure, perfection or enforcement
of any Lien in exchange for evidences of Indebtedness, securities
or other property of such person held by Loewen or any of its
Restricted Subsidiaries, or for other
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liabilities or obligations
of such other person to Loewen or any of its Restricted
Subsidiaries that were created, in accordance with the terms of
the Indenture; (vii) Investments in Interest Rate Protection
Agreements on commercially reasonable terms entered into by
Loewen or any of its Restricted Subsidiaries in the ordinary
course of business in connection with the operations of Loewen
and its Restricted Subsidiaries to hedge against fluctuations in
interest rates; and (viii) Investments of funds received by
Loewen or its Restricted Subsidiaries (including, without
limitation, LGII) in the ordinary course of business, which funds
are required to be held in trust for the benefit of others by
Loewen or such Restricted Subsidiary, as the case may be, and
which funds do not constitute assets or liabilities of Loewen or
such Restricted Subsidiary; (ix) Investments not in excess of
$50,000,000 in the aggregate in other Unrestricted Subsidiaries
which are engaged in the insurance business; and (x) Investments
not in excess of $50,000,000 in persons (other than Wholly-Owned
Subsidiaries) engaged in businesses incidental to the funeral
home, cemetery and cremation businesses of Loewen and its
Restricted Subsidiaries.
"Related Obligor" means Loewen, LGII or a Restricted
Subsidiary of Loewen or LGII.
LIMITATION ON ISSUANCES AND SALE OF PREFERRED STOCK BY
RESTRICTED SUBSIDIARIES. Loewen (a) will not permit any of its
Restricted Subsidiaries (including, without limitation, LGII) to
issue any Preferred Stock (other than (i) Preferred Stock issued
to Loewen or a Wholly-Owned Subsidiary of Loewen and (ii)
Preferred Securities of a Special Finance Subsidiary, defined
herein); and (b) will not permit any person to own any Preferred
Stock of any Restricted Subsidiary of Loewen (other than (i)
Preferred Stock owned by Loewen or a Wholly-Owned Subsidiary of
Loewen and (ii) Preferred Securities of a Special Finance
Subsidiary); provided, however, that this covenant shall not
prohibit the issuance and sale of (x) all, but not less than all,
of the issued and outstanding Capital Stock of any Restricted
Subsidiary of Loewen owned by Loewen or any of its Restricted
Subsidiaries in compliance with the other provisions of the
Indenture or (y) directors' qualifying shares or investments by
foreign nationals mandated by applicable law.
"Special Finance Subsidiary" means a Restricted Subsidiary
whose sole assets are debt obligations of LGII or Loewen and
whose sole liabilities are Preferred Securities, the proceeds
from the sale of which are or have been advanced to LGII or
Loewen.
LIMITATION ON LIENS. Loewen will not, and will not permit
any of its Restricted Subsidiaries (including, without
limitation, LGII) to, create, incur, assume or suffer to exist
any Liens of any kind against or upon any of its property or
assets, or any proceeds therefrom where the aggregate amount of
Indebtedness secured by any such Liens, together with the
aggregate amount of property subject to any Sale-Leaseback
Transactions of Loewen and its Restricted Subsidiaries (other
than Permitted Sale-Leaseback Transactions, defined herein),
exceeds 10% of Loewen's Consolidated Net Worth, unless (x) in the
case of Liens securing Indebtedness that is subordinate or junior
in right of payment to the Debt Securities, the Debt Securities
are secured by a Lien on such property, assets or proceeds that
is senior in priority to such Liens and (y) in all other cases,
the Debt Securities are equally and ratably secured except for
(a) Liens existing as at the Measurement Date; (b) Liens securing
the Debt Securities or the Guarantees, if applicable; (c) Liens
in favor of Loewen, LGII or any Wholly-Owned Subsidiary;
(d) Liens securing Indebtedness which is incurred to refinance
Indebtedness which has been secured by a Lien permitted under the
provisions of this Indenture and which has been incurred in
accordance with the provisions of the Indenture; provided,
however, that such Liens do not extend to or cover any property
or assets of Loewen or any of its Restricted Subsidiaries not
securing the Indebtedness so refinanced; and (e) Permitted Liens.
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"Permitted Liens" means the following types of Liens: (a)
Liens for taxes, assessments or governmental charges or claims
either (i) not delinquent or (ii) contested in good faith by
appropriate proceedings and as to which Loewen or any of its
Restricted Subsidiaries (including, without limitation, LGII)
shall have set aside on its books such reserves as may be
required pursuant to Canadian GAAP; (b) statutory Liens of
landlords and Liens of carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or
other appropriate provision, if any, as shall be required by
Canadian GAAP shall have been made in respect thereof; (c) Liens
incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and
other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids,
leases, governmental contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for
the payment of borrowed money); (d) judgment Liens not giving
rise to an Event of Default so long as such Lien is adequately
bonded and any appropriate legal proceedings which may have been
duly initiated for the review of such judgment shall not have
been finally terminated or the period within which such
proceedings may be initiated shall not have expired; (e)
easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not
interfering in any material respect with the ordinary conduct of
the business of Loewen or any of its Restricted Subsidiaries
(including, without limitation, LGII); (f) any interest or title
of a lessor under any Capitalized Lease Obligation or operating
lease; (g) any Lien existing on any asset of any corporation at
the time such corporation becomes a Restricted Subsidiary and not
created in contemplation of such event; (h) any Lien on any asset
securing Indebtedness incurred or assumed for the purpose of
financing all or any part of the cost of acquiring or
constructing such asset; provided, that such Lien attaches to
such asset concurrently with or within 18 months after the
acquisition or completion thereof; (i) any Lien on any asset of
any corporation existing at the time such corporation is merged
or consolidated with or into Loewen or a Restricted Subsidiary
and not created in contemplation of such event; (j) any Lien
existing on any asset prior to the acquisition thereof by Loewen
or a Restricted Subsidiary and not created in contemplation of
such acquisition; (k) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods; and
(l) any extension, renewal or replacement of any Lien permitted
by the preceding clauses (g), (h), (i) or (j) hereof in respect
of the same property or assets theretofore subject to such Lien
in connection with the extension, renewal or refunding of the
Indebtedness secured thereby; provided that (i) such Lien shall
attach solely to the same property or assets and (ii) such
extension, renewal or refunding of such Indebtedness shall be
without increase in the principal remaining unpaid as at the date
of such extension, renewal or refunding.
"Permitted Sale-Leaseback Transactions" means any Sale-
Leaseback Transaction with respect to property acquired or
constructed after the Issue Date; provided that (a) the
Attributable Value of such Sale-Leaseback Transaction shall be
deemed to be Indebtedness of Loewen or such Restricted
Subsidiary, as the case may be, and (b) after giving pro forma
effect to any such Sale-Leaseback Transaction and the foregoing
clause (a), Loewen would be able to incur $1.00 of additional
Indebtedness pursuant to the covenant described under "--
Limitation on Indebtedness" (assuming a market rate of interest
with respect to such additional Indebtedness). For purposes of
the foregoing, "Attributable Value" means, as to any lease other
than a Capitalized Lease Obligation and at any date as of which
the amount thereof is to be determined, the total net amount of
rent required to be paid by such person under a lease during the
initial term thereof as determined in accordance with Canadian
GAAP, discounted from the last date of such initial term to the
date of determination at a rate per annum equal to the discount
rate which would be applicable to a Capitalized Lease Obligation
with a like term in accordance with Canadian GAAP. The net
amount of rent required to be paid under any such lease for any
such period shall be the aggregate amount of rent payable by the
lessee with respect to such period after excluding amounts
required to be paid on account of insurance, taxes, assessments,
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utility, operating and labor costs and similar charges. In the
case of any lease which is terminable by the lessee upon the
payment of a penalty, such net amount shall also include the
amount of such penalty, but no rent shall be considered as
required to be paid under such lease subsequent to the first date
upon which it may be so terminated. "Attributable Value" means,
as to a Capitalized Lease Obligation under which any person is at
the time liable and at any date as of which the amount thereof is
to be determined, the capitalized amount thereof that would
appear on the face of a balance sheet of such person in
accordance with Canadian GAAP.
CHANGE OF CONTROL. Upon the occurrence of a Change of
Control (defined herein), LGII or Loewen (if applicable) will be
obligated to make an offer to purchase (a "Change of Control
Offer"), and shall purchase, on a Business Day (the "Change of
Control Purchase Date") not more than 60 nor less than 30 days
following the occurrence of the Change of Control, all of the
then outstanding Debt Securities of each series properly tendered
and not withdrawn at a purchase price (the "Change of Control
Purchase Price") equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, to the Change of
Control Purchase Date. The Change of Control Offer is required
to remain open for at least 20 Business Days and until the close
of business on the Change of Control Purchase Date.
If a Change of Control occurs and LGII fails to pay the
Purchase Price for all Debt Securities properly tendered and not
withdrawn, Loewen will be obliged to purchase all such Debt
Securities at the Change of Control Purchase Price on the Change
of Control Purchase Date in compliance with the requirements
applicable to a Change of Control Offer made by LGII.
In order to effect such Change of Control Offer, LGII or
Loewen, as the case may be, shall not later than the 30th day
after the occurrence of a Change of Control, mail to each holder
of Debt Securities notice of the Change of Control Offer, which
notice shall govern the terms of the Change of Control Offer and
shall state, among other things, the procedures that holders of
Debt Securities must follow to accept the Change of Control
Offer.
If a Change of Control were to occur, there can be no
assurance that LGII or Loewen would have sufficient funds to pay
the purchase price for all Debt Securities that Loewen or LGII
might to required to purchase. In the event that LGII or Loewen
is required to purchase Debt Securities pursuant to a Change of
Control Offer, each of LGII and Loewen expect that they would
need to seek third-party financing to the extent they may not
have available funds to meet their purchase obligations.
However, there can be no assurance that Loewen or LGII will be
able to obtain such financing on favorable terms, if at all.
Neither LGII nor Loewen shall be required to make a Change
of Control Offer upon a Change of Control if a third party makes
the Change of Control Offer in a manner, at the times and
otherwise in compliance with the requirements applicable to a
Change of Control Offer made by Loewen and purchases all Debt
Securities validly tendered and not withdrawn under such Change
of Control Offer.
LGII and Loewen will comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act, and any
other securities laws or regulations in connection with the
repurchase of Debt Securities pursuant to a Change of Control
Offer.
"Change of Control" means the occurrence on or after the
Measurement Date of any of the following events: (a) any
"person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), excluding Permitted Holders, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-
5 under the Exchange Act, except that a person shall be deemed to
have "beneficial ownership" of all securities that such person
has the right to acquire, whether such right is exercisable
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immediately or only after the passage of time, upon the happening
of an event or otherwise), directly or indirectly, of more than
35% of the total Voting Stock of Loewen or LGII, under
circumstances where the Permitted Holders (i) "beneficially own"
(as so defined) a lower percentage of the Voting Stock than such
other "person" or "group" and (ii) do not have the right or
ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of
Loewen or LGII; (b) Loewen or LGII consolidates with, or merges
with or into, another person or sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially
all of its assets to another person, or another person
consolidates with, or merges with or into, Loewen or LGII, in any
such event pursuant to a transaction in which the outstanding
Voting Stock of Loewen or LGII is converted into or exchanged for
cash, securities or other property, other than any such
transaction where (i) the outstanding Voting Stock of Loewen or
LGII is converted into or exchanged for (1) Voting Stock (other
than Redeemable Capital Stock) of the surviving or transferee
corporation or (2) cash, securities and other property in an
amount which could then be paid by Loewen or LGII as a Restricted
Payment under the provisions hereof, and (ii) immediately after
such transaction no "person" or "group" (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act), excluding
Permitted Holders, is the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a person
shall be deemed to have "beneficial ownership" of all securities
that such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time, upon
the happening of an event or otherwise), directly or indirectly,
of more than 50% of the total Voting Stock of the surviving or
transferee corporation; (c) at any time during any consecutive
two-year period, individuals who at the beginning of such period
constituted the Board of Directors of Loewen or LGII (together
with any new directors whose election by such Board of Directors
or whose nomination for election by the shareholders or
stockholders of Loewen or LGII was approved by a vote of 66-2/3%
of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason
(including the failure of such individuals to be elected in a
proxy contest involving a solicitation of proxies) to constitute
a majority of the Board of Directors of Loewen or LGII then in
office; or (d) Loewen or LGII is liquidated or dissolved or
adopts a plan of liquidation other than a liquidation of LGII
into Loewen. With respect to the sale of assets referred to
above, the meaning of the phrase "all or substantially all" shall
vary according to the facts and circumstances of the subject
transaction.
DISPOSITION OF PROCEEDS OF ASSET SALES. Loewen will not,
and will not permit any of its Restricted Subsidiaries
(including, without limitation, LGII) or First Capital Life
Insurance Company of Louisiana, National Capital Life Insurance
Company, Security Industrial Insurance Company, Security
Industrial Fire Insurance Company or any successors to such
Subsidiaries to, make any Asset Sale (defined herein) unless
(a) Loewen or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the shares or assets sold or
otherwise disposed of and (b) at least 75% of such consideration
consists of cash or Cash Equivalents. To the extent the Net Cash
Proceeds (defined herein) of any Asset Sale are not required to
be applied to repay, and permanently reduce the commitments
under, the Credit Agreements (as required by the terms thereof)
or any other Pari Passu Indebtedness, or are not so applied,
Loewen or such Restricted Subsidiary, as the case may be, may,
within 180 days of such Asset Sale, apply such Net Cash Proceeds
to an investment in properties and assets that replace the
properties and assets that were the subject of such Asset Sale or
in properties and assets that will be used in the business of
Loewen and its Restricted Subsidiaries existing on the Issue Date
or in businesses reasonably related thereto ("Replacement
Assets"). Any Net Cash Proceeds from any Asset Sale that are
neither used to repay, and permanently reduce the commitments
under, the Credit Agreements nor invested in Replacement Assets
within the 180-day period described above constitute "Excess
Proceeds" subject to disposition as provided below.
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When the aggregate amount of Excess Proceeds equals or
exceeds $10,000,000, Loewen shall make an offer to purchase (an
"Asset Sale Offer"), from all holders of each series of Debt
Securities, not more than 40 Business Days thereafter, an
aggregate principal amount of Debt Securities equal to such
Excess Proceeds, at a price in cash equal to 100% of the
outstanding principal amount thereof plus accrued and unpaid
interest, if any, to the purchase date (the "Asset Sale Offer
Price"). To the extent that the aggregate principal amount of
Debt Securities tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds, Loewen may use such deficiency for
general corporate purposes. If the aggregate principal amount of
Debt Securities validly tendered and not withdrawn by holders
thereof exceeds the Excess Proceeds, Debt Securities to be
purchased will be selected on a pro rata basis. Upon completion
of an Asset Sale Offer, the amount of Excess Proceeds shall be
reset to zero.
Loewen and LGII will comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act, and any
other securities laws or regulations in connection with the
repurchase of Debt Securities pursuant to any Asset Sale Offer.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease or other disposition to any person
other than Loewen or a Restricted Subsidiary of Loewen
(including, without limitation, LGII), in one or a series of
related transactions, of (a) any Capital Stock of any Restricted
Subsidiary of Loewen (other than in respect of directors'
qualifying shares or investments by foreign nationals mandated by
applicable law) or of First Capital Life Insurance Company of
Louisiana, National Capitol Life Insurance Company, Security
Industrial Insurance Company, Security Industrial Fire Insurance
Company or any successors to such Subsidiaries; (b) all or
substantially all of the properties and assets of any division or
line of business of Loewen or any Restricted Subsidiary of
Loewen; or (c) any other properties or assets of Loewen or any
Restricted Subsidiary of Loewen other than properties and assets
sold in the ordinary course of business. For the purposes of
this definition, the term "Asset Sale" shall not include (i) any
sale, transfer or other disposition of equipment, tools or other
assets (including Capital Stock of any Restricted Subsidiary of
Loewen) by Loewen or any of its Restricted Subsidiaries in one or
a series of related transactions in respect of which Loewen or
such Restricted Subsidiary receives cash or property with an
aggregate Fair Market Value of $2,000,000 or less; and (ii) any
sale, issuance, conveyance, transfer, lease or other disposition
of properties or assets that is governed by the provisions of the
applicable Indenture.
"Net Cash Proceeds" means with respect to any Asset Sale,
the proceeds thereof in the form of cash or Cash Equivalents
including payments in respect of deferred payment obligations
when received in the form of cash or Cash Equivalents (except to
the extent that such obligations are financed or sold with
recourse to Loewen or any Restricted Subsidiary of Loewen
(including, without limitation, LGII) net of (i) brokerage
commissions and other fees and expenses (including, without
limitation, fees and expenses of legal counsel and investment
bankers) related to such Asset Sale, (ii) provisions for all
taxes payable as a result of such Asset Sale, (iii) amounts
required to be paid to any person (other than Loewen or any
Restricted Subsidiary of Loewen) owning a beneficial interest in
the assets subject to the Asset Sale and (iv) appropriate amounts
to be provided by Loewen or any Restricted Subsidiary of Loewen,
as the case may be, as a reserve required in accordance with
Canadian GAAP against any liabilities associated with such Asset
Sale and retained by Loewen or any Restricted Subsidiary of
Loewen, as the case may be, after such Asset Sale, including,
without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with
such Asset Sale, all as reflected in an officers' certificate
delivered to the Trustee.
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LIMITATION ON TRANSACTIONS WITH INTERESTED PERSONS. Loewen
will not, and will not permit any of its Restricted Subsidiaries
(including, without limitation, LGII) to, directly or indirectly,
enter into or suffer to exist any transaction or series of
related transactions (including, without limitation, the sale,
transfer, disposition, purchase, exchange or lease of assets,
property or services) with, or for the benefit of, any Affiliate
of Loewen or any beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such
person has the right to acquire, whether such right is
exercisable immediately, after the passage of time or upon the
happening of an event) of 5% or more of the Common Shares at any
time outstanding ("Interested Persons"), unless (a) such
transaction or series of related transactions are on terms that
are no less favorable to Loewen or such Restricted Subsidiary, as
the case may be, than those which could have been obtained in a
comparable transaction at such time from persons who are not
Affiliates of Loewen or Interested Persons, (b) with respect to a
transaction or series of transactions involving aggregate
payments or value equal to or greater than $10,000,000, Loewen
has obtained a written opinion from an Independent Financial
Advisor stating that the terms of such transaction or series of
transactions are fair to Loewen or its Restricted Subsidiary, as
the case may be, from a financial point of view and (c) with
respect to a transaction or series of transactions involving
aggregate payments or value equal to or greater than $2,500,000,
Loewen shall have delivered an Officer's Certificate to the
Trustee certifying that such transaction or series of
transactions comply with the preceding clause (a) and, if
applicable, certifying that the opinion referred to in the
preceding clause (b) has been delivered and that such transaction
or series of transactions has been approved by a majority of the
Board of Directors of Loewen (including a majority of the
disinterested directors); provided, however, that this covenant
will not restrict Loewen from (i) paying dividends in respect of
its Capital Stock permitted under the covenant described under "--
Limitation on Restricted Payments," (ii) paying reasonable and
customary fees to directors of Loewen or any Restricted
Subsidiary who are not employees of Loewen or any Restricted
Subsidiary, (iii) entering into transactions with its Wholly-
Owned Subsidiaries or permitting its Wholly-Owned Subsidiaries
from entering into transactions with other Wholly- Owned
Subsidiaries of Loewen, (iv) making loans or advances to senior
officers and directors of Loewen or any Restricted Subsidiary not
in excess of $6,000,000 in the aggregate at any one time
outstanding, (v) guaranteeing loans made to officers and other
employees of Loewen or any Restricted Subsidiaries in connection
with Loewen's 1994 Management Equity Investment Plan not in
excess of $6,000,000 in the aggregate at any one time
outstanding, (vi) making loans or advances to officers, employees
or consultants of Loewen and its Restricted Subsidiaries for
travel and moving expenses in the ordinary course of business for
bona fide business purposes of Loewen and its Restricted
Subsidiaries, (vii) making other loans or advances to officers,
employees or consultants of Loewen and its Restricted
Subsidiaries in the ordinary course of business for bona fide
business purposes of Loewen and its Restricted Subsidiaries not
in excess of $10,000,000 in the aggregate at any one time
outstanding, (viii) making payments to officers or employees of
Loewen or its Restricted Subsidiaries pursuant to obligations
undertaken, at a time when such persons were not officers or
employees of Loewen or its Restricted Subsidiaries, in connection
with arms' length Asset Acquisitions or (ix) declaring or paying
dividends on, or purchasing or redeeming, the Preferred
Securities of a Special Finance Subsidiary.
LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES. Loewen will not, and will not permit any
of its Restricted Subsidiaries (including, without limitation,
LGII) to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or
restriction on the ability of any Restricted Subsidiary of Loewen
to (a) pay dividends, in cash or otherwise, or make any other
distributions on or in respect of its Capital Stock or any other
interest or participation in, or measured by, its profits, (b)
pay any Indebtedness owed to Loewen or any other Restricted
Subsidiary of Loewen, (c) make loans or advances to, or any
Investment in, Loewen or any other Restricted Subsidiary of
Loewen, (d) transfer any of its properties or assets to Loewen or
any other
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Restricted Subsidiary of Loewen or (e) guarantee any
Indebtedness of Loewen or any other Restricted Subsidiary of
Loewen, except for such encumbrances or restrictions existing
under or by reason of (i) applicable law, (ii) customary
non-assignment provisions of any contract or any lease governing
a leasehold interest of Loewen or any Restricted Subsidiary of
Loewen, (iii) customary restrictions on transfers of property
subject to a Lien permitted under the provisions of this
Indenture which could not materially adversely affect Loewen's
ability to satisfy its obligations under the provisions of this
Indenture and the Debt Securities, (iv) any agreement or other
instrument of a person acquired by Loewen or any Restricted
Subsidiary of Loewen (or a Restricted Subsidiary of such person)
in existence at the time of such acquisition (but not created in
contemplation thereof), which encumbrance or restriction is not
applicable to any person, or the properties or assets of any
person, other than the person, or the properties or assets of the
person, so acquired, (v) provisions contained in any agreement or
instrument relating to Indebtedness which prohibit the transfer
of all or substantially all of the assets of the obligor
thereunder unless the transferee shall assume the obligations of
the obligor under such agreement or instrument and (vi)
encumbrances and restrictions under Indebtedness in effect on the
Issue Date (including under the Debt Securities) and encumbrances
and restrictions in permitted refinancings or replacements
thereof which are no less favorable to the holders of the Debt
Securities than those contained in the Indebtedness so refinanced
or replaced.
LIMITATIONS ON SALE-LEASEBACK TRANSACTIONS. Loewen will
not, and will not permit any of its Restricted Subsidiaries
(including, without limitation, LGII) to, enter into any
Sale-Leaseback Transaction, other than Permitted Sale-Leaseback
Transactions, with respect to any property of Loewen or any of
its Restricted Subsidiaries where the aggregate amount of
property subject to such Sale-Leaseback Transactions, together
with the aggregate amount of Liens securing Indebtedness of
Loewen and its Restricted Subsidiaries (other than Permitted
Liens), exceeds 10% of Loewen's Consolidated Net Worth.
LIMITATION ON APPLICABILITY OF CERTAIN COVENANTS. During
any period of time that (i) the ratings assigned to any series of
Debt Securities by each of S&P and Moody's (collectively, the
"Rating Agencies") are no less than BBB-and Baa3, respectively
(the "Investment Grade Ratings"), and (ii) no Default or Event of
Default has occurred and is continuing with respect to such
series of Debt Securities, Loewen and its Restricted Subsidiaries
(including, without limitation, LGII) will not be subject to the
covenants entitled "Limitation on Indebtedness," "Limitation on
Restricted Payments," "Disposition of Proceeds of Asset Sales,"
"Limitation on Issuances and Sale of Preferred Stock by
Restricted Subsidiaries," "Limitations on Transactions with
Interested Persons" and "Limitation on Dividends and Other
Payment Restrictions Affecting Restricted Subsidiaries"
(collectively, the "Suspended Covenants") with respect to such
series of Debt Securities. If one or both Rating Agencies
withdraws its rating or downgrades its Investment Grade Rating,
then thereafter Loewen and its Restricted Subsidiaries will be
subject, on a prospective basis, to the Suspended Covenants
(until the Rating Agencies have again assigned Investment Grade
Ratings to the Debt Securities) and compliance with the Suspended
Covenants with respect to Restricted Payments made after the time
of such withdrawal or downgrade will be calculated in accordance
with the covenant described under "Limitations on Indebtedness,"
as if such covenant had been in effect at all times after the
Measurement Date.
REPORTING REQUIREMENTS
Loewen shall file with the Commission, or if not permitted
or required to so file will deliver to the Trustee, the annual
reports, quarterly reports and the information, documents and
other reports required to be filed with the Commission pursuant
to Sections 13 and 15 of the Exchange Act, whether or not Loewen
has a class of securities registered under the Exchange Act.
Loewen shall file with the
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Trustee and provide to each holder of
Debt Securities, within 15 days after it files them with the
Commission (or if such filing is not permitted under the Exchange
Act, 15 Days after Loewen would have been required to make such
filing), copies of such reports.
EVENTS OF DEFAULT
The following will be "Events of Default" with respect to
each series of Debt Securities:
(a) default in the payment of the principal of or premium,
if any, on the Debt Securities of such series as and when the
same shall become due and payable (upon maturity, acceleration,
optional redemption, required purchase, scheduled principal
payment, by declaration or otherwise); or
(b) default in the payment of any installment of interest
upon any of the Debt Securities of such series, as and when the
same shall become due and payable, and continuance of such
default for a period of 30 days; or
(c) failure on the part of LGII or Loewen (if applicable)
duly to observe or perform any other term, covenant or agreement
contained in the Debt Securities of such series or pursuant to
the provisions of this Indenture (other than Defaults specified
in clause (a) or (b) above) and such Default continues for a
period of 60 days after the date on which written notice of such
Default requiring LGII to remedy the same shall have been given
(i) to the Issuer by the Trustee by registered mail, or (ii) to
LGII and the Trustee by holders of at least 25% in aggregate
principal amount of the Debt Securities of such series then
outstanding; or
(d) default or defaults under one or more agreements,
instruments, mortgages, bonds, debentures or other evidences of
Indebtedness under which Loewen or any Restricted Subsidiary
(including, without limitation, LGII) then has outstanding
Indebtedness in excess of $20,000,000 (including Securities of
another series), individually or in the aggregate, and either
(i) such Indebtedness is already due and payable in full or
(ii) such default or defaults have resulted in the acceleration
of the maturity of such Indebtedness; or
(e) one or more judgments, orders or decrees of any court
or regulatory or administrative agency of competent jurisdiction
for the payment of money in excess of $20,000,000, either
individually or in the aggregate, shall be entered against Loewen
or any Restricted Subsidiary (including without limitation LGII)
or any of their respective properties and shall not be discharged
or bonded against or stayed and there shall have been a period of
60 days after the date on which any period for appeal has expired
and during which a stay of enforcement of such judgment, order or
decree, shall not be in effect; or
(f) either (i) the collateral agent under the Collateral
Agreement or (ii) any holder of at least $20,000,000 in aggregate
principal amount of Indebtedness of Loewen or any of its
Restricted Subsidiaries (including, without limitation, LGII)
shall commence judicial proceedings to foreclose upon assets of
Loewen or any of its Restricted Subsidiaries having an aggregate
Fair Market Value, individually or in the aggregate, in excess of
$20,000,000 or shall have exercised any right under applicable
law or applicable security documents to take ownership of any
such assets in lieu of foreclosure; or
(g) certain events of bankruptcy, insolvency or
reorganization with respect to Loewen or any Significant
Subsidiary of Loewen (including without limitation LGII) shall
have occurred; or
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(h) the Guarantees with respect to such series of Debt
Securities, if any, cease to be in full force and effect or are
declared null and void, or LGII denies that it has any further
liability under the Guarantees with respect to such series, or
gives notice to such effect and such condition shall have
continued for a period of 60 days after written notice of such
failure (which notice shall specify the Default, demand that it
be remedied and state that it is a "Notice of Default") requiring
Loewen and LGII to remedy the same shall have been given (i) to
Loewen and LGII by the Trustee, or (ii) to Loewen, LGII and the
Trustee by holders of at least 25% in aggregate principal amount
of the Debt Securities of such series then outstanding.
NOTICE OF DEFAULT
Within 90 days after the occurrence of a Default or an Event
of Default with respect to Debt Securities of any series, the
Trustee shall mail to all holders of Debt Securities of such
series notice of the Default or Event of Default known to the
Trustee with respect to such series, unless such default shall
have been cured before the giving of such notice. Except in the
case of a Default in the payment of the principal of, premium, if
any, or interest on any Debt Securities, or in the payment or
satisfaction of any sinking fund or other purchase obligation,
the Trustee may withhold such notice if and so long as the board
of directors, the executive committee of the board of directors
or a committee of the directors of the Trustee and/or Trust
Officers in good faith determine that the withholding of such
notice is in the interest of the holders of the Debt Securities
of such series.
ACCELERATION
If an Event of Default (other than as specified in clause
(g) above) occurs and is continuing with respect to the Debt
Securities of any series then outstanding, (a) the Trustee, by
written notice to Loewen, or (b) the holders of at least 25% in
aggregate principal amount of the Debt Securities of such series
then outstanding, by written notice to the Trustee and Loewen,
may declare the principal amount (or, if the Debt Securities of
such series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of such
series) of all the Debt Securities of such series, premium, if
any, and accrued and unpaid interest, if any, on all of the Debt
Securities of such series to be due and payable immediately, upon
which declaration, all amounts payable in respect of the Debt
Securities of such series shall be immediately due and payable.
If an Event of Default specified in clause (g) above occurs and
is continuing, then the unpaid principal amount (or, if the Debt
Securities of any series then outstanding are Original Issue
Discount Securities, such portion of the principal amounts as may
be specified in the terms of each such series), premium, if any,
and accrued and unpaid interest on all Debt Securities of each
series then outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act
by the Trustee or any holder of Debt Securities of such series.
After a declaration of acceleration hereunder with respect
to Debt Securities of any series, but before a judgment or decree
for payment of the money due has been obtained by the Trustee,
the holders of a majority in aggregate principal amount of the
outstanding Debt Securities of such series, by written notice to
Loewen and the Trustee, may rescind and annul such declaration
and its consequences if (a) Loewen has paid or deposited with the
Trustee a sum sufficient to pay (i) all amounts due the Trustee
under the respective Indenture and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents
and counsel, (ii) all overdue interest on all Debt Securities of
such series, (iii) the principal of and premium, if any, on any
Debt Securities of such series which have become due otherwise
than by such declaration of acceleration and interest thereon at
the rate borne by the Debt Securities of such series, and (iv) to
the extent that payment of such interest is lawful, interest upon
overdue interest and overdue principal which has become due
otherwise than by such declaration of
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acceleration at the rate
borne by the Debt Securities of such series; (b) the rescission
would not conflict with any judgment or decree of a court of
competent jurisdiction; and (c) all Events of Default, other than
the non-payment of principal of, premium, if any, and interest on
the Debt Securities of such series that has become due solely by
such declaration of acceleration, have been cured or waived; but
no such rescission and annulment shall extend to or shall affect
any subsequent default, or shall impair any right consequent
thereon. No such rescission shall affect any subsequent Default
or Event of Default or impair any right subsequent thereon.
WAIVER
The holders of a majority in aggregate principal amount of
the outstanding Debt Securities of a series by notice to the
Trustee may, on behalf of the holders of all the Debt Securities
of such series, waive any existing Default or Event of Default
and its consequences, except a Default or Event of Default
specified in clause (a) or (b) above, or in respect of any
provision of the applicable Indenture which cannot be modified or
amended without the consent of the holder so affected. When a
Default or Event of Default is so waived, it shall be deemed
cured and shall cease to exist.
LIMITATION ON SUITS
No holder of any Debt Securities of any series shall have
any right to institute any suit, action or proceeding with
respect to an Indenture or the Debt Securities of such series, or
for the appointment of a receiver or trustee or similar official,
or for any other remedy hereunder or thereunder, unless: (1) the
holder gives written notice to the Trustee of a continuing Event
of Default; (2) the holders of at least 25% in aggregate
principal amount of the Debt Securities of such series then
outstanding shall have made written request to the Trustee to
institute such action, suit or proceeding in its own name as
Trustee hereunder; (3) such holder or holders offer and, if
requested, provide to the Trustee reasonable indemnity as it may
require against the costs, expenses and liabilities to be
incurred therein or thereby; (4) the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or
proceeding; and (5) during such 60-day period the holders of a
majority in aggregate principal amount of the Debt Securities of
such series then outstanding do not give the Trustee a direction
which is inconsistent with the request; it being understood and
intended, and being expressly covenanted by the holder of every
Debt Security of such series with every other taker and holder
and the Trustee, that no one or more holders of Debt Securities
of such series shall have any right in any manner whatever by
virtue of or by availing of any provision of an Indenture or of
the Debt Securities to affect, disturb or prejudice the rights of
any other holder of Debt Securities of such series, or to obtain
or seek to obtain priority over or preference as to any other
such holder, or to enforce any right under an Indenture or the
Debt Securities of any series, except in the manner herein
provided and for the equal, ratable and common benefit of all
holders of Debt Securities of such series.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity
to collect the payment of principal of, premium, if any, or
interest on the Debt Securities of any series or to enforce the
performance of any provision of the applicable Debt Securities or
Indenture.
CERTIFICATES OF COMPLIANCE
LGII shall furnish to the Trustee annual and quarterly
statements as to the performance by LGII of its obligations under
the Indenture and as to any default in such performance. LGII is
also required to
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notify the Trustee within 10 days of any event
which is, or after notice or lapse of time or both would become,
an Event of Default.
DEFEASANCE OR COVENANT DEFEASANCE
Each of LGII and Loewen, if applicable, may, at its option
and at any time, terminate its respective obligations with
respect to an outstanding series of Debt Securities
("defeasance"). Such defeasance means that Loewen and LGII shall
be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Debt Securities of such series,
except for (i) the rights of holders of outstanding Debt
Securities of such series to receive payment in respect of the
principal of, premium, if any, and interest on such Debt
Securities when such payments are due, (ii) Loewen's obligations
to issue temporary Debt Securities of such series, register the
transfer or exchange of any Debt Securities of such series,
replace mutilated, destroyed, lost or stolen Debt Securities of
such series and maintain an office or agency for payments in
respect of the Debt Securities of such series, (iii) the rights,
powers, trusts, duties and immunities of the Trustee, and (iv)
the defeasance provisions of the Indenture. In addition, each of
Loewen and LGII may, at its option and at any time, elect to
terminate its obligations with respect to certain covenants that
are set forth in the Indenture, some of which are described
above, and any subsequent failure to comply with such obligations
shall not constitute a Default or Event of Default with respect
to the Debt Securities of such series ("covenant defeasance").
In order to exercise either defeasance or covenant
defeasance, (i) Loewen must irrevocably deposit with the Trustee,
in trust, for the benefit of the holders of the Debt Securities
of such series, cash in United States dollars, U.S. Government
Obligations, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium,
if any, and interest on the outstanding Debt Securities of such
series to maturity (except lost, stolen or destroyed Debt
Securities of such series which have been replaced or paid); (ii)
Loewen or LGII shall have delivered to the Trustee an opinion of
counsel to the effect that the holders of the outstanding Debt
Securities of such series will not recognize income, gain or loss
for federal income tax purposes as a result of such defeasance or
covenant defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as
would have been the case if such defeasance or covenant
defeasance had not occurred (in the case of defeasance, such
opinion must refer to and be based upon a ruling of the Internal
Revenue Service or a change in applicable federal income tax
laws); (iii) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit; (iv) such
defeasance or covenant defeasance shall not cause the Trustee to
have a conflicting interest with respect to any securities of
Loewen; (v) such defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a default
under, any material agreement or instrument to which Loewen or
LGII is a party or by which it is bound; (vi) Loewen or LGII
shall have delivered to the Trustee an opinion of counsel to the
effect that after the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar law affecting
creditors' rights generally; and (vii) Loewen or LGII shall have
delivered to the Trustee an officers' certificate and an opinion
of counsel, each stating that all conditions precedent under the
Indenture to either defeasance or covenant defeasance, as the
case may be, have been complied with.
SATISFACTION AND DISCHARGE
The Indenture with respect to a series of Debt Securities
will be discharged and will cease to be of further effect (except
as to surviving rights or registration of transfer or exchange of
the Debt Securities, as expressly provided for in the Indenture)
as to all outstanding Debt Securities of such series when (i)
either (a) all of the Debt Securities of such series theretofore
authenticated and delivered (except
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lost, stolen or destroyed
Debt Securities of such series which have been replaced or repaid
and Debt Securities of such series for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by Loewen and thereafter repaid to Loewen or discharged
from such trust) have been delivered to the Trustee for
cancellation or (b) all Debt Securities of such series have been
called for redemption or otherwise become due and payable and
Loewen or LGII has irrevocably deposited or caused to be
deposited with the Trustee funds in an amount sufficient to pay
and discharge the entire Indebtedness on the Debt Securities of
such series not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and interest on
the Debt Securities of such series to the date of deposit
together with irrevocable instructions from Loewen or LGII
directing the Trustee to apply such funds to the payment thereof
at maturity; (ii) Loewen and LGII have paid all other sums
payable by Loewen under the Indenture; (iii) there exists no
Default or Event of Default under the Indenture; and (iv) Loewen
or LGII has delivered to the Trustee an officers' certificate and
an opinion of counsel stating that all conditions precedent under
the Indenture relating to the satisfaction and discharge of the
Indenture have been complied with.
AMENDMENTS AND WAIVERS
Loewen and the Trustee may from time to time and at any time
amend or supplement an Indenture (a) to cure any ambiguity,
defect or inconsistency or to correct or supplement any provision
contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained
herein or in any supplemental indenture, or to make any other
provisions as to LGII may deem necessary or desirable, provided
that no such action shall adversely affect the interests of the
holders of any series of Debt Securities; (b) to evidence the
succession of another corporation to LGII, or successive
successions, and the assumption by the successor corporation of
the covenants, agreements and obligations of LGII; (c) to
establish the form or terms of Debt Securities of any series and
to provide for adjustment of conversion rights; (d) to comply
with any requirements of the Commission in order to effect or
maintain the qualification of any Indenture under the Trust
Indenture Act of 1939, as amended (the "TIA"); (e) to evidence
and provide for the acceptance of appointment by a successor
trustee with respect to the Debt Securities of one or more series
and to add to or change any of the provisions of an Indenture as
shall be necessary to provide for or facilitate the
administration of trusts by more than one trustee; and (f) to add
to the covenants of LGII such further covenants, restrictions,
conditions or provisions as the Issuer and the Trustee shall
consider to be for the protection of the holders of all or any
series of Debt Securities (and if such covenants, restrictions,
conditions or provisions are to be for the protection of less
than all series of Debt Securities, stating that the same are
expressly being included solely for the protection of such
series), and to make the occurrence, or the occurrence and
continuance, of a default in any such additional covenants,
restrictions, conditions or provisions an Event of Default;
provided, that in respect of any such additional covenant,
restriction, condition or provision a supplemental indenture may
provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon
such an Event of Default or may limit the remedies available to
the Trustee upon such an Event of Default or may limit the right
of the holders of a majority in aggregate principal amount of the
Debt Securities of such series to waive such Event of Default.
Any supplemental indenture authorized by an Indenture may be
executed without the consent of the holders of any of the Debt
Securities then outstanding. Notwithstanding the foregoing, the
Trustee and Loewen may not make any change to an Indenture that
adversely affects the rights of any holders of outstanding Debt
Securities. Loewen shall be required to deliver to the Trustee
an Opinion of Counsel stating that any such change does not
adversely affect the rights of any holder.
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GLOBAL DEBT SECURITIES
Debt Securities of a series may be issued in whole or in
part in the form of one or more fully registered global
securities (a "Registered Global Security") that may be deposited
with a depositary ("Depositary") or with a nominee for the
Depositary identified in the applicable Prospectus Supplement.
In such case, one or more Registered Global Securities will be
issued in a denomination or aggregate denominations equal to the
portion of the aggregate principal amount of Debt Securities of
the series to be represented by such Registered Global Security
or Securities. Unless and until it is exchanged in whole or in
part for Debt Securities in definitive certificated form, a
Registered Global Security may not be registered for transfer or
exchange except as a whole by the Depositary for such Registered
Global Security to a nominee of such Depositary or by a nominee
of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary to any such nominee to a
successor Depositary for such series or a nominee of such
successor Depositary and except in the circumstances described in
the applicable Prospectus Supplement.
The specific terms of the depositary arrangement with
respect to a portion of a series of Debt Securities to be
represented by a Registered Global Security will be described in
the applicable Prospectus Supplement. Loewen expects that the
following provisions will apply to any such depositary
arrangements.
Upon the issuance of any Global Registered Securities, the
Depositary will credit, on its internal book-entry system, the
principal amount of Debt Securities of the individual beneficial
interest represented by such Global Registered Securities to the
respective accounts of institutions ("participants") that have
accounts with the Depositary or its nominee. The accounts to be
credited will be designated by the underwriters or agents
engaging in the distribution of such Debt Securities or by Loewen
if such Debt Securities are offered and sold directly by Loewen.
Ownership of beneficial interests by participants in such
Registered Global Security will be shown on, and the transfer of
that ownership interest will be effected only through, records
maintained by the Depositary for such Registered Global Security
or by its nominee. Ownership of beneficial interests in such
Registered Global Security by persons that hold such interests
through a participant will be shown on, and the transfer of such
ownership interests will be effected only through, records
maintained by such participant. The laws of some jurisdictions
require that certain purchasers of securities take physical
delivery of such securities in certificated form. The foregoing
limitations and such laws may impair the ability to transfer
beneficial interest in such Registered Global Securities.
So long as the Depositary for a Registered Global Security,
or its nominee, is the registered owner of such Registered Global
Security, such Depositary or such nominee, as the case may be,
will be considered the sole owner or holder of the Debt
Securities represented thereby for all purposes under the
Indentures. Unless otherwise specified in the applicable
Prospectus Supplement and except as specified below, owners of
beneficial interests in such Registered Global Security will not
be entitled to have Debt Securities of the series represented by
such Registered Global Security registered in their names, will
not receive or be entitled to receive physical delivery of Debt
Securities of such series in certificated form and will not be
considered the holders thereof for any purposes under the
Indentures. Accordingly, each person owning a beneficial
interest in such Registered Global Security will be required to
rely on the procedures of the Depositary and, if such person is
not a participant, on the procedures of the participant through
which such person owns its interest., to exercise the rights of a
holder under the Indentures. The Depositary may grant proxies
and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or
other action which a holder is entitled to give or take under the
applicable Indenture. Loewen understands that, under existing
industry practices, if Loewen
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requests any action of holders or
an owner of a beneficial interest in a Registered Global Security
desires to give any notice or take any action a holder is
entitled to give or take under the applicable Indenture, the
Depositary would authorize the participants to give such notice
or take such action, and participants would authorize beneficial
owners owning through such participants to give such notice or
take such action or would otherwise act upon the instructions of
beneficial owners owning through them.
Unless otherwise specified in the applicable Prospectus
Supplement, payments with respect to principal of, premium, if
any and interest, if any, on Debt Securities represented by a
Registered Global Security registered in the name of a Depositary
or its nominee will be made to such Depositary or its nominee, as
the case may be, as the registered owners of such Registered
Global Security.
Loewen expects that the Depositary for any Debt Securities
represented by a Registered Global Security, upon receipt of any
payment of principal, premium or interest will immediately credit
participants' accounts with payment in amounts proportionate to
their respective beneficial interest in the principal amount of
such Registered Global Security as shown on the records of such
Depositary. Loewen also expects that payments by participants to
owners of beneficial interests in such Registered Global Security
held through such participants will be governed by standing
instructions and customary practices, as is now the case with the
securities held for the accounts of customers registered in
"street names" and will be the responsibility of such
participants. None of Loewen, the Trustee or any agent of Loewen
shall have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial
ownership interests in a Registered Global Security, or for
maintaining, supervising, or reviewing any records relating to
such beneficial ownership interests.
Unless otherwise specified in the applicable Prospectus
Supplement, if the Depositary for any Debt Securities represented
by a Registered Global Security is at any time unwilling or
unable to continue as Depositary and a successor Depositary is
not appointed by Loewen within 90 days, Loewen will issue such
Debt Securities in definitive certificated form in exchange for
such Registered Global Security. In addition, Loewen may at any
time and in its sole discretion determine not to have any o the
Debt Securities of a series represented by one or more Registered
Global Securities and, in such event, will issue Debt Securities
of such series in definitive certificated form in exchange for
all of the Registered Global Securities representing such Debt
Securities. Further, if Loewen so specifies with respect to Debt
Securities of any series an owner of a beneficial interest in a
Registered Global Security representing Debt Securities of such
series may, on terms acceptable to Loewen and the Depositary,
receive Debt Securities of such series in definitive form
registered in the name of such beneficial owner or its designee.
THE TRUSTEE
Unless otherwise specified in the applicable Prospectus
Supplement, Fleet National Bank, or its successor, shall be the
Trustee under each Indenture. The Indentures provide that,
except during the continuance of an Event of Default, the Trustee
will perform only such duties as are specifically set forth in
the Indenture. If any Event of Default has occurred and is
continuing the Trustee will exercise such rights and powers
vested in it under the Indenture and use the same degree of care
and skill in its exercise as a prudent person would exercise
under the circumstances in the conduct of such person's own
affairs.
The Indentures, including provisions of the TIA incorporated
by reference therein, will contain limitations on the rights of
the Trustee should it become a creditor of LGII, to obtain
payment of claims in certain cases or to realize on certain
property received by it in respect of any such claims, as
security or otherwise.
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In addition to serving as Trustee under the Indentures,
Fleet National Bank also serves as trustee under (a) the
Indenture dated as of March 20, 1996, as amended (the "March 1996
Indenture"), among LGII, Loewen, as Guarantor, and Fleet National
Bank, as trustee, and (b) the Indenture dated as of October 1,
1996, as amended (the "October 1996 Indenture") among LGII,
Loewen, as Guarantor, and Fleet National Bank, as trustee. In
March 1996, LGII issued $225,000,000 7 1/2% Series 1 Senior
Guaranteed Notes due 2001 and $125,000,000 8 1/4% Series 2 Senior
Guaranteed Notes due 2003 under the March 1996 Indenture, and in
October 1996, LGII issued $125,000,000 7 3/4% Series 3 Senior
Guaranteed Notes due 2001 and $225,000,000 8 1/4% Series 4 Senior
Guaranteed Notes due 2003 under the October 1996 Indenture.
Pursuant to the TIA, in certain circumstances, if an event of
default were to occur under the March 1996 Indenture, the October
1996 Indenture and/or any Indenture relating to Debt Securities,
Fleet National Bank could be required to resign as trustee under
one or more of such indentures. If Fleet National Bank were to
resign as trustee, Loewen or LGII would be required to take
prompt steps to have a successor trustee or trustees appointed in
the manner provided in the indenture or indentures from which
Fleet National Bank has resigned.
PLAN OF DISTRIBUTION
LGII may offer and sell the Debt Securities from time to
time through agents, to or through underwriters, through dealers
or directly to purchasers. The Prospectus Supplement with
respect to the Debt Securities to be offered will set forth the
terms of the offering of the Debt Securities, including (i) the
name or names of any underwriters, dealers or agents, (ii) the
offering price of the Debt Securities, (iii) the proceeds to the
Company from such sale, (iv) any underwriting discounts and
commissions or other amounts constituting underwriters' or
agents' compensation, and (v) any securities exchange or
automated quotation system on which the Debt Securities may be
listed. Any initial public offering price, discounts or
concessions allowed or reallowed or paid to dealers may be
changed from time to time.
The distribution of the Debt Securities may be effected from
time to time in one or more transactions at a fixed price or
prices, which may be changed, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices
or at negotiated prices.
Offers to purchase Debt Securities may be solicited by
agents designated by LGII from time to time. Any such agent
involved in the offer or sale of the Debt Securities will be
named, and any commissions payable by LGII to such agent will be
set forth, in the applicable Prospectus Supplement. Any such
agent may be deemed to be an underwriter (as that term is defined
in the Securities Act) of the Debt Securities so offered and
sold.
If Debt Securities are sold by means of an underwritten
offering, LGII will execute an underwriting agreement with one or
more underwriters at the time an agreement for such sale is
reached. The names of the specific managing underwriter or
underwriters, as well as any other underwriters, and the terms of
the transaction, including commissions, discounts and any other
compensation of the underwriters and dealers, if any, will be set
forth in the Prospectus Supplement which will be used by the
underwriters to make resales of the Debt Securities. If
underwriters are utilized in the sale of Debt Securities, the
Debt Securities will be acquired by the underwriters for their
own account and may be resold from time to time in one or more
transactions, including negotiated transactions, at fixed public
offering prices or at varying prices determined by the
underwriter at the time of sale. Debt Securities may be offered
to the public either through underwriting syndicates represented
by managing underwriters or directly by the managing
underwriters. If any underwriter or underwriters are utilized in
the sale of the Debt Securities, unless otherwise indicated in
the Prospectus Supplement, the underwriting
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agreement will
provide that the obligations of the underwriters are subject to
certain conditions precedent and that the underwriters with
respect to a sale of Debt Securities will be obligated to
purchase all of such series of Debt Securities if any are
purchased.
If a dealer is utilized in the sale of Debt Securities, LGII
will sell such Debt Securities to the dealer as principal. The
dealer may then resell such Debt Securities to the public at
varying prices to be determined by such dealer at the time of
resale. Any such dealer may be deemed to be an underwriter (as
that term is defined in the Securities Act) of the Debt
Securities so offered and sold. The name of the dealer and the
terms of the transaction will be set forth in the Prospectus
Supplement relating thereto.
Offers to purchase Debt Securities may be solicited by LGII
directly to institutional investors and others who may be deemed
to be underwriters (as that term is defined in the Securities
Act) with respect to any resale thereof. The terms of any such
sales will be described in the Prospectus Supplement relating
thereto.
Agents, underwriters and dealers may be entitled under
relevant agreements to indemnification or contribution by LGII
against certain liabilities, including liabilities under the
Securities Act.
Agents, underwriters and dealers may be customers of, engage
in transactions with or perform services for the Company in the
ordinary course of business.
Debt Securities may also be offered and sold, if so
indicated in the applicable Prospectus Supplement, in connection
with a remarketing upon their purchase, in accordance with a
redemption or repayment pursuant to their terms, or otherwise, by
one or ore firms ("remarketing firms"), acting as principals for
their own accounts or as agents of LGII. Any remarketing firm
will be identified and the terms of its agreement, if any, with
its compensation will be described in the applicable Prospectus
Supplement. Remarketing firms may be deemed to be underwriters
(as such term is defined in the Securities Act) in connection
with the Debt Securities remarketed thereby. Remarketing firms
may be entitled under agreements which may be entered into with
LGII to indemnification or contribution by the Company against
certain liabilities, including liabilities under the Securities
Act, and may be customers of, engage in transactions with or
perform services for the Company in the ordinary course of
business.
If so indicated in the applicable Prospectus Supplement,
LGII may authorize agents, underwriters or dealers to solicit
offers by certain types of institutions to purchase Debt
Securities from LGII at the public offering prices set forth in
the applicable Prospectus Supplement pursuant to delayed delivery
contracts ("Contracts") providing for payment and delivery on a
specified date or dates in the future. A commission indicated in
the applicable Prospectus Supplement will be paid to
underwriters, dealers and agents soliciting purchases of
Securities pursuant to Contracts accepted by LGII.
LEGAL MATTERS
The validity of the Debt Securities and certain matters of
New York law relating to the validity of the Guarantees will be
passed upon for LGII and Loewen by Thelen, Marrin, Johnson &
Bridges LLP, San Francisco, California. Certain matters relating
to the validity of the Guarantees will be passed upon for Loewen
by Russell & DuMoulin, Vancouver, British Columbia, Canada.
EXPERTS
The consolidated financial statements of Loewen incorporated
by reference in this Prospectus have been audited by KPMG,
Chartered Accountants, for the periods indicated in its report
thereon,
31
<PAGE>
which is incorporated herein by reference. Such
consolidated financial statements have been so incorporated in
reliance on such report given on the authority of KPMG as experts
in accounting and auditing.
ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES AGAINST GUARANTOR
The Guarantor is a corporation organized under and governed
by the laws of the Province of British Columbia, Canada. Certain
of its directors, controlling persons, and officers are residents
of Canada, and all or a portion of the assets of such persons and
of the Guarantor are located outside the United States. As a
result, it may be difficult or impossible for United States
holders of the Common Shares to effect service within the United
States upon the Guarantor (although it may be possible to effect
service upon direct or indirect United States subsidiaries of
Loewen) and those directors or officers who are not residents of
the United States, or to realize in the United States upon
judgments of courts of the United States predicated upon the
civil liability of such persons under the Securities Act or the
Exchange Act, to the extent such judgments exceed such person's
United States assets. Loewen has been advised by Russell &
DuMoulin, its Canadian counsel, that there is doubt as to the
enforceability in Canada against any of these persons, in
original actions or in actions for enforcement of judgments of
United States courts, of liabilities predicated solely on the
Securities Act or the Exchange Act.
32
<PAGE>
No dealer, salesperson or other
person has been authorized to give
any information or to make any
representations other than those
contained in this Prospectus in
connection with the offer and sale
of securities made hereby, and if $500,000,000
given or made, such information or
representations must not be relied LOEWEN GROUP INTERNATIONAL, INC.
upon as having been authorized by
the Company. This Prospectus does DEBT SECURITIES
not constitute an offer of any
securities other than those to
which it relates or an offer or a
solicitation in any jurisdiction GUARANTEED BY
to any person to whom it is not
lawful to make such offer or THE LOEWEN GROUP INC.
solicitation in such jurisdiction.
Neither the delivery of this
Prospectus, nor any distribution
of securities made hereunder
shall, under any circumstances,
create any implication that there
has not been a change in the facts
set forth in this Prospectus or in
the affairs of the Company since PROSPECTUS
the date hereof or that the
information contained herein is
correct as of any time subsequent
to the date hereof.
TABLE OF CONTENTS
Page
Available Information 2 , 1997
Incorporation of Certain
Information by Reference 2
Disclosure Regarding Forward-
Looking Statements 3
Financial Information 3
The Company 4
Use of Proceeds 4
Ratio of Earnings to Fixed
Charges 5
Description of Debt Securities 5
Plan of Distribution 30
Legal Matters 31
Experts 31
Enforceability of Certain
Civil Liabilities Against
Guarantor 32
<PAGE>
PART II
Item 14. Other Expenses of Issuance and Distribution.
The estimated fees payable by the registrants in
connection with the issuance and distribution of the securities
being registered are as follows:
SEC Registration Fee $303,030.30
Accounting Fees and Expense *
Legal Fees and Expenses *
Printing Fees *
Trustee Fees *
Transfer Agent Fees *
Miscellaneous *
TOTAL $ *
____________
* To be provided by amendment.
Item 15. Indemnification of Officers and Directors.
LOEWEN
Section 152 of the Company Act of British Columbia provides
in part that:
A company may, with the approval of the court, indemnify a
director or former director of the company or a director of a
corporation of which it is or was a shareholder, and his heirs
and personal representatives, against all costs, charges and
expenses, including any amount paid to settle an action or
satisfy a judgment, actually and reasonably incurred by him,
including an amount paid to settle an action or satisfy a
judgment in a civil, criminal or administrative action or
proceeding to which he is made a party by reason of being or
having been a director, including an action brought by the
company or corporation, if
(a) he acted honestly and in good faith with a view to the
best interests of the corporation of which his is or was a
director; and
(b) in the case of a criminal or administrative action or
proceeding, he had reasonable grounds for believing that his
conduct was lawful.
Part 19 of Loewen's Articles provides that Loewen shall
indemnify its directors generally in accordance with the
provisions of Section 152 and that Loewen shall indemnify its
Secretary and any Assistant Secretary against all costs, charges
and expenses incurred that have arisen as a result of serving
Loewen in such capacity. The Articles further provide that
Loewen may indemnify any of its officers, employees or agents
against all costs, charges and expenses incurred as a result of
acting as an officer, employee and agent of Loewen.
Pursuant to indemnification agreements, Loewen has agreed to
indemnify its directors and certain officers against all costs,
charges and expenses incurred by reason of being a director or
officer of
II - 1
<PAGE>
Loewen. Loewen's duty to indemnify is subject to
court approval and conditioned upon the individual acting
honestly and in good faith with a view to the best interests of
Loewen.
LGII
Section 145 of the Delaware General Corporation Law
("Delaware Law") permits, subject to certain conditions, a
corporation to indemnify its directors, officers, employees and
agents against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably
incurred by such director, officer, employee or agent in
connection with threatened, pending or completed actions, suits
and proceedings (other than actions by or in the right of the
corporation) in or to which any of such persons is a party or is
threatened to be made a party.
Section 5.01 of the By-laws of LGII provides that LGII may
indemnify its directors, officers, employees and agents to the
fullest extent permitted by Delaware Law, including the
advancement of funds, provided that such persons acted in good
faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of LGII and, with respect to
any criminal action or proceeding, had no reasonable cause to
believe such person's conduct was unlawful.
The Board of Directors of LGII has determined that the
expenses of the officers named in the class actions currently
pending against the Loewen, LGII and certain individual
defendants incurred in defending such class actions should be
paid by LGII from time to time in advance of the final
disposition of such proceedings, subject to each such individual
entering into an undertaking to repay all amounts paid by LGII if
it is ultimately determined that such individual is not entitled
to be indemnified by LGII under the Delaware Law.
II - 2
<PAGE>
Item 16. Exhibits.
Exhibit
Number Description
1 UNDERWRITING AGREEMENTS
1.1 Form of Underwriting Agreement relating to Common
Shares *
1.2 Form of Underwriting Agreement relating to
Preferred Shares *
1.3 Form of Underwriting Agreement relating to Debt
Securities of Loewen *
1.4 Form of Underwriting Agreement relating to Debt
Securities of LGII *
1.5 Form of Underwriting Agreement relating to
Warrants *
4 INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS,
INCLUDING INDENTURES
4.1 Form of Indenture by and among Loewen, as issuer,
LGII, as guarantor, and Fleet National Bank, as
trustee
4.2 Form if Indenture by and among LGII, as issuer,
Loewen, as guarantor, and Fleet National Bank, as
trustee
4.3 Form of Warrant to Acquire Common Shares *
4.4 Form of Warrant to Acquire Preferred Shares *
4.5 Form of Warrant to Acquire Debt Securities of
Loewen *
4.6 Altered Memorandum of The Loewen Group Inc., filed
with the British Columbia Registrar of Companies
(the "Registrar") on June 21, 1996 (1)
4.7 Articles of Loewen, restated, filed with the
Registrar on March 1, 1988, as amended (2)
4.8 Shareholder Protection Rights Plan, dated as of
April 20,1990, as amended on May 24, 1990 and
April 7, 1994 and reconfirmed on May 17, 1995 (3)
4.9 Collateral Trust Agreement, dated as of May 15,
1996, among Bankers Trust Company, as trustee,
Loewen, LGII and various other pledgers (4)
4.10 Amended and Restated 1994 MEIP Credit Agreement,
dated as of June 14, 1994, by and between Loewen
Management Investment Corporation, in its capacity
as agent for LGII, Loewen ,the banks listed
therein and Wachovia Bank of Georgia, N.A., as
agent for such banks (5)
4.11 Indenture, dated as of August 15, 1994, by and
between LGII, as issuer, Loewen, as guarantor, and
State Street Bank and Trust Company, as trustee
with respect to 9.45% Junior Subordinated
Debentures, Series A, due 2024, issued by LGII and
guaranteed by Loewen (6)
II - 3
<PAGE>
4.12 Indenture, dated as of March 20, 1996, by and
between LGII, Loewen and Fleet National Bank
(formerly Fleet National Bank of Connecticut), as
trustee, with respect to Series 1 and 2 Senior
Guaranteed Notes of LGII (2)
4.13 Third Amendment to Operating Credit Agreement,
dated for reference July 15, 1996, among Loewen,
LGII and Royal Bank of Canada (5)
4.14 Amended and Restated Operating Credit Agreement,
dated for reference July 15, 1996, between Loewen
and Royal Bank of Canada (5)
4.15 Indenture, dated as of October 1, 1996, by and
between LGII, Loewen and Fleet National Bank, as
trustee, with respect to Series 3 and 4 Senior
Guaranteed Notes of LGII (5)
4.16 Credit Agreement, dated as of May 15, 1996, among
LGII, as borrower, Loewen, as a guarantor, the
lenders named therein, as the lenders, Goldman
Sachs & Co., as the documentation agent and Bank
of Montreal, as issuer, swingline lender and agent
(4)
4.17 Note Agreements by Loewen and LGII re 9.70% Senior
Guaranteed Notes, Series A, due November 1, 1988,
issued by LGII ("Series A Notes"), 9.93% Senior
Guaranteed Notes, Series B, due November 1, 2001,
issued by LGII ("Series B Notes"), and 9.70%
Senior Guaranteed Notes, Series C, due November 1,
1988, issued by Loewen ("Series C Notes"), dated
for reference October 1, 1991 (3)
4.18 Second Amendment to Note Agreements, among LGII,
Loewen and institutions named therein, dated for
reference May 15, 1996, re Series A Notes, Series
B Notes and Series C Notes (4)
4.19 Note Agreement by Loewen and LGII re 9.62% Senior
Guaranteed Notes, Series D, due September 11,
2003, issued by Loewen ("Series D Notes"), dated
for reference September 1, 1993, as amended June
10, 1994 (3)
4.20 Second Amendment to Note Agreement, among LGII,
Loewen and institutions named therein, dated for
reference May 15, 1996, re Series D Notes (4)
4.21 Note Agreement by Loewen and LGII re 6.49% Senior
Guaranteed Notes, Series E, due February 25, 2004,
issued by LGII ("Series E Notes"), dated for
reference February 1, 1994 (3)
4.22 Second Amendment to Note Agreement, among LGII,
Loewen and Teachers Insurance and Annuity
Association of America, re Series E Notes (4)
4.23 Loewen and LGII hereby agree to furnish to the
Commission, upon request, a copy of the
instruments which define the rights of holders of
long-term debt of the Company. None of such
instruments not included as exhibits herein
collectively represents long-term debt in excess
of 10% of the consolidated total assets of the
Company.
5 OPINIONS RE LEGALITY
II - 4
<PAGE>
5.1 Opinion of Russell & DuMoulin as to the legality
of the Common Shares, Preferred Shares, Debt
Securities and Warrants to purchase Securities of
Loewen and the Guarantees of LGII Debt Securities
*
5.2 Opinion of Thelen, Marrin, Johnson & Bridges LLP
as to the legality of the Debt Securities of LGII
and the Guarantees of Loewen Debt Securities *
12 STATEMENTS RE COMPUTATION OF RATIOS
12.1 Statement re Computation of Earnings to Fixed
Charges Ratio (Canadian GAAP) (7)
12.2 Statement re Computation of Earnings to Fixed
Charges Ratio (U.S. GAAP) (7)
23 CONSENTS OF EXPERTS AND COUNSEL
23.1 Consent of Russell & DuMoulin (included in Exhibit
5.1) *
23.2 Consent of Thelen, Marrin, Johnson & Bridges LLP
(included in Exhibit 5.2) *
23.3 Consent of KPMG
23.4 Consent of Price Waterhouse LLP
23.5 Consent of Richter, Usher & Vineberg
23.6 Consent of Altschuler, Melvion and Glasser LLP
23.7 Consents of Keith J. Schulte Accountancy
Corporation
23.8 Consents of Hirsch, Oelbaum, Bram & Hanover
23.9 Consent of KPMG Peat Marwick LLP
24 POWERS OF ATTORNEY (included on the signature
pages to this Registration Statement)
25 STATEMENT RE ELIGIBILITY OF TRUSTEE *
* To be filed by amendment.
(1) Incorporated by reference from Loewen's Quarterly
Report on Form 10-Q for the quarter ended June 30,
1996, filed on August 15, 1996 (File No. 1-12163)
(2) Incorporated by reference from Loewen's Annual Report
on Form 10-K for the year ended December 31, 1995,
filed on March 28, 1996, as amended (File No. 0-18429)
(3) Incorporated by reference from Loewen's Annual Report
on Form 10-K for the year ended December 31, 1994,
filed on March 31, 1995 (File No. 0-18429)
(4) Incorporated by reference from the Registration
Statement on Form S-4 filed by LGII and Loewen on May
3, 1996, as amended (File Nos. 333-03135 and 333-03135-
01)
II - 5
<PAGE>
(5) Incorporated by reference from Loewen's Quarterly
Report on Form 10-Q for the quarter ended September 30,
1996, filed on November 14, 1996 (File No. 1-12163)
(6) Incorporated by reference from the combined
Registration Statement on Form F-9/F-3 filed by LGII
and Loewen on July 1, 1994, as amended (File Nos. 33-
81032 and 33-81034)
(7) Incorporated by reference from the Registration
Statement on Form S-4 filed by LGII and Loewen on
November 18, 1996, as amended (File Nos. 333-16319 and
333-16319-01)
Item 17. Undertakings.
(a) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of this registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in this registration statement or any material change to
such information in this registration statement;
provided however, that paragraphs (a)(1)(i) and (a)(1)(ii)
shall not apply if the information required to be included in
a post-effective amendment by such paragraphs is contained in
one or more periodic reports filed with or furnished to the
Commission by Loewen pursuant to Section 13 or 15(d) of the
Exchange Act that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
II - 6
<PAGE>
(b) The undersigned registrants hereby undertake that,
for purposes of determining any liability under the Securities
Act, each filing of Loewen's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934
(and where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrants pursuant to
the foregoing provisions, or otherwise, the registrants have been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrants of expenses incurred
or paid by a director, officer or controlling person of the
registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrants will, unless in the opinion of their counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by them is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
(i) The undersigned registrants hereby undertake that:
(1) For purposes of determining any liability under
the Securities Act of 1933, the information omitted from the
form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrants pursuant to Rule
424(b)1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the
time it was declared effective.
(2) For the purpose of determining any liability
under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
(j) The undersigned registrants hereby undertake to file
an application for the purpose of determining the eligibility of
the trustee to act under subsection (a) of Section 310 of the
Trust Indenture Act in accordance with the rules and regulations
prescribed by the Commission under Section 305(b)(2) of the Act.
II - 7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrants certifies that they have reasonable grounds to
believe that they meets all of the requirements for filing on
Form S-3 and has duly caused this Registration Statement to be
signed on their behalf by the undersigned, thereunto duly
authorized in the City of Burnaby, Province of British Columbia,
Canada on March 19, 1997.
The Loewen Group Inc.
By: /s/ Raymond L. Loewen
Raymond L. Loewen
Chairman of the Board and Chief
Executive Officer
Loewen Group International, Inc.
By: /s/ Raymond L. Loewen
Raymond L. Loewen
Chairman of the Board and Chief
Executive Officer
II - 8
<PAGE>
THE LOEWEN GROUP INC.
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints
Raymond L. Loewen, Peter S. Hyndman and Paul Wagler, and each of
them severally, acting alone and without the other, his true and
lawful attorney-in-fact with authority to execute in the name of
each such person, and to file with the Securities and Exchange
Commission, together with any exhibits thereto and other
documents therewith, any and all amendments (including without
limitation post-effective amendments) to this registration
statement necessary or advisable to enable the Registrant to
comply with the Securities Act and any rules, regulations and
requirements of the Securities and Exchange Commission in respect
thereof, which amendments may make such changes in this
registration statement as the aforesaid attorney-in-fact deems
appropriate.
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
Dated: March 19, 1997 /s/ Raymond L. Loewen
Raymond L. Loewen
Chairman of the Board, Chief Executive
Officer and Director
(Principal Executive Officer)
Dated: March 19, 1997 /s/ Timothy R. Hogenkamp
Timothy R. Hogenkamp
President and Chief Operating Officer
and Director
(Principal Executive Officer)
Dated: March 19, 1997 /s/ Paul Wagler
Paul Wagler
Senior Vice-President, Finance and Chief
Financial Officer
and Director
(Principal Financial Officer)
Dated: March 19, 1997 /s/ Wm. Grant Ballantyne
Wm. Grant Ballantyne
Senior Vice-President, Financial Control
and Administration
(Principal Accounting Officer)
Dated: March 19, 1997 /s/ Kenneth S. Bagnell
Kenneth S. Bagnell
Director
II - 9
<PAGE>
Dated: March 19, 1997 /s/ The Honorable J. Carter Beese, Jr.
The Honorable J. Carter Beese, Jr.
Director
Dated: March 19, 1997 /s/ Earl A. Grollman
Earl A. Grollman
Director
Dated: March 19, 1997 /s/ Peter S. Hyndman
Peter S. Hyndman
Director
Dated: March 19, 1997 /s/ Albert S. Lineberry, Sr.
Albert S. Lineberry, Sr.
Director
Dated: March 19, 1997
Charles B. Loewen
Director
Dated: March 19, 1997 /s/ Robert B. Lundgren
Robert B. Lundgren
Director
Dated: March 19, 1997 /s/ James D. McLennan
James D. McLennan
Director
Dated: March 19, 1997 /s/ Lawrence Miller
Lawrence Miller
Director
Dated: March 19, 1997 /s/ Ernest G. Penner
Ernest G. Penner
Director
II - 10
<PAGE>
Dated: March 19, 1997 /s/ The Right Honourable John N.
Turner, P.C., C.C. Q.C.
The Right Honourable John N. Turner,
P.C., C.C., Q.C.
Director
AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
The undersigned is Loewen's authorized representative in the
United States.
Dated: March 19, 1997 /s/ Timothy R. Hogenkamp
Timothy R. Hogenkamp
II - 11
<PAGE>
LOEWEN GROUP INTERNATIONAL, INC.
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints
Raymond L. Loewen, Peter S. Hyndman and Paul Wagler, and each of
them severally, acting alone and without the other, his true and
lawful attorney-in-fact with authority to execute in the name of
each such person, and to file with the Securities and Exchange
Commission, together with any exhibits thereto and other
documents therewith, any and all amendments (including without
limitation post-effective amendments) to this registration
statement necessary or advisable to enable the Registrant to
comply with the Securities Act and any rules, regulations and
requirements of the Securities and Exchange Commission in respect
thereof, which amendments may make such changes in this
registration statement as the aforesaid attorney-in-fact deems
appropriate.
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
Dated: March 19, 1997 /s/ Raymond L. Loewen
Raymond L. Loewen
Chairman of the Board, Chief Executive
Officer and Director
(Principal Executive Officer)
Dated: March 19, 1997 /s/ Timothy R. Hogenkamp
Timothy R. Hogenkamp
President and Chief Operating Officer
and Director
(Principal Executive Officer)
Dated: March 19, 1997 /s/ Paul Wagler
Paul Wagler
Senior Vice-President, Finance and Chief
Financial Officer
and Director
(Principal Financial Officer)
Dated: March 19, 1997 /s/ Wm. Grant Ballantyne
Wm. Grant Ballantyne
Senior Vice-President, Financial Control
and Administration
(Principal Accounting Officer)
Dated: March 19, 1997
George M. Amato
Director
II - 12
<PAGE>
Dated: March 19, 1997 /s/ Gordon S. Bigelow
Gordon S. Bigelow
Director
Dated: March 19, 1997 /s/ J.C. Carothers, Jr.
J.C. Carothers, Jr.
Director
Dated: March 19, 1997 /s/ H. Steven Childress
H. Steven Childress
Director
Dated: March 19, 1997
Bruce E. Earthman
Director
Dated: March 19, 1997
Edward J. Fitzgerald
Director
Dated: March 19, 1997
Honorine T. Flanangan
Director
Dated: March 19, 1997
Thomas F. Glodek
Director
Dated: March 19, 1997 /s/ Earl A. Grollman
Earl A. Grollman
Director
Dated: March 19, 1997 /s/ Mary M. Howard
Mary M. Howard
Director
Dated: March 19, 1997 /s/ Peter S. Hyndman
Peter S. Hyndman
Director
II - 13
<PAGE>
Dated: March 19, 1997 /s/ Albert S. Lineberry, Jr.
Albert S. Lineberry, Jr.
Director
Dated: March 19, 1997
Michael L. Louden
Director
Dated: March 19, 1997 /s/ John E. Malletta, Sr.
John E. Malletta, Sr.
Director
Dated: March 19, 1997 /s/ Lawrence Miller
Lawrence Miller
Director
Dated: March 19, 1997 /s/ J. David Mullins
J. David Mullins
Director
Dated: March 19, 1997 /s/ David F. Riemann
David F. Riemann
Director
Dated: March 19, 1997 /s/ Robert D. Russell
Robert D. Russell
Director
Dated: March 19, 1997
Michael L. Schweer
Director
Dated: March 19, 1997 /s/ Bill Seale
Bill Seale
Director
II - 14
<PAGE>
Dated: March 19, 1997 /s/ William R. Shane
William R. Shane
Director
Dated: March 19, 1997
David J. Shipper
Director
Dated: March 19, 1997
Sandra C. Strong
Director
Dated: March 19, 1997 /s/ Robert L. Studley
Robert L. Studley
Director
Dated: March 19, 1997
Robert A. Weinstein
Director
Dated: March 19, 1997 /s/ John R. Wright, Sr.
John R. Wright, Sr.
Director
II - 15
THE LOEWEN GROUP INC., as Issuer
LOEWEN GROUP INTERNATIONAL, INC., as Guarantor
and
FLEET NATIONAL BANK, as Trustee
INDENTURE
Dated as of ____________, 1997
$500,000,000
Debt Securities
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ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION 1
Section 1.01 Definitions 1
Section 1.02 Incorporation by Reference of Trust
Indenture Act 21
Section 1.03 Rules of Construction 22
ARTICLE TWO THE SECURITIES 22
Section 2.01 Amount of Securities; Issuable In
Series 22
Section 2.02 Forms Generally 25
Section 2.03 Form Of Trustee's Certificate Of
Authentication 25
Section 2.04 Authentication And Delivery Of
Securities 26
Section 2.05 Execution Of Securities 29
Section 2.06 Certificate Of Authentication 29
Section 2.07 Denomination And Date Of Securities;
Payments Of Interest 29
Section 2.08 Registrar 30
Section 2.09 Provision As To Paying Agent 30
Section 2.10 Transfer and Exchange 31
Section 2.11 Mutilated, Defaced, Destroyed, Lost
And Stolen Securities 33
Section 2.12 Cancellation Of Securities;
Disposition Thereof 34
Section 2.13 Temporary Securities 35
Section 2.14 Defaulted Interest 35
Section 2.15 CUSIP Number 35
Section 2.16 Deposit of Moneys 35
ARTICLE THREE SECURITYHOLDERS LIST AND REPORTS BY TLGI
AND THE TRUSTEE 36
Section 3.01 TLGI To Furnish Trustee Information
As To Names And Addresses Of
Securityholders 36
Section 3.02 Preservation And Disclosure Of
Securityholders Lists 36
Section 3.03 Reports By TLGI. TLGI covenants: 37
ARTICLE FOUR COVENANTS 38
Section 4.01 Payment of Securities 38
Section 4.02 Office For Notices And Payments, Etc. 39
Section 4.03 Corporate Existence 39
Section 4.04 Payment of Taxes and Other Claims 39
Section 4.05 Maintenance of Properties; Insurance;
Books and Records; Compliance with Law 40
Section 4.06 Compliance Certificate 40
Section 4.07 Limitation on Indebtedness 41
Section 4.08 Limitation on Restricted Payments 42
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Section 4.09 Limitation on Issuances and Sale of
Preferred Stock by Restricted
Subsidiaries 44
Section 4.10 Limitation on Liens 44
Section 4.11 Change of Control 45
Section 4.12 Disposition of Proceeds of Asset
Sales 47
Section 4.13 Limitation on Transactions with
Interested Persons 49
Section 4.14 Limitation on Dividends and Other
Payment Restrictions Affecting
Subsidiaries 50
Section 4.15 Limitations on Sale-Leaseback
Transactions 51
Section 4.16 Limitation on Applicability of
Certain Covenants 51
Section 4.17 Commission Reports 52
Section 4.18 Rule 144A Information Requirement 52
Section 4.19 Waiver of Stay, Extension or Usury
Laws 52
ARTICLE FIVE SUCCESSOR CORPORATION 53
Section 5.01 When TLGI or LGII May Merge, etc. 53
Section 5.02 Successor Substituted 54
ARTICLE SIX REMEDIES 54
Section 6.01 Events of Default 54
Section 6.02 Acceleration 56
Section 6.03 Other Remedies 57
Section 6.04 Waiver of Past Defaults 58
Section 6.05 Direction Of Proceedings; Waiver Of
Defaults By Majority Of Securityholders 58
Section 6.06 Limitation on Suits 58
Section 6.07 Right of Holders To Receive Payment 59
Section 6.08 Collection Suit by Trustee 59
Section 6.09 Trustee May File Proofs of Claims 59
Section 6.10 Application Of Moneys Collected By
Trustee 60
Section 6.11 Undertaking for Costs 61
Section 6.12 Restoration of Rights and Remedies 61
Section 6.13 Remedies Cumulative And Continuing 61
ARTICLE SEVEN TRUSTEE 62
Section 7.01 Duties And Responsibilities Of The
Trustee; During Default; Prior To
Default 62
Section 7.02 Certain Rights Of The Trustee 63
Section 7.03 Trustee And Agents May Hold
Securities; Collections, Etc. 64
Section 7.04 Trustee's Disclaimer 64
Section 7.05 Notice of Default 65
Section 7.06 Money Held in Trust 65
Section 7.07 Reports by Trustee to Holders 65
Section 7.08 Compensation and Indemnity 65
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Section 7.09 Resignation And Removal; Appointment
Of Successor Trustee 66
Section 7.10 Merger, Conversion, Consolidation Or
Succession To Business Of Trustee 68
Section 7.11 Persons Eligible For Appointment As
Trustee 68
Section 7.12 Preferential Collection of Claims
Against TLGI 68
Section 7.13 Qualification Of Trustee; Conflicting
Interests 69
Section 7.14 Acceptance Of Appointment By
Successor Trustee 74
Section 7.15 Appointment Of Authenticating Agent 75
ARTICLE EIGHT SATISFACTION AND DISCHARGE OF INDENTURE 76
Section 8.01 Satisfaction And Discharge Of
Indenture 76
Section 8.02 Indemnity for U.S. Government
obligations; Repayment 78
Section 8.03 Application By Trustee Of Funds
Deposited For Payment Of Securities 79
Section 8.04 Repayment to TLGI 79
Section 8.05 Reinstatement 80
ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS 80
Section 9.01 Supplemental Indentures Without
Consent Of Securityholders 80
Section 9.02 Supplemental Indentures With Consent
Of Securityholders 81
Section 9.03 Compliance with Trust Indenture Act 83
Section 9.04 Effect Of Supplemental Indenture 83
Section 9.05 Notation on or Exchange of Securities 83
Section 9.06 Trustee May Sign Amendments, etc. 84
ARTICLE TEN CONCERNING THE SECURITYHOLDERS 84
Section 10.01 Evidence Of Action Taken By
Securityholders 84
Section 10.02 Proof Of Execution Of Instruments
And Of Holding Of Securities 84
Section 10.03 Holders To Be Treated As Owners 85
Section 10.04 Securities Owned By TLGI Deemed Not
Outstanding 85
Section 10.05 Right Of Revocation Of Action Taken 85
Section 10.06 Record Date For Consents And Waiver 86
ARTICLE ELEVEN MISCELLANEOUS 86
Section 11.01 Conflict Of Any Provision Of
Indenture With Trust Indenture Act Of
1939 86
Section 11.02 Notices 86
Section 11.03 Communication by Holders with Other
Holders 87
Section 11.04 Officer's Certificates And Opinions
Of Counsel; Statements To Be Contained
Therein 87
Section 11.05 Payments Due On Saturdays, Sundays
And Holidays 88
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Section 11.06 Rules by Trustee, Paying Agent,
Registrar 88
Section 11.07 Governing Law 89
Section 11.08 Consent to Service of Process 89
Section 11.09 No Interpretation of Other
Agreements 89
Section 11.10 Partners, Incorporators,
Stockholders, Officers And Directors Of
TLGI Exempt From Individual Liability 89
Section 11.11 Successors 90
Section 11.12 Duplicate Originals 90
Section 11.13 Severability 90
Section 11.14 Table of Contents, Headings, Etc. 90
Section 11.15 Provisions Of Indenture For The Sole
Benefit Of Parties And Holders Of Senior
Indebtedness And Of Securities 90
ARTICLE TWELVE REDEMPTION OF SECURITIES AND SINKING FUNDS 91
Section 12.01 Applicability Of Article 91
Section 12.02 Notice Of Redemption; Partial
Redemptions 91
Section 12.03 Payments Of Securities Called For
Redemption 92
Section 12.04 Exclusion Of Certain Securities From
Eligibility For Selection For Redemption 93
Section 12.05 Mandatory And Optional Sinking Funds 93
ARTICLE THIRTEEN CONVERSION OF SECURITIES 95
Section 13.01 Applicability Of Article 95
Section 13.02 Exercise Of Conversion Privilege 95
Section 13.03 Fractional Interests 97
Section 13.04 Adjustment Of Conversion Price 97
Section 13.05 Continuation Of Conversion Privilege
In Case Of Merger, Consolidation Or Sale
Of Assets 100
Section 13.06 Notice Of Certain Events 101
Section 13.07 Taxes On Conversion 101
Section 13.08 TLGI To Provide Stock 102
Section 13.09 Disclaimer Of Responsibility For
Certain Matters 102
Section 13.10 Return Of Funds Deposited For
Redemption Of Converted Securities 103
SIGNATURES
Exhibit A - Form of Guarantee
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THIS INDENTURE, dated as of ____________, 1997, between
The Loewen Group Inc., a body corporate organized under and
governed by the laws of the Province of British Columbia, Canada
(hereinafter referred to as "TLGI"), Loewen Group International,
Inc., a Delaware corporation and a wholly owned subsidiary of
TLGI ("LGII"), and Fleet National Bank, a national banking
association as trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, TLGI has duly authorized the issue from time
to time of debentures, notes or other evidences of indebtedness
to be issued in one or more series (the "Securities") up to such
principal amount or amounts as may from time to time be
authorized in accordance with the terms of this Indenture;
WHEREAS, TLGI has duly authorized the execution and
delivery of this Indenture to provide, among other things, for
the authentication, delivery and administration of the
Securities; and
WHEREAS, all things necessary to make this Indenture a
valid indenture and agreement according to its terms have been
undertaken and completed;
NOW, THEREFORE, In consideration of the premises and
the purchase of the Securities by the Holders thereof, TLGI, LGII
and the Trustee mutually covenant and agree for the equal and
proportionate benefit of the respective Holders from time to time
of the Securities as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
"1996 Revolving Credit Facility" means the $750,000,000
Credit Agreement, dated as of May 15, 1996, among LGII, as
borrower, TLGI, as guarantor, the lenders named therein, as the
lenders, Goldman, Sachs & Co., as the documentation agent and
Bank of Montreal, as issuer, swingline lender and agent.
"Acquired Indebtedness" means Indebtedness of a person
(a) assumed or created in connection with an Asset Acquisition
from such person or (b) existing at the time such person becomes
a Restricted Subsidiary of any other person.
"Affiliate" means, with respect to any specified
person, any other person directly or indirectly controlling or
controlled by or under direct or indirect common control with
such specified person.
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"Asset Acquisition" means (a) an Investment by TLGI or
any Restricted Subsidiary of TLGI (including, without limitation,
LGII) in any other person pursuant to which such person shall
become a Restricted Subsidiary of TLGI, or shall be merged with
or into TLGI or any Restricted Subsidiary of TLGI, (b) the
acquisition by TLGI or any Restricted Subsidiary of TLGI of the
assets of any person (other than a Restricted Subsidiary of TLGI)
which constitute all or substantially all of the assets of such
person or (c) the acquisition by TLGI or any Restricted
Subsidiary of TLGI of any division or line of business of any
person (other than a Restricted Subsidiary of TLGI).
"Asset Sale" means any direct or indirect sale,
issuance, conveyance, transfer, lease or other disposition to any
person other than TLGI or a Restricted Subsidiary of TLGI
(including, without limitation, LGII), in one or a series of
related transactions, of (a) any Capital Stock of any Restricted
Subsidiary of TLGI (other than in respect of directors'
qualifying shares or investments by foreign nationals mandated by
applicable law) or of First Capital Life Insurance Company of
Louisiana, National Capitol Life Insurance Company, Security
Industrial Insurance Company, Security Industrial Fire Insurance
Company or any successors to such Subsidiaries; (b) all or
substantially all of the properties and assets of any division or
line of business of TLGI or any Restricted Subsidiary of TLGI; or
(c) any other properties or assets of TLGI or any Restricted
Subsidiary of TLGI other than properties and assets sold in the
ordinary course of business. For the purposes of this
definition, the term "Asset Sale" shall not include (i) any sale,
transfer or other disposition of equipment, tools or other assets
(including Capital Stock of any Restricted Subsidiary of TLGI) by
TLGI or any of its Restricted Subsidiaries in one or a series of
related transactions in respect of which TLGI or such Restricted
Subsidiary receives cash or property with an aggregate Fair
Market Value of $2,000,000 or less; and (ii) any sale, issuance,
conveyance, transfer, lease or other disposition of properties or
assets that is governed by the provisions of Article Four.
"Asset Sale Offer" shall have the meaning set forth in
Section 4.12.
"Asset Sale Offer Price" shall have the meaning set
forth in Section 4.12.
"Asset Sale Purchase Date" shall have the meaning set
forth in Section 4.12.
"Associated Rights" means any rights to purchase shares
of TLGI's capital stock or other securities that are associated
with any class of stock constituting Common Stock for purposes
hereof if at the time of the issuance thereof such rights are not
separable from any class of stock except upon the occurrence of a
contingency, whether such rights exist at the date of the
execution hereof or are thereafter issued by TLGI as a dividend
on any such class of stock or otherwise.
"Attributable Value" means, as to any particular lease
under which any person is at the time liable other than a
Capitalized Lease Obligation, and at any date as of which the
amount thereof is to be determined, the total net amount of rent
required to be paid by such person under such lease during the
initial term thereof as determined in accordance with GAAP,
discounted from the last date of such initial term to the date of
determination at a rate per annum equal to the discount rate
which would be applicable to a Capitalized Lease Obligation with
a
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<PAGE>
like term in accordance with GAAP. The net amount of rent
required to be paid under any such lease for any such period
shall be the aggregate amount of rent payable by the lessee with
respect to such period after excluding amounts required to be
paid on account of insurance, taxes, assessments, utility,
operating and labor costs and similar charges. In the case of
any lease which is terminable by the lessee upon the payment of a
penalty, such net amount shall also include the amount of such
penalty, but no rent shall be considered as required to be paid
under such lease subsequent to the first date upon which it may
be so terminated. "Attributable Value" means, as to a
Capitalized Lease Obligation under which any person is at the
time liable and at any date as of which the amount thereof is to
be determined, the capitalized amount thereof that would appear
on the face of a balance sheet of such person in accordance with
GAAP.
"Authenticating Agent" shall have the meaning set forth
in Section 7.15.
"Bankruptcy Law" means Title 11 of the United States
Code or any similar law for the relief of debtors.
"Board of Directors" means the board of directors of
LGII or TLGI, as the case may be, or any committee of such Board
duly authorized to act on its respective behalf.
"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of TLGI to
have been duly adopted or consented to by the Board of Directors
of TLGI and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means, with respect to any Security, a
day that (a) in the Place of Payment (or in any of the Places of
Payment, if more than one) in which amounts are payable, as
specified in the form of such Security, and (b) in the city in
which the Corporate Trust Office is located, is not a day on
which banking institutions are authorized or required by law or
regulation to close.
"Canadian Revolver" means CDN $50,000,000 Operating
Credit Agreement dated August 15, 1994, as amended on July 15,
1996, among TLGI, LGII and Royal Bank of Canada.
"Canadian Term Loan" means CDN $35,000,000 Credit
Agreement dated as of January 12, 1995 between TLGI, LGII and
Dresdner Bank Canada.
"Capital Stock" means, with respect to any person, any
and all shares, interests, participations, rights in or other
equivalents (however designated) of such person's capital stock,
and any rights (other than debt securities convertible into
capital stock), warrants or options exchangeable for or
convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation
under a lease of (or other agreement conveying the right to use)
any property (whether real, personal or mixed) that is required
to be classified and accounted for as a capital lease obligation
under GAAP, and the
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amount of any such obligation at any date
shall be the capitalized amount thereof at such date, determined
in accordance with GAAP.
"Cash Equivalents" means, at any time, (i) any evidence
of Indebtedness with a maturity of 180 days or less issued or
directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is
pledged in support thereof); (ii) certificates of deposit or
acceptances with a maturity of 180 days or less of any financial
institution that is a member of the Federal Reserve System having
combined capital and surplus and undivided profits of not less
than $500,000,000; (iii) certificates of deposit with a maturity
of 180 days or less of any financial institution that is not
organized under the laws of the United States, any state thereof
or the District of Columbia that are rated at least A-1 by S&P or
at least P-1 by Moody's or at least an equivalent rating category
of another nationally recognized securities rating agency; (iv)
repurchase agreements and reverse repurchase agreements relating
to marketable direct obligations issued or unconditionally
guaranteed by the government of the United States of America or
issued by any agency thereof and backed by the full faith and
credit of the United States of America, in each case maturing
within 180 days from the date of acquisition; provided that the
terms of such agreements comply with the guidelines set forth in
the Federal Financial Agreements of Depository Institutions With
Securities Dealers and Others, as adopted by the Comptroller of
the Currency on October 31, 1985; and (v) notes held by TLGI or
any Restricted Subsidiary (including, without limitation, LGII)
which were obtained by TLGI or such Restricted Subsidiary in
connection with Asset Sales (x) in the ordinary course of its
funeral home, cemetery or cremation businesses or (y) which were
required to be made pursuant to applicable federal or state law.
"Change of Control" means the occurrence on or after
the Measurement Date of any of the following events: (a) any
"person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), excluding Permitted Holders, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-
5 under the Exchange Act, except that a person shall be deemed to
have "beneficial ownership" of all securities that such person
has the right to acquire, whether such right is exercisable
immediately or only after the passage of time, upon the happening
of an event or otherwise), directly or indirectly, of more than
35% of the total Voting Stock of TLGI or LGII, under
circumstances where the Permitted Holders (i) "beneficially own"
(as so defined) a lower percentage of the Voting Stock than such
other "person" or "group" and (ii) do not have the right or
ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of
TLGI or LGII; (b) TLGI or LGII consolidates with, or merges with
or into, another person or sells, assigns, conveys, transfers,
leases or otherwise disposes of all or substantially all of its
assets to another person, or another person consolidates with, or
merges with or into, TLGI or LGII, in any such event pursuant to
a transaction in which the outstanding Voting Stock of TLGI or
LGII is converted into or exchanged for cash, securities or other
property, other than any such transaction where (i) the
outstanding Voting Stock of TLGI or LGII is converted into or
exchanged for (1) Voting Stock (other than Redeemable Capital
Stock) of the surviving or transferee corporation or (2) cash,
securities and other property in an amount which could then be
paid by TLGI or LGII as a Restricted Payment under the provisions
hereof, and
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(ii) immediately after such transaction no "person"
or "group" (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act), excluding Permitted Holders, is the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the
right to acquire, whether such right is exercisable immediately
or only after the passage of time, upon the happening of an event
or otherwise), directly or indirectly, of more than 50% of the
total Voting Stock of the surviving or transferee corporation;
(c) at any time during any consecutive two-year period,
individuals who at the beginning of such period constituted the
Board of Directors of TLGI or LGII (together with any new
directors whose election by such Board of Directors or whose
nomination for election by the shareholders or stockholders of
TLGI or LGII was approved by a vote of 66-2/3% of the directors
then still in office who were either directors at the beginning
of such period or whose election or nomination for election was
previously so approved) cease for any reason (including the
failure of such individuals to be elected in a proxy contest
involving a solicitation of proxies) to constitute a majority of
the Board of Directors of TLGI or LGII then in office; or (d)
TLGI or LGII is liquidated or dissolved or adopts a plan of
liquidation other than a liquidation of LGII into TLGI.
"Change of Control Offer" shall have the meaning set
forth in Section 4.11.
"Change of Control Purchase Date" shall have the
meaning set forth in Section 4.11.
"Collateral Agreement" means the Collateral Trust
Agreement, dated as of May 15, 1996, among Bankers Trust Company,
as trustee, TLGI, LGII and various other Subsidiaries.
"Commission" means the Securities and Exchange
Commission, as from time to time constituted, or if at any time
after the execution and delivery of the Indenture such Commission
is not existing and performing the applicable duties now assigned
to it, then the body or bodies performing such duties at such
time.
"Common Stock" means the Common shares without par
value of TLGI as the same exists at the date of execution and
delivery of this Indenture or other capital stock of TLGI into
which such common stock is reclassified or changed from time to
time.
"common stock" means, with respect to any person, any
and all shares, interests or other participations in, and other
equivalents (however designated and whether voting or nonvoting)
of, such person's common stock, whether outstanding at the Issue
Date or issued after the Issue Date, and includes, without
limitation, all series and classes of such common stock.
"Consolidated Cash Flow Available for Fixed Charges"
means, with respect to any person for any period, (A) the sum of,
without duplication, the amounts for such period, taken as a
single accounting period, of (a) Consolidated Net Income,
(b) Consolidated Non-cash Charges, (c) Consolidated Interest
Expense and (d) Consolidated Income Tax Expense less (B) any non-
cash items increasing Consolidated Net Income for such period.
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"Consolidated Fixed Charge Coverage Ratio" means, with
respect to any person, the ratio of the aggregate amount of
Consolidated Cash Flow Available for Fixed Charges of such person
for the full fiscal quarter immediately preceding the date of the
transaction (the "Transaction Date") giving rise to the need to
calculate the Consolidated Fixed Charge Coverage Ratio (such full
fiscal quarter period being referred to herein as the "Prior
Quarter") to the aggregate amount of Consolidated Fixed Charges
of such person for the Prior Quarter. In addition to and without
limitation of the foregoing, for purposes of this definition,
"Consolidated Cash Flow Available for Fixed Charges" and
"Consolidated Fixed Charges" shall be calculated after giving
effect on a pro forma basis for the period of such calculation
to, without duplication, (a) the incurrence of any Indebtedness
of such person or any of its Restricted Subsidiaries (and the
application of the net proceeds thereof) during the period
commencing on the first day of the Prior Quarter to and including
the Transaction Date (the "Reference Period"), including, without
limitation, the incurrence of the Indebtedness giving rise to the
need to make such calculation (and the application of the net
proceeds thereof), as if such incurrence (and application)
occurred on the first day of the Reference Period, and (b) any
Material Asset Sales or Material Asset Acquisitions (including,
without limitation, any Material Asset Acquisition giving rise to
the need to make such calculation as a result of such person or
one of its Restricted Subsidiaries (including any person who
becomes a Restricted Subsidiary as a result of the Material Asset
Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness) occurring during the Reference Period, as
if such Material Asset Sale or Material Asset Acquisition
occurred on the first day of the Reference Period. Furthermore,
in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this
"Consolidated Fixed Charge Coverage Ratio," (i) interest on
outstanding Indebtedness determined on a fluctuating basis as at
the Transaction Date and which will continue to be so determined
thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness in
effect on the Transaction Date; and (ii) if interest on any
Indebtedness actually incurred on the Transaction Date may
optionally be determined at an interest rate based upon a factor
of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the
Transaction Date will be deemed to have been in effect during the
Reference Period. If such person or any of its Restricted
Subsidiaries directly or indirectly guarantees Indebtedness of a
third person, the above clause shall give effect to the
incurrence of such guaranteed Indebtedness as if such person or
such Restricted Subsidiary had directly incurred or otherwise
assumed such guaranteed Indebtedness. For purposes of this
calculation, a Material Asset Acquisition is an Asset Acquisition
which is deemed by such person to be material for such purposes
or which has a purchase price of $30,000,000 or more and a
Material Asset Sale is one or more Asset Sales which relate to
assets with an aggregate value of more than $30,000,000.
"Consolidated Fixed Charges" means, with respect to any
person for any period, the sum of, without duplication, the
amounts for such period of (i) Consolidated Interest Expense and
(ii) the product of (a) the aggregate amount of dividends and
other distributions paid or accrued during such period in respect
of Preferred Stock and Redeemable Capital Stock of such person
and its Restricted Subsidiaries on a consolidated basis and (b) a
multiplier, the numerator of which is one and the denominator of
which is one minus the then current combined federal, state and
local statutory tax rate of such person, expressed as a decimal;
provided,
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however, that the multiplier in clause (b) shall be one
if such dividend or other distribution is fully tax deductible.
"Consolidated Income Tax Expense" means, with respect
to any person for any period, the provision for federal, state,
local and foreign income taxes of such person and its Restricted
Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to
any person for any period, without duplication, the sum of
(i) the interest expense of such person and its Restricted
Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP, including, without limitation,
(a) any amortization of debt discount, (b) the net cost under
Interest Rate Protection Obligations, (c) the interest portion of
any deferred payment obligation, (d) all commissions, discounts
and other fees and charges owed with respect to letters of credit
and bankers' acceptance financings and (e) all accrued interest
and (ii) the interest component of Capitalized Lease Obligations
paid, accrued and/or scheduled to be paid or accrued by such
person and its Restricted Subsidiaries during such period as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any
person, for any period, the consolidated net income (or loss) of
such person and its Restricted Subsidiaries for such period as
determined in accordance with GAAP, adjusted, to the extent
included in calculating such net income, by excluding, without
duplication, (i) all extraordinary gains or losses, (ii) the
portion of net income (but not losses) of such person and its
Restricted Subsidiaries allocable to minority interests in
unconsolidated persons to the extent that cash dividends or
distributions have not actually been received by such person or
one of its Restricted Subsidiaries, (iii) net income (or loss) of
any person combined with such person or one of its Restricted
Subsidiaries on a "pooling of interests" basis attributable to
any period prior to the date of combination, (iv) any gain or
loss realized upon the termination of any employee pension
benefit plan, on an after-tax basis, (v) gains or losses in
respect of any Asset Sales by such person or one of its
Restricted Subsidiaries, and (vi) the net income of any
Restricted Subsidiary of such person to the extent that the
declaration of dividends or similar distributions by that
Restricted Subsidiary of that income is not at the time
permitted, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to
that Restricted Subsidiary or its stockholders.
"Consolidated Net Tangible Assets" of TLGI as at any
date means the total amount of assets of TLGI and its Restricted
Subsidiaries, less applicable reserves, on a consolidated basis
as of the end of the fiscal quarter immediately preceding such
date, as determined in accordance with GAAP, less: (i) Intangible
Assets and (ii) appropriate adjustments on account of minority
interests of other persons holding equity investments in
Restricted Subsidiaries, in the case of each of clauses (i) and
(ii) above as reflected on the consolidated balance sheet of TLGI
and its Restricted Subsidiaries as at the end of the fiscal
quarter immediately preceding such date.
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"Consolidated Net Worth" means, with respect to any
person at any date, the consolidated stockholders' equity of such
person less the amount of such stockholders' equity attributable
to Redeemable Capital Stock of such person and its Restricted
Subsidiaries, as determined in accordance with GAAP.
"Consolidation" means, with respect to any person, the
consolidation of the accounts of such person and each of its
Subsidiaries if and to the extent the accounts of such person and
each of its Restricted Subsidiaries would normally be
consolidated with those of such person, all in accordance with
GAAP. The term "consolidated" shall have a meaning correlative
to the foregoing.
"Control" means, with respect to any specified person,
the power to direct the management and policies of such person,
directly or indirectly, whether through the ownership of Voting
Stock, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Conversion Agent" shall have the meaning set forth in
Section 4.02.
"Conversion Price" shall have the meaning set forth in
Section 13.04.
"Corporate Trust Office" means the office of the
Trustee at which the corporate trust business of the Trustee
shall, at any particular time, be principally administered, which
office is, at the date as of which this Indenture is dated,
located in Hartford, Connecticut, except that with respect to the
presentation of Securities for payment, for conversion or for
registration of transfer and exchange, such term shall also mean
the office of the Trustee's agent in the Borough of Manhattan,
the City and State of New York, at which at any particular time
its corporate agency business shall be conducted.
"Credit Agreements" means the 1996 Revolving Credit
Facility, the Canadian Revolver, the MEIP Facility and the
Canadian Term Loan; in each case as any such instrument may be
amended, supplemented or otherwise modified from time to time,
and any successor or replacement facility.
"Currency Agreement" means any foreign exchange
contract, currency swap agreement or other similar agreement or
arrangement designed to protect TLGI or any of its Restricted
Subsidiaries against fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any Bankruptcy
Law.
"Date of Conversion" shall have the meaning set forth
in Section 13.02.
"Default" means any event that is, or after notice or
passage of time or both would be, an Event of Default.
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"Depositary" means, with respect to the Securities of
any series issuable or issued in the form of one or more Global
Securities, the Person designated as Depositary by TLGI pursuant
to Section 2.01 until a successor Depositary shall have become
such pursuant to the applicable provisions of this Indenture,
and, thereafter "Depositary" shall mean or include each Person
who is then a Depositary hereunder, and, if at any time there is
more than one such Person, "Depositary" as used with respect to
the Securities of any such series shall mean the Depositary with
respect to the Global Securities of such series.
"Event of Default" has the meaning set forth under
Section 6.01 herein.
"Excess Proceeds" shall have the meaning set forth in
Section 4.12.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Fair Market Value" means, with respect to any asset,
the price which could be negotiated in an arm's-length free
market transaction, for cash, between a willing seller and a
willing buyer, neither of which is under pressure or compulsion
to complete the transaction; provided, however, that with respect
to any transaction which involves an asset or assets in excess of
$5,000,000, such determination shall be evidenced by a Board
Resolution of TLGI delivered to the Trustee.
"GAAP" means accounting principles generally accepted
in Canada consistently applied until such time as TLGI or LGII
shall prepare their respective books of record in accordance with
accounting principles generally accepted in the United States
("U.S. GAAP") at which time and all times thereafter GAAP shall
mean U.S. GAAP consistently applied.
"Global Security" means a Security evidencing all or a
part of a series of Securities issued to the Depositary for such
series in accordance with Section 2.01 and bearing the legend
prescribed in Section 2.04.
"guarantee" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments
for collection in the ordinary course of business), direct or
indirect, in any manner, of any part or all of such obligation
and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way
the payment or performance (or payment of damages in the event of
non-performance) of all or any part of such obligation,
including, without limiting the foregoing, the payment of amounts
drawn down by letters of credit.
"Holder", "Noteholder", "Holder of Securities",
"Securityholder" or other similar terms mean, in the case of any
Security, the Person in whose name such Security is registered in
the security register kept by TLGI for that purpose in accordance
with the terms hereof.
"Indebtedness" means, with respect to any person,
without duplication, (a) all liabilities of such person for
borrowed money or for the deferred purchase price of property or
services, excluding any trade payables and other accrued current
liabilities incurred in the ordinary course of business and which
are not overdue by more than 90 days, but excluding,
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without
limitation, all obligations, contingent or otherwise, of such
person in connection with any undrawn letters of credit, banker's
acceptance or other similar credit transaction, (b) all
obligations of such person evidenced by bonds, notes, debentures
or other similar instruments, (c) all indebtedness created or
arising under any conditional sale or other title retention
agreement with respect to property acquired by such person (even
if the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or
sale of such property), but excluding trade accounts payable
arising in the ordinary course of business, (d) all Capitalized
Lease Obligations of such person, (e) all Indebtedness referred
to in the preceding clauses of other persons and all dividends of
other persons, the payment of which is secured by (or for which
the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon property
(including, without limitation, accounts and contract rights)
owned by such person, even though such person has not assumed or
become liable for the payment of such Indebtedness (the amount of
such obligation being deemed to be the lesser of the value of
such property or asset or the amount of the obligation so
secured), (f) all guarantees of Indebtedness referred to in this
definition by such person, (g) all Redeemable Capital Stock of
such person valued at the greater of its voluntary or involuntary
maximum fixed repurchase price plus accrued dividends, (h) all
obligations under or in respect of Currency Agreements and
Interest Rate Protection Obligations of such person, (i) any
Preferred Stock of any Restricted Subsidiary of such person
valued at the sum of (without duplication) (A) the liquidation
preference thereof, (B) any mandatory redemption payment
obligations in respect thereof and (C) accrued dividends thereon,
and (j) any amendment, supplement, modification, deferral,
renewal, extension or refunding of any liability of the types
referred to in clauses (a) through (i) above. For purposes
hereof, the "maximum fixed repurchase price" of any Redeemable
Capital Stock which does not have a fixed repurchase price shall
be calculated in accordance with the terms of such Redeemable
Capital Stock as if such Redeemable Capital Stock were purchased
on any date on which Indebtedness shall be required to be
determined pursuant to the provisions hereof, and if such price
is based upon, or measured by, the fair market value of such
Redeemable Capital Stock, such fair market value shall be
determined in good faith by the board of directors of the issuer
of such Redeemable Capital Stock. For purposes of this
definition, the term "Indebtedness" shall not include (i)
Indebtedness of a Wholly-Owned Subsidiary owed to and held by
TLGI, LGII or another Wholly-Owned Subsidiary, in each case which
is not subordinate in right of payment to any Indebtedness of
such Subsidiary, except that (a) any transfer of such
Indebtedness by TLGI, LGII or a Wholly-Owned Subsidiary (other
than to TLGI, LGII or to a Wholly-Owned Subsidiary) and (b) the
sale, transfer or other disposition by TLGI, LGII or any
Restricted Subsidiary of TLGI or LGII of Capital Stock of a
Wholly-Owned Subsidiary which is owed Indebtedness of another
Wholly-Owned Subsidiary such that it ceases to be a Wholly-Owned
Subsidiary of TLGI or LGII shall, in each case, be an incurrence
of Indebtedness by such Restricted Subsidiary subject to the
other provisions hereof; and (ii) Indebtedness of TLGI or LGII
owed to and held by a Wholly-Owned Subsidiary of TLGI or LGII
which is unsecured and subordinate in right of payment to the
payment and performance of TLGI's or LGII's obligations under the
provisions hereof and the Securities except that (a) any transfer
of such Indebtedness by a Wholly-Owned Subsidiary of TLGI or LGII
(other than to another Wholly-Owned Subsidiary of TLGI or LGII)
and (b) the sale, transfer or other disposition by TLGI or LGII
or any Restricted Subsidiary of TLGI or LGII of Capital Stock of
a Wholly-Owned Subsidiary which holds Indebtedness of
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TLGI or
LGII such that it ceases to be a Wholly-Owned Subsidiary shall,
in each case, be an incurrence of Indebtedness by TLGI or LGII,
as the case may be, subject to the other provisions hereof.
"Indenture" means this instrument as originally
executed and delivered or, if amended or supplemented as herein
provided, as so amended or supplemented or both, including, for
all purposes of this instrument and any such supplement, the
provisions of the Trust Indenture Act of 1939 that are deemed to
be a part of and govern this instrument and any such supplement,
respectively, and shall include the forms and terms of particular
series of Securities established as contemplated hereunder.
"Independent Financial Advisor" means a firm (i) which
does not, and whose directors, officers and employees or
Affiliates do not, have a direct or indirect financial interest
in TLGI or LGII and (ii) which, in the judgment of the Board of
Directors of TLGI, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"interest" means, with respect to any interest bearing
Security, the amount of all interest accruing on such Security,
and, when used with respect to non-interest bearing Securities
(including, without limitation, any Original Issue Discount
Security which by its terms bears interest only after maturity or
upon default in any other payment due on such Security), interest
payable on or after maturity (whether at stated maturity, upon
acceleration or redemption or otherwise) or after the date, if
any, on which TLGI becomes obligated to acquire a Security,
whether upon conversion, by purchase or otherwise, in each case,
including all interest accruing subsequent to the occurrence of
any events specified in Sections 6.01(f) and (g) or which would
have accrued but for any such event, whether or not such claims
are allowable under applicable law.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities, as set forth therein.
"Interest Rate Protection Agreement" means any
arrangement with any other person whereby, directly or
indirectly, such person is entitled to receive from time to time
periodic payments calculated by applying either a floating or a
fixed rate of interest on a stated notional amount in exchange
for periodic payments made by such person calculated by applying
a fixed or a floating rate of interest on the same notional
amount and shall include, without limitation, interest rate
swaps, caps, floors, collars and similar agreements.
"Interest Rate Protection Obligations" means the
obligations of any person under any Interest Rate Protection
Agreement.
"Investment" means, with respect to any person, any
direct or indirect loan or other extension of credit or capital
contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for
the account or use of others), or any purchase or acquisition by
such person of any Capital Stock, bonds, notes, debentures or
other securities or evidences of Indebtedness issued by, any
other person. "Investments" shall exclude extensions of trade
credit by TLGI and its Restricted Subsidiaries (including,
without
11
<PAGE>
limitation, LGII) in the ordinary course of business in
accordance with normal trade practices of TLGI or such Restricted
Subsidiary, as the case may be.
"Issue Date" means the issue date specified in the
securities of each series except as otherwise provided in Section
2.01.
"Issuer Order" means a written statement, request or
order of TLGI which is signed in its name by the chairman of the
Board of Directors, the president, any vice president or the
treasurer of TLGI.
"Last Sale Price" shall have the meaning set forth in
Section 13.03.
"Lien" means any mortgage, charge, pledge, lien
(statutory or other), security interest, hypothecation,
assignment for security, claim, or preference or priority or
other encumbrance upon or with respect to any property of any
kind. A person shall be deemed to own subject to a Lien any
property which such person has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.
"Maturity Date" means, with respect to any Security,
the date on which any principal of such Security becomes due and
payable as therein or herein provided, whether at the Stated
Maturity with respect to such principal or by declaration of
acceleration, call for redemption or purchase or otherwise.
"Measurement Date" means March 20, 1996.
"MEIP Facility" means the 1994 Management Equity
Investment Plan ("MEIP") Credit Agreement, dated as of June 14,
1994, as amended and restated as of May 15, 1996, by and between
Loewen Management Investment Corporation, in its capacity as
agent for LGII, TLGI, the banks listed therein and Wachovia Bank
of Georgia, N.A., as agent.
"Moody's" means Moody's Investors Service, Inc. and its
successors.
"Net Cash Proceeds" means, with respect to any Asset
Sale, the proceeds thereof in the form of cash or Cash
Equivalents including payments in respect of deferred payment
obligations when received in the form of cash or Cash Equivalents
(except to the extent that such obligations are financed or sold
with recourse to TLGI or any Restricted Subsidiary of TLGI
(including, without limitation, LGII) net of (i) brokerage
commissions and other fees and expenses (including, without
limitation, fees and expenses of legal counsel and investment
bankers) related to such Asset Sale, (ii) provisions for all
taxes payable as a result of such Asset Sale, (iii) amounts
required to be paid to any person (other than TLGI or any
Restricted Subsidiary of TLGI) owning a beneficial interest in
the assets subject to the Asset Sale and (iv) appropriate amounts
to be provided by TLGI or any Restricted Subsidiary of TLGI, as
the case may be, as a reserve required in accordance with GAAP
against any liabilities associated with such Asset Sale and
retained by TLGI or any Restricted Subsidiary of TLGI, as the
case may be, after such Asset Sale, including, without
limitation, pension and other post-employment
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<PAGE>
benefit
liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with
such Asset Sale, all as reflected in an officers' certificate
delivered to the Trustee.
"Officer" means the Chairman of the Board, the Chief
Executive Officer, the Chief Operating Officer, the President,
any Executive Vice President, any Senior Vice President, any Vice
President, the Chief Financial Officer, the Treasurer, the
Secretary or the Controller of LGII or TLGI, as the case may be.
"Officer's Certificate", when used with respect to
TLGI, means a certificate signed by the chairman of the Board of
Directors, the president, or any vice president and by the
treasurer, any assistant treasurer, the controller, any assistant
controller, the secretary or any assistant secretary of TLGI.
Each such certificate shall include the statements provided for
in Section 11.04, if and to the extent required by the provisions
of such Section 11.04. One of the officers signing any Officer's
Certificate given pursuant to Section 3.03 shall be the principal
executive, financial or accounting officer of TLGI.
"Opinion of Counsel" means an opinion in writing signed
by the general counsel of TLGI or by such other legal counsel who
may be an employee of or counsel to TLGI and who shall be
satisfactory to the Trustee. Each such opinion shall include the
statements provided for in Section 11.04, if and to the extent
required by the provisions of such Section 11.04.
"original issue date" of any Security (or portion
thereof) means the earlier of (a) the date of such Security or
(b) the date of any Security (or portion thereof) for which such
Security was issued (directly or indirectly) on registration of
transfer, exchange or substitution.
"original issue discount" of any debt security,
including any Original Issue Discount Security, means the
difference between the principal amount of such debt security and
the initial issue price of such debt security (as set forth in
the case of an Original Issue Discount Security on the face of
such Security).
"Original Issue Discount Security" means any Security
that provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration
of the maturity thereof pursuant to Section 6.01
"Outstanding" (except as otherwise provided in Section
7.13), when used with reference to Securities, shall, subject to
the provisions of Section 10.04, mean, as of any particular time,
all Securities authenticated and delivered by the Trustee under
this Indenture, except: (a) Securities theretofore cancelled by
the Trustee or delivered to the Trustee for cancellation; (b)
Securities (other than Securities of any series as to which the
provisions of Article Eight hereof shall not be applicable), or
portions thereof, for the payment or redemption of which moneys
or U.S. Government Obligations (as provided for in Section 8.01)
in the necessary amount shall have been deposited in trust with
the Trustee or with any Paying Agent (other than TLGI) or shall
have been set aside, segregated and held in trust by TLGI for the
Holders of such Securities (if TLGI shall act as its own Paying
Agent), provided that, if such Securities, or portions thereof,
are to be redeemed prior to the maturity thereof, notice of such
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<PAGE>
redemption shall have been given as herein provided, or provision
satisfactory to the Trustee shall have been made for giving such
notice; (c) Securities which shall have been paid or in
substitution for which other Securities shall have been
authenticated and delivered pursuant to the terms of Section 2.11
(except with respect to any such Security as to which proof
satisfactory to the Trustee is presented that such Security is
held by a Person in whose hands such Security is a legal, valid
and binding obligation of TLGI); and (d) Securities converted
into Common Stock pursuant hereto prior to the applicable record
date and, for purposes of selection for redemption, Securities
not deemed Outstanding pursuant to Section 12.02; provided,
however, that Securities surrendered for conversion during the
period between the close of business on any record date for such
Security and the opening of business on the related interest
payment date (or on the related interest payment date) shall be
considered Outstanding for purposes of payment of interest on
such related interest payment date. In determining whether the
Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have given any
request, demand, authorization, direction, notice, consent or
waiver hereunder, the principal amount of an Original Issue
Discount Security that shall be deemed to be Outstanding for such
purposes shall be the portion of the principal amount thereof
that would be due and payable as of the date of such
determination (as certified by TLGI to the Trustee) upon a
declaration of acceleration of the maturity thereof pursuant to
Section 6.01.
"Pari Passu Indebtedness" means Indebtedness of LGII or
TLGI which ranks pari passu in right of payment with the
Securities.
"Paying Agent" has the meaning set forth in Section
4.02, except that, for the purposes of Section 4.11 and Section
4.12 and Articles Eight and Twelve, the Paying Agent shall not be
TLGI or a Subsidiary of TLGI or any of their respective
Affiliates.
"Periodic Offering" means an offering of Securities of
a series from time to time, the specific terms of which
Securities, including, without limitation, the rate or rates of
interest, if any, thereon, the stated maturity or maturities
thereof and the redemption and conversion provisions, if any,
with respect thereto, are to be determined by TLGI or its agents
upon the issuance of such Securities.
"Permitted Holders" mean (i) Raymond Loewen and Anne
Loewen, taken together, and (ii) in the case of LGII, TLGI.
"Permitted Indebtedness" means, without duplication,
each of the following:
(a) the Securities;
(b) Indebtedness of TLGI and its Restricted
Subsidiaries (including, without limitation, LGII) outstanding on
the Issue Date (other than Indebtedness under the Credit
Agreements;
(c) Indebtedness of TLGI or LGII, as the case may be,
under the Credit Agreements in an aggregate principal amount at
any one time outstanding not to exceed the aggregate of the
maximum credit limits of the Credit Agreements as of the Issue
Date, less the
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Net Proceeds of any Asset Sale that are applied to
repay, and permanently reduce the commitments under, the Credit
Agreements (as required by the terms thereof);
(d) (i) Interest Rate Protection Obligations of TLGI
covering Indebtedness of TLGI and its Restricted Subsidiaries
(including, without limitation, LGII); (ii) Interest Rate
Protection Obligations of any Restricted Subsidiary of TLGI
covering Indebtedness of such Restricted Subsidiary; provided,
however, that, in the case of either clause (i) or (ii), (x) any
Indebtedness to which any such Interest Rate Protection
Obligations relate bears interest at fluctuating interest rates
and is otherwise permitted to be incurred under this covenant and
(y) the notional principal amount of any such Interest Rate
Protection Obligations does not exceed the principal amount of
the Indebtedness to which such Interest Rate Protection
Obligations relate;
(e) Indebtedness under Currency Agreements; provided,
however, that in the case of Currency Agreements which relate to
Indebtedness, such Currency Agreements do not increase the
Indebtedness of TLGI and its Restricted Subsidiaries (including,
without limitation, LGII) outstanding other than as a result of
fluctuations in foreign currency exchange rates or by reason of
fees, indemnities and compensation payable thereunder;
(f) Indebtedness arising from the honoring by a bank
or other financial institution of a check, draft or similar
instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary
course of business; provided, however, that such Indebtedness is
extinguished within two business days of incurrence;
(g) Indebtedness incurred in respect of performance
bonds or letters of credit in lieu thereof provided in the
ordinary course of business;
(h) Indebtedness of TLGI and its Restricted
Subsidiaries (including, without limitation, LGII) represented by
letters of credit for the account of TLGI and its Restricted
Subsidiaries in order to provide security for workers'
compensation claims, payment obligations in connection with
self-insurance or similar requirements in the ordinary course of
business;
(i) Indebtedness of TLGI and its Restricted
Subsidiaries (including, without limitation, LGII) in addition to
that described in clauses (a) through (h) above, in an aggregate
principal amount outstanding at any time not exceeding
$5,000,000; and
(j) (i) Indebtedness of TLGI the proceeds of which are
used solely to refinance (whether by amendment, renewal,
extension or refunding) Indebtedness of TLGI and its Restricted
Subsidiaries (including, without limitation, LGII) and (ii)
Indebtedness of any Restricted Subsidiary of TLGI the proceeds of
which are used solely to refinance (whether by amendment,
renewal, extension or refunding) Indebtedness of such Restricted
Subsidiary, in each case other than the Indebtedness refinanced,
redeemed or retired on the Issue Date or Indebtedness incurred
under clause (c), (d), (e), (f), (g), (h), or (i) of this
covenant; provided, however, that (x) the principal amount of
Indebtedness incurred pursuant to this clause (j) (or, if such
Indebtedness provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof, the original issue price of
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<PAGE>
such Indebtedness) shall not exceed the sum of the principal
amount of Indebtedness so refinanced, plus the amount of any
premium required to be paid in connection with such refinancing
pursuant to the terms of such Indebtedness or the amount of any
premium reasonably determined by the Board of Directors of TLGI
as necessary to accomplish such refinancing by means of a tender
offer or privately negotiated purchase, plus the amount of
expenses in connection therewith, (y) in the case of Indebtedness
incurred by TLGI pursuant to this clause (j) to refinance Pari
Passu Indebtedness, such Indebtedness constitutes Pari Passu
Indebtedness.
"Permitted Investments" means any of the following:
(i) Investments in any Wholly-Owned Subsidiary of TLGI (including
(a) LGII and (b) any person that pursuant to such Investment
becomes a Wholly-Owned Subsidiary of TLGI) and any person that is
merged or consolidated with or into, or transfers or conveys all
or substantially all of its assets to, TLGI or any Wholly-Owned
Subsidiary of TLGI at the time such Investment is made;
(ii) Investments in Cash Equivalents; (iii) Investments in
Currency Agreements on commercially reasonable terms entered into
by TLGI or any of its Restricted Subsidiaries in the ordinary
course of business in connection with the operations of the
business of TLGI or its Restricted Subsidiaries to hedge against
fluctuations in foreign exchange rates; (iv) loans or advances to
officers, employees or consultants of TLGI and its Restricted
Subsidiaries for travel and moving expenses in the ordinary
course of business for bona fide business purposes of TLGI and
its Restricted Subsidiaries; (v) other loans or advances to
officers, employees or consultants of TLGI and its Restricted
Subsidiaries in the ordinary course of business for bona fide
business purposes of TLGI and its Restricted Subsidiaries not in
excess of $10,000,000 in the aggregate at any one time
outstanding; (vi) Investments in evidences of Indebtedness,
securities or other property received from another person by TLGI
or any of its Restricted Subsidiaries in connection with any
bankruptcy proceeding or by reason of a composition or
readjustment of debt or a reorganization of such person or as a
result of foreclosure, perfection or enforcement of any Lien in
exchange for evidences of Indebtedness, securities or other
property of such person held by TLGI or any of its Restricted
Subsidiaries, or for other liabilities or obligations of such
other person to TLGI or any of its Restricted Subsidiaries that
were created, in accordance with the terms of this Indenture;
(vii) Investments in Interest Rate Protection Agreements on
commercially reasonable terms entered into by TLGI or any of its
Restricted Subsidiaries in the ordinary course of business in
connection with the operations of TLGI and its Restricted
Subsidiaries to hedge against fluctuations in interest rates; and
(viii) Investments of funds received by TLGI or its Restricted
Subsidiaries (including, without limitation, LGII) in the
ordinary course of business, which funds are required to be held
in trust for the benefit of others by TLGI or such Restricted
Subsidiary, as the case may be, and which funds do not constitute
assets or liabilities of TLGI or such Restricted Subsidiary; (ix)
Investments not in excess of $50,000,000 in the aggregate in
other Unrestricted Subsidiaries which are engaged in the
insurance business; and (x) Investments not in excess of
$50,000,000 in persons (other than Wholly-Owned Subsidiaries)
engaged in businesses incidental to the funeral home, cemetery
and cremation businesses of TLGI and its Restricted Subsidiaries.
"Permitted Liens" means the following types of Liens:
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(a) Liens for taxes, assessments or governmental
charges or claims either (i) not delinquent or (ii) contested in
good faith by appropriate proceedings and as to which TLGI or any
of its Restricted Subsidiaries (including, without limitation,
LGII) shall have set aside on its books such reserves as may be
required pursuant to GAAP;
(b) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, suppliers, materialmen,
repairmen and other Liens imposed by law incurred in the ordinary
course of business for sums not yet delinquent or being contested
in good faith, if such reserve or other appropriate provision, if
any, as shall be required by GAAP shall have been made in respect
thereof;
(c) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, governmental contracts,
performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed
money);
(d) judgment Liens not giving rise to an Event of
Default so long as such Lien is adequately bonded and any
appropriate legal proceedings which may have been duly initiated
for the review of such judgment shall not have been finally
terminated or the period within which such proceedings may be
initiated shall not have expired;
(e) easements, rights-of-way, zoning restrictions and
other similar charges or encumbrances in respect of real property
not interfering in any material respect with the ordinary conduct
of the business of TLGI or any of its Restricted Subsidiaries
(including, without limitation, LGII);
(f) any interest or title of a lessor under any
Capitalized Lease Obligation or operating lease;
(g) any Lien existing on any asset of any corporation
at the time such corporation becomes a Restricted Subsidiary and
not created in contemplation of such event;
(h) any Lien on any asset securing Indebtedness
incurred or assumed for the purpose of financing all or any part
of the cost of acquiring or constructing such asset; provided,
that such Lien attaches to such asset concurrently with or within
18 months after the acquisition or completion thereof;
(i) any Lien on any asset of any corporation existing
at the time such corporation is merged or consolidated with or
into TLGI or a Restricted Subsidiary and not created in
contemplation of such event;
(j) any Lien existing on any asset prior to the
acquisition thereof by TLGI or a Restricted Subsidiary and not
created in contemplation of such acquisition;
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(k) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; and
(l) any extension, renewal or replacement of any Lien
permitted by the preceding clauses (g), (h), (i) or (j) hereof in
respect of the same property or assets theretofore subject to
such Lien in connection with the extension, renewal or refunding
of the Indebtedness secured thereby; provided that (1) such Lien
shall attach solely to the same property or assets and (2) such
extension, renewal or refunding of such Indebtedness shall be
without increase in the principal remaining unpaid as at the date
of such extension, renewal or refunding.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-
stock company, trust, estate, charitable foundation,
unincorporated organization, government or any agency or
political subdivision thereof.
"Place of Payment", when used with respect to the
Securities of any series, means the place or places where the
principal of and interest, if any, on the Securities of such
series are payable as determined in accordance with Section 2.01.
"Predecessor Notes" means, with respect to any
particular Security, every previous Security evidencing all or a
portion of the same debt as that evidenced by such particular
Security; and, for the purposes of this definition, any
Securities authenticated and delivered under Section 2.04 hereof
in exchange for mutilated Notes or in lieu of lost, destroyed or
stolen Securities, shall be deemed to evidence the same debt as
the mutilated, lost, destroyed or stolen Securities.
"Preferred Securities" means, with respect to a Special
Finance Subsidiary, any securities of such Subsidiary treated for
accounting purposes as an equity security that has preferential
rights to any other security of such person with respect to
dividends or redemptions or upon liquidation.
"Preferred Stock" means, with respect to any person,
any Capital Stock of such person that has preferential rights to
any other Capital Stock of such person with respect to dividends
or redemptions or upon liquidation and any Preferred Securities.
"principal" or "principal amount" of a debt security,
including any Security, means the amount (including, without
limitation, if and to the extent applicable, any premium and, in
the case of an Original Issue Discount Security, any accrued
original issue discount, but excluding interest) that is payable
with respect to such debt security as of any date and for any
purpose (including, without limitation, in connection with any
sinking fund, upon any redemption at the option of TLGI, upon any
purchase or exchange at the option of TLGI or the holder of such
debt security and upon any acceleration of the maturity of such
debt security) plus, when appropriate, the premium, if any, on
the security and any interest on overdue principal.
"record date" shall have the meaning set forth in
Section 2.07.
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"Redeemable Capital Stock" means any shares of any
class or series of Capital Stock that, either by the terms
thereof, by the terms of any security into which it is
convertible or exchangeable or by contract or otherwise, is or
upon the happening of an event or passage of time would be,
required to be redeemed prior to the Stated Maturity with respect
to the principal of any Security or is redeemable at the option
of the holder thereof at any time prior to any such Stated
Maturity, or is convertible into or exchangeable for debt
securities at any time prior to any such Stated Maturity.
"Registrar" has the meaning set forth in Section 4.02.
"Related Obligor" has the meaning set forth in Section
4.08.
"Responsible Officer", when used with respect to the
Trustee, means any officer assigned by the Trustee to administer
its corporate trust matters.
"Restricted Payments" has the meaning set forth in
Section 4.08.
"Restricted Subsidiary" means any Subsidiary of TLGI
other than an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Sale-Leaseback Transaction" of any person means an
arrangement with any lender or investor or to which such lender
or investor is a party providing for the leasing by such person
of any property or asset of such person which has been or is
being sold or transferred by such person after the acquisition
thereof or the completion of construction or commencement of
operation thereof to such lender or investor or to any person to
whom funds have been or are to be advanced by such lender or
investor on the security of such property or asset. The stated
maturity of such arrangement shall be the date of the last
payment of rent or any other amount due under such arrangement
prior to the first date on which such arrangement may be
terminated by the lessee without payment of a penalty.
"S&P" means Standard & Poor's Corporation, and its
successors.
"Security" or "Securities" (except as otherwise
provided in Section 7.13) has the meaning stated in the first
recital of this Indenture or, as the case may be, securities that
have been authenticated and delivered pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as
amended from time to time.
"Seller Financing Indebtedness" means a purchase money
Indebtedness issued to the seller of a business or other assets
for, and not in excess of, the purchase price thereof.
"Senior Debt" means Indebtedness which is not (i)
Indebtedness of TLGI to any Subsidiary, and (ii) Indebtedness of
TLGI which by its terms is subordinate or junior in any respect
to any other Indebtedness or other obligation of TLGI.
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"Significant Subsidiary" shall mean a Restricted
Subsidiary which is a "Significant Subsidiary" as defined in Rule
1.02(v) of Regulation S-X under the Securities Act.
"Special Finance Subsidiary" means a Restricted
Subsidiary whose sole assets are debt obligations of LGII or TLGI
and whose sole liabilities are Preferred Securities the proceeds
from the sale of which are or have been advanced to LGII or TLGI.
"Stated Maturity" means, when used with respect to any
Security or any installment of interest thereon, the date
specified in such Security as the fixed date on which the
principal of such Security or such installment of interest is due
and payable, and when used with respect to any other
Indebtedness, means the date specified in the instrument
governing such Indebtedness as the fixed date on which the
principal of such Indebtedness, or any installment of interest
thereon, is due and payable.
"Subsidiary" means, with respect to any person, (i) a
corporation a majority of whose Voting Stock is at the time,
directly or indirectly, owned by such person, by one or more
Subsidiaries of such person or by such person and one or more
Subsidiaries thereof and (ii) any other person (other than a
corporation), including, without limitation, a joint venture, in
which such person, one or more Subsidiaries thereof or such
person and one or more Subsidiaries thereof, directly or
indirectly, at the date of determination thereof, has at least
majority ownership interest entitled to vote in the election of
directors, managers or trustees thereof (or other person
performing similar functions). For purposes of this definition,
any directors' qualifying shares or investments by foreign
nationals mandated by applicable law shall be disregarded in
determining the ownership of a Subsidiary.
"Surviving Entity" shall have the meaning set forth in
Section 5.01.
"TLGI" means The Loewen Group, Inc., and shall include
any successor replacing TLGI as issuer of the Securities pursuant
to the provisions hereof, and thereafter means such successor.
"Trading Day" shall have the meaning set forth in
Section 13.03.
"Trust Indenture Act of 1939" or "TIA" (except as
otherwise provided in Sections 9.01, 9.02 and 13.5) means the
Trust Indenture Act of 1939, as amended by the Trust Indenture
Reform Act of 1990, as in force at the date as of which this
Indenture is originally executed.
"TLGI" shall mean The Loewen Group Inc., and shall
include any successor replacing such TLGI pursuant to the
provisions hereof, and thereafter means such successor.
"Trust Officer" means any officer in the Corporate
Trust Administration of the Trustee or any other officer of the
Trustee customarily performing functions similar to those
performed by any of the above-designated officers and also means,
with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge
of and familiarity with the particular subject.
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"Trustee" means the Person identified as "Trustee" in
the first paragraph hereof and, subject to the provisions of
Article Seven, shall also include any successor trustee.
"Trustee" shall also mean or include each Person who is then a
trustee hereunder and, if at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any
series shall mean the trustee with respect to the Securities of
such series.
"U.S. Government Obligations" shall have the meaning
set forth in Section 8.01(B).
"Unrestricted Subsidiary" means (i) First Capital Life
Insurance Company of Louisiana, National Capital Life Insurance
Company, Security Industrial Insurance Company, Security
Industrial Fire Insurance Company or any successors to such
Subsidiaries or (ii) a Subsidiary of TLGI declared by the Board
of Directors of TLGI to be an Unrestricted Subsidiary; provided,
that no such Subsidiary shall be declared to be an Unrestricted
Subsidiary unless (x) none of its properties or assets were owned
by TLGI or any of its Subsidiaries prior to the Issue Date, other
than any such assets as are transferred to such Unrestricted
Subsidiary in accordance with the covenant contained in Section
4.08, (y) its properties and assets, to the extent that they
secure Indebtedness, secure only Non-Recourse Indebtedness and
(z) it has no Indebtedness other than Non-Recourse Indebtedness.
As used above, "Non-Recourse Indebtedness" means Indebtedness as
to which (i) neither TLGI nor any of its Subsidiaries (other than
the relevant Unrestricted Subsidiary or another Unrestricted
Subsidiary) (1) provides credit support (including any
undertaking, agreement or instrument which would constitute
Indebtedness), (2) guarantees or is otherwise directly or
indirectly liable or (3) constitutes the lender (in each case,
other than pursuant to and in compliance with the covenant
contained in Section 4.08 and (ii) no default with respect to
such Indebtedness (including any rights which the holders thereof
may have to take enforcement action against the relevant
Unrestricted Subsidiary or its assets) would permit (upon notice,
lapse of time or both) any holder of any other Indebtedness of
TLGI or its Subsidiaries (other than Unrestricted Subsidiaries)
to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated
maturity.
"Voting Stock" means any class or classes of Capital
Stock pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a
majority of the board of directors, managers or trustees of any
person (irrespective of whether or not, at the time, Capital
Stock of any other class or classes shall have, or might have,
voting power by reason of the happening of any contingency).
"Wholly-Owned Subsidiary" means (i) any Restricted
Subsidiary of TLGI of which 100% of the outstanding Capital Stock
is owned by TLGI or one or more Wholly-Owned Subsidiaries of TLGI
or by TLGI and one or more Wholly-Owned Subsidiaries of TLGI,
including LGII, or (ii) any Subsidiary, at least 66 2/3% of the
outstanding voting securities of which, and all of the
outstanding shares entitled to receive dividends or other
distributions of which, shall at the time be owned or controlled,
directly or indirectly, by TLGI or one or more Wholly-Owned
Subsidiaries of TLGI or by TLGI and one or more Wholly-Owned
Subsidiaries of TLGI, including LGII. For purposes of this
definition, any directors' qualifying shares or
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investments by
foreign nationals mandated by applicable law shall be disregarded
in determining the ownership of a Subsidiary.
"Yield to Maturity" means the yield to maturity on a
series of Securities, calculated at the time of issuance of such
series, or, if applicable, at the most recent redetermination of
interest on such series, and calculated in accordance with
generally accepted financial practice or as otherwise provided in
the terms of such series of Securities.
Section 1.02. Incorporation by Reference of Trust
Indenture Act.
Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a
part of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Noteholder or
Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means
the Trustee; and
"obligor" on the indenture securities means TLGI or any
other obligor on the Securities.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute
or defined by Commission rule and not otherwise defined herein
have the meanings assigned to them therein.
Section 1.03. Rules of Construction.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) words in the singular include the plural, and
words in the plural include the singular.
(b) "or" is not exclusive;
(c) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with GAAP;
(d) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision;
and
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(e) all references to "$" or "dollars" shall refer to
the lawful currency of the United States of America.
ARTICLE TWO
THE SECURITIES
Section 2.01. Amount of Securities; Issuable In
Series. The aggregate principal amount of Securities which may
be authenticated and delivered under this Indenture may not
exceed $500,000,000 at any time, except to the extent permitted
by Section 2.11. The Securities may be issued in one or more
series and the Securities of each such series shall rank equally
and pari passu as to the right of payment of principal and
interest, if any, with the Securities of each other series, and
with all other Senior Debt of TLGI. There shall be established
in or pursuant to one or more Board Resolutions (and, to the
extent established pursuant to rather than set forth in a Board
Resolution, in an Officer's Certificate detailing such
establishment) or established in one or more indentures
supplemental hereto, prior to the initial issuance of Securities
of any series:
(1) the designation of the Securities of the series,
which shall distinguish the Securities of the series from
the Securities of all other series;
(2) whether the Securities will be convertible into
Common Stock or Preferred Stock (or cash in lieu thereof)
and, if so, the terms and conditions upon which such
conversion will be effected including the initial Conversion
Price and any adjustments thereto in addition to or
different from those set forth in Section 13.04, the
conversion period and other provisions in addition to or in
lieu of those set forth herein;
(3) any limit upon the aggregate principal amount of
the Securities of the series that may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of
the series pursuant to Section 2.10, 2.12, 2.13, 9.05, 12.03
or 13.02);
(4) the date or dates on which the principal of the
Securities of the series is payable;
(5) the rate or rates at which the Securities of the
series shall bear interest, if any, the date or dates from
which any such interest shall accrue, on which any such
interest shall be payable and on which a record shall be
taken for the determination of Holders to whom any such
interest is payable or the method by which such rate or
rates or date or dates shall be determined or both;
(6) the place or places where and the manner in which
the principal of and any interest on Securities of the
series shall be payable and the office or agency for the
Securities of the series maintained by TLGI pursuant to
Section 4.02 (if other than as provided in Section 4.02);
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(7) any provisions relating to the issuance of
Securities of such series at an original issue discount
(including, without limitation, the issue price thereof, the
rate or rates at which such original issue discount shall
accrue, if any, and the date or dates from or to which or
period or periods during which such original issue discount
shall accrue at such rate or rates);
(8) the right, if any, of TLGI to redeem, purchase or
repay Securities of the series, in whole or in part, at its
option and the period or periods within which, the price or
prices (or the method by which such price or prices shall be
determined or both) at which, the form or method of payment
therefor if other than in cash and any terms and conditions
upon which and the manner in which (if different from the
provisions of Article Twelve) Securities of the series may
be so redeemed, purchased or repaid, in whole or in part,
pursuant to any sinking fund or otherwise;
(9) the obligation, if any, of TLGI to redeem,
purchase or repay Securities of the series, in whole or in
part, pursuant to any mandatory redemption, sinking fund or
analogous provisions or at the option of a Holder thereof
and the period or periods within which, the price or price
(or the method by which such price or prices shall be
determined or both) at which, the form or method of payment
therefor if other than in cash and any terms and conditions
upon which and the manner in which (if different from the
provisions of Article Twelve) Securities of the series shall
be redeemed, purchased or repaid, in whole or in part,
pursuant to such obligation;
(10) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which
Securities of the series shall be issuable;
(11) if other than the principal amount thereof, the
portion of the principal amount of Securities of the series
which shall be payable upon acceleration of the maturity
thereof;
(12) whether the Securities of the series will be
issuable as Global Securities;
(13) if the Securities of such series are to be
issuable in definitive form (whether upon original issue or
upon exchange of a temporary Security of such series) only
upon receipt of certain certificates or other documents or
satisfaction of other conditions, the form and terms of such
certificates, documents or conditions;
(14) any trustees, depositaries, authenticating or
paying agents, transfer agents or registrars, conversion
agents or any other agents with respect to the Securities of
such series;
(15) any deleted, modified or additional events of
default or remedies or any additional covenants with respect
to the Securities of such series;
(16) whether the provisions of Section 8.01(C)
will be applicable to Securities of such series;
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(17) if the amounts of payment of principal of and
interest on the Securities of such series are to be
determined with reference to an index, the manner in which
such amounts shall be determined;
(18) any other terms of the series (which terms shall
not be inconsistent with the provisions of this Indenture);
and
(19) whether the Securities of the series will be
secured.
All Securities of any one series shall be substantially
identical, except as to denomination and except as may otherwise
be provided by or pursuant to the Board Resolution or Officer's
Certificate referred to above or as set forth in any such
indenture supplemental hereto. All Securities of any one series
need not be issued at the same time and may be issued from time
to time, consistent with the terms of this Indenture, if so
provided or pursuant to such Board Resolution, such Officer's
Certificate or in any such indenture supplemental hereto.
Any such Board Resolution or Officer's Certificate
referred to above with respect to Securities any series filed
with the Trustee on or before the initial issuance of the
Securities of such series shall be incorporated herein by
reference with respect to Securities of such series and shall
thereafter be deemed to be a part of this Indenture for all
purposes relating to Securities of such series as fully as if
such Board Resolution or Officer's Certificate were set forth
herein in full.
Section 2.02 Forms Generally. The Securities of
each series shall be substantially in such form (not inconsistent
with this Indenture) as shall be established by or pursuant to
one or more Board Resolutions (as set forth in a Board Resolution
or, to the extent established pursuant to rather than set forth
in a Board Resolution, an Officer's Certificate detailing such
establishment) or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted
by this Indenture, and may have imprinted or otherwise reproduced
thereon such legend or legends or endorsements, not inconsistent
with the provisions of this Indenture, as may be required to
comply with any law or with any rules or regulations pursuant
thereto, or with any rules of any securities exchange or to
conform to general usage, all as may be determined by the
officers executing such Securities, as evidenced by their
execution of such Securities.
The definitive Securities shall be printed,
lithographed or engraved or produced by any combination of these
methods or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be
listed, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
Section 2.03. Form Of Trustee's Certificate Of
Authentication. The Trustee's certificate of authentication on
all Securities shall be substantially as follows:
This is one of the Securities of the series designated
herein referred to in the within-mentioned Indenture.
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[Trustee], as Trustee
By:
----------------------------
------
Authorized Signatory
If at any time there shall be an Authenticating Agent
appointed with respect to any series of Securities, then the
Securities of such series shall bear, in addition to the
Trustee's certificate of authentication, an alternate certificate
of authentication which shall be substantially as follows:
This is one of the Securities of the series designated
herein referred to in the within-mentioned Indenture.
[Trustee], as Trustee
By:
----------------------------
------
as Authenticating Agent
By:
----------------------------
------
Authorized Signatory
Section 2.04. Authentication And Delivery Of
Securities. TLGI may deliver Securities of any series executed
by TLGI to the Trustee for authentication together with the
applicable documents referred to below in this Section 2.04, and
the Trustee shall thereupon authenticate and deliver such
Securities to, or upon the order of, TLGI (contained in TLGI
Order referred to below in this Section 2.04) or pursuant to such
procedures acceptable to the Trustee and to such recipients as
may be specified from time to time by an Issuer Order. The
maturity date, original issue date, interest rate, if any, and
any other terms of the Securities of such series shall be
determined by or pursuant to such Issuer Order and procedures.
If provided for in such procedures, such Issuer Order may
authorize authentication and delivery pursuant to oral
instructions from TLGI or its duly authorized agent, which
instructions shall be promptly confirmed in writing. In
authenticating the Securities of such series and accepting the
additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive (in the
case of subparagraphs (2), (3) and (4) below only at or before
the time of the first request of TLGI to the Trustee to
authenticate Securities of such series) and (subject to Section
7.01) shall be fully protected in relying upon, unless and until
such documents have been superseded or revoked:
(1) an Issuer Order requesting such authentication and
setting forth delivery instructions if the Securities of
such series are not to be delivered to TLGI, provided that,
with respect to Securities of a series subject to a Periodic
Offering, (a) such Issuer Order may be delivered by TLGI to
the Trustee prior to the delivery to the Trustee of such
Securities for authentication and delivery, (b) the Trustee
shall authenticate and deliver
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Securities of such series for
original issue from time to time, in an aggregate principal
amount not exceeding the aggregate principal amount
established for such series, pursuant to an Issuer Order or
pursuant to procedures acceptable to the Trustee as may be
specified from time to time by an Issuer Order, (c) the
maturity date or dates, original issue date or dates,
interest rate or rates, if any, and any other terms of
Securities of such series shall be determined by an Issuer
Order or pursuant to such procedures, (d) if provided for in
such procedures, such Issuer Order may authorize
authentication and delivery pursuant to telecommunication or
electronic instructions from TLGI or its duly authorized
agent or agents, and (e) after the original issuance of the
first Security of such series to be issued, any separate
request by TLGI that the Trustee authenticate Securities of
such series for original issuance will be deemed to be a
certification by TLGI that it is in compliance with all
conditions precedent provided for in this Indenture relating
to the authentication and delivery of such Securities;
(2) the Board Resolutions, Officer's Certificate or
executed supplemental indenture referred to in Sections 2.01
and 2.02 by or pursuant to which the form or forms and terms
of the Securities of such series were established;
(3) an Officer's Certificate setting forth the form or
forms and terms of the Securities stating that the form or
forms and terms of the Securities have been established
pursuant to Sections 2.01 and 2.02 and comply with this
Indenture and covering such other matters as the Trustee may
reasonably request; and
(4) at the option of TLGI, either an Opinion of
Counsel, or a letter from legal counsel addressed to the
Trustee permitting it to rely on an Opinion of Counsel,
substantially to the effect that:
(A) the form or forms of the Securities of such
series have been duly authorized and established in
conformity with the provisions of this Indenture;
(B) in the case of an underwritten offering, the
Securities of such series have been duly authorized and
established in conformity with the provisions of this
Indenture, and, in the case of an offering that is not
underwritten, certain terms of the Securities of such
series have been established pursuant to a Board
Resolution, an Officer's Certificate or a supplemental
indenture in accordance with this Indenture, and when
such other terms as are to be established pursuant to
procedures set forth in an Issuer Order shall have been
established, all such terms will have been duly
authorized by TLGI and will have been established in
conformity with the provisions of this Indenture;
(C) when the Securities of such series have been
executed by TLGI and authenticated by the Trustee in
accordance with the provisions of this Indenture and
delivered against payment therefor by the purchasers
thereof, they will be valid and legally binding
obligations of TLGI, enforceable in accordance with
their respective terms, and will be entitled to the
benefits of this Indenture; and
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(D) the execution and delivery by TLGI of, and
the performance by TLGI of its obligations under, the
Securities of such series will not contravene any
provision of applicable law or the articles of
incorporation or by-laws of TLGI or any agreement or
other instrument binding upon TLGI or any of its
Subsidiaries that is material to TLGI and its
Subsidiaries, considered as one enterprise, or, to such
counsel's knowledge after the inquiry indicated
therein, any judgment, order or decree of any
governmental agency or any court having jurisdiction
over TLGI or any Subsidiary, and no consent, approval
or authorization of any governmental body or agency is
required for the performance by TLGI of its obligations
under the Securities, except such as are specified and
have been obtained and such as may be required by the
securities or blue sky laws of the various states in
connection with the offer and sale of the Securities.
In rendering such opinions, such counsel may qualify
any opinions as to enforceability by stating that such
enforceability may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium and other similar laws
affecting the rights and remedies of creditors and is subject to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law). Such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the State of New York and the
federal law of the United States, upon opinions of other counsel
(copies of which shall be delivered to the Trustee), who shall be
counsel reasonably satisfactory to the Trustee, in which case the
opinion shall state that such counsel believes that both such
counsel and the Trustee are entitled so to rely. Such counsel
may also state that, insofar as such opinion involves factual
matters, such counsel has relied, to the extent such counsel
deems proper, upon certificates of officers of TLGI and its
Subsidiaries and certificates of public officials.
The Trustee shall have the right to decline to
authenticate and delivery any Securities of any series under this
Section 2.04 if the Trustee, being advised by counsel, determines
that such action may not lawfully be taken by TLGI or if the
Trustee in good faith by its board of directors or board of
trustees, executive committee or a trust committee of directors
or trustees or Responsible Officers shall determine that such
action would expose the Trustee to personal liability to existing
Holders or would adversely affect the Trustee's own rights,
duties or immunities under the Securities, this Indenture or
otherwise.
If TLGI shall establish pursuant to Section 2.01 that
the Securities of a series are to be issued in the form of one or
more Global Securities, then TLGI shall execute and the Trustee
shall, in accordance with this Section 2.04 and Issuer Order with
respect to such series, authenticate and deliver one or more
Global Securities that (i) shall represent and shall be
denominated in an amount equal to the aggregate principal amount
of all of the Securities of such series to be issued in the form
of Global Securities and not yet cancelled, (ii) shall be
registered in the name of the Depositary for such Global Security
or Securities or the nominee of such Depositary, (iii) shall be
delivered by the Trustee to such Depositary or pursuant to such
Depositary's instructions, and (iv) shall bear a legend
substantially to the following effect:
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"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY."
Each Depositary designated pursuant to Section 2.01
must, at the time of its designation and at all times while it
serves as Depositary, be a clearing agency registered under the
Securities Exchange Act of 1934 and any other applicable statute
or regulation.
Section 2.05. Execution Of Securities. The
Securities shall be signed on behalf of TLGI by two Officers,
under its corporate seal which may, but need not, be attested by
its secretary or one of its assistant secretaries. Such
signatures may be the manual or facsimile signatures of the
present or any future such officers. The seal of TLGI may be in
the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced in the Securities.
Typographical and other minor errors or defects in any such
reproduction of the seal or any such signature shall not affect
the validity or enforceability of any Security that has been duly
authenticated and delivered by the Trustee.
In case of any officer of TLGI who shall have signed
any of the Securities shall cease to be such officer before the
Security so signed shall be authenticated and delivered by the
Trustee or disposed of by TLGI, such Security nevertheless may be
authenticated and delivered or disposed of as though the person
who signed such Security had not ceased to be such officer of
TLGI; and any Security may be signed on behalf of TLGI by such
persons as, at the actual date of the execution of such Security,
shall be the proper officers of TLGI, although at the date of the
execution and delivery of this Indenture any such person was not
such an officer.
Section 2.06. Certificate Of Authentication. Only
such Securities as shall bear thereon a certificate of
authentication substantially in the form hereinbefore recited,
executed by the Trustee by the manual signature of one of its
authorized signatories, or its Authenticating Agent, shall be
entitled to the benefits of this Indenture or be valid or
obligatory for any purpose. The execution of such certificates
by the Trustee, or its Authenticating Agent, upon any Security
executed by TLGI shall be conclusive evidence that the Security
so authenticated has been duly authenticated and delivered
hereunder and that the Holder is entitled to the benefits of this
Indenture. Each reference in this Indenture to authentication by
the Trustee includes authentication by an agent appointed
pursuant to Section 7.15.
Section 2.07 Denomination And Date Of Securities;
Payments Of Interest. The Securities of each series shall be
issuable in registered form in denominations established as
contemplated by Section 2.01 or, with respect to the Securities
of any series, if not so established, in denominations of $1,000
and any integral multiple thereof. The Securities of each series
shall be numbered, lettered or other distinguished in such manner
or in accordance
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with such plan as the officers of TLGI executing
the same may determine with the approval of the Trustee, as
evidenced by the execution and authentication thereof.
Each Security shall be dated the date of its
authentication. The Securities of each series shall bear
interest, if any, from the date, and such interest, if any, shall
be payable on the dates, established as contemplated by Section
2.01.
The Person in whose name any Security of any series is
registered at the close of business on any record date applicable
to a particular series with respect to any interest payment date
for such series shall be entitled to receive the interest, if
any, payable on such interest payment date notwithstanding any
transfer or exchange of such Security subsequent to the record
date and prior to such interest payment date, except if and to
the extent TLGI shall default in the payment of the interest due
on such interest payment date for such series, in which case such
defaulted interest shall be paid to the Persons in whose names
Outstanding Securities for such series are registered (a) at the
close of business on a subsequent record date (which shall be not
less than five Business Days prior to the date of payment of such
defaulted interest) established by notice given by mail by or on
behalf of TLGI to the Holders of Securities not less than 15 days
preceding such subsequent record date or (b) as determined by
such other procedure as is mutually acceptable to TLGI and the
Trustee. The term "record date" as used with respect to any
interest payment date (except a date for payment of defaulted
interest) for the Securities of series shall mean the date
specified as such in the terms of the Securities of such series
established as contemplated by Section 2.01, or, if no such date
is so established, if such interest payment date is the first day
of a calendar month, the fifteenth day of the next preceding
calendar month or, if such interest payment date is the fifteenth
day of a calendar month, the first day of such calendar month,
whether or not such record date is a Business Day.
Section 2.08. Registrar.
TLGI will keep at the office of each Registrar for each
series of Securities a register or registers in which, subject to
such reasonable regulations as it may prescribe, it will provide
for the registration of Securities of each series and the
registration of transfer of Securities of such series. Each such
register shall be in written form in the English language or in
any other form capable of being converted into such form within a
reasonable time. At all reasonable times such register or
registers shall be open for inspection and available for copying
by the Trustee. Each Registrar for each series of Securities
shall keep a register of such series of Securities and of their
transfer and exchange. TLGI may have one or more co-Registrars.
TLGI shall enter into an appropriate agency agreement
with any Registrar not a party to this Indenture, which shall
incorporate the provisions of the TIA. The agreement shall
implement the provisions of this Indenture that relate to such
Registrar. TLGI shall notify the Trustee of the name and address
of any such Registrar. If TLGI fails to maintain a Registrar, or
fails to give the foregoing notice, the Trustee shall act as such
and shall be entitled to appropriate compensation in accordance
with Section 7.08.
Section 2.09. Provision As To Paying Agent.
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TLGI may have one or additional paying agents. The
term "Paying Agent" includes any additional paying agent. Except
as otherwise expressly provided in this Indenture, TLGI or any
Affiliate thereof may act as Paying Agent.
If TLGI shall appoint a Paying Agent other than the
Trustee, it will cause such Paying Agent to execute and deliver
to the Trustee an instrument in which such agent shall agree with
the Trustee, subject to the provisions of this Section 2.09,
(1) that it will hold all sums held by it as such
agent for the payment of the principal of or interest, if
any, on the Securities (whether such sums have been paid to
it by TLGI or by any other obligor on the Securities) in
trust for the benefit of the Holders of the Securities or
the Trustee; and
(2) that it will give the Trustee notice of any
failure by TLGI (or by the other obligor on the Securities)
to make any payment of the principal of or interest, if any,
on the Securities when the same shall be due and payable;
and
(3) that it will, at any time during the continuance
of any such failure, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The agreement shall implement the provisions of this Indenture
that relate to such Paying Agent.
TLGI shall notify the Trustee of the name and address
of any such Paying Agent. If TLGI fails to maintain a Paying
Agent or agent for service of notices and demands, or fails to
give the foregoing notice, the Trustee shall act as such and
shall be entitled to appropriate compensation in accordance with
Section 7.08.
Each Paying Agent shall hold in trust for the benefit
of Holders of the Securities or the Trustee all money held by the
Paying Agent for the payment of principal of, or interest, if
any, on, the Securities (whether such money has been distributed
to it by TLGI or any other obligor on the Securities), and TLGI
(or any other obligor on the Securities) and the Paying Agent
shall notify the Trustee of any default by TLGI (or any other
obligor on the Securities) in making any such payment.
If TLGI or an Affiliate of TLGI acts as Paying Agent,
it will, on or before each due date of the principal of or
interests, if any, on the Securities, set aside, segregate and
hold in trust for the benefit of the Holders of the Securities a
sum sufficient to pay such principal or interest, if any, so
becoming due and will notify the Trustee of any failure to take
such action and of any failure by TLGI (or by any other obligor
under the Securities) to make any payment of the principal of or
interest, if any, on the Securities when the same shall become
due and payable. TLGI at any time may require a Paying Agent to
distribute all money held by it to the Trustee and account for
any funds disbursed and the Trustee may at any time during the
continuance of any Payment Default with respect to the
Securities, upon written request to a Paying Agent, require such
Paying Agent to pay all money held by it to the Trustee and to
account for any funds distributed. Upon doing so, the Paying
Agent (other than an obligor on
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the Securities) shall have no
further liability for the money so paid over to the Trustee.
Anything in this Section 2.09 to the contrary notwithstanding,
any agreement of the Trustee or any Paying Agent to hold sums in
trust as provided in this Section 2.09 is subject to Sections
8.03 and 8.04.
Section 2.10. Transfer and Exchange.
Upon due presentation for registration of transfer of
any Security of any series at the office of any Registrar, TLGI
shall execute and the Trustee shall authenticate and deliver in
the name of the transferee or transferees a new Security or
Securities of the same series, maturity date, interest date, if
any, and original issue date in authorized denominations for a
like aggregate principal amount.
All Securities presented for registration of transfer
shall (if so required by TLGI or the Trustee) be duly endorsed
by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to TLGI and the Trustee duly
executed by, the Holder or his attorney duly authorized in
writing.
At the option of the Holder thereof, Securities of any
series (other than a Global Security, except as set forth below)
may be exchanged for a Security or Securities of such series
having authorized denominations and an equal aggregate principal
amount, upon surrender of such Securities to be exchanged at the
office of the Registrar.
TLGI may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in
connection with any registration of transfer of Securities. No
service charge shall be made for any such transaction or for any
exchange of Securities of any series for any such transaction or
for any exchange of Securities of any series as contemplated by
the immediately preceding paragraph.
TLGI shall not be required to exchange or register a
transfer of (a) any Securities of any series for a period of 15
days next preceding the first mailing or publication of notice of
redemption of Securities of such series to be redeemed, (b) any
Securities selected, called or being called for redemption, in
whole or in part, in the case of any Security to be redeemed in
part, the portion thereof not so to be redeemed or (c) any
Security if the Holder thereof has exercised his right, if any,
to require TLGI to repurchase such Security in whole or in part,
except the portion of such Security not required to be
repurchased.
Notwithstanding any other provision of this Section
2.10, unless and until it is exchanged in whole or in part for
Securities in definitive registered form, a Global Security
representing all or a part of the Securities of a series may not
be transferred except as a whole by the Depositary for such
series to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a
successor Depositary for such series or a nominee of such
successor Depositary.
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If at any time the Depositary for any Securities of a
series represented by one or more Global Securities notifies TLGI
that it is unwilling or unable to continue as Depositary for such
Securities or if at any time the Depositary for such Securities
shall no longer be eligible under Section 2.04, TLGI shall
appoint a successor Depositary with respect to such Securities.
If a successor Depositary for such Securities is not appointed by
TLGI within 90 days after TLGI receives such notice or becomes
aware of such ineligibility, TLGI's election pursuant to Section
2.01 that such Securities be represented by one or more Global
Securities shall no longer be effective and TLGI shall execute,
and the Trustee, upon receipt of an Issuer Order for the
authentication and delivery of definitive Securities of such
series, will authenticate and deliver Securities of such series
in definitive registered form, in any authorized denominations,
in an aggregate principal amount equal to the principal amount of
the Global Security or Securities representing such Securities in
exchange for such Global Security or Securities.
TLGI may at any time and in its sole discretion
determine that the Securities of any series issued in the form of
one or more Global Securities shall no longer be represented by a
Global Security or Securities. In such event TLGI shall execute,
and the Trustee, upon receipt of an Officer's Certificate for the
authentication and delivery of definitive Securities of such
series, shall authenticate and deliver, Securities of such series
in definitive registered form, in any authorized denominations,
in an aggregate principal amount equal to the principal amount of
the Global Security or Securities representing such Securities,
in exchange for such Global Security or Securities.
If specified by TLGI pursuant to Section 2.01 with
respect to Securities represented by a Global Security, the
Depositary for such Global Security may surrender such Global
Security in exchange in whole or in part for Securities of the
same series in definitive registered form on such terms as are
acceptable to TLGI and such Depositary. Thereupon, TLGI shall
execute, and the Trustee shall authenticate and deliver, without
service charge,
(i) to the Person specified by such Depositary, a new
Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate
principal amount equal to and in exchange for such Person's
beneficial interest in the Global Security; and
(ii) to such Depositary a new Global Security in a
denomination equal to the difference, if any, between the
principal amount of the surrendered Global Security and the
aggregate principal amount of Securities authenticated and
delivered pursuant to clause (i) above.
Upon the exchange of a Global Security for Securities
in definitive registered form in authorized denominations, such
Global Security shall be cancelled by the Trustee or an agent of
TLGI or the Trustee. Securities in definitive registered form
issued in exchange for a Global Security pursuant to this Section
2.10 shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security,
pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee or an agent of
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TLGI or
the Trustee. The Trustee or such agent shall deliver at its
office such Securities to or as directed by the Persons in whose
names such Securities are so registered.
All Securities issued upon any transfer or exchange of
Securities shall be valid and legally binding obligations of
TLGI, evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Securities surrendered upon such
transfer or exchange.
Section 2.11. Mutilated, Defaced, Destroyed, Lost And
Stolen Securities. In case any temporary or definitive Security
shall become mutilated, defaced or be destroyed, lost or stolen,
TLGI in its discretion may execute, and upon the written request
of any officer of TLGI, the Trustee, in the absence of notice to
the Trustee that such Security has been acquired by a bona fide
purchaser, shall authenticate and deliver a new Security of the
same series, maturity date, interest rate, if any, and original
issue date, bearing a number or other distinguishing symbol not
contemporaneously outstanding, in exchange and substitution for
the mutilated or defaced Security, or in lieu of and in
substitution for the Security so destroyed, lost or stolen. In
every case the applicant for a substitute Security shall furnish
to TLGI and to the Trustee and any agent of TLGI or the Trustee
such security or indemnity as may be required by the Trustee to
indemnity and defend and to save each of the Trustee and TLGI
harmless and, in every case of destruction, loss or theft,
evidence to their satisfaction of the destruction, loss or theft
of such Security and of the ownership thereof and in the case of
mutilation or defacement, shall surrender the Security to the
Trustee or such agent.
Upon the issuance of any substitute Security, TLGI may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the
Trustee or its agent) connected therewith. In case any Security
which has matured or is about to mature or has been called for
redemption in full or is being surrendered for conversion in full
shall become mutilated or defaced or be destroyed, lost or
stolen, TLGI may instead of issuing a substitute Security, pay or
authorize the payment of the same or the conversion of such
Security (without surrender thereof except in the case of a
mutilated or defaced Security), if the applicant for such payment
or conversion shall furnish to TLGI and to the Trustee and any
agent of TLGI or the Trustee such security or indemnity as any of
them may require to hold each of them harmless, and, in every
case of destruction, loss or theft, the applicant shall also
furnish to TLGI and the Trustee and any agent of TLGI or the
Trustee evidence to the Trustee's satisfaction of the
destruction, loss or theft of such Security and of the ownership
thereof.
Every substitute Security of any series issued pursuant
to the provisions of this Section 2.11 by virtue of the fact that
any such Security is destroyed, lost or stolen shall constitute
an additional contractual obligation of TLGI, whether or not the
destroyed, lost or stolen Security shall be at any time
enforceable by anyone and shall be entitled to all the benefits
of (but shall be subject to all the limitations of rights set
forth in) this Indenture equally and proportionately with any and
all other Securities of such series duly authenticated and
delivered hereunder. All Securities shall be held and owned upon
the express condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the
replacement, payment or conversion of mutilated, defaced,
destroyed, lost or stolen Securities and shall
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preclude any and
all other rights or remedies notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the
replacement payment or conversion of negotiable instruments or
other securities without their surrender.
Section 2.12 Cancellation Of Securities; Disposition
Thereof. All Securities surrendered for payment, purchase,
redemption, registration of transfer, exchange or conversion, or
for credit against any payment in respect of a sinking or
analogous fund, if surrendered to TLGI or any agent of TLGI or
the Trustee or any agent of the Trustee, shall be delivered to
the Trustee or its agent for cancellation or, if surrendered to
the Trustee, shall be cancelled by it; and no Securities shall be
issued in lieu thereof except as expressly permitted by any of
the provisions of this Indenture. The Trustee or its agent shall
dispose of cancelled Securities held by it, or hold such
Securities in accordance with its standard retention policy, and
deliver a certificate of disposition or retention to TLGI. If
TLGI or its agent shall acquire any of the Securities, such
acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Securities unless and until
the same are delivered to the Trustee or its agent for
cancellation.
Section 2.13. Temporary Securities. Pending the
preparation of definitive Securities for any series, TLGI may
execute and the Trustee shall authenticate and deliver temporary
Securities for such series (printed, lithographed, typewritten or
otherwise reproduced, in each case in form satisfactory to the
Trustee). Temporary Securities of any series shall be issuable
in any authorized denomination, and substantially in the form of
the definitive Securities of such series but with such omissions,
insertions and variations as may be appropriate for temporary
Securities, all as may be determined by TLGI with the concurrence
of the Trustee as evidenced by the execution and authentication
thereof. Temporary Securities may contain such references to any
provisions of this Indenture as may be appropriate. Every
Temporary Security shall be executed by TLGI and be authenticated
by the Trustee upon the same conditions and in substantially the
same manner, and with like effect, as the definitive Securities.
Without reasonable delay TLGI shall execute and shall furnish
definitive Securities of such series and thereupon temporary
Securities of such series may be surrendered in exchange therefor
without charge at each office or agency to be maintained by TLGI
for that purpose pursuant to Section 4.02 and the Trustee shall
authenticate and deliver in exchange for such temporary
Securities of such series an equal aggregate principal amount of
definitive Securities of the same series having authorized
denominations. Until so exchanged, the temporary Securities of
any series shall be entitled to the same benefits under this
Indenture as definitive Securities of such series, unless
otherwise established pursuant to Section 2.01.
Section 2.14. Defaulted Interest. If TLGI defaults
on a payment of interest on the Securities of any series, it
shall pay the defaulted interest, plus (to the extent permitted
by law) any interest payable on the defaulted interest, in
accordance with the terms hereof, to the persons who are Holders
on a subsequent special record date, which date shall be at least
five Business Days prior to the payment date. TLGI shall fix
such special record date and payment date in a manner
satisfactory to the Trustee. At least 15 days before such
special record date, TLGI shall mail to each Holder a notice that
states the special record date, the payment date and
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the amount
of defaulted interest, and interest payable on such defaulted
interest, if any, to be paid.
Section 2.15. CUSIP Number. TLGI in issuing the
Securities of each series may use a "CUSIP" number with respect
to each such series (if then generally in use), and if so, the
Trustee may use the CUSIP numbers in notices of redemption or
exchange as a convenience to Holders; provided, however, that any
such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP number printed in the notice
or on the Securities, and that reliance may be placed only on the
other identification numbers printed on the Securities. TLGI
will promptly notify the Trustee of any change in the CUSIP
number.
Section 2.16. Deposit of Moneys. Whenever TLGI shall
have one or more Paying Agents, it will, on or before each due
date of the principal of or interest, if any, on any Securities,
deposit with a Paying Agent a sum sufficient to pay the principal
or interest, if any, so becoming due, such sum to be held in
trust for the benefit of the Persons entitled to such principal
or interest, if any, and (unless such Paying Agent is the
Trustee) TLGI will promptly notify the Trustee of its action or
failure so to act.
ARTICLE THREE
SECURITYHOLDERS LIST AND REPORTS BY TLGI AND THE TRUSTEE
Section 3.01 TLGI To Furnish Trustee Information As
To Names And Addresses Of Securityholders. TLGI and any other
obligor on the Securities covenant and agree that they will
furnish or cause to be furnished to the Trustee a list in such
form as the Trustee may reasonably require of the names and
addresses of the Holders of the Securities of each series as of a
date not more than 15 days prior to the time such information is
furnished;
(a) semiannually and not more than 15 days after each
March 1 and September 1; and
(b) at such other times as the Trustee may request in
writing, within 30 days after receipt by TLGI of any such
request;
provided that if and so long as Trustee shall be the Registrar
for such series, such list shall not be required to be furnished.
Section 3.02 Preservation And Disclosure Of
Securityholders Lists.
(a) The Trustee shall preserve, in current a form as
is reasonably practicable, all information as to the names and
addresses of the Holders of each series of Securities (i)
contained in the most recent list furnished to it as provided in
Section 3.01, and (ii) received by it in its capacity of
Registrar or Paying Agent for such series, if so acting, and
shall otherwise comply with TIA 312(a). The Trustee may
destroy any list furnished to it as provided in Section 3.01 upon
receipt of a new list so furnished.
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(b) In case three or more Holders of Securities
(hereinafter referred to as "applicants") apply in writing to
the Trustee and furnish to the Trustee reasonable proof that each
such applicant has owned a Security for a period of at least six
months preceding the date of such application, and such
application states that the applicants desire to communicate with
other Holders of Securities of a particular series (in which case
the applicants must all hold Securities of such series) or with
Holders of all Securities with respect to their rights under this
Indenture or under such Securities, and such application is
accompanied by a copy of the form of proxy or other communication
which such applicants propose to transmit, then the Trustee
shall, within five Business Days after the receipt of such
application, at its election, either
(i) afford to such applicants access to the
information preserved at the time by the Trustee in
accordance with the provisions of subsection (a) of this
Section 3.02, or
(ii) inform such applicants as to the approximate
number of Holders of Securities of such series of all
Securities, as the case may be, whose names and addresses
appear in the information preserved at the time by the
Trustee, in accordance with the provisions of subsection (a)
of this Section 3.02, and as to the approximate cost of
mailing to such Securityholders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants
access to such information, the Trustee shall, upon the written
request of such applicants, mail to each Securityholder of such
series or all Holders of Securities, as the case may be, whose
name and address appears in the information preserved at the time
by the Trustee in accordance with the provisions of subsection
(a) of this Section 3.02, a copy of the form of proxy or other
communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing , unless within five days after
such tender, the Trustee shall mail to such applicants and file
with the Commission, together with a copy of the material to be
mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interests
of the Holders of Securities of such series or of all Securities,
as the case may be, or would be in violation of applicable law.
Such written statement shall specify the basis of such opinion.
If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or, if,
after entry of an order sustaining one or more of such objection,
the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met, and
shall enter an order to declaring, the Trustee shall mail copies
of such material to all such Securityholders with reasonable
promptness after the entry of such order and the renewal of such
tender; otherwise the Trustee shall be relieved of any obligation
or duty to such applicants respecting their application.
(c) Each and every Holder of Securities, by receiving
and holding the same, agrees with TLGI and the Trustee that
neither TLGI nor the Trustee nor any agent of TLGI or the Trustee
shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders of
Securities in accordance with the provisions of
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subsection (b) of
this Section 3.02, regardless of the source from which such
information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a
request made under such subsection (b).
Section 3.03 Reports By TLGI. TLGI covenants:
(a) to file with the Trustee, within 15 days after
TLGI is required to file the same with the Commission, copies of
the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as
the Commission may from time to time by rules and regulations
prescribe) which TLGI may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934; or, if TLGI is not required to file
information, documents or reports pursuant to either of such
Sections, then to file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant
to Section 13 of the Securities Exchange Act of 1934 in respect
of debt security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;
(b) to file with the Trustee and the Commission, in
accordance with rules and regulations presented from time to time
by the Commission, such additional information, documents and
reports with respect to compliance by TLGI with the conditions
and covenants provided for in this Indenture as may be required
from time to time by such rules and regulations;
(c) to transmit by mail to the Holders of Securities
within 30 days after the filing thereof with the Trustee, in the
manner and to the extent provided in Section 7.07, such summaries
of any information, documents and reports required to be filed by
TLGI pursuant to subsections (a) and (b) of this Section 3.03 as
may be required to be transmitted to such Holders by rules and
regulations prescribed from time to time by the Commission; and
(d) furnish to the Trustee, not less than annually, a
brief certificate from the principal executive officer, principal
financial officer or principal accounting officer as to his
knowledge of TLGI's compliance with all conditions and covenants
under this Indenture. For purposes of this subsection (d), such
compliance shall be determined without regard to any period of
grace or requirement of notice provided under this Indenture.
ARTICLE FOUR
COVENANTS
TLGI and LGII hereby covenant as follows, from and
after the Closing Date and continuing so long as any amount
remains unpaid on any Securities:
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Section 4.01. Payment of Securities. TLGI covenants
and agrees that it will duly and punctually pay, or cause to be
paid, the principal of and interest on the Securities of each
series on the dates and in the manner provided in the Securities
and this Indenture. An installment of principal or interest
shall be considered paid on the date due if the Trustee or Paying
Agent (other than TLGI, a Subsidiary of TLGI or any Affiliate
thereof) holds on that date money designated and set aside for
and sufficient to pay the installment in a timely manner and is
not prohibited from paying such money to the Holders of the
Securities pursuant to the terms of this Indenture.
TLGI covenants and agrees that it will pay interest on
overdue principal at the rate and in the manner provided in the
Securities; it shall pay interest on overdue installments of
interest at the same rate and in the same manner, to the extent
lawful.
Section 4.02. Office For Notices And Payments, Etc.
So long as any of the Securities are Outstanding, TLGI will
maintain in each Place of Payment, an office or agency where the
Securities may be presented for payment ("Paying Agent"), an
office or agency where the Securities may be presented for
registration of transfer and for exchange ("Registrar") and, if
applicable, an office or agency where the Securities may be
presented for conversion ("Conversion Agent") as in this
Indenture provided, and an office or agency where notices and
demands to or upon TLGI in respect of the Securities or of this
Indenture may be served. In case TLGI shall at any time fail to
maintain any such office or agency, or shall fail to give notice
to the Trustee of any change in the location thereof,
presentation may be made and notice and demand may be served in
respect of the Securities or of this Indenture at the Corporate
Trust Office. TLGI hereby initially designates the Corporate
Trust Office for each such purpose and appoints the Trustee as
Registrar, Paying Agent, Conversion Agent and as the agent upon
whom notices and demands may be served with respect to the
Securities.
Section 4.03. Corporate Existence. Subject to, and
except as otherwise provided in, Article Five, TLGI shall do or
cause to be done all things necessary to and will cause each
Restricted Subsidiary to, preserve and keep in full force and
effect the corporate or partnership existence and rights (charter
and statutory), licenses and/or franchises of TLGI and the
Restricted Subsidiaries (including, without limitation, LGII);
provided, however, that TLGI and the Restricted Subsidiaries
shall not be required to preserve any such rights, licenses or
franchises if the Board of Directors of TLGI shall reasonably
determine that (x) the preservation thereof is no longer
desirable in the conduct of the business of TLGI and its
Subsidiaries taken as a whole and (y) the loss thereof is not
materially adverse to either TLGI and its Subsidiaries taken as a
whole or to the ability of TLGI to otherwise satisfy its
obligations hereunder.
Section 4.04. Payment of Taxes and Other Claims. TLGI
will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon TLGI or any of its
Restricted Subsidiaries (including, without limitation, LGII) or
upon the income, profits or property of TLGI or any of its
Restricted Subsidiaries, and (b) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a
Lien upon the property of TLGI or any Restricted Subsidiary of
TLGI; provided, however, that TLGI shall not be required to pay
or
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discharge or cause to be paid or discharged any such tax,
assessment, charge or claim the amount, applicability or validity
of which is being contested in good faith by appropriate
proceedings and for which adequate provision has been made or
where the failure to effect such payment or discharge is not
adverse in any material respect to TLGI.
Section 4.05. Maintenance of Properties; Insurance;
Books and Records; Compliance with Law.
(a) TLGI shall, and shall cause each of its Restricted
Subsidiaries (including, without limitation, LGII) to, cause all
properties and assets to be maintained and kept in good
condition, repair and working order (reasonable wear and tear
excepted) and supplied with all necessary equipment, and shall
cause to be made all necessary repairs, renewals, replacements,
additions, betterments and improvements thereto, as shall be
reasonably necessary for the proper conduct of its business;
provided, however, that nothing in this Section 4.05(a) shall
prevent TLGI or any of its Restricted Subsidiaries from
discontinuing the operation and maintenance of any of its
properties or assets if such discontinuance is, in the judgment
of the Board of Directors of TLGI or such Restricted Subsidiary,
desirable in the conduct of its business and if such
discontinuance is not materially adverse to either TLGI and its
Subsidiaries taken as a whole or the ability of LGII or TLGI to
otherwise satisfy its obligations hereunder.
(b) TLGI shall, and shall cause each of its Restricted
Subsidiaries (including, without limitation, LGII) to, maintain
with financially sound and reputable insurers such insurance as
may be required by law (other than with respect to any
environmental impairment liability insurance not commercially
available) and such other insurance to such extent and against
such hazards and liabilities, as is customarily maintained by
companies similarly situated (which may include self-insurance in
the same form as is customarily maintained by companies similarly
situated).
(c) TLGI shall, and shall cause each of its Restricted
Subsidiaries (including, without limitation, LGII) to, keep
proper books of record and account, in which full and correct
entries shall be made of all business and financial transactions
of TLGI and each Restricted Subsidiary of TLGI and reflect on its
financial statements adequate accruals and appropriations to
reserves, all in accordance with GAAP consistently applied to
TLGI and its Subsidiaries taken as a whole.
(d) TLGI shall and shall cause each of its Restricted
Subsidiaries (including, without limitation, LGII) to comply with
all statutes, laws, ordinances, or government rules and
regulations to which it is subject, non-compliance with which
would materially adversely affect the business, earnings,
properties, assets or condition (financial or otherwise) of TLGI
and its Subsidiaries taken as a whole.
Section 4.06. Compliance Certificate.
(a) TLGI will deliver to the Trustee within 60 days
after the end of each of TLGI's first three fiscal quarters and
within 90 days after the end of TLGI's fiscal year an Officers'
Certificate stating whether or not the signers know of any
Default or Event of Default
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under this Indenture by TLGI or LGII
or an event which, with notice or lapse of time or both, would
constitute a default by TLGI or LGII under any Pari Passu
Indebtedness that occurred during such fiscal period. If they do
know of such a Default, Event of Default or default, the
certificate shall describe any such Default, Event of Default or
default and its status. The first certificate to be delivered
pursuant to this Section 4.06(a) shall be for the first fiscal
quarter of TLGI beginning after the Issue Date. TLGI shall also
deliver a certificate to the Trustee at least annually from its
principal executive, financial or accounting officer as to his or
her knowledge of LGII's and TLGI's compliance with all conditions
and covenants under this Indenture and LGII's, such compliance to
be determined without regard to any period of grace or
requirement of notice provided herein or therein.
(b) TLGI shall deliver to the Trustee within 90 days
after the end of each fiscal year a written statement by LGII's
and TLGI's independent chartered accountants stating (A) that
their audit examination has included a review of the terms of
this Indenture and the Securities as they relate to accounting
matters, and (B) whether, in connection with their audit
examination, any Default or Event of Default under this Indenture
or an event which, with notice or lapse of time or both, would
constitute a default under any Pari Passu Indebtedness has come
to their attention and, if such a Default, Event of Default or a
default under any Pari Passu Indebtedness has come to their
attention, specifying the nature and period of existence thereof;
provided, however, that, without any restriction as to the scope
of the audit examination, such independent certified public
accountants shall not be liable by reason of any failure to
obtain knowledge of any such Default, Event of Default or a
default under any Pari Passu Indebtedness that would not be
disclosed in the course of an audit examination conducted in
accordance with GAAP.
(c) Each of LGII and TLGI will deliver to the Trustee
as soon as possible, and in any event within 10 days after LGII
and/or TLGI, as the case may be, becomes aware or should
reasonably have become aware of the occurrence of any Default,
Event of Default or an event which, with notice or lapse of time
or both, would constitute a default by LGII and/or TLGI, as the
case may be, under any Indebtedness, an Officers' Certificate
specifying such Default, Event of Default or default and what
action LGII and/or TLGI, as the case may be, is taking or
proposes to take with respect thereto.
Section 4.07. Limitation on Indebtedness.
TLGI will not, and will not permit any of its
Restricted Subsidiaries (including, without limitation, LGII) to,
directly or indirectly, create, incur, issue, assume, guarantee
or in any manner become directly or indirectly liable,
contingently or otherwise, for the payment of (collectively, to
"incur") any Indebtedness (including, without limitation, any
Acquired Indebtedness) other than Permitted Indebtedness.
Notwithstanding the foregoing limitations, TLGI and LGII (and any
Wholly-Owned Subsidiary with respect to Seller Financing
Indebtedness) will be permitted to incur Indebtedness (including,
without limitation, Acquired Indebtedness) if at the time of such
incurrence, and after giving pro forma effect thereto, the
Consolidated Fixed Charge Coverage Ratio of TLGI is at least
equal to 2.25 : 1.
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Section 4.08. Limitation on Restricted Payments.
TLGI will not, and will not permit any of its
Restricted Subsidiaries (including, without limitation, LGII) to,
directly or indirectly:
(a) declare or pay any dividend or make any other
distribution or payment on or in respect of Capital Stock of TLGI
or any of its Restricted Subsidiaries or any payment made to the
direct or indirect holders (in their capacities as such) of
Capital Stock of TLGI or any of its Restricted Subsidiaries
(other than (x) dividends or distributions payable solely in
Capital Stock of TLGI (other than Redeemable Capital Stock) or in
options, warrants or other rights to purchase Capital Stock of
TLGI (other than Redeemable Capital Stock) and (y) dividends or
other distributions to the extent declared or paid to TLGI or any
Wholly-Owned Subsidiary of TLGI),
(b) purchase, redeem, defease or otherwise acquire or
retire for value any Capital Stock of TLGI or any of its
Restricted Subsidiaries (other than any such Capital Stock of a
Wholly-Owned Subsidiary of TLGI),
(c) make any principal payment on, or purchase,
defease, repurchase, redeem or otherwise acquire or retire for
value, prior to any scheduled maturity, scheduled repayment,
scheduled sinking fund payment or other Stated Maturity, any
Indebtedness that is subordinate or junior in right of payment to
the Securities or Pari Passu Indebtedness (other than any such
subordinated or Pari Passu Indebtedness owned by TLGI or a Wholly-
Owned Subsidiary of TLGI), or
(d) make any Investment (other than any Permitted
Investment) in any person, (such payments or Investments
described in the preceding clauses (a), (b), (c) and (d) are
collectively referred to as "Restricted Payments"), unless, at
the time of and after giving effect to the proposed Restricted
Payment (the amount of any such Restricted Payment, if other than
cash, shall be the Fair Market Value on the date of such
Restricted Payment of the asset(s) proposed to be transferred by
TLGI or such Restricted Subsidiary, as the case may be, pursuant
to such Restricted Payment), (A) no Default or Event of Default
shall have occurred and be continuing, (B) immediately prior to
and after giving effect to such Restricted Payment, TLGI would be
able to incur $1.00 of additional Indebtedness pursuant to
Section 4.07 (assuming a market rate of interest with respect to
such additional Indebtedness) and (C) the aggregate amount of all
Restricted Payments declared or made from and after the
Measurement Date would not exceed the sum of (1) 50% of the
aggregate Consolidated Net Income of TLGI accrued on a cumulative
basis during the period beginning on the first day of the fiscal
quarter of TLGI during which the Measurement Date occurs and
ending on the last day of the fiscal quarter of TLGI immediately
preceding the date of such proposed Restricted Payment, which
period shall be treated as a single accounting period (or, if
such aggregate cumulative Consolidated Net Income of TLGI for
such period shall be a deficit, minus 100% of such deficit) plus
(2) the aggregate net cash proceeds received by TLGI or LGII
(without duplication) either (x) as capital contributions to TLGI
or LGII (without duplication) after the Measurement Date from any
person (other than TLGI, LGII or a Restricted Subsidiary of TLGI
or LGII, as the case may be) or (y) from the
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issuance or sale of
Capital Stock (excluding Redeemable Capital Stock, but including
Capital Stock issued upon the conversion of convertible
Indebtedness or from the exercise of options, warrants or rights
to purchase Capital Stock (other than Redeemable Capital Stock))
of TLGI or LGII (without duplication) to any person (other than
to TLGI, LGII or a Restricted Subsidiary of TLGI or LGII, as the
case may be) after the Measurement Date plus (3) in the case of
the disposition or repayment of any Investment constituting a
Restricted Payment made after the Measurement Date (excluding any
Investment described in clause (v) of the following paragraph),
an amount equal to the lesser of the return of capital with
respect to such Investment and the cost of such Investment less,
in either case, the cost of the disposition of such Investment
plus (4) the sum of $15,000,000. For purposes of the preceding
clause (C)(2), the value of the aggregate net proceeds received
by TLGI or LGII (without duplication) upon the issuance of
Capital Stock upon the conversion of convertible Indebtedness or
upon the exercise of options, warrants or rights will be the net
cash proceeds received upon the issuance of such Indebtedness,
options, warrants or rights plus the incremental cash amount
received by TLGI or LGII (without duplication) upon the
conversion or exercise thereof.
None of the foregoing provisions will prohibit (i) the
payment of any dividend within 60 days after the date of its
declaration, if at the date of declaration such payment would be
permitted by the foregoing paragraph; (ii) so long as no Default
or Event of Default shall have occurred and be continuing, the
redemption, repurchase or other acquisition or retirement of any
shares of any class of Capital Stock of TLGI, LGII or any
Restricted Subsidiary of TLGI or LGII in exchange for, or out of
the net cash proceeds of, a substantially concurrent (x) capital
contribution to TLGI or LGII from any person (other than a
Related Obligor) or (y) issue and sale of other shares of Capital
Stock (other than Redeemable Capital Stock) of TLGI or LGII to
any person (other than to a Related Obligor); (iii) so long as no
Default or Event of Default shall have occurred and be
continuing, any redemption, repurchase or other acquisition or
retirement of Indebtedness that is subordinate or junior in right
of payment to the Securities by exchange for, or out of the net
cash proceeds of, a substantially concurrent (x) capital
contribution to TLGI or LGII from any person (other than a
Related Obligor) or (y) issue and sale of (1) Capital Stock
(other than Redeemable Capital Stock) of TLGI or LGII to any
person (other than a Related Obligor); provided, however, that
the amount of any such net proceeds that are utilized for any
such redemption, repurchase or other acquisition or retirement
shall be excluded from clause (C)(2) of the preceding paragraph;
or (2) Indebtedness of TLGI or LGII issued to any person (other
than a Related Obligor), so long as such Indebtedness is Pari
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Passu Indebtedness or Indebtedness that is subordinate or junior
in right of payment to the Securities in the same manner and at
least to the same extent as the Indebtedness so purchased,
exchanged, redeemed, acquired or retired; (iv) so long as no
Default or Event of Default shall have occurred and be
continuing, any redemption, repurchase or other acquisition or
retirement of Pari Passu Indebtedness by exchange for, or out of
the net cash proceeds of, a substantially concurrent (x) capital
contribution to TLGI or LGII from any person (other than a
Related Obligor) or (y) issue and sale of (1) Capital Stock
(other than Redeemable Capital Stock) of TLGI or LGII to any
person (other than a Related Obligor); provided, however, that
the amount of any such net proceeds that are utilized for any
such redemption, repurchase or other acquisition or retirement
shall be excluded from clause (C)(2) of the preceding paragraph;
or (2) Indebtedness of TLGI or LGII issued to any person (other
than a Related Obligor), so long as such Indebtedness is Pari
Passu Indebtedness or Indebtedness that is subordinate or junior
in right of payment to the Securities in the same manner and at
least to the same extent as the Indebtedness so purchased,
exchanged, redeemed, acquired or retired; (v) Investments
constituting Restricted Payments made as a result of the receipt
of consideration that consists of cash or Cash Equivalents from
any Asset Sale made pursuant to and in compliance with Section
4.12; (vi) so long as no Default or Event of Default has occurred
and is continuing, repurchases by TLGI of common stock of TLGI
from employees of TLGI or their authorized representatives upon
the death, disability or termination of employment of such
employees, in an aggregate amount not exceeding $10,000,000 in
any calendar year; (vii) Investments constituting Restricted
Payments that are permitted by subparagraphs (iv) and (v) of the
proviso to Section 4.13; and (viii) the declaration or the
payment of dividends on, or the scheduled purchase or redemption
of, the Preferred Securities of a Special Finance Subsidiary or
the Series C Preferred Shares, of TLGI. In computing the amount
of Restricted Payments previously made for purposes of clause (C)
of the preceding paragraph, Restricted Payments made under the
preceding clauses (v), (vi) and (vii) shall be included and those
under clauses (i), (ii), (iii), (iv) and (viii) shall not be so
included. For purposes of this Section 4.08 only, the term
"Related Obligor" shall mean TLGI, LGII or a Restricted
Subsidiary of TLGI or LGII.
Section 4.09. Limitation on Issuances and Sale of
Preferred Stock by Restricted Subsidiaries.
TLGI (a) will not permit any of its Restricted
Subsidiaries (including, without limitation, LGII) to issue any
Preferred Stock (other than (i) Preferred Stock issued to TLGI or
a Wholly-Owned Subsidiary of TLGI and (ii) Preferred Securities
of a Special Finance Subsidiary); and (b) will not permit any
person to own any Preferred Stock of any Restricted Subsidiary of
TLGI (other than (i) Preferred Stock owned by TLGI or a Wholly-
Owned Subsidiary of TLGI and (ii) Preferred Securities of a
Special Finance Subsidiary); provided, however, that this
covenant shall not prohibit the issuance and sale of (x) all, but
not less than all, of the issued and outstanding Capital Stock of
any Restricted Subsidiary of TLGI owned by TLGI or any of its
Restricted Subsidiaries in compliance with the other provisions
of this Indenture or (y) directors' qualifying shares or
investments by foreign nationals mandated by applicable law.
Section 4.10. Limitation on Liens.
TLGI will not, and will not permit any of its
Restricted Subsidiaries (including, without limitation, LGII) to,
create, incur, assume or suffer to exist any Liens of any kind
against or upon any of its property or assets, or any proceeds
therefrom where the aggregate amount of Indebtedness secured by
any such Liens, together with the aggregate amount of property
subject to any Sale-Leaseback Transactions of TLGI and its
Restricted Subsidiaries (other than Permitted Sale-Leaseback
Transactions), exceeds 10% of TLGI's Consolidated Net Worth,
unless (x) in the case of Liens securing Indebtedness that is
subordinate or junior in right of payment to the Securities, the
Securities are secured by a Lien on such property, assets or
proceeds that is senior in priority to such Liens and (y) in all
other cases, the Securities are equally and ratably secured
except for (a) Liens existing as at the Measurement Date;
(b) Liens
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securing the Securities; (c) Liens in favor of TLGI,
LGII or any Wholly-Owned Subsidiary; (d) Liens securing
Indebtedness which is incurred to refinance Indebtedness which
has been secured by a Lien permitted under the provisions of this
Indenture and which has been incurred in accordance with the
provisions of the Indenture; provided, however, that such Liens
do not extend to or cover any property or assets of TLGI or any
of its Restricted Subsidiaries not securing the Indebtedness so
refinanced; and (e) Permitted Liens.
Section 4.11. Change of Control.
Upon the occurrence of a Change of Control, TLGI will
be obligated to make, and LGII will ensure that TLGI makes, an
offer to purchase (a "Change of Control Offer"), and shall
purchase, on a Business Day (the "Change of Control Purchase
Date") not more than 60 nor less than 30 days following the
occurrence of the Change of Control, all of the then outstanding
Securities of each series properly tendered and not withdrawn at
a purchase price (the "Change of Control Purchase Price") equal
to 101% of the principal amount thereof (or, in the case of an
Original Issue Discount Security, the principal thereof
(including any amount in respect of original issue discount) plus
accrued and unpaid interest, if any, to the Change of Control
Purchase Date. The Change of Control Offer is required to remain
open for at least 20 Business Days and until the close of
business on the Change of Control Purchase Date.
Notice of a Change of Control Offer shall be mailed by
TLGI not later than the 30th day after the date of occurrence of
the Change of Control to the Holders of Securities at their last
registered addresses with a copy to the Trustee and the Paying
Agent. The Change of Control Offer shall remain open from the
time of mailing for at least 20 Business Days and until 5:00
p.m., New York City time, on the Change of Control Purchase Date.
The notice, which shall govern the terms of the Change of Control
Offer, shall include such disclosures as are required by law and
shall state:
(a) that the Change of Control Offer is being made
pursuant to this Section 4.11 and that all Securities validly
tendered into the Change of Control Offer and not withdrawn will
be accepted for payment;
(b) the purchase price (including the amount of
accrued interest, if any) for each Security, the Change of
Control Purchase Date and the date on which the Change of Control
Offer expires;
(c) that any Security not tendered for payment will
continue to accrue interest in accordance with the terms thereof;
(d) that, unless TLGI shall default in the payment of
the purchase price, any Security accepted for payment pursuant to
the Change of Control Offer shall cease to accrue interest after
the Change of Control Purchase Date;
(e) that Holders electing to have Securities purchased
pursuant to a Change of Control Offer will be required to
surrender their Securities to the Paying Agent at the address
specified in the notice prior to 5:00 p.m., New York City time,
on the Change of Control
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Purchase Date and must complete any form
of letter of transmittal proposed by TLGI and reasonably
acceptable to the Trustee and the Paying Agent;
(f) that Holders of Securities will be entitled to
withdraw their election if the Paying Agent receives, not later
than 5:00 p.m., New York City time, on the Change of Control
Purchase Date, a tested telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of
Securities the Holder delivered for purchase, the Security
certificate number (if any) and a statement that such Holder is
withdrawing its election to have such Securities purchased;
(g) that Holders whose Securities are purchased only
in part will be issued Securities equal in principal amount to
the unpurchased portion of the Securities surrendered;
(h) the instructions that Holders must follow in order
to tender their Securities; and
(i) information concerning the business of LGII and
TLGI, the most recent annual and quarterly reports of TLGI filed
with the Commission pursuant to the Exchange Act (or, if TLGI is
not then permitted to file any such reports with the Commission,
the comparable reports prepared pursuant to Section 4.17), a
description of material developments in the business of LGII and
TLGI, information with respect to pro forma historical financial
information after giving effect to such Change of Control and
such other information concerning the circumstances and relevant
facts regarding such Change of Control Offer as would be material
to a Holder of Securities in connection with the decision of such
Holder as to whether or not it should tender Securities pursuant
to the Change of Control Offer.
On the Change of Control Purchase Date, TLGI shall
(i) accept for payment Securities or portions thereof validly
tendered pursuant to the Change of Control Offer, (ii) deposit
with the Paying Agent money, in immediately available funds,
sufficient to pay the purchase price of all Securities or
portions thereof so tendered and accepted and (iii) deliver to
the Trustee the Securities so accepted together with an Officers'
Certificate setting forth the Securities or portions thereof
tendered to and accepted for payment by TLGI. The Paying Agent
shall promptly mail or deliver to the Holders of Securities so
accepted payment in an amount equal to the purchase price, and
the Trustee shall promptly authenticate and mail or deliver to
such Holders a new Security equal in principal amount to any
unpurchased portion of the Security surrendered. Any Securities
not so accepted shall be promptly mailed or delivered by TLGI to
the Holder thereof. TLGI will publicly announce the results of
the Change of Control Offer not later than the first Business Day
following the Change of Control Purchase Date.
If a Change of Control occurs and TLGI fails to pay the
Purchase Price for all Securities properly tendered and not
withdrawn, LGII will be obliged to purchase all such Securities
at the Change of Control Purchase Price on the Change of Control
Purchase Date in compliance with the requirements applicable to a
Change of Control Offer made by TLGI.
TLGI and LGII shall not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the
Change of Control Offer in a manner, at the times
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and otherwise
in compliance with the requirements applicable to a Change of
Control Offer made by TLGI and purchases all Securities validly
tendered and not withdrawn under such Change of Control Offer.
TLGI and LGII will comply, to the extent applicable,
with the requirements of Section 14(e) of the Exchange Act, and
any other securities laws or regulations in connection with the
repurchase of Securities pursuant to a Change of Control Offer.
Section 4.12. Disposition of Proceeds of Asset Sales.
(a) TLGI will not, and will not permit any of its
Restricted Subsidiaries (including, without limitation, LGII) or
First Capital Life Insurance Company of Louisiana, National
Capital Life Insurance Company, Security Industrial Insurance
Company, Security Industrial Fire Insurance Company or any
successors to such Subsidiaries to, make any Asset Sale unless
(a) TLGI or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the shares or assets sold or
otherwise disposed of and (b) at least 75% of such consideration
consists of cash or Cash Equivalents. To the extent the Net Cash
Proceeds of any Asset Sale are not required to be applied to
repay, and permanently reduce the commitments under, the Credit
Agreements (as required by the terms thereof) or any other Pari
Passu Indebtedness, or are not so applied, TLGI or such
Restricted Subsidiary, as the case may be, may, within 180 days
of such Asset Sale, apply such Net Cash Proceeds to an investment
in properties and assets that replace the properties and assets
that were the subject of such Asset Sale or in properties and
assets that will be used in the business of TLGI and its
Restricted Subsidiaries existing on the Issue Date or in
businesses reasonably related thereto ("Replacement Assets").
Any Net Cash Proceeds from any Asset Sale that are neither used
to repay, and permanently reduce the commitments under, the
Credit Agreements nor invested in Replacement Assets within the
180-day period described above constitute "Excess Proceeds"
subject to disposition as provided below.
(b) When the aggregate amount of Excess Proceeds
equals or exceeds $10,000,000, after satisfying any similar
purchase obligations of TLGI or LGII under Senior Debt
instruments outstanding as of the Issue Date, TLGI shall make an
offer to purchase (an "Asset Sale Offer"), from all holders of
each series of the Securities, not more than 40 Business Days
thereafter, an aggregate principal amount of Securities equal to
such Excess Proceeds, at a price in cash equal to 100% of the
outstanding principal amount thereof (or, in the case of an
Original Issue Discount Security, the principal thereof
(including any amount in respect of original issue discount) plus
accrued and unpaid interest, if any, to the purchase date (the
"Asset Sale Offer Price)..
(c) Notice of an Asset Sale Offer shall be mailed by
TLGI to all Holders of Securities not less than 20 Business Days
nor more than 40 Business Days before the Asset Sale Purchase
Date at their last registered address with a copy to the Trustee
and the Paying Agent. The Asset Sale Offer shall remain open
from the time of mailing for at least 20 Business Days and until
at least 5:00 p.m., New York City time, on the Asset Sale
Purchase Date. The notice,
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which shall govern the terms of the
Asset Sale Offer, shall include such disclosures as are required
by law and shall state:
(1) that the Asset Sale Offer is being made pursuant
to this Section 4.12;
(2) the Asset Sale Offer Price (including the amount
of accrued interest, if any) for each Security, the Asset Sale
Purchase Date and the date on which the Asset Sale Offer expires;
(3) that any Security not tendered or accepted for
payment will continue to accrue interest in accordance with the
terms thereof;
(4) that, unless LGII shall default in the payment of
the Asset Sale Offer Price, any Security accepted for payment
pursuant to the Asset Sale Offer shall cease to accrue interest
after the Asset Sale Purchase Date;
(5) that Holders electing to have Securities purchased
pursuant to an Asset Sale Offer will be required to surrender
their Securities to the Paying Agent at the address specified in
the notice prior to 5:00 p.m., New York City time, on the Asset
Sale Purchase Date and must complete any form of letter of
transmittal proposed by LGII and reasonably acceptable to the
Trustee and the Paying Agent;
(6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00 p.m.,
New York City time, on the Asset Sale Purchase Date, a tested
telex, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of Securities the Holder
delivered for purchase, the Security certificate number (if any)
and a statement that such Holder is withdrawing its election to
have such Securities purchased;
(7) that if Securities in a principal amount in excess
of the Holder's pro rata share of the amount of Excess Proceeds
are tendered pursuant to the Asset Sale Offer, LGII shall
purchase Securities on a pro rata basis among the Securities
tendered (with such adjustments as may be deemed appropriate by
LGII so that only Securities in denominations of $1,000 or
integral multiples of $1,000 shall be acquired);
(8) that Holders whose Securities are purchased only
in part will be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered;
(9) the instructions that Holders must follow in order
to tender their Securities; and
(10) information concerning the business of LGII and
TLGI, the most recent annual and quarterly reports of TLGI filed
with the Commission pursuant to the Exchange Act (or, if TLGI is
not permitted to file any such reports with the Commission, the
comparable reports prepared pursuant to Section 4.17), a
description of material developments in the business of LGII and
TLGI, information with respect to pro forma historical financial
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information after giving effect to such Asset Sale and Asset Sale
Offer and such other information concerning the circumstances and
relevant facts regarding such Asset Sale Offer as would be
material to a Holder of Securities in connection with the
decision of such Holder as to whether or not it should tender
Securities pursuant to the Asset Sale Offer.
(11) On the Asset Sale Purchase Date, TLGI shall
(i) accept for payment, on a pro rata basis, Securities or
portions thereof tendered pursuant to the Asset Sale Offer,
(ii) deposit with the Paying Agent money, in immediately
available funds, in an amount sufficient to pay the Asset Sale
Offer Price of all Securities or portions thereof so tendered and
accepted and (iii) deliver to the Trustee the Securities so
accepted together with an Officers' Certificate setting forth the
Securities or portions thereof tendered to and accepted for
payment by TLGI. The Paying Agent shall promptly mail or deliver
to Holders of Securities so accepted payment in an amount equal
to the Asset Sale Offer Price, and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Security
equal in principal amount to any unpurchased portion of the
Security surrendered. Any Securities not so accepted shall be
promptly mailed or delivered by TLGI to the Holder thereof. TLGI
will publicly announce the results of the Asset Sale Offer not
later than the first Business Day following the Asset Sale
Purchase Date. To the extent that the aggregate principal amount
of Securities tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds, TLGI or LGII, as the case may be, may
use such deficiency for general corporate purposes. Upon
completion of such Asset Sale Offer, the amount of Excess
Proceeds shall be reset to zero. For purposes of this
Section 4.12, the Trustee shall act as Paying Agent.
(12) TLGI and LGII will comply, to the extent
applicable, with the requirements of Section 14(e) of the
Exchange Act and any other securities laws or regulations in
connection with the repurchase of Securities pursuant to the
Asset Sale Offer.
Section 4.13. Limitation on Transactions with
Interested Persons.
TLGI will not, and will not permit any of its
Restricted Subsidiaries (including, without limitation, LGII) to,
directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without
limitation, the sale, transfer, disposition, purchase, exchange
or lease of assets, property or services) with, or for the
benefit of, any Affiliate of TLGI or any beneficial owner (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except
that a person shall be deemed to have "beneficial ownership" of
all securities that such person has the right to acquire, whether
such right is exercisable immediately, after the passage of time
or upon the happening of an event) of 5% or more of the Common
Shares at any time outstanding ("Interested Persons"), unless
(a) such transaction or series of related transactions are on
terms that are no less favorable to TLGI or such Restricted
Subsidiary, as the case may be, than those which could have been
obtained in a comparable transaction at such time from persons
who are not Affiliates of TLGI or Interested Persons, (b) with
respect to a transaction or series of transactions involving
aggregate payments or value equal to or greater than $10,000,000,
TLGI has obtained a written opinion from an Independent Financial
Advisor stating that the terms of such transaction or series of
transactions are fair to TLGI or its Restricted Subsidiary, as
the case may be, from a financial point of view and
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(c) with
respect to a transaction or series of transactions involving
aggregate payments or value equal to or greater than $2,500,000,
TLGI shall have delivered an Officer's Certificate to the Trustee
certifying that such transaction or series of transactions comply
with the preceding clause (a) and, if applicable, certifying
that the opinion referred to in the preceding clause (b) has been
delivered and that such transaction or series of transactions has
been approved by a majority of the Board of Directors of TLGI
(including a majority of the disinterested directors); provided,
however, that this covenant will not restrict TLGI from
(i) paying dividends in respect of its Capital Stock permitted
under Section 4.08, (ii) paying reasonable and customary fees to
directors of TLGI or any Restricted Subsidiary who are not
employees of TLGI or any Restricted Subsidiary, (iii) entering
into transactions with its Wholly-Owned Subsidiaries or
permitting its Wholly-Owned Subsidiaries from entering into
transactions with other Wholly- Owned Subsidiaries of TLGI, (iv)
making loans or advances to senior officers and directors of TLGI
or any Restricted Subsidiary not in excess of $6,000,000 in the
aggregate at any one time outstanding, (v) guaranteeing loans
made to officers and other employees of TLGI or any Restricted
Subsidiaries in connection with TLGI's 1994 Management Equity
Investment Plan not in excess of $6,000,000 in the aggregate at
any tone time outstanding, (vi) making loans or advances to
officers, employees or consultants of TLGI and its Restricted
Subsidiaries for travel and moving expenses in the ordinary
course of business for bona fide business purposes of TLGI and
its Restricted Subsidiaries, (vii) making other loans or advances
to officers, employees or consultants of TLGI and its Restricted
Subsidiaries in the ordinary course of business for bona fide
business purposes of TLGI and its Restricted Subsidiaries not in
excess of $10,000,000 in the aggregate at any one time
outstanding, (viii) making payments to officers or employees of
TLGI or its Restricted Subsidiaries pursuant to obligations
undertaken, at a time when such persons were not officers or
employees of TLGI or its Restricted Subsidiaries, in connection
with arms' length Asset Acquisitions or (ix) declaring or paying
dividends on, or purchasing or redeeming, the Preferred
Securities of a Special Finance Subsidiary.
Section 4.14. Limitation on Dividends and Other
Payment Restrictions Affecting Subsidiaries.
TLGI will not, and will not permit any of its
Restricted Subsidiaries (including, without limitation, LGII) to,
directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary of TLGI to (a) pay
dividends, in cash or otherwise, or make any other distributions
on or in respect of its Capital Stock or any other interest or
participation in, or measured by, its profits, (b) pay any
Indebtedness owed to TLGI or any other Restricted Subsidiary of
TLGI, (c) make loans or advances to, or any Investment in, TLGI
or any other Restricted Subsidiary of TLGI, (d) transfer any of
its properties or assets to TLGI or any other Restricted
Subsidiary of TLGI or (e) guarantee any Indebtedness of TLGI or
any other Restricted Subsidiary of TLGI, except for such
encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) customary non-assignment provisions of any
contract or any lease governing a leasehold interest of TLGI or
any Restricted Subsidiary of TLGI, (iii) customary restrictions
on transfers of property subject to a Lien permitted under the
provisions of this Indenture which could not materially adversely
affect TLGI's ability to satisfy its obligations under the
provisions of this Indenture and the Securities, (iv) any
agreement or other instrument of a person acquired by TLGI or any
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Restricted Subsidiary of TLGI (or a Restricted Subsidiary of such
person) in existence at the time of such acquisition (but not
created in contemplation thereof), which encumbrance or
restriction is not applicable to any person, or the properties or
assets of any person, other than the person, or the properties or
assets of the person, so acquired, (v) provisions contained in
any agreement or instrument relating to Indebtedness which
prohibit the transfer of all or substantially all of the assets
of the obligor thereunder unless the transferee shall assume the
obligations of the obligor under such agreement or instrument and
(vi) encumbrances and restrictions under Indebtedness in effect
on the Issue Date (including under the Securities) and
encumbrances and restrictions in permitted refinancings or
replacements thereof which are no less favorable to the holders
of the Securities than those contained in the Indebtedness so
refinanced or replaced.
Section 4.15. Limitations on Sale-Leaseback
Transactions.
TLGI will not, and will not permit any of its
Restricted Subsidiaries (including, without limitation, LGII) to,
enter into any Sale-Leaseback Transaction with respect to any
property of TLGI or any of its Restricted Subsidiaries where the
aggregate amount of property subject to such Sale-Leaseback
Transactions, together with the aggregate amount of Liens
securing Indebtedness of TLGI and its Restricted Subsidiaries
(other than Permitted Liens), exceeds 10% of TLGI's Consolidated
Net Worth. Notwithstanding the foregoing, TLGI and its
Restricted Subsidiaries may enter into Sale-Leaseback
Transactions ("Permitted Sale-Leaseback Transactions") with
respect to property acquired or constructed after the Issue Date;
provided that (a) the Attributable Value of such Sale-Leaseback
Transaction shall be deemed to be Indebtedness of TLGI or such
Restricted Subsidiary, as the case may be, and (b) after giving
pro forma effect to any such Sale-Leaseback Transaction and the
foregoing clause (a), TLGI would be able to incur $1.00 of
additional Indebtedness pursuant to 4.07 (assuming a market rate
of interest with respect to such additional Indebtedness).
Section 4.16. Limitation on Applicability of Certain
Covenants.
During any period of time that (i) the ratings assigned
to the Securities by each of S&P and Moody's (collectively, the
"Rating Agencies") are no less than BBB-and Baa3, respectively
(the "Investment Grade Ratings"), and (ii) no Default or Event of
Default has occurred and is continuing, TLGI and its Restricted
Subsidiaries (including, without limitation, LGII) will not be
subject to the covenants contained in Sections 4.07, 4.08, 4.09,
4.12, 4.13 and 4.14 (collectively, the "Suspended Covenants"). If
one or both Rating Agencies withdraws its rating or downgrades
its Investment Grade Rating, then thereafter TLGI and its
Restricted Subsidiaries will be subject, on a prospective basis,
to the Suspended Covenants (until the Rating Agencies have again
assigned Investment Grade Ratings to the Securities) and
compliance with the Suspended Covenants with respect to
Restricted Payments made after the time of such withdrawal or
downgrade will be calculated in accordance with the covenant
contained in Section 4.07 as if such covenant had been in effect
at all times after the Measurement Date.
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Section 4.17 Commission Reports.
TLGI shall file with the Commission, or if not
permitted or required to so file will deliver to the Trustee, the
annual reports, quarterly reports and the information, documents
and other reports required to be filed with the Commission
pursuant to Sections 13 and 15 of the Exchange Act, whether or
not TLGI has a class of securities registered under the Exchange
Act. In accordance with the provisions of TIA 314(a), TLGI
shall file with the Trustee and provide to each Holder, within 15
days after it files them with the Commission (or if such filing
is not permitted under the Exchange Act, 15 days after TLGI would
have been required to make such filing), copies of such reports.
TLGI also shall comply with the other provisions of TIA 314(a).
In addition, TLGI shall cause its annual reports to stockholders
and any quarterly or other financial reports furnished by it to
stockholders generally to be filed with the Trustee and mailed no
later than the date such materials are mailed or made available
to TLGI's stockholders, to the Holders at their addresses as set
forth in the register of securities maintained by the Registrar.
Section 4.18. Rule 144A Information Requirement.
If at any time TLGI is no longer subject to the
reporting requirements of the Exchange Act, it will furnish to
the Holders or beneficial holders of the Securities and
prospective purchasers of the Securities designated by the
holders of the Securities, upon their request, any information
required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
Section 4.19. Waiver of Stay, Extension or Usury Laws.
Each of TLGI and LGII covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury law or other
law which would prohibit or forgive TLGI or LGII, as the case may
be, from paying all or any portion of the principal of, premium,
if any, or interest on the Securities as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which
may affect the covenants or the performance of this Indenture;
and (to the extent that it may lawfully do so) each of TLGI and
LGII hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede
the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. When TLGI or LGII May Merge, etc.
(a) TLGI will not, and will not permit LGII to, in any
transaction or series of transactions, merge or consolidate with
or into, or sell, assign, convey, transfer, lease or
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otherwise
dispose of all or substantially all of its properties and assets
as an entirety to, any person or persons, and TLGI will not
permit any of its Restricted Subsidiaries (including, without
limitation, LGII) to enter into any such transaction or series of
transactions if such transaction or series of transactions, in
the aggregate, would result in a sale, assignment, conveyance,
transfer, lease or other disposition of all or substantially all
of the properties and assets of TLGI or LGII or TLGI and its
Restricted Subsidiaries, taken as a whole, or LGII and its
Restricted Subsidiaries, taken as a whole, to any other person or
persons, unless at the time of and after giving effect thereto
(a) either (i) if the transaction or series of transactions is a
merger or consolidation, TLGI or LGII or the Restricted
Subsidiary, as the case may be, shall be the surviving person of
such merger or consolidation, or (ii) the person formed by such
consolidation or into which TLGI, LGII or such Restricted
Subsidiary, as the case may be, is merged or to which the
properties and assets of TLGI, LGII or such Restricted
Subsidiary, as the case may be, are transferred (any such
surviving person or transferee person being the "Surviving
Entity") shall be a corporation organized and existing under the
laws of the United States of America, any state thereof, the
District of Columbia, Canada or any province thereof and shall
expressly assume by a supplemental indenture executed and
delivered to the Trustee, in form reasonably satisfactory to the
Trustee, the due and punctual payment of the principal of,
premium, if any, and interest on all the Securities and the
performance and observance of every covenant and obligation of
this Indenture and the Securities on the part of TLGI or LGII, as
the case may be, to be performed or observed and, in each case,
this Indenture shall remain in full force and effect; (b)
immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of
such transaction or series of transactions), no Default or Event
of Default shall have occurred and be continuing and TLGI, LGII
or the Surviving Entity, as the case may be, after giving effect
to such transaction or series of transactions on a pro forma
basis (including, without limitation, any Indebtedness incurred
or anticipated to be incurred in connection with or in respect of
such transaction or series of transactions), could incur $1.00 of
additional Indebtedness pursuant to Section 4.07 (assuming a
market rate of interest with respect to such additional
Indebtedness); (c) immediately after giving effect to such
transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of
such transaction or series of transactions), the Consolidated Net
Worth of TLGI, LGII or the Surviving Entity, as the case may be,
is at least equal to the Consolidated Net Worth of TLGI or LGII,
as the case may be, immediately before such transaction or series
of transactions; and (d) TLGI or the Surviving Entity, as the
case may be, shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each in form and substance
reasonably satisfactory to the Trustee, each stating that such
consolidation, merger, sale, assignment, conveyance, transfer,
lease or other disposition and, if a supplemental indenture is
required in connection with such transaction or series of
transactions, such supplemental indenture, complies with this
Indenture and that all conditions precedent herein provided for
relating to such transaction or series of transactions have been
complied with; provided, however, that solely for purposes of
computing amounts described in subclause (C) of Section 4.08, any
such successor person shall only be deemed to have succeeded to
and be
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substituted for TLGI or LGII, as the case may be, with
respect to periods subsequent to the effective time of such
merger, consolidation or transfer of assets.
Section 5.02. Successor Substituted.
Upon any consolidation or merger, or any sale,
assignment, conveyance, transfer, lease or disposition of all or
substantially all of the properties and assets of TLGI or LGII in
accordance with Section 5.01 hereof, the successor person or
persons formed by such consolidation or into which TLGI is merged
or the successor person to which such sale, assignment,
conveyance, transfer, lease or other disposition is made, shall
succeed to, and be substituted for, and may exercise every right
and power of, TLGI under this Indenture and the Securities with
the same effect as if such successor had been named as TLGI
herein; provided, however, that solely for purposes of computing
amounts described in subclause (C) of Section 4.08, any such
successor person shall only be deemed to have succeeded to and be
substituted for TLGI with respect to periods subsequent to the
effective time of such merger, consolidation or transfer of
assets.
ARTICLE SIX
REMEDIES
Section 6.01. Events of Default. "Event of Default",
wherever used herein with respect to Securities of any series,
means any one or more of the following events (whatever the
reason for such Event of Default), unless it is earlier
inapplicable to a particular series or is specifically deleted or
modified in or pursuant to the Board Resolutions or supplemental
indenture establishing such series of Securities or in the form
of Security for such series:
(a) default in the payment of the principal of or
premium, if any, on the Securities of such series as and when the
same shall become due and payable (upon maturity, acceleration,
optional redemption, required purchase, scheduled principal
payment, by declaration or otherwise); or
(b) default in the payment of any installment of
interest upon any of the Securities of such series, as and when
the same shall become due and payable, and continuance of such
default for a period of 30 days; or
(c) failure on the part of TLGI duly to observe or
perform any other term, covenant or agreement contained in the
Securities of such series or pursuant to the provisions of this
Indenture (other than Defaults specified in clause (a) or (b)
above) and such Default continues for a period of 60 days after
the date on which written notice of such Default requiring TLGI
to remedy the same shall have been given (i) to TLGI by the
Trustee by registered mail, or (ii) to TLGI and the Trustee by
Holders of at least 25% in aggregate principal amount of the
Securities of such series then Outstanding; or
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(d) default or defaults under one or more agreements,
instruments, mortgages, bonds, debentures or other evidences of
Indebtedness under which TLGI or any Restricted Subsidiary of
TLGI (including, without limitation, LGII) then has outstanding
Indebtedness in excess of $20,000,000 (including Securities of
another series), individually or in the aggregate, and either
(i) such Indebtedness is already due and payable in full or
(ii) such default or defaults have resulted in the acceleration
of the maturity of such Indebtedness; or
(e) one or more judgments, orders or decrees of any
court or regulatory or administrative agency of competent
jurisdiction for the payment of money in excess of $20,000,000,
either individually or in the aggregate, shall be entered against
TLGI or any Restricted Subsidiary of TLGI (including, without
limitation, LGII) or any of their respective properties and shall
not be discharged or bonded against or stayed and there shall
have been a period of 60 days after the date on which any period
for appeal has expired and during which a stay of enforcement of
such judgment, order or decree, shall not be in effect; or
(f) either (i) the collateral agent under the
Collateral Agreement or (ii) any holder of at least $20,000,000
in aggregate principal amount of Indebtedness of TLGI or any of
its Restricted Subsidiaries (including, without limitation, LGII)
shall commence judicial proceedings to foreclose upon assets of
TLGI or any of its Restricted Subsidiaries having an aggregate
Fair Market Value, individually or in the aggregate, in excess of
$20,000,000 or shall have exercised any right under applicable
law or applicable security documents to take ownership of any
such assets in lieu of foreclosure; or
(g) TLGI or any Significant Subsidiary of TLGI
pursuant to or under or within the meaning of any Bankruptcy Law:
(1) commences a voluntary case or proceeding;
(2) consents to the entry of an order for relief
against it in an involuntary case or proceeding;
(3) consents to the appointment of a Custodian of it
or for all or substantially all of its property;
(4) makes a general assignment for the benefit of its
creditors; or
(5) shall generally not pay its debts when such debts
become due or shall admit in writing its inability to pay
its debts generally; or
(h) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
(1) is for relief against TLGI or any Significant
Subsidiary of TLGI in an involuntary case or proceeding,
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(2) appoints a Custodian of TLGI or any Significant
Subsidiary of TLGI for all or substantially all of its
properties, or
(3) orders the liquidation of TLGI or any Significant
Subsidiary of TLGI,
and in each case the order or decree remains unstayed and in
effect for 60 days; or
(i) any other Event of Default provided with respect
to the Securities of such series; or
(j) default in the payment or satisfaction of any
sinking fund or other purchase obligation with respect to the
Securities of such series, as and when such obligation shall
become due and payable.
Subject to the provisions of Sections 7.01 and 7.02,
the Trustee shall not be charged with knowledge of any Default or
Event of Default unless written notice thereof shall have been
given to a Trust Officer at the Corporate Trust Office of the
Trustee by LGII, TLGI, the Paying Agent, any Holder, any holder
of Indebtedness or any of their respective agents.
Section 6.02. Acceleration. If an Event of Default
(other than as specified in Section 6.01(g) or 6.01(h)) occurs
and is continuing with respect to the Securities of any series
then Outstanding, the Trustee, by written notice to TLGI, or the
Holders of at least 25% in aggregate principal amount of the
Securities of such series then Outstanding, by written notice to
the Trustee and TLGI, may declare the principal amount (or, if
the Securities of such series are Original Issue Discount
Securities, such portion of the principal amount as may be
specified in the terms of such series) of all the Securities of
such series, premium, if any, and accrued and unpaid interest, if
any, on all of the Securities of such series to be due and
payable immediately, upon which declaration, all amounts payable
in respect of the Securities of such series shall be immediately
due and payable. If an Event of Default specified in Section
6.01(g) or 6.01(h) occurs and is continuing, then the unpaid
principal amount (or, if the Securities of any series then
Outstanding are Original Issue Discount Securities, such portion
of the principal amounts as may be specified in the terms of each
such series), premium, if any, and accrued and unpaid interest on
all Securities of each series then outstanding shall ipso facto
become and be immediately due and payable without any declaration
or other act by the Trustee or any Securityholder.
After a declaration of acceleration hereunder with
respect to Securities of any series, but before a judgment or
decree for payment of the money due has been obtained by the
Trustee, the Holders of a majority in aggregate principal amount
of the Outstanding Securities of such series, by written notice
to TLGI and the Trustee, may rescind and annul such declaration
and its consequences if (a) TLGI has paid or deposited with the
Trustee a sum sufficient to pay (i) all amounts due the Trustee
under Section 7.08 and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel, (ii) all overdue interest on all Securities of such
series, (iii) the principal of and premium, if any, on any
Securities of such series which have become due otherwise than by
such declaration of acceleration and interest thereon at the rate
borne by the Securities of such series, and (iv) to the extent
that payment of
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such interest is lawful, interest upon overdue
interest and overdue principal which has become due otherwise
than by such declaration of acceleration at the rate borne by the
Securities of such series; (b) the rescission would not conflict
with any judgment or decree of a court of competent jurisdiction;
and (c) all Events of Default, other than the non-payment of
principal of, premium, if any, and interest on the Securities of
such series that has become due solely by such declaration of
acceleration, have been cured or waived as provided in Section
6.04; but no such rescission and annulment shall extent to or
shall affect any subsequent default, or shall impair any right
consequent thereon.
No such rescission shall affect any subsequent Default
or Event of Default or impair any right subsequent therein.
Section 6.03. Other Remedies.
TLGI covenants that (a) if default shall be made in the
payment of any installment of interest upon any of the Securities
of any series then Outstanding as and when the same shall become
due and payable, and such default shall have continued for a
period of 30 days, or (b) if default shall be made in the payment
of the principal of any of the Securities of such series as and
when the same shall have become due and payable, whether at
maturity of the Securities of such series or upon redemption or
by declaration or otherwise, then, upon demand of the Trustee,
TLGI will pay to the Trustee, for the benefit of the Holders of
the Securities, the whole amount that then shall have become due
and payable on all such Securities of such series for principal
or interest, if any, or both, as the case may be, with interest
upon the overdue principal and (to the extent that payment of
such interest is enforceable under applicable law) upon the
overdue installments of interest, if any, at the rate borne by
the Securities of such series; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and
expenses of collection, including reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents,
attorneys and counsel, and any expenses or liabilities incurred
by the Trustee hereunder other than through its negligence or bad
faith.
If TLGI shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any
actions or proceedings at law or in equity for the collection of
the sums so due and unpaid, and may prosecute any such action or
proceeding to judgment or final decree, and may enforce any such
judgment or final decree against TLGI or any other obligor on the
Securities of such series and collect in the manner provided by
law out of the property of TLGI or any other obligor on the
Securities of such series, wherever situated, the moneys adjudged
or decreed to be payable.
If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of, premium, if
any, or interest on the Securities or to enforce the performance
of any provision of the Securities or this Indenture.
All rights of action and of asserting claims under this
Indenture, or under any of the Securities, may be enforced by the
Trustee without the possession of any of the Securities, or
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the
production thereof at any trial or other proceeding relative
thereto, and any such suits or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment shall be for the ratable
benefit of the Holders of the Securities of the series in respect
of which such judgment has been recovered.
Section 6.04. Waiver of Past Defaults. Subject to the
provisions of Section 6.07 and 9.02, the Holders of not less than
a majority in aggregate principal amount of the Outstanding
Securities of such series by notice to the Trustee may, on behalf
of the Holders of all the Securities of any such series, waive
any existing Default or Event of Default and its consequences,
except a Default or Event of Default specified in Section 6.01(a)
or (b) or in respect of any provision hereof which cannot be
modified or amended without the consent of the Holder so affected
pursuant to Section 9.02. When a Default or Event of Default is
so waived, it shall be deemed cured and shall cease to exist.
Section 6.05. Direction Of Proceedings; Waiver Of
Defaults By Majority Of Securityholders. The Holders of a
majority in aggregate principal amount of the Securities of any
series then Outstanding shall have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred on the Trustee with respect to Securities of such
series; provided, however, that the Trustee may refuse to follow
any direction (a) that conflicts with any rule of law or this
Indenture, (b) that the Trustee determines may be unduly
prejudicial to the rights of another Noteholder, or (c) that may
expose the Trustee to personal liability unless the Trustee has
been provided reasonable indemnity against any loss or expense
caused by its following such direction; and provided, further,
that the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction. The
Holders of a majority in aggregate principal amount of the
Securities of any series then Outstanding may on behalf of the
Holders of all of the Securities of such series waive any past
default or Event of Default hereunder and its consequences except
a default in the payment of interest, if any, on, or the
principal of, the Securities of such series. The provisions of
Section 316(a)(1)(B) of the Trust Indenture Act of 1939 are
expressly excluded herefrom. Upon any such waiver TLGI, the
Trustee and the Holders of the Securities of such series shall be
restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent
or other default or Event of Default or impair any right
consequent thereon. Whenever any default or Event or Default
hereunder shall have been waived as permitted by this Section
6.05, said default or Event of Default shall for all purposes of
the Securities and this Indenture be deemed to have been cured
and to be not continuing.
Section 6.06. Limitation on Suits. No Holder of any
Securities of any series then Outstanding shall have any right by
virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Indenture of the Securities or
for the appointment of a receiver or trustee or similar official,
or for any other remedy hereunder or thereunder, unless: (1) the
Holder gives written notice to the Trustee of a continuing Event
of Default; (2) the Holders of at least 25% in aggregate
principal amount of the Securities of such series then
Outstanding shall have made written request to the Trustee to
institute such action, suit or proceeding in its own name as
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Trustee hereunder; (3) such Holder or Holders offer and, if
requested, provide to the Trustee reasonable indemnity as it may
require against the costs, expenses and liabilities to be
incurred therein or thereby; (4) the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or
proceeding; and (5) during such 60-day period the Holders of a
majority in aggregate principal amount of the Securities of such
series then Outstanding do not give the Trustee a direction which
is inconsistent with the request; it being understood and
intended, and being expressly covenanted by the Holder of every
Security of such series with every other taker and Holder and the
Trustee, that no one or more Holders of Securities of such series
shall have any right in any manner whatever by virtue of or by
availing of any provision of this Indenture or of the Securities
to affect, disturb or prejudice the rights of any other Holder of
such Securities of such series, or to obtain or seek to obtain
priority over or preference as to any other such Holder, or to
enforce any right under this Indenture or the Securities, except
in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Securities of such series.
Section 6.07. Right of Holders To Receive Payment.
Notwithstanding any other provisions in this Indenture, the right
of any Holder of any Security to receive payment of the principal
of and interest, if any, on such Security, on or after the
respective due dates expressed in such Security, or, if
applicable, to convert such Security as provided in Article
Thirteen, or to institute suit for the enforcement of any such
payment on or after such respective dates or for the enforcement
of any such right to convert shall not be impaired or affected
without the consent of such Holder.
Section 6.08. Collection Suit by Trustee. If an Event
of Default specified in clause (a) or (b) of Section 6.01 occurs
and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against TLGI or any other
obligor on the Securities for the whole amount of principal of,
premium, if any, and accrued interest remaining unpaid, together
with interest on overdue principal and, to the extent that
payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum
borne by the Securities and such further amount as shall be
sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
Section 6.09. Trustee May File Proofs of Claims. The
Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Holders allowed in any
judicial proceedings relative to TLGI (or any other obligor on
the Securities of such series), its or their creditors or its or
property and shall be entitled and empowered to collect and
receive any monies or other property payable or deliverable on
any such claims and to distribute the same, and any Custodian in
any such judicial proceedings is hereby authorized by each Holder
to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agent and counsel, and any other amounts due the
Trustee under Section 7.08. Nothing herein contained
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shall be
deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
Section 6.10. Application Of Moneys Collected By
Trustee. Any moneys collected by the Trustee pursuant to Section
6.10 with respect to Securities of any series then Outstanding
shall be applied in the order following, at the date or dates
fixed by the Trustee for the distribution of such moneys, upon
presentation of the several Securities of such series, and
stamping thereon the payment, if only partially paid, and upon
surrender thereof, if fully paid:
FIRST: To the payment of costs and expenses of
collection and reasonable compensation to the Trustee, its
agents, attorneys and counsel, and of all other expenses and
liabilities incurred, and all advances made, by the trustee
pursuant to Section 7.08 except as a result of its
negligence or bad faith;
SECOND: If the principal of the Outstanding Securities
of such series shall not have become due and be unpaid, to
the payment of interest, if any, on the Securities of such
series, in the order of the maturity of the installments of
such interest, if any, with interest (to the extent that
such interest has been collected by the Trustee) upon the
overdue installments of interest, if any, at the rate borne
by the Securities of such series, such payment to be made
ratably to the Persons entitled thereto;
THIRD: If the principal of the Outstanding Securities
of such series shall have become due, by declaration or
otherwise, to the payment of the whole amount then owing and
unpaid upon the Securities of such series for principal
(including any premium, if any) and interest, if any, with
interest on the overdue principal and (to the extent that
such interest has been collected by the Trustee) upon
overdue installments of interest, if any, at the rate borne
by the Securities of such series; and in case such moneys
shall be insufficient to pay in full the whole amounts so
due and unpaid upon the Securities of such series, then to
the payment of such principal and interest, if any, without
preference or priority of principal over interest, or of
interest over principal, or of any installment of interest,
or of any other installment of interest, or of any Security
over any other Security, ratably to the aggregate of such
principal such series for principal (including any premium,
if any) and accrued and unpaid interest; and
FOURTH: To the payment of any surplus then remaining to
TLGI, its successors or assigns, or to whomsoever may be
lawfully entitled to receive the same.
No claim for interest which in any manner at or after
maturity shall have been transferred or pledged separate or apart
from the Securities to which it relates, or which in any manner
shall have been kept alive after maturity by an extension
(otherwise than pursuant to an extension made pursuant to a plan
proposed by TLGI to the Holders of all Securities of any series
then Outstanding), purchase, funding or otherwise by or on behalf
or with the consent or approval of TLGI shall be entitled, in
case of a default hereunder, to any benefit of this Indenture,
except after prior payment in full of the principal of all
Securities of any series then
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Outstanding and of all claims for
interest not so transferred, pledged, kept alive, extended,
purchased or funded.
The Trustee, upon prior written notice to TLGI, may fix
a record date and payment date for any payment to Noteholders
pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs. All parties to
this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to
pay the cost of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section
6.11 shall not apply to any suit instituted by the Trustee, to
any suit instituted by any Securityholder or group of
Securityholders, holding in the aggregate more than ten percent
in principal amount of the Securities of any series then
Outstanding, or to any suit instituted by any Securityholders for
the enforcement of the payment of the principal of, or interest,
if any, on any Security against TLGI on or after the due date
expressed in such Security or for the enforcement of the right to
convert any Security in accordance with Article Thirteen. The
provisions of Section 315(e) of the Trust Indenture Act of 1939
are expressly excluded herefrom.
Section 6.12. Restoration of Rights and Remedies. If
the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture or any Security
and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case LGII, TLGI, the Trustee
and the Holders shall, subject to any determination in such
proceeding, be restored severally and respectively to their
former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
Section 6.13. Remedies Cumulative And Continuing. All
powers and remedies given by this Article Six to the Trustee or
to the Securityholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any thereof or of any
other powers and remedies available to the Trustee or the
Securityholders, by judicial proceedings or otherwise, to enforce
the performance or observance of the covenants and agreements
contained in this Indenture, and no delay or omission of the
Trustee or of any Securityholder to exercise any right or power
accruing upon any default occurring and continuing as aforesaid
shall impair any such right or power, or shall be construed to be
a waiver of any such default or an acquiescence therein; and,
subject to the Provisions of Section 6.06, every power and remedy
given by this Article Six or by law to the Trustee or to the
Securityholders may be exercised from time to time, and as often
as shall be deemed expedient, by the Trustee or by the
Securityholders.
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ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties And Responsibilities Of The
Trustee; During Default; Prior To Default.
(a) In case an Event of Default with respect to the
Securities of a series has occurred (which has not been cured or
waived), the Trustee shall exercise with respect to such series
of Securities such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) With respect to the Holders of any series of
Securities issued hereunder, the Trustee, prior to the occurrence
of an Event of Default with respect to the Securities of a
particular series and after the curing or waiving of all Events
of Default which may have occurred with respect to such series,
undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture.
(c) No provision of this Indenture shall be construed
to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that
(i) prior to the occurrence of an Event of Default
with respect to the Securities of any series and after the
curing or waiving of all such Events of Default with respect
to such series which may have occurred;
(1) the duties and obligations of the Trustee
with respect to the Securities of any series shall be
determined solely by the express provisions of this
Indenture, and the Trustee shall not be liable except
for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(2) in the absence of the absence of bad faith on
the part of the Trustee, the Trustee may conclusively
rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the
Trustee and conforming to the requirements of this
Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof
are specifically required to be furnished by the
Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to
the requirements of this Indenture;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it
shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
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(iii) the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders
pursuant to Section 6.05 relating to the time, method and
place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture.
(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers if it
shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(e) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c) and
(d) of this Section 7.01.
Section 7.02. Certain Rights Of The Trustee. Subject
to Section 7.01 hereof and the provisions of TIA 315:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond,
debenture, note, coupon, security or other paper or document
reasonably believed by it to be genuine and to have been signed
or presented by the proper party or parties. The Trustee need
not investigate any fact or matter stated in the document.
(b) any request, direction, order or demand of TLGI
mentioned herein shall be sufficiently evidenced by an Officer's
Certificate or Issue Order (unless other evidence in respect
thereof be herein specifically prescribed); and any resolution of
the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the secretary or an assistant secretary of
TLGI, and before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or
an Opinion of Counsel, which shall conform to Sections 11.04 and
11.05. The Trustee shall not be liable for any action it takes
or omits to take in good faith in reliance on such certificate or
opinion.
(c) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys not regularly in its employ
and the Trustee shall not be responsible for any misconduct or
negligence on the part of any such agent or attorney appointed
with due care by it hereunder.
(d) the Trustee shall not be liable for any action
taken or omitted by it in good faith and reasonably believed by
it to be authorized or within the discretion, rights or powers
conferred upon it by this Indenture other than any liabilities
arising out of its own negligence.
(e) the Trustee may consult with counsel of its own
choosing and the written advice or Opinion of Counsel as to
matters of law shall be full and complete authorization and
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protection in respect of any action taken, suffered or omitted to
be taken by it hereunder in good faith and in reliance thereon in
accordance with the advice or Opinion of Counsel.
(f) prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all Events of
Default, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, approval, appraisal, bond, debenture,
note, coupon, security, or other paper or documentation requested
in writing so to do by the Holders of not less than a majority in
aggregate principal amount of the Securities of all series
affected then Outstanding; provided that, if the payment within a
reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the
terms of this Indenture, the Trustee may require reasonable
indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such investigation
shall be paid by TLGI or, if paid by the Trustee or any
predecessor Trustee, shall be repaid by TLGI upon demand, and the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(g) the Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this
Indenture at the request, order or direction of any of the
Securityholders pursuant to the provisions of this Indenture
(including, without limitation, pursuant to Section 6.01), unless
such Securityholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
which might be incurred therein or thereby.
Section 7.03. Trustee And Agents May Hold Securities;
Collections, Etc.
The Trustee, any Paying Agent, Registrar or any other
agent of TLGI or the Trustee, in its individual or any other
capacity, may become the owner or pledgee of Securities and,
subject to Sections 7.11 and 7.12 and TIA 310 and 311, may
otherwise deal with TLGI with the same rights it would have if it
were not the Trustee, Paying Agent, Registrar or such other
agent.
Section 7.04. Trustee's Disclaimer. The Trustee makes
no representations as to the validity or sufficiency of this
Indenture or of the Securities or of any prospectus used to sell
the Securities, it shall not be accountable for the use or
application by TLGI of any of the Securities or of the proceeds
thereof, it shall not be responsible for the use or application
of any money received by any Paying Agent other than the Trustee
and it shall not be responsible for any statement in the
Securities other than the Trustee's certificate of
authentication.
Section 7.05. Notice of Default. The Trustee shall,
within 90 days after the occurrence of a Default or an Event of
Default , with respect to Securities of any series then
Outstanding, mail to all Holders of Securities of such series, as
the names and the addresses of such Holders appear upon the
Security register, notice of all Default or Event of Default
known to the Trustee with respect to such series, unless such
defaults shall have been cured before the giving of such notice;
provided, however, that, except in the case of a Default in the
payment of
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the principal of, premium, if any, or interest on any
of the Securities, or in the payment or satisfaction of any
sinking fund or other purchase obligation, the Trustee shall be
protected in withholding such notice if and so long as the board
of directors, the executive committee of the board of directors
or a committee of the directors of the Trustee and/or Trust
Officers in good faith determines that the withholding of such
notice is in the interest of the Holders.
Section 7.06. Money Held in Trust. Subject to the
provisions of Section 8.04 hereof, all moneys received by the
Trustee shall, until used or applied as herein provided, be held
in trust for the purposes for which they were received, but need
not be segregated from other funds except to the extent required
herein or by law. Neither the Trustee nor any agent of TLGI or
the Trustee shall be under any liability for interest on any
moneys received by it hereunder, except as the Trustee may agree
with TLGI.
Section 7.07. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the
May 15 following the date of this Indenture, the Trustee shall,
to the extent that any of the events described in TIA 313(a)
shall have occurred within the previous twelve months, but not
otherwise, mail to each Holder a brief report dated as of such
May 15 that complies with TIA 313(a). The Trustee also shall
comply with TIA 313(b) and 313(c).
A copy of each report at the time of its mailing to
Holders shall be mailed to TLGI and filed with the Commission and
each securities exchange, if any, on which the Securities are
listed.
TLGI shall notify the Trustee in writing if the
Securities become listed on any securities exchange.
Section 7.08. Compensation and Indemnity.
TLGI covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, reasonable
compensation (which shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust)
and TLGI covenants and agrees to pay or reimburse the Trustee and
each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the expenses
and disbursements of its counsel and of all agents and other
persons not regularly in its employ) except any such expense,
disbursements or advance as may arise from its negligence or bad
faith.
TLGI also covenants to indemnify the Trustee and each
predecessor Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad
faith on its part, arising out of or in connection with the
acceptance or administration of this Indenture or the trusts
hereunder and its rights or duties hereunder, including the costs
and expenses of defending itself against or investigating any
claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder. The Trustee shall
notify TLGI
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promptly of any claim asserted against the Trustee
for which it may seek indemnity. TLGI shall defend the claim and
the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and TLGI shall pay the reasonable fees and
expenses of such counsel. TLGI need not pay for any settlement
made without its prior written consent. TLGI need not reimburse
any expense or indemnify against any loss or liability to the
extent incurred by the Trustee through its negligence, bad faith
or willful misconduct.
To secure the payment obligations of TLGI in this
Section 7.08, the Trustee shall have a Lien prior to the
Securities on all assets held or collected by the Trustee, in its
capacity as Trustee, except funds held in trust for the benefit
of the Holders of particular Securities to pay principal of,
premium, if any, or interest on particular Securities, and the
Securities are hereby subordinated to such senior claim. When
the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 6.01 or in
connection with Article Six hereof, the expenses (including the
reasonable fees and expenses of its counsel) and the compensation
for the services in connection therewith are intended to
constitute expenses of administration under any bankruptcy law.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 6.01(g)
or (h), the expenses and the compensation for the services are
intended to constitute expenses of administration under any
Bankruptcy Law.
The obligations of TLGI under this Section 7.08 and any
Lien arising hereunder shall survive the resignation or removal
of any trustee, the discharge of the obligations of TLGI pursuant
to Article Eight and/or the termination of this Indenture.
Section 7.09. Resignation And Removal; Appointment Of
Successor Trustee.
(a) The Trustee, or any trustee or trustees hereafter
appointed, may at any time resign with respect to one or more or
all series of Securities by giving written notice of resignation
to TLGI and by mailing notice of such resignation to the Holders
of then Outstanding Securities of each series affected at their
addresses as they shall appear on the registry books. Upon
receiving such notice of resignation, TLGI shall promptly appoint
a successor trustee or trustees with respect to the applicable
series by written instrument in duplicate, executed by authority
of the Board of Directors, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor
trustee or trustees. If no successor trustee shall have been so
appointed with respect to any series and have accepted
appointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of
competent jurisdiction for the appointment of a successor
trustee, or any Securityholder who has been bona fide Holder of a
Security or Securities of the applicable series for at least six
months may, subject to the provisions of Section 5.9, on behalf
of himself and all others similarly situated, petition any such
court for the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall
occur:
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(i) the Trustee shall fail to comply with the
provisions of Section 7.13 with respect to any series of
Securities after written request therefor by TLGI or by any
Securityholder who has been a bona fide Holder of a Security
or Securities of such series at least six months; or
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 7.11 and shall
fail to resign after written request therefor by TLGI or by
any such Securityholder; or
(iii) the Trustee shall become incapable of acting
with respect to any series of Securities, or shall be
adjudged a bankrupt or insolvent, or a receiver or
liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, TLGI may remove the Trustee with respect
to the applicable series of Securities and appoint a successor
trustee for such series by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee, or, subject to the provisions of
Section 5.9, any Securityholder who has been a bona fide Holder
of a Security or Securities of such series for at least six
months may on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee
with respect to such series. Such court may thereupon, after
such notice, if any, as it may deed proper and prescribe, remove
the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal
amount of the Securities of each series then Outstanding may at
any time remove the Trustee with respect to Securities of such
series and appoint a successor trustee with respect to the
Securities of such series by delivering to the Trustee so
removed, to the successor trustee so appointed and to TLGI the
evidence provided for in Section 7.1 of the action in that regard
taken by the Securityholders.
(d) Any resignation or removal of the Trustee with
respect to any series and any appointment of a successor trustee
with respect to such series pursuant to any of the provisions of
this Section 7.09 shall become effective upon acceptance of
appointment by the successor trustee as provided in Section
7.14.
Section 7.10. Merger, Conversion, Consolidation Or
Succession To Business Of Trustee. Any corporation into which
the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust
business of the Trustee, shall be the successor of the Trustee
hereunder, provided that such corporation shall be qualified
under the provisions of Section 7.13 and eligible under the
provisions of Section 7.11, without the execution or filing of
any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
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In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the
Securities of any series shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and
deliver such Securities so authenticated; and, in case at that
time any of the Securities of any series shall not have been
authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in
the name of the successor Trustee; and in all such cases such
certificate shall have the full force which it is anywhere in the
Securities of such series or in this Indenture provided that the
certificate of Trustee shall have; provided that the right to
adopt the certificate of authentication of any predecessor
Trustee or to authenticate Securities of any series in the name
of any predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
Section 7.11. Persons Eligible For Appointment As
Trustee. The Trustee for each series of Securities hereunder
shall at all times be a corporation organized and doing business
under the laws of the United States of America or of any state or
the District of Columbia having a combined capital and surplus of
at least $50,000,000 and which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or
examination by federal, state or District of Columbia authority,
or a corporation or other Person permitted to act as trustee by
the Commission. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 7.11, the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published. No obligor upon the Securities
or any Affiliates of such obligor shall serve as Trustee upon the
Securities. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 7.11,
the Trustee shall resign immediately in the manner and with the
effect specified in Section 7.09.
Section 7.12. Preferential Collection of Claims
Against TLGI.
The Trustee shall comply with TIA 311(a), excluding
any creditor relationship listed in TIA 311(b). If the present
or any future Trustee shall resign or be removed, it shall be
subject to TIA 311(a) to the extent provided therein.
Section 7.13 Qualification Of Trustee; Conflicting
Interests.
(a) If the Trustee has or shall acquire any
conflicting interest (as defined in subsection (c)), then within
90 days after ascertaining that it has such conflicting interest,
and if the default (as defined in subsection (c)) to which such
conflicting interest relates has not been cured or duly waived or
otherwise eliminated before the end of such 90-day period, the
Trustee shall either eliminate such conflicting interest or,
except as otherwise provided below, resign, and TLGI shall take
prompt steps to have a successor appointed in the manner provided
in Section 7.09.
(b) If the Trustee shall fail to comply with the
provisions of subsection (a), the Trustee shall, within 10 days
after the expiration of such 90-day period, transmit notice of
such failure to the Securityholders in the manner and to the
extent provided in Section 4.4 and,
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subject to the provisions of
Section 5.9, unless the Trustee's duty to resign is stayed as
provided below, any Securityholder who has been a bond fide
holder of Securities for at least six months may, on behalf of
himself and all other similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee, and the
appointment of a successor, if the Trustee fails, after written
request thereof by such Securityholder, to comply with the
provisions of subsection (a).
Except in the case of a default in the payment of the
principal of or interest on any Security, or in the payment of
any sinking or purchase fund installment, the Trustee shall not
be required to resign as provided by this Section 7.13 if the
Trustee shall have sustained the burden of proving, on
application to the Commission and after opportunity for hearing
thereon, that
(i) the default under this Indenture may be cured or
waived during a reasonable period and under the procedures
described in such application, and
(ii) a stay of the Trustee's duty to resign will not be
inconsistent with the interests of Holders of the
Securities.
The filing of such an application shall automatically
stay the performance of the duty to resign until the Commission
orders otherwise. Any resignation of the Trustee shall become
effecting only upon the appointment of a successor trustee in
accordance with the provisions of Section 7.09 and such
successor's acceptance of such an appointment.
(c) For the purposes of this Section 7.13, the Trustee
shall be deemed to have a conflicting interest with respect to
Securities of any series if the Securities of such series are in
default (as determined in accordance with the provisions of
Section 5.1, but exclusive of any period of grace or requirement
of notice) and
(i) the Trustee is trustee under this Indenture with
respect to the Outstanding Securities of any other series or
is a trustee under another indenture under which any other
securities, or certificates of interest or participation in
any other securities, of TLGI are outstanding, unless such
other indenture is a collateral trust indenture under which
the only collateral consists of Securities issued under this
Indenture; provided that there shall be excluded from the
operation of this paragraph, this Indenture with respect to
the Securities of any other series and there shall also be
so excluded any other indenture or indentures under which
other securities, or certificates of interest or
participation in other securities, of TLGI are outstanding
if (x) this Indenture is and, if applicable, this Indenture
and any series issued pursuant to this Indenture and such
other indenture or indentures are wholly unsecured and rank
equally, and such other indenture or indentures are
hereafter qualified under the Trust Indenture Act of 1939,
unless the Commission shall have found and declared by order
pursuant to Section 305(b) or Section 307(c) of the Trust
Indenture Act of 1939, that differences exist between the
provisions of this Indenture with respect to Securities of
such series and one or more other series, or the provisions
of this Indenture and the provisions of such other indenture
or indentures which are so likely to involve a material
conflict of interest as to make it necessary in the
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public
interest or for the protection of investors to disqualify
the Trustee from acting as such under this Indenture with
respect to Securities to such series and such other series
or under this Indenture or such other indenture or
indentures, or (y) TLGI shall have sustained the burden of
proving, on application to the Commission and after
opportunity for hearing thereon, that trusteeship under this
Indenture with respect to Securities of such series and such
other series, or under this Indenture and such other
indenture or indentures is not so likely to involve a
material conflict of interest as to make it necessary in the
public interest or for the protection of investors to
disqualify the Trustee from acting as such under this
Indenture with respect to Securities of such series and such
other series, or under this Indenture and such other
indentures;
(ii) the Trustee or any of its directors or executive
officers is an underwriter for TLGI;
(iii) the Trustee directly or indirectly controls
or is directly or indirectly controlled by or is under
direct or indirect common control with an underwriters for
TLGI;
(iv) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee,
appointee, or representative of TLGI, or of an underwriter
(other than the Trustee itself) for TLGI who is currently
engaged in the business of underwriting, except that (x) one
individual may be a director or an executive officer, or
both, of the Trustee and a director or an executive officer,
or both, of TLGI, but may not be at the same time an
executive officer or both the Trustee and TLGI; (y) if and
so long as the number of directors of the Trustee in office
is more than nine, one additional individual may be a
director or an executive officer, or both, of the Trustee
and a director of TLGI, and (z) the Trustee may be
designated by TLGI or by any underwriter for TLGI to act in
the capacity of transfer agent, registrar, custodian, paying
agent, fiscal agent, escrow agent, or depositary, or in any
other similar capacity, or, subject to the provisions of
subsection (c)(i) of this Section, to act as trustee,
whether under an indenture or otherwise;
(v) 10% or more of the voting securities of the
Trustee is beneficially owned either by TLGI or by any
director, partner or executive officer thereof, or 20% or of
such voting securities is beneficially owned, collectively,
by any two or more of such person; or 10% or more of the
voting securities of the Trustee is beneficially owned
either by an underwriter for TLGI or by any director,
partner, or executive officer thereof, or is beneficially
owned, collectively, by any two or more such persons;
(vi) the Trustee is the beneficial owner of, or holds
as collateral security for an obligation which is in
default, (x) 5% or more of the voting securities of 10% or
more of any other class of security of TLGI, not including
the Securities issued under this Indenture and securities
issued under any other indenture under which the Trustee is
also trustee, or (y) 10% or more of any class of security of
an underwriter for TLGI;
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(vii) the Trustee is the beneficial owner of, or
holds as collateral security for an obligation which is in
default, 5% or more of the voting securities of any person
who, to the knowledge of the Trustee, owns 10% or more of
the voting securities of, or controls directly or indirectly
or is under direct or indirect common control with, TLGI;
(viii) the Trustee is the beneficial owner of, or
holds as collateral Security for an obligation which is in
default, 10% or more of any class of security of any person
who, to the knowledge of the Trustees, owns 50% or more of
the voting securities of TLGI;
(ix) the Trustee owns on the date of default (as
determined in accordance with the provisions of Section 5.1,
but exclusive of any period of grace or requirement of
notice) or on any anniversary of such default while such
default remains outstanding, in the capacity of executor,
administrator, testamentary or inter vivos trustee,
guardian, committee or conservator, or in any other similar
capacity, an aggregate of 25% or more of the voting
securities, or of any class security, of any person, the
beneficial ownership of a specified percentage of which
would have constituted a conflicting interest under
paragraphs (vi), (vii) or (viii) of this subsection. As to
any such securities of which the Trustee acquired ownership
through becoming executor, administrator, or testamentary
trustee of an estate which included them, the provisions of
the preceding sentence shall not apply, for a period of two
years from the date of such acquisition, to the extent that
such securities included in such estate do not exceed 25% of
such voting securities of 25% of any such class of security.
Promptly after the dates of any such default and annually in
each succeeding year that the Securities remain in default,
the Trustee shall make a check of its holdings of such
securities in any of the above-mentioned capacities as of
such dates. If TLGI fails to make payment in full of
principal of or interest on any of the Securities when and
as the same becomes due and payable, and such failure
continues for 30 days thereafter, the Trustee shall make a
prompt check of this holdings of such Securities in any of
the above-mentioned capacities as of the date of the
expiration of such 30-day period, and after such date,
notwithstanding the foregoing provisions of this paragraph,
all such Securities so held by the Trustee, with sole or
joint control over such Securities vested in it, shall, but
only so long as such failure shall continue, be considered
as though beneficially owned by the Trustee for the purposes
of paragraphs (vi), (vii) and (viii) of this subsection; or
(x) except under the circumstances described in
paragraphs (1), (3), (4), (5) or (6) of Section 6.13(b), the
Trustee shall or shall become creditor of TLGI.
For purposes of subsection (c)(i), the term "series of
securities" or "series" means a series, class or group of
securities issuable under an indenture pursuant to whose terms
holders of one such series may vote to direct the Trustee, or
otherwise take action pursuant to a vote of such holders,
separately from holders of another such series; provided, that
"series of securities" or "series" shall not include any series
of securities issuable under an indenture if all such series rank
equally and are wholly unsecured.
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The specification of percentages in subsections (c)(v)
to (ix), inclusive, of this Section 7.13 shall not be construed
as indicating that the ownership of such percentages of the
securities of a person is or is not necessary or sufficient to
constitute direct or indirect control of the purposes of
subsections (c)(iii) or (vii) of this Section 7.13.
For the purposes of subsections (c)(vi), (vii), (viii)
and (ix) of this Section 7.13, only,
(i) the terms "security" and "securities" shall
include only such securities as are generally known as
corporate securities, but shall not include any note or
other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more
banks, trust companies, or banking firms, or any certificate
of interest or participation in any such note or evidence of
indebtedness;
(ii) an obligation shall be deemed to be in default
when a default in payment of principal shall have continued
for 30 days or more and shall not have been cured; and
(iii) the Trustee shall not be deemed to be the
owner or holder of (x) any security which it holds as
collateral security, as trustee or otherwise, for an
obligation which is not in default as defined in clause (ii)
above, or (y) any Security which it holds as collateral
security under this Indenture, irrespective of any default
hereunder, or (z) any security which it holds as agent for
collection, or as custodian, escrow agent, or depositary, or
in any similar representative capacity.
Except as provided above, the word "security" or
"securities" as used in this Section 7.13 shall mean any note,
stock, treasury stock, bond, debenture, evidence of indebtedness,
certificate of interest or participation in any profit-sharing
agreement, collateral trust certificate, preorganization
certificate or subscription, transferable share, investment
contract, voting trust certificate, certificate of deposit for a
security, fractional undivided interest in oil, gas or other
mineral rights, or, in general, any interest or instrument
commonly known as a "security", or any certificate of interest or
participation in, temporary or interim certificate for, receipt
for, guarantee of, or warrant to right to subscribe to or
purchase, any of the foregoing.
(d) For purposes of this Section 7.13:
(i) the term "underwriter" when used with reference to
TLGI shall mean every person who, within a one year period
prior to the time as of which the determination is made, was
an underwriter of any security of TLGI outstanding at the
time of the determination;
(ii) the term "director" shall mean any director of a
corporation or any individual performing similar functions
with respect to any organization whether incorporated or
unincorporated;
(iii) the term "person" shall mean an individual, a
corporation, a partnership, an association, a joint-stock
company, a trust, an unincorporated organization, or a
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government or political subdivision thereof; as used in this
paragraph, the term "trust" shall include only a trust where
the interest or interests of the beneficiary or
beneficiaries are evidenced by a security;
(iv) the term "voting security" shall mean any security
presently entitling the owner or holder thereof to vote in
the direction or management of the affairs of a person, or
any Security issued under or pursuant to any trust,
agreement or arrangement whereby a trustee or trustee or
agent or agents for the owner or holder of such security are
presently entitled to vote in the direction or management of
the affairs of a person;
(v) the term "Issuer" shall mean any obligor upon the
Securities; and
(vi) the term "executive officer" shall mean the
president, every vice president, every trust officer, the
cashier, the secretary, and the treasurer of a corporation,
and any individual customarily performing similar functions
with respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the
board of directors.
(e) The percentage of voting securities and other
securities specified in this Section 7.13 shall be calculated in
accordance with the following provisions:
(i) a specified percentage of the voting securities of
the Trustee, TLGI or any other person referred to in this
Section 7.13 (each of whom is referred to in this Section
7.13 (each of whom is referred to as a "person" in this
paragraph) means such amount of the outstanding voting
securities of such person as entitled the holder or holders
thereof to cast such specified percentage of the aggregate
votes which the holders of all the outstanding voting
securities of such person are entitled to cast in the
direction or management of the affairs of such person;
(ii) a specified percentage of a class of securities of
a person means such percentage amount of securities of the
class outstanding;
(iii) the term "amount", when used in regard to
securities, means the principal amount if relating to
evidences of indebtedness, the number of shares if relating
to capital shares, and the number of units if relating to
any other kind of Security;
(iv) the term "outstanding" means issued and not held
by or for the account for TLGI; the following securities
shall not be deemed within the meaning of this definition;
(A) securities of an issuer held in a sinking
fund relating to securities of TLGI of the same class;
(B) securities of an issuer held in a sinking
fund relating to another class of securities of TLGI,
if the obligation evidenced by such other class of
securities is not in default as to principal or
interest or otherwise;
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(C) securities pledged by TLGI thereof as
security for an obligation of TLGI not in default as to
principal or interest or otherwise; and
(D) securities held in escrow if placed in escrow
by TLGI thereof; provided, that any voting securities
of an issuer shall be deemed outstanding if any person
other than TLGI is entitled to exercise the voting
rights thereof; and
(v) a security shall be deemed to be of the same class
as another security if both securities confer upon the
holder or holders thereof substantially the same rights and
privileges; provided that, in the case of secured evidences
of indebtedness, all of which are issued under the single
indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed
sufficient to constitute such series different classes and
provided, further, that, in the case of unsecured evidences
of indebtedness, differences in the interest rates or
maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or
not they are issued under a single indenture.
Section 7.14 Acceptance Of Appointment By Successor
Trustee. Any successor trustee appointed as provided in Section
6.10 shall execute and deliver to TLGI and to its predecessor to
an instrument accepting such appointment hereunder, and thereupon
the resignation or removal of the predecessor trustee with
respect to all or any applicable series shall become effective as
such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties
and obligations with respect to such series of its predecessor
hereunder, when like effect as if originally named as trustee for
such series hereunder; but, nevertheless, on the written request
of TLGI or of the successor trustee, upon payment of its charges
then unpaid, the trustee ceasing to act shall, subject to Section
8.04, pay over to the successor trustee all moneys at time held
by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers,
duties and obligations. Upon request of any such successor
trustee, TLGI shall execute any and all instruments in writing
for more fully and certainly vesting in and confirming to such
successor trustee all rights and powers. Any trustee ceasing to
act shall, nevertheless, retain a prior claim upon all property
or funds held or collected by such trustee to secure any amounts
then due it pursuant to the provisions of Section 7.08.
If a successor trustee is appointed with respect to the
Securities of one or more (but not all) series, TLGI, the
predecessor trustee and each successor trustee with respect to
the Securities of any applicable series shall execute and deliver
an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the predecessor
trustee with respect to the Securities of any series as to which
the predecessor trustee is not retiring shall continue to be
vested in the predecessor trustee, and shall add to or change any
of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts
hereunder by more than one trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute
such trustees co-trustees of the same trust and that each such
trustee shall be trustee of a trust or trusts under separate
indentures.
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No successor trustee with respect to any series of
Securities shall accept appointment as provided in this Section
7.14 unless at the time of such acceptance such successor trustee
shall be qualified under the provisions of Section 7.13 and
eligible under the provisions of Section 7.11.
Upon acceptance of appointment by any successor trustee
as provided in this Section 7.14, TLGI shall give notice thereof
to the Holders of Securities of each series affected, by mailing
such notice to such Holders at their addresses as they shall
appear on the registry books. If the acceptance of appointment
is substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with
the notice called for by Section 7.09. If TLGI fails to give
such notice within ten days after acceptance of appointment by
the successor trustee, the successor trustees shall cause such
notice to be given at the expense of TLGI.
Section 7.15 Appointment Of Authenticating Agent. As
long as any Securities of a series remain Outstanding, the
Trustee may, by an instrument in writing, appoint with the
approval TLGI an authenticating agent (the "Authenticating
Agent") which shall be authorized to act on behalf of the Trustee
to authenticate Securities, including Securities issued upon
exchange, registration of transfer, partial redemption or
pursuant to Section 2.11. Securities of each such series
authenticated by such Authenticating Agent shall be entitled to
the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee. Whenever
reference is made in this Indenture to the authentication and
delivery of Securities of any series by the Trustee or the
Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the
Trustee by an Authenticating Agent for such series and a
certificate of authentication executed on behalf of the Trustee
by such authenticating Agent. Such authenticating Agent shall at
all times be a corporation organized and doing business under the
laws the United States of America or of any state or the District
of Columbia, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least
$50,00,000 (determined as provided in Section 7.11 with respect
to the Trustee) and subject to supervision or examination by
federal or state authority.
Any corporation into which any Authenticating Agent may
be merged or converted, or with which it may be consolidated, or
any corporation resulting from any merger, conversion or
consolidation to which any Authenticating Agent shall be a party,
or any corporation succeeding to the corporate agency business of
any Authenticating Agent, shall continue to be the authenticating
Agent with respect to all series of Securities for which it
served as Authenticating Agent without the execution or filing of
any paper or any further act on the part of the Trustee or such
Authenticating Agent. Any Authenticating Agent may at any time,
and if it shall cease to be eligible shall, resign by giving
written notice of resignation to the Trustee and to TLGI. The
Trustee may at any time terminate the agency of an Authenticating
Agent by giving written notice thereof to such Authenticating
Agent and to TLGI.
Upon receiving such notice of resignation or upon such
a termination, or in case at any time any Authenticating Agent
shall cease to be eligible in accordance with the provisions
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of
this Section 7.15 with respect to one or more series of
Securities, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to TLGI and TLGI shall provide
notice of such appointment to all Holders of Securities of such
series in the manner and to the extent provided in Section 11.02.
Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all rights,
powers, duties and responsibilities of its predecessor hereunder,
with like effect as if originally named as Authenticating Agent.
TLGI agrees to pay to the Authenticating Agent for such series
from time to time reasonable compensation. The Authenticating
Agent for the Securities of any series shall have no
responsibility or liability for any action taken by it as such at
the direction of the Trustee.
Sections 7.02, 7.03, 7.04 and 10.03 shall be applicable
to any Authenticating Agent.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01 Satisfaction And Discharge Of Indenture.
(A) If at any time (a) TLGI shall have paid or caused to be paid
the principal of and interest, if any, on all the Securities
Outstanding (other than Securities which have been destroyed,
lost or stolen and which have been replaced or paid as provided
in Section 2.11) as and when the same shall have become due and
payable, or (b) TLGI shall have delivered to the Trustee for
cancellation all Securities theretofore authenticated (other than
Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.11); and if,
in any such case, TLGI shall also pay or cause to be paid all
other sums payable hereunder by TLGI, then this Indenture shall
cease to be of further effect, and the Trustee, on demand of TLGI
accompanied by an Officer's Certificate and an Opinion of
Counsel, each stating that all conditions precedent relating to
the satisfaction and discharge contemplated by this provision
have been complied with, and at the cost and expense of TLGI,
shall execute proper instruments acknowledging such satisfaction
and discharging this Indenture. TLGI agrees to reimburse the
Trustee for any costs or expenses thereafter reasonably and
properly incurred, and to compensate the Trustee for any services
thereafter reasonably and properly rendered, by the Trustee in
connection with this Indenture or the Securities.
(B) If at any time (a) TLGI shall have paid or caused
to be paid the principal of and interest, if any, on all the
Securities of any series Outstanding (other than Securities of
such series which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.11) as and
when the same shall have become due and payable, or (b) TLGI
shall have delivered to the Trustee for cancellation all
Securities of any series theretofore authenticated (other than
any Securities of such series which have been destroyed, lost or
stolen and which have been replaced or paid as provided in
Section 2.11), or (c) in the case of any series of Securities
with respect to which the exact amount described in clause (ii)
below can be determined at the time of making the deposit
referred to in such clause (ii), (i) all the Securities of such
series not theretofore delivered to the Trustee for cancellation
shall have become due and
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payable, or are by their terms to
become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and (ii) TLGI
shall have irrevocably deposited or caused to be deposited with
the Trustee as funds in trust, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of
Securities of such series, cash in an amount (other than moneys
repaid by the Trustee or any Paying Agent to TLGI in accordance
with Section 8.04) or direct obligations of the United States of
America, backed by its full faith and credit ("U.S. Government
Obligations"), maturing as to principal and interest, if any, at
such times and in such amounts as will insure the availability of
cash, or a combination thereof, sufficient in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, to pay (A) the principal of and interest, if any, on all
Securities of such series on each date that such principal or
interest, if any, is due and payable, and (B) any mandatory
sinking fund payments on the dates on which such payments are due
and payable in accordance with the terms of this Indenture and
the Securities of such series; then TLGI shall be deemed to have
paid and discharged the entire indebtedness on all the Securities
of such series on the date of the deposit referred to in clause
(ii) above and the provisions of this Indenture with respect to
the Securities of such series shall no longer be in effect
(except, in the case of clause (c) of this Section 8.01(B), as to
(i) rights of registration of transfer and exchange of Securities
of such series, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities of such series, (iii) rights
of Holders of Securities of such series to receive payments of
principal thereof and interest, if any, thereon upon the original
stated due dates therefor (but not upon acceleration), and
remaining rights of the Holders of Securities of such series to
receive mandatory sinking fund payments, if any, (iv) the rights,
obligations, duties and immunities of the Trustee hereunder, (v)
the rights of the Holders of Securities of such series as
beneficiaries hereof with respect to the property so deposited
with the Trustee payable to all or any of them, (vi) the
obligations of TLGI under Section 4.02 with respect to Securities
of such series and (vii) the obligations of TLGI under Article
Thirteen) and the Trustee, on demand of TLGI accompanied by an
Officer's Certificate and an Opinion of Counsel, each stating
that all conditions precedent contemplated by this provision have
been complied with, and at the cost and expense of TLGI, shall
execute proper instruments acknowledging the same.
(C) The following provisions shall apply to the
Securities of each series (other than Securities that are
convertible into Common Stock) unless specifically otherwise
provided in a Board Resolution, Officer's Certificate or
indenture supplement hereto provided pursuant to Section 2.01.
In addition to discharge of this Indenture pursuant to the next
preceding paragraph, in the case of any series of Securities with
respect to which the exact amount described in subparagraph (a)
below can be determined at the time of making the deposit
referred to in such subparagraph (a), TLGI shall be deemed to
have paid and discharged the entire indebtedness on all the
Securities of such a series on the 91st day after the date of the
deposit referred to in subparagraph (a) below, and the provisions
of this Indenture with respect to the Securities of such series
shall no longer be in effect (except as to (i) rights of
registration of transfer and exchange of Securities of such
series, (ii) substitution of mutilated, defaced, destroyed, lost
or stolen Securities of such series, (iii) rights of Holders of
Securities of such series to receive payments of principal
thereof and interest, if any, thereon upon the original
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stated
due dates therefor (but not upon acceleration), and remaining
rights of the Holders of Securities of such series to receive
mandatory sinking fund payments, if any, (iv) the rights,
obligations, duties and immunities of the Trustee hereunder, (v)
the rights of the Holders of Securities of such series as
beneficiaries hereof with respect to the property so deposited
with the Trustee payable to all or any of them, (vi) the
obligations of TLGI under Section 4.02 with respect to Securities
of such series and (vii) the obligations of TLGI under Article
Thirteen) and the Trustee, on demand of TLGI accompanied by an
Officer's Certificate and an Opinion of Counsel, each stating
that all conditions precedent contemplated by this provision have
been complied with, and at the cost and expense of TLGI, shall
execute proper instruments acknowledging the same, if
(a) with reference to this provision TLGI has
irrevocably deposited or caused to be irrevocably deposited
with the Trustee as funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the
Holders of Securities of such series (i) cash in an amount,
or (ii) U.S. Government Obligations, maturing as to
principal and interest, if any, at such times and in such
amounts as will insure the availability of cash, or (iii) a
combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to
the Trustee, to pay (A) the principal of and interest, if
any, on all Securities of such series on each date that such
principal or interest, if any, if due and payable, and (B)
any mandatory sinking fund payments on the dates on which
such payments are due and payable in accordance with the
terms of this Indenture and the Securities of such series;
(b) such deposit will not result in a breach or
violation of, or constitute a default under, any agreement
or instrument to which TLGI is a party or by which it is
bound; and
(c) TLGI has delivered to the Trustee an Opinion of
Counsel based on the fact that (x) TLGI has received from,
or there has been published by, the Internal Revenue Service
a ruling or (y), since the date hereof, there has been a
change in the applicable United States federal income tax
law, in either case to the effect that, and such opinion
shall confirm that, the Holders of the Securities of such
series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to federal income tax on
the same amount and in the same manner and at the same
times, as would have been the case if such deposit,
defeasance and discharge had not occurred.
Section 8.02. Indemnity for U.S. Government
obligations; Repayment.
TLGI shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 8.01 or the
principal, premium, if any, and interest received in respect
thereof other than any such tax, fee or other charge which by law
is for the account of the Holders of the Outstanding Securities
of such series.
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Anything in Section 8.01 to the contrary
notwithstanding, the Trustee shall deliver or pay to TLGI from
time to time upon the request, in writing, by TLGI any money or
U.S. Government Obligations held by it as provided in
Section 8.01 above which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be
deposited to effect an equivalent legal defeasance or covenant
defeasance.
Section 8.03. Application By Trustee Of Funds
Deposited For Payment Of Securities. Subject to Section 8.04,
all moneys and U.S. Government Obligations deposited with the
Trustee pursuant to Sections 8.01 shall be held in trust, and
such moneys and all moneys from such U.S. Government Obligations
shall be applied by it to the payment, either directly or through
any Paying Agent (including TLGI acting as its own paying agent),
to the Holders of the particular Securities of such series for
the payment or redemption of which such moneys and U.S.
Government Obligations have been deposited with the Trustee, of
all sums due and to become due thereon for principal and
interest, if any, but such moneys need not be segregated from
other funds except to the extent required by law. The Trustee
and any Paying Agent shall promptly pay to TLGI, upon the written
request of TLGI, any excess moneys or U.S. Government Obligations
held by them at any time, including all moneys deposited with the
Trustee pursuant to Section 8.01(B) and held by it or any Paying
Agent for the payment of Securities subsequently converted.
Section 8.04. Repayment to TLGI.
Subject to Sections 7.08 and 8.01, the Trustee shall
promptly pay to TLGI, upon receipt by the Trustee of an Officers'
Certificate, any excess money, determined in accordance with
Section 8.01 or 8.02, held by it at any time. Any moneys
deposited with or paid to the Trustee or any Paying Agent for the
payment of the principal of or interest, if any, on any Security
of any series and not applied but remaining unclaimed for two
years after the date upon which such principal or interest, if
any, shall have become due and payable, shall, upon the written
request of TLGI and unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed
property law, be repaid to TLGI by the Trustee for such series or
such Paying Agent, and the Holder of the Securities of such
series shall, unless otherwise required by mandatory provisions
of applicable escheat or abandoned or unclaimed property laws,
thereafter look only to TLGI for any payment which such Holder
may be entitled to collect, and all liability of the Trustee or
any Paying Agent with respect to such moneys shall thereupon
cease.
In connection with the satisfaction and discharge of
this Indenture with respect to Securities of any series, all
moneys then held by any Paying Agent under the provisions of this
Indenture with respect to such series of Securities shall, upon
demand of TLGI, be repaid to it or paid to the Trustee and
thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
Section 8.05. Reinstatement.
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If the Trustee or Paying Agent is unable to apply any
money or U.S. Government Obligations in accordance with this
Indenture by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application,
then and only then TLGI's obligations under this Indenture and
the Securities of such series shall be revived and reinstated as
though no deposit had been made pursuant to this Indenture until
such time as the Trustee is permitted to apply all such money or
U.S. Government Obligations in accordance with this Indenture;
provided, however, that if TLGI has made any payment of principal
of, premium, if any, or interest on any Securities of such series
because of the reinstatement of its obligations, TLGI shall be
subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Supplemental Indentures Without Consent
Of Securityholders.
TLGI, when authorized by a resolution of the Board of
Directors (which resolution may provide general terms or
parameters for such action and may provide that the specific
terms of such action may be determined in accordance with or
pursuant to an Issuer Order), and the Trustee may from time to
time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act of 1939 as in force at the date of the
execution thereof) for one or more of the following purposes:
(a) to cure any ambiguity, defect or inconsistency or
to correct or supplement any provision contained herein or in any
supplemental indenture which may be defective or inconsistent
with any other provision contained herein or in any supplemental
indenture, or to make any other provisions as to TLGI may deem
necessary or desirable, provided that no such action shall
adversely affect the interests of the Holders of the Securities;
(b) to evidence the succession of another corporation
to TLGI, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and
obligations of TLGI pursuant to Article Five;
(c) to establish the form or terms of Securities of
any series as permitted by Sections 2.01 and 2.02 and to provide
for adjustment of conversion rights pursuant to Section 13.05;
(d) to comply with any requirements of the Commission
in order to effect or maintain the qualification of this
Indenture under the TIA;
(e) to evidence and provide for the acceptance of
appointment hereunder by a successor trustee with respect to the
Securities of one or more series and to add to or change any
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of
the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by
more than one trustee, pursuant to the requirements of Section
7.14; and
(f) to add to the covenants of TLGI such further
covenants, restrictions, conditions or provisions as TLGI and the
Trustee shall consider to be for the protection of the Holders of
all or any series of Securities (and if such covenants,
restrictions, conditions or provisions are to be for the
protection of less than all series of Securities, stating that
the same are expressly being included solely for the protection
of such series), and to make the occurrence, or the occurrence
and continuance, of a default in any such additional covenants,
restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies
provided, in this Indenture as herein set forth; provided, that
in respect of any such additional covenant, restriction,
condition or provision such supplemental indenture may provide
for a particular period of grace after default (which period may
be shorter or longer than that allowed in the case of other
defaults) or may provide for an immediate enforcement upon such
an Event of Default or may limit the remedies available to the
Trustee upon such an Event of Default or may limit the right of
the Holders of a majority in aggregate principal amount of the
Securities of such series to waive such Event of Default.
The Trustee is hereby authorized to join with TLGI in
the execution of any such supplemental indenture, to make any
further appropriate agreements and stipulations which may be
therein contained and to accept the conveyance, transfer,
assignment, mortgage or pledge of any property thereunder, but
the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions
of this Section 9.01 may be executed without the consent of the
Holders of any of the Securities then Outstanding,
notwithstanding any of the provisions of Section 9.02.
Notwithstanding the above, the Trustee and TLGI may not
make any change that adversely affects the rights of any Holders
hereunder. TLGI shall be required to deliver to the Trustee an
Opinion of Counsel stating that any such change made pursuant to
paragraph (a) or (f) of this Section 9.01 does not adversely
affect the rights of any Holder.
Section 9.02. Supplemental Indentures With Consent Of
Securityholders.
With the consent (evidenced as provided in Article Ten)
of the Holders of not less than a majority in aggregate principal
amount of the Securities then Outstanding of any series affected
by such supplemental indenture, TLGI, when authorized by a
resolution of the Board of Directors (which resolution may
provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order), and the
Trustee may, from time to time and at any time, enter into an
indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture act of 1939 as in force
at the date of execution thereof) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or
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of any supplemental indenture or
of modifying in any manner the rights of the Holders of the
Securities of such series; provided, that no such supplemental
indenture shall (a) extend the final maturity of any Security, or
reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest, if any, thereon (or, in the case
of an Original Issue Discount Security, reduce the rate of
accrual of original issue discount thereon), or reduce or alter
the method of computation of any amount payable on redemption,
repayment or purchase by the Company thereof (or the time at
which any such redemption, repayment or purchase may be made), or
make the principal thereof (including any amount in respect of
original issue discount), or interest, if any, thereon payable in
any coin or currency other than that provided in the Securities
or in accordance with the terms of the Securities, or reduce the
portion of the principal amount of an Original Issue Discount
Security that would be due and payable upon an acceleration of
the maturity thereof pursuant to Section 6.01 or the amount
thereof provable in bankruptcy pursuant to Section 6.02, or
impair or affect the right of any Securityholder to institute
suit for the payment or conversion thereof or materially and
adversely affect the right to convert the Securities in
accordance herewith or, if the Securities provide therefor, any
right of repayment or purchase at the option of the
Securityholder, in each case without the consent of the Holder of
each Security so affected, or (b) reduce the aforesaid percentage
of Securities of any series, the consent of the Holders of which
is required for any such supplemental indenture, without the
consent of the Holders of each Security so affected. No consent
of any Holder of any Security shall be necessary under this
Section 9.02 to permit the Trustee and TLGI to execute
supplemental indentures pursuant to Sections 5.01, 9.01 and
13.05.
A supplemental indenture which changes or eliminates
any covenant, Event of Default or other provision of this
Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which
modifies the rights of Holders of Securities of such series, with
respect to such covenant or provision, shall be deemed not to
affect the rights under this Indenture of the Holders of
Securities of any other series.
Upon the request of TLGI, accompanied by a copy of a
resolution of the Board of Directors (which resolution may
provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order) certified by
the secretary or an assistant secretary of TLGI authorizing the
execution of any such supplemental indenture, and upon the filing
with the Trustee of evidence of the consent of the Holders of the
Securities and aforesaid and other documents, if any required by
Section 10.01, the Trustee shall join with TLGI in the execution
of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such
supplemental indenture.
It shall not be necessary for the consent of the
Securityholders under this Section 8.2 to approve the particular
form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.
Promptly after the execution by TLGI and the Trustee of
any supplemental indenture pursuant to the provisions of this
Section 9.02, the Trustee shall give notice thereof to
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the
Holders of then Outstanding Securities of each series affected
thereby, by mailing a notice thereof by first-class mail to such
Holders at their addresses as they shall appear on the Security
register. Any failure of TLGI to give such notice, or any defect
therein, shall not, however, in any way impair or affect the
validity of any such supplemental indenture.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment of or supplement to this Indenture, or
each series of the Securities shall comply with the TIA as then
in effect.
Section 9.04. Effect Of Supplemental Indenture.
Upon the execution of any supplemental indenture
pursuant to the provisions hereof, this Indenture shall be and be
deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, TLGI and the
Holders of Securities of each series affected thereby shall
thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and
all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of
this Indenture for any and all purposes and every Holder of
Securities of each series affected thereby theretofore or
thereafter authenticated and delivered hereunder shall be bound
thereby.
Section 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms
of a Security of any series, the Trustee shall (in accordance
with the specific direction of TLGI) request the Holder of the
Security to deliver it to the Trustee. The Trustee shall (in
accordance with the specific direction of TLGI) in form approved
by the Trustee for such series as to any matter provided for by
such supplemental indenture or as to any action taken by
Securityholders and return it to the Holder. Alternatively, if
TLGI or the Trustee so determines, new Securities of any series
so modified as to conform, in the opinion of the Trustee and
TLGI, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by TLGI, authenticated by
the Trustee and delivered in exchange for the Securities of such
series then Outstanding. Failure to make the appropriate
notation or issue a new Security shall not affect the validity
and effect of such amendment, supplement or waiver.
Section 9.06. Trustee May Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or
waiver authorized pursuant to this Article Nine if the amendment,
supplement or waiver does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does,
the Trustee may, but need not, sign it. In signing or refusing
to sign such amendment, supplement or waiver, the Trustee shall
be entitled to receive, and shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating
that the execution of any amendment, supplement or waiver is
authorized or permitted by this Indenture, that it is not
inconsistent herewith and that it will be valid and binding upon
TLGI in accordance with its terms.
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ARTICLE TEN
CONCERNING THE SECURITYHOLDERS
Section 10.01 Evidence Of Action Taken By
Securityholders. Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be given or taken by a specified percentage in
principal amount of the Securityholders of any or all series may
be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such specified percentage
of Securityholders in person or by agent duly appointed in
writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments
are delivered to the Trustee. Proof of execution of any
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to
Sections 7.01 and 7.02) conclusive in favor of the Trustee and
TLGI, if made in the manner provided in this Article Ten.
Section 10.02 Proof Of Execution Of Instruments And Of
Holding Of Securities. Subject to Sections 7.01 and 7.02, the
execution of any instrument by a Securityholder or his agent or
proxy may be proved in the following manner:
(a) The fact and date of the execution by any Holder
of any instrument may be proved by the certificate of any
notary public or other officer of any jurisdiction
authorized to take acknowledgments of deeds or administer
oaths that the person executing such instruments
acknowledged to him the execution thereof, or by an
affidavit of a witness to such execution sworn to before any
such notary or other such officer. Where such execution is
by or on behalf of any legal entity other than an
individual, such certificate or affidavit shall also
constitute sufficient proof of the authority of the person
executing the same.
(b) The ownership of Securities shall be proved by the
Security register or by a certificate of the Security
registrar.
Section 10.03 Holders To Be Treated As Owners. TLGI,
the Trustee and any agent of TLGI or the Trustee may deem and
treat the Person in whose name any Security shall be registered
upon the Security register for such series as the absolute owner
of such Security (whether not such Security shall be overdue and
notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of
the principal of and, subject to the provisions of this
Indenture, interest, if any, on such Security and for all other
purposes; and neither TLGI nor the Trustee nor any agent of TLGI
or the Trustee shall be affected by any notice to the contrary.
Section 10.04 Securities Owned By TLGI Deemed Not
Outstanding. In determining whether the Holders of the requisite
aggregate principal amount of Outstanding Securities of any or
all series have concurred in any direction, consent or waiver
under this Indenture, Securities which are owned by TLGI or any
other obligor on the Securities with respect to which such
determination is being made or by any Affiliate of TLGI or any
other obligor on the Securities with respect to which such
determination is being made shall be
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disregarded and deemed not
to be Outstanding for the purpose of any such determination,
except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or
waiver only Securities which the Trustee knows are so owned shall
be so disregarded. Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's
right so to act with respect to such Securities and that the
pledgee is not TLGI or any other obligor upon the Securities or
any Affiliate of TLGI or any other obligor on the Securities. In
case of a dispute as to such right, the advice of counsel shall
be full protection in respect of any decision made by the Trustee
in accordance with such advice. Upon request of the Trustee,
TLGI shall furnish to the Trustee promptly an Officer's
Certificate listing and identifying all Securities, if any, known
by TLGI to be owned or held by or for the account of any of the
above described Persons; and, subject to Sections 7.01 and 7.02,
the Trustee shall be entitled to accept such Officer's
Certificate as conclusive evidence of the facts therein set forth
and of the fact that all Securities not listed therein are
Outstanding for the purposes of any such determination.
Section 10.05 Right Of Revocation Of Action Taken. At
any time prior to (but not after) the evidencing to the Trustee,
as provided in Section 10.01, of the taking of any action by the
Holders of the percentage in aggregate principal amount of the
Securities of any or all series, as the case may be, specified in
this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to
be included among the serial numbers of the Securities the
Holders of which have consented to such action may, by filing
written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article Ten, revoke such action so
far as concerns such Security, provided that such revocation
shall not become effective until three business days after such
filing. Except as aforesaid any such action taken by the Holder
of any Security shall be conclusive and binding upon such Holder
and upon all future Holders and owners of such Security and of
any Securities issued in exchange or substitution therefor or on
registration of transfer thereof, irrespective of whether or not
any notation in regard thereto is made upon any such Security.
Any action taken by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the
case may be, specified in this Indenture in connection with such
action shall be conclusively binding upon TLGI, the Trustee and
the Holders of all the Securities affected by such action.
Section 10.06 Record Date For Consents And Waiver.
TLGI may, but shall not be obligated to, direct the Trustee to
establish a record date for the purpose of determining the
Persons entitled to (i) waive any past default with respect to
the Securities of such series in accordance with Section 6.05 of
this Indenture, (ii) consent to any supplemental indenture in
accordance with Section 9.02 of this Indenture, or (iii) waive
compliance with any term, condition or provision of any covenant
hereunder. If a record date is fixed, the Holders on such record
date, or their duly designated proxies, and any such Persons,
shall be entitled to waive any such past default, consent to any
such supplemental indenture or waive compliance with any such
term, condition or provision, whether or not such Holder remains
a Holder after such record date; provided, however, that unless
such waiver or consent is obtained from the Holders, or duly
designated proxies, of the requisite principal amount of
Outstanding Securities of such series prior to the date which is
the 180th day after such record date, any such waiver or consent
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previously given shall automatically and without further action
by any Holder be cancelled and of no further effect.
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Conflict Of Any Provision Of Indenture
With Trust Indenture Act Of 1939.
If and to the extent that any provision of this
Indenture Limits, qualifies or conflicts with another provision
included in this Indenture which is required to be included
herein by any of Sections 310 to 317, inclusive, or is deemed
applicable to this Indenture by virtue of the provisions of this
Trust Indenture Act of 1939, such required provision shall
control.
Section 11.02. Notices.
Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the
Trustee or by the Holders of Securities to or on TLGI, or as
required pursuant to the Trust Indenture Act of 1939, may be
given or served by being deposited postage prepaid, first-class
mail (except as otherwise specifically provided herein) addressed
(until another address of TLGI is filed by TLGI with the Trustee)
to TLGI or LGII at Loewen Group International, Inc., 50 East
RiverCenter Boulevard, Covington, Kentucky 41011, Attention:
___________, with a copy to: The Loewen Group Inc., 4126 Norland
Ave., Burnaby, British Columbia, Canada V56358. Any notice,
direction, request or demand by TLGI or any Holder of Securities
to or upon the Trustee shall be deemed to have been sufficiently
given or served by being deposited postage prepaid, first-class
mail (except as otherwise specifically provided herein) addressed
(until another address of the Trustee is filed by the Trustee
with TLGI) to Fleet National Bank, 777 Main Street, Hartford,
Cnnecticut 06115, Attention: ____________.
Where this Indenture provides for notice to Holders of
Securities, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder entitled thereto, at
his last address as it appears in the Security register. Where
this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall
be the equivalent of such notice. Waivers of notice by Holder
shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in
reliance upon such waiver. In case, by reason of the suspension
of or irregularities in regular mail service, it shall be
impracticable to mail any notice when such notice is required to
be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be reasonably satisfactory
to the Trustee shall be deemed to be sufficient notice.
Any notice or communication shall be sufficiently given
if in writing and delivered in person or mailed by first class
mail, postage prepaid, addressed as follows:
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Section 11.03. Communication by Holders with Other
Holders.
Holders may communicate pursuant to TIA 312(b) with
other Holders with respect to their rights under this Indenture
or the Securities. The obligors, the Trustee, the Registrar and
any other person shall have the protection of TIA 312(c).
Section 11.04. Officer's Certificates And Opinions Of
Counsel; Statements To Be Contained Therein.
Upon any application or demand by TLGI to the Trustee
to take any action under any of the provisions of this Indenture,
or as required pursuant to the Trust Indenture Act of 1939, TLGI
shall furnish to the Trustee an Officer's Certificate stating
that all conditions precedent provided for in this Indenture
relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel
all such conditions precedent have been complied with, except
that in the case of any such application or demand as to which
the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular
application or demand, no additional certificate or opinion need
be furnished.
Each certificate or opinion provided for in this
Indenture (other than a certificate provided pursuant to Section
3.03(d)) and delivered to the Trustee with respect to compliance
with a condition or covenant provided for in this Indenture shall
include (a) a statement that the person making such certificate
or opinion has read such covenant or condition, (b) a brief
statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in
such certificate or opinion are based, (c) a statement that, in
the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an opinion
as to whether or not such covenant or condition has been complied
with, and (d) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of
TLGI may be based, insofar as it related to legal matters, upon a
certificate or opinion of or representations by counsel, unless
such officer knows that the certificate or opinion or
representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that
the same are erroneous. Any certificate, statement or opinion of
counsel may be based, insofar as it relates to factual matters,
information with respect to which is in the possession of TLGI,
upon the certificate, statement or opinion of or representations
by an officer or officers of TLGI, unless such counsel knows that
the certificate, statement or opinion or representations
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with
respect to the matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of
TLGI or of counsel may be based, insofar as it relates to
accounting matters, upon a certificate or opinion of or
representation by an accountant or firm of accountants in the
employ of TLGI, unless such officer or counsel, as the case may
be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or
in the exercise of reasonable care should know that the same are
erroneous.
Any certificate or opinion of any independent firm of
public accountants filed with and directed to the Trustee shall
contain a statement that such firm in independent.
Section 11.05. Payments Due On Saturdays, Sundays And
Holidays.
If the date of maturity of principal of or interest, if
any, on the Securities of any series or the date fixed for
redemption, purchase or repayment of any such Security or at the
last date for conversion of any Security shall not be a Business
Day, then (notwithstanding any other provision of this Indenture
or the Securities) payment of interest, if any, or principal need
not be made on such date and such conversion need not be made by
such date, but may be made on the next succeeding Business Day
with the same force and effect as if made on the date of maturity
or the date fixed for redemption, purchase or repayment or the
last date of such conversion, and, in the case of payment, no
interest shall accrue for the period after such date.
Section 11.06. Rules by Trustee, Paying Agent,
Registrar.
The Trustee may make reasonable rules for action by or
at a meeting of Noteholders. The Paying Agent or Registrar may
make reasonable rules for its functions.
Section 11.07. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS
INDENTURE, AND THE SECURITIES WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF APPLICABLE
FEDERAL LAW. The Trustee, TLGI and the Holders agree to submit
to the jurisdiction of the courts of the State of New York in any
action or proceeding arising out of or relating to this Indenture
or the Securities.
Section 11.08. Consent to Service of Process.
TLGI irrevocably (a) agrees that any legal suit, action
or proceeding arising out of or based upon this Indenture and the
Securities issued hereunder may be instituted in any federal or
state court located in the City of New York, (b) waives, to the
fullest extent it may effectively do so, any objection which it
may now or hereafter have to the laying of venue of any such
proceeding, and (c) submits to the nonexclusive jurisdiction of
such courts in any such suit, action or proceeding. TLGI has
appointed Thelen, Marrin, Johnson & Bridges LLP, 330 Madison
Avenue, New York, New York 10017, Attention: David P. Graybeal,
Esq., as its authorized agent (the "Authorized Agent") upon whom
process may be served in any suit, action or proceeding arising
out of or based on this Indenture which may be instituted in any
federal or state court located in The City of New York, expressly
consents to the jurisdiction of any such court in respect of any
suit, action or proceeding, and waives any other requirements of
or
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objections to personal jurisdiction with respect thereto.
Such appointment shall be irrevocable. TLGI agrees to take any
and all action, including the filing of any and all documents and
instruments, that may be necessary to continue such appointment
in full force and effect as aforesaid. Service of process upon
the Authorized Agent and written notice of such service to TLGI
shall be deemed, in every respect, effective service of process
upon TLGI. Notwithstanding the foregoing, designation of an
authorized agent does not constitute submission to jurisdiction
or consent to service or process in any legal action or
proceeding predicated on United States federal or state
securities laws.
Section 11.09. No Interpretation of Other Agreements.
This Indenture may not be used to interpret another
indenture, loan or debt agreement of TLGI or any of its
Subsidiaries. Any such indenture, loan or debt agreement may not
be used to interpret this Indenture.
Section 11.10. Partners, Incorporators, Stockholders,
Officers And Directors Of TLGI Exempt From Individual Liability.
No recourse under or upon any obligation, covenant or
agreement contained in this Indenture, or in any Security, or
because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such or against any past, present or
future director, officer, employee, stockholder or Affiliate, as
such, of TLGI, or any partner of TLGI or of any successor, either
directly or through TLGI or any successor, under any rule of law,
statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise,
all such liability being expressly waived and released by the
acceptance of the Securities by the Holders thereof and as part
of the consideration for the issue of the Securities.
Section 11.11. Successors.
All agreements of TLGI in this Indenture and the
Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
Section 11.12. Duplicate Originals.
The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all such
executed copies together represent the same agreement.
Section 11.13. Severability.
In case any provision in this Indenture or the
Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby, and a
Holder shall have no claim therefor against any party hereto.
Section 11.14. Table of Contents, Headings, Etc.
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The Table of Contents and headings of the Articles and
Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall
in no way modify or restrict any of the terms or provisions
hereof.
Section 11.15. Provisions Of Indenture For The Sole
Benefit Of Parties And Holders Of Senior Indebtedness And Of
Securities.
Nothing in this Indenture or in the Securities,
expressed or implied, shall give or be construed to give to any
Person, other than the parties hereto and their successors and
the Holders of the Securities, any legal or equitable right,
remedy or claim under this Indenture or under any covenant or
provisions herein contained, all such covenants and provisions
being for the sole benefit of the parties hereto and their
successors, the holders of the Holders of the Securities.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
Section 12.01 Applicability Of Article. The
provisions of this Article shall be applicable to the Securities
of any series which are redeemable before their maturity or to
any sinking fund for the retirement of Securities of a series
except as otherwise specified, as contemplated by Section 2.01
for Securities of such series.
Section 12.02 Notice Of Redemption; Partial
Redemptions. Notice of redemption to the Holders of Securities
of any series to be redeemed as a whole or in part at the option
of TLGI shall be given by mailing notice of such redemption by
first-class mail, postage prepaid, at least 30 days and not more
than 60 days prior to the date fixed for redemption to such
Holders of Securities of such series at their last addresses as
they shall appear upon the registry books. Any notice which is
mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder
receives the notice. Failure to give notice by mail, or any
defect in the notice to the Holder of any Security of a series
designated for redemption as a whole or in part shall not affect
the validity of the proceedings for the redemption of any other
Security of such series.
The notice of redemption to each such Holder shall
specify the principal amount of each Security of such series held
by such Holder to be redeemed, the date fixed for redemption, the
redemption price, the place or places of payment, that payment
will be made upon presentation and surrender of such Securities,
that such redemption is pursuant to the mandatory or optional
sinking fund, or both, if such be the case, that interest, if
any, (or, in the case of Original Issue Discount Securities,
original issue discount) accrued to the date fixed for redemption
will be paid as specified in such notice and that on and after
said date interest, if any, thereon or on the portions thereof to
be redeemed (or, in the case of Original Issue Discount
Securities, original issue discount) will cease to accrue and, if
applicable, shall also specify the Conversion Price then in
effect and the date on which the right to convert such Securities
or the portions thereof to be redeemed will expire. In case any
Security of a series is to be redeemed in
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part only, the notice
of redemption shall state the portion of the principal amount
thereof to be redeemed and shall state that on and after the date
fixed for redemption, upon surrender of such Security, a new
Security or Securities of such series in principal amount equal
to the unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to
be redeemed at the option of TLGI shall be given by TLGI or, at
TLGI's request, by the Trustee in the name and at the expense of
TLGI.
On or before the redemption date specified in the
notice of redemption given as provided in this Section 12.02,
TLGI will deposit with the Trustee or with one or more Paying
Agents (or, if TLGI is acting as its own paying agent, set aside,
segregate and hold in trust as provided in Section 2.09) an
amount of money sufficient to redeem on the redemption date all
the Outstanding Securities of such series so called for
redemption (other than those theretofore surrendered for
conversion into Common Stock and deemed not to be Outstanding
hereunder) at the appropriate redemption price, together with
accrued interest, if any, to the date fixed for redemption on all
the Outstanding Securities of such series so called for
redemption (other than those theretofore surrendered for
conversion into Common Stock and deemed not to be Outstanding
hereunder). If any Security called for redemption is converted
pursuant hereto, any moneys deposited with the Trustee or any
Paying Agent or so segregated and held in trust for the
redemption of such Security shall be paid to TLGI upon TLGI's
request, or, if then held by TLGI, shall be discharged from such
trust. TLGI will deliver to the Trustee at least 30 days prior
to the date fixed for redemption (unless a shorter notice shall
be satisfactory to the Trustee) an Officer's Certificate stating
the aggregate principal amount of Securities to be redeemed. In
case of a redemption at the election of TLGI prior to the
expiration of any restriction on such redemption, TLGI shall
deliver to the Trustee, prior to the giving of any notice of
redemption to Holders pursuant to this Section 12.02, an
Officer's Certificate stating that such restriction has been
complied with.
If less than all the Securities of a series are to be
redeemed, the Trustee shall select, in such manner as it shall
deem appropriate and fair, Securities of such series to be
redeemed. Securities may be redeemed in part in multiples equal
to the minimum authorized denomination for Securities of such
series or any multiple thereof. The Trustee shall promptly
notify TLGI in writing of the Securities of such series selected
for redemption and, in the case of any Securities of such series
selected for partial redemption, the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to the
redemption of Securities of any series shall relate, in the case
of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been
or is to be redeemed. If any Security selected for partial
redemption is surrendered for conversion after such selection,
the converted portion of such Security shall be deemed (so far as
may be) to be the portion selected for redemption. Upon any
redemption of less than all the Securities of a series, for
purposes of selection for redemption TLGI and the Trustee may
treat as Outstanding Securities surrendered for conversion during
the period of 15 days next preceding the mailing of a notice of
redemption, and need not treat as Outstanding any
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Security
authenticated and delivered during such period in exchange for
the unconverted portion of any Security converted in part during
such period.
Section 12.03 Payments Of Securities Called For
Redemption. If notice of redemption has been given as above
provided, the Securities or portions of Securities specified in
such notice shall become due and payable on the date and at the
place or places stated in such notice at the applicable
redemption price, together with interest, if any, accrued to the
date fixed for redemption, and on and after said date (unless
TLGI shall default in the payment of such Securities at the
redemption price, together with interest, if any, accrued to said
date) interest (or, in the case of Original Issue Discount
Securities, original issue discount) on the Securities or
portions of Securities so called for redemption shall cease to
accrue, and such Securities shall cease from and after the date
fixed for redemption (unless an earlier date shall be specified
in a Board Resolution, Officer's Certificate or executed
supplemental indenture referred to in Sections 2.02 and 2.01 by
or pursuant to which the form and terms of the Securities of such
series were established) to be convertible into Common Stock,
and, except as provided in Sections 7.06 and 8.04, to be entitled
to any other benefit or security under this Indenture, and the
Holders thereof shall have no right in respect of such Securities
except the right to receive the redemption price thereof and
unpaid interest to the date fixed for redemption. On
presentation and surrender of such Securities at a place of
payment specified in said notice, said Securities or the
specified portions thereof shall be paid and redeemed by TLGI at
the applicable redemption price, together with interest, if any,
accrued thereon on the date fixed for redemption; provided that
payment of interest, if any, becoming due on or prior to the date
fixed for redemption shall be payable to the Holders of
Securities registered as such on the relevant record date subject
to the terms and provisions of Sections 2.01 and 2.07 hereof.
If any Security called for redemption shall not be so
paid upon surrender thereof for redemption, the redemption price
shall, until paid or duly provided for, bear interest from the
date fixed for redemption at the rate of interest or Yield to
Maturity (in the case of an Original Issue Discount Security)
borne by such Security, and such Security shall remain
convertible into Common Stock until the redemption price of such
Security (together with such interest thereon) shall have been
paid or duly provided for.
Upon presentation of any Security redeemed in part
only, TLGI shall execute and the Trustee shall authenticate and
deliver to or on the order of the Holder thereof, at the expenses
of TLGI, a new Security or Securities of such series and of like
tenor, of authorized denominations, in principal amount equal to
the unredeemed portion of the Security so presented.
Section 12.04 Exclusion Of Certain Securities From
Eligibility For Selection For Redemption. Securities shall be
excluded from eligibility for selection for redemption if they
are identified by registration and certificate number in an
Officer's Certificate delivered to the Trustee at least 45 days
prior to the last date on which notice of redemption may be given
as being owned of record and beneficially by, and not pledged or
hypothecated by, either (a) TLGI or (b) a Person specifically
identified in such written statement as an Affiliate of TLGI.
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Section 12.05 Mandatory And Optional Sinking Funds.
The minimum amount of any sinking fund payment provided for by
the terms of the Securities of any series is herein referred to
as a "mandatory sinking fund payment", and any payment in excess
of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an "optional
sinking fund payment". The date on which a sinking fund payment
is to be made is herein referred to as the "sinking fund payment
date".
In lieu of making all or any part of any mandatory
sinking fund payment with respect to any series of Securities in
cash, TLGI may at its option (a) deliver to the Trustee
Securities of such series theretofore purchased or otherwise
acquired (except upon redemption pursuant to the mandatory
sinking fund) by TLGI or receive credit for Securities of such
series (not previously so credited) theretofore purchased or
otherwise acquired (except as aforesaid) by TLGI and delivered to
the Trustee for cancellation pursuant to Section 2.12, (b)
receive credit for Securities (not previously so credited)
converted into Common Stock and so delivered to the Trustee for
cancellation, (c) receive credit for optional sinking fund
payments (not previously so credited) made pursuant to this
Section 2.09, or (d) receive credit for Securities of such series
(not previously so credited) redeemed by TLGI through any
optional redemption provision contained in the terms of such
series. Securities so delivered or credited shall be received or
credited by the Trustee at the sinking fund redemption price
specified in such Securities.
On or before the 60th day next preceding each sinking
fund payment date for any series, TLGI will deliver to the
Trustee an Officer's Certificate (a) specifying the portion of
the mandatory sinking fund payment to be satisfied by payment of
cash and the portion to be satisfied by credit of Securities of
such series and the basis for such credit, (b) stating that none
of the Securities of such series to be so credited has
theretofore been so credited, (c) stating that no defaults in the
payment of interest or Events of Default with respect to such
series have occurred (which have not been waived or cured or
otherwise ceased to exist) and are continuing, and (d) stating
whether or not TLGI intends to exercise its right to make an
optional sinking fund payment with respect to such series and, if
so, specifying the amount of such optional sinking fund payment
which TLGI intends to pay on or before the next succeeding
sinking fund payment date. Any Securities of such series to be
credited and required to be delivered to the Trustee in order for
the Issue to be entitled to credit therefor as aforesaid which
have not theretofore been delivered to the Trustee shall be
delivered for cancellation pursuant to Section 2.12 to the
Trustee with such Officer's Certificate (or reasonably promptly
thereafter if acceptable to the Trustee). Such Officer's
Certificate shall be irrevocable and upon its receipt by the
Trustee TLGI shall become unconditionally obligated to make all
the cash payments or payments therein referred to, if any, on or
before the next succeeding sinking fund payment date. Failure to
TLGI, on or before any such 60th day, to deliver such Officer's
Certificate and Securities (subject to the parenthetical clause
in the second preceding sentence) specified in this paragraph, if
any, shall not constitute a default but shall constitute, on and
as such date, the irrevocable election of TLGI (i) that the
mandatory sinking fund payment for such series due on the next
succeeding sinking fund payment date shall be paid entirely in
cash without the option to deliver or credit Securities of such
series in respect thereof, and (ii) that TLGI will make no
optional sinking fund payment with respect to such series as
provided in this Section 12.05.
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If the sinking fund payment or payments (mandatory or
optional or both) to be made in cash on the next succeeding
sinking fund payment date plus any unused balance of any
preceding sinking fund payments made in cash shall exceed $50,000
or a lesser sum if TLGI shall so request with respect to the
Securities of any particular series, such cash shall be applied
on the next succeeding sinking fund payment date to the
redemption of Securities of such series at the sinking fund
redemption price together with accrued interest, if any, to the
date fixed for redemption. If such amount shall be $50,000 or
less and TLGI makes no such request, then it shall be carried
over until a sum in excess of $50,000 is available. The Trustee
shall select, in the manner provided in Section 12.02, for
redemption on such sinking fund payment date a sufficient
principal amount of Securities of such series to absorb said
cash, as nearly as may be, and shall (if requested in writing by
TLGI) inform TLGI of the serial numbers of the Securities of such
series (or portions thereof) so selected. The Trustee, in the
name and at the expense of TLGI (or TLGI, if it shall so request
the Trustee in writing) shall cause notice of redemption of the
Securities of such series to be given in substantially the manner
provided in Section 12.02 (and with the effect provided in
Section 12.03) for the redemption of Securities of such series in
part at the option of TLGI. The amount of any sinking fund
payments not so applied or allocated to the redemption of
Securities of such series shall be added to the next cash sinking
fund payment for such series and, together with such payment,
shall be applied in accordance with the provisions of this
Section 12.05. Any and all sinking fund moneys held on the
stated maturity date of the Securities of any particular series
(or earlier, if such maturity is accelerated), which are not held
for the payment or redemption of particular Securities of such
series shall be applied, together with other moneys, if
necessary, sufficient for the purpose, to the payment of the
principal of and interest, if any, on, the Securities of such
series at maturity.
On or before each sinking fund payment date, TLGI shall
pay to the Trustee in cash or shall otherwise provide for the
payment of all interest, if any, accrued to the date fixed for
redemption of Securities to be redeemed on such sinking fund
payment date.
The Trustee shall not redeem or cause to be redeemed
any Securities of a series with sinking fund moneys or give any
notice of redemption of Securities for such series by operation
of the sinking fund during the continuance of a default in
payment of interest on such Securities or of any Event of Default
with respect to such series except that, where the giving of
notice of redemption of any Securities shall theretofore have
been made, the Trustee shall redeem or cause to be redeemed such
Securities, provided that it shall have received from TLGI a sum
sufficient for such redemption. Except as aforesaid, any moneys
in the sinking fund for such series at the time when any such
default or Event of Default shall occur, and any moneys
thereafter paid into the sinking fund, shall, during the
continuance of such default or Event of Default, be deemed to
have been collected under Article Seven and held for the payment
of all such Securities. In case such Event of Default shall have
been waived as provided in Section 6.05 or the default cured on
or before the 60th day preceding the sinking fund payment date in
any year, such moneys shall thereafter be applied on the next
succeeding sinking fund payment date in accordance with this
Section 12.05 to the redemption of such Securities.
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ARTICLE THIRTEEN
CONVERSION OF SECURITIES
Section 13.01 Applicability Of Article. The
provisions of this Article shall be applicable to the Securities
of any series which are convertible into Common Stock or, if so
provided in a Board Resolution, Officer's Certificate or executed
supplemental indenture referred to in Sections 2.01 and 2.02 by
or pursuant to which the form and terms of the Securities of such
series were established, cash in lieu thereof, as and to the
extent provided by the terms of the Securities of such series.
Section 13.02 Exercise Of Conversion Privilege. In
order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security to the
Conversion Agent at any time during usual business hours at its
office or agency maintained for the purpose as provided in this
Indenture, accompanied by a fully executed written notice, in
substantially the form set forth on the reverse of the Security,
that the Holder elects to convert such Security or a stated
portion thereof constituting a multiple of $1,000 in principal
amount, and, if such Security is surrendered for conversion
during the period between the close of business on any record
date for such Security and the opening of business on the related
interest payment date (or on such interest payment date),
accompanied also by payment of an amount equal to the interest
payable on such interest payment date on the portion of the
principal amount of the Security being surrendered for
conversion. Such notice shall also state the name or names (and
address) in which the certificate or certificates for shares of
common Stock shall be issued (or to whom payment in cash in lieu
of Common Stock shall be made). Securities surrendered for
conversion shall (if so required by TLGI or the Conversion Agent)
be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to TLGI and the
Conversion Agent duly executed by, the Holder or his attorney
duly authorized in writing. As promptly as practicable after the
receipt of such notice and the surrender of such Security as
aforesaid, TLGI shall, subject to the provisions of Section
13.07, issue and deliver at such office or agency to such Holder,
or on his written order, a certificate or certificates for the
number of all shares of Common Stock issuable on conversion of
such Security in accordance with the provisions of such Security
and cash, as provided in Section 13.03, in respect of any
fraction of a share of Common Stock otherwise issuable upon such
conversion or, if so provided in a Board Resolution, Officer's
Certificate or executed supplemental indenture referred to in
Sections 2.01 and 2.02 by or pursuant to which the form and terms
of the Securities of such series were established, cash in lieu
of shares of Common Stock. Such conversion shall be at the
Conversion Price in effect, and shall be deemed to have been
effected, immediately prior to the close of business on the date
(herein called the "Date of Conversion") on which such notice in
proper form shall have been received by the Conversion Agent and
such Security shall have been surrendered as aforesaid, and the
Person or Persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable, if
any, upon such conversion shall be deemed to have become on the
Date of Conversion the holder or holders of record of the shares
represented thereby; provided, however, that such surrender on
any date when the stock transfers books of TLGI shall be closed
shall constitute the Person or Persons in whose name or names the
certificate or certificates for such shares are to be issued, if
any, as the record holder or
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holders thereof for all purposes at
the opening of business on the next succeeding day on which such
stock transfer books are open but such conversion shall
nevertheless be at the Conversion Price in effect at the close of
business on the date when such Security shall have been so
surrendered with the conversion notice in proper form. In the
case of conversion of a portion, but less than all, of a
Security, TLGI shall execute, and the Trustee shall authenticate
and deliver to the Holder thereof, at the expense of TLGI, a
Security or Securities in the aggregate principal amount of the
unconverted portion of the Security surrendered. Except as
otherwise expressly provided in this Indenture, no payment or
adjustment shall be made for interest accrued on any Security (or
portion thereof) converted or for dividends or distributions on
any Common Stock issued upon conversion of any Security. The
right, if any, of a Holder of any Security to cause TLGI to
redeem, purchase or repay such Security shall terminate upon
receipt by TLGI of any notice of conversion of such Security.
Section 13.03 Fractional Interests. No fractions of
shares or script representing fractions of shares shall be issued
upon conversion of Securities. If more than one Security shall
be surrendered for conversion at one time by the same Holder, the
number of full shares which shall be issuable upon conversion
thereof shall be computed on the basis of the aggregate principal
amount of the Securities so surrendered. If any fraction of a
share of Common Stock would, except for the provisions of this
Section 13.03, be issuable on the conversion of any Security or
Securities, TLGI shall make payment in lieu thereof in cash equal
to the value of such fraction computed on the basis of the Last
Sale Price of one share of Common Stock on the most recent
Trading Day prior to the Date of Conversion. "Last Sale Price"
on any Trading Day shall mean (i) the closing price regular way
(or, if no closing price is reported the average of the bid and
asked prices) as reported on the New York Stock Exchange
Composite Tape, or (ii) if on such Trading Day the Common Stock
is not listed or admitted to trading on such exchange, the
closing price regular way (or, if no closing price is reported
the average of the bid and asked prices) on the principal
national securities exchange on which the Common Stock is listed
or admitted to trading, or (iii) if not listed or admitted to
trading on any national securities exchange on such Trading Day,
then the average of the closing bid and asked prices as reported
through the National Association of Securities Dealers, Inc. on
its NASDAQ National Market System or NASDAQ System or a similar
organization if NASDAQ is no longer reporting information, or
(iv) if the Common Stock is not listed or admitted to trading on
any national securities exchange or quoted on such National
Market System or NASDAQ System on such Trading Day, then the
average of the closing bid and asked prices in the over-the-
counter market as furnished by any New York Stock Exchange member
firm selected from time to time by TLGI for that purpose or (v)
if not quoted by any such organization on such Trading Day, the
fair value of such Common Stock on such Trading Day, as
determined by the Board of Directors. The term "Trading Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday,
other than any day on which securities are not traded on any of
the above-mentioned exchanges or in such markets.
Section 13.04 Adjustment Of Conversion Price. The
conversion price or rate (herein called the "Conversion Price")
for a series of Securities shall be as set forth in a Board
Resolution, Officer's Certificate or executed supplemental
indenture referred to in Sections 2.01 and 2.02 by or pursuant to
which the form and terms of the Securities of such series were
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established, and, except as otherwise provided therein, shall be
subject to adjustment from time to time as follows:
(a) In case TLGI shall (1) pay a dividend or make a
distribution in shares of Common Stock on the Common Stock,
(2) subdivide its outstanding shares of Common Stock into a
greater number of shares, (3) combine its outstanding shares
of Common Stock into a smaller number of shares, (4) issue
by reclassification of its Common Stock any shares of
capital stock of TLGI or (5) redeem any Associated Rights,
the Conversion Price in effect immediately prior to such
action shall be adjusted so that the Holder of any Security
thereafter surrendered for conversion shall be entitled to
receive the number of shares of Common Stock or other
capital stock of TLGI which he would have owned immediately
following such action had such Security been converted
immediately prior thereto. An adjustment made pursuant to
this subsection (a) shall become effective immediately,
except as provided in subsection (e) below, after the record
date in the case of a dividend or distribution and shall
become effective immediately after the effective date in the
case of a subdivision, combination or reclassification. If
as a result of an adjustment made pursuant to this
subsection (a), the Holder of any Security thereafter
surrendered for conversion shall become entitled to receive
shares of two or more classes of capital stock (including
shares of Common Stock and other capital stock) of TLGI, the
Board of Directors (whose determination shall be conclusive
and shall be described in a statement filed with the
Trustee) shall determine the allocation of the adjusted
Conversion Price between or among shares of such classes of
capital stock or shares of Common Stock and other capital
stock.
(b) In case TLGI shall issue rights or warrants to all
holders of Common Stock entitling them (for a period not
exceeding 45 days from the date of such issuance) to
subscribe for or purchase shares of Common Stock at price
per share less than the current market price per share (as
determined pursuant to subsection (d) below) of the Common
Stock on the record date mentioned below, the Conversion
Price shall be adjusted to a price, computed to the nearest
cent, so that the same shall equal the price determined by
multiplying:
(1) the Conversion Price in effect immediately
prior to the date of issuance of such rights or
warrants by a fraction, of which
(2) the numerator shall be (A) the number of
shares of Common Stock outstanding on the date of
issuance of such rights or warrants, immediately prior
to such issuance, plus (B) the number of shares which
the aggregate offering price of the total number of
shares so offered for subscription or purchase would
purchase at such current market price (determined by
multiplying such total number of shares by the exercise
price of such rights or warrants and dividing the
product so obtained by such current market price), and
of which
(3) the denominator shall be (A) the number of
shares of Common Stock outstanding on the date of
issuance of such rights or warrants, immediately
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prior
to such issuance, plus (B) the number of additional
shares of Common Stock which are so offered for
subscription or purchase.
Such adjustment shall become effective immediately,
except as provide in subsection (e) below, after the record date
for the determination of holders entitled to receive such rights
or warrants.
(c) In case TLGI shall distribute to substantially all
holders of Common Stock, evidences of indebtedness, equity
securities (including equity interests in TLGI's
Subsidiaries) other than Common Stock, or other assets
(other than cash dividends paid out of surplus of TLGI), or
shall distribute to substantially all holders of Common
Stock rights or warrants to subscribe for securities (other
than those referred to in subsection (b) above) then in each
such case the Conversion Price shall be adjusted so that the
same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the date of
such distribution by a fraction of which the numerator shall
be the current market price per share (determined as
provided in subsection (d) below) of the Common Stock on the
record date mentioned below less then fair market value (as
determined by the Board of Directors, whose determination
shall, if made in good faith, be conclusive evidence of such
fair market value) of the portion of the assets so
distributed or of such subscription rights or warrants
applicable to one share of Common Stock, and of which the
denominator shall be such current market price per share of
the Common Stock. Such adjustment shall become effective
immediately, except as provided in subsection (e) below,
after the record date for the determination of stockholders
entitled to receive such distribution.
(d) For the purpose of any computation under
subsections (b) and (c) above, the current market price per
share of Common Stock on any date shall be deemed to be the
average of the Last Sale Prices for the 30 consecutive
Trading Days commencing 45 Trading Days before the date in
question.
(e) In any case in which this Section 13.04 shall
require that an adjustment be made immediately following a
record date, TLGI may elect to defer the effectiveness of
such adjustment (but in no event until a date later than the
effective time of the event giving rise to such adjustment),
in which case TLGI shall, with respect to any Security
converted after such record date and before such adjustment
shall have become effective, (i) defer paying any cash
payment pursuant to Section 13.03 or issuing to the Holder
of such Security the number of shares of Common Stock and
other capital stock of TLGI issuable upon such conversion in
excess of the number of shares of Common Stock and other
capital stock of TLGI issuable thereupon only on the basis
of the Conversion Price prior to adjustment, and (ii) not
later than five Business Days after such adjustment shall
have become effective, pay to such Holder the appropriate
cash payment pursuant to Section 13.03 and issue to such
Holder the additional shares of Common Stock and other
capital stock of TLGI issuable on such conversion.
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(f) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% of the Conversion Price; provided,
that any adjustments which by reason of this subsection (f)
are not required to be made shall be carried forward and
taken into account in any subsequent adjustment and,
provided further, that adjustment shall be required and made
in accordance with the provisions of this Article Thirteen
(other than this subsection (f) not later than such time as
may be required in order to preserve the tax-free nature of
a distribution to the Holders of Securities or Common
Stock. All calculations under this Article Thirteen shall
be made to the nearest cent or to the nearest one-hundredth
of a share, as the case may be.
(g) Whenever the Conversion Price is adjusted as
herein provided, TLGI shall promptly (i) file with the
Trustee and each Conversion Agent an Officer's Certificate
setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such
adjustment, which certificate shall be conclusive evidence
of the correctness of such adjustment, and (ii) mail or
cause to be mailed a notice of such adjustment to each
Holder of Securities in the manner provided in Section
11.04.
Anything in this Section 13.04 to the contrary
notwithstanding, TLGI shall be entitled to make such reductions
in the Conversion Price, in addition to those required by this
Section 13.04, as it in its discretion shall determine to be
advisable in order that any stock dividend, subdivision of
shares, distribution of rights or warrants to purchase stock or
securities, or distribution of other assets (other than cash
dividends) hereafter made by TLGI to its stockholders shall not
be taxable.
Section 13.05 Continuation Of Conversion Privilege In
Case Of Merger, Consolidation Or Sale Of Assets. If any of the
following shall occur, namely: (a) any consolidation or merger of
TLGI as a result of which the holders of Common Stock shall be
entitled to receive stock, other securities or other assets
(including cash) with respect to or in exchange for Common Stock;
or (b) any sale, lease, exchange or other disposition of all or
substantially all of the property and assets of TLGI as an
entirety, then TLGI, or such successor or purchasing corporation,
as the case may be, shall, as a condition precedent to such
consolidation, merger, sale, lease, exchange or other
disposition, execute and deliver to the Trustee a supplemental
indenture (which shall conform to the Trust Indenture Act of 1939
as in force at the date of the execution thereof) providing that
the Holder of each convertible Security then Outstanding shall
have the right to convert such Security into the kind and amount
of shares of stock and other securities and property (including
cash) receivable upon or in connection with such consolidation,
merger, sale, lease, exchange or other disposition by a Holder of
the number of shares of Common Stock issuable upon conversion of
such Security immediately prior to such consolidation, merger,
sale, lease, exchange or other disposition. Such supplemental
indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for
in this Article Thirteen. If, in the case of any such
consolidation, merger, sale, lease, exchange or other
disposition, the stock or other securities and property
(including cash) receivable thereupon or in connection therewith
by a holder of shares of
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Common Stock includes shares of stock or
other securities and property (including cash) of a corporation
other than the successor or purchasing corporation, as the case
may be, in such consolidation, merger, sale, lease, exchange or
other disposition, then such supplemental indenture shall also be
executed by such other corporation and shall contain such
additional provisions to protect the interests of the Holders of
the Securities as the Board of Directors shall reasonably
consider necessary by reason of the foregoing. The provisions of
this Section 13.05 shall similarly apply to successive
consolidations, mergers, sales, leases, exchanges or other
dispositions.
Notice of the execution of each such supplemental
indenture shall be mailed to each Holder of Securities in the
manner provided in Section 11.02.
Neither the Trustee nor any Conversion Agent shall be
under any responsibility to determine the correctness of any
provisions contained in any such supplemental indenture relating
either to the kind or amount of shares of stock or securities or
property (including cash) receivable by Holders of Securities
upon the conversion of their Securities after any such
consolidation, merger, sale, lease, exchange or other disposition
or to any adjustment to be made with respect thereto, but,
subject to the provisions of Sections 7.01 and 7.02, may accept
as conclusive evidence of the correctness of any such provisions,
and shall be protected in relying upon, the Officer's Certificate
(which TLGI shall be obligated to file with the Trustee prior to
the execution of any such supplemental indenture) with respect
thereto.
Section 13.06 Notice Of Certain Events. If:
(a) TLGI shall declare a dividend (or any other
distribution) payable to the holders of Common Stock otherwise
than in cash; or
(b) TLGI shall authorize the granting to all holders
of Common Stock of rights to subscribe for or purchase any shares
of stock of any class or of any other rights; or
(c) TLGI shall authorize any reclassification or
change of the Common Stock (other than a subdivision or
combination of its outstanding shares of Common Stock), or any
consolidation or merger to which TLGI is a party and for which
approval of any stockholders of TLGI is required, or the sale,
lease, exchange or other disposition of all or substantially all
the property and assets of TLGI; or
(d) there shall be authorized or ordered any voluntary
or involuntary dissolution, liquidation or winding-up of TLGI;
then, TLGI shall cause to be filed at the office or agency
maintained for the purpose of conversion of the Securities as
provided in Section 4.02, and shall cause to be mailed to each
Holder of Securities, in the manner provided in Section 11.02, at
least 20 days before the date hereinafter specified (or the
earlier of the dates hereinafter specified, in the event that
more than one date is specified), a notice stating the date on
which (1) a record is expected to be taken for the purpose of
such dividend, distribution or
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rights, or if a record is not to
be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution or rights
are to be determined, or (2) such reclassification, change,
consolidation, merger, sale, lease, exchange or other
disposition, dissolution, liquidation or winding-up is expected
to become effective and the date, if any is to be fixed, as of
which it is expected that holders of Common Stock of record shall
be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such
reclassification, change, consolidation, merger, sale, lease,
exchange or other disposition, dissolution, liquidation or wind-
up.
Section 13.07 Taxes On Conversion. TLGI will pay any
and all documentary, stamp or similar taxes payable to the United
States of America or any political subdivision or taxing
authority thereof or therein in respect of the issue or delivery
of shares of Common Stock on conversion of Securities pursuant
thereto; provided, however, that TLGI shall not be required to
pay any tax which may be payable in respect of any transfer
involved in the issue or delivery of shares of Common Stock in a
name other than that of the Holder of the Securities to be
converted (or payment of cash in lieu thereof to a Person other
than such Holder) and no such issue or delivery (or payment)
shall be made unless and until the Person requesting such issue
or delivery (or payment) has paid to TLGI the amount of any such
tax or has established, to the satisfaction of TLGI, that such
tax has been paid. TLGI extends no protection with respect to
any other taxes imposed in connection with conversion of
Securities.
Section 13.08 TLGI To Provide Stock. TLGI shall
reserve, free from preemptive rights, out of its authorized but
unissued shares, sufficient shares to provide for the conversion
of convertible Securities from time to time as such Securities
are presented for conversion; provided, however, that nothing
contained herein shall be construed to preclude TLGI from
satisfying its obligations in respect to the conversion of
Securities by delivery of repurchased shares of Common Stock
which are held in the treasury of TLGI.
If any shares of Common Stock to be reserved for the
purpose of conversion of Securities hereunder require
registration with or approval of any governmental authority under
any federal or state law before such shares may be validly issued
or delivered upon conversion, then TLGI covenants that it will in
good faith and as expeditiously as possible endeavor to secure
such registration or approval, as the case may be; provided,
however, that nothing in this Section 13.08 shall be deemed to
affect in any way the obligations of TLGI to convert Securities
into Common Stock as provided in this Article Thirteen.
Before taking any action which would cause an
adjustment reducing the Conversion Price below the then par
value, if any, of the Common Stock, TLGI will take all corporate
action which may, in the opinion of counsel, be necessary in
order that TLGI may validly and legally issue fully paid and non-
assessable shares of Common Stock at such adjusted Conversion
Price.
TLGI covenants that all shares of Common Stock which
may be issued upon conversion of Securities will upon issue be
fully paid and non-assessable by TLGI and free of preemptive
rights.
Section 13.09 Disclaimer Of Responsibility For Certain
Matters. Neither the Trustee, any Conversion Agent nor any agent
of either shall at any time be under any duty or
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responsibility
to any Holder of Securities to determine whether any facts exist
which may require any adjustment of the Conversion Price, or with
respect to the Officer's Certificate referred to in Section
13.04(g), or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed,
in making the same. Neither the Trustee, any Conversion Agent
nor any agent of either shall be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common
Stock, or of any securities or property (including cash), which
may at any time be issued or delivered upon the conversion of any
Security; and neither the Trustee, any Conversion Agent nor any
agent of either makes any representation with respect thereto.
Neither the Trustee, any Conversion Agent nor any agent of either
shall be responsible for any failure of TLGI to issue, register
the transfer of or delivery any shares of Common Stock or stock
certificates or other securities or property (including cash)
upon the surrender of any Security for the purpose of conversion
or, subject to Sections 7.01 and 7.02, to comply with any of the
covenants of TLGI contained in this Article Thirteen.
Section 13.10 Return Of Funds Deposited For Redemption
Of Converted Securities. Any funds which at any time shall have
been deposited by TLGI or on its behalf with the Trustee or any
Paying Agent for the purpose of paying the principal of and
interest, if any, on any of the Securities and which shall not be
required for such purposes because of the conversion of such
Securities, as provided in this Indenture, shall forthwith after
such conversion be repaid to TLGI by the Trustee or such Paying
Agent.
102
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ARTICLE XIV
GUARANTEE OF SECURITIES
14.01. Guarantee.
Subjecct to the provisions of this Article Fourteen, LGII
hereby unconditionally guarantees to each Holder of a Security
authenticated and delivered by the Trustee and to the Trustee and
its successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Securities or the
obligations of TLGI to the Holders or the Trustee hereunder or
thereunder that: (a) the principal of, premium, if any, and
interest, if any, on the Securities will be duly and punctually
paid in full when due, whether at maturity, by acceleration or
otehrwise, and interest on the overdue princiapl and (to the
extent permitted by law) interest, if any, on the Securities and
all other obligations of TLGI to the Holders or the Turstee
hereunder or thereunder (including fees, expenses or other) will
be promptly paid in full or performed, all in accordance with the
terms hereof and thereof; and (b) in case of any extension of
time of payment or renewal of any Securities, the same will be
promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at Stated Maturity
or by acceleration or otherwise. Failing payment when due of any
amount so guaranteed, or failing performance of any other
obligations of TLGI to the Holders, for whatever reason, LGII
will be obligated to pay, or to perform or to cause the
performance of, the same immediately. An Event of Default under
this Indenture or the Securities shall constitute an event of
default under this Guarantee,and shall entitle the Holders of
Securities to accelerate the obligations of LGII hereunder in the
same manner and to the same extent as the obligations of TLGI.
LGII hereby agrees that its obligations hereunder shall be
unconditional, irrepsective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence
of any action to enforce the same, any waiver or consent by any
holder of the Securities with respect to any provisions hereof or
thereof, the recovery of any judgment against TLGI, any action to
enforce the same, whether or not a Guarantee is affixed to any
particular Security, or any other circumstance which might
otherwise consititue a legal or equitable discharge or defense of
a guarantor. LGII hereby waives the benefit of diligence,
presentment, demand of payment, filing of claims with a court in
the event of insolvency or bankruptcy of TLGI, any right to
require a proceeding first against TLGI, protest, notice and all
demands whatsoever and covenants that its Guarantee will not be
discharged except by complete performance of the obligations
contained in the Securities, this Indenture and this Guarantee.
If any Holder or the Trustee is required by any court or
otherwise to return to TLGI, or any custodian, trustee,
liquidator or other similar official acting in relation to TLGI,
any amount paid by TLGI to the Trustee or such Holder, this
Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. LGII further agrees that,
as between it, on the one hand, and the Holders of Securities and
the Trustee, on the other hand (a) subject to this Article
Fourteen, the maturity of the obligations guaranteed hereby may
be accelerated as provided in Article Six hereof for the purposes
of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect tf the
oblgiations guaranteed hereby, and (b) in the event of any
acceleration of such obligations as provided in Article Six
hereof, such obligations (whether or not due and payable) shall
forthwith become due and payable by LGII for the purpose of this
Guarantee.
<PAGE>
This Guarantee shall remain in full force and effect and
continue to be effective should any petition be filed by or
against LGII for liquidation or reorganization, should LGII
become insolvent or make an assignment for the benefit of
creditors or should a receiver or trustee be appointed for all or
any signifcant part of LGII's assets, and shall, to the fullest
extent permitted by law, continue to be effective or be
reinstated, as the case may be, if at any time payment and
performance of the Securities are, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee on the Securities, whether as "voidable
preference," "fraudulent transfer" or oterhwise, all as though
such payment or performance had not been made. In the event that
any payment, or any part thereof, is rescinded, reduced, restored
or returned, Securities shall, to the fullest extent permitted by
law, be reinstated and deemed reduced only by such amount paid
and not so rescinded, reduced, restored or returned.
No stockholder, officer, director, employer or incorporator,
past, present or future, as such, shall have any personal
liability under this Guarantee by reason of his, her or its
status as such stockholder, officer, director, emploiyer or
incorporator.
The Guarantee constitutes a guarantee of payment and ranks
pari passu in right of payment to all senior indebtedness of
LGII.
14.02. Execution and Delivery of Guarantee.
To further evidence the Guarantee set forth in Section
14.01, LGII hereby agrees that a notation on the Guarantee,
substantially in the form of Exhibit A hererto, shall be endorsed
on each Security authenticated and delivered by the Trustee after
the Guarantee is executed by either manual or facsimile siganture
of Officers of LGII. The validity and enforceability of the
Guarantee shall not be affected by the fact that it is not
affixed to a particular Security.
LGII hereby agrees that its Guarantee set forth in Section
14.01 shall remain in full force and effect nothwithstanding any
failure to endorse on each Security a notation of the Guarantee.
If an Officer of LGII whose signature is on this Indenture
or a Security no longer holds that office at the time the Trustee
authenticates the Security or at any time thereafter, LGII's
Guarantee of such Security shall be valid nonetheless.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery
of the Guarantee set forth in this Indenture on behalf of LGII.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
THE LOEWEN GROUP INC.
By:
___________________________________
Name:
___________________________________
Title:
___________________________________
[CORPORATE SEAL]
Attest:
By: ___________________________________
Title: ___________________________________
LOEWEN GROUP INTERNATIONAL, INC.
By:
___________________________________
Name:
___________________________________
Title:
___________________________________
[CORPORATE SEAL]
Attest:
By: ___________________________________
Title: ___________________________________
103
<PAGE>
FLEET NATIONAL BANK, as Trustee
By:
___________________________________
Name:
___________________________________
Title:
___________________________________
[CORPORATE SEAL]
Attest:
By: ___________________________________
Title: ___________________________________
104
<PAGE>
EXHIBIT A
FORM OF GUARANTEE
For value received, the undersigned hereby
unconditionally guarantees to the Holder of this Security the
payments of principal of, premium, if any, and interest, if any,
on this Security in the amounts and at the time when due and
interest on the overdue principal, premium, if any, and interest,
if any, of this Security, if lawful, and the payment or
performance of all other obligations of TLGI under the Indenture
or the Securities, to the Holder of this Security and the
Trustee, all in accordance with and subject to the terms and
limitations of this Security, the Indenture (including, without
limitation, Article 14 thereof) and this Guarantee. This
Guarantee will become effective in accordance with Article
Fourteen of the Indenture and its terms shall be evidenced
therein. The validity and enforceability of the Guarantee shall
not be affected by the fact that it is not affixed to any
particular Security.
The obligations of the undersigned to the Holders of
Securities and to the Trustee pursuant to the Guarantee and the
Indenture are expressly set forth in the Indenture (including,
without limitation, Article 14 thereof) and reference is hereby
made to the Indenture for the precise terms of the Guarantee and
all of the other provisions of the Indenture to which this
Guarantee relates. Each Holder of a Senior Note, by accepting
the same, agrees to and shall be bound by such provisions.
IN WITNESS WHEREOF, LGII has caused this instrument to
be duly executed under its corporate seal.
Dated: _____________
LOEWEN GROUP INTERNATIONAL, INC.
By:
___________________________________
Name:
___________________________________
Title:
___________________________________
[CORPORATE SEAL]
Attest:
By: ___________________________________
Title: ___________________________________
A-1
LOEWEN GROUP INTERNATIONAL, INC., as Issuer,
THE LOEWEN GROUP INC., as Guarantor
and
FLEET NATIONAL BANK, as Trustee
INDENTURE
Dated as of ____________, 1997
$500,000,000
Debt Securities
<PAGE>
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION 1
Section 1.01 Definitions 1
Section 1.02 Incorporation by Reference of Trust
Indenture Act 21
Section 1.03 Rules of Construction 22
ARTICLE TWO THE SECURITIES 22
Section 2.01 Amount of Securities; Issuable In
Series 22
Section 2.02 Forms Generally 25
Section 2.03 Form Of Trustee's Certificate Of
Authentication 25
Section 2.04 Authentication And Delivery Of
Securities 26
Section 2.05 Execution Of Securities 28
Section 2.06 Certificate Of Authentication 29
Section 2.07 Denomination And Date Of Securities;
Payments Of Interest 29
Section 2.08 Registrar 30
Section 2.09 Provision As To Paying Agent 30
Section 2.10 Transfer and Exchange 31
Section 2.11 Mutilated, Defaced, Destroyed, Lost
And Stolen Securities 33
Section 2.12 Cancellation Of Securities;
Disposition Thereof 34
Section 2.13 Temporary Securities 35
Section 2.14 Defaulted Interest 35
Section 2.15 CUSIP Number 35
Section 2.16 Deposit of Moneys 35
ARTICLE THREE SECURITYHOLDERS LIST AND REPORTS BY LGII
AND THE TRUSTEE 36
Section 3.01 LGII To Furnish Trustee Information
As To Names And Addresses Of
Securityholders 36
Section 3.02 Preservation And Disclosure Of
Securityholders Lists 36
Section 3.03 Reports By LGII. LGII covenants: 37
ARTICLE FOUR COVENANTS 38
Section 4.01 Payment of Securities 38
Section 4.02 Office For Notices And Payments, Etc. 39
Section 4.03 Corporate Existence 39
Section 4.04 Payment of Taxes and Other Claims 39
Section 4.05 Maintenance of Properties; Insurance;
Books and Records; Compliance with Law 40
Section 4.06 Compliance Certificate 40
Section 4.07 Limitation on Indebtedness 41
Section 4.08 Limitation on Restricted Payments 42
<PAGE>
Section 4.09 Limitation on Issuances and Sale of
Preferred Stock by Restricted
Subsidiaries 44
Section 4.10 Limitation on Liens 44
Section 4.11 Change of Control 45
Section 4.12 Disposition of Proceeds of Asset
Sales 47
Section 4.13 Limitation on Transactions with
Interested Persons 49
Section 4.14 Limitation on Dividends and Other
Payment Restrictions Affecting
Subsidiaries 50
Section 4.15 Limitations on Sale-Leaseback
Transactions 51
Section 4.16 Limitation on Applicability of
Certain Covenants 51
Section 4.17 Commission Reports 52
Section 4.18 Rule 144A Information Requirement 52
Section 4.19 Waiver of Stay, Extension or Usury
Laws 52
ARTICLE FIVE SUCCESSOR CORPORATION 53
Section 5.01 When TLGI or LGII May Merge, etc. 53
Section 5.02 Successor Substituted 54
ARTICLE SIX REMEDIES 54
Section 6.01 Events of Default 54
Section 6.02 Acceleration 56
Section 6.03 Other Remedies 57
Section 6.04 Waiver of Past Defaults 58
Section 6.05 Direction Of Proceedings; Waiver Of
Defaults By Majority Of Securityholders 58
Section 6.06 Limitation on Suits 59
Section 6.07 Right of Holders To Receive Payment 59
Section 6.08 Collection Suit by Trustee 60
Section 6.09 Trustee May File Proofs of Claims 60
Section 6.10 Application Of Moneys Collected By
Trustee 60
Section 6.11 Undertaking for Costs 61
Section 6.12 Restoration of Rights and Remedies 62
Section 6.13 Remedies Cumulative And Continuing 62
ARTICLE SEVEN TRUSTEE 62
Section 7.01 Duties And Responsibilities Of The
Trustee; During Default; Prior To
Default 62
Section 7.02 Certain Rights Of The Trustee 64
Section 7.03 Trustee And Agents May Hold
Securities; Collections, Etc. 65
Section 7.04 Trustee's Disclaimer 65
Section 7.05 Notice of Default 65
Section 7.06 Money Held in Trust 65
Section 7.07 Reports by Trustee to Holders 66
Section 7.08 Compensation and Indemnity 66
<PAGE>
Section 7.09 Resignation And Removal; Appointment
Of Successor Trustee 67
Section 7.10 Merger, Conversion, Consolidation Or
Succession To Business Of Trustee 68
Section 7.11 Persons Eligible For Appointment As
Trustee 69
Section 7.12 Preferential Collection of Claims
Against LGII 69
Section 7.13 Qualification Of Trustee; Conflicting
Interests 69
Section 7.14 Acceptance Of Appointment By
Successor Trustee 75
Section 7.15 Appointment Of Authenticating Agent 76
ARTICLE EIGHT SATISFACTION AND DISCHARGE OF INDENTURE 77
Section 8.01 Satisfaction And Discharge Of
Indenture 77
Section 8.02 Indemnity for U.S. Government
obligations; Repayment 79
Section 8.03 Application By Trustee Of Funds
Deposited For Payment Of Securities 80
Section 8.04 Repayment to LGII 80
Section 8.05 Reinstatement 81
ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS 81
Section 9.01 Supplemental Indentures Without
Consent Of Securityholders 81
Section 9.02 Supplemental Indentures With Consent
Of Securityholders 82
Section 9.03 Compliance with Trust Indenture Act 84
Section 9.04 Effect Of Supplemental Indenture 84
Section 9.05 Notation on or Exchange of Securities 84
Section 9.06 Trustee May Sign Amendments, etc. 85
ARTICLE TEN CONCERNING THE SECURITYHOLDERS 85
Section 10.01 Evidence Of Action Taken By
Securityholders 85
Section 10.02 Proof Of Execution Of Instruments
And Of Holding Of Securities 85
Section 10.03 Holders To Be Treated As Owners 86
Section 10.04 Securities Owned By LGII Deemed Not
Outstanding 86
Section 10.05 Right Of Revocation Of Action Taken 86
Section 10.06 Record Date For Consents And Waiver 87
ARTICLE ELEVEN MISCELLANEOUS 87
Section 11.01 Conflict Of Any Provision Of
Indenture With Trust Indenture Act Of
1939 87
Section 11.02 Notices 87
Section 11.03 Communication by Holders with Other
Holders 88
Section 11.04 Officer's Certificates And Opinions
Of Counsel; Statements To Be Contained
Therein 88
Section 11.05 Payments Due On Saturdays, Sundays
And Holidays 89
<PAGE>
Section 11.06 Rules by Trustee, Paying Agent,
Registrar 90
Section 11.07 Governing Law 90
Section 11.08 Consent to Service of Process 90
Section 11.09 No Interpretation of Other
Agreements 90
Section 11.10 Partners, Incorporators,
Stockholders, Officers And Directors Of
LGII Exempt From Individual Liability 91
Section 11.11 Successors 91
Section 11.12 Duplicate Originals 91
Section 11.13 Severability 91
Section 11.14 Table of Contents, Headings, Etc. 91
Section 11.15 Provisions Of Indenture For The Sole
Benefit Of Parties And Holders Of Senior
Indebtedness And Of Securities 91
ARTICLE TWELVE REDEMPTION OF SECURITIES AND SINKING FUNDS 92
Section 12.01 Applicability Of Article 92
Section 12.02 Notice Of Redemption; Partial
Redemptions 92
Section 12.03 Payments Of Securities Called For
Redemption 94
Section 12.04 Exclusion Of Certain Securities From
Eligibility For Selection For Redemption 94
Section 12.05 Mandatory And Optional Sinking Funds 95
ARTICLE THIRTEEN GUARANTEE OF SECURITIES 97
13.01. Guarantee 97
13.02. Execution and Delivery of Guarantee. 98
13.03. Interest Act (Canada). 99
SIGNATURES
EXHIBIT A Form of Guarantee
<PAGE>
THIS INDENTURE, dated as of ____________, 1997, among
Loewen Group International, Inc., a Delaware corporation
(hereinafter referred to as "LGII"), The Loewen Group Inc., a
body corporate organized under and governed by the laws of the
Province of British Columbia, Canada (hereinafter referred to as
"TLGI") and Fleet National Bank, a national banking association
as trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, LGII has duly authorized the issue from time
to time of its senior debentures, notes or other evidences of
indebtedness to be issued in one or more series (the
"Securities") up to such principal amount or amounts as may from
time to time be authorized in accordance with the terms of this
Indenture, and, in each case, guaranteed by TLGI;
WHEREAS, each of LGII and TLGI has duly authorized the
execution and delivery of this Indenture to provide, among other
things, for the authentication, delivery and administration of
the Securities, and the guarantee by TLGI; and
WHEREAS, all things necessary to make this Indenture a
valid indenture and agreement according to its terms have been
undertaken and completed;
NOW, THEREFORE, In consideration of the premises and
the purchase of the Securities by the Holders thereof, LGII, TLGI
and the Trustee mutually covenant and agree for the equal and
proportionate benefit of the respective Holders from time to time
of the Securities as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
"1996 Revolving Credit Facility" means the $750,000,000
Credit Agreement, dated as of May 15, 1996, among LGII, as
borrower, TLGI, as guarantor, the lenders named therein, as the
lenders, Goldman, Sachs & Co., as the documentation agent and
Bank of Montreal, as issuer, swingline lender and agent.
"Acquired Indebtedness" means Indebtedness of a person
(a) assumed or created in connection with an Asset Acquisition
from such person or (b) existing at the time such person becomes
a Restricted Subsidiary of any other person.
"Affiliate" means, with respect to any specified
person, any other person directly or indirectly controlling or
controlled by or under direct or indirect common control with
such specified person.
"Asset Acquisition" means (a) an Investment by TLGI or
any Restricted Subsidiary of TLGI (including, without limitation,
LGII) in any other person pursuant to which
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such person shall
become a Restricted Subsidiary of TLGI, or shall be merged with
or into TLGI or any Restricted Subsidiary of TLGI, (b) the
acquisition by TLGI or any Restricted Subsidiary of TLGI of the
assets of any person (other than a Restricted Subsidiary of TLGI)
which constitute all or substantially all of the assets of such
person or (c) the acquisition by TLGI or any Restricted
Subsidiary of TLGI of any division or line of business of any
person (other than a Restricted Subsidiary of TLGI).
"Asset Sale" means any direct or indirect sale,
issuance, conveyance, transfer, lease or other disposition to any
person other than TLGI or a Restricted Subsidiary of TLGI
(including, without limitation, LGII), in one or a series of
related transactions, of (a) any Capital Stock of any Restricted
Subsidiary of TLGI (other than in respect of directors'
qualifying shares or investments by foreign nationals mandated by
applicable law) or of First Capital Life Insurance Company of
Louisiana, National Capitol Life Insurance Company, Security
Industrial Insurance Company, Security Industrial Fire Insurance
Company or any successors to such Subsidiaries; (b) all or
substantially all of the properties and assets of any division or
line of business of TLGI or any Restricted Subsidiary of TLGI; or
(c) any other properties or assets of TLGI or any Restricted
Subsidiary of TLGI other than properties and assets sold in the
ordinary course of business. For the purposes of this
definition, the term "Asset Sale" shall not include (i) any sale,
transfer or other disposition of equipment, tools or other assets
(including Capital Stock of any Restricted Subsidiary of TLGI) by
TLGI or any of its Restricted Subsidiaries in one or a series of
related transactions in respect of which TLGI or such Restricted
Subsidiary receives cash or property with an aggregate Fair
Market Value of $2,000,000 or less; and (ii) any sale, issuance,
conveyance, transfer, lease or other disposition of properties or
assets that is governed by the provisions of Article Four.
"Asset Sale Offer" shall have the meaning set forth in
Section 4.12.
"Asset Sale Offer Price" shall have the meaning set
forth in Section 4.12.
"Asset Sale Purchase Date" shall have the meaning set
forth in Section 4.12.
"Attributable Value" means, as to any particular lease
under which any person is at the time liable other than a
Capitalized Lease Obligation, and at any date as of which the
amount thereof is to be determined, the total net amount of rent
required to be paid by such person under such lease during the
initial term thereof as determined in accordance with GAAP,
discounted from the last date of such initial term to the date of
determination at a rate per annum equal to the discount rate
which would be applicable to a Capitalized Lease Obligation with
a like term in accordance with GAAP. The net amount of rent
required to be paid under any such lease for any such period
shall be the aggregate amount of rent payable by the lessee with
respect to such period after excluding amounts required to be
paid on account of insurance, taxes, assessments, utility,
operating and labor costs and similar charges. In the case of
any lease which is terminable by the lessee upon the payment of a
penalty, such net amount shall also include the amount of such
penalty, but no rent shall be considered as required to be paid
under such lease subsequent to the first date upon which it may
be so terminated. "Attributable Value" means, as to a
Capitalized Lease Obligation under which any person is at the
time liable and at
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any date as of which the amount thereof is to
be determined, the capitalized amount thereof that would appear
on the face of a balance sheet of such person in accordance with
GAAP.
"Authenticating Agent" shall have the meaning set forth
in Section 7.15.
"Bankruptcy Law" means Title 11 of the United States
Code or any similar law for the relief of debtors.
"Board of Directors" means the board of directors of
LGII or TLGI, as the case may be, or any committee of such Board
duly authorized to act on its respective behalf.
"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of LGII or
TLGI, as the case may be, to have been duly adopted or consented
to by the Board of Directors of LGII or TLGI, as the case may be,
and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means, with respect to any Security, a
day that (a) in the Place of Payment (or in any of the Places of
Payment, if more than one) in which amounts are payable, as
specified in the form of such Security, and (b) in the city in
which the Corporate Trust Office is located, is not a day on
which banking institutions are authorized or required by law or
regulation to close.
"Canadian Revolver" means CDN $50,000,000 Operating
Credit Agreement dated August 15, 1994, as amended on July 15,
1996, among TLGI, LGII and Royal Bank of Canada.
"Canadian Term Loan" means CDN $35,000,000 Credit
Agreement dated as of January 12, 1995 between TLGI, LGII and
Dresdner Bank Canada.
"Capital Stock" means, with respect to any person, any
and all shares, interests, participations, rights in or other
equivalents (however designated) of such person's capital stock,
and any rights (other than debt securities convertible into
capital stock), warrants or options exchangeable for or
convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation
under a lease of (or other agreement conveying the right to use)
any property (whether real, personal or mixed) that is required
to be classified and accounted for as a capital lease obligation
under GAAP, and the amount of any such obligation at any date
shall be the capitalized amount thereof at such date, determined
in accordance with GAAP.
"Cash Equivalents" means, at any time, (i) any evidence
of Indebtedness with a maturity of 180 days or less issued or
directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is
pledged in support thereof); (ii) certificates of deposit or
acceptances with a maturity of 180 days or less of any financial
institution that is a member of the Federal Reserve System having
combined capital and surplus and undivided profits of not
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less
than $500,000,000; (iii) certificates of deposit with a maturity
of 180 days or less of any financial institution that is not
organized under the laws of the United States, any state thereof
or the District of Columbia that are rated at least A-1 by S&P or
at least P-1 by Moody's or at least an equivalent rating category
of another nationally recognized securities rating agency; (iv)
repurchase agreements and reverse repurchase agreements relating
to marketable direct obligations issued or unconditionally
guaranteed by the government of the United States of America or
issued by any agency thereof and backed by the full faith and
credit of the United States of America, in each case maturing
within 180 days from the date of acquisition; provided that the
terms of such agreements comply with the guidelines set forth in
the Federal Financial Agreements of Depository Institutions With
Securities Dealers and Others, as adopted by the Comptroller of
the Currency on October 31, 1985; and (v) notes held by TLGI or
any Restricted Subsidiary (including, without limitation, LGII)
which were obtained by TLGI or such Restricted Subsidiary in
connection with Asset Sales (x) in the ordinary course of its
funeral home, cemetery or cremation businesses or (y) which were
required to be made pursuant to applicable federal or state law.
"Change of Control" means the occurrence on or after
the Measurement Date of any of the following events: (a) any
"person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), excluding Permitted Holders, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-
5 under the Exchange Act, except that a person shall be deemed to
have "beneficial ownership" of all securities that such person
has the right to acquire, whether such right is exercisable
immediately or only after the passage of time, upon the happening
of an event or otherwise), directly or indirectly, of more than
35% of the total Voting Stock of TLGI or LGII, under
circumstances where the Permitted Holders (i) "beneficially own"
(as so defined) a lower percentage of the Voting Stock than such
other "person" or "group" and (ii) do not have the right or
ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of
TLGI or LGII; (b) TLGI or LGII consolidates with, or merges with
or into, another person or sells, assigns, conveys, transfers,
leases or otherwise disposes of all or substantially all of its
assets to another person, or another person consolidates with, or
merges with or into, TLGI or LGII, in any such event pursuant to
a transaction in which the outstanding Voting Stock of TLGI or
LGII is converted into or exchanged for cash, securities or other
property, other than any such transaction where (i) the
outstanding Voting Stock of TLGI or LGII is converted into or
exchanged for (1) Voting Stock (other than Redeemable Capital
Stock) of the surviving or transferee corporation or (2) cash,
securities and other property in an amount which could then be
paid by TLGI or LGII as a Restricted Payment under the provisions
hereof, and (ii) immediately after such transaction no "person"
or "group" (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act), excluding Permitted Holders, is the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the
right to acquire, whether such right is exercisable immediately
or only after the passage of time, upon the happening of an event
or otherwise), directly or indirectly, of more than 50% of the
total Voting Stock of the surviving or transferee corporation;
(c) at any time during any consecutive two-year period,
individuals who at the beginning of such period constituted the
Board of Directors of TLGI or LGII (together with any new
directors whose election by such Board of
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Directors or whose
nomination for election by the shareholders or stockholders of
TLGI or LGII was approved by a vote of 66-2/3% of the directors
then still in office who were either directors at the beginning
of such period or whose election or nomination for election was
previously so approved) cease for any reason (including the
failure of such individuals to be elected in a proxy contest
involving a solicitation of proxies) to constitute a majority of
the Board of Directors of TLGI or LGII then in office; or (d)
TLGI or LGII is liquidated or dissolved or adopts a plan of
liquidation other than a liquidation of LGII into TLGI.
"Change of Control Offer" shall have the meaning set
forth in Section 4.11.
"Change of Control Purchase Date" shall have the
meaning set forth in Section 4.11.
"Collateral Agreement" means the Collateral Trust
Agreement, dated as of May 15, 1996, among Bankers Trust Company,
as trustee, TLGI, LGII and various other Subsidiaries.
"Commission" means the Securities and Exchange
Commission, as from time to time constituted, or if at any time
after the execution and delivery of the Indenture such Commission
is not existing and performing the applicable duties now assigned
to it, then the body or bodies performing such duties at such
time.
"Consolidated Cash Flow Available for Fixed Charges"
means, with respect to any person for any period, (A) the sum of,
without duplication, the amounts for such period, taken as a
single accounting period, of (a) Consolidated Net Income,
(b) Consolidated Non-cash Charges, (c) Consolidated Interest
Expense and (d) Consolidated Income Tax Expense less (B) any non-
cash items increasing Consolidated Net Income for such period.
"Consolidated Fixed Charge Coverage Ratio" means, with
respect to any person, the ratio of the aggregate amount of
Consolidated Cash Flow Available for Fixed Charges of such person
for the full fiscal quarter immediately preceding the date of the
transaction (the "Transaction Date") giving rise to the need to
calculate the Consolidated Fixed Charge Coverage Ratio (such full
fiscal quarter period being referred to herein as the "Prior
Quarter") to the aggregate amount of Consolidated Fixed Charges
of such person for the Prior Quarter. In addition to and without
limitation of the foregoing, for purposes of this definition,
"Consolidated Cash Flow Available for Fixed Charges" and
"Consolidated Fixed Charges" shall be calculated after giving
effect on a pro forma basis for the period of such calculation
to, without duplication, (a) the incurrence of any Indebtedness
of such person or any of its Restricted Subsidiaries (and the
application of the net proceeds thereof) during the period
commencing on the first day of the Prior Quarter to and including
the Transaction Date (the "Reference Period"), including, without
limitation, the incurrence of the Indebtedness giving rise to the
need to make such calculation (and the application of the net
proceeds thereof), as if such incurrence (and application)
occurred on the first day of the Reference Period, and (b) any
Material Asset Sales or Material Asset Acquisitions (including,
without limitation, any Material Asset Acquisition giving rise to
the need to make such calculation as a result of such person or
one of its Restricted Subsidiaries (including any person who
becomes a Restricted Subsidiary as a result of the Material Asset
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Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness) occurring during the Reference Period, as
if such Material Asset Sale or Material Asset Acquisition
occurred on the first day of the Reference Period. Furthermore,
in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this
"Consolidated Fixed Charge Coverage Ratio," (i) interest on
outstanding Indebtedness determined on a fluctuating basis as at
the Transaction Date and which will continue to be so determined
thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness in
effect on the Transaction Date; and (ii) if interest on any
Indebtedness actually incurred on the Transaction Date may
optionally be determined at an interest rate based upon a factor
of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the
Transaction Date will be deemed to have been in effect during the
Reference Period. If such person or any of its Restricted
Subsidiaries directly or indirectly guarantees Indebtedness of a
third person, the above clause shall give effect to the
incurrence of such guaranteed Indebtedness as if such person or
such Restricted Subsidiary had directly incurred or otherwise
assumed such guaranteed Indebtedness. For purposes of this
calculation, a Material Asset Acquisition is an Asset Acquisition
which is deemed by such person to be material for such purposes
or which has a purchase price of $30,000,000 or more and a
Material Asset Sale is one or more Asset Sales which relate to
assets with an aggregate value of more than $30,000,000.
"Consolidated Fixed Charges" means, with respect to any
person for any period, the sum of, without duplication, the
amounts for such period of (i) Consolidated Interest Expense and
(ii) the product of (a) the aggregate amount of dividends and
other distributions paid or accrued during such period in respect
of Preferred Stock and Redeemable Capital Stock of such person
and its Restricted Subsidiaries on a consolidated basis and (b) a
multiplier, the numerator of which is one and the denominator of
which is one minus the then current combined federal, state and
local statutory tax rate of such person, expressed as a decimal;
provided, however, that the multiplier in clause (b) shall be one
if such dividend or other distribution is fully tax deductible.
"Consolidated Income Tax Expense" means, with respect
to any person for any period, the provision for federal, state,
local and foreign income taxes of such person and its Restricted
Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP.
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"Consolidated Interest Expense" means, with respect to
any person for any period, without duplication, the sum of
(i) the interest expense of such person and its Restricted
Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP, including, without limitation,
(a) any amortization of debt discount, (b) the net cost under
Interest Rate Protection Obligations, (c) the interest portion of
any deferred payment obligation, (d) all commissions, discounts
and other fees and charges owed with respect to letters of credit
and bankers' acceptance financings and (e) all accrued interest
and (ii) the interest component of Capitalized Lease Obligations
paid, accrued and/or scheduled to be paid or accrued by such
person and its Restricted Subsidiaries during such period as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any
person, for any period, the consolidated net income (or loss) of
such person and its Restricted Subsidiaries for such period as
determined in accordance with GAAP, adjusted, to the extent
included in calculating such net income, by excluding, without
duplication, (i) all extraordinary gains or losses, (ii) the
portion of net income (but not losses) of such person and its
Restricted Subsidiaries allocable to minority interests in
unconsolidated persons to the extent that cash dividends or
distributions have not actually been received by such person or
one of its Restricted Subsidiaries, (iii) net income (or loss) of
any person combined with such person or one of its Restricted
Subsidiaries on a "pooling of interests" basis attributable to
any period prior to the date of combination, (iv) any gain or
loss realized upon the termination of any employee pension
benefit plan, on an after-tax basis, (v) gains or losses in
respect of any Asset Sales by such person or one of its
Restricted Subsidiaries, and (vi) the net income of any
Restricted Subsidiary of such person to the extent that the
declaration of dividends or similar distributions by that
Restricted Subsidiary of that income is not at the time
permitted, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to
that Restricted Subsidiary or its stockholders.
"Consolidated Net Tangible Assets" of TLGI as at any
date means the total amount of assets of TLGI and its Restricted
Subsidiaries, less applicable reserves, on a consolidated basis
as of the end of the fiscal quarter immediately preceding such
date, as determined in accordance with GAAP, less: (i) Intangible
Assets and (ii) appropriate adjustments on account of minority
interests of other persons holding equity investments in
Restricted Subsidiaries, in the case of each of clauses (i) and
(ii) above as reflected on the consolidated balance sheet of TLGI
and its Restricted Subsidiaries as at the end of the fiscal
quarter immediately preceding such date.
"Consolidated Net Worth" means, with respect to any
person at any date, the consolidated stockholders' equity of such
person less the amount of such stockholders' equity attributable
to Redeemable Capital Stock of such person and its Restricted
Subsidiaries, as determined in accordance with GAAP.
"Consolidation" means, with respect to any person, the
consolidation of the accounts of such person and each of its
Subsidiaries if and to the extent the accounts of such person and
each of its Restricted Subsidiaries would normally be
consolidated with those of such person, all in accordance with
GAAP. The term "consolidated" shall have a meaning correlative
to the foregoing.
"Control" means, with respect to any specified person,
the power to direct the management and policies of such person,
directly or indirectly, whether through the ownership of Voting
Stock, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Corporate Trust Office" means the office of the
Trustee at which the corporate trust business of the Trustee
shall, at any particular time, be principally administered, which
office is, at the date as of which this Indenture is dated,
located in Hartford, Connecticut, except
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that with respect to the
presentation of Securities for payment, for conversion or for
registration of transfer and exchange, such term shall also mean
the office of the Trustee's agent in the Borough of Manhattan,
the City and State of New York, at which at any particular time
its corporate agency business shall be conducted.
"Credit Agreements" means the 1996 Revolving Credit
Facility, the Canadian Revolver, the MEIP Facility and the
Canadian Term Loan; in each case as any such instrument may be
amended, supplemented or otherwise modified from time to time,
and any successor or replacement facility.
"Currency Agreement" means any foreign exchange
contract, currency swap agreement or other similar agreement or
arrangement designed to protect TLGI or any of its Restricted
Subsidiaries against fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any Bankruptcy
Law.
"Default" means any event that is, or after notice or
passage of time or both would be, an Event of Default.
"Depositary" means, with respect to the Securities of
any series issuable or issued in the form of one or more Global
Securities, the Person designated as Depositary by LGII pursuant
to Section 2.01 until a successor Depositary shall have become
such pursuant to the applicable provisions of this Indenture,
and, thereafter "Depositary" shall mean or include each Person
who is then a Depositary hereunder, and, if at any time there is
more than one such Person, "Depositary" as used with respect to
the Securities of any such series shall mean the Depositary with
respect to the Global Securities of such series.
"Event of Default" has the meaning set forth under
Section 6.01 herein.
"Excess Proceeds" shall have the meaning set forth in
Section 4.12.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Fair Market Value" means, with respect to any asset,
the price which could be negotiated in an arm's-length free
market transaction, for cash, between a willing seller and a
willing buyer, neither of which is under pressure or compulsion
to complete the transaction; provided, however, that with respect
to any transaction which involves an asset or assets in excess of
$5,000,000, such determination shall be evidenced by a Board
Resolution of TLGI delivered to the Trustee.
"GAAP" means accounting principles generally accepted
in Canada consistently applied until such time as TLGI or LGII
shall prepare their respective books of record in accordance with
accounting principles generally accepted in the United States
("U.S. GAAP") at which time and all times thereafter GAAP shall
mean U.S. GAAP consistently applied.
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"Global Security" means a Security evidencing all or a
part of a series of Securities issued to the Depositary for such
series in accordance with Section 2.01 and bearing the legend
prescribed in Section 2.04.
"guarantee" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments
for collection in the ordinary course of business), direct or
indirect, in any manner, of any part or all of such obligation
and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way
the payment or performance (or payment of damages in the event of
non-performance) of all or any part of such obligation,
including, without limiting the foregoing, the payment of amounts
drawn down by letters of credit.
"Guarantee" shall mean the guarantee of the Securities
by TLGI created pursuant to Article Fourteen.
"Holder", "Noteholder", "Holder of Securities",
"Securityholder" or other similar terms mean, in the case of any
Security, the Person in whose name such Security is registered in
the security register kept by LGII for that purpose in accordance
with the terms hereof.
"Indebtedness" means, with respect to any person,
without duplication, (a) all liabilities of such person for
borrowed money or for the deferred purchase price of property or
services, excluding any trade payables and other accrued current
liabilities incurred in the ordinary course of business and which
are not overdue by more than 90 days, but excluding, without
limitation, all obligations, contingent or otherwise, of such
person in connection with any undrawn letters of credit, banker's
acceptance or other similar credit transaction, (b) all
obligations of such person evidenced by bonds, notes, debentures
or other similar instruments, (c) all indebtedness created or
arising under any conditional sale or other title retention
agreement with respect to property acquired by such person (even
if the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or
sale of such property), but excluding trade accounts payable
arising in the ordinary course of business, (d) all Capitalized
Lease Obligations of such person, (e) all Indebtedness referred
to in the preceding clauses of other persons and all dividends of
other persons, the payment of which is secured by (or for which
the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon property
(including, without limitation, accounts and contract rights)
owned by such person, even though such person has not assumed or
become liable for the payment of such Indebtedness (the amount of
such obligation being deemed to be the lesser of the value of
such property or asset or the amount of the obligation so
secured), (f) all guarantees of Indebtedness referred to in this
definition by such person, (g) all Redeemable Capital Stock of
such person valued at the greater of its voluntary or involuntary
maximum fixed repurchase price plus accrued dividends, (h) all
obligations under or in respect of Currency Agreements and
Interest Rate Protection Obligations of such person, (i) any
Preferred Stock of any Restricted Subsidiary of such person
valued at the sum of (without duplication) (A) the liquidation
preference thereof, (B) any mandatory redemption payment
obligations in respect thereof and (C) accrued dividends thereon,
and (j) any amendment, supplement, modification, deferral,
renewal, extension or refunding of any liability of the types
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referred to in clauses (a) through (i) above. For purposes
hereof, the "maximum fixed repurchase price" of any Redeemable
Capital Stock which does not have a fixed repurchase price shall
be calculated in accordance with the terms of such Redeemable
Capital Stock as if such Redeemable Capital Stock were purchased
on any date on which Indebtedness shall be required to be
determined pursuant to the provisions hereof, and if such price
is based upon, or measured by, the fair market value of such
Redeemable Capital Stock, such fair market value shall be
determined in good faith by the board of directors of the issuer
of such Redeemable Capital Stock. For purposes of this
definition, the term "Indebtedness" shall not include (i)
Indebtedness of a Wholly-Owned Subsidiary owed to and held by
TLGI, LGII or another Wholly- Owned Subsidiary, in each case
which is not subordinate in right of payment to any Indebtedness
of such Subsidiary, except that (a) any transfer of such
Indebtedness by TLGI, LGII or a Wholly-Owned Subsidiary (other
than to TLGI, LGII or to a Wholly-Owned Subsidiary) and (b) the
sale, transfer or other disposition by TLGI, LGII or any
Restricted Subsidiary of TLGI or LGII of Capital Stock of a
Wholly-Owned Subsidiary which is owed Indebtedness of another
Wholly-Owned Subsidiary such that it ceases to be a Wholly-Owned
Subsidiary of TLGI or LGII shall, in each case, be an incurrence
of Indebtedness by such Restricted Subsidiary subject to the
other provisions hereof; and (ii) Indebtedness of TLGI or LGII
owed to and held by a Wholly-Owned Subsidiary of TLGI or LGII
which is unsecured and subordinate in right of payment to the
payment and performance of TLGI's or LGII's obligations under the
provisions hereof and the Securities except that (a) any transfer
of such Indebtedness by a Wholly-Owned Subsidiary of TLGI or LGII
(other than to another Wholly-Owned Subsidiary of TLGI or LGII)
and (b) the sale, transfer or other disposition by TLGI or LGII
or any Restricted Subsidiary of TLGI or LGII of Capital Stock of
a Wholly-Owned Subsidiary which holds Indebtedness of TLGI or
LGII such that it ceases to be a Wholly-Owned Subsidiary shall,
in each case, be an incurrence of Indebtedness by TLGI or LGII,
as the case may be, subject to the other provisions hereof.
"Indenture" means this instrument as originally
executed and delivered or, if amended or supplemented as herein
provided, as so amended or supplemented or both, including, for
all purposes of this instrument and any such supplement, the
provisions of the Trust Indenture Act of 1939 that are deemed to
be a part of and govern this instrument and any such supplement,
respectively, and shall include the forms and terms of particular
series of Securities established as contemplated hereunder.
"Independent Financial Advisor" means a firm (i) which
does not, and whose directors, officers and employees or
Affiliates do not, have a direct or indirect financial interest
in TLGI or LGII and (ii) which, in the judgment of the Board of
Directors of TLGI, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"interest" means, with respect to any interest bearing
Security, the amount of all interest accruing on such Security,
and, when used with respect to non-interest bearing Securities
(including, without limitation, any Original Issue Discount
Security which by its terms bears interest only after maturity or
upon default in any other payment due on such Security), interest
payable on or after maturity (whether at stated maturity, upon
acceleration or redemption or otherwise) or after the date, if
any, on which LGII becomes obligated to acquire a Security,
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whether upon conversion, by purchase or otherwise, in each case,
including all interest accruing subsequent to the occurrence of
any events specified in Sections 6.01(f) and (g) or which would
have accrued but for any such event, whether or not such claims
are allowable under applicable law.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities, as set forth therein.
"Interest Rate Protection Agreement" means any
arrangement with any other person whereby, directly or
indirectly, such person is entitled to receive from time to time
periodic payments calculated by applying either a floating or a
fixed rate of interest on a stated notional amount in exchange
for periodic payments made by such person calculated by applying
a fixed or a floating rate of interest on the same notional
amount and shall include, without limitation, interest rate
swaps, caps, floors, collars and similar agreements.
"Interest Rate Protection Obligations" means the
obligations of any person under any Interest Rate Protection
Agreement.
"Investment" means, with respect to any person, any
direct or indirect loan or other extension of credit or capital
contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for
the account or use of others), or any purchase or acquisition by
such person of any Capital Stock, bonds, notes, debentures or
other securities or evidences of Indebtedness issued by, any
other person. "Investments" shall exclude extensions of trade
credit by TLGI and its Restricted Subsidiaries (including,
without limitation, LGII) in the ordinary course of business in
accordance with normal trade practices of TLGI or such Restricted
Subsidiary, as the case may be.
"Issue Date" means the issue date specified in the
securities of each series except as otherwise provided in Section
2.01.
"Issuer Order" means a written statement, request or
order of LGII which is signed in its name by the chairman of the
Board of Directors, the president, any vice president or the
treasurer of LGII.
"Last Sale Price" shall have the meaning set forth in
Section 13.03.
"LGII" means Loewen Group International, Inc., and
shall include any successor replacing LGII as the issuer of the
Securities pursuant to the provisions hereof, and thereafter
means such successor.
"Lien" means any mortgage, charge, pledge, lien
(statutory or other), security interest, hypothecation,
assignment for security, claim, or preference or priority or
other encumbrance upon or with respect to any property of any
kind. A person shall be deemed to own subject to a Lien any
property which such person has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.
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"Maturity Date" means, with respect to any Security,
the date on which any principal of such Security becomes due and
payable as therein or herein provided, whether at the Stated
Maturity with respect to such principal or by declaration of
acceleration, call for redemption or purchase or otherwise.
"Measurement Date" means March 20, 1996.
"MEIP Facility" means the 1994 Management Equity
Investment Plan ("MEIP") Credit Agreement, dated as of June 14,
1994, as amended and restated as of May 15, 1996, by and between
Loewen Management Investment Corporation, in its capacity as
agent for LGII, TLGI, the banks listed therein and Wachovia Bank
of Georgia, N.A., as agent.
"Moody's" means Moody's Investors Service, Inc. and its
successors.
"Net Cash Proceeds" means, with respect to any Asset
Sale, the proceeds thereof in the form of cash or Cash
Equivalents including payments in respect of deferred payment
obligations when received in the form of cash or Cash Equivalents
(except to the extent that such obligations are financed or sold
with recourse to TLGI or any Restricted Subsidiary of TLGI
(including, without limitation, LGII) net of (i) brokerage
commissions and other fees and expenses (including, without
limitation, fees and expenses of legal counsel and investment
bankers) related to such Asset Sale, (ii) provisions for all
taxes payable as a result of such Asset Sale, (iii) amounts
required to be paid to any person (other than TLGI or any
Restricted Subsidiary of TLGI) owning a beneficial interest in
the assets subject to the Asset Sale and (iv) appropriate amounts
to be provided by TLGI or any Restricted Subsidiary of TLGI, as
the case may be, as a reserve required in accordance with GAAP
against any liabilities associated with such Asset Sale and
retained by TLGI or any Restricted Subsidiary of TLGI, as the
case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with
such Asset Sale, all as reflected in an officers' certificate
delivered to the Trustee.
"Officer" means the Chairman of the Board, the Chief
Executive Officer, the Chief Operating Officer, the President,
any Executive Vice President, any Senior Vice President, any Vice
President, the Chief Financial Officer, the Treasurer, the
Secretary or the Controller of LGII or TLGI, as the case may be.
"Officer's Certificate", when used with respect to
LGII, means a certificate signed by the chairman of the Board of
Directors, the president, or any vice president and by the
treasurer, any assistant treasurer, the controller, any assistant
controller, the secretary or any assistant secretary of LGII.
Each such certificate shall include the statements provided for
in Section 11.04, if and to the extent required by the provisions
of such Section 11.04. One of the officers signing any Officer's
Certificate given pursuant to Section 3.03 shall be the principal
executive, financial or accounting officer of LGII.
"Opinion of Counsel" means an opinion in writing signed
by the general counsel of LGII or by such other legal counsel who
may be an employee of or counsel to LGII and who
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shall be
satisfactory to the Trustee. Each such opinion shall include the
statements provided for in Section 11.04, if and to the extent
required by the provisions of such Section 11.04.
"original issue date" of any Security (or portion
thereof) means the earlier of (a) the date of such Security or
(b) the date of any Security (or portion thereof) for which such
Security was issued (directly or indirectly) on registration of
transfer, exchange or substitution.
"original issue discount" of any debt security,
including any Original Issue Discount Security, means the
difference between the principal amount of such debt security and
the initial issue price of such debt security (as set forth in
the case of an Original Issue Discount Security on the face of
such Security).
"Original Issue Discount Security" means any Security
that provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration
of the maturity thereof pursuant to Section 6.01.
"Outstanding" (except as otherwise provided in Section
7.13), when used with reference to Securities, shall, subject to
the provisions of Section 10.04, mean, as of any particular time,
all Securities authenticated and delivered by the Trustee under
this Indenture, except: (a) Securities theretofore cancelled by
the Trustee or delivered to the Trustee for cancellation; (b)
Securities (other than Securities of any series as to which the
provisions of Article Eight hereof shall not be applicable), or
portions thereof, for the payment or redemption of which moneys
or U.S. Government Obligations (as provided for in Section 8.01)
in the necessary amount shall have been deposited in trust with
the Trustee or with any Paying Agent (other than LGII) or shall
have been set aside, segregated and held in trust by LGII for the
Holders of such Securities (if LGII shall act as its own Paying
Agent), provided that, if such Securities, or portions thereof,
are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as herein provided, or provision
satisfactory to the Trustee shall have been made for giving such
notice; and (c) Securities which shall have been paid or in
substitution for which other Securities shall have been
authenticated and delivered pursuant to the terms of Section 2.11
(except with respect to any such Security as to which proof
satisfactory to the Trustee is presented that such Security is
held by a Person in whose hands such Security is a legal, valid
and binding obligation of LGII). In determining whether the
Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have given any
request, demand, authorization, direction, notice, consent or
waiver hereunder, the principal amount of an Original Issue
Discount Security that shall be deemed to be Outstanding for such
purposes shall be the portion of the principal amount thereof
that would be due and payable as of the date of such
determination (as certified by LGII to the Trustee) upon a
declaration of acceleration of the maturity thereof pursuant to
Section 6.01.
"Pari Passu Indebtedness" means Indebtedness of LGII or
TLGI which ranks pari passu in right of payment with the
Securities or the Guarantee, as the case may be.
"Paying Agent" has the meaning set forth in Section
4.02, except that, for the purposes of Section 4.11 and Section
4.12 and Articles Eight and Twelve, the Paying Agent shall not be
LGII or a Subsidiary of LGII or any of their respective
Affiliates.
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"Periodic Offering" means an offering of Securities of
a series from time to time, the specific terms of which
Securities, including, without limitation, the rate or rates of
interest, if any, thereon, the stated maturity or maturities
thereof and the redemption and conversion provisions, if any,
with respect thereto, are to be determined by LGII or its agents
upon the issuance of such Securities.
"Permitted Holders" mean (i) Raymond Loewen and Anne
Loewen, taken together, and (ii) in the case of LGII, TLGI.
"Permitted Indebtedness" means, without duplication,
each of the following:
(a) the Securities and Indebtedness of TLGI evidenced
by its Guarantee with respect to the Securities;
(b) Indebtedness of TLGI and its Restricted
Subsidiaries (including, without limitation, LGII) outstanding on
the Issue Date (other than Indebtedness under the Credit
Agreements);
(c) Indebtedness of TLGI or LGII, as the case may be,
under the Credit Agreements in an aggregate principal amount at
any one time outstanding not to exceed the aggregate of the
maximum credit limits of the Credit Agreements as of the Issue
Date, less the Net Proceeds of any Asset Sale that are applied to
repay, and permanently reduce the commitments under, the Credit
Agreements (as required by the terms thereof);
(d) (i) Interest Rate Protection Obligations of TLGI
covering Indebtedness of TLGI and its Restricted Subsidiaries
(including, without limitation, LGII); (ii) Interest Rate
Protection Obligations of any Restricted Subsidiary of TLGI
covering Indebtedness of such Restricted Subsidiary; provided,
however, that, in the case of either clause (i) or (ii), (x) any
Indebtedness to which any such Interest Rate Protection
Obligations relate bears interest at fluctuating interest rates
and is otherwise permitted to be incurred under this covenant and
(y) the notional principal amount of any such Interest Rate
Protection Obligations does not exceed the principal amount of
the Indebtedness to which such Interest Rate Protection
Obligations relate;
(e) Indebtedness under Currency Agreements; provided,
however, that in the case of Currency Agreements which relate to
Indebtedness, such Currency Agreements do not increase the
Indebtedness of TLGI and its Restricted Subsidiaries (including,
without limitation, LGII) outstanding other than as a result of
fluctuations in foreign currency exchange rates or by reason of
fees, indemnities and compensation payable thereunder;
(f) Indebtedness arising from the honoring by a bank
or other financial institution of a check, draft or similar
instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary
course of business; provided, however, that such Indebtedness is
extinguished within two business days of incurrence;
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(g) Indebtedness incurred in respect of performance
bonds or letters of credit in lieu thereof provided in the
ordinary course of business;
(h) Indebtedness of TLGI and its Restricted
Subsidiaries (including, without limitation, LGII) represented by
letters of credit for the account of TLGI and its Restricted
Subsidiaries in order to provide security for workers'
compensation claims, payment obligations in connection with
self-insurance or similar requirements in the ordinary course of
business;
(i) Indebtedness of TLGI and its Restricted
Subsidiaries (including, without limitation, LGII) in addition to
that described in clauses (a) through (h) above, in an aggregate
principal amount outstanding at any time not exceeding
$5,000,000; and
(j) (i) Indebtedness of TLGI the proceeds of which are
used solely to refinance (whether by amendment, renewal,
extension or refunding) Indebtedness of TLGI and its Restricted
Subsidiaries (including, without limitation, LGII) and (ii)
Indebtedness of any Restricted Subsidiary of TLGI the proceeds of
which are used solely to refinance (whether by amendment,
renewal, extension or refunding) Indebtedness of such Restricted
Subsidiary, in each case other than the Indebtedness refinanced,
redeemed or retired on the Issue Date or Indebtedness incurred
under clause (c), (d), (e), (f), (g), (h), or (i) of this
covenant; provided, however, that (x) the principal amount of
Indebtedness incurred pursuant to this clause (j) (or, if such
Indebtedness provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof, the original issue price of
such Indebtedness) shall not exceed the sum of the principal
amount of Indebtedness so refinanced, plus the amount of any
premium required to be paid in connection with such refinancing
pursuant to the terms of such Indebtedness or the amount of any
premium reasonably determined by the Board of Directors of TLGI
as necessary to accomplish such refinancing by means of a tender
offer or privately negotiated purchase, plus the amount of
expenses in connection therewith, (y) in the case of Indebtedness
incurred by TLGI pursuant to this clause (j) to refinance Pari
Passu Indebtedness, such Indebtedness constitutes Pari Passu
Indebtedness.
"Permitted Investments" means any of the following:
(i) Investments in any Wholly-Owned Subsidiary of TLGI (including
(a) LGII and (b) any person that pursuant to such Investment
becomes a Wholly-Owned Subsidiary of TLGI) and any person that is
merged or consolidated with or into, or transfers or conveys all
or substantially all of its assets to, TLGI or any Wholly-Owned
Subsidiary of TLGI at the time such Investment is made;
(ii) Investments in Cash Equivalents; (iii) Investments in
Currency Agreements on commercially reasonable terms entered into
by TLGI or any of its Restricted Subsidiaries in the ordinary
course of business in connection with the operations of the
business of TLGI or its Restricted Subsidiaries to hedge against
fluctuations in foreign exchange rates; (iv) loans or advances to
officers, employees or consultants of TLGI and its Restricted
Subsidiaries for travel and moving expenses in the ordinary
course of business for bona fide business purposes of TLGI and
its Restricted Subsidiaries; (v) other loans or advances to
officers, employees or consultants of TLGI and its Restricted
Subsidiaries in the ordinary course of business for bona fide
business purposes of TLGI and its Restricted Subsidiaries not in
excess of $10,000,000 in the aggregate at any one time
outstanding; (vi) Investments in evidences of Indebtedness,
securities or other property
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received from another person by TLGI
or any of its Restricted Subsidiaries in connection with any
bankruptcy proceeding or by reason of a composition or
readjustment of debt or a reorganization of such person or as a
result of foreclosure, perfection or enforcement of any Lien in
exchange for evidences of Indebtedness, securities or other
property of such person held by TLGI or any of its Restricted
Subsidiaries, or for other liabilities or obligations of such
other person to TLGI or any of its Restricted Subsidiaries that
were created, in accordance with the terms of this Indenture;
(vii) Investments in Interest Rate Protection Agreements on
commercially reasonable terms entered into by TLGI or any of its
Restricted Subsidiaries in the ordinary course of business in
connection with the operations of TLGI and its Restricted
Subsidiaries to hedge against fluctuations in interest rates; and
(viii) Investments of funds received by TLGI or its Restricted
Subsidiaries (including, without limitation, LGII) in the
ordinary course of business, which funds are required to be held
in trust for the benefit of others by TLGI or such Restricted
Subsidiary, as the case may be, and which funds do not constitute
assets or liabilities of TLGI or such Restricted Subsidiary; (ix)
Investments not in excess of $50,000,000 in the aggregate in
other Unrestricted Subsidiaries which are engaged in the
insurance business; and (x) Investments not in excess of
$50,000,000 in persons (other than Wholly-Owned Subsidiaries)
engaged in businesses incidental to the funeral home, cemetery
and cremation businesses of TLGI and its Restricted Subsidiaries.
"Permitted Liens" means the following types of Liens:
(a) Liens for taxes, assessments or governmental
charges or claims either (a) not delinquent or (b) contested in
good faith by appropriate proceedings and as to which TLGI or any
of its Restricted Subsidiaries (including, without limitation,
LGII) shall have set aside on its books such reserves as may be
required pursuant to GAAP;
(b) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, suppliers, materialmen,
repairmen and other Liens imposed by law incurred in the ordinary
course of business for sums not yet delinquent or being contested
in good faith, if such reserve or other appropriate provision, if
any, as shall be required by GAAP shall have been made in respect
thereof;
(c) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, governmental contracts,
performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed
money);
(d) judgment Liens not giving rise to an Event of
Default so long as such Lien is adequately bonded and any
appropriate legal proceedings which may have been duly initiated
for the review of such judgment shall not have been finally
terminated or the period within which such proceedings may be
initiated shall not have expired;
(e) easements, rights-of-way, zoning restrictions and
other similar charges or encumbrances in respect of real property
not interfering in any material respect with the ordinary
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conduct
of the business of TLGI or any of its Restricted Subsidiaries
(including, without limitation, LGII);
(f) any interest or title of a lessor under any
Capitalized Lease Obligation or operating lease;
(g) any Lien existing on any asset of any corporation
at the time such corporation becomes a Restricted Subsidiary and
not created in contemplation of such event;
(h) any Lien on any asset securing Indebtedness
incurred or assumed for the purpose of financing all or any part
of the cost of acquiring or constructing such asset; provided,
that such Lien attaches to such asset concurrently with or within
18 months after the acquisition or completion thereof;
(i) any Lien on any asset of any corporation existing
at the time such corporation is merged or consolidated with or
into TLGI or a Restricted Subsidiary and not created in
contemplation of such event;
(j) any Lien existing on any asset prior to the
acquisition thereof by TLGI or a Restricted Subsidiary and not
created in contemplation of such acquisition;
(k) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; and
(l) any extension, renewal or replacement of any Lien
permitted by the preceding clauses (g), (h), (i) or (j) hereof in
respect of the same property or assets theretofore subject to
such Lien in connection with the extension, renewal or refunding
of the Indebtedness secured thereby; provided that (1) such Lien
shall attach solely to the same property or assets and (2) such
extension, renewal or refunding of such Indebtedness shall be
without increase in the principal remaining unpaid as at the date
of such extension, renewal or refunding.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-
stock company, trust, estate, charitable foundation,
unincorporated organization, government or any agency or
political subdivision thereof.
"Place of Payment", when used with respect to the
Securities of any series, means the place or places where the
principal of and interest, if any, on the Securities of such
series are payable as determined in accordance with Section 2.01.
"Predecessor Notes" means, with respect to any
particular Security, every previous Security evidencing all or a
portion of the same debt as that evidenced by such particular
Security; and, for the purposes of this definition, any
Securities authenticated and delivered under Section 2.04 hereof
in exchange for mutilated Notes or in lieu of lost, destroyed or
stolen Securities, shall be deemed to evidence the same debt as
the mutilated, lost, destroyed or stolen Securities.
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"Preferred Securities" means, with respect to a Special
Finance Subsidiary, any securities of such Subsidiary treated for
accounting purposes as an equity security that has preferential
rights to any other security of such person with respect to
dividends or redemptions or upon liquidation.
"Preferred Stock" means, with respect to any person,
any Capital Stock of such person that has preferential rights to
any other Capital Stock of such person with respect to dividends
or redemptions or upon liquidation and any Preferred Securities.
"principal" or "principal amount" of a debt security,
including any Security, means the amount (including, without
limitation, if and to the extent applicable, any premium and, in
the case of an Original Issue Discount Security, any accrued
original issue discount, but excluding interest) that is payable
with respect to such debt security as of any date and for any
purpose (including, without limitation, in connection with any
sinking fund, upon any redemption at the option of LGII, upon any
purchase or exchange at the option of LGII or the holder of such
debt security and upon any acceleration of the maturity of such
debt security) plus, when appropriate, the premium, if any, on
the security and any interest on overdue principal.
"record date" shall have the meaning set forth in
Section 2.07.
"Redeemable Capital Stock" means any shares of any
class or series of Capital Stock that, either by the terms
thereof, by the terms of any security into which it is
convertible or exchangeable or by contract or otherwise, is or
upon the happening of an event or passage of time would be,
required to be redeemed prior to the Stated Maturity with respect
to the principal of any Security or is redeemable at the option
of the holder thereof at any time prior to any such Stated
Maturity, or is convertible into or exchangeable for debt
securities at any time prior to any such Stated Maturity.
"Registrar" has the meaning set forth in Section 4.02.
"Related Obligor" has the meaning set forth in Section
4.08.
"Responsible Officer", when used with respect to the
Trustee, means any officer assigned by the Trustee to administer
its corporate trust matters.
"Restricted Payments" has the meaning set forth in
Section 4.08.
"Restricted Subsidiary" means any Subsidiary of TLGI
other than an Unrestricted Subsidiary.
"Sale-Leaseback Transaction" of any person means an
arrangement with any lender or investor or to which such lender
or investor is a party providing for the leasing by such person
of any property or asset of such person which has been or is
being sold or transferred by such person after the acquisition
thereof or the completion of construction or commencement of
operation thereof to such lender or investor or to any person to
whom funds have been or are to
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be advanced by such lender or
investor on the security of such property or asset. The stated
maturity of such arrangement shall be the date of the last
payment of rent or any other amount due under such arrangement
prior to the first date on which such arrangement may be
terminated by the lessee without payment of a penalty.
"S&P" means Standard & Poor's Corporation, and its
successors.
"Security" or "Securities" (except as otherwise
provided in Section 7.13) has the meaning stated in the first
recital of this Indenture or, as the case may be, securities that
have been authenticated and delivered pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as
amended from time to time.
"Seller Financing Indebtedness" means a purchase money
Indebtedness issued to the seller of a business or other assets
for, and not in excess of, the purchase price thereof.
"Senior Debt" means Indebtedness which is not (i)
Indebtedness of TLGI or LGII to any Subsidiary, and (ii)
Indebtedness of TLGI or LGII which by its terms is subordinate or
junior in any respect to any other Indebtedness or other
obligation of TLGI or LGII.
"Significant Subsidiary" shall mean a Restricted
Subsidiary which is a "Significant Subsidiary" as defined in Rule
1.02(v) of Regulation S-X under the Securities Act.
"Special Finance Subsidiary" means a Restricted
Subsidiary whose sole assets are debt obligations of LGII or TLGI
and whose sole liabilities are Preferred Securities the proceeds
from the sale of which are or have been advanced to LGII or TLGI.
"Stated Maturity" means, when used with respect to any
Security or any installment of interest thereon, the date
specified in such Security as the fixed date on which the
principal of such Security or such installment of interest is due
and payable, and when used with respect to any other
Indebtedness, means the date specified in the instrument
governing such Indebtedness as the fixed date on which the
principal of such Indebtedness, or any installment of interest
thereon, is due and payable.
"Subsidiary" means, with respect to any person, (i) a
corporation a majority of whose Voting Stock is at the time,
directly or indirectly, owned by such person, by one or more
Subsidiaries of such person or by such person and one or more
Subsidiaries thereof and (ii) any other person (other than a
corporation), including, without limitation, a joint venture, in
which such person, one or more Subsidiaries thereof or such
person and one or more Subsidiaries thereof, directly or
indirectly, at the date of determination thereof, has at least
majority ownership interest entitled to vote in the election of
directors, managers or trustees thereof (or other person
performing similar functions). For purposes of this definition,
any directors' qualifying shares or investments by foreign
nationals mandated by applicable law shall be disregarded in
determining the ownership of a Subsidiary.
"Surviving Entity" shall have the meaning set forth in
Section 5.01.
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"TLGI" shall mean The Loewen Group, Inc., and shall
include any successor replacing TLGI as guarantor of the
Securities pursuant to the provisions hereof, and thereafter
means such successor.
"Trading Day" shall have the meaning set forth in
Section 13.03.
"Trust Indenture Act of 1939" or "TIA" (except as
otherwise provided in Sections 9.01, 9.02 and 13.5) means the
Trust Indenture Act of 1939, as amended by the Trust Indenture
Reform Act of 1990, as in force at the date as of which this
Indenture is originally executed.
"Trust Officer" means any officer in the Corporate
Trust Administration of the Trustee or any other officer of the
Trustee customarily performing functions similar to those
performed by any of the above-designated officers and also means,
with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge
of and familiarity with the particular subject.
"Trustee" means the Person identified as "Trustee" in
the first paragraph hereof and, subject to the provisions of
Article Seven, shall also include any successor trustee.
"Trustee" shall also mean or include each Person who is then a
trustee hereunder and, if at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any
series shall mean the trustee with respect to the Securities of
such series.
"U.S. Government Obligations" shall have the meaning
set forth in Section 8.01(B).
"Unrestricted Subsidiary" means (i) First Capital Life
Insurance Company of Louisiana, National Capital Life Insurance
Company, Security Industrial Insurance Company, Security
Industrial Fire Insurance Company or any successors to such
Subsidiaries or (ii) a Subsidiary of TLGI declared by the Board
of Directors of TLGI to be an Unrestricted Subsidiary; provided,
that no such Subsidiary shall be declared to be an Unrestricted
Subsidiary unless (x) none of its properties or assets were owned
by TLGI or any of its Subsidiaries prior to the Issue Date, other
than any such assets as are transferred to such Unrestricted
Subsidiary in accordance with the covenant contained in Section
4.08, (y) its properties and assets, to the extent that they
secure Indebtedness, secure only Non-Recourse Indebtedness and
(z) it has no Indebtedness other than Non-Recourse Indebtedness.
As used above, "Non-Recourse Indebtedness" means Indebtedness as
to which (i) neither TLGI nor any of its Subsidiaries (other than
the relevant Unrestricted Subsidiary or another Unrestricted
Subsidiary) (1) provides credit support (including any
undertaking, agreement or instrument which would constitute
Indebtedness), (2) guarantees or is otherwise directly or
indirectly liable or (3) constitutes the lender (in each case,
other than pursuant to and in compliance with the covenant
contained in Section 4.08 and (ii) no default with respect to
such Indebtedness (including any rights which the holders thereof
may have to take enforcement action against the relevant
Unrestricted Subsidiary or its assets) would permit (upon notice,
lapse of time or both) any holder of any other Indebtedness of
TLGI or its Subsidiaries (other than Unrestricted Subsidiaries)
to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated
maturity.
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"Voting Stock" means any class or classes of Capital
Stock pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a
majority of the board of directors, managers or trustees of any
person (irrespective of whether or not, at the time, Capital
Stock of any other class or classes shall have, or might have,
voting power by reason of the happening of any contingency).
"Wholly-Owned Subsidiary" means (i) any Restricted
Subsidiary of TLGI of which 100% of the outstanding Capital Stock
is owned by TLGI or one or more Wholly-Owned Subsidiaries of TLGI
or by TLGI and one or more Wholly-Owned Subsidiaries of TLGI,
including LGII, or (ii) any Subsidiary, at least 66 2/3% of the
outstanding voting securities of which, and all of the
outstanding shares entitled to receive dividends or other
distributions of which, shall at the time be owned or controlled,
directly or indirectly, by TLGI or one or more Wholly-Owned
Subsidiaries of TLGI or by TLGI and one or more Wholly-Owned
Subsidiaries of TLGI, including LGII. For purposes of this
definition, any directors' qualifying shares or investments by
foreign nationals mandated by applicable law shall be disregarded
in determining the ownership of a Subsidiary.
"Yield to Maturity" means the yield to maturity on a
series of Securities, calculated at the time of issuance of such
series, or, if applicable, at the most recent redetermination of
interest on such series, and calculated in accordance with
generally accepted financial practice or as otherwise provided in
the terms of such series of Securities.
Section 1.02. Incorporation by Reference of Trust
Indenture Act.
Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a
part of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"indenture securities" means the Securities and the
Guarantee;
"indenture security holder" means a Noteholder or
Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means
the Trustee; and
"obligor" on the indenture securities means LGII, TLGI
or any other obligor on the Securities or the Guarantee.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute
or defined by Commission rule and not otherwise defined herein
have the meanings assigned to them therein.
Section 1.03. Rules of Construction.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
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(a) words in the singular include the plural, and
words in the plural include the singular.
(b) "or" is not exclusive;
(c) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with GAAP;
(d) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision;
and
(e) all references to "$" or "dollars" shall refer to
the lawful currency of the United States of America.
ARTICLE TWO
THE SECURITIES
Section 2.01. Amount of Securities; Issuable In
Series. The aggregate principal amount of Securities which may
be authenticated and delivered under this Indenture may not
exceed $500,000,000 at any time, except to the extent permitted
by Section 2.11. The Securities may be issued in one or more
series and the Securities of each such series shall rank equally
and pari passu as to the right of payment of principal and
interest, if any, with the Securities of each other series, and
with all other Senior Debt of LGII. There shall be established
in or pursuant to one or more Board Resolutions (and, to the
extent established pursuant to rather than set forth in a Board
Resolution, in an Officer's Certificate detailing such
establishment) or established in one or more indentures
supplemental hereto, prior to the initial issuance of Securities
of any series:
(1) the designation of the Securities of the series,
which shall distinguish the Securities of the series from
the Securities of all other series;
(2) whether the Securities will be convertible into
Common Stock (or cash in lieu thereof) and, if so, the terms
and conditions upon which such conversion will be effected
including the initial Conversion Price and any adjustments
thereto in addition to or different from those set forth in
Section 13.04, the conversion period and other provisions in
addition to or in lieu of those set forth herein;
(3) any limit upon the aggregate principal amount of
the Securities of the series that may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of
the series pursuant to Section 2.10, 2.12, 2.13, 9.05, 12.03
or 13.02);
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(4) the date or dates on which the principal of the
Securities of the series is payable;
(5) the rate or rates at which the Securities of the
series shall bear interest, if any, the date or dates from
which any such interest shall accrue, on which any such
interest shall be payable and on which a record shall be
taken for the determination of Holders to whom any such
interest is payable or the method by which such rate or
rates or date or dates shall be determined or both;
(6) the place or places where and the manner in which
the principal of and any interest on Securities of the
series shall be payable and the office or agency for the
Securities of the series maintained by LGII pursuant to
Section 4.02 (if other than as provided in Section 4.02);
(7) any provisions relating to the issuance of
Securities of such series at an original issue discount
(including, without limitation, the issue price thereof, the
rate or rates at which such original issue discount shall
accrue, if any, and the date or dates from or to which or
period or periods during which such original issue discount
shall accrue at such rate or rates);
(8) the right, if any, of LGII to redeem, purchase or
repay Securities of the series, in whole or in part, at its
option and the period or periods within which, the price or
prices (or the method by which such price or prices shall be
determined or both) at which, the form or method of payment
therefor if other than in cash and any terms and conditions
upon which and the manner in which (if different from the
provisions of Article Twelve) Securities of the series may
be so redeemed, purchased or repaid, in whole or in part,
pursuant to any sinking fund or otherwise;
(9) the obligation, if any, of LGII to redeem,
purchase or repay Securities of the series, in whole or in
part, pursuant to any mandatory redemption, sinking fund or
analogous provisions or at the option of a Holder thereof
and the period or periods within which, the price or price
(or the method by which such price or prices shall be
determined or both) at which, the form or method of payment
therefor if other than in cash and any terms and conditions
upon which and the manner in which (if different from the
provisions of Article Twelve) Securities of the series shall
be redeemed, purchased or repaid, in whole or in part,
pursuant to such obligation;
(10) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which
Securities of the series shall be issuable;
(11) if other than the principal amount thereof, the
portion of the principal amount of Securities of the series
which shall be payable upon acceleration of the maturity
thereof;
(12) whether the Securities of the series will be
issuable as Global Securities;
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(13) if the Securities of such series are to be
issuable in definitive form (whether upon original issue or
upon exchange of a temporary Security of such series) only
upon receipt of certain certificates or other documents or
satisfaction of other conditions, the form and terms of such
certificates, documents or conditions;
(14) any trustees, depositaries, authenticating or
paying agents, transfer agents or registrars, conversion
agents or any other agents with respect to the Securities of
such series;
(15) any deleted, modified or additional events of
default or remedies or any additional covenants with respect
to the Securities of such series;
(16) whether the provisions of Section 8.01(C) will be
applicable to Securities of such series;
(17) if the amounts of payment of principal of and
interest on the Securities of such series are to be
determined with reference to an index, the manner in which
such amounts shall be determined;
(18) any other terms of the series (which terms shall
not be inconsistent with the provisions of this Indenture);
and
(19) whether the Securities of the series will be
secured.
All Securities of any one series shall be substantially
identical, except as to denomination and except as may otherwise
be provided by or pursuant to the Board Resolution or Officer's
Certificate referred to above or as set forth in any such
indenture supplemental hereto. All Securities of any one series
need not be issued at the same time and may be issued from time
to time, consistent with the terms of this Indenture, if so
provided or pursuant to such Board Resolution, such Officer's
Certificate or in any such indenture supplemental hereto.
Any such Board Resolution or Officer's Certificate
referred to above with respect to Securities any series filed
with the Trustee on or before the initial issuance of the
Securities of such series shall be incorporated herein by
reference with respect to Securities of such series and shall
thereafter be deemed to be a part of this Indenture for all
purposes relating to Securities of such series as fully as if
such Board Resolution or Officer's Certificate were set forth
herein in full.
Section 2.02 Forms Generally. The Securities of
each series shall be substantially in such form (not inconsistent
with this Indenture) as shall be established by or pursuant to
one or more Board Resolutions (as set forth in a Board Resolution
or, to the extent established pursuant to rather than set forth
in a Board Resolution, an Officer's Certificate detailing such
establishment) or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted
by this Indenture, and may have imprinted or otherwise reproduced
thereon such legend or legends or endorsements, not inconsistent
with the provisions of this Indenture, as may
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be required to
comply with any law or with any rules or regulations pursuant
thereto, or with any rules of any securities exchange or to
conform to general usage, all as may be determined by the
officers executing such Securities, as evidenced by their
execution of such Securities.
The definitive Securities and the Guarantee shall be
printed, lithographed or engraved or produced by any combination
of these methods or may be produced in any other manner permitted
by the rules of any securities exchange on which the Securities
may be listed, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
Section 2.03. Form Of Trustee's Certificate Of
Authentication. The Trustee's certificate of authentication on
all Securities shall be substantially as follows:
This is one of the Securities of the series designated
herein referred to in the within-mentioned Indenture.
Fleet National Bank, as
Trustee
By:
----------------------------
------
Authorized Signatory
If at any time there shall be an Authenticating Agent
appointed with respect to any series of Securities, then the
Securities of such series shall bear, in addition to the
Trustee's certificate of authentication, an alternate certificate
of authentication which shall be substantially as follows:
This is one of the Securities of the series designated
herein referred to in the within-mentioned Indenture.
Fleet National Bank, as
Trustee
By:
----------------------------
------
as Authenticating Agent
By:
----------------------------
------
Authorized Signatory
Section 2.04. Authentication And Delivery Of
Securities. LGII may deliver Securities of any series executed
by LGII to the Trustee for authentication together with the
applicable documents referred to below in this Section 2.04, and
the Trustee shall thereupon authenticate and deliver such
Securities to, or upon the order of, LGII (contained in an Issuer
Order referred to below in this Section 2.04) or pursuant to such
procedures acceptable to the Trustee and to such recipients as
may be specified from time to time by an Issuer Order. The
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maturity date, original issue date, interest rate, if any, and
any other terms of the Securities of such series shall be
determined by or pursuant to such Issuer Order and procedures.
If provided for in such procedures, such Issuer Order may
authorize authentication and delivery pursuant to oral
instructions from LGII or its duly authorized agent, which
instructions shall be promptly confirmed in writing. In
authenticating the Securities of such series and accepting the
additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive (in the
case of subparagraphs (2), (3) and (4) below only at or before
the time of the first request of LGII to the Trustee to
authenticate Securities of such series) and (subject to Section
7.01) shall be fully protected in relying upon, unless and until
such documents have been superseded or revoked:
(1) an Issuer Order requesting such authentication and
setting forth delivery instructions if the Securities of
such series are not to be delivered to LGII, provided that,
with respect to Securities of a series subject to a Periodic
Offering, (a) such Issuer Order may be delivered by LGII to
the Trustee prior to the delivery to the Trustee of such
Securities for authentication and delivery, (b) the Trustee
shall authenticate and deliver Securities of such series for
original issue from time to time, in an aggregate principal
amount not exceeding the aggregate principal amount
established for such series, pursuant to an Issuer Order or
pursuant to procedures acceptable to the Trustee as may be
specified from time to time by an Issuer Order, (c) the
maturity date or dates, original issue date or dates,
interest rate or rates, if any, and any other terms of
Securities of such series shall be determined by an Issuer
Order or pursuant to such procedures, (d) if provided for in
such procedures, such Issuer Order may authorize
authentication and delivery pursuant to telecommunication or
electronic instructions from LGII or its duly authorized
agent or agents, and (e) after the original issuance of the
first Security of such series to be issued, any separate
request by LGII that the Trustee authenticate Securities of
such series for original issuance will be deemed to be a
certification by LGII that it is in compliance with all
conditions precedent provided for in this Indenture relating
to the authentication and delivery of such Securities;
(2) the Board Resolutions, Officer's Certificate or
executed supplemental indenture referred to in Sections 2.01
and 2.02 by or pursuant to which the form or forms and terms
of the Securities of such series were established;
(3) an Officer's Certificate setting forth the form or
forms and terms of the Securities stating that the form or
forms and terms of the Securities have been established
pursuant to Sections 2.01 and 2.02 and comply with this
Indenture and covering such other matters as the Trustee may
reasonably request; and
(4) at the option of LGII, either an Opinion of
Counsel, or a letter from legal counsel addressed to the
Trustee permitting it to rely on an Opinion of Counsel,
substantially to the effect that:
(A) the form or forms of the Securities of such
series have been duly authorized and established in
conformity with the provisions of this Indenture;
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(B) in the case of an underwritten offering, the
Securities of such series have been duly authorized and
established in conformity with the provisions of this
Indenture, and, in the case of an offering that is not
underwritten, certain terms of the Securities of such
series have been established pursuant to a Board
Resolution, an Officer's Certificate or a supplemental
indenture in accordance with this Indenture, and when
such other terms as are to be established pursuant to
procedures set forth in an Issuer Order shall have been
established, all such terms will have been duly
authorized by LGII and will have been established in
conformity with the provisions of this Indenture;
(C) when the Securities of such series have been
executed by LGII and authenticated by the Trustee in
accordance with the provisions of this Indenture and
delivered against payment therefor by the purchasers
thereof, they will be valid and legally binding
obligations of LGII, enforceable in accordance with
their respective terms, and will be entitled to the
benefits of this Indenture; and
(D) the execution and delivery by LGII of, and
the performance by LGII of its obligations under, the
Securities of such series will not contravene any
provision of applicable law or the articles of
incorporation or by-laws of LGII or any agreement or
other instrument binding upon LGII or any of its
Subsidiaries that is material to LGII and its
Subsidiaries, considered as one enterprise, or, to such
counsel's knowledge after the inquiry indicated
therein, any judgment, order or decree of any
governmental agency or any court having jurisdiction
over LGII or any Subsidiary, and no consent, approval
or authorization of any governmental body or agency is
required for the performance by LGII of its obligations
under the Securities, except such as are specified and
have been obtained and such as may be required by the
securities or blue sky laws of the various states in
connection with the offer and sale of the Securities.
In rendering such opinions, such counsel may qualify
any opinions as to enforceability by stating that such
enforceability may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium and other similar laws
affecting the rights and remedies of creditors and is subject to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law). Such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the State of New York and the
federal law of the United States, upon opinions of other counsel
(copies of which shall be delivered to the Trustee), who shall be
counsel reasonably satisfactory to the Trustee, in which case the
opinion shall state that such counsel believes that both such
counsel and the Trustee are entitled so to rely. Such counsel
may also state that, insofar as such opinion involves factual
matters, such counsel has relied, to the extent such counsel
deems proper, upon certificates of officers of LGII and its
Subsidiaries and certificates of public officials.
The Trustee shall have the right to decline to
authenticate and delivery any Securities of any series under this
Section 2.04 if the Trustee, being advised by counsel, determines
that such action may not lawfully be taken by LGII or if the
Trustee in good faith by
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its board of directors or board of
trustees, executive committee or a trust committee of directors
or trustees or Responsible Officers shall determine that such
action would expose the Trustee to personal liability to existing
Holders or would adversely affect the Trustee's own rights,
duties or immunities under the Securities, this Indenture or
otherwise.
If LGII shall establish pursuant to Section 2.01 that
the Securities of a series are to be issued in the form of one or
more Global Securities, then LGII shall execute and the Trustee
shall, in accordance with this Section 2.04 and Issuer Order with
respect to such series, authenticate and deliver one or more
Global Securities that (i) shall represent and shall be
denominated in an amount equal to the aggregate principal amount
of all of the Securities of such series to be issued in the form
of Global Securities and not yet cancelled, (ii) shall be
registered in the name of the Depositary for such Global Security
or Securities or the nominee of such Depositary, (iii) shall be
delivered by the Trustee to such Depositary or pursuant to such
Depositary's instructions, and (iv) shall bear a legend
substantially to the following effect:
"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY."
Each Depositary designated pursuant to Section 2.01
must, at the time of its designation and at all times while it
serves as Depositary, be a clearing agency registered under the
Securities Exchange Act of 1934 and any other applicable statute
or regulation.
Section 2.05. Execution Of Securities. The
Securities shall be signed on behalf of LGII by two Officers,
under its corporate seal which may, but need not, be attested by
its secretary or one of its assistant secretaries. Such
signatures may be the manual or facsimile signatures of the
present or any future such officers. The seal of LGII may be in
the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced in the Securities.
Typographical and other minor errors or defects in any such
reproduction of the seal or any such signature shall not affect
the validity or enforceability of any Security that has been duly
authenticated and delivered by the Trustee.
In case of any officer of LGII who shall have signed
any of the Securities shall cease to be such officer before the
Security so signed shall be authenticated and delivered by the
Trustee or disposed of by LGII, such Security nevertheless may be
authenticated and delivered or disposed of as though the person
who signed such Security had not ceased to be such officer of
LGII; and any Security may be signed on behalf of LGII by such
persons as, at the actual date of the execution of such Security,
shall be the proper officers of LGII, although at the date of the
execution and delivery of this Indenture any such person was not
such an officer.
Section 2.06. Certificate Of Authentication. Only
such Securities as shall bear thereon a certificate of
authentication substantially in the form hereinbefore recited,
executed by
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the Trustee by the manual signature of one of its
authorized signatories, or its Authenticating Agent, shall be
entitled to the benefits of this Indenture or be valid or
obligatory for any purpose. The execution of such certificates
by the Trustee, or its Authenticating Agent, upon any Security
executed by LGII shall be conclusive evidence that the Security
so authenticated has been duly authenticated and delivered
hereunder and that the Holder is entitled to the benefits of this
Indenture. Each reference in this Indenture to authentication by
the Trustee includes authentication by an agent appointed
pursuant to Section 7.15.
Section 2.07 Denomination And Date Of Securities;
Payments Of Interest. The Securities of each series shall be
issuable in registered form in denominations established as
contemplated by Section 2.01 or, with respect to the Securities
of any series, if not so established, in denominations of $1,000
and any integral multiple thereof. The Securities of each series
shall be numbered, lettered or other distinguished in such manner
or in accordance with such plan as the officers of LGII executing
the same may determine with the approval of the Trustee, as
evidenced by the execution and authentication thereof.
Each Security shall be dated the date of its
authentication. The Securities of each series shall bear
interest, if any, from the date, and such interest, if any, shall
be payable on the dates, established as contemplated by Section
2.01.
The Person in whose name any Security of any series is
registered at the close of business on any record date applicable
to a particular series with respect to any interest payment date
for such series shall be entitled to receive the interest, if
any, payable on such interest payment date notwithstanding any
transfer or exchange of such Security subsequent to the record
date and prior to such interest payment date, except if and to
the extent LGII shall default in the payment of the interest due
on such interest payment date for such series, in which case such
defaulted interest shall be paid to the Persons in whose names
Outstanding Securities for such series are registered (a) at the
close of business on a subsequent record date (which shall be not
less than five Business Days prior to the date of payment of such
defaulted interest) established by notice given by mail by or on
behalf of LGII to the Holders of Securities not less than 15 days
preceding such subsequent record date or (b) as determined by
such other procedure as is mutually acceptable to LGII and the
Trustee. The term "record date" as used with respect to any
interest payment date (except a date for payment of defaulted
interest) for the Securities of series shall mean the date
specified as such in the terms of the Securities of such series
established as contemplated by Section 2.01, or, if no such date
is so established, if such interest payment date is the first day
of a calendar month, the fifteenth day of the next preceding
calendar month or, if such interest payment date is the fifteenth
day of a calendar month, the first day of such calendar month,
whether or not such record date is a Business Day.
Section 2.08. Registrar.
LGII will keep at the office of each Registrar for each
series of Securities a register or registers in which, subject to
such reasonable regulations as it may prescribe, it will provide
for the registration of Securities of each series and the
registration of transfer of Securities of such series. Each such
register shall be in written form in the English language or
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in
any other form capable of being converted into such form within a
reasonable time. At all reasonable times such register or
registers shall be open for inspection and available for copying
by the Trustee. Each Registrar for each series of Securities
shall keep a register of such series of Securities and of their
transfer and exchange. LGII may have one or more co-Registrars.
LGII shall enter into an appropriate agency agreement
with any Registrar not a party to this Indenture, which shall
incorporate the provisions of the TIA. The agreement shall
implement the provisions of this Indenture that relate to such
Registrar. LGII shall notify the Trustee of the name and address
of any such Registrar. If LGII fails to maintain a Registrar, or
fails to give the foregoing notice, the Trustee shall act as such
and shall be entitled to appropriate compensation in accordance
with Section 7.08.
Section 2.09. Provision As To Paying Agent.
LGII may have one or additional paying agents. The
term "Paying Agent" includes any additional paying agent. Except
as otherwise expressly provided in this Indenture, LGII or any
Affiliate thereof may act as Paying Agent.
If LGII shall appoint a Paying Agent other than the
Trustee, it will cause such Paying Agent to execute and deliver
to the Trustee an instrument in which such agent shall agree with
the Trustee, subject to the provisions of this Section 2.09,
(1) that it will hold all sums held by it as such
agent for the payment of the principal of or interest, if
any, on the Securities (whether such sums have been paid to
it by LGII or by any other obligor on the Securities) in
trust for the benefit of the Holders of the Securities or
the Trustee; and
(2) that it will give the Trustee notice of any
failure by LGII (or by the other obligor on the Securities)
to make any payment of the principal of or interest, if any,
on the Securities when the same shall be due and payable;
and
(3) that it will, at any time during the continuance
of any such failure, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The agreement shall implement the provisions of this Indenture
that relate to such Paying Agent.
LGII shall notify the Trustee of the name and address
of any such Paying Agent. If LGII fails to maintain a Paying
Agent or agent for service of notices and demands, or fails to
give the foregoing notice, the Trustee shall act as such and
shall be entitled to appropriate compensation in accordance with
Section 7.08.
Each Paying Agent shall hold in trust for the benefit
of Holders of the Securities or the Trustee all money held by the
Paying Agent for the payment of principal of, or interest, if
any, on, the Securities (whether such money has been distributed
to it by LGII or any other obligor on the Securities), and LGII
(or any other obligor on the Securities) and the Paying
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Agent
shall notify the Trustee of any default by LGII (or any other
obligor on the Securities) in making any such payment.
If LGII or an Affiliate of LGII acts as Paying Agent,
it will, on or before each due date of the principal of or
interests, if any, on the Securities, set aside, segregate and
hold in trust for the benefit of the Holders of the Securities a
sum sufficient to pay such principal or interest, if any, so
becoming due and will notify the Trustee of any failure to take
such action and of any failure by LGII (or by any other obligor
under the Securities) to make any payment of the principal of or
interest, if any, on the Securities when the same shall become
due and payable. LGII at any time may require a Paying Agent to
distribute all money held by it to the Trustee and account for
any funds disbursed and the Trustee may at any time during the
continuance of any Payment Default with respect to the
Securities, upon written request to a Paying Agent, require such
Paying Agent to pay all money held by it to the Trustee and to
account for any funds distributed. Upon doing so, the Paying
Agent (other than an obligor on the Securities or the Guarantee)
shall have no further liability for the money so paid over to the
Trustee. Anything in this Section 2.09 to the contrary
notwithstanding, any agreement of the Trustee or any Paying Agent
to hold sums in trust as provided in this Section 2.09 is subject
to Sections 8.03 and 8.04.
Section 2.10. Transfer and Exchange.
Upon due presentation for registration of transfer of
any Security of any series at the office of any Registrar, LGII
shall execute and the Trustee shall authenticate and deliver in
the name of the transferee or transferees a new Security or
Securities of the same series, maturity date, interest date, if
any, and original issue date in authorized denominations for a
like aggregate principal amount.
All Securities presented for registration of transfer
shall (if so required by LGII or the Trustee) be duly endorsed
by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to LGII and the Trustee duly
executed by, the Holder or his attorney duly authorized in
writing.
At the option of the Holder thereof, Securities of any
series (other than a Global Security, except as set forth below)
may be exchanged for a Security or Securities of such series
having authorized denominations and an equal aggregate principal
amount, upon surrender of such Securities to be exchanged at the
office of the Registrar.
LGII may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in
connection with any registration of transfer of Securities. No
service charge shall be made for any such transaction or for any
exchange of Securities of any series for any such transaction or
for any exchange of Securities of any series as contemplated by
the immediately preceding paragraph.
LGII shall not be required to exchange or register a
transfer of (a) any Securities of any series for a period of 15
days next preceding the first mailing or publication of notice of
redemption of Securities of such series to be redeemed, (b) any
Securities selected, called or
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being called for redemption, in
whole or in part, in the case of any Security to be redeemed in
part, the portion thereof not so to be redeemed or (c) any
Security if the Holder thereof has exercised his right, if any,
to require LGII to repurchase such Security in whole or in part,
except the portion of such Security not required to be
repurchased.
Notwithstanding any other provision of this Section
2.10, unless and until it is exchanged in whole or in part for
Securities in definitive registered form, a Global Security
representing all or a part of the Securities of a series may not
be transferred except as a whole by the Depositary for such
series to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a
successor Depositary for such series or a nominee of such
successor Depositary.
If at any time the Depositary for any Securities of a
series represented by one or more Global Securities notifies LGII
that it is unwilling or unable to continue as Depositary for such
Securities or if at any time the Depositary for such Securities
shall no longer be eligible under Section 2.04, LGII shall
appoint a successor Depositary with respect to such Securities.
If a successor Depositary for such Securities is not appointed by
LGII within 90 days after LGII receives such notice or becomes
aware of such ineligibility, LGII's election pursuant to Section
2.01 that such Securities be represented by one or more Global
Securities shall no longer be effective and LGII shall execute,
and the Trustee, upon receipt of an Issuer Order for the
authentication and delivery of definitive Securities of such
series, will authenticate and deliver Securities of such series
in definitive registered form, in any authorized denominations,
in an aggregate principal amount equal to the principal amount of
the Global Security or Securities representing such Securities in
exchange for such Global Security or Securities.
LGII may at any time and in its sole discretion
determine that the Securities of any series issued in the form of
one or more Global Securities shall no longer be represented by a
Global Security or Securities. In such event LGII shall execute,
and the Trustee, upon receipt of an Officer's Certificate for the
authentication and delivery of definitive Securities of such
series, shall authenticate and deliver, Securities of such series
in definitive registered form, in any authorized denominations,
in an aggregate principal amount equal to the principal amount of
the Global Security or Securities representing such Securities,
in exchange for such Global Security or Securities.
If specified by LGII pursuant to Section 2.01 with
respect to Securities represented by a Global Security, the
Depositary for such Global Security may surrender such Global
Security in exchange in whole or in part for Securities of the
same series in definitive registered form on such terms as are
acceptable to LGII and such Depositary. Thereupon, LGII shall
execute, and the Trustee shall authenticate and deliver, without
service charge,
(i) to the Person specified by such Depositary, a new
Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate
principal amount equal to and in exchange for such Person's
beneficial interest in the Global Security; and
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(ii) to such Depositary a new Global Security in a
denomination equal to the difference, if any, between the
principal amount of the surrendered Global Security and the
aggregate principal amount of Securities authenticated and
delivered pursuant to clause (i) above.
Upon the exchange of a Global Security for Securities
in definitive registered form in authorized denominations, such
Global Security shall be cancelled by the Trustee or an agent of
LGII or the Trustee. Securities in definitive registered form
issued in exchange for a Global Security pursuant to this Section
2.10 shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security,
pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee or an agent of LGII or
the Trustee. The Trustee or such agent shall deliver at its
office such Securities to or as directed by the Persons in whose
names such Securities are so registered.
All Securities issued upon any transfer or exchange of
Securities shall be valid and legally binding obligations of
LGII, evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Securities surrendered upon such
transfer or exchange.
Section 2.11. Mutilated, Defaced, Destroyed, Lost And
Stolen Securities. In case any temporary or definitive Security
shall become mutilated, defaced or be destroyed, lost or stolen,
LGII in its discretion may execute, and upon the written request
of any officer of LGII, the Trustee, in the absence of notice to
the Trustee that such Security has been acquired by a bona fide
purchaser, shall authenticate and deliver a new Security of the
same series, maturity date, interest rate, if any, and original
issue date, bearing a number or other distinguishing symbol not
contemporaneously outstanding, in exchange and substitution for
the mutilated or defaced Security, or in lieu of and in
substitution for the Security so destroyed, lost or stolen. In
every case the applicant for a substitute Security shall furnish
to LGII and to the Trustee and any agent of LGII or the Trustee
such security or indemnity as may be required by the Trustee to
indemnity and defend and to save each of the Trustee and LGII
harmless and, in every case of destruction, loss or theft,
evidence to their satisfaction of the destruction, loss or theft
of such Security and of the ownership thereof and in the case of
mutilation or defacement, shall surrender the Security to the
Trustee or such agent.
Upon the issuance of any substitute Security, LGII may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the
Trustee or its agent) connected therewith. In case any Security
which has matured or is about to mature or has been called for
redemption in full or is being surrendered for conversion in full
shall become mutilated or defaced or be destroyed, lost or
stolen, LGII may instead of issuing a substitute Security, pay or
authorize the payment of the same or the conversion of such
Security (without surrender thereof except in the case of a
mutilated or defaced Security), if the applicant for such payment
or conversion shall furnish to LGII and to the Trustee and any
agent of LGII or the Trustee such security or indemnity as any of
them may require to hold each of them harmless, and, in every
case of destruction, loss or theft, the applicant shall also
furnish to LGII and the
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Trustee and any agent of LGII or the
Trustee evidence to the Trustee's satisfaction of the
destruction, loss or theft of such Security and of the ownership
thereof.
Every substitute Security of any series issued pursuant
to the provisions of this Section 2.11 by virtue of the fact that
any such Security is destroyed, lost or stolen shall constitute
an additional contractual obligation of LGII and TLGI, whether or
not the destroyed, lost or stolen Security shall be at any time
enforceable by anyone and shall be entitled to all the benefits
of (but shall be subject to all the limitations of rights set
forth in) this Indenture equally and proportionately with any and
all other Securities of such series duly authenticated and
delivered hereunder. All Securities shall be held and owned upon
the express condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the
replacement, payment or conversion of mutilated, defaced,
destroyed, lost or stolen Securities and shall preclude any and
all other rights or remedies notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the
replacement payment or conversion of negotiable instruments or
other securities without their surrender.
Section 2.12 Cancellation Of Securities; Disposition
Thereof. All Securities surrendered for payment, purchase,
redemption, registration of transfer, exchange or conversion, or
for credit against any payment in respect of a sinking or
analogous fund, if surrendered to LGII or any agent of LGII or
the Trustee or any agent of the Trustee, shall be delivered to
the Trustee or its agent for cancellation or, if surrendered to
the Trustee, shall be cancelled by it; and no Securities shall be
issued in lieu thereof except as expressly permitted by any of
the provisions of this Indenture. The Trustee or its agent shall
dispose of cancelled Securities held by it, or hold such
Securities in accordance with its standard retention policy, and
deliver a certificate of disposition or retention to LGII. If
LGII or its agent shall acquire any of the Securities, such
acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Securities unless and until
the same are delivered to the Trustee or its agent for
cancellation.
Section 2.13. Temporary Securities. Pending the
preparation of definitive Securities for any series, LGII may
execute and the Trustee shall authenticate and deliver temporary
Securities for such series (printed, lithographed, typewritten or
otherwise reproduced, in each case in form satisfactory to the
Trustee). Temporary Securities of any series shall be issuable
in any authorized denomination, and substantially in the form of
the definitive Securities of such series but with such omissions,
insertions and variations as may be appropriate for temporary
Securities, all as may be determined by LGII with the concurrence
of the Trustee as evidenced by the execution and authentication
thereof. Temporary Securities may contain such references to any
provisions of this Indenture as may be appropriate. Every
Temporary Security shall be executed by LGII and be authenticated
by the Trustee upon the same conditions and in substantially the
same manner, and with like effect, as the definitive Securities.
Without reasonable delay LGII shall execute and shall furnish
definitive Securities of such series and thereupon temporary
Securities of such series may be surrendered in exchange therefor
without charge at each office or agency to be maintained by LGII
for that purpose pursuant to Section 4.02 and the Trustee shall
authenticate and deliver in exchange for such temporary
Securities of such series an equal aggregate principal amount of
definitive Securities of the same series having
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authorized
denominations. Until so exchanged, the temporary Securities of
any series shall be entitled to the same benefits under this
Indenture as definitive Securities of such series, unless
otherwise established pursuant to Section 2.01.
Section 2.14. Defaulted Interest. If LGII defaults
on a payment of interest on the Securities of any series, it
shall pay the defaulted interest, plus (to the extent permitted
by law) any interest payable on the defaulted interest, in
accordance with the terms hereof, to the persons who are Holders
on a subsequent special record date, which date shall be at least
five Business Days prior to the payment date. LGII shall fix
such special record date and payment date in a manner
satisfactory to the Trustee. At least 15 days before such
special record date, LGII shall mail to each Holder a notice that
states the special record date, the payment date and the amount
of defaulted interest, and interest payable on such defaulted
interest, if any, to be paid.
Section 2.15. CUSIP Number. LGII in issuing the
Securities of each series may use a "CUSIP" number with respect
to each such series (if then generally in use), and if so, the
Trustee may use the CUSIP numbers in notices of redemption or
exchange as a convenience to Holders; provided, however, that any
such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP number printed in the notice
or on the Securities, and that reliance may be placed only on the
other identification numbers printed on the Securities. LGII
will promptly notify the Trustee of any change in the CUSIP
number.
Section 2.16. Deposit of Moneys. Whenever LGII shall
have one or more Paying Agents, it will, on or before each due
date of the principal of or interest, if any, on any Securities,
deposit with a Paying Agent a sum sufficient to pay the principal
or interest, if any, so becoming due, such sum to be held in
trust for the benefit of the Persons entitled to such principal
or interest, if any, and (unless such Paying Agent is the
Trustee) LGII will promptly notify the Trustee of its action or
failure so to act.
ARTICLE THREE
SECURITYHOLDERS LIST AND REPORTS BY LGII AND THE TRUSTEE
Section 3.01 LGII To Furnish Trustee Information As
To Names And Addresses Of Securityholders. LGII and any other
obligor on the Securities covenant and agree that they will
furnish or cause to be furnished to the Trustee a list in such
form as the Trustee may reasonably require of the names and
addresses of the Holders of the Securities of each series as of a
date not more than 15 days prior to the time such information is
furnished;
(a) semiannually and not more than 15 days after each
March 1 and September 1; and
(b) at such other times as the Trustee may request in
writing, within 30 days after receipt by LGII of any such
request;
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provided that if and so long as Trustee shall be the Registrar
for such series, such list shall not be required to be furnished.
Section 3.02 Preservation And Disclosure Of
Securityholders Lists.
(a) The Trustee shall preserve, in current a form as
is reasonably practicable, all information as to the names and
addresses of the Holders of each series of Securities (i)
contained in the most recent list furnished to it as provided in
Section 3.01, and (ii) received by it in its capacity of
Registrar or Paying Agent for such series, if so acting, and
shall otherwise comply with TIA 312(a). The Trustee may
destroy any list furnished to it as provided in Section 3.01 upon
receipt of a new list so furnished.
(b) In case three or more Holders of Securities
(hereinafter referred to as "applicants") apply in writing to
the Trustee and furnish to the Trustee reasonable proof that each
such applicant has owned a Security for a period of at least six
months preceding the date of such application, and such
application states that the applicants desire to communicate with
other Holders of Securities of a particular series (in which case
the applicants must all hold Securities of such series) or with
Holders of all Securities with respect to their rights under this
Indenture or under such Securities, and such application is
accompanied by a copy of the form of proxy or other communication
which such applicants propose to transmit, then the Trustee
shall, within five Business Days after the receipt of such
application, at its election, either
(i) afford to such applicants access to the
information preserved at the time by the Trustee in
accordance with the provisions of subsection (a) of this
Section 3.02, or
(ii) inform such applicants as to the approximate
number of Holders of Securities of such series of all
Securities, as the case may be, whose names and addresses
appear in the information preserved at the time by the
Trustee, in accordance with the provisions of subsection (a)
of this Section 3.02, and as to the approximate cost of
mailing to such Securityholders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants
access to such information, the Trustee shall, upon the written
request of such applicants, mail to each Securityholder of such
series or all Holders of Securities, as the case may be, whose
name and address appears in the information preserved at the time
by the Trustee in accordance with the provisions of subsection
(a) of this Section 3.02, a copy of the form of proxy or other
communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing , unless within five days after
such tender, the Trustee shall mail to such applicants and file
with the Commission, together with a copy of the material to be
mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interests
of the Holders of Securities of such series or of all Securities,
as the case may be, or would be in violation of applicable law.
Such written statement shall specify the basis of such opinion.
If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or, if,
after
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entry of an order sustaining one or more of such objection,
the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met, and
shall enter an order to declaring, the Trustee shall mail copies
of such material to all such Securityholders with reasonable
promptness after the entry of such order and the renewal of such
tender; otherwise the Trustee shall be relieved of any obligation
or duty to such applicants respecting their application.
(c) Each and every Holder of Securities, by receiving
and holding the same, agrees with LGII and the Trustee that
neither LGII nor the Trustee nor any agent of LGII or the Trustee
shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders of
Securities in accordance with the provisions of subsection (b) of
this Section 3.02, regardless of the source from which such
information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a
request made under such subsection (b).
Section 3.03 Reports By TLGI. TLGI covenants:
(a) to file with the Trustee, within 15 days after
TLGI is required to file the same with the Commission, copies of
the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as
the Commission may from time to time by rules and regulations
prescribe) which TLGI may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934; or, if TLGI is not required to file
information, documents or reports pursuant to either of such
Sections, then to file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant
to Section 13 of the Securities Exchange Act of 1934 in respect
of debt security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;
(b) to file with the Trustee and the Commission, in
accordance with rules and regulations presented from time to time
by the Commission, such additional information, documents and
reports with respect to compliance by LGII with the conditions
and covenants provided for in this Indenture as may be required
from time to time by such rules and regulations;
(c) to transmit by mail to the Holders of Securities
within 30 days after the filing thereof with the Trustee, in the
manner and to the extent provided in Section 7.07, such summaries
of any information, documents and reports required to be filed by
TLGI pursuant to subsections (a) and (b) of this Section 3.03 as
may be required to be transmitted to such Holders by rules and
regulations prescribed from time to time by the Commission; and
(d) furnish to the Trustee, not less than annually, a
brief certificate from the principal executive officer, principal
financial officer or principal accounting officer as to his
knowledge of LGII's compliance with all conditions and covenants
under this Indenture. For
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purposes of this subsection (d), such
compliance shall be determined without regard to any period of
grace or requirement of notice provided under this Indenture.
ARTICLE FOUR
COVENANTS
Each of LGII and TLGI hereby jointly and severally
covenant as follows, from and after the Closing Date and
continuing so long as any amount remains unpaid on any
Securities:
Section 4.01. Payment of Securities. Each of LGII and
TLGI covenants and agrees that it will duly and punctually pay,
or cause to be paid, the principal of and interest on the
Securities of each series on the dates and in the manner provided
in the Securities and this Indenture. An installment of
principal or interest shall be considered paid on the date due if
the Trustee or Paying Agent (other than LGII, TLGI, a Subsidiary
of LGII or TLGI or any Affiliate thereof) holds on that date
money designated and set aside for and sufficient to pay the
installment in a timely manner and is not prohibited from paying
such money to the Holders of the Securities pursuant to the terms
of this Indenture.
Each of LGII or TLGI, as the case may be, covenants and
agrees that it will pay interest on overdue principal at the rate
and in the manner provided in the Securities; it shall pay
interest on overdue installments of interest at the same rate and
in the same manner, to the extent lawful.
Section 4.02. Office For Notices And Payments, Etc.
So long as any of the Securities are Outstanding, LGII will
maintain in each Place of Payment, an office or agency where the
Securities may be presented for payment ("Paying Agent"), an
office or agency where the Securities may be presented for
registration of transfer and for exchange ("Registrar") and, if
applicable, an office or agency where the Securities may be
presented for conversion ("Conversion Agent") as in this
Indenture provided, and an office or agency where notices and
demands to or upon LGII in respect of the Securities or of this
Indenture may be served. In case LGII shall at any time fail to
maintain any such office or agency, or shall fail to give notice
to the Trustee of any change in the location thereof,
presentation may be made and notice and demand may be served in
respect of the Securities or of this Indenture at the Corporate
Trust Office. LGII hereby initially designates the Corporate
Trust Office for each such purpose and appoints the Trustee as
Registrar, Paying Agent, Conversion Agent and as the agent upon
whom notices and demands may be served with respect to the
Securities.
Section 4.03. Corporate Existence. Subject to, and
except as otherwise provided in, Article Five, each of LGII or
TLGI, as the case may be, shall do or cause to be done all things
necessary to and will cause each Restricted Subsidiary to,
preserve and keep in full force and effect the corporate or
partnership existence and rights (charter and statutory),
licenses and/or franchises of TLGI and the Restricted
Subsidiaries (including, without limitation, LGII); provided,
however, that TLGI and the Restricted Subsidiaries shall not be
required to preserve
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any such rights, licenses or franchises if
the Board of Directors of TLGI shall reasonably determine that
(x) the preservation thereof is no longer desirable in the
conduct of the business of TLGI and its Subsidiaries taken as a
whole and (y) the loss thereof is not materially adverse to
either TLGI and its Subsidiaries taken as a whole or to the
ability of LGII or TLGI to otherwise satisfy its obligations
hereunder.
Section 4.04. Payment of Taxes and Other Claims. Each
of LGII and TLGI will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all
taxes, assessments and governmental charges levied or imposed
upon TLGI or any of its Restricted Subsidiaries (including,
without limitation, LGII) or upon the income, profits or property
of TLGI or any of its Restricted Subsidiaries, and (b) all lawful
claims for labor, materials and supplies which, if unpaid, might
by law become a Lien upon the property of TLGI or any Restricted
Subsidiary of TLGI; provided, however, that neither LGII nor TLGI
shall be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim the amount,
applicability or validity of which is being contested in good
faith by appropriate proceedings and for which adequate provision
has been made or where the failure to effect such payment or
discharge is not adverse in any material respect to TLGI.
Section 4.05. Maintenance of Properties; Insurance;
Books and Records; Compliance with Law.
(a) Each of LGII and TLGI shall, and shall cause each
of its Restricted Subsidiaries (including, without limitation,
LGII) to, cause all properties and assets to be maintained and
kept in good condition, repair and working order (reasonable wear
and tear excepted) and supplied with all necessary equipment, and
shall cause to be made all necessary repairs, renewals,
replacements, additions, betterments and improvements thereto, as
shall be reasonably necessary for the proper conduct of its
business; provided, however, that nothing in this Section 4.05(a)
shall prevent TLGI or any of its Restricted Subsidiaries from
discontinuing the operation and maintenance of any of its
properties or assets if such discontinuance is, in the judgment
of the Board of Directors of TLGI or such Restricted Subsidiary,
desirable in the conduct of its business and if such
discontinuance is not materially adverse to either TLGI and its
Subsidiaries taken as a whole or the ability of LGII or TLGI to
otherwise satisfy its obligations hereunder.
(b) Each of LGII and TLGI shall, and shall cause each
of its Restricted Subsidiaries (including, without limitation,
LGII) to, maintain with financially sound and reputable insurers
such insurance as may be required by law (other than with respect
to any environmental impairment liability insurance not
commercially available) and such other insurance to such extent
and against such hazards and liabilities, as is customarily
maintained by companies similarly situated (which may include
self-insurance in the same form as is customarily maintained by
companies similarly situated).
(c) Each of LGII and TLGI shall, and shall cause each
of its Restricted Subsidiaries (including, without limitation,
LGII) to, keep proper books of record and account, in which full
and correct entries shall be made of all business and financial
transactions of TLGI
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and each Restricted Subsidiary of TLGI and
reflect on its financial statements adequate accruals and
appropriations to reserves, all in accordance with GAAP
consistently applied to TLGI and its Subsidiaries taken as a
whole.
(d) Each of LGII and TLGI shall and shall cause each
of its Restricted Subsidiaries (including, without limitation,
LGII) to comply with all statutes, laws, ordinances, or
government rules and regulations to which it is subject,
non-compliance with which would materially adversely affect the
business, earnings, properties, assets or condition (financial or
otherwise) of TLGI and its Subsidiaries taken as a whole.
Section 4.06. Compliance Certificate.
(a) Each of LGII and TLGI will deliver to the Trustee
within 60 days after the end of each of TLGI's first three fiscal
quarters and within 90 days after the end of TLGI's fiscal year
an Officers' Certificate stating whether or not the signers know
of any Default or Event of Default under this Indenture by LGII
or TLGI or an event which, with notice or lapse of time or both,
would constitute a default by LGII or TLGI under any Pari Passu
Indebtedness that occurred during such fiscal period. If they do
know of such a Default, Event of Default or default, the
certificate shall describe any such Default, Event of Default or
default and its status. The first certificate to be delivered
pursuant to this Section 4.06(a) shall be for the first fiscal
quarter of TLGI beginning after the Issue Date. TLGI shall also
deliver a certificate to the Trustee at least annually from its
principal executive, financial or accounting officer as to his or
her knowledge of LGII's and TLGI's compliance with all conditions
and covenants under this Indenture and LGII's, such compliance to
be determined without regard to any period of grace or
requirement of notice provided herein or therein.
(b) TLGI shall deliver to the Trustee within 90 days
after the end of each fiscal year a written statement by LGII's
and TLGI's independent chartered accountants stating (A) that
their audit examination has included a review of the terms of
this Indenture and the Securities as they relate to accounting
matters, and (B) whether, in connection with their audit
examination, any Default or Event of Default under this Indenture
or an event which, with notice or lapse of time or both, would
constitute a default under any Pari Passu Indebtedness has come
to their attention and, if such a Default, Event of Default or a
default under any Pari Passu Indebtedness has come to their
attention, specifying the nature and period of existence thereof;
provided, however, that, without any restriction as to the scope
of the audit examination, such independent certified public
accountants shall not be liable by reason of any failure to
obtain knowledge of any such Default, Event of Default or a
default under any Pari Passu Indebtedness that would not be
disclosed in the course of an audit examination conducted in
accordance with GAAP.
(c) Each of LGII and TLGI will deliver to the Trustee
as soon as possible, and in any event within 10 days after LGII
and/or TLGI, as the case may be, becomes aware or should
reasonably have become aware of the occurrence of any Default,
Event of Default or an event which, with notice or lapse of time
or both, would constitute a default by LGII and/or TLGI, as the
case may be, under any Indebtedness, an Officers' Certificate
specifying such
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Default, Event of Default or default and what
action LGII and/or TLGI, as the case may be, is taking or
proposes to take with respect thereto.
Section 4.07. Limitation on Indebtedness.
TLGI will not, and will not permit any of its
Restricted Subsidiaries (including, without limitation, LGII) to,
directly or indirectly, create, incur, issue, assume, guarantee
or in any manner become directly or indirectly liable,
contingently or otherwise, for the payment of (collectively, to
"incur") any Indebtedness (including, without limitation, any
Acquired Indebtedness) other than Permitted Indebtedness.
Notwithstanding the foregoing limitations, TLGI and LGII (and any
Wholly-Owned Subsidiary with respect to Seller Financing
Indebtedness) will be permitted to incur Indebtedness (including,
without limitation, Acquired Indebtedness) if at the time of such
incurrence, and after giving pro forma effect thereto, the
Consolidated Fixed Charge Coverage Ratio of TLGI is at least
equal to 2.25 : 1.
Section 4.08. Limitation on Restricted Payments.
TLGI will not, and will not permit any of its
Restricted Subsidiaries (including, without limitation, LGII) to,
directly or indirectly:
(a) declare or pay any dividend or make any other
distribution or payment on or in respect of Capital Stock of TLGI
or any of its Restricted Subsidiaries or any payment made to the
direct or indirect holders (in their capacities as such) of
Capital Stock of TLGI or any of its Restricted Subsidiaries
(other than (x) dividends or distributions payable solely in
Capital Stock of TLGI (other than Redeemable Capital Stock) or in
options, warrants or other rights to purchase Capital Stock of
TLGI (other than Redeemable Capital Stock) and (y) dividends or
other distributions to the extent declared or paid to TLGI or any
Wholly-Owned Subsidiary of TLGI),
(b) purchase, redeem, defease or otherwise acquire or
retire for value any Capital Stock of TLGI or any of its
Restricted Subsidiaries (other than any such Capital Stock of a
Wholly-Owned Subsidiary of TLGI),
(c) make any principal payment on, or purchase,
defease, repurchase, redeem or otherwise acquire or retire for
value, prior to any scheduled maturity, scheduled repayment,
scheduled sinking fund payment or other Stated Maturity, any
Indebtedness that is subordinate or junior in right of payment to
the Securities or Pari Passu Indebtedness (other than any such
subordinated or Pari Passu Indebtedness owned by TLGI or a Wholly-
Owned Subsidiary of TLGI), or
(d) make any Investment (other than any Permitted
Investment) in any person, (such payments or Investments
described in the preceding clauses (a), (b), (c) and (d) are
collectively referred to as "Restricted Payments"), unless, at
the time of and after giving effect to the proposed Restricted
Payment (the amount of any such Restricted Payment, if other than
cash, shall be the Fair Market Value on the date of such
Restricted Payment of the asset(s) proposed to be transferred by
TLGI or such Restricted Subsidiary, as the case may be, pursuant
to such
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Restricted Payment), (A) no Default or Event of Default
shall have occurred and be continuing, (B) immediately prior to
and after giving effect to such Restricted Payment, TLGI would be
able to incur $1.00 of additional Indebtedness pursuant to
Section 4.07 (assuming a market rate of interest with respect to
such additional Indebtedness) and (C) the aggregate amount of all
Restricted Payments declared or made from and after the
Measurement Date would not exceed the sum of (1) 50% of the
aggregate Consolidated Net Income of TLGI accrued on a cumulative
basis during the period beginning on the first day of the fiscal
quarter of TLGI during which the Measurement Date occurs and
ending on the last day of the fiscal quarter of TLGI immediately
preceding the date of such proposed Restricted Payment, which
period shall be treated as a single accounting period (or, if
such aggregate cumulative Consolidated Net Income of TLGI for
such period shall be a deficit, minus 100% of such deficit) plus
(2) the aggregate net cash proceeds received by TLGI or LGII
(without duplication) either (x) as capital contributions to TLGI
or LGII (without duplication) after the Measurement Date from any
person (other than TLGI, LGII or a Restricted Subsidiary of TLGI
or LGII, as the case may be) or (y) from the issuance or sale of
Capital Stock (excluding Redeemable Capital Stock, but including
Capital Stock issued upon the conversion of convertible
Indebtedness or from the exercise of options, warrants or rights
to purchase Capital Stock (other than Redeemable Capital Stock))
of TLGI or LGII (without duplication) to any person (other than
to TLGI, LGII or a Restricted Subsidiary of TLGI or LGII, as the
case may be) after the Measurement Date plus (3) in the case of
the disposition or repayment of any Investment constituting a
Restricted Payment made after the Measurement Date (excluding any
Investment described in clause (v) of the following paragraph),
an amount equal to the lesser of the return of capital with
respect to such Investment and the cost of such Investment less,
in either case, the cost of the disposition of such Investment
plus (4) the sum of $15,000,000. For purposes of the preceding
clause (C)(2), the value of the aggregate net proceeds received
by TLGI or LGII (without duplication) upon the issuance of
Capital Stock upon the conversion of convertible Indebtedness or
upon the exercise of options, warrants or rights will be the net
cash proceeds received upon the issuance of such Indebtedness,
options, warrants or rights plus the incremental cash amount
received by TLGI or LGII (without duplication) upon the
conversion or exercise thereof.
None of the foregoing provisions will prohibit (i) the
payment of any dividend within 60 days after the date of its
declaration, if at the date of declaration such payment would be
permitted by the foregoing paragraph; (ii) so long as no Default
or Event of Default shall have occurred and be continuing, the
redemption, repurchase or other acquisition or retirement of any
shares of any class of Capital Stock of TLGI, LGII or any
Restricted Subsidiary of TLGI or LGII in exchange for, or out of
the net cash proceeds of, a substantially concurrent (x) capital
contribution to TLGI or LGII from any person (other than a
Related Obligor) or (y) issue and sale of other shares of Capital
Stock (other than Redeemable Capital Stock) of TLGI or LGII to
any person (other than to a Related Obligor); (iii) so long as no
Default or Event of Default shall have occurred and be
continuing, any redemption, repurchase or other acquisition or
retirement of Indebtedness that is subordinate or junior in right
of payment to the Securities and the Guarantee by exchange for,
or out of the net cash proceeds of, a substantially concurrent
(x) capital contribution to TLGI or LGII from any person (other
than a Related Obligor) or (y) issue and sale of (1) Capital
Stock (other than Redeemable Capital Stock) of TLGI or LGII to
any person (other than a Related Obligor); provided, however,
that the amount of any such net
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proceeds that are utilized for
any such redemption, repurchase or other acquisition or
retirement shall be excluded from clause (C)(2) of the preceding
paragraph; or (2) Indebtedness of TLGI or LGII issued to any
person (other than a Related Obligor), so long as such
Indebtedness is Pari Passu Indebtedness or Indebtedness that is
subordinate or junior in right of payment to the Securities and
the Guarantee in the same manner and at least to the same extent
as the Indebtedness so purchased, exchanged, redeemed, acquired
or retired; (iv) so long as no Default or Event of Default shall
have occurred and be continuing, any redemption, repurchase or
other acquisition or retirement of Pari Passu Indebtedness by
exchange for, or out of the net cash proceeds of, a substantially
concurrent (x) capital contribution to TLGI or LGII from any
person (other than a Related Obligor) or (y) issue and sale of
(1) Capital Stock (other than Redeemable Capital Stock) of TLGI
or LGII to any person (other than a Related Obligor); provided,
however, that the amount of any such net proceeds that are
utilized for any such redemption, repurchase or other acquisition
or retirement shall be excluded from clause (C)(2) of the
preceding paragraph; or (2) Indebtedness of TLGI or LGII issued
to any person (other than a Related Obligor), so long as such
Indebtedness is Pari Passu Indebtedness or Indebtedness that is
subordinate or junior in right of payment to the Securities and
the Guarantee in the same manner and at least to the same extent
as the Indebtedness so purchased, exchanged, redeemed, acquired
or retired; (v) Investments constituting Restricted Payments made
as a result of the receipt of consideration that consists of cash
or Cash Equivalents from any Asset Sale made pursuant to and in
compliance with Section 4.12; (vi) so long as no Default or Event
of Default has occurred and is continuing, repurchases by TLGI of
common stock of TLGI from employees of TLGI or their authorized
representatives upon the death, disability or termination of
employment of such employees, in an aggregate amount not
exceeding $10,000,000 in any calendar year; (vii) Investments
constituting Restricted Payments that are permitted by
subparagraphs (iv) and (v) of the proviso to Section 4.13; and
(viii) the declaration or the payment of dividends on, or the
scheduled purchase or redemption of, the Preferred Securities of
a Special Finance Subsidiary or the Series C Preferred Shares, of
TLGI. In computing the amount of Restricted Payments previously
made for purposes of clause (C) of the preceding paragraph,
Restricted Payments made under the preceding clauses (v), (vi)
and (vii) shall be included and those under clauses (i), (ii),
(iii), (iv) and (viii) shall not be so included. For purposes of
this Section 4.08 only, the term "Related Obligor" shall mean
TLGI, LGII or a Restricted Subsidiary of TLGI or LGII.
Section 4.09. Limitation on Issuances and Sale of
Preferred Stock by Restricted Subsidiaries.
TLGI (a) will not permit any of its Restricted
Subsidiaries (including, without limitation, LGII) to issue any
Preferred Stock (other than (i) Preferred Stock issued to TLGI or
a Wholly-Owned Subsidiary of TLGI and (ii) Preferred Securities
of a Special Finance Subsidiary); and (b) will not permit any
person to own any Preferred Stock of any Restricted Subsidiary of
TLGI (other than (i) Preferred Stock owned by TLGI or a Wholly-
Owned Subsidiary of TLGI and (ii) Preferred Securities of a
Special Finance Subsidiary); provided, however, that this
covenant shall not prohibit the issuance and sale of (x) all, but
not less than all, of the issued and outstanding Capital Stock of
any Restricted Subsidiary of TLGI owned by TLGI or any of its
Restricted Subsidiaries in compliance with the other provisions
of this
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Indenture or (y) directors' qualifying shares or
investments by foreign nationals mandated by applicable law.
Section 4.10. Limitation on Liens.
TLGI will not, and will not permit any of its
Restricted Subsidiaries (including, without limitation, LGII) to,
create, incur, assume or suffer to exist any Liens of any kind
against or upon any of its property or assets, or any proceeds
therefrom where the aggregate amount of Indebtedness secured by
any such Liens, together with the aggregate amount of property
subject to any Sale-Leaseback Transactions of TLGI and its
Restricted Subsidiaries (other than Permitted Sale-Leaseback
Transactions), exceeds 10% of TLGI's Consolidated Net Worth,
unless (x) in the case of Liens securing Indebtedness that is
subordinate or junior in right of payment to the Securities, the
Securities are secured by a Lien on such property, assets or
proceeds that is senior in priority to such Liens and (y) in all
other cases, the Securities are equally and ratably secured
except for (a) Liens existing as at the Measurement Date;
(b) Liens securing the Securities or the Guarantee; (c) Liens in
favor of TLGI, LGII or any Wholly-Owned Subsidiary; (d) Liens
securing Indebtedness which is incurred to refinance Indebtedness
which has been secured by a Lien permitted under the provisions
of this Indenture and which has been incurred in accordance with
the provisions of the Indenture; provided, however, that such
Liens do not extend to or cover any property or assets of TLGI or
any of its Restricted Subsidiaries not securing the Indebtedness
so refinanced; and (e) Permitted Liens.
Section 4.11. Change of Control.
Upon the occurrence of a Change of Control, LGII will
be, and TLGI will ensure that LGII will be, obligated to make an
offer to purchase (a "Change of Control Offer"), and shall
purchase, on a Business Day (the "Change of Control Purchase
Date") not more than 60 nor less than 30 days following the
occurrence of the Change of Control, all of the then outstanding
Securities of each series properly tendered and not withdrawn at
a purchase price (the "Change of Control Purchase Price") equal
to 101% of the principal amount thereof (or, in the case of an
Original Issue Discount Security, the principal thereof
(including any amount in respect of original issue discount) plus
accrued and unpaid interest, if any, to the Change of Control
Purchase Date. The Change of Control Offer is required to remain
open for at least 20 Business Days and until the close of
business on the Change of Control Purchase Date.
Notice of a Change of Control Offer shall be mailed by
LGII not later than the 30th day after the date of occurrence of
the Change of Control to the Holders of Securities at their last
registered addresses with a copy to the Trustee and the Paying
Agent. The Change of Control Offer shall remain open from the
time of mailing for at least 20 Business Days and until 5:00
p.m., New York City time, on the Change of Control Purchase Date.
The notice, which shall govern the terms of the Change of Control
Offer, shall include such disclosures as are required by law and
shall state:
(a) that the Change of Control Offer is being made
pursuant to this Section 4.11 and that all Securities validly
tendered into the Change of Control Offer and not withdrawn will
be accepted for payment;
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(b) the purchase price (including the amount of
accrued interest, if any) for each Security, the Change of
Control Purchase Date and the date on which the Change of Control
Offer expires;
(c) that any Security not tendered for payment will
continue to accrue interest in accordance with the terms thereof;
(d) that, unless LGII shall default in the payment of
the purchase price, any Security accepted for payment pursuant to
the Change of Control Offer shall cease to accrue interest after
the Change of Control Purchase Date;
(e) that Holders electing to have Securities purchased
pursuant to a Change of Control Offer will be required to
surrender their Securities to the Paying Agent at the address
specified in the notice prior to 5:00 p.m., New York City time,
on the Change of Control Purchase Date and must complete any form
of letter of transmittal proposed by LGII and reasonably
acceptable to the Trustee and the Paying Agent;
(f) that Holders of Securities will be entitled to
withdraw their election if the Paying Agent receives, not later
than 5:00 p.m., New York City time, on the Change of Control
Purchase Date, a tested telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of
Securities the Holder delivered for purchase, the Security
certificate number (if any) and a statement that such Holder is
withdrawing its election to have such Securities purchased;
(g) that Holders whose Securities are purchased only
in part will be issued Securities equal in principal amount to
the unpurchased portion of the Securities surrendered;
(h) the instructions that Holders must follow in order
to tender their Securities; and
(i) information concerning the business of LGII and
TLGI, the most recent annual and quarterly reports of TLGI filed
with the Commission pursuant to the Exchange Act (or, if TLGI is
not then permitted to file any such reports with the Commission,
the comparable reports prepared pursuant to Section 4.17), a
description of material developments in the business of LGII and
TLGI, information with respect to pro forma historical financial
information after giving effect to such Change of Control and
such other information concerning the circumstances and relevant
facts regarding such Change of Control Offer as would be material
to a Holder of Securities in connection with the decision of such
Holder as to whether or not it should tender Securities pursuant
to the Change of Control Offer.
On the Change of Control Purchase Date, LGII shall
(i) accept for payment Securities or portions thereof validly
tendered pursuant to the Change of Control Offer, (ii) deposit
with the Paying Agent money, in immediately available funds,
sufficient to pay the purchase price of all Securities or
portions thereof so tendered and accepted and (iii) deliver to
the Trustee the Securities so accepted together with an Officers'
Certificate setting forth the Securities or portions thereof
tendered to and accepted for payment by LGII. The Paying Agent
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shall promptly mail or deliver to the Holders of Securities so
accepted payment in an amount equal to the purchase price, and
the Trustee shall promptly authenticate and mail or deliver to
such Holders a new Security equal in principal amount to any
unpurchased portion of the Security surrendered. Any Securities
not so accepted shall be promptly mailed or delivered by LGII to
the Holder thereof. LGII will publicly announce the results of
the Change of Control Offer not later than the first Business Day
following the Change of Control Purchase Date.
If a Change of Control occurs and LGII fails to pay the
Purchase Price for all Securities properly tendered and not
withdrawn, TLGI will be obliged to purchase all such Securities
at the Change of Control Purchase Price on the Change of Control
Purchase Date in compliance with the requirements applicable to a
Change of Control Offer made by LGII.
LGII shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change
of Control Offer in a manner, at the times and otherwise in
compliance with the requirements applicable to a Change of
Control Offer made by LGII and purchases all Securities validly
tendered and not withdrawn under such Change of Control Offer.
LGII and TLGI will comply, to the extent applicable,
with the requirements of Section 14(e) of the Exchange Act, and
any other securities laws or regulations in connection with the
repurchase of Securities pursuant to a Change of Control Offer.
Section 4.12. Disposition of Proceeds of Asset Sales.
(a) TLGI will not, and will not permit any of its
Restricted Subsidiaries (including, without limitation, LGII) or
First Capital Life Insurance Company of Louisiana, National
Capital Life Insurance Company, Security Industrial Insurance
Company, Security Industrial Fire Insurance Company or any
successors to such Subsidiaries to, make any Asset Sale unless
(a) TLGI or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the shares or assets sold or
otherwise disposed of and (b) at least 75% of such consideration
consists of cash or Cash Equivalents. To the extent the Net Cash
Proceeds of any Asset Sale are not required to be applied to
repay, and permanently reduce the commitments under, the Credit
Agreements (as required by the terms thereof) or any other Pari
Passu Indebtedness, or are not so applied, TLGI or such
Restricted Subsidiary, as the case may be, may, within 180 days
of such Asset Sale, apply such Net Cash Proceeds to an investment
in properties and assets that replace the properties and assets
that were the subject of such Asset Sale or in properties and
assets that will be used in the business of TLGI and its
Restricted Subsidiaries existing on the Issue Date or in
businesses reasonably related thereto ("Replacement Assets").
Any Net Cash Proceeds from any Asset Sale that are neither used
to repay, and permanently reduce the commitments under, the
Credit Agreements nor invested in Replacement Assets within the
180-day period described above constitute "Excess Proceeds"
subject to disposition as provided below.
(b) When the aggregate amount of Excess Proceeds
equals or exceeds $10,000,000, after satisfying any similar
purchase obligations of TLGI or LGII under Senior Debt
instruments outstanding as of the Issue Date, TLGI shall cause
LGII to make an offer to
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purchase (an "Asset Sale Offer"), from
all holders of each series of the Securities, not more than 40
Business Days thereafter, an aggregate principal amount of
Securities equal to such Excess Proceeds, at a price in cash
equal to 100% of the outstanding principal amount thereof (or, in
the case of an Original Issue Discount Security, the principal
thereof (including any amount in respect of original issue
discount) plus accrued and unpaid interest, if any, to the
purchase date (the "Asset Sale Offer Price").
(c) Notice of an Asset Sale Offer shall be mailed by
LGII to all Holders of Securities not less than 20 Business Days
nor more than 40 Business Days before the Asset Sale Purchase
Date at their last registered address with a copy to the Trustee
and the Paying Agent. The Asset Sale Offer shall remain open
from the time of mailing for at least 20 Business Days and until
at least 5:00 p.m., New York City time, on the Asset Sale
Purchase Date. The notice, which shall govern the terms of the
Asset Sale Offer, shall include such disclosures as are required
by law and shall state:
(1) that the Asset Sale Offer is being made pursuant
to this Section 4.12;
(2) the Asset Sale Offer Price (including the amount
of accrued interest, if any) for each Security, the Asset Sale
Purchase Date and the date on which the Asset Sale Offer expires;
(3) that any Security not tendered or accepted for
payment will continue to accrue interest in accordance with the
terms thereof;
(4) that, unless LGII shall default in the payment of
the Asset Sale Offer Price, any Security accepted for payment
pursuant to the Asset Sale Offer shall cease to accrue interest
after the Asset Sale Purchase Date;
(5) that Holders electing to have Securities purchased
pursuant to an Asset Sale Offer will be required to surrender
their Securities to the Paying Agent at the address specified in
the notice prior to 5:00 p.m., New York City time, on the Asset
Sale Purchase Date and must complete any form of letter of
transmittal proposed by LGII and reasonably acceptable to the
Trustee and the Paying Agent;
(6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00 p.m.,
New York City time, on the Asset Sale Purchase Date, a tested
telex, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of Securities the Holder
delivered for purchase, the Security certificate number (if any)
and a statement that such Holder is withdrawing its election to
have such Securities purchased;
(7) that if Securities in a principal amount in excess
of the Holder's pro rata share of the amount of Excess Proceeds
are tendered pursuant to the Asset Sale Offer, LGII shall
purchase Securities on a pro rata basis among the Securities
tendered (with such adjustments as may be deemed appropriate by
LGII so that only Securities in denominations of $1,000 or
integral multiples of $1,000 shall be acquired);
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(8) that Holders whose Securities are purchased only
in part will be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered;
(9) the instructions that Holders must follow in order
to tender their Securities; and
(10) information concerning the business of LGII and
TLGI, the most recent annual and quarterly reports of TLGI filed
with the Commission pursuant to the Exchange Act (or, if TLGI is
not permitted to file any such reports with the Commission, the
comparable reports prepared pursuant to Section 4.17), a
description of material developments in the business of LGII and
TLGI, information with respect to pro forma historical financial
information after giving effect to such Asset Sale and Asset Sale
Offer and such other information concerning the circumstances and
relevant facts regarding such Asset Sale Offer as would be
material to a Holder of Securities in connection with the
decision of such Holder as to whether or not it should tender
Securities pursuant to the Asset Sale Offer.
(11) On the Asset Sale Purchase Date, LGII shall
(i) accept for payment, on a pro rata basis, Securities or
portions thereof tendered pursuant to the Asset Sale Offer,
(ii) deposit with the Paying Agent money, in immediately
available funds, in an amount sufficient to pay the Asset Sale
Offer Price of all Securities or portions thereof so tendered and
accepted and (iii) deliver to the Trustee the Securities so
accepted together with an Officers' Certificate setting forth the
Securities or portions thereof tendered to and accepted for
payment by LGII. The Paying Agent shall promptly mail or deliver
to Holders of Securities so accepted payment in an amount equal
to the Asset Sale Offer Price, and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Security
equal in principal amount to any unpurchased portion of the
Security surrendered. Any Securities not so accepted shall be
promptly mailed or delivered by LGII to the Holder thereof. LGII
will publicly announce the results of the Asset Sale Offer not
later than the first Business Day following the Asset Sale
Purchase Date. To the extent that the aggregate principal amount
of Securities tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds, LGII or TLGI, as the case may be, may
use such deficiency for general corporate purposes. Upon
completion of such Asset Sale Offer, the amount of Excess
Proceeds shall be reset to zero. For purposes of this
Section 4.12, the Trustee shall act as Paying Agent.
(12) LGII and TLGI will comply, to the extent
applicable, with the requirements of Section 14(e) of the
Exchange Act and any other securities laws or regulations in
connection with the repurchase of Securities pursuant to the
Asset Sale Offer.
Section 4.13. Limitation on Transactions with
Interested Persons.
TLGI will not, and will not permit any of its
Restricted Subsidiaries (including, without limitation, LGII) to,
directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without
limitation, the sale, transfer, disposition, purchase, exchange
or lease of assets, property or services) with, or for the
benefit of, any Affiliate of TLGI or any beneficial owner (as
defined in Rules 13d-3 and 13d-5 under the
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Exchange Act, except
that a person shall be deemed to have "beneficial ownership" of
all securities that such person has the right to acquire, whether
such right is exercisable immediately, after the passage of time
or upon the happening of an event) of 5% or more of the Common
Shares at any time outstanding ("Interested Persons"), unless
(a) such transaction or series of related transactions are on
terms that are no less favorable to TLGI or such Restricted
Subsidiary, as the case may be, than those which could have been
obtained in a comparable transaction at such time from persons
who are not Affiliates of TLGI or Interested Persons, (b) with
respect to a transaction or series of transactions involving
aggregate payments or value equal to or greater than $10,000,000,
TLGI has obtained a written opinion from an Independent Financial
Advisor stating that the terms of such transaction or series of
transactions are fair to TLGI or its Restricted Subsidiary, as
the case may be, from a financial point of view and (c) with
respect to a transaction or series of transactions involving
aggregate payments or value equal to or greater than $2,500,000,
TLGI shall have delivered an Officer's Certificate to the Trustee
certifying that such transaction or series of transactions comply
with the preceding clause (a) and, if applicable, certifying
that the opinion referred to in the preceding clause (b) has been
delivered and that such transaction or series of transactions has
been approved by a majority of the Board of Directors of TLGI
(including a majority of the disinterested directors); provided,
however, that this covenant will not restrict TLGI from
(i) paying dividends in respect of its Capital Stock permitted
under Section 4.08, (ii) paying reasonable and customary fees to
directors of TLGI or any Restricted Subsidiary who are not
employees of TLGI or any Restricted Subsidiary, (iii) entering
into transactions with its Wholly-Owned Subsidiaries or
permitting its Wholly-Owned Subsidiaries from entering into
transactions with other Wholly- Owned Subsidiaries of TLGI, (iv)
making loans or advances to senior officers and directors of TLGI
or any Restricted Subsidiary not in excess of $6,000,000 in the
aggregate at any one time outstanding, (v) guaranteeing loans
made to officers and other employees of TLGI or any Restricted
Subsidiaries in connection with TLGI's 1994 Management Equity
Investment Plan not in excess of $6,000,000 in the aggregate at
any tone time outstanding, (vi) making loans or advances to
officers, employees or consultants of TLGI and its Restricted
Subsidiaries for travel and moving expenses in the ordinary
course of business for bona fide business purposes of TLGI and
its Restricted Subsidiaries, (vii) making other loans or advances
to officers, employees or consultants of TLGI and its Restricted
Subsidiaries in the ordinary course of business for bona fide
business purposes of TLGI and its Restricted Subsidiaries not in
excess of $10,000,000 in the aggregate at any one time
outstanding, (viii) making payments to officers or employees of
TLGI or its Restricted Subsidiaries pursuant to obligations
undertaken, at a time when such persons were not officers or
employees of TLGI or its Restricted Subsidiaries, in connection
with arms' length Asset Acquisitions or (ix) declaring or paying
dividends on, or purchasing or redeeming, the Preferred
Securities of a Special Finance Subsidiary.
Section 4.14. Limitation on Dividends and Other
Payment Restrictions Affecting Subsidiaries.
TLGI will not, and will not permit any of its
Restricted Subsidiaries (including, without limitation, LGII) to,
directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary of TLGI to (a) pay
dividends, in cash or otherwise, or make any other distributions
on or in respect
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of its Capital Stock or any other interest or
participation in, or measured by, its profits, (b) pay any
Indebtedness owed to TLGI or any other Restricted Subsidiary of
TLGI, (c) make loans or advances to, or any Investment in, TLGI
or any other Restricted Subsidiary of TLGI, (d) transfer any of
its properties or assets to TLGI or any other Restricted
Subsidiary of TLGI or (e) guarantee any Indebtedness of TLGI or
any other Restricted Subsidiary of TLGI, except for such
encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) customary non-assignment provisions of any
contract or any lease governing a leasehold interest of TLGI or
any Restricted Subsidiary of TLGI, (iii) customary restrictions
on transfers of property subject to a Lien permitted under the
provisions of this Indenture which could not materially adversely
affect TLGI's ability to satisfy its obligations under the
provisions of this Indenture and the Securities, (iv) any
agreement or other instrument of a person acquired by TLGI or any
Restricted Subsidiary of TLGI (or a Restricted Subsidiary of such
person) in existence at the time of such acquisition (but not
created in contemplation thereof), which encumbrance or
restriction is not applicable to any person, or the properties or
assets of any person, other than the person, or the properties or
assets of the person, so acquired, (v) provisions contained in
any agreement or instrument relating to Indebtedness which
prohibit the transfer of all or substantially all of the assets
of the obligor thereunder unless the transferee shall assume the
obligations of the obligor under such agreement or instrument and
(vi) encumbrances and restrictions under Indebtedness in effect
on the Issue Date (including under the Securities) and
encumbrances and restrictions in permitted refinancings or
replacements thereof which are no less favorable to the holders
of the Securities than those contained in the Indebtedness so
refinanced or replaced.
Section 4.15. Limitations on Sale-Leaseback
Transactions.
TLGI will not, and will not permit any of its
Restricted Subsidiaries (including, without limitation, LGII) to,
enter into any Sale-Leaseback Transaction with respect to any
property of TLGI or any of its Restricted Subsidiaries where the
aggregate amount of property subject to such Sale-Leaseback
Transactions, together with the aggregate amount of Liens
securing Indebtedness of TLGI and its Restricted Subsidiaries
(other than Permitted Liens), exceeds 10% of TLGI's Consolidated
Net Worth. Notwithstanding the foregoing, TLGI and its
Restricted Subsidiaries may enter into Sale-Leaseback
Transactions ("Permitted Sale-Leaseback Transactions") with
respect to property acquired or constructed after the Issue Date;
provided that (a) the Attributable Value of such Sale-Leaseback
Transaction shall be deemed to be Indebtedness of TLGI or such
Restricted Subsidiary, as the case may be, and (b) after giving
pro forma effect to any such Sale-Leaseback Transaction and the
foregoing clause (a), TLGI would be able to incur $1.00 of
additional Indebtedness pursuant to 4.07 (assuming a market rate
of interest with respect to such additional Indebtedness).
Section 4.16. Limitation on Applicability of Certain
Covenants.
During any period of time that (i) the ratings assigned
to the Securities by each of S&P and Moody's (collectively, the
"Rating Agencies") are no less than BBB-and Baa3, respectively
(the "Investment Grade Ratings"), and (ii) no Default or Event of
Default has occurred and is continuing, TLGI and its Restricted
Subsidiaries (including, without limitation,
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LGII) will not be
subject to the covenants contained in Sections 4.07, 4.08, 4.09,
4.12, 4.13 and 4.14 (collectively, the "Suspended Covenants"). If
one or both Rating Agencies withdraws its rating or downgrades
its Investment Grade Rating, then thereafter TLGI and its
Restricted Subsidiaries will be subject, on a prospective basis,
to the Suspended Covenants (until the Rating Agencies have again
assigned Investment Grade Ratings to the Securities) and
compliance with the Suspended Covenants with respect to
Restricted Payments made after the time of such withdrawal or
downgrade will be calculated in accordance with the covenant
contained in Section 4.07 as if such covenant had been in effect
at all times after the Measurement Date.
Section 4.17 Commission Reports.
TLGI shall file with the Commission, or if not
permitted or required to so file will deliver to the Trustee, the
annual reports, quarterly reports and the information, documents
and other reports required to be filed with the Commission
pursuant to Sections 13 and 15 of the Exchange Act, whether or
not TLGI has a class of securities registered under the Exchange
Act. In accordance with the provisions of TIA 314(a), TLGI
shall file with the Trustee and provide to each Holder, within 15
days after it files them with the Commission (or if such filing
is not permitted under the Exchange Act, 15 days after TLGI would
have been required to make such filing), copies of such reports.
TLGI also shall comply with the other provisions of TIA 314(a).
In addition, TLGI shall cause its annual reports to stockholders
and any quarterly or other financial reports furnished by it to
stockholders generally to be filed with the Trustee and mailed no
later than the date such materials are mailed or made available
to TLGI's stockholders, to the Holders at their addresses as set
forth in the register of securities maintained by the Registrar.
Section 4.18. Rule 144A Information Requirement.
If at any time TLGI is no longer subject to the
reporting requirements of the Exchange Act, it will furnish to
the Holders or beneficial holders of the Securities and
prospective purchasers of the Securities designated by the
holders of the Securities, upon their request, any information
required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
Section 4.19. Waiver of Stay, Extension or Usury Laws.
Each of LGII and TLGI covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury law or other
law which would prohibit or forgive LGII or TLGI, as the case may
be, from paying all or any portion of the principal of, premium,
if any, or interest on the Securities as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which
may affect the covenants or the performance of this Indenture;
and (to the extent that it may lawfully do so) each of LGII and
TLGI hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede
the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as
though no such law had been enacted.
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ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. When TLGI or LGII May Merge, etc.
(a) TLGI will not, and will not permit LGII to, in any
transaction or series of transactions, merge or consolidate with
or into, or sell, assign, convey, transfer, lease or otherwise
dispose of all or substantially all of its properties and assets
as an entirety to, any person or persons, and TLGI will not
permit any of its Restricted Subsidiaries (including, without
limitation, LGII) to enter into any such transaction or series of
transactions if such transaction or series of transactions, in
the aggregate, would result in a sale, assignment, conveyance,
transfer, lease or other disposition of all or substantially all
of the properties and assets of TLGI or LGII or TLGI and its
Restricted Subsidiaries, taken as a whole, or LGII and its
Restricted Subsidiaries, taken as a whole, to any other person or
persons, unless at the time of and after giving effect thereto
(a) either (i) if the transaction or series of transactions is a
merger or consolidation, TLGI or LGII or the Restricted
Subsidiary, as the case may be, shall be the surviving person of
such merger or consolidation, or (ii) the person formed by such
consolidation or into which TLGI, LGII or such Restricted
Subsidiary, as the case may be, is merged or to which the
properties and assets of TLGI, LGII or such Restricted
Subsidiary, as the case may be, are transferred (any such
surviving person or transferee person being the "Surviving
Entity") shall be a corporation organized and existing under the
laws of the United States of America, any state thereof, the
District of Columbia, Canada or any province thereof and shall
expressly assume by a supplemental indenture executed and
delivered to the Trustee, in form reasonably satisfactory to the
Trustee, the due and punctual payment of the principal of,
premium, if any, and interest on all the Securities and the
performance and observance of every covenant and obligation of
this Indenture and the Securities on the part of TLGI or LGII, as
the case may be, to be performed or observed and, in each case,
this Indenture shall remain in full force and effect; (b)
immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of
such transaction or series of transactions), no Default or Event
of Default shall have occurred and be continuing and TLGI, LGII
or the Surviving Entity, as the case may be, after giving effect
to such transaction or series of transactions on a pro forma
basis (including, without limitation, any Indebtedness incurred
or anticipated to be incurred in connection with or in respect of
such transaction or series of transactions), could incur $1.00 of
additional Indebtedness pursuant to Section 4.07 (assuming a
market rate of interest with respect to such additional
Indebtedness); (c) immediately after giving effect to such
transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of
such transaction or series of transactions), the Consolidated Net
Worth of TLGI, LGII or the Surviving Entity, as the case may be,
is at least equal to the Consolidated Net Worth of TLGI or LGII,
as the case may be, immediately before such transaction or series
of transactions; and (d) TLGI, LGII or the Surviving Entity, as
the case may be, shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each in form and substance
reasonably satisfactory to the Trustee, each stating that such
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consolidation, merger, sale, assignment, conveyance, transfer,
lease or other disposition and, if a supplemental indenture is
required in connection with such transaction or series of
transactions, such supplemental indenture, complies with this
Indenture and that all conditions precedent herein provided for
relating to such transaction or series of transactions have been
complied with; provided, however, that solely for purposes of
computing amounts described in subclause (C) of Section 4.08, any
such successor person shall only be deemed to have succeeded to
and be substituted for TLGI or LGII, as the case may be, with
respect to periods subsequent to the effective time of such
merger, consolidation or transfer of assets.
Section 5.02. Successor Substituted.
Upon any consolidation or merger, or any sale,
assignment, conveyance, transfer, lease or disposition of all or
substantially all of the properties and assets of TLGI or LGII in
accordance with Section 5.01 hereof, the successor person or
persons formed by such consolidation or into which TLGI or LGII
is merged or the successor person to which such sale, assignment,
conveyance, transfer, lease or other disposition is made, shall
succeed to, and be substituted for, and may exercise every right
and power of, TLGI or LGII, as the case may be, under this
Indenture and the Securities with the same effect as if such
successor had been named as TLGI or LGII, as the case may be,
herein; provided, however, that solely for purposes of computing
amounts described in subclause (C) of Section 4.08, any such
successor person shall only be deemed to have succeeded to and be
substituted for TLGI or LGII, as the case may be, with respect to
periods subsequent to the effective time of such merger,
consolidation or transfer of assets.
ARTICLE SIX
REMEDIES
Section 6.01. Events of Default. "Event of Default",
wherever used herein with respect to Securities of any series,
means any one or more of the following events (whatever the
reason for such Event of Default), unless it is earlier
inapplicable to a particular series or is specifically deleted or
modified in or pursuant to the Board Resolutions or supplemental
indenture establishing such series of Securities or in the form
of Security for such series:
(a) default in the payment of the principal of or
premium, if any, on the Securities of such series as and when the
same shall become due and payable (upon maturity, acceleration,
optional redemption, required purchase, scheduled principal
payment, by declaration or otherwise); or
(b) default in the payment of any installment of
interest upon any of the Securities of such series, as and when
the same shall become due and payable, and continuance of such
default for a period of 30 days; or
(c) failure on the part of LGII or TLGI duly to
observe or perform any other term, covenant or agreement
contained in the Securities of such series or the Guarantee with
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respect to Securities of such series or pursuant to the
provisions of this Indenture (other than Defaults specified in
clause (a) or (b) above) and such Default continues for a period
of 60 days after the date on which written notice of such Default
requiring LGII and TLGI to remedy the same shall have been given
(i) to LGII and TLGI by the Trustee by registered mail, or
(ii) to LGII, TLGI and the Trustee by Holders of at least 25% in
aggregate principal amount of the Securities of such series then
Outstanding; or
(d) default or defaults under one or more agreements,
instruments, mortgages, bonds, debentures or other evidences of
Indebtedness under which TLGI or any Restricted Subsidiary of
TLGI (including, without limitation, LGII) then has outstanding
Indebtedness in excess of $20,000,000 (including Securities of
another series), individually or in the aggregate, and either
(i) such Indebtedness is already due and payable in full or
(ii) such default or defaults have resulted in the acceleration
of the maturity of such Indebtedness; or
(e) one or more judgments, orders or decrees of any
court or regulatory or administrative agency of competent
jurisdiction for the payment of money in excess of $20,000,000,
either individually or in the aggregate, shall be entered against
TLGI or any Restricted Subsidiary of TLGI (including, without
limitation, LGII) or any of their respective properties and shall
not be discharged or bonded against or stayed and there shall
have been a period of 60 days after the date on which any period
for appeal has expired and during which a stay of enforcement of
such judgment, order or decree, shall not be in effect; or
(f) either (i) the collateral agent under the
Collateral Agreement or (ii) any holder of at least $20,000,000
in aggregate principal amount of Indebtedness of TLGI or any of
its Restricted Subsidiaries (including, without limitation, LGII)
shall commence judicial proceedings to foreclose upon assets of
TLGI or any of its Restricted Subsidiaries having an aggregate
Fair Market Value, individually or in the aggregate, in excess of
$20,000,000 or shall have exercised any right under applicable
law or applicable security documents to take ownership of any
such assets in lieu of foreclosure; or
(g) TLGI or any Significant Subsidiary of TLGI
pursuant to or under or within the meaning of any Bankruptcy Law:
(1) commences a voluntary case or proceeding;
(2) consents to the entry of an order for relief
against it in an involuntary case or proceeding;
(3) consents to the appointment of a Custodian of it
or for all or substantially all of its property;
(4) makes a general assignment for the benefit of its
creditors; or
(5) shall generally not pay its debts when such debts
become due or shall admit in writing its inability to pay
its debts generally; or
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(h) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
(1) is for relief against TLGI or any Significant
Subsidiary of TLGI in an involuntary case or proceeding,
(2) appoints a Custodian of TLGI or any Significant
Subsidiary of TLGI for all or substantially all of its
properties, or
(3) orders the liquidation of TLGI or any Significant
Subsidiary of TLGI,
and in each case the order or decree remains unstayed and in
effect for 60 days; or
(i) any other Event of Default provided with respect
to the Securities of such series; or
(j) the Guarantee with respect to such series ceases
to be in full force and effect or is declared null and void, or
TLGI denies that it has any further liability under the Guarantee
with respect to such series, or gives notice to such effect and
such condition shall have continued for a period of 60 days after
written notice of such failure (which notice shall specify the
Default, demand that it be remedied and state that it is a
"Notice of Default") requiring TLGI and LGII to remedy the same
shall have been given (x) to TLGI and LGII by the Trustee or
(y) to TLGI, LGII and the Trustee by Holders of at least 25% in
aggregate principal amount of the Securities of any series then
outstanding.
(k) default in the payment or satisfaction of any
sinking fund or other purchase obligation with respect to the
Securities of such series, as and when such obligation shall
become due and payable.
Subject to the provisions of Sections 7.01 and 7.02,
the Trustee shall not be charged with knowledge of any Default or
Event of Default unless written notice thereof shall have been
given to a Trust Officer at the Corporate Trust Office of the
Trustee by LGII, TLGI, the Paying Agent, any Holder, any holder
of Indebtedness or any of their respective agents.
Section 6.02. Acceleration. If an Event of Default
(other than as specified in Section 6.01(g) or 6.01(h)) occurs
and is continuing with respect to the Securities of any series
then Outstanding, the Trustee, by written notice to LGII and
TLGI, or the Holders of at least 25% in aggregate principal
amount of the Securities of such series then Outstanding, by
written notice to the Trustee, LGII and TLGI, may declare the
principal amount (or, if the Securities of such series are
Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series) of all
the Securities of such series, premium, if any, and accrued and
unpaid interest, if any, on all of the Securities of such series
to be due and payable immediately, upon which declaration, all
amounts payable in respect of the Securities of such series shall
be immediately due and payable. If an Event of Default specified
in Section 6.01(g) or 6.01(h) occurs and is continuing, then the
unpaid principal amount (or, if the Securities of any series then
Outstanding are Original Issue Discount Securities, such portion
of the principal
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amounts as may be specified in the terms of each
such series), premium, if any, and accrued and unpaid interest on
all Securities of each series then outstanding shall ipso facto
become and be immediately due and payable without any declaration
or other act by the Trustee or any Securityholder.
After a declaration of acceleration hereunder with
respect to Securities of any series, but before a judgment or
decree for payment of the money due has been obtained by the
Trustee, the Holders of a majority in aggregate principal amount
of the Outstanding Securities of such series, by written notice
to LGII, TLGI and the Trustee, may rescind and annul such
declaration and its consequences if (a) LGII or TLGI has paid or
deposited with the Trustee a sum sufficient to pay (i) all
amounts due the Trustee under Section 7.08 and the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, (ii) all overdue interest on all
Securities of such series, (iii) the principal of and premium, if
any, on any Securities of such series which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Securities of such series, and
(iv) to the extent that payment of such interest is lawful,
interest upon overdue interest and overdue principal which has
become due otherwise than by such declaration of acceleration at
the rate borne by the Securities of such series; (b) the
rescission would not conflict with any judgment or decree of a
court of competent jurisdiction; and (c) all Events of Default,
other than the non-payment of principal of, premium, if any, and
interest on the Securities of such series that has become due
solely by such declaration of acceleration, have been cured or
waived as provided in Section 6.04; but no such rescission and
annulment shall extent to or shall affect any subsequent default,
or shall impair any right consequent thereon.
No such rescission shall affect any subsequent Default
or Event of Default or impair any right subsequent therein.
Section 6.03. Other Remedies.
Each of LGII and TLGI covenants that (a) if default
shall be made in the payment of any installment of interest upon
any of the Securities of any series then Outstanding as and when
the same shall become due and payable, and such default shall
have continued for a period of 30 days, or (b) if default shall
be made in the payment of the principal of any of the Securities
of such series as and when the same shall have become due and
payable, whether at maturity of the Securities of such series or
upon redemption or by declaration or otherwise, then, upon demand
of the Trustee, LGII or TLGI, as the case may be, will pay, or
cause to be paid, to the Trustee, for the benefit of the Holders
of the Securities, the whole amount that then shall have become
due and payable on all such Securities of such series for
principal or interest, if any, or both, as the case may be, with
interest upon the overdue principal and (to the extent that
payment of such interest is enforceable under applicable law)
upon the overdue installments of interest, if any, at the rate
borne by the Securities of such series; and, in addition thereto,
such further amount as shall be sufficient to cover the costs and
expenses of collection, including reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents,
attorneys and counsel, and any expenses or liabilities incurred
by the Trustee hereunder other than through its negligence or bad
faith.
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If LGII or TLGI shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as
trustee of an express trust, shall be entitled and empowered to
institute any actions or proceedings at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against LGII, TLGI or
any other obligor on the Securities of such series and collect in
the manner provided by law out of the property of LGII, TLGI or
any other obligor on the Securities of such series, wherever
situated, the moneys adjudged or decreed to be payable.
If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of, premium, if
any, or interest on the Securities or to enforce the performance
of any provision of the Securities or this Indenture.
All rights of action and of asserting claims under this
Indenture, or under any of the Securities, may be enforced by the
Trustee without the possession of any of the Securities, or the
production thereof at any trial or other proceeding relative
thereto, and any such suits or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment shall be for the ratable
benefit of the Holders of the Securities of the series in respect
of which such judgment has been recovered.
Section 6.04. Waiver of Past Defaults. Subject to the
provisions of Section 6.07 and 9.02, the Holders of not less than
a majority in aggregate principal amount of the Outstanding
Securities of such series by notice to the Trustee may, on behalf
of the Holders of all the Securities of any such series, waive
any existing Default or Event of Default and its consequences,
except a Default or Event of Default specified in Section 6.01(a)
or (b) or in respect of any provision hereof which cannot be
modified or amended without the consent of the Holder so affected
pursuant to Section 9.02. When a Default or Event of Default is
so waived, it shall be deemed cured and shall cease to exist.
Section 6.05. Direction Of Proceedings; Waiver Of
Defaults By Majority Of Securityholders. The Holders of a
majority in aggregate principal amount of the Securities of any
series then Outstanding shall have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred on the Trustee with respect to Securities of such
series; provided, however, that the Trustee may refuse to follow
any direction (a) that conflicts with any rule of law or this
Indenture, (b) that the Trustee determines may be unduly
prejudicial to the rights of another Noteholder, or (c) that may
expose the Trustee to personal liability unless the Trustee has
been provided reasonable indemnity against any loss or expense
caused by its following such direction; and provided, further,
that the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction. The
Holders of a majority in aggregate principal amount of the
Securities of any series then Outstanding may on behalf of the
Holders of all of the Securities of such series waive any past
default or Event of Default hereunder and its consequences except
a default in the payment of interest, if any, on, or the
principal of, the Securities of such series. The provisions of
Section 316(a)(1)(B) of the Trust Indenture Act of
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1939 are
expressly excluded herefrom. Upon any such waiver LGII, the
Trustee and the Holders of the Securities of such series shall be
restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent
or other default or Event of Default or impair any right
consequent thereon. Whenever any default or Event or Default
hereunder shall have been waived as permitted by this Section
6.05, said default or Event of Default shall for all purposes of
the Securities and this Indenture be deemed to have been cured
and to be not continuing.
Section 6.06. Limitation on Suits. No Holder of any
Securities of any series then Outstanding shall have any right by
virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Indenture of the Securities or
for the appointment of a receiver or trustee or similar official,
or for any other remedy hereunder or thereunder, unless: (1) the
Holder gives written notice to the Trustee of a continuing Event
of Default; (2) the Holders of at least 25% in aggregate
principal amount of the Securities of such series then
Outstanding shall have made written request to the Trustee to
institute such action, suit or proceeding in its own name as
Trustee hereunder; (3) such Holder or Holders offer and, if
requested, provide to the Trustee reasonable indemnity as it may
require against the costs, expenses and liabilities to be
incurred therein or thereby; (4) the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or
proceeding; and (5) during such 60-day period the Holders of a
majority in aggregate principal amount of the Securities of such
series then Outstanding do not give the Trustee a direction which
is inconsistent with the request; it being understood and
intended, and being expressly covenanted by the Holder of every
Security of such series with every other taker and Holder and the
Trustee, that no one or more Holders of Securities of such series
shall have any right in any manner whatever by virtue of or by
availing of any provision of this Indenture or of the Securities
to affect, disturb or prejudice the rights of any other Holder of
such Securities of such series, or to obtain or seek to obtain
priority over or preference as to any other such Holder, or to
enforce any right under this Indenture or the Securities, except
in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Securities of such series.
Section 6.07. Right of Holders To Receive Payment.
Notwithstanding any other provisions in this Indenture, the right
of any Holder of any Security to receive payment of the principal
of and interest, if any, on such Security, on or after the
respective due dates expressed in such Security, or to institute
suit for the enforcement of any such payment on or after such
respective dates or for the enforcement of any such right to
convert shall not be impaired or affected without the consent of
such Holder.
Section 6.08. Collection Suit by Trustee. If an Event
of Default specified in clause (a) or (b) of Section 6.01 occurs
and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against LGII, TLGI or any
other obligor on the Securities for the whole amount of principal
of, premium, if any, and accrued interest remaining unpaid,
together with interest on overdue principal and, to the extent
that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum
borne by the Securities and such further amount as shall be
sufficient to cover the costs and
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expenses of collection,
including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
Section 6.09. Trustee May File Proofs of Claims. The
Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Holders allowed in any
judicial proceedings relative to LGII or TLGI (or any other
obligor on the Securities of such series), its or their creditors
or its or property and shall be entitled and empowered to collect
and receive any monies or other property payable or deliverable
on any such claims and to distribute the same, and any Custodian
in any such judicial proceedings is hereby authorized by each
Holder to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 7.08. Nothing herein
contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
Section 6.10. Application Of Moneys Collected By
Trustee. Any moneys collected by the Trustee pursuant to Section
6.10 with respect to Securities of any series then Outstanding
shall be applied in the order following, at the date or dates
fixed by the Trustee for the distribution of such moneys, upon
presentation of the several Securities of such series, and
stamping thereon the payment, if only partially paid, and upon
surrender thereof, if fully paid:
FIRST: To the payment of costs and expenses of
collection and reasonable compensation to the Trustee, its
agents, attorneys and counsel, and of all other expenses and
liabilities incurred, and all advances made, by the trustee
pursuant to Section 7.08 except as a result of its
negligence or bad faith;
SECOND: If the principal of the Outstanding Securities
of such series shall not have become due and be unpaid, to
the payment of interest, if any, on the Securities of such
series, in the order of the maturity of the installments of
such interest, if any, with interest (to the extent that
such interest has been collected by the Trustee) upon the
overdue installments of interest, if any, at the rate borne
by the Securities of such series, such payment to be made
ratably to the Persons entitled thereto;
THIRD: If the principal of the Outstanding Securities
of such series shall have become due, by declaration or
otherwise, to the payment of the whole amount then owing and
unpaid upon the Securities of such series for principal
(including any premium, if any) and interest, if any, with
interest on the overdue principal and (to the extent that
such interest has been collected by the Trustee) upon
overdue installments of interest, if any, at the rate borne
by the Securities of such series; and in case such moneys
shall be insufficient to pay in full the whole amounts so
due and unpaid upon the
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Securities of such series, then to
the payment of such principal and interest, if any, without
preference or priority of principal over interest, or of
interest over principal, or of any installment of interest,
or of any other installment of interest, or of any Security
over any other Security, ratably to the aggregate of such
principal such series for principal (including any premium,
if any) and accrued and unpaid interest; and
FOURTH: To the payment of any surplus then remaining to
LGII or TLGI, as the case may be, their respective
successors or assigns, or to whomsoever may be lawfully
entitled to receive the same.
No claim for interest which in any manner at or after
maturity shall have been transferred or pledged separate or apart
from the Securities to which it relates, or which in any manner
shall have been kept alive after maturity by an extension
(otherwise than pursuant to an extension made pursuant to a plan
proposed by LGII to the Holders of all Securities of any series
then Outstanding), purchase, funding or otherwise by or on behalf
or with the consent or approval of LGII shall be entitled, in
case of a default hereunder, to any benefit of this Indenture,
except after prior payment in full of the principal of all
Securities of any series then Outstanding and of all claims for
interest not so transferred, pledged, kept alive, extended,
purchased or funded.
The Trustee, upon prior written notice to LGII, may fix
a record date and payment date for any payment to Noteholders
pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs. All parties to
this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to
pay the cost of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section
6.11 shall not apply to any suit instituted by the Trustee, to
any suit instituted by any Securityholder or group of
Securityholders, holding in the aggregate more than ten percent
in principal amount of the Securities of any series then
Outstanding, or to any suit instituted by any Securityholders for
the enforcement of the payment of the principal of, or interest,
if any, on any Security against LGII on or after the due date
expressed in such Security. The provisions of Section 315(e) of
the Trust Indenture Act of 1939 are expressly excluded herefrom.
Section 6.12. Restoration of Rights and Remedies. If
the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture or any Security
or the Guarantee and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the
Trustee or to such Holder, then and in every such case LGII,
TLGI, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter
all rights
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and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
Section 6.13. Remedies Cumulative And Continuing. All
powers and remedies given by this Article Six to the Trustee or
to the Securityholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any thereof or of any
other powers and remedies available to the Trustee or the
Securityholders, by judicial proceedings or otherwise, to enforce
the performance or observance of the covenants and agreements
contained in this Indenture, and no delay or omission of the
Trustee or of any Securityholder to exercise any right or power
accruing upon any default occurring and continuing as aforesaid
shall impair any such right or power, or shall be construed to be
a waiver of any such default or an acquiescence therein; and,
subject to the Provisions of Section 6.06, every power and remedy
given by this Article Six or by law to the Trustee or to the
Securityholders may be exercised from time to time, and as often
as shall be deemed expedient, by the Trustee or by the
Securityholders.
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties And Responsibilities Of The
Trustee; During Default; Prior To Default.
(a) In case an Event of Default with respect to the
Securities of a series has occurred (which has not been cured or
waived), the Trustee shall exercise with respect to such series
of Securities such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) With respect to the Holders of any series of
Securities issued hereunder, the Trustee, prior to the occurrence
of an Event of Default with respect to the Securities of a
particular series and after the curing or waiving of all Events
of Default which may have occurred with respect to such series,
undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture.
(c) No provision of this Indenture shall be construed
to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that
(i) prior to the occurrence of an Event of Default
with respect to the Securities of any series and after the
curing or waiving of all such Events of Default with respect
to such series which may have occurred;
(1) the duties and obligations of the Trustee
with respect to the Securities of any series shall be
determined solely by the express provisions of this
Indenture, and the Trustee shall not be liable except
for the performance of
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such duties and obligations as
are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(2) in the absence of the absence of bad faith on
the part of the Trustee, the Trustee may conclusively
rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the
Trustee and conforming to the requirements of this
Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof
are specifically required to be furnished by the
Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to
the requirements of this Indenture;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it
shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders
pursuant to Section 6.05 relating to the time, method and
place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture.
(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers if it
shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(e) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c) and
(d) of this Section 7.01.
Section 7.02. Certain Rights Of The Trustee. Subject
to Section 7.01 hereof and the provisions of TIA 315:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond,
debenture, note, coupon, security or other paper or document
reasonably believed by it to be genuine and to have been signed
or presented by the proper party or parties. The Trustee need
not investigate any fact or matter stated in the document.
(b) any request, direction, order or demand of LGII
mentioned herein shall be sufficiently evidenced by an Officer's
Certificate or Issue Order (unless other evidence in respect
thereof be herein specifically prescribed); and any resolution of
the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the secretary or an assistant secretary of
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LGII, and before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or
an Opinion of Counsel, which shall conform to Sections 11.04 and
11.05. The Trustee shall not be liable for any action it takes
or omits to take in good faith in reliance on such certificate or
opinion.
(c) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys not regularly in its employ
and the Trustee shall not be responsible for any misconduct or
negligence on the part of any such agent or attorney appointed
with due care by it hereunder.
(d) the Trustee shall not be liable for any action
taken or omitted by it in good faith and reasonably believed by
it to be authorized or within the discretion, rights or powers
conferred upon it by this Indenture other than any liabilities
arising out of its own negligence.
(e) the Trustee may consult with counsel of its own
choosing and the written advice or Opinion of Counsel as to
matters of law shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to
be taken by it hereunder in good faith and in reliance thereon in
accordance with the advice or Opinion of Counsel.
(f) prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all Events of
Default, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, approval, appraisal, bond, debenture,
note, coupon, security, or other paper or documentation requested
in writing so to do by the Holders of not less than a majority in
aggregate principal amount of the Securities of all series
affected then Outstanding; provided that, if the payment within a
reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the
terms of this Indenture, the Trustee may require reasonable
indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such investigation
shall be paid by LGII or, if paid by the Trustee or any
predecessor Trustee, shall be repaid by LGII upon demand, and the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(g) the Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this
Indenture at the request, order or direction of any of the
Securityholders pursuant to the provisions of this Indenture
(including, without limitation, pursuant to Section 6.01), unless
such Securityholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
which might be incurred therein or thereby.
Section 7.03. Trustee And Agents May Hold Securities;
Collections, Etc.
The Trustee, any Paying Agent, Registrar or any other
agent of LGII, TLGI or the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities
and, subject to Sections 7.11 and 7.12 and TIA 310 and 311,
may otherwise deal
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with LGII, TLGI and their Subsidiaries with
the same rights it would have if it were not the Trustee, Paying
Agent, Registrar or such other agent.
Section 7.04. Trustee's Disclaimer. The Trustee makes
no representations as to the validity or sufficiency of this
Indenture or of the Securities or of any prospectus used to sell
the Securities or of the Guarantee, it shall not be accountable
for the use or application by LGII of any of the Securities or of
the proceeds thereof, it shall not be responsible for the use or
application of any money received by any Paying Agent other than
the Trustee and it shall not be responsible for any statement in
the Securities other than the Trustee's certificate of
authentication.
Section 7.05. Notice of Default. The Trustee shall,
within 90 days after the occurrence of a Default or an Event of
Default , with respect to Securities of any series then
Outstanding, mail to all Holders of Securities of such series, as
the names and the addresses of such Holders appear upon the
Security register, notice of all Default or Event of Default
known to the Trustee with respect to such series, unless such
defaults shall have been cured before the giving of such notice;
provided, however, that, except in the case of a Default in the
payment of the principal of, premium, if any, or interest on any
of the Securities, or in the payment or satisfaction of any
sinking fund or other purchase obligation, the Trustee shall be
protected in withholding such notice if and so long as the board
of directors, the executive committee of the board of directors
or a committee of the directors of the Trustee and/or Trust
Officers in good faith determines that the withholding of such
notice is in the interest of the Holders.
Section 7.06. Money Held in Trust. Subject to the
provisions of Section 8.04 hereof, all moneys received by the
Trustee shall, until used or applied as herein provided, be held
in trust for the purposes for which they were received, but need
not be segregated from other funds except to the extent required
herein or by law. Neither the Trustee nor any agent of LGII or
the Trustee shall be under any liability for interest on any
moneys received by it hereunder, except as the Trustee may agree
with LGII.
Section 7.07. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the
May 15 following the date of this Indenture, the Trustee shall,
to the extent that any of the events described in TIA 313(a)
shall have occurred within the previous twelve months, but not
otherwise, mail to each Holder a brief report dated as of such
May 15 that complies with TIA 313(a). The Trustee also shall
comply with TIA 313(b) and 313(c).
A copy of each report at the time of its mailing to
Holders shall be mailed to LGII and filed with the Commission and
each securities exchange, if any, on which the Securities are
listed.
LGII shall notify the Trustee in writing if the
Securities become listed on any securities exchange.
Section 7.08. Compensation and Indemnity.
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LGII and TLGI covenant and agree to pay to the Trustee
from time to time, and the Trustee shall be entitled to,
reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust) and LGII and TLGI covenant and agree to pay or
reimburse the Trustee and each predecessor Trustee upon its
request for all reasonable expenses, disbursements and advances
incurred or made by or on behalf of it in accordance with any of
the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel
and of all agents and other persons not regularly in its employ)
except any such expense, disbursements or advance as may arise
from its negligence or bad faith.
LGII and TLGI also covenant to indemnify the Trustee
and each predecessor Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this
Indenture or the trusts hereunder and its rights or duties
hereunder, including the costs and expenses of defending itself
against or investigating any claim or liability in connection
with the exercise or performance of any of its powers or duties
hereunder. The Trustee shall notify LGII and TLGI promptly of
any claim asserted against the Trustee for which it may seek
indemnity. LGII and TLGI shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate
counsel and LGII and TLGI shall pay the reasonable fees and
expenses of such counsel. LGII and TLGI need not pay for any
settlement made without its prior written consent. LGII and TLGI
need not reimburse any expense or indemnify against any loss or
liability to the extent incurred by the Trustee through its
negligence, bad faith or willful misconduct.
To secure the payment obligations of LGII in this
Section 7.08, the Trustee shall have a Lien prior to the
Securities on all assets held or collected by the Trustee, in its
capacity as Trustee, except funds held in trust for the benefit
of the Holders of particular Securities to pay principal of,
premium, if any, or interest on particular Securities, and the
Securities are hereby subordinated to such senior claim. When
the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 6.01 or in
connection with Article Six hereof, the expenses (including the
reasonable fees and expenses of its counsel) and the compensation
for the services in connection therewith are intended to
constitute expenses of administration under any bankruptcy law.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 6.01(g)
or (h), the expenses and the compensation for the services are
intended to constitute expenses of administration under any
Bankruptcy Law.
The obligations of LGII and TLGI under this Section
7.08 and any Lien arising hereunder shall survive the resignation
or removal of any trustee, the discharge of the obligations of
LGII and TLGI pursuant to Article Eight and/or the termination of
this Indenture.
Section 7.09. Resignation And Removal; Appointment Of
Successor Trustee.
(a) The Trustee, or any trustee or trustees hereafter
appointed, may at any time resign with respect to one or more or
all series of Securities by giving written notice of
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resignation
to LGII and by mailing notice of such resignation to the Holders
of then Outstanding Securities of each series affected at their
addresses as they shall appear on the registry books. Upon
receiving such notice of resignation, LGII shall promptly appoint
a successor trustee or trustees with respect to the applicable
series by written instrument in duplicate, executed by authority
of the Board of Directors, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor
trustee or trustees. If no successor trustee shall have been so
appointed with respect to any series and have accepted
appointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of
competent jurisdiction for the appointment of a successor
trustee, or any Securityholder who has been bona fide Holder of a
Security or Securities of the applicable series for at least six
months may, subject to the provisions of Section 5.9, on behalf
of himself and all others similarly situated, petition any such
court for the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall
occur:
(i) the Trustee shall fail to comply with the
provisions of Section 7.13 with respect to any series of
Securities after written request therefor by LGII or by any
Securityholder who has been a bona fide Holder of a Security
or Securities of such series at least six months; or
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 7.11 and shall
fail to resign after written request therefor by LGII or by
any such Securityholder; or
(iii) the Trustee shall become incapable of acting
with respect to any series of Securities, or shall be
adjudged a bankrupt or insolvent, or a receiver or
liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, LGII may remove the Trustee with respect
to the applicable series of Securities and appoint a successor
trustee for such series by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee, or, subject to the provisions of
Section 5.9, any Securityholder who has been a bona fide Holder
of a Security or Securities of such series for at least six
months may on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee
with respect to such series. Such court may thereupon, after
such notice, if any, as it may deed proper and prescribe, remove
the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal
amount of the Securities of each series then Outstanding may at
any time remove the Trustee with respect to Securities of such
series and appoint a successor trustee with respect to the
Securities of such series by
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delivering to the Trustee so
removed, to the successor trustee so appointed and to LGII the
evidence provided for in Section 7.1 of the action in that regard
taken by the Securityholders.
(d) Any resignation or removal of the Trustee with
respect to any series and any appointment of a successor trustee
with respect to such series pursuant to any of the provisions of
this Section 7.09 shall become effective upon acceptance of
appointment by the successor trustee as provided in Section
7.14.
Section 7.10. Merger, Conversion, Consolidation Or
Succession To Business Of Trustee. Any corporation into which
the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust
business of the Trustee, shall be the successor of the Trustee
hereunder, provided that such corporation shall be qualified
under the provisions of Section 7.13 and eligible under the
provisions of Section 7.11, without the execution or filing of
any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the
Securities of any series shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and
deliver such Securities so authenticated; and, in case at that
time any of the Securities of any series shall not have been
authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in
the name of the successor Trustee; and in all such cases such
certificate shall have the full force which it is anywhere in the
Securities of such series or in this Indenture provided that the
certificate of Trustee shall have; provided that the right to
adopt the certificate of authentication of any predecessor
Trustee or to authenticate Securities of any series in the name
of any predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
Section 7.11. Persons Eligible For Appointment As
Trustee. The Trustee for each series of Securities hereunder
shall at all times be a corporation organized and doing business
under the laws of the United States of America or of any state or
the District of Columbia having a combined capital and surplus of
at least $50,000,000 and which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or
examination by federal, state or District of Columbia authority,
or a corporation or other Person permitted to act as trustee by
the Commission. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 7.11, the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published. No obligor upon the Securities
or any Affiliates of such obligor shall serve as Trustee upon the
Securities. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 7.11,
the Trustee shall resign immediately in the manner and with the
effect specified in Section 7.09.
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Section 7.12. Preferential Collection of Claims
Against LGII.
The Trustee shall comply with TIA 311(a), excluding
any creditor relationship listed in TIA 311(b). If the present
or any future Trustee shall resign or be removed, it shall be
subject to TIA 311(a) to the extent provided therein.
Section 7.13 Qualification Of Trustee; Conflicting
Interests.
(a) If the Trustee has or shall acquire any
conflicting interest (as defined in subsection (c)), then within
90 days after ascertaining that it has such conflicting interest,
and if the default (as defined in subsection (c)) to which such
conflicting interest relates has not been cured or duly waived or
otherwise eliminated before the end of such 90-day period, the
Trustee shall either eliminate such conflicting interest or,
except as otherwise provided below, resign, and LGII shall take
prompt steps to have a successor appointed in the manner provided
in Section 7.09.
(b) If the Trustee shall fail to comply with the
provisions of subsection (a), the Trustee shall, within 10 days
after the expiration of such 90-day period, transmit notice of
such failure to the Securityholders in the manner and to the
extent provided in Section 4.4 and, subject to the provisions of
Section 5.9, unless the Trustee's duty to resign is stayed as
provided below, any Securityholder who has been a bond fide
holder of Securities for at least six months may, on behalf of
himself and all other similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee, and the
appointment of a successor, if the Trustee fails, after written
request thereof by such Securityholder, to comply with the
provisions of subsection (a).
Except in the case of a default in the payment of the
principal of or interest on any Security, or in the payment of
any sinking or purchase fund installment, the Trustee shall not
be required to resign as provided by this Section 7.13 if the
Trustee shall have sustained the burden of proving, on
application to the Commission and after opportunity for hearing
thereon, that
(i) the default under this Indenture may be cured or
waived during a reasonable period and under the procedures
described in such application, and
(ii) a stay of the Trustee's duty to resign will not be
inconsistent with the interests of Holders of the
Securities.
The filing of such an application shall automatically
stay the performance of the duty to resign until the Commission
orders otherwise. Any resignation of the Trustee shall become
effecting only upon the appointment of a successor trustee in
accordance with the provisions of Section 7.09 and such
successor's acceptance of such an appointment.
(c) For the purposes of this Section 7.13, the Trustee
shall be deemed to have a conflicting interest with respect to
Securities of any series if the Securities of such series are in
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default (as determined in accordance with the provisions of
Section 5.1, but exclusive of any period of grace or requirement
of notice) and
(i) the Trustee is trustee under this Indenture with
respect to the Outstanding Securities of any other series or
is a trustee under another indenture under which any other
securities, or certificates of interest or participation in
any other securities, of LGII are outstanding, unless such
other indenture is a collateral trust indenture under which
the only collateral consists of Securities issued under this
Indenture; provided that there shall be excluded from the
operation of this paragraph, this Indenture with respect to
the Securities of any other series and there shall also be
so excluded any other indenture or indentures under which
other securities, or certificates of interest or
participation in other securities, of LGII are outstanding
if (x) this Indenture is and, if applicable, this Indenture
and any series issued pursuant to this Indenture and such
other indenture or indentures are wholly unsecured and rank
equally, and such other indenture or indentures are
hereafter qualified under the Trust Indenture Act of 1939,
unless the Commission shall have found and declared by order
pursuant to Section 305(b) or Section 307(c) of the Trust
Indenture Act of 1939, that differences exist between the
provisions of this Indenture with respect to Securities of
such series and one or more other series, or the provisions
of this Indenture and the provisions of such other indenture
or indentures which are so likely to involve a material
conflict of interest as to make it necessary in the public
interest or for the protection of investors to disqualify
the Trustee from acting as such under this Indenture with
respect to Securities to such series and such other series
or under this Indenture or such other indenture or
indentures, or (y) LGII shall have sustained the burden of
proving, on application to the Commission and after
opportunity for hearing thereon, that trusteeship under this
Indenture with respect to Securities of such series and such
other series, or under this Indenture and such other
indenture or indentures is not so likely to involve a
material conflict of interest as to make it necessary in the
public interest or for the protection of investors to
disqualify the Trustee from acting as such under this
Indenture with respect to Securities of such series and such
other series, or under this Indenture and such other
indentures;
(ii) the Trustee or any of its directors or executive
officers is an underwriter for LGII;
(iii) the Trustee directly or indirectly controls
or is directly or indirectly controlled by or is under
direct or indirect common control with an underwriters for
LGII;
(iv) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee,
appointee, or representative of LGII, or of an underwriter
(other than the Trustee itself) for LGII who is currently
engaged in the business of underwriting, except that (x) one
individual may be a director or an executive officer, or
both, of the Trustee and a director or an executive officer,
or both, of LGII, but may not be at the same time an
executive officer or both the Trustee and LGII; (y) if and
so long as the number of directors of the Trustee in office
is more than nine, one additional
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individual may be a
director or an executive officer, or both, of the Trustee
and a director of LGII, and (z) the Trustee may be
designated by LGII or by any underwriter for LGII to act in
the capacity of transfer agent, registrar, custodian, paying
agent, fiscal agent, escrow agent, or depositary, or in any
other similar capacity, or, subject to the provisions of
subsection (c)(i) of this Section, to act as trustee,
whether under an indenture or otherwise;
(v) 10% or more of the voting securities of the
Trustee is beneficially owned either by LGII or by any
director, partner or executive officer thereof, or 20% or of
such voting securities is beneficially owned, collectively,
by any two or more of such person; or 10% or more of the
voting securities of the Trustee is beneficially owned
either by an underwriter for LGII or by any director,
partner, or executive officer thereof, or is beneficially
owned, collectively, by any two or more such persons;
(vi) the Trustee is the beneficial owner of, or holds
as collateral security for an obligation which is in
default, (x) 5% or more of the voting securities of 10% or
more of any other class of security of LGII, not including
the Securities issued under this Indenture and securities
issued under any other indenture under which the Trustee is
also trustee, or (y) 10% or more of any class of security of
an underwriter for LGII;
(vii) the Trustee is the beneficial owner of, or
holds as collateral security for an obligation which is in
default, 5% or more of the voting securities of any person
who, to the knowledge of the Trustee, owns 10% or more of
the voting securities of, or controls directly or indirectly
or is under direct or indirect common control with, LGII;
(viii) the Trustee is the beneficial owner of, or
holds as collateral Security for an obligation which is in
default, 10% or more of any class of security of any person
who, to the knowledge of the Trustees, owns 50% or more of
the voting securities of LGII;
(ix) the Trustee owns on the date of default (as
determined in accordance with the provisions of Section 5.1,
but exclusive of any period of grace or requirement of
notice) or on any anniversary of such default while such
default remains outstanding, in the capacity of executor,
administrator, testamentary or inter vivos trustee,
guardian, committee or conservator, or in any other similar
capacity, an aggregate of 25% or more of the voting
securities, or of any class security, of any person, the
beneficial ownership of a specified percentage of which
would have constituted a conflicting interest under
paragraphs (vi), (vii) or (viii) of this subsection. As to
any such securities of which the Trustee acquired ownership
through becoming executor, administrator, or testamentary
trustee of an estate which included them, the provisions of
the preceding sentence shall not apply, for a period of two
years from the date of such acquisition, to the extent that
such securities included in such estate do not exceed 25% of
such voting securities of 25% of any such class of security.
Promptly after the dates of any such default and annually in
each succeeding year that the Securities remain in default,
the Trustee shall make a check of its holdings of such
securities in any of the above-mentioned capacities
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as of
such dates. If LGII fails to make payment in full of
principal of or interest on any of the Securities when and
as the same becomes due and payable, and such failure
continues for 30 days thereafter, the Trustee shall make a
prompt check of this holdings of such Securities in any of
the above-mentioned capacities as of the date of the
expiration of such 30-day period, and after such date,
notwithstanding the foregoing provisions of this paragraph,
all such Securities so held by the Trustee, with sole or
joint control over such Securities vested in it, shall, but
only so long as such failure shall continue, be considered
as though beneficially owned by the Trustee for the purposes
of paragraphs (vi), (vii) and (viii) of this subsection; or
(x) except under the circumstances described in
paragraphs (1), (3), (4), (5) or (6) of Section 6.13(b), the
Trustee shall or shall become creditor of LGII.
For purposes of subsection (c)(i), the term "series of
securities" or "series" means a series, class or group of
securities issuable under an indenture pursuant to whose terms
holders of one such series may vote to direct the Trustee, or
otherwise take action pursuant to a vote of such holders,
separately from holders of another such series; provided, that
"series of securities" or "series" shall not include any series
of securities issuable under an indenture if all such series rank
equally and are wholly unsecured.
The specification of percentages in subsections (c)(v)
to (ix), inclusive, of this Section 7.13 shall not be construed
as indicating that the ownership of such percentages of the
securities of a person is or is not necessary or sufficient to
constitute direct or indirect control of the purposes of
subsections (c)(iii) or (vii) of this Section 7.13.
For the purposes of subsections (c)(vi), (vii), (viii)
and (ix) of this Section 7.13, only,
(i) the terms "security" and "securities" shall
include only such securities as are generally known as
corporate securities, but shall not include any note or
other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more
banks, trust companies, or banking firms, or any certificate
of interest or participation in any such note or evidence of
indebtedness;
(ii) an obligation shall be deemed to be in default
when a default in payment of principal shall have continued
for 30 days or more and shall not have been cured; and
(iii) the Trustee shall not be deemed to be the
owner or holder of (x) any security which it holds as
collateral security, as trustee or otherwise, for an
obligation which is not in default as defined in clause (ii)
above, or (y) any Security which it holds as collateral
security under this Indenture, irrespective of any default
hereunder, or (z) any security which it holds as agent for
collection, or as custodian, escrow agent, or depositary, or
in any similar representative capacity.
Except as provided above, the word "security" or
"securities" as used in this Section 7.13 shall mean any note,
stock, treasury stock, bond, debenture, evidence of
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indebtedness,
certificate of interest or participation in any profit-sharing
agreement, collateral trust certificate, preorganization
certificate or subscription, transferable share, investment
contract, voting trust certificate, certificate of deposit for a
security, fractional undivided interest in oil, gas or other
mineral rights, or, in general, any interest or instrument
commonly known as a "security", or any certificate of interest or
participation in, temporary or interim certificate for, receipt
for, guarantee of, or warrant to right to subscribe to or
purchase, any of the foregoing.
(d) For purposes of this Section 7.13:
(i) the term "underwriter" when used with reference to
LGII shall mean every person who, within a one year period
prior to the time as of which the determination is made, was
an underwriter of any security of LGII outstanding at the
time of the determination;
(ii) the term "director" shall mean any director of a
corporation or any individual performing similar functions
with respect to any organization whether incorporated or
unincorporated;
(iii) the term "person" shall mean an individual, a
corporation, a partnership, an association, a joint-stock
company, a trust, an unincorporated organization, or a
government or political subdivision thereof; as used in this
paragraph, the term "trust" shall include only a trust where
the interest or interests of the beneficiary or
beneficiaries are evidenced by a security;
(iv) the term "voting security" shall mean any security
presently entitling the owner or holder thereof to vote in
the direction or management of the affairs of a person, or
any Security issued under or pursuant to any trust,
agreement or arrangement whereby a trustee or trustee or
agent or agents for the owner or holder of such security are
presently entitled to vote in the direction or management of
the affairs of a person;
(v) the term "Issuer" shall mean any obligor upon the
Securities; and
(vi) the term "executive officer" shall mean the
president, every vice president, every trust officer, the
cashier, the secretary, and the treasurer of a corporation,
and any individual customarily performing similar functions
with respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the
board of directors.
(e) The percentage of voting securities and other
securities specified in this Section 7.13 shall be calculated in
accordance with the following provisions:
(i) a specified percentage of the voting securities of
the Trustee, LGII or any other person referred to in this
Section 7.13 (each of whom is referred to in this Section
7.13 (each of whom is referred to as a "person" in this
paragraph) means such amount of the outstanding voting
securities of such person as entitled the holder or holders
thereof to cast such specified percentage of the aggregate
votes which the holders of all the
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outstanding voting
securities of such person are entitled to cast in the
direction or management of the affairs of such person;
(ii) a specified percentage of a class of securities of
a person means such percentage amount of securities of the
class outstanding;
(iii) the term "amount", when used in regard to
securities, means the principal amount if relating to
evidences of indebtedness, the number of shares if relating
to capital shares, and the number of units if relating to
any other kind of Security;
(iv) the term "outstanding" means issued and not held
by or for the account for LGII; the following securities
shall not be deemed within the meaning of this definition;
(A) securities of an issuer held in a sinking
fund relating to securities of LGII of the same class;
(B) securities of an issuer held in a sinking
fund relating to another class of securities of LGII,
if the obligation evidenced by such other class of
securities is not in default as to principal or
interest or otherwise;
(C) securities pledged by LGII thereof as
security for an obligation of LGII not in default as to
principal or interest or otherwise; and
(D) securities held in escrow if placed in escrow
by LGII thereof; provided, that any voting securities
of an issuer shall be deemed outstanding if any person
other than LGII is entitled to exercise the voting
rights thereof; and
(v) a security shall be deemed to be of the same class
as another security if both securities confer upon the
holder or holders thereof substantially the same rights and
privileges; provided that, in the case of secured evidences
of indebtedness, all of which are issued under the single
indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed
sufficient to constitute such series different classes and
provided, further, that, in the case of unsecured evidences
of indebtedness, differences in the interest rates or
maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or
not they are issued under a single indenture.
Section 7.14 Acceptance Of Appointment By Successor
Trustee. Any successor trustee appointed as provided in Section
6.10 shall execute and deliver to LGII and to its predecessor to
an instrument accepting such appointment hereunder, and thereupon
the resignation or removal of the predecessor trustee with
respect to all or any applicable series shall become effective as
such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties
and obligations with respect to such series of its predecessor
hereunder, when like effect as if originally named as trustee for
such series hereunder; but, nevertheless, on the written request
of LGII or of the successor trustee, upon payment of its charges
then unpaid, the trustee ceasing to act shall, subject to Section
8.04, pay
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over to the successor trustee all moneys at time held
by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers,
duties and obligations. Upon request of any such successor
trustee, LGII shall execute any and all instruments in writing
for more fully and certainly vesting in and confirming to such
successor trustee all rights and powers. Any trustee ceasing to
act shall, nevertheless, retain a prior claim upon all property
or funds held or collected by such trustee to secure any amounts
then due it pursuant to the provisions of Section 7.08.
If a successor trustee is appointed with respect to the
Securities of one or more (but not all) series, LGII, the
predecessor trustee and each successor trustee with respect to
the Securities of any applicable series shall execute and deliver
an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the predecessor
trustee with respect to the Securities of any series as to which
the predecessor trustee is not retiring shall continue to be
vested in the predecessor trustee, and shall add to or change any
of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts
hereunder by more than one trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute
such trustees co-trustees of the same trust and that each such
trustee shall be trustee of a trust or trusts under separate
indentures.
No successor trustee with respect to any series of
Securities shall accept appointment as provided in this Section
7.14 unless at the time of such acceptance such successor trustee
shall be qualified under the provisions of Section 7.13 and
eligible under the provisions of Section 7.11.
Upon acceptance of appointment by any successor trustee
as provided in this Section 7.14, LGII shall give notice thereof
to the Holders of Securities of each series affected, by mailing
such notice to such Holders at their addresses as they shall
appear on the registry books. If the acceptance of appointment
is substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with
the notice called for by Section 7.09. If LGII fails to give
such notice within ten days after acceptance of appointment by
the successor trustee, the successor trustees shall cause such
notice to be given at the expense of LGII.
Section 7.15 Appointment Of Authenticating Agent. As
long as any Securities of a series remain Outstanding, the
Trustee may, by an instrument in writing, appoint with the
approval LGII an authenticating agent (the "Authenticating
Agent") which shall be authorized to act on behalf of the Trustee
to authenticate Securities, including Securities issued upon
exchange, registration of transfer, partial redemption or
pursuant to Section 2.11. Securities of each such series
authenticated by such Authenticating Agent shall be entitled to
the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee. Whenever
reference is made in this Indenture to the authentication and
delivery of Securities of any series by the Trustee or the
Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the
Trustee by an Authenticating Agent for such series and a
certificate of authentication executed on behalf of the
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Trustee
by such authenticating Agent. Such authenticating Agent shall at
all times be a corporation organized and doing business under the
laws the United States of America or of any state or the District
of Columbia, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least
$50,00,000 (determined as provided in Section 7.11 with respect
to the Trustee) and subject to supervision or examination by
federal or state authority.
Any corporation into which any Authenticating Agent may
be merged or converted, or with which it may be consolidated, or
any corporation resulting from any merger, conversion or
consolidation to which any Authenticating Agent shall be a party,
or any corporation succeeding to the corporate agency business of
any Authenticating Agent, shall continue to be the authenticating
Agent with respect to all series of Securities for which it
served as Authenticating Agent without the execution or filing of
any paper or any further act on the part of the Trustee or such
Authenticating Agent. Any Authenticating Agent may at any time,
and if it shall cease to be eligible shall, resign by giving
written notice of resignation to the Trustee and to LGII. The
Trustee may at any time terminate the agency of an Authenticating
Agent by giving written notice thereof to such Authenticating
Agent and to LGII.
Upon receiving such notice of resignation or upon such
a termination, or in case at any time any Authenticating Agent
shall cease to be eligible in accordance with the provisions of
this Section 7.15 with respect to one or more series of
Securities, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to LGII and LGII shall provide
notice of such appointment to all Holders of Securities of such
series in the manner and to the extent provided in Section 11.02.
Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all rights,
powers, duties and responsibilities of its predecessor hereunder,
with like effect as if originally named as Authenticating Agent.
LGII agrees to pay to the Authenticating Agent for such series
from time to time reasonable compensation. The Authenticating
Agent for the Securities of any series shall have no
responsibility or liability for any action taken by it as such at
the direction of the Trustee.
Sections 7.02, 7.03, 7.04 and 10.03 shall be applicable
to any Authenticating Agent.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01 Satisfaction And Discharge Of Indenture.
(A) If at any time (a) LGII or TLGI shall have paid or caused to
be paid the principal of and interest, if any, on all the
Securities Outstanding (other than Securities which have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.11) as and when the same shall have become
due and payable, or (b) LGII or TLGI shall have delivered to the
Trustee for cancellation all Securities theretofore authenticated
(other than Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section
2.11); and if, in any such case, LGII and TLGI shall also pay or
cause to be paid all other sums payable
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hereunder by LGII or
TLGI, then this Indenture and the Guarantee shall cease to be of
further effect, and the Trustee, on demand of LGII and TLGI
accompanied by an Officer's Certificate and an Opinion of
Counsel, each stating that all conditions precedent relating to
the satisfaction and discharge contemplated by this provision
have been complied with, and at the cost and expense of LGII,
shall execute proper instruments acknowledging such satisfaction
and discharging this Indenture. LGII agrees to reimburse the
Trustee for any costs or expenses thereafter reasonably and
properly incurred, and to compensate the Trustee for any services
thereafter reasonably and properly rendered, by the Trustee in
connection with this Indenture or the Securities.
(B) If at any time (a) LGII or TLGI shall have paid or
caused to be paid the principal of and interest, if any, on all
the Securities of any series Outstanding (other than Securities
of such series which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 2.11) as
and when the same shall have become due and payable, or (b) LGII
or TLGI shall have delivered to the Trustee for cancellation all
Securities of any series theretofore authenticated (other than
any Securities of such series which have been destroyed, lost or
stolen and which have been replaced or paid as provided in
Section 2.11), or (c) in the case of any series of Securities
with respect to which the exact amount described in clause (ii)
below can be determined at the time of making the deposit
referred to in such clause (ii), (i) all the Securities of such
series not theretofore delivered to the Trustee for cancellation
shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and (ii) LGII or
TLGI shall have irrevocably deposited or caused to be deposited
with the Trustee as funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders
of Securities of such series, cash in an amount (other than
moneys repaid by the Trustee or any Paying Agent to LGII in
accordance with Section 8.04) or direct obligations of the United
States of America, backed by its full faith and credit ("U.S.
Government Obligations"), maturing as to principal and interest,
if any, at such times and in such amounts as will insure the
availability of cash, or a combination thereof, sufficient in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof
delivered to the Trustee, to pay (A) the principal of and
interest, if any, on all Securities of such series on each date
that such principal or interest, if any, is due and payable, and
(B) any mandatory sinking fund payments on the dates on which
such payments are due and payable in accordance with the terms of
this Indenture and the Securities of such series; then LGII shall
be deemed to have paid and discharged the entire indebtedness on
all the Securities of such series on the date of the deposit
referred to in clause (ii) above and the provisions of this
Indenture and the Guarantee with respect to the Securities of
such series shall no longer be in effect (except, in the case of
clause (c) of this Section 8.01(B), as to (i) rights of
registration of transfer and exchange of Securities of such
series, (ii) substitution of mutilated, defaced, destroyed, lost
or stolen Securities of such series, (iii) rights of Holders of
Securities of such series to receive payments of principal
thereof and interest, if any, thereon upon the original stated
due dates therefor (but not upon acceleration), and remaining
rights of the Holders of Securities of such series to receive
mandatory sinking fund payments, if any, (iv) the rights,
obligations, duties and immunities of the Trustee hereunder, (v)
the rights of the Holders of Securities of such series as
beneficiaries
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hereof with respect to the property so deposited
with the Trustee payable to all or any of them, (vi) the
obligations of LGII and TLGI under Section 4.02 with respect to
Securities of such series and (vii) the obligations of LGII and
TLGI under Article Thirteen) and the Trustee, on demand of LGII
accompanied by an Officer's Certificate and an Opinion of
Counsel, each stating that all conditions precedent contemplated
by this provision have been complied with, and at the cost and
expense of LGII, shall execute proper instruments acknowledging
the same.
(C) The following provisions shall apply to the
Securities of each series unless specifically otherwise provided
in a Board Resolution, Officer's Certificate or indenture
supplement hereto provided pursuant to Section 2.01. In addition
to discharge of this Indenture and the Guarantee pursuant to the
next preceding paragraph, in the case of any series of Securities
with respect to which the exact amount described in subparagraph
(a) below can be determined at the time of making the deposit
referred to in such subparagraph (a), LGII and TLGI shall be
deemed to have paid and discharged the entire indebtedness on all
the Securities of such a series on the 91st day after the date of
the deposit referred to in subparagraph (a) below, and the
provisions of this Indenture and the Guarantee with respect to
the Securities of such series shall no longer be in effect
(except as to (i) rights of registration of transfer and exchange
of Securities of such series, (ii) substitution of mutilated,
defaced, destroyed, lost or stolen Securities of such series,
(iii) rights of Holders of Securities of such series to receive
payments of principal thereof and interest, if any, thereon upon
the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders of Securities
of such series to receive mandatory sinking fund payments, if
any, (iv) the rights, obligations, duties and immunities of the
Trustee hereunder, (v) the rights of the Holders of Securities of
such series as beneficiaries hereof with respect to the property
so deposited with the Trustee payable to all or any of them, (vi)
the obligations of LGII and TLGI under Section 4.02 with respect
to Securities of such series and (vii) the obligations of LGII
and TLGI under Article Thirteen) and the Trustee, on demand of
LGII accompanied by an Officer's Certificate and an Opinion of
Counsel, each stating that all conditions precedent contemplated
by this provision have been complied with, and at the cost and
expense of LGII, shall execute proper instruments acknowledging
the same, if
(a) with reference to this provision LGII or TLGI has
irrevocably deposited or caused to be irrevocably deposited
with the Trustee as funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the
Holders of Securities of such series (i) cash in an amount,
or (ii) U.S. Government Obligations, maturing as to
principal and interest, if any, at such times and in such
amounts as will insure the availability of cash, or (iii) a
combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to
the Trustee, to pay (A) the principal of and interest, if
any, on all Securities of such series on each date that such
principal or interest, if any, if due and payable, and (B)
any mandatory sinking fund payments on the dates on which
such payments are due and payable in accordance with the
terms of this Indenture and the Securities of such series;
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(b) such deposit will not result in a breach or
violation of, or constitute a default under, any agreement
or instrument to which LGII is a party or by which it is
bound; and
(c) LGII has delivered to the Trustee an Opinion of
Counsel based on the fact that (x) LGII has received from,
or there has been published by, the Internal Revenue Service
a ruling or (y), since the date hereof, there has been a
change in the applicable United States federal income tax
law, in either case to the effect that, and such opinion
shall confirm that, the Holders of the Securities of such
series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to federal income tax on
the same amount and in the same manner and at the same
times, as would have been the case if such deposit,
defeasance and discharge had not occurred.
Section 8.02. Indemnity for U.S. Government
obligations; Repayment.
LGII and TLGI shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed
against the U.S. Government Obligations deposited pursuant to
Section 8.01 or the principal, premium, if any, and interest
received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the
Outstanding Securities of such series.
Anything in Section 8.01 to the contrary
notwithstanding, the Trustee shall deliver or pay to LGII from
time to time upon the request, in writing, by LGII any money or
U.S. Government Obligations held by it as provided in
Section 8.01 above which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be
deposited to effect an equivalent legal defeasance or covenant
defeasance.
Section 8.03. Application By Trustee Of Funds
Deposited For Payment Of Securities. Subject to Section 8.04,
all moneys and U.S. Government Obligations deposited with the
Trustee pursuant to Sections 8.01 shall be held in trust, and
such moneys and all moneys from such U.S. Government Obligations
shall be applied by it to the payment, either directly or through
any Paying Agent (including LGII acting as its own paying agent),
to the Holders of the particular Securities of such series for
the payment or redemption of which such moneys and U.S.
Government Obligations have been deposited with the Trustee, of
all sums due and to become due thereon for principal and
interest, if any, but such moneys need not be segregated from
other funds except to the extent required by law. The Trustee
and any Paying Agent shall promptly pay to LGII, upon the written
request of LGII, any excess moneys or U.S. Government Obligations
held by them at any time, including all moneys deposited with the
Trustee pursuant to Section 8.01(B) and held by it or any Paying
Agent for the payment of Securities subsequently converted.
Section 8.04. Repayment to LGII.
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Subject to Sections 7.08 and 8.01, the Trustee shall
promptly pay to LGII, or if deposited with the Trustee by TLGI,
to TLGI, upon receipt by the Trustee of an Officers' Certificate,
any excess money, determined in accordance with Section 8.01 or
8.02, held by it at any time. Any moneys deposited with or paid
to the Trustee or any Paying Agent for the payment of the
principal of or interest, if any, on any Security of any series
and not applied but remaining unclaimed for two years after the
date upon which such principal or interest, if any, shall have
become due and payable, shall, upon the written request of LGII
and unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property law, be
repaid to LGII or TLGI by the Trustee for such series or such
Paying Agent, and the Holder of the Securities of such series
shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property laws,
thereafter look only to LGII and TLGI for any payment which such
Holder may be entitled to collect, and all liability of the
Trustee or any Paying Agent with respect to such moneys shall
thereupon cease.
In connection with the satisfaction and discharge of
this Indenture with respect to Securities of any series, all
moneys then held by any Paying Agent under the provisions of this
Indenture with respect to such series of Securities shall, upon
demand of LGII, be repaid to it or paid to the Trustee and
thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
Section 8.05. Reinstatement.
If the Trustee or Paying Agent is unable to apply any
money or U.S. Government Obligations in accordance with this
Indenture by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application,
then and only then LGII's and TLGI's obligations under this
Indenture and the Securities of such series shall be revived and
reinstated as though no deposit had been made pursuant to this
Indenture until such time as the Trustee is permitted to apply
all such money or U.S. Government Obligations in accordance with
this Indenture; provided, however, that if LGII or TLGI has made
any payment of principal of, premium, if any, or interest on any
Securities of such series because of the reinstatement of its
obligations, LGII or TLGI, as the case may be, shall be
subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Supplemental Indentures Without Consent
Of Securityholders.
LGII, when authorized by a resolution of the Board of
Directors (which resolution may provide general terms or
parameters for such action and may provide that the specific
terms of such action may be determined in accordance with or
pursuant to an Issuer Order), and the Trustee may from time to
time and at any time enter into an indenture or
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indentures
supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act of 1939 as in force at the date of the
execution thereof) for one or more of the following purposes:
(a) to cure any ambiguity, defect or inconsistency or
to correct or supplement any provision contained herein or in any
supplemental indenture which may be defective or inconsistent
with any other provision contained herein or in any supplemental
indenture, or to make any other provisions as to LGII may deem
necessary or desirable, provided that no such action shall
adversely affect the interests of the Holders of the Securities;
(b) to evidence the succession of another corporation
to LGII, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and
obligations of LGII pursuant to Article Five;
(c) to establish the form or terms of Securities of
any series as permitted by Sections 2.01 and 2.02 and to provide
for adjustment of conversion rights pursuant to Section 13.05;
(d) to comply with any requirements of the Commission
in order to effect or maintain the qualification of this
Indenture under the TIA;
(e) to evidence and provide for the acceptance of
appointment hereunder by a successor trustee with respect to the
Securities of one or more series and to add to or change any of
the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by
more than one trustee, pursuant to the requirements of Section
7.14; and
(f) to add to the covenants of LGII such further
covenants, restrictions, conditions or provisions as LGII and the
Trustee shall consider to be for the protection of the Holders of
all or any series of Securities (and if such covenants,
restrictions, conditions or provisions are to be for the
protection of less than all series of Securities, stating that
the same are expressly being included solely for the protection
of such series), and to make the occurrence, or the occurrence
and continuance, of a default in any such additional covenants,
restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies
provided, in this Indenture as herein set forth; provided, that
in respect of any such additional covenant, restriction,
condition or provision such supplemental indenture may provide
for a particular period of grace after default (which period may
be shorter or longer than that allowed in the case of other
defaults) or may provide for an immediate enforcement upon such
an Event of Default or may limit the remedies available to the
Trustee upon such an Event of Default or may limit the right of
the Holders of a majority in aggregate principal amount of the
Securities of such series to waive such Event of Default.
The Trustee is hereby authorized to join with LGII in
the execution of any such supplemental indenture, to make any
further appropriate agreements and stipulations which may be
therein contained and to accept the conveyance, transfer,
assignment, mortgage or pledge of any property thereunder, but
the Trustee shall not be obligated to enter into any such
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supplemental indenture which affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions
of this Section 9.01 may be executed without the consent of the
Holders of any of the Securities then Outstanding,
notwithstanding any of the provisions of Section 9.02.
Notwithstanding the above, the Trustee and LGII may not
make any change that adversely affects the rights of any Holders
hereunder. LGII shall be required to deliver to the Trustee an
Opinion of Counsel stating that any such change made pursuant to
paragraph (a) or (f) of this Section 9.01 does not adversely
affect the rights of any Holder.
Section 9.02. Supplemental Indentures With Consent Of
Securityholders.
With the consent (evidenced as provided in Article Ten)
of the Holders of not less than a majority in aggregate principal
amount of the Securities then Outstanding of any series affected
by such supplemental indenture, LGII, when authorized by a
resolution of the Board of Directors (which resolution may
provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order), and the
Trustee may, from time to time and at any time, enter into an
indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture act of 1939 as in force
at the date of execution thereof) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or
of modifying in any manner the rights of the Holders of the
Securities of such series or any provision of the Guarantee;
provided, that no such supplemental indenture shall (a) extend
the final maturity of any Security, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment
of interest, if any, thereon (or, in the case of an Original
Issue Discount Security, reduce the rate of accrual of original
issue discount thereon), or reduce or alter the method of
computation of any amount payable on redemption, repayment or
purchase by the Company thereof (or the time at which any such
redemption, repayment or purchase may be made), or make the
principal thereof (including any amount in respect of original
issue discount), or interest, if any, thereon payable in any coin
or currency other than that provided in the Securities or in
accordance with the terms of the Securities, or reduce the
portion of the principal amount of an Original Issue Discount
Security that would be due and payable upon an acceleration of
the maturity thereof pursuant to Section 6.01 or the amount
thereof provable in bankruptcy pursuant to Section 6.02, or
impair or affect the right of any Securityholder to institute
suit for the payment or conversion thereof or materially and
adversely affect the right to convert the Securities in
accordance herewith or, if the Securities provide therefor, any
right of repayment or purchase at the option of the
Securityholder, in each case without the consent of the Holder of
each Security so affected, or (b) reduce the aforesaid percentage
of Securities of any series, the consent of the Holders of which
is required for any such supplemental indenture, without the
consent of the Holders of each Security so affected. No consent
of any Holder of any Security shall be necessary under this
Section 9.02 to permit the Trustee and LGII to execute
supplemental indentures pursuant to Sections 5.01, 9.01 and
13.05.
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A supplemental indenture which changes or eliminates
any covenant, Event of Default or other provision of this
Indenture or the Guarantee which has expressly been included
solely for the benefit of one or more particular series of
Securities, or which modifies the rights of Holders of Securities
of such series, with respect to such covenant or provision, shall
be deemed not to affect the rights under this Indenture of the
Holders of Securities of any other series.
Upon the request of LGII, accompanied by a copy of a
resolution of the Board of Directors (which resolution may
provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order) certified by
the secretary or an assistant secretary of LGII authorizing the
execution of any such supplemental indenture, and upon the filing
with the Trustee of evidence of the consent of the Holders of the
Securities and aforesaid and other documents, if any required by
Section 10.01, the Trustee shall join with LGII in the execution
of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such
supplemental indenture.
It shall not be necessary for the consent of the
Securityholders under this Section 8.2 to approve the particular
form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.
Promptly after the execution by LGII and the Trustee of
any supplemental indenture pursuant to the provisions of this
Section 9.02, the Trustee shall give notice thereof to the
Holders of then Outstanding Securities of each series affected
thereby, by mailing a notice thereof by first-class mail to such
Holders at their addresses as they shall appear on the Security
register. Any failure of LGII to give such notice, or any defect
therein, shall not, however, in any way impair or affect the
validity of any such supplemental indenture.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment of or supplement to this Indenture, the
Guarantee or each series of the Securities shall comply with the
TIA as then in effect.
Section 9.04. Effect Of Supplemental Indenture.
Upon the execution of any supplemental indenture
pursuant to the provisions hereof, this Indenture shall be and be
deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, LGII and the
Holders of Securities of each series affected thereby shall
thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and
all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of
this Indenture for any and all purposes and every Holder of
Securities of each series affected thereby theretofore or
thereafter authenticated and delivered hereunder shall be bound
thereby.
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Section 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms
of a Security of any series, the Trustee shall (in accordance
with the specific direction of LGII) request the Holder of the
Security to deliver it to the Trustee. The Trustee shall (in
accordance with the specific direction of LGII) in form approved
by the Trustee for such series as to any matter provided for by
such supplemental indenture or as to any action taken by
Securityholders and return it to the Holder. Alternatively, if
LGII or the Trustee so determines, new Securities of any series
so modified as to conform, in the opinion of the Trustee and
LGII, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by LGII, authenticated by
the Trustee and delivered in exchange for the Securities of such
series then Outstanding. Failure to make the appropriate
notation or issue a new Security shall not affect the validity
and effect of such amendment, supplement or waiver.
Section 9.06. Trustee May Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or
waiver authorized pursuant to this Article Nine if the amendment,
supplement or waiver does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does,
the Trustee may, but need not, sign it. In signing or refusing
to sign such amendment, supplement or waiver, the Trustee shall
be entitled to receive, and shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating
that the execution of any amendment, supplement or waiver is
authorized or permitted by this Indenture, that it is not
inconsistent herewith and that it will be valid and binding upon
LGII in accordance with its terms.
ARTICLE TEN
CONCERNING THE SECURITYHOLDERS
Section 10.01 Evidence Of Action Taken By
Securityholders. Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be given or taken by a specified percentage in
principal amount of the Securityholders of any or all series may
be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such specified percentage
of Securityholders in person or by agent duly appointed in
writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments
are delivered to the Trustee. Proof of execution of any
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to
Sections 7.01 and 7.02) conclusive in favor of the Trustee and
LGII, if made in the manner provided in this Article Ten.
Section 10.02 Proof Of Execution Of Instruments And Of
Holding Of Securities. Subject to Sections 7.01 and 7.02, the
execution of any instrument by a Securityholder or his agent or
proxy may be proved in the following manner:
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(a) The fact and date of the execution by any Holder
of any instrument may be proved by the certificate of any
notary public or other officer of any jurisdiction
authorized to take acknowledgments of deeds or administer
oaths that the person executing such instruments
acknowledged to him the execution thereof, or by an
affidavit of a witness to such execution sworn to before any
such notary or other such officer. Where such execution is
by or on behalf of any legal entity other than an
individual, such certificate or affidavit shall also
constitute sufficient proof of the authority of the person
executing the same.
(b) The ownership of Securities shall be proved by the
Security register or by a certificate of the Security
registrar.
Section 10.03 Holders To Be Treated As Owners. LGII,
the Trustee and any agent of LGII or the Trustee may deem and
treat the Person in whose name any Security shall be registered
upon the Security register for such series as the absolute owner
of such Security (whether not such Security shall be overdue and
notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of
the principal of and, subject to the provisions of this
Indenture, interest, if any, on such Security and for all other
purposes; and neither LGII nor the Trustee nor any agent of LGII
or the Trustee shall be affected by any notice to the contrary.
Section 10.04 Securities Owned By LGII Deemed Not
Outstanding. In determining whether the Holders of the requisite
aggregate principal amount of Outstanding Securities of any or
all series have concurred in any direction, consent or waiver
under this Indenture, Securities which are owned by LGII or any
other obligor on the Securities with respect to which such
determination is being made or by any Affiliate of LGII or any
other obligor on the Securities with respect to which such
determination is being made shall be disregarded and deemed not
to be Outstanding for the purpose of any such determination,
except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or
waiver only Securities which the Trustee knows are so owned shall
be so disregarded. Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's
right so to act with respect to such Securities and that the
pledgee is not LGII or any other obligor upon the Securities or
any Affiliate of LGII or any other obligor on the Securities. In
case of a dispute as to such right, the advice of counsel shall
be full protection in respect of any decision made by the Trustee
in accordance with such advice. Upon request of the Trustee,
LGII shall furnish to the Trustee promptly an Officer's
Certificate listing and identifying all Securities, if any, known
by LGII to be owned or held by or for the account of any of the
above described Persons; and, subject to Sections 7.01 and 7.02,
the Trustee shall be entitled to accept such Officer's
Certificate as conclusive evidence of the facts therein set forth
and of the fact that all Securities not listed therein are
Outstanding for the purposes of any such determination.
Section 10.05 Right Of Revocation Of Action Taken. At
any time prior to (but not after) the evidencing to the Trustee,
as provided in Section 10.01, of the taking of any action by the
Holders of the percentage in aggregate principal amount of the
Securities of any or all
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series, as the case may be, specified in
this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to
be included among the serial numbers of the Securities the
Holders of which have consented to such action may, by filing
written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article Ten, revoke such action so
far as concerns such Security, provided that such revocation
shall not become effective until three business days after such
filing. Except as aforesaid any such action taken by the Holder
of any Security shall be conclusive and binding upon such Holder
and upon all future Holders and owners of such Security and of
any Securities issued in exchange or substitution therefor or on
registration of transfer thereof, irrespective of whether or not
any notation in regard thereto is made upon any such Security.
Any action taken by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the
case may be, specified in this Indenture in connection with such
action shall be conclusively binding upon LGII, the Trustee and
the Holders of all the Securities affected by such action.
Section 10.06 Record Date For Consents And Waiver.
LGII may, but shall not be obligated to, direct the Trustee to
establish a record date for the purpose of determining the
Persons entitled to (i) waive any past default with respect to
the Securities of such series in accordance with Section 6.05 of
this Indenture, (ii) consent to any supplemental indenture in
accordance with Section 9.02 of this Indenture, or (iii) waive
compliance with any term, condition or provision of any covenant
hereunder. If a record date is fixed, the Holders on such record
date, or their duly designated proxies, and any such Persons,
shall be entitled to waive any such past default, consent to any
such supplemental indenture or waive compliance with any such
term, condition or provision, whether or not such Holder remains
a Holder after such record date; provided, however, that unless
such waiver or consent is obtained from the Holders, or duly
designated proxies, of the requisite principal amount of
Outstanding Securities of such series prior to the date which is
the 180th day after such record date, any such waiver or consent
previously given shall automatically and without further action
by any Holder be cancelled and of no further effect.
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Conflict Of Any Provision Of Indenture
With Trust Indenture Act Of 1939.
If and to the extent that any provision of this
Indenture Limits, qualifies or conflicts with another provision
included in this Indenture which is required to be included
herein by any of Sections 310 to 317, inclusive, or is deemed
applicable to this Indenture by virtue of the provisions of this
Trust Indenture Act of 1939, such required provision shall
control.
Section 11.02. Notices.
Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the
Trustee or by the Holders of Securities to or on LGII, or as
required pursuant to the Trust Indenture Act of 1939, may be
given or served by being
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deposited postage prepaid, first-class
mail (except as otherwise specifically provided herein) addressed
(until another address of LGII or TLGI is filed by LGII with the
Trustee) to Loewen Group International, Inc., 50 East River
Center Boulevard, Suite 800, Covington, KY 41011, Attention:
___________, with a copy to: The Loewen Group Inc., 4126 Norland
Ave., Burnaby, British Columbia, Canada V56358. Any notice,
direction, request or demand by LGII or any Holder of Securities
to or upon the Trustee shall be deemed to have been sufficiently
given or served by being deposited postage prepaid, first-class
mail (except as otherwise specifically provided herein) addressed
(until another address of the Trustee is filed by the Trustee
with LGII) to Fleet National Bank, 777 Main Street, Hartford,
Connecticut 06115, Attention: _______________.
Where this Indenture provides for notice to Holders of
Securities, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder entitled thereto, at
his last address as it appears in the Security register. Where
this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall
be the equivalent of such notice. Waivers of notice by Holder
shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in
reliance upon such waiver. In case, by reason of the suspension
of or irregularities in regular mail service, it shall be
impracticable to mail any notice when such notice is required to
be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be reasonably satisfactory
to the Trustee shall be deemed to be sufficient notice.
Any notice or communication shall be sufficiently given
if in writing and delivered in person or mailed by first class
mail, postage prepaid, addressed as follows:
Section 11.03. Communication by Holders with Other
Holders.
Holders may communicate pursuant to TIA 312(b) with
other Holders with respect to their rights under this Indenture
or the Securities. The obligors, the Trustee, the Registrar and
any other person shall have the protection of TIA 312(c).
Section 11.04. Officer's Certificates And Opinions Of
Counsel; Statements To Be Contained Therein.
Upon any application or demand by LGII or TLGI to the
Trustee to take any action under any of the provisions of this
Indenture, or as required pursuant to the Trust Indenture Act of
1939, LGII shall furnish to the Trustee an Officer's Certificate
stating that all conditions precedent provided for in this
Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required
by any provision of this Indenture relating to such particular
application or demand, no additional certificate or opinion need
be furnished.
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Each certificate or opinion provided for in this
Indenture (other than a certificate provided pursuant to Section
3.03(d)) and delivered to the Trustee with respect to compliance
with a condition or covenant provided for in this Indenture shall
include (a) a statement that the person making such certificate
or opinion has read such covenant or condition, (b) a brief
statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in
such certificate or opinion are based, (c) a statement that, in
the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an opinion
as to whether or not such covenant or condition has been complied
with, and (d) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of
LGII may be based, insofar as it related to legal matters, upon a
certificate or opinion of or representations by counsel, unless
such officer knows that the certificate or opinion or
representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that
the same are erroneous. Any certificate, statement or opinion of
counsel may be based, insofar as it relates to factual matters,
information with respect to which is in the possession of LGII,
upon the certificate, statement or opinion of or representations
by an officer or officers of LGII, unless such counsel knows that
the certificate, statement or opinion or representations with
respect to the matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of
LGII or of counsel may be based, insofar as it relates to
accounting matters, upon a certificate or opinion of or
representation by an accountant or firm of accountants in the
employ of LGII, unless such officer or counsel, as the case may
be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or
in the exercise of reasonable care should know that the same are
erroneous.
Any certificate or opinion of any independent firm of
public accountants filed with and directed to the Trustee shall
contain a statement that such firm in independent.
Section 11.05. Payments Due On Saturdays, Sundays And
Holidays.
If the date of maturity of principal of or interest, if
any, on the Securities of any series or the date fixed for
redemption, purchase or repayment of any such Security or at the
last date for conversion of any Security shall not be a Business
Day, then (notwithstanding any other provision of this Indenture
or the Securities) payment of interest, if any, or principal need
not be made on such date and such conversion need not be made by
such date, but may be made on the next succeeding Business Day
with the same force and effect as if made on the date of maturity
or the date fixed for redemption, purchase or repayment or the
last date of such conversion, and, in the case of payment, no
interest shall accrue for the period after such date.
Section 11.06. Rules by Trustee, Paying Agent,
Registrar.
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The Trustee may make reasonable rules for action by or
at a meeting of Noteholders. The Paying Agent or Registrar may
make reasonable rules for its functions.
Section 11.07. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS
INDENTURE, THE GUARANTEE AND THE SECURITIES WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW, AND FOR ALL PURPOSES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH
STATE OR APPLICABLE FEDERAL LAW. The Trustee, LGII, TLGI and the
Holders agree to submit to the jurisdiction of the courts of the
State of New York in any action or proceeding arising out of or
relating to this Indenture, the Guarantee or the Securities.
Section 11.08. Consent to Service of Process.
Each of LGII and TLGI irrevocably (a) agrees that any
legal suit, action or proceeding arising out of or based upon
this Indenture and the Securities issued hereunder may be
instituted in any federal or state court located in the City of
New York, (b) waives, to the fullest extent it may effectively do
so, any objection which it may now or hereafter have to the
laying of venue of any such proceeding, and (c) submits to the
nonexclusive jurisdiction of such courts in any such suit, action
or proceeding. LGII and TLGI has appointed Thelen, Marrin,
Johnson & Bridges LLP, 330 Madison Avenue, New York, New York
10017, Attention: David P. Graybeal, Esq., as its authorized
agent (the "Authorized Agent") upon whom process may be served in
any suit, action or proceeding arising out of or based on this
Indenture which may be instituted in any federal or state court
located in The City of New York, expressly consents to the
jurisdiction of any such court in respect of any suit, action or
proceeding, and waives any other requirements of or objections to
personal jurisdiction with respect thereto. Such appointment
shall be irrevocable. Each of LGII and TLGI agrees to take any
and all action, including the filing of any and all documents and
instruments, that may be necessary to continue such appointment
in full force and effect as aforesaid. Service of process upon
the Authorized Agent and written notice of such service to LGII
and TLGI shall be deemed, in every respect, effective service of
process upon LGII and TLGI. Notwithstanding the foregoing,
designation of an authorized agent does not constitute submission
to jurisdiction or consent to service or process in any legal
action or proceeding predicated on United States federal or state
securities laws.
Section 11.09. No Interpretation of Other Agreements.
This Indenture may not be used to interpret another
indenture, loan or debt agreement of LGII, TLGI or any of its
Subsidiaries. Any such indenture, loan or debt agreement may not
be used to interpret this Indenture.
Section 11.10. Partners, Incorporators, Stockholders,
Officers And Directors Of LGII Exempt From Individual Liability.
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No recourse under or upon any obligation, covenant or
agreement contained in this Indenture, or in any Security or the
Guarantee, or because of any indebtedness evidenced thereby,
shall be had against any incorporator, as such or against any
past, present or future director, officer, employee, stockholder
or Affiliate, as such, of LGII or TLGI, or any partner of LGII or
TLGI or of any successor, either directly or through LGII or any
successor, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Securities
by the Holders thereof and as part of the consideration for the
issue of the Securities.
Section 11.11. Successors.
All agreements of each of LGII and TLGI in this
Indenture and the Securities and the Guarantee shall bind its
successors. All agreements of the Trustee in this Indenture
shall bind its successors.
Section 11.12. Duplicate Originals.
The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all such
executed copies together represent the same agreement.
Section 11.13. Severability.
In case any provision in this Indenture, the Guarantee
or the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby, and a
Holder shall have no claim therefor against any party hereto.
Section 11.14. Table of Contents, Headings, Etc.
The Table of Contents and headings of the Articles and
Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall
in no way modify or restrict any of the terms or provisions
hereof.
Section 11.15. Provisions Of Indenture For The Sole
Benefit Of Parties And Holders Of Senior Indebtedness And Of
Securities.
Nothing in this Indenture or in the Securities,
expressed or implied, shall give or be construed to give to any
Person, other than the parties hereto and their successors and
the Holders of the Securities, any legal or equitable right,
remedy or claim under this Indenture or under any covenant or
provisions herein contained, all such covenants and provisions
being for the sole benefit of the parties hereto and their
successors, the holders of the Holders of the Securities.
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ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
Section 12.01 Applicability Of Article. The
provisions of this Article shall be applicable to the Securities
of any series which are redeemable before their maturity or to
any sinking fund for the retirement of Securities of a series
except as otherwise specified, as contemplated by Section 2.01
for Securities of such series.
Section 12.02 Notice Of Redemption; Partial
Redemptions. Notice of redemption to the Holders of Securities
of any series to be redeemed as a whole or in part at the option
of LGII shall be given by mailing notice of such redemption by
first-class mail, postage prepaid, at least 30 days and not more
than 60 days prior to the date fixed for redemption to such
Holders of Securities of such series at their last addresses as
they shall appear upon the registry books. Any notice which is
mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder
receives the notice. Failure to give notice by mail, or any
defect in the notice to the Holder of any Security of a series
designated for redemption as a whole or in part shall not affect
the validity of the proceedings for the redemption of any other
Security of such series.
The notice of redemption to each such Holder shall
specify the principal amount of each Security of such series held
by such Holder to be redeemed, the date fixed for redemption, the
redemption price, the place or places of payment, that payment
will be made upon presentation and surrender of such Securities,
that such redemption is pursuant to the mandatory or optional
sinking fund, or both, if such be the case, that interest, if
any, (or, in the case of Original Issue Discount Securities,
original issue discount) accrued to the date fixed for redemption
will be paid as specified in such notice and that on and after
said date interest, if any, thereon or on the portions thereof to
be redeemed (or, in the case of Original Issue Discount
Securities, original issue discount) will cease to accrue and, if
applicable, shall also specify the Conversion Price then in
effect and the date on which the right to convert such Securities
or the portions thereof to be redeemed will expire. In case any
Security of a series is to be redeemed in part only, the notice
of redemption shall state the portion of the principal amount
thereof to be redeemed and shall state that on and after the date
fixed for redemption, upon surrender of such Security, a new
Security or Securities of such series in principal amount equal
to the unredeemed portion thereof will be issued (accompanied by
a notation of Guarantee duly endorsed by TLGI).
The notice of redemption of Securities of any series to
be redeemed at the option of LGII shall be given by LGII or, at
LGII's request, by the Trustee in the name and at the expense of
LGII.
On or before the redemption date specified in the
notice of redemption given as provided in this Section 12.02,
LGII will deposit with the Trustee or with one or more Paying
Agents (or, if LGII is acting as its own paying agent, set aside,
segregate and hold in trust as provided in Section 2.09) an
amount of money sufficient to redeem on the redemption date all
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the Outstanding Securities of such series so called for
redemption (other than those theretofore surrendered for
conversion into Common Stock and deemed not to be Outstanding
hereunder) at the appropriate redemption price, together with
accrued interest, if any, to the date fixed for redemption on all
the Outstanding Securities of such series so called for
redemption (other than those theretofore surrendered for
conversion into Common Stock and deemed not to be Outstanding
hereunder). If any Security called for redemption is converted
pursuant hereto, any moneys deposited with the Trustee or any
Paying Agent or so segregated and held in trust for the
redemption of such Security shall be paid to LGII upon LGII's
request, or, if then held by LGII, shall be discharged from such
trust. LGII will deliver to the Trustee at least 30 days prior
to the date fixed for redemption (unless a shorter notice shall
be satisfactory to the Trustee) an Officer's Certificate stating
the aggregate principal amount of Securities to be redeemed. In
case of a redemption at the election of LGII prior to the
expiration of any restriction on such redemption, LGII shall
deliver to the Trustee, prior to the giving of any notice of
redemption to Holders pursuant to this Section 12.02, an
Officer's Certificate stating that such restriction has been
complied with.
If less than all the Securities of a series are to be
redeemed, the Trustee shall select, in such manner as it shall
deem appropriate and fair, Securities of such series to be
redeemed. Securities may be redeemed in part in multiples equal
to the minimum authorized denomination for Securities of such
series or any multiple thereof. The Trustee shall promptly
notify LGII in writing of the Securities of such series selected
for redemption and, in the case of any Securities of such series
selected for partial redemption, the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to the
redemption of Securities of any series shall relate, in the case
of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been
or is to be redeemed. If any Security selected for partial
redemption is surrendered for conversion after such selection,
the converted portion of such Security shall be deemed (so far as
may be) to be the portion selected for redemption. Upon any
redemption of less than all the Securities of a series, for
purposes of selection for redemption LGII and the Trustee may
treat as Outstanding Securities surrendered for conversion during
the period of 15 days next preceding the mailing of a notice of
redemption, and need not treat as Outstanding any Security
authenticated and delivered during such period in exchange for
the unconverted portion of any Security converted in part during
such period.
Section 12.03 Payments Of Securities Called For
Redemption. If notice of redemption has been given as above
provided, the Securities or portions of Securities specified in
such notice shall become due and payable on the date and at the
place or places stated in such notice at the applicable
redemption price, together with interest, if any, accrued to the
date fixed for redemption, and on and after said date (unless
LGII shall default in the payment of such Securities at the
redemption price, together with interest, if any, accrued to said
date) interest (or, in the case of Original Issue Discount
Securities, original issue discount) on the Securities or
portions of Securities so called for redemption shall cease to
accrue, and such Securities shall cease from and after the date
fixed for redemption (unless an earlier date shall be specified
in a Board Resolution, Officer's Certificate or executed
supplemental indenture referred to in Sections 2.02 and 2.01 by
or pursuant to which the form and terms of the Securities of such
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series were established) to be convertible into Common Stock,
and, except as provided in Sections 7.06 and 8.04, to be entitled
to any other benefit or security under this Indenture, and the
Holders thereof shall have no right in respect of such Securities
except the right to receive the redemption price thereof and
unpaid interest to the date fixed for redemption. On
presentation and surrender of such Securities at a place of
payment specified in said notice, said Securities or the
specified portions thereof shall be paid and redeemed by LGII at
the applicable redemption price, together with interest, if any,
accrued thereon on the date fixed for redemption; provided that
payment of interest, if any, becoming due on or prior to the date
fixed for redemption shall be payable to the Holders of
Securities registered as such on the relevant record date subject
to the terms and provisions of Sections 2.01 and 2.07 hereof.
If any Security called for redemption shall not be so
paid upon surrender thereof for redemption, the redemption price
shall, until paid or duly provided for, bear interest from the
date fixed for redemption at the rate of interest or Yield to
Maturity (in the case of an Original Issue Discount Security)
borne by such Security, and such Security shall remain
convertible into Common Stock until the redemption price of such
Security (together with such interest thereon) shall have been
paid or duly provided for.
Upon presentation of any Security redeemed in part
only, LGII shall execute and the Trustee shall authenticate and
deliver to or on the order of the Holder thereof, at the expenses
of LGII, a new Security or Securities of such series and of like
tenor, of authorized denominations, in principal amount equal to
the unredeemed portion of the Security so presented.
Section 12.04 Exclusion Of Certain Securities From
Eligibility For Selection For Redemption. Securities shall be
excluded from eligibility for selection for redemption if they
are identified by registration and certificate number in an
Officer's Certificate delivered to the Trustee at least 45 days
prior to the last date on which notice of redemption may be given
as being owned of record and beneficially by, and not pledged or
hypothecated by, either (a) LGII or (b) a Person specifically
identified in such written statement as an Affiliate of LGII.
Section 12.05 Mandatory And Optional Sinking Funds.
The minimum amount of any sinking fund payment provided for by
the terms of the Securities of any series is herein referred to
as a "mandatory sinking fund payment", and any payment in excess
of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an "optional
sinking fund payment". The date on which a sinking fund payment
is to be made is herein referred to as the "sinking fund payment
date".
In lieu of making all or any part of any mandatory
sinking fund payment with respect to any series of Securities in
cash, LGII may at its option (a) deliver to the Trustee
Securities of such series theretofore purchased or otherwise
acquired (except upon redemption pursuant to the mandatory
sinking fund) by LGII or receive credit for Securities of such
series (not previously so credited) theretofore purchased or
otherwise acquired (except as aforesaid) by LGII and delivered to
the Trustee for cancellation pursuant to Section 2.12, (b)
receive credit for Securities (not previously so credited)
converted into Common Stock and so delivered to the
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Trustee for
cancellation, (c) receive credit for optional sinking fund
payments (not previously so credited) made pursuant to this
Section 2.09, or (d) receive credit for Securities of such series
(not previously so credited) redeemed by LGII through any
optional redemption provision contained in the terms of such
series. Securities so delivered or credited shall be received or
credited by the Trustee at the sinking fund redemption price
specified in such Securities.
On or before the 60th day next preceding each sinking
fund payment date for any series, LGII will deliver to the
Trustee an Officer's Certificate (a) specifying the portion of
the mandatory sinking fund payment to be satisfied by payment of
cash and the portion to be satisfied by credit of Securities of
such series and the basis for such credit, (b) stating that none
of the Securities of such series to be so credited has
theretofore been so credited, (c) stating that no defaults in the
payment of interest or Events of Default with respect to such
series have occurred (which have not been waived or cured or
otherwise ceased to exist) and are continuing, and (d) stating
whether or not LGII intends to exercise its right to make an
optional sinking fund payment with respect to such series and, if
so, specifying the amount of such optional sinking fund payment
which LGII intends to pay on or before the next succeeding
sinking fund payment date. Any Securities of such series to be
credited and required to be delivered to the Trustee in order for
the Issue to be entitled to credit therefor as aforesaid which
have not theretofore been delivered to the Trustee shall be
delivered for cancellation pursuant to Section 2.12 to the
Trustee with such Officer's Certificate (or reasonably promptly
thereafter if acceptable to the Trustee). Such Officer's
Certificate shall be irrevocable and upon its receipt by the
Trustee LGII shall become unconditionally obligated to make all
the cash payments or payments therein referred to, if any, on or
before the next succeeding sinking fund payment date. Failure to
LGII, on or before any such 60th day, to deliver such Officer's
Certificate and Securities (subject to the parenthetical clause
in the second preceding sentence) specified in this paragraph, if
any, shall not constitute a default but shall constitute, on and
as such date, the irrevocable election of LGII (i) that the
mandatory sinking fund payment for such series due on the next
succeeding sinking fund payment date shall be paid entirely in
cash without the option to deliver or credit Securities of such
series in respect thereof, and (ii) that LGII will make no
optional sinking fund payment with respect to such series as
provided in this Section 12.05.
If the sinking fund payment or payments (mandatory or
optional or both) to be made in cash on the next succeeding
sinking fund payment date plus any unused balance of any
preceding sinking fund payments made in cash shall exceed $50,000
or a lesser sum if LGII shall so request with respect to the
Securities of any particular series, such cash shall be applied
on the next succeeding sinking fund payment date to the
redemption of Securities of such series at the sinking fund
redemption price together with accrued interest, if any, to the
date fixed for redemption. If such amount shall be $50,000 or
less and LGII makes no such request, then it shall be carried
over until a sum in excess of $50,000 is available. The Trustee
shall select, in the manner provided in Section 12.02, for
redemption on such sinking fund payment date a sufficient
principal amount of Securities of such series to absorb said
cash, as nearly as may be, and shall (if requested in writing by
LGII) inform LGII of the serial numbers of the Securities of such
series (or portions thereof) so selected. The Trustee, in the
name and at the expense of LGII (or LGII, if it shall so request
the Trustee in writing) shall cause notice of redemption of the
Securities of such series to be given in substantially the manner
provided in Section 12.02
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(and with the effect provided in
Section 12.03) for the redemption of Securities of such series in
part at the option of LGII. The amount of any sinking fund
payments not so applied or allocated to the redemption of
Securities of such series shall be added to the next cash sinking
fund payment for such series and, together with such payment,
shall be applied in accordance with the provisions of this
Section 12.05. Any and all sinking fund moneys held on the
stated maturity date of the Securities of any particular series
(or earlier, if such maturity is accelerated), which are not held
for the payment or redemption of particular Securities of such
series shall be applied, together with other moneys, if
necessary, sufficient for the purpose, to the payment of the
principal of and interest, if any, on, the Securities of such
series at maturity.
On or before each sinking fund payment date, LGII shall
pay to the Trustee in cash or shall otherwise provide for the
payment of all interest, if any, accrued to the date fixed for
redemption of Securities to be redeemed on such sinking fund
payment date.
The Trustee shall not redeem or cause to be redeemed
any Securities of a series with sinking fund moneys or give any
notice of redemption of Securities for such series by operation
of the sinking fund during the continuance of a default in
payment of interest on such Securities or of any Event of Default
with respect to such series except that, where the giving of
notice of redemption of any Securities shall theretofore have
been made, the Trustee shall redeem or cause to be redeemed such
Securities, provided that it shall have received from LGII a sum
sufficient for such redemption. Except as aforesaid, any moneys
in the sinking fund for such series at the time when any such
default or Event of Default shall occur, and any moneys
thereafter paid into the sinking fund, shall, during the
continuance of such default or Event of Default, be deemed to
have been collected under Article Seven and held for the payment
of all such Securities. In case such Event of Default shall have
been waived as provided in Section 6.05 or the default cured on
or before the 60th day preceding the sinking fund payment date in
any year, such moneys shall thereafter be applied on the next
succeeding sinking fund payment date in accordance with this
Section 12.05 to the redemption of such Securities.
ARTICLE THIRTEEN
GUARANTEE OF SECURITIES
13.01. Guarantee.
Subject to the provisions of this Article Thirteen,
TLGI hereby unconditionally guarantees to each Holder of a
Security authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the
validity and enforceability of this Indenture, the Securities or
the obligations of LGII to the Holders or the Trustee hereunder
or thereunder, that: (a) the principal of, premium, if any, and
interest, if any, on the Securities will be duly and punctually
paid in full when due, whether at maturity, by acceleration or
otherwise, and interest on the overdue principal and (to the
extent permitted by law) interest, if any, on the Securities and
all other obligations of LGII to the Holders or the Trustee
hereunder or thereunder (including fees, expenses or other) will
be promptly paid in full or performed, all in accordance with the
terms hereof and thereof; and (b) in case of any extension of
time of payment or renewal of any Securities, the same will be
promptly paid in full when due or performed in
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accordance with
the terms of the extension or renewal, whether at Stated
Maturity, by acceleration or otherwise. Failing payment when due
of any amount so guaranteed, or failing performance of any other
obligation of LGII to the Holders, for whatever reason, TLGI will
be obligated to pay, or to perform or cause the performance of,
the same immediately. An Event of Default under this Indenture
or the Securities shall constitute an event of default under this
Guarantee, and shall entitle the Holders of Securities to
accelerate the obligations of TLGI hereunder in the same manner
and to the same extent as the obligations of LGII.
TLGI hereby agrees that its obligations hereunder shall
be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence
of any action to enforce the same, any waiver or consent by any
holder of the Securities with respect to any provisions hereof or
thereof, the recovery of any judgment against LGII, any action to
enforce the same, whether or not a Guarantee is affixed to any
particular Security, or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of
a guarantor. TLGI hereby waives the benefit of diligence,
presentment, demand of payment, filing of claims with a court in
the event of insolvency or bankruptcy of LGII, any right to
require a proceeding first against LGII, protest, notice and all
demands whatsoever and covenants that its Guarantee will not be
discharged except by complete performance of the obligations
contained in the Securities, this Indenture and this Guarantee.
If any Holder or the Trustee is required by any court or
otherwise to return to LGII, or any custodian, trustee,
liquidator or other similar official acting in relation to LGII,
any amount paid by LGII to the Trustee or such Holder, this
Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. TLGI further agrees that,
as between it, on the one hand, and the Holders of Securities and
the Trustee, on the other hand, (a) subject to this Article
Fourteen, the maturity of the obligations guaranteed hereby may
be accelerated as provided in Article Six hereof for the purposes
of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (b) in the event of any
acceleration of such obligations as provided in Article Six
hereof, such obligations (whether or not due and payable) shall
forthwith become due and payable by TLGI for the purpose of this
Guarantee.
This Guarantee shall remain in full force and effect
and continue to be effective should any petition be filed by or
against LGII for liquidation or reorganization, should LGII
become insolvent or make an assignment for the benefit of
creditors or should a receiver or trustee be appointed for all or
any significant part of LGII's assets, and shall, to the fullest
extent permitted by law, continue to be effective or be
reinstated, as the case may be, if at any time payment and
performance of the Securities are, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee on the Securities, whether as a "voidable
preference," "fraudulent transfer" or otherwise, all as though
such payment or performance had not been made. In the event that
any payment, or any part thereof, is rescinded, reduced, restored
or returned, Securities shall, to the fullest extent permitted by
law, be reinstated and deemed reduced only by such amount paid
and not so rescinded, reduced, restored or returned.
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<PAGE>
No stockholder, officer, director, employer or
incorporator, past, present or future, as such, shall have any
personal liability under this Guarantee by reason of his, her or
its status as such stockholder, officer, director, employer or
incorporator.
The Guarantee constitutes a guarantee of payment and
ranks pari passu in right of payment to all senior indebtedness
of TLGI.
13.02. Execution and Delivery of Guarantee.
To further evidence the Guarantee set forth in Section
13.01, TLGI hereby agrees that a notation on the Guarantee,
substantially in the form included in Exhibit A hereto, shall be
endorsed on each Security authenticated and delivered by the
Trustee after the Guarantee is executed by either manual or
facsimile signature of Officers of TLGI. The validity and
enforceability of the Guarantee shall not be affected by the fact
that it is not affixed to any particular Security.
TLGI hereby agrees that its Guarantee set forth in
Section 13.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Security a
notation of the Guarantee.
If an Officer of TLGI whose signatures is on this
Indenture or a Security no longer holds that office at the time
the Trustee authenticates the Security or at any time thereafter,
TLGI's Guarantee of such Security shall be valid nevertheless.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery
of the Guarantee set forth in this Indenture on behalf of TLGI.
13.03. Interest Act (Canada).
If and to the extent that the laws of Canada are
applicable to any amounts payable by TLGI under this Indenture
that are characterized as interest by any applicable authority,
for purposes of disclosure under the Interest Act (Canada), the
yearly rate of interest for any period less than one year to
which interest at a stated rate computed on the basis of a year
of 360 days consisting of twelve 30-day months is equivalent is
the stated rate multiplied by a fraction of which (a) the
numerator is the product of (i) the actual number of days in the
calendar year in which the first day of the relevant period falls
and (ii) the sum of (A) the product of (x) 30 and (y) the number
of complete months elapsed in the relevant period and (B) the
actual number of days elapsed in any incomplete month in the
relevant period, and (b) the denominator is the product of (i)
360 and (ii) the actual number of days in the relevant period.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
LOEWEN GROUP INTERNATIONAL, INC.
By:
___________________________________
Name:
___________________________________
Title:
___________________________________
[CORPORATE SEAL]
Attest:
By: ___________________________________
Title: ___________________________________
THE LOEWEN GROUP INC.
By:
___________________________________
Name:
___________________________________
Title:
___________________________________
[CORPORATE SEAL]
Attest:
By: ___________________________________
Title: ___________________________________
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<PAGE>
FLEET NATIONAL BANK, as Trustee
By:
___________________________________
Name:
___________________________________
Title:
___________________________________
[CORPORATE SEAL]
Attest:
By: ___________________________________
Title: ___________________________________
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<PAGE>
EXHIBIT A
FORM OF GUARANTEE
For value received, the undersigned hereby
unconditionally guarantees to the Holder of this Security the
payments of principal of, premium, if any, and interest, if any,
on this Security in the amounts and at the time when due and
interest on the overdue principal, premium, if any, and interest,
if any, of this Security, if lawful, and the payment or
performance of all other obligations of LGII under the Indenture
or the Securities, to the Holder of this Security and the
Trustee, all in accordance with and subject to the terms and
limitations of this Security, the Indenture (including, without
limitation, Article 13 thereof) and this Guarantee. This
Guarantee will become effective in accordance with Article
Thirteen of the Indenture and its terms shall be evidenced
therein. The validity and enforceability of the Guarantee shall
not be affected by the fact that it is not affixed to any
particular Security.
The obligations of the undersigned to the Holders of
Securities and to the Trustee pursuant to the Guarantee and the
Indenture are expressly set forth in the Indenture (including,
without limitation, Article 13 thereof) and reference is hereby
made to the Indenture for the precise terms of the Guarantee and
all of the other provisions of the Indenture to which this
Guarantee relates. Each Holder of a Senior Note, by accepting
the same, agrees to and shall be bound by such provisions.
IN WITNESS WHEREOF, TLGI has caused this instrument to
be duly executed under its corporate seal.
Dated: _____________
THE LOEWEN GROUP INC.
By:
___________________________________
Name:
___________________________________
Title:
___________________________________
[CORPORATE SEAL]
Attest:
By: ___________________________________
Title: ___________________________________
A-1
EXHIBIT 23.3
[LETTERHEAD OF KPMG]
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
The Loewen Group Inc.
We consent to incorporation by reference in the shelf
registration statement on Form S-3 of our report, dated February
26, 1996, except as to Note 12(b), which is as of March 19, 1996
and Note 20, which is as of March 26, 1996, relating to the
consolidated balance sheets of The Loewen Group Inc. as at
December 31, 1995 and 1994, and the related consolidated
statements of operations, retained earnings, and changes in
financial position for each of the years in the three year period
ended December 31, 1995, and related schedule, which report is
incorporated herein by reference and to the reference to our firm
under the heading "Experts" in the prospectus.
/s/ KPMG
Chartered Accountants
Vancouver, Canada
March 20, 1997
EXHIBIT 23.4
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors of
The Loewen Group Inc.
We hereby consent to the incorporation by reference in the
Prospectus constituting part of the Registration Statements on
Form S-3 of The Loewen Group Inc. of our report dated June 16,
1995 with respect to the financial statements of MHI Group, Inc.
as of April 30, 1995, and for each of the two years in the period
ended April 30, 1995, which appears as Exhibit No. 99.1 to The
Loewen Group Inc. Form 8-K dated May 1, 1996.
/s/ PRICE WATERHOUSE, LLP
Tampa, Florida
March 20, 1997
EXHIBIT 23.5
AUDITOR'S CONSENT
The Board of Directors of
The Loewen Group Inc.
We consent to the incorporation by reference in the registration
statement on Form S-3 of The Loewen Group Inc. of our report
dated February 27, 1996 with respect to the financial statements
of Paperman & Sons Inc. as of November 30, 1995 and for the
eleven months then ended included in the Current Report on Form 8-
K of The Loewen Group Inc. dated May 1, 1996.
/s/ Richter, Usher & Vineberg
Chartered Accountants
Montreal, Quebec
March 20, 1997
EXHIBIT 23.6
INDEPENDENT AUDITORS' CONSENT
We have issued our report dated July 26, 1995, accompanying the
consolidated financial statements of Weinstein Family Services,
Inc. and Subsidiaries as of and for the year ended April 30, 1995
included in the current report on Form 8-K of the Loewen Group
Inc. dated May 1, 1996, which is incorporated by reference in
this registration statement. We hereby consent to the
incorporation by reference in the registration statement on Form
S-3 of the aforementioned report.
/s/ Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
March 20, 1997
EXHIBIT 23.7
[LETTERHEAD OF KEITH J. SCHULTE ACCOUNTANCY CORPORATION]
The Board of Directors of
The Loewen Group Inc.
We consent to the incorporation by reference in the registration
statement on Form S-3 of The Loewen Group Inc. of our report
dated April 24, 1996, with respect to the financial statements of
Security Plus Mini & RV Storage, Inc. as of December 31, 1994 and
for the year then ended included in the Current Report on Form 8-
K of The Loewen Group Inc. dated May 1, 1996.
KEITH J. SCHULTE ACCOUNTANCY CORPORATION
By: /s/ Keith J. Schulte
Certified Public Accountant
Long Beach, California
March 20, 1997
<PAGE>
[LETTERHEAD OF KEITH J. SCHULTE ACCOUNTANCY CORPORATION]
The Board of Directors of
The Loewen Group Inc.
We consent to the incorporation by reference in the registration
statement on Form S-3 of The Loewen Group Inc. of our report
dated April 24, 1996, with respect to the financial statements of
International Memorial Society, Inc. as of December 31, 1994 and
for the year then ended included in the Current Report on Form 8-
K of The Loewen Group Inc. dated May 1, 1996.
KEITH J. SCHULTE ACCOUNTANCY CORPORATION
By: /s/ Keith J.
Schulte
Certified Public Accountant
Long Beach, California
March 20, 1997
<PAGE>
[LETTERHEAD OF KEITH J. SCHULTE ACCOUNTANCY CORPORATION]
The Board of Directors of
The Loewen Group Inc.
We consent to the incorporation by reference in the registration
statement on Form S-3 of The Loewen Group Inc. of our report
dated April 24, 1996, with respect to the financial statements of
Springs Mausoleum, Inc. as of December 31, 1994 and for the year
then ended included in the Current Report on Form 8-K of The
Loewen Group Inc. dated May 1, 1996.
KEITH J. SCHULTE ACCOUNTANCY CORPORATION
By: /s/ Keith J.
Schulte
Certified Public Accountant
Long Beach, California
March 20, 1997
EXHIBIT 23.8
[LETTERHEAD OF HIRSCH, OELBAUM, BRAM & HANOVER]
INDEPENDENT AUDITORS' CONSENT
The Board of Directors of
The Loewen Group Inc.
We consent to the incorporation by reference in the registration
statement on Form S-3 of The Loewen Group Inc. of our report
dated February 27, 1995 and April 23, 1996 as to Note 8, with
respect to the financial statements of Cemetery Gardens, Inc., as
of December 31, 1994 and for the year then ended included in the
Current Report on Form 8-K of The Loewen Group Inc. dated May 1,
1996.
/s/ Hirsch, Oelbaum, Bram & Hanover, C.P.A., P.C.
New York, New York
March 20, 1997
<PAGE>
[LETTERHEAD OF HIRSCH, OELBAUM, BRAM & HANOVER]
INDEPENDENT AUDITORS' CONSENT
The Board of Directors of
The Loewen Group Inc.
We consent to the incorporation by reference in the registration
statement on Form S-3 of The Loewen Group Inc. of our report
dated May 15, 1995 and, with respect to the financial statements
of Beverly Hills Cemetery Corporation, Inc., as of December 31,
1994 and for the year then ended included in the Current Report
on Form 8-K of The Loewen Group Inc. dated May 1, 1996.
/s/ Hirsch, Oelbaum, Bram & Hanover, C.P.A., P.C.
New York, New York
March 20, 1997
EXHIBIT 23.9
INDEPENDENT AUDITORS' CONSENT
The Board of Directors of
The Loewen Group Inc.
We consent to the incorporation by reference in the Registration
Statements on Form S-3 of The Loewen Group Inc. of our report
dated May 31, 1996 with respect to the consolidated balance sheet
of Ourso Investment Corporation and subsidiaries as of December
31, 1995, and the related consolidated statements of operations,
shareholders' equity, and cash flows for the year then ended,
which report appears in the Form 8-K/A No. 2 of The Loewen Group
Inc. dated July 5, 1996.
/s/ KPMG Peat Marwick LLP
KPMG PEAT MARWICK LLP
New Orleans, Louisiana
March 20, 1997
