-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TMwqTXwQVa7qC6Y3KUEbu6lxdQh9gcjuSGb5fqX5GQaxm4yh9nMLwqHLF2FkgqwG Xh1k9ZowEm55c8UAtE8XYQ== 0000950134-01-509377.txt : 20020412 0000950134-01-509377.hdr.sgml : 20020412 ACCESSION NUMBER: 0000950134-01-509377 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20011204 ITEM INFORMATION: Bankruptcy or receivership ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20011211 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LOEWEN GROUP INC CENTRAL INDEX KEY: 0000845577 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PERSONAL SERVICES [7200] IRS NUMBER: 980121376 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12163 FILM NUMBER: 1811315 BUSINESS ADDRESS: STREET 1: 2225 SHEPPARD AVENUE EAST CITY: TORONTO ONTARIO CANA STATE: A1 ZIP: 00000S8 BUSINESS PHONE: 6042999321 MAIL ADDRESS: STREET 1: 2225 SHEPPARD AVENUE EAST CITY: TORONTO ONTARIO CANA STATE: A1 ZIP: 00000 8-K 1 d92756e8-k.txt FORM 8-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): DECEMBER 4, 2001 THE LOEWEN GROUP INC. (Exact Name of Registrant as Specified in Charter) BRITISH COLUMBIA 1-12163 98-0121376 - --------------------------- ----------------------- ------------------ (State or Other Jurisdiction (Commission File Number) (I.R.S. Employer of Incorporation ) Identification No.) 2225 SHEPPARD AVENUE EAST 11TH FLOOR, ATRIA III TORONTO, ONTARIO, CANADA M2J 5C2 - ----------------------------------------- ------------- (Address of Principal Executive Offices) (Postal code)
Registrant's telephone number, including area code: 604-299-9321 NOT APPLICABLE ------------------------------------------------------------- (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) ================================================================================ ITEM 3. BANKRUPTCY OR RECEIVERSHIP. As previously reported, on June 1, 1999 (the "Petition Date"), The Loewen Group Inc. (the "Company") and each of approximately 850 United States subsidiaries, including Loewen Group International, Inc. ("LGII"), and one foreign subsidiary voluntarily filed a petition for creditor protection under Chapter 11 of the United States Bankruptcy Code ("Chapter 11") in the United States Bankruptcy Court for the District of Delaware (the "U.S. Bankruptcy Court"). Concurrent with the Chapter 11 filing, the Company and 117 Canadian subsidiaries voluntarily filed an application for creditor protection under the Companies' Creditors Arrangement Act with the Ontario Superior Court of Justice, Toronto, Ontario, Canada (the "Canadian Court"). Subsequent to the Petition Date, five additional subsidiaries of the Company voluntarily filed petitions for creditor protection and 41 subsidiaries were voluntarily deleted. On December 5, 2001, the Bankruptcy Court entered an order (the "Confirmation Order") confirming the Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries, dated September 10, 2001 (the "Fourth Amended Plan"), as modified by (i) the Modification to the Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries, dated November 30, 2001 (the "First Modification"), (ii) the Second Modification to the Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries, dated November 30, 2001 (the "Second Modification"), and (iii) the Order Approving Modification of Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries and Compromise and Settlement of Claims Filed By Thomas Hardy, dated November 29, 2001 (the "Third Modification" and together with the First Modification and the Second Modification, the "Modifications"). The Fourth Amended Plan, as modified by the Modifications is referred to herein as the "Plan." A copy of a press release announcing confirmation of the Plan is attached as Exhibit 99.1 to this Form 8-K. It is contemplated that the effective date of the Plan (the "Effective Date") will occur on or about January 2, 2002. However, the occurrence of the Effective Date is subject to specified conditions, some of which are outside of the Company's control, and, accordingly, there can be no assurance that the Plan will become effective or as to the timing thereof. The Plan provides for, among other things: o transactions that will result in the ultimate parent company in the corporate structure being LGII, a Delaware corporation which will change its name to Alderwoods Group, Inc. (LGII, as reorganized pursuant to the Plan, is referred to herein as "Alderwoods"), including the cancellation of the capital stock of LGII; o the cancellation of the capital stock of certain direct and indirect subsidiaries of the Company other than stock which is owned by the Company or its subsidiaries; o the cancellation of the 9.45% Cumulative Monthly Income Preferred Securities, Series A issued by Loewen Group Capital, L.P. and the related obligations in exchange for warrants ("New Warrants") to purchase shares of common stock, par value $0.01 per share, of Alderwoods ("New Common Stock"); o the cancellation of debt claiming the benefit of a collateral trust agreement dated May 15, 1996, entered into by the Company, LGII and a collateral trustee, in exchange for a combination of cash, New Common Stock and new 12 1/4% Senior Notes Due 2009 of Alderwoods and, under specified circumstances, new 12 1/4% Senior Notes Due 2004 and/or new 11% Senior Secured Notes Due 2007 of Alderwoods; 2 o the cancellation of certain other indebtedness in exchange for cash, New Common Stock, New Warrants or interests in a liquidating trust that will hold (i) five-year warrants of reorganized Prime Successions Holdings, Inc. ("Prime") issued to the Company in Prime's recent reorganization proceeding, and (ii) an undivided 25% interest in the net proceeds, if any, of the Company's claim against the United States of America, ICSID case NO. ARB (AF)/98/3, under the North American Free Trade Agreement; o the satisfaction of certain administrative claims through the issuance of new 12 1/4% Convertible Subordinated Notes Due 2012 of Alderwoods and New Common Stock, which will result in Alderwoods becoming the owner of all of the outstanding common shares of Rose Hills Holdings Corp.; o the assumption, assumption and assignment or rejection of executory contracts and unexpired leases to which the Company or any of its debtor subsidiaries is a party; o the selection of boards of directors of Alderwoods and its reorganized subsidiaries; and o the simplification of the corporate structure through a series of subsidiary restructuring transactions and transactions which will result in the assets of Alderwoods consisting primarily of the capital stock of its directly owned subsidiaries. Current holders of the Company's common shares and Series C preferred shares will receive no value under the Plan. A more detailed description of the Plan is set forth in the Disclosure Statement, dated September 10, 2001, relating thereto (the "Disclosure Statement"), a copy of which is filed as Exhibit 99.2 and incorporated herein by this reference. The foregoing summary of the Plan and the description of the Plan set forth in the Disclosure Statement are qualified in their entirety by reference to the full text of the Fourth Amended Plan, the First Modification, the Second Modification, the Third Modification and the Confirmation Order, copies of which are filed as Exhibits 2.1, 2.2, 2.3, 2.4 and 2.5, respectively, hereto and incorporated herein by this reference. On December 7, 2001, the Canadian Court entered an order (the "CCAA Order") recognizing the provisions of the Plan and the Confirmation Order and providing that the provisions of the Plan and the Confirmation Order will have full force and effect in Canada. Pursuant to the CCAA Order and the Plan, among other things, on the Effective Date, the Company will transfer certain of the Company's operating assets located in Canada to one of the Company's Canadian subsidiaries and will thereafter transfer substantially all of its other assets to LGII (including the capital stock of such Canadian subsidiary), and certain of the Company's Canadian subsidiaries will be restructured. The foregoing summary of the CCAA Order is qualified in its entirety by reference to the full text of the CCAA Order, a copy of which is filed as Exhibit 2.6 hereto and incorporated herein by this reference. As of October 31, 2001, there were issued and outstanding 74,145,466 common shares of the Company and 8,799,900 Series C preferred shares of the Company. Immediately following the Effective Date, the Company will have outstanding the same equity securities as were outstanding immediately prior thereto. However, as a result of the transactions contemplated by the Plan, following the Effective Date, the Company will have no meaningful assets, no directors, officers or employees and no meaningful relationship with Alderwoods or any of its subsidiaries. As described above, Alderwoods will become the ultimate parent company in the corporate structure on the Effective Date and will issue shares of its New Common Stock in respect of allowed 3 claims and interests as provided in the Plan. No securities of the Company will be issued pursuant to the Plan, and, accordingly, no such securities are reserved for that purpose. Information as to the assets and liabilities of the Company as of September 30, 2001 is filed as Exhibit 99.3 hereto and incorporated herein by this reference. Such information has been extracted from the unaudited financial statements included in the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2001 filed with the Securities and Exchange Commission and should be read in conjunction with such financial statement, including the notes thereto. Such financial statements were prepared in accordance with Canadian generally accepted accounting principles and Note 10 thereto includes a description of material differences, and a reconciliation of certain line items, between Canadian generally accepted accounting principles and United States generally accepted accounting principles. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Financial Statements of Businesses Acquired: Not Applicable. (b) Pro Forma Financial Information: Not Applicable. (c) Exhibits: Exhibit Number Exhibit Description 2.1 Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries, dated September 10, 2001 2.2 Modification to the Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries, dated November 30, 2001 2.3 Second Modification to the Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries, dated November 30, 2001 2.4 Order Approving Modification of Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries and Compromise and Settlement of Claims Filed by Thomas Hardy, dated November 29, 2001 2.5 Findings of Fact, Conclusions of Law and Order Confirming Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries, As Modified, dated December 5, 2001 2.6 Final Order dated December 7, 2001 99.1 Press Release dated December 4, 2001 4 99.2 Disclosure Statement Relating to the Fourth Amended Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries dated September 10, 2001 (incorporated by reference to Exhibit 99.2 to the Form 8-K of The Loewen Group Inc., SEC File No. 1-12163, filed September 10, 2001) 99.3 Consolidated Balance Sheet of The Loewen Group Inc. as of September 30, 2001 (unaudited) 5 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. The Loewen Group Inc. By: /s/ BRADLEY D. STAM --------------------------------- Name: Bradley D. Stam Title: Senior Vice President, Legal & Asset Management Date: December 11, 2001 6 EXHIBIT INDEX
Exhibit Number Description - ------- ----------- 2.1 Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries, dated September 10, 2001 2.2 Modification to the Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries, dated November 30, 2001 2.3 Second Modification to the Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries, dated November 30, 2001 2.4 Order Approving Modification of Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries and Compromise and Settlement of Claims Filed by Thomas Hardy, dated November 29, 2001 2.5 Findings of Fact, Conclusions of Law and Order Confirming Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries, As Modified, dated December 5, 2001 2.6 Final Order dated December 7, 2001 99.1 Press Release dated December 4, 2001 99.2 Disclosure Statement Relating to the Fourth Amended Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries dated September 10, 2001 (incorporated by reference to Exhibit 99.2 to the Form 8-K of The Loewen Group Inc., SEC File No. 1-12163, filed September 10, 2001) 99.3 Consolidated Balance Sheet of The Loewen Group Inc. as of September 30, 2001 (unaudited)
EX-2.1 3 d92756ex2-1.txt 4TH AMENDED JOINT PLAN OF REORGANIZATION EXHIBIT 2.1 UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE IN RE: : JOINTLY ADMINISTERED CASE NO. 99-1244 (PJW) LOEWEN GROUP INTERNATIONAL, INC., : A DELAWARE CORPORATION, ET AL., : CHAPTER 11 DEBTORS. : : - -------------------------------------- FOURTH AMENDED JOINT PLAN OF REORGANIZATION OF LOEWEN GROUP INTERNATIONAL, INC., ITS PARENT CORPORATION AND CERTAIN OF THEIR DEBTOR SUBSIDIARIES WILLIAM H. SUDELL, JR. (DE 463) ROBERT J. DEHNEY (DE 3578) MORRIS, NICHOLS, ARSHT & TUNNELL 1201 North Market Street Wilmington, Delaware 19899-1347 (302) 658-9200 - and - RICHARD M. CIERI (OH 0032464) JONES, DAY, REAVIS & POGUE North Point 901 Lakeside Avenue Cleveland, Ohio 44114 (216) 586-3939 HENRY L. GOMPF (TX 08116400) GREGORY M. GORDON (TX 08435300) JONES, DAY, REAVIS & POGUE 2727 North Harwood Street Dallas, Texas 75201 (214) 220-3939 ATTORNEYS FOR DEBTORS AND DEBTORS IN POSSESSION September 10, 2001 TABLE OF CONTENTS
Page ---- ARTICLE I DEFINED TERMS, RULES OF INTERPRETATION AND COMPUTATION OF TIME.................................1 A. Defined Terms..................................................................................1 1. "1994 Plan"...........................................................................1 2. "Administrative Claim"................................................................1 3. "Administrative Trade Claim"..........................................................1 4. "Allowed Claim".......................................................................1 5. "Allowed . . . Claim".................................................................2 6. "Allowed Class . . . Interest"........................................................2 7. "Allowed Interest"....................................................................2 8. "Available Cash Amount"...............................................................2 9. "Ballot"..............................................................................2 10. "Bankruptcy Code".....................................................................2 11. "Bankruptcy Court"....................................................................2 12. "Bankruptcy Rules"....................................................................2 13. "Bar Date"............................................................................2 14. "Bar Date Order"......................................................................2 15. "Blackstone"..........................................................................2 16. "Blackstone Release"..................................................................3 17. "Blackstone Settlement"...............................................................3 18. "Blackstone Settlement Agreement".....................................................3 19. "Blackstone Settlement Documents".....................................................3 20. "BMO Letter of Credit Facility".......................................................3 21. "BMO Revolving Credit Facility".......................................................3 22. "Business Day"........................................................................3 23. "Canadian Court"......................................................................3 24. "Canadian Operating Assets"...........................................................3 25. "Cash Investment Yield"...............................................................3 26. "Cash Management Order"...............................................................3 27. "CCAA"................................................................................4 28. "CCAA Debtors"........................................................................4 29. "CCAA Debtor Restructuring Transactions"..............................................4 30. "CCAA Order"..........................................................................4 31. "Claim"...............................................................................4 32. "Claims Objection Bar Date"...........................................................5
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Page ---- 33. "Class"...............................................................................5 34. "Collateralized Accommodation Claims".................................................5 35. "Confirmation"........................................................................5 36. "Confirmation Date"...................................................................5 37. "Confirmation Hearing"................................................................5 38. "Confirmation Order"..................................................................5 39. "Creditors' Committee"................................................................5 40. "CTA".................................................................................5 41. "CTA Issue"...........................................................................5 42. "CTA Note Claim"......................................................................5 43. "CTA Trustee".........................................................................5 44. "CTA Trustee Reserve Amount"..........................................................5 45. "Cure Amount Claim"...................................................................5 46. "Cut-Off Date"........................................................................5 47. "Cut-Off Date Balance Sheet"..........................................................6 48. "Debtors".............................................................................6 49. "Delco"...............................................................................6 50. "DIP Financing Facility"..............................................................6 51. "DIP Lender"..........................................................................6 52. "Disbursing Agent"....................................................................6 53. "Disclosure Statement"................................................................6 54. "Disposition Properties"..............................................................6 55. "Disputed Claim"......................................................................6 56. "Disputed Insured Claim" and "Disputed Uninsured Claim"...............................7 57. "Disputed Interest"...................................................................7 58. "Distribution Record Date"............................................................7 59. "Division"............................................................................7 60. "Document Reviewing Centers"..........................................................7 61. "Effective Date"......................................................................7 62. "Eligible Group III Proceeding".......................................................7 63. "Estate"..............................................................................7 64. "Equity Incentive Plan"...............................................................7 65. "Excess Cash Distribution Amount".....................................................7 66. "Exchange Act"........................................................................7 67. "Executory Contract and Unexpired Lease"..............................................7 68. "Exit Financing Facility Agent Bank"..................................................7
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Page ---- 69. "Exit Financing Revolving Credit Facility"............................................8 70. "Exit Financing Term Loan"............................................................8 71. "Exit Financing Term Loan Closing"....................................................8 72. "Face Amount".........................................................................8 73. "Fee Claim"...........................................................................8 74. "Fee Order"...........................................................................8 75. "File," "Filed" or "Filing"...........................................................8 76. "Final Order".........................................................................8 77. "Group I CTA Note Claim"..............................................................9 78. "Group II CTA Note Claim".............................................................9 79. "Group III CTA Note Claim"............................................................9 80. "Indenture Trustee"...................................................................9 81. "Insured Claim".......................................................................9 82. "Intercompany Claim"..................................................................9 83. "Interest"............................................................................9 84. "LGCLP"...............................................................................9 85. "Liquidating Trust"...................................................................9 86. "Liquidating Trust Agreement".........................................................9 87. "Liquidating Trust Assets"............................................................9 88. "Liquidating Trust Trustee"...........................................................9 89. "Loewen Companies"....................................................................9 90. "Loewen Subsidiary Debtors"...........................................................9 91. "MEIP Credit Facility"................................................................9 92. "MEIPs Debentures"...................................................................10 93. "Michigan Cemetery Debtors"..........................................................10 94. "Minimum Cash Distribution Amount"...................................................10 95. "MIPS"...............................................................................10 96. "MIPS Guarantee".....................................................................10 97. "MIPS Junior Subordinated Debenture".................................................10 98. "MIPS Junior Subordinated Debenture Guarantee".......................................10 99. "Nafcanco"...........................................................................10 100. "NAFTA"..............................................................................10 101. "NAFTA Arbitration Agreement"........................................................10 102. "NAFTA Claims".......................................................................10 103. "NAFTA Contingency Fee Agreement"....................................................10 104. "NAFTA Net Proceeds".................................................................10
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Page ---- 105. "National Securities Exchange".......................................................10 106. "Net Proceeds".......................................................................10 107. "New Common Stock"...................................................................11 108. "New Five-Year Secured Notes"........................................................11 109. "New Five-Year Secured Notes Indenture"..............................................11 110. "New Registration Rights Agreements".................................................11 111. "New Secured Debt Principal Amount"..................................................11 112. "New Seven-Year Unsecured Notes".....................................................11 113. "New Seven-Year Unsecured Notes Indenture"...........................................11 114. "New Seven-Year Unsecured Notes Additional Principal Amount".........................11 115. "New Seven-Year Unsecured Notes Principal Amount"....................................11 116. "New Tax Sharing Agreement"..........................................................11 117. "New Two-Year Unsecured Notes".......................................................11 118. "New Two-Year Unsecured Notes Indenture".............................................11 119. "New Unsecured Subordinated Convertible Notes".......................................11 120. "New Unsecured Subordinated Convertible Notes Indenture".............................12 121. "New Unsecured Subordinated Convertible Notes Principal Amount"......................12 122. "New Warrant Agreement"..............................................................12 123. "New Warrants".......................................................................12 124. "Non-Ownership Regulated Debtors"....................................................12 125. "O'Keefe Notes"......................................................................12 126. "O'Keefe Note Agreement".............................................................12 127. "O'Keefe Note Claim".................................................................12 128. "O'Keefe Note Guaranties"............................................................12 129. "Old Stock of . . ." or " . . . Old Stock"...........................................12 130. "Ordinary Course Professionals Order"................................................12 131. "PATS Notes".........................................................................12 132. "PATS Trust Agreement"...............................................................12 133. "Petition Date"......................................................................12 134. "Plan"...............................................................................12 135. "Pledgor"............................................................................13 136. "Prepetition Indenture"..............................................................13 137. "Prepetition Note Agreement".........................................................13 138. "Prime"..............................................................................13 139. "Prime Put/Call Agreement"...........................................................13 140. "Prime Succession Warrants"..........................................................13
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Page ---- 141. "Principal CTA Creditors"............................................................13 142. "Priority Claim".....................................................................13 143. "Priority Tax Claim".................................................................13 144. "Professional".......................................................................13 145. "Pro Rata"...........................................................................13 146. "Public Notes".......................................................................14 147. "Public Note Claims".................................................................14 148. "Quarterly Distribution Date"........................................................14 149. "Realized Asset Disposition Proceeds Amount".........................................14 150. "Real Property Executory Contract and Unexpired Lease"...............................14 151. "Recovery Actions"...................................................................14 152. "Reinstated" or "Reinstatement"......................................................14 153. "Reinvestment Transactions"..........................................................15 154. "Reorganization Case"................................................................15 155. "Reorganized . . ."..................................................................15 156. "Reserved CTA Claims"................................................................15 157. "Reserved Shares"....................................................................15 158. "Reserved Warrants"..................................................................15 159. "Restructuring Transactions".........................................................15 160. "Retained Claims"....................................................................15 161. "RHI"................................................................................15 162. "Rose Hills".........................................................................15 163. "Rose Hills Put/Call Agreement"......................................................15 164. "Schedules"..........................................................................15 165. "Secondary Liability Claim"..........................................................15 166. "Secured Claim"......................................................................15 167. "Securities Litigation"..............................................................15 168. "Series 1 Notes".....................................................................16 169. "Series 2 Notes".....................................................................16 170. "Series 3 Notes".....................................................................16 171. "Series 4 Notes".....................................................................16 172. "Series 5 Notes".....................................................................16 173. "Series 6 Notes".....................................................................16 174. "Series 7 Notes".....................................................................16 175. "Series D Notes".....................................................................16 176. "Series E Notes".....................................................................16
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Page ---- 177. "Series Reserve Amount"..............................................................16 178. "State Street".......................................................................16 179. "Stipulation of Amount and Nature of Claim"..........................................16 180. "Subsidiary Restructuring Transactions"..............................................17 181. "Tax"................................................................................17 182. "Third Party Disbursing Agent".......................................................17 183. "TLGI Old Common Stock"..............................................................17 184. "TLGI Old Preferred Stock"...........................................................17 185. "Tolling Parties"....................................................................17 186. "Tort Claim".........................................................................17 187. "Trade Claim"........................................................................17 188. "UBS Option Contract"................................................................17 189. "Uninsured Claim"....................................................................17 190. "Unrealized Asset Disposition Proceeds Amount".......................................17 191. "Unresolved Michigan Cemetery Contracts".............................................17 192. "Unsecured Claim"....................................................................17 193. "Unsecured Claims Reserve"...........................................................17 194. "U.S. GAAP"..........................................................................18 195. "Voting Deadline"....................................................................18 B. Rules of Interpretation and Computation of Time...............................................18 1. Rules of Interpretation..............................................................18 2. Computation of Time..................................................................18 ARTICLE II CLASSES OF CLAIMS AND INTERESTS...............................................................18 A. Unimpaired Classes of Claims..................................................................18 1. Class 1 (Unsecured Priority Claims)..................................................18 2. Class 4 (Secured Claims Other than CTA Note Claims, Class 22 Claims and Class 23 Claims)...........................................................................18 3. Class 18 (Loewen Company Owned Old Stock in Non-Ownership Regulated Debtors).........19 4. Class 21 (Other Equity Interests)....................................................19 B. Impaired Classes of Claims and Interests......................................................19 1. Class 2 (Loewen Subsidiary Debtor Convenience Claims)................................19 2. Class 3 (TLGI and LGII Convenience Claims)...........................................19 3. Class 5 (Group I CTA Note Claims)....................................................19 4. Class 6 (Group II CTA Note Claims)...................................................19 5. Class 7 (Group III CTA Note Claims)..................................................19
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Page ---- 6. Class 8 (O'Keefe Note Claims)........................................................19 7. Class 9 (MIPS Debenture Claims)......................................................19 8. Class 10 (Intercompany Claims).......................................................19 9. Class 11 (Unsecured Nonpriority Claims)..............................................19 10. Class 12 (MIPS Securities Litigation Claims).........................................19 11. Class 13 (Other Securities Litigation Claims)........................................19 12. Class 14 (TLGI Old Preferred Stock)..................................................20 13. Class 15 (TLGI Old Common Stock).....................................................20 14. Class 16 (LGII Old Stock)............................................................20 15. Class 17 (Third Party Owned Old Stock of Non-Ownership Regulated Debtors)............20 16. Class 19 (Loewen Group Capital, L.P. MIPS Partnership Interests).....................20 17. Class 20 (Other Loewen Group Capital, L.P. Partnership Interests)....................20 18. Class 22 (Indemnified Fee and Expense Claims of the CTA Trustee).....................20 19. Class 23 (Indemnified Fee and Expense Claims of the State Street)....................20 ARTICLE III TREATMENT OF CLAIMS AND INTERESTS.............................................................20 A. Unclassified Claims...........................................................................20 1. Payment of Administrative Claims.....................................................20 2. Payment of Priority Tax Claims.......................................................22 B. Unimpaired Classes of Claims..................................................................22 1. Class 1 (Unsecured Priority Claims)..................................................22 2. Class 4 (Secured Claims Other than CTA Note Claims, Class 22 Claims and Class 23 Claims).................................................22 3. Class 18 (Loewen Company Owned Old Stock in Non-Ownership Regulated Debtors).....................................................23 4. Class 21 (Other Equity Interests)....................................................23 C. Impaired Classes of Claims and Interests......................................................23 1. Class 2 (Loewen Subsidiary Debtor Convenience Claims)................................23 2. Class 3 (TLGI and LGII Convenience Claims)...........................................23 3. Class 5 (Group I CTA Note Claims)....................................................23 4. Class 6 (Group II CTA Note Claims)...................................................24 5. Class 7 (Group III CTA Note Claims)..................................................24 6. Class 8 (O'Keefe Note Claims)........................................................24 7. Class 9 (MIPS Debenture Claims)......................................................24 8. Class 10 (Intercompany Claims).......................................................24 9. Class 11 (Unsecured Nonpriority Claims)..............................................25 10. Class 12 (MIPS Securities Litigation Claims).........................................25
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Page ---- 11. Class 13 (Other Securities Litigation Claims)........................................25 12. Class 14 (TLGI Old Preferred Stock)..................................................25 13. Class 15 (TLGI Old Common Stock).....................................................25 14. Class 16 (LGII Old Stock)............................................................26 15. Class 17 (Third Party Owned Old Stock in Non-Ownership Regulated Debtors)............26 16. Class 19 (Loewen Group Capital, L.P. MIPS Partnership Interests).....................26 17. Class 20 (Other Loewen Group Capital, L.P. Partnership Interests)....................26 18. Class 22 (Indemnified Fee and Expense Claims of the CTA Trustee).....................26 19. Class 23 (Indemnified Fee and Expense Claims of State Street)........................26 D. Special Provisions Regarding the Treatment of Allowed Secondary Liability Claims; Maximum Recovery............................................................27 E. Special Provisions Regarding Indenture Trustees' Claims.......................................27 F. Special Provisions Regarding Certain Fee and Expense Claims...................................28 G. Special Provision Regarding Claims Under the Rose Hills Put/Call Agreement....................29 H. Creation of Liquidating Trust.................................................................29 1. The Liquidating Trust Trustee........................................................29 2. Distribution of the Assets of the Liquidating Trust..................................29 I. CTA Issue Litigation..........................................................................30 ARTICLE IV MEANS FOR IMPLEMENTATION OF THE PLAN..........................................................31 A. Continued Corporate Existence and Vesting of Assets in the Reorganized Debtors................31 B. Restructuring Transactions....................................................................31 1. Subsidiary Restructuring Transactions................................................31 2. Reinvestment Transactions............................................................32 3. Obligations of Any Successor Corporation in a Restructuring Transaction..............32 4. Dissolution of LGCLP.................................................................32 C. Corporate Governance, Directors and Officers, Employment-Related Agreements and Compensation Programs..........................................................33 1. Certificates of Incorporation and Bylaws.............................................33 2. Directors and Officers of the Reorganized Debtors....................................33 3. New Employment, Retirement, Indemnification and Other Related Agreements and Incentive Compensation Programs...............................33 4. Corporate Action.....................................................................34 D. Exit Financing Revolving Credit Facility and Exit Financing Term Loan; Obtaining Cash for Plan Distributions: Transfers of Funds Among the Debtors..................34 E. Implementation of the Blackstone Settlement...................................................35 F. Preservation of Rights of Action; Releases....................................................35 1. Preservation of Rights of Action by the Debtors and the Reorganized Debtors..........35
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Page ---- 2. General Releases.....................................................................35 3. Releases Related to the CTA; Limited Indemnity of Indenture Trustees.................36 4. Releases in Connection with the Blackstone Settlement................................37 5. 1994 Plan Release....................................................................37 6. Reservation of Certain Third-Party CTA Claims........................................37 G. Continuation of Certain Employee Benefit Plans................................................37 H. Limitations on Amounts To Be Distributed to Holders of Allowed Insured Claims.................37 I. Cancellation and Surrender of Instruments, Securities and Other Documentation.................38 J. New Registration Rights Agreements............................................................38 K. New Warrant Agreement.........................................................................38 L. New Tax Sharing Agreement.....................................................................38 M. Release of Liens..............................................................................39 N. Effectuating Documents; Further Transactions; Exemption from Certain Transfer Taxes...........39 O. Bankruptcy Rule 9019 Request..................................................................39 P. Affiliates Participating in the Plan..........................................................39 ARTICLE V TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES.........................................40 A. Executory Contracts and Unexpired Leases To Be Assumed or Assumed and Assigned................40 1. Assumption and Assignment Generally..................................................40 2. Assumptions and Assignments of Real Property Executory Contracts and Unexpired Leases...............................................................................40 3. Assignments Related to the Restructuring Transactions................................40 4. Approval of Assumptions and Assignments..............................................40 B. Payments Related to the Assumption of Executory Contracts and Unexpired Leases................41 C. Executory Contracts and Unexpired Leases To Be Rejected.......................................41 D. Bar Date for Rejection Damages................................................................41 E. Obligations to Indemnify Directors, Officers and Employees....................................41 F. Contracts and Leases Entered into After the Petition Date.....................................42 G. NAFTA Contingency Fee Agreement and NAFTA Arbitration Agreement...............................42 ARTICLE VI PROVISIONS GOVERNING DISTRIBUTIONS............................................................42 A. Distributions for Claims Allowed as of the Effective Date.....................................42 1. Distributions To Be Made on the Effective Date.......................................42 2. Distributions on the Effective Date in Respect of Class 11 Unsecured Nonpriority Claims...................................................................43 B. Method of Distributions to Holders of Claims..................................................43 C. Compensation and Reimbursement for Services Related to Distributions..........................43 D. Provisions Governing the Unsecured Claims Reserve.............................................43
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Page ---- 1. Funding of the Unsecured Claims Reserve..............................................43 2. Property Held in Unsecured Claims Reserve............................................43 E. Delivery of Distributions and Undeliverable or Unclaimed Distributions........................44 1. Delivery of Distributions............................................................44 2. Undeliverable Distributions Held by Disbursing Agents................................45 F. Distribution Record Date......................................................................46 G. Means of Cash Payments........................................................................46 H. Timing and Calculation of Amounts To Be Distributed...........................................46 1. Allowed Claims in Classes Other than Class 11........................................46 2. Allowed Claims in Class 11...........................................................46 3. Distributions of New Equity and New Notes............................................47 4. De Minimis Distributions.............................................................47 5. Compliance with Tax Requirements.....................................................48 I. Setoffs.......................................................................................48 J. Surrender of Canceled Instruments or Securities...............................................48 1. Tender of Public Notes...............................................................48 2. Lost, Stolen, Mutilated or Destroyed Notes...........................................48 3. Failure to Surrender Public Notes....................................................49 4. Other Notes..........................................................................49 ARTICLE VII PROCEDURES FOR RESOLVING DISPUTED CLAIMS......................................................49 A. Prosecution of Objections to Claims...........................................................49 1. Objections to Claims.................................................................49 2. Authority to Prosecute Objections....................................................49 B. Treatment of Disputed Claims..................................................................50 C. Distributions on Account of Disputed Claims Once Allowed......................................50 D. Tax Requirements for Income Generated by Unsecured Claims Reserve.............................50 ARTICLE VIII SUBSTANTIVE CONSOLIDATION OF THE DEBTORS......................................................50 ARTICLE IX CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN.............................50 A. Conditions to Confirmation....................................................................50 B. Conditions to the Effective Date..............................................................51 C. Waiver of Conditions to Confirmation or the Effective Date....................................52 D. Effect of Nonoccurrence of Conditions to the Effective Date...................................52 ARTICLE X CRAMDOWN......................................................................................52 ARTICLE XI DISCHARGE, TERMINATION, INJUNCTION AND SUBORDINATION RIGHTS...................................53 A. Discharge of Claims and Termination of Interests..............................................53
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Page ---- B. Injunctions...................................................................................53 C. Termination of Subordination Rights and Settlement of Related Claims and Controversies........54 ARTICLE XII RETENTION OF JURISDICTION.....................................................................54 ARTICLE XIII MISCELLANEOUS PROVISIONS......................................................................55 A. Dissolution of the Creditors' Committee.......................................................55 B. Limitation of Liability.......................................................................56 C. Modification of the Plan......................................................................56 D. Revocation of the Plan........................................................................56 E. Severability of Plan Provisions...............................................................56 F. Successors and Assigns........................................................................56 G. Service of Certain Plan Exhibits and Disclosure Statement Exhibits............................57 H. Service of Documents..........................................................................57
xi TABLE OF EXHIBITS(1) Exhibit I.A.18 Blackstone Settlement Agreement Exhibit I.A.24 Canadian Operating Assets(2) Exhibit I.A.28 List of CCAA Debtors Exhibit I.A.29 Outline of CCAA Debtor Restructuring Transactions Exhibit I.A.30 NAFTA Claim assignment provisions Exhibit I.A.48 TLGI, LGII and Loewen Subsidiary Debtors, including the applicable Division to which each has been assigned for purposes of Class 11 of the Plan, an identification of Pledgors and an identification of Non-Ownership Regulated Debtors for purposes of Class 17 of the Plan Exhibit I.A.69 Terms of Exit Financing Revolving Credit Facility(2) Exhibit I.A.89 Loewen Companies other than TLGI, LGII, Loewen Subsidiary Debtors, CCAA Debtors and Michigan Cemetery Debtors Exhibit I.A.93 Michigan Cemetery Debtors Exhibit I.A.109 New Five-Year Secured Notes Indenture(2) Exhibit I.A.113 New Seven-Year Unsecured Notes Indenture(2) Exhibit I.A.118 New Two-Year Unsecured Notes Indenture(2) Exhibit I.A.120 New Unsecured Subordinated Convertible Notes Indenture(2) Exhibit III.B.2 Certain Agreements Exhibit III.C Allowed CTA Note Claims Exhibit III.H Liquidating Trust Agreement Exhibit IV.B.1 Summary Outlines of Subsidiary Restructuring Transactions Exhibit IV.C.1.a(i) Certificate of Incorporation of Reorganized LGII Exhibit IV.C.1.a(ii) Bylaws of Reorganized LGII Exhibit IV.C.1.b(i) Certificates of Incorporation of each Reorganized Loewen Subsidiary Debtor Exhibit IV.C.1.b(ii) Form of Bylaws of each Reorganized Loewen Subsidiary Debtor Exhibit IV.C.2 Initial Directors and Officers of each of the Reorganized Debtors(2) Exhibit IV.C.3 List of employment and other agreements and plans that are in effect or will take effect as of the Effective Date; Initial Grants under Equity Incentive Plan Exhibit IV.F.1 Certain Retained Claims
- --------- (1) Except as otherwise indicated, all Exhibits will be available for review during regular business hours at the Document Reviewing Centers. The Debtors reserve the right to modify, amend, supplement, restate or withdraw any of the Exhibits after they are Filed. The Debtors will File all modified, amended, supplemented or restated Exhibits as promptly as possible and will make such Exhibits available for review at the Document Reviewing Centers. Exhibit IV.J New Registration Rights Agreements Exhibit IV.K New Warrant Agreement Exhibit IV.L New Tax Sharing Agreement(2) Exhibit V.A.1 Nonexclusive Schedule of Executory Contracts and Unexpired Leases To Be Assumed or Assumed and Assigned(2) Exhibit V.C Schedule of Executory Contracts and Unexpired Leases To Be Rejected(2) Exhibit IX.B.8 Dismissed Actions
- ---------- (2) To be Filed and available for review at the Document Reviewing Centers no later than ten days before the deadline to object to Confirmation of the Plan. 1 INTRODUCTION Loewen Group International, Inc. ("LGII"), its parent corporation, The Loewen Group Inc. ("TLGI"), and the other above-captioned debtors and debtors in possession other than the Michigan Cemetery Debtors as defined below (collectively, the "Debtors") propose the following fourth amended joint plan of reorganization (the "Plan") for the resolution of the outstanding claims against and equity interests in the Debtors. The Debtors are proponents of the Plan within the meaning of section 1129 of the Bankruptcy Code. Reference is made to the Debtors' Disclosure Statement, Filed contemporaneously with the Plan, for a discussion of the history, businesses, results of operations, historical financial information, projections and properties of the Debtors, and for a summary and analysis of the Plan. There also are other agreements and documents, which are or will be Filed with the Bankruptcy Court, that are referenced in the Plan or the Disclosure Statement and that will be available for review. ARTICLE I DEFINED TERMS, RULES OF INTERPRETATION AND COMPUTATION OF TIME A. DEFINED TERMS As used in the Plan, capitalized terms have the meanings set forth below. Any term that is not otherwise defined herein, but that is used in the Bankruptcy Code or the Bankruptcy Rules, will have the meaning given to that term in the Bankruptcy Code or the Bankruptcy Rules, as applicable. 1. "1994 PLAN" means the 1994 Management Equity Investment Plan of TLGI, as amended or modified. 2. "ADMINISTRATIVE CLAIM" means a Claim for costs and expenses of administration allowed under section 503(b), 507(b) or 1114(e)(2) of the Bankruptcy Code, including: (a) the actual and necessary costs and expenses incurred after the Petition Date of preserving the respective Estates and operating the businesses of the Debtors (such as wages, salaries, commissions for services and payments for inventories, leased equipment and premises), including Claims under the DIP Financing Facility and the Blackstone Settlement Agreement; (b) compensation for legal, financial advisory, accounting and other services and reimbursement of expenses awarded or allowed under section 330(a) or 331 of the Bankruptcy Code, including Fee Claims; (c) all fees and charges assessed against the Estates under chapter 123 of title 28, United States Code, 28 U.S.C. Sections 1911-1930; (d) Claims for reclamation allowed in accordance with section 546(c)(2) of the Bankruptcy Code and section 2-702 of the Uniform Commercial Code; and (e) all Intercompany Claims accorded priority pursuant to section 364(c)(1) of the Bankruptcy Code or the Cash Management Order. 3. "ADMINISTRATIVE TRADE CLAIM" means an Administrative Claim arising from or with respect to the sale of goods or rendition of services on or after the Petition Date in the ordinary course of the applicable Debtor's business, including Administrative Claims of employees for ordinary course wages, expense reimbursement and health and welfare benefits. 4. "ALLOWED CLAIM" means: a. a Claim that: (i) has been listed by a particular Debtor on its Schedules as other than disputed, contingent or unliquidated; and (ii) is not otherwise a Disputed Claim; b. a Claim (i) for which a proof of Claim or request for payment of Administrative Claim has been Filed by the applicable Bar Date or otherwise been deemed timely Filed under applicable law; and (ii) that is not otherwise a Disputed Claim; or c. a Claim that is allowed: (i) in any Stipulation of Amount and Nature of Claim executed by the applicable Reorganized Debtor and Claim holder on or after the Effective Date; (ii) in any contract, 2 instrument or other agreement entered into in connection with the Plan and, if prior to the Effective Date, approved by the Bankruptcy Court; (iii) in a Final Order; or (iv) pursuant to the terms of the Plan. 5. "ALLOWED . . . CLAIM" means an Allowed Claim in the particular Class or category specified. Any reference herein to a particular Allowed Claim includes both the secured and unsecured portions of such Claim. 6. "ALLOWED CLASS . . . INTEREST" means an Allowed Interest in the particular Class described. 7. "ALLOWED INTEREST" means an Interest: (a) that is registered as of the Distribution Record Date in a stock or equity interest register that is maintained by or on behalf of the applicable Debtor and (b)(i) is not a Disputed Interest or (ii) has been allowed by a Final Order. 8. "AVAILABLE CASH AMOUNT" means an amount equal to: (a) the amount of "cash" reflected on the Cut-Off Date Balance Sheet (which term will include cash equivalents); less (b) the sum of (i) the amount of any Net Proceeds received by the Debtors on or prior to the Cut-Off Date in respect of the sale of Disposition Properties, (ii) any amounts reflected as "cash" on the Cut-Off Date Balance Sheet that are required to be kept on hand or on deposit with any third person (including any financial institution) pursuant to any contract or agreement or any law, statute, governmental regulation (including any insurance regulation) or judicial or administrative order or decree, (iii) the estimated amount of Administrative Claims, including the amounts required to be paid or set aside under Section III.E and Section III.F, payable in cash, financing fees and other reorganization expenses as of the Effective Date, (iv) the estimated aggregate amount of Claims in Classes 1, 2 and 3 as of the Effective Date, (v) the estimated amount of Claims in Class 4 as to which a Debtor has elected Option A treatment as provided in Section III.B.2 as of the Effective Date and the estimated amount of any cash payments required to be made under section 1124(2) of the Bankruptcy Code in respect of Claims in Class 4 as to which a Debtor has elected or is deemed to have elected Option B treatment as provided in Section III.B.2 as of the Effective Date, (vi) the amount payable to the Liquidating Trust Trustee on the Effective Date pursuant to Section 3.1 of the Liquidating Trust Agreement, (vii) any amount set aside pursuant to Section III.I and (viii) the estimated amount of Cure Amount Claims payable in cash as of the Effective Date, all as determined by the Debtors. 9. "BALLOT" means the form or forms distributed to each holder of an impaired Claim entitled to vote on the Plan on which the holder indicates acceptance or rejection of the Plan or, in the case of a holder of an Unsecured Claim in Class 11, whether such holder elects to have such Unsecured Claim treated in Class 2 or Class 3, as applicable, rather than Class 11, in accordance with Section II.B.1 or II.B.2. With respect to any Ballot on which a holder elects to have an Unsecured Claim treated in Class 2 or Class 3, for voting purposes under the Plan that Ballot will be treated as being voted in Class 2 or Class 3, as the case may be. 10. "BANKRUPTCY CODE" means title 11 of the United States Code, 11 U.S.C. Sections 101-1330, as now in effect or hereafter amended. 11. "BANKRUPTCY COURT" means the United States District Court having jurisdiction over the Reorganization Cases and, to the extent of any reference made pursuant to 28 U.S.C. Section 157, the bankruptcy unit of such District Court. 12. "BANKRUPTCY RULES" means, collectively, the Federal Rules of Bankruptcy Procedure and the local rules of the Bankruptcy Court, as now in effect or hereafter amended. 13. "BAR DATE" means the applicable bar date by which a proof of Claim must be or must have been Filed, as established by an order of the Bankruptcy Court, including the Bar Date Order and the Confirmation Order. 14. "BAR DATE ORDER" means an order of the Bankruptcy Court establishing Bar Dates for Filing proofs of Claims in the Reorganization Cases, as the same may be amended, modified or supplemented. 15. "BLACKSTONE" means, as appropriate, Blackstone Capital Partners II Merchant Banking Fund L.P., Blackstone Rose Hills Offshore Capital Partners L.P., Blackstone Family Investment Partnership, L.P. and/or Blackstone Offshore Capital Partners II L.P. 3 16. "BLACKSTONE RELEASE" means a mutual release pursuant to which the parties to the Blackstone Settlement Agreement will each, as of the Effective Date, forever release, waive and discharge the other and affiliates thereof from any and all claims, demands, rights, causes of action and controversies arising from or relating to the Prime Put/Call Agreement (including the rejection thereof), the Rose Hills Put/Call Agreement or otherwise relating to or involving Prime or Rose Hills, except as provided in the Blackstone Settlement Agreement. 17. "BLACKSTONE SETTLEMENT" means the settlement and resolution among TLGI, LGII, Roses Delaware, Inc., Blackstone and RHI of all claims, issues and disputes between such parties relating to or involving Prime, Rose Hills or the Reorganization Cases as contemplated by the Blackstone Settlement Agreement. 18. "BLACKSTONE SETTLEMENT AGREEMENT" means an agreement among TLGI, LGII, Roses Delaware, Inc., Blackstone and RHI, substantially in the form of Exhibit I.A.18, pursuant to which on the Effective Date: (a) the parties thereto will grant the Blackstone Release; (b) Reorganized LGII will assume the Rose Hills Put/Call Agreement as amended and modified as provided therein; and (c) the Rose Hills Put/Call Agreement will be amended and modified to provide that (i) the put thereunder will automatically be exercised, (ii) in full satisfaction of all the Debtor's obligations under the Rose Hills Put/Call Agreement, Reorganized LGII will deliver to Blackstone and RHI the New Unsecured Subordinated Convertible Notes and New Common Stock as provided in Section III.G, (iii) in full satisfaction of all obligations of Blackstone and RHI under the Rose Hills Put/Call Agreement, Blackstone and RHI will convey to Reorganized LGII all common stock of Rose Hills owned by them, free and clear of all liens, and (iv) upon the closing of such transaction, the Rose Hills Put/Call Agreement will terminate and be of no further force or effect. 19. "BLACKSTONE SETTLEMENT DOCUMENTS" means any and all agreements, documents and instruments (including the Blackstone Settlement Agreement) necessary or appropriate to document, effectuate and consummate the Blackstone Settlement, each in form and substance acceptable to the parties thereto. 20. "BMO LETTER OF CREDIT FACILITY" means the Letter of Credit Facility, dated as of July 16, 1996, by and between Bank of Montreal and LGII, together with the guaranty thereof by TLGI. 21. "BMO REVOLVING CREDIT FACILITY" means the Second Amended and Restated Credit Agreement, dated as of March 27, 1998, as amended or modified, between LGII, as borrower, TLGI, as guarantor, the lenders named therein, as lenders, and Bank of Montreal, as L/C Issuer, swing line lender and administrative and syndication agent. 22. "BUSINESS DAY" means any day, other than a Saturday, Sunday or "legal holiday" (as defined in Bankruptcy Rule 9006(a)). 23. "CANADIAN COURT" means the Ontario Superior Court of Justice having jurisdiction in respect of TLGI and the CCAA Debtors under the CCAA. 24. "CANADIAN OPERATING ASSETS" means the assets of TLGI identified on Exhibit I.A.24, together with the real property located at 4126 Norland Avenue, Burnaby, B.C. 25. "CASH INVESTMENT YIELD" means the net yield earned by the applicable Disbursing Agent from the investment of cash held pending distribution pursuant to the Plan (including any dividends and other distributions on account of New Common Stock), which investment will be in a manner consistent with the Reorganized Debtors' investment and deposit guidelines. 26. "CASH MANAGEMENT ORDER" means the "Order: (A) Approving Centralized Cash Management Systems, Entry into Letter Agreement with Wachovia Bank, N.A., Certain Intercompany Transactions with Nondebtor Affiliates, Use of Existing Bank Accounts and Business Forms and Current Investment and Deposit Guidelines; and (B) According Superiority Status to All Postpetition Intercompany Claims" entered by the Bankruptcy Court on June 1, 1999, as amended June 11, 1999. 4 27. "CCAA" means the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended, of Canada. 28. "CCAA DEBTORS" means those companies subject to the proceedings under the CCAA before the Canadian Court (Court File No. 99-CL-3384) and identified on Exhibit I.A.28. 29. "CCAA DEBTOR RESTRUCTURING TRANSACTIONS" means those restructuring transactions involving the CCAA Debtors as described in Exhibit I.A.29. 30. "CCAA ORDER" means one or more orders of the Canadian Court providing that: a. a plan of arrangement pursuant to the terms of the Business Corporations Act (Ontario) to effect the CCAA Debtor Restructuring Transactions is approved; b. recognition is given to the Confirmation Order and Plan that, in consideration for LGII making the distributions to TLGI's creditors set out in article III hereof, TLGI will assign, transfer and deliver (or, in the case of NAFTA Claims arising under article 1117 of NAFTA, will cause Delco to assign, transfer and deliver), free and clear of all liens, claims and encumbrances, including all Claims: i. to LGII, all of TLGI's right, title and interest in, to and under all rights, properties and assets of every kind, character and description, wherever located and whether tangible or intangible, real or personal or fixed or contingent then owned, held, used, licensed, conceived or developed by TLGI other than (A) its rights in the NAFTA Claims, (B) its ownership interests in Delco and (C) its rights in the Canadian Operating Assets; ii. to Nafcanco, all of TLGI's right, title and interest in and to all proceeds of the NAFTA Claims arising under article 1116 of NAFTA that TLGI receives; and to LGII all of Delco's right, title and interest in and to all proceeds of the NAFTA Claims arising under article 1117 of NAFTA that Delco receives; and in respect thereof, TLGI will irrevocably delegate to Nafcanco all powers and responsibilities of TLGI in respect of the pursuit and prosecution of the NAFTA Claims; all in accordance with the terms of Exhibit I.A.30; and iii. to a holding company incorporated under the laws of one of the Provinces of Canada, which, following competition of the transfer contemplated in (i) above, will be a wholly owned subsidiary of LGII, all of TLGI's right, title and interest in, to and under the Canadian Operating Assets; such consideration having a value equal to the fair market value of such rights, properties and assets, all without the need for any action by TLGI's directors or shareholders, but subject to such other terms and conditions as may be imposed by the Canadian Court; c. recognition is given to the Confirmation Order and Plan providing that on the Effective Date none of the holders of a CTA Note Claim will have any further claim against the CCAA Debtors; d. recognition is given to the provisions of the Bankruptcy Court's order approving the settlement of the CTA Issue and other matters that are the subject of Adversary Proceeding No. 00-01181 and to the provisions of the Confirmation Order and Plan providing for injunctions and releases; and e. the provisions of the Confirmation Order, other orders of the Bankruptcy Court and Plan referred to in clauses b, c and d above will have full force and effect in Canada. 31. "CLAIM" means a "claim," as defined in section 101(5) of the Bankruptcy Code, against any Debtor. 5 32. "CLAIMS OBJECTION BAR DATE" means, for all Claims, other than those Claims allowed in accordance with Section I.A.4.c, the latest of: (a) 150 days after the Effective Date; (b) 90 days after the Filing of a proof of Claim for such Claim; (c) 60 days after the conclusion of an arbitration, mediation or other alternative dispute resolution process in respect to a Claim as to which no objection was Filed prior to the commencement of such process; and (d) such other period of limitation as may be specifically fixed by the Plan, the Confirmation Order, the Bankruptcy Rules or a Final Order for objecting to such Claim. 33. "CLASS" means a class of Claims or Interests, as described in Article II. 34. "COLLATERALIZED ACCOMMODATION CLAIMS" means, with respect to any transaction in which the obligation of a Debtor has been secured by property of one or more other Debtors, (a) the Unsecured Claims against the Debtor that is the primary obligor in respect of such obligation and (b) the Secured Claims against the other Debtor or Debtors that have granted an interest in collateral to secure such obligation. 35. "CONFIRMATION" means the entry of the Confirmation Order on the docket of the Bankruptcy Court. 36. "CONFIRMATION DATE" means the date on which the Bankruptcy Court enters the Confirmation Order on its docket, within the meaning of Bankruptcy Rules 5003 and 9021. 37. "CONFIRMATION HEARING" means the hearing held by the Bankruptcy Court on Confirmation of the Plan, as such hearing may be continued from time to time. 38. "CONFIRMATION ORDER" means the order of the Bankruptcy Court confirming the Plan pursuant to section 1129 of the Bankruptcy Code. 39. "CREDITORS' COMMITTEE" means the official committee of unsecured creditors of the Debtors appointed by the United States Trustee in the Reorganization Cases pursuant to section 1102 of the Bankruptcy Code. 40. "CTA" means the Collateral Trust Agreement, dated as of May 15, 1996, among the CTA Trustee, TLGI, LGII and the Pledgors, as amended or modified. 41. "CTA ISSUE" means the absence of Additional Secured Indebtedness Registration Statements (as defined in the CTA) in the CTA Trustee's files in respect of the Series 6 Notes, the Series 7 Notes or the PATS Notes. 42. "CTA NOTE CLAIM" means a Group I CTA Note Claim, a Group II CTA Note Claim or a Group III CTA Note Claim, as applicable. 43. "CTA TRUSTEE" means Bankers Trust Company, as trustee under the CTA. 44. "CTA TRUSTEE RESERVE AMOUNT" means the amount, determined by the Bankruptcy Court in connection with the Confirmation Hearing upon motion by the CTA Trustee Filed not later than October 5, 2001, that would provide an adequate reserve for the CTA Trustee's Claims to fees and expenses under and pursuant to the indemnification provisions of the CTA, taking into account the provisions of the Plan and assuming that the provisions of Section IV.F.3.e will be fully enforceable against the persons or entities deemed to grant releases, waivers and discharges thereunder. 45. "CURE AMOUNT CLAIM" means a Claim based upon a Debtor's defaults pursuant to an Executory Contract or Unexpired Lease at the time such contract or lease is assumed by that Debtor under section 365 of the Bankruptcy Code. 46. "CUT-OFF DATE" means the close of business on the last day of the month immediately preceding the month during which the Effective Date occurs. 6 47. "CUT-OFF DATE BALANCE SHEET" means the consolidated balance sheet of TLGI as of the Cut-Off Date prepared in accordance with U.S. GAAP. 48. "DEBTORS" means, collectively, TLGI, LGII and the debtors and debtors in possession identified in Exhibit I.A.48. 49. "DELCO" means a Delaware limited liability company formed as a wholly owned subsidiary of LGII. 50. "DIP FINANCING FACILITY" means, collectively: (a) the Debtor-in-Possession Credit Agreement, dated as of May 24, 2000, as it may be subsequently amended and modified, among the Debtors, those entities identified therein as "Lenders" and their respective successors and assigns and First Union National Bank (as agent bank); (b) all amendments thereto and extensions thereof; and (c) all security agreements and instruments related to the documents identified in (a) and (b). 51. "DIP LENDER" means, collectively: (a) those entities identified as "Lenders" in the DIP Financing Facility and their respective successors and assigns and (b) First Union National Bank (as agent bank). 52. "DISBURSING AGENT" means Reorganized LGII, in its capacity as a disbursing agent pursuant to Section VI.B, or any Third Party Disbursing Agent. 53. "DISCLOSURE STATEMENT" means the disclosure statement (including all exhibits and schedules thereto or referenced therein) that relates to the Plan, as approved by the Bankruptcy Court pursuant to section 1125 of the Bankruptcy Code, as the same may be amended, modified or supplemented. 54. "DISPOSITION PROPERTIES" means, collectively: (a) Security Industrial Insurance Company; (b) the properties of the Debtors described in paragraph 11 of the Bankruptcy Court's "Order (A) Approving Global Bid Procedures Program and (B) Authorizing Debtors to Grant Pre-Approved Bid Protections to Prospective Purchasers" dated January 21, 2000; (c) the properties of the Debtors described in paragraph 3 of the Bankruptcy Court's "Order Establishing Procedures for Transactions Involving Certain Miscellaneous Assets" dated August 25, 1999; and (d) any other assets of the Debtors designated by the Debtors as "Disposition Properties" on or prior to the Effective Date. 55. "DISPUTED CLAIM" means: a. if no proof of Claim has been Filed by the applicable Bar Date or has otherwise been deemed timely Filed under applicable law: (i) a Claim that is listed on a Debtor's Schedules as other than disputed, contingent or unliquidated, but as to which the applicable Debtor, Reorganized Debtor or, prior to the Confirmation Date, any other party in interest, has Filed an objection by the Claims Objection Bar Date and such objection has not been withdrawn or denied by a Final Order; or (ii) a Claim that is listed on a Debtor's Schedules as disputed, contingent or unliquidated; b. if a proof of Claim or request for payment of an Administrative Claim has been Filed by the Bar Date or has otherwise been deemed timely Filed under applicable law: (i) a Claim for which no corresponding Claim is listed on a Debtor's Schedules; (ii) a Claim for which a corresponding Claim is listed on a Debtor's Schedules as other than disputed, contingent or unliquidated, but the nature or amount of the Claim as asserted in the proof of Claim varies from the nature and amount of such Claim as it is listed on the Schedules; (iii) a Claim for which a corresponding Claim is listed on a Debtor's Schedules as disputed, contingent or unliquidated; (iv) a Claim for which an objection has been Filed by the applicable Debtor, Reorganized Debtor or, prior to the Confirmation Date, any other party in interest, by the Claims Objection Bar Date, and such objection has not been withdrawn or denied by a Final Order; or (v) a Tort Claim; 7 c. a Claim for damages in respect of an Executory Contract or Unexpired Lease that has been rejected or is anticipated to be rejected under section 365 of the Bankruptcy Code and as to which the applicable Bar Date has not occurred and such Claim is not otherwise an Allowed Claim; or d. a Claim if the holder of such Claim is subject to a Retained Claim listed on Exhibit IV.F.1 and such Retained Claim has not been resolved pursuant to a Final Order. 56. "DISPUTED INSURED CLAIM" AND "DISPUTED UNINSURED CLAIM" mean, respectively, an Insured Claim or an Uninsured Claim that is also a Disputed Claim. 57. "DISPUTED INTEREST" means an Interest as to which: (a) an objection (i) has been timely Filed under applicable law and (ii) has not been withdrawn on or before any date fixed by the Plan or by order of the Bankruptcy Court for Filing such objections; and (b) such objection has not been denied by a Final Order. 58. "DISTRIBUTION RECORD DATE" means the Confirmation Date. 59. "DIVISION" means a subclass of Claims in Class 11 based upon the classification of the Debtors as set forth on Exhibit I.A.48. 60. "DOCUMENT REVIEWING CENTERS" means, collectively: (a) the offices of Jones, Day, Reavis & Pogue located at (i) North Point, 901 Lakeside Avenue, Cleveland, Ohio 44114 and (ii) 599 Lexington Avenue, 32nd Floor, New York, New York 10022; (b) the offices of Meighen Demers LLP located at Suite 1100, Merrill Lynch Canada Tower, 200 King Street West, Toronto, Ontario M5H 3T4; and (c) any other locations designated by the Debtors at which any party in interest may review all of the exhibits and schedules to the Plan and the Disclosure Statement. 61. "EFFECTIVE DATE" means a day, as determined by the Debtors, that is the Business Day as soon as reasonably practicable after all conditions to the Effective Date in Section IX.B have been met or waived pursuant to Section IX.C. 62. "ELIGIBLE GROUP III PROCEEDING" means a legal proceeding commenced by or on behalf of holders of Group III CTA Note Claims (other than holders of Claims under the BMO Letter of Credit Facility) within one year of the Effective Date against one or more parties relating to such party's liability to the holders of the Group III CTA Note Claims in respect to the CTA Issue. 63. "ESTATE" means, as to each Debtor, the estate created for that Debtor in its Reorganization Case pursuant to section 541 of the Bankruptcy Code. 64. "EQUITY INCENTIVE PLAN" means the Equity Incentive Plan to be adopted by Reorganized LGII on the Effective Date as described on Exhibit IV.C.3. 65. "EXCESS CASH DISTRIBUTION AMOUNT" means the sum of: (a) Minimum Cash Distribution Amount and (b) if the Available Cash Amount exceeds the sum of (i) the Minimum Cash Distribution Amount and (ii) $40 million, an amount equal to 75% of any such excess. 66. "EXCHANGE ACT" means the Securities Exchange Act of 1934, 15 U.S.C. Sections 78a-78jj, as now in effect or hereafter amended. 67. "EXECUTORY CONTRACT AND UNEXPIRED LEASE" OR "EXECUTORY CONTRACT OR UNEXPIRED LEASE" means a contract or lease to which one or more of the Debtors is a party that is subject to assumption or rejection under section 365 of the Bankruptcy Code. 68. "EXIT FINANCING FACILITY AGENT BANK" means the agent bank under the Exit Financing Revolving Credit Facility and, if applicable, the Exit Financing Term Loan. 8 69. "EXIT FINANCING REVOLVING CREDIT FACILITY" means a secured revolving credit facility in the amount of $100 million, a specified portion of which will be available as a letter of credit sub-facility, which will be entered into by Reorganized LGII and the Exit Financing Facility Agent Bank on the Effective Date on substantially the terms set forth on Exhibit I.A.69. 70. "EXIT FINANCING TERM LOAN" means a secured term loan in an original principal amount equal to the New Secured Debt Principal Amount, which will be entered into by Reorganized LGII and the Exit Financing Facility Agent Bank on the Effective Date if satisfactory terms can be agreed upon by such parties. 71. "EXIT FINANCING TERM LOAN CLOSING" means the closing, if any, on the Effective Date of the Exit Financing Term Loan, including the funding of the New Secured Debt Principal Amount thereunder. 72. "FACE AMOUNT" means: a. when used with reference to a Disputed Insured Claim, either (i) the full stated amount claimed by the holder of such Claim in any proof of Claim Filed by the Bar Date, or otherwise deemed timely Filed under applicable law, if the proof of Claim specifies only a liquidated amount; (ii) if no proof of Claim is Filed by the Bar Date or otherwise deemed timely Filed under applicable law, the full amount of the Claim listed on the Schedules, provided that such amount is not listed as disputed, contingent or unliquidated; or (iii) the applicable deductible under the relevant insurance policy, minus any reimbursement obligations of the applicable Debtor to the insurance carrier for sums expended by the insurance carrier on account of such Claim (including defense costs), if such amount is less than the amount specified in (i) or (ii) above or the proof of Claim specifies an unliquidated amount; b. when used with reference to a Disputed Uninsured Claim, either (i) the full stated amount claimed by the holder of such Claim in any proof of Claim Filed by the Bar Date or otherwise deemed timely Filed under applicable law, if the proof of Claim specifies only a liquidated amount; or (ii) the amount of the Claim acknowledged by the applicable Debtor or Reorganized Debtor in any objection Filed to such Claim or in the Schedules as an undisputed, noncontingent and liquidated Claim, estimated by the Bankruptcy Court pursuant to section 502(c) of the Bankruptcy Code, proposed by the Debtors or established by the Reorganized Debtors following the Effective Date, if no proof of Claim has been Filed by the Bar Date or has otherwise been deemed timely Filed under applicable law or if the proof of Claim specifies an unliquidated amount; and c. when used with reference to a Disputed Claim under Section I.A.53.c, either the amount of such Claim (i) as estimated by the applicable Debtor or Reorganized Debtor or (ii) if applicable, as estimated by the Bankruptcy Court pursuant to section 502(c) of the Bankruptcy Code. 73. "FEE CLAIM" means a Claim under section 330(a), 331, 503 or 1103 of the Bankruptcy Code for compensation of a Professional or other entity for services rendered or expenses incurred in the Reorganization Cases. 74. "FEE ORDER" means the "Administrative Order, Pursuant to Sections 105 and 331 of the Bankruptcy Code, Establishing Procedures for Interim Compensation and Reimbursement of Expenses of Professionals" entered by the Bankruptcy Court on or about August 24, 1999. 75. "FILE," "FILED" OR "FILING" means file, filed or filing with the Bankruptcy Court or its authorized designee in the Reorganization Cases. 76. "FINAL ORDER" means an order or judgment of the Bankruptcy Court, or other court of competent jurisdiction, as entered on the docket in any Reorganization Case or the docket of any other court of competent jurisdiction, that has not been reversed, stayed, modified or amended, and as to which the time to appeal or seek certiorari or move for a new trial, reargument or rehearing has expired, and no appeal or petition for certiorari or other proceedings for a new trial, reargument or rehearing has been timely taken, or as to which any appeal that has been taken or any petition for certiorari that has been timely filed has been withdrawn or resolved by the highest 9 court to which the order or judgment was appealed or from which certiorari was sought or the new trial, reargument or rehearing shall have been denied or resulted in no modification of such order. 77. "GROUP I CTA NOTE CLAIM" means a Claim under the BMO Revolving Credit Facility, the MEIP Credit Facility, the Series D Notes, the Series E Notes, the Series 1 Notes, the Series 2 Notes or the Series 5 Notes, including any and all guaranties thereof but does not include any Claims that are treated under Section III.C.18, Section III.C.19, Section III.E or Section III.F or otherwise would constitute an Administrative Claim. 78. "GROUP II CTA NOTE CLAIM" means a Claim under the Series 3 Notes or the Series 4 Notes, including any and all guaranties thereof but does not include any Claims that are treated under Section III.C.18, Section III.C.19, Section III.E or Section III.F or otherwise would constitute an Administrative Claim. 79. "GROUP III CTA NOTE CLAIM" means a Claim under the Series 6 Notes, the Series 7 Notes, the PATS Notes or the BMO Letter of Credit Facility, including any and all guaranties thereof but does not include any Claims that are treated under Section III.C.18, Section III.C.19, Section III.E or Section III.F or otherwise would constitute an Administrative Claim. 80. "INDENTURE TRUSTEE" means an indenture trustee under one of the Prepetition Indentures and the trustee under the PATS Trust Agreement, in each case acting as such on the date hereof or any successor thereto. 81. "INSURED CLAIM" means any Claim arising from an incident or occurrence alleged to have occurred prior to the Effective Date that is covered under an insurance policy, other than a workers' compensation insurance policy, applicable to the Debtors or their businesses. 82. "INTERCOMPANY CLAIM" means any claim by a Loewen Company against a Debtor including an Administrative Claim. 83. "INTEREST" means the rights of the holder of the Old Stock of any Debtor and the rights of any entity to purchase or demand the issuance of any of the foregoing, including: (a) redemption, conversion, exchange, voting, participation and dividend rights; (b) liquidation preferences; and (c) stock options and warrants. 84. "LGCLP" means Loewen Group Capital, L.P. 85. "LIQUIDATING TRUST" means the trust created pursuant to the Liquidating Trust Agreement to hold the Liquidating Trust Assets. 86. "LIQUIDATING TRUST AGREEMENT" means the trust agreement to be entered into pursuant to Section III.H substantially in the form of Exhibit III.H. 87. "LIQUIDATING TRUST ASSETS" means (a) the Prime Succession Warrants, (b) an undivided 25% interest in the NAFTA Net Proceeds and (c) any cash proceeds thereof. 88. "LIQUIDATING TRUST TRUSTEE" means the trustee under the Liquidating Trust Agreement selected by the Creditors' Committee. 89. "LOEWEN COMPANIES" means TLGI, LGII, all Loewen Subsidiary Debtors, the CCAA Debtors, the Michigan Cemetery Debtors and each other entity that is wholly-owned, directly or indirectly, by TLGI or LGII, including the entities listed on Exhibit I.A.89. 90. "LOEWEN SUBSIDIARY DEBTORS" means, individually or collectively, a Debtor or Debtors other than TLGI or LGII. 91. "MEIP CREDIT FACILITY" means the Amended and Restated MEIP Credit Agreement, dated as of June 14, 1994, as amended and restated on May 15, 1996, as amended or modified, among Loewen Management 10 Investment Corporation, in its capacity as agent for LGII, TLGI, Wachovia Bank of Georgia, N.A., as agent, and the banks listed therein as lenders. 92. "MEIPS DEBENTURES" means the 1994 Exchangeable Floating Rate Debentures due July 15, 2001 issued by LGII to Loewen Management Investment Corporation. 93. "MICHIGAN CEMETERY DEBTORS" means the entities identified on Exhibit I.A.93. 94. "MINIMUM CASH DISTRIBUTION AMOUNT" means $40 million less the sum of (a) amounts to be paid or set aside pursuant to Section III.E and (b) amounts to be paid or set aside pursuant to Section III.F in respect to Claims in clause (a) of Section III.F.1. 95. "MIPS" means the 9.45% Cumulative Monthly Income Preferred Securities, Series A, issued by LGCLP. 96. "MIPS GUARANTEE" means the guarantee of TLGI of certain payments in respect to the MIPS pursuant to the MIPS Guarantee Agreement, executed as of August 15, 1994, by TLGI. 97. "MIPS JUNIOR SUBORDINATED DEBENTURE" means the subordinated debenture issued by LGII pursuant to the Indenture, dated as of August 15, 1994, between LGII, TLGI, as guarantor, and State Street Bank and Trust Company, as trustee. 98. "MIPS JUNIOR SUBORDINATED DEBENTURE GUARANTEE" means the guarantee of TLGI of payment of the MIPS Junior Subordinated Debenture pursuant to the Guarantee, executed as of August 15, 1994, by TLGI. 99. "NAFCANCO" means a Nova Scotia unlimited liability company formed as a wholly owned subsidiary of LGII. 100. "NAFTA" means the North American Free Trade Agreement. 101. "NAFTA ARBITRATION AGREEMENT" means the letter agreement between TLGI and Raymond L. Loewen, dated May 27, 1999. 102. "NAFTA CLAIMS" means the claims and causes of action asserted by TLGI in the pending arbitration matter of The Loewen Group, Inc. and Raymond L. Loewen v. The United States of America, ICSID Case No. ARB (AF)/98/3. 103. "NAFTA CONTINGENCY FEE AGREEMENT" means the contingency fee letter agreement between Jones, Day, Reavis & Pogue and TLGI, dated July 25, 2000, as approved by the order of the Bankruptcy Court entered on or about October 12, 2000. 104. "NAFTA NET PROCEEDS" means the proceeds, if any, of the NAFTA Claims as such proceeds may be adjusted as a result of the arbitration contemplated by the NAFTA Arbitration Agreement, less (a) any amounts payable under paragraph 3 of the NAFTA Arbitration Agreement and (b) any amounts payable pursuant to the NAFTA Contingency Fee Agreement. 105. "NATIONAL SECURITIES EXCHANGE" means any exchange registered pursuant to section 6(a) of the Exchange Act. 106. "NET PROCEEDS" means the aggregate cash proceeds received by the Debtors in respect of the sale of any of the Disposition Properties (including any amounts allocated to Neweol (Delaware) LLC in respect of the sale of receivables relating to the Disposition Properties), net of the direct costs relating to such sale, including: (a) legal, accounting and investment banking fees and sales commissions paid or payable in connection with such sale; (b) any Taxes paid or payable as a result of such sale; and (c) any amounts required to be applied to the 11 repayment of indebtedness secured by a lien on the asset or assets that were the subject of the sale (other than the DIP Financing Facility). 107. "NEW COMMON STOCK" means the shares of common stock, par value $0.01 per share, of Reorganized LGII, authorized pursuant to the certificate of incorporation of Reorganized LGII. 108. "NEW FIVE-YEAR SECURED NOTES" means the secured notes of Reorganized LGII, if any, to be issued to holders of Allowed Claims in Class 5, Class 6 and Class 7 pursuant to the New Five-Year Secured Notes Indenture in a principal amount equal to the New Secured Debt Principal Amount. 109. "NEW FIVE-YEAR SECURED NOTES INDENTURE" means, if New Five-Year Secured Notes are issued pursuant to the Plan, the indenture among Reorganized LGII, the Reorganized Loewen Subsidiary Debtors named therein, the other Loewen Companies named therein, if any, and the trustee named therein substantially in the form of Exhibit I.A.109. 110. "NEW REGISTRATION RIGHTS AGREEMENTS" means (a) the Equity Registration Rights Agreement between Reorganized LGII and the holders of New Common Stock named therein with respect to the registration of such shares of New Common Stock and (b) the Debt Registration Rights Agreement between Reorganized LGII and the holders of the New Five-Year Secured Notes, the New Seven-Year Unsecured Notes and the New Two-Year Unsecured Notes named therein with respect to the registration of such debt securities held by such parties, substantially in the forms of Exhibit IV.J. 111. "NEW SECURED DEBT PRINCIPAL AMOUNT" means $250 million. 112. "NEW SEVEN-YEAR UNSECURED NOTES" means the unsecured notes of Reorganized LGII to be issued to holders of Allowed Claims in Class 5, Class 6 and Class 7 pursuant to the New Seven-Year Unsecured Notes Indenture in a principal amount equal to the New Seven-Year Unsecured Principal Amount. 113. "NEW SEVEN-YEAR UNSECURED NOTES INDENTURE" means the indenture among Reorganized LGII, the Reorganized Loewen Subsidiary Debtors named therein, the other Loewen Companies named therein, if any, and the trustee named therein substantially in the form of Exhibit I.A.113. 114. "NEW SEVEN-YEAR UNSECURED NOTES ADDITIONAL PRINCIPAL AMOUNT" means the lesser of (a) the amount by which $35 million exceeds the Excess Cash Distribution Amount or (b) $5 million. 115. "NEW SEVEN-YEAR UNSECURED NOTES PRINCIPAL AMOUNT" means the sum of (a) $325 million and (b), if the Excess Cash Distribution Amount is less than $35 million, the New Seven-Year Unsecured Notes Additional Principal Amount. 116. "NEW TAX SHARING AGREEMENT" means the tax sharing agreement among the Reorganized Debtors and certain of the other Loewen Companies, substantially in the form of Exhibit IV.L. 117. "NEW TWO-YEAR UNSECURED NOTES" means the unsecured notes of Reorganized LGII, if any, to be issued to holders of Allowed Claims in Class 5, Class 6 and Class 7 pursuant to the New Two-Year Unsecured Notes Indenture. 118. "NEW TWO-YEAR UNSECURED NOTES INDENTURE" means, if New Two-Year Unsecured Notes are issued pursuant to the Plan, the indenture among Reorganized LGII, the Reorganized Loewen Subsidiary Debtors named therein, the other Loewen Companies named therein, if any, and the trustee named therein substantially in the form of Exhibit I.A.118. 119. "NEW UNSECURED SUBORDINATED CONVERTIBLE NOTES" means the unsecured subordinated convertible notes of Reorganized LGII to be issued to Blackstone and RHI, in connection with the Blackstone Settlement, pursuant to the New Unsecured Subordinated Convertible Notes Indenture. 12 120. "NEW UNSECURED SUBORDINATED CONVERTIBLE NOTES INDENTURE" means the indenture among Reorganized LGII, the Reorganized Loewen Subsidiary Debtors named therein, the other Loewen Companies named therein, if any, and the trustee named therein substantially in the form of Exhibit I.A.120. 121. "NEW UNSECURED SUBORDINATED CONVERTIBLE NOTES PRINCIPAL AMOUNT" means $24,678,571. 122. "NEW WARRANT AGREEMENT" means the warrant agreement between Reorganized LGII and the warrant agent named therein substantially in the form of Exhibit IV.K. 123. "NEW WARRANTS" means the warrants to be issued by Reorganized LGII exercisable to purchase up to 3,034,700 shares of New Common Stock pursuant to the New Warrant Agreement, substantially in the form provided therein. 124. "NON-OWNERSHIP REGULATED DEBTORS" means a Debtor listed as such on Exhibit I.A.48, certain Old Stock of which is owned by a person or entity other than a Loewen Company and such ownership is not required by the governmental regulations applicable to such Debtor. 125. "O'KEEFE NOTES" means: (a) the note dated June 2, 1997, issued by LGII, Reimann Holdings, Inc. and Wright & Ferguson Funeral Home to Teachers Insurance and Annuity Association pursuant to the O'Keefe Note Agreement; and (b) the note dated June 2, 1997, issued by the same entities to certain individuals and law firms named therein. 126. "O'KEEFE NOTE AGREEMENT" means the Note Agreement by LGII and TLGI, as guarantor, and accepted by Teachers Insurance and Annuity Association, dated as of November 15, 1997, as amended or modified. 127. "O'KEEFE NOTE CLAIM" means a Claim against LGII, Reimann Holdings, Inc. and Wright & Ferguson Funeral Home under the O'Keefe Note Agreement or the O'Keefe Notes or against TLGI under the O'Keefe Note Guaranties. 128. "O'KEEFE NOTE GUARANTIES" means the Guaranties dated as of June 2, 1997, by TLGI, as amended or modified, in respect of the O'Keefe Notes. 129. "OLD STOCK OF . . ." OR " . . . OLD STOCK" means, when used with reference to a particular Debtor or Debtors, the common stock, preferred stock, membership interests, partnership interests or similar ownership interests, including options, warrants or rights to acquire any such interests, issued by such Debtor or Debtors and outstanding immediately prior to the Petition Date. 130. "ORDINARY COURSE PROFESSIONALS ORDER" means the "Order Authorizing Debtors and Debtors in Possession to Retain, Employ and Pay Professionals in the Ordinary Course of the Debtors' Businesses" entered by the Bankruptcy Court on or about June 1, 1999. 131. "PATS NOTES" means the PATS Guaranteed Notes issued pursuant to the Indenture, dated as of September 30, 1997, as amended or modified, among LGII, as issuer, TLGI, as guarantor, and State Street Bank and Trust, as trustee. 132. "PATS TRUST AGREEMENT" means the Trust Agreement, dated as of September 25, 1997, as amended or modified, between LGII and State Street, as trustee, in respect to the Loewen Pass-Through Asset Trust 1997-1. 133. "PETITION DATE" means June 1, 1999. 134. "PLAN" means this fourth amended joint plan of reorganization for the Debtors, to the extent applicable to any Debtor, and all exhibits attached hereto or referenced herein, as the same may be amended, modified or supplemented. 13 135. "PLEDGOR" means a pledgor under the CTA, including the Debtor pledgors that are listed on Exhibit I.A.48. 136. "PREPETITION INDENTURE" means an indenture in respect of any of the Public Notes (including the PATS Trust Agreement) or the MIPS Junior Subordinated Debenture, as applicable. 137. "PREPETITION NOTE AGREEMENT" means the Series D Note Agreement or the Series E Note Agreement, as applicable. 138. "PRIME" means Prime Succession Holdings, Inc. 139. "PRIME PUT/CALL AGREEMENT" means the Put/Call Agreement, dated as of August 26, 1996, as amended or modified, among Blackstone, PSI Management Direct L.P., TLGI and LGII and any and all agreements, documents and instruments related thereto or executed and delivered in connection therewith. 140. "PRIME SUCCESSION WARRANTS" means the warrants exercisable to purchase shares of common stock of reorganized Prime originally issued to 4103 Investments Ltd., a CCAA Debtor, pursuant to the Joint Plan of Reorganization of Prime Succession Holdings, Inc. and Prime Succession, Inc. and Its Subsidiaries in respect to Prime's chapter 11 proceeding in United States Bankruptcy Court District of Delaware (Case No. 00-2969 (PJW)). 141. "PRINCIPAL CTA CREDITORS" means Bank of Montreal, Wachovia Bank, N.A., Angelo Gordon & Co., Cerberus Capital Management, Franklin Mutual Advisers, LLP, GSCP Recovery, Inc. and Oaktree Capital Management LLC. 142. "PRIORITY CLAIM" means a Claim that is entitled to priority in payment pursuant to section 507(a) of the Bankruptcy Code that is not an Administrative Claim or a Priority Tax Claim. 143. "PRIORITY TAX CLAIM" means a Claim that is entitled to priority in payment pursuant to section 507(a)(8) of the Bankruptcy Code. 144. "PROFESSIONAL" means any professional employed in the Reorganization Cases pursuant to section 327 or 1103 of the Bankruptcy Code or any professional or other entity seeking compensation or reimbursement of expenses in connection with the Reorganization Cases pursuant to section 503(b)(4) of the Bankruptcy Code. 145. "PRO RATA" means: a. when used with reference to a distribution of cash, New Five-Year Secured Notes, New Two-Year Unsecured Notes, New Seven-Year Unsecured Notes, New Common Stock, New Warrants or interests in the Liquidating Trust, to holders of Allowed Claims in Classes 5, 6, 7 and 8 or, in the case of Class 11, a Division of Class 11 pursuant to Article III, proportionately so that with respect to a particular Allowed Claim in such Class or Division of Class 11, the ratio of (i)(A) the amount of cash, New Five-Year Secured Notes, New Two-Year Unsecured Notes, New Seven-Year Unsecured Notes, New Common Stock, New Warrants or interests in the Liquidating Trust distributed on account of such Claim to (B) the amount of such Claim, is the same as the ratio of (ii)(A) the amount of cash, New Five-Year Secured Notes, New Two-Year Unsecured Notes, New Seven-Year Unsecured Notes, New Common Stock, New Warrants or interests in the Liquidating Trust, distributed on account of all Allowed Claims in such Class or Division of Class 11 to (B) the amount of all Allowed Claims in such Class or Division of Class 11; b. when used with reference to distributions of cash to holders of Allowed Claims in a Division of Class 11, including the Cash Investment Yield, the portion of cash allocable to a particular Allowed Claim on the basis of the amount of cash then being distributed on account of such Claim (including dividends and other distributions on New Common Stock being distributed on account of such Claim). Calculations of the Pro Rata shares of Cash Investment Yield to be distributed at any particular time will be 14 based on the Cash Investment Yield generated as of the last day of the month prior to the month in which such distributions are to be made; and c. when used with reference to distributions of New Warrants to holders of Allowed Interests and Claims in Class 19, a fraction equal to (a) the number of MIPS held by the particular holder of Allowed Interests and Claims in Class 19, divided by (b) 3,000,000. 146. "PUBLIC NOTES" means any of the Series 1 Notes, the Series 2 Notes, the Series 3 Notes, the Series 4 Notes, the Series 5 Notes, the Series 6 Notes, the Series 7 Notes and the PATS Notes. 147. "PUBLIC NOTE CLAIMS" means any Claim arising under the Public Notes. 148. "QUARTERLY DISTRIBUTION DATE" means the last Business Day of the month following the end of each calendar quarter after the Effective Date; provided, however, that if the Effective Date is within 45 days of the end of a calendar quarter, the first Quarterly Distribution Date will be the last Business Day of the month following the end of the first calendar quarter after the calendar quarter in which the Effective Date falls. 149. "REALIZED ASSET DISPOSITION PROCEEDS AMOUNT" means an amount equal to the aggregate Net Proceeds received by the Debtors on or prior to the Effective Date in respect of the sale of Disposition Properties. 150. "REAL PROPERTY EXECUTORY CONTRACT AND UNEXPIRED LEASE" means, collectively, an Executory Contract or Unexpired Lease relating to a Debtor's interest in real property and any Executory Contracts and Unexpired Leases granting rights or interests related to or appurtenant to the applicable real property, including all easements; licenses; permits; rights; privileges; immunities; options; rights of first refusal; powers; uses; usufructs; reciprocal easement or operating agreements; vault, tunnel or bridge agreements or franchises; development rights; and any other interests in real estate or rights in rem related to the applicable real property. 151. "RECOVERY ACTIONS" means, collectively and individually, preference actions, fraudulent conveyance actions, rights of setoff and other claims, demands, rights or causes of action under sections 502(d), 510, 544, 547, 548, 549, 550 and 553 of the Bankruptcy Code and other applicable bankruptcy or nonbankruptcy law. 152. "REINSTATED" OR "REINSTATEMENT" means rendering a Claim or Interest unimpaired within the meaning of section 1124 of the Bankruptcy Code. Unless the Plan specifies a particular method of Reinstatement, when the Plan provides that an Allowed Claim or Allowed Interest will be Reinstated, such Claim or Interest will be Reinstated, at the applicable Reorganized Debtor's sole discretion, in accordance with one of the following: a. the legal, equitable and contractual rights to which such Claim or Interest entitles the holder will be unaltered; or b. notwithstanding any contractual provision or applicable law that entitles the holder of such Claim or Interest to demand or receive accelerated payment of such Claim or Interest after the occurrence of a default: i. any such default that occurred before or after the commencement of the applicable Reorganization Case, other than a default of a kind specified in section 365(b)(2) of the Bankruptcy Code, will be cured; ii. the maturity of such Claim or Interest as such maturity existed before such default will be reinstated; iii. the holder of such Claim or Interest will be compensated for any damages incurred as a result of any reasonable reliance by such holder on such contractual provision or such applicable law; and 15 iv. the legal, equitable or contractual rights to which such Claim or Interest entitles the holder of such Claim or Interest will not otherwise be altered. 153. "REINVESTMENT TRANSACTIONS" means the transactions specified in Section IV.B.2. 154. "REORGANIZATION CASE" means: (a) when used with reference to a particular Debtor, the chapter 11 case pending for that Debtor in the Bankruptcy Court; and (b) when used with reference to all Debtors, the chapter 11 cases pending for the Debtors in the Bankruptcy Court. 155. "REORGANIZED . . ." means, when used in reference to a particular Debtor, such Debtor on and after the Effective Date. 156. "RESERVED CTA CLAIMS" has the meaning ascribed thereto in Section IV.F.6.a. 157. "RESERVED SHARES" means the shares of New Common Stock to be placed in the applicable Unsecured Claims Reserve for distribution to holders of a Division of Allowed Claims in Class 11 in the amount specified in Section III.C.9. 158. "RESERVED WARRANTS" means the New Warrants, if any, to be placed in the applicable Unsecured Claims Reserve for distribution to holders of a Division of Allowed Claims in Class 11 in the amount specified in Section III.C.9. 159. "RESTRUCTURING TRANSACTIONS" means, collectively, the Subsidiary Restructuring Transactions and the Reinvestment Transactions. 160. "RETAINED CLAIMS" means those claims, demands, rights and causes of action set forth in Exhibit IV.F.1. 161. "RHI" means RHI Management Direct L.P., a Delaware limited partnership. 162. "ROSE HILLS" means Rose Hills Holdings Corp. 163. "ROSE HILLS PUT/CALL AGREEMENT" means the Put/Call Agreement, dated as of November 19, 1996, as amended or modified, including as amended or modified by the Blackstone Settlement Agreement, among Blackstone, Roses Delaware, Inc., TLGI, LGII and RHI and any and all agreements, documents and instruments related thereto or executed and delivered in connection therewith. 164. "SCHEDULES" means the schedules of assets and liabilities and the statement of financial affairs Filed by a particular Debtor, as required by section 521 of the Bankruptcy Code and the Official Bankruptcy Forms, as the same may have been or may be amended, modified or supplemented. 165. "SECONDARY LIABILITY CLAIM" means a Claim that arises from a Debtor being liable jointly, severally or secondarily liable for any contractual, tort, guaranty or other obligation of another Debtor based on (a) vicarious liability, (b) liabilities arising out of piercing the corporate veil or alter ego liability or (c) other similar legal theories. 166. "SECURED CLAIM" means a Claim that is secured by a lien on property in which an Estate has an interest or that is subject to setoff under section 553 of the Bankruptcy Code, to the extent of the value of the Claim holder's interest in the applicable Estate's interest in such property or to the extent of the amount subject to setoff, as applicable, as determined pursuant to section 506(a) and, if applicable, section 1129(b) of the Bankruptcy Code. 167. "SECURITIES LITIGATION" means any litigation, including all actions currently consolidated in the United States District Court for the Eastern District of Pennsylvania captioned In re The Loewen Group, Inc. Securities Litigation, Master File No. 98-CV-6740, arising out of: (a) the purchase or sale of the TLGI Old 16 Common Stock or the TLGI Old Preferred Stock or any other Old Stock of any Debtor; and (b) the purchase or sale of the MIPS. 168. "SERIES 1 NOTES" means the Series 1 Senior Notes issued by LGII pursuant to the Indenture, dated as of March 20, 1996, between LGII, TLGI, as guarantor, and Fleet National Bank of Connecticut, as Indenture Trustee, as amended or modified. 169. "SERIES 2 NOTES" means the Series 2 Senior Notes issued by LGII pursuant to the Indenture, dated as of March 20, 1996, between LGII, TLGI, as guarantor, and Fleet National Bank of Connecticut, as Indenture Trustee, as amended or modified. 170. "SERIES 3 NOTES" means the Series 3 Senior Notes issued by LGII pursuant to the Indenture, dated as of October 1, 1996, between LGII, as issuer, TLGI, as guarantor, and Fleet National Bank, as Indenture Trustee, as amended or modified. 171. "SERIES 4 NOTES" means the Series 4 Senior Notes issued by LGII pursuant to the Indenture, dated as of October 1, 1996, between LGII, as issuer, TLGI, as guarantor, and Fleet National Bank, as Indenture Trustee, as amended or modified. 172. "SERIES 5 NOTES" means the Series 5 Senior Guaranteed Notes issued by TLGI pursuant to the Indenture, dated as of September 26, 1997, between TLGI, as issuer, LGII, as guarantor, and The Trust Company of Bank of Montreal, as Indenture Trustee, as amended or modified. 173. "SERIES 6 NOTES" means the Series 6 Senior Notes issued by LGII pursuant to the Indenture, dated as of March 28, 1998, between LGII, as issuer, TLGI, as guarantor, and State Street Bank and Trust Company, as Indenture Trustee, as amended or modified. 174. "SERIES 7 NOTES" means the Series 7 Senior Notes issued by LGII pursuant to the Indenture, dated as of March 28, 1998, between LGII, as issuer, TLGI, as guarantor, and State Street Bank and Trust Company, as Indenture Trustee, as amended or modified. 175. "SERIES D NOTES" means the Series D Senior Guaranteed Notes issued by TLGI pursuant to the Note Agreement, dated as of September 1, 1993, between TLGI, as issuer, LGII, as guarantor, and the purchasers thereunder together with the related guaranties of Neweol Finance B.V. and Loewen Group Barbados Inc. and all related agreements, as amended or modified. 176. "SERIES E NOTES" means the Series E Senior Guaranteed Notes issued by LGII pursuant to the Note Agreement, dated as of February 1, 1994, between LGII, as issuer, TLGI, as guarantor, and the purchasers thereunder together with the related guarantees of Neweol Finance B.V. and Loewen Financial Corporation and all related agreements, as amended or modified. 177. "SERIES RESERVE AMOUNT" means, as to each of the Series 1 Notes, Series 2 Notes, Series 3 Notes, Series 4 Notes, Series 6 Notes, Series 7 Notes and PATS Notes, the amount for such series, determined by the Bankruptcy Court in connection with the Confirmation Hearing upon motion of State Street filed not later than October 1, 2001, that would provide an adequate reserve for State Street's Claims to fees and expenses under and pursuant to the indemnification provisions of the applicable Prepetition Indenture, taking into account the provisions of the Plan and assuming that the provisions of Section IV.F.3.f will be enforceable against persons or entities deemed to grant releases, waivers and discharges thereunder. 178. "STATE STREET" means State Street Bank and Trust Company. 179. "STIPULATION OF AMOUNT AND NATURE OF CLAIM" means (a) a stipulation or other agreement between the applicable Debtor or Reorganized Debtor and a holder of a Claim or Interest or (b) an agreed order of the Bankruptcy Court establishing the amount and nature of a Claim or Interest. 17 180. "SUBSIDIARY RESTRUCTURING TRANSACTIONS" means those transactions, individually or collectively, reducing the number of LGII's direct or indirect subsidiaries organized within each state and effecting certain other structural changes, pursuant to Section IV.B.1 and as described in Exhibit IV.B.1. 181. "TAX" means: (a) any net income, alternative or add-on minimum, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, license, property, environmental or other tax, assessment or charge of any kind whatsoever (together in each instance with any interest, penalty, addition to tax or additional amount) imposed by any federal, state, local or foreign taxing authority; or (b) any liability for payment of any amounts of the foregoing types as a result of being a member of an affiliated, consolidated, combined or unitary group, or being a party to any agreement or arrangement whereby liability for payment of any such amounts is determined by reference to the liability of any other entity. 182. "THIRD PARTY DISBURSING AGENT" means an entity designated by Reorganized LGII to act as a Disbursing Agent pursuant to Section VI.B. 183. "TLGI OLD COMMON STOCK" means the common shares, without par value, of TLGI, including options, warrants or rights to acquire any such shares. 184. "TLGI OLD PREFERRED STOCK" means the Series C Preferred Shares, without par value, of TLGI, including options, warrants or rights to acquire any such shares. 185. "TOLLING PARTIES" means the following entities: (a) Bankers Trust Company; (b) Davis, Polk & Wardwell; (c) Kramer Levin Naftalis & Frankel LLP; (d) Reid & Reige, P.C.; (e) Russell & DuMoulin; (f) Salomon Smith Barney, for itself and as successor to Smith Barney, Inc.; (g) Skadden, Arps, Slate, Meagher & Flom LLP; (h) State Street Bank and Trust Company; (i) Thelen Reid & Priest LLP; (j) UBS Warburg LLC, for itself and as successor to UBS Securities LLC; and (k) Fleet National Bank. 186. "TORT CLAIM" means any Claim that has not been settled, compromised or otherwise resolved that: (a) arises out of allegations of personal injury, wrongful death, property damage, products liability or similar legal theories of recovery; or (b) arises under any federal, state or local statute, rule, regulation or ordinance governing, regulating or relating to health, safety, hazardous substances or the environment. 187. "TRADE CLAIM" means any Unsecured Claim arising from or with respect to the sale of goods or rendition of services prior to the Petition Date in the ordinary course of the applicable Debtor's business, including any Claim of an employee that is not a Priority Claim. 188. "UBS OPTION CONTRACT" means, collectively: (a) the ISDA Master Agreement, dated as of September 25, 1997, between Union Bank of Switzerland and LGII; (b) the letter agreement, dated September 30, 1997, between the same parties; (c) the Company Call Option Guaranty of TLGI, dated September 30, 1997; and (d) any agreements relating to the foregoing, in each case as amended or modified. 189. "UNINSURED CLAIM" means any Claim that is not an Insured Claim. 190. "UNREALIZED ASSET DISPOSITION PROCEEDS AMOUNT" means any positive amount equal to (a) $165 million, less (b) the Realized Asset Disposition Proceeds Amount. 191. "UNRESOLVED MICHIGAN CEMETERY CONTRACTS" means any Executory Contract or Unexpired Lease between any Michigan Cemetery Debtor and/or LGII and any of Meadco, L.L.C., Siena Group, L.L.C. or Alger Group, L.L.C. 192. "UNSECURED CLAIM" means any Claim that is not an Administrative Claim, Cure Amount Claim, Priority Claim, Priority Tax Claim, Secured Claim or Intercompany Claim. 193. "UNSECURED CLAIMS RESERVE" means the reserve holding cash, if any, Reserved Shares and Reserved Warrants, if any, established pursuant to Section VI.D.1 for a Division in Class 11, which reserve will be 18 maintained in trust for holders of Allowed Claims in such Division of Class 11 and will not constitute property of any of the Reorganized Debtors. 194. "U.S. GAAP" means U.S. generally accepted accounting principles. 195. "VOTING DEADLINE" means the deadline for submitting Ballots to accept or reject the Plan in accordance with section 1126 of the Bankruptcy Code that is specified in the Disclosure Statement, the Ballots or related solicitation documents approved by the Bankruptcy Court. B. RULES OF INTERPRETATION AND COMPUTATION OF TIME 1. RULES OF INTERPRETATION For purposes of the Plan, unless otherwise provided herein: (a) whenever from the context it is appropriate, each term, whether stated in the singular or the plural, will include both the singular and the plural; (b) unless otherwise provided in the Plan, any reference in the Plan to a contract, instrument, release or other agreement or document being in a particular form or on particular terms and conditions means that such document will be substantially in such form or substantially on such terms and conditions; (c) any reference in the Plan to an existing document or Exhibit Filed or to be Filed means such document or Exhibit, as it may have been or may be amended, modified or supplemented pursuant to the Plan or the Confirmation Order; (d) any reference to an entity as a holder of a Claim or Interest includes that entity's successors, assigns and affiliates; (e) all references in the Plan to Sections, Articles and Exhibits are references to Sections, Articles and Exhibits of or to the Plan; (f) the words "herein," "hereunder" and "hereto" refer to the Plan in its entirety rather than to a particular portion of the Plan; (g) captions and headings to Articles and Sections are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation of the Plan; (h) subject to the provisions of any contract, certificates of incorporation, bylaws, similar constituent documents, instrument, release or other agreement or document entered into or delivered in connection with the Plan, the rights and obligations arising under the Plan will be governed by, and construed and enforced in accordance with, federal law, including the Bankruptcy Code and the Bankruptcy Rules; and (i) the rules of construction set forth in section 102 of the Bankruptcy Code will apply. 2. COMPUTATION OF TIME In computing any period of time prescribed or allowed by the Plan, the provisions of Bankruptcy Rule 9006(a) will apply. ARTICLE II CLASSES OF CLAIMS AND INTERESTS All Claims and Interests, except Administrative Claims and Priority Tax Claims, are placed in the following Classes. In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax Claims, as described in Section III.A, have not been classified and thus are excluded from the following Classes. A Claim or Interest is classified in a particular Class only to the extent that the Claim or Interest qualifies within the description of that Class and is classified in other Classes to the extent that any remainder of the Claim or Interest qualifies within the description of such other Classes. A. UNIMPAIRED CLASSES OF CLAIMS 1. CLASS 1 (UNSECURED PRIORITY CLAIMS): Priority Claims against any Debtor that are entitled to priority under section 507(a)(3), 507(a)(4) or 507(a)(6) of the Bankruptcy Code. 2. CLASS 4 (SECURED CLAIMS OTHER THAN CTA NOTE CLAIMS, CLASS 22 CLAIMS AND CLASS 23 CLAIMS): Secured Claims against any Debtor and Collateralized Accommodation Claims, in each case that are not otherwise classified in Class 5, Class 6, Class 7, Class 22 or Class 23. 19 3. CLASS 18 (LOEWEN COMPANY OWNED OLD STOCK IN NON-OWNERSHIP REGULATED DEBTORS): Interests in any Non-Ownership Regulated Debtor held by any Loewen Company. 4. CLASS 21 (OTHER EQUITY INTERESTS): Interests in any Debtor other than Interests in Class 14, 15, 16, 17, 18, 19 or 20. B. IMPAIRED CLASSES OF CLAIMS AND INTERESTS 1. CLASS 2 (LOEWEN SUBSIDIARY DEBTOR CONVENIENCE CLAIMS): Unsecured Claims against any Loewen Subsidiary Debtor that otherwise would be included in Class 11, but with respect to each such Claim, the applicable Claim either (a) is equal to or less than $10,000 or (b) is reduced to $10,000 pursuant to an election by such holder made on the Ballot provided for voting on the Plan by the Voting Deadline. For purposes of treatment under Class 2, multiple Claims of a holder against a particular Debtor arising in a series of similar or related transactions between such Debtor and the original holder of such Claims will be treated as a single Claim and no splitting of Claims will be recognized for purposes of distribution. 2. CLASS 3 (TLGI AND LGII CONVENIENCE CLAIMS): Unsecured Claims against TLGI or LGII that otherwise would be included in Class 11, but with respect to each such Claim, the applicable Claim either (a) is equal to or less than $1,000 or (b) is reduced to an aggregate of $1,000 pursuant to an election by such holder made on the Ballot provided for voting on the Plan by the Voting Deadline. For purposes of treatment under Class 3, multiple Claims of a holder against a particular Debtor arising in a series of similar or related transactions between such Debtor and the original holder of such Claims will be treated as a single Claim and no splitting of Claims will be recognized for purposes of distribution. 3. CLASS 5 (GROUP I CTA NOTE CLAIMS): All Group I CTA Note Claims. 4. CLASS 6 (GROUP II CTA NOTE CLAIMS): All Group II CTA Note Claims. 5. CLASS 7 (GROUP III CTA NOTE CLAIMS): All Group III CTA Note Claims. 6. CLASS 8 (O'KEEFE NOTE CLAIMS): All O'Keefe Note Claims. 7. CLASS 9 (MIPS DEBENTURE CLAIMS): Unsecured Claims against LGII and TLGI under or in respect of the MIPS Junior Subordinated Debenture and the MIPS Junior Subordinated Debenture Guarantee. 8. CLASS 10 (INTERCOMPANY CLAIMS): Claims of any of the Loewen Companies against any of the Debtors that are not classified in Class 9. 9. CLASS 11 (UNSECURED NONPRIORITY CLAIMS): Unsecured Claims against any Debtor (including the unsecured portion of any Claim that if fully secured would have been classified in Class 4 and as to which the applicable Debtor shall have elected Option A or Option C treatment under Section III.B.2 and including any Claims in respect to the UBS Option Contract) that are not Collateralized Accommodation Claims or otherwise classified in Class 1, 2, 3, 5, 6, 7, 8, 9, 10, 12 or 13. 10. CLASS 12 (MIPS SECURITIES LITIGATION CLAIMS): Unsecured Claims, including the Securities Litigation Claims, against TLGI, LGII or LGCLP arising: (a) from rescission of a purchase or sale of the MIPS; (b) for damages arising from the purchase or sale of the MIPS, including Claims for damages for fraud or misrepresentation or otherwise subject to section 510(b) of the Bankruptcy Code; or (c) for indemnification, reimbursement or contribution allowed under section 502 of the Bankruptcy Code on account of such Claims. 11. CLASS 13 (OTHER SECURITIES LITIGATION CLAIMS): Unsecured Claims, including the Securities Litigation Claims, against any Debtor arising: (a) from rescission of a purchase or sale of TLGI Old Preferred Stock, TLGI Old Common Stock or any other equity security of any Debtor (other than the MIPS); (b) for damages arising from the purchase or sale of any such security, including Claims for damages for fraud or misrepresentation 20 or otherwise subject to section 510(b) of the Bankruptcy Code; or (c) for indemnification, reimbursement or contribution allowed under section 502 of the Bankruptcy Code on account of such Claims. 12. CLASS 14 (TLGI OLD PREFERRED STOCK): Interests in TLGI on account of the TLGI Old Preferred Stock. 13. CLASS 15 (TLGI OLD COMMON STOCK): Interests in TLGI on account of the TLGI Old Common Stock. 14. CLASS 16 (LGII OLD STOCK): Interests in LGII on account of LGII Old Stock. 15. CLASS 17 (THIRD PARTY OWNED OLD STOCK OF NON-OWNERSHIP REGULATED DEBTORS): Interests in any Non-Ownership Regulated Debtor held by any person or entity other than a Loewen Company. 16. CLASS 19 (LOEWEN GROUP CAPITAL, L.P. MIPS PARTNERSHIP INTERESTS): Interests in LGCLP on account of the MIPS and any Claims the holders of such Interests have against TLGI under the MIPS Guarantee. 17. CLASS 20 (OTHER LOEWEN GROUP CAPITAL, L.P. PARTNERSHIP INTERESTS): Interests in LGCLP other than on account of the MIPS. 18. CLASS 22 (INDEMNIFIED FEE AND EXPENSE CLAIMS OF THE CTA TRUSTEE): All Allowed Claims of the CTA Trustee against any Debtor for indemnification in respect of fees and expenses under, and pursuant to the provisions of, the CTA. 19. CLASS 23 (INDEMNIFIED FEE AND EXPENSE CLAIMS OF THE STATE STREET): All Allowed Claims of State Street against any Debtor for indemnification in respect of fees and expenses in State Street's capacity as predecessor indenture trustee under, and pursuant to the provisions of, the Prepetition Indentures for each of the Series 1 Notes, Series 2 Notes, Series 3 Notes, Series 4 Notes, Series 6 Notes, Series 7 Notes and PATS Notes (including the PATS Trust Agreement). ARTICLE III TREATMENT OF CLAIMS AND INTERESTS A. UNCLASSIFIED CLAIMS 1. PAYMENT OF ADMINISTRATIVE CLAIMS a. ADMINISTRATIVE CLAIMS IN GENERAL Except as specified in this Section III.A.1, and subject to the bar date provisions herein, unless otherwise agreed by the holder of an Administrative Claim and the applicable Debtor or Reorganized Debtor, each holder of an Allowed Administrative Claim will receive from Reorganized LGII or the applicable Reorganized Debtor, in full satisfaction of its Administrative Claim, cash equal to the allowed amount of such Administrative Claim either: (i) on the Effective Date; or (ii) if the Administrative Claim is not allowed as of the Effective Date, 30 days after the date on which an order allowing such Administrative Claim becomes a Final Order or a Stipulation of Amount and Nature of Claim is executed by Reorganized LGII or the applicable Reorganized Debtor and the holder of the Administrative Claim. b. STATUTORY FEES On or before the Effective Date, Administrative Claims for fees payable pursuant to 28 U.S.C. Section 1930, as determined by the Bankruptcy Court at the Confirmation Hearing, will be paid in cash equal to the amount of such Administrative Claims. All fees payable pursuant to 28 U.S.C. Section 1930 will be paid by the 21 Reorganized Debtors in accordance therewith until the closing of the Reorganization Cases pursuant to section 350(a) of the Bankruptcy Code. c. ORDINARY COURSE LIABILITIES Allowed Administrative Claims based on liabilities incurred by a Debtor in the ordinary course of its business (including Administrative Trade Claims, Administrative Claims of governmental units for Taxes, including Tax audit Claims related to Tax years commencing after the Petition Date, and Allowed Administrative Claims arising from those contracts and leases of the kind described in Section V.F or out of the employee benefit policies, plans and agreements identified in Exhibit IV.C.3) will be paid by the applicable Reorganized Debtor pursuant to the terms and conditions of the particular transaction giving rise to such Administrative Claims, without any further action by the holders of such Administrative Claims, provided that Administrative Claims in respect of the Rose Hills Put/Call Agreement will be paid in accordance with Section III.G. d. CLAIMS UNDER THE DIP FINANCING FACILITY Unless otherwise agreed by the DIP Lenders pursuant to the DIP Financing Facility, on or before the Effective Date, Allowed Administrative Claims under or evidenced by the DIP Financing Facility will be paid in cash equal to the amount of such Allowed Administrative Claims. e. ADMINISTRATIVE CLAIMS OF INDENTURE TRUSTEES Allowed Administrative Claims of each Indenture Trustee will be paid pursuant to the terms of Section III.E. f. BAR DATES FOR ADMINISTRATIVE CLAIMS i. GENERAL BAR DATE PROVISIONS Except as otherwise provided in Sections III.A.1.f; III.E and III.F, unless previously Filed, requests for payment of Administrative Claims must be Filed and served on the Reorganized Debtors, pursuant to the procedures specified in the Confirmation Order and the notice of entry of the Confirmation Order, no later than 30 days after the Effective Date. Holders of Administrative Claims that are required to File and serve a request for payment of such Administrative Claims and that do not File and serve such a request by such date will be forever barred from asserting such Administrative Claims against the Debtors, the Reorganized Debtors or their respective property and such Administrative Claims will be deemed discharged as of the Effective Date. Objections to such requests must be Filed and served on the Reorganized Debtors and the requesting party by the later of (A) 90 days after the Effective Date or (B) 60 days after the Filing of the applicable request for payment of Administrative Claims. ii. BAR DATES FOR CERTAIN ADMINISTRATIVE CLAIMS A. PROFESSIONAL COMPENSATION Professionals or other entities asserting a Fee Claim (other than under Section III.E or Section III.F) for services rendered before the Effective Date must File and serve on the Reorganized Debtors and such other entities who are designated by the Bankruptcy Rules, the Confirmation Order, the Fee Order or other order of the Bankruptcy Court an application for final allowance of such Fee Claim no later than 60 days after the Effective Date; provided, however, that any professional who may receive compensation or reimbursement of expenses pursuant to the Ordinary Course Professionals Order may continue to receive such compensation and reimbursement of expenses for services rendered before the Effective Date, without further Bankruptcy Court review or approval, pursuant to the Ordinary Course Professionals Order. Objections to any Fee Claim must be Filed and served on the Reorganized Debtors and the requesting party by the later of (1) 90 days after the Effective Date or (2) 30 days after the Filing of the applicable request for payment of the Fee Claim. To the extent necessary, 22 the Confirmation Order will amend and supersede any previously entered order of the Bankruptcy Court, including the Fee Order, regarding the payment of Fee Claims. B. ORDINARY COURSE LIABILITIES Holders of Administrative Claims based on liabilities incurred by a Debtor in the ordinary course of its business, including Administrative Trade Claims, Administrative Claims of governmental units for Taxes (including Tax audit Claims arising after the Petition Date) and Administrative Claims arising from those contracts and leases of the kind described in Section V.F, including the Rose Hills Put/Call Agreement, will not be required to File or serve any request for payment of such Administrative Claims. Such Administrative Claims will be satisfied pursuant to Section III.A.1.c. C. CLAIMS UNDER THE DIP FINANCING FACILITY Holders of Administrative Claims under or evidenced by the DIP Financing Facility will not be required to File or serve any request for payment of such Claims. Such Administrative Claims will be satisfied pursuant to Section III.A.1.d. 2. PAYMENT OF PRIORITY TAX CLAIMS a. PRIORITY TAX CLAIMS Pursuant to section 1129(a)(9)(C) of the Bankruptcy Code, unless otherwise agreed by the holder of a Priority Tax Claim and the applicable Debtor or Reorganized Debtor, each holder of an Allowed Priority Tax Claim will receive, in full satisfaction of its Priority Tax Claim, deferred cash payments over a period not exceeding six years from the date of assessment of such Priority Tax Claim. Payments will be made in equal annual installments of principal, plus simple interest accruing from the Effective Date at 7% per annum on the unpaid portion of each Allowed Priority Tax Claim (or upon such other terms determined by the Bankruptcy Court to provide the holders of Priority Tax Claims with deferred cash payments having a value, as of the Effective Date, equal to the allowed amount of such Priority Tax Claims). Unless otherwise agreed by the holder of a Priority Tax Claim and the applicable Debtor or Reorganized Debtor, the first payment on account of an Allowed Priority Tax Claim will be payable one year after the Effective Date or, if the Priority Tax Claim is not allowed within one year after the Effective Date, the first Quarterly Distribution Date after the date on which (i) an order allowing such Priority Tax Claim becomes a Final Order or (ii) a Stipulation of Amount and Nature of Claim is executed by the applicable Reorganized Debtor and the holder of the Priority Tax Claim; provided, however, that the Reorganized Debtors will have the right to pay any Allowed Priority Tax Claim, or any remaining balance of such Priority Tax Claim, in full at any time on or after the Effective Date, without premium or penalty. b. OTHER PROVISIONS CONCERNING TREATMENT OF PRIORITY TAX CLAIMS Notwithstanding the provisions of Section III.A.2.a, the holder of an Allowed Priority Tax Claim will not be entitled to receive any payment on account of any penalty arising with respect to or in connection with the Allowed Priority Tax Claim. Any such Claim or demand for any such penalty (i) will be subject to treatment in Class 11 and (ii) the holder of an Allowed Priority Tax Claim will not be entitled to assess or attempt to collect such penalty from the Reorganized Debtors or their property. B. UNIMPAIRED CLASSES OF CLAIMS 1. CLASS 1 (UNSECURED PRIORITY CLAIMS): On the Effective Date, each holder of an Allowed Claim in Class 1 will receive cash equal to the amount of such Claim. 2. CLASS 4 (SECURED CLAIMS OTHER THAN CTA NOTE CLAIMS, CLASS 22 CLAIMS AND CLASS 23 CLAIMS): On the Effective Date, unless otherwise agreed by a Claim holder and each applicable Debtor or Reorganized Debtor including pursuant to those agreements listed on Exhibit III.B.2, each holder of an Allowed Claim in Class 4 will receive treatment on account of such Allowed Claim in the manner set forth in 23 Option A, B or C below, at the election of the applicable Debtor or, in the case of Collateralized Accommodation Claim, Debtors. The applicable Debtor or Debtors will be deemed to have elected Option B, except with respect to any Allowed Claims as to which the applicable Debtor or Debtors elect Option A or Option C in a certification Filed prior to the conclusion of the Confirmation Hearing. To the extent that the applicable Debtor or Debtors elect Option C treatment for any Class 4 Claims, such Claims will be deemed impaired and to have rejected the Plan. Option A: Each holder of an Allowed Claim in Class 4 with respect to which the applicable Debtor or Debtors elect Option A will receive cash in the full amount of such Allowed Claim. For purposes of Option A, Collateralized Accommodation Claims against multiple Debtors in respect of a particular transaction will be treated as a single Claim and no multiple recoveries will be permitted. Option B: Each Allowed Claim in Class 4 with respect to which the applicable Debtor or Debtors elect or is deemed to have elected Option B will be Reinstated. Option C: Each holder of an Allowed Claim in Class 4 with respect to which the applicable Debtor or Debtors elect Option C will be entitled to receive, and the applicable Debtor or Debtors (or Reorganized Debtor or Reorganized Debtors) shall release and transfer to such holder, the collateral securing such Allowed Claim. 3. CLASS 18 (LOEWEN COMPANY OWNED OLD STOCK IN NON-OWNERSHIP REGULATED DEBTORS): On the Effective Date, subject to the Subsidiary Restructuring Transactions, Allowed Interests in Class 18 will be Reinstated. 4. CLASS 21 (OTHER EQUITY INTERESTS): On the Effective Date, subject to the Subsidiary Restructuring Transactions, Allowed Interests in Class 21 will be Reinstated. C. IMPAIRED CLASSES OF CLAIMS AND INTERESTS TLGI's transfer of assets to LGII as part of the Reinvestment Transactions will occur before the cancellation of the LGII Old Stock and the issuance of the New Common Stock. Each holder's recovery is being received first in exchange for the principal amount of holder's Claim, not the unpaid pre-Petition Date interest, if any, on that Claim. 1. CLASS 2 (LOEWEN SUBSIDIARY DEBTOR CONVENIENCE CLAIMS): On the Effective Date, each holder of an Allowed Claim in Class 2 against any Loewen Subsidiary Debtor will receive cash equal to the amount of such Claim against such Debtor (as reduced, if applicable, pursuant to an election by the holder thereof in accordance with Section II.B.1). 2. CLASS 3 (TLGI AND LGII CONVENIENCE CLAIMS): On the Effective Date, each holder of an Allowed Claim in Class 3 against TLGI or LGII will receive cash equal to the amount of such Claim against such Debtor (as reduced, if applicable, pursuant to an election by the holder thereof in accordance with Section II.B.2). 3. CLASS 5 (GROUP I CTA NOTE CLAIMS): On the Effective Date, each holder of an Allowed Claim in Class 5 will receive in full satisfaction of all of its Allowed Group I CTA Note Claims: (a) a Pro Rata share of cash in an amount equal to the sum of (i) $125,392,500 if the Exit Financing Term Loan Closing occurs, (ii) 50.157% of the Realized Asset Disposition Proceeds Amount and (iii) 50.157% of the Excess Cash Distribution Amount; (b) a Pro Rata share of New Five-Year Secured Notes in an original principal amount of $125,392,500, unless the Exit Financing Term Loan Closing occurs; (c) a Pro Rata share of New Two-Year Unsecured Notes in an original principal amount equal to 50.157% of the Unrealized Asset Disposition Proceeds Amount; (d) a Pro Rata share of New Seven-Year Unsecured Notes in an original principal amount of $163,010,200; (e) a Pro Rata share of New Seven-Year Unsecured Notes in an original principal amount equal to 50.157% of the New Seven-Year Unsecured Notes Additional Principal Amount, if the Excess Cash Distribution Amount is less than $35,000,000; and (f) a Pro Rata share of 18,421,900 shares of New Common Stock. Notwithstanding the foregoing, (x) 50.157% of the CTA Trustee Reserve Amount will be withheld from the cash otherwise distributable in respect of the Excess Cash Distribution Amount to holders of Allowed Class 5 Claims and applied as set forth in Section III.C.18 and 24 (y) the applicable Series Reserve Amount will be withheld from the cash otherwise distributable in respect of the Excess Cash Distribution Amount to holders of Allowed Claims relating to the Series 1 Notes and Series 2 Notes and applied as set forth in Section III.C.19. The Allowed Group I CTA Note Claims are set forth on Exhibit III.C. 4. CLASS 6 (GROUP II CTA NOTE CLAIMS): On the Effective Date, each holder of an Allowed Claim in Class 6 will receive in full satisfaction of all of its Allowed Group II CTA Note Claims: (a) a Pro Rata share of cash in an amount equal to the sum of (i) $45,755,000, if the Exit Financing Term Loan Closing occurs, (ii) 18.302% of the Realized Asset Disposition Proceeds Amount and (iii) 18.302% of the Excess Cash Distribution Amount; (b) a Pro Rata share of New Five-Year Secured Notes in an original principal amount of $45,755,000, unless the Exit Financing Term Loan Closing occurs; (c) a Pro Rata share of New Two-Year Unsecured Notes in an original principal amount equal to 18.302% of the Unrealized Asset Disposition Proceeds Amount; (d) a Pro Rata share of New Seven-Year Unsecured Notes in an original principal amount of $59,481,500; (e) a Pro Rata share of New Seven-Year Unsecured Notes in an original principal amount equal to 18.302% of the New Seven-Year Unsecured Notes Additional Principal Amount, if the Excess Cash Distribution Amount is less than $35,000,000; and (f) a Pro Rata share of 6,722,100 shares of New Common Stock. Notwithstanding the foregoing, (x) 18.302% of the CTA Trustee Reserve Amount will be withheld from the cash otherwise distributable in respect of the Excess Cash Distribution Amount to holders of Allowed Class 6 Claims and applied as set forth in Section III.C.18 and (y) the applicable Series Reserve Amount will be withheld from the cash otherwise distributable in respect of the Excess Cash Distribution Amount to holders of Allowed Claims relating to the Series 3 Notes and Series 4 Notes and applied as set forth in Section III.C.19. The Allowed Group II CTA Note Claims are set forth on Exhibit III.C. 5. CLASS 7 (GROUP III CTA NOTE CLAIMS): On the Effective Date, each holder of an Allowed Claim in Class 7 will receive in full satisfaction of all of its Allowed Group III CTA Note Claims: (a) a Pro Rata share of cash in an amount equal to the sum of (i) $78,852,500, if the Exit Financing Term Loan Closing occurs, (ii) 31.541% of the Realized Asset Disposition Proceeds Amount and (iii) 31.541% of the Excess Cash Distribution Amount; (b) a Pro Rata share of New Five-Year Secured Notes in an original principal amount of $78,852,500, unless the Exit Financing Term Loan Closing occurs; (c) a Pro Rata share of New Two-Year Unsecured Notes in an original principal amount equal to 31.541% of the Unrealized Asset Disposition Proceeds Amount; (d) a Pro Rata share of New Seven-Year Unsecured Notes in an original principal amount of $102,500,300; (e) a Pro Rata share of New Seven-Year Unsecured Notes in an original principal amount equal to 31.541% of the New Seven-Year Unsecured Notes Additional Principal Amount, if the Excess Cash Distribution Amount is less than $35,000,000; and (f) a Pro Rata share of 11,584,500 shares of New Common Stock. Notwithstanding the foregoing, (x) 31.541% of the CTA Trustee Reserve Amount will be withheld from the cash otherwise distributable in respect of the Excess Cash Distribution Amount to holders of Allowed Class 7 Claims and applied as set forth in Section III.C.18 and (y) the applicable Series Reserve Amount will be withheld from the cash otherwise distributable in respect of the Excess Cash Distribution Amount to holders of Allowed Claims relating to the Series 6 Notes, Series 7 Notes and PATS Notes and applied as set forth in Section III.C.19. The Allowed Group III CTA Note Claims are set forth on Exhibit III.C. 6. CLASS 8 (O'KEEFE NOTE CLAIMS): On the Effective Date, each holder of an Allowed Claim in Class 8 will receive in satisfaction of all of its Class 8 Claims against all Debtors: (a) a Pro Rata share of 771,400 shares of New Common Stock, (b) a Pro Rata share of New Warrants exercisable to purchase 235,200 shares of New Common Stock and (c) a Pro Rata share of a 16.91% interest in the Liquidating Trust. 7. CLASS 9 (MIPS DEBENTURE CLAIMS): On the Effective Date, in full satisfaction of all of its Class 9 Claims against LGII and TLGI, if Class 19 accepts the Plan, LGCLP will receive New Warrants exercisable to purchase 496,800 shares of New Common Stock, which New Warrants will in turn be distributed by LGCLP to the holders of Allowed Interests and Claims in Class 19. If Class 19 does not accept the Plan, no property shall be distributed to or retained by the holder of Allowed Claims in Class 9. The general partner of LGCLP will be deemed to have accepted the Plan on behalf of LGCLP. 8. CLASS 10 (INTERCOMPANY CLAIMS): Except as provided below, all Claims in Class 10 will be Reinstated. Notwithstanding the foregoing: (a) on the Effective Date, each holder of an Allowed Claim in Class 10 in respect of the MEIPs Debentures will receive its Pro Rata share of $10,000 in complete discharge of any such Claim; (b) no property will be distributed to or retained by any of the Loewen Companies on account of any Allowed Claim in Class 10 with respect to which, immediately prior to the Effective Date, the obligor is LGII and 25 the holder is TLGI or a non-United States, wholly owned, direct or indirect subsidiary of TLGI (or an entity that is treated as a branch of any such subsidiary for U.S. federal income tax purposes); and (c) no property will be distributed to or retained by any of the Loewen Companies that is a member of the "affiliated group" (as that term is defined in section 1504(a) of the Internal Revenue Code) of which LGII is the common parent with respect to any Allowed Claim in Class 10 on which the obligor is also a member of such affiliated group; any such Claims referenced in clauses (b) and (c) will be discharged on the Effective Date, and the amounts thus discharged will be measured by reference to the net balances of such Claims on the Effective Date after being offset by any amounts owed by the holder thereof to the particular Debtor obligor on the Effective Date. For purposes of clause (c) hereof any of the Loewen Companies, all of the partners of which are members of such affiliated group, will be deemed to be a member of such affiliated group. Notwithstanding this treatment of Class 10 Claims, each of the Loewen Companies holding an Allowed Claim in Class 10 will be deemed to have accepted the Plan. 9. CLASS 11 (UNSECURED NONPRIORITY CLAIMS): On the Effective Date, each holder of an Allowed Claim in Class 11 of any particular Debtor will receive, based upon the principal amount of such holder's Allowed Claim and the Division in which such Debtor is classified: (a) a Pro Rata share of the number of shares of New Common Stock indicated below for such Division; (b) a Pro Rata share of New Warrants exercisable to purchase the number of shares of New Common Stock indicated below for such Division, if any; and (c) a Pro Rata share of the percentage interest in the Liquidating Trust indicated below for such Division, if any:
SHARES OF NEW COMMON STOCK PURCHASABLE UPON SHARES OF NEW EXERCISE OF NEW PERCENTAGE INTEREST IN DIVISION COMMON STOCK WARRANTS LIQUIDATING TRUST - -------- ------------- ---------------- ---------------------- A 132,500 443,600 14.70% B 464,100 1,554,000 51.50% C 768,200 0 0 D 120,500 0 0 E 136,800 0 0 F 292,800 91,200 5.87% G 67,100 38,500 2.48% H 134,000 132,700 8.54%
10. CLASS 12 (MIPS SECURITIES LITIGATION CLAIMS): No property will be distributed to or retained by the holders of Allowed Claims in Class 12. 11. CLASS 13 (OTHER SECURITIES LITIGATION CLAIMS): No property will be distributed to or retained by the holders of Allowed Claims in Class 13. 12. CLASS 14 (TLGI OLD PREFERRED STOCK): No property will be distributed to holders of Allowed Interests in Class 14. 13. CLASS 15 (TLGI OLD COMMON STOCK): No property will be distributed to holders of Allowed Interests in Class 15. 26 14. CLASS 16 (LGII OLD STOCK): No property will be distributed to or retained by the holders of Allowed Interests in Class 16 and such Interests will be canceled on the Effective Date as part of the Reinvestment Transactions. 15. CLASS 17 (THIRD PARTY OWNED OLD STOCK IN NON-OWNERSHIP REGULATED DEBTORS): No property will be distributed to or retained by the holders of Allowed Interests in Class 17 and such Interests will be canceled on the Effective Date; provided, however, that with respect to any Non-Ownership Regulated Debtor that is determined by the Bankruptcy Court to be solvent (as defined under the Bankruptcy Code) as of the Confirmation Date, a holder of an Allowed Interest in Class 17 in such Debtor will receive, on the Effective Date, New Common Stock with an aggregate value, based on the reorganization value per share as set forth in the Disclosure Statement, equal to the value of such holder's interest in such Debtor as determined by the Bankruptcy Court. 16. CLASS 19 (LOEWEN GROUP CAPITAL, L.P. MIPS PARTNERSHIP INTERESTS): If Class 19 accepts the Plan, on the Effective Date, each holder of Allowed Interests and Claims in Class 19 will receive a Pro Rata share of New Warrants distributed to LGCLP as the holder of Class 9 Claims and exercisable to purchase 496,800 shares of New Common Stock. If Class 19 does not accept the Plan, no property shall be distributed to or retained by holders of Allowed Interests in Class 19. 17. CLASS 20 (OTHER LOEWEN GROUP CAPITAL, L.P. PARTNERSHIP INTERESTS): No property will be distributed to or retained by holders of Allowed Interests in Class 20. 18. CLASS 22 (INDEMNIFIED FEE AND EXPENSE CLAIMS OF THE CTA TRUSTEE): On the Effective Date, the Debtors will set aside in a segregated account cash in an amount equal to the CTA Trustee Reserve Amount to which account applicable lien rights, if any, of the CTA Trustee under the CTA will be deemed to attach. The source of funds for such account will be the cash otherwise payable under Section III.C.3, Section III.C.4 and Section III.C.5 in respect of the Excess Cash Distribution Amount. Upon entry of a Final Order of the Bankruptcy Court granting an Allowed Class 22 Claim, Reorganized LGII will pay to the CTA Trustee, solely from funds in such account, cash in the amount of such Allowed Claim. Upon entry of a Final Order of the Bankruptcy Court that all or a portion of Class 22 Claims shall not be Allowed, cash in an amount equal to all or such portion of the CTA Trustee Reserve Amount, together with any interest earned thereon, shall be distributed from such account as cash payable in respect of the Excess Cash Distribution Amount as provided in Section III.C.3, Section III.C.4 and Section III.C.5. Any amounts remaining in such account on the third anniversary of the Effective Date will be distributed to holders of Class 5, Class 6 and Class 7 Claims by Reorganized LGII as if such funds were being paid in respect of the Excess Cash Distribution Amount on the Effective Date as set forth in Section III.C.3, Section III.C.4 and Section III.C.5; provided, however, that if there is a proceeding then pending against the CTA Trustee in respect of which it may be entitled to an Allowed Class 22 Claim, upon motion of the CTA Trustee, the Bankruptcy Court may extend the period such account must be maintained. Until disbursed as provided in this Section III.C.18, subject to any lien rights of the CTA Trustee, any cash in the segregated account shall be deemed to be held in trust for the holders of Class 5, Class 6 and Class 7 Claims. 19. CLASS 23 (INDEMNIFIED FEE AND EXPENSE CLAIMS OF STATE STREET): On the Effective Date, the Debtors will set aside in separate segregated accounts cash in an amount equal to the Series Reserve Amount applicable to each of the Series 1 Notes, Series 2 Notes, Series 3 Notes, Series 4 Notes, Series 6 Notes, Series 7 Notes and PATS Notes. Applicable lien rights, if any, of State Street under the respective Prepetition Indenture will be deemed to attach to the applicable segregated account. The source of funds for each such account will be the cash otherwise payable under Section III.C.3, Section III.C.4 or Section III.C.5 in respect of the Excess Cash Distribution Amount to holders of CTA Note Claims under the particular series of notes in respect to which such account was established. Upon entry of a Final Order of the Bankruptcy Court granting an Allowed Class 23 Claim in respect of a particular series of notes, Reorganized LGII will pay to State Street, solely from funds in the applicable account, cash in the amount of such Allowed Claim. Upon entry of a Final Order of the Bankruptcy Court that all or any portion of Class 23 Claims in respect of a particular series shall not be Allowed, cash in an amount equal to all or a portion of the respective Series Reserve Amount, together with any interest earned thereon, shall be distributed pro rata to the holders of such series of CTA Note Claims. Any amounts remaining in any such account on the third anniversary of the Effective Date will be distributed pro rata to the holders of the particular series of CTA Note Claims from whose distributions the amount in such account was withheld by Reorganized LGII as if such funds were being paid on the Effective Date; provided, however, that if there is a proceeding then 27 outstanding against State Street in respect to which it may be entitled to a Class 23 Allowed Claim under the respective Prepetition Indenture, upon motion of State Street, the Bankruptcy Court may extend the period such account must be maintained. Until disbursed as provided in this Section III.C.19, subject to any lien rights of State Street, any cash held in a segregated account shall be deemed to be held in trust for the holders of Claims in respect of the applicable series of CTA Note Claims. D. SPECIAL PROVISIONS REGARDING THE TREATMENT OF ALLOWED SECONDARY LIABILITY CLAIMS; MAXIMUM RECOVERY 1. The classification and treatment of Allowed Claims under the Plan take into consideration all Secondary Liability Claims, and no distributions in respect of any Secondary Liability Claims will be made. 2. Notwithstanding any provision hereof to the contrary, a creditor holding multiple Allowed Claims against more than one Debtor that do not constitute Secondary Liability Claims and that arise from the contractual joint, joint and several or several liability of such Debtors, the guaranty by one Debtor of another Debtor's obligation or other similar circumstances may not receive in the aggregate from all Debtors more than 100% of the amount of the underlying Claim giving rise to such multiple Claims. E. SPECIAL PROVISIONS REGARDING INDENTURE TRUSTEES' CLAIMS 1. In full satisfaction of each Indenture Trustee's fee and expense Claims for services rendered under the respective Prepetition Indenture prior to the Effective Date (including such services rendered in connection with the Reorganization Cases and Adversary Proceeding No. 00-01181), including such Claims secured by the Indenture Trustee's charging lien under the Prepetition Indentures, subject to the provisions of this Section III.E, each Indenture Trustee will receive from Reorganized LGII cash equal to the amount of such Claims and any charging lien held by such Indenture Trustee will be released on the Effective Date. Distributions received by holders of Allowed Claims in Classes 5, 6, 7, 9 and 19 pursuant to the Plan will not be reduced on account of the payment of the Indenture Trustees' Claims pursuant to this Section III.E. Notwithstanding any other provision of this Section III.E, any payments in respect of amounts estimated to be incurred prior to the Effective Date pursuant to Section III.E.2 will not exceed the lesser of the estimate provided pursuant to Section III.E.2 or the actual amount incurred as reflected in appropriate supporting documentation submitted to Reorganized LGII promptly following the Effective Date. 2. No later than September 28, 2001, each Indenture Trustee will submit to LGII, each other Indenture Trustee, the Creditors' Committee, and each of the Principal CTA Creditors appropriate documentation in support of such fees and expenses incurred or estimated to be incurred by such Indenture Trustee through the Effective Date, whether incurred prior to or subsequent to the Petition Date. The amount of these fees and expenses will be reported to the Bankruptcy Court at the Confirmation Hearing. Notwithstanding the foregoing, if the Effective Date will not occur on or prior to December 31, 2001, any Indenture Trustee may supplement, no later than five Business Days prior to the Effective Date, such documentation to estimate the additional amount of such fees and expenses from January 1, 2002 to the anticipated Effective Date, which additional amount will be treated in accordance with this Section III.E and as otherwise directed by the Bankruptcy Court, including with respect to any supplemental objection procedures. 3. On the Effective Date, Reorganized LGII will pay to each Indenture Trustee, in full satisfaction of such Trustee's fee and expense Claim, cash in an amount equal to the fee and expense amount such Trustee submitted under Section III.E.2; provided, however, that (a) only LGII, an Indenture Trustee, the Creditors' Committee or a Principal CTA Creditor shall have standing to File an objection to the fee and expense amount submitted by an Indenture Trustee under Section III.E.2, (b) any such objection shall be Filed with the Bankruptcy Court on or before the tenth day preceding the Voting Deadline, (c) if such objection is timely Filed, cash equal to the amount subject to such objection will not be paid to such Trustee but rather will be placed in a segregated, interest bearing money market account in which the respective Indenture Trustee will be granted a perfected security interest and (d) if such an objection is not timely Filed such Trustee's fee and expense Claim will be treated as an Allowed Claim and will be paid as provided under Section III.E.1. In addition, pending submission of the supporting documentation in respect of previously estimated Claims as contemplated by the last sentence of Section III.E.1, an amount equal to such previously estimated Claims will be placed in such segregated account. 28 The Confirmation Order will provide that such Trustee's charging lien will attach solely to the cash placed in such money market account until the funds in that account are distributed as provided in Section III.E.4. The portion of any such Claim for fees and expenses actually incurred and as to which no objection has been made will be paid on the Effective Date notwithstanding the pendency of an objection to the remaining portion or receipt of supporting documentation in respect of previously estimated Claims. 4. In the event of an objection to the amount of an Indenture Trustee's fees and expenses as contemplated by Section III.E.3, the disputed portion of the fees and expenses will be subject to approval of the Bankruptcy Court and approved except to the extent found not reasonable (within the meaning of respective Prepetition Indenture). A Trustee's request for its fees and expenses will not be subject to the additional standards contained in section 503(b) of the Bankruptcy Code. Promptly upon approval by the Bankruptcy Court, the Trustee's approved fees and expenses will be treated as Allowed Claims and will be paid from the segregated account established pursuant to Section III.E.3, plus any interest earned thereon. 5. After payment of all amounts payable to an Indenture Trustee under the Section III.E, any amounts remaining in a segregated account established pursuant to Section III.E.3 will be distributed to holders of Class 5, Class 6 and Class 7 Claims by Reorganized LGII as if such funds were being paid in respect of the Excess Cash Distribution Amount on the Effective Date. 6. Each respective Indenture Trustee will also be entitled to fees and expenses incurred following the Effective Date in its capacity as a Third Party Disbursing Agent with respect to the Public Notes. F. SPECIAL PROVISIONS REGARDING CERTAIN FEE AND EXPENSE CLAIMS 1. In full satisfaction of Claims of (a)(i) any of the Principal CTA Creditors (only if such entity votes all of its Claims to accept the Plan) for reasonable fees and expenses incurred by such entity in connection with the Reorganization Cases (including in connection with Adversary Proceeding No. 00-01181) and (ii) Teachers Insurance and Annuity Association (only if such entity votes all of its Claims to accept the Plan) for reasonable fees and expenses incurred as aforesaid in an amount not to exceed $100,000; and (b) counsel and the accountants for the Creditors' Committee for services rendered by such counsel prior to the formation of the Creditors' Committee in an amount not to exceed $60,000 and $30,000, respectively, subject to the provisions of this Section III.F, each holder of such a Claim will receive from Reorganized LGII on the Effective Date cash equal to the amount of such Claim. The payments under clause (a) of this Section III.F.1 are part of the overall settlement embodied by this Plan among the Principal CTA Creditors and the Debtors. Notwithstanding any other provision of this Section III.F, any payments in respect of amounts estimated to be incurred prior to the Effective Date pursuant to Section III.F.2 will not exceed the lesser of the estimate provided pursuant to Section III.F.2 or the actual amount incurred as reflected in appropriate supporting documentation submitted to Reorganized LGII promptly following the Effective Date. 2. No later than September 28, 2001, each holder of a Claim under Section III.F.1 will submit to each of the entities specified in Section III.E.2 appropriate documentation in support of its respective Claims for fees and expenses incurred or estimated to be incurred through the Effective Date. The amount of these fees and expenses will be reported to the Bankruptcy Court at the Confirmation Hearing. Notwithstanding the foregoing, if the Effective Date will not occur on or prior to December 31, 2001, any holder of a Claim under Section III.F.1 may supplement, no later than five Business Days prior to the Effective Date, such documentation to estimate the additional amount of such fees and expenses from January 1, 2002 to the anticipated Effective Date, which additional amount will be treated in accordance with this Section III.F and as otherwise directed by the Bankruptcy Court, including with respect to any supplemental objection procedures. 3. On the Effective Date, Reorganized LGII will pay to each holder of a Claim under Section III.F.1 in full satisfaction of such holder's fee and expense Claim, cash in an amount equal to the fee and expense amount such holder submitted under Section III.F.2; provided, however, that (a) only LGII, an Indenture Trustee, the Creditors' Committee or a Principal CTA Creditor shall have standing to File an objection to the reasonableness of the fee and expense amount submitted under Section III.F.2, (b) any such objection shall be Filed with the Bankruptcy Court on or before the tenth day preceding the Voting Deadline, (c) if such an objection is timely Filed, cash equal to the amount subject to such objection will not be paid to the holder of the challenged Claim but rather will be placed in a segregated interest bearing money market account and (d) if such an objection is not timely Filed, 29 such holder's fee and expense Claim will be treated as an Allowed Claim and will be paid as provided under Section III.F.1. In addition, pending submission of the supporting documentation in respect of previously estimated Claims as contemplated by the last sentence of Section III.F.1, an amount equal to such previously estimated Claims will be placed in such segregated account. The portion of any such Claim for fees and expenses actually incurred and as to which no objection has been made will be paid on the Effective Date notwithstanding the pendency of an objection to the remaining portion or receipt of supporting documentation in respect of previously estimated Claims. 4. In the event of an objection to the amount of such holder's fees and expenses as contemplated by Section III.F.3, the disputed portion of the fees and expenses will be subject to approval of the Bankruptcy Court and approved except to the extent found not reasonable. The request of a holder of a Claim under Section III.F.1 for its fees and expenses will not be subject to the additional standards contained in section 503(b) of the Bankruptcy Code. Promptly upon approval by the Bankruptcy Court, a holder's approved fees and expenses will be treated as Allowed Claims and will be paid from the segregated account established pursuant to Section III.F.3, plus any interest earned thereon. 5. After payment of all amounts payable to a holder of a Claim under clause (a) of Section III.F.1, any amounts remaining in a segregated account established pursuant to Section III.F.3 will be distributed to holders of Class 5, Class 6 and Class 7 Claims by Reorganized LGII as if such funds were being paid in respect of the Excess Cash Distribution Amount on the Effective Date. Any such remaining amounts in respect to a Claim under clause (b) of Section III.F.1 will be paid over to Reorganized LGII. G. SPECIAL PROVISION REGARDING CLAIMS UNDER THE ROSE HILLS PUT/CALL AGREEMENT In full satisfaction of the Claims of Blackstone and RHI under the Rose Hills Put/Call Agreement, including the exercise of the put thereunder, subject to the prior satisfaction of all conditions thereto as set forth in the Blackstone Settlement Agreement, on the Effective Date, Reorganized LGII shall issue to Blackstone and to RHI the New Unsecured Subordinated Convertible Notes in an original principal amount equal to the New Unsecured Subordinated Convertible Note Principal Amount and 379,449 shares of New Common Stock in accordance with the terms of the Blackstone Settlement Agreement. H. CREATION OF LIQUIDATING TRUST On the Effective Date, the Debtors will take any and all such actions as may be necessary or appropriate to establish the Liquidating Trust, including: (a) the execution and delivery of the Liquidating Trust Agreement and (b) the transfer to the Liquidating Trust of the Liquidating Trust Assets, which transfer shall occur immediately following completion of the Reinvestment Transactions. Upon such transfer, the Liquidating Trust Assets shall cease to be property of the CCAA Debtors, Debtors, the Reorganized Debtors or their respective Estates. 1. THE LIQUIDATING TRUST TRUSTEE No fewer than ten days prior to the Confirmation Hearing, the Creditors' Committee will take such actions and employ such procedures as it deems necessary and appropriate to designate the Liquidating Trust Trustee. The designation of any successor will be governed by the Liquidating Trust Agreement. 2. DISTRIBUTION OF THE ASSETS OF THE LIQUIDATING TRUST The Liquidating Trust Trustee will distribute all cash proceeds received in respect of the Liquidating Trust Assets, promptly following the receipt thereof by the Liquidating Trust, to holders of interests in the Liquidating Trust proportionately based on their respective interests. Prior to making any such distribution, however, the Liquidating Trust Trustee will deduct from the amount otherwise so distributable an amount sufficient for the satisfaction of the following: (a) all taxes and unpaid administrative expenses; (b) all unpaid fees and expenses incurred in employing professional advisors, including the compensation and fees of the Liquidating Trust Trustee; (c) reimbursement of Reorganized LGII for any expenses of the Liquidating Trust paid by Reorganized 30 LGII as provided in the Liquidating Trust Agreement; and (d) any other amounts required to be withheld from the distribution pursuant to the Liquidating Trust Agreement. I. CTA ISSUE LITIGATION If (i) Class 7 (Group III CTA Note Claims) accepts the Plan and (ii) one or more Eligible Group III Proceedings are commenced prior to, on or after the Effective Date, Reorganized LGII shall reimburse the holders of Allowed Group III CTA Note Claims for the reasonable fees and expenses (collectively, the "Fees") incurred on and after the Effective Date by their counsel ("Counsel") in connection with such proceedings, up to an aggregate for all such Counsel of $3,000,000 (the "Eligible Group III Proceedings Fee Fund"), upon the following terms and conditions. 1. As used in this Section III.I, the term "Pro Rata" shall mean with respect to a particular Allowed Group III CTA Note Claim, proportionately, so that the ratio of (i)(A) the amount of the Non-Reimbursable Fee Tranche or the Reimbursable Fee Tranche, as the case may be, is the same as the ratio of (ii)(A) the aggregate principal amount of the Series 6 Notes, the Series 7 Notes and the PATS Notes held by such holder as of the Distribution Record Date to (B) $750 million (i.e., the aggregate outstanding principal amount of the Series 6 Notes, the Series 7 Notes and the PATS Notes as of the Distribution Record Date); provided, however, in the event that any Eligible Group III Proceeding (a "Resolved Proceeding") is resolved pursuant to a Final Order and Counsel in such Resolved Proceeding has given written notice to Reorganized LGII that such Counsel has been fully reimbursed for its Fees, the term "Pro Rata" shall mean, with respect to a particular Allowed Group III CTA Note Claim the holder of which was not a plaintiff in the Resolved Proceeding, proportionately, so that the ratio of (i)(A) the amount of the undisbursed remainder of the Non-Reimbursable Fee Tranche or the Reimbursable Fee Tranche, as the case may be, to which the holder of such Claim is entitled hereunder to (B) the aggregate undisbursed remainder of the Non-Reimbursable Fee Tranche or the Reimbursable Fee Tranche, as the case may be, is the same as the ratio of (ii)(A) the aggregate principal amount of the Series 6 Notes, the Series 7 Notes and the PATS Notes held by such holder as of the Distribution Record Date to (B) the difference between (x) $750 million and (y) the aggregate principal amount of the Series 6 Notes, the Series 7 Notes and the PATS Notes held by the plaintiffs in the Resolved Proceeding as of the Distribution Record Date. 2. The Eligible Group III Proceedings Fee Fund shall comprise a "Non-Reimbursable Fee Tranche" and a "Reimbursable Fee Tranche" (collectively, the "Fee Tranches"), each of which shall be in the amount of $1,500,000. 3. Each holder of an Allowed Group III CTA Note Claim shall be entitled to its Pro Rata portion of the Non-Reimbursable Fee Tranche for reimbursement of Fees. Holders of Allowed Group III CTA Note Claims who receive funds from the Non-Reimbursable Fee Tranche shall not have any obligation to reimburse Reorganized LGII for any such funds. 4. In the event that a holder of an Allowed Group III CTA Note Claim is reimbursed by Reorganized LGII to the full extent of the Pro Rata portion of the Non-Reimbursable Fee Tranche to which such holder is entitled hereunder, such holder shall be entitled to its Pro Rata portion of the Reimbursable Fee Tranche for reimbursement of Fees. In the event that a holder of an Allowed Group III CTA Note Claim receives any cash recovery (the "Proceeding Recovery") in respect of an Eligible Group III Proceeding, whether by judgment, settlement or otherwise, such holder shall be obligated to reimburse Reorganized LGII for all Fees received by such holder or such holder's Counsel from the Reimbursable Fee Tranche, plus interest thereon at 10% per annum from the date of its (or its Counsel's) receipt of each reimbursement from the Reimbursable Fee Tranche; provided, however, in no event shall such holder be obligated to reimburse Reorganized LGII for any such Fees in an amount that exceeds, in the aggregate, such holder's Proceeding Recovery. 5. The request for and acceptance of funds disbursed by Reorganized LGII from the Reimbursable Fee Tranche will, without the necessity of any further action, constitute the consent and agreement of each plaintiff and such plaintiff's Counsel in the respective Eligible Group III Proceeding to repay to Reorganized LGII, subject to the proviso in the immediately preceding paragraph of this Section III.I, all Fees received by such plaintiff or such plaintiff's Counsel from the Reimbursable Fee Tranche, plus interest thereon at 10% per annum from the date of its 31 (or its Counsel's) receipt of each reimbursement from the Reimbursable Fee Tranche. Such repayment (together with applicable interest) will be made prior to any distribution of the Proceeding Recovery to such plaintiff. 6. Reimbursement by Reorganized LGII of Fees from the Fee Tranches to which a holder of an Allowed Group III CTA Note Claim may be entitled hereunder shall be paid by Reorganized LGII directly to such holder's Counsel upon presentation to Reorganized LGII, at the address set forth in Section XIII.H hereof, of reasonable documentation of the incurrence of the Fees. Such documentation additionally shall include a statement identifying the clients that such Counsel represents and the aggregate principal amount of the Series 6 Notes, the Series 7 Notes and the PATS Notes held by such clients as of the Distribution Record Date. Requests for reimbursement of Fees in respect of any Eligible Group III Proceeding shall be made no more frequently than on a calendar quarter basis. 7. In the event that (a) Counsel for the holders of Allowed Group III CTA Note Claims in a Resolved Proceeding has been reimbursed from the Fee Tranches to the full extent of its entitlement hereunder and such Counsel has given written notice to Reorganized LGII to that effect, and (b) there remain funds in one or both of the Tranches that have not yet been disbursed by Reorganized LGII, the holders of Allowed Group III CTA Notes Claims who are plaintiffs in a pending Eligible Group III Proceeding that is not a Resolved Proceeding shall be entitled to share on a Pro Rata basis any funds that would otherwise be allocable to the holders of Allowed Group III CTA Note Claims who were plaintiffs in the Resolved Proceeding, subject to the same reimbursement obligations set forth herein. 8. At the option of Reorganized LGII, Reorganized LGII may on the Effective Date set aside in a segregated account all or part of the Fee Tranches pending disbursement thereof. 9. Any disputes relating to the eligibility or reasonableness of any request for reimbursement of Fees or otherwise with respect to this Section III.I shall be determined by the Bankruptcy Court. ARTICLE IV MEANS FOR IMPLEMENTATION OF THE PLAN A. CONTINUED CORPORATE EXISTENCE AND VESTING OF ASSETS IN THE REORGANIZED DEBTORS Except as otherwise provided herein (and subject to the Restructuring Transaction provisions of Section IV.B), each Debtor will, as a Reorganized Debtor, continue to exist after the Effective Date as a separate corporate entity, with all the powers of a corporation under applicable law and without prejudice to any right to alter or terminate such existence (whether by merger, dissolution or otherwise) under applicable state law. Except as otherwise provided herein, as of the Effective Date, all property of the respective Estates of the Debtors, and any property acquired by a Debtor or Reorganized Debtor under the Plan, will vest in the applicable Reorganized Debtor, free and clear of all Claims, liens, charges, other encumbrances and Interests. On and after the Effective Date, each Reorganized Debtor may operate its businesses and may use, acquire and dispose of property and compromise or settle any Claims without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly imposed by the Plan or the Confirmation Order. Without limiting the foregoing, each Reorganized Debtor may pay the charges that it incurs on or after the Effective Date for professionals' fees, disbursements, expenses or related support services (including fees relating to the preparation of Professional fee applications) without application to the Bankruptcy Court. B. RESTRUCTURING TRANSACTIONS 1. SUBSIDIARY RESTRUCTURING TRANSACTIONS Commencing immediately as of and following the Effective Date, together with certain other structural changes, the subsidiaries of Reorganized LGII will be restructured so as to reduce the number of such subsidiaries organized in each state in which the Debtors conduct business to the maximum extent permissible and 32 determined by the Debtors to be appropriate, taking into account applicable regulatory requirements and other pertinent considerations. The Subsidiary Restructuring Transactions will include all mergers, consolidations, reorganizations, asset transfers and dissolutions that the Debtors determine to be necessary or appropriate. The actions to effect the Subsidiary Restructuring Transactions and Reinvestment Transactions may include: (a) the execution and delivery of appropriate agreements or other documents of merger, consolidation, restructuring, disposition, liquidation or dissolution containing terms that are consistent with the terms of the Plan and that satisfy the applicable requirements of applicable state law and such other terms to which the applicable entities may agree; (b) the execution and delivery of appropriate instruments of transfer, assignment, assumption or delegation of any asset, property, right, liability, duty or obligation on terms consistent with the terms of the Plan and having such other terms to which the applicable entities may agree; (c) the filing of appropriate certificates or articles of merger, consolidation or dissolution pursuant to applicable state law; and (d) all other actions that the applicable entities determine to be necessary or appropriate, including making filings or recordings that may be required by applicable state law in connection with such transactions. A description of the Subsidiary Restructuring Transactions as presently contemplated is attached hereto as Exhibit IV.B.1. 2. REINVESTMENT TRANSACTIONS Prior to the Effective Date, TLGI will cause LGII to form (a) Delco and (b) Nafcanco. On the Effective Date, LGII will transfer its rights to receive any proceeds of the NAFTA Claims arising under article 1117 of NAFTA to Delco and will transfer the ownership interests in Delco to TLGI. Immediately thereafter, TLGI will: (a) assign, transfer and deliver, free and clear of all liens, claims and encumbrances (including all Claims) to Nafcanco all of TLGI's right, title and interest in and to all proceeds of the NAFTA Claims arising under article 1116 of NAFTA that TLGI receives; (b) will irrevocably delegate to Nafcanco all powers and responsibilities of TLGI in respect of the pursuit and prosecution of the NAFTA Claims; and (c) cause Delco to assign, transfer and deliver, free and clear of all liens, claims and encumbrances (including all Claims) to LGII all right, title and interest to all proceeds of the NAFTA Claims arising under article 1117 of NAFTA that Delco receives; all in accordance with the terms of Exhibit I.A.30. On the Effective Date, following the CCAA Debtor Restructuring Transactions as described on Exhibit I.A.29, pursuant to the Confirmation Order and the terms hereof, TLGI will assign, transfer and deliver, free and clear of all liens, claims and encumbrances (including all Claims) (i) all of TLGI's right, title and interest in, to and under all rights, properties and assets of every kind and character and description wherever located and whether tangible or intangible, real or personal or fixed or contingent then owned, held, used, licensed, conceived or developed by TLGI (other than its rights in the NAFTA Claims, its ownership interest in Delco and its rights in the Canadian Operating Assets) to LGII, which will become the ultimate parent entity of the Loewen Companies and (ii) all of TLGI's right, title and interest in, to and under the Canadian Operating Assets, to a holding company incorporated under the laws of one of the Provinces of Canada, which, following completion of the transfers contemplated by clause (i) will be a wholly owned subsidiary of LGII, including the transfer of the Canadian Operating Assets. The only shares of capital stock of LGII to be outstanding immediately following the Effective Date will be the New Common Stock. Reorganized LGII will not assume or otherwise be liable for any obligations of or Claims against TLGI but will make the payments provided for in Articles III and V of this Plan. 3. OBLIGATIONS OF ANY SUCCESSOR CORPORATION IN A RESTRUCTURING TRANSACTION The Restructuring Transactions may include one or more asset transfers, mergers, consolidations, restructurings, dispositions, liquidations or dissolutions, as may be determined by the Debtors or Reorganized Debtors to be necessary or appropriate to result in substantially all of the respective assets, properties, rights, liabilities, duties and obligations of certain of the Debtors or Reorganized Debtors vesting in one or more surviving, resulting or acquiring corporations. In each case in which the surviving, resulting or acquiring corporation in any such transaction is a successor to a Debtor or Reorganized Debtor, such surviving, resulting or acquiring corporation will perform the obligations of the applicable Debtor or Reorganized Debtor pursuant to the Plan to pay or otherwise satisfy the Allowed Claims against such Debtor or Reorganized Debtor, except as provided in any contract, instrument or other agreement or document effecting a disposition to such surviving, resulting or acquiring corporation, which may provide that another Reorganized Debtor will perform such obligations. 4. DISSOLUTION OF LGCLP On or promptly following the Effective Date, LGCLP will be dissolved. 33 C. CORPORATE GOVERNANCE, DIRECTORS AND OFFICERS, EMPLOYMENT-RELATED AGREEMENTS AND COMPENSATION PROGRAMS 1. CERTIFICATES OF INCORPORATION AND BYLAWS a. REORGANIZED LGII As of the Effective Date, the certificate of incorporation and the bylaws of Reorganized LGII will be substantially in the forms of Exhibits IV.C.1.a(i) and IV.C.1.a(ii), respectively. The certificate of incorporation of Reorganized LGII, among other things, will prohibit the issuance of nonvoting equity securities to the extent required by section 1123(a) of the Bankruptcy Code and will authorize the issuance of New Common Stock in amounts not less than the amounts necessary to permit the distributions thereof required or contemplated by the Plan. After the Effective Date, Reorganized LGII may amend and restate its certificate of incorporation or bylaws as permitted by the General Corporation Law of the State of Delaware, subject to the terms and conditions of such constituent documents. b. REORGANIZED LOEWEN SUBSIDIARY DEBTORS As of the Effective Date, the certificates of incorporation and the bylaws or similar constituent documents of each Reorganized Loewen Subsidiary Debtor will be substantially in the forms of Exhibits IV.C.1.b(i) and IV.C.1.b(ii), respectively. The initial certificates of incorporation and the bylaws or similar constituent documents of each Reorganized Loewen Subsidiary Debtor, among other things, will prohibit the issuance of nonvoting equity securities to the extent required by section 1123(a) of the Bankruptcy Code. After the Effective Date or the effective time of any applicable Restructuring Transaction, each such entity may amend and restate its certificate of incorporation or bylaws or similar constituent documents as permitted by applicable state law, subject to the terms and conditions of such constituent documents. 2. DIRECTORS AND OFFICERS OF THE REORGANIZED DEBTORS The initial board of directors and officers of Reorganized LGII and each of the Reorganized Loewen Subsidiary Debtors will consist of the individuals identified on Exhibit IV.C.2. Each such director and officer will serve from and after the Effective Date until his or her successor is duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the terms of the certificates of incorporation and bylaws or similar constituent documents of the applicable Reorganized Debtor and applicable state law. Exhibit IV.C.2 identifies the initial term for each director in accordance with the provisions of the Reorganized Debtors' respective certificates of incorporation and bylaws. 3. NEW EMPLOYMENT, RETIREMENT, INDEMNIFICATION AND OTHER RELATED AGREEMENTS AND INCENTIVE COMPENSATION PROGRAMS a. As of the Effective Date, the Reorganized Debtors will have authority to: (i) maintain, amend or revise existing employment, retirement, welfare, incentive, severance, indemnification and other agreements with their active directors, officers and employees, subject to the terms and conditions of any such agreement; and (ii) enter into new employment, retirement, welfare, incentive, severance, indemnification and other agreements for active and retired employees. Reorganized LGII also will have authority to make the initial grants under the Equity Incentive Plan. Exhibit IV.C.3 provides (i) a list of the employment agreements and plans that will continue in effect from and after the Effective Date, (ii) a description of the Equity Incentive Plan that will take effect as of the Effective Date, (iii) a list of the initial grants to be made on the Effective Date pursuant to the Equity Incentive Plan and (iv) a description of certain change in control agreements that will take effect as of the Effective Date. In addition, as part of the Reinvestment Transactions, TLGI will assign to Reorganized LGII or to a subsidiary specified by Reorganized LGII, and Reorganized LGII or such subsidiary will assume, TLGI's employment agreements with John S. Lacey, its Chairman, and Paul A. Houston, its President and Chief Executive Officer. As of the Effective Date, such employment agreements will be modified to clarify that (i) each of Mr. Lacey and Mr. Houston will receive a grant of stock options under the Equity Incentive Plan after the Effective Date 34 exercisable to purchase 495,000 shares of New Common Stock and (ii) the options so granted will become exercisable in cumulative installments with respect to 25% of the shares on the later of November 3, 2001 and the date next following the day on which the exercise price of such options becomes fixed, 25% of the shares on November 1, 2002 and the remaining 50% of the shares on November 3, 2003. The Disclosure Statement provides a summary and description of the Debtors' employment, retirement, severance, indemnification and other related agreements and incentive compensation programs that are to take or remain in effect on or as of the Effective Date. b. From and after the Effective Date, the Reorganized Debtors will be obligated to pay retiree benefits (as defined in section 1114(a) of the Bankruptcy Code), if any, in accordance with the terms of the retiree benefit plans or other agreements governing the payment of such benefits, subject to any rights to amend, modify or terminate such benefits under the terms of the applicable retiree benefits plan, other agreement or applicable nonbankruptcy law. 4. CORPORATE ACTION The following events will occur and be effective as of the date specified in the documents effectuating the same or, if no such other date is specified in such documents, the Effective Date and will be authorized and approved in all respects and for all purposes without any requirement of further action by stockholders or directors of any of the Debtors: (a) the Restructuring Transactions; (b) the adoption of new or amended and restated certificates of incorporation and bylaws or similar constituent documents for the Reorganized Debtors; (c) the initial selection of directors and officers for Reorganized LGII and the Reorganized Loewen Subsidiary Debtors; (d) the entry into the Exit Financing Revolving Credit Facility and the Exit Financing Term Loan; (e) the distribution of cash pursuant to the Plan; (f) the issuance and distribution of New Five-Year Secured Notes, New Two-Year Unsecured Notes and New Seven-Year Unsecured Notes pursuant to the Plan; (g) the issuance and distribution of New Common Stock pursuant to the Plan; (h) the issuance and distribution of New Warrants pursuant to the Plan; (i) the adoption, execution, delivery and implementation of all contracts, leases, instruments, releases and other agreements or documents related to the Plan (including the New Five-Year Secured Notes Indenture, the New Two-Year Unsecured Notes Indenture, the New Seven-Year Unsecured Notes Indenture, the New Unsecured Subordinated Convertible Notes Indenture, the New Warrant Agreement, the Liquidating Trust Agreement and the New Registration Rights Agreement); (j) the adoption, execution and implementation of employment, retirement and indemnification agreements, incentive compensation programs, retirement income plans, welfare benefit plans and other employee plans and related agreements, including the Equity Incentive Plan and the plans and agreements listed or described on Exhibit IV.C.3; (k) the adoption, execution, delivery and implementation of the Blackstone Settlement Documents (including the Blackstone Settlement Agreement) and the issuance and delivery of the New Unsecured Subordinated Convertible Notes and New Common Stock pursuant to the Plan in connection therewith; (l) the assignment of the proceeds of the NAFTA Claims; (m) the assignment of the Liquidating Trust Assets; and (n) the other matters provided for under the Plan involving the corporate structure of any Debtor or Reorganized Debtor or corporate action to be taken by or required of any Debtor or Reorganized Debtor. D. EXIT FINANCING REVOLVING CREDIT FACILITY AND EXIT FINANCING TERM LOAN; OBTAINING CASH FOR PLAN DISTRIBUTIONS: TRANSFERS OF FUNDS AMONG THE DEBTORS On the Effective Date, the Reorganized Debtors are authorized to execute and deliver those documents necessary or appropriate to obtain the Exit Financing Revolving Credit Facility and the Exit Financing Term Loan. All cash necessary for the Reorganized Debtors to make payments pursuant to the Plan will be obtained from the Reorganized Debtors' cash balances and operations, the Exit Financing Revolving Credit Facility or the Exit Financing Term Loan. Cash payments to be made pursuant to the Plan will be made by Reorganized LGII; provided, however, that the Debtors and the Reorganized Debtors will be entitled to transfer funds between and among themselves as they determine to be necessary or appropriate to enable Reorganized LGII to satisfy its obligations under the Plan. Any Intercompany Claims resulting from such transfers will be accounted for and settled in accordance with the Debtors' historical intercompany account settlement practices. 35 E. IMPLEMENTATION OF THE BLACKSTONE SETTLEMENT On the Effective Date, the Reorganized Debtors are authorized to take any and all actions necessary or appropriate to consummate the Blackstone Settlement. F. PRESERVATION OF RIGHTS OF ACTION; RELEASES 1. PRESERVATION OF RIGHTS OF ACTION BY THE DEBTORS AND THE REORGANIZED DEBTORS Except as provided in the Plan or in any contract, instrument, release or other agreement entered into or delivered in connection with the Plan, in accordance with section 1123(b) of the Bankruptcy Code, the Reorganized Debtors or their successors will retain and may enforce any claims, demands, rights, causes of action and liabilities that any Debtor or Estate may hold, including claims transferred to Reorganized LGII by TLGI on the Effective Date and the Retained Claims, against any person or entity. The Reorganized Debtors or their successors may pursue such retained claims, demands, rights or causes of action, as appropriate, in accordance with the best interests of the Reorganized Debtors or their successors holding such claims, demands, rights or causes of action. Further, the Reorganized Debtors or their successors retain their rights to File and pursue any adversary proceedings against any trade creditor or vendor related to debit balances or deposits owed to any Debtor. Notwithstanding the foregoing, on the Effective Date, the Reorganized Debtors and their successors will be deemed to waive and release any claims, rights, causes of action or liabilities arising under section 547 of the Bankruptcy Code relating to preferential transfers held by any Debtor or Reorganized Debtor (including claims subject to a pending proceeding set forth on Exhibit IX.B.8) against any entity other than any Retained Claims. 2. GENERAL RELEASES As of the Effective Date, in consideration for the obligations of the Debtors and the Reorganized Debtors under the Plan and the cash, New Five-Year Secured Notes, New Two-Year Unsecured Notes, New Seven-Year Unsecured Notes, New Unsecured Subordinated Convertible Notes, New Common Stock, New Warrants or interests in the Liquidating Trust to be distributed pursuant to the Plan, the settlement of certain issues relating to certain CTA Note Claims and other contracts, instruments, releases, agreements or documents to be entered into or delivered by the Debtors or the Reorganized Debtors in connection with the Plan, (a) each holder of a Claim or Interest that votes in favor of the Plan, (b) to the fullest extent permissible under applicable law, as such law may be extended or interpreted subsequent to the Effective Date, each entity that has held, holds or may hold a Claim or Interest or at any time was a creditor or stockholder of any of the Debtors and that does not vote on the Plan or votes against the Plan and (c), solely as to clause (ii) below, each Debtor, Reorganized Debtor and other Loewen Company will be deemed to forever release, waive and discharge all claims, demands, rights, causes of action and liabilities (other than the right to enforce the Debtors' or the Reorganized Debtors' obligations under the Plan and the contracts, instruments, releases, agreements and documents delivered thereunder), whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising in law, equity or otherwise, that are based in whole or in part on any act, omission, transaction or other occurrence taking place on or prior to the Effective Date in any way relating to a Debtor, the Reorganization Cases, the Plan, the CTA or the CTA Note Claims (excluding any claims with respect to reimbursement and indemnification provisions of the credit facilities excepted from cancellation under Section IV.I) that such entity has, had or may have against (i) any Debtor or other Loewen Company and each of their respective present or former directors, officers, employees, attorneys, accountants, financial advisors and agents, acting in such capacity, and (ii) the members of the Creditors' Committee, each Indenture Trustee, each Principal CTA Creditor, each holder of a CTA Note Claim and each of their respective present or former directors, officers, employees, attorneys, accountants, financial advisors and agents, acting in such capacity (including all claims, demands, rights, causes of action and liabilities alleged in Adversary Proceeding No. 00-01181, which will be deemed dismissed with prejudice as of the Effective Date) (which release, waiver and discharge will be in addition to the discharge of Claims and termination of Interests provided herein and under the Confirmation Order and the Bankruptcy Code). Notwithstanding the foregoing, no claims, demands, causes of action or liabilities against (x) any Tolling Party or (y) and present or former director, officer or employee of any Loewen Company (other than TLGI and LGII), acting in such capacity that relates to the operations in the ordinary course of business of such Company will be released, waived or discharged under this Section IV.F.2. 36 3. RELEASES RELATED TO THE CTA; LIMITED INDEMNITY OF INDENTURE TRUSTEES a. As of the Effective Date, and upon cancellation of the CTA as provided in Section IV.I, each Indenture Trustee, the CTA Trustee and each holder of a CTA Note Claim will be deemed to forever release, waive and discharge each Loewen Company, including as a Pledgor or guarantor under the CTA, from any claims, demands, rights, causes of action or liabilities in respect to any rights or claims under or in respect to the CTA and CTA Note Claims (other than the right to enforce the Debtors' or the Reorganized Debtors' obligations under the Plan and the contracts, instruments, releases, agreements and documents delivered thereunder), all of such claims, demands, rights, causes of action and liabilities having been settled and discharged through the respective distributions to holders of Claims in Class 5, Class 6 or Class 7. b. As of the Effective Date, each holder of a CTA Note Claim, each Indenture Trustee and each Principal CTA Creditor will be deemed to forever release, waive and discharge each other holder of a CTA Note Claim, each Indenture Trustee, each Principal CTA Creditor and each of their respective present or former directors, officers, employees, attorneys, accountants, financial advisors and agents, acting in such capacity, from any claims, demands, rights, causes of action or liabilities in respect to the treatment and distributions under the Plan or otherwise in respect of the CTA or the CTA Note Claims or payments thereon (excluding any claims with respect to reimbursement and indemnification provisions of the credit facilities excepted from cancellation under Section IV.I), all of such claims, demands, rights, causes of actions and liabilities having been settled, released, waived and discharged as part of the settlement embodied in the Plan. Notwithstanding the foregoing, no claims, demands, causes of action or liabilities against any Tolling Party will be released, waived or discharged under this Section IV.F.3.b. c. As of the Effective Date, the Debtors will be deemed to release, waive and discharge any and all avoidance or recovery action under sections 510, 542, 544, 545, 547, 548, 549, 550, 551 or 553 of the Bankruptcy Code against all persons and entities in respect to any CTA Note Claim or in respect of any payment thereon (including avoidance claims subject to a proceeding set forth on Exhibit IX.B.8, which will be deemed dismissed with prejudice). d. Notwithstanding the cancellation of the Prepetition Indentures under Section IV.I, subject to the limitations in this Section IV.F.3.d, the obligation of any Debtor to indemnify any Indenture Trustee under a Prepetition Indenture shall continue in effect after the Effective Date until the fifth anniversary of the Effective Date and be performed by Reorganized LGII but in any case only for the reimbursement of reasonable attorneys' fees and expenses (net of any amounts actually collected from adverse parties thereto) of an Indenture Trustee incurred in connection with the defense by such Indenture Trustee of an action against such Indenture Trustee for an action or omission by such Indenture Trustee relating to the settlement of the issues concerning the status of certain CTA Note Claims under the CTA including the CTA Issue and the matters that are the subject of Adversary Proceeding No. 00-01181 pending before the Bankruptcy Court. In no event will Reorganized LGII be obligated to make any reimbursement under this Section IV.F.3.d to all Indenture Trustees in the aggregate in excess of $1,000,000. Moreover, no Indenture Trustee will be entitled to receive more than $250,000 of reimbursement hereunder, unless on the fifth anniversary of the Effective Date the $1,000,000 has not been fully disbursed and no proper claims by an Indenture Trustee for amounts up to its individual $250,000 limit are outstanding (including claims by an Indenture Trustee for amount up to its individual $250,000 limit that such Indenture Trustee reasonably expects to incur as part of a pending proceeding (as described above)) in which case any remaining unclaimed and undisbursed portion of such $1,000,000 may and shall be distributed on a pro rata basis based on unreimbursed Indenture Trustee claims under this Section III.F.3.d, but in no event in excess of the aggregate of such unreimbursed amounts. e. As of the Effective Date, each holder of a CTA Note Claim, each Indenture Trustee and each Principal CTA Creditor will be deemed to forever release, waive and discharge the CTA Trustee and its respective present or former directors, officers, employees, attorneys or agents, acting in such capacity, from any claims, demands, rights, causes of actions or liabilities that, if enforced against the CTA Trustee, entitle the CTA Trustee to an Allowed Claim for indemnification from TLGI or LGII pursuant to the terms of Section 7.5 of the CTA; provided, however, that nothing in this Section IV.F.3.e shall constitute a 37 release, waiver or discharge of any claim, demand, right, cause of action or liability relating to the amount of the CTA Trustee Reserve Amount or to treatment of a Claim as an Allowed Class 22 Claim. f. As of the Effective Date, each holder of a CTA Note Claim, each Indenture Trustee and each Principal CTA Creditor will be deemed to forever release, waive and discharge State Street and its respective present or former directors, officers, employees, attorneys or agents, acting in such capacity, from any claims, demands, rights, causes of action or liabilities that, if enforced against State Street, entitle State Street to an Allowed Claim for indemnification from TLGI or LGII pursuant to the terms of any Prepetition Indenture; provided, however, that nothing in this Section IV.F.3.f shall constitute a release, waiver or discharge of any claim, demand, right, cause of action or liability relating to the amount of any Series Reserve Amount or to treatment of a Claim as an Allowed Class 23 Claim. 4. RELEASES IN CONNECTION WITH THE BLACKSTONE SETTLEMENT On the Effective Date and as part of the Blackstone Settlement, the Blackstone Release will become effective. 5. 1994 PLAN RELEASE To the extent not otherwise settled or resolved prior to the Effective Date, the Debtors will release each participant (other than Raymond L. Loewen) in the 1994 Plan from any and all claims of the Debtors against such participant arising from the financing of such participant's purchase of an option to purchase MEIPs Debentures pursuant to the 1994 Plan, subject, however, to the execution and delivery by such participant on or prior to the Effective Date of a release of the Loewen Companies from any and all Claims of such participant related to the 1994 Plan or such participant's participation therein. 6. RESERVATION OF CERTAIN THIRD-PARTY CTA CLAIMS a. Except as provided in Section IV.F.2 or IV.F.3, any claims, demands, rights, causes of action and liabilities that any holder of a CTA Note Claim or any Indenture Trustee, on behalf of itself or any holder of any CTA Note Claim, may have against Tolling Parties or other third parties with respect to the CTA ("Reserved CTA Claims") are reserved and, unless the Bankruptcy Court determines otherwise, will not be affected by Confirmation or the occurrence of the Effective Date. Claims, demands, rights, causes of action and liabilities against all persons and entities that are the beneficiaries of the release provided in Section IV.F.2 or the release provided in Section IV.F.3 do not constitute Reserved CTA Claims. b. Subject to the Bankruptcy Court's determination under Section IX.A.5, Reserved CTA Claims of any holder of a CTA Note Claim or any Indenture Trustee, on behalf of itself or any holder of any CTA Note Claim, shall in no way be prejudiced or adversely affected by virtue of the fact that any holder of any such claim voted in favor of the Plan, did not challenge the treatment of its Claim or its recovery under the Plan, did not pursue to conclusion its claims or defenses in Adversary Proceeding No. 00-01181 pending before the Bankruptcy Court, or otherwise did not fully pursue any rights that it may have had with respect to its CTA Note Claim before the Bankruptcy Court. G. CONTINUATION OF CERTAIN EMPLOYEE BENEFIT PLANS From and after the Effective Date, the Reorganized Debtors intend to continue (or continue as modified or replaced) their existing employee benefit policies, plans and agreements identified on Exhibit IV.C.3 and any issuances of New Common Stock thereunder shall be deemed to have been issued in accordance with section 1145(a) of the Bankruptcy Code. H. LIMITATIONS ON AMOUNTS TO BE DISTRIBUTED TO HOLDERS OF ALLOWED INSURED CLAIMS Distributions under the Plan to each holder of an Allowed Insured Claim will be in accordance with the treatment provided under the Plan for the Class or Division in which such Allowed Insured Claim is 38 classified, but solely to the extent that such Allowed Insured Claim is not satisfied from proceeds payable to the holder thereof under any pertinent insurance policies and applicable law. Nothing in this Section IV.H will constitute a waiver of any claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action or liabilities that any entity may hold against any other entity, including the Debtors' insurance carriers. I. CANCELLATION AND SURRENDER OF INSTRUMENTS, SECURITIES AND OTHER DOCUMENTATION Except as provided in any contract, instrument or other agreement or document entered into or delivered in connection with the Plan, on the Effective Date and immediately following the applicable distributions made pursuant to Article III, the CTA, the BMO Revolving Credit Facility, the MEIP Credit Facility, the Public Notes, the Prepetition Indentures, the Series D Notes, the Series E Notes, the Prepetition Note Agreements and the O'Keefe Notes and any guaranties or other obligation in respect thereof will be canceled and of no further force and effect, without any further action on the part of any Debtor or Reorganized Debtor and any and all collateral in respect thereof will be released. Upon such cancellation, the CTA Trustee will turn over to Reorganized LGII or as otherwise directed by Reorganized LGII any collateral held by the CTA Trustee under the CTA. Immediately thereafter, the LGII Old Stock, the Old Stock of the Non-Ownership Regulated Debtors owned by any person or entity (other than a Loewen Company) and the MIPS and other partnership interests of LGCLP shall be deemed canceled and of no further force without any further action on the part of any Debtor or Reorganized Debtor. Notwithstanding the foregoing, (i) the applicable provisions of the Prepetition Indentures shall continue in effect (1) solely for the purposes of permitting the respective Indenture Trustee to make the distributions to be made in respect to the Public Notes as contemplated by Section VI.B, (2) to the extent such provisions provide that a court may require in any suit against any Indenture Trustee an undertaking by a party litigant in such suit to pay costs of such suit or that a court may assess reasonable costs, including reasonable attorneys' fees against a party litigant and (3) to the extent provided in Section IV.F.3.d, and (ii) the reimbursement and indemnification provisions contained in Section 11.8 of the BMO Revolving Credit Facility and Section 7.05 of the MEIP Credit Facility shall continue in effect and shall not be canceled. Notwithstanding anything in the Plan to the contrary, including, without limitation, the reservation of certain third-party claims in Section IV.F.6 above, from and after the cancellation of the Prepetition Indentures on the Effective Date, the Indenture Trustees shall have no right, duty or obligation, contractual or otherwise, to initiate, continue or otherwise pursue any claims, demands, rights, causes of action or liabilities in respect of the CTA or the CTA Note Claims or the status thereof under the CTA, including, without limitation, any such claims, demands, rights, causes of action or liabilities that any Indenture Trustee may have against any of the Tolling Parties. The holders of or parties to such canceled instruments, securities and other documentation will have no rights arising from or relating to such instruments, securities and other documentation or the cancellation thereof, except the rights provided pursuant to the Plan; provided, however, that no distribution under the Plan will be made to or on behalf of any holder of an Allowed Claim evidenced by such canceled instruments or securities unless and until such instruments or securities are received by the applicable Disbursing Agent to the extent required in Section VI.J. J. NEW REGISTRATION RIGHTS AGREEMENTS On the Effective Date, Reorganized LGII and the other parties thereto will execute and deliver the New Registration Rights Agreements substantially in the forms of Exhibit IV.J. K. NEW WARRANT AGREEMENT On the Effective Date, Reorganized LGII and the warrant agent thereunder will execute and deliver the New Warrant Agreement substantially in the form of Exhibit IV.K. L. NEW TAX SHARING AGREEMENT On the Effective Date, Reorganized LGII, the Reorganized Loewen Subsidiary Debtors and certain of the other Loewen Companies will execute and deliver the New Tax Sharing Agreement substantially in the form of Exhibit IV.L. 39 M. RELEASE OF LIENS Except as otherwise provided in the Plan or in any contract, instrument, release or other agreement or document entered into or delivered in connection with the Plan, on the Effective Date and concurrently with the applicable distributions made pursuant to Article III, all mortgages, deeds of trust, liens or other security interests against the property of any Estate will be fully released and discharged, and all of the right, title and interest of any holder of such mortgages, deeds of trust, liens or other security interests, including any rights to any collateral thereunder, will revert to the applicable Reorganized Debtor and its successors and assigns. N. EFFECTUATING DOCUMENTS; FURTHER TRANSACTIONS; EXEMPTION FROM CERTAIN TRANSFER TAXES The Chairman of the Board, Chief Executive Officer, President, Executive Vice President, Chief Financial Officer, Chief Operating Officer, Senior Vice President or any Vice President of each Debtor or Reorganized Debtor will be authorized to execute, deliver, file or record such contracts, instruments, releases and other agreements or documents and take such actions as may be necessary or appropriate to effectuate and implement the provisions of the Plan. The Secretary or any Assistant Secretary of each Debtor or Reorganized Debtor will be authorized to certify or attest to any of the foregoing actions. Pursuant to section 1146(c) of the Bankruptcy Code, the following will not be subject to any stamp tax, real estate transfer tax, vehicle transfer tax or similar tax: (1) the issuance, transfer or exchange of New Five-Year Secured Notes, New Two-Year Unsecured Notes, New Seven-Year Unsecured Notes, New Common Stock or New Warrants; (2) the execution and delivery of the Liquidating Trust Agreement and the distribution of interests in the Liquidating Trust; (3) the creation of any mortgage, deed of trust, lien or other security interest; (4) the making or assignment of any lease or sublease; (5) the execution and delivery of the Exit Financing Revolving Facility and the Exit Financing Term Loan; (6) any Restructuring Transaction; (7) the execution and delivery of the Blackstone Settlement Documents (including the Blackstone Settlement Agreement) or the issuance of the New Unsecured Subordinated Convertible Notes and New Common Stock in connection therewith; or (8) the making or delivery of any deed or other instrument of transfer under, in furtherance of or in connection with the Plan or the sale or other disposition of any Disposition Properties, including the transfer of certain of TLGI's assets to LGII, the transfer of the Liquidating Trust Assets to the Liquidating Trust, any merger agreements, agreements of consolidation, restructuring, disposition, liquidation or dissolution, deeds, bills of sale or assignments executed in connection with any Restructuring Transaction or otherwise pursuant to, or as contemplated by, the Plan. O. BANKRUPTCY RULE 9019 REQUEST The Plan constitutes a request pursuant to Bankruptcy Rule 9019 for approval of the settlements embodied in the Plan in respect to Adversary Proceeding No. 00-01181 and certain related matters. P. AFFILIATES PARTICIPATING IN THE PLAN On the Effective Date, any non-Debtor Loewen Company that is named as a party in the New Five-Year Secured Notes Indenture, the New Two-Year Unsecured Notes Indenture, the New Seven-Year Unsecured Notes Indenture and the New Unsecured Subordinated Convertible Notes Indenture will execute and deliver such documents. Each such non-Debtor Loewen Company will be an affiliate of the Debtors participating in the Plan within the meaning of section 1145 of the Bankruptcy Code. 40 ARTICLE V TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES A. EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED OR ASSUMED AND ASSIGNED 1. ASSUMPTION AND ASSIGNMENT GENERALLY Except as otherwise provided in the Plan or in any contract, instrument, release or other agreement or document entered into in connection with the Plan, on the Effective Date, pursuant to section 365 of the Bankruptcy Code, the applicable Debtor or Debtors will assume or assume and assign each Executory Contract and Unexpired Lease including the Rose Hills Put/Call Agreement and those listed on Exhibits V.A.1, but excluding those listed on Exhibit V.C; provided, however, that the Debtors or Reorganized Debtors reserve the right, at any time through and including 90 days after the Effective Date, or, in the case of any Unresolved Michigan Cemetery Contracts, at any time through and including 90 days after entry of a Final Order in Adversary Proceeding No. 00-929 pending before the Bankruptcy Court, to amend Exhibit V.A.1 to: (a) delete any Executory Contract or Unexpired Lease listed therein, thus providing for its rejection pursuant to Section V.C; or (b) add any Executory Contract or Unexpired Lease thereto, thus providing for its assumption or assumption and assignment pursuant to this Section V.A. The Debtors or Reorganized Debtors will provide notice of any amendments to Exhibit V.A.1 to the parties to the Executory Contracts or Unexpired Leases affected thereby and, if prior to the Effective Date, to the parties on the then-applicable service list in the Reorganization Cases (including counsel to the Creditors' Committee). Listing a contract or lease on Exhibit V.A.1 will not constitute an admission by a Debtor or Reorganized Debtor that a Debtor or Reorganized Debtor has any liability thereunder or that such contract or lease is executory. 2. ASSUMPTIONS AND ASSIGNMENTS OF REAL PROPERTY EXECUTORY CONTRACTS AND UNEXPIRED LEASES Each (a) Real Property Executory Contract and Unexpired Lease and (b) Executory Contract or Unexpired Lease assumed under Section V.A will include any modifications, amendments, supplements, restatements or other agreements made directly or indirectly by any agreement, instrument or other document that in any manner affects such contract or lease, irrespective of whether such agreement, instrument or other document is listed on Exhibit V.A.1, unless any such modification, amendment, supplement, restatement or other agreement is rejected pursuant to Section V.C and is listed on Exhibit V.C. 3. ASSIGNMENTS RELATED TO THE RESTRUCTURING TRANSACTIONS Any Executory Contract or Unexpired Lease (including any related agreements as described in Sections I.A.150 and V.A.2) to be held by any Debtor or another surviving, resulting or acquiring corporation in an applicable Restructuring Transaction will be deemed assigned to the applicable entity, pursuant to section 365 of the Bankruptcy Code, as of the Effective Date (irrespective of when the applicable Restructuring Transaction is effected). Nothing in this Section V.A.3 shall restrict, modify or otherwise limit the Debtors' or Reorganized Debtors' right to amend Exhibit V.A.1 or V.C in accordance with Sections V.A.1 and V.C, respectively. 4. APPROVAL OF ASSUMPTIONS AND ASSIGNMENTS The Confirmation Order will constitute an order of the Bankruptcy Court approving the assumptions and assignments described in this Section V.A and Section V.E, pursuant to section 365 of the Bankruptcy Code, as of the Effective Date. An order of the Bankruptcy Court entered on or prior to the Confirmation Date will specify the procedures for providing notice to each party whose Executory Contract or Unexpired Lease is being assumed or assumed and assigned pursuant to the Plan of: (a) the contract or lease being assumed or assumed and assigned; (b) the Cure Amount Claim, if any, that the applicable Debtor believes it would be obligated to pay in connection with such assumption; and (c) the procedures for such party to object to the assumption or assumption and assignment of the applicable contract or lease or the amount of the proposed Cure Amount Claim. 41 B. PAYMENTS RELATED TO THE ASSUMPTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES To the extent that such Claims constitute monetary defaults, the Cure Amount Claims associated with each Executory Contract and Unexpired Lease to be assumed pursuant to the Plan will be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, at the option of the Debtor assuming such contract or lease or the assignee of such Debtor, if any: (1) by payment of the Cure Amount Claim in cash on the Effective Date; (2) after the Effective Date, as soon as practicable after the amendment of Exhibit V.A.1, as applicable, providing for the assumption or assumption and assignment of the Executory Contract or Unexpired Lease; or (3) on such other terms as are agreed to by the parties to such Executory Contract or Unexpired Lease. If there is a dispute regarding (1) the amount of any Cure Amount Claim, (2) the ability of the applicable Reorganized Debtor or any assignee to provide "adequate assurance of future performance" (within the meaning of section 365 of the Bankruptcy Code) under the contract or lease to be assumed or (3) any other matter pertaining to assumption or assumption and assignment of such contract or lease, the payment of any Cure Amount Claim required by section 365(b)(1) of the Bankruptcy Code will be made following the entry of a Final Order resolving the dispute and approving the assumption. For assumptions of Executory Contracts or Unexpired Leases between Debtors, the Reorganized Debtor assuming such contract may cure any monetary default (1) by treating such amount as either a direct or indirect contribution to capital or distribution (as appropriate) or (2) through an intercompany account balance in lieu of payment in cash. C. EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE REJECTED On the Effective Date, except for an Executory Contract or Unexpired Lease that was previously assumed, assumed and assigned or rejected by an order of the Bankruptcy Court or that is assumed pursuant to Section V.A or V.E (including any related agreements assumed pursuant to Sections I.A.150 and V.A.2), each Executory Contract and Unexpired Lease listed on Exhibit V.C. that has not previously expired or terminated pursuant to its own terms will be rejected pursuant to section 365 of the Bankruptcy Code; provided, however, that the Debtors or Reorganized Debtors reserve the right, at any time through and including 90 days after the Effective Date or, in the case of any Unresolved Michigan Cemetery Contracts, at any time through and including 90 days after entry of a Final Order in Adversary Proceeding No. 00-929 pending before the Bankruptcy Court, to amend Exhibit V.C to: (1) delete any Executory Contract or Unexpired Lease listed therein, thus providing for its assumption or assumption and assignment pursuant to Section V.A; or (2) add any Executory Contract or Unexpired Lease thereto, thus providing for its rejection pursuant to this Section V.C. The Debtors or Reorganized Debtors will provide notice of any amendments to Exhibit V.C to the parties to the Executory Contracts or Unexpired Leases affected thereby and, if prior to the Effective Date, to the parties on the then-applicable service list in the Reorganization Cases (including counsel to the Creditors' Committee). Listing a contract or lease on Exhibit V.C will not constitute an admission by a Debtor or Reorganized Debtor that a Debtor or Reorganized Debtor has any liability thereunder or that such contract or lease is executory. The Confirmation Order will constitute an order of the Bankruptcy Court approving such rejections, pursuant to section 365 of the Bankruptcy Code, as of the Effective Date. D. BAR DATE FOR REJECTION DAMAGES Notwithstanding anything in the Bar Date Order to the contrary, if the rejection of an Executory Contract or Unexpired Lease pursuant to Section V.C gives rise to a Claim (including any Claims arising from those indemnification obligations described in Section V.E.2) by the other party or parties to such contract or lease, such Claim will be forever barred and will not be enforceable against the Debtors, the Reorganized Debtors, their respective successors or their respective properties unless a proof of Claim is Filed and served on the Reorganized Debtors, pursuant to the procedures specified in the Confirmation Order and the notice of the entry of the Confirmation Order or another order of the Bankruptcy Court, no later than: (1) 30 days after the Effective Date; or (2) if Exhibit V.C is amended after the Effective Date to provide for the rejection of the Executory Contract or Unexpired Lease, 30 days after the Debtors or Reorganized Debtors serve notice of such amendment. E. OBLIGATIONS TO INDEMNIFY DIRECTORS, OFFICERS AND EMPLOYEES 1. The obligations of each Debtor or Reorganized Debtor to indemnify any person who was serving as one of its directors, officers or employees as of December 31, 2000 by reason of such person's prior or future service in such a capacity or as a director, officer or employee of another corporation, partnership or other legal 42 entity, to the extent provided in the applicable certificates of incorporation, bylaws or similar constituent documents, by statutory law or by written agreement, policies or procedures of or with such Debtor, will be deemed and treated as executory contracts that are assumed by the applicable Debtor or Reorganized Debtor pursuant to the Plan and section 365 of the Bankruptcy Code as of the Effective Date, to the extent that the provision of such indemnification is authorized by the certificate of incorporation or similar constituent document of the applicable Reorganized Debtor. Accordingly, such indemnification obligations will survive and be unaffected by entry of the Confirmation Order, irrespective of whether such indemnification is owed for an act or event occurring before or after the Petition Date. 2. The obligations of each Debtor or Reorganized Debtor to indemnify any person who, as of December 31, 2000, was no longer serving as a director, officer or employee of such Debtor or Reorganized Debtor, which indemnity obligation arose by reason of such person's prior service in any such capacity or as a director, officer or employee of another corporation, partnership or other legal entity, whether provided in the applicable certificates of incorporation, bylaws or similar constituent documents, by statutory law or by written agreement, policies or procedures of or with such Debtor, will terminate and be discharged pursuant to section 502(e) of the Bankruptcy Code or otherwise, as of the Effective Date; provided, however, that to the extent that such indemnification obligations no longer give rise to contingent Claims that can be disallowed pursuant to section 502(e) of the Bankruptcy Code, such indemnification obligations will be deemed and treated as executory contracts that are rejected by the applicable Debtor pursuant to the Plan and section 365 of the Bankruptcy Code, as of the Effective Date, and any Claims arising from such indemnification obligations (including any rejection damage claims) will be subject to the bar date provisions of Section V.D. F. CONTRACTS AND LEASES ENTERED INTO AFTER THE PETITION DATE Contracts and leases entered into after the Petition Date by any Debtor, including any Executory Contracts and Unexpired Leases assumed by such Debtor, will be performed by the Debtor or Reorganized Debtor liable thereunder in the ordinary course of its business. Accordingly, such contracts and leases (including any assumed Executory Contracts and Unexpired Leases) will survive and remain unaffected by entry of the Confirmation Order. G. NAFTA CONTINGENCY FEE AGREEMENT AND NAFTA ARBITRATION AGREEMENT As of the Effective Date and as part of the Reinvestment Transaction, TLGI will assign to Reorganized LGII, and Reorganized LGII will assume the NAFTA Contingency Fee Agreement and the NAFTA Arbitration Agreement. ARTICLE VI PROVISIONS GOVERNING DISTRIBUTIONS A. DISTRIBUTIONS FOR CLAIMS ALLOWED AS OF THE EFFECTIVE DATE 1. DISTRIBUTIONS TO BE MADE ON THE EFFECTIVE DATE Except as otherwise provided in this Article VI, distributions of cash, New Five-Year Secured Notes, New Two-Year Unsecured Notes, New Seven-Year Unsecured Notes, New Unsecured Subordinated Convertible Notes, New Common Stock, New Warrants or interests in the Liquidating Trust to be made on the Effective Date to holders of Claims or Interests that are allowed as of the Effective Date will be deemed made on the Effective Date if made on the Effective Date or as promptly thereafter as practicable, but in any event no later than: (a) 60 days after the Effective Date; or (b) such later date when the applicable conditions of Section V.B (regarding cure payments for Executory Contracts and Unexpired Leases being assumed), Section VI.E.2 (regarding undeliverable distributions) or Section VI.J (regarding surrender of canceled instruments and securities) are satisfied. Distributions on account of Claims that become Allowed Claims after the Effective Date will be made pursuant to Sections VI.H and VII.C. 43 2. DISTRIBUTIONS ON THE EFFECTIVE DATE IN RESPECT OF CLASS 11 UNSECURED NONPRIORITY CLAIMS From and after the Effective Date, New Common Stock and New Warrants, if any, to be distributed on account of each Division of Class 11 Claims (and any cash generated from dividends or distributions thereon) (a) will be maintained by and in the name of the applicable Disbursing Agent in the applicable Unsecured Claims Reserve in accordance with Article VII and held in trust pending distribution by the Disbursing Agent for the benefit of the holders of such Claims in such Division, (b) will be accounted for separately and (c) will not constitute property of any of the Reorganized Debtors. New Common Stock and New Warrants to be issued and distributed on account of Class 9 Claims will be deemed issued on the Effective Date, irrespective of the date on which it actually is distributed. B. METHOD OF DISTRIBUTIONS TO HOLDERS OF CLAIMS Reorganized LGII, or such Third Party Disbursing Agents as Reorganized LGII may employ in its sole discretion, will make all distributions of cash, New Five-Year Secured Notes, New Two-Year Unsecured Notes, New Seven-Year Unsecured Notes, New Unsecured Subordinated Convertible Notes, New Common Stock or New Warrants and other instruments or documents required under the Plan. The respective Indenture Trustees will serve as a Third Party Disbursing Agent for each series of Public Notes and, subject to the requirements of Section VI.F will make distributions contemplated by Sections III.C.3, III.C.4 or III.C.5, as the case may be, in accordance with the terms of the respective Prepetition Indenture; provided, however, that no Indenture Trustee will have any obligation in respect to distributions to holders of CTA Note Claims from funds set aside under Sections III.C.18, III.C.19, III.E or III.F. Each Disbursing Agent will serve without bond, and any Disbursing Agent may employ or contract with other entities to assist in or make the distributions required by the Plan. C. COMPENSATION AND REIMBURSEMENT FOR SERVICES RELATED TO DISTRIBUTIONS Each Third Party Disbursing Agent providing services related to distributions pursuant to the Plan will receive from Reorganized LGII, without further Bankruptcy Court approval, reasonable compensation for such services and reimbursement of reasonable out-of-pocket expenses incurred in connection with such services. These payments will be made on terms agreed to with Reorganized LGII and will not be deducted from distributions to be made pursuant to the Plan to holders of Allowed Claims (including any distributions of Cash Investment Yield) receiving distributions from a Third Party Disbursing Agent. D. PROVISIONS GOVERNING THE UNSECURED CLAIMS RESERVE 1. FUNDING OF THE UNSECURED CLAIMS RESERVE On the Effective Date, the respective number of Reserved Warrants, if any, and Reserved Shares will be placed in the applicable Unsecured Claims Reserve by Reorganized LGII for the benefit of holders of Allowed Claims in each Division of Class 11. 2. PROPERTY HELD IN UNSECURED CLAIMS RESERVE a. DIVIDENDS AND DISTRIBUTIONS Cash dividends and other distributions on account of New Common Stock to be held in an Unsecured Claims Reserve will be transferred to the respective Unsecured Claims Reserve concurrently with the transfer of such dividends and other distributions to other holders of New Common Stock. Cash held in an Unsecured Claims Reserve as a result of such dividends and other distributions (i) will be deposited in a segregated bank account in the name of the applicable Disbursing Agent and held in trust pending distribution by the Disbursing Agent for the benefit of holders of the respective Division of Class 11 Claims, (ii) will be accounted for separately and (iii) will not constitute property of the Reorganized Debtors. The Disbursing Agent will invest the cash held in the Unsecured Claims Reserve in a manner consistent with the Reorganized Debtors' investment and deposit guidelines. The Disbursing Agent also will place in the Unsecured Claims Reserve the Cash Investment 44 Yield from such investment of cash, and distributions on account of each Allowed Claim in Class 11 will include a Pro Rata share of the Cash Investment Yield from such investment of cash. b. RECOURSE Each holder of an Allowed Claim (or a Disputed Claim that ultimately becomes an Allowed Claim) in Class 11 will have recourse only to the undistributed cash, New Common Stock and New Warrants held in the applicable Unsecured Claims Reserve for satisfaction of the distributions to which holders of that Division of Allowed Claims in Class 11 are entitled under the Plan, and not to any Reorganized Debtor, its property or any assets previously distributed on account of any Allowed Claim. E. DELIVERY OF DISTRIBUTIONS AND UNDELIVERABLE OR UNCLAIMED DISTRIBUTIONS 1. DELIVERY OF DISTRIBUTIONS a. GENERALLY Except as provided in Section VI.E.1.b, distributions to holders of Allowed Claims or Allowed Interests will be made by a Disbursing Agent (i) at the addresses set forth on the respective proofs of Claim Filed by holders of such Claims, (ii) at the addresses set forth in any written certification of address change delivered to the Disbursing Agent (including pursuant to a letter of transmittal delivered to a Disbursing Agent) after the date of Filing of any related proof of Claim or (iii) at the addresses reflected in the applicable Debtor's Schedules if no proof of Claim has been Filed and the Disbursing Agent has not received a written notice of a change of address. b. SPECIAL PROVISIONS FOR DISTRIBUTIONS TO HOLDERS OF PUBLIC NOTE CLAIMS Subject to the requirements of Section VI.J, distributions to holders of Allowed Public Note Claims will be made by a Disbursing Agent to the record holders of the Public Notes as of the Distribution Record Date, as identified on a record holder register to be provided to the Disbursing Agent by the applicable Indenture Trustee within five Business Days after the Distribution Record Date. Such record holder register: (i) will provide the name, address and holdings of each respective registered holder of Public Notes as of the Distribution Record Date; and (ii) must be consistent with such Indenture Trustee's Allowed proof of Claim. Each entry on such record holder register will be treated as an Allowed Class 5, Class 6 or Class 7 Claim, as the case may be, for purposes of distributions made pursuant to this Article VI. c. SPECIAL PROVISIONS FOR DISTRIBUTIONS TO HOLDERS OF CREDIT FACILITY CLAIMS Cash distributions to holders of Allowed Claims arising under the BMO Revolving Credit Facility or the MEIP Credit Facility will be paid to the respective administrative agent of each such facility for distribution by such administrative agent to the holders consistent with Exhibit III.C; provided, however, that, notwithstanding any other provisions of the Plan and regardless of the occurrence of the Exit Financing Term Loan Closing, such administrative agent shall be entitled to reserve or set off from the amount of such cash or other non-cash distribution otherwise distributable or payable to such holders the full amount that is (i) undrawn under any letters of credit (a) issued under the BMO Revolving Credit Facility or the MEIP Credit Facility and (b) outstanding as of the Effective Date, or (ii) otherwise owed or payable to such administrative agent pursuant to the reimbursement and indemnification provisions contained in Section 11.8 of the BMO Revolving Credit Facility or Section 7.05 of the MEIP Credit Facility. Subject to the preceding, and subject to the requirements of Section VI.J, non-cash distributions to holders of Allowed Claims arising under the BMO Revolving Credit Facility or the MEIP Credit Facility will be made by a Disbursing Agent to the holders of such Claims as of the Distribution Record Date, as identified on a register to be provided to the Disbursing Agent by the administrative agent under the respective credit agreement within five Business Days after the Distribution Record Date. Such register: (i) will provide the name, address and claim amount of each respective holder of such Claims as of the Distribution Record Date; and (ii) must be consistent with Exhibit III.C. At least five Business Days prior to making any non-cash distributions on account of Allowed Claims arising under the BMO Revolving Credit Facility or the MEIP Credit Facility, the 45 Disbursing Agent will provide to the administrative agent under the respective credit agreement a schedule setting forth the type and amount of the distributions to be made to each holder of such Allowed Claims. 2. UNDELIVERABLE DISTRIBUTIONS HELD BY DISBURSING AGENTS a. HOLDING AND INVESTMENT OF UNDELIVERABLE DISTRIBUTIONS; UNDELIVERED NEW COMMON STOCK i. If any distribution to a holder of an Allowed Claim or Allowed Interest is returned to a Disbursing Agent as undeliverable, no further distributions will be made to such holder unless and until the applicable Disbursing Agent is notified by written certification of such holder's then-current address. Subject to Section VI.E.2.c, undeliverable distributions will remain in the possession of the applicable Disbursing Agent pursuant to this Section VI.E.2.a.i until such time as a distribution becomes deliverable. Undeliverable cash (including dividends or other distributions on account of undeliverable New Common Stock) will be held in segregated bank accounts in the name of the applicable Disbursing Agent for the benefit of the potential claimants of such funds. Any Disbursing Agent holding undeliverable cash will invest such cash in a manner consistent with the Reorganized Debtors' investment and deposit guidelines. Undeliverable New Common Stock or New Warrants will be held by the applicable Disbursing Agent for the benefit of the potential claimants of such securities. ii. Pending the distribution of any New Common Stock, the applicable Disbursing Agent will cause all of the New Common Stock held by it in its capacity as Disbursing Agent to be (A) represented in person or by proxy at each meeting of the stockholders of Reorganized LGII, (B) voted in any election of directors of Reorganized LGII for the nominees recommended by the board of directors of Reorganized LGII and (C) voted with respect to any other matter as recommended by the board of directors of Reorganized LGII. b. AFTER DISTRIBUTIONS BECOME DELIVERABLE On each Quarterly Distribution Date, the applicable Disbursing Agents will make all distributions that become deliverable to holders of Allowed Claims or Allowed Interests during the preceding calendar quarter. Each such distribution will include, to the extent applicable: (i) a Pro Rata share of dividends or other distributions, if any, that were previously paid to the Disbursing Agent in respect of any New Common Stock included in such distribution; and (ii) a Pro Rata share of the Cash Investment Yield from the investment of any undeliverable cash (including dividends or other distributions on undeliverable New Common Stock) from the date that such distribution would have first been due had it then been deliverable to the date that such distribution becomes deliverable. c. FAILURE TO CLAIM UNDELIVERABLE DISTRIBUTIONS Any holder of an Allowed Claim or Allowed Interest that does not assert a claim pursuant to the Plan for an undeliverable distribution to be made by a Disbursing Agent within two years after the later of (i) the Effective Date and (ii) the last date on which a distribution was deliverable to such holder will have its claim for such undeliverable distribution discharged and will be forever barred from asserting any such claim against the Reorganized Debtors or their respective property. In such cases with respect to Allowed Claims or Allowed Interests in any Division of Class 11: (i) unclaimed cash, New Common Stock and New Warrants will be retained in the applicable Unsecured Claims Reserve for Pro Rata redistribution to holders of Allowed Claims in such Division, pursuant to Section VI.H.2.b; and (ii) for purposes of this redistribution, each Allowed Claim in such Division of Class 11 for which such distributions are undeliverable will be deemed disallowed in its entirety. In such cases with respect to Allowed Claims in any Class other than Class 11, unclaimed distributions will become property of Reorganized LGII, free of any restrictions thereon, and any such unclaimed distribution held by a Third Party Disbursing Agent will be returned to Reorganized LGII. Nothing contained in the Plan will require any Debtor, Reorganized Debtor or Disbursing Agent to attempt to locate any holder of an Allowed Claim or an Allowed Interest. 46 F. DISTRIBUTION RECORD DATE 1. A Disbursing Agent will have no obligation to recognize the transfer of, or the sale of any participation in, any Allowed Claim that occurs after the close of business on the Distribution Record Date and will be entitled for all purposes herein to recognize and make distributions only to those holders of Allowed Claims that are holders of such Claims, or participants therein, as of the close of business on the Distribution Record Date. 2. As of the close of business on the Distribution Record Date, the respective transfer registers for the Public Notes, as maintained by the Debtors or the Indenture Trustee, will be closed. The applicable Disbursing Agent will have no obligation to recognize the transfer or sale of any Public Note Claim that occurs after the close of business on the Distribution Record Date and will be entitled for all purposes herein to recognize and make distributions only to those holders of Public Note Claims who are holders of such Claims as of the close of business on the Distribution Record Date. 3. Except as otherwise provided in a Final Order of the Bankruptcy Court, the transferees of Claims that are transferred pursuant to Bankruptcy Rule 3001 on or prior to the Distribution Record Date will be treated as the holders of such Claims for all purposes, notwithstanding that any period provided by Bankruptcy Rule 3001 for objecting to such transfer has not expired by the Distribution Record Date. G. MEANS OF CASH PAYMENTS Except as otherwise specified herein, cash payments made pursuant to the Plan will be in U.S. currency by checks drawn on a domestic bank selected by the applicable Debtor or Reorganized Debtor or, at the option of the applicable Debtor or Reorganized Debtor, by wire transfer from a domestic bank; provided, however, that cash payments to foreign holders of Allowed Trade Claims may be made, at the option of the applicable Debtor or Reorganized Debtor, in such funds and by such means as are necessary or customary in a particular foreign jurisdiction. H. TIMING AND CALCULATION OF AMOUNTS TO BE DISTRIBUTED 1. ALLOWED CLAIMS IN CLASSES OTHER THAN CLASS 11 Subject to Section VI.A, on the Effective Date, each holder of an Allowed Claim or Allowed Interest in a Class other than Class 11 will receive the full amount of the distributions that the Plan provides for Allowed Claims or Allowed Interests in the applicable Class. On each Quarterly Distribution Date, distributions also will be made, pursuant to Section VII.C, to holders of Disputed Claims in any such Class that were allowed during the preceding calendar quarter. Such quarterly distributions also will be in the full amount that the Plan provides for Allowed Claims in the applicable Class. 2. ALLOWED CLAIMS IN CLASS 11 a. INITIAL DISTRIBUTIONS The amount of distributions to be made on the Effective Date (subject to Section VI.A) to holders of Allowed Claims in a Division of Class 11 on account of such Claims will be made from the applicable Unsecured Claims Reserve and will be calculated as if each Disputed Claim in such Division were an Allowed Claim in its Face Amount. On each Quarterly Distribution Date, distributions also will be made, pursuant to Section VII.C, to holders of Disputed Claims in a Division of Class 11 that were allowed during the preceding calendar quarter. Such quarterly distributions also will be calculated pursuant to the provisions set forth in this Section VI.H.2.a. b. ADDITIONAL DISTRIBUTIONS ON ACCOUNT OF PREVIOUSLY ALLOWED CLAIMS On the fourth Quarterly Distribution Date and annually thereafter, each holder of a Claim previously allowed in a Division of Class 11 will receive an additional distribution from the applicable Unsecured Claims Reserve on account of such Claim in an amount equal to: (i) the amount of New Common Stock and New 47 Warrants that such holder would have been entitled to receive pursuant to Section VI.H.2.a as if such Claim had become an Allowed Claim on the applicable Quarterly Distribution Date, minus, in each case, (ii) the aggregate amount of New Common Stock and New Warrants previously distributed on account of such Claim. Each such additional distribution also will include, on the basis of the amount then being distributed (i) a Pro Rata share of any dividends or other distributions made on account of the New Common Stock held in the applicable Unsecured Claims Reserve and (ii) a Pro Rata share of the related Cash Investment Yield from the investment of any cash dividends and other distributions in the Unsecured Claims Reserve, from the date such cash was deposited into the Unsecured Claims Reserve to the date that such distribution is made. 3. DISTRIBUTIONS OF NEW EQUITY AND NEW NOTES a. Notwithstanding any other provision of the Plan, only whole numbers of shares of New Common Stock and New Warrants exercisable to purchase whole numbers of shares of New Common Stock will be issued. When any distribution on account of an Allowed Claim or an Allowed Interest would otherwise result in the issuance of a number of shares of New Common Stock that is not a whole number or New Warrants exercisable to purchase a number of shares of New Common Stock that is not a whole number, the number of shares of such stock will be rounded to the next higher or lower whole number as follows: (a) fractions equal to or greater than 1/2 will be rounded to the next higher whole number and (b) fractions less than 1/2 will be rounded to the next lower whole number. The total number of shares of New Common Stock to be distributed or shares of New Common Stock issuable upon exercise of such New Warrants on account of Allowed Claims and Allowed Interests will be adjusted as necessary to account for the rounding provided for in this Section VI.H.3. No consideration will be provided in lieu of fractional shares that are rounded down. b. Notwithstanding any other provisions of the Plan, principal amounts of the New Five-Year Secured Notes, New Two-Year Unsecured Notes, New Seven-Year Unsecured Notes and New Unsecured Subordinated Convertible Notes will be issued only in denominations of $100 and integral multiples thereof. When any distribution on account of an Allowed Claim would otherwise result in the issuance of a New Five-Year Secured Note, New Two-Year Unsecured Note, New Seven-Year Unsecured Note or New Unsecured Subordinated Convertible Note with an aggregate principal amount that is not an integral multiple of $100, the actual distribution of such notes shall be rounded to the next higher or lower integral multiple of $100, as follows: (i) principal amounts of $50 or greater shall be rounded to the next higher integral multiple of $100, and (ii) principal amounts of less than $50 shall be rounded to the next lower integral multiple of $100. No consideration shall be provided in lieu of principal amounts of a New Five-Year Secured Note, New Two-Year Unsecured Note, New Seven-Year Unsecured Note or New Unsecured Subordinated Convertible Note that is rounded down. 4. DE MINIMIS DISTRIBUTIONS No Disbursing Agent will distribute cash to the holder of an Allowed Claim in an impaired Class if the amount of cash to be distributed on account of such Claim is less than $25. Any holder of an Allowed Claim on account of which the amount of cash to be distributed is less than $25 will have its claim for such distribution discharged and will be forever barred from asserting any such claim against the Reorganized Debtors or their respective property. Any cash not distributed pursuant to this Section VI.H.4 with respect to Claims in a Class other than Class 11 will be the property of Reorganized LGII, free of any restrictions thereon, and any such cash held by a Third Party Disbursing Agent will be returned to Reorganized LGII. Any cash not distributed pursuant to this Section VI.H.4 with respect to Allowed Claims in a Division of Class 11, including dividends or other distributions made on account of New Common Stock held in an Unsecured Claims Reserve, will be retained in the applicable Unsecured Claims Reserve for redistribution Pro Rata to holders of Allowed Claims in the applicable Division of Class 11, pursuant to Section VI.H.2.b. For purposes of this redistribution, each Allowed Claim in Class 11 for which distributions are less than $25 will have its claim for such distribution discharged and will be forever barred from asserting any such claim against the Unsecured Claims Reserve or otherwise. 48 5. COMPLIANCE WITH TAX REQUIREMENTS a. In connection with the Plan, to the extent applicable, each Disbursing Agent will comply with all Tax withholding and reporting requirements imposed on it by any governmental unit, and all distributions pursuant to the Plan will be subject to such withholding and reporting requirements. Each Disbursing Agent will be authorized to take any actions that may be necessary or appropriate to comply with such withholding and reporting requirements. b. Notwithstanding any other provision of the Plan, each entity receiving a distribution of cash, New Five-Year Secured Notes, New Two-Year Unsecured Notes, New Seven-Year Unsecured Notes, New Unsecured Subordinated Convertible Notes, New Common Stock, New Warrants or interests in the Liquidating Trust pursuant to the Plan will have sole and exclusive responsibility for the satisfaction and payment of any Tax obligations imposed on it by any governmental unit on account of such distribution, including income, withholding and other Tax obligations. I. SETOFFS Except with respect to claims of a Debtor or Reorganized Debtor released pursuant to the Plan or any contract, instrument, release or other agreement or document entered into or delivered in connection with the Plan, the Reorganized Debtors or, as instructed by the applicable Reorganized Debtor or its successor, a Third Party Disbursing Agent may, pursuant to section 553 of the Bankruptcy Code or applicable nonbankruptcy law, set off against any Allowed Claim and the distributions to be made pursuant to the Plan on account of such Claim (before any distribution is made on account of such Claim) the claims, rights and causes of action of any nature that the applicable Debtor or Reorganized Debtor or its successor may hold against the holder of such Allowed Claim; provided, however, that neither the failure to effect a setoff nor the allowance of any Claim hereunder will constitute a waiver or release by the applicable Debtor or Reorganized Debtor or its successor of any claims, rights and causes of action that the Debtor or Reorganized Debtor or its successor may possess against such a Claim holder. J. SURRENDER OF CANCELED INSTRUMENTS OR SECURITIES As a condition precedent to receiving any distribution pursuant to the Plan on account of an Allowed Claim or Allowed Interest evidenced by the notes, instruments, securities or other documentation canceled pursuant to Section IV.I, the holder of such Claim or Interest must tender, as specified in this Section VI.J, the applicable notes, instruments, securities or other documentation evidencing such Claim or Interest to the applicable Disbursing Agent, together with any letter of transmittal required by such Disbursing Agent. Pending such surrender, any distributions pursuant to the Plan on account of any such Claim or Interest will be treated as an undeliverable distribution pursuant to Section VI.E.2. 1. TENDER OF PUBLIC NOTES Except as provided in Section VI.J.2 for lost, stolen, mutilated or destroyed Public Notes or as otherwise provided herein, each holder of an Allowed Public Note Claim shall surrender such certificated security to the respective Indenture Trustee by mail, in person, electronically or by other means acceptable to such Indenture Trustee for cancellation. All surrendered Public Notes will be marked as canceled and delivered to the appropriate Reorganized Debtor. Surrender of a global certificate held in the name of Cede & Co. Inc. shall constitute surrender for the purposes of this provision. 2. LOST, STOLEN, MUTILATED OR DESTROYED NOTES Any holder of an Allowed Public Note Claim with respect to which the underlying Public Note has been lost, stolen, mutilated or destroyed must, in lieu of surrendering such Public Note, deliver to the applicable Indenture Trustee (a) evidence satisfactory to the Indenture Trustee of the loss, theft, mutilation or destruction and (b) such security or indemnity as may be required by the Indenture Trustee to hold the Indenture Trustee and the Reorganized Debtors, as applicable, harmless from any damages, liabilities or costs incurred in treating such individual as a holder of a Public Note. Upon compliance with this Section VI.J.2 by a holder of an Allowed Public 49 Note Claim, such holder will, for all purposes under the Plan, be deemed to have surrendered the applicable Public Note. 3. FAILURE TO SURRENDER PUBLIC NOTES Any holder of an Allowed Public Note Claim that fails to surrender or be deemed to have surrendered the applicable Public Notes within two years after the Effective Date will have its right to distributions pursuant to the Plan on account of such Public Note Claim discharged and will be forever barred from asserting any such Claim against the Reorganized Debtors or their respective property. In such case, any cash, New Five-Year Secured Notes, New Two-Year Unsecured Notes, New Seven-Year Unsecured Notes or New Common Stock held for distribution on account of such Public Note Claim will be treated pursuant to the provisions set forth in Section VI.E.2.c. 4. OTHER NOTES Except as otherwise provided in this Section VI.J, holders of Allowed Claims will be required to tender any notes evidencing such Claims or, if not evidenced by a note, any other instrument evidencing their respective Allowed Claims to the applicable Disbursing Agent as and when such entities receive distributions under the Plan. If any such entity's notes or other instruments evidencing its Allowed Claims are lost, stolen, mutilated or destroyed, such entity will be required, in lieu of surrendering such note or other instrument, to deliver to the applicable Disbursing Agent (a) evidence satisfactory to the Disbursing Agent of the loss, theft, mutilation or destruction and (b) such security or indemnity as may be required by the Disbursing Agent to hold the Disbursing Agent and the Reorganized Debtors, as applicable, harmless from any damages, liabilities or costs incurred in treating such individual as the holder of such Claims. ARTICLE VII PROCEDURES FOR RESOLVING DISPUTED CLAIMS A. PROSECUTION OF OBJECTIONS TO CLAIMS 1. OBJECTIONS TO CLAIMS All objections to Claims must be Filed and served on the holders of such Claims by the Claims Objection Bar Date, and, if Filed prior to the Effective Date, such objections will be served on the parties on the then-applicable service list in the Reorganization Cases. If an objection has not been Filed to a proof of Claim or a scheduled Claim by the Claims Objection Bar Date, the Claim to which the proof of Claim or scheduled Claim relates will be treated as an Allowed Claim if such Claim has not been allowed earlier. An objection is deemed to have been timely Filed as to all Tort Claims, thus making each such Claim a Disputed Claim as of the Claims Objection Bar Date. Each such Tort Claim will remain a Disputed Claim until it becomes an Allowed Claim in accordance with Section I.A.4. As of the Effective Date, the Debtors will be deemed to have waived any and all objections to the Allowed CTA Note claims in the amounts listed on Exhibit III.C, all of which Claims in such amounts will be treated as Allowed Claims for all purposes of the Plan. 2. AUTHORITY TO PROSECUTE OBJECTIONS After the Confirmation Date, only the Debtors or the Reorganized Debtors or their successors will have the authority to File, settle, compromise, withdraw or litigate to judgment objections to Claims, including pursuant to any alternative dispute resolution or similar procedures previously or hereafter approved by the Bankruptcy Court. After the Effective Date, the Reorganized Debtors or their successors may settle or compromise any Disputed Claim without approval of the Bankruptcy Court. 50 B. TREATMENT OF DISPUTED CLAIMS Notwithstanding any other provisions of the Plan, no payments or distributions will be made on account of a Disputed Claim until such Claim becomes an Allowed Claim. In lieu of distributions under the Plan to holders of Disputed Claims in Class 11, if allowed, the applicable Unsecured Claims Reserve will be established on the Effective Date to hold property for the benefit of these Claim holders, as well as holders of Allowed Claims in that Division of Class 11. Reorganized LGII will fund each Unsecured Claims Reserve with New Common Stock and New Warrants, as described in Section VI.D.1. C. DISTRIBUTIONS ON ACCOUNT OF DISPUTED CLAIMS ONCE ALLOWED On each Quarterly Distribution Date, the applicable Disbursing Agent will make all distributions on account of any Disputed Claim that has become an Allowed Claim during the preceding calendar quarter. Such distributions will be made pursuant to the provisions of the Plan governing the applicable Class, including the incremental distribution provisions set forth in Section VI.H.2. D. TAX REQUIREMENTS FOR INCOME GENERATED BY UNSECURED CLAIMS RESERVE The recovery of holders of Allowed Claims in a Division of Class 11 consists of the treatment set forth herein and the post-Effective Date interest on the cash portion of distributions in respect of such Claims, if any, at a rate determined by the Cash Investment Yield. Therefore, the Reorganized Debtors and the holders of all Allowed Claims in a Division of Class 11 will treat cash distributions of the Cash Investment Yield as interest for all income Tax purposes, and the applicable Reorganized Debtor will cause such information returns to be issued to such holders consistent with this treatment as may be required by any governmental unit. The applicable Reorganized Debtor will include in its Tax returns all items of income, deduction and credit of the particular Unsecured Claims Reserve; provided, however, that no distribution will be made to the applicable Reorganized Debtor out of the Unsecured Claims Reserves as a result of this inclusion. The applicable Disbursing Agent will pay, or cause to be paid, out of the funds held in the applicable Unsecured Claims Reserve, any Tax imposed on the Unsecured Claims Reserve (as opposed to the applicable Reorganized Debtor or the holders of Allowed Claims in a Division of Class 11) by any governmental unit with respect to income generated by the funds and New Common Stock held in a Division of Unsecured Claims Reserve. The applicable Disbursing Agent also will file or cause to be filed any Tax or information return related to the applicable Unsecured Claims Reserve that is required by any governmental unit. ARTICLE VIII SUBSTANTIVE CONSOLIDATION OF THE DEBTORS The Debtors reserve the right to seek approval of the Bankruptcy Court for the substantive consolidation of some or all of the Debtors for the purpose of implementing the Plan, including for purposes of voting, Confirmation and distributions to be made under the Plan. ARTICLE IX CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN A. CONDITIONS TO CONFIRMATION The Bankruptcy Court will not enter the Confirmation Order unless and until the following conditions have been satisfied or duly waived pursuant to Section IX.C: 1. The Confirmation Order shall be reasonably acceptable in form and substance to the Debtors. 51 2. The Debtors shall have received a commitment for the Exit Financing Revolving Credit Facility from the Exit Financing Facility Agent Bank on terms and conditions satisfactory to the Debtors. 3. The Plan shall not have been amended, altered or modified from the Plan as Filed on September 10, 2001, unless such amendment, alteration or modification is in form and substance reasonably satisfactory to the Debtors. 4. The Bankruptcy Court shall have entered an order (as part of the Confirmation Order) approving and authorizing pursuant to Bankruptcy Rule 9019 the settlement of the CTA Issue, other matters that are the subject of Adversary Proceeding No. 00-01181 and other issues relating to the CTA Note Claims as provided in this Plan and providing for the dismissal with prejudice of all claims in Adversary Proceeding No. 00-01181 pending before the Bankruptcy Court as of the Effective Date. 5. To the extent permitted under applicable law, the Confirmation Order shall provide that: (a) the treatment in the Plan of CTA Note Claims is fair, reasonable, and adequate in light of the litigation risks confronting Indenture Trustees and holders of CTA Note Claims in Adversary Proceeding No. 00-01181 pending before the Bankruptcy Court; (b) the decisions of certain holders of CTA Note Claims to accept the Plan under which their CTA Note Claims are not treated on a pari passu basis with the CTA Note Claims of certain other holders of such CTA Note Claims were appropriate and reasonable in light of the litigation risks that they faced in Adversary Proceeding No. 00-01181; and (c) Reserved CTA Claims of any holder of a CTA Note Claim shall in no way be prejudiced or adversely affected by virtue of the fact that any holder of any such claim voted in favor of the Plan, did not challenge the treatment of its Claim or its recovery under the Plan, did not pursue to conclusion its claims or defenses in Adversary Proceeding No. 00-01181 pending before the Bankruptcy Court, or otherwise did not fully pursue any rights that it may have had with respect to its CTA Note Claim before the Bankruptcy Court. B. CONDITIONS TO THE EFFECTIVE DATE The Effective Date will not occur and the Plan will not be consummated unless and until each of the following conditions have been satisfied or duly waived pursuant to Section IX.C: 1. The documents effectuating the Exit Financing Revolving Credit Facility shall have been executed and delivered by Reorganized LGII and the Exit Financing Facility Agent Bank. 2. The Plan shall not have been amended, altered or modified from the Plan as Filed on September 10, 2001, unless such amendment, alteration or modification is, and all Exhibits to the Plan are, in form and substance reasonably satisfactory to the Debtors. 3. Each of the New Five-Year Secured Notes Indenture (if any New Five-Year Secured Notes will be issued pursuant to the Plan), the New Two-Year Unsecured Notes Indenture (if any New Two-Year Unsecured Notes will be issued pursuant to the Plan), the New Seven-Year Unsecured Notes Indenture and the New Unsecured Subordinated Convertible Notes Indenture shall have been qualified under the Trust Indenture Act of 1939, as amended. 4. The New Common Stock shall have been registered under the Exchange Act pursuant to either a Form 8-A Registration Statement or a Form 10 Registration Statement that has become effective under the Exchange Act. 5. The shares of New Common Stock to be issued pursuant to the Plan shall have been designated as Nasdaq National Market securities by The Nasdaq Stock Market, Inc. or authorized for listing on or accepted for quotation through a National Securities Exchange subject to official notice of issuance. 6. The Bankruptcy Court shall have entered an order (contemplated to be part of the Confirmation Order) approving and authorizing the Debtors and the Reorganization Debtors to take all actions necessary or appropriate to implement the Plan in form and substance acceptable to the Debtors, including completion of the Restructuring Transactions and the other transactions contemplated by the Plan and the implementation and 52 consummation of the contracts, instruments, releases and other agreements or documents entered into or delivered in connection with the Plan. 7. The CCAA Order shall be reasonably acceptable in form and substance to the Debtors and shall have been entered and become a Final Order. 8. Adversary Proceeding No. 00-01181 and the adversary proceedings listed on Exhibit IX.B.8 shall have been dismissed with prejudice. 9. The board of directors of LGII shall have approved, for purposes of Section 203 of the General Corporation Law of the State of Delaware: (a) the issuance pursuant to the Plan of New Common Stock to any person or entity that will become the owner of 15% or more of the outstanding New Common Stock as a result of such issuance and (b) any issuance to any person or entity that will become the owner of 12% or more but less than 15% of the outstanding New Common Stock as a result of the issuance pursuant to the Plan of New Common Stock which causes such person or entity to become the owner of 15% or more of the outstanding New Common Stock; provided, however, that nothing in clause (b) of this Section IX.B.9 will obligate Reorganized LGII to issue any shares of New Common Stock to any person or entity. 10. Before or as of the Effective Date, (a) letter of credit number SLCDC 3896/912993, as amended, issued under the BMO Revolving Credit Facility, the beneficiary of which is First Union National Bank, in the current undrawn amount of $5,000,000 shall have expired or been replaced with no further drawings thereon, and (b) letter of credit number SLCDC 3896/91198, as amended, issued under the BMO Revolving Credit Facility, the beneficiary of which Wachovia Bank of Georgia, N.A., in the current undrawn amount of approximately $1,405,000 shall have expired or been replaced with no further drawings thereon. C. WAIVER OF CONDITIONS TO CONFIRMATION OR THE EFFECTIVE DATE The conditions to Confirmation set forth in Section IX.A and the conditions to the Effective Date set forth in Section IX.B may be waived in whole or part by the Debtors at any time without an order of the Bankruptcy Court with the consent of the Principal CTA Creditors and the Creditors' Committee or otherwise pursuant to an order of the Bankruptcy Court; provided, however, that the conditions of Sections IX.A.4, IX.A.5, IX.B.6 and IX.B.7 may only be waived pursuant to an order of the Bankruptcy Court. D. EFFECT OF NONOCCURRENCE OF CONDITIONS TO THE EFFECTIVE DATE If each of the conditions to the Effective Date is not satisfied or duly waived in accordance with Section IX.C, then upon motion by the Debtors made before the time that each of such conditions has been satisfied or duly waived and upon notice to such parties in interest as the Bankruptcy Court may direct, the Confirmation Order will be vacated by the Bankruptcy Court; provided, however, that, notwithstanding the Filing of such motion, the Confirmation Order may not be vacated if each of the conditions to the Effective Date is either satisfied or duly waived before the Bankruptcy Court enters an order granting such motion. If the Confirmation Order is vacated pursuant to this Section IX.D: (1) the Plan will be null and void in all respects, including with respect to (a) the discharge of Claims and termination of Interests pursuant to section 1141 of the Bankruptcy Code and (b) the assumptions, assignments or rejections of Executory Contracts and Unexpired Leases pursuant to Sections V.A and V.C; and (2) nothing contained in the Plan will (a) constitute a waiver or release of any claims by or against, or any Interest in, the Debtors or (b) prejudice in any manner the rights of the Debtors or any other party in interest. ARTICLE X CRAMDOWN The Debtors request Confirmation under section 1129(b) of the Bankruptcy Code with respect to: (a) any impaired Class or Division of Class 11 that does not accept the Plan pursuant to section 1126 of the Bankruptcy Code; and (b) any Class that is deemed to have not accepted the Plan pursuant to section 1126(g) of the 53 Bankruptcy Code. The Debtors reserve the right to modify the Plan to the extent, if any, that Confirmation pursuant to section 1129(b) of the Bankruptcy Code requires modification. ARTICLE XI DISCHARGE, TERMINATION, INJUNCTION AND SUBORDINATION RIGHTS A. DISCHARGE OF CLAIMS AND TERMINATION OF INTERESTS 1. Except as provided in the Plan or in the Confirmation Order, the rights afforded under the Plan and the treatment of Claims and Interests under the Plan will be in exchange for and in complete satisfaction, discharge and release of all Claims and termination of all Interests arising on or before the Effective Date, including any interest accrued on Claims from the Petition Date. Except as provided in the Plan or in the Confirmation Order, Confirmation will, as of the Effective Date: (a) discharge the Debtors from all Claims or other debts that arose on or before the Effective Date, and all debts of the kind specified in section 502(g), 502(h) or 502(i) of the Bankruptcy Code, whether or not (i) a proof of Claim based on such debt is Filed or deemed Filed pursuant to section 501 of the Bankruptcy Code, (ii) a Claim based on such debt is allowed pursuant to section 502 of the Bankruptcy Code or (iii) the holder of a Claim based on such debt has accepted the Plan; and (b) terminate all Interests and other rights of equity security holders in the Debtors. 2. In accordance with the foregoing, except as provided in the Plan or the Confirmation Order, as of the Effective Date, the Confirmation Order will be a judicial determination of a discharge of all Claims and other debts and liabilities against the Debtors and a termination of all Interests and other rights of equity security holders in the Debtors, pursuant to sections 524 and 1141 of the Bankruptcy Code, and such discharge will void any judgment obtained against a Debtor at any time, to the extent that such judgment relates to a discharged Claim or terminated Interest. B. INJUNCTIONS 1. Except as provided in the Plan or the Confirmation Order, as of the Effective Date, all entities that have held, currently hold or may hold a Claim or other debt or liability that is discharged or an Interest or other right of an equity security holder that is terminated pursuant to the terms of the Plan will be permanently enjoined from taking any of the following actions on account of any such discharged Claims, debts or liabilities or terminated Interests or rights: (a) commencing or continuing in any manner any action or other proceeding against the Debtors, the Reorganized Debtors or their respective property, other than to enforce any right pursuant to the Plan to a distribution; (b) enforcing, attaching, collecting or recovering in any manner any judgment, award, decree or order against the Debtors, the Reorganized Debtors or their respective property, other than as permitted pursuant to (a) above; (c) creating, perfecting or enforcing any lien or encumbrance against the Debtors, the Reorganized Debtors or their respective property; (d) asserting a setoff, right of subrogation or recoupment of any kind against any debt, liability or obligation due to the Debtors or the Reorganized Debtors; and (e) commencing or continuing any action, in any manner, in any place that does not comply with or is inconsistent with the provisions of the Plan. 2. As of the Effective Date, all entities that have held, currently hold or may hold any claims, demands, rights, causes of action or liabilities that are released, waived or discharged pursuant to the Plan, including pursuant to Section IV.F or the Confirmation Order, will be permanently enjoined from taking any action against any released person or entity or its property on account of such released, waived or discharged claims, demands, rights, causes of action or liabilities, including without limitation: (a) commencing or continuing in any manner any action or other proceeding; (b) enforcing, attaching, collecting or recovering in any manner any judgment, award, decree or order; (c) creating, perfecting or enforcing any lien or encumbrance; (d) asserting a setoff, right of subrogation or recoupment of any kind against any debt, liability or obligation due to any released entity; and (e) commencing or continuing any action, in any manner, in any place that does not comply with or is inconsistent with the provisions of the Plan or Confirmation Order. 3. In the event an action, suit or proceeding is brought against a person or entity in respect to a claim, demand, right, cause of action, liability or other matter in respect to which such person or entity has been released, 54 waived or discharged under the Plan, including Section IV.F or the Confirmation Order, the reasonable attorneys' fees and costs of such person or entity in successfully defending such action, suit or proceeding will be paid by the party or parties commencing such action, suit or proceeding and, as a condition to going forward with such action, suit, or proceeding at the outset thereof, the party or parties commencing such action, suit or proceeding shall be required to provide adequate assurance of their capacity to make such payment of reasonable attorneys' fees and costs. 4. By accepting distributions pursuant to the Plan, each holder of an Allowed Claim or Allowed Interest receiving distributions pursuant to the Plan will be deemed to have specifically consented to the injunctions and other provisions set forth in this Section XI.B. C. TERMINATION OF SUBORDINATION RIGHTS AND SETTLEMENT OF RELATED CLAIMS AND CONTROVERSIES 1. The classification and manner of satisfying all Claims and Interests under the Plan take into consideration all subordination rights, whether arising under general principles of equitable subordination, contract, section 510(c) of the Bankruptcy Code or otherwise, that a holder of a Claim or Interest may have against other Claim or Interest holders with respect to any distribution made pursuant to the Plan. All subordination rights that a holder of a Claim or Interest may have with respect to any distribution to be made pursuant to the Plan will be discharged and terminated, and all actions related to the enforcement of such subordination rights will be permanently enjoined. Accordingly, distributions pursuant to the Plan to holders of Allowed Claims or Allowed Interests will not be subject to payment to a beneficiary of such terminated subordination rights or to levy, garnishment, attachment or other legal process by a beneficiary of such terminated subordination rights. 2. Pursuant to Bankruptcy Rule 9019 and in consideration for the distributions and other benefits provided under the Plan, the provisions of the Plan will constitute a good faith compromise and settlement of all claims or controversies relating to the subordination rights that a holder of a Claim or Interest may have with respect to any Allowed Claim or Allowed Interest or any distribution to be made pursuant to the Plan on account of any Allowed Claim or Allowed Interest. The entry of the Confirmation Order will constitute the Bankruptcy Court's approval, as of the Effective Date, of the compromise or settlement of all such claims or controversies and the Bankruptcy Court's finding that such compromise or settlement is in the best interests of the Debtors, the Reorganized Debtors and their respective property and Claim and Interest holders and is fair, equitable and reasonable. ARTICLE XII RETENTION OF JURISDICTION Notwithstanding the entry of the Confirmation Order and the occurrence of the Effective Date, the Bankruptcy Court will retain such jurisdiction over the Reorganization Cases after the Effective Date as is legally permissible, including jurisdiction to: 1. Allow, disallow, determine, liquidate, classify, estimate or establish the priority or secured or unsecured status of any Claim or Interest, including: (a) the resolution of any request for payment of any Administrative Claim; (b) the resolution of any objections to the allowance, priority or classification of Claims or Interests; (c) the resolution of any objection to any approval of the Indenture Trustees' or CTA Trustee's fees and expenses pursuant to Section III.E; and (d) the resolution of any objection to any fees and expenses pursuant to Section III.F; 2. Grant or deny any applications for allowance of compensation or reimbursement of expenses authorized pursuant to the Bankruptcy Code or the Plan for periods ending on or before the Effective Date; 3. Resolve any matters related to the assumption, assumption and assignment or rejection of any Executory Contract or Unexpired Lease to which any Debtor is a party or with respect to which any Debtor or Reorganized Debtor may be liable and to hear, determine and, if necessary, liquidate any Claims arising therefrom, including any Cure Amount Claims; 55 4. Resolve any matters related to the Disposition Properties; 5. Ensure that distributions to holders of Allowed Claims are accomplished pursuant to the provisions of the Plan; 6. Decide or resolve any motions, adversary proceedings, contested or litigated matters and any other matters, including the Retained Claims, and the Recovery Actions to the extent not released hereunder, and grant or deny any applications involving the Debtors that may be pending on the Effective Date or brought thereafter; 7. Enter such orders as may be necessary or appropriate to implement or consummate the provisions of the Plan and all contracts, instruments, releases and other agreements or documents entered into or delivered in connection with the Plan, the Disclosure Statement or the Confirmation Order; 8. Resolve any cases, controversies, suits or disputes that may arise in connection with the consummation, interpretation or enforcement of the Plan or any contract, instrument, release or other agreement or document that is entered into or delivered pursuant to the Plan or any entity's rights arising from or obligations incurred in connection with the Plan or such documents; 9. Modify the Plan before or after the Effective Date pursuant to section 1127 of the Bankruptcy Code; modify the Disclosure Statement, the Confirmation Order or any contract, instrument, release or other agreement or document entered into or delivered in connection with the Plan, the Disclosure Statement or the Confirmation Order; or remedy any defect or omission or reconcile any inconsistency in any Bankruptcy Court order, the Plan, the Disclosure Statement, the Confirmation Order or any contract, instrument, release or other agreement or document entered into, delivered or created in connection with the Plan, the Disclosure Statement or the Confirmation Order, in such manner as may be necessary or appropriate to consummate the Plan; 10. Issue injunctions, enforce the injunctions contained in the Plan and the Confirmation Order, enter and implement other orders or take such other actions as may be necessary or appropriate to restrain interference by any entity with consummation, implementation or enforcement of the Plan or the Confirmation Order; 11. Enter and implement such orders as are necessary or appropriate if the Confirmation Order is for any reason or in any respect modified, stayed, reversed, revoked or vacated or distributions pursuant to the Plan are enjoined or stayed; 12. Determine any other matters that may arise in connection with or relate to the Plan, the Disclosure Statement, the Confirmation Order or any contract, instrument, release or other agreement or document entered into or delivered in connection with the Plan, the Disclosure Statement or the Confirmation Order; 13. Enter a final decree closing the Reorganization Cases; and 14. Determine matters concerning state, local and federal Taxes in accordance with sections 346, 505 and 1146 of the Bankruptcy Code, including any Disputed Claims for Taxes. 15. Determine any issues or disputes concerning whether a proceeding constitutes an Eligible Group III Proceeding or otherwise as contemplated by Section III.I. ARTICLE XIII MISCELLANEOUS PROVISIONS A. DISSOLUTION OF THE CREDITORS' COMMITTEE On the Effective Date, the Creditors' Committee will dissolve and the members of the Creditors' Committee will be released and discharged from all duties and obligations arising from or related to the Reorganization Cases. The Professionals retained by the Creditors' Committee and the members thereof will not be 56 entitled to assert any Fee Claim for any services rendered or expenses incurred after the Effective Date, except for services rendered and expenses incurred in connection with any applications for allowance of compensation and reimbursement of expenses pending on the Effective Date or Filed and served after the Effective Date pursuant to Section III.A.1.f.ii.A and in connection with any appeal of the Confirmation Order. B. LIMITATION OF LIABILITY The Debtors, the Reorganized Debtors and their respective directors, officers, employees and professionals, acting in such capacity, and the Creditors' Committee and its members and professionals will neither have nor incur any liability to any entity for any act taken or omitted to be taken in connection with or related to the formulation, preparation, dissemination, implementation, Confirmation or consummation of the Plan, the Disclosure Statement or any contract, instrument, release or other agreement or document created or entered into, or any other act taken or omitted to be taken, in connection with the Plan; provided, however, that the foregoing provisions of this Section XIII.B will have no effect on: (1) the liability of any entity that would otherwise result from the failure to perform or pay any obligation or liability under the Plan or any contract, instrument, release or other agreement or document to be entered into or delivered in connection with the Plan; or (2) the liability of any entity that would otherwise result from any such act or omission to the extent that such act or omission is determined in a Final Order to have constituted gross negligence or willful misconduct. C. MODIFICATION OF THE PLAN Subject to the restrictions on modifications set forth in section 1127 of the Bankruptcy Code, the Debtors or the Reorganized Debtors, as applicable, reserve the right to alter, amend or modify the Plan before its substantial consummation. D. REVOCATION OF THE PLAN The Debtors reserve the right to revoke or withdraw the Plan as to any or all of the Debtors prior to the Confirmation Date. If the Debtors revoke or withdraw the Plan as to any or all of the Debtors, or if Confirmation as to any or all of the Debtors does not occur, then, with respect to such Debtors, the Plan will be null and void in all respects, and nothing contained in the Plan will: (1) constitute a waiver or release of any claims by or against, or any Interests in, such Debtors; or (2) prejudice in any manner the rights of any Debtors or any other party. E. SEVERABILITY OF PLAN PROVISIONS If, prior to Confirmation, any term or provision of the Plan is held by the Bankruptcy Court to be invalid, void or unenforceable, the Bankruptcy Court will have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void or unenforceable, and such term or provision then will be applicable as altered or interpreted; provided, however, that any such alteration or interpretation must be in form and substance acceptable to the Debtors. Notwithstanding any such holding, alteration or interpretation, the remainder of the terms and provisions of the Plan will remain in full force and effect and will in no way be affected, impaired or invalidated by such holding, alteration or interpretation. The Confirmation Order will constitute a judicial determination and will provide that each term and provision of the Plan, as it may have been altered or interpreted in accordance with the foregoing, is valid and enforceable pursuant to its terms. F. SUCCESSORS AND ASSIGNS The rights, benefits and obligations of any entity named or referred to in the Plan will be binding on, and will inure to the benefit of, any heir, executor, administrator, successor or assign of such entity. 57 G. SERVICE OF CERTAIN PLAN EXHIBITS AND DISCLOSURE STATEMENT EXHIBITS Because the Exhibits to the Plan are voluminous, the Exhibits are not being served with copies of the Plan and the Disclosure Statement. Any party in interest may review the Plan Exhibits during normal business hours (9:00 a.m. to 4:30 p.m., local time) in the Document Reviewing Centers. H. SERVICE OF DOCUMENTS Any pleading, notice or other document required by the Plan or Confirmation Order to be served on or delivered to the Debtors, the Reorganized Debtors or the Creditors' Committee must be sent by overnight delivery service, facsimile transmission, courier service or messenger to: 1. The Debtors and the Reorganized Debtors: Bradley D. Stam, Esq. Senior Vice President -- Legal & Asset Management THE LOEWEN GROUP INC. 2225 Sheppard Avenue East Atria North III, 11th Floor Toronto, Ontario Canada M2J 5C2 Fax: (416) 498-2466 -and - Richard M. Cieri, Esq. JONES, DAY, REAVIS & POGUE North Point 901 Lakeside Avenue Cleveland, Ohio 44114 Fax: (216) 579-0212 Henry L. Gompf, Esq. Gregory M. Gordon, Esq. JONES, DAY, REAVIS & POGUE 2727 North Harwood Street Dallas, Texas 75201 Fax: (214) 969-5100 (Counsel to the Debtors and Reorganized Debtors) 2. The Creditors' Committee: Evan D. Flaschen, Esq. BINGHAM DANA LLP One State Street Hartford, Connecticut 06103 Fax: (860) 240-2800 (Counsel to the Creditors' Committee) 58 3. The United States Trustee: Patricia A. Staiano, Esq. OFFICE OF THE UNITED STATES TRUSTEE 950 Curtis Center West 601 Walnut Street Philadelphia, Pennsylvania 19106 Fax: (215) 597-5795 59 Dated: September 10, 2001 Respectfully submitted, LOEWEN GROUP INTERNATIONAL, INC. By: /s/ BRADLEY D. STAM ------------------------------------------- Name: Bradley D. Stam Title: Senior Vice President, Legal & Asset Management THE LOEWEN GROUP INC., on its own behalf and on behalf of each of the Loewen Subsidiary Debtors By: /s/ BRADLEY D. STAM ------------------------------------------- Name: Bradley D. Stam Title: Senior Vice President, Legal & Asset Management COUNSEL: WILLIAM H. SUDELL, JR. (DE 463) ROBERT J. DEHNEY (DE 3578) MORRIS, NICHOLS, ARSHT & TUNNELL 1201 North Market Street Wilmington, Delaware 19899-1347 (302) 658-9200 RICHARD M. CIERI (OH 0032464) JONES, DAY, REAVIS & POGUE North Point 901 Lakeside Avenue Cleveland, Ohio 44114 (216) 586-3939 HENRY L. GOMPF (TX 08116400) GREGORY M. GORDON (TX 08435300) JONES, DAY, REAVIS & POGUE 2727 North Harwood Street Dallas, Texas 75201 (214) 220-3939 ATTORNEYS FOR DEBTORS AND DEBTORS IN POSSESSION EX-2.2 4 d92756ex2-2.txt MODIFICATION TO 4TH AMENDED JOINT PLAN EXHIBIT 2.2 UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE IN RE: : JOINTLY ADMINISTERED CASE NO. 99-1244 (PJW) LOEWEN GROUP INTERNATIONAL, INC., : A DELAWARE CORPORATION, ET AL., : CHAPTER 11 DEBTORS. : : - ----------------------------------- MODIFICATION TO THE FOURTH AMENDED JOINT PLAN OF REORGANIZATION OF LOEWEN GROUP INTERNATIONAL, INC., ITS PARENT CORPORATION AND CERTAIN OF THEIR DEBTOR SUBSIDIARIES WILLIAM H. SUDELL, JR. (DE 463) ROBERT J. DEHNEY (DE 3578) MORRIS, NICHOLS, ARSHT & TUNNELL 1201 North Market Street Wilmington, Delaware 19899-1347 (302) 658-9200 - and - RICHARD M. CIERI (OH 0032464) JONES, DAY, REAVIS & POGUE North Point 901 Lakeside Avenue Cleveland, Ohio 44114 (216) 586-3939 HENRY L. GOMPF (TX 08116400) GREGORY M. GORDON (TX 08435300) JONES, DAY, REAVIS & POGUE 2727 North Harwood Street Dallas, Texas 75201 (214) 220-3939 ATTORNEYS FOR DEBTORS AND DEBTORS IN POSSESSION November 30, 2001 Subject to approval by the Bankruptcy Court and pursuant to this Modification to the Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries, the Debtors effect the following changes to the Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries (the "Plan"): MODIFICATIONS TO THE PLAN Section I.A.46 of the Plan is hereby amended in its entirety to read as follows: "CUT-OFF DATE" means the close of business on the last date of the most recent preceding month ended not less than 21 days prior to the Effective Date. Section I.A.69 of the Plan is hereby amended in its entirety to read as follows: "EXIT FINANCING REVOLVING CREDIT FACILITY" means a secured revolving credit facility in the amount of the lesser of $75 million or an amount determinable pursuant to a borrowing base calculation, a specified portion of which will be available in the form of letters of credit. Section I.A.141 is hereby amended in its entirety to read as follows: "PRINCIPAL CTA CREDITORS" means Bank of Montreal, Wachovia Bank, N.A., Angelo Gordon & Co., Cerberus Capital Management, Franklin Mutual Advisers, LLP, GSCP Recovery, Inc., Morgens, Waterfall, Vintiadis & Company, Inc. and Oaktree Capital Management LLC. Subpart (1) to Section IV.I to the Plan is hereby amended to read as follows: "(1) solely for the purposes of permitting the respective Indenture Trustee to make the distributions to holders of the Public Notes as contemplated by Section VI.B," Section IV.M of the Plan is hereby amended to add the following to the end thereof: "Notwithstanding any provision of this Plan other than Section III.C.18 and Section III.C.19, lien rights, if any, of the CTA Trustee and State Street arising under or in respect to the CTA or a Prepetition Indenture, respectively, will be fully released and discharged on the Effective Date. As of the Effective Date, the Reorganized Debtors shall be authorized to file on behalf of creditors Form UCC-3s or such other form or forms as is necessary to effect the provisions of this Section IV.M." The second sentence of Section VI.B to the Plan is hereby amended to read: "The respective Indenture Trustee will serve as a Third Party Disbursing Agent for each series of Public Notes and, subject to the requirements of Section VI.F will make distributions to holders of Public Notes contemplated by Sections III.C.3, III.C.4 or III.C.5, as the case may be, in accordance with the terms of the respective Prepetition Indenture; provided, however, that no Indenture Trustee will have any obligation in respect to distributions to holders of CTA Note Claims from funds set aside under Sections III.C.18, III.C.19, III.E or III.F. Section VI.H.4 of the Plan is hereby amended in its entirety to read: "No Disbursing Agent will distribute cash to the holder of an Allowed Claim in an impaired Class other than Class 2 or Class 3 if the amount of cash to be distributed on account of such Claim is less than $25. Any holder of such an Allowed Claim on account of which the amount of cash to be distributed is less than $25 and would not be entitled to a distribution pursuant to the preceding sentence will have its claim for such distribution discharged and will be forever barred from asserting any such claim against the Reorganized Debtors or their respective property. Any cash not distributed pursuant to this Section VI.H.4 with respect to Claims in a Class other than Class 11 will be the property of Reorganized LGII, free of any restrictions thereon, and any such cash held by a Third Party Disbursing Agent will be returned to Reorganized LGII. Any cash not distributed pursuant to this Section VI.H.4 with respect to Allowed Claims in a Division of Class 11, including dividends or other distributions made on 2 account of New Common Stock held in an Unsecured Claims Reserve, will be retained in the applicable Unsecured Claims Reserve for redistribution Pro Rata to holders of Allowed Claims in the applicable Division of Class 11, pursuant to Section VI.H.2.b. For purposes of this redistribution, each Allowed Claim in Class 11 for which distributions are less than $25 will have its claim for such distribution discharged and will be forever barred from asserting any such claim against the Unsecured Claims Reserve or otherwise." Section IX.B.7 of the Plan is hereby amended in its entirety to read as follows: "The CCAA Order shall be reasonably acceptable in form and substance to the Debtors and shall have been entered by the Canadian Court." The Plan is hereby amended by adding the following new Section III.Q: Q. POTENTIAL ADDITIONAL CASH DISTRIBUTION TO HOLDERS OF CTA NOTE CLAIMS. In the event that the Effective Date occurs in the second calendar month following the month in which the Cut-Off Date occurs, promptly following the Effective Date, Reorganized LGII will recalculate the Excess Cash Distribution Amount based on the Available Cash Amount determined as of the last day of the calendar month ended immediately prior to the Effective Date. In the event that such recalculated Excess Cash Distribution Amount exceeds the originally calculated Excess Cash Distribution Amount, no later than 45 days following the Effective Date, the difference will be distributed by the Reorganized Debtors directly to the holders of CTA Note Claims as if such amounts were being paid on the Effective Date as set forth in Section III.C.3, Section III.C.4 and Section III.C.5. 3 Dated: November 30, 2001 Respectfully submitted, LOEWEN GROUP INTERNATIONAL, INC. By: /s/ BRADLEY D. STAM ------------------------------------------- Name: Bradley D. Stam Title: Senior Vice President, Legal & Asset Management COUNSEL: WILLIAM H. SUDELL, JR. (DE 463) ROBERT J. DEHNEY (DE 3578) MORRIS, NICHOLS, ARSHT & TUNNELL 1201 North Market Street Wilmington, Delaware 19899-1347 (302) 658-9200 RICHARD M. CIERI (OH 0032464) JONES, DAY, REAVIS & POGUE North Point 901 Lakeside Avenue Cleveland, Ohio 44114 (216) 586-3939 HENRY L. GOMPF (TX 08116400) GREGORY M. GORDON (TX 08435300) JONES, DAY, REAVIS & POGUE 2727 North Harwood Street Dallas, Texas 75201 (214) 220-3939 ATTORNEYS FOR DEBTORS AND DEBTORS IN POSSESSION 4 EX-2.3 5 d92756ex2-3.txt SECOND MODIFICATION TO 4TH AMENDED JOINT PLAN EXHIBIT 2.3 UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE IN RE: : JOINTLY ADMINISTERED CASE NO. 99-1244 (PJW) LOEWEN GROUP INTERNATIONAL, INC., : A DELAWARE CORPORATION, ET AL., : CHAPTER 11 DEBTORS. : : - ---------------------------------- SECOND MODIFICATION TO THE FOURTH AMENDED JOINT PLAN OF REORGANIZATION OF LOEWEN GROUP INTERNATIONAL, INC., ITS PARENT CORPORATION AND CERTAIN OF THEIR DEBTOR SUBSIDIARIES WILLIAM H. SUDELL, JR. (DE 463) ROBERT J. DEHNEY (DE 3578) MORRIS, NICHOLS, ARSHT & TUNNELL 1201 North Market Street Wilmington, Delaware 19899-1347 (302) 658-9200 - and - RICHARD M. CIERI (OH 0032464) JONES, DAY, REAVIS & POGUE North Point 901 Lakeside Avenue Cleveland, Ohio 44114 (216) 586-3939 HENRY L. GOMPF (TX 08116400) GREGORY M. GORDON (TX 08435300) JONES, DAY, REAVIS & POGUE 2727 North Harwood Street Dallas, Texas 75201 (214) 220-3939 ATTORNEYS FOR DEBTORS AND DEBTORS IN POSSESSION November 30, 2001 Subject to approval by the Bankruptcy Court and pursuant to this Second Modification to the Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries, the Debtors effect the following changes to the Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries (the "Plan"): MODIFICATION TO THE PLAN Section IV.F.2 of the Plan is hereby amended in its entirety to read as follows: As of the Effective Date, in consideration for the obligations of the Debtors and the Reorganized Debtors under the Plan and the cash, New Five-Year Secured Notes, New Two-Year Unsecured Notes, New Seven-Year Unsecured Notes, New Unsecured Subordinated Convertible Notes, New Common Stock, New Warrants or interests in the Liquidating Trust to be distributed pursuant to the Plan, the settlement of certain issues relating to certain CTA Note Claims and other contracts, instruments, releases, agreements or documents to be entered into or delivered by the Debtors or the Reorganized Debtors in connection with the Plan, (a) each holder of a Claim or Interest that votes in favor of the Plan and (b) solely as to clause (ii) below, each Debtor, Reorganized Debtor and other Loewen Company will be deemed to forever release, waive and discharge all claims, demands, rights, causes of action and liabilities (other than the right to enforce the Debtors' or the Reorganized Debtors' obligations under the Plan and the contracts, instruments, releases, agreements and documents delivered thereunder), whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising in law, equity or otherwise, that are based in whole or in part on any act, omission, transaction or other occurrence taking place on or prior to the Effective Date in any way relating to a Debtor, the Reorganization Cases, the Plan, the CTA or the CTA Note Claims (excluding any claims with respect to reimbursement and indemnification provisions of the credit facilities excepted from cancellation under Section IV.I) that such entity has, had or may have against (i) any Debtor or other Loewen Company and each of their respective present or former directors, officers, employees, attorneys, accountants, financial advisors and agents, acting in such capacity, and (ii) the members of the Creditors' Committee, each Indenture Trustee, each Principal CTA Creditor, each holder of a CTA Note Claim and each of their respective present or former directors, officers, employees, attorneys, accountants, financial advisors and agents, acting in such capacity (including all claims, demands, rights, causes of action and liabilities alleged in Adversary Proceeding No. 00-01181, which will be deemed dismissed with prejudice as of the Effective Date) (which release, waiver and discharge will be in addition to the discharge of Claims and termination of Interests provided herein and under the Confirmation Order and the Bankruptcy Code). Notwithstanding the foregoing, no claims, demands, causes of action or liabilities against (x) any Tolling Party or (y) and present or former director, officer or employee of any Loewen Company (other than TLGI and LGII), acting in such capacity that relates to the operations in the ordinary course of business of such Company will be released, waived or discharged under this Section IV.F.2. Section VI.D.1 is hereby amended to add the following to the end thereof: On the Effective Date, Reorganized LGII will reserve 775,000 shares of New Common Stock from its authorized but unissued shares (the "Class 11 Shortfall Reserve"). On or before the first anniversary of the Effective Date, Reorganized LGII will file with the Bankruptcy Court and serve on all holders of Class 11 Claims in Divisions C, D, E, F, G and H a report detailing the Allowed Claims and estimated Claims amounts in each of such Divisions. To the extent the then Allowed Claims and estimated Claims amounts in any such Division exceed the estimated Claims for such Division as set forth in the Disclosure Statement, Reorganized LGII shall file with the Bankruptcy Court and serve on all holders of Class 11 Claims in Divisions C, D, E, F, G and H, at the time of the filing of such report, a motion for authority to issue from the Class 11 Shortfall Reserve to the applicable Unsecured Claims Reserve additional shares of New Common Stock, based on a $17.17 per share value, in an amount determined by the Bankruptcy Court, but not to exceed the number of shares necessary to permit distributions to holders of Allowed Claims in the applicable Division equal to the estimated percentage recovery for such Division as set forth in the Disclosure Statement. Any shares of New Common Stock not so issued would be released from the Class 11 Shortfall Reserve. Upon issuance of any additional shares of New Common Stock to an Unsecured Claims Reserve such shares will constitute Reserved Shares. 2 Dated: November 30, 2001 Respectfully submitted, LOEWEN GROUP INTERNATIONAL, INC. By: /s/ BRADLEY D. STAM ------------------------------------------- Name: Bradley D. Stam Title: Senior Vice President, Legal & Asset Management COUNSEL: WILLIAM H. SUDELL, JR. (DE 463) ROBERT J. DEHNEY (DE 3578) MORRIS, NICHOLS, ARSHT & TUNNELL 1201 North Market Street Wilmington, Delaware 19899-1347 (302) 658-9200 RICHARD M. CIERI (OH 0032464) JONES, DAY, REAVIS & POGUE North Point 901 Lakeside Avenue Cleveland, Ohio 44114 (216) 586-3939 HENRY L. GOMPF (TX 08116400) GREGORY M. GORDON (TX 08435300) JONES, DAY, REAVIS & POGUE 2727 North Harwood Street Dallas, Texas 75201 (214) 220-3939 ATTORNEYS FOR DEBTORS AND DEBTORS IN POSSESSION 3 EX-2.4 6 d92756ex2-4.txt ORDER APPROVING MODIFICATION OF 4TH AMENDED PLAN EXHIBIT 2.4 UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE IN RE: : : JOINTLY ADMINISTERED LOEWEN GROUP INTERNATIONAL, : CASE NO. 99-1244 (PJW) INC., A DELAWARE CORPORATION, ET AL., : : CHAPTER 11 DEBTORS. : ORDER APPROVING MODIFICATION OF FOURTH AMENDED JOINT PLAN OF REORGANIZATION OF LOEWEN GROUP INTERNATIONAL, INC., ITS PARENT CORPORATION AND CERTAIN OF THEIR DEBTOR SUBSIDIARIES AND COMPROMISE AND SETTLEMENT OF CLAIMS FILED BY THOMAS HARDY This matter coming before the Court at the hearing on confirmation of the Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries (the "Plan"), the above-captioned debtors and debtors-in-possession (collectively, the "Debtors") and Thomas Hardy ("Hardy") having advised the Court that they have agreed to resolve Hardy's objection to confirmation of the Plan and all of Hardy's claims filed against the Debtors by modifying the Plan on the terms set forth on Exhibit A attached hereto; the Court finding that (a) the Court has jurisdiction over this matter pursuant to 28 U.S.C. Sections 157 and 1334, (b) this is a core proceeding pursuant to 28 U.S.C. Section 157(b)(2), (c) the terms of the compromise and settlement with Hardy (the "Hardy Settlement") are fair and reasonable and in the best interests of the Debtors' estates and creditors and (d) the proposed modification of the Plan (the "Modification") does not adversely change the treatment under the Plan of the claim of any creditor against, or the interest of any equity security holder in, the Debtors; and the Court having determined that just cause exists for the relief granted herein; 1 IT IS HEREBY ORDERED THAT the terms of the Hardy Settlement and the Modification are approved. Date: Nov. 29, 2001 /s/ PETER J. WALSH ------------------------------------ UNITED STATES BANKRUPTCY JUDGE 2 EXHIBIT A HARDY SETTLEMENT 1. Subject to the approval by the Bankruptcy Court of this agreement as an approved modification of the Fourth Amended Joint Plan of Reorganization (the "Plan"), Hardy will withdraw his confirmation objections and will be deemed to have changed his votes in favor of the Plan. All of Hardy's claims are settled hereby. 2. The Plan with respect to Loewen Life Insurance Group, Inc. will be modified to provide for the issuance to Hardy of 11,648 shares of New Common Stock and the payment to Hardy of $2,000,000 on the later of the Effective Date or January 1, 2002. The Plan will be further modified so that the number of shares allocated to Division C of Class 11 will be reduced by 128,130 shares. EX-2.5 7 d92756ex2-5.txt ORDER CONFIRMING PLAN EXHIBIT 2.5 DECEMBER 4, 2001 VERSION IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE IN RE: : : JOINTLY ADMINISTERED LOEWEN GROUP INTERNATIONAL, : CASE NO. 99-1244 (PJW) INC., A DELAWARE CORPORATION, ET AL., : : CHAPTER 11 DEBTORS. : - -------------------------------------------------------------------------------- FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER CONFIRMING FOURTH AMENDED JOINT PLAN OF REORGANIZATION OF LOEWEN GROUP INTERNATIONAL, INC., ITS PARENT CORPORATION AND CERTAIN OF THEIR DEBTOR SUBSIDIARIES, AS MODIFIED - -------------------------------------------------------------------------------- INTRODUCTION.....................................................................................................1 I. FINDINGS OF FACT........................................................................................4 A. JURISDICTION AND VENUE.........................................................................4 B. COMPLIANCE WITH THE REQUIREMENTS OF SECTION 1129 OF THE BANKRUPTCY CODE........................4 1. Section 1129(a)(1) -- Compliance of the Plan with Applicable Provisions of the Bankruptcy Code.......................................................................4 2. Section 1129(a)(2) -- Compliance with Applicable Provisions of the Bankruptcy Code.................................................................................10 3. Section 1129(a)(3) -- Proposal of the Plan in Good Faith.............................10 4. Section 1129(a)(4) -- Bankruptcy Court Approval of Certain Payments as Reasonable...........................................................................11 5. Section 1129(a)(5) -- Disclosure of Identity of Proposed Management, Compensation of Insiders and Consistency of Management Proposals with the Interests of Creditors and Public Policy.............................................12 6. Section 1129(a)(6) -- Approval of Rate Changes.......................................12 7. Section 1129(a)(7) -- Best Interests of Holders of Claims and Interests..............12 8. Section 1129(a)(8) -- Acceptance of the Plan by Each Impaired Class..................13 9. Section 1129(a)(9) -- Treatment of Claims Entitled to Priority Pursuant to Section 507(a) of the Bankruptcy Code................................................13 10. Section 1129(a)(10) -- Acceptance By at Least One Impaired, Non-Insider Class........16 11. Section 1129(a)(11) -- Feasibility of the Plan.......................................16 12. Section 1129(a)(12) -- Payment of Bankruptcy Fees....................................16 13. Section 1129(a)(13) -- Retiree Benefits..............................................17 14. Section 1129(b) -- Confirmation of the Plan Over the Nonacceptance of Impaired Classes..............................................................................17 15. Bankruptcy Rule 3016(a)..............................................................18 16. Section 1129(d) -- Purpose of Plan...................................................18 C. THE CTA SETTLEMENT............................................................................19 1. Approval of the CTA Settlement Under Bankruptcy Rule 9019............................19 2. The Limited Objections to the CTA Settlement.........................................21
i D. SATISFACTION OF CONDITIONS TO CONFIRMATION....................................................21 II. CONCLUSIONS OF LAW.....................................................................................21 A. JURISDICTION AND VENUE........................................................................21 B. MODIFICATIONS OF THE PLAN.....................................................................22 C. EXEMPTIONS FROM SECURITIES LAWS...............................................................22 D. EXEMPTIONS FROM TAXATION......................................................................24 E. COMPLIANCE WITH SECTION 1129 OF THE BANKRUPTCY CODE...........................................24 F. APPROVAL OF THE SETTLEMENTS AND RELEASES PROVIDED UNDER THE PLAN AND CERTAIN OTHER MATTERS.......................................................................................25 G. THE CTA SETTLEMENT............................................................................26 H. AGREEMENTS AND OTHER DOCUMENTS................................................................26 I. ASSUMPTIONS, ASSUMPTIONS AND ASSIGNMENTS AND REJECTIONS OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES..............................................................................28 III. ORDER..................................................................................................28 A. CONFIRMATION OF THE PLAN......................................................................28 B. EFFECTS OF CONFIRMATION.......................................................................29 1. Binding Nature of Plan Terms.........................................................29 2. Continued Corporate Existence; Vesting of Assets.....................................29 3. Cancellation and Surrender of Instruments, Securities and Other Documentation........30 4. Release of Liens.....................................................................31 C. CLAIMS BAR DATES AND OTHER CLAIMS MATTERS.....................................................32 1. Bar Dates for Administrative Claims..................................................32 2. Bar Date for Rejection Damages Claims and Related Procedures.........................33 3. Special Provisions Regarding the Indenture Trustees' Claims..........................34 4. Provisions Regarding Reserve Amounts.................................................35 5. Standing With Respect to Claims of CTA Trustee and State Street and Class 11 Shortfall Reserve....................................................................36 D. MATTERS RELATING TO IMPLEMENTATION OF THE PLAN................................................36 1. Restructuring Transactions...........................................................36 2. Amendment and Restatement of Certificates of Incorporation and Bylaws................38
ii 3. Directors and Officers; Employment-Related Agreements and Compensation Programs.............................................................................39 4. Approval of Agreements Related to Plan Distributions.................................41 5. Approval of Exit Financing...........................................................42 6. Implementation of the Blackstone Settlement..........................................43 7. Implementation of the New Tax Sharing Agreement......................................44 8. Approval and Implementation of CTA Settlement and Dismissal of Related Actions With Prejudice.......................................................................44 9. Implementation of Liquidating Trust..................................................46 10. Approval of Executory Contract and Unexpired Lease Provisions and Related Procedures...........................................................................46 11. Distribution Record Date.............................................................51 12. Application of Section 525 of the Bankruptcy Code to the Reorganized Debtors.........52 E. ACTIONS IN FURTHERANCE OF THE PLAN............................................................53 F. RELEASES AND INDEMNIFICATION..................................................................54 G. RESOLUTION OF CERTAIN OBJECTIONS TO CONFIRMATION..............................................55 H. DISCHARGE, TERMINATION, INJUNCTION AND SUBORDINATION RIGHTS...................................58 1. Discharge of Claims and Satisfaction and Termination of Interests....................58 2. Injunctions..........................................................................59 3. Termination of Subordination Rights and Settlement of Related Claims and Controversies........................................................................61 I. SUBSTANTIAL CONSUMMATION......................................................................62 J. RETENTION OF JURISDICTION.....................................................................62 K. REQUEST FOR AID OF FOREIGN COURT..............................................................63 L. NOTICE OF ENTRY OF CONFIRMATION ORDER.........................................................63
iii TABLE OF EXHIBITS
EXHIBIT EXHIBIT NAME - ------- ------------ A Plan B Modifications C Confirmation Notice
iv INTRODUCTION The above-captioned debtors and debtors in possession (collectively, the "Debtors") having proposed the Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries, dated September 10, 2001, as modified by (i) the modifications authorized by two separate orders of the Court dated November 27, 2001 (the "Modifications Orders") and an order of the Court dated November 29, 2001 with respect to the claims of Thomas Hardy against the Debtors' estates (the "Hardy Settlement Order") and (ii) as described on the record at the hearing on confirmation, a modification to remove from the Plan Debtors Advanced Planning (Alabama), Inc. (99-1262), Haakinson-Groulx Mortuary, Inc. (99-1547), Hill Funeral Home, Inc. (99-1567) and Johnson Funeral Home of Church Hill, Inc. (99-1608) (collectively, the "Modifications" and, such Plan as modified by the Modifications, the "Plan");(1) the Bankruptcy Court having entered its Order (A) Approving Disclosure Statement, (B) Establishing Procedures for Solicitation and Tabulation of Votes to Accept or Reject Proposed Joint Plan of Reorganization and (C) Scheduling a Hearing on Confirmation of Proposed Joint Plan of Reorganization and Approval of Collateral Trust Agreement Settlement and Approving Related Notice Procedures (the "Disclosure Statement Order") dated September 4, 2001, by which the Bankruptcy Court, among other things, approved the Debtors' proposed disclosure statement (as such has been amended, the "Disclosure - -------- (1) Unless otherwise specified, capitalized terms and phrases used herein have the meanings assigned to them in the Plan. The rules of interpretation set forth in Section I.B.1 of the Plan shall apply to these Findings of Fact, Conclusions of Law and Order (this "Confirmation Order"). In addition, in accordance with Section I.A of the Plan, any term used in the Plan or this Confirmation Order that is not defined in the Plan or this Confirmation Order, but that is used in the Bankruptcy Code or the Bankruptcy Rules, shall have the meaning given to that term in the Bankruptcy Code or the Bankruptcy Rules, as applicable. In accordance with Section III.A of this Confirmation Order, if there is any direct conflict between the terms of the Plan and the terms of this Confirmation Order, the terms of this Confirmation Order shall control. A copy of the Plan (without the exhibits thereto) is attached hereto as Exhibit A and incorporated herein by reference. Copies of the Modifications approved by the Modifications Orders and the Hardy Settlement Order are attached hereto collectively as Exhibit B and incorporated herein by reference. Statement"), established procedures for the solicitation and tabulation of votes to accept or reject the Plan, scheduled a hearing on Confirmation of the Plan and the collateral trust agreement settlement embodied in the Plan and approved related notice procedures; Logan & Company, Inc., the Bankruptcy Court-appointed voting and tabulation agent in respect of the Plan, having filed the Affidavit of Kathleen M. Logan Certifying Tabulation of Ballots Accepting and Rejecting the Debtors' Fourth Amended Joint Plan of Reorganization (the "Voting Affidavit") on November 23, 2001; the Bankruptcy Court, by its Order Authorizing Certain Creditors to Change Their Votes and Accept the Fourth Amended Joint Plan of Reorganization of Loewen Group International, Inc., Its Parent Corporation and Certain of Their Debtor Subsidiaries, dated November 27, 2001, having authorized three creditors to change their votes to accept the Plan; the Court having established, in the Disclosure Statement Order, November 27, 2001 at 9:30 a.m. (and, if necessary, continuing through and including November 29, 2001) as the date and time of the hearing pursuant to section 1129 of the Bankruptcy Code, 11 U.S.C. Sections 101-1330 (the "Bankruptcy Code"), to consider Confirmation of the Plan (the "Confirmation Hearing"); affidavits of service of the solicitation materials with respect to the Plan having been executed by Kathleen M. Logan with respect to the mailing of notice of the Confirmation Hearing and solicitation materials in respect of the Plan in accordance with the Disclosure Statement Order (collectively, the "Affidavits of Service") and having been filed with the Bankruptcy Court on or about September 26, 2001 and November 19, 2001; affidavits of publication of the Notice of (A) Deadline for Casting Votes to Accept or Reject Proposed Joint Plan of Reorganization, (B) Hearing to Consider Confirmation of Proposed Joint Plan of Reorganization and Approval of Collateral Trust Agreement Settlement and (C) Related Matters (collectively, the "Affidavits of Publication") having been filed with the Bankruptcy Court on October 12, 2001 with respect to the publication of notice of the Confirmation Hearing and certain related matters in the national editions of The Globe and Mail, The National Post, The Wall Street Journal, The New York Times and USA Today in accordance with the Disclosure Statement Order; objections to 2 Confirmation of the Plan (the "Objections") having been filed by approximately 28 parties in interest; the Debtors having filed a memorandum of law in support of Confirmation of the Plan and in response to the Objections (the "Memorandum of Law") on November 20, 2001; the Debtors having filed the Declaration of Bradley D. Stam (the "Stam Declaration"); the Bankruptcy Court having reviewed the Plan, the Disclosure Statement, the Disclosure Statement Order, the Voting Affidavit, the Affidavits of Service, the Affidavits of Publication, the Objections, the Memorandum of Law, the Stam Declaration and the other papers before the Bankruptcy Court in connection with the Confirmation of the Plan; the Bankruptcy Court having heard the statements of counsel in support of and in opposition to Confirmation at the Confirmation Hearing, as reflected in the record at the Confirmation Hearing; the Bankruptcy Court having considered all testimony presented and evidence admitted at the Confirmation Hearing; the Bankruptcy Court having taken judicial notice of the papers and pleadings on file in these chapter 11 cases; and the Bankruptcy Court finding that (i) notice of the Confirmation Hearing and the opportunity of any party in interest to object to Confirmation was adequate and appropriate, in accordance with Bankruptcy Rule 2002(b) and the Disclosure Statement Order, as to all parties to be affected by the Plan and the transactions contemplated thereby and (ii) the legal and factual bases set forth in the applicable papers and at the Confirmation Hearing, and as set forth in this Confirmation Order, establish just cause for the relief granted herein; the Bankruptcy Court hereby makes the following Findings of Fact, Conclusions of Law and Order.(2) - --------- (2) This Confirmation Order constitutes the Bankruptcy Court's findings of fact and conclusions of law under Fed. R. Civ. P. 52, as made applicable herein by Bankruptcy Rules 7052 and 9014. Any finding of fact shall constitute a finding of fact even if it is stated as a conclusion of law, and any conclusion of law shall constitute a conclusion of law even if it is stated as a finding of fact. 3 I. FINDINGS OF FACT. A. JURISDICTION AND VENUE. On June 1, 1999, 831 of the Debtors commenced their respective Reorganization Cases by filing voluntary petitions for relief under chapter 11 of the Bankruptcy Code. Five of the Debtors commenced their respective Reorganization Cases subsequent to June 1, 1999. Loewen Group International, Inc. ("LGII"), the direct or indirect parent or affiliate of each of the Loewen Subsidiary Debtors, is domiciled in Delaware. B. COMPLIANCE WITH THE REQUIREMENTS OF SECTION 1129 OF THE BANKRUPTCY CODE. 1. SECTION 1129(a)(1) -- COMPLIANCE OF THE PLAN WITH APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE. The Plan complies with all applicable provisions of the Bankruptcy Code, as required by section 1129(a)(1) of the Bankruptcy Code, including sections 1122 and 1123 of the Bankruptcy Code. a. SECTIONS 1122 AND 1123(a)(1)-(4) -- CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS. The Plan constitutes a separate plan of reorganization for each of the Debtors under the Plan. Pursuant to sections 1122(a) and 1123(a)(1) of the Bankruptcy Code, Article II of the Plan designates Classes of Claims and Interests, other than Administrative Claims and Priority Tax Claims.(3) As required by section 1122(a), each Class of Claims and Interests for each Debtor contains only Claims or Interests that are substantially similar to the other Claims or Interests within that Class for such Debtor. The Plan designates twenty-three Classes of Claims and Interests, designated as Classes 1 through 23. Class 11 is further subclassified into eight Divisions. Such classification is proper under section 1122(a) of the Bankruptcy Code because such Claims and Interests have differing rights among each other and against the Debtors' assets - --------- (3) Pursuant to section 1123(a)(1) of the Bankruptcy Code, classes of Administrative Claims and Priority Tax Claims are not required to be classified. 4 or differing interests in the Debtors or their reorganization. In accordance with section 1122(b) of the Bankruptcy Code, the Plan provides for two Classes of Unsecured Claims comprised of (i) $10,000 or less against any Loewen Subsidiary Debtor and (ii) $1,000 or less against The Loewen Group Inc. ("TLGI") and LGII. This classification is reasonable and necessary for administrative convenience. Pursuant to sections 1123(a)(2) and 1123(a)(3) of the Bankruptcy Code, Article III of the Plan specifies all Classes of Claims and Interests that are not impaired under the Plan and specifies the treatment of all Classes of Claims and Interests that are impaired under the Plan. Pursuant to section 1123(a)(4) of the Bankruptcy Code, Article III of the Plan also provides the same treatment for each Claim or Interest within a particular Class, unless the holder of a Claim or Interest agrees to less favorable treatment of its Claim or Interest. b. SECTION 1123(a)(5) -- ADEQUATE MEANS FOR IMPLEMENTATION OF THE PLAN. Article IV and various other provisions of the Plan provide adequate means for the Plan's implementation. Those provisions relate to, among other things: (i) the continued corporate existence of the Debtors (subject to the Restructuring Transactions) and the vesting of the Debtors' assets in the Reorganized Debtors; (ii) the consummation of the Restructuring Transactions, including the Subsidiary Restructuring Transactions and the Reinvestment Transactions, and the dissolution of LGCLP; (iii) the implementation of the Blackstone Settlement; (iv) the implementation of the Equity Incentive Plan; (v) the cancellation and surrender of instruments, securities and other documentation; (vi) the execution and delivery of the New Registration Rights Agreements; (vii) the execution and delivery of the New Warrant Agreement; (viii) the execution and delivery of the New Tax Sharing Agreement; (ix) the release of liens; (x) the amendment and restatement of certificates of incorporation, bylaws or similar constituent documents of the Reorganized Debtors; (xi) the selection of the initial directors and officers for the Reorganized Debtors and the authorization of the Reorganized Debtors to enter into, maintain or modify employment-related arrangements with directors, officers and 5 employees, including those identified on Exhibit IV.C.3 to the Plan; (xii) the authorization and implementation of certain actions including the distribution of cash; the issuance and distribution of New Five-Year Secured Notes, New Two-Year Unsecured Notes, New Seven-Year Unsecured Notes and New Unsecured Subordinated Convertible Notes; the issuance and distribution of New Common Stock; the issuance and distribution of New Warrants; the creation and distribution of interests in the Liquidating Trust; and the execution and delivery of the New Five-Year Secured Notes Indenture, the New Two-Year Unsecured Notes Indenture, the New Seven-Year Unsecured Notes Indenture, the New Unsecured Subordinated Convertible Notes Indenture, the New Warrant Agreement and the Liquidating Trust Agreement; (xiii) the authorization of the Reorganized Debtors to enter into the Exit Financing Revolving Credit Facility; (xiv) the preservation of rights of actions by the Debtors and Reorganized Debtors, releases of the Reorganized Debtors and certain other entities, releases related to the CTA, full general releases of and limited indemnification of the Indenture Trustees, releases in connection with the Blackstone Settlement, releases related to the 1994 Plan and the reservation of certain causes of action related to the CTA including against the Tolling Parties; (xv) the continuation of certain employee benefit plans identified on Exhibit IV.C.3 to the Plan; (xvi) limitations on amounts to be distributed to holders of Allowed Insured Claims; (xvii) certain releases by holders of Claims or Interests approving the Plan; (xviii) injunctions related to the releases under the Plan; (xix) the authorization of officers of each Debtor or Reorganized Debtor to execute, deliver, file or record such contracts, instruments, releases and agreements or documents and take such other actions as may be necessary or appropriate to effectuate and implement the provisions of the Plan; (xx) the approval of the settlements embodied in the Plan pursuant to Bankruptcy Rule 9019 in respect of Adversary Proceeding No. 00-01181 and certain related matters; (xxi) the participation in the Plan by certain non-Debtor Loewen Companies as contemplated by section 1145 of the Bankruptcy Code; and (xxii) the dismissal with prejudice of Adversary Proceeding No. 00-01181 and certain other adversary proceedings. 6 c. SECTION 1123(a)(6) -- PROHIBITION AGAINST THE ISSUANCE OF NONVOTING EQUITY SECURITIES AND ADEQUATE PROVISIONS FOR VOTING POWER OF CLASSES OF SECURITIES. Sections IV.C.1.a and IV.C.1.b of the Plan provide that the certificates of incorporation and the bylaws or similar constituent documents of Reorganized LGII and each of the Reorganized Loewen Subsidiary Debtors, among other things, will prohibit the issuance of nonvoting equity securities to the extent required by section 1123(a) of the Bankruptcy Code. Such prohibitory provisions have been incorporated into the constituent documents included in Exhibits IV.C.1.a(i) and IV.C.1.b(i) to the Plan. In light of the foregoing, the Plan satisfies the requirement of section 1123(a)(6) of the Bankruptcy Code that a plan of reorganization provide for an appropriate distribution of voting power among the classes of securities possessing voting power. d. SECTION 1123(a)(7) -- SELECTION OF DIRECTORS AND OFFICERS IN A MANNER CONSISTENT WITH THE INTERESTS OF CREDITORS AND EQUITY SECURITY HOLDERS AND PUBLIC POLICY. i. Section IV.C.2 of the Plan provides that the initial board of directors and officers of Reorganized LGII and each of the Reorganized Loewen Subsidiary Debtors will consist of the individuals identified on Exhibit IV.C.2 to the Plan. Exhibit IV.C.2 to the Plan also identifies the initial term for each director in accordance with the provisions of each of the Reorganized Debtors' respective certificates of incorporation and bylaws or similar constituent documents. Each of the Reorganized Debtors' directors and officers will serve from and after the Effective Date until his or her successor is duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the terms of the certificates of incorporation and bylaws or similar constituent documents of the applicable Reorganized Debtor and applicable state law. 7 ii. The initial board of directors of Reorganized LGII was selected pursuant to a process involving representatives of the Debtors, the Creditors' Committee and a Principal CTA Creditor, as described in the Disclosure Statement. iii. In light of the foregoing, the manner of selection of the initial officers and directors of the Reorganized Debtors and the manner of selection of successor officers and directors of the Reorganized Debtors, as set forth in the certificates of incorporation and bylaws or similar constituent documents of the applicable Reorganized Debtor and applicable state law, are consistent with the interests of the holders of Claims and Interests and public policy. e. SECTION 1123(b)(1)-(2) -- IMPAIRMENT OF CLAIMS AND INTERESTS AND ASSUMPTION, ASSUMPTION AND ASSIGNMENT OR REJECTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES. In accordance with section 1123(b)(1) of the Bankruptcy Code, Article III of the Plan impairs or leaves unimpaired, as the case may be, each Class of Claims and Interests. In accordance with section 1123(b)(2) of the Bankruptcy Code, Article V of the Plan provides for the assumption, assumption and assignment or rejection of the Executory Contracts and Unexpired Leases of the Debtors that have not been previously assumed, assumed and assigned or rejected pursuant to section 365 of the Bankruptcy Code and appropriate authorizing orders of the Bankruptcy Court; provided, however, that the Debtors or Reorganized Debtors reserve the right, at any time through and including 90 days after the Effective Date and in certain other circumstances, to add or delete any Executory Contract or Unexpired Lease to be assumed, assumed and assigned or rejected to or from the applicable exhibit to the Plan. 8 f. SECTION 1123(b)(3) -- RETENTION, ENFORCEMENT AND SETTLEMENT OF CLAIMS HELD BY THE DEBTORS. Section IV.F.1 of the Plan provides for the preservation of certain claims, rights and causes of action by the Debtors and Reorganized Debtors. The Plan provides for settlement of Claims of CTA creditors. Sections IV.F.2 through 5 of the Plan set forth certain general releases and various releases included in settlements. Section IV.F.6 of the Plan provides for the reservation of certain third-party CTA claims. g. SECTION 1123(b)(5) -- MODIFICATION OF THE RIGHTS OF HOLDERS OF CLAIMS. Article III of the Plan modifies or leaves unaffected, as the case may be, the rights of holders of each Class of Claims. h. SECTION 1123(b)(6) -- OTHER PROVISIONS NOT INCONSISTENT WITH APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE. The Plan includes additional appropriate provisions that are not inconsistent with applicable provisions of the Bankruptcy Code, including: (i) the provisions of Article IV of the Plan regarding the means for implementing the Plan; (ii) the provisions of Article V of the Plan governing the assumption, assumption and assignment or rejection of Executory Contracts and Unexpired Leases (including the provisions of Sections V.A.1 and V.C of the Plan allowing any Debtor or Reorganized Debtor to amend Exhibit V.A.1 and V.C to the Plan at any time through and including 90 days after the Effective Date and in certain other circumstances); (iii) the provisions of Article VI of the Plan governing distributions on account of Allowed Claims, particularly as to the timing and calculation of amounts to be distributed; (iv) the provisions of Article VII of the Plan establishing procedures for resolving Disputed Claims and making distributions on account of such Disputed Claims once resolved; (v) the provisions of Article VIII of the Plan reserving the right to seek the substantive consolidation of the Debtors for certain purposes; (vi) the provisions of Article XI of the Plan regarding the discharge of Claims and the termination of Interests; and (vii) the provisions of Article XII of the Plan 9 regarding retention of jurisdiction by the Bankruptcy Court over certain matters after the Effective Date. i. SECTION 1123(d) -- CURE OF DEFAULTS. Section V.B of the Plan provides for the satisfaction of Cure Amount Claims associated with each Executory Contract and Unexpired Lease to be assumed pursuant to the Plan in accordance with section 365(b)(1) of the Bankruptcy Code. Additionally, in accordance with Article III of the Plan, certain Claims will be Reinstated, including by curing certain defaults in connection with such Claims. All Cure Amount Claims and Reinstated Claims will be determined in accordance with the underlying agreements and applicable nonbankruptcy law, and pursuant to the procedures established by separate orders of the Bankruptcy Court. 2. SECTION 1129(a)(2) -- COMPLIANCE WITH APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE. The Debtors have complied with all applicable provisions of the Bankruptcy Code, as required by section 1129(a)(2) of the Bankruptcy Code, including section 1125 of the Bankruptcy Code and Bankruptcy Rules 3017 and 3018. The Disclosure Statement and the procedures by which the Ballots for acceptance or rejection of the Plan were solicited and tabulated were fair, properly conducted and in accordance with sections 1125 and 1126 of the Bankruptcy Code, Bankruptcy Rules 3017 and 3018 and the Disclosure Statement Order. Consistent with Section XIII.B of the Plan, the Debtors, the Reorganized Debtors and the Creditors' Committee and their respective directors, officers, employees, agents, members and professionals, as applicable, have acted in "good faith," within the meaning of section 1125(e) of the Bankruptcy Code. 3. SECTION 1129(a)(3) -- PROPOSAL OF THE PLAN IN GOOD FAITH. The Debtors proposed the Plan in good faith and not by any means forbidden by law. In determining that the Plan has been proposed in good faith, the Bankruptcy Court has 10 examined the totality of the circumstances surrounding the formulation of the Plan. Based on the evidence presented at the Confirmation Hearing, the Bankruptcy Court finds and concludes that the Plan and the settlements encompassed in the Plan have been proposed with the legitimate and honest purpose of reorganizing the business affairs of each of the Debtors and maximizing the returns available to creditors of the Debtors. Consistent with the overriding purpose of chapter 11 of the Bankruptcy Code, the Plan is designed to allow the Debtors to reorganize by resolving certain pending litigation and providing them with a capital structure that will allow them to satisfy their obligations with sufficient liquidity and capital resources and to fund necessary capital expenditures and otherwise conduct their businesses. Moreover, the Plan itself and the arms' length negotiations among the Debtors, the Creditors' Committee and the Debtors' other constituencies leading to the Plan's formulation, as well as the overwhelming support of creditors for the Plan, provide independent evidence of the Debtors' good faith in proposing the Plan. 4. SECTION 1129(a)(4) -- BANKRUPTCY COURT APPROVAL OF CERTAIN PAYMENTS AS REASONABLE. a. Section III.A.1.f.ii.A of the Plan provides that, except as otherwise provided in the Ordinary Course Professionals Order, Professionals or other entities asserting a Fee Claim for services rendered before the Effective Date must File and serve on the Reorganized Debtors and such other entities who are designated by the Bankruptcy Rules, this Confirmation Order, the Fee Order or other order of the Bankruptcy Court an application for final allowance of such Fee Claim no later than 60 days after the Effective Date. The Bankruptcy Court will review the reasonableness of such applications under sections 328 and 330 of the Bankruptcy Code and any applicable case law. Pursuant to the Fee Order, the Bankruptcy Court has authorized periodic payment of the fees and expenses of Professionals incurred in connection with these chapter 11 cases. All such fees and expenses, however, remain subject to final review for reasonableness by the Bankruptcy Court. Notwithstanding the 11 foregoing, as part of the settlement of the CTA issues under the Plan, Section III.E and Section III.F of the Plan set forth special provisions regarding the payment of the Indenture Trustees' Claims and Principal CTA Creditors' and certain other entities' Claims for fees and expenses, which satisfy the requirements of section 1129(a)(4) of the Bankruptcy Code. b. In connection with the foregoing, Article XII of the Plan provides that the Bankruptcy Court will retain jurisdiction after the Effective Date to hear and determine all applications for or objections to allowance of compensation or reimbursement of expenses authorized pursuant to the Bankruptcy Code or the Plan. 5. SECTION 1129(a)(5) -- DISCLOSURE OF IDENTITY OF PROPOSED MANAGEMENT, COMPENSATION OF INSIDERS AND CONSISTENCY OF MANAGEMENT PROPOSALS WITH THE INTERESTS OF CREDITORS AND PUBLIC POLICY. In the Disclosure Statement and Exhibit IV.C.2 to the Plan, the Debtors have disclosed the identity of the proposed directors and officers of the Reorganized Debtors and the identity and the compensation of insiders who will be employed or retained by the Reorganized Debtors. The appointment or continuance of the proposed directors and officers is consistent with the interests of holders of Claims and Interests and public policy. 6. SECTION 1129(a)(6) -- APPROVAL OF RATE CHANGES. The Debtors' current businesses do not involve the establishment of rates over which any regulatory commission has or will have jurisdiction after Confirmation. 7. SECTION 1129(a)(7) -- BEST INTERESTS OF HOLDERS OF CLAIMS AND INTERESTS. With respect to each impaired Class of Claims or Interests for each Debtor, each holder of a Claim or Interest in such impaired Class has accepted or is deemed to have accepted the Plan or, as demonstrated by the liquidation analyses included as, or referenced in, Exhibit III to the Disclosure Statement, will receive or retain under the Plan on account of such Claim or 12 Interest property of a value, as of the Effective Date, that is not less than the amount such holder would receive or retain if the Debtors were liquidated on the Effective Date under chapter 7 of the Bankruptcy Code. 8. SECTION 1129(a)(8) -- ACCEPTANCE OF THE PLAN BY EACH IMPAIRED CLASS. Pursuant to sections 1124 and 1126 of the Bankruptcy Code: (a) as indicated in Article II of the Plan, Classes 1, 4 (with respect to Claims as to which Option A or B is selected), 18 and 21 are Classes of unimpaired Claims or Interests; (b) pursuant to the Plan's terms, Classes 9 and 10 are deemed to have accepted the Plan; and (c) as indicated in the Voting Affidavit: (i) the creditors for all Debtors with respect to Classes 3, 5, 6, 7 and 19 voted to accept the Plan; (ii) with respect to Classes 2, 8, and 11, the creditors of all Debtors except for 17 Debtors in Class 2, four Debtors in Class 8 and 21 Debtors in Class 11 voted to accept the Plan; and (iii) with respect to Class 22 and Class 23, the creditors rejected the Plan for Debtors TLGI and LGII. Because the holders of Claims and Interests in Classes 12, 13, 14, 15, 16, 17 and 20 will not receive or retain any property on account of such Claims or Interests, Classes 12, 13, 14, 15, 16, 17 and 20 are deemed not to have accepted the Plan pursuant to section 1126(g) of the Bankruptcy Code. Notwithstanding the lack of compliance with section 1129(a)(8) of the Bankruptcy Code with respect to Classes 12, 13, 14, 15, 16, 17 and 20 and, as to certain Debtors, Classes 2, 8, 11, 22 and 23, the Plan is confirmable because, as described in Section I.B.14 below, the Plan, as modified, satisfies the "cramdown" requirements of section 1129(b) of the Bankruptcy Code with respect to such Classes. 9. SECTION 1129(a)(9) -- TREATMENT OF CLAIMS ENTITLED TO PRIORITY PURSUANT TO SECTION 507(a) OF THE BANKRUPTCY CODE. a. The Plan provides for treatment of Allowed Administrative Claims, Priority Tax Claims and Priority Claims, subject to certain bar date provisions, in the manner required by section 1129(a)(9) of the Bankruptcy Code. 13 b. Pursuant to Section III.A.1.a of the Plan, each holder of an Allowed Administrative Claim will receive from Reorganized LGII or the applicable Reorganized Debtor, in full satisfaction of its Administrative Claim, cash equal to the allowed amount of such Administrative Claim either: (i) on the Effective Date; or (ii) if the Administrative Claim is not allowed as of the Effective Date, 30 days after the date on which an order allowing such Administrative Claim becomes a Final Order or a Stipulation of Amount and Nature of Claim is executed by Reorganized LGII or the applicable Reorganized Debtor and the holder of the Administrative Claim. c. Pursuant to Section III.A.1.c of the Plan, Allowed Administrative Claims based on liabilities incurred by a Debtor in the ordinary course of its business (including Administrative Trade Claims, Administrative Claims of governmental units for Taxes, including Tax audit Claims related to tax years commencing after the Petition Date, and Administrative Claims arising from those contracts and leases of the kind described in Section V.F of the Plan or out of the employee benefit policies, plans and agreements identified in Exhibit IV.C.3 to the Plan) will be paid by the applicable Reorganized Debtor pursuant to the terms and conditions of the particular transaction giving rise to such Administrative Claims, without any further action by the holders of such Administrative Claims, provided that Administrative Claims in respect of the Rose Hills Put/Call Agreement will be paid in accordance with Section III.G of the Plan. d. Pursuant to Section III.A.1.e of the Plan, Allowed Administrative Claims and fee and expense Claims for services rendered under the respective Prepetition Indentures prior to the Effective Date of each Indenture Trustee will be paid pursuant to the terms of Section III.E of the Plan. 14 e. Under Section III.A.2.a of the Plan, each holder of an Allowed Priority Tax Claim will receive, in full satisfaction of its Priority Tax Claim, deferred cash payments over a period not exceeding six years from the date of assessment of such Priority Tax Claim. Payments will be made in equal annual installments of principal, plus simple interest accruing from the Effective Date at 7% per annum on the unpaid portion of each Allowed Priority Tax Claim (or upon such other terms determined by the Court to provide the holders of Priority Tax Claims with deferred cash payments having a value, as of the Effective Date, equal to the allowed amount of such Priority Tax Claims). Unless otherwise agreed by the holder of a Priority Tax Claim and the applicable Debtor or Reorganized Debtor, the first payment on account of an Allowed Priority Tax Claim will be payable one year after the Effective Date or, if the Priority Tax Claim is not allowed within one year after the Effective Date, the first Quarterly Distribution Date after the date on which (i) an order allowing the Priority Tax Claim becomes a Final Order or (ii) a Stipulation of Amount and Nature of Claim is executed by the applicable Reorganized Debtor and the holder of the Priority Tax Claim; provided, however, that the Reorganized Debtors will have the right to pay any Allowed Priority Tax Claim or any remaining balance of such Priority Tax Claim, in full at any time on or after the Effective Date, without premium or penalty. f. Pursuant to Section III.A.2.b. of the Plan, notwithstanding the provisions of Section III.A.2.a of the Plan, the holder of an Allowed Priority Tax Claim will not be entitled to receive any payment on account of any penalty arising with respect to or in connection with the Allowed Priority Tax Claim. Any such Claim or demand for any such penalty will be subject to treatment in Class 11, and the holder of an Allowed Priority Tax Claim 15 will not be entitled to assess or attempt to collect such penalty from the Reorganized Debtors or their property. g. Pursuant to Section III.B.1 of the Plan, holders of Allowed Unsecured Priority Claims, other than Priority Tax Claims, will receive cash equal to the amount of such claims on the Effective Date. 10. SECTION 1129(a)(10) -- ACCEPTANCE BY AT LEAST ONE IMPAIRED, NON-INSIDER CLASS. As indicated in the Voting Affidavit and as reflected in the record of the Confirmation Hearing, at least one Class of Claims or Interests that is impaired under the Plan has voted to accept the Plan determined without including the acceptance by any insider, with respect to all Debtors under the Plan, as modified. 11. SECTION 1129(a)(11) -- FEASIBILITY OF THE PLAN. Although the Debtors' businesses are highly competitive, and although it is impossible to predict with certainty the precise future profitability of the Debtors' businesses or the industries and markets in which the Debtors operate, as demonstrated by the Debtors' financial projections contained in the Disclosure Statement and the evidence in the record, Confirmation of the Plan is not likely to be followed by the liquidation of, or the need for further financial reorganization of the Debtors, the Reorganized Debtors or any successor to the Reorganized Debtors under the Plan. Upon the Effective Date, the Reorganized Debtors will have sufficient cash flow and capital resources to pay their liabilities as they become due and to satisfy their capital needs for the conduct of their businesses. 12. SECTION 1129(a)(12) -- PAYMENT OF BANKRUPTCY FEES. Section III.A.1.b of the Plan provides that, on or before the Effective Date, Administrative Claims for undisputed fees payable pursuant to 28 U.S.C. Section 1930 will be paid in cash equal to the amount of such Administrative Claims. The United States trustee filed an 16 objection to Confirmation. The United States trustee and the Debtors, however, require additional time to conduct discovery on the issue of pre-Confirmation quarterly fees. The amount of the disputed pre-Confirmation quarterly fees payable by the Debtors (the "Disputed U.S. Trustee Fees") will be determined pursuant to a separate stipulation and order entered into by the parties. By confirming the Plan, the Bankruptcy Court finds that the Debtors will have the ability, if necessary, to pay the Disputed U.S. Trustee Fees in an estimated amount of $10,000,000 at the time the order of the Bankruptcy Court determining the quarterly fee dispute becomes final and nonappealable. Nothing in this paragraph shall bind the parties with respect to the amount of quarterly fees due in subsequent litigation regarding the Disputed U.S. Trustee Fees. 13. SECTION 1129(a)(13) -- RETIREE BENEFITS. Pursuant to Section IV.C.3.b of the Plan, from and after the Effective Date, the Reorganized Debtors will be obligated to pay retiree benefits (as defined in section 1114(a) of the Bankruptcy Code), if any, in accordance with the terms of the retiree benefit plans or other agreements governing the payment of such benefits, subject to any rights to amend, modify or terminate such benefits under the terms of the applicable retiree benefits plan, other agreement or applicable nonbankruptcy law. 14. SECTION 1129(b) -- CONFIRMATION OF THE PLAN OVER THE NONACCEPTANCE OF IMPAIRED CLASSES. Pursuant to section 1129(b)(1) of the Bankruptcy Code, the Plan may be confirmed notwithstanding that Claims and Interests in Classes 12, 13, 14, 15, 16, 17 and 20 and, as to certain Debtors (the "Cramdown Debtors"), Classes 2, 8 and 11 and, as to TLGI and LGII, Classes 22 and 23 are impaired and are deemed not to have accepted the Plan pursuant to section 1126(g) of the Bankruptcy Code. Other than the requirement in section 1129(a)(8) of the Bankruptcy Code with respect to Classes 12, 13, 14, 15, 16, 17 and 20, with respect to Classes 2, 8 and 11 in instances where such classes rejected the Plan as to the Cramdown Debtors and with 17 respect to Classes 22 and 23 as to TLGI and LGII , all of the requirements of section 1129(a) of the Bankruptcy Code have been met. The Plan does not discriminate unfairly and is fair and equitable with respect to Classes 12, 13, 14, 15, 16, 17 and 20 and with respect to Classes 2, 8 and 11, in instances where such classes rejected the Plan as to the Cramdown Debtors and with respect to Classes 22 and 23 as to TLGI and LGII. No holders of Claims and Interests junior to the Claims and Interests in Classes 12, 13, 14, 15, 16, 17 and 20, and the Claims in Classes 2, 8 and 11 in instances where such classes rejected the Plan as to the Cramdown Debtors, will receive or retain any property on account of their Claims and Interests and, as evidenced by the valuations and estimates contained in the Disclosure Statement and by the testimony and other evidence in the record, no holders of Claims or Interests senior to Classes 12, 13, 14, 15, 16, 17 and 20 and, as to the Cramdown Debtors, Classes 2, 8 and 11, are receiving more than full payment on account of the Claims and Interests in such Classes. As evidenced by the valuations and estimates contained in the Disclosure Statement and by the testimony and other evidence in the record, and in light of the findings in Section I.B.7 above and this Section I.B.14, neither TLGI Old Preferred Stock nor TLGI Old Common Stock has any residual value, after Claims against TLGI, and Claims against and Interests in the other Debtors, are taken into account. 15. BANKRUPTCY RULE 3016(a). The Plan and the Modifications are dated and identify the entities submitting the Plan and the Modifications. 16. SECTION 1129(d) -- PURPOSE OF PLAN. The primary purpose of the Plan is not avoidance of taxes or avoidance of the requirements of Section 5 of the Securities Act, and there has been no objection filed by any governmental unit asserting such avoidance. 18 C. THE CTA SETTLEMENT. 1. APPROVAL OF THE CTA SETTLEMENT UNDER BANKRUPTCY RULE 9019. a. The Plan incorporates the terms of a settlement (the "CTA Settlement") of the CTA Proceeding and the CTA Issue, and thus resolves numerous claims, causes of action and other potentially disputed issues between and among the Debtors, the Subject Debt Holders (as such term is defined in the Disclosure Statement), the Other CTA Debt Holders (as such term is defined in the Disclosure Statement) and the Indenture Trustees. The CTA Settlement departs from the previously proposed pari passu recoveries for holders of Group I, Group II, and Group III CTA Note Claims. That pari passu approach would have produced estimated percentage recoveries of 68.5% for each of the CTA Note Claims. In its place, the CTA Settlement provides, subject to the CTA Trustee Reserve Amount and the Series Reserve Amounts, estimated recoveries of 76.7%, 72.5%, and 57% for the three groups, respectively, reflecting, among other things, the relative litigation risks that the Debtors concluded each group faced in the CTA Proceeding. b. The CTA Proceeding is a complicated piece of litigation involving many parties. The full and protracted litigation of the legal and factual issues presented in the CTA Proceeding would be costly and would impair a prompt, efficient and economical reorganization. The facts that would need to be established likely would require extensive, costly and time-consuming discovery, including substantial discovery from third parties, and would be vigorously contested. Many of the legal issues would be novel and complex. As a result, the ultimate outcome of the CTA Proceeding is uncertain, and many different outcomes are possible, which would affect the various interested parties in different ways. 19 c. The CTA Settlement and the Plan itself are the product of extensive arms-length negotiations among the Debtors, the Creditors' Committee, the Subject Debt Holders, the Other CTA Debt Holders and certain other parties in interest. The Tolling Parties are not parties to the CTA Settlement. d. The benefits of the CTA Settlement to the Debtors are substantial. Together with the Creditors' Committee settlement described in the Disclosure Statement, the CTA Settlement resolves both the relative recoveries as between holders of CTA Note Claims and other creditors and as among the holders of the three groups of CTA Note Claims. The CTA Settlement resolves the CTA Proceeding and significantly speeds the Debtors' emergence from their chapter 11 cases. As a result, the CTA Settlement confers significant benefits on the Debtors and their estates. e. The fairness and reasonableness of the CTA Settlement to the Debtors and to their estates are directly supported by (i) the Stam Declaration; (ii) the CTA Whitepaper prepared by the Debtors' counsel; (iii) the record in the CTA Proceeding; and (iv) the findings and statements of the Bankruptcy Court throughout the CTA Proceeding and at the Confirmation Hearing. Moreover, the appropriateness of the CTA Settlement is further supported by (i) the lack of objections to the substance of the CTA Settlement and (ii) the acceptance of the Plan by an overwhelming majority of the holders of Claims, including 99.1% in number and 99.8% in amount of the holders of CTA Note Claims that voted on the Plan, as set forth in the Voting Affidavit. f. The CTA Settlement also is supported by a variety of other factors, including: (i) the fact that it was negotiated over several months and is the product of arms- 20 length negotiations among the Debtors, the Creditors' Committee, the Subject Debt Holders, the Other CTA Debt Holders and certain other parties in interest during which the parties aggressively advocated their respective legal positions; (ii) the operative terms of the settlement with respect to the proposed aggregate recoveries for holders of Group I, Group II, and Group III CTA Note Claims reflect considered evaluations of the probability of success of the legal and factual positions presented in the CTA Proceeding; and (iii) the settlement enjoys widespread support among creditors generally, and among holders of CTA Note Claims in particular. 2. THE LIMITED OBJECTIONS TO THE CTA SETTLEMENT. Certain provisions of the CTA Settlement have drawn limited objections. None of these objections addresses the merits of the CTA Settlement with respect to the Debtors' estates. D. SATISFACTION OF CONDITIONS TO CONFIRMATION. Section IX.A of the Plan contains conditions precedent to Confirmation that must be satisfied or duly waived pursuant to Section IX.C of the Plan. The conditions precedent set forth in Sections IX.A.1 through IX.A.4 of the Plan have been satisfied. The Bankruptcy Court has declined to approve Section IV.F.6.b and Section IX.A.5 of the Plan for the reasons stated on the record at the Confirmation Hearing. The transcript of the Confirmation Hearing constitutes the Bankruptcy Court's findings and conclusions with respect to those provisions. In light of the Bankruptcy Court's ruling, the Debtors are entitled to waive, and have waived, the condition to confirmation set forth in Section IX.A.5 pursuant to the terms of Section IX.C. II. CONCLUSIONS OF LAW. A. JURISDICTION AND VENUE. The Bankruptcy Court has jurisdiction over this matter pursuant to 28 U.S.C. Sections 157 and 1334. This is a core proceeding pursuant to 28 U.S.C. Section 157(b)(2). The Debtors 21 were and are qualified to be debtors under section 109 of the Bankruptcy Code. Venue of the Reorganization Cases in the United States Bankruptcy Court for the District of Delaware was proper as of the Petition Date, pursuant to 28 U.S.C. Section 1408, and continues to be proper. B. MODIFICATIONS OF THE PLAN. The notice provided by the Debtors of the Modifications was adequate and appropriate under the circumstances and, accordingly, is approved. The Modifications: (1) comply in all respects with section 1127 of the Bankruptcy Code, Bankruptcy Rule 3019 and all other provisions of the Bankruptcy Code; and (2) do not adversely change the treatment under the Plan of any Claims or Interests. In light of the technical or immaterial nature of each of the Modifications, no additional disclosure under section 1125 of the Bankruptcy Code is required with respect to the Modifications. Accordingly, pursuant to section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019, all holders of Claims and Interests that have accepted or are conclusively presumed to have accepted the Plan as filed on September 10, 2001 are deemed to have accepted the Plan, as modified by the Modifications. C. EXEMPTIONS FROM SECURITIES LAWS. 1. Pursuant to section 1125(e) of the Bankruptcy Code, the Debtors' transmittal of solicitation materials, their solicitation of acceptances of the Plan and their offering, issuance and distribution of the New Five-Year Secured Notes and related guarantees, the New Two-Year Unsecured Notes and related guarantees, the New Seven-Year Unsecured Notes and related guarantees, the New Unsecured Subordinated Convertible Notes and related guarantees, the New Common Stock, the New Warrants and interests in the Liquidating Trust pursuant to the Plan are not, and will not be, governed by or subject to any otherwise applicable law, rule or regulation governing the solicitation of acceptance of a plan of reorganization or the offer, issuance, sale or purchase of securities. 22 2. Pursuant to section 1145(a)(1) of the Bankruptcy Code, the offering, issuance and distribution of the New Five-Year Secured Notes and related guarantees, the New Two-Year Unsecured Notes and related guarantees, the New Seven-Year Unsecured Notes and related guarantees, the New Unsecured Subordinated Convertible Notes and related guarantees, the New Common Stock, the New Warrants and interests in the Liquidating Trust pursuant to the Plan in respect of Claims (including without limitation Claims under the Rose Hills Put/Call Agreement and Claims under the emergence bonus provisions of the Debtors' Key Employee Retention Program) or Interests are, and will be, exempt from section 5 of the Securities Act of 1933, as amended (the "Securities Act"), and any state or local law requiring registration for offer or sale of a security or registration or licensing of an issuer or underwriter of, or broker or dealer in, a security. In addition, pursuant to section 1145(a)(2) of the Bankruptcy Code, the offering, issuance and distribution of New Common Stock upon the conversion of New Unsecured Subordinated Convertible Notes pursuant to the New Unsecured Subordinated Convertible Notes Indenture and the offering, issuance and distribution of New Common Stock upon the exercise of New Warrants pursuant to the New Warrant Agreement will be exempt from section 5 of the Securities Act and any state or local law requiring registration for offer or sale of a security or registration or licensing of an issuer or underwriter of, or broker or dealer in, a security. 3. Pursuant to, and to the fullest extent permitted under, section 1145 of the Bankruptcy Code, the resale of any security referenced in Section II.C.2 of this Confirmation Order will be exempt from section 5 of the Securities Act and any state or local law requiring registration for offer or sale of a security or registration or licensing of an issuer or underwriter of, or broker or dealer in, a security. 23 D. EXEMPTIONS FROM TAXATION. Pursuant to section 1146(c) of the Bankruptcy Code: (1) the issuance, distribution, transfer or exchange of the New Five-Year Secured Notes, the New Two-Year Unsecured Notes, the New Seven-Year Unsecured Notes, the New Unsecured Subordinated Convertible Notes, the New Common Stock, the New Warrants, interests in the Liquidating Trust and any other securities issuable pursuant to the Plan; (2) the creation, modification, assignment, consolidation, filing or recording of any mortgage, deed of trust, lien, security agreement, financing statement, release or similar instrument; (3) the securing of additional indebtedness by such means or by other means or the additional securing of existing indebtedness by such means or by other means; (4) the creation, modification, assignment, delivery, filing or recording of any lease or sublease; or (5) the creation, modification, assignment, delivery, filing or recording of any deed or other instrument of transfer under, in furtherance of or in connection with the Plan, including the Exit Financing Revolving Credit Facility, the Exit Financing Term Loan, the New Tax Sharing Agreement and any other agreements or certificates of merger, consolidation, dissolution or liquidation, deeds, bills of sale, assignments or other instruments of transfer executed in connection with the Plan, this Confirmation Order, the Restructuring Transactions or any transactions arising out of, contemplated by or in any way related to the foregoing, whether occurring on or after the Effective Date, shall not be subject to any stamp tax or similar tax, and the appropriate state or local governmental officials or agents are hereby directed to forego the collection of any such tax and to accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax. E. COMPLIANCE WITH SECTION 1129 OF THE BANKRUPTCY CODE. As set forth in Section I.B above, the Plan complies in all respects with the applicable requirements of section 1129 of the Bankruptcy Code. 24 F. APPROVAL OF THE SETTLEMENTS AND RELEASES PROVIDED UNDER THE PLAN AND CERTAIN OTHER MATTERS. 1. Pursuant to section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019(a), the settlements, compromises, releases, waivers, discharges and injunctions set forth in the Plan, including Sections IV.E, IV.F (except for Section IV.F.6.b, which the Bankruptcy Court declined to approve for the reasons stated on the record at the Confirmation Hearing), XI.A, XI.B and XI.C of the Plan, are approved as integral parts of the Plan and are fair, equitable, reasonable and in the best interests of the Debtors, the Reorganized Debtors and their respective Estates and the holders of Claims and Interests; are approved as fair, equitable and reasonable, pursuant to, among other authorities, section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019(a); and are effective and binding in accordance with their terms. 2. In approving the settlements, compromises, releases, waivers, discharges and injunctions of and from such potential claims, as described above, the Bankruptcy Court has considered: (a) the balance of the likelihood of success of claims asserted by the Debtors or other claimants against the likelihood of success of the defenses or counterclaims possessed by the Debtors, other claimants or other potential defendants; (b) the complexity, cost and delay of litigation that would result in the absence of these settlements, compromises, releases, waivers, discharges and injunctions; (c) the lack of objections by any creditor or party in interest to the settlements, compromises, releases, waivers, discharges and injunctions, other than those Objections that have been addressed by the Modifications and the terms of this Confirmation Order, and the acceptance of the Plan by an overwhelming majority of the holders of Claims, as set forth in the Voting Affidavit; and (d) that the Plan, which gives effect to the settlements, compromises, releases, waivers, discharges and injunctions, is the product of extensive arms' 25 length negotiations among the Debtors, the Creditors' Committee and other parties in interest. See Protective Comm. Stockholders of TMT Trailer Ferry Inc. v. Anderson, 390 U.S. 414, 424 (1968) (citing factors such as those set forth above to be evaluated by courts in determining whether a settlement as a whole is fair and equitable); accord Myers v. Martin (In re Martin), 91 F.3d 389, 394 (3d Cir. 1996) (setting forth similar factors to be considered in evaluating the reasonableness of a settlement). G. THE CTA SETTLEMENT. 1. The CTA Settlement meets the standards set forth in Bankruptcy Rule 9019. It is a fair and reasonable resolution of the issues and claims it addresses, and is in the best interests of the Debtors' estates. 2. The releases of claims against the CTA Trustee and State Street that would entitle them to a claim for indemnification against the Debtors represent an integral part of the settlement and are enforceable. (Plan Section IV.F.3.e and f.) No party has objected to these releases. 3. The releases of claims against the Indenture Trustees represent an integral part of the settlement and are enforceable. (Plan Section IV.F.3.b). No party has objected to these releases. 4. The $3,000,000 Eligible Group III Proceedings Fee Fund is an integral part of the CTA Settlement and is appropriate. H. AGREEMENTS AND OTHER DOCUMENTS. The Debtors have disclosed all material facts regarding (i) all contracts, instruments, releases and other agreements and documents relating to the Restructuring Transactions, including the Subsidiary Restructuring Transactions and the Reinvestment 26 Transactions, and the dissolution of LGCLP; (ii) the amended and restated certificate of incorporation and bylaws or similar consistent documents of each Reorganized Debtor; (iii) the employment and indemnification agreements and benefit plans described on Exhibit IV.C.3 to the Plan, including the Equity Incentive Plan, and all other contracts, instruments, agreements and documents to be executed and delivered or adopted by any Reorganized Debtor in connection with any of them; (iv) the New Five-Year Secured Notes Indenture, the New Two-Year Unsecured Notes Indenture, the New Seven-Year Unsecured Notes Indenture, the New Unsecured Subordinated Convertible Notes Indenture, the New Warrant Agreement, the Liquidating Trust Agreement, the New Registration Rights Agreements and all other contracts, instruments, agreements and documents to be executed and delivered by any Reorganized Debtor in connection with any of them; (v) the Exit Financing Revolving Credit Facility and the Exit Financing Term Loan and all other contracts, instruments, agreements and documents to be executed and delivered by any Reorganized Debtor in connection with either of them; (vi) all contracts, instruments, releases and other agreements and documents relating to the Blackstone Settlement; and (vii) the New Tax Sharing Agreement (collectively, "Plan Documents"). Pursuant to section 303 of the General Corporation Law of the State of Delaware and any comparable provision of the business corporation laws of any other state (collectively, the "State Reorganization Effectuation Statutes"), as applicable, no action of the respective directors or stockholders of any Reorganized Debtor will be required to authorize such Reorganized Debtor to enter into, execute and deliver, adopt or amend, as the case may be, the Plan Documents, and following the Effective Date, each of the Plan Documents will be a legal, valid and binding obligation of such Reorganized Debtors as are parties thereto, enforceable against such Reorganized Debtors in accordance with the respective terms thereof (subject only to bankruptcy, insolvency and other similar laws affecting creditors' rights generally and to general equitable principles). 27 I. ASSUMPTIONS, ASSUMPTIONS AND ASSIGNMENTS AND REJECTIONS OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES. Each pre- or post-Confirmation assumption, assumption and assignment or rejection of an Executory Contract or Unexpired Lease pursuant to Sections V.A and V.C of the Plan, including any pre- or post-Confirmation assumption, assumption and assignment or rejection effectuated as a result of any amendment to Exhibit V.A.1 or V.C to the Plan, as contemplated by Sections V.A.1 and V.C of the Plan, shall be legal, valid and binding upon the applicable Debtor or Reorganized Debtor and all nondebtor parties to such Executory Contract or Unexpired Lease, all to the same extent as if such assumption, assumption and assignment or rejection had been effectuated pursuant to an appropriate authorizing order of the Bankruptcy Court entered before the Confirmation Date under section 365 of the Bankruptcy Code. III. ORDER. ACCORDINGLY, THE COURT HEREBY ORDERS THAT: A. CONFIRMATION OF THE PLAN. The Plan is confirmed in each and every respect, other than Sections IV.F.6.b and IX.A.5 of the Plan (which the Bankruptcy Court declined to approve for the reasons stated on the record at the Confirmation Hearing), pursuant to section 1129 of the Bankruptcy Code; provided, however, that if there is any direct conflict between the terms of the Plan and the terms of this Confirmation Order, the terms of this Confirmation Order shall control. All of the Objections and other responses to, and statements and comments regarding, the Plan, other than those withdrawn with prejudice in their entirety prior to, or on the record at, the Confirmation Hearing are either resolved on the terms set forth herein or overruled. 28 B. EFFECTS OF CONFIRMATION. 1. BINDING NATURE OF PLAN TERMS. Notwithstanding any otherwise applicable law, immediately upon the entry of this Confirmation Order, the terms of the Plan and this Confirmation Order are deemed binding upon the Debtors, the Reorganized Debtors, any and all holders of Claims or Interests (irrespective of whether such Claims or Interests are impaired under the Plan or whether the holders of such Claims or Interests accepted, rejected or are deemed to have accepted or rejected the Plan), any and all nondebtor parties to Executory Contracts and Unexpired Leases with any of the Debtors and any and all entities who are parties to or are subject to the settlements, compromises, releases, waivers, discharges and injunctions described in Sections II.F and II.G above and the respective heirs, executors, administrators, successors or assigns, if any, of any of the foregoing. 2. CONTINUED CORPORATE EXISTENCE; VESTING OF ASSETS. Except as otherwise provided in the Plan (and subject to the provisions regarding Restructuring Transactions in Section IV.B of the Plan), each Debtor shall, as a Reorganized Debtor, continue to exist after the Effective Date as a separate corporate entity, with all the powers of a corporation (or such other corporate form) under applicable law and without prejudice to any right to alter or terminate such existence (whether by merger, dissolution or otherwise) under applicable state law. Except as otherwise provided in the Plan, as of the Effective Date, all property of the respective Estates of the Debtors, and any property acquired by a Debtor or Reorganized Debtor under the Plan, shall vest in the applicable Reorganized Debtor, free and clear of all Claims, liens, charges, other encumbrances and Interests. On and after the Effective Date, each Reorganized Debtor is authorized to (a) operate its businesses; (b) use, acquire and dispose of property; and (c) compromise or settle any Claims or Interests, in each case without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or the Bankruptcy Rules, other than those restrictions expressly imposed by the Plan or this Confirmation Order. Without limiting the foregoing, each Reorganized 29 Debtor is authorized to pay the charges that it incurs on or after the Effective Date for professionals' fees, disbursements, expenses or related support services (including fees relating to the preparation of Professional fee applications) without application to the Bankruptcy Court. 3. CANCELLATION AND SURRENDER OF INSTRUMENTS, SECURITIES AND OTHER DOCUMENTATION. Except as provided in any contract, instrument or other agreement or document created, entered into or delivered in connection with the Plan, on the Effective Date and immediately following the applicable distributions made pursuant to Article III of the Plan, the CTA, the BMO Revolving Credit Facility, the MEIP Credit Facility, the Public Notes, the Prepetition Indentures, the Series D Notes, the Series E Notes, the Prepetition Note Agreements and the O'Keefe Notes and any guaranties or other obligations in respect thereof will be canceled and of no further force and effect, without any further action on the part of any Debtor or Reorganized Debtor, and any and all collateral in respect thereof will be released. Upon such cancellation, the CTA Trustee will turn over to Reorganized LGII or as otherwise directed by Reorganized LGII any collateral held by the CTA Trustee under the CTA. Immediately thereafter, the LGII Old Stock, the Old Stock of the Non-Ownership Regulated Debtors owned by any person or entity other than a Loewen Company and the MIPS and other partnership interests of LGCLP shall be deemed canceled and of no further force without any further action on the part of any Debtor or Reorganized Debtor. Notwithstanding the foregoing: (a) the applicable provisions of the Prepetition Indentures shall continue in effect (i) solely for the purposes of permitting the respective Indenture Trustee to make the distributions to holders of the Public Notes as contemplated by Section VI.B of the Plan, as modified, (ii) to the extent such provisions provide that a court may require in any suit against any Indenture Trustee an undertaking by a party litigant in such suit to pay costs of such suit or that a court may assess reasonable costs, including reasonable attorneys' fees, against a party litigant and (iii) to the extent provided in Section IV.F.3.d of the Plan; and (b) the reimbursement and indemnification 30 provisions contained in Section 11.8 of the BMO Revolving Credit Facility and Section 7.05 of the MEIP Credit Facility shall continue in effect and shall not be canceled. Notwithstanding anything in the Plan to the contrary, including without limitation the reservation of certain third-party claims in Section IV.F.6 of the Plan, from and after the cancellation of the Prepetition Indentures on the Effective Date, the Indenture Trustees shall have no right, duty or obligation, contractual or otherwise, to initiate, continue or otherwise pursue any claims, demands, rights, causes of action or liabilities in respect of the CTA or the CTA Note Claims or the status thereof under the CTA, including without limitation any such claims, demands, rights, causes of action or liabilities that any Indenture Trustee may have against any of the Tolling Parties. The holders of or parties to such canceled instruments, securities and other documentation shall have no rights arising from or relating to such instruments, securities and other documentation or the cancellation thereof, except the rights provided pursuant to the Plan; provided, however, that no distribution under the Plan shall be made to or on behalf of any holder of an Allowed Claim evidenced by such canceled instruments or securities unless and until such instruments or securities are received by the applicable Disbursing Agent pursuant to, and to the extent required by, Section VI.J of the Plan. 4. RELEASE OF LIENS. Except as otherwise provided in the Plan or in any contract, instrument, release or other agreement or document entered into or delivered in connection with the Plan, on the Effective Date and concurrently with the applicable distributions made pursuant to Article III of the Plan, all mortgages, deeds of trust, liens or other security interests against the property of any Estate are fully released and discharged, and all of the right, title and interest of any holder of such mortgages, deeds of trust, liens or other security interests, including any rights to any collateral thereunder, shall revert to the applicable Reorganized Debtor and its successors and assigns. Notwithstanding any provision of the Plan other than Section III.C.18 and Section III.C.19, lien rights, if any, of the CTA Trustee and State Street arising under or in 31 respect to the CTA or a Prepetition Indenture, respectively, will be fully released and discharged on the Effective Date. As of the Effective Date, the Reorganized Debtors shall be authorized to file on behalf of creditors Form UCC-3s or such other form or forms as are necessary to effect the provisions of Section IV.M of the Plan. C. CLAIMS BAR DATES AND OTHER CLAIMS MATTERS. 1. BAR DATES FOR ADMINISTRATIVE CLAIMS. a. GENERAL BAR DATE PROVISIONS. Except as otherwise provided in Sections III.A.1.f, III.E and III.F of the Plan and Section III.C.1.b below, unless previously Filed, requests for payment of Administrative Claims must be Filed and served on the Reorganized Debtors, pursuant to the procedures specified in this Confirmation Order and the notice of entry of the Confirmation Order, no later than 30 days after the Effective Date. Holders of Administrative Claims that are required to File and serve a request for payment of such Administrative Claims and that do not File and serve a request by the applicable bar date shall be forever barred from asserting such Administrative Claims against the Debtors, the Reorganized Debtors or their respective property, and such Administrative Claims shall be deemed discharged as of the Effective Date. Objections to such requests must be Filed and served on the Reorganized Debtors and the requesting party by the later of (i) 90 days after the Effective Date or (ii) 60 days after the Filing of the applicable request for payment of Administrative Claims. b. BAR DATES FOR CERTAIN ADMINISTRATIVE CLAIMS. i. PROFESSIONAL COMPENSATION. Professionals or other entities asserting a Fee Claim (other than under Section III.E or Section III.F of the Plan) for services rendered before the Effective Date must File and serve on the Reorganized Debtors and such other entities that are designated by the Bankruptcy Rules, the Confirmation Order, the Fee Order or other order of the Bankruptcy Court 32 an application for final allowance of such Fee Claim no later than 60 days after the Effective Date; provided, however, that any professional who may receive compensation or reimbursement of expenses pursuant to the Ordinary Course Professionals Order may continue to receive such compensation and reimbursement of expenses for services rendered before the Effective Date, without further Bankruptcy Court review or approval, pursuant to the Ordinary Course Professionals Order. Objections to any Fee Claim must be Filed and served on the Reorganized Debtors and the requesting party by the later of (A) 90 days after the Effective Date or (B) 30 days after the Filing of the applicable request for payment of the Fee Claim. To the extent necessary, entry of this Confirmation Order shall amend and supersede any previously entered orders of the Bankruptcy Court, including the Fee Order, regarding the payment of Fee Claims. ii. ORDINARY COURSE LIABILITIES. Holders of Administrative Claims based on liabilities incurred by a Debtor in the ordinary course of its business, including Administrative Trade Claims, Administrative Claims of governmental units for Taxes (including Tax audit Claims arising after the Petition Date) and Administrative Claims arising from those contracts and leases of the kind described in Section V.F of the Plan, including the Rose Hill Put/Call Agreement, will not be required to File or serve any request for payment of such Administrative Claims. Such Administrative Claims shall be satisfied pursuant to Section III.A.1.c of the Plan. 2. BAR DATE FOR REJECTION DAMAGES CLAIMS AND RELATED PROCEDURES. a. Pursuant to the Bankruptcy Court's Order (A) Establishing Procedures Relating to the Proposed Assumption, Assumption and Assignment and Rejection of Executory Contracts and Unexpired Leases Pursuant to the Debtors' Plan of Reorganization and (B) Approving the Form and Manner of Notice Thereof, dated November 2, 2001 (the "Executory Contract and Unexpired Lease Procedures Order"), and notwithstanding anything in the Bar Date Order or any other order of the Bankruptcy Court to the contrary, if the rejection of 33 an Executory Contract or Unexpired Lease pursuant to Section V.C of the Plan gives rise to a Claim (including any Claims arising from those indemnification obligations described in Section V.E.2 of the Plan) by the other party or parties to the Executory Contract or Unexpired Lease, such Claim shall be forever barred and shall not be enforceable against the Debtors, the Reorganized Debtors, their respective successors or their respective properties unless a proof of Claim is filed: (i) with respect to a proposed rejection to which a Rejection Objection (as such term is defined in the Executory Contract and Unexpired Lease Procedures Order) is not filed, no later than (A) 30 days after the Effective Date or (B) if Exhibit V.C of the Plan is amended after the Effective Date to provide for the rejection of the Executory Contract or Unexpired Lease, 30 days after the Debtors or Reorganized Debtors serve notice of that amendment; or (ii) with respect to a proposed rejection that is approved by the Bankruptcy Court after a Rejection Objection is filed, 30 days after the entry of an order approving the rejection. Such rejection damages Claims shall be filed with the Debtors' claims and noticing agent, Logan & Company, Inc., by sending the executed proof of claim by mail, overnight delivery or hand delivery to 546 Valley Road, Upper Montclair, New Jersey 07043 (Attn: Loewen Group Claims Processing Center) so that the proof of claim is actually received on or before the applicable bar date. b. The Debtors or the Reorganized Debtors shall provide written notice to each nondebtor party whose Executory Contract or Unexpired Lease is being rejected pursuant to the Plan of such proposed rejection in accordance with the procedures established in the Executory Contract and Unexpired Lease Procedures Order. 3. SPECIAL PROVISIONS REGARDING THE INDENTURE TRUSTEES' CLAIMS. The provisions relating to the allowance and payment of the Indenture Trustees' Claims contained in Section III.E of the Plan are approved in all respects. Any charging lien 34 held by the Indenture Trustees shall be released as of the Effective Date and shall attach solely to the cash placed in the segregated account established pursuant to Section III.E.3 of the Plan until the funds in that account are distributed in accordance with Section III.E of the Plan. Distributions received by holders of Allowed Claims in Classes 5, 6, 7, 9 and 19 pursuant to the Plan shall not be reduced on account of the payment of the Indenture Trustees' Claims pursuant to Section III.E of the Plan. 4. PROVISIONS REGARDING RESERVE AMOUNTS. a. The following motions of the CTA Trustee and State Street shall be resolved pursuant to the terms of this Section III.C.4: i. Bankers Trust Company's Motion for Reserves for Indemnity and Fees and Expenses (D.I. 8115); and ii. Motion of State Street Bank and Trust Company for Determination of the Series Reserve Amounts in Connection With the Debtors' Proposed Fourth Amended Joint Plan of Reorganization and Pursuant to 11 U.S.C. Sections 105(a), 364(d) and 1123(a)(3) (D.I. 8215). b. The CTA Trustee Reserve Amount shall consist of: (i) for fees and expenses incurred on or prior to the Effective Date, the lesser of $2,660,000 or the amount of fees and expenses actually incurred; and (ii) $2,500,000 for fees and expenses that may be incurred after the Effective Date. c. The Series Reserve Amounts shall, in the aggregate, consist of: (i) for fees and expenses incurred on or prior to the Effective Date, the lesser of $2,000,000 or the amount of fees and expenses actually incurred; and (ii) $3,500,000 for fees and expenses that may be incurred after the Effective Date. The respective Series Reserve Amounts shall be determined in accordance with the procedures stated on the record at the Confirmation Hearing. 35 5. STANDING WITH RESPECT TO CLAIMS OF CTA TRUSTEE AND STATE STREET AND CLASS 11 SHORTFALL RESERVE. Notwithstanding any provision of the Plan or this Confirmation Order to the contrary, each of the Principal CTA Creditors: (a) shall have standing to object to the nature, treatment and amount of any Claims asserted by the CTA Trustee and State Street, respectively, under Classes 22 and 23 of the Plan; and (b) shall receive notice of, and have standing with respect to, any motion of the Reorganized Debtors for authority to issue New Common Stock from the Class 11 Shortfall Reserve to be established pursuant to Section IV.D.1 of the Plan, as modified. D. MATTERS RELATING TO IMPLEMENTATION OF THE PLAN. 1. RESTRUCTURING TRANSACTIONS. a. As of the Effective Date, pursuant to the State Reorganization Effectuation Statutes, as applicable, and other appropriate provisions of applicable state business corporation laws and sections 1123(a) and 1142(b) of the Bankruptcy Code, the Debtors and Reorganized Debtors are authorized to effectuate the following transactions, all as contemplated by Section IV.B of the Plan and in accordance with the applicable terms of the Plan, the applicable Exhibits to the Plan and this Confirmation Order and all without further action by the Bankruptcy Court or the directors or stockholders of any of the Debtors or Reorganized Debtors: (i) the Subsidiary Restructuring Transactions; (ii) the Reinvestment Transactions and, following the Reinvestment Transactions, the transfer by LGII of substantially all of its assets (other than its ownership interests in Loewen Companies) to a wholly owned Delaware subsidiary of LGII; and (iii) the dissolution of LGCLP. b. The Debtors and/or Reorganized Debtors, as appropriate, are authorized to take such actions as any of the Chairman of the Board, the Chief Executive Officer, 36 the President, any Senior Vice President, any Vice President or the Secretary of the applicable Debtor or Reorganized Debtor (collectively, the "Responsible Officers") may determine are necessary or appropriate to effect the transactions contemplated by Section III.D.1.a of this Confirmation Order, including without limitation the execution and delivery of appropriate contracts, instruments or other agreements or documents (collectively, the "Restructuring Documents") and the making of such filings in connection therewith as may be required under appropriate provisions of applicable state business corporation law or other applicable law. c. Each of the Responsible Officers and any Assistant Secretary of each Debtor or Reorganized Debtor are authorized to execute, deliver, file and have recorded the Restructuring Documents and to take such other actions on behalf of such Debtor or Reorganized Debtor as such person may determine to be required under appropriate provisions of applicable state business corporation laws or any other applicable law in connection with transactions contemplated by Section III.D.1.a of this Confirmation Order, and the Secretary and any Assistant Secretary of each Debtor or Reorganized Debtor are authorized to certify or attest to any of the foregoing actions. The execution of any such Restructuring Document or the taking of any such action shall be deemed conclusive evidence of the authority of such person so to act. d. Each federal, state and local governmental agency or department is authorized and directed to accept the filing of any Restructuring Document. This Confirmation Order is declared to be in recordable form and shall be accepted by any filing or recording officer or authority of any applicable governmental authority or department without any further orders, certificates or other supporting documents. 37 2. AMENDMENT AND RESTATEMENT OF CERTIFICATES OF INCORPORATION AND BYLAWS. a. As of the Effective Date, pursuant to the State Reorganization Effectuation Statutes, as applicable, and other appropriate provisions of applicable state business corporation laws and sections 1123(a) and 1142(b) of the Bankruptcy Code, (i) Reorganized LGII is authorized and directed to amend and restate its certificate of incorporation and bylaws substantially in the forms of Exhibits IV.C.1.a(i) and IV.C.1.a(ii), respectively, to the Plan and (ii) each Reorganized Loewen Subsidiary Debtor is authorized and directed to amend and restate its certificate of incorporation, bylaws or similar constituent documents substantially in the forms of Exhibits IV.C.1.b(i) and IV.C.1.b(ii), respectively, to the Plan, all as contemplated by Section IV.C.1 of the Plan and in accordance with the applicable terms of the Plan, the applicable Exhibits to the Plan and this Confirmation Order and all without further action by the Bankruptcy Court or the directors or stockholders of any of the Debtors or Reorganized Debtors. (The amendments and restatements of certificate of incorporation, bylaws or similar constituent documents contemplated by this Section III.D.2.a shall be collectively referred to herein as the "Governance Documents.") b. The Reorganized Debtors are authorized to cause to be filed with the Secretary of State or other applicable state or local official Governance Documents and to take such other actions as any of the Responsible Officers of the applicable Reorganized Debtor may determine are necessary or appropriate to effect the amendments and restatements contemplated by Section III.D.2.a of this Confirmation Order. c. Each of the Responsible Officers and any Assistant Secretary of each Reorganized Debtor are authorized to execute, deliver, file and have recorded the 38 Governance Documents and to take such other actions on behalf as such person may determine to be required under appropriate provisions of applicable state business corporation laws or any other applicable law in connection with the amendments and restatements contemplated by Section III.D.2.a of this Confirmation Order, and the Secretary and any Assistant Secretary of each Reorganized Debtor are authorized to certify or attest to any of the foregoing actions. The execution of any such Governance Document or the taking of any such action shall be deemed conclusive evidence of the authority of such person so to act. d. Each federal, state and local governmental agency or department is authorized and directed to accept the filing of any Governance Document. This Confirmation Order is declared to be in recordable form and shall be accepted by any filing or recording officer or authority of any applicable governmental authority or department without any further orders, certificates or other supporting documents. e. After the Effective Date, each Reorganized Debtor is authorized to amend or restate its certificate of incorporation, bylaws or similar constituent documents as permitted by applicable state business corporation laws or other applicable laws and by such certificate of incorporation, bylaws or other similar constituent document. 3. DIRECTORS AND OFFICERS; EMPLOYMENT-RELATED AGREEMENTS AND COMPENSATION PROGRAMS. a. DIRECTORS AND OFFICERS OF REORGANIZED DEBTORS. i. The appointment of the initial directors and officers of each of the Reorganized Debtors, as set forth in Exhibit IV.C.2 to the Plan, as of and immediately following the Effective Date is approved. 39 ii. Each such director and officer shall serve from and after the Effective Date until his or her successor is duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the terms of the certificates of incorporation and bylaws or similar constituent documents of the applicable Reorganized Debtor and applicable state law. The initial term for each director shall be as set forth on Exhibit IV.C.2 to the Plan in accordance with the provisions of the Reorganized Debtors' respective certificates of incorporation and bylaws or similar constituent documents. b. APPROVAL OF NEW EMPLOYMENT, RETIREMENT, INDEMNIFICATION, AND OTHER RELATED AGREEMENTS AND INCENTIVE COMPENSATION PROGRAMS. Pursuant to the State Reorganization Effectuation Statutes, as applicable, and other appropriate provisions of applicable business corporation laws and section 1142(b) of the Bankruptcy Code, without further action by the Bankruptcy Court or the directors or stockholders of any Reorganized Debtor and without limiting the power or authority of the Reorganized Debtor following the Effective Date to take any and all such actions as may be permitted or required by applicable non-bankruptcy law: (i) as of the Effective Date, TLGI is authorized to assign to a wholly owned Canadian subsidiary of TLGI, and such subsidiary will assume and perform the obligations of TLGI under, the employment agreements of John S. Lacey and Paul A. Houston and such agreements will be modified as provided in Section IV.C.3 of the Plan and described in the Disclosure Statement; (ii) as of the Effective Date, Reorganized LGII is authorized to, directly or indirectly through a wholly owned Canadian subsidiary, enter into employment agreements with Kenneth A. Sloan, Bradley D. Stam, Gordon Orlikow and James Arthurs, in each case on substantially the terms described in the Disclosure Statement; (iii) as of the Effective Date, Reorganized LGII is authorized to enter into indemnification agreements with each of its directors and each of Messrs. Lacey, Houston, Sloan, Stam, Orlikow and Arthurs; (iv) as of the Effective Date, Reorganized LGII is authorized to adopt the Equity 40 Incentive Plan, such plan to have substantially the terms described in the Disclosure Statement, and to make initial grants thereunder as contemplated by Exhibit IV.C.3 to the Plan and described in the Disclosure Statement; (v) as of the Effective Date, Reorganized LGII is authorized to adopt a Director Compensation Plan, such plan to have substantially the terms described in Exhibit IV.C.3 to the Plan and the Disclosure Statement; (vi) as of the Effective Date, each Reorganized Debtor is authorized to adopt a Reserve Account Release Program, such program to have substantially the terms described in Exhibit IV.C.3 to the Plan and the Disclosure Statement; and (vii) as of the Effective Date, subject to the requirements of section 1114 of the Bankruptcy Code, the Reorganized Debtors are authorized to maintain, amend or revise existing employment, retirement, welfare, incentive, severance, indemnification and other agreements and plans (including the savings plans, health and welfare benefit plans and the Key Employee Retention Program described in Exhibit IV.C.3 to the Plan and the Disclosure Statement) with and for their active directors, officers and employees and enter into new employment, retirement, welfare, incentive, severance, indemnification and other agreements and plans with and for active and retired employees and take any and all such actions as may be necessary or appropriate to perform and effectuate such agreements and plans and otherwise make available the benefits contemplated by such agreements and plans. 4. APPROVAL OF AGREEMENTS RELATED TO PLAN DISTRIBUTIONS. a. As of the Effective Date, pursuant to the State Reorganization Effectuation Statutes, as applicable, and other appropriate provisions of applicable state business corporation laws and section 1142(b) of the Bankruptcy Code, without further action by the Bankruptcy Court or the directors or stockholders of any Reorganized Debtor, each Reorganized Debtor, as applicable, is authorized and directed, to execute, deliver and perform its obligations under the New Five-Year Secured Notes Indenture, the New Two-Year Unsecured Notes Indenture, the New Seven-Year Unsecured Notes Indenture, the New Unsecured Subordinated 41 Convertible Notes Indenture, the New Warrant Agreement, the Liquidating Trust Agreement and the New Registration Rights Agreements and to take all such other actions and execute, deliver, record and file all such other contracts, instruments or other agreements or documents as any of the Responsible Officers may determine are necessary or appropriate in connection with the issuance and distribution of the New Five-Year Secured Notes, the New Two-Year Unsecured Notes, the New Seven-Year Unsecured Notes, the New Unsecured Subordinated Convertible Notes, the New Common Stock and the New Warrants and interests in the Liquidating Trust under the Plan. b. The New Five-Year Secured Notes Indenture, the New Two-Year Unsecured Notes Indenture, the New Seven-Year Unsecured Notes Indenture, the New Unsecured Subordinated Convertible Notes Indenture, the New Warrant Agreement, the Liquidating Trust Agreement and the New Registration Rights Agreements, as in effect on the Effective Date, shall be substantially in the respective forms thereof filed as Exhibits to the Plan. 5. APPROVAL OF EXIT FINANCING. a. As of the Effective Date, pursuant to the State Reorganization Effectuation Statutes, as applicable, and other appropriate provisions of applicable state business corporation law and section 1142(b) of the Bankruptcy Code, without further action by the Bankruptcy Court or the directors or stockholders of any Reorganized Debtor, each Reorganized Debtor is authorized to take all such actions and execute, deliver, record and file all contracts, instruments or other agreements or documents as any of its Responsible Officers may determine are necessary or appropriate in connection with the Exit Financing Revolving Credit Facility. 42 b. The Exit Financing Revolving Credit Facility shall be substantially on the terms of the commitment letter (the "Commitment Letter") set forth in amended Exhibit I.A.69 to the Plan. The Debtors are expressly authorized to enter into and perform their obligations, including, without limitation, the payment of the commitment fee and the supplemental deposit, under the Commitment Letter. The reasonable out-of-pocket costs and expenses incurred by The CIT Group/Business Credit, Inc. ("CIT") in connection with the Exit Financing Revolving Credit Facility and CIT's due diligence with respect thereto shall constitute administrative expenses under section 503(b) of the Bankruptcy Code. 6. IMPLEMENTATION OF THE BLACKSTONE SETTLEMENT. a. On the Effective Date, pursuant to the State Reorganization Effectuation Statutes, as applicable, and other appropriate provisions of applicable state business corporation laws and section 1142(b) of the Bankruptcy Code, without further action by the Bankruptcy Court or the directors or stockholder of any Reorganized Debtor, each Reorganized Debtor is authorized to take all such action and execute, deliver, record and file all such contracts, instruments and other agreements or documents as any of its Responsible Officers may determine are necessary or appropriate in connection with the consummation of the Blackstone Settlement, including without limitation, issuing to Blackstone and to RHI the New Unsecured Subordinated Convertible Notes in an original principal amount equal to the New Unsecured Subordinated Convertible Note Principal Amount and 379,449 shares of New Common Stock in accordance with the terms of the Blackstone Settlement Agreement. b. The Blackstone Settlement shall be substantially on the terms set forth in the Blackstone Settlement Agreement attached as Exhibit I.A.18 to the Plan. 43 7. IMPLEMENTATION OF THE NEW TAX SHARING AGREEMENT. a. As of the Effective Date, pursuant to the State Reorganization Effectuation Statutes, as applicable, and other appropriate provisions of applicable state business corporation laws and section 1142(b) of the Bankruptcy Code, without further action by the Bankruptcy Court or the directors or stockholders of any Reorganized Debtor, each Reorganized Debtor is authorized and directed to execute, deliver and perform its obligations under the New Tax Sharing Agreement. b. The New Tax Sharing Agreement, as in effect on the Effective Date, shall be substantially in the form thereof filed as an Exhibit to the Plan. 8. APPROVAL AND IMPLEMENTATION OF CTA SETTLEMENT AND DISMISSAL OF RELATED ACTIONS WITH PREJUDICE. a. Except for Sections IV.F.6.b and IX.A.5 of the Plan (which the Bankruptcy Court declined to approve for the reasons stated on the record at the Confirmation Hearing), the CTA Settlement, including, without limitation, the settlement of the CTA Issue, the other matters that are the subject of Adversary Proceeding No. 00-01181 and the other matters relating to the CTA Note Claims embodied in the Plan, is hereby approved in all respects pursuant to Bankruptcy Rule 9019. b. As of the Effective Date, all claims in Adversary Proceeding No. 00-01181, and the adversary proceedings identified below (being the adversary proceedings identified on Exhibit IX.B.8 of the Plan), shall be deemed dismissed with prejudice. i. Official Committee of Unsecured Creditors vs. Loewen Luxembourg (No. 1) S.A., Adv. Pro. No. A-01-4079. ii. Official Committee of Unsecured Creditors vs. Loewen Luxembourg (No. 2) S.A., Adv. Pro. No. A-01-4078. 44 iii. Loewen Group International, Inc. and The Loewen Group Inc. vs. Harris Trust and Savings Bank; State Street Bank and Trust Company; HSBC Bank USA; U.S. Bank, N.A.; Bank One Trust Company, N.A.; and Does 1-1000, Adv. Pro. No. A-01-4103. iv. Loewen Group International, Inc., The Loewen Group Inc., Riemann Holdings, Inc. and Wright & Ferguson Funeral Home vs. Teachers Insurance and Annuity Association of America, Adv. Pro. No. A-01-4102. v. Loewen Group International, Inc. and The Loewen Group Inc. vs. Pacific Life Insurance Company (f.k.a. Pacific Mutual Life Insurance Company), Adv. Pro. No. A-01-4101. vi. Loewen Group International, Inc. and The Loewen Group Inc. vs. The Union Central Life Insurance Company, Adv. Pro. No. A-01-4098. vii. Loewen Group International, Inc., The Loewen Group Inc. and Loewen Management Investment Corporation vs. Wachovia Bank, N.A. (f.k.a. Wachovia Bank of Georgia, N.A.) and Does 1-100, Adv. Pro. No. A-01-4095. viii. Loewen Group International, Inc. and The Loewen Group Inc. vs. Guarantee Mutual Life Insurance Company (a.k.a. Guarantee Life Insurance Company), Adv. Pro. No. A-01-4091. ix. Loewen Group International, Inc. and The Loewen Group Inc. vs. The Manhattan Life Insurance Company, n.k.a. Carillon Advisors, Inc., Adv. Pro. No. A-01-4092. x. Loewen Group International, Inc. and The Loewen Group Inc. vs. General American Life Insurance Company, Adv. Pro. No. A-01-4090. xi. Loewen Group International, Inc. and The Loewen Group Inc. vs. Bank of Montreal and Does 1-100, Adv. Pro. No. A-01-4088. c. Without further action by the Bankruptcy Court, the Reorganized Debtors are authorized to comply with the obligations with respect to Eligible Group III Proceedings under Section III.I of the Plan. 45 9. IMPLEMENTATION OF LIQUIDATING TRUST. Without further action by the Bankruptcy Court, the Reorganized Debtors are authorized to take any and all actions as may be necessary or appropriate to establish the Liquidating Trust, including: (a) the execution and delivery of the Liquidating Trust Agreement; and (b) the transfer to the Liquidating Trust of the Liquidating Trust Assets, which transfer shall occur immediately following completion of the Reinvestment Transactions. 10. APPROVAL OF EXECUTORY CONTRACT AND UNEXPIRED LEASE PROVISIONS AND RELATED PROCEDURES. a. Except as otherwise modified herein, the Executory Contract and Unexpired Lease provisions of Article V of the Plan are specifically approved. Except as otherwise provided in the Plan or in any contract, instrument, release or other agreement or document entered into in connection with the Plan, on the Effective Date, pursuant to section 365 of the Bankruptcy Code, the applicable Debtor or Debtors shall assume, or assume and assign, as indicated, each of the Executory Contracts and Unexpired Leases including the Rose Hills Put/Call Agreement and those listed on Exhibit V.A.1 to the Plan, but excluding those listed on Exhibit V.C to the Plan; provided, however, that the Debtors or Reorganized Debtors reserve the right, at any time through and including 90 days after the Effective Date, to amend Exhibit V.A.1 to the Plan to: (i) delete any Executory Contract or Unexpired Lease listed therein, thus providing for its rejection pursuant to Section V.C of the Plan, or (ii) add any Executory Contract or Unexpired Lease thereto, thus providing for its assumption or assumption and assignment pursuant to Section V.A. of the Plan. The Debtors or the Reorganized Debtors shall provide notice of any amendments to Exhibit V.A.1 to the Plan to the parties to the Executory Contracts or Unexpired Leases affected thereby and, if prior to the Effective Date, to the parties on the then-applicable service list in the Reorganization Cases (including counsel to the Creditors' 46 Committee). Listing a contract or lease on Exhibit V.A.1 to the Plan shall not constitute an admission by a Debtor or Reorganized Debtor that a Debtor or Reorganized Debtor has any liability thereunder or that such contract or lease is executory. b. Each (a) Real Property Executory Contract and Unexpired Lease and (b) Executory Contract or Unexpired Lease assumed under Section V.A of the Plan will include any modifications, amendments, supplements, restatements or other agreements made directly or indirectly by any agreement, instrument or other document that in any manner affects such contract or lease, irrespective of whether such agreement, instrument or other document is listed on Exhibit V.A.1 to the Plan, unless any such modification, amendment, supplement, restatement or other agreement is rejected pursuant to Section V.C of the Plan and is listed on Exhibit V.C to the Plan. c. Any Executory Contract or Unexpired Lease (including any related agreements as described in Sections I.A.150 and V.A.2 of the Plan) to be held by any Debtor or another surviving, resulting or acquiring corporation in the applicable Restructuring Transaction, shall be deemed assigned to the applicable entity, pursuant to section 365 of the Bankruptcy Code, as of the Effective Date (irrespective of when the applicable Restructuring Transaction is effected). Nothing in Section V.A.3 of the Plan shall restrict, modify or otherwise limit the Debtors' or Reorganized Debtors' right to amend Exhibit V.A.1 or V.C in accordance with Sections V.A.1 and V.C of the Plan, respectively. d. This Confirmation Order shall constitute an order of the Bankruptcy Court approving the assumptions and assumptions and assignments described in Sections V.A and V.E of the Plan, pursuant to section 365 of the Bankruptcy Code, as of the 47 Effective Date. The Executory Contract and Unexpired Lease Procedures Order shall govern the procedures for: (i) providing notice to each party whose Executory Contract or Unexpired Lease is being assumed or assumed and assigned pursuant to the Plan; (ii) determination of the amount of the Cure Amount Claim, if any, that would be payable in connection with any such assumption or assumption and assignment; and (iii) objections by contract parties to the assumption or assumption and assignment of the applicable contract or lease or the amount of the Debtors' or Reorganized Debtors' proposed Cure Amount Claim. e. To the extent that such Claims constitute monetary defaults, the Cure Amount Claims associated with each Executory Contract and Unexpired Lease to be assumed pursuant to the Plan shall be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, at the option of the Debtor assuming such contract or lease or the assignee of such Debtor, if any: (i) by payment of the Cure Amount Claim in cash on the Effective Date; (ii) after the Effective Date, as soon as practicable after the amendment to Exhibit V.A.1 to the Plan, as applicable, providing for the assumption or the assumption and assignment of the Executory Contract or Unexpired Lease; or (iii) on such other terms as are agreed to by the parties to such Executory Contract or Unexpired Lease. If there is a dispute regarding (A) the amount of any Cure Amount Claim, (B) the ability of the applicable Reorganized Debtor or any assignee to provide "adequate assurance of future performance" (within the meaning of section 365 of the Bankruptcy Code) under the contract or lease to be assumed or (C) any other matter pertaining to assumption or assumption and assignment of such contract or lease, the dispute shall be resolved pursuant to the procedures set forth in the Executory Contract and Unexpired Lease Procedures Order, and the payment of any Cure Amount Claim required by section 365(b)(1) of the Bankruptcy Code shall be made following the entry of a Final Order resolving the dispute and 48 approving the assumption or assumption and assignment. For assumptions of Executory Contracts or Unexpired Leases between Debtors, the Reorganized Debtor assuming such contract may cure any monetary default (I) by treating such amount as either a direct or indirect contribution to capital or distribution (as appropriate) or (II) through an intercompany account balance in lieu of payment in cash. f. On the Effective Date, except for an Executory Contract or Unexpired Lease that was previously assumed, assumed and assigned or rejected by an order of the Bankruptcy Court or that is assumed pursuant to Section V.A or V.E of the Plan (including any related agreements assumed pursuant to Sections I.A.150 and V.A.2 of the Plan), each Executory Contract and Unexpired Lease listed on Exhibit V.C to the Plan that has not previously expired or terminated pursuant to its own terms shall be rejected pursuant to section 365 of the Bankruptcy Code; provided, however, that the Debtors or Reorganized Debtors reserve the right, at any time through and including 90 days after the Effective Date, to amend Exhibit V.C to the Plan to: (1) delete any Executory Contract or Unexpired Lease listed therein, thus providing for its assumption or assumption and assignment pursuant to Section V.A of the Plan; or (2) add any Executory Contract or Unexpired Lease thereto, thus providing for its rejection pursuant to Section V.C of the Plan. The Debtors or Reorganized Debtors shall provide notice of any amendments to Exhibit V.C to the Plan to the parties to the Executory Contracts and Unexpired Leases affected thereby and, if prior to the Effective Date, to the parties on the then-applicable service list in the Reorganization Cases (including counsel to the Creditors' Committee). Listing a contract or lease on Exhibit V.C to the Plan shall not constitute an admission by a Debtor or Reorganized Debtor that a Debtor or Reorganized Debtor has any liability thereunder or that such contract or lease is executory. The Confirmation Order shall 49 constitute an order of the Bankruptcy Court approving such rejections, pursuant to section 365 of the Bankruptcy Code, as of the Effective Date. g. The Executory Contract and Unexpired Lease Procedures Order and Section III.C.2 of this Confirmation Order shall govern (i) the procedures for providing notice to each party whose Executory Contract or Unexpired Lease is being rejected pursuant to the Plan, (ii) the procedures for objections by contract parties to the rejection of the applicable contract or lease and (iii) the procedures and bar date for asserting a damages claim in respect of the rejection. h. Subject to the provisions of Section III.D.10.i below, the obligations of each Debtor or Reorganized Debtor to indemnify any person who was serving as one of its directors, officers or employees as of December 31, 2000 by reason of such person's prior or future service in such a capacity or as a director, officer or employee of another corporation, partnership or other legal entity, to the extent provided in the applicable certificates of incorporation, bylaws or similar constituent documents, by statutory law or by written agreement, policies or procedures of or with such Debtor, are deemed and treated as executory contracts that are assumed by the applicable Debtor or Reorganized Debtor pursuant to the Plan and section 365 of the Bankruptcy Code as of the Effective Date, to the extent that the provision of such indemnification is authorized by the certificate of incorporation or similar constituent document of the applicable Reorganized Debtor. Accordingly, such indemnification obligations will survive and be unaffected by entry of the Confirmation Order, irrespective of whether such indemnification is owed for an act or event occurring before or after the Petition Date. 50 i. The obligations of each Debtor or Reorganized Debtor to indemnify any person who, as of December 31, 2000, was no longer serving as a director, officer or employee of such Debtor or Reorganized Debtor, which indemnity obligation arose by reason of such person's prior service in any such capacity or as a director, officer or employee of another corporation, partnership or other legal entity, whether provided in the applicable certificates of incorporation, bylaws or similar constituent documents, by statutory law or by written agreement, policies or procedures of or with such Debtor, will terminate and be discharged pursuant to section 502(e) of the Bankruptcy Code or otherwise, as of the Effective Date; provided, however, that to the extent that such indemnification obligations no longer give rise to contingent Claims that can be disallowed pursuant to section 502(e) of the Bankruptcy Code, such indemnification obligations will be deemed and treated as executory contracts that are rejected by the applicable Debtor pursuant to the Plan and section 365 of the Bankruptcy Code, as of the Effective Date, and any Claims arising from such indemnification obligations (including any rejection damage claims) will be subject to the bar date provisions of this Confirmation Order and the Executory Contract and Unexpired Lease Procedures Order. j. As of the Effective Date and as part of the Reinvestment Transaction, TLGI will assume and assign to Reorganized LGII the NAFTA Contingency Fee Agreement and the NAFTA Arbitration Agreement. 11. DISTRIBUTION RECORD DATE. a. The Distribution Record Date shall be the Confirmation Date. b. A Disbursing Agent shall have no obligation to recognize the transfer of, or the sale of any participation in, any Allowed Claim that occurs after the close of 51 business on the Distribution Record Date and shall be entitled for all purposes herein and in the Plan to recognize and make distributions only to those holders of Allowed Claims that are holders of such Claims, or participants therein, as of the close of business on the Distribution Record Date. c. As of the close of business on the Distribution Record Date, the respective transfer registers for the Public Notes, as maintained by the Debtors or the Indenture Trustee, shall be closed. The applicable Disbursing Agent shall have no obligation to recognize the transfer or sale of any Public Note Claim that occurs after the close of business on the Distribution Record Date and shall be entitled for all purposes herein to recognize and make distributions only to those holders of Public Note Claims who are holders of such Claims as of the close of business on the Distribution Record Date. d. Except as otherwise provided in a Final Order of the Bankruptcy Court, the transferees of Claims that are transferred pursuant to Bankruptcy Rule 3001 on or prior to the Distribution Record Date shall be treated as the holders of such Claims for all purposes, notwithstanding that any period provided by Bankruptcy Rule 3001 for objecting to such transfer has not expired by the Distribution Record Date. 12. APPLICATION OF SECTION 525 OF THE BANKRUPTCY CODE TO THE REORGANIZED DEBTORS. Pursuant to section 525(a) of the Bankruptcy Code, no governmental unit may deny, revoke, suspend or refuse to renew a license, permit, charter, franchise or other similar grant to, condition such a grant to or discriminate with respect to such a grant against any of the Reorganized Debtors or any of their respective affiliates, directors, officers, employees, agents, successors and assigns because of the filing of the Reorganization Cases. 52 E. ACTIONS IN FURTHERANCE OF THE PLAN. The approvals and authorizations specifically set forth in this Confirmation Order are nonexclusive and are not intended to limit the authority of any Debtor or Reorganized Debtor or any officer thereof to take any and all actions necessary or appropriate to implement, effectuate and consummate the Plan, this Confirmation Order or the transactions contemplated thereby or hereby. In addition to the authority to execute and deliver, adopt or amend, as the case may be, the contracts, instruments, releases and other agreements specifically granted in this Confirmation Order, each of the Debtors and the Reorganized Debtors is authorized and empowered, without further action in the Bankruptcy Court or its directors or stockholders, to take any and all such actions as any of its Responsible Officers may determine are necessary or appropriate to implement, effectuate and consummate the Plan, this Confirmation Order or the transactions contemplated thereby or hereby. Pursuant to section 1142 of the Bankruptcy Code and the State Reorganization Effectuation Statutes, no action of the directors or stockholders of any Debtor or Reorganized Debtor shall be required for such Debtor or Reorganized Debtor to enter into, execute and deliver, adopt or amend, as the case may be, any of the contracts, instruments, releases and other agreements or documents and plans to be entered into, executed and delivered, adopted or amended in connection with the Plan and, following the Effective Date, each of such contracts, instruments, releases and other agreements shall be a legal, valid and binding obligation of the applicable Reorganized Debtor, enforceable against such Reorganized Debtor in accordance with its terms subject only to bankruptcy, insolvency and other similar laws affecting creditors' rights generally and to general equitable principles. Shares of New Common Stock issued pursuant to the Plan, including upon conversion of the New Unsecured Subordinated Convertible Notes and exercise of the New Warrants, shall, upon issuance, be duly authorized, validly issued and fully paid and nonassessable shares of New Common Stock of Reorganized LGII. Each of the Responsible Officers of each Debtor and Reorganized Debtor is authorized to execute, deliver, file or record such contracts, instruments, 53 financing statements, releases, mortgages, deeds, assignments, leases, applications, registration statements, reports or other agreements or documents and take such other actions as such Responsible Officer may determine are necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan, this Confirmation Order and the transactions contemplated thereby or hereby, all without further application to or order of the Bankruptcy Court and whether or not such actions or documents are specifically referred to in the Plan, the Disclosure Statement, the Disclosure Statement Order, this Confirmation Order or the exhibits to any of the foregoing, and the signature of a Responsible Officer on a document executed in accordance with this Section III.E shall be conclusive evidence of the Responsible Officer's determination that such document and any related actions are necessary and appropriate to effectuate and/or further evidence the terms and conditions of the Plan, this Confirmation Order or the transactions contemplated thereby or hereby. The Secretary or any Assistant Secretary of each Debtor or Reorganized Debtor is authorized to certify or attest to any of the foregoing actions. Pursuant to section 1142 of the Bankruptcy Code, to the extent that, under applicable nonbankruptcy law, any of the foregoing actions would otherwise require the consent or approval of the stockholders or directors of any of the Debtors or Reorganized Debtors, this Confirmation Order shall constitute such consent or approval, and such actions are deemed to have been taken by unanimous action of the directors and stockholders of the appropriate Debtor or Reorganized Debtor. F. RELEASES AND INDEMNIFICATION. The releases and indemnification obligations contained in Section IV.F of the Plan, as modified, are approved in all respects (the Bankruptcy Code declined to approve Section IV.F.6.b of the Plan for the reasons stated on the record at the Confirmation Hearing), are incorporated herein in their entirety, are so ordered and shall be immediately effective on the Effective Date of the Plan without further act or order. 54 G. RESOLUTION OF CERTAIN OBJECTIONS TO CONFIRMATION. Certain of the Objections to Confirmation are hereby resolved on the terms and subject to the conditions set forth below. The compromises and settlements contemplated by each resolution to an Objection are fair, equitable and reasonable, are in the best interests of the Debtors and their respective Estates and creditors and are expressly approved pursuant to Bankruptcy Rule 9019. 1. The Objections to Confirmation of the following parties are hereby deemed withdrawn with prejudice: a. Alger Group L.L.C., Meadco L.L.C. and Siena Group L.L.C.; b. Cemex, Inc.; c. Thomas F. Glodek; d. Missouri Department of Revenue; e. County of Denton, City of Pilot Point, Pilot Point I.S.D., Santa Fe I.S.D., County of Guadalupe, Cleveland I.S.D., Midway I.S.D. and County of Taylor; f. John W. Harvey and Barbara T. Harvey; and g. Les Harper. 2. Notwithstanding anything in the Plan or this Confirmation Order to the contrary, any Allowed Secured Claim held by John G. Smith and Betty S. Smith (collectively, the "Smiths") against Debtor Burris Funeral Home, Inc. shall receive the treatment provided by the Bankruptcy Court's Order Authorizing (A) the Sale by Debtor DMA Corporation and Certain Other Debtors of Property Free and Clear of All Liens, Claims and Encumbrances and (B) the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases Related Thereto Pursuant to Sections 363 and 365 of the Bankruptcy Code dated June 15, 2001 (D.I. 7233). 55 3. Debtor Evangeline Funeral Home, Inc. ("Evangeline"), pursuant to Section III.B.2 of the Plan, shall be deemed to elect Option A (payment in full) treatment of any Allowed Class 4 Claim held by Lois Dugas Babineaux and Dalton L. Babineaux, Jr. (collectively, the "Babineauxs") against Evangeline. Any lien securing an Allowed Class 4 Claim held by the Babineauxs against Evangeline shall continue in force until such Allowed Claim is paid in full. 4. The Debtors, pursuant to Section III.B.2 of the Plan, shall be deemed to elect Option B (Reinstatement) treatment of any Allowed Class 4 Claim held by F. James Wylie, Jr. ("Wylie"). Any lien securing an Allowed Class 4 Claim held by Wylie against the Debtors shall continue in force until such Allowed Claim is paid in full. 5. Nothing in the Plan or this Confirmation Order shall affect the resolution of the following disputes between the Debtors and Mary Frances Hughes, which disputes shall proceed as scheduled in the appropriate forums where such disputes are currently pending or shall otherwise be ordered by the Bankruptcy Court to proceed: (a) Second Amended Proof of Claim of Mary Frances Hughes and Objection to Second Amended Proof of Claim of Mary Frances Hughes filed by the Debtors; (b) Motion for Turnover of Pre-Need Funeral Contracts and Objection to Motion for Turnover of Pre-Need Funeral Contracts; (c) Motion to Assume Share Purchase Agreement filed by Mary Frances Hughes; (d) Motion to Compel Compliance With Section 365(d)(3) and Objection to Motion to Compel Compliance With Section 365(d)(3); (e) assumption and assignment of leases under the terms of the Bankruptcy Court's Supplemental Order Authorizing (A) The Sale of Certain Property Free and Clear of all Liens, Claims and Encumbrances and (B) The Assumption and Assignment of Certain Executory Contracts and Unexpired Leases Related Thereto Pursuant to Sections 363 and 365 of the Bankruptcy Code (D.I. 7228) dated June 15, 2001; and (f) arbitration of the boundary dispute involving Crown Hill Memorial Park, Inc. and Mary Frances Hughes. Any and all Claims of Mary Frances Hughes 56 against the Debtors that are finally allowed upon the completion or resolution of the foregoing proceedings, or appeals therefrom, shall be satisfied pursuant to the terms of the Plan. Furthermore, nothing in the Plan or this Confirmation Order shall constitute a release in the pending lawsuit between Mary Frances Hughes and Jones, Day, Reavis & Pogue. 6. Notwithstanding any provision of the Plan or this Confirmation Order to the contrary, the payments of Allowed Priority Tax Claims held by the State of New York and the State of Tennessee shall commence on the first Quarterly Distribution Date or the date of allowance, whichever is later, and continue quarterly thereafter and shall accrue simple interest from the Effective Date at 8% per annum. 7. Notwithstanding any provision of the Plan or this Confirmation Order to the contrary, unless otherwise agreed by the parties, the payments of the Allowed Priority Tax Claims held by the United States shall commence on the first Quarterly Distribution Date or the date of allowance, whichever is later, and continue quarterly thereafter and shall accrue compounded interest from the Effective Date at 8% per annum. Notwithstanding any provision of the Plan or this Confirmation Order to the contrary, Confirmation of the Plan shall not affect the setoff rights, if any, of the United States under section 553 of the Bankruptcy Code and other applicable law. 8. The Objection to Confirmation of John and Barbara Monteith is resolved on the terms stated on the record at the Confirmation Hearing. 9. The Debtors, pursuant to Section III.B.2 of the Plan, shall irrevocably be deemed to elect Option A (payment in full) treatment of any Allowed Class 4 Claim held by William A. Trankle individually and on behalf of McHenry County Memorial Park and Windridge, Inc. ("Trankle"). Any lien securing an Allowed Class 4 Claim held by Trankle against the Debtors shall continue in full force and effect until such Allowed Claim is paid in full. 57 10. During the pendency of the adversary proceeding filed by the Debtors and currently pending before the Bankruptcy Court as Adversary Proceeding No. 01-4096-PJW (the "Preference Adversary"), subject to the Debtors' rights on the merits in the Preference Adversary, Continental Casualty Company, Transportation Insurance Company, Transcontinental Insurance Company, RSKCo Services, Inc. and their affiliates (collectively, the "CNA Companies" or "CNA") shall remain free to draw on their available collateral as and when permitted under the terms of the insurance policies or related agreements (collectively, the "CNA Agreements") among and between the Debtors and CNA. Nothing contained in the Plan or this Confirmation Order shall release or discharge any nondebtor parties from their obligations to CNA, if any, in respect of the cash collateral and letters of credit that have been provided to CNA to collateralize the Debtors' obligations under the CNA Agreements, or under any independent contracts or agreements between CNA and such nondebtor parties. 11. For the reasons stated on the record at the Confirmation Hearing, the Objections to Confirmation Filed by Bank One Trust Company, N.A. and The Trust Company of Bank of Montreal are deemed withdrawn with prejudice. 12. Nothing contained in the Plan or this Confirmation Order shall be deemed to discharge, void or otherwise affect the liens, if any, and the rights and remedies connected therewith, of Thomas E. Hoffmeyer, Bruce B. Dunn and Bruce W. Gorsline under those certain real property mortgages given by the Debtors on or about February 21, 1996. H. DISCHARGE, TERMINATION, INJUNCTION AND SUBORDINATION RIGHTS. 1. DISCHARGE OF CLAIMS AND SATISFACTION AND TERMINATION OF INTERESTS. a. Except as provided in the Plan or in this Confirmation Order, the rights afforded under the Plan and the treatment of Claims and Interests under the Plan shall be in exchange for and in complete satisfaction, discharge and release of all Claims and termination 58 of all Interests arising on or before the Effective Date, including any interest accrued on Claims from the Petition Date. Except as provided in the Plan or in this Confirmation Order, Confirmation shall, as of the Effective Date and immediately after cancellation of the TLGI Old Preferred Stock, TLGI Old Common Stock, and LGII Old Common Stock: (i) discharge the Debtors from all Claims or other debts that arose on or before the Effective Date, and all debts of the kind specified in sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, whether or not (A) a proof of Claim based on such debt is Filed or deemed Filed pursuant to section 501 of the Bankruptcy Code, (B) a Claim based on such debt is allowed pursuant to section 502 of the Bankruptcy Code or (C) the holder of a Claim based on such debt has accepted the Plan; and (ii) terminate all Interests and other rights of equity security holders in the Debtors. b. In accordance with the foregoing, except as provided in the Plan or in this Confirmation Order, this Confirmation Order constitutes a judicial determination, as of the Effective Date and immediately after the cancellation of the TLGI Old Preferred Stock, the TLGI Old Common Stock and the LGII Old Common Stock and the issuance of the New Common Stock, of a discharge of all Claims and other debts and liabilities against the Debtors and termination of all Interests and other rights of equity security holders in the Debtors, pursuant to sections 524 and 1141 of the Bankruptcy Code, and such discharge shall void any judgment obtained against a Debtor at any time, to the extent that such judgment relates to a discharged Claim or terminated Interest. 2. INJUNCTIONS. a. Except as provided in the Plan or this Confirmation Order, as of the Effective Date, all entities that have held, currently hold or may hold a Claim or other debt or liability that is discharged or an Interest or other right of an equity security holder that is 59 terminated pursuant to the terms of the Plan are permanently enjoined from taking any of the following actions on account of any such discharged Claims, debts or liabilities or terminated Interests or rights: (i) commencing or continuing in any manner any action or other proceeding against the Debtors, the Reorganized Debtors or their respective property, other than to enforce any right pursuant to the Plan to a distribution; (ii) enforcing, attaching, collecting or recovering in any manner any judgment, award, decree or order against the Debtors, the Reorganized Debtors or their respective property, other than as permitted pursuant to (i) above; (iii) creating, perfecting or enforcing any lien or encumbrance against the Debtors, the Reorganized Debtors or their respective property; (iv) asserting a setoff, right of subrogation or recoupment of any kind against any debt, liability or obligation due to the Debtors or the Reorganized Debtors; and (v) commencing or continuing any action, in any manner, in any place that does not comply with or is inconsistent with the provisions of the Plan. b. As of the Effective Date, all entities that have held, currently hold or may hold any claims, demands, rights, causes of action or liabilities that are released, waived or discharged pursuant to the Plan, including pursuant to Section IV.F of the Plan, or this Confirmation Order, are permanently enjoined from taking any action against any released person or entity or its property on account of such released claims, demands, rights, causes of action or liabilities, including, without limitation: (i) commencing or continuing in any manner any action or other proceeding; (ii) enforcing, attaching, collecting or recovering in any manner any judgment, award, decree or order; (iii) creating, perfecting or enforcing any lien or encumbrance; (iv) asserting a setoff, right of subrogation or recoupment of any kind against any debt, liability or obligation due to any released entity; and (v) commencing or continuing any 60 action, in any manner, in any place that does not comply with or is inconsistent with the provisions of the Plan or this Confirmation Order. c. In the event an action, suit or proceeding is brought against a person or entity in respect to a claim, demand, right, cause of action, liability or other matter in respect to which such person or entity has been released, waived or discharged under the Plan, including Section IV.F of the Plan, or this Confirmation Order, the reasonable attorneys' fees and costs of such person or entity in successfully defending such action, suit or proceeding will be paid by the party or parties commencing such action, suit or proceeding and, as a condition to going forward with such action, suit or proceeding at the outset thereof, the party or parties commencing such action, suit or proceeding shall be required to provide adequate assurance of their capacity to make such payment of reasonable attorneys' fees and costs. 3. TERMINATION OF SUBORDINATION RIGHTS AND SETTLEMENT OF RELATED CLAIMS AND CONTROVERSIES. a. The classification and manner of satisfying all Claims and Interests under the Plan take into consideration all subordination rights, whether arising under general principles of equitable subordination, contract, section 510(c) of the Bankruptcy Code or otherwise, that a holder of a Claim or Interest may have against other Claim or Interest holders with respect to any distribution made pursuant to the Plan. All subordination rights that a holder of a Claim may have with respect to any distribution to be made pursuant to the Plan are discharged and terminated, and all actions related to the enforcement of such subordination rights are permanently enjoined. Accordingly, distributions pursuant to the Plan to holders of Allowed Claims or Allowed Interests shall not be subject to payment to a beneficiary of such terminated 61 subordination rights or to levy, garnishment, attachment or other legal process by a beneficiary of such terminated subordination rights. b. Pursuant to Bankruptcy Rule 9019 and in consideration for the distributions and other benefits provided under the Plan, the provisions of the Plan shall constitute a good faith compromise and settlement of all claims or controversies relating to the subordination rights that a holder of a Claim may have with respect to any Allowed Claim or Allowed Interest or any distribution to be made pursuant to the Plan on account of any Allowed Claim or Allowed Interest. The entry of this Confirmation Order constitutes the Bankruptcy Court's approval, as of the Effective Date, of the compromise or settlement of all such claims or controversies and the Bankruptcy Court's finding that such compromise or settlement is in the best interests of the Debtors, the Reorganized Debtors and their respective property and is fair, equitable and reasonable. I. SUBSTANTIAL CONSUMMATION. The substantial consummation of the Plan, within the meaning of section 1127 of the Bankruptcy Code, is deemed to occur on the Effective Date. J. RETENTION OF JURISDICTION. Notwithstanding the entry of this Confirmation Order and the occurrence of the Effective Date, the Bankruptcy Court shall retain such jurisdiction over the Reorganization Cases after the Effective Date as is legally permissible, including jurisdiction over the matters set forth in Article XII of the Plan, which provisions are incorporated herein by reference; provided, however, that nothing in Article XII of the Plan shall be interpreted as providing for the Bankruptcy Court's retention of jurisdiction over the future assertion of Reserved CTA Claims by holders of CTA Note Claims against the Tolling Parties or other third parties. 62 K. REQUEST FOR AID OF FOREIGN COURT. The Bankruptcy Court requests the aid and assistance of the Ontario Superior Court of Justice, pursuant to the Cross-Border Insolvency Protocol approved by the Bankruptcy Court in the Reorganization Cases on the Petition Date, and such other foreign courts as necessary to recognize, implement and enforce this Confirmation Order and the Plan in accordance with their terms. L. NOTICE OF ENTRY OF CONFIRMATION ORDER. 1. Pursuant to Bankruptcy Rules 2002(f)(7) and 3020(c), the Debtors or the Reorganized Debtors are directed to serve a notice of the entry of this Confirmation Order and the establishment of bar dates for certain Claims hereunder, substantially in the form of Exhibit C attached hereto and incorporated herein by reference (the "Confirmation Notice"), on all parties that received notice of the Confirmation Hearing, no later than 15 Business Days after the Confirmation Date; provided, however, that the Debtors or the Reorganized Debtors shall be obligated to serve the Confirmation Notice only on the record holders of Claims or Interests as of the Confirmation Date and the Indenture Trustees. 2. As soon as practicable after the entry of this Confirmation Order, the Debtors shall make copies of this Confirmation Order and the Confirmation Notice available on the Debtors' website. 3. The Debtors are directed to publish the Confirmation Notice once in the national editions of The Globe and Mail, The National Post, The Wall Street Journal, The New York Times and USA Today no later than 15 Business Days after the Confirmation Date. 63 Dated: Dec. 5, 2001 /s/ PETER J. WALSH ---------------------------------- UNITED STATES BANKRUPTCY JUDGE 64 EXHIBIT A FOURTH AMENDED JOINT PLAN OF REORGANIZATION OF LOEWEN GROUP INTERNATIONAL, INC., ITS PARENT CORPORATION AND CERTAIN OF THEIR DEBTOR SUBSIDIARIES EXHIBIT B MODIFICATIONS TO FOURTH AMENDED JOINT PLAN OF REORGANIZATION OF LOEWEN GROUP INTERNATIONAL, INC., ITS PARENT CORPORATION AND CERTAIN OF THEIR DEBTOR SUBSIDIARIES EXHIBIT C CONFIRMATION NOTICE EX-2.6 8 d92756ex2-6.txt FINAL ORDER DATED DECEMBER 7, 2001 EXHIBIT 2.6 COURT FILE NO. 99-CL-3384 SUPERIOR COURT OF JUSTICE COMMERCIAL LIST THE HONOURABLE ) FRIDAY, THE 7TH DAY OF MR. JUSTICE FARLEY ) DECEMBER, 2001 IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c.C-36, AS AMENDED ("CCAA") AND IN THE MATTER OF THE ONTARIO BUSINESS CORPORATIONS ACT, R.S.O. 1990, c. B-16, AS AMENDED ("OBCA") AND IN THE MATTER OF A PLAN OF ARRANGEMENT OF THE LOEWEN GROUP INC. AND THE OTHER COMPANIES LISTED ON SCHEDULE "A" FINAL ORDER THIS APPLICATION made by The Loewen Group Inc. ("TLGI") and the other applicants listed on Schedule "A" attached hereto (the "Schedule 'A' Applicants" and collectively with TLGI the "Applicants") for an order in the form attached to the Supplementary Application Record was heard this day, at 393 University Avenue, Toronto, Ontario UPON hearing the submissions of counsel present; AND UPON having read the affidavit of Bradley D. Stam sworn December 5, 2001, the Monitor's Report dated December 3, 2001, such other affidavits filed herein and such further material in the pleadings and proceedings as was deemed necessary; -2- AND UPON the Court being informed of the Order of Honourable Judge Walsh of the United States Bankruptcy Court for the District of Delaware (the "U.S. Court") dated December 5, 2001 (the "U.S. Confirmation Order") confirming the Fourth Amended Plan of Reorganization of TLGI and its United States subsidiaries, as amended to the date of the U.S. Confirmation Order (the "U.S. Plan"); NOTICE AND SERVICE 1. THIS COURT ORDERS that the time for service of the Notice of Application and the Affidavit in support of this Application be and it is hereby abridged such that the Application is properly returnable today, and, further, that any requirement for service of the Notice of Application and of the Supplementary Application Record upon any interested party, other than the parties herein mentioned, is hereby dispensed with. RECOGNITION OF THE U.S. PLAN AND THE U.S. CONFIRMATION ORDER 2. THIS COURT ORDERS that, pursuant to section 18.6 of the CCAA, the U.S. Confirmation Order and the U.S. Plan, including without limitation the provisions thereof which are dealt with in greater particularity herein, be and they are hereby recognized in their entirety and shall be implemented and effective in Canada subject to and in accordance with each and every of their terms. PLAN OF ARRANGEMENT 3. THIS COURT ORDERS that the plan of arrangement (the "Plan of Arrangement") annexed hereto as Schedule "B" and involving certain of the Schedule "A" Applicants (the "Affected Companies"), including without limitation the transfers of assets provided for therein, be and it is hereby approved and ratified pursuant to section 182 of the OBCA. 4. THIS COURT ORDERS that the Plan of Arrangement will, upon filing Articles of Arrangement and the issuance of the Certificates of Arrangement by the Director pursuant to provisions of the OBCA, become effective in accordance with its terms and be binding on -3- each of the Affected Companies, all shareholders of the Affected Companies and all of the persons affected by the Plan of Arrangement. TRANSFERS PURSUANT TO THE U.S. PLAN 5. THIS COURT ORDERS AND DIRECTS that, as provided for by and in accordance with the U.S. Plan and the U.S. Confirmation Order: (a) TLGI assign, transfer and deliver to Loewen Group International, Inc. ("LGII"), all of TLGI's right, title and interest in, to and under all rights, properties and assets of every kind, character and description, wherever located and whether tangible or intangible, real or personal or fixed or contingent then owned, held, used licensed, conceived or developed by TLGI other than: (i) TLGI's rights in the claims and causes of action asserted by TLGI in the pending arbitration matter of The Loewen Group, Inc. and Raymond L. Loewen v. The United States of America, ICSID Case No. ARB (AF)/98/3 (the "NAFTA Claims"); (ii) TLGI's ownership interest in Loewen (NAFTA), LLC, a Delaware limited liability company formed as a wholly owned subsidiary of LGII ("Delco"), which ownership interest will be assigned, transferred and delivered from LGII to TLGI prior to the transfer contemplated in (c) below; and (iii) TLGI's rights, title and interest in the assets of TLGI identified on Schedule "C" hereto including the real property municipally known as 4126 Norland Avenue, Burnaby, British Columbia (the "Canadian Operating Assets"); (b) TLGI assign, transfer and deliver to Nafcanco ULC, a Nova Scotia unlimited liability company formed as a wholly owned subsidiary of LGII, all of TLGI's -4- right, title and interest in and to all proceeds of the NAFTA Claims arising under article 1116 of the North American Free Trade Agreement ("NAFTA") that TLGI receives, all in accordance with NAFTA claims assignment provisions set out in Schedule "D"; (c) TLGI cause Delco to assign, transfer and deliver to LGII all of Delco's right, title and interest in and to all proceeds of the NAFTA Claims arising under article 1117 of NAFTA that Delco receives, all in accordance with the terms of Schedule "D"; and (d) TLGI assign, transfer and deliver to Alderwoods Group Services Inc. a holding company incorporated under the laws of the Province of Ontario as a wholly owned subsidiary of TLGI, which, following completion of the transfer contemplated in (a) above, will be a wholly owned subsidiary of LGII, all of TLGI's right title and interest in, to and under the Canadian Operating Assets. 6. THIS COURT ORDERS AND DECLARES that, as required by the U.S. Plan and the U.S. Confirmation Order, all powers and responsibilities of TLGI in respect of the pursuit and prosecution of the NAFTA Claims are irrevocably delegated to Nafcanco ULC, all in accordance with the terms of Schedule "D". CORPORATE TRANSFERS, ASSIGNMENTS AND OTHER ACTS 7. THIS COURT ORDERS AND DIRECTS that, in addition to the specific assignments and transfers contemplated in paragraphs 3 and 5 and the delegation provided for in paragraph 6, the Applicants effect all other assignments, transfers and other corporate acts (the "Corporate Acts") necessary or desirable to give effect to the Plan of Arrangement, the Transfers (as defined below), the U.S. Plan and the U.S. Confirmation Order. EFFECTIVE TRANSFERS 8. THIS COURT ORDERS that all transfers and assignments described in paragraphs 3, 5 and 7 (the "Transfers") effected on or before the Effective Date (as that term is defined in the -5- U.S. Plan, and hereinafter referred to as the "Effective Date"), in accordance with the terms of the Plan of Arrangement, the U.S. Plan and the U.S. Confirmation Order and the Corporate Acts as applicable (the "Transfer Documentation") will: (a) be legal, valid and effective transfers and assignments; (b) vest in the transferee or assignee valid title, free and clear of all liens, claims or encumbrances except as specifically provided in the Transfer Documentation; and (c) not constitute fraudulent or other challengeable conveyances under any applicable law, including without limitation any bulk sales legislation. CTA SETTLEMENT, RELEASES AND INJUNCTION 9. THIS COURT ORDERS that the U.S. Confirmation Order and the U.S. Plan providing: (a) for the approval of the settlement of the CTA Issue (as that term is defined in the U.S. Plan) and the other matters that are the subject of Adversary Proceeding No. 00-01181 in the U.S. Court; (b) for certain injunctions and releases; and (c) that on the Effective Date none of the holders of a CTA Note Claim (as that term is defined in the U.S. Plan) will have any further claim, except as otherwise provided in the U.S. Plan, against the Loewen Companies (as that term is defined in the U.S. Plan), be and they are hereby recognized in their entirety and shall be implemented and effective in Canada subject to and in accordance with each and every term pursuant to section 18.6 of the CCAA. THE STAY OF PROCEEDINGS 10. THIS COURT ORDERS that the stay of proceedings provided for in the Order of this Honourable Court dated June 1, 1999 (the "Initial Order") and extended by further orders of this Honourable Court from time to time shall remain in full force and effect until the end of the day on the Effective Date. -6- THE CONTINUING BUSINESS 11. THIS COURT ORDERS that no person or entity shall, following the Effective Date, accelerate, terminate, rescind, refuse to perform or otherwise repudiate its obligations thereunder, or enforce or exercise any right (including any right of set-off, dilution, buy-out, divestiture, forced sale, option or other remedy) under or in respect of any such obligation or agreement, by reason: (d) of any event(s) which occurred on or prior to June 1, 1999, which would have entitled any other Person party thereto to enforce those rights or remedies (including defaults or events of default arising as a result of the financial condition or insolvency of any of the Applicants), all of which defaults or non-compliance shall be deemed to have been waived; or (e) of any and all notices of default and demands for payment under any agreement made on or prior to June 1, 1999, all of which shall be deemed to be of no further force and effect; or (f) that the Applicants have sought or obtained relief under the CCAA; or (g) of the effect on the Applicants of the completion of any of the transactions described herein; or (h) of any compromises effected pursuant to the U.S. Plan. 12. THIS COURT ORDERS that section 29 of Regulation 470, 1992, to the Funeral Directors and Establishments Act, R.S.O. 1990, c.F.36 does not apply to the Transfers. THE PROCEEDS OF THE PAPERMAN TRANSACTION 13. THIS COURT ORDERS that the Order of this Honourable Court dated March 23, 2001 (the "Paperman Order") is hereby varied and that Paperman & Sons Inc. (now known as 9102-8167 Quebec Inc.), 170535 Canada Inc. and 3144569 Canada Inc. (the "Vendors") -7- shall now be entitled to deal with the proceeds of the sale approved by the Paperman Order as the Vendors see fit and without any restriction imposed by this Court. THE SCHEDULE "A" CLAIMS PROCESS 14. THIS COURT ORDERS AND CONFIRMS that in accordance with paragraph 5.1 of the Order of this Honourable Court of January 27, 2000 (the "First Claims Order"), the bar date against the Schedule "A" Applicants is effective in accordance with the terms of paragraph 5 of the First Claims Order. 15. THIS COURT ORDERS that the claim of Roger Coutu shall continue as against P. Coutu Funeral Chapels Ltd. and such claim is unaffected by this Order. DISCHARGE OF THE MONITOR 16. THIS COURT ORDERS that KPMG Inc. is hereby discharged as monitor of the Applicants on the Effective Date and shall, subject to a final passing of its accounts, thereafter have no further obligations, responsibilities or duties under the Initial Order or otherwise. 17. THIS COURT ORDERS that any person or entity who fails to bring a motion returnable before this Honourable Court, and on notice to KPMG Inc., on or before 10 a.m. December 7, 2001 (the "Objections Bar Date") shall be and is hereby forever barred from claiming against KPMG Inc. or any of its affiliates, related partnerships and corporations, and each and everyone of their partners, agents or employees (the "KPMG Parties") in respect of any matter related to this proceeding, including the conduct of any of the KPMG Parties, whether known or unknown, for the period to and including December 6, 2001, with the exception of any claims against the KPMG Parties for gross negligence or wilful misconduct arising as a result of their appointment or the fulfillment of their duties in carrying out of the provisions of the Initial Order. -8- 18. THIS COURT ORDERS that any person or entity who fails to bring a motion returnable before this Honourable Court, and on notice to KPMG Inc., before the Effective Date shall be and is hereby forever barred from claiming against any of the KPMG Parties in respect of any matter related to this proceeding, including the conduct of any of the KPMG Parties, whether known or unknown, for the period from and including December 7, 2001, with the exception of any claims against the KPMG Parties for gross negligence or wilful misconduct arising as a result of their appointment or the fulfillment of their duties in carrying out of the provisions of the Initial Order. 19. THIS COURT DECLARES that for greater certainty paragraph 28 of the Initial Order continues in full force and effect. FURTHER ADVICE AND DIRECTION 20. THIS COURT ORDERS that the Applicants and any other interested parties are hereby granted leave to apply to this Court for such further advice, directions or assistance as may be necessary to give effect to the terms of this Order. AID AND ASSISTANCE 21. THIS COURT ORDERS AND REQUESTS the aid and recognition of any court or any judicial, regulatory or administrative body in any province or territory of Canada (including the assistance of any court in Canada pursuant to Section 17 of the CCAA) and the Federal Court of Canada and any judicial, regulatory or administrative body of the United States and the states or other subdivisions of the United States and of any other nation or state to act in aid of and to be complementary to this Court in carrying out the terms of this Order. ----------------------- SCHEDULE "A" - LIST OF SCHEDULE "A" APPLICANTS ALBERTA 1. 247663 Alberta Limited 2. Courtney-Winter's Funeral Chapel Ltd. 3. Lakeland Funeral Home Ltd. 4. Mountain View and Metcalf Funeral Chapels Ltd. 5. Memento Funeral Chapel (1975) Ltd. 6. Memories Funeral Directors & Crematory Inc. BRITISH COLUMBIA 7. 1498124 Ontario Limited (formerly 28886 Investments Ltd.) 8. 1451469 Ontario Limited (formerly 4032 Investments Ltd.) 9. 1495554 Ontario Limited (formerly 4054 Investments Ltd.) 10. 1498130 Ontario Limited (formerly 4103 Investments Ltd.) 11. 1451470 Ontario Limited (formerly 476822 B.C. Ltd.) 12. Alberni Valley Memorial Gardens Ltd. 13. Aldon Enterprises Ltd. 14. Armstrong-Enderby Funeral Home Ltd. 15. Graham Funeral Home Ltd. 16. Gregory's Williams Lake Funeral Home Ltd. 17. Haywards Thomson & Irving Funeral Directors (1986) Inc. 18. Hayward's B.C. Funeral Company & Limousine Service Ltd. 19. Hollyburn Funeral Home Ltd. 20. Hollyburn Funeral Services Ltd. 21. Mt. Washington Memorial and Funeral Chapel Ltd. 22. Neweol Investments Ltd. 23. 1495555 Ontario Limited (formerly 4166 Investments Ltd.) 24. TLGI Holdings Limited 25. Glenhaven Memorial Chapel Ltd. 26. Kamloops Funeral Home Ltd. 27. Suburban Funeral Homes Ltd. 28. Surrey Memorial Services and Crematorium Ltd. 29. TLGI Management Corp. 30. Assman's Funeral Chapel Ltd. 31. Chapel Hill Funeral Home Ltd. 32. Chapel of Memories Funeral Directors Ltd. 33. Hamilton-Harron Funeral Centre and Crematorium Ltd. 34. Henderson's Fraser Valley Funeral Home Ltd. 35. Henderson's Funeral Home Ltd. 36. Lakewood Funeral Home Ltd. 37. Pabril Ventures Limited 38. Piercy's Funeral Home Limited 39. Mission Hill Crematorium Ltd. 40. Sutton's Funeral Directors Ltd. 41. Parksville Funeral Chapel Ltd. 42. Vancouver Memorial Services and Crematorium Ltd. 43. Vernon Funeral Home (1986) Ltd. 44. TLGM Holdings Inc. 45. TLGM One Holdings Inc. CANADA (FEDERAL) 46. Troispap Inc. 47. 170535 Canada Inc. 48. 3144569 Canada Inc. MANITOBA 49. Kerr's Funeral Chapel (1988) Ltd. 50. Loewen Funeral Chapels (1973) Ltd. 51. 1452457 Ontario Limited (formerly 60752 Manitoba Ltd.) 52. The J. Thomson Company Limited 53. 1452463 Ontario Limited (formerly 2239699 Manitoba Ltd.) 54. Klassen Funeral Chapel Ltd. 55. 1452461 Ontario Limited (formerly 2696216 Manitoba Ltd.) 56. P. Coutu Funeral Chapels Ltd. 57. Green Acres Memorial Services (1969) Ltd. 58. Green Acres Memorial Gardens (1969) Limited 59. Holy Angel Mausoleum Inc. NOVA SCOTIA 60. Digby Funeral Home Limited 61. Independent Funeral Services Incorporated 62. J.A. Snow's Funeral Home (1985) Limited 63. Jayne's Funeral Home (1984) Limited 64. Mattatall Funeral Home (1986) Limited 65. Robert L. Hall Funeral Home Limited 66. Wayne Hatt Enterprises Limited 67. Ettinger-Kennedy Memorial Residence Limited ONTARIO 68. Addison Funeral Home, Inc. 69. Canadian Funeral Services Inc. 70. Cambridge Funeral Services Limited 71. Comstock Funeral Home (1987) Ltd. 72. Giffen-Mack Chapel Ltd. 73. Green Funeral Home Limited 74. H.S. Anderson and Sons (1986) Ltd. 75. J.B. Marlatt Funeral Homes (1985) Limited 76. R. Martino Funeral Homes (1987) Ltd. 77. Sault Ste. Marie Funeral Homes Ltd. 78. Schreiter-Sandrock Limited 79. The Brown Funeral Home (Kenora 1983) Limited 80. The Ratz-Bechtel Limited 81. Trull Funeral Homes (1987) Limited 82. 1026698 Ontario Inc 83. Delmoro Funeral Home (Woodbridge) Ltd. 84. Delmoro Funeral Home (North York) Ltd. 85. Dryden Funeral Service Limited 86. Hawkins Funeral Home Ltd. 87. O'Reilly-Lee Funeral Home Limited 88. Walter D. Kelly Funeral Home and Chapel Ltd. PRINCE EDWARD ISLAND 89. Cutcliffe Funeral Home (1986) Ltd. 90. MacLean Funeral Home (1986) Limited QUEBEC 91. 9102-8167 Quebec Inc. (formerly Paperman & Sons Inc.) 92. Guayco Investments Inc./Investissements Guayco Inc. 93. Les Salons Funeraires Guay Inc. SASKATCHEWAN 94. Lee Funeral Home Inc. 95. Parkview Funeral Home Ltd. 96. Weyburn Funeral Home (1987) Ltd. 97. 1450261 Ontario Limited (formerly 600838 Saskatchewan Ltd.) 98. Unser-Rist Funeral Home Services Inc. 99. Wilson & Zehner Funeral Chapel Ltd. 100. 1450263 Ontario Limited (formerly 601346 Saskatchewan Ltd.) 101. Centre-Sask Funeral Management Co. Ltd 102. Coventry Funeral Services Ltd. 103. Dionne-Moriarty Enterprises Ltd. 104. E. Andrychuk Funeral Home Ltd. 105. H. D. Funeral Home Ltd. 106. Helmsing Funeral Chapels Ltd. 107. Jerome-Martens Funeral Services Limited 108. Orsted Funeral Home Ltd. 109. Prairie Funeral Services Ltd. 110. Clements' Rosetown Funeral Home Limited 111. McKague's Funeral Chapels Ltd. 112. Sallows and McDonald Funeral Home (1987) Limited 113. Scharf's Funeral Home Ltd. 114. Unity Funeral Chapel Ltd. 115. 1450264 Ontario Limited (formerly Rist Enterprises Corporation) 116. 1450260 Ontario Limited (formerly Ross Funeral Service Ltd.) 117. Souris Valley Memorial Gardens Company Ltd. SCHEDULE "B" EXHIBIT "1" PLAN OF ARRANGEMENT UNDER SECTION 182 OF THE BUSINESS CORPORATIONS ACT (ONTARIO) ARTICLE I INTERPRETATION 1.1 DEFINITIONS In this Plan of Arrangement, unless there is something in the subject matter or context inconsistent therewith, or otherwise defined, the following terms will have the respective meanings set out below and grammatical variations of those terms will have corresponding meanings: "AMALCO" means, as the context requires, the amalgamated corporation resulting from any of the amalgamations effected pursuant to Article III hereof; "ARRANGEMENT" means the arrangement proposed under the provisions of Section 182 of the OBCA on the terms and conditions set forth in this Plan of Arrangement and any amendment or variation thereto made in accordance with this Plan of Arrangement; "ARRANGEMENT COMPANIES" means the corporations subject to this Arrangement, namely the NewCanCo Amalgamating Companies, the NewHoldCo Amalgamating Companies and the Stated Capital Subsidiaries; "BUSINESS DAY" means a day which is not a Saturday, Sunday or civic or a statutory holiday in Toronto, Ontario, Canada; "COURT" means the Ontario Superior Court of Justice; "DIRECTOR" means the Director appointed under Section 278 of the OBCA; "EFFECTIVE DATE" means the date upon which the Plan of Arrangement becomes effective, as established on the date of issue shown in the certificate of arrangement to be issued under the OBCA in respect of the Arrangement; "FINAL ORDER" means the final order of the Court approving the Arrangement as such order may be amended at any time prior to the Effective Date; "LGII" means The Loewen Group International, Inc., a corporation incorporated under the laws of the State of Delaware; "MANAGEMENTCO" means TLGI Management Corp., a corporation continued under the OBCA; -2- "NEWCANCO" means the amalgamated corporation resulting from the amalgamation pursuant to Section 3.1 (h) hereof; "NEWCANCO AMALGAMATING COMPANIES" means those corporations identified on Schedule "I" hereto; "NEWCANCO AMALGAMATING COMPANIES SHARES" means the issued and outstanding shares in the capital of any of the NewCanCo Amalgamating Companies registered in the name of TLGI; "NEWCANCO SHARES" means the issued and outstanding Class A common shares from time to time in the capital stock of NewCanCo; "NEWHOLDCO" means the amalgamated corporation resulting from the amalgamation pursuant to Section 3.1(i) hereof; "NEWHOLDCO AMALGAMATING COMPANIES" means those corporations identified on Schedule "II" hereto; "NEWEOL" means Neweol Investments Ltd., a corporation continued under the OBCA; "OBCA" means the Business Corporations Act (Ontario), as amended and in force from time to time; "PLAN OF ARRANGEMENT" means this Plan of Arrangement and any amendment or variation thereto made in accordance with this Plan of Arrangement; "STATED CAPITAL SUBSIDIARIES" means those corporations identified on Schedule "III" hereto; "TLGI" means The Loewen Group Inc., a corporation incorporated under the laws of British Columbia; "TLGI SUBSIDIARIES" means those corporations identified on Schedule "IV" hereto; "TLGI SUBSIDIARY SHARES" means the issued shares in the capital stock of each of the TLGI Subsidiaries registered in the name of TLGI; "1495555" means 1495555 Ontario Limited (formerly 4166 Investments Ltd.), a corporation continued under the OBCA; "1495554" means 1495554 Ontario Limited (formerly 4054 Investments Ltd.), a corporation continued under the OBCA; and "1498124" means 1498124 Ontario Limited (formerly 28886 Investments Ltd.), a corporation continued under the OBCA. -3- 1.2 HEADINGS The division of this Plan of Arrangement into Articles and Sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Plan of Arrangement. The terms "this Plan of Arrangement", "hereof", "hereunder" and similar expressions refer to this Plan of Arrangement and not to any particular Article or Section hereof and include any appendices hereto and any agreement or instrument supplementary or ancillary hereto or thereto. Reference herein to Articles and Sections are to Articles and Sections of this Plan of Arrangement. 1.3 CONSTRUCTION In this Plan of Arrangement, unless something in the context is inconsistent therewith: (a) the singular of any term includes the plural, and vice versa, and the use of any term is generally applicable to any gender and where applicable, a body corporate, firm or other entity and the word "or" is not exclusive and the word "including" is not limiting, whether or not non-limiting language (such as "without limitation" or "but not limited to" or words of similar import) is used with reference thereto; and (b) a reference to any statute in this Plan of Arrangement includes all regulations made there under, all amendments to that statute or regulations in force from time to time, and any statute or regulation that supplements or supersedes any such statute or regulations. ARTICLE II ARRANGEMENT AGREEMENT 2.1 BINDING EFFECT Upon obtaining the Final Order, and the issuance of a certificate of arrangement by the Director in respect thereof, this Plan of Arrangement shall be binding upon each of the Arrangement Companies. ARTICLE III THE ARRANGEMENT 3.1 SHARE EXCHANGE AND AMALGAMATIONS On the Effective Date, the following will occur and will be deemed to occur in the following order without any further act or formality: (a) the stated capital of each of the Stated Capital Subsidiaries shall be reduced to $1.00; (b) Managementco shall redeem 5,298,471 of the Class A Preferred shares in its capital stock registered in the name of TLGI and as the consideration for such -4- redemption, Managementco will transfer to TLGI the 15,276 common shares in the capital stock of Neweol registered in the name of Managementco; (c) Neweol shall reduce its stated capital account maintained for its common shares by the amount of $1.00 for the purpose of distributing, and shall concurrently distribute, the 219 common shares in the capital stock of LGII registered in the name of Neweol, to its shareholder, TLGI; (d) Neweol shall reduce its stated capital account maintained for its common shares by the amount of $80,000 for the purpose of distributing, and shall concurrently distribute, the 1 common share in the capital stock of 1495555 registered in the name of Neweol, to its shareholder, TLGI; (e) 1495554 shall wind-up and be dissolved in accordance with subsection 237 of the OBCA and, in connection with and as a consequence of such dissolution, all of the assets, rights and properties of 1495554 shall be distributed, transferred, conveyed and assigned to, and all of the unpaid liabilities of 1495554 shall be assumed by TLGI; (f) 1495555 shall wind-up and be dissolved in accordance with subsection 237 of the OBCA and, in connection with and as a consequence of such dissolution, all of the assets, rights and properties of 1495555 shall be distributed, transferred, conveyed and assigned to, and all of the unpaid liabilities of 1495555 shall be assumed by TLGI; (g) 1498124 shall wind-up and be dissolved in accordance with subsection 237 of the OBCA and, in connection with and as a consequence of such dissolution all of the assets, rights and properties of 1498124 shall be distributed, transferred and conveyed and assigned to, and all of the unpaid liabilities of 1498124 shall be assumed by TLGI; (h) the NewCanCo Amalgamating Companies shall together amalgamate pursuant to Section 175 of the OBCA and shall continue as one corporation under the name Alderwoods Group Canada Inc., with the effect described in Section 3.2 below; (i) the NewHoldCo Amalgamating Companies shall together amalgamate pursuant to Section 175 of the OBCA and shall continue as one corporation under the name Alderwoods Group Services Inc., with the effect described in Section 3.3 below; and (j) the TLGI Subsidiaries shall each approve the transfer and assignment of the right, title and interest in the TLGI Subsidiary Shares to NewCanCo and NewCanCo shall as payment therefor issue to the registered holder of the TLGI Subsidiary Shares that number of NewCanCo Shares, as set out in Schedule "V" for each TLGI Subsidiary Share so transferred. -5- 3.2 AMALGAMATION The following provisions will apply to NewCanCo unless and until otherwise determined in the manner required by law or by NewCanCo, its shareholders or directors: (a) the effect of the Arrangement shall be as if the NewCanCo Amalgamating Companies were corporations amalgamating in accordance with Section 175 of the OBCA, pursuant to Section 182 of the OBCA; (b) the property of each of the NewCanCo Amalgamating Companies (including any rights that may arise under any permit or agreement) immediately before the Arrangement becomes effective shall continue to be the property of NewCanCo; (c) NewCanCo shall continue to be liable for the obligations of the NewCanCo Amalgamating Companies (including any obligations that may arise under any permit or agreement) in existence immediately before the Arrangement becomes effective; (d) any existing cause of action, claim or liability to prosecution of or affecting any of the NewCanCo Amalgamating Companies shall be unaffected by the Arrangement becoming effective; (e) any civil, criminal or administrative action or proceeding pending by or against any of the NewCanCo Amalgamating Companies immediately before the Arrangement becomes effective may continue to be prosecuted by or against NewCanCo; (f) any conviction against, or a ruling, order or judgment in favour of or against, any of the NewCanCo Amalgamating Companies immediately before the Arrangement becomes effective may after the Effective Date be enforced by or against NewCanCo; (g) the name of NewCanCo shall be ALDERWOODS GROUP CANADA INC.; (h) the registered office of NewCanCo shall be located in the City of Toronto, in the Province of Ontario. The address of the registered office of NewCanCo will be 2225 Sheppard Avenue East, Toronto, Ontario, M2J 5C2; (i) there shall be no restriction on the business that NewCanCo may carry on or the powers that it may exercise; (j) NewCanCo shall be authorized to issue an unlimited number of Class A Common Shares and an unlimited number of Class B Common Shares, which shall have attached thereto the respective rights, privileges, restrictions and conditions set out in Schedule A hereto; -6- (k) the right to transfer shares of NewCanCo shall be restricted in that no shares shall be transferred without the approval of the directors; (l) the number of directors of NewCanCo shall, unless otherwise changed in accordance with the OBCA, consist of not less than 1 and not more than 20, the number of directors within the minimum and maximum number set out herein to be determined from time to time by the directors; (m) the accountants of NewCanCo shall be KPMG, LLP Chartered Accountants; (n) the initial directors shall consist of the individuals referred to below, each of whom shall hold such office until the first annual meeting of shareholders or until their successors have been duly elected or appointed: Jeffrey Lowe 2225 Sheppard Avenue East Canadian Resident Suite 1100 Toronto, ON M2J 5C2 William R. Tottle 2225 Sheppard Avenue East Canadian Resident Suite 1100 Toronto, ON M2J 5C2 J. Richard Clayton 2225 Sheppard Avenue East Canadian Resident Suite 1100 Toronto, ON M2J 5C2
(o) the individuals referred to below shall hold the office or offices set opposite their respective names until their respective successors shall be elected or appointed: Paul A. Houston - President Ronald G. Collins - Vice-President Laurel J. Langford - Secretary-Treasurer Azalea Angeles - Assistant Secretary
(p) the by-laws of NewCanCo shall be the by-laws of TLGI Holdings Limited, a corporation governed by the laws of the Province of Ontario immediately before the Effective Date; (q) the financial year of NewCanCo shall end on December 31 of each year; and (r) the following share exchanges, issuances or cancellations, as the case may be, shall take place on the Effective Date prior to the Plan of Arrangement being effective: -7- (i) subject to clauses (ii) and (iii) below, the NewCanCo Amalgamating Companies Shares shall be converted into and the holder thereof shall receive in respect thereof 34,100 NewCanCo Class A Common Shares; (ii) subject to clause (iii) below, the outstanding shares of Managementco, other than the shares registered in the name of TLGI, shall be converted into and the holder thereof shall receive in respect thereof 143,100 NewCanCo Class B Common Shares; (iii) any issued shares in the capital stock of each of the NewCanCo Amalgamating Companies held by or on behalf of any of the NewCanCo Amalgamating Companies immediately prior to the Effective Date of the Arrangement shall be cancelled without any repayment of capital in respect thereof; and (iv) all the authorized but unissued shares in the capital of each of the NewCanCo Amalgamating Companies shall be cancelled. 3.3 AMALGAMATION The following provisions will apply to NewHoldCo unless and until otherwise determined in the manner required by law or by NewHoldCo, its shareholders or directors; (a) the effect of the Arrangement shall be as if the NewHoldCo Amalgamating Companies were corporations amalgamating in accordance with Section 175 of the OBCA, pursuant to Section 182 of the OBCA; (b) the property of each of the NewHoldCo Amalgamating Companies (including any rights that may arise under any permit or agreement) immediately before the Arrangement becomes effective shall continue to be the property of NewHoldCo; (c) NewHoldCo shall continue to be liable for the obligations of the NewHoldCo Amalgamating Companies (including any obligations that may arise under any permit or agreement) in existence immediately before the Arrangement becomes effective; (d) any existing cause of action, claim or liability to prosecution of or affecting any of the NewHoldCo Amalgamating Companies shall be unaffected by the Arrangement becoming effective; (e) any civil, criminal or administrative action or proceeding pending by or against any of the NewHoldCo Amalgamating Companies immediately before the Arrangement becomes effective may continue to be prosecuted by or against NewHoldCo; (f) any conviction against, or a ruling, order or judgment in favour of or against, any of the NewHoldCo Amalgamating Companies immediately before the -8- Arrangement becomes effective may after the Effective Date be enforced by or against NewHoldCo; (g) the name of NewHoldCo shall be ALDERWOODS GROUP SERVICES INC.; (h) the registered office of NewHoldCo shall be located in the City of Toronto in the Province of Ontario. The address of the registered office of NewHoldCo will be 2225 Sheppard Avenue East, Toronto, Ontario, M2J 5C2; (i) there shall be no restriction on the business of NewHoldCo may carry on or the powers that it may exercise; (j) NewHoldCo shall be authorized to issue an unlimited number of Class A common shares and an unlimited number of Class B common shares, which shall have attached thereto the respective rights, privileges, restrictions and conditions set out in Schedule A hereto; (k) the right to transfer shares of NewHoldCo shall be restricted in that no shares shall be transferred without the approval of the Directors; (l) the number of directors of NewHoldCo shall, unless otherwise changed in accordance with the OBCA, consist of not less than 1 and not more than 20, the number of directors within the minimum and maximum number set out herein to be determined from time to time by the directors; (m) the accountants of NewHoldCo shall be KPMG LLP, Chartered Accountants; (n) the initial directors shall consist of the individuals referred to below, each of whom shall hold such office until the first annual meeting of shareholders or until their respective successors have been duly elected or appointed: Jeffrey Lowe 2225 Sheppard Avenue East Canadian Resident Suite 1100 Toronto, ON M2J 5C2 William R. Tottle 2225 Sheppard Avenue East Canadian Resident Suite 1100 Toronto, ON M2J 5C2
-9- (o) the individuals referred to below shall hold the office or offices set opposite their respective names until their respective successors shall be elected or appointed: John S. Lacey - Chairman Paul A. Houston - President and Chief Executive Officer Kenneth A. Sloan - Senior Vice-President, Chief Financial Officer Bradley D. Stam - Senior Vice-President, Legal and Asset Management Gordon Orlikow - Senior, Vice-President, People James Arthurs - Senior Vice-President, Chief Information Officer Ronald G. Collins - Vice-President Laurel J. Langford - Secretary-Treasurer Azalea Angeles - Assistant Secretary
(p) the by-laws of NewHoldCo shall be the by-laws of Neweol, a corporation governed by the laws of the Province of Ontario immediately before the Effective Date; (q) the financial year of NewHoldCo shall end on December 31 of each year; (r) The following share exchanges, issuances and cancellations, as the case may be, shall take place on the Effective Date prior to the Plan of Arrangement becoming effective: (i) the outstanding shares in the capital stock of 1498130 Ontario Limited and Neweol held by TLGI shall be converted into, and TLGI as such holder shall receive in respect thereof 179,106 Class A Common Shares of NewHoldCo; (ii) the outstanding shares in the capital stock of 1498130 Ontario Limited held by LGII shall be converted into, and LGII as such holder shall receive in respect thereof 103,494 Class B Common Shares of NewHoldCo; and (iii) all the authorized but unissued shares in the capital stock of each of the NewHoldCo Amalgamating Companies shall be cancelled. ARTICLE IV OTHER PROVISIONS 4.1 LIMITED NUMBER OF SHAREHOLDERS The number of shareholders of NewCanCo shall be limited to not more than 50 persons, not including persons who are in the employment of NewCanCo and persons who, having been formerly in the employment of NewCanCo or any of the NewCanCo Amalgamating -10- Companies, were, while in that employment, and have continued after the termination of that employment to be, shareholders of NewCanCo, two or more persons who are the joint registered owners of one or more shares being counted as a single shareholder. 4.2 NO PUBLIC OFFERING Any invitation to the public to subscribe for any securities of NewCanCo is prohibited. 4.3 LIMITED NUMBER OF SHAREHOLDERS The number of shareholders of NewHoldCo shall be limited to not more than 50 persons, not including persons who are in the employment of NewHoldCo and persons who, having been formerly in the employment of NewHoldCo or any of the NewHoldCo Amalgamating Companies, were, while in that employment, and have continued after the termination of that employment to be, shareholders of NewHoldCo, two or more persons who are the joint registered owners of one or more shares being counted as a single shareholder. 4.4 NO PUBLIC OFFERING Any invitation to the public to subscribe for any securities of NewHoldCo is prohibited. ARTICLE V CERTIFICATES AND DOCUMENTATION 5.1 ENTITLEMENT TO AMALCO SHARE CERTIFICATES After the Effective Date, the former shareholders of the NewCanCo Amalgamating Companies and the NewHoldCo Amalgamating Companies respectively shall be entitled on the basis set forth in Article III to receive certificates representing the shares in NewCanCo or NewHoldCo, as the case may be, respectively issued to them. 5.2 FRACTIONAL SHARES No fractional shares will be issued by either NewCanCo or NewHoldCo, and no cash will be paid in lieu thereof. Any fractions resulting will be rounded to the nearest whole number, with fractions of one-half or more being rounded to the next whole number. ARTICLE VI AMENDMENT 6.1 PLAN OF ARRANGEMENT AMENDMENT (a) The Arrangement Companies may by agreement, and hereby reserve the right to amend, modify and/or supplement this Plan of Arrangement at any time and from time to time provided that any amendment, modification or supplement must be contained in a written document which is filed herewith and, subject to paragraph (b) below approved by the Court; -11- (b) Any amendment, modification or supplement to the Plan of Arrangement may be made following the Effective Date unilaterally by NewCanCo or NewHoldCo, provided that it concerns a matter which, in the reasonable opinion of NewCanCo or NewHoldCo, is of an administrative nature required to better give effect to the implementation of this Plan of Arrangement and is not adverse to the financial economic interests of any creditor or holder of securities of NewCanCo or NewHoldCo. SCHEDULE "I" NEWCANCO AMALGAMATING COMPANIES 1. 1026698 Ontario Inc. 2. 1450260 Ontario Limited (formerly Ross Funeral Service Ltd.) 3. 1450261 Ontario Limited (formerly 600838 Saskatchewan Ltd.) 4. 1450263 Ontario Limited (formerly 601346 Saskatchewan Ltd.) 5. 1450264 Ontario Limited (formerly Rist Enterprises Corporation) 6. 1451469 Ontario Limited (formerly 4032 Investments Ltd.) 7. 1451470 Ontario Limited (formerly 476822 B.C. Ltd.) 8. 1452457 Ontario Limited (formerly 60752 Manitoba Limited) 9. 1452461 Ontario Limited (formerly 2696216 Manitoba Ltd.) 10. 1452463 Ontario Limited (formerly 2239699 Manitoba Ltd.) 11. 1499682 Ontario Ltd. (formerly 307744 Saskatchewan Ltd.) 12. Addison Funeral Home, Inc. 13. Alberni Valley Memorial Gardens Ltd. 14. Aldon Enterprises Ltd. 15. Armstrong-Enderby Funeral Home Ltd. 16. Assman's Funeral Chapel Ltd. 17. Cambridge Funeral Services Limited 18. Canadian Funeral Services Inc. 19. Centre-Sask Funeral Management Co. Ltd. 20. Chapel Hill Funeral Home Ltd. 21. Chapel of Memories Funeral Directors Ltd. 22. Clements' Rosetown Funeral Home Limited 23. Comstock Funeral Home (1987) Ltd. 24. Courtney-Winter's Funeral Chapel Ltd. 25. Coventry Funeral Services Ltd. 26. Cutcliffe Funeral Home (1986) Ltd. 27. Digby Funeral Home Limited 28. Dionne-Moriarty Enterprises Ltd. 29. Dryden Funeral Service Limited 30. E. Andrychuk Funeral Home Ltd. 31. Ettinger-Kennedy Memorial Residence Limited 32. Giffen-Mack Chapel Ltd. 33. Glenhaven Memorial Chapel Ltd. 34. Graham Funeral Home Ltd. 35. Green Acres Memorial Gardens (1969) Ltd. 36. Green Acres Memorial Services (1969) Ltd. 37. Green Funeral Home Limited 38. H D Funeral Home Ltd. 39. H.S. Anderson and Sons (1986) Ltd. 40. Hamilton-Harron Funeral Centre and Crematorium Ltd. 41. Hawkins Funeral Home Ltd. 42. Hayward's B.C. Funeral Company & Limousine Service Ltd. 43. Haywards Thomson & Irving Funeral Directors (1986) Inc. 44. Helmsing Funeral Chapels Ltd. 45. Henderson's Fraser Valley Funeral Home Ltd. 46. Henderson's Funeral Homes Ltd. 47. Hollyburn Funeral Home Ltd. 48. Hollyburn Funeral Services Ltd. 49. Holy Angel Mausoleum In. 50. Independent Funeral Services Incorporated 51. J.A. Snow's Funeral Home (1985) Limited -2- 52. J.B. Marlatt Funeral Homes (1985) Limited 53. Jerome-Martens Funeral Services Limited 54. Kamloops Funeral Home Ltd. 55. Kerr's Funeral Chapel (1988) Ltd. 56. Klassen Funeral Chapel Ltd. 57. Lakeland Funeral Home Ltd. 58. Lakewood Funeral Home Ltd. 59. Lee Funeral Home Inc. (formerly Lee Funeral Home Ltd.) 60. Loewen Funeral Chapels (1973) Ltd. 61. Mattatall Funeral Home (1986) Limited 62. McKague's Funeral Chapels Ltd. 63. Maclean Funeral Home (1986) Limited (to be sold - need to confirm current status) 64. Memories Funeral Directors & Crematory Ltd. 65. Mission Hill Crematorium Ltd. 66. Mountain View and Metcalf Funeral Chapels Ltd. 67. Mt. Washington Memorial and Funeral Chapel Ltd. 68. Orsted Funeral Home Ltd. 69. Pabril Ventures Limited 70. Parksville Funeral Chapel Ltd. 71. Parkview Funeral Home Ltd. 72. Piercy's Funeral Home Limited 73. Prairie Funeral Services Ltd. 74. R. Martino Funeral Homes (1987) Ltd. 75. Robert L. Hall Funeral Home Limited 76. Sallows and McDonald Funeral Home (1987) Limited 77. Sault Ste. Marie Funeral Homes Ltd. 78. Scharf's Funeral Home Ltd. 79. Schreiter-Sandrock Limited 80. Souris Valley Memorial Gardens Company Ltd. 81. Suburban Funeral Homes Ltd. 82. Surrey Memorial Services and Crematorium Ltd. 83. Sutton's Funeral Directors Ltd. 84. The Brown Funeral Home (Kenora 1983) Limited 85. The J. Thompson Company Limited 86. The Ratz-Bechtel Limited 87. TLGI Holdings Limited 88. TLGI Management Corp. 89. TLGM Holdings Inc. 90. TLGM One Holdings Inc. 91. Troispap Inc. 92. Trull Funeral Homes (1987) Limited 93. Unity Funeral Chapel Ltd. 94. Unser-Rist Funeral Home Services Inc. 95. Vancouver Memorial Services and Crematorium Ltd. 96. Vernon Funeral Home (1986) Ltd. 97. Walter D. Kelly Funeral Home and Chapel Ltd. 98. Wayne Hatt Enterprises Ltd. 99. Weyburn Funeral Home (1987) Ltd. 100. Wilson & Zehner Funeral Chapel SCHEDULE "II" NEWHOLDCO AMALGAMATING COMPANIES 1. 1498130 Ontario Limited (formerly 4103 Investments Ltd.) 2. Neweol Investments Ltd. SCHEDULE "III" STATED CAPITAL SUBSIDIARIES 1. 1495555 Ontario Limited (formerly 4166 Investments Ltd.) 2. 1495554 Ontario Limited (formerly 4054 Investments Ltd.) 3. 1498124 Ontario Limited (formerly 28886 Investments Ltd.) SCHEDULE "IV" TLGI SUBSIDIARIES 1. Guayco Investments Inc. 2. 247663 Alberta Ltd. 3. Oshawa Funeral Service (Thornton Chapel) Inc. 4. Pine Grove Crematorium (1996) Ltd. 5. P. Coutu Funeral Chapels Ltd. 6. O'Reilly-Lee Funeral Home Ltd. 7. Gregory's Williams Lake Funeral Home Ltd. 8. 82888 Investments Ltd. 9. 3899 Investments Ltd. SCHEDULE "V" ISSUED NEWCANCO SHARES TO TLGI SUBSIDIARIES
TLGI Subsidiary No. of NewCanCo Shares - --------------- ---------------------- Guayco Investments Inc. 6,654 247663 Alberta Ltd. 1 Oshawa Funeral Service (Thornton Chapel) Inc. 2,039 Pine Grove Crematorium (1996) Ltd. 33 P. Coutu Funeral Chapels Ltd. 1 O'Reilly-Lee Funeral Home Ltd. 1 Gregory's Williams Lake Funeral Home Ltd. 33 82888 Investments Ltd. 211 3899 Investments Ltd. 422
SCHEDULE A (a) DIVIDENDS The Class A Common Shares and the Class B Common Shares shall rank equally as to dividends and all dividends declared in any fiscal year shall be declared and paid in equal or equivalent amounts per share on all of the Class A Common Shares and all of the Class B Common Shares at the time outstanding without preference or distinction. (b) DECLARATION OF DIVIDENDS The respective holders of the Class A Common Shares and the Class B Common Shares shall be entitled to receive any dividends declared by the Corporation. (c) LIQUIDATION, DISSOLUTION OR WINDING-UP In the event of any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, the respective holders of the Class A Common Shares and the Class B Common Shares shall be entitled to receive the amount paid up thereon and any dividends declared thereon and unpaid, and thereafter all of the remaining property and assets of the Corporation shall be paid or distributed to the holders of the Class A Common Shares. (d) VOTING RIGHTS Each holder of one or more Class A Common Shares and each holder of one or more Class B Common Shares shall be entitled to receive notice of and to attend all meetings of shareholders of the Corporation, except meetings at which only holders of a specified class of shares (other than Class A Common Shares or Class B Common Shares) or a specified series of shares are entitled to vote. At all meetings at which notice must be given to the holders of the Class A Common Shares and the Class B Common Shares, each holder of one or more Class A Common Shares and each holder of one or more Class B Common Shares shall be entitled to one vote in respect of each such share held by such holder. SCHEDULE "C" CANADIAN OPERATING ASSETS 1. Any interest in real estate that is located in Canada, whether freehold, leasehold or otherwise. 2. Furniture, fixtures and office equipment located in Canada. 3. Accounts Receivables (other than some of the existing intercompany receivables) including tax refunds due, and employee travel advances. 4. Employment Agreements (to the extent not rejected pursuant to the provisions of the U.S. Bankruptcy Code) with persons resident in Canada. 5. Personal property (and interests therein) situate in Canada, including vehicles. 6. Executory Contracts (to the extent not rejected pursuant to the provisions of the U.S. Bankruptcy Code) dealing with goods and services to be supplied or performed, as the case may be, exclusively in Canada. SCHEDULE "D" NAFTA CLAIM ASSIGNMENT PROVISIONS The assignments of the NAFTA Claim will be effected as follows: Step 1. LGII forms (a) Loewen (Nafta), LLC ("Delco") as a wholly owned Delaware limited liability company and (b) Nafcanco ULC ("Nafcanco") as a wholly owned Nova Scotia unlimited liability company. Step 2. LGII assigns, transfers and delivers to Delco all of its rights under Article 1135(2)(b) of NAFTA to receive any proceeds of the NAFTA Claims arising under Article 1117 of NAFTA ("Article 1117 Proceeds"). Step 3. LGII assigns, transfers and delivers to TLGI all of the issued and outstanding membership interests in Delco, such that Delco becomes wholly owned by TLGI. Step 4. Delco assigns, transfers and delivers to LGII all of Delco's right, title and interest in and to any Article 1117 Proceeds that Delco receives. Step 5. TLGI assigns, transfers and delivers to Nafcanco all of TLGI's right, title and interest in and to any proceeds of the NAFTA Claims arising under Article 1116 of NAFTA that TLGI receives. Step 6. TLGI irrevocably delegates to Nafcanco all powers and responsibilities of TLGI in respect of the pursuit and prosecution of the NAFTA Claims and grants to Nafcanco an irrevocable power of attorney authorizing Nafcanco to take action in the name and on behalf of TLGI in connection therewith, all as described below. Step 7. Immediately following completion of the Restructuring Transactions, (as defined in the U.S. Plan) each of LGII and Nafcanco assigns, transfers and delivers to the Liquidating Trust 25% of its right, title and interests in and to any net proceeds of the NAFTA Claims arising under Article 1117 and any net proceeds of the NAFTA Claims arising under Article 1116, respectively. Step 8. TLGI will authorize Nafcanco, on TLGI's behalf and in TLGI's name, to pursue and prosecute TLGI's NAFTA Claims in the pending arbitration proceeding known as The Loewen Group, Inc. and Raymond L. Loewen v. The United States of America, ICSID Case No. ARB (AF)98/3. Pursuant to such authority, Nafcanco is authorized to employ counsel to represent TLGI and to pursue and prosecute such -2- NAFTA Claims to judgment, or to comprise and settle the matter on terms Nafcanco deems proper. TLGI also authorizes Nafcanco, for and in TLGI's name, to appear, answer, plead and defend in all actions, suits and proceedings whatsoever arising from or associated with TLGI's NAFTA Claims. EX-99.1 9 d92756ex99-1.txt PRESS RELEASE DATED DECEMBER 4, 2001 EXHIBIT 99.1 THE LOEWEN GROUP INC. NEWS Media Contact: Mark Utting Director of Communications The Loewen Group Inc., Tel: (416) 498-2754 Email: mark.utting@loewengroup.com Investor Contact: (800) 347-7010 FOR IMMEDIATE RELEASE LOEWEN CONFIRMATION CLEARS WAY FOR LAUNCH OF ALDERWOODS GROUP December 4, 2001 - The Loewen Group Inc. announced today that the United States Bankruptcy Court for the District of Delaware has confirmed its Fourth Amended Plan of Reorganization. The confirmation order clears the way for the company to emerge as Alderwoods Group Inc. on January 2, 2002, subject to obtaining recognition of the order in Canada and the satisfaction of certain other conditions. John S. Lacey, Chairman of Board, said: "This is a great day and a new beginning for the Alderwoods Group. We want to thank our board of directors, the various creditor groups and other stakeholders who have supported our reorganization plan. We also want to thank the management team and our employees. The last two and a half years have been tough for all of us, but through it all our people have remained focused and committed to the job at hand. Because of their efforts, Alderwoods will be well positioned to compete and succeed in the future." Alderwoods Group will be based in the United States, and will derive about 90 percent of its revenue from its U.S. operations. It will be North America's second largest funeral services provider, with approximately 920 funeral homes and 275 cemeteries in the United States, Canada and the United Kingdom. Through its workforce of 10,000 dedicated professionals, it will pursue a strategy focused on providing excellent service to customer families, service that delivers an experience of total care and convenience. Paul Houston, President and Chief Executive Officer, said: "Emergence on January 2nd will be like a late Christmas present for all of our hard-working employees. The launch of Alderwoods will give us a huge morale boost, and allow us to compete once again without the cloud of uncertainty that goes with a corporate reorganization. This boost, along with the many performance enhancement initiatives we've already implemented, will put us in great shape to go out there and create our new future." - more - Upon emergence, the company will issue 40 million new common shares to creditors holding allowed claims under the Plan of Reorganization. The Alderwoods Group common shares (symbol: AWGI) will be listed on the NASDAQ exchange, with trading expected to begin on or shortly after the emergence date. Alderwoods Group will be launched with a significantly stronger balance sheet. The company will have liquidity of approximately $100 million, comprising cash and a revolving credit facility. Shareholders' equity is expected to total close to $700 million, while debt outstanding will be $835 million. Commenting on the Alderwoods Group name, Mr. Houston said: "We're delighted with our new name. It was selected based on very positive responses during consumer testing and after receiving input from a number of our employees. Consumers embraced the name, which is largely derived from the Alder tree, associating it with comfort, peacefulness and nature. It's a good name, particularly given the businesses that we're in and the essential role we play in serving and comforting our customer families during a very difficult time." With confirmation of the Plan of Reorganization by the U.S. Bankruptcy Court, the company will now seek to obtain recognition of the confirmation order in Canada. Recognition in Canada is expected to be obtained at a hearing scheduled for December 7, 2001 by the Ontario Superior Court of Justice, which presides over the company's parallel bankruptcy proceedings under the Canadian Companies' Creditors Arrangement Act. ### Safe Harbor: Certain statements contained in this press release, including, but not limited to, information regarding the future economic performance and financial condition of the company, the status and progress of the company's reorganization, the plans and objectives of the company's management and the company's assumptions regarding such performance and plans, are forward-looking in nature. Factors that could cause actual results to differ from the forward-looking information contained in this release include, but are not limited to, uncertainty regarding arrangements relating to the company's reorganization, the resolution of issues relating to certain indebtedness of the company and other issues presented by the reorganization, uncertainty related to the company's ability to satisfy the conditions to the effective date set forth in the reorganization plan, general economic conditions, the company's ability to implement its business plan and the company's future competitive position. Note to Photo Editors: To obtain an electronic version of the company's new name and logo please contact Mark Utting, Director of Communications, at (416) 498-2754. EX-99.3 10 d92756ex99-3.txt CONSOLIDATED BALANCE SHEET AS OF SEPT. 30, 2001 EXHIBIT 99.3 THE LOEWEN GROUP INC. CONSOLIDATED BALANCE SHEET EXPRESSED IN THOUSANDS OF U.S. DOLLARS
SEPTEMBER 30 2001 ------------ (UNAUDITED) ASSETS Current assets Cash ............................................. $ 228,366 Receivables, net of allowances ................... 166,704 Inventories ...................................... 32,948 Prepaid expenses ................................. 24,158 ------------ 452,176 Long-term receivables, net of allowances ........... 472,235 Cemetery property .................................. 762,963 Property and equipment ............................. 642,779 Names and reputations .............................. 561,471 Insurance invested assets .......................... 329,669 Future income tax assets ........................... 1,944 Pre-arranged funeral services ...................... 415,303 Other assets ....................................... 111,842 ------------ $ 3,750,382 ============ LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities not subject to compromise Current liabilities Accounts payable and accrued liabilities ...... $ 107,029 Long-term debt, current portion ............... 23,868 ------------ 130,897 Long-term debt, net of current portion ........... 43,287 Other liabilities ................................ 375,206 Insurance policy liabilities ..................... 222,718 Future income tax liabilities .................... 120,458 Deferred pre-arranged funeral services revenue ... 415,303 Liabilities subject to compromise .................. 2,294,372 Shareholders' equity Common shares .................................... 1,276,414 Preferred shares ................................. 157,144 Deficit .......................................... (1,295,576) Foreign exchange adjustment ...................... 10,159 ------------ 148,141 ------------ $ 3,750,382 ============
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