THIRD AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.2
THIRD AMENDMENT TO CREDIT AGREEMENT
This THIRD AMENDMENT TO CREDIT AGREEMENT (the “Third Amendment”) dated May 7, 2007, is by and among StoneMor GP LLC, a Delaware limited liability company (the “General Partner”), StoneMor Partners L.P., a Delaware limited partnership (the “Partnership”), StoneMor Operating LLC, a Delaware limited liability company (the “Operating Company”), the Subsidiaries of the Operating Company set forth on the signature page hereto (together with the Operating Company, each individually a “Borrower” and collectively, the “Borrowers” and together with the General Partner and the Partnership, each individually a “Credit Party” and collectively, the “Credit Parties”), the lenders party hereto (the “Lenders”), and Bank of America, N.A., successor by merger to Fleet National Bank, a national banking association organized and existing under the laws of the United States of America, as Administrative Agent for the benefit of the Lenders (in such capacity, the “Administrative Agent”), as Collateral Agent for the benefit of the Lenders and other Secured Creditors, as Swingline Lender and as Letter of Credit Issuer.
BACKGROUND
A. Pursuant to that certain Credit Agreement entered into on September 20, 2004, by and among the parties hereto, as amended by a First Amendment dated November 12, 2004 and a Second Amendment dated September 28, 2006 (as amended, modified or otherwise supplemented from time to time, the “Credit Agreement”), the Lenders agreed, inter alia, to extend to the Borrowers (i) a revolving credit facility in the maximum aggregate principal amount of Twelve Million Five Hundred Thousand Dollars ($12,500,000), and (ii) an acquisition line in the maximum aggregate principal amount of Twenty Two Million Five Hundred Thousand Dollars ($22,500,000).
B. Borrowers have requested that the Lenders make certain amendments to the Credit Agreement to provide for (i) a temporary increase of the revolving credit facility to a maximum aggregate principal amount of up to Seventeen Million Five Hundred Thousand Dollars ($17,500,000), and (ii) a corresponding temporary decrease of the acquisition line.
NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:
1. Definitions.
(a) General Rule. Except as expressly set forth herein, all capitalized terms used and not defined herein shall have the respective meanings ascribed thereto in the Credit Agreement.
(b) Additional Definitions. The following additional definitions are hereby added to Section 1 of the Credit Agreement to read in its entirety as follows:
“Adjustment Amount” means as of the date of the Third Amendment and prior to the effective date of an Adjustment Notice, Three Million Dollars ($3,000,000), and on and after the effective date of an Adjustment Notice, Five Million Dollars ($5,000,000).
“Adjustment Notice” means a written notice from the Borrowers delivered to the Administrative Agent and the Lenders stating that (a) the Borrowers irrevocably request that the Adjustment Amount be increased from $3,000,000 to $5,000,000, (b) no Default or Event of Default has occurred and is continuing.
“Adjustment Period” means the period from the date of the Third Amendment, through the earlier of (a) June 29, 2007, and (b) any date on which the Agreement is amended and restated.
“Third Amendment” means the Third Amendment to this Agreement dated May 7, 2007.
2. Amendment to Schedule I. Schedule I is hereby amended and restated in its entirety as “Amended and Restated Schedule I” attached to this Third Amendment, so that, during the Adjustment Period the Total Revolving Loan Commitment is increased by the Adjustment Amount and the Total Acquisition Loan Commitment is decreased by the Adjustment Amount (in each case as such amount may be adjusted pursuant to Section 3 hereof).
3. Adjustment Notice. Once during the Adjustment Period, the Borrowers may deliver to the Administrative Agent and the Lenders an Adjustment Notice, which, if no Default or Event of Default has occurred and is continuing or would result therefrom, shall be effective as of the fifth (5th) Business Day following delivery of such Adjustment Notice, whereupon the Adjustment Amount will be increased in accordance with the definition of “Adjustment Amount”.
4. Amendment to Notes. Each Note is hereby deemed to be amended during the Adjustment Period to reflect a maximum amount of the related Commitment as adjusted in accordance with Section 2 to this Third Amendment; provided however, that if, for any reason, at the end of the Adjustment Period the aggregate outstanding principal amount of Revolving Loans of any Lender which, when added to such Lender’s RL Percentage of the sum of (x) the Letter of Credit Outstandings at such time (exclusive of Unpaid Drawings which are repaid with the proceeds of, and simultaneously with the incurrence of, the respective incurrence of Revolving Loans) and (y) the aggregate principal amount of all Swingline Loans then outstanding (exclusive of Swingline Loans which are repaid with the proceeds of, and simultaneously with the incurrence of, the respective incurrence of Revolving Loans), is in excess of the Revolving Loan Commitment of such Lender at such time, the maximum principal amount of such Lender’s Note shall be deemed to include such excess amount until such excess amount has been repaid in accordance with the Agreement.
5. Representations and Warranties. Each Credit Party hereby represents and warrants to the Administrative Agent and the Lenders that, as to such Credit Party:
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(a) Representations. Each of the representations and warranties of or as to such Credit Party contained in the Credit Agreement and the other Credit Documents are true and correct in all material respects on and as of the date hereof as if made on and as of the date hereof;
(b) Power and Authority. (i) Such Credit Party has the power and authority under the laws of its jurisdiction of organization and under its organizational documents to enter into and perform this Third Amendment and any other documents which the Administrative Agent requires such Credit Party to deliver hereunder (this Third Amendment and any such additional documents delivered in connection with the Third Amendment are herein referred to as the “Third Amendment Documents”); and (ii) all actions, corporate or otherwise, necessary or appropriate for the due execution and full performance by such Credit Party of the Third Amendment Documents have been adopted and taken and, upon their execution, the Credit Agreement, as amended by this Third Amendment and the other Third Amendment Documents will constitute the valid and binding obligations of such Credit Party enforceable in accordance with their respective terms, except as such enforcement may be limited by any Debtor Relief Law from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies;
(c) No Violation. The making and performance of the Third Amendment Documents will not (i) contravene, conflict with or result in a breach or default under any material applicable law, statute, rule or regulation, or any order, writ, injunction, judgment, ruling or decree of any court, arbitrator or governmental instrumentality, (ii) taking into account such consents as have been obtained in connection with this Third Amendment, contravene, constitute a default under, conflict or be inconsistent with or result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of the property or assets of any Credit Party pursuant to the terms of any material indenture, mortgage, deed of trust, loan agreement, credit agreement or any other agreement or instrument to which any Credit Party is a party or by which it or any of its property or assets are bound or to which it may be subject or (iii) contravene or violate any provision of the certificate of incorporation, by-laws, certificate of partnership, partnership agreement, certificate of limited liability company, limited liability company agreement or equivalent organizational document, as the case may be, any Credit Party;
(d) No Default. No Default or Event of Default has occurred and is continuing, or will exist immediately after giving effect to this Third Amendment; and
(e) No Material Adverse Effect. No Material Adverse Effect has occurred since December 31, 2005.
6. Conditions to Effectiveness of Amendment. This Third Amendment shall be effective upon the Administrative Agent’s receipt of the following, each in form and substance reasonably satisfactory to the Administrative Agent:
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(a) Third Amendment. This Third Amendment, duly executed by the Credit Parties, the Administrative Agent, the Collateral Agent and the Lenders and consented to by the Purchasers;
(b) Other Fees and Expenses. Payment to the Administrative Agent and the Lenders, in immediately available funds, of all amounts necessary to reimburse the Administrative Agent and the Lenders for the reasonable out-of-pocket fees and costs incurred by the Administrative Agent, including, without limitation, all such fees and costs incurred by the Administrative Agent’s attorneys, in connection with the preparation and execution of this Third Amendment and any other Credit Document;
(c) Consent and Waivers. Copies of any consents or waivers necessary in order for the Credit Parties to comply with or perform any of its covenants, agreements or obligations contained in any agreement which are required as a result of any Credit Party’s execution of this Third Amendment, if any; and
(d) Other Documents and Actions. Such additional agreements, instruments, documents, writings and actions as the Administrative Agent may reasonably request.
7. No Waiver; Ratification. The execution, delivery and performance of this Third Amendment shall not (a) operate as a waiver of any right, power or remedy of the Lenders under the Credit Agreement, any Credit Document or any Third Amendment Document and the agreements and documents executed in connection therewith or (b) constitute a waiver of any provision thereof. Except as expressly modified hereby, all terms, conditions and provisions of the Credit Agreement and the other Credit Documents shall remain in full force and effect and are hereby ratified and confirmed by the Credit Parties. Nothing contained herein constitutes an agreement or obligation by the Administrative Agent or the Lenders to grant any further amendments to any of the Credit Documents.
8. Acknowledgments. To induce the Administrative Agent and the Lenders to enter into this Third Amendment, the Credit Parties acknowledge, agree, warrant, and represent that:
(a) Acknowledgment of Obligations; Collateral; Waiver of Claims. (i) The Credit Documents are valid and enforceable against, and all of the terms and conditions of the Credit Documents are binding on, the Credit Parties, except as such enforcement may be limited by any Debtor Relief Law from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies; (ii) the liens and security interests granted to the Administrative Agent, on behalf of the Lenders, by the Credit Parties pursuant to the Credit Documents are valid, legal and binding, properly recorded or filed and first priority perfected liens and security interests subject only to Permitted Encumbrances, and such liens and security interests will continue to secure all Loans and other Obligations, including those made under the Commitments adjusted by this Third Amendment; and (iii) the Credit Parties hereby waive any and all defenses, set-offs and counterclaims which they, whether jointly or severally,
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may have or claim to have against the Administrative Agent and the Lenders as of the date hereof.
(b) No Waiver of Existing Defaults. Nothing in this Third Amendment nor any communication between the Administrative Agent, any Lender, any Credit Party or any of their respective officers, agents, employees or representatives shall be deemed to constitute a waiver of (i) any Default or Event of Default arising as a result of the foregoing representation proving to be false or incorrect in any material respect; or (ii) any rights or remedies which the Administrative Agent or the Lenders have against any Credit Party under the Credit Agreement or any other Credit Document and/or applicable law, with respect to any such Default or Event of Default arising as a result of the foregoing representation proving to be false or incorrect in any material respect.
9. Binding Effect. This Third Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
10. Governing Law. This Third Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without reference to the choice of law doctrine of the Commonwealth of Pennsylvania.
11. Headings. The headings of the sections of this Third Amendment are inserted for convenience only and shall not be deemed to constitute a part of this Third Amendment.
12. Counterparts. This Third Amendment may be executed in any number of counterparts with the same affect as if all of the signatures on such counterparts appeared on one document and each counterpart shall be deemed an original.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto, by their respective duly authorized officers, have executed this Third Amendment to Credit Agreement as of the date first above written.
| BANK OF AMERICA, N.A., successor by merger to Fleet National Bank, in its various capacities as set forth above | ||
| By: | ||
| Xxxxxxx X. Xxxx, Senior Vice President | ||
| SOVEREIGN BANK, as a Lender | ||
| By: | ||
| Xxxx X. Xxxxxxx, Vice President | ||
| COMMERCE BANK, N.A., as a Lender | ||
| By: | ||
| Xxxxx X. Xxxxx, Senior Vice President | ||
| Credit Parties | ||
| STONEMOR GP LLC | ||
| By: | ||
| Xxxxxxx X. Xxxxx, Executive Vice President | ||
| STONEMOR PARTNERS L.P. By: STONEMOR GP LLC its General Partner | ||
| By: | ||
| Xxxxxxx X. Xxxxx, Executive Vice President | ||
| STONEMOR OPERATING LLC | ||
| By: | ||
| Xxxxxxx X. Xxxxx, Executive Vice President | ||
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| Alleghany Memorial Park LLC | Green Lawn Memorial Park LLC | Osiris Holding of Rhode Island LLC | StoneMor Kansas LLC | |||
| Alleghany Memorial Park Subsidiary, Inc. | Green Lawn Memorial Park Subsidiary LLC | Osiris Holding of Rhode Island Subsidiary, Inc. | StoneMor Kansas Subsidiary LLC | |||
| Altavista Memorial Park LLC | Henlopen Memorial Park LLC | Osiris Management, Inc. | StoneMor Kentucky LLC | |||
| Altavista Memorial Park Subsidiary, Inc. | Henlopen Memorial Park Subsidiary, Inc. | Osiris Telemarketing Corp. | StoneMor Kentucky Subsidiary LLC | |||
| Arlington Development Company | Xxxxx Memorial Park LLC | Perpetual Xxxxxxx.Xxx, Inc. | StoneMor Michigan LLC | |||
| Augusta Memorial Park Perpetual Care Company | Xxxxx Memorial Park Subsidiary, Inc. | The Prospect Cemetery LLC | StoneMor Michigan Subsidiary LLC | |||
| Bedford County Memorial Park LLC | X.X. Xxxxxx LLC | The Prospect Cemetery Subsidiary LLC | StoneMor Missouri LLC | |||
| Bedford County Memorial Park Subsidiary LLC | X.X. Xxxxxx Subsidiary LLC | Prospect Hill Cemetery LLC | StoneMor Missouri Subsidiary LLC | |||
| Bethel Cemetery Association | Juniata Memorial Park LLC | Prospect Hill Cemetery Subsidiary LLC | StoneMor North Carolina LLC | |||
| Xxxx Israel Cemetery Association of Woodbridge, New Jersey | Juniata Memorial Park Subsidiary LLC | PVD Acquisitions LLC | StoneMor North Carolina Funeral Services, Inc. | |||
| Birchlawn Burial Park LLC | KIRIS LLC | PVD Acquisitions Subsidiary, Inc. | StoneMor North Carolina Subsidiary LLC | |||
| Birchlawn Burial Park Subsidiary, Inc. | KIRIS Subsidiary, Inc. | Riverside Cemetery LLC | StoneMor Oregon LLC | |||
| Blue Ridge Memorial Gardens LLC | Lakewood/Xxxxxxxx Cemetery LLC | Riverside Cemetery Subsidiary LLC | StoneMor Oregon Subsidiary LLC | |||
| Blue Ridge Memorial Gardens Subsidiary LLC | Lakewood/Xxxxxxxx Cemetery Subsidiary, Inc. | Riverview Memorial Gardens LLC | StoneMor Pennsylvania LLC | |||
| Xxxxxx County Memorial Park LLC | Lakewood Memory Gardens South LLC | Riverview Memorial Gardens Subsidiary LLC | StoneMor Pennsylvania Subsidiary LLC | |||
| Xxxxxx County Memorial Park Subsidiary, Inc. | Lakewood Memory Gardens South Subsidiary, Inc. | Rockbridge Memorial Gardens LLC | StoneMor Washington, Inc. | |||
| Cedar Hill Funeral Home, Inc. | Laurel Hill Memorial Park LLC | Rockbridge Memorial Gardens Subsidiary Company | StoneMor Washington Subsidiary LLC | |||
| Cemetery Investments LLC | Laurel Hill Memorial Park Subsidiary, Inc. | Rolling Green Memorial Park LLC | Sunset Memorial Gardens LLC | |||
| Cemetery Investments Subsidiary, Inc. | Laurelwood Cemetery LLC | Rolling Green Memorial Park Subsidiary LLC | Sunset Memorial Gardens Subsidiary, Inc. | |||
| Cemetery Management Services, L.L.C. | Laurelwood Cemetery Subsidiary LLC | Rose Lawn Cemeteries LLC | Sunset Memorial Park LLC | |||
| Cemetery Management Services of Mid-Atlantic States, L.L.C. | Laurelwood Holding Company | Rose Lawn Cemeteries Subsidiary, Incorporated | Sunset Memorial Park Subsidiary, Inc. | |||
| Cemetery Management Services of Ohio, L.L.C. | Legacy Estates, Inc. | Roselawn Development LLC | Temple Hill LLC | |||
| Cemetery Management Services of Pennsylvania, L.L.C. | Locustwood Cemetery Association | Roselawn Development Subsidiary Corporation | Temple Hill Subsidiary Corporation | |||
| Chartiers Cemetery LLC | Xxxxxx [Virginia] LLC | Xxxxxxx Memorial Cemetery LLC | Tioga County Memorial Gardens LLC | |||
| Chartiers Cemetery Subsidiary LLC | Xxxxxx [Virginia] Subsidiary, Inc. | Xxxxxxx Memorial Cemetery Subsidiary, Inc. | Tioga County Memorial Gardens Subsidiary LLC | |||
| Clover Leaf Park Cemetery Association | Xxxxxxxx Xxxx Cemetery LLC | Shenandoah Memorial Park LLC | Tri-County Memorial Gardens LLC | |||
| CMS West LLC | Xxxxxxxx Xxxx Cemetery Subsidiary, Inc. | Shenandoah Memorial Park Subsidiary, Inc. | Tri-County Memorial Gardens Subsidiary LLC | |||
| CMS West Subsidiary LLC | Melrose Land LLC | Southern Memorial Sales LLC | Twin Hills Memorial Park and Mausoleum LLC | |||
| Columbia Memorial Park LLC | Melrose Land Subsidiary LLC | Southern Memorial Sales Subsidiary, Inc. | Twin Hills Memorial Park and Mausoleum Subsidiary LLC | |||
| Columbia Memorial Park Subsidiary, Inc. | Modern Park Development LLC | Springhill Memory Gardens LLC | The Valhalla Cemetery Company LLC | |||
| The Coraopolis Cemetery LLC | Modern Park Development Subsidiary, Inc. | Springhill Memory Gardens Subsidiary, Inc. | The Valhalla Cemetery Subsidiary Corporation | |||
| The Coraopolis Cemetery Subsidiary LLC | Xxxxxx Cemetery Perpetual Care Company | Star City Memorial Sales LLC | Virginia Memorial Service LLC | |||
| Cornerstone Family Insurance Services, Inc. | Mount Lebanon Cemetery LLC | Star City Memorial Sales Subsidiary, Inc. | Virginia Memorial Service Subsidiary Corporation | |||
| Cornerstone Family Services of New Jersey, Inc. | Mount Lebanon Cemetery Subsidiary LLC | Xxxxxxx X. Xxxx Funeral Home, Inc. | WNCI LLC | |||
| Cornerstone Family Services of West Virginia LLC | Mt. Airy Cemetery LLC | Xxxxxxx LLC | W N C Subsidiary, Inc. | |||
| Cornerstone Family Services of West Virginia Subsidiary, Inc. | Mt. Airy Cemetery Subsidiary LLC | Xxxxxxx Subsidiary, Incorporated | Westminster Cemetery LLC | |||
| Cornerstone Funeral and Cremation Services LLC | Oak Hill Cemetery LLC | StoneMor Alabama LLC | Westminster Cemetery Subsidiary LLC | |||
| Covenant Acquisition LLC | Oak Hill Cemetery Subsidiary, Inc. | StoneMor Alabama Subsidiary, Inc. | Wicomico Memorial Parks LLC | |||
| Covenant Acquisition Subsidiary, Inc. | Osiris Holding Finance Company | StoneMor Colorado LLC | Wicomico Memorial Parks Subsidiary, Inc. | |||
| Crown Hill Cemetery Association | Osiris Holding of Maryland LLC | StoneMor Colorado Subsidiary LLC | Willowbrook Management Corp. | |||
| Xxxxxx X. Xxxxx Funeral Home, Inc. | Osiris Holding of Maryland Subsidiary, Inc. | StoneMor Georgia LLC | Woodlawn Memorial Gardens LLC | |||
| Xxxx Haven Memorial Park LLC | Osiris Holding of Pennsylvania LLC | StoneMor Georgia Subsidiary, Inc. | Woodlawn Memorial Gardens Subsidiary LLC | |||
| Xxxx Haven Memorial Park Subsidiary, Inc. | Osiris Holding of Pennsylvania Subsidiary LLC | StoneMor Illinois LLC | Woodlawn Memorial Park LLC | |||
| StoneMor Illinois Subsidiary LLC | Woodlawn Memorial Park Subsidiary LLC | |||||
| By: ____________________________________ Xxxxxxx X. Xxxxx, Executive Vice President for each of the above-named Credit Parties | ||||||
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ACKNOWLEDGEMENT OF NOTEHOLDERS
The undersigned, each by its elected officer duly authorized as of the date set forth below, having previously executed and delivered an Intercreditor Agreement, as defined in the Credit Agreement (the “Credit Agreement”) being amended by this Third Amendment (the “Third Amendment”), does hereby consent and agree to the above terms and conditions of this Third Amendment, including, without limitation, specifically as to Sections 2 and 3 of the Third Amendment adjusting the amounts of the Total Revolving Loan Commitment and the Total Acquisition Loan Commitment, and, notwithstanding any restriction in the Note Purchase Documents (including Section 10.4(i) of the Note Purchase Agreement) or the Intercreditor Agreement, consents to any increase in the aggregate outstanding principal amount of Revolving Credit Loans, so long as the aggregate outstanding principal amount of all Loans does not exceed $37,500,000. Capitalized terms used above, but not defined, shall have the meanings given to such terms in the Credit Agreement.
| SFT I, Inc. | ||
| By: | ||
| Name: Title: |
||
| PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY | ||
| By: | Prudential Investment Management, Inc., as Investment Manager | |
| By: | ||
| Name: Title: |
||
| THE PRUDENTIAL INSURANCE COMPANY OF AMERICA | ||
| By: | ||
| Name: Title: |
||
Dated this May , 2007
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SCHEDULE I
LIST OF LENDERS AND COMMITMENTS
A. At any time prior to or after the Adjustment Period, and subject to additional adjustments pursuant to Sections 2.13, 4.2, 4.3, 11 and/or 13.7 of the Agreement, the Lenders and Commitments shall be as follows.
| Lender |
Revolving Loan Commitment | Acquisition Loan Commitment | ||||
| Bank of America, N.A. |
$ | 5,357,142.86 | $ | 9,642,857.14 | ||
| Sovereign Bank |
$ | 3,571,428.57 | $ | 6,428,571.43 | ||
| Commerce Bank, N.A. |
$ | 3,571,428.57 | $ | 6,428,571.43 | ||
| Total |
$ | 12,500,000 | $ | 22,500,000 | ||
B. At any time during the Adjustment Period, prior to the effective date of any Adjustment Notice, and subject to additional adjustments pursuant to Sections 2.13, 4.2, 4.3, 11 and/or 13.7 of the Agreement, the Lenders and Commitments shall be as follows.
| Lender |
Revolving Loan Commitment | Acquisition Loan Commitment | ||||
| Bank of America, N.A. |
$ | 6,642,857.14 | $ | 8,357,142.84 | ||
| Sovereign Bank |
$ | 4,428,571.43 | $ | 5,571,428.58 | ||
| Commerce Bank, N.A. |
$ | 4,428,571.43 | $ | 5,571,428.58 | ||
| Total |
$ | 15,500,000 | $ | 19,500,000 | ||
C. At any time during the Adjustment Period, on and after the effective date of any Adjustment Notice, and subject to additional adjustments pursuant to Sections 2.13, 4.2, 4.3, 11 and/or 13.7 of the Agreement, the Lenders and Commitments shall be as follows.
| Lender |
Revolving Loan Commitment | Acquisition Loan Commitment | ||||
| Bank of America, N.A. |
$ | 7,500,000 | $ | 7,500,000 | ||
| Sovereign Bank |
$ | 5,000,000 | $ | 5,000,000 | ||
| Commerce Bank, N.A. |
$ | 5,000,000 | $ | 5,000,000 | ||
| Total |
$ | 17,500,000 | $ | 17,500,000 | ||
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