STOCKHOLDERS' AGREEMENT
Among
ROSE HILLS HOLDINGS CORP.,
BLACKSTONE CAPITAL PARTNERS II MERCHANT BANKING FUND L.P.,
XXXXXXXXXX XXXX HILLS OFFSHORE CAPITAL PARTNERS L.P.,
BLACKSTONE FAMILY INVESTMENT PARTNERSHIP II L.P.,
ROSES DELAWARE, INC.,
XXXXXX GROUP INTERNATIONAL, INC.
And
RHI MANAGEMENT DIRECT L.P.
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Dated as of November 19, 1996
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS............................... 2
Section 1.1 Certain Defined Terms.................................. 2
ARTICLE II
SUBSCRIPTION; FINANCINGS; ....................... 3
Section 2.1 Subscriptions for Common Stock and Preferred Stock..... 3
Section 2.2 Debt Financing.
(a) High Yield Financing......................... 3
(b) Bank Financing............................... 4
Section 2.3 RHAC................................................... 4
Section 2.4 Payment of Expenses.................................... 4
ARTICLE III
RESTRICTIONS ON TRANSFER OF CAPITAL STOCK............... 4
Section 3.1 BCP, XXXX.............................................. 4
Section 3.2 Xxxxxx................................................. 4
Section 3.3 Transfers Void; Conditions to Permitted Transfers...... 4
Section 3.4 Put and Call Options................................... 5
Section 3.5 Redemption of Preferred Stock.......................... 5
Section 3.6 Additional Issuance of Capital Stock................... 5
ARTICLE IV
GOVERNANCE................................ 5
Section 4.1 Election of the Board of Directors..................... 5
Section 4.2 RHAC Board of Directors................................ 6
Section 4.3 Declaration and Payment of Dividends................... 6
ARTICLE V
OTHER ARRANGEMENTS........................... 6
Section 5.1 Transaction Fees....................................... 6
Section 5.3 Other Expenses......................................... 6
Section 5.4 Additional Equity...................................... 7
Section 5.5 Contribution of Nearby Properties...................... 8
Section 5.6 Capital Stock of Subsidiaries.......................... 9
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Page
ARTICLE VI
MISCELLANEOUS.............................. 9
Section 6.1 Legend................................................. 9
Section 6.2 Notices................................................ 10
Section 6.3 Severability........................................... 11
Section 6.4 Entire Agreement....................................... 11
Section 6.5 Amendment and Waiver................................... 11
Section 6.6 Consent to Specific Performance........................ 11
Section 6.7 Assignment............................................. 11
Section 6.8 Variations in Pronouns................................. 12
Section 6.9 Term................................................... 12
Section 6.10 Governing Law......................................... 12
Section 6.11 Further Assurances.................................... 12
Section 6.12 Headings.............................................. 12
Section 6.13 Counterparts.......................................... 12
Schedule 1 - Funds Flow Memorandum
Exhibit A - Subscription Agreement
Exhibit B - Nearby Property Contribution Agreement
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STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT, dated as of November 19, 1996 (this
"Agreement"), among Rose Hills Holdings Corp., a Delaware corporation formerly
known as Tudor Holding Company ("Holdings"); Blackstone Capital Partners II
Merchant Banking Fund L.P., a Delaware limited partnership ("BCPII"); Xxxxxxxxxx
Xxxx Hills Offshore Capital Partners L.P., a Delaware limited partnership
("BROCP"); Blackstone Family Investment Partnership II L.P., a Delaware limited
partnership ("BFIP" and, together with BCPII, BROCP and each of their respective
permitted assigns and transferees as provided herein, "BCP"); Roses Delaware,
Inc., a Delaware corporation ("RDI"), Xxxxxx Group International, Inc., a
Delaware corporation ("LGII"), The Xxxxxx Group Inc., a British Columbia
corporation (together with its successors, "LWN"; and together with LGII, RDI,
any Contributor (as defined below) and each of their respective permitted
assigns and transferees as provided herein, "Xxxxxx") and RHI Management Direct
L.P., a Delaware limited partnership ("XXXX"). BCP, Xxxxxx and XXXX are herein
collectively referred to as the "Stockholders" and individually as a
"Stockholder."
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as
of September 19, 1996 as amended by the amendment thereto dated November 19,
1996 (the "Merger Agreement"), among Roses, Inc., the stockholders of Roses,
Inc., Tudor Acquisition Corp. (which was previously renamed Rose Hills
Acquisition Corp. and which has been renamed Rose Hills Company), a wholly owned
subsidiary of Holdings ("RHAC"), and RH Mortuary Corporation, a Delaware
corporation and a wholly-owned subsidiary of RHAC ("Mortuary"), Mortuary is
merging with and into Roses, Inc.;
WHEREAS, pursuant to an Asset Purchase Agreement, dated
September 19, 1996 (the "Asset Purchase Agreement" and, together with the Merger
Agreement, the "Rose Hills Agreements"), between Rose Hills Memorial Park
Association (the "Association") and RHAC, Rose Hills, Inc., a Delaware
corporation and a wholly owned subsidiary of RHAC, as assignee of RHAC's right
and obligations under the Asset Purchase Agreement, is purchasing certain assets
and assuming certain liabilities of the Association;
WHEREAS, at the Closing the Stockholders will subscribe for
newly issued shares of capital stock of Holdings, such that upon the
consummation of such subscription the Stockholders will hold all of the then
issued and outstanding shares of capital stock of Holdings;
WHEREAS, the parties hereto desire to enter into this
Agreement for the purpose of setting forth certain agreements regarding future
relationships among them;
NOW, THEREFORE, in consideration of the mutual covenants and
conditions as hereinafter set forth, the parties hereto do hereby agree as
follows:
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ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms. Capitalized terms used
herein and not otherwise defined herein shall have the following meanings:
"Affiliate" of any Person means any other Person that directly
or indirectly controls, is controlled by, or is under common control with, such
Person, and "Affiliation" shall have a correlative meaning.
"ASA" means the Administrative Services Agreement dated as of
November 19, 1996 among RHAC, LWN and LGII.
"Board of Directors" means the Board of Directors of Holdings.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in the City of New York are authorized or
required by law to close.
"Closing" means the consummation of the transactions described
in Article II hereof.
"Closing Date" means the date on which the Closing pursuant to
the Rose Hills Agreements occurs.
"Common Stock" means the common stock, par value $.01 per
share, of Holdings, including shares of non-voting Common Stock.
"Contribution Price" means, with respect to a Nearby Property
or Nearby Properties conveyed to Holdings pursuant to a Nearby Property
Contribution Agreement, the relevant Acquisition Creation Price calculated with
respect thereto pursuant to the Put/Call Agreement.
"Contributor" means LWN or any of its Affiliates that is
designated as the Contributor under a Nearby Property Contribution Agreement and
which acquires shares of Non-Voting Common Stock or Preferred Stock in
accordance with the terms thereof.
"Nearby Property Contribution Agreement" means an agreement in
the form of Exhibit B hereto with respect to the transfer of a Nearby Property
or Nearby Properties as to which the option set forth in Section 5.5 hereof has
been effectively exercised.
"Nearby Property" means any funeral home or cemetery that is
located within a 20 mile radius of any funeral home or cemetery then owned,
operated or controlled by RHAC.
"Non-Voting-Common Stock" means the non-voting common stock,
par value $0.01 per share, of Holdings issued pursuant to Section 5.5 hereof in
connection with the
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acquisition of a funeral home or cemetery pursuant to a Nearby Property
Contribution Agreement. Such stock shall be identical in all respects to the
regular Common Stock of Holdings except that it shall have no voting rights.
"Offering Memorandum" means the offering memorandum dated
November 14, 1996 relating to the offering of RHAC's 9 1/2% Senior Subordinated
Notes due 2004.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or other entity or a country or
government or any agency or political subdivision or instrumentality thereof or
of such subdivision.
"Put/Call Agreement" means the Put/Call Agreement dated as of
November 19, 1996 among LWN and the Stockholders.
"Preferred Stock" means the 10% Paid-in-Kind Cumulative
Preferred Stock, par value $.01 per share, of Holdings.
"Securities Act" means the Securities Act of 1933, as amended.
"Transaction" means the transactions, contemplated by the Rose
Hills Agreements together with the other transactions described in Article II
hereof.
"Transfer" means to directly or indirectly sell, give,
transfer, assign, pledge, hypothecate or otherwise dispose of, or to contract or
agree to do any of the foregoing.
ARTICLE II
SUBSCRIPTION; FINANCINGS; ACQUISITIONS
Section 2.1 Subscriptions for Common Stock and Preferred
Stock. At the Closing, the Stockholders named therein will enter into a
subscription agreement substantially in the form of Exhibit A (the "Subscription
Agreement"), pursuant to which such parties will subscribe for newly issued
shares of capital stock of Holdings, such that such Stockholders will hold all
of the then issued and outstanding shares of capital stock of Holdings.
Section 2.2 Debt Financing.
(a) High Yield Financing. Prior to the Closing Date, RHAC
issued $80 million aggregate principal amount of its 9 1/2% Senior Subordinated
Notes Due 2004 (the "Notes"), the proceeds of which (after deducting the initial
purchaser's discount) are being made available to RHAC on the Closing Date.
(b) Bank Financing. On the Closing Date, RHAC will obtain a
term loan in a principal amount of $75 million (the "Term Loan"), pursuant to an
agreement among RHAC and a syndicate of financial institutions, which agreement
shall also provide for a $25 million revolving credit facility to be made
available to RHAC.
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Section 2.3 RHAC. At the Closing, Holdings shall contribute
the proceeds from the subscription of shares to RHAC and will cause RHAC to make
appropriate contributions of capital and intercompany loans to its subsidiaries
in order for those subsidiaries to pay the amounts called for in the Rose Hills
Agreements.
Section 2.4 Payment of Expenses. Holdings shall cause RHAC to
use the aggregate net proceeds of the high yield financing described in
subsection 2.2(a) hereof and the Term Loan held by it to (i) discharge the
liabilities described on Schedule 1 attached hereto and (ii) for general
corporate purposes including, but not limited to, payment in accordance with
Sections 5.1, 5.2 and 5.3 hereof of the fees and expenses described therein.
ARTICLE III
RESTRICTIONS ON TRANSFER OF CAPITAL STOCK
Section 3.1 BCP, XXXX. Each of BCPII, BROCP and BFIP may,
subject to the last sentence of Section 3.3 hereof, Transfer all or part of its
shares of Common Stock to any of such Person's Affiliates, but may not Transfer
such shares to any other Person without the prior written consent of Xxxxxx,
provided, that if Xxxxxx fails to comply with its obligations under Section 4.1
or Article VIII of the Put/Call Agreement (as defined below) or has otherwise
breached the Put/Call Agreement such restriction shall lapse. Without the
consent of BCP and LGII, XXXX may not transfer shares of Common Stock to any
other Person.
Section 3.2 Xxxxxx. Xxxxxx may, subject to the last sentence
of Section 3.3 hereof, Transfer its shares of Common Stock or Preferred Stock to
any Affiliate of Xxxxxx, but may not Transfer such shares to any other Person
without the prior written consent of BCP, provided, that Xxxxxx may and shall
effect the Transfer of such shares if so directed by BCP in accordance with
Section 7.4 of the Put/Call Agreement.
Section 3.3 Transfers Void; Conditions to Permitted Transfers.
Each Stockholder agrees that it will not Transfer any Common Stock or Preferred
Stock that such Stockholder now owns or hereafter acquires without complying
with the terms and conditions of this Agreement. Any Transfer of Common Stock or
Preferred Stock in violation of this Agreement shall be void ab initio. No
Stockholder may do indirectly, through a sale of its capital stock or otherwise,
that which is not permitted by this Section 3. No shares of Common Stock or
Preferred Stock may be Transferred or issued to any Person unless such Person,
prior to or concurrently with such Transfer or issuance, undertakes by a written
supplemental agreement to be bound by the terms of this Agreement and the
Put/Call Agreement to the same extent and in the same manner as the other
Stockholders.
Section 3.4 Put and Call Options. Notwithstanding the
foregoing provisions of this Article III, pursuant to a separate put and call
agreement entered into concurrently herewith (the "Put/Call Agreement"), Xxxxxx
shall have an option to purchase the shares of Common Stock held by BCP and
XXXX, and BCP and XXXX shall have an option to require Xxxxxx to purchase the
shares of Common Stock held by BCP and XXXX, subject, in each
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case, to the provisions of the Put/Call Agreement. Transfers of Common Stock in
accordance with the exercise of the Options described in the Put/Call Agreement
shall be permitted notwithstanding anything to the contrary in Sections 3.1, 3.2
or 3.3 hereof.
Section 3.5 Redemption of Preferred Stock. Notwithstanding the
provisions of paragraphs 5 and 6 of Article Fifth of the restated Certificate of
Incorporation of Holdings, there shall be no redemption of Preferred Stock held
by Xxxxxx or its Affiliates without the consent of Xxxxxx and BCP.
Section 3.6 Additional Issuance of Capital Stock. Except as
provided in Section 5.4 and 5.5 hereof, subsequent to the Closing Date, Holdings
will not issue additional shares of Common Stock or Preferred Stock without the
consent of BCP and Xxxxxx, and any Contributor to which such shares are issued
shall, as a condition to such issuance, execute and deliver to the parties
hereto a counterpart of the Agreement.
ARTICLE IV
GOVERNANCE
Section 4.1 Election of the Board of Directors. (a) Except as
provided below, each Stockholder shall vote all of the shares of voting Common
Stock owned or held of record by it so as to elect and continue in office a
Board of Directors comprised of eight directors, five of whom BCPII shall have
the right to designate (the "BCP Directors") and three of whom LGII shall have
the right to designate (the "LGII Directors").
(b) If at any time that this Agreement is in effect BCP or
LGII shall notify the other of its desire to remove, with or without cause, any
director of Holdings previously designated by it, each Stockholder shall vote
all of the shares of voting Common Stock owned or held of record by it so as to
remove such director.
(c) If at any time that this Agreement is in effect any
director previously designated by BCP or LGII ceases to serve on the Board of
Directors (whether by reason of death, resignation, removal or otherwise), the
Stockholder who designated such director shall be entitled to designate a
successor director to fill the vacancy created thereby. Each Stockholder agrees
that it will vote all of the shares of voting Common Stock owned or held of
record by it so as to elect such director.
(d) The provisions of this Section 4.1 shall terminate upon a
sale of Common Stock pursuant to Section 7.4 of the Put/Call Agreement.
Section 4.2 RHAC Board of Directors. Each party to this
Agreement agrees that Holdings shall cause the board of directors of RHAC to at
all times consist of the same individuals who comprise the Board of Directors of
Holdings.
Section 4.3 Declaration and Payment of Dividends. The parties
hereto agree to cause the Board of Directors to declare on a quarterly basis,
subject to their fiduciary
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duties and the provisions of the General Corporation Law of the State of
Delaware (the "GCL"), and Holdings to pay on a quarterly basis, subject to the
provisions of the GCL, dividends on the Preferred Stock in accordance with
Holdings' Certificate of Incorporation.
Section 4.4 Certain Business Practices. Holdings shall not,
and shall cause each of its direct and indirect subsidiaries not to, make any
(i) significant changes in its current preneed cemetery or preneed funeral sales
policies or practices or its trusting, insurance or sales commission practices
other than as set forth in the Confidential Information Memorandum, dated
October 1996, prepared by Xxxxxxx Sachs or (ii) sale or related series of sales
of cemetery lots or grave sites (collectively, "Sites") in excess of $250,000 or
100 Sites to any one person or group of related persons without, in each case,
the approval of RHAC's Board of Directors.
ARTICLE V
OTHER ARRANGEMENTS
Section 5.1 Transaction Fees. If the Transaction is
consummated, Holdings shall pay on the Closing Date (a) a fee equal to 1% of the
Creation Price (as defined in the Put/Call Agreement) to Blackstone Management
Partners L.P. ("Blackstone") and (b) a consulting fee equal to $1,500,000 and a
reimbursement of expenses in the amount of $1,000,000 to Xxxxxx. Holdings shall
pay Blackstone $2,964,800 at Closing and shall pay the remainder of such fee to
Blackstone after the final calculation of such Creation Price.
Section 5.2 Monitoring Fees. The Stockholders shall each vote
their shares of Voting Common Stock and take such other action as may be
reasonably necessary so as to cause an annual monitoring fee in the amount of
$250,000 to be paid by Holdings or one of its subsidiaries, annually in advance,
to Blackstone Management Partners L.P. from the Closing Date through the date on
which the option of either of BCP or Xxxxxx is exercised pursuant to the
Put/Call Agreement. Holdings shall reimburse BCP for all of its expenses
incurred in monitoring.
Section 5.3 Other Expenses. (a) If the Transaction is
consummated, Holdings shall reimburse (i) BCP for (or otherwise pay on behalf of
BCP) all out-of-pocket expenses (including amounts paid by BCP to its
professional advisors) incurred in connection with the Transaction and (ii)
Xxxxxx for amounts payable to Xxxxxx'x professional advisors in connection with
the Transaction and paid by Xxxxxx.
(b) Xxxxxx shall reimburse Holdings for any withholding taxes
incurred by Holdings in respect of, or related to, the dividends payable on the
Preferred Stock at the time such liabilities are incurred.
Section 5.4 Additional Equity. (a) Following the Closing Date,
if an additional equity contribution to Holdings is necessary to either cure or
prevent an event of default under or breach of any financial covenant contained
in the credit agreement relating to RHAC's Term Loan or the Notes, BCP shall
have the right to contribute 100% of such
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additional equity. If BCP elects to make such a contribution, it shall give
Xxxxxx written notice (the "BCP Additional Equity Notice") to such effect and
Xxxxxx shall have the right, exercisable by written notice to BCP within five
Business Days from receipt of the BCP Additional Equity Notice, to replace
(prior to BCP's making such contribution) a portion of BCP's contribution with a
contribution by Xxxxxx up to an amount equal to the ratio (before such
contributions) of the Xxxxxx Contribution to the BCP Contribution (each as
defined in the Put/Call Agreement). If BCP elects not to make such a
contribution, it shall give Xxxxxx written notice to such effect and Xxxxxx
shall have the right to contribute 100% of such additional equity. If Xxxxxx
elects to make such 100% contribution, it shall give BCP written notice (the
"Xxxxxx Additional Equity Notice") to such effect and BCP shall have the right,
exercisable by written notice to Xxxxxx within five Business Days from receipt
of the Xxxxxx Additional Equity Notice, to replace (prior to Xxxxxx'x making
such contribution) a portion of Xxxxxx'x contribution with a contribution by BCP
up to an amount equal to the ratio (before such contributions) of the BCP
Contribution to the Xxxxxx Contribution. Such capital contributions will involve
the purchase of additional shares of Common Stock or Preferred Stock, as the
case may be, and the purchase price shall be the same price per share paid by
BCP and Xxxxxx on the Closing Date.
(b) Following the Closing Date, if additional equity is
required (the determination that such additional equity is required to be made
by the Board of Directors) to make acquisitions of new properties which
acquisitions have been approved by the Board of Directors, Xxxxxx will have the
right to contribute 100% of such additional equity which shall be, at the option
of Xxxxxx, in the form of Common Stock or Preferred Stock and the purchase price
shall be the same price per share paid by Xxxxxx on the Closing Date.
(c) In the event an additional equity contribution is required
to be made pursuant to subparagraph (a) or (b) of this Section 5.4, the
Stockholders hereby agree to vote the shares of voting Common Stock held by each
of them to authorize the filing of an amendment to Holdings' Certificate of
Incorporation and to take all such other actions required in order to authorize
and consummate the issuance of the relevant number of additional shares of
capital stock of Holdings in connection with such additional equity
contribution.
(d) Each party electing to make an additional equity
contribution pursuant to subparagraph (a) of this Section 5.4, whether
individually or on a pro rata basis, shall contribute such additional equity to
Holdings no later than ten Business Days from the date the BCP Additional Equity
Notice or the Xxxxxx Additional Equity Notice, as the case may be, was given
and, in any event, simultaneously with the making of the contribution by the
other party electing to make such contribution (the "Additional Equity Closing
Date").
(e) As of each Additional Equity Closing Date, Holdings hereby
reaffirms to BCP and/or Xxxxxx, as the case may be, that the representations and
warranties contained in Article II of the Subscription Agreement are true and
correct on such Additional Equity Closing Date in all material respects as if
made on and as of such Additional Equity Closing Date.
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Section 5.5 Contribution of Nearby Properties. (a) In the
event that prior to the Exit Relevant Period Xxxxxx acquires, operates or
controls, directly or through a wholly owned subsidiary, or otherwise becomes an
Affiliate of, any Person that owns, operates or controls, directly or
indirectly, a Nearby Property or Nearby Properties, then LWN and LGII and any
Affiliate designated by them as "Contributor" for purposes of the relevant
Nearby Property Contribution Agreement shall have the option, exercisable in
their sole discretion and subject to the terms and conditions set forth herein,
to execute and deliver to Holdings a Nearby Property Contribution Agreement
covering such Nearby Property or Nearby Properties, which Holdings shall
promptly execute and deliver to LWN, LGII and the designated Contributor,
pursuant to which Nearby Property Contribution Agreement the relevant
Contributor, shall, subject to the terms and on the conditions of such Nearby
Property Contribution Agreement, convey all of such Nearby Property(ies) to
Holdings in exchange for newly issued shares of Non-Voting Common Stock or
Preferred Stock of Holdings (or a combination thereof as selected by the
relevant Contributor) having an aggregate value equal to the Contribution Price
as therein provided.
(b) (i) Subject to clause (ii) below, the option provided by
this Section 5.5 is exercisable only with respect to Nearby Properties (A)
acquired by LWN directly or through a wholly owned subsidiary, or (B) owned,
operated or controlled directly or indirectly by a Person who becomes an
Affiliate of LWN; provided, that such option is exercisable in the case of
either clause (A) or (B) only if the revenues attributable to the Nearby
Properties, during the most recently calculated quarterly accounting period
prior to consummation of such acquisition transaction or series of transactions
or the date of such Affiliation, as the case may be, constitute less than 30% of
the total revenues during the same period of all the funeral homes and
cemeteries being acquired from such seller in such transaction or series of
transactions or owned by the Person that becomes an Affiliate of LWN, as the
case may be.
(ii) This option may not be exercised with respect to any
Nearby Property that was identified by Xxxxxx as an acquisition candidate and as
to which Xxxxxx has provided an appropriately complete description to RHAC, but
which has been declined to be considered or has been otherwise rejected by
RHAC's Board of Directors as a potential acquisition. In addition, this option
may not be exercised with respect to any Nearby Property that was identified by
Xxxxxx as an acquisition candidate and that, pursuant to Xxxxxx'x exclusive
engagement under Section 1.3 b. of the ASA, should have been appropriately
presented and described to RHAC but which was not so presented and described.
(c) The execution and delivery to Holdings of a Nearby
Property Contribution Agreement by LWN, LGII and the relevant Contributor with
respect to any Nearby Property must occur no later than ten months after the
relevant Affiliation Date (as defined in the ASA) in order for this option to be
effective.
Section 5.6 Capital Stock of Subsidiaries. Notwithstanding the
foregoing, the parties hereby agree that, except for the issuance to Xxxxxx
Xxxxxxx of common stock of Xxxxxxxx-Xxxxxx Mortuary ("Glasband") representing 5%
of Glasband's issued and outstanding Common Stock, Holdings shall not permit any
of its direct or indirect subsidiaries directly or indirectly, to issue any
shares of capital stock to any entity or person other than a wholly-owned
subsidiary of Holdings.
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ARTICLE VI
MISCELLANEOUS
Section 6.1 Legend. Each certificate representing shares of
Common Stock or Preferred Stock now held or hereafter acquired by any
Stockholder shall bear the following legend (until such time as subsequent
transfers thereof are no longer restricted in accordance with the Securities Act
of 1933, as amended or this Agreement):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
GIVEN, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, HYPOTHECATED, OR
OTHERWISE DISPOSED OF UNLESS SUCH GIFT, SALE, ASSIGNMENT,
TRANSFER, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES
WITH THE PROVISIONS OF THE STOCKHOLDERS' AGREEMENT (THE
"STOCKHOLDERS' AGREEMENT"), DATED AS OF NOVEMBER 19, 1996,
AMONG ROSE HILLS HOLDINGS CORP., BLACKSTONE CAPITAL PARTNERS
II MERCHANT BANKING FUND L.P., XXXXXXXXXX XXXX HILLS OFFSHORE
CAPITAL PARTNERS II L.P., BLACKSTONE FAMILY INVESTMENT
PARTNERSHIP II L.P., ROSES DELAWARE, INC., XXXXXX GROUP
INTERNATIONAL INC. AND RHI MANAGEMENT DIRECT L.P. A COPY OF
THE STOCKHOLDERS' AGREEMENT IS ON FILE WITH THE SECRETARY OF
THE COMPANY. THE SECURITIES REPRESENTED BY THIS CERTIFICATE
ARE NOT REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") OR THE SECURITIES LAWS OF ANY STATE, AND
EXCEPT AS OTHERWISE PROVIDED IN THE STOCKHOLDERS' AGREEMENT,
NO SALE, ASSIGNMENT, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND ALL APPLICABLE STATE SECURITIES OR
"BLUE SKY" LAWS OR (B) TO THE EXTENT REQUESTED BY THE COMPANY,
IF THE COMPANY HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL
WHICH SHALL BE REASONABLY SATISFACTORY TO THE COMPANY TO THE
EFFECT THAT SUCH SALE, ASSIGNMENT, TRANSFER, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE
PROVISIONS OF THE ACT AND THE RULES AND REGULATIONS IN EFFECT
THEREUNDER AND IS NOT IN VIOLATION OF APPLICABLE STATE
SECURITIES LAWS. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE
OF THIS CERTIFICATE, ACKNOWLEDGES THAT IT IS BOUND BY THE
PROVISIONS OF THE STOCKHOLDERS' AGREEMENT TO THE EXTENT
PROVIDED THEREIN."
Section 6.2 Notices. Notices hereunder shall be given only by
personal delivery, registered or certified mail, return receipt requested,
overnight courier service, or
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telex, telegram or other form of electronic mail or by telecopy (and
subsequently confirmed by any other permitted means hereunder) and shall be
deemed transmitted when personally delivered or deposited in the mail or
delivered to a courier service or a carrier for electronic transmittal (as the
case may be), postage or charges prepaid, and addressed to the particular party
to whom the notice is to be sent as follows:
(a) in the case of Holdings:
Rose Hills Holdings Corp.
c/o The Blackstone Group
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
(b) in the case of BCP AND XXXX:
c/o The Blackstone Group
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
(c) in the case of Xxxxxx:
Xxxxxx Group International, Inc.
00 Xxxx Xxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Legal Department
with a copy to:
The Xxxxxx Group Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx V5G 358
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Telecopier No.: (000) 000-0000
Attention: Senior Vice President and Chief Financial Officer
or to such address as a party may instruct by notice hereunder.
Section 6.3 Severability. In the event any provision hereof is
held void or unenforceable by any court, then such provisions shall be severable
and shall not affect the remaining provisions hereof.
Section 6.4 Entire Agreement. This Agreement, together with
the other agreements referred to herein, is the entire Agreement among the
parties, and, when executed by the parties hereto, supersedes all prior
agreements and communications, either verbal or in writing (including the Term
Sheet dated September 18, 1996, as amended on November 13, 1996), between the
parties hereto with respect to the subject matter contained herein.
Section 6.5 Amendment and Waiver. This Agreement may not be
amended, modified or supplemented unless consented to in writing by the parties
hereto. Any failure by a party hereto to comply with any obligation, agreement
or condition herein may be expressly waived in writing by each of the other
parties hereto, but such waiver or failure to insist upon strict compliance with
such obligation, agreement or condition shall not operate as a waiver of, or
estoppel with respect to, any such subsequent or other failure.
Section 6.6 Consent to Specific Performance. The parties
hereto declare that it is impossible to measure in money the damages which would
accrue to a party by reason of failure to perform any of the obligations
hereunder. Therefore, if any party shall institute any action or proceeding to
enforce the provisions hereof, any party against whom such action or proceeding
is brought hereby waives any claim or defense therein that the other party has
an adequate remedy at law.
Section 6.7 Assignment. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided, no Stockholder may assign to any
Person any of its rights hereunder other than in connection with a Transfer to
such Person of shares of Common Stock or Preferred Stock in accordance with all
the provisions of this Agreement.
Section 6.8 Variations in Pronouns. All pronouns and any
variations thereof shall be deemed to refer to the masculine, feminine or
neuter, singular or plural, as the identity of the antecedent person or persons
or entity or entities may require.
Section 6.9 Term. This Agreement shall terminate upon the
earlier to occur of (i) consummation of the exercise of the Option (as defined
in the Put/Call Agreement) pursuant to the Put/Call Agreement, without any
default in connection therewith and (ii) any date agreed upon in writing by BCP
and Xxxxxx.
Section 6.10 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
12
Section 6.11 Further Assurances. Each of the parties shall
execute such documents and other papers and take such further actions as may be
reasonably required or desirable to carry out the provisions hereof and the
transactions contemplated hereby.
Section 6.12 Headings. The headings in this Agreement are
intended solely for convenience of reference and shall be given no effect in the
interpretation of this Agreement.
Section 6.13 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have executed this
Agreement on the date first above written.
ROSE HILLS HOLDINGS CORP.
By: /s/ Xxxxxx X. Xxxxxx
______________________________
Name: Xxxxxx X. Xxxxxx
Title:
XXXXXX GROUP INTERNATIONAL, INC.
By: /s/ F. Xxxxxx Xxxxx
______________________________
Name: F. Xxxxxx Xxxxx
Title:
ROSES DELAWARE, INC.
By: /s/ F. Xxxxxx Xxxxx
______________________________
Name: F. Xxxxxx Xxxxx
Title:
BLACKSTONE CAPITAL PARTNERS II
MERCHANT BANKING FUND L.P.
By: BLACKSTONE MANAGEMENT
ASSOCIATES II L.L.C.
General Partner
By: /s/ Xxxxxx X. Xxxxxx
_____________________
Name: Xxxxxx X. Xxxxxx
Title:
14
BLACKSTONE FAMILY INVESTMENT
PARTNERSHIP II L.P.
By: BLACKSTONE MANAGEMENT
ASSOCIATES II L.L.C.
General Partner
By: /s/ Xxxxxx X. Xxxxxx
_____________________
Name: Xxxxxx X. Xxxxxx
Title:
XXXXXXXXXX XXXX HILLS OFFSHORE
CAPITAL PARTNERS L.P.
By: BLACKSTONE MANAGEMENT
ASSOCIATES II L.L.C.
General Partner
By: /s/ Xxxxxx X. Xxxxxx
_____________________
Name: Xxxxxx X. Xxxxxx
Title:
RHI MANAGEMENT DIRECT L.P.
By: PSI P&S CORP.
General Partner
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title:
