TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
ARTICLE I
|
|
|
DEFINITIONS
|
|
|
|
|
1.1
|
|
Terms Defined in UCC
|
|
|
1
|
|
1.2
|
|
Definitions of Certain Terms Used Herein
|
|
|
1
|
|
1.3
|
|
Terms Generally
|
|
|
5
|
|
ARTICLE II
|
|
|
[Reserved]
|
|
|
ARTICLE III
|
|
|
GRANT OF SECURITY INTEREST
|
|
|
ARTICLE IV
|
|
|
REPRESENTATIONS AND WARRANTIES
|
|
|
|
|
4.1
|
|
Title, Authorization, Validity and Enforceability
|
|
|
6
|
|
4.2
|
|
Conflicting Laws and Contracts
|
|
|
7
|
|
4.3
|
|
Principal Location
|
|
|
7
|
|
4.4
|
|
No Other Names; Etc.
|
|
|
7
|
|
4.5
|
|
Federal Employer Identification Number; State Organization Number; Jurisdiction of Organization
|
|
|
7
|
|
4.6
|
|
Property Locations
|
|
|
7
|
|
4.7
|
|
Reserved
|
|
|
7
|
|
4.8
|
|
Reserved
|
|
|
7
|
|
4.9
|
|
Filing Requirements
|
|
|
7
|
|
4.10
|
|
No Financing Statements, Security Agreements
|
|
|
8
|
|
4.11
|
|
Pledged Securities and Other Investment Property
|
|
|
8
|
|
4.12
|
|
Intellectual Property
|
|
|
8
|
|
4.13
|
|
Deposit Accounts and Securities Accounts
|
|
|
8
|
|
4.14
|
|
Commercial Tort Claims
|
|
|
8
|
|
4.15
|
|
Specific Collateral
|
|
|
8
|
|
4.16
|
|
Enforcement
|
|
|
9
|
|
ARTICLE V
|
|
|
COVENANTS
|
|
|
|
|
5.1
|
|
General
|
|
|
9
|
|
5.2
|
|
Receivables
|
|
|
11
|
|
5.3
|
|
Maintenance of Goods
|
|
|
11
|
|
5.4
|
|
Instruments, Securities, Chattel Paper, Documents and Pledged Deposits
|
|
|
11
|
|
5.5
|
|
Uncertificated Securities and Certain Other Investment Property
|
|
|
12
|
|
5.6
|
|
Stock and Other Ownership Interests
|
|
|
12
|
|
5.7
|
|
Deposit Accounts and Securities Accounts
|
|
|
13
|
|
5.8
|
|
Letter-of-Credit
Rights
|
|
|
13
|
|
i
|
|
|
|
|
|
|
5.9
|
|
Federal, State or Municipal Claims
|
|
|
14
|
|
5.10
|
|
No Interference
|
|
|
14
|
|
5.11
|
|
Insurance
|
|
|
14
|
|
5.12
|
|
Intellectual Property
|
|
|
14
|
|
5.13
|
|
Commercial Tort Claims
|
|
|
15
|
|
5.14
|
|
Landlord/Bailee Agreements
|
|
|
15
|
|
5.15
|
|
Updating of Perfection Certificate
|
|
|
15
|
|
|
ARTICLE VI
|
|
|
DEFAULT
|
|
|
|
|
6.1
|
|
Default
|
|
|
16
|
|
6.2
|
|
Remedies
|
|
|
16
|
|
6.3
|
|
Grantors Obligations Upon Default
|
|
|
17
|
|
6.4
|
|
License
|
|
|
18
|
|
ARTICLE VII
|
|
|
WAIVERS, AMENDMENTS AND REMEDIES
|
|
|
ARTICLE VIII
|
|
|
PROCEEDS; COLLECTION OF RECEIVABLES
|
|
|
|
|
8.1
|
|
Lockboxes
|
|
|
19
|
|
8.2
|
|
Collection of Receivables
|
|
|
19
|
|
8.3
|
|
Special Collateral Account
|
|
|
19
|
|
8.4
|
|
Application of Proceeds
|
|
|
19
|
|
8.5
|
|
Cemetery Laws
|
|
|
19
|
|
ARTICLE IX
|
|
|
GENERAL PROVISIONS
|
|
|
|
|
9.1
|
|
Notice of Disposition of Collateral; Condition of Collateral
|
|
|
20
|
|
9.2
|
|
Limitation on Collateral Agents and other Secured Parties Duty with Respect to the Collateral
|
|
|
20
|
|
9.3
|
|
Compromises and Collection of Collateral
|
|
|
21
|
|
9.4
|
|
Secured Party Performance of Grantors Obligations
|
|
|
21
|
|
9.5
|
|
Authorization for Secured Party to Take Certain Action
|
|
|
21
|
|
9.6
|
|
Specific Performance of Certain Covenants
|
|
|
22
|
|
9.7
|
|
Use and Possession of Certain Premises
|
|
|
22
|
|
9.8
|
|
Cemetery Laws
|
|
|
22
|
|
9.9
|
|
Reinstatement
|
|
|
23
|
|
9.10
|
|
Benefit of Agreement
|
|
|
23
|
|
9.11
|
|
Survival of Representations
|
|
|
23
|
|
9.12
|
|
Expenses
|
|
|
23
|
|
9.13
|
|
Headings
|
|
|
23
|
|
9.14
|
|
Termination
|
|
|
23
|
|
9.15
|
|
Entire Agreement
|
|
|
24
|
|
9.16
|
|
Governing Law; Jurisdiction; Waiver of Jury Trial
|
|
|
24
|
|
9.17
|
|
Indemnity
|
|
|
25
|
|
9.18
|
|
Subordination of Intercompany Indebtedness
|
|
|
25
|
|
ii
|
|
|
|
|
|
|
9.19
|
|
Severability
|
|
|
26
|
|
9.20
|
|
Counterparts
|
|
|
26
|
|
ARTICLE X
|
|
|
NOTICES
|
|
|
|
|
10.1
|
|
Sending Notices
|
|
|
26
|
|
10.2
|
|
Change in Address for Notices
|
|
|
26
|
|
ARTICLE XI
|
|
|
THE COLLATERAL AGENT
|
|
|
|
|
|
|
EXHIBITS
|
|
|
|
|
Exhibit A
|
|
Form of Amendment
|
|
|
Exhibit B
|
|
Form of Supplement
|
|
|
Exhibit C
|
|
Form of Short-form Intellectual Property Security Agreement
|
Exhibit D
|
|
Certificate re: Intercompany Indebtedness
|
|
|
Exhibit E
|
|
Form of Intercompany Note
|
|
|
iii
THIS COLLATERAL AGREEMENT (this
Agreement
) is entered into as
of June 27, 2019
by and among StoneMor Partners L.P., a Delaware limited partnership (the
Partnership
), Cornerstone Family Services of West Virginia Subsidiary, Inc., a West Virginia corporation
(the
Co-Issuer
and, together with the Partnership, the
Issuers
), the other Subsidiary Guarantors and the other Grantors from time to time party hereto, and Wilmington Trust, National
Association, a national banking association, not in its individual capacity but solely as collateral agent under the Indenture (as defined below) (the
Collateral Agent
) for itself and for the Secured Parties.
WHEREAS, the Partnership, certain Subsidiaries of the Partnership, Wilmington Trust, National Association, not in its
individual capacity but solely as trustee (the
Trustee
) and the Collateral Agent are entering into that certain Indenture, dated as of the date hereof (as the same may be amended, restated, supplemented or otherwise modified from
time to time, the
Indenture
), providing for the issuance of the Notes by the Issuer to the Noteholder Parties; and
WHEREAS, it is a condition to the effectiveness of the Indenture that the Grantors enter into this Agreement.
ACCORDINGLY, in order to induce the Collateral Agent to enter into the Indenture and the Noteholder Parties to purchase the
Notes under the Indenture, the Grantors hereby agree with the Collateral Agent, for the benefit of the Secured Parties, as follows:
ARTICLE I
DEFINITIONS
Terms Defined in the Indenture
. All capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Indenture. All terms defined in Article 9 of the UCC and not defined in this Agreement or the Indenture have the meanings specified therein.
1.1
Terms Defined in UCC
. The following terms have the meanings given to them in the
UCC: Account,
As-Extracted
Collateral, Chattel Paper, Control, Deposit Account, Documents, Equipment, Farm
Products, Financial Assets, Fixture, General Intangible, Goods, Health-Care-Insurance Receivable, Instruments, Inventory, Investment Property,
Letter-of-Credit
Right, Securities Account, Security and Supporting Obligation.
1.2
Definitions of Certain Terms Used Herein
. As used in this Agreement, the
following terms shall have the following meanings:
Amendment
has the meaning assigned to such term in
Section
5.4
.
Collateral
means all cash, Accounts, Chattel Paper, Commercial
Tort Claims, Deposit Accounts, Documents, Equipment, Fixtures, General Intangibles, Goods, Instruments, Intellectual Property, Inventory, Investment Property, letters of credit,
Letter-of-Credit
Rights, Pledged Collateral, Pledged Deposits, Securities, Supporting Obligations and Other Collateral, wherever located, in which any Grantor now has or
hereafter acquires any right or interest, and the proceeds (including Pledged Collateral Rights), insurance proceeds and products thereof, and all collateral security and guarantees given by any person with respect to any of the foregoing, together
with all books and records, customer lists, credit files, computer files, programs, printouts and other
computer materials and records related thereto;
provided
, however, in no case shall Collateral include any Excluded Property.
Commercial Tort Claims
means commercial tort claims, as defined in the UCC of any Grantor, including each
commercial tort claim specifically described in
Schedule 13
of the Perfection Certificate.
Control
Agreement
means, with respect to any Deposit Account or any Securities Account, an agreement among the Collateral Agent, the financial institution or other person at which such account is maintained and the Grantor maintaining such
account, as applicable, effective to grant Control over such account to the Collateral Agent.
Controlled Deposit
Account
means each Deposit Account (including all funds on deposit therein) that is the subject of an effective Control Agreement and that is maintained by any Grantor.
Controlled Securities Account
means each Securities Account (including all Financial Assets held therein
and all certificates and instruments, if any, representing or evidencing such Financial Assets) that is the subject of an effective Control Agreement and that is maintained by any Grantor with a securities intermediary.
Copyrights
means (a) all copyrights, rights and interests in copyrights, works protectable by
copyright, copyright registrations, and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without
limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing
throughout the world.
Default
means an event described in
Section
6.1
.
Excluded Accounts
has the meaning assigned to such term in
Section
5.7
.
Excluded Property
means (a) all Trust Accounts, together with any proceeds of a Grantors
Receivables that are required by law to be placed into a Trust Account for the benefit of the applicable account debtors and all such funds held in Trust Accounts from time to time (but excluding, in any case, such funds that any Grantor has a right
to demand payment of, or is otherwise entitled to a distribution, or any rights of any Grantor in respect thereof, whether the corpus, income or proceeds of a Trust Account, in each case, in accordance with applicable law, and such right shall not
be deemed to be Excluded Property, but shall instead be treated for all purposes hereunder as a General Intangible or Account, as applicable), (b) Excluded Securities, (c) assets (including rights) that may not be pledged as a matter of law or
without prior approval of any Governmental Authorities (unless such approval has been obtained and except to the extent such law would be rendered ineffective with respect to the creation of the security interest hereunder pursuant to Sections
9-406,
9-407,
9-408
or
9-409
of the UCC (or any successor provision or provisions));
provided
,
however
, that the Collateral shall include (and such security interest shall attach) immediately at such time as the legal prohibitions described in this clause (c) shall no longer be applicable, (d) motor vehicles
and similar assets subject to a certificate of title in the United States, (e) Excluded Real Property, (f) United States
intent-to-use
trademark applications
to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such
intent-to-use
trademark application under applicable
2
federal law, (g) any lease, license, contract, permit, authorization or agreement to which any Grantor is a party or any of its rights or interests thereunder if and to the extent and for so
long as the grant of a security interest therein or in any assets or rights which are the subject thereof, shall constitute or result in (1) the abandonment, invalidation or unenforceability of any right, title or interest of any Grantor
therein, or (2) a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract, permit, authorization or agreement (unless such law, rule, regulation, term, provision or condition would be rendered
ineffective with respect to the creation of the security interest hereunder pursuant to Sections
9-406,
9-407,
9-408
or
9-409
of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law;
provided
,
however
, that the Collateral shall include (and such security interest
shall attach) immediately at such time as the contractual or legal prohibitions described in this clause (g) shall no longer be applicable and to the extent severable, shall attach immediately to any portion of such lease, license, contract,
permit, authorization or agreement not subject to the prohibitions specified above without further action of any party, and (h) margin stock, and (i) those assets (including owned or leased real property that is not included in the
definition of Excluded Real Property) as to which the Required Noteholder Parties determine (with communication of such determination, if any, to be delivered to the Issuers by the Trustee at the direction of the Required Noteholder
Parties) that the cost or other consequences of obtaining such security interest are likely to be excessive in relation to the value to be afforded thereby.
Excluded Real Property
means, unless encumbered by an existing mortgage, (a) owned and leased real
property (including real property operated, or to be operated, as a cemetery, crematory or funeral home) that may not be pledged as a matter of law or without prior approval of any Governmental Authorities or third person (unless such approval has
been obtained), (b) all owned and leased real property that is not operated, and is not intended to be operated, as a cemetery, crematory or funeral home (including corporate and sales offices that are not located at a cemetery, crematory or funeral
home property) and (c) Immaterial Leases under which any Grantor is the tenant.
Exclusive Copyright Licenses
means all exclusive licenses to third-party U.S. Copyrights to which a Grantor
is the licensee.
Grantors
means each Issuer and each Subsidiary Guarantor, including any Subsidiary
that becomes a party hereto pursuant to
Section
9.21
.
Indebtedness
Certificate
shall mean the certificate substantially in the form of Exhibit D.
Insolvency
Event
has the meaning assigned to such term in
Section
9.18
.
Intellectual
Property
means all Patents, Trademarks, Copyrights and any other intellectual property, including any licenses thereto.
Intercompany Indebtedness
has the meaning assigned to such term in
Section
9.18
.
Intercompany Note
shall mean any intercompany note substantially in the form of
Exhibit D
.
Landlord/Bailee Agreement
means any landlord waiver or other agreement, in form and substance
reasonably satisfactory to the Collateral Agent (acting on behalf of the Noteholder Parties), between the Collateral Agent and any third party (including any bailee, consignee, customs
3
broker, or other similar person) in possession of any Collateral or any landlord of any real property where any Collateral is located, as such landlord waiver or other agreement may be amended,
restated, or otherwise modified from time to time.
Obligor
has the meaning assigned to such term in
Section
9.18
.
Other Collateral
means any property of the Grantors, not
included within the defined terms Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Equipment, Fixtures, General Intangibles, Goods, Instruments, Intellectual Property, Inventory, Investment Property,
Letter-of-Credit
Rights, Pledged Deposits and Supporting Obligations, including, without limitation, all cash on hand, letters of credit, Pledged Collateral Rights or any
other deposits (general or special, time or demand, provisional or final) with any bank or other financial institution, it being intended that the Collateral include all real and personal property of the Grantors, subject to the limitations
contained in
Article III
;
provided
, however, in no case shall Other Collateral include any Excluded Property.
Patents
means (a) any and all patents and patent applications; (b) all inventions and
improvements described and claimed therein; (c) all reissues, divisions, continuations, renewals, extensions, and
continuations-in-part
thereof; (d) all
licenses of the foregoing whether as licensee or licensor; (e) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and
future infringements thereof; (f) all rights to sue for past, present, and future infringements thereof; and (g) all rights corresponding to any of the foregoing throughout the world.
Payment in Full
or
Paid in Full
means that all Secured Obligations (other than in
respect of contingent indemnification and expense reimbursement claims not then due) have been paid in full in cash or other consideration acceptable in writing by the Collateral Agent (to the extent such other consideration is consented to by the
requisite Noteholder Parties).
Permitted Property Location
has the meaning assigned to such term in
Section
4.6
.
Pledged Collateral
means all Equity Interests, Indebtedness
owed to any Grantor, promissory notes, other Instruments, Securities and other Investment Property of the Grantors constituting, or intending to constitute, Collateral, whether or not physically delivered to the Collateral Agent pursuant to this
Agreement.
Pledged Collateral Rights
means any payments of principal or interest, securities,
dividends, instruments or other distributions and any other right or property which any Grantor shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for or on the conversion
of any Pledged Collateral, any right to receive an Equity Interest, any right to receive earnings, in which any Grantor now has or hereafter acquires any right, or any rights or privileges issued by an issuer of such Pledged Collateral.
Pledged Deposits
means all time deposits of money (other than Deposit Accounts and Instruments), whether or
not evidenced by certificates, which a Grantor may from time to time designate as pledged to the Collateral Agent or to any Secured Party as security for any Secured Obligations, and all rights to receive interest on said deposits.
4
Receivables
means the Accounts, Chattel Paper, Documents,
Investment Property, Instruments or Pledged Deposits, and any other rights or claims to receive money which are General Intangibles or which are otherwise included as Collateral.
Secured Obligations
means the Note Obligations.
Short-form Intellectual Property Security Agreement
has the meaning assigned to such term in
Section
5.12
.
Target Amount
means $250,000.
Trademarks
means (a) all trademarks (including service marks), trade names, trade dress, and trade
styles and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing; (b) all licenses of the foregoing, whether as licensee or licensor; (c) all renewals of the foregoing;
(d) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (e) all rights to sue for past,
present, and future infringements of the foregoing, including the right to settle suits involving claims and demands for royalties owing; and (f) all rights corresponding to any of the foregoing throughout the world.
1.3
Terms Generally
. The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words include, includes and including shall
be deemed to be followed by the phrase without limitation. The word will shall be construed to have the same meaning and effect as the word shall. The word law shall be construed as referring to all
statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected persons customarily comply), and all judgments, orders and decrees, of all Governmental
Authorities. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time
amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or regulation shall be
construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any person shall be construed to include such persons
successors and assigns (subject to any restrictions on assignment set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (d) the words
herein, hereof and hereunder, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) all references herein to Articles,
Sections and Exhibits shall be construed to refer to Articles and Sections of and Exhibits and to, this Agreement, (f) the words asset and property shall be construed to have the same meaning and effect and to refer to
any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, and (g) all certificates and other required deliverables and submissions made by an officer of any Grantor shall be deemed for
all purposes to be made by such person solely in such persons capacity as an officer of such Grantor and not in such persons individual capacity.
5
ARTICLE II
[RESERVED]
ARTICLE III
GRANT OF SECURITY INTEREST
Each Grantor, as collateral security for the prompt and complete Payment In Full and performance when due (whether at stated
maturity, by acceleration or otherwise) in full of the Secured Obligations, hereby pledges, assigns and grants to the Collateral Agent, for the benefit of the Secured Parties, a Lien on and security interest in, all of its right, title and interest
in, to and under the Collateral of such Grantor, whether now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest, wheresoever located,
including all accessions thereto and proceeds thereof, and whether now or hereafter existing or arising.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each of the Grantors represents and warrants to the Collateral Agent and the Secured Parties that:
4.1
Title, Authorization, Validity and Enforceability
. Such Grantor has good and
valid rights in or the power to transfer the Collateral owned by it and title to the Collateral with respect to which it has purported to grant a security interest hereunder, free and clear of all Liens except for Liens permitted under
Section 8.02 of the Indenture, and has full corporate, limited liability company or partnership, as applicable, power and authority to grant to the Collateral Agent the security interest in such Collateral pursuant hereto. The execution and
delivery by such Grantor of this Agreement and the performance by such Grantor of its obligations in accordance with the terms of this Agreement have been duly authorized by proper corporate, limited liability company, limited partnership or
partnership, as applicable, proceedings, and this Agreement constitutes a legal, valid and binding obligation of such Grantor and creates a security interest which is enforceable against such Grantor in all Collateral it now owns or hereafter
acquires, except as enforceability may be limited by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization or similar laws relating to or affecting the enforcement of creditors rights generally, (ii) general equitable
principles (whether considered in a proceeding in equity or at law), and (iii) requirements of reasonableness, good faith and fair dealing. When financing statements have been filed in the appropriate offices against such Grantor in the
locations listed in
Schedule 6
of the Perfection Certificate, the Collateral Agent will have a legal, valid and perfected first priority Lien on the Collateral owned by such Grantor in which a Lien may be perfected by the filing of a
financing statement under the UCC, by the filing with the United States Patent and Trademark Office or United States Copyright Office and comparable offices in foreign jurisdictions or by the equivalent filings in foreign jurisdictions, subject to
Liens permitted under Section 8.02 of the Indenture. When any Pledged Collateral are delivered to the Collateral Agent, for the benefit of the Secured Parties, in accordance with this Agreement and a financing statement naming the Collateral
Agent as the secured party and covering the Pledged Collateral is filed in the appropriate filing office, the Collateral Agent will obtain, for the benefit of the Secured Parties, a legal, valid and perfected first priority lien upon and security
interest in such Pledged Collateral under the UCC, subject only to
6
Liens permitted under Section 8.02 of the Indenture, to the extent such perfection is governed by the UCC.
4.2
Conflicting Laws and Contracts
. Neither the execution and delivery by such
Grantor of this Agreement, the creation and perfection of the security interest in the Collateral granted hereunder, the performance by such Grantor of its obligations in accordance with the terms and provisions hereof, nor compliance with the terms
and provisions hereof will violate (i) any applicable law, rule, regulation, order, writ, judgment, injunction, decree or award binding on such Grantor or (ii) such Grantors charter, articles or certificate of incorporation,
partnership agreement or
by-laws
(or similar constitutive documents), or (iii) the provisions of any material indenture, instrument or agreement to which such Grantor is a party or is subject, or by which
it, or its property may be bound or affected, or conflict with or constitute a default thereunder, or result in or require the creation or imposition of any Lien in, of or on the property of such Grantor pursuant to the terms of any such indenture,
instrument or agreement (other than any Lien of the Collateral Agent on behalf of the Secured Parties).
4.3
Principal Location
. Such Grantors location of its place of business (if it
has only one) or its chief executive office (if it has more than one place of business), are disclosed in
Schedule
2(a)
of the Perfection Certificate. As of the Closing Date, such Grantor has no other places of business,
and no Permitted Property Locations (as defined in
Section
4.6
), except those set forth in
Schedule 7(a)
of the Perfection Certificate.
4.4
No Other Names; Etc
. Within the five-year period ending as of the date such
person becomes a Grantor hereunder, such Grantor has not conducted business under any name, changed its jurisdiction of formation, merged with or into or consolidated with any other person, except as disclosed in
Schedule 1(c)
of the
Perfection Certificate. The name in which such Grantor has executed this Agreement is the exact name as it appears in such Grantors organizational documents, as amended, as filed with such Grantors jurisdiction of organization as of the
date such person becomes a Grantor hereunder.
4.5
Federal Employer Identification
Number; State Organization Number; Jurisdiction of Organization
. Such Grantors federal employer identification number is, and if such Grantor is a registered organization, such Grantors State of organization, type of organization and
State of organization identification number are, listed in
Schedule 1(a)
of the Perfection Certificate.
4.6
Property Locations
. Except with respect to Inventory, Equipment and Fixtures
(i) having a value individually less than $250,000 and $500,000
in the aggregate (for all Grantors), (ii) in transit or (iii) under repair, the Inventory, Equipment and Fixtures are located solely at the locations of such Grantor
described in
Section
4.3
(each, a
Permitted Property Location
).
4.7
Reserved
.
4.8
Reserved
.
4.9
Filing Requirements
. None of the material Equipment owned by such Grantor is
covered by any certificate of title, except for motor vehicles. None of the Collateral owned by such Grantor is of a type for which security interests or liens may be perfected by filing under any federal statute except for (i) motor vehicles
and (ii) Patents, Trademarks, Copyrights and Exclusive Copyright Licenses held by such Grantor and described in
Schedules 12(a)
and
12(b)
of the Perfection Certificate.
7
4.10
No Financing Statements, Security
Agreements
. No effective financing statement or security agreement describing all or any portion of the Collateral naming such Grantor as debtor has been filed or is of record in any jurisdiction except financing statements (i) naming the
Collateral Agent on behalf of the Secured Parties as the secured party and (ii) in respect of Liens permitted by Section 8.02 of the Indenture;
provided
, that nothing herein shall be deemed to constitute an agreement to subordinate
any of the Liens of the Collateral Agent under the Note Documents to any Liens otherwise permitted under Section 8.02 of the Indenture.
4.11
Pledged Securities and Other Investment Property
.
Schedules 10
,
11
and
12
of the Perfection Certificate set forth a complete and accurate list of the Pledged Collateral, including Instruments, Securities and other Investment Property constituting Collateral, including all Certificates of
Indebtedness. Each Grantor is the direct and beneficial owner of the Pledged Collateral, including Instrument, Security and other type of Investment Property listed in
Schedules 10
,
11
and
12
of the Perfection Certificate as
being owned by it, free and clear of any Liens, except for Liens permitted by Section 8.02 of the Indenture. Each Grantor further represents and warrants that (i) all Pledged Collateral owned by it constituting an Equity Interest has been
(to the extent such concepts are relevant with respect to such Pledged Collateral) duly authorized and validly issued, are fully paid and
non-assessable
and constitute the percentage of the issued and
outstanding shares of stock (or other Equity Interests) of the respective issuers thereof indicated in
Schedule 10
of the Perfection Certificate, (ii) with respect to any certificates delivered to the Collateral Agent representing an
Equity Interest, either such certificates are Securities as defined in Article 8 of the UCC of the applicable jurisdiction as a result of actions by the issuer or otherwise, or, if such certificates are not Securities, such Grantor has taken or, has
so informed the Collateral Agent so that the Collateral Agent may take, steps to perfect the Collateral Agents security interest therein as a General Intangible and (iii) all such Pledged Collateral held by a securities intermediary is
held in one or more Controlled Securities Accounts.
4.12
Intellectual Property
.
Schedules 12(a)
and 12
(b)
of the Perfection Certificate contains a complete and accurate listing as of the Closing Date of all Intellectual Property of each of the Grantors that is registered or the subject of an application for
registration or issuance, as well as all Exclusive Copyright Licenses. Except where the failure could not reasonably be expected to result in a Material Adverse Effect, all of the U.S. registrations, applications for registration or applications for
issuance of the Intellectual Property are valid and subsisting, in good standing and are recorded or in the process of being recorded in the name of the applicable Grantor. The consummation of the transactions contemplated by the Note Documents will
not result in the termination or impairment of any of the Intellectual Property which could reasonably be expected to result in a Material Adverse Effect.
4.13
Deposit Accounts and Securities Accounts
. All of such Grantors Deposit
Accounts and Securities Accounts (other than Trust Accounts) are listed on
Schedule 14
of the Perfection Certificate.
4.14
Commercial Tort Claims
. The only existing Commercial Tort Claims of any Grantor
with a value in excess of $250,000
are those listed on
Schedule 13
of the Perfection Certificate, which sets forth such information separately for each Grantor.
4.15
Specific Collateral
. None of the Collateral is or is proceeds or products of
Farm Products,
As-Extracted
Collateral, Health-Care-Insurance Receivables or timber to be cut.
8
4.16
Enforcement
. No permit, consent,
approval, authorization, license, registration, notice to or filing with any Governmental Authority or any other person is required for the exercise by the Collateral Agent of its rights (including voting rights) provided for in this Agreement or
the enforcement of remedies in respect of the Collateral pursuant to this Agreement, including the transfer of any Collateral, except as may be required in connection with the disposition of any portion of the Pledged Collateral by laws affecting
the offering and sale of securities generally, any approvals that may be required to be obtained from any bailees or landlords to collect the Collateral, or compliance with (or as may be required by) applicable securities laws or Cemetery Laws,
under which consent cannot be obtained prior to such exercise of rights or enforcement of remedies provided herein.
ARTICLE V
COVENANTS
Until this Agreement
is terminated in accordance with
Section
9.14
, each Grantor hereby agrees to the following:
5.1
General
.
5.1.1
Reserved
.
5.1.2
Taxes
. Each Grantor agrees to comply with the terms of
Section 7.05 of the Indenture.
5.1.3
Records and Reports
.
Each Grantor shall keep and maintain proper books and records with respect to the Collateral owned by such Grantor, and furnish to the Collateral Agent such reports relating to the Collateral as required by the Note Documents.
5.1.4
Financing Statements and Other Actions; Defense of Title
. Each
Grantor will file or cause the filing of and hereby authorizes the Collateral Agent to file, and if requested will execute and deliver to the Collateral Agent, all financing statements and amendments thereto describing the Collateral owned by such
Grantor and other documents and take such other actions as may from time to time as required, or as reasonably be requested by the Collateral Agent, in order to perfect or maintain a first priority, perfected security interest in and, if applicable,
Control of, the Collateral owned by such Grantor, subject to Liens permitted under Section 8.02 of the Indenture;
provided
, that nothing herein shall be deemed to constitute an agreement to subordinate any of the Liens of the Collateral
Agent under the Note Documents to any Liens otherwise permitted under Section 8.02 of the Indenture. Such financing statements and amendments thereto may describe the Collateral in the same manner as described herein or may contain an
indication or description of collateral that describes such property in any other manner as the Collateral Agent may determine, in its reasonable discretion, is necessary, advisable or prudent to ensure that the perfection of the security interest
in the Collateral granted to the Collateral Agent herein, including, without limitation, describing such property as all assets of the debtor whether now owned or hereafter acquired and wheresoever located, including all accessions thereto and
proceeds thereof. Each Grantor will take any and all actions necessary to defend title to the Collateral owned by such Grantor against all persons and to defend the security interest of the Collateral Agent in such Collateral and the priority
thereof against any Lien not expressly permitted under the Note Documents.
9
Notwithstanding the grant of authority to the Collateral Agent under this
Section
5.1.4
, each Grantor agrees to file or cause the filing of any initial financing
statement or amendment thereto necessary to perfect or maintain the perfection of the Collateral Agents first priority security interest in the Collateral owned by such Grantor.
5.1.5
Disposition of Collateral
. No Grantor will Dispose of the
Collateral owned by such Grantor except Dispositions permitted pursuant to Section 8.05 of the Indenture.
5.1.6
Liens
. No Grantor will create, incur, or suffer to exist any
Lien on the Collateral owned by such Grantor except Liens permitted pursuant to Section 8.02 of the Indenture; provided that, nothing herein shall be deemed to constitute an agreement to subordinate any of the Liens of the Collateral Agent
under the Note Documents to any Liens otherwise permitted under Section 8.02 of the Indenture.
5.1.7
Reserved
.
5.1.8
Further Assurances
. Such Grantor shall furnish to the
Collateral Agent from time to time statements and schedules further identifying and describing the Collateral and such other documents in connection with the Collateral as the Collateral Agent may reasonably request (acting at the direction of the
Required Noteholder Parties), all in reasonable detail and in form and substance reasonably satisfactory to the Collateral Agent (acting at the direction of the Required Noteholder Parties). In addition, at any time and from time to time, upon the
written request of the Collateral Agent (acting at the direction of the Required Noteholder Parties), such Grantor shall, for the purpose of the Collateral Agent obtaining or preserving the full benefits of this Agreement and of the rights, powers
and remedies herein granted, take such further action as the Collateral Agent may reasonably request (acting at the direction of the Required Noteholder Parties).
5.1.9
Change in Corporate Existence, Type or Jurisdiction of
Organization, Location, Name
. Each Grantor will:
|
(i)
|
preserve its existence and organizational structure as in effect on the Closing Date;
|
|
(ii)
|
not change its name or jurisdiction of organization;
|
|
(iii)
|
not maintain its place of business (if it has only one) or its chief executive office (if it has more than
one place of business) at a location other than a location specified in
Schedule 2(a)
of the Perfection Certificate; and
|
|
(iv)
|
(A) subject to
Section
4.6
, not have any Inventory, Equipment or Fixtures at a
location other than a Permitted Property Location or (B) not change its name or taxpayer identification number,
|
unless, in each such case, such Grantor shall have given the Collateral Agent not less than ten (10) days (or such
shorter period as the Collateral Agent (acting at the direction of the Required Noteholder Parties in their sole discretion) may agree to) prior written notice of such event or occurrence and the Grantors shall have (unless the Required Noteholder
Parties determine, with communication of such determination, if any, to be delivered to Issuers, the Trustee and the Collateral Agent, that such event or occurrence will not adversely affect the validity, perfection or priority of the Collateral
Agents security interest
10
in the Collateral), taken such steps (with the cooperation of such Grantor to the extent necessary or advisable) as are necessary or advisable to properly maintain the validity, perfection and
priority of the Collateral Agents security interest in the Collateral owned by such Grantor. Upon the reasonable request of the Collateral Agent (acting at the direction of the Required Noteholder Parties) from time to time, such Grantor will
provide a list of all Permitted Property Locations and each other location where any Inventory, Equipment, Fixtures or proceeds or products thereof are located.
5.1.10
Other Financing Statements
. No Grantor will suffer to exist
or authorize the filing of any effective financing statement, amendment or termination statement naming it as debtor covering all or any portion of the Collateral owned by such Grantor, except any financing statement, amendment or termination
statement authorized under
Section
5.1.4
and any financing statement, amendment or termination statement in respect of Liens permitted by Section 8.02 of the Indenture. Each Grantor acknowledges that it is not
authorized to file any financing statement, amendment or termination statement with respect to any financing statement filed in connection herewith without the prior written consent of the Collateral Agent (on behalf of the requisite Noteholder
Parties), subject to such Grantors rights under
Section 9-509(d)(2)
of the UCC.
5.2
Receivables
.
5.2.1
Deposit of Receivables in Trust Accounts
. Such Grantor shall
not deposit or cause to be deposited into any Trust Account any Receivables or proceeds thereof unless required under applicable Cemetery Laws.
5.2.2
Collection of Receivables
. Subject to
Section
9.3
, except in the ordinary course of business of such Grantor and consistent with such Grantors reasonable and good faith business judgment, each Grantor will collect and enforce, at such Grantors sole
expense, all amounts due or hereafter due to such Grantor under the Receivables owned by such Grantor.
5.2.3
Reserved
.
5.2.4
Reserved
.
5.2.5
Electronic Chattel Paper
. Each Grantor shall take all steps
necessary to grant the Collateral Agent Control of all electronic chattel paper with a value individually of $250,000
or more in accordance with the UCC and all transferable records as defined in each of the Uniform Electronic
Transactions Act and the Electronic Signatures in Global and National Commerce Act.
5.3
Maintenance of Goods
. Each Grantor will do all things necessary to maintain,
preserve, protect and keep the Inventory and the Equipment owned by such Grantor in good repair, working order and saleable condition (ordinary wear and tear and casualty excepted) and make all necessary and proper repairs, renewals and replacements
so that its business carried on in connection therewith may be properly conducted at all times, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
5.4
Instruments, Securities, Chattel Paper, Documents and Pledged Deposits
. Each
Grantor will (i) deliver to the Collateral Agent immediately upon execution of this Agreement the
11
originals of all Chattel Paper (with a value, individually, of $250,000
or more), Equity Interests and other Securities (to the extent certificated) and promissory notes or other
Instruments (including, for the avoidance of doubt, the Indebtedness Certificate and the Intercompany Note), in each case constituting Collateral, (ii) hold in trust for the Collateral Agent upon receipt and immediately thereafter deliver to
the Collateral Agent any such Chattel Paper, Equity Interests, Securities, promissory note, and Instruments constituting Collateral, (iii) upon the designation of any Pledged Deposits (as set forth in the definition thereof), deliver to the
Collateral Agent such Pledged Deposits which are evidenced by certificates included in the Collateral endorsed in blank, marked with such legends and assigned as the Collateral Agent shall specify, (iv) upon the Collateral Agents request,
after the occurrence and during the continuance of a Default, deliver to the Collateral Agent (or hold in trust for the Collateral Agent upon receipt and immediately deliver to the Collateral Agent) any Document evidencing or constituting
Collateral, and (v) concurrently with each such delivery deliver to the Collateral Agent a duly executed amendment to this Agreement, in the form of
Exhibit A
hereto (the
Amendment
), pursuant to which such Grantor will
pledge such additional Collateral, and each such delivery shall be accompanied by stock powers or note powers, as applicable, duly executed in blank or other instruments of transfer as are necessary to grant the Collateral Agent control over such
Collateral. Such Grantor hereby authorizes the Collateral Agent to attach each Amendment to this Agreement and agrees that all additional Collateral owned by it set forth in such Amendments shall be considered to be part of the Collateral. Any
intercompany Indebtedness shall be subject to the Indebtedness Certificate, and, in the case of (x) intercompany obligations owing to a Note Party thereunder, pledged to the Collateral Agent, and (y) intercompany obligations owing to a
Subsidiary that is not a Note Party, subordinated to the Secured Obligations in accordance therewith.
5.5
Uncertificated Securities and Certain Other Investment Property
. Each Grantor
will use all commercially reasonable efforts to cause the appropriate issuers (and, if held with a securities intermediary, such securities intermediary) of uncertificated securities or other types of Investment Property not represented by
certificates which are Collateral owned by such Grantor to mark their books and records with the numbers and face amounts of all such uncertificated securities or other types of Investment Property not represented by certificates and all rollovers
and replacements therefor to reflect the Lien of the Collateral Agent granted pursuant to this Agreement. Each Grantor will use all commercially reasonable efforts, with respect to Investment Property constituting Collateral owned by such Grantor
held with a financial intermediary, to cause such financial intermediary to enter into a control agreement with the Collateral Agent in form and substance necessary to vest the Collateral Agent with control over such Investment Property.
5.6
Stock and Other Ownership Interests
.
5.6.1
Changes in Capital Structure of Subsidiaries
. Except as
permitted in the Indenture, no Grantor will (i) permit or suffer any Subsidiary of such Grantor to dissolve, liquidate, retire any of its capital stock or other Instruments or Securities evidencing ownership, reduce its capital or merge or
consolidate with any other entity, or (ii) vote any of the Instruments, Securities or other Investment Property in favor of any of the foregoing, except to the extent permitted under the Indenture.
5.6.2
Issuance of Additional Securities
. Except as permitted under
the Indenture, no Grantor will permit or suffer any Subsidiary to issue any securities or other ownership interests, any right to receive the same or any right to receive earnings, except to such Grantor or ratably to the holders of the securities
or other ownership interests of such Subsidiary.
12
5.6.3
Registration of
Pledged Securities and other Investment Property
. Each Grantor will permit any registrable Collateral owned by such Grantor to be registered in the name of the Collateral Agent or its nominee at any time at the option of the Required Noteholder
Parties following the occurrence and during the continuance of a Default and without any further consent of such Grantor.
5.6.4
Exercise of Rights in Pledged Securities and other Investment
Property
. Each Grantor will permit the Collateral Agent or its nominee at any time during the continuance of a Default, upon notice as set forth in clause (v) of
Section
6.2
, to exercise or refrain from exercising
any and all voting and other consensual rights pertaining to the Pledged Collateral owned by such Grantor or any part thereof, and to receive all dividends and interest in respect of such Pledged Collateral.
5.7
Deposit Accounts and Securities Accounts
. Each Grantor shall, subject to
Section 7.12 of the Indenture, subject to compliance with Cemetery Laws, (i) deposit all of its cash in Controlled Deposit Accounts or Controlled Securities Accounts,
provided
,
however
, that each Grantor may separately
maintain, and deposit cash in, (v) Trust Accounts,
(w) zero-balance
accounts for the purpose of managing local disbursements, (x) payroll, employee benefits, withholding tax and other fiduciary
accounts, (y) Deposit Accounts and Securities Accounts with a balance or value of less than or equal to $1,000,000 (based on the closing account balances of the end of each Business Day) in the aggregate for all Grantors and (z) cash
collateral accounts supporting letters of credit or cash management services permitted by the Indenture for so long as such accounts are supporting obligations under outstanding letters of credit or cash management services (the accounts described
in clauses (v), (w), (x), (y), and (z) being referred to collectively as the
Excluded Accounts
, such accounts not being required to be Controlled Deposit Accounts or Controlled Securities Accounts) and (ii) subject to
compliance with applicable Cemetery Laws, (x) maintain all of its Pledged Collateral constituting Collateral held by a securities intermediary in Controlled Securities Accounts. If the balance or value of the accounts described in clause
(y) above exceeds $1,000,000 in the aggregate at any time (based on the closing account balances of the end of each Business Day), or if a Default has occurred and is then continuing, then the Grantors shall promptly (but no less frequently
than weekly) cause such excess to be transferred to one or more of the Controlled Deposit Accounts or Controlled Securities Accounts and (y) cause all cash or other assets distributed, withdrawn or otherwise removed from any Trust Account
(whether principal, interest or other earnings), to the extent constituting Collateral, to be deposited into Controlled Deposit Accounts or Controlled Securities Accounts, as applicable; provided that with respect to (a) Excluded Accounts
excluded by virtue of clause (y) of the definition thereof, the Grantors shall use commercially reasonable efforts to institute instructions to or otherwise cause the depository institution in respect of such accounts to automatically sweep the
available balance thereof, and (b) any Deposit Account of a Cemetery
Non-Profit,
the Grantors shall use commercially reasonable efforts to collect amounts payable by any such Cemetery
Non-Profit
to such Grantors, and in this regard, the Grantors may, to the extent permitted by the relevant Cemetery
Non-Profit,
institute instructions to or otherwise cause
the depository institution in respect of any such account to automatically sweep the available balance thereof with respect to funds that any Grantor has a right to demand payment of, for all such balances (described in clauses (a) or (b)) in
the aggregate in excess of the Target Amount, to a Controlled Account, on a weekly basis (but in no event less frequently than monthly).
5.8
Letter-of-Credit
Rights
. Each Grantor will, upon the Collateral Agents request (acting at the direction of the Required Noteholder Parties), use commercially
reasonable efforts to cause each issuer of a letter of credit in an amount in excess of $125,000 individually, to consent to
13
the assignment of proceeds of such letter of credit in order to give the Collateral Agent Control of the
Letter-of-Credit
Rights to such letter of credit.
5.9
Federal, State or Municipal Claims
. Each Grantor will notify the Collateral
Agent in writing of any Collateral owned by such Grantor which constitutes a claim involving an amount of $125,000
or more against the United States government or any state or local government or any instrumentality or agency thereof, the
assignment of which claim is restricted by federal, state or municipal law. Furthermore, each Grantor will execute and deliver to the Collateral Agent such documents, agreements and instruments, and will take such further actions (including, without
limitation, the taking of necessary actions under the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.)), which the Collateral Agent may, from time to time, reasonably request
(acting at the direction of the Required Noteholder Parties), to ensure perfection and priority of the Liens hereunder in respect of Accounts and General Intangibles owing by any government or instrumentality or agency thereof, all at the expense of
the Issuer.
5.10
No Interference
. Each Grantor agrees that it will not
interfere with any right, power and remedy of the Collateral Agent provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Collateral Agent of
any one or more of such rights, powers or remedies in accordance with this Agreement.
5.11
Insurance
. Each Grantor agrees to comply with the terms of Section 7.04 of
the Indenture with respect to its properties.
5.12
Intellectual Property
.
5.12.1 If, after the Closing Date, any Subsidiary becomes a Grantor
hereunder or any Grantor obtains rights to, including, but not limited to filing and acceptance of a statement of use or an amendment to allege use with the United States Patent and Trademark Office, or applies for or seeks registration of, any
Patent, Trademark, Copyright or Exclusive Copyright License in addition to the Patents, Trademarks, Copyrights and Exclusive Copyright Licenses described in
Schedules 12(a)
and
12(b)
of the Perfection Certificate, which are all of such
Grantors Patents, Trademarks, Copyrights and Exclusive Copyright Licenses as of the Closing Date, then such Grantor shall give the Collateral Agent prompt written notice thereof. Each Grantor agrees to promptly on the Closing Date (or such
later date as agreed by the Required Noteholder Parties) and promptly following any notice delivered pursuant to the immediately preceding sentence, to execute and deliver to the Collateral Agent an intellectual property security agreement
substantially in the form of
Exhibit C
hereto (each, a
Short-form Intellectual Property Security Agreement
) or any other document necessary, in each case to evidence the security interest in, to and on such Grantors
Patents, Trademarks, Copyrights and Exclusive Copyright Licenses in a form appropriate for recording in the applicable office. Each Grantor also hereby authorizes the Collateral Agent to modify this Agreement unilaterally (i) by amending
Schedules 12(a)
and
12(b)
of the Perfection Certificate to include any future Patents, Trademarks, Copyrights and/or Exclusive Copyright Licenses of which the Collateral Agent receives notification from such Grantor pursuant hereto and
(ii) by recording, in addition to and not in substitution for this Agreement, a Short-form Intellectual Property Security Agreement containing the information on
Schedules 12(a)
and
12(b)
of the Perfection Certificate including a
description of such future Patents, Trademarks, Copyrights and/or Exclusive
14
Copyright Licenses in the applicable office. Notwithstanding the grant of authority to the Collateral Agent under this
Section
5.12.1
, each Grantor agrees to modify or
cause the modification of this Agreement (i) by amending
Schedules 12(a)
and
12(b)
of the Perfection Certificate as described above and (ii) by recording, in addition to and not in substitution for this Agreement, a
Short-form Intellectual Property Security Agreement as described above executed and delivered by such Grantor pursuant hereto in the applicable office.
5.12.2 As of the Closing Date, no Grantor has any interest in, or title to,
any Copyrights, Patents, Trademarks or Exclusive Copyright Licenses except as set forth in
Schedules 12(a)
and
12(b)
of the Perfection Certificate. This Agreement is effective to create a valid and continuing Lien on such Copyrights,
Patents, Trademarks and Exclusive Copyright Licenses and, upon filing of intellectual property security agreements substantially in the same form as the Short-form Intellectual Property Security Agreement with the United States Copyright Office and
the United States Patent and Trademark Office and comparable offices in foreign jurisdictions, and the filing of appropriate financing statements in the jurisdictions listed in
Schedule 6
of the Perfection Certificate hereto, all action
necessary or desirable to protect and perfect the security interest in, to and on each Grantors Patents, Trademarks, Copyrights and Exclusive Copyright Licenses has been taken and such perfected security interest is enforceable as such as
against any and all creditors of and purchasers from any Grantor.
5.13
Commercial
Tort Claims
. If, after the Closing Date, any Grantor identifies the existence of a Commercial Tort Claim belonging to such Grantor that has arisen in the course of such Grantors business (with a value, individually, of $250,000 or more) in
addition to the Commercial Tort Claims described in
Schedule 13
of the Perfection Certificate, then such Grantor shall give the Collateral Agent prompt written notice thereof and promptly execute and deliver to the Collateral Agent any
supplement to this Agreement or any other document necessary to evidence the grant of a security interest therein in favor of the Collateral Agent.
5.14
Landlord/Bailee Agreements
. Upon the request of the Collateral Agent (acting at
the direction of the Required Noteholder Parties) during the existence of a Default, each Grantor shall make commercially reasonable efforts to obtain a Landlord/Bailee Agreement, from the lessor of each leased property or bailee or consignee with
respect to any warehouse or other location where Collateral with a value in excess of $250,000 is stored or located, which agreement or letter shall provide access rights, contain a waiver or subordination of all Liens or claims that the landlord,
bailee or consignee may assert against the Collateral at that location, and shall otherwise be reasonably satisfactory in form and substance to the Collateral Agent (acting at the direction of the Required Noteholder Parties) (it being understood
that any such agreement purporting to impose individual liability on the Collateral Agent shall not be satisfactory to the Collateral Agent).
5.15
Updating of
Perfection Certificate
. Promptly following the Collateral
Agents request (acting at the direction of the Required Noteholder Parties) therefor (but in no event more frequently than once per calendar year absent the existence of a Default), the Grantors will provide to the Collateral Agent (with a
copy to the Trustee), an updated Perfection Certificate (or, to the extent such request relates to specified information contained in the Perfection Certificate, such information) (provided that if there have been no changes to any Schedules of the
Perfection Certificate since the previous updating thereof required hereby, the Grantors shall indicate that there has been no change to the applicable schedule(s)) reflecting all changes since the date of the information most recently
received pursuant to this
Section
5.15
. Notwithstanding anything to the contrary contained in this Agreement, to the extent a representation and warranty contained in
15
Article IV
or a covenant contained in this
Article V
relates or is subject to the Perfection Certificate, such covenant shall be deemed applicable as of the most recent date that is
the later of (i) the Closing Date or (ii) the date upon which the Grantors have delivered the updated Perfection Certificate as described above.
ARTICLE VI
DEFAULT
6.1
Default
. The occurrence of any Event of Default under, and as
defined in, the Indenture shall constitute a default (
Default
) hereunder.
6.2
Remedies
. Upon the occurrence and during the continuance of a Default, the Collateral Agent may
(but shall have no obligation to), subject to compliance with applicable Cemetery Laws, exercise any or all of the following rights and remedies:
|
(i)
|
Those rights and remedies provided in this Agreement, the Indenture, or any other Note Document,
provided
that this clause (i) shall not be understood to limit any rights or remedies available to the Collateral Agent and the Secured Parties prior to a Default.
|
|
(ii)
|
Those rights and remedies available to a secured party under the UCC or under any other applicable law
(including, without limitation, any law governing the exercise of a banks right of setoff or bankers lien) when a debtor is in default under a security agreement.
|
|
(iii)
|
Give notice of sole control or any other instruction under any Control Agreement and take any action therein
with respect to the Collateral covered thereby.
|
|
(iv)
|
Without notice (except as specifically provided in
Section
9.1
) enter the premises
of any Grantor where any Collateral is located (through self-help and without judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of, deliver, or
realize upon, the Collateral or any part thereof in one or more parcels at public or private sale or sales (which sales may be adjourned or continued from time to time with or without notice and may take place at any Grantors premises of
elsewhere), for cash, on credit or for future delivery without assumption of any credit risk, and upon such other terms as the Collateral Agent may deem commercially reasonable.
|
|
(v)
|
Concurrently with written notice to the applicable Grantor, transfer and register in its name or in the name
of its nominee the whole or any part of the Pledged Collateral, to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations, to exercise the voting and all
other rights as a holder with respect thereto, to collect and receive all cash dividends, interest, principal and other distributions made thereon and to otherwise act with respect to the Pledged Collateral as though the Collateral Agent was the
outright owner thereof.
|
6.2.1 The Collateral Agent,
on behalf of the Secured Parties, may comply with any applicable state or federal law requirements in connection with a disposition of the
16
Collateral, and such compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.
6.2.2 The Collateral Agent shall have the right (but shall have no
obligation) upon any such public sale or sales and, to the extent permitted by law, upon any such private sale or sales, to purchase for the benefit of the Secured Parties, the whole or any part of the Collateral so sold, free of any right of equity
redemption, which equity redemption the Grantor hereby expressly releases.
6.2.3 Until the Collateral Agent is able to effect a sale, lease, or other
disposition of Collateral, the Collateral Agent shall have the right (but shall have no obligation) to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its value or for
any other purpose deemed appropriate by the Collateral Agent. The Collateral Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of Collateral and to enforce any of the Collateral Agents remedies (for
the benefit of the Secured Parties), with respect to such appointment without prior notice or hearing as to such appointment.
6.2.4 Reserved.
6.2.5 Notwithstanding the foregoing, neither the Collateral Agent nor any
other Secured Party shall be required to (i) make any demand upon, or pursue or exhaust any of their rights or remedies against, any Grantor, any other obligor, any guarantor, pledgor or any other person with respect to the payment of the
Secured Obligations or to pursue or exhaust any of their rights or remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Secured Obligations or to
resort to the Collateral or any such guarantee in any particular order, or (iii) effect a public sale of any Collateral.
6.2.6 Each Grantor recognizes that the Collateral Agent may be unable to
effect a public sale of any or all the Pledged Collateral and may be compelled to resort to one or more private sales thereof in accordance with
Section
6.2.1
. Each Grantor also acknowledges that any private sale may result
in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely
by virtue of such sale being private. The Collateral Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit any Grantor or the issuer of the Pledged Collateral to register such
securities for public sale under the Securities Act, or under applicable state securities laws, even if the applicable Grantor and the issuer would agree to do so.
6.3
Grantors
Obligations Upon Default
. Upon the request of the
Collateral Agent after the occurrence and during the continuation of a Default (it being understood that the Collateral Agent shall have no obligation to make such request), subject to compliance with applicable Cemetery Laws, each Grantor will:
|
(i)
|
assemble and make available to the Collateral Agent the Collateral and all books and records relating thereto
at any place or places specified by the Collateral Agent;
|
17
|
(ii)
|
permit the Collateral Agent, by the Collateral Agents representatives and agents, to enter, occupy and
use any premises where all or any part of the Collateral, or the books and records relating thereto, or both, are located, to take possession of all or any part of the Collateral, or the books and records relating thereto, or both, to remove all or
any part of the Collateral, or the books and records relating thereto, or both, and to conduct sales of the Collateral, without any obligation to pay the Grantor for such use and occupancy; and
|
|
(iii)
|
take, or cause an issuer of Pledged Collateral to take, any and all actions necessary to qualify the Pledged
Collateral to enable the Collateral Agent to consummate a public sale or other disposition of the Pledged Collateral.
|
6.4
License
. Subject to compliance with applicable Cemetery Laws, the Collateral
Agent is hereby granted a license or other right to use, following the occurrence and during the continuance of a Default, without charge, each Grantors labels, Patents, Copyrights, rights of use of any name, trade secrets, trade names,
Trademarks, service marks, customer lists and advertising matter, or any other Intellectual Property, as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral, and, following the occurrence and
during the continuance of a Default, such Grantors rights under all licenses and all franchise agreements shall inure to the Collateral Agents benefit, subject to any restrictions set forth therein. In addition, subject to compliance
with applicable Cemetery Laws, each Grantor hereby irrevocably agrees that the Collateral Agent may (but shall have no obligation to), following the occurrence and during the continuance of a Default, sell any of such Grantors Inventory
directly to any person, including without limitation persons who have previously purchased such Grantors Inventory from such Grantor and in connection with any such sale or other enforcement of the Collateral Agents rights under this
Agreement, may (but shall have no obligation to) sell Inventory which bears any Trademark owned by or licensed to such Grantor and any Inventory that is covered by any Copyright owned by or licensed to such Grantor and the Collateral Agent may (but
shall have no obligation to) finish any work in process and affix any Trademark owned by or licensed to such Grantor and sell such Inventory as provided herein.
ARTICLE VII
WAIVERS, AMENDMENTS
AND REMEDIES
No delay or omission of the Collateral Agent or any Secured Party to exercise any right, power or remedy
granted under this Agreement shall impair such right, power or remedy or be construed to be a waiver of any Default or an acquiescence therein, and any single or partial exercise of any such right, power or remedy shall not preclude any other or
further exercise thereof or the exercise of any other right, power or remedy. No waiver, amendment or other variation of the terms, conditions or provisions of this Agreement whatsoever shall be valid unless in writing signed by the Collateral Agent
and each Grantor, and then only to the extent in such writing specifically set forth;
provided
that, the addition of any Subsidiary as a Grantor hereunder by execution of a Supplement shall not require receipt of any consent from or execution
of any documentation by any other Grantor party hereto. All rights, powers and remedies contained in this Agreement or by law afforded shall be cumulative and all shall be available to the Collateral Agent and the Secured Parties until the Secured
Obligations have been Paid in Full.
18
ARTICLE VIII
PROCEEDS; COLLECTION OF RECEIVABLES
8.1
Lockboxes
. Upon request of the Collateral Agent (acting at the direction of the
Required Noteholder Parties) after the occurrence and during the continuation of a Default, subject to compliance with applicable Cemetery Laws, each Grantor shall execute and deliver to the Collateral Agent an irrevocable lockbox agreement
sufficient to grant the Collateral Agent Control over the applicable lockbox in the form provided by or otherwise acceptable to the Collateral Agent (it being understood that any such agreement purporting to impose individual liability on the
Collateral Agent shall not be acceptable to the Collateral Agent), which agreement shall be accompanied by an acknowledgment by the bank where the lockbox is located of the Lien of the Collateral Agent granted hereunder, of the banks agreement
to comply with instructions from the Collateral Agent from time to time regarding the lockbox, without further consent by such Grantor, and of irrevocable instructions to wire all amounts collected therein to a special collateral account at or
otherwise under the Control of the Collateral Agent.
8.2
Collection of
Receivables
. The Collateral Agent may (but shall have no obligation to) at any time after the occurrence and during the continuation of a Default, by giving each Grantor written notice, elect to require that the Receivables be paid directly to
the Collateral Agent for the benefit of the Secured Parties. In such event, each Grantor shall, and shall permit the Collateral Agent to, promptly notify the account debtors or obligors under the Receivables owned by such Grantor of the Collateral
Agents interest therein and direct such account debtors or obligors to make payment of all amounts then or thereafter due under such Receivables directly to the Collateral Agent. Upon receipt of any such notice from the Collateral Agent, each
Grantor shall thereafter hold in trust for the Collateral Agent, on behalf of the Secured Parties, all amounts and proceeds received by it with respect to the Receivables and Other Collateral and immediately and at all times thereafter deliver to
the Collateral Agent all such amounts and proceeds in the same form as so received, whether by cash, check, draft or otherwise, with any necessary endorsements. The Collateral Agent shall hold and apply funds so received as provided by the terms of
Section
8.3
and
Section
8.4
.
8.3
Special Collateral Account
. Upon request of the Collateral Agent after the
occurrence and during the continuation of a Default, the Collateral Agent may (but shall have no obligation to) require all cash proceeds of the Collateral to be deposited in a special
non-interest
bearing
cash collateral account with or otherwise under the Control of the Collateral Agent and held there as security for the Secured Obligations. No Grantor shall have any control whatsoever over such cash collateral account. If any Default has occurred
and is continuing, the Collateral Agent may (but shall have no obligation to) (and shall, at the direction of the Required Noteholder Parties delivered in accordance with the Indenture), from time to time, distribute the collected balances in such
cash collateral account to the Trustee to apply as payment of the Secured Obligations in accordance with Section 9.03 of the Indenture, whether or not the Secured Obligations shall then be due.
8.4
Application of Proceeds
. The proceeds of the Collateral shall be distributed by
the Collateral Agent to the Trustee for application as payment of the Secured Obligations as provided under Section 9.03 of the Indenture.
8.5
Cemetery Laws
. Notwithstanding anything to the contrary contained in this
Article
VIII
, the Collateral Agents rights under this
Article VIII
shall be subject to compliance with
19
applicable Cemetery Laws, including requirements pertaining to the placement of proceeds of any Grantors Receivables into Trust Accounts or the use of Perpetual Care Trust distributions.
ARTICLE IX
GENERAL
PROVISIONS
9.1
Notice of Disposition of Collateral; Condition of Collateral
. To
the fullest extent permitted under applicable law, each Grantor hereby waives notice of the time and place of any public sale or the time after which any private sale or other disposition of all or any part of the Collateral may be made. To the
extent such notice may not be waived under applicable law, any notice made shall be deemed reasonable if sent to the Issuer, addressed as set forth in Section 15.01 of the Indenture, at least ten (10) days prior to (i) the date of any
such public sale or (ii) the time after which any such private sale or other disposition may be made. The Collateral Agent shall have no obligation to
clean-up
or otherwise prepare the Collateral for
sale. To the maximum extent permitted by applicable law, each Grantor waives all claims, damages, and demands against the Collateral Agent or any other Secured Party arising out of the repossession, retention or sale of the Collateral, except such
as arise solely out of the gross negligence or willful misconduct of the Collateral Agent or such other Secured Party as finally determined by a court of competent jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and
irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Collateral Agent or any other Secured Party, any valuation, stay, appraisal, extension, moratorium, redemption or similar laws and any and all
rights or defenses it may have as a surety now or hereafter existing which, but for this provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the power of sale
conferred by this Agreement, or otherwise. Except as otherwise specifically provided herein, each Grantor hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with
this Agreement or any Collateral.
9.2
Limitation on Collateral
Agent
s and other Secured Parties
Duty with Respect to the Collateral
. The Collateral Agent shall have no obligation to
clean-up
or otherwise prepare the Collateral
for sale. The Collateral Agent and each other Secured Party shall use reasonable care with respect to the Collateral in its possession or under its control. Neither the Collateral Agent nor any other Secured Party shall have any other duty,
responsibility or obligation as to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Collateral Agent or such other Secured Party, or any income thereon or as to the preservation of rights
against prior parties or any other rights pertaining thereto. To the extent that applicable law imposes duties on the Collateral Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that, subject to
compliance with applicable Cemetery Laws, it is commercially reasonable for the Collateral Agent (i) to fail to incur fees and expenses deemed significant by the Collateral Agent to prepare Collateral for disposition or otherwise to transform
raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to
obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against account debtors or other persons obligated on Collateral or to
remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against account debtors and other persons obligated on Collateral directly or through the use of collection agencies and other collection
specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other
20
persons, whether or not in the same business as such Grantor, for expressions of interest in acquiring all or any portion of such Collateral, (vii) to hire one or more professional
auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the
Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession
or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Collateral Agent against risks of loss, collection or disposition of Collateral or to provide to the Collateral Agent a guaranteed return from the collection or
disposition of Collateral, or (xii) to the extent deemed appropriate by the Collateral Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Collateral Agent in the collection or
disposition of any of the Collateral. Each Grantor acknowledges that the purpose of this
Section
9.2
is to provide
non-exhaustive
indications of what actions or omissions by the
Collateral Agent would be commercially reasonable in the Collateral Agents exercise of remedies against the Collateral and that other actions or omissions by the Collateral Agent shall not, subject to compliance with applicable Cemetery Laws,
be deemed commercially unreasonable solely on account of not being indicated in this
Section
9.2
. Without limitation upon the foregoing, nothing contained in this
Section
9.2
shall be construed to
grant any rights to any Grantor or to impose any duties, responsibility or obligation on the Collateral Agent that would not have been granted or imposed by this Agreement or by applicable law in the absence of this
Section
9.2
.
9.3
Compromises and Collection of
Collateral
. Each Grantor and the Collateral Agent recognize that setoffs, counterclaims, defenses and other claims may be asserted by obligors with respect to certain of the Receivables, that certain of the Receivables may be or become
uncollectible in whole or in part and that the expense and probability of success in litigating a disputed Receivable may exceed the amount that reasonably may be expected to be recovered with respect to a Receivable. In view of the foregoing, each
Grantor agrees that the Collateral Agent may (but shall have no obligation to), at any time and from time to time, if a Default has occurred and is continuing, compromise with the obligor on any Receivable, accept in full payment of any Receivable
such amount as the Collateral Agent in its sole discretion shall determine or abandon any Receivable, and any such action by the Collateral Agent shall be commercially reasonable so long as the Collateral Agent acts in good faith based on
information known to it at the time it takes any such action.
9.4
Secured Party
Performance of Grantor
s Obligations
. Without having any obligation to do so, during the existence of a Default, the Collateral Agent may perform or pay any obligation which any Grantor has agreed to perform or pay in this
Agreement and such Grantor shall promptly reimburse the Collateral Agent for any reasonable amounts paid by the Collateral Agent pursuant to this
Section
9.4
. Each Grantors obligation to reimburse the Collateral Agent
pursuant to the preceding sentence shall be a Secured Obligation payable on demand.
9.5
Authorization for Secured Party to Take Certain Action
. Each Grantor irrevocably
authorizes the Collateral Agent at any time and from time to time in the sole discretion of the Collateral Agent to file financing statements or amendments necessary or desirable in the Collateral Agents sole discretion to perfect and to
maintain the perfection and priority of the Collateral Agents security interest in the Collateral. Each Grantor further irrevocably authorizes the Collateral Agent at any time and from time to time during the existence of a Default in the sole
discretion of the Collateral Agent and appoints the Collateral Agent as its attorney in fact (i) to file financing statements necessary or desirable in the Collateral Agents sole discretion to perfect and
21
to maintain the perfection and priority of the Collateral Agents security interest in the Collateral, (ii) to indorse and collect any cash proceeds of the Collateral, (iii) to
file any financing statement with respect to the Collateral and to file any other financing statement or amendment of a financing statement (which does not add new collateral or add a debtor) in such offices as the Collateral Agent in its sole
discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Collateral Agents security interest in the Collateral, (iv) to contact and enter into one or more agreements with the issuers of
uncertificated securities which are Collateral owned by such Grantor and which are Securities or with financial intermediaries holding other Investment Property as may be necessary or advisable to give the Collateral Agent Control over such
Securities or other Investment Property, (v) subject to the terms of
Section
5.1.5
and subject to compliance with applicable Cemetery Laws, to enforce payment of the Instruments, Accounts and Receivables in the name of
the Collateral Agent or such Grantor, (vi) to distribute the proceeds of any Collateral received by the Collateral Agent to the Trustee to apply as payment for the Secured Obligations as provided in
Article VIII
, and (vii) to
discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens as are specifically permitted hereunder or under any other Note Document), and each Grantor agrees to reimburse the Collateral Agent on demand for
any reasonable payment made or any reasonable fee or expense incurred by the Collateral Agent in connection therewith, provided that the authorization and power granted to the Collateral Agent under this Section 9.5 or any other provision of
any Note Document shall not relieve any Grantor of any of its obligations under this Agreement, the Indenture or any other Note Document and shall not impose any duty on the Collateral Agent to take any of the foregoing actions. For the avoidance of
doubt, each Grantor agrees to file or cause the filing of financing statements and amendments thereto and any other document or instrument necessary to perfect or maintain the perfection of the Collateral Agents first priority security
interest in the Collateral of each Grantor in the appropriate filing offices.
9.6
Specific Performance of Certain Covenants
. Each Grantor acknowledges and agrees
that a breach of any of the covenants contained in
Sections 5.1.5
,
5.1.6
,
5.4
,
6.3
or
9.8
or in
Article VIII
hereof will cause irreparable injury to the Collateral Agent and the Secured Parties, that the
Collateral Agent and Secured Parties have no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of the Collateral Agent or the Secured Parties to seek and obtain specific performance of other
obligations of the Grantors contained in this Agreement, that the covenants of the Grantors contained in the Sections referred to in this
Section
9.6
shall be specifically enforceable against the Grantors.
9.7
Use and Possession of Certain Premises
. Upon the occurrence and during the
continuation of a Default, subject to compliance with applicable Cemetery Laws, the Collateral Agent shall be entitled (but not obligated) to occupy and use any premises owned or leased by the Grantors where any of the Collateral or any records
relating to the Collateral are located until the Secured Obligations are paid or the Collateral is removed therefrom, whichever first occurs, without any obligation to pay any Grantor for such use and occupancy.
9.8
Cemetery Laws
. Notwithstanding anything to the contrary contained in this
Agreement or the other Note Documents, the Collateral Agent acknowledges and agrees that its rights and remedies (including the exercise of the same) with respect to the Collateral are subject to compliance with applicable Cemetery Laws and, among
other things, that the exercise of such rights and remedies may require the approval (including prior approval) of Governmental Authorities under applicable Cemetery Laws.
22
9.9
Reinstatement
. This Agreement shall
remain in full force and effect and continue to be effective should any petition be filed by or against any Grantor for liquidation or reorganization, should any Grantor become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any significant part of any Grantors assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Secured
Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a voidable preference, fraudulent
conveyance, or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed
reduced only by such amount paid and not so rescinded, reduced, restored or returned.
9.10
Benefit of Agreement
. The terms and provisions of this Agreement shall be
binding upon and inure to the benefit of the Grantors, the Collateral Agent and the Secured Parties and their respective successors and assigns (including all persons who become bound as a debtor to this Agreement), except that the Grantors shall
not have the right to assign their rights or delegate their obligations under this Agreement or any interest herein, except in compliance with the Indenture. No assignments, transfers, exchanges or other dispositions of the Notes or any agreement
governing the Secured Obligations or any portion thereof or interest therein shall in any manner impair the Lien granted to the Collateral Agent, for the benefit of the Secured Parties, hereunder.
9.11
Survival of Representations
. All representations and warranties of the Grantors
contained in this Agreement shall survive the execution and delivery of this Agreement.
9.12
Expenses
. Subject to the provisions of Section 10.06 of the Indenture, the
Grantors shall pay (i) all reasonable fees and reasonable and documented
out-of-pocket
expenses incurred by the Collateral Agent, the Trustee and its Affiliates and
the Required Noteholder Parties (including the reasonable fees, charges, expenses and disbursements of counsel for the Collateral Agent and of counsel for the Required Noteholder Parties) in connection with the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Note Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated) and
(ii) all
out-of-pocket
fees and expenses incurred by the Collateral Agent or any Secured Party (including the fees, charges, expenses and disbursements of any
counsel for the Collateral Agent or any Secured Party) in connection with the enforcement or protection of its rights, powers or remedies (A) in connection with this Agreement and any other Note Document, including its rights under this
Section
9.12
, or (B) in connection with the Notes issued under the Indenture, including all such fees and
out-of-pocket
expenses incurred
during any workout, restructuring or negotiations in respect of the Indenture and the Notes.
9.13
Headings
. The title of and section headings in this Agreement are for
convenience of reference only, and shall not govern the interpretation of any of the terms and provisions of this Agreement.
9.14
Termination
. This Agreement shall continue in effect (notwithstanding the fact
that from time to time there may be no Secured Obligations outstanding) until terminated in accordance with Section 14.11 of the Indenture. The terms and provisions of Section 14.11 of the Indenture are incorporated into this Agreement by
this reference as if more fully set forth herein.
23
9.15
Entire Agreement
. This Agreement
and the Indenture embody the entire agreement and understanding between the Grantors and the Collateral Agent relating to the Collateral and supersedes all prior agreements and understandings among the Grantors and the Collateral Agent relating to
the Collateral.
9.16
Governing Law; Jurisdiction; Waiver of Jury Trial
.
9.16.1
THIS AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSES OF
ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT (OTHER THAN AS EXPRESSLY SET FORTH HEREIN) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO ANY PRINCIPLE OF CONFLICTS OF LAW THAT COULD REQUIRE THE APPLICATION OF ANY OTHER LAW.
9.16.2 Each Grantor irrevocably and unconditionally agrees that it will not
commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Collateral Agent, any Noteholder Party, or any Affiliate of the foregoing in any way
relating to this Agreement or the transactions relating hereto, in any forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate
court from any thereof, each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts, and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such New
York State court or, to the fullest extent permitted by applicable law, in such federal court. Each Grantor agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Collateral Agent or any Noteholder Party may otherwise have to bring any action or proceeding relating to this Agreement against
any Grantor or its properties in the courts of any jurisdiction.
9.16.3 Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any New York State or federal court. Each
Grantor hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
9.16.4 Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Article X of this Agreement. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
9.16.5
WAIVER OF JURY TRIAL
. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER NOTE DOCUMENTS
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT
24
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER NOTE DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 9.16.5
.
9.17
Indemnity
. Each Grantor hereby agrees, jointly with the other Grantors and
severally, to indemnify and reimburse the Collateral Agent and the Secured Parties, and their respective successors, assigns, agents and employees in accordance with the terms of Section 10.06 of the Indenture applied
mutatis mutandis
.
9.18
Subordination of Intercompany Indebtedness
. Each Grantor agrees that any
and all claims of such Grantor against any other Grantor (each an
Obligor
) with respect to any Intercompany Indebtedness, any endorser, obligor or any other guarantor of all or any part of the Secured Obligations, or against any
of its properties shall be subordinate and subject in right of payment to the prior Payment in Full, of all Secured Obligations; provided that, and not in contravention of the foregoing, at all times prior to such Grantors receipt of written
notice of the Collateral Agents exercise of its rights under this
Section
9.18
during the existence of a Default, such Grantor may make loans to and receive payments in the ordinary course of business to or otherwise
with respect to such Intercompany Indebtedness from each such Obligor to the extent not prohibited by the terms of this Agreement and the other Note Documents. Notwithstanding any right of any Grantor to ask, demand, sue for, take or receive any
payment from any Obligor, all rights, liens and security interests of such Grantor, whether now or hereafter arising and howsoever existing, wheresoever located, in any assets of any other Obligor shall be and are subordinated to the rights of the
Secured Parties and the Collateral Agent in those assets. No Grantor shall have any right to possession of any such asset or to foreclose upon any such asset, whether by judicial action or otherwise, unless and until this Agreement has terminated in
accordance with
Section
9.14
. If all or any part of the assets of any Obligor, or the proceeds thereof, are subject to any distribution, division or application to the creditors of such Obligor, whether partial or complete,
voluntary or involuntary, and whether by reason of liquidation, bankruptcy, arrangement, receivership, assignment for the benefit of creditors or any other action or proceeding, or should a receiver or trustee be appointed for all or any significant
part of any Grantors assets or property (such events being herein referred to as an
Insolvency Event
), any payment or distribution of any kind or character, either in cash, securities or other property, which shall be
payable or deliverable upon or with respect to any indebtedness of any Obligor to any Grantor (
Intercompany Indebtedness
) shall be paid or delivered directly to the Collateral Agent for application on any of the Secured
Obligations, due or to become due, until such Secured Obligations shall have first been Paid in Full. Should any payment, distribution, security or instrument or proceeds thereof be received by the applicable Grantor upon or with respect to the
Intercompany Indebtedness after any Insolvency Event and prior to the termination of this Agreement in accordance with
Section
9.14
, such Grantor shall receive and hold the same in trust for the Collateral Agent for the
benefit of the Secured Parties and shall forthwith deliver the same to the Collateral Agent, for the benefit of the Secured Parties, in precisely the form received (except for the endorsement or assignment of the Grantor where necessary), for
application to any of the Secured Obligations, due or not due, and, until so delivered, the same shall be held in trust by the Grantor as the property of the Collateral Agent for the benefit of the Secured Parties. If any such Grantor fails to make
any such endorsement or assignment to the Collateral Agent, the Collateral
25
Agent or any of its officers or employees is irrevocably authorized to make the same. Each Grantor agrees that until the termination of this Agreement in accordance with
Section
9.14
, except as permitted under the Indenture, no Grantor will assign or transfer to any person (other than the Collateral Agent or another Grantor) any claim any such Grantor has or may have against any Obligor.
9.19
Severability
. Any provision in this Agreement that is held to be
inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of
that provision in any other jurisdiction, and to this end the provisions of this Agreement are declared to be severable.
9.20
Counterparts
. This Agreement may be executed in counterparts (and by different
parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or
other electronic means shall be effective as delivery of a manually executed counterpart of this Agreement.
9.21
Additional Grantors
. Upon execution and delivery, by any Subsidiary that is
required or permitted to become a party hereto by Section 7.12 of the Indenture or the Collateral Requirement of the Indenture, of (a) a written supplement substantially in the form of Exhibit B hereto and (b) a joinder to the
Indebtedness Certificate and to the Intercompany Note, in each case reasonably satisfactory to the Collateral Agent and the Partnership, such Subsidiary shall become a Grantor hereunder with the same force and effect as if originally named as a
Grantor herein. The execution and delivery of any such instrument shall not require the consent of any other party to this Agreement. The rights and obligations of each party to this Agreement shall remain in full force and effect notwithstanding
the addition of any new party to this Agreement.
ARTICLE X
NOTICES
10.1
Sending Notices
. Any notice required or permitted to be given under this
Agreement shall be sent (and deemed received) in the manner and to the addresses set forth in Section 15.01 of the Indenture. Any notice delivered to the Issuer shall be deemed to have been delivered to all of the Grantors.
10.2
Change in Address for Notices
. Each of the Grantors, the Collateral Agent and
the Noteholder Parties may change the address for service of notice upon it by a notice in writing to the other parties.
ARTICLE XI
THE COLLATERAL AGENT
Wilmington Trust, National Association has been appointed Collateral Agent for the Secured Parties hereunder pursuant to
Article XIV of the Indenture. It is expressly understood and agreed by the parties to this Agreement that any authority conferred upon the Collateral Agent hereunder is subject to the terms of the delegation of authority made by the Secured Parties
to the Collateral
26
Agent pursuant to the Indenture, and that the Collateral Agent has agreed to act (and any successor Collateral Agent shall act) as such hereunder only on the express conditions contained in such
Articles X and Article XIV. Any successor Collateral Agent appointed pursuant to Articles X and XIV of the Indenture shall be entitled to all the rights, interests and benefits of the Collateral Agent hereunder.
It is expressly understood and agreed that Wilmington Trust, National Association is entering this Agreement solely in its
capacity as Collateral Agent for the Secured Parties under the Indenture and not in its individual or corporate capacity. In acting hereunder, the Collateral Agent shall be entitled to all of the rights, privileges, immunities, indemnities and
benefits granted to the Collateral Agent under the Indenture, including without limitation those set forth in Articles X and XIV of the Indenture, as if such rights, privileges, immunities, indemnities and benefits were expressly set forth herein.
Whether or not expressly stated therein, in executing, delivering and performing its obligations under any Security Document, the Collateral Agent shall be entitled to the rights, privileges, immunities, indemnities and benefits granted to it under
the Indenture and this Agreement.
[
remainder of page intentionally blank
]
27
IN WITNESS WHEREOF, each of the Grantors and the Collateral Agent have executed
this Agreement as of the date first above written.
|
|
|
STONEMOR PARTNERS L.P.
|
|
|
By:
|
|
/s/ Garry P. Herdler
|
Name: Garry P. Herdler
|
Title: Chief Financial Officer
|
Signature Page to Collateral Agreement
|
|
|
|
|
Alleghany Memorial Park LLC
|
|
|
Alleghany Memorial Park Subsidiary, Inc.
|
|
|
Altavista Memorial Park LLC
|
|
|
Altavista Memorial Park Subsidiary, Inc.
|
|
|
Arlington Development Company
|
|
|
Augusta Memorial Park Perpetual Care Company
|
|
|
Birchlawn Burial Park LLC
|
|
|
Birchlawn Burial Park Subsidiary, Inc.
|
|
|
Bronswood Cemetery, Inc.
|
|
|
Cedar Hill Funeral Home, Inc.
|
|
|
Cemetery Investments LLC
|
|
|
Cemetery Investments Subsidiary, Inc.
|
|
|
Cemetery Management Services, L.L.C.
|
|
|
Cemetery Management Services of Ohio, L.L.C.
|
|
|
Chapel Hill Associates, Inc.
|
|
|
Chapel Hill Funeral Home, Inc.
|
|
|
CMS West LLC
|
|
|
CMS West Subsidiary LLC
|
|
|
Columbia Memorial Park LLC
|
|
|
Columbia Memorial Park Subsidiary, Inc.
|
|
|
Cornerstone Family Insurance Services, Inc.
|
|
|
Cornerstone Family Services of New Jersey, Inc.
|
|
|
Cornerstone Family Services of West Virginia LLC
|
|
|
Cornerstone Family Services of West Virginia Subsidiary, Inc.
|
|
|
Cornerstone Funeral and Cremation Services LLC
|
|
|
Cornerstone Trust Management Services LLC
|
|
|
Covenant Acquisition LLC
|
|
|
Covenant Acquisition Subsidiary, Inc.
|
|
|
Covington Memorial Funeral Home, Inc.
|
|
|
Covington Memorial Gardens, Inc.
|
|
|
Eloise B. Kyper Funeral Home, Inc.
|
|
|
Forest Lawn Gardens, Inc.
|
|
|
Forest Lawn Memorial Chapel, Inc.
|
|
|
Forest Lawn Memory Gardens, Inc.
|
|
|
Glen Haven Memorial Park LLC
|
|
|
Glen Haven Memorial Park Subsidiary, Inc.
|
|
|
Henlopen Memorial Park LLC
|
|
|
Henlopen Memorial Park Subsidiary LLC
|
|
|
Henry Memorial Park LLC
|
|
|
Henry Memorial Park Subsidiary, Inc.
|
|
|
Juniata Memorial Park LLC
|
|
|
KIRIS LLC
|
|
|
KIRIS Subsidiary, Inc.
|
|
|
Kirk & Nice, Inc.
|
|
|
Kirk & Nice Suburban Chapel, Inc.
|
|
|
Lakewood/Hamilton Cemetery LLC
|
|
|
Lakewood/Hamilton Cemetery Subsidiary, Inc.
|
|
|
Lakewood Memory Gardens South LLC
|
|
|
Lakewood Memory Gardens South Subsidiary, Inc.
|
Signature Page to Guaranty and Collateral Agreement
|
|
|
|
|
Laurel Hill Memorial Park LLC
|
|
|
Laurel Hill Memorial Park Subsidiary, Inc.
|
|
|
Laurelwood Holding Company
|
|
|
Legacy Estates, Inc.
|
|
|
Loewen [Virginia] LLC
|
|
|
Loewen [Virginia] Subsidiary, Inc.
|
|
|
Lorraine Park Cemetery LLC
|
|
|
Lorraine Park Cemetery Subsidiary, Inc.
|
|
|
Modern Park Development LLC
|
|
|
Modern Park Development Subsidiary, Inc.
|
|
|
Oak Hill Cemetery LLC
|
|
|
Oak Hill Cemetery Subsidiary, Inc.
|
|
|
Osiris Holding Finance Company
|
|
|
Osiris Holding of Maryland LLC
|
|
|
Osiris Holding of Maryland Subsidiary, Inc.
|
|
|
Osiris Holding of Pennsylvania LLC
|
|
|
Osiris Holding of Rhode Island LLC
|
|
|
Osiris Holding of Rhode Island Subsidiary, Inc.
|
|
|
Osiris Management, Inc.
|
|
|
Osiris Telemarketing Corp.
|
|
|
Perpetual Gardens.Com, Inc.
|
|
|
Plymouth Warehouse Facilities LLC
|
|
|
Prince George Cemetery Corporation
|
|
|
PVD Acquisitions LLC
|
|
|
PVD Acquisitions Subsidiary, Inc.
|
|
|
Rockbridge Memorial Gardens LLC
|
|
|
Rockbridge Memorial Gardens Subsidiary Company
|
|
|
Rolling Green Memorial Park LLC
|
|
|
Rose Lawn Cemeteries LLC
|
|
|
Rose Lawn Cemeteries Subsidiary, Incorporated
|
|
|
Roselawn Development LLC
|
|
|
Roselawn Development Subsidiary Corporation
|
|
|
Russell Memorial Cemetery LLC
|
|
|
Russell Memorial Cemetery Subsidiary, Inc.
|
|
|
Shenandoah Memorial Park LLC
|
|
|
Shenandoah Memorial Park Subsidiary, Inc.
|
|
|
Sierra View Memorial Park
|
|
|
Southern Memorial Sales LLC
|
|
|
Southern Memorial Sales Subsidiary, Inc.
|
|
|
Springhill Memory Gardens LLC
|
|
|
Springhill Memory Gardens Subsidiary, Inc.
|
|
|
Star City Memorial Sales LLC
|
|
|
Star City Memorial Sales Subsidiary, Inc.
|
|
|
Stephen R. Haky Funeral Home, Inc.
|
|
|
Stitham LLC
|
|
|
Stitham Subsidiary, Incorporated
|
|
|
StoneMor Alabama LLC
|
|
|
StoneMor Alabama Subsidiary, Inc.
|
|
|
StoneMor Arkansas Subsidiary LLC
|
|
|
StoneMor California, Inc.
|
Signature Page to Guaranty and Collateral Agreement
|
|
|
|
|
StoneMor California Subsidiary, Inc.
|
|
|
StoneMor Cemetery Products LLC
|
|
|
StoneMor Colorado LLC
|
|
|
StoneMor Colorado Subsidiary LLC
|
|
|
StoneMor Florida LLC
|
|
|
StoneMor Florida Subsidiary LLC
|
|
|
StoneMor Georgia LLC
|
|
|
StoneMor Georgia Subsidiary, Inc.
|
|
|
StoneMor Hawaiian Joint Venture Group LLC
|
|
|
StoneMor Hawaii LLC
|
|
|
StoneMor Hawaii Subsidiary, Inc.
|
|
|
StoneMor Holding of Pennsylvania LLC
|
|
|
StoneMor Illinois LLC
|
|
|
StoneMor Illinois Subsidiary LLC
|
|
|
StoneMor Indiana LLC
|
|
|
StoneMor Indiana Subsidiary LLC
|
|
|
StoneMor Iowa LLC
|
|
|
StoneMor Iowa Subsidiary LLC
|
|
|
StoneMor Kansas LLC
|
|
|
StoneMor Kansas Subsidiary LLC
|
|
|
StoneMor Kentucky LLC
|
|
|
StoneMor Kentucky Subsidiary LLC
|
|
|
StoneMor Michigan LLC
|
|
|
StoneMor Michigan Subsidiary LLC
|
|
|
StoneMor Mississippi LLC
|
|
|
StoneMor Mississippi Subsidiary LLC
|
|
|
StoneMor Missouri LLC
|
|
|
StoneMor Missouri Subsidiary LLC
|
|
|
StoneMor North Carolina LLC
|
|
|
StoneMor North Carolina Subsidiary LLC
|
|
|
StoneMor North Carolina Funeral Services, Inc.
|
|
|
StoneMor Ohio LLC
|
|
|
StoneMor Ohio Subsidiary, Inc.
|
|
|
StoneMor Oklahoma LLC
|
|
|
StoneMor Oklahoma Subsidiary LLC
|
|
|
StoneMor Operating LLC
|
|
|
StoneMor Oregon LLC
|
|
|
StoneMor Oregon Subsidiary LLC
|
|
|
StoneMor Pennsylvania LLC
|
|
|
StoneMor Pennsylvania Subsidiary LLC
|
|
|
StoneMor Puerto Rico LLC
|
|
|
StoneMor Puerto Rico Cemetery and Funeral, Inc.
|
|
|
StoneMor Puerto Rico Subsidiary LLC
|
|
|
StoneMor South Carolina LLC
|
|
|
StoneMor South Carolina Subsidiary LLC
|
|
|
StoneMor Tennessee Subsidiary, Inc.
|
|
|
StoneMor Washington, Inc.
|
|
|
StoneMor Washington Subsidiary LLC
|
|
|
StoneMor Wisconsin LLC
|
|
|
StoneMor Wisconsin Subsidiary LLC
|
Signature Page to Guaranty and Collateral Agreement
|
|
|
Sunset Memorial Gardens LLC
|
Sunset Memorial Gardens Subsidiary, Inc.
|
Sunset Memorial Park LLC
|
Sunset Memorial Park Subsidiary, Inc.
|
Temple Hill LLC
|
Temple Hill Subsidiary Corporation
|
The Valhalla Cemetery Company LLC
|
The Valhalla Cemetery Subsidiary Corporation
|
Tioga County Memorial Gardens LLC
|
Virginia Memorial Service LLC
|
Virginia Memorial Service Subsidiary Corporation
|
WNCI LLC
|
W N C Subsidiary, Inc.
|
Wicomico Memorial Parks LLC
|
Wicomico Memorial Parks Subsidiary, Inc.
|
Willowbrook Management Corp.
|
Woodlawn Memorial Park Subsidiary LLC
|
|
|
By:
|
|
/s/ Garry P. Herdler
|
|
|
Name: Garry Herdler
|
|
|
Title: Chief Financial Officer of each Grantor named above, signing on behalf of each Grantor independently
|
Signature Page to Guaranty and Collateral Agreement
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Collateral Agent
|
By:
/s/ Joseph P.
ODonnell
|
Name: Joseph P. ODonnell
|
Title: Vice President
|
Signature Page to Guaranty and Collateral Agreement
EXHIBIT A
FORM OF AMENDMENT
This Amendment, dated [__________], 20[__] is delivered pursuant to
Section
5.4
of the Agreement
referred to below. All defined terms herein shall have the meanings ascribed thereto or incorporated by reference in the Agreement. The undersigned hereby certifies that the representations and warranties in
Article IV
of the Agreement are
and continue to be true and correct in all material respects (without duplication of any materiality or Material Adverse Effect qualifier). The undersigned further agrees that this Amendment may be attached to that certain Collateral Agreement,
dated June [27], 2019 (as previously amended, restated, supplemented or otherwise modified, the
Agreement
), among the undersigned, as a Grantor, the other Grantors from time to time party thereto, and Wilmington Trust, National
Association, as the Collateral Agent, and that the Collateral listed on
Schedule I
to this Amendment shall be and become a part of the Collateral referred to in said Agreement and shall secure all Secured Obligations referred to in said
Agreement.
|
|
|
|
|
|
|
|
|
|
|
[GRANTOR]
|
|
|
|
|
|
|
|
|
|
|
By:_________________________
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
Title:
|
|
|
EXHIBIT B
FORM OF SUPPLEMENT
Reference is hereby made to the Collateral Agreement (as amended, restated, supplemented or otherwise modified from time to
time, the
Agreement
), dated as of June 27, 2019, made by each of StoneMor Partners, L.P., a Delaware limited liability company (the
Partnership
), Cornerstone Family Services of West Virginia Subsidiary,
Inc., a West Virginia corporation (the
Co-Issuer
and, together with the Partnership, the
Issuers
) the other Grantors from time to time party thereto, and Wilmington Trust,
National Association, as the Collateral Agent. Capitalized terms used herein and not defined herein shall have the meanings given to them in the Agreement.
Section 9.21 of the Agreement provides that an Additional Grantor may become a Grantor under the Agreement by the
execution and delivery of a written supplement to the Agreement substantially in the form of this Supplement to become an Additional Grantor in accordance with the terms of the Indenture.
By its execution below, the undersigned, [NAME OF NEW GRANTOR], a [__________] [corporation/limited liability company/limited
partnership] (the
New Grantor
) agrees to become, and does hereby become, a Grantor under the Agreement and agrees to be bound by the Agreement as if originally a party thereto. The New Grantor hereby collaterally assigns and
pledges to the Collateral Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties, a security interest in all of the New Grantors right, title and interest in and to the
Collateral, whether now owned or hereafter acquired, to secure the prompt and complete payment and performance of the Secured Obligations. For the avoidance of doubt, the grant of a security interest herein shall not be deemed to be an assignment of
intellectual property rights owned by the New Grantor.
By its execution below, the undersigned represents and warrants
as to itself that all of the representations and warranties contained in the Agreement are true and correct in all material respects (without duplication of any materiality or Material Adverse Effect qualifier) as of the date hereof. The New Grantor
represents and warrants that the supplements to the Perfection Certificate attached hereto are true and correct in all material respects (without duplication of any materiality or Material Adverse Effect qualifier) and that such supplements set
forth all information required to be scheduled under the Perfection Certificate with respect to the New Grantor. The New Grantor shall take all steps necessary and required under the Agreement to perfect, in favor of the Collateral Agent, a first
priority Lien against the New Grantors Collateral, subject to Liens permitted under Section 8.02 of the Indenture.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the New Grantor has executed and delivered this Supplement as of this ____ day of ____________, 20__.
|
|
|
|
|
|
|
|
|
|
|
[NAME OF NEW GRANTOR]
|
|
|
|
|
|
|
|
|
|
|
By:_____________________________
|
|
|
|
|
|
|
Name:___________________________
|
|
|
|
|
|
|
Title:_______________________
|
|
|
EXHIBIT C
FORM OF SHORT-FORM INTELLECTUAL PROPERTY SECURITY AGREEMENT
GRANT OF
SECURITY
INTEREST IN [TRADEMARK/PATENT/COPYRIGHT] RIGHTS
This GRANT OF SECURITY INTEREST IN [TRADEMARK/ PATENT/
COPYRIGHT] RIGHTS (this
Agreement
), dated as of [●], 20[●], is made by and among the Grantors listed on the signature pages hereof (each, a
Grantor
and collectively, the
Grantors
),
in favor of Wilmington Trust, National Association, as collateral agent (in such capacity, the
Collateral Agent
) for the benefit of the Secured Parties in connection with that certain Indenture, dated as of June [27], 2019 (as
amended, restated, supplemented or otherwise modified from time to time, the
Indenture
), by and among StoneMor Partners L.P., a Delaware limited partnership (the
Partnership
), Cornerstone Family Services of West
Virginia Subsidiary, Inc., a West Virginia corporation (the
Co-Issuer
and, together with the Partnership, the
Issuers
), the Collateral Agent and Wilmington Trust, National
Association, as Trustee.
W
I
T
N
E
S
S
E
T
H
:
WHEREAS, pursuant to the Indenture the Issuers have issued the Notes upon the terms and subject to the conditions set forth
therein;
WHEREAS, in connection with the Indenture, each Grantor and any Subsidiaries that become a party thereto, have
executed and delivered the Collateral Agreement, dated as of June [27], 2019, in favor of the Collateral Agent, acting for the benefit of the Secured Parties (together with all amendments, restatements, supplements and modifications, if any, from
time to time thereafter made thereto, the
Collateral Agreement
);
WHEREAS, pursuant to the Collateral
Agreement, each Grantor has granted to the Collateral Agent, for the benefit of the Secured Parties, a lien on and security interest in, all of its right, title and interest in, to and under certain Intellectual Property, including the
[Trademarks/Patents/Copyrights], that is not Excluded Property; and
NOW THEREFORE, in consideration of the premises and
to induce the Collateral Agent and the Secured Parties to enter into the Indenture and to induce the Noteholder Parties to purchase the Notes under the Indenture, the Grantors hereby agree with the Collateral Agent, for the benefit of the Secured
Parties, as follows:
1.
Definitions
. Unless otherwise defined
herein or the context otherwise requires, terms used in this Agreement, including its preamble and recitals, shall have the meanings assigned to such terms in the Indenture and the Collateral Agreement, as applicable.
2.
Grant of Security Interest
. Each Grantor, as collateral security for
the prompt and complete Payment in Full and performance when due (whether at the stated maturity, by acceleration or otherwise) in full of the Secured Obligations, hereby grants to the Collateral Agent, for the benefit of the Secured Parties, a Lien
on and security interest in all of such Grantors right, title and interest in, to and under its [Trademarks/Patents/Copyrights and Exclusive Copyright Licenses] (including, without limitation, those items listed on
Schedule
A
hereto) that are not
C-1
Excluded Property, including [the goodwill associated with such Trademarks and]
1
the right to receive all proceeds therefrom (collectively,
the
Collateral
).
3.
Purpose
. This Agreement has
been executed and delivered by each Grantor for the purpose of recording the grant of security interest herein with the United States [Patent and Trademark] [Copyright] Office. Each Grantor authorizes and requests that the [Commissioner for
Trademarks/Patents/ Register of Copyrights] record this Agreement. The security interest granted hereby has been granted to the Secured Parties in connection with the Collateral Agreement and is expressly subject to the terms and conditions thereof.
The Collateral Agreement (and all rights, powers and remedies of the Collateral Agent for the benefit of the Secured Parties thereunder) shall remain in full force and effect in accordance with its terms.
4.
Acknowledgment
. Each Grantor does hereby further acknowledge and
affirm that the rights, powers and remedies of the Collateral Agent for the benefit of the Secured Parties with respect to the security interest in the Collateral granted hereby are more fully set forth in the Indenture and the Collateral Agreement,
the terms and provisions of which (including the remedies provided for therein) are incorporated by reference herein as if fully set forth herein. In the event of any conflict between the terms of this Agreement and the terms of the Collateral
Agreement, the terms of the Collateral Agreement shall govern. In the event of any conflict between the terms of this Agreement and the terms of the Indenture, the terms of the Indenture shall govern.
5.
Counterparts
. This Agreement may be executed in one or more
counterparts (including by facsimile or other electronic transmission), each of which will be deemed an original, but all of which together constitute one and the same original.
6.
Governing Law
: THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
7. Wilmington Trust,
National Association is entering this Agreement solely in its capacity as Collateral Agent for the Secured Parties under the Indenture and not in its individual or corporate capacity. In acting hereunder and under the Collateral Agreement, the
Collateral Agent shall be entitled to all of the rights, privileges, immunities, indemnities and benefits granted to the Collateral Agent under the Indenture, including without limitation those set forth in Articles X and XIV of the Indenture, as if
such rights, privileges, immunities, indemnities and benefits were expressly set forth herein.
1
|
Language applicable to Grant of Security Interest in Trademark Rights.
|
C-2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as of the day and year first above written.
|
|
|
[●],
as a
Grantor
|
|
By:
|
Name:
|
Title:
|
[
Signature Page to Grant of Security Interest in [Trademark/Patent/Copyright] Rights
]
|
|
|
WILMINGTON TRUST, NATIONAL ASSOCIATION, as the Collateral Agent
|
|
|
By:
|
|
|
Name:
Title:
|
[
Signature Page to Grant of Security Interest in [Trademark/Patent/Copyright] Rights
]
SCHEDULE A
[P
ATENT
/T
RADEMARK
/C
OPYRIGHT
] R
EGISTRATIONS
AND
A
PPLICATIONS
[For Patents:]
|
|
|
|
|
|
|
OWNER
|
|
APPLICATION
NUMBER
|
|
PATENT NUMBER
|
|
TITLE
|
|
|
|
|
|
|
|
[For Trademarks:]
|
|
|
|
|
|
|
OWNER
|
|
APPLICATION
NUMBER
|
|
REGISTRATION NUMBER
|
|
TRADEMARK
|
|
|
|
|
|
|
|
[For Copyrights:]
Copyright Registrations
|
|
|
|
|
OWNER
|
|
REGISTRATION NUMBER
|
|
TITLE
|
|
|
|
|
|
Exclusive Copyright Licenses
|
|
|
|
|
|
|
OWNER / LICENSOR
|
|
LICENSEE
|
|
REGISTRATION NUMBER
|
|
TITLE
|
|
|
|
|
|
|
|
EXHIBIT D
Certification Regarding Intercompany Promissory Notes
The Makers, Payees, and StoneMor Partners L.P., a Delaware limited partnership (
Assignee
), as applicable, (listed on
Exhibit A hereto) of the Promissory Notes (the
Notes
) (also listed on Exhibit A hereto), hereby jointly and severally certify and agree as follows:
Each Maker and Payee and the Assignee of a Payee listed on Exhibit A hereto is a Grantor party to that certain Collateral Agreement dated as
of June 27, 2019, as amended and reaffirmed (the
Agreement
), by and among them and the other Grantors party thereto, along with Wilmington Trust, National Association, as Collateral Agent thereunder.
The copies of the Notes attached hereto as Exhibit B (and described in Exhibit A) are true, correct and compete copies of the original Notes
executed and delivered by the respective Makers to the respective Payees and assigned and delivered by certain Payees for certain of the Notes to Assignee, as set forth on Exhibit A hereto. The respective Payees of the Notes and the Assignee for the
Notes assigned to it listed on Exhibit A, remain the direct and beneficial owners of the Notes free and clear of any liens, and none of the Notes has been modified, amended or otherwise transferred or assigned.
No payment of principal and/or interest has been made by any Maker on account of any of the Notes, and the full principal sum set forth in
each Note, together with interest accrued thereon at the annual rate set forth in each Note from the date of each Note, is due and payable. No demand for payment of any of the Notes has been made by any Payee or the Assignee. No Payee or the
Assignee has declared the unpaid principal amount and all accrued interest under any of the Notes immediately due and payable. The Payees and the Assignee have waived all defaults under the Notes.
To the best of the Makers, Payees, and Assignees knowledge, the Notes no longer exist.
The copies of the Notes attached hereto may be enforced by the Collateral Agent, or its nominee, pursuant to the Agreement to the same extent
as the originals of the Notes. In any proceeding by the Collateral Agent, or its nominee, to enforce any of the Notes, the copy attached to this Certification (or a copy thereof) may be utilized to the same extent and with the same force and effect
as though the original.
The Makers, Payees, and Assignee hereby deliver this Certification and the copies of the Notes attached hereto to
the Collateral Agent as Collateral and Intercompany Indebtedness under and as defined in the Agreement, to be so held by the Collateral Agent subject to the provisions of the Agreement applicable thereto, to have the same force and effect as would
be the case if the original Notes were so delivered. The original Notes will be delivered to the Collateral Agent under the Agreement should any of them be found to exist.
D-1
The respective Payees and Assignee of the Notes hereby irrevocably assign each of the Notes to
the Collateral Agent or its nominee to the extent permitted by the Agreement to enforce the Collateral Agents rights therein under the Agreement.
In Witness Whereof, the Makers, the Payees and Assignee of the Notes have executed this Certification as of the __th day of June, 2019.
|
|
|
MAKERS, PAYEES and ASSIGNEE listed on Exhibit A hereto
|
|
|
By:
|
|
|
|
|
Garry Herdler, Chief Financial Officer
|
D-2
Exhibit A
[Assignees]
D-3
Exhibit B
[Promissory Notes]
D-4
EXHIBIT E
FORM OF INTERCOMPANY NOTE
New York, New York
June 27,
2019
FOR VALUE RECEIVED, each of the undersigned (and its successors), to the extent a borrower from time to time with
respect to any loan or advance constituting Indebtedness (a
Loan
) from any other entity listed on the signature pages hereto (each, in such capacity, a
Payor
), hereby promises to pay such other entity listed
below (each, in such capacity, a
Payee
) or its registered assigns, at the time specified on the Schedule attached hereto with respect to such Loan (or if there is no such disclosure on such Schedule, on demand or as otherwise
agreed by such Payor and such Payee), and in lawful money of the United States of America, or in such other currency as agreed to by such Payor and such Payee, in immediately available or same day funds, as applicable, at such location as the
applicable Payee shall from time to time designate, the unpaid principal amount of all Loans made by such Payee to such Payor. Each Payor promises also to pay interest, if any, on the unpaid principal amount of all such Loans in like money at said
location from the date of such Loans until paid at such rate per annum as shall be reflected on the Schedule or as otherwise agreed upon from time to time by such Payor and such Payee. The terms and conditions of one or more Loans may (but are not
required to) be set forth on the Schedule attached to this note (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, this
Note
) to memorialize the agreement of the Payor and Payee with
respect to such Loan(s), in which case the terms and conditions specified in the Schedule shall govern as between the Payor and Payee unless otherwise agreed in writing between them.
This Note is an Intercompany Note referred to in the Collateral Agreement, dated as of June 27, 2019 (as amended,
restated, amended and restated, supplemented or otherwise modified from time to time, the
Collateral Agreement
), among,
inter alios
, StoneMor Partners L.P., a Delaware limited partnership (the
Partnership
), Cornerstone Family Services of West Virginia Subsidiary, Inc., a West Virginia corporation (the
Co-Issuer
and, together with the Partnership, the
Issuers
), the other Grantors and each other Subsidiary of the Partnership (other than Cemetery
Non-Profits,
Archdiocese Holdco and certain
non-Wholly
Owned Subsidiaries to the extent the Partnership reasonably determines in good faith that execution and delivery of this Note by such Subsidiary would violate any Requirement of Law (including any fiduciary duties) or any organizational documents,
constitutional documents, joint venture agreement, shareholder agreement, or similar agreement of such Subsidiary prohibits the execution and delivery of this Note or the obligations required of such Subsidiary hereunder without the consent of any
other party or would give any other party (other than a Note Party or a Wholly Owned Subsidiary) to any organizational documents, constitutional documents, joint venture agreement, shareholder agreement or similar agreement governing such Subsidiary
the right to terminate its obligations thereunder; provided that such limitation shall not apply if (1) such other party is a Note Party or a Wholly Owned Subsidiary, (2) consent has been obtained to execute and deliver this Note and
perform the obligations hereunder (it being understood that the foregoing shall not be deemed to obligate the Partnership or any Subsidiary to obtain any such consent) and for so long as such organizational documents, constitutional documents, joint
venture agreement, shareholder agreement or similar agreement or replacement or renewal thereof is in effect (the
Specified Subsidiaries
)) from time to time party thereto, and Wilmington Trust, National Association, a national
banking association, not in its individual capacity but solely as collateral agent (the
D-5
Collateral Agent
). Unless otherwise specified, capitalized terms used in this Note and not otherwise defined herein have the meanings specified in the Collateral Agreement or
the Indenture, dated as of June 27, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the
Indenture
), among the Issuers, the Collateral Agent, and Wilmington Trust, National Association, as
Trustee, as applicable.
Each Payee that is a Note Party hereby acknowledges and agrees that after the occurrence and
during the continuance of an Event of Default under the Indenture and after notice from the Collateral Agent to such Payee, the Collateral Agent may exercise all rights provided in the Indenture, the Collateral Agreement and any other applicable
Note Document with respect to this Note.
Each Payee is hereby authorized (but not required) to record all Loans made by
it to any Payor (all of which shall be evidenced by this Note), and all repayments or prepayments thereof, in its books and records, such books and records constituting prima facie evidence of the accuracy of the information contained therein.
Anything in this Note to the contrary notwithstanding, the Indebtedness evidenced by this Note owed by any Payor that is a
Note Party (an
Affected Payor
) to any Payee that is not a Note Party (an
Affected Payee
) shall be subordinate and junior in right of payment, to the extent and in the manner hereinafter set forth, to all Secured
Obligations of such Affected Payor, including, without limitation, where applicable, under such Affected Payors guarantee of the Secured Obligations under the Indenture (the Secured Obligations and the guarantee of the foregoing obligations
are hereinafter collectively referred to as
Senior Indebtedness
):
In the event of any insolvency or
bankruptcy proceedings, and any receivership, liquidation, reorganization or other similar proceedings in connection therewith, relative to any Affected Payor, or to its property, and in the event of any proceedings for voluntary liquidation,
dissolution or other winding up of such Affected Payor (except as permitted under the Indenture), whether or not involving insolvency or bankruptcy, then (x) the holders of Senior Indebtedness shall be paid in full in cash in respect of all
amounts constituting Senior Indebtedness (excluding contingent indemnification and expense reimbursement claims not then due) before any Affected Payee is entitled to receive (whether directly or indirectly), or make any demands for, any payment on
account of this Note and (y) until the holders of Senior Indebtedness are paid in full (excluding contingent indemnification and expense reimbursement claims not then due) in cash in respect of all amounts constituting Senior Indebtedness, any
payment or distribution to which such Affected Payee would otherwise be entitled (other than (A) equity securities or (B) debt securities of such Affected Payor that are subordinated, to at least the same extent as this Note, to the
payment of Senior Indebtedness (excluding contingent indemnification and expense reimbursement claims not then due) then outstanding (such securities hereinafter referred to as
Restructured Debt Securities
)) in respect of this
Note shall be made to the holders of Senior Indebtedness;
(i) (x) if any
Event of Default under the Indenture occurs and is continuing with respect to any Senior Indebtedness and (y) the Collateral Agent delivers notice to the Note Parties instructing the Note Parties that the Collateral Agent is exercising its
rights pursuant to this clause (ii) then, unless agreed by such Collateral Agent, no payment or distribution of any kind or character shall be made by or on behalf of the Affected Payor or any other person on its behalf, and no payment or
distribution of any kind or character shall be received by or on behalf of the Affected Payee or any other person on its behalf, with respect to this Note unless and until the holders of
D-6
Senior Indebtedness have been paid in full in cash in respect of all amounts constituting Senior Indebtedness (excluding contingent indemnification and expense reimbursement claims not then due);
and
(ii) if any payment or distribution of any character, whether in cash,
securities or other property, in respect of this Note shall (despite these subordination provisions) be received by any Affected Payee in violation of the foregoing clause (i) or (ii) before all Senior Indebtedness shall have been paid in full
in cash (excluding contingent indemnification and expense reimbursement claims not then due), such payment or distribution shall be held in trust for the benefit of, and shall be paid over or delivered to, the holders of Senior Indebtedness (or
their representatives), in accordance with the relevant Note Documents ratably according to the respective aggregate amounts remaining unpaid thereon, to the extent necessary to pay such Senior Indebtedness in full in cash.
To the fullest extent permitted by law, no present or future holder of Senior Indebtedness shall be prejudiced in its right to
enforce the subordination of this Note by any act or failure to act on the part of any Affected Payor or by any act or failure to act on the part of such holder or any trustee or agent for such holder. Each Affected Payee and each Affected Payor
hereby agrees that the subordination of this Note is for the benefit of the Collateral Agent and the Secured Parties and that the Collateral Agent may, on behalf of the Secured Parties, proceed to enforce the subordination provisions herein to the
extent applicable.
Nothing contained in the subordination provisions set forth above is intended to or will impair, as
between each Payor and each Payee, the obligations of such Payor, which are absolute and unconditional, to pay to such Payee the principal of and interest, if any, on this Note as and when due and payable in accordance with its terms, or is intended
to or will affect the relative rights of such Payee and other creditors of such Payor other than the holders of Senior Indebtedness. Each Payee is hereby authorized (but not required) to record all Loans made by it to any Payor (all of which shall
be evidenced by this Note), and all repayments or prepayments thereof, in its books and records, such books and records constituting prima facie evidence of the accuracy of the information contained therein. For the avoidance of doubt, this Note
shall not in any way replace, or affect the principal amount of, any intercompany loan outstanding between any Payor and any Payee prior to the execution hereof, and to the extent permitted by applicable law, from and after the date hereof, each
such intercompany loan shall be deemed to incorporate the terms set forth in this Note to the extent applicable and shall be deemed to be evidenced by this Note together with any documents and instruments executed prior to the date hereof in
connection with such intercompany Indebtedness.
To the fullest extent permitted by law, each Payor hereby waives
presentment, demand, protest or notice of any kind in connection with this Note. Except to the extent of any taxes required by law to be withheld, all payments under this Note shall be made without offset, counterclaim or deduction of any kind.
This Note shall be binding upon each Payor and its successors and assigns, and the terms and provisions of this Note shall
inure to the benefit of each Payee and its successors and assigns, including subsequent holders hereof.
It is understood
that this Note shall evidence only Indebtedness and not amounts owing in respect of accounts payable incurred in connection with goods sold or services rendered in the ordinary course of business and not in connection with the borrowing of money.
D-7
From time to time after the date hereof, and as may be reflected on the Schedule,
if desired, additional Subsidiaries of any Issuer (other than Archdiocese Holdco, any Cemetery
Non-Profits,
any Specified Subsidiaries or any other Excluded Subsidiary described in clause (d) of such
definition) may become parties hereto (as Payor and/or Payee, as the case may be) by executing a counterpart signature page to this Note (each additional Subsidiary, an
Additional Party
). Upon delivery of such counterpart
signature page to the Payees, which shall automatically be incorporated into this Note, notice of which is hereby waived by the other Payors and Payees, each Additional Party shall be a Payor and/or a Payee, as the case may be, and shall be as fully
a party hereto as if such Additional Party were an original signatory hereof. Each Payor expressly agrees that its obligations arising hereunder shall not be affected or diminished by the addition or release of any other Payor or Payee hereunder.
This Note shall be fully effective as to any Payor or Payee that is or becomes a party hereto regardless of whether any other person becomes or fails to become or ceases to be a Payor or Payee hereunder.
Indebtedness governed by this Note shall be maintained in registered form within the meaning of
Section 163(f) of the Internal Revenue Code of 1986, as amended, if required. The Payor or its designee (which shall, at the Collateral Agents request, be the Collateral Agent, acting solely for these purposes as agent of the Payor) shall
record the transfer of the right to payments of principal and interest on the Indebtedness governed by this Note to holders of the Senior Indebtedness in a register (the Register), and no such transfer shall be effective until entered in
the Register.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
For the avoidance of doubt, notwithstanding anything
herein to the contrary, the exercise of any right or remedy by the Collateral Agent hereunder is subject to the limitations and provisions of the Collateral Agreement and the Indenture. In the event of any conflict between the terms of (i) the
Collateral Agreement and the terms of this Note governing the exercise of any right or remedy by the Collateral Agent, the terms of the Collateral Agreement shall govern and control and (ii) the Indenture and the terms of this Note governing
the exercise of any right or remedy by the Collateral Agent, the terms of the Indenture shall govern and control.
[Signature Pages Follow]
D-8
|
|
|
[NAME OF ENTITY],
as Payee and Payor
|
D-9
Schedule to Intercompany Note
Exhibit 4.4
EXECUTION VERSION
REGISTRATION RIGHTS AGREEMENT
by and among
StoneMor
Partners L.P.,
Cornerstone Family Services of West Virginia Subsidiary, Inc.,
the Initial Guarantors party hereto
and
The Initial Purchasers
Listed On Schedule B
Dated as of June 27, 2019
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this
Agreement
) is made and entered into as of June 27, 2019, by and among
StoneMor Partners L.P., a Delaware limited partnership (the
Partnership
), and Cornerstone Family Services of West Virginia Subsidiary, Inc., a West Virginia corporation (the
Co-Issuer
, together with the Partnership, the
Issuers
), the entities listed on Schedule A hereto (the
Initial Guarantors
), and the initial purchasers
listed on Schedule B hereto (each, an
Initial Purchaser
and, collectively, the
Initial Purchasers
), each of whom has agreed to purchase the Issuers 9.875% / 11.500% Senior Secured PIK Toggle Notes due 2024
(the
Notes
) fully and unconditionally guaranteed by the Initial Guarantors (the
Guarantee
) pursuant to the Indenture (as defined below).
This Agreement is made pursuant to the Indenture, dated as of June 27, 2019 (the
Indenture
), among the Issuers, the
subsidiary guarantors party thereto, the Initial Purchasers and Wilmington Trust, National Association, as trustee (in such capacity, the
Trustee
) and collateral agent, (i) for the benefit of the Initial Purchasers and
(ii) for the benefit of the holders from time to time of Transfer Restricted Notes, including the Initial Purchasers. In order to induce the Initial Purchasers to purchase the Notes, the Issuers have agreed to provide the registration rights
set forth in this Agreement.
The parties hereby agree as follows:
SECTION 1.
Definitions
. As used in this Agreement, the following capitalized terms shall have the following meanings:
Additional Interest:
As defined in Section 5 hereof.
Advice:
As defined in Section 6(c) hereof.
Broker-Dealer:
Any broker or dealer registered under the Exchange Act.
Business Day:
Any day that is not a Saturday, Sunday or other day on which commercial banks in New York City or in the place of payment
are authorized or required by law to remain, or are in fact, closed.
Commission:
The Securities and Exchange Commission.
Consummate:
A registered Exchange Offer shall be deemed Consummated for purposes of this Agreement upon the occurrence of
(i) the filing and effectiveness under the Securities Act of the Exchange Offer Registration Statement relating to the Exchange Notes to be issued in the Exchange Offer, (ii) the maintenance of such Registration Statement continuously
effective and the keeping of the Exchange Offer open for a period not less than the minimum period required pursuant to Section 3(b) hereof, and (iii) the delivery by the Issuers to the Registrar under the Indenture of Exchange Notes in
the same aggregate principal amount as the aggregate principal amount of Transfer Restricted Notes that were validly tendered by Holders thereof pursuant to the Exchange Offer.
Exchange Act:
The Securities Exchange Act of 1934, as amended.
Exchange Date:
As defined in Section 3(a) hereto.
Exchange Offer:
An offer registered under the Securities Act by the Issuers and the Guarantors pursuant to a Registration Statement
pursuant to which the Issuers offer the Holders of all outstanding Transfer Restricted Notes the opportunity to exchange all such outstanding Transfer Restricted Notes held by such Holders for Exchange Notes in an aggregate principal amount equal to
the aggregate principal amount of the Transfer Restricted Notes tendered in such exchange offer by such Holders with terms that are identical in all respects to the Transfer Restricted Notes (except that Exchange Notes will not contain terms with
respect to the interest rate step up provision and the transfer restrictions).
Exchange Offer Registration Statement:
The Registration Statement relating to the
Exchange Offer, including the related Prospectus.
Exchange Notes:
The 9.875% / 11.500% Senior Secured PIK Toggle Notes due 2024,
of the same series under the Indenture as the Transfer Restricted Notes, to be issued to Holders in exchange for Transfer Restricted Notes pursuant to this Agreement.
FINRA:
Financial Industry Regulatory Authority, Inc.
Freely Tradable:
Means, with respect to a Note, a Note that at any time of determination (i) may be sold to the public in
accordance with Rule 144 under the Securities Act (
Rule 144
) by a person that is not an affiliate (as defined in Rule 144 under the Securities Act) of the Issuers where no conditions of Rule 144 are then applicable
(other than the holding period requirement in paragraph (d) of Rule 144 so long as such holding period requirement is satisfied at such time of determination), (ii) does not bear any restrictive legends relating to the Securities Act and
(iii) bears an unrestricted CUSIP number.
Holders:
As defined in Section 2(b) hereof.
Indemnified Holder:
As defined in Section 8(a) hereof.
Indenture:
The Indenture, dated as of June 27, 2019, by and among the Issuers, the subsidiary guarantors party thereto, the
Trustee and the Initial Purchasers, pursuant to which the Notes are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof.
Initial Placement:
The issuance and sale by the Issuers of the Notes to the Initial Purchasers pursuant to the Indenture.
Initial Guarantors:
As defined in the preamble hereto.
Initial Purchasers:
As defined in the preamble hereto.
Interest Payment Date:
As defined in the Indenture and the Notes.
Notes:
As defined in the preamble hereto.
Person:
An individual, partnership, corporation, limited liability company, trust, unincorporated organization or other legal entity,
or a government or agency or political subdivision thereof.
Prospectus:
The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such prospectus.
Registration Default:
As defined in Section 5 hereof.
Registration Statement:
Any Exchange Offer Registration Statement or Shelf Registration Statement, which is filed pursuant to the
provisions of this Agreement, in each case, including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments) and all exhibits and material incorporated by reference therein.
Securities Act:
The Securities Act of 1933, as amended.
Shelf Filing Deadline:
As defined in Section 4(a) hereof.
Shelf Registration Statement:
As defined in Section 4(a) hereof.
2
Transfer Restricted Notes:
The Notes;
provided
that the Notes shall cease to
be Transfer Restricted Notes on the earliest to occur of (i) the date on which a Registration Statement with respect to such Notes has become effective under the Securities Act and such Notes have been exchanged or disposed of pursuant to such
Registration Statement, (ii) the date on which such Notes cease to be outstanding or (iii) the date on which such Notes are Freely Tradable.
Trust Indenture Act:
The Trust Indenture Act of 1939, as amended.
Underwritten Registration or Underwritten Offering:
A registration in which securities of the Issuers are sold to an underwriter for
reoffering to the public.
SECTION 2.
Securities Subject to this Agreement
.
(a)
Transfer Restricted Notes.
The securities entitled to the benefits of this Agreement are the Transfer Restricted Notes.
(b)
Holders of Transfer Restricted Notes.
A Person is deemed to be a holder of Transfer Restricted Notes (each, a
Holder
) whenever such Person owns Transfer Restricted Notes.
SECTION 3.
Registered Exchange Offer
.
(a) Unless the Exchange Offer shall not be permissible under applicable law or Commission policy (after the procedures set forth in
Section 6(a) hereof have been complied with), or there are no Transfer Restricted Notes outstanding, the Issuers and the Initial Guarantors shall (i) cause to be filed with the Commission, a Registration Statement under the Securities Act
relating to the Exchange Notes and the Exchange Offer, (ii) use their commercially reasonable efforts to cause such Registration Statement to become effective under the Securities Act, (iii) in connection with the foregoing, file
(A) all
pre-effective
amendments to such Registration Statement as may be necessary in order to cause such Registration Statement to become effective, (B) if applicable, a post-effective amendment to
such Registration Statement pursuant to Rule 430A under the Securities Act and (C) cause all necessary filings in connection with the registration and qualification of the Exchange Notes to be made under the state securities or blue sky laws of
such jurisdictions as are necessary to permit Consummation of the Exchange Offer, and (iv) promptly after the effectiveness of such Registration Statement, commence the Exchange Offer. The Issuers and the Initial Guarantors shall use their
commercially reasonable efforts to cause to be filed a Registration Statement by April 15, 2020 (or if such day is not a Business Day, the next succeeding Business Day) and to Consummate the Exchange Offer not later than the 90
th
day after April 15, 2020 (or if such day is not a Business Day, the next succeeding Business Day) (the
Exchange Date
). The Exchange Offer shall be on the appropriate form
permitting registration of the Exchange Notes to be offered in exchange for the Transfer Restricted Notes and to permit resales of Transfer Restricted Notes held by Broker-Dealers as contemplated by Section 3(c) hereof.
(b) The Issuers and the Initial Guarantors shall cause the Exchange Offer Registration Statement to be effective continuously and shall use
their commercially reasonable efforts to keep the Exchange Offer open for a period of not less than 20 Business Days (or longer if required by applicable securities laws) after the date notice of the Exchange Offer is mailed to the Holders. The
Issuers shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Exchange Notes shall be included in the Exchange Offer Registration Statement. The Issuers shall use their
commercially reasonable efforts to cause the Exchange Offer to be Consummated by the Exchange Date.
(c) The Issuers shall indicate in a
Plan of Distribution section contained in the Prospectus forming a part of the Exchange Offer Registration Statement that any Broker-Dealer who holds Transfer Restricted Notes that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer Restricted Notes acquired directly from the Issuers), may exchange such Transfer Restricted Notes pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to
be an underwriter within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the Exchange Notes received by such Broker-Dealer in
the Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker-Dealer of the Prospectus
3
contained in the Exchange Offer Registration Statement. Such Plan of Distribution section shall also contain all other information with respect to such resales by Broker-Dealers that
the Commission may require in order to permit such resales pursuant thereto, but such Plan of Distribution shall not name any such Broker-Dealer or disclose the amount of Transfer Restricted Notes held by any such Broker-Dealer except to
the extent required by the Commission as a result of a change in policy after the date of this Agreement.
The Issuers and the Initial
Guarantors shall use their commercially reasonable efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 6(c) hereof to the extent necessary to ensure
that it is available for resales of Transfer Restricted Notes acquired by Broker-Dealers for their own accounts as a result of market-making activities or other trading activities, and to ensure that it conforms with the requirements of this
Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period ending on the earlier of (i) 90 days from the date on which the Exchange Offer Registration Statement is declared
effective and (ii) the date on which a Broker-Dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities.
The Issuers shall provide sufficient copies of the latest version of such Prospectus to Broker-Dealers promptly upon request at any time
during such
90-day
(or shorter as provided in the foregoing sentence) period in order to facilitate such resales.
SECTION 4.
Shelf Registration
.
(a)
Shelf Registration.
If (i) the Issuers and the Initial Guarantors are not required to file an Exchange Offer Registration
Statement or to Consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy (after the procedures set forth in Section 6(a) hereof have been complied with), (ii) for any reason the Exchange
Offer is not Consummated by the Exchange Date and the Notes are not all Freely Tradable at to such time, or (iii) prior to the Exchange Date with respect to any Holder of Transfer Restricted Notes such Holder notifies the Issuers that
(A) such Holder is prohibited by applicable law or Commission policy from participating in the Exchange Offer, (B) such Holder may not resell the Exchange Notes acquired by it in the Exchange Offer to the public without delivering a
prospectus and that the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder, or (C) such Holder is a Broker-Dealer and holds Transfer Restricted Notes acquired
directly from the Issuers or one of their affiliates, then, upon such Holders request, the Issuers and the Initial Guarantors shall
(x) cause to be filed a shelf registration statement pursuant to Rule 415 under the Securities Act, which may be an amendment
to the Exchange Offer Registration Statement (in either event, the
Shelf Registration Statement
) on or prior to the 60th day after the date such obligation arises,
provided
that the Issuers shall not be required to file
such Shelf Registration Statement any earlier than April 15, 2020 (or if such day is not a Business Day, the next succeeding Business Day) (such date being the
Shelf Filing Deadline
), which Shelf Registration Statement shall
provide for resales of all Transfer Restricted Notes the Holders of which shall have provided the information required pursuant to Section 4(b) hereof; and
(y) use their commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective by the
Commission (or automatically become effective under the Securities Act) on or before the 45th day after the Shelf Filing Deadline (or if such 45th day is not a Business Day, the next succeeding Business Day).
Notwithstanding anything to the contrary in this Agreement, at any time, the Issuers may delay the filing of any Shelf Registration Statement
or delay or suspend the effectiveness thereof, for a reasonable period of time, but not in excess of 60 consecutive days or more than three (3) times during any calendar year (each, a
Shelf Suspension Period
), if the Board of
Directors of the Partnership or a similar governing body of any parent company of the Partnership (each, a
Board
) determines reasonably and in good faith that the filing of any such Shelf Registration Statement or the continuing
effectiveness thereof would require the disclosure of
non-public
material information that, in the reasonable judgment of such Board, would be detrimental to the Partnership if so disclosed or would otherwise
materially adversely affect a financing, acquisition, disposition, merger or other material
4
transaction or such action is required by applicable law. Any Shelf Suspension Period pursuant to this Section 4(a) shall begin on the date specified in a written notice given by the Issuers
to the Holders and shall end on the date specified in a subsequent written notice given by the Issuers to the Holders.
Each of the
Issuers and the Initial Guarantors shall use its commercially reasonable efforts to keep such Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Sections 6(b) and 6(c) hereof to the extent
necessary to ensure that it is available for resales of Transfer Restricted Notes by the Holders of such Notes entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Securities
Act and the policies, rules and regulations of the Commission as announced from time to time, from the date on which the Shelf Registration Statement is declared effective by the Commission until the expiration of the
one-year
period referred to in Rule 144 applicable to securities held by
non-affiliates
under the Securities Act (or shorter period that will terminate when all the
Transfer Restricted Notes covered by such Shelf Registration Statement have been sold pursuant to such Shelf Registration Statement or are Freely Tradable). Notwithstanding anything to the contrary, the requirements to file a Shelf Registration
Statement and to have such Shelf Registration Statement become effective and remain effective shall terminate at such time as all of the Notes are Freely Tradable.
(b)
Provision by Holders of Certain Information in Connection with the Shelf Registration Statement.
No Holder of Transfer Restricted
Notes may include any of its Transfer Restricted Notes in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Issuers in writing, within 20 Business Days after receipt of a request therefor, such
information as the Issuers may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. Each Holder as to which any Shelf Registration Statement is being effected agrees
to furnish promptly to the Issuers all information required to be disclosed in order to make the information previously furnished to the Issuers by such Holder not materially misleading.
SECTION
5.
Additional Interest
. If (i) the Exchange Offer has not been Consummated by the Exchange Date,
(ii) any Shelf Registration Statement, if required hereby, has not been declared effective by the Commission or (or has not automatically become effective) 45 days after the Shelf Filing Deadline, or (iii) any Registration Statement
required by this Agreement has been declared effective (or has automatically become effective) but ceases to remain effective at any time at which it is required to be effective under this Agreement (each such event referred to in clauses
(i) through (iii), a
Registration Default
), the Issuers hereby agree that the interest rate borne by the Transfer Restricted Notes shall be increased by 0.25% per annum during the
90-day
period immediately following the occurrence of any Registration Default and shall increase by 0.25% per annum at the end of each subsequent
90-day
period (such
increase,
Additional Interest
), but in no event shall such increase exceed 1.00% per annum. At the earlier of (i) the cure of all Registration Defaults relating to the particular Transfer Restricted Notes or (ii) the
particular Transfer Restricted Notes having become Freely Tradable, the interest rate borne by the relevant Transfer Restricted Notes will be reduced to the original interest rate borne by such Transfer Restricted Notes;
provided
,
however
, that, if after any such reduction in interest rate, a different Registration Default occurs, the interest rate borne by the relevant Transfer Restricted Notes shall again be increased pursuant to the foregoing provisions.
The additional interest set forth above shall be the exclusive monetary remedy available to Holders for each Registration Default.
Notwithstanding anything to the contrary herein, (i) the amount of Additional Interest payable shall not increase because more than one Registration Default has occurred and is continuing, (ii) a Holder that is not entitled to the benefits
of the Shelf Registration as a result of failure to comply with Section 4(b) hereof shall not be entitled to Additional Interest with respect to any Registration Default that pertains to the Shelf Registration Statement and (iii) the
Issuers shall not be obligated to pay Additional Interest provided in this Section 5 during a Shelf Suspension Period permitted by Section 4(a) hereof.
All obligations of the Issuers and the Initial Guarantors set forth in the preceding paragraph that are outstanding with respect to any
Transfer Restricted Note at the time such security ceases to be a Transfer Restricted Note shall survive until such time as all such obligations with respect to such security shall have been satisfied in full.
5
SECTION 6.
Registration Procedures
.
(a)
Exchange Offer Registration Statement.
In connection with the Exchange Offer, the Issuers and the Initial Guarantors shall comply
with all of the provisions of Section 6(c) hereof, shall use their commercially reasonable efforts to effect such exchange to permit the sale of Transfer Restricted Notes being sold in accordance with the intended method or methods of
distribution thereof, and shall comply with all of the following provisions:
(i) If in the reasonable opinion of counsel
to the Issuers there is a question as to whether the Exchange Offer is permitted by applicable law, each of the Issuers and the Initial Guarantors hereby agrees to seek a
no-action
letter or other favorable
decision from the Commission allowing the Issuers and the Initial Guarantors to Consummate an Exchange Offer for such Transfer Restricted Notes. Each of the Issuers and the Initial Guarantors hereby agrees to pursue the issuance of such a decision
to the Commission staff level but shall not be required to take commercially unreasonable action to effect a change of Commission policy. Each of the Issuers and the Initial Guarantors hereby agrees, however, to (A) participate in telephonic
conferences with the Commission, (B) deliver to the Commission staff an analysis prepared by counsel to the Issuers setting forth the legal bases, if any, upon which such counsel has concluded that such an Exchange Offer should be permitted and
(C) diligently pursue a favorable resolution by the Commission staff of such submission.
(ii)
As a condition
to its participation in the Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer Restricted Notes shall furnish, upon the request of the Issuers, prior to the Consummation thereof, a written representation to the Issuers
(which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an affiliate of the Issuers, (B) it is not engaged in, and does not intend to engage in, and
has no arrangement or understanding with any Person to participate in, a distribution (within the meaning of the Securities Act) of the Exchange Notes to be issued in the Exchange Offer and (C) it is acquiring the Exchange Notes in its ordinary
course of business. In addition, all such Holders of Transfer Restricted Notes shall otherwise cooperate in the Issuers preparations for the Exchange Offer. Each Holder will be required to acknowledge and agree that any Broker-Dealer and any
such Holder using the Exchange Offer to participate in a distribution of the securities to be acquired in the Exchange Offer (1) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission
enunciated in
Morgan Stanley and Co., Inc.
(available June 5, 1991) and
Exxon Capital Holdings Corporation
(available May 13, 1988), as interpreted in the Commissions letter to Shearman & Sterling dated
July 2, 1993, and similar
no-action
letters (which may include any
no-action
letter obtained pursuant to clause (i) above), and (2) must comply with the
registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and that such a secondary resale transaction should be covered by an effective registration statement containing the selling
security holder information required by Item 507 or 508, as applicable, of Regulation
S-K
if the resales are of Exchange Notes obtained by such Holder in exchange for Transfer Restricted Notes acquired by such
Holder directly from the Issuers.
(b)
Shelf Registration Statement.
If required pursuant to Section 4(a), in connection with
the Shelf Registration Statement, each of the Issuers and the Initial Guarantors shall comply with all the provisions of Section 6(c) hereof and shall use its commercially reasonable efforts to effect such registration to permit the sale of the
Transfer Restricted Notes being sold in accordance with the intended method or methods of distribution thereof, and pursuant thereto each of the Issuers and the Initial Guarantors will as expeditiously as possible prepare and file with the
Commission a Shelf Registration Statement relating to the registration on any appropriate form under the Securities Act, which form shall be available for the sale of the Transfer Restricted Notes in accordance with the intended method or methods of
distribution thereof.
(c)
General Provisions.
In connection with any Registration Statement and any Prospectus required by this
Agreement to permit the sale or resale of Transfer Restricted Notes (including, without limitation, any Registration Statement and the related Prospectus required to permit resales of Transfer Restricted Notes by Broker-Dealers), each of the Issuers
and the Initial Guarantors shall:
(i) use its commercially reasonable efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements (including, if required by the Securities Act or any
6
regulation thereunder, financial statements of the Initial Guarantors for the period specified in Section 3 or 4 hereof, as applicable; upon the occurrence of any event that would cause any
such Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not to be effective and usable for resale of Transfer Restricted Notes during the period required by this Agreement,
the Issuers shall file promptly an appropriate amendment to such Registration Statement, in the case of clause (A), correcting any such misstatement or omission, and, in the case of either clause (A) or (B), use its commercially reasonable
efforts to cause such amendment to be declared effective and such Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and post-effective amendments to the applicable Registration
Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or Section 4 hereof, as applicable, or such shorter period as will terminate when all Transfer Restricted Notes
covered by such Registration Statement have been sold or are Freely Tradable; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to
comply fully with the applicable provisions of Rules 424, 430A and 430B under the Securities Act in a timely manner; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders promptly and, if requested by such Persons, to confirm such advice
in writing, (A) when the Prospectus or any prospectus supplement or post-effective amendment has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective,
(B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Notes for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or
supplement thereto, or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading. If at
any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Notes under state securities or blue sky laws, each of the Issuers and the Initial Guarantors shall use its commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest
possible time;
(iv) furnish without charge to each of the Initial Purchasers or counsel thereto, each selling Holder named
in any Registration Statement, and each of the underwriter(s), if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement), which documents will be subject to the review and comment of such Holders and underwriter(s) in connection with such sale, if
any, for a period of at least five Business Days, and the Issuers will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated
by reference) to which an Initial Purchaser of Transfer Restricted Notes covered by such Registration Statement or the underwriter(s), if any, shall reasonably object in writing within five Business Days after the receipt thereof (such objection to
be deemed timely made upon confirmation of telecopy transmission within such period). The objection of an Initial Purchaser or underwriter, if any, shall be deemed to be reasonable if such Registration Statement, amendment, Prospectus or supplement,
as applicable, as proposed to be filed, contains a material misstatement or omission;
7
(v) promptly prior to the filing of any document that is to be incorporated
by reference into a Registration Statement or Prospectus after the initial filing of any such Registration Statement, provide copies of such document to the Initial Purchasers or counsel thereto, each selling Holder named in any Registration
Statement, and to the underwriter(s), if any, make the Issuers and the Initial Guarantors representatives available for discussion of such document and other customary due diligence matters, and include such information in such document
prior to the filing thereof as such selling Holders or underwriter(s), if any, reasonably may request;
(vi) make available
at reasonable times for inspection by the Initial Purchasers, the managing underwriter(s), if any, participating in any disposition pursuant to such Registration Statement and any attorney or accountant retained by such Initial Purchasers or any of
the underwriter(s), all financial and other records, pertinent corporate documents and properties of each of the Issuers and the Initial Guarantors and cause the Issuers and the Initial Guarantors officers, directors and employees to
supply all information reasonably requested by any such Holder, underwriter, attorney or accountant in connection with such Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its
effectiveness and to participate in meetings with investors to the extent requested by the managing underwriter(s), if any;
(vii) if requested by any selling Holders or the underwriter(s), if any, promptly incorporate in any Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation, information relating
to the Plan of Distribution of the Transfer Restricted Notes, information with respect to the principal amount of Transfer Restricted Notes being sold to such underwriter(s), the purchase price being paid therefor and any other terms of
the offering of the Transfer Restricted Notes to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Issuers are notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
(viii) cause the Transfer Restricted Notes covered
by the Registration Statement to be rated with the appropriate rating agencies, if so requested by the Holders of a majority in aggregate principal amount of Notes covered thereby or the underwriter(s), if any;
(ix) furnish to each Initial Purchaser, each selling Holder and each of the underwriter(s), if any, without charge, at least
one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including financial statements and schedules, all documents incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(x) deliver to each selling Holder and each of the underwriter(s), if any, without
charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; each of the Issuers and the Initial Guarantors hereby consents to the use of the
Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Transfer Restricted Notes covered by the Prospectus or any amendment or
supplement thereto;
(xi) enter into such agreements (including an underwriting agreement), and make such representations
and warranties, and take all such other actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Notes pursuant to any Registration Statement contemplated by this Agreement, all to such extent as
may be reasonably requested by any Initial Purchaser or by any Holder of Transfer Restricted Notes or underwriter in connection with any sale or resale pursuant to any Registration Statement contemplated by this Agreement; and in connection with any
offering pursuant to a Shelf Registration Statement whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Registration, each of the Issuers and the Initial Guarantors shall:
(A) furnish to the Initial Purchaser, each selling Holder and each underwriter, if any, in such substance and scope as they may
request and as are customarily made by issuers to
8
underwriters in primary underwritten offerings, upon the effectiveness of the Shelf Registration Statement:
(1) a certificate, dated the date of the effectiveness of the Shelf Registration Statement, signed by (y) the President
or any Vice President and (z) a principal financial or accounting officer or, except with respect to the certificate of the Partnership, any other officer of each of the Issuers and the Initial Guarantors, confirming, as of the date thereof and
to the extent applicable, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties made in any underwriting agreement or otherwise are true and correct with the same force and effect as
though expressly made at and as of Exchange Date, (iii) the Issuers and the Initial Guarantors have complied in all material respects with all agreements and satisfied all conditions on their part to be performed or satisfied at or prior to the
Exchange Date, and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or, to their knowledge, contemplated by the Commission, and
such other matters as such parties may reasonably request;
(2) an opinion, dated the date of the effectiveness of the
Shelf Registration Statement, of counsel for the Issuers and the Initial Guarantors, covering such matters as such parties may reasonably request, and in any event including a customary statement substantially to the effect that such counsel has
participated in conferences with officers and other representatives of the Issuers and the Initial Guarantors, representatives of the independent public accountants for the Issuers and the Initial Guarantors, representatives of the Initial
Purchasers and the underwriter(s), if any, and counsel to the underwriter(s), if any, in connection with the preparation of such Shelf Registration Statement and the related Prospectus and have considered the matters required to be stated therein
and the statements contained therein, although such counsel has not independently verified the accuracy, completeness or fairness of such statements; and that such counsel advises that, on the basis of the foregoing, no facts came to such
counsels attention that caused such counsel to believe that the Registration Statement, at the time such Registration Statement or any post-effective amendment thereto became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus contained in such Shelf Registration Statement as of its date contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Without limiting the foregoing, such counsel may state further that such
counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements, notes and schedules and other financial data included in any Shelf Registration Statement contemplated by
this Agreement or the related Prospectus; and
(3) a customary comfort letter, dated the date of effectiveness of the
Shelf Registration Statement, from the Issuers independent accountants, in the customary form and covering matters of the type customarily requested to be covered in comfort letters by underwriters in connection with primary underwritten
offerings;
(B) set forth in full or incorporate by reference in the underwriting agreement, if any, the indemnification
provisions and procedures of Section 8 hereof with respect to all parties to be indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with
Section 6(c)(xi)(A) hereof and with any customary
9
conditions contained in the underwriting agreement or other agreement entered into by the Issuers or any of the Initial Guarantors pursuant to this Section 6(c)(xi), if any.
If at any time, in connection with an offering pursuant to a Shelf Registration Statement, the representations and warranties of the Issuers
and the Initial Guarantors contemplated in Section 6(c)(xi)(A)(1) hereof cease to be true and correct, the Issuers or the Initial Guarantors shall so advise the Initial Purchasers and the underwriter(s), if any, and each selling Holder promptly
and, if requested by such Persons, shall confirm such advice in writing;
(xii) prior to any public offering of Transfer
Restricted Notes, cooperate with the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Transfer Restricted Notes under the state securities or blue sky laws of such
jurisdictions as the selling Holders or underwriter(s), if any, may request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Notes covered by the Shelf
Registration Statement;
provided, however
, that neither the Issuers nor the Initial Guarantors shall be required to register or qualify as a foreign entity where it is not then so qualified or to take any action that would subject it to the
service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not then so subject;
(xiii) shall issue, upon the request of any Holder of Transfer Restricted Notes covered by the Shelf Registration Statement,
Exchange Notes having an aggregate principal amount equal to the aggregate principal amount of Transfer Restricted Notes surrendered to the Issuers by such Holder in exchange therefor or being sold by such Holder; such Exchange Notes to be
registered in the name of such Holder or in the name of the purchaser(s) of such Notes, as the case may be; in return, the Transfer Restricted Notes held by such Holder shall be surrendered to the Issuers for cancellation;
(xiv) cooperate with the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Notes to be sold and not bearing any restrictive legends; and enable such Transfer Restricted Notes to be in such denominations and registered in such names as the Holders or the underwriter(s), if any,
may request at least two Business Days prior to any sale of Transfer Restricted Notes made by such Holders or underwriter(s);
(xv) use its commercially reasonable efforts to cause the Transfer Restricted Notes covered by the Registration Statement to be
registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Transfer Restricted Notes, subject to the
proviso contained in Section 6(c)(xii) hereof;
(xvi) if any fact or event contemplated by Section 6(c)(iii)(D)
hereof shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Notes, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading;
(xvii) provide a CUSIP number for all Notes not later than the effective date of the Registration Statement covering such Notes
and provide the Trustee under the Indenture with printed certificates for such Notes which are in a form eligible for deposit with the Depository Trust Company and take all other action necessary to ensure that all such Notes are eligible for
deposit with the Depository Trust Company;
(xviii) cooperate and assist in any filings required to be made with the FINRA
and in the performance of any due diligence investigation by any underwriter (including any qualified independent underwriter) that is required to be retained in accordance with the rules and regulations of the FINRA;
(xix) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission,
and make generally available to its security holders, as soon as practicable,
10
a consolidated earnings statement meeting the requirements of Rule 158 under the Securities Act (which need not be audited) for the twelve-month period (A) commencing at the end of any
fiscal quarter in which Transfer Restricted Notes are sold to underwriters in an Underwritten Offering or (B) if not sold to underwriters in such an offering, beginning with the first month of the Issuers first fiscal quarter commencing
after the effective date of the Registration Statement;
(xx) cause the Indenture to be qualified under the Trust Indenture
Act not later than the effective date of the first Registration Statement required by this Agreement, and, in connection therewith, cooperate with the Trustee and the Holders of Notes to effect such changes to the Indenture as may be required for
such Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and to execute and use its commercially reasonable efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all
other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner;
(xxi) cause all Transfer Restricted Notes covered by the Registration Statement to be listed on each securities exchange or
automated quotation system on which similar securities issued by the Issuers are then listed if requested by the Holders of a majority in aggregate principal amount of Transfer Restricted Notes or the managing underwriter(s), if any; and
(xxii) provide promptly to each Holder upon request each document filed with the Commission pursuant to the requirements of
Section 13 and Section 15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted Note that, upon
receipt of any notice from the Issuers of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition of Transfer Restricted Notes pursuant to the applicable Registration
Statement until such Holders receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof, or until it is advised in writing (the
Advice
) by the Issuers that the use of the
Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Issuers, each Holder will deliver to the Issuers (at the Issuers expense)
all copies, other than permanent file copies then in such Holders possession, of the Prospectus covering such Transfer Restricted Notes that was current at the time of receipt of such notice. In the event the Issuers shall give any such
notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or Section 4 hereof, as applicable, shall be extended by the number of days during the period from and including the date of the
giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by
Section 6(c)(xvi) hereof or shall have received the Advice;
provided, however,
that no such extension shall be taken into account in determining whether Additional Interest is due pursuant to Section 5 hereof or the amount of such
Additional Interest, it being agreed that the Issuers option to suspend use of a Registration Statement pursuant to this paragraph shall be treated as a Registration Default for purposes of Section 5 hereof other than during any Shelf
Suspension Period.
SECTION 7.
Registration Expenses
.
(a) All expenses incident to the Issuers and the Initial Guarantors performance of or compliance with this Agreement will be borne
by the Issuers and the Initial Guarantors, jointly and severally, regardless of whether a Registration Statement becomes effective, including, without limitation: (i) all registration and filing fees and expenses (including filings made by any
Initial Purchaser or Holder with the FINRA (and, if applicable, the fees and expenses of any qualified independent underwriter that may be required by the rules and regulations of the FINRA)); (ii) all fees and expenses of compliance
with federal securities and state securities or blue sky laws; (iii) all expenses of printing (including printing certificates for the Exchange Notes to be issued in the Exchange Offer and printing of Prospectuses), messenger and delivery
services and telephone; (iv) all fees and disbursements of counsel for the Issuers, the Initial Guarantors and, subject to Section 7(b) hereof, the Holders of Transfer Restricted Notes; (v) all application and filing fees in
connection with listing the Exchange Notes on a securities exchange or automated quotation system pursuant to the requirements thereof; and (vi) all fees and disbursements of independent
11
certified public accountants of the Issuers and the Initial Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance).
Each of the Issuers and the Initial Guarantors will, in any event, bear its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Issuers or the Initial Guarantors.
(b) In connection with any Shelf Registration Statement required by this Agreement, the Issuers and the Initial Guarantors, jointly and
severally, will reimburse the Initial Purchasers and the Holders of Transfer Restricted Notes registered pursuant to the Shelf Registration Statement for the reasonable fees and disbursements of not more than one counsel, who shall be Davis
Polk & Wardwell LLP or such other counsel as may be chosen by the Holders of a majority in principal amount of the Transfer Restricted Notes for whose benefit such Shelf Registration Statement is being prepared.
SECTION 8.
Indemnification
.
(a) The Issuers and the Initial Guarantors, jointly and severally, agree to indemnify and hold harmless (i) each Holder and
(ii) each Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any Holder (any of the Persons referred to in this clause (ii) being hereinafter referred to as a
controlling person
) and (iii) the respective officers, directors, partners, employees, representatives and agents of any Holder or any controlling person (any Person referred to in clause (i), (ii) or (iii) may
hereinafter be referred to as an
Indemnified Holder
), to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, judgments, actions and expenses (including, without limitation, and as
incurred, reimbursement of all reasonable costs of investigating, preparing, pursuing, settling, compromising, paying or defending any claim or action, or any investigation or proceeding by any governmental agency or body, commenced or threatened,
including the reasonable fees and expenses of counsel to any Indemnified Holder), joint or several, directly or indirectly caused by, related to, based upon, arising out of or in connection with any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or Prospectus (or any amendment or supplement thereto), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses (A) are caused by an untrue statement or omission or alleged untrue statement or omission that is made in reliance upon and in conformity with
information relating to any of the Holders furnished in writing to the Issuers by any of the Holders expressly for use therein or (B) arising from an offer or sale of Notes or Exchange Notes occurring during a Shelf Suspension Period or by a
Holder or Participating Broker-Dealer to whom the Issuers theretofore provided notice thereof pursuant to Section 6(c)(iii)(D) hereof. This indemnity agreement shall be in addition to any liability which the Issuers or any of the Initial
Guarantors may otherwise have.
In case any action or proceeding (including any governmental or regulatory investigation or proceeding)
shall be brought or asserted against any of the Indemnified Holders with respect to which indemnity may be sought against the Issuers or the Initial Guarantors, such Indemnified Holder (or the Indemnified Holder controlled by such controlling
person) shall promptly notify the Issuers and the Initial Guarantors in writing;
provided, however,
that the failure to give such notice shall not relieve any of the Issuers or the Initial Guarantors of its obligations pursuant to this
Agreement. Such Indemnified Holder shall have the right to employ its own counsel in any such action and the fees and expenses of such counsel shall be paid, as incurred, by the Issuers and the Initial Guarantors (regardless of whether it is
ultimately determined that an Indemnified Holder is not entitled to indemnification hereunder). The Issuers and the Initial Guarantors shall not, in connection with any one such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time
for such Indemnified Holders, which firm shall be designated by the Holders. The Issuers and the Initial Guarantors shall be liable for any settlement of any such action or proceeding effected with the Issuers and the Initial Guarantors
prior written consent, which consent shall not be withheld unreasonably, and each of the Issuers and the Initial Guarantors agrees to indemnify and hold harmless any Indemnified Holder from and against any loss, claim, damage, liability or expense
by reason of any settlement of any action effected with the written consent of the Issuers and the Initial Guarantors. The Issuers and the Initial Guarantors shall not, without the prior written consent of each Indemnified Holder, settle or
compromise or consent
12
to the entry of judgment in or otherwise seek to terminate any pending or threatened action, claim, litigation or proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not any Indemnified Holder is a party thereto), unless such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Holder from all liability arising out of such action, claim,
litigation or proceeding.
(b) Each Holder of Transfer Restricted Notes agrees, severally and not jointly, to indemnify and hold harmless
the Issuers, the Initial Guarantors and their respective directors, officers of the Issuers and the Initial Guarantors who sign a Registration Statement, and any Person controlling (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) the Issuers or any of the Initial Guarantors, and the respective officers, directors, partners, employees, representatives and agents of each such Person, to the same extent as the foregoing indemnity from the
Issuers and the Initial Guarantors to each of the Indemnified Holders, but only with respect to claims and actions (A) based on information relating to such Holder furnished in writing by such Holder expressly for use in any Registration
Statement or (B) arising from an offer or sale of Notes or Exchange Notes occurring during a Shelf Suspension Period or by a Holder or Participating Broker-Dealer to whom the Issuers theretofore provided notice thereof pursuant to
Section 6(c)(iii)(D) hereof. In case any action or proceeding shall be brought against the Issuers, the Initial Guarantors or their respective directors or officers or any such controlling person in respect of which indemnity may be sought
against a Holder of Transfer Restricted Notes, such Holder shall have the rights and duties given the Issuers and the Initial Guarantors, and the Issuers, the Initial Guarantors, their respective directors and officers and such controlling person
shall have the rights and duties given to each Holder by the preceding paragraph.
(c) If the indemnification provided for in this
Section 8 is unavailable to an indemnified party under Section 8(a) or Section 8(b) hereof (other than by reason of exceptions provided in those Sections) in respect of any losses, claims, damages, liabilities, judgments, actions or
expenses referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities
or expenses in such proportion as is appropriate to reflect the relative benefits received by the Issuers and the Initial Guarantors, on the one hand, and the Holders, on the other hand, from the Initial Placement (which in the case of the Issuers
and the Initial Guarantors shall be deemed to be equal to the total gross proceeds to the Issuers and the Initial Guarantors from the Initial Placement), the amount of Additional Interest which did not become payable as a result of the filing of the
Registration Statement resulting in such losses, claims, damages, liabilities, judgments actions or expenses, and such Registration Statement, or if such allocation is not permitted by applicable law, the relative fault of the Issuers and the
Initial Guarantors, on the one hand, and the Holders, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of the Issuers on the one hand and of the Indemnified Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Issuers or any of the Initial Guarantors, on the one hand, or the Indemnified Holders, on the other hand, and the parties relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the
limitations set forth in the second paragraph of Section 8(a) hereof, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.
The Issuers, the Initial Guarantors and each Holder of Transfer Restricted Notes agree that it would not be just and equitable if contribution
pursuant to this Section 8(c) were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to
in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, none of the
Holders (and its related Indemnified Holders) shall be required to contribute, in the aggregate, any amount in excess of the amount by which the total discount received by such Holder with respect to the Notes exceeds the amount of any damages which
such
13
Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders obligations to contribute pursuant to this Section 8(c) are
several in proportion to the respective principal amount of Notes held by each of the Holders hereunder and not joint.
SECTION 9.
Rule 144A
. Each of the Issuers and the Initial Guarantors hereby agrees with each Holder, for so long as any Transfer Restricted Notes remain outstanding, to make available to any Holder or beneficial owner of Transfer Restricted Notes in
connection with any sale thereof and any prospective purchaser of such Transfer Restricted Notes from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Transfer
Restricted Notes pursuant to Rule 144A under the Securities Act.
SECTION 10.
Participation in Underwritten Registrations
. No
Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holders Transfer Restricted Notes on the basis provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up
letters and other documents required
under the terms of such underwriting arrangements.
SECTION 11.
Selection of Underwriters
. The Holders of Transfer Restricted
Notes covered by the Shelf Registration Statement who desire to do so may sell such Transfer Restricted Notes in an Underwritten Offering. In any such Underwritten Offering, the investment banker(s) and managing underwriter(s) that will administer
such offering will be selected by the Holders of a majority in aggregate principal amount of the Transfer Restricted Notes included in such offering;
provided
,
however
, that such investment banker(s) and managing underwriter(s) must be
reasonably satisfactory to the Issuers.
SECTION 12.
Miscellaneous
.
(a)
Remedies.
Each of the Issuers and the Initial Guarantors hereby agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate.
(b)
No Inconsistent Agreements.
Each of the Issuers and the Initial Guarantors will not on or after the date of this Agreement enter
into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Neither the Issuers nor any of the Initial Guarantors has previously
entered into any agreement granting any registration rights with respect to its securities to any Person. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of
the Issuers or any of the Initial Guarantors securities under any agreement in effect on the date hereof.
(c)
Adjustments
Affecting the Notes.
The Issuers will not take any action, or permit any change to occur, with respect to the Notes that would materially and adversely affect the ability of the Holders to Consummate any Exchange Offer.
(d)
Amendments and Waivers.
The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to
or departures from the provisions hereof may not be given unless the Issuers have (i) in the case of Section 5 hereof and this Section 12(d)(i), obtained the written consent of Holders of all outstanding Transfer Restricted Notes and
(ii) in the case of all other provisions hereof, obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Notes (excluding any Transfer Restricted Notes held by the Issuers or its
Affiliates). Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Exchange Offer and that does not affect
directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Notes being tendered or
registered;
provided, however,
14
that, with respect to any matter that directly or indirectly affects the rights of any Initial Purchaser hereunder, the Issuers shall obtain the written consent of each such Initial Purchaser
with respect to which such amendment, qualification, supplement, waiver, consent or departure is to be effective.
(e)
Notices.
All
notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telex, telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy
to the Trustee under the Indenture; and
(ii) if to the Issuers:
StoneMor Partners L.P.
3600
Horizon Blvd., Suite 100
Trevose, PA 19053
Attention: Chief Financial Officer
With a copy to:
Cahill
Gordon & Reindel LLP
80 Pine Street
New York, NY 10005
Attention:
William M. Hartnett
All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be concurrently delivered by the
Person giving the same to the Trustee at the address specified in the Indenture.
(f)
Successors and Assigns.
This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without limitation, and without the need for an express assignment, subsequent Holders of Transfer Restricted Notes;
provided, however
,
that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Transfer Restricted Notes from such Holder.
(g)
Counterparts.
This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
(h)
Headings.
The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning
hereof.
(i)
Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CONFLICTS OF LAW RULES THEREOF.
(j)
Severability.
In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein
shall not be affected or impaired thereby.
15
(k)
Entire Agreement.
This Agreement is intended by the parties as a final expression
of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein with respect to the registration rights granted by the Issuers with respect to the Transfer Restricted Notes. This Agreement supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
17
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.
|
|
|
STONEMOR PARTNERS L.P.
By: StoneMor
GP LLC, its General Partner
|
|
|
By:
|
|
/s/ Garry P. Herdler
|
|
|
Name: Garry P. Herdler
|
|
|
Title: Chief Financial Officer
|
|
|
|
CORNERSTONE FAMILY SERVICES OF WEST VIRGINIA SUBSIDIARY, INC.
|
|
|
By:
|
|
/s/ Garry P. Herdler
|
|
|
Name: Garry P. Herdler
|
|
|
Title: Chief Financial Officer
|
16
|
Alleghany Memorial Park LLC
|
Alleghany Memorial Park Subsidiary, Inc.
|
Altavista Memorial Park LLC
|
Altavista Memorial Park Subsidiary, Inc.
|
Arlington Development Company
|
Augusta Memorial Park Perpetual Care Company
|
Birchlawn Burial Park LLC
|
Birchlawn Burial Park Subsidiary, Inc.
|
Bronswood Cemetery, Inc.
|
Cedar Hill Funeral Home, Inc.
|
Cemetery Investments LLC
|
Cemetery Investments Subsidiary, Inc.
|
Cemetery Management Services, L.L.C.
|
Cemetery Management Services of Ohio, L.L.C.
|
Chapel Hill Associates, Inc.
|
Chapel Hill Funeral Home, Inc.
|
CMS West LLC
|
CMS West Subsidiary LLC
|
Columbia Memorial Park LLC
|
Columbia Memorial Park Subsidiary, Inc.
|
Cornerstone Family Insurance Services, Inc.
|
Cornerstone Family Services of New Jersey, Inc.
|
Cornerstone Family Services of West Virginia LLC
|
Cornerstone Funeral and Cremation Services LLC
|
Cornerstone Trust Management Services LLC
|
Covenant Acquisition LLC
|
Covenant Acquisition Subsidiary, Inc.
|
Covington Memorial Funeral Home, Inc.
|
Covington Memorial Gardens, Inc.
|
Eloise B. Kyper Funeral Home, Inc.
|
Forest Lawn Gardens, Inc.
|
Forest Lawn Memorial Chapel, Inc.
|
Forest Lawn Memory Gardens, Inc.
|
Glen Haven Memorial Park LLC
|
Glen Haven Memorial Park Subsidiary, Inc.
|
Henlopen Memorial Park LLC
|
Henlopen Memorial Park Subsidiary LLC
|
Henry Memorial Park LLC
|
Henry Memorial Park Subsidiary, Inc.
|
Juniata Memorial Park LLC
|
KIRIS LLC
|
KIRIS Subsidiary, Inc.
|
Kirk & Nice, Inc.
|
Kirk & Nice Suburban Chapel, Inc.
|
Lakewood/Hamilton Cemetery LLC
|
Lakewood/Hamilton Cemetery Subsidiary, Inc.
|
Lakewood Memory Gardens South LLC
|
Lakewood Memory Gardens South Subsidiary, Inc.
|
Laurel Hill Memorial Park LLC
|
Laurel Hill Memorial Park Subsidiary, Inc.
|
Laurelwood Holding Company
|
Legacy Estates, Inc.
|
Loewen [Virginia] LLC
|
Loewen [Virginia] Subsidiary, Inc.
|
Lorraine Park Cemetery LLC
|
17
|
Lorraine Park Cemetery Subsidiary, Inc.
|
Modern Park Development LLC
|
Modern Park Development Subsidiary, Inc.
|
Oak Hill Cemetery LLC
|
Oak Hill Cemetery Subsidiary, Inc.
|
Osiris Holding Finance Company
|
Osiris Holding of Maryland LLC
|
Osiris Holding of Maryland Subsidiary, Inc.
|
Osiris Holding of Pennsylvania LLC
|
Osiris Holding of Rhode Island LLC
|
Osiris Holding of Rhode Island Subsidiary, Inc.
|
Osiris Management, Inc.
|
Osiris Telemarketing Corp.
|
Perpetual Gardens.Com, Inc.
|
Plymouth Warehouse Facilities LLC
|
Prince George Cemetery Corporation
|
PVD Acquisitions LLC
|
PVD Acquisitions Subsidiary, Inc.
|
Rockbridge Memorial Gardens LLC
|
Rockbridge Memorial Gardens Subsidiary Company
|
Rolling Green Memorial Park LLC
|
Rose Lawn Cemeteries LLC
|
Rose Lawn Cemeteries Subsidiary, Incorporated
|
Roselawn Development LLC
|
Roselawn Development Subsidiary Corporation
|
Russell Memorial Cemetery LLC
|
Russell Memorial Cemetery Subsidiary, Inc.
|
Shenandoah Memorial Park LLC
|
Shenandoah Memorial Park Subsidiary, Inc.
|
Sierra View Memorial Park
|
Southern Memorial Sales LLC
|
Southern Memorial Sales Subsidiary, Inc.
|
Springhill Memory Gardens LLC
|
Springhill Memory Gardens Subsidiary, Inc.
|
Star City Memorial Sales LLC
|
Star City Memorial Sales Subsidiary, Inc.
|
Stephen R. Haky Funeral Home, Inc.
|
Stitham LLC
|
Stitham Subsidiary, Incorporated
|
StoneMor Alabama LLC
|
StoneMor Alabama Subsidiary, Inc.
|
StoneMor Arkansas Subsidiary LLC
|
StoneMor California, Inc.
|
StoneMor California Subsidiary, Inc.
|
StoneMor Cemetery Products LLC
|
StoneMor Colorado LLC
|
StoneMor Colorado Subsidiary LLC
|
StoneMor Florida LLC
|
StoneMor Florida Subsidiary LLC
|
StoneMor Georgia LLC
|
StoneMor Georgia Subsidiary, Inc.
|
StoneMor Hawaiian Joint Venture Group LLC
|
StoneMor Hawaii LLC
|
StoneMor Hawaii Subsidiary, Inc.
|
StoneMor Holding of Pennsylvania LLC
|
StoneMor Illinois LLC
|
18
|
StoneMor Illinois Subsidiary LLC
|
StoneMor Indiana LLC
|
StoneMor Indiana Subsidiary LLC
|
StoneMor Iowa LLC
|
StoneMor Iowa Subsidiary LLC
|
StoneMor Kansas LLC
|
StoneMor Kansas Subsidiary LLC
|
StoneMor Kentucky LLC
|
StoneMor Kentucky Subsidiary LLC
|
StoneMor Michigan LLC
|
StoneMor Michigan Subsidiary LLC
|
StoneMor Mississippi LLC
|
StoneMor Mississippi Subsidiary LLC
|
StoneMor Missouri LLC
|
StoneMor Missouri Subsidiary LLC
|
StoneMor North Carolina LLC
|
StoneMor North Carolina Subsidiary LLC
|
StoneMor North Carolina Funeral Services, Inc.
|
StoneMor Ohio LLC
|
StoneMor Ohio Subsidiary, Inc.
|
StoneMor Oklahoma LLC
|
StoneMor Oklahoma Subsidiary LLC
|
StoneMor Operating LLC
|
StoneMor Oregon LLC
|
StoneMor Oregon Subsidiary LLC
|
StoneMor Pennsylvania LLC
|
StoneMor Pennsylvania Subsidiary LLC
|
StoneMor Puerto Rico LLC
|
StoneMor Puerto Rico Cemetery and Funeral, Inc.
|
StoneMor Puerto Rico Subsidiary LLC
|
StoneMor South Carolina LLC
|
StoneMor South Carolina Subsidiary LLC
|
StoneMor Tennessee Subsidiary, Inc.
|
StoneMor Washington, Inc.
|
StoneMor Washington Subsidiary LLC
|
StoneMor Wisconsin LLC
|
StoneMor Wisconsin Subsidiary LLC
|
Sunset Memorial Gardens LLC
|
Sunset Memorial Gardens Subsidiary, Inc.
|
Sunset Memorial Park LLC
|
Sunset Memorial Park Subsidiary, Inc.
|
Temple Hill LLC
|
Temple Hill Subsidiary Corporation
|
The Valhalla Cemetery Company LLC
|
The Valhalla Cemetery Subsidiary Corporation
|
Tioga County Memorial Gardens LLC
|
Virginia Memorial Service LLC
|
Virginia Memorial Service Subsidiary Corporation
|
WNCI LLC
|
W N C Subsidiary, Inc.
|
Wicomico Memorial Parks LLC
|
Wicomico Memorial Parks Subsidiary, Inc.
|
Willowbrook Management Corp.
|
Woodlawn Memorial Park Subsidiary LLC
|
19
|
|
|
|
|
By:
|
|
/s/ Garry P. Herdler
|
|
|
Name: Garry P. Herdler
|
|
|
Title: Chief Financial Officer of each Guarantor named above, signing on behalf of each Guarantor independently
|
20
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
FPA New Income Inc.
|
|
|
By:
|
|
/s/ J. Richard Atwood
|
|
|
Name: J. Richard Atwood
|
|
|
Title: Director
|
|
|
|
|
|
By:
|
|
/s/ E. Lake Setzler III
|
|
|
Name: E. Lake Setzler III
|
|
|
Title: Treasurer
|
[
Signature Page to Registration Rights Agreement
]
21
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
FPA Flexible Fixed Income, a Series of FPA Funds Trust
|
|
|
By:
|
|
/s/ J. Richard Atwood
|
|
|
Name: J. Richard Atwood
|
|
|
Title: President
|
|
|
|
|
|
By:
|
|
/s/ E. Lake Setzler III
|
|
|
Name: E. Lake Setzler III
|
|
|
Title: Treasurer
|
[
Signature Page to Registration Rights Agreement
]
22
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
Source Capital, Inc.
|
|
|
By:
|
|
/s/ J. Richard Atwood
|
|
|
Name: J. Richard Atwood
|
|
|
Title: President
|
|
|
|
|
|
By:
|
|
/s/ E. Lake Setzler III
|
|
|
Name: E. Lake Setzler III
|
|
|
Title: Treasurer
|
[
Signature Page to Registration Rights Agreement
]
23
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
Academy of Motion Picture Arts and Sciences
|
|
|
By:
|
|
FPA GP, Inc.
|
|
|
Its: General Partner
|
|
|
By:
|
|
/s/ J. Richard Atwood
|
|
|
Name: J. Richard Atwood
|
|
|
Title: Director
|
[
Signature Page to Registration Rights Agreement
]
24
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
Morningstar Defensive Bond Fund
|
|
|
By:
|
|
First Pacific Advisors, LP, its investment manager
|
|
|
|
|
By: FPA GP, Inc.
|
|
|
Its: General Partner
|
|
|
|
|
|
By:
|
|
/s/ J. Richard Atwood
|
|
|
Name: J. Richard Atwood
|
|
|
Title: Director
|
[
Signature Page to Registration Rights Agreement
]
25
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
Motion Picture Industry Health Plan (Active)
|
|
|
By:
|
|
First Pacific Advisors, LP, its investment manager
|
|
|
|
|
By: FPA GP, Inc.
|
|
|
Its: General Partner
|
|
|
|
|
|
By:
|
|
/s/ J. Richard Atwood
|
|
|
Name: J. Richard Atwood
|
|
|
Title: Director
|
[
Signature Page to Registration Rights Agreement
]
26
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
Motion Picture Industry Individual Account Plan
|
|
|
By:
|
|
First Pacific Advisors, LP, its investment manager
|
|
|
|
|
By: FPA GP, Inc.
|
|
|
Its: General Partner
|
|
|
|
|
|
By:
|
|
/s/ J. Richard Atwood
|
|
|
Name: J. Richard Atwood
|
|
|
Title: Director
|
[
Signature Page to Registration Rights Agreement
]
27
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
Motion Picture Industry Health Plan (Retiree)
|
|
|
By:
|
|
First Pacific Advisors, LP, its investment manager
|
|
|
|
|
By: FPA GP, Inc.
|
|
|
Its: General Partner
|
|
|
|
|
|
By:
|
|
/s/ J. Richard Atwood
|
|
|
Name: J. Richard Atwood
|
|
|
Title: Director
|
[
Signature Page to Registration Rights Agreement
]
28
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
Hudson East River Systems, LLC (f/k/a New York-Presbyterian Hospital)
|
|
|
By:
|
|
First Pacific Advisors, LP, its investment manager
|
|
|
|
|
By: FPA GP, Inc.
|
|
|
Its: General Partner
|
|
|
|
|
|
By:
|
|
/s/ J. Richard Atwood
|
|
|
Name: J. Richard Atwood
|
|
|
Title: Director
|
[
Signature Page to Registration Rights Agreement
]
29
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
The Health Plan of the Upper Ohio Valley Inc.
|
|
|
By:
|
|
First Pacific Advisors, LP, its investment manager
|
|
|
|
|
By: FPA GP, Inc.
|
|
|
Its: General Partner
|
|
|
|
|
|
By:
|
|
/s/ J. Richard Atwood
|
|
|
Name: J. Richard Atwood
|
|
|
Title: Director
|
[
Signature Page to Registration Rights Agreement
]
30
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
SAG-AFTRA
Health Plan
|
|
|
By:
|
|
First Pacific Advisors, LP, its investment manager
|
|
|
|
|
By: FPA GP, Inc.
|
|
|
Its: General Partner
|
|
|
|
|
|
By:
|
|
/s/ J. Richard Atwood
|
|
|
Name: J. Richard Atwood
|
|
|
Title: Director
|
[
Signature Page to Registration Rights Agreement
]
31
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
The Nature Conservancy
|
|
|
By:
|
|
First Pacific Advisors, LP, its investment manager
|
|
|
|
|
By: FPA GP, Inc.
|
|
|
Its: General Partner
|
|
|
|
|
|
By:
|
|
/s/ J. Richard Atwood
|
|
|
Name: J. Richard Atwood
|
|
|
Title: Director
|
[
Signature Page to Registration Rights Agreement
]
32
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
Redwood Master Fund, Ltd
|
|
|
By:
|
|
/s/ Ruben Kliksberg
|
|
|
Name: Ruben Kliksberg
|
|
|
Title: Co-CEO
|
[
Signature Page to Registration Rights Agreement
]
33
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
Redwood Opportunity Master Fund Ltd
|
|
|
By:
|
|
/s/ Ruben Kliksberg
|
|
|
Name: Ruben Kliksberg
|
|
|
Title: Co-CEO
|
[
Signature Page to Registration Rights Agreement
]
34
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
CORBIN OPPORTUNITY FUND, L.P.
|
|
By: Corbin Capital Partners, L.P. its
investment manager
|
|
|
By:
|
|
/s/ Steve Carlino
|
|
|
Name: Steve Carlino
|
|
|
Title: CFO
|
[
Signature Page to Registration Rights Agreement
]
35
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
|
|
PONTUS HOLDINGS LTD.
|
|
|
By:
|
|
/s/ Russell Bryant
|
|
|
Name:
|
|
Russell Bryant
|
|
|
Title:
|
|
Chief Financial Officer
|
|
|
|
|
Quadrant Capital Advisors, Inc.
|
|
|
|
|
Investment Advisor to Pontus Holdings Ltd.
|
[
Signature Page to Registration Rights Agreement
]
36
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
|
|
KNIGHTHEAD (NY) FUND, LP
|
|
|
BY:
|
|
Knighthead Capital Management, LLC,
Its Investment Advisor
|
|
|
By:
|
|
/s/ Laura Torrado
|
|
|
Name:
|
|
Laura Torrado
|
|
|
Title:
|
|
Authorized Signatory
|
[
Signature Page to Registration Rights Agreement
]
37
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
|
|
KNIGHTHEAD ANNUITY & LIFE
ASSURANCE COMPANY
|
|
|
BY:
|
|
Knighthead Capital Management, LLC,
Its Investment Advisor
|
|
|
By:
|
|
/s/ Laura Torrado
|
|
|
Name:
|
|
Laura Torrado
|
|
|
Title:
|
|
Authorized Signatory
|
[
Signature Page to Registration Rights Agreement
]
38
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
|
KNIGHTHEAD MASTER FUND, LP
|
|
BY: Knighthead Capital Management, LLC,
Its Investment Manager
|
|
|
By:
|
|
/s/ Laura Torrado
|
|
|
Name: Laura Torrado
|
|
|
Title: Authorized Signatory
|
[
Signature Page to Registration Rights Agreement
]
39
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
Goldman Sachs & Co. LLC
|
|
|
By:
|
|
/s/ Lee D. Becker
|
|
|
Name: Lee D. Becker
|
|
|
Title: Managing Director
|
[
Signature Page to Registration Rights Agreement
]
40
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
Arbour Lane - TX, L.P.
|
|
|
By:
|
|
/s/ Kenneth Hoffman
|
|
|
Name: Kenneth Hoffman
|
|
|
Title: Partner
|
[
Signature Page to Registration Rights Agreement
]
41
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
Farallon Capital Partners, L.P.
|
|
|
By:
|
|
/s/ Rajiv A. Patel
|
|
|
Name: Rajiv A. Patel
|
|
|
Title: Managing Member
|
[
Signature Page to Registration Rights Agreement
]
42
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
Farallon Capital Institutional Partners, L.P.
|
|
|
By:
|
|
/s/ Rajiv A. Patel
|
|
|
Name: Rajiv A. Patel
|
|
|
Title: Managing Member
|
[
Signature Page to Registration Rights Agreement
]
43
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
Four Crossings Institutional Partners V, L.P.
|
|
|
By:
|
|
/s/ Rajiv A. Patel
|
|
|
Name: Rajiv A. Patel
|
|
|
Title: Managing Member
|
[
Signature Page to Registration Rights Agreement
]
44
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
Farallon Capital Institutional Partners II, L.P.
|
|
|
By:
|
|
/s/ Rajiv A. Patel
|
|
|
Name: Rajiv A. Patel
|
|
|
Title: Managing Member
|
[
Signature Page to Registration Rights Agreement
]
45
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
Farallon Capital Offshore Investors II, L.P.
|
|
|
By:
|
|
/s/ Rajiv A. Patel
|
|
|
Name: Rajiv A. Patel
|
|
|
Title: Managing Member
|
[
Signature Page to Registration Rights Agreement
]
46
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
|
|
|
Farallon Capital F5 Master I, L.P.
|
|
|
By:
|
|
/s/ Rajiv A. Patel
|
|
|
Name: Rajiv A. Patel
|
|
|
Title: Managing Member
|
[
Signature Page to Registration Rights Agreement
]
47
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
Farallon Capital (AM) Investors, L.P.
|
|
|
By:
|
|
/s/ Rajiv A. Patel
|
|
|
Name: Rajiv A. Patel
|
|
|
Title: Managing Member
|
[
Signature Page to Registration Rights Agreement
]
48
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
Farallon Capital Institutional Partners III, L.P.
|
|
|
By:
|
|
/s/ Rajiv A. Patel
|
|
|
Name: Rajiv A. Patel
|
|
|
Title: Managing Member
|
[
Signature Page to Registration Rights Agreement
]
49
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
FS Global Credit Opportunities Fund
|
|
|
By:
|
|
/s/ Edward T. Gallivan, Jr.
|
|
|
Name: Edward T. Gallivan, Jr.
|
|
|
Title: CFO
|
[
Signature Page to Registration Rights Agreement
]
50
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:
The Mangrove Partners Master Fund, Ltd.
|
|
|
By:
|
|
/s/ Ward Dietrich
|
|
|
Name: Ward Dietrich
|
|
|
Title: Authorized Person
|
[
Signature Page to Registration Rights Agreement
]
51
SCHEDULE A
The Initial Guarantors
|
ALLEGHANY MEMORIAL PARK LLC
|
ALLEGHANY MEMORIAL PARK SUBSIDIARY, INC.
|
ALTAVISTA MEMORIAL PARK LLC
|
ALTAVISTA MEMORIAL PARK SUBSIDIARY, INC.
|
ARLINGTON DEVELOPMENT COMPANY
|
AUGUSTA MEMORIAL PARK PERPETUAL CARE COMPANY
|
BIRCHLAWN BURIAL PARK LLC
|
BIRCHLAWN BURIAL PARK SUBSIDIARY, INC.
|
BRONSWOOD CEMETERY, INC.
|
CEDAR HILL FUNERAL HOME, INC.
|
CEMETERY INVESTMENTS LLC
|
CEMETERY INVESTMENTS SUBSIDIARY, INC.
|
CEMETERY MANAGEMENT SERVICES, L.L.C.
|
CEMETERY MANAGEMENT SERVICES OF OHIO, L.L.C.
|
CHAPEL HILL ASSOCIATES, INC.
|
CHAPEL HILL FUNERAL HOME, INC.
|
CMS WEST LLC
|
CMS WEST SUBSIDIARY LLC
|
COLUMBIA MEMORIAL PARK LLC
|
COLUMBIA MEMORIAL PARK SUBSIDIARY, INC.
|
CORNERSTONE FAMILY INSURANCE SERVICES, INC.
|
CORNERSTONE FAMILY SERVICES OF NEW JERSEY, INC.
|
CORNERSTONE FAMILY SERVICES OF WEST VIRGINIA LLC
|
CORNERSTONE FUNERAL AND CREMATION SERVICES LLC
|
CORNERSTONE TRUST MANAGEMENT SERVICES LLC
|
COVENANT ACQUISITION LLC
|
COVENANT ACQUISITION SUBSIDIARY, INC.
|
COVINGTON MEMORIAL FUNERAL HOME, INC.
|
COVINGTON MEMORIAL GARDENS, INC.
|
ELOISE B. KYPER FUNERAL HOME, INC.
|
FOREST LAWN GARDENS, INC.
|
FOREST LAWN MEMORIAL CHAPEL, INC.
|
FOREST LAWN MEMORY GARDENS, INC.
|
GLEN HAVEN MEMORIAL PARK LLC
|
GLEN HAVEN MEMORIAL PARK SUBSIDIARY, INC.
|
HENLOPEN MEMORIAL PARK LLC
|
HENLOPEN MEMORIAL PARK SUBSIDIARY LLC
|
HENRY MEMORIAL PARK LLC
|
HENRY MEMORIAL PARK SUBSIDIARY, INC.
|
JUNIATA MEMORIAL PARK LLC
|
KIRIS LLC
|
KIRIS SUBSIDIARY, INC.
|
KIRK & NICE, INC.
|
KIRK & NICE SUBURBAN CHAPEL, INC.
|
LAKEWOOD/HAMILTON CEMETERY LLC
|
LAKEWOOD/HAMILTON CEMETERY SUBSIDIARY, INC.
|
LAKEWOOD MEMORY GARDENS SOUTH LLC
|
LAKEWOOD MEMORY GARDENS SOUTH SUBSIDIARY, INC.
|
LAUREL HILL MEMORIAL PARK LLC
|
LAUREL HILL MEMORIAL PARK SUBSIDIARY, INC.
|
LAURELWOOD HOLDING COMPANY
|
LEGACY ESTATES, INC.
|
LOEWEN [VIRGINIA] LLC
|
A-1
|
LOEWEN [VIRGINIA] SUBSIDIARY, INC.
|
LORRAINE PARK CEMETERY LLC
|
LORRAINE PARK CEMETERY SUBSIDIARY, INC.
|
MODERN PARK DEVELOPMENT LLC
|
MODERN PARK DEVELOPMENT SUBSIDIARY, INC.
|
OAK HILL CEMETERY LLC
|
OAK HILL CEMETERY SUBSIDIARY, INC.
|
OSIRIS HOLDING FINANCE COMPANY
|
OSIRIS HOLDING OF MARYLAND LLC
|
OSIRIS HOLDING OF MARYLAND SUBSIDIARY, INC.
|
OSIRIS HOLDING OF PENNSYLVANIA LLC
|
OSIRIS HOLDING OF RHODE ISLAND LLC
|
OSIRIS HOLDING OF RHODE ISLAND SUBSIDIARY, INC.
|
OSIRIS MANAGEMENT, INC.
|
OSIRIS TELEMARKETING CORP.
|
PERPETUAL GARDENS.COM, INC.
|
PLYMOUTH WAREHOUSE FACILITIES LLC
|
PRINCE GEORGE CEMETERY CORPORATION
|
PVD ACQUISITIONS LLC
|
PVD ACQUISITIONS SUBSIDIARY, INC.
|
ROCKBRIDGE MEMORIAL GARDENS LLC
|
ROCKBRIDGE MEMORIAL GARDENS SUBSIDIARY COMPANY
|
ROLLING GREEN MEMORIAL PARK LLC
|
ROSE LAWN CEMETERIES LLC
|
ROSE LAWN CEMETERIES SUBSIDIARY, INCORPORATED
|
ROSELAWN DEVELOPMENT LLC
|
ROSELAWN DEVELOPMENT SUBSIDIARY CORPORATION
|
RUSSELL MEMORIAL CEMETERY LLC
|
RUSSELL MEMORIAL CEMETERY SUBSIDIARY, INC.
|
SHENANDOAH MEMORIAL PARK LLC
|
SHENANDOAH MEMORIAL PARK SUBSIDIARY, INC.
|
SIERRA VIEW MEMORIAL PARK
|
SOUTHERN MEMORIAL SALES LLC
|
SOUTHERN MEMORIAL SALES SUBSIDIARY, INC.
|
SPRINGHILL MEMORY GARDENS LLC
|
SPRINGHILL MEMORY GARDENS SUBSIDIARY, INC.
|
STAR CITY MEMORIAL SALES LLC
|
STAR CITY MEMORIAL SALES SUBSIDIARY, INC.
|
STEPHEN R. HAKY FUNERAL HOME, INC.
|
STITHAM LLC
|
STITHAM SUBSIDIARY, INCORPORATED
|
STONEMOR ALABAMA LLC
|
STONEMOR ALABAMA SUBSIDIARY, INC.
|
STONEMOR ARKANSAS SUBSIDIARY LLC
|
STONEMOR CALIFORNIA, INC.
|
STONEMOR CALIFORNIA SUBSIDIARY, INC.
|
STONEMOR CEMETERY PRODUCTS LLC
|
STONEMOR COLORADO LLC
|
STONEMOR COLORADO SUBSIDIARY LLC
|
STONEMOR FLORIDA LLC
|
STONEMOR FLORIDA SUBSIDIARY LLC
|
STONEMOR GEORGIA LLC
|
STONEMOR GEORGIA SUBSIDIARY, INC.
|
STONEMOR HAWAIIAN JOINT VENTURE GROUP LLC
|
STONEMOR HAWAII LLC
|
STONEMOR HAWAII SUBSIDIARY, INC.
|
A-2
|
STONEMOR HOLDING OF PENNSYLVANIA LLC
|
STONEMOR ILLINOIS LLC
|
STONEMOR ILLINOIS SUBSIDIARY LLC
|
STONEMOR INDIANA LLC
|
STONEMOR INDIANA SUBSIDIARY LLC
|
STONEMOR IOWA LLC
|
STONEMOR IOWA SUBSIDIARY LLC
|
STONEMOR KANSAS LLC
|
STONEMOR KANSAS SUBSIDIARY LLC
|
STONEMOR KENTUCKY LLC
|
STONEMOR KENTUCKY SUBSIDIARY LLC
|
STONEMOR MICHIGAN LLC
|
STONEMOR MICHIGAN SUBSIDIARY LLC
|
STONEMOR MISSISSIPPI LLC
|
STONEMOR MISSISSIPPI SUBSIDIARY LLC
|
STONEMOR MISSOURI LLC
|
STONEMOR MISSOURI SUBSIDIARY LLC
|
STONEMOR NORTH CAROLINA LLC
|
STONEMOR NORTH CAROLINA SUBSIDIARY LLC
|
STONEMOR NORTH CAROLINA FUNERAL SERVICES, INC.
|
STONEMOR OHIO LLC
|
STONEMOR OHIO SUBSIDIARY, INC.
|
STONEMOR OKLAHOMA LLC
|
STONEMOR OKLAHOMA SUBSIDIARY LLC
|
STONEMOR OPERATING LLC
|
STONEMOR OREGON LLC
|
STONEMOR OREGON SUBSIDIARY LLC
|
STONEMOR PENNSYLVANIA LLC
|
STONEMOR PENNSYLVANIA SUBSIDIARY LLC
|
STONEMOR PUERTO RICO LLC
|
STONEMOR PUERTO RICO CEMETERY AND FUNERAL, INC.
|
STONEMOR PUERTO RICO SUBSIDIARY LLC
|
STONEMOR SOUTH CAROLINA LLC
|
STONEMOR SOUTH CAROLINA SUBSIDIARY LLC
|
STONEMOR TENNESSEE SUBSIDIARY, INC.
|
STONEMOR WASHINGTON, INC.
|
STONEMOR WASHINGTON SUBSIDIARY LLC
|
STONEMOR WISCONSIN LLC
|
STONEMOR WISCONSIN SUBSIDIARY LLC
|
SUNSET MEMORIAL GARDENS LLC
|
SUNSET MEMORIAL GARDENS SUBSIDIARY, INC.
|
SUNSET MEMORIAL PARK LLC
|
SUNSET MEMORIAL PARK SUBSIDIARY, INC.
|
TEMPLE HILL LLC
|
TEMPLE HILL SUBSIDIARY CORPORATION
|
THE VALHALLA CEMETERY COMPANY LLC
|
THE VALHALLA CEMETERY SUBSIDIARY CORPORATION
|
TIOGA COUNTY MEMORIAL GARDENS LLC
|
VIRGINIA MEMORIAL SERVICE LLC
|
VIRGINIA MEMORIAL SERVICE SUBSIDIARY CORPORATION
|
WNCI LLC
|
W N C SUBSIDIARY, INC.
|
WICOMICO MEMORIAL PARKS LLC
|
WICOMICO MEMORIAL PARKS SUBSIDIARY, INC.
|
WILLOWBROOK MANAGEMENT CORP.
|
WOODLAWN MEMORIAL PARK SUBSIDIARY LLC
|
A-3
SCHEDULE B
The Initial Purchasers
FPA
New Income Inc.
FPA Flexible Fixed Income, a Series of FPA Funds Trust
Source Capital, Inc.
Academy of
Motion Picture Arts and Sciences
Morningstar Defensive Bond Fund
Motion Picture Industry Health Plan (Active)
Motion Picture Industry Individual Account Plan
Motion Picture Industry Health Plan (Retiree)
Hudson East River Systems, LLC (f/k/a New York-Presbyterian Hospital)
The Health Plan of the Upper Ohio Valley Inc.
SAG-AFTRA
Health Plan
Nature Conservancy
Redwood
Master Fund, Ltd.
Redwood Opportunity Master Fund, Ltd
Corbin Opportunity Fund, L.P.
Pontus Holdings, Ltd.
Knighthead
(NY) Fund L.P.
Knighthead Annuity & Life Assurance Company
Knighthead Master Fund, L.P.
Goldman Sachs & Co. LLC
Arbour Lane - TX, L.P.
Farallon
Capital Partners, L.P.
Farallon Capital Institutional Partners, L.P.
Four Crossings Institutional Partners V, L.P.
Farallon Capital Institutional Partners II, L.P.
Farallon Capital Offshore Investors II, L.P.
Farallon Capital F5 Master I, L.P.
Farallon Capital (AM) Investors, L.P.
Farallon Capital Institutional Partners III, L.P.
FS Global Credit Opportunities Fund
The Mangrove Partners Master Fund, Ltd.
B-1
Exhibit 99.1
|
|
|
CONTACT:
|
|
John McNamara
|
|
|
Director - Investor Relations
|
|
|
StoneMor Partners L.P.
|
|
|
(215)
826-2945
|
STONEMOR PARTNERS L.P. ANNOUNCES RECAPITALIZATION TRANSACTIONS AND BOARD CHANGES; ANDREW AXELROD NAMED CHAIRMAN OF THE BOARD
Company to Conduct an Investor Conference Call on Friday, June 28, 2019 at 8:30am ET
TREVOSE, PA
June
27
, 2019
StoneMor
Partners L.P.
(NYSE: STON) (
StoneMor
or the
Partnership
)
,
a leading owner and operator of 322 cemeteries
and 91 funeral homes in 27 states and Puerto Rico, today announced that it has closed a $447.5 million recapitalization transaction, consisting of (i) a private placement of $385.0 million of 9.875% Senior Secured PIK Toggle Notes due
2024 (the
Senior Secured Notes
) of the Partnership to certain financial institutions (the
Senior Secured Notes Private Placement
); and (ii) a concurrent private placement of $62.5 million
of liquidation value of Series A Convertible Preferred Units of the Partnership (the
Series A Preferred Units
) to Axar Capital Management LP (
Axar
) and certain other investors (collectively, the
Series A Purchasers
) at a price of $1.1040 per Series A Preferred Unit, resulting in gross proceeds of $57.5 million and reflecting an 8% discount to the $1.20 per unit liquidation value of the Series A Preferred Units
(the
Series A Preferred Unit Private Placement
). The Series A Preferred Units were executed as a private placement to enable a timely closing of the recapitalization to occur before June 30, 2019. The 52,083,333 Series
A Preferred Units are convertible into common units on a
share-for
share-basis, subject to certain anti-dilution adjustments. Up to 33,487,904 of the Series A Preferred Units are redeemable by the Partnership
out of the proceeds of a planned rights offering (described below) of at least $40.185 million of common units to be sold at $1.20 per unit to existing holders. The net proceeds of the Senior Secured Notes and the Series A Preferred Units have
been used to fully repay the Partnerships outstanding senior notes due in June 2021 and retire the Partnerships revolving credit facility due in May 2020, as well as for associated transaction expenses with the balance available for
general corporate purposes. Immediately prior to and as a condition precedent to the recapitalization transactions, the Board of Directors of StoneMor GP LLC was reconstituted to comprise seven members, three of whom have been designated by Axar.
Andrew Axelrod, the founder and managing partner of Axar, has been named Chairman of the Board of Directors.
Joe Redling, StoneMors President and
Chief Executive Officer, said, We are excited to announce this transformative transaction. The recapitalization of our balance sheet resets the financial footing of StoneMor and positions us to execute our business strategy. We believe this
debt refinancing demonstrates both strong underlying values of our asset base, as well as confidence in the Companys ability to execute its turnaround plan. We have now also filled our key senior management roles, including a CFO experienced
in operational turnarounds, we have aligned our strategic goals and we are now improving StoneMors corporate governance with a reconstituted Board
1
of Directors. With this transaction completed, we now have sufficient liquidity to continue the turnaround that we initiated in the fourth quarter of 2018.
Redling continued This refinancing, together with our cost structure and performance improvement efforts and our contemplated corporate transition are
important steps to revitalizing StoneMors business and positioning it for future success. We look forward to completing our planned corporate
C-Corp
conversion following completion of the rights
offering. We believe this transaction helps ensure that StoneMor will continue to provide the families and communities we serve with the highest level of support. Honoring the life stories of our customers is our mission and we will continue to
dedicate our efforts to deliver on that promise each and every day. We are grateful for the continued support of Axar Capital Management, as evidenced by its significant investment in our Series A Preferred Units, as we continue our efforts to
enhance shareholder value.
Senior Secured Notes Private Placement
The Partnership and Cornerstone Family Services of West Virginia Subsidiary, Inc. (together with the Partnership, the Issuers) issued an aggregate
principal amount of $385.0 million of Senior Secured Notes pursuant to an indenture, dated as of June 27, 2019. The Issuers will pay interest at either a fixed rate of 9.875% per annum in cash or, at their periodic option through
January 30, 2022, a fixed rate of 7.50% per annum in cash plus a fixed rate of 4.00% per annum payable in kind. The Senior Secured Notes were issued at a price equal to 96.5% of par. Interest is payable quarterly in arrears on the 30
th
day of each March, June, September and December, commencing September 30, 2019. The Senior Secured Notes mature on June 30, 2024. The Issuers obligations under the Senior Secured
Notes are jointly and severally guaranteed by substantially all of the direct and indirect subsidiaries of the Partnership (the Guarantees). In addition, the Issuers obligations under the Senior Secured Notes Indenture and the
Senior Secured Notes, including the Guarantees are secured by a first priority lien and security interest (subject to permitted liens and security interests) in substantially all of the Issuers and the guarantors assets, whether now
owned or hereafter acquired. The Issuers also entered into a registration rights agreement for the benefit of the purchasers of the Senior Secured Notes.
The Senior Secured Notes were sold in a transaction not subject to the registration requirements of the United States Securities Act of 1933, as amended (the
Securities Act
) and may not be reoffered or resold in the United States without registration under the Securities Act or pursuant to an applicable exemption from, or in a transaction not subject to such registration
requirements.
Series A Preferred Unit Private Placement
The Series A Preferred Units were sold pursuant to the Series A Preferred Unit Purchase Agreement (the
Series A Purchase Agreement
)
and rank senior to all existing limited partner interests in the Partnership. They are convertible at a 1:1 ratio (subject to anti-dilution adjustments) (i) at the option of the holder into common units of the Partnership at any time commencing
10 days following the completion of the Partnerships contemplated rights offering (as described below), or (ii) automatically into shares of common stock of StoneMor Inc., immediately upon the completion of the previously-announced
conversion of StoneMor group into corporate form. The Series A Preferred Units will participate in voting and distributions with the common units on an
as-converted
basis and will be entitled to a liquidation
preference of $1.20 per Series A Preferred Unit upon any liquidation, dissolution or winding up of the Partnership.
Pursuant to the Series A Preferred
Purchase Agreement, the Partnership agreed to undertake an offering to holders of Common Units (other than to the Series A Purchasers, American Infrastructure Funds and their respective affiliates)
2
of the
non-transferable,
right to purchase their pro rata share of at least $40.2 million of additional Common Units at a price of $1.20 per common
unit, and use the proceeds of the rights offering to redeem up to 33,487,904 of Series A Preferred Units from the Purchasers, at a price of $1.20 per Series A Preferred Unit.
In connection with the Series A Preferred Unit Private Placement, the Board of Directors of the Partnerships general partner, StoneMor GP LLC (the
General Partner
) was reconstituted to a
7-member
board consisting of three designees of Axar: Andrew Axelrod, David Miller and Spencer Goldenberg; one designee of StoneMor GP Holdings
LLC (the
GP Holdco
): Robert Hellman; two continuing independent directors, Patricia Wellenbach and Stephen Negrotti; and Joe Redling, the General Partners Chief Executive Officer. In addition, the Partnership entered
into an agreement with the Series A Purchasers to provide registration rights for the common units of the Partnership or shares of common stock of StoneMor Inc. into which the Series A Preferred Units will convert.
Garry Herdler, StoneMors Senior Vice President and Chief Financial Officer, commented, When I was hired in April 2019, we outlined a turnaround
strategy focused on four key goals: cash flow and liquidity, capital structure, strategic balance sheet/portfolio review, and performance improvement from cost reductions and revenue enhancement. We closed this $447.5 million debt and equity
recapitalization within 75 days of my start, with both new and existing investors. This completes a major milestone in this strategy as it delivers initial progress on the first two of the four goals within our initial
100-day
plan it significantly extends the debt capital structure with a five-year maturity and it provides StoneMor with a meaningful liquidity improvement now to execute our turnaround strategy,
including the next phase of our performance improvement plans.
Herdler continued While it is still early in the turnaround, we believe we
have also identified significant expense reduction opportunities, elements of which we will discuss in more detail on the investor call scheduled with this announcement. In our first quarter earnings release, we stated that we believe other cost
reduction and performance improvement opportunities existed. We have now also identified the next phase of this operational turnaround strategy with additional
4-wall
level operational savings,
identified projects and industry benchmarking, including prioritizing opportunities in procurement, sourcing, product hierarchy, field labor efficiencies, shared services and outsourcing. Lastly, we continue to be on track to deliver our second
fiscal quarter financial results, on time, in August 2019.
Recapitalization Transaction Investor Call
The Partnership will conduct a conference call to discuss the recapitalization transactions tomorrow, Friday, June 28, 2019 at 8:30 a.m. ET. The Company
plans to provide slides on the discussion topics on its website for participants on the call and also anticipates furnishing those materials as an exhibit to a Current Report on Form
8-K
it will file with the
Securities and Exchange Commission (the SEC). The conference call can be accessed by calling
800-954-0620.
The live webcast of the conference call will also
be available to investors who may access the call through the investors section of www.stonemor.com. The webcast and audio replay will also be archived on the Partnerships website at www.stonemor.com.
This announcement is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, any security and does not
constitute an offer, solicitation or sale of any security in any jurisdiction in which such offer, solicitation or sale would be unlawful.
* * *
3
About StoneMor Partners L.P.
StoneMor Partners L.P., headquartered in Trevose, Pennsylvania, is an owner and operator of cemeteries and funeral homes in the United States, with 322
cemeteries and 91 funeral homes in 27 states and Puerto Rico.
StoneMors cemetery products and services, which are sold on both a
pre-need
(before death) and
at-need
(at death) basis, include: burial lots, lawn and mausoleum crypts, burial vaults, caskets, memorials, and all services which provide for
the installation of this merchandise. For additional information about StoneMor Partners L.P., please visit StoneMors website, and the investors section, at
http://www.stonemor.com
.
4
Important Information for Investors and Unitholders
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.
In connection with the proposed rights offering, StoneMor Partners, L.P. (the Partnership) will file a registration statement and prospectus with
the Securities and Exchange Commission (the SEC). Any offer of common units pursuant to such rights offering will be made solely pursuant to the prospectus for the rights offering and following the effectiveness of such registration
statement.
In connection with the proposed reorganization, StoneMor GP LLC (to be converted into a corporation named StoneMor Inc. (
StoneMor
GP
)) and the Partnership will jointly file with the SEC a registration statement on Form
S-4,
which will include a prospectus of StoneMor GP and a proxy statement of the
Partnership. StoneMor GP and the Partnership also plan to file other documents with the SEC regarding the proposed transaction. After the registration statement has been declared effective by the SEC, a definitive joint proxy
statement/prospectus will be mailed to the unitholders of the Partnership. INVESTORS AND UNITHOLDERS OF THE PARTNERSHIP ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER DOCUMENTS
RELATING TO THE PROPOSED REORGANIZATION THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED REORGANIZATION. Investors and unitholders will be
able to obtain free copies of the joint proxy statement/prospectus and other documents containing important information about StoneMor GP and the Partnership once such documents are filed with the SEC, through the website maintained by the SEC
at
http://www.sec.gov.
Copies of the documents filed with the SEC by the Partnership will be available free of charge on their internet website at
www.stonemor.com
or by contacting their Investor Relations Department at
(215)
826-2945.
Cautionary Note Regarding Forward-Looking Statements
Certain statements contained in this press release, including, but not limited to, information regarding the Partnerships contemplated rights offering
and transition to a corporate structure, as well as continued performance and cost structure improvement efforts undertaken by the Partnership, are forward-looking statements. Generally, the words believe, may,
will, estimate, continue, anticipate, intend, project, expect, predict and similar expressions identify these forward-looking statements. These
statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are
based on managements current expectations and estimates. These statements are neither promises nor guarantees and are made subject to certain risks and uncertainties that could cause actual results to differ materially from the results stated
or implied in this press release. StoneMors major risks are related to uncertainties associated with the cash flow from
pre-need
and
at-need
sales, trusts and
financings, which may impact StoneMors ability to meet its financial projections, service its debt and resume paying distributions, with the proposed merger and whether and when the transactions contemplated by the merger and reorganization
agreement will be consummated, as well as with StoneMors ability to maintain an effective system of internal control over financial reporting and disclosure controls and procedures.
StoneMors additional risks and uncertainties include, but are not limited to: uncertainties associated with future revenue and revenue growth;
uncertainties associated with the integration or anticipated benefits of recent acquisitions or any future acquisitions; StoneMors ability to successfully implement its strategic plan relating to
5
achieving operating improvements, including improving sales productivity and reducing operating expenses; the effect of economic downturns; the impact of StoneMors significant leverage on
its operating plans; the decline in the fair value of certain equity and debt securities held in StoneMors trusts; StoneMors ability to attract, train and retain an adequate number of sales people; uncertainties associated with the
volume and timing of
pre-need
sales of cemetery services and products; increased use of cremation; changes in the death rate; changes in the political or regulatory environments, including potential changes in
tax accounting and trusting policies; StoneMors ability to successfully compete in the cemetery and funeral home industry; litigation or legal proceedings that could expose StoneMor to significant liabilities and damage StoneMors
reputation, including but not limited to litigation and governmental investigations or proceedings arising out of or related to accounting and financial reporting matters; the effects of cyber security attacks due to StoneMors significant
reliance on information technology; uncertainties relating to the financial condition of third-party insurance companies that fund StoneMors
pre-need
funeral contracts; and various other uncertainties
associated with the death care industry and StoneMors operations in particular.
When considering forward-looking statements, you should keep
in mind the risk factors and other cautionary statements set forth in StoneMors Annual Report on Form
10-K
and the other reports that StoneMor files with the Securities and Exchange Commission, from time
to time. Except as required under applicable law, StoneMor assumes no obligation to update or revise any forward-looking statements made herein or any other forward-looking statements made by it, whether as a result of new information, future events
or otherwise.
6
StoneMor Debt/Equity Recapitalization
Overview June 28, 2019 Exhibit 99.2
Cautionary Statement Certain statements
contained in this presentation, including, but not limited to, information regarding the Partnership’s contemplated rights offering and transition to a corporate structure, as well as continued performance and cost structure improvement
efforts undertaken by the Partnership, are forward-looking statements. Generally, the words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,”
“project,” “expect,” “predict” and similar expressions identify these forward-looking statements. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements are based on management’s current expectations and estimates. These statements are neither promises nor guarantees and are made subject to certain risks and uncertainties that could cause actual results to
differ materially from the results stated or implied in this press release. StoneMor’s major risks are related to uncertainties associated with the cash flow from pre-need and at-need sales, trusts and financings, which may impact
StoneMor’s ability to meet its financial projections, service its debt and resume paying distributions, with the proposed merger and whether and when the transactions contemplated by the merger and reorganization agreement will be consummated,
as well as with StoneMor’s ability to maintain an effective system of internal control over financial reporting and disclosure controls and procedures. StoneMor’s additional risks and uncertainties include, but are not limited to:
uncertainties associated with future revenue and revenue growth; uncertainties associated with the integration or anticipated benefits of recent acquisitions or any future acquisitions; StoneMor’s ability to successfully implement its
strategic plan relating to achieving operating improvements, including improving sales productivity and reducing operating expenses; the effect of economic downturns; the impact of StoneMor’s significant leverage on its operating plans; the
decline in the fair value of certain equity and debt securities held in StoneMor’s trusts; StoneMor’s ability to attract, train and retain an adequate number of sales people; uncertainties associated with the volume and timing of
pre-need sales of cemetery services and products; increased use of cremation; changes in the death rate; changes in the political or regulatory environments, including potential changes in tax accounting and trusting policies; StoneMor’s
ability to successfully compete in the cemetery and funeral home industry; litigation or legal proceedings that could expose StoneMor to significant liabilities and damage StoneMor’s reputation, including but not limited to litigation and
governmental investigations or proceedings arising out of or related to accounting and financial reporting matters; the effects of cyber security attacks due to StoneMor’s significant reliance on information technology; uncertainties relating
to the financial condition of third-party insurance companies that fund StoneMor’s pre-need funeral contracts; and various other uncertainties associated with the death care industry and StoneMor’s operations in particular. When
considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements set forth in StoneMor’s Annual Report on Form 10-K and the other reports that StoneMor files with the Securities and Exchange
Commission, from time to time. Except as required under applicable law, StoneMor assumes no obligation to update or revise any forward-looking statements made herein or any other forward-looking statements made by it, whether as a result of new
information, future events or otherwise.
Table of Contents Slide Executive Summary
5 Recapitalization Summary 10 Investment Highlights 16 Appendix 25
Introductions Joe Redling President &
Chief Executive Officer Joined StoneMor in July 2018 Previously served as COO of Vonage and CEO of Nutrisystem, managing both businesses through high-growth periods while also executing aggressive cost-cutting initiatives (combined ~$70M in cost
reductions) Previously spent eight years at AOL as President of the subscription business, leading the transformation to an ad-based business model and reducing costs by $1.5B over two years Significant experience leading transformative initiatives
at complex, high-fixed cost companies, including Six Flags and Arnold Palmer Golf Management Garry Herdler SVP & Chief Financial Officer Joined StoneMor on April 15, 2019 with over 25 years of experience Previous CFO (6 mid-market PE-owned, a
$27B global, a NYSE-listed) Acted in multiple integrations & turnarounds; and in 3 restructurings M&A as CFO: completed > 20 mid-market M&A deals in 6 different CFO roles Most recently: CFO of QuadReal Property Group to financially
integrate 4 firms and grow real estate portfolio from $19B to $27B in 17 countries PE Operational Improvement Consulting (Alvarez & Marsal and PE Funds) Leveraged finance Investment Banker (~10 years at Deutsche Bank Securities / Bankers Trust
and CIBC); and a KPMG CPA/Tax Advisor Public Board: Diversified Royalty Corp: Chair of Investment Cmte., AC Member
Executive Summary
Situation Overview StoneMor has raised
$385M of senior secured debt with a $57.5M preferred equity raise to refinance the existing Revolving Credit Facility and Senior Unsecured Notes Fully retire existing Credit Facility due May 2020 and existing Senior Notes due June 2021 A common unit
rights offering of at least $40.185M will be launched and executed within ~100 days to all common unit holders, excluding preferred purchasers and AIM, to retire up to 2/3 of the Convertible Preferred Units With the recapitalization, the
Company’s Board of Directors is changing significantly Andrew Axelrod – Founder and Managing Partner of Axar Capital – is now Chairman of the Board Addition of two new independent directors to replace existing directors
Recapitalization provides sufficient liquidity to execute the turnaround strategy StoneMor formed a new executive team over the last year to spearhead the turnaround CEO, Joe Redling, joined in July 2018 CFO, Garry Herdler, joined April 2019 COO,
Jim Ford, joined March 2018 The new management team has already taken decisive action to: Increase sales productivity and drive asset-level accountability and profitability Identify and execute cost reductions; $30M of reductions underway with more
to come The Company is now a timely filer with 1Q19, ended 3/31/19, filed on May 10, 2019 Company now well positioned to execute turnaround strategy
CEO Initial Assessment Following Joe
Redling’s appointment in July 2018, management immediately conducted a thorough operational review, identifying several critical issues and swiftly implementing strategic initiatives to address the challenges Area of Focus Observation
Initiative Asset Base Substantial asset base for a company of its size Lack of true understanding of diverse asset base Reorganized how the Company views its assets: Tiering of operating units by class and contribution Initiating a divestiture plan
for “lower tier” assets that are adding no significant value Prioritizing resources to optimize top tier properties Focus on trust asset management Cost Structure Bloated cost structure presented material opportunity for expense cuts
Targeting to eliminate a minimum of $30M costs across corporate G&A, sales and field operations (initial plan) Pre-Need Sales Production Sales continued to struggle with minimal insights, solutions or controls on sales profitability Reducing
selling costs by eliminating low producing staff and revising staffing models to align with addressable market sizing Organizational / Corporate Structure A major reorganization was required: leadership, structure and culture Streamlining of
operations was required Visibility and focus on profitability was lacking at the corporate and business unit level There was no clear leadership or strategy as to how the organization would move forward Non-distributing Master Limited Partnership
made accessing the capital markets difficult Re-aligned priorities to focus on field operating units, instilling HQ as a service bureau attitude Decentralized operations, pushing accountability and authority to the divisional level Added 10 key
members to the leadership team both at HQ and in the field Made the conversion of the company to a C-Corp. a condition of joining the Company so capital could be accessed in the future
Strategic Evaluation of Asset Base
Management is utilizing the insight gained from its asset-level review to share best-practices and drive increased profitability across StoneMor’s portfolio of cemeteries and funeral homes Tier 1 ~25% of assets Qualities: Top performing assets
with attractive qualities, such as high volume, strong market presence and experienced, efficient operators Plan for Improvement: Assess current operating performance and identify areas for improvement Strategy: Focus on continued investment in the
assets to ensure full inventory offering to customer base and emphasis on retaining and incentivizing key employees at these assets Tier 2 ~40% of assets Qualities: Assets that possess some attractive qualities, but require operational improvement,
such as increasing operating efficiency, market share and volume Plan for Improvement: Address key issues with divisional presidents, design and implement plan to remedy existing issues at the asset level and improve financial and operational
performance Strategy: Place timeline for execution of initiatives Tier 3 ~35% of assets Qualities: Weakly performing assets qualified by low volume, unattractive market composition, weak market share and poor operating efficiency Plan for
Improvement: Reduce costs to mitigate losses and divert time / attention spent at assets to Tier 1 and 2 assets Strategy: Assets must generate cash flow or become potential candidate for divestiture The Company now reviews performance by tier and
region, providing management with an ability to derive asset-level, data-driven insights Management is seeing traction with the general manager operating model and leveraging insights from top performing regional operators and applying
best-practices throughout the asset base Operations is focused on “Tier 1” & Key Tier 2 Locations for Quick Operational Execution Impacts Over 90% of asset-level operating income and pre-need sales production
Turnaround Strategy Company Goals
Strategic Initiatives Workstream / Action Plans Improve Cash Flow & Liquidity Optimize Capital Structure Strategic Balance Sheet/ Portfolio Review Improve Performance thru - Cost Reductions Revenue Enhancement Align Team Goals and Cadence;
Prioritize; Execute Interdependencies, resources Deliverables next 6-18 months A. Improve Processes and Modernize Tools Improve Process/Quick Wins Closing Cadence, Processing Field Operations Processes B. Maximize Revenue and Profitability 4-Wall
Contribution Sales, Margins, Contribution Regional Overheads Corporate Overhead Working Capital C. Digitize StoneMor Other IT “Quick” wins Procure-to-Pay Customer Connection Work/Service orders Selling Productivity Digitize the Customer
Connection Organize/ Incent Field / Max Productivity Improve CRM integration & Conversion Focus on Pre-Need Sales Unlock the Funeral Home potential Spending Efficiency / Working Capital Manage Business Spend Upgrade Contracting Processes Retail
Mindset to Inventory & Assortment Focus on Collections & Credit for WC Process Improve & Real Time Mgmt. Improve Process, Systems & Security Increase 4-Wall & KPI Metrics-Based Focus Improve Financial Measurement and Management
Toolsets à Actionable Info Enhance Audits & Accelerate Closings Funding the Future Align/prioritize CapEx strategic investment StoneMor is focused on improving sales while reducing costs to improve 4-wall profitability, benchmarking against
deathcare peers and to more closely approach industry norms
Recapitalization Summary
Recapitalization Highlights Facility:
$385M of Senior Secured PIK Toggle Notes Maturity: 5 Years Interest: 9.875% or 7.50% Cash Interest / 4.00% PIK for 30 months Prepayment Premium: Non-Call 2 / 104 / 102 / Par thereafter Equity: $57.5M convertible preferred unit issuance at $1.104 per
share A common unit rights offering of at least $40.185 million will be launched and executed within ~100 days to all common unit holders, excluding preferred purchasers and AIM, at $1.20 per share to retire up to $40.185 million of Convertible
Preferred Units Plan to convert to C-Corp on ~December 31, 2019, but not later than March 31, 2020 Recapitalization provides sufficient liquidity to execute the turnaround strategy
Refinance Revolving Credit Facility and
Senior Unsecured Bonds and $57.5 MM Equity Injection Pro Forma Capitalization Recapitalization provides the Company with the liquidity and flexibility to execute its turnaround plan Note: Please see appendix for further detail of capitalization
table Includes ~$10 million for existing letters of credit and ~$6 million to secure credit card program Other debt is composed of notes payable – acquisition debt and insurance & vehicle financing Adjustment does not reflect write-off of
deferred financing fees or transaction expenses
Summary Debt Term Sheet Debt Term Sheet
Overview Facility $385 million Senior Secured PIK Toggle Notes Ranking / Security First priority perfected lien on all existing & future assets Maturity 5 years Interest Rate 9.875% cash PIK toggle available for 2.5 years: 7.50% cash & 4.00%
PIK Interest paid quarterly Fees OID: 3.5% Prepayment Premium NC – 2 / 104 / 102 / par thereafter Carve-out for certain asset sales Schedule Mandatory Amortization None Excess Cash Flow Sweep / Asset Sales 75% excess cash flow sweep Company to
keep a portion of asset sale proceeds over $55M, but not in excess of $155M, for reinvestment Covenants Minimum Interest Coverage Minimum Asset Coverage Minimum Liquidity (step-downs over time) Other Minimum $57.5 million primary equity issuance at
closing
Equity Summary At least $40.185M common
equity unit rights offering at $1.20 per unit to retire up to 33,487,904 of the Convertible Preferred Units (excludes 18,595,429 Convertible Preferred Units purchased by Axar) Rights offering to be launched and completed within 100 days to all
common unitholders, excluding preferred purchasers and AIM Offers opportunity for existing common unitholders to maintain their pro rata ownership in the Partnership Rights Offering Overview Timeline Objective Estimated Duration Rights Offering To
be launched and completed within 100 days C-Corp Conversion Targeting completion for December 31, 2019; expected no later than March 31, 2020 Convertible Preferred Offering Securities offered: Preferred Units of the Partnership convertible into
Common Units (the “Convertible Preferred Units”) Amounts & Purchase Price: Stated value of $62.5M ($1.20 per share) with a purchase price of $57.5M ($1.104 per share, 8.0% OID) Units Issued: 52,083,333 Convertible Preferred Units Use
of Proceeds: General corporate purposes, including debt refinancing and related expenses Conversion: Convert to common on a 1:1 basis
Board of Directors Name Background New
Board Member Independent Board Member Andrew Axelrod Chairman; Founder and Managing Partner of Axar Capital P Joe Redling President & CEO David Miller Chairman of JG Wentworth P P Spencer Goldenberg CFO of Menin Hospitality P
P Bob Hellman Co-Founder of American Infrastructure MLP Funds Stephen Negrotti Chair of Audit Committee; Former EY Partner P Patricia Wellenbach CEO of Philadelphia Please Touch Museum P
Investment Highlights
Investment Highlights Highly Attractive
Market Opportunity Strategic Initiatives Driving Improved Performance Significant Backlog Experienced Management Team and Reconstituted Board Strong Asset Base with Meaningful Intrinsic Value 1 2 3 4 5
Source: IBIS World (1) SCI and Carriage
are based on publicly available information. NorthStar and Arbor are based on internal estimates Highly Attractive Market Opportunity Historical & Projected U.S. Deaths (in millions) Aging 65+ Population 92% North American Deathcare Market Share
(1) Large, steady and growing addressable market and significant fragmentation provide for a highly attractive market opportunity Cemeteries and funeral homes represent a ~$21B market opportunity annually Addressable market continues to expand with
the aging of the baby boomer generation Highly fragmented industry; top 5 players control ~21% of market Fragmentation presents significant opportunity for future consolidation with no distinct number 2 player in North America Large, Steady and
Growing Addressable Market Highly Fragmented Industry with Significant Consolidation Opportunities Industry Characteristics 1 2 3 4 5 SCI StoneMor Carriage NorthStar Arbor 15.1% 1.5% 1.3% 1.2% 1.1%
StoneMor has built a significant
backlog driven by strong pre-need production over the years Continued pre-need contract sales refill and grow backlog, locking in future cash flow Total Cemetery Interments Performed Deferred Revenue Significant Backlog ($ in millions)
Strong Asset Base with Meaningful
Intrinsic Value Consumer receivables associated with pre-need contracts, net of cancellation reserve Cash held in state regulated merchandise trusts associated with pre-need sales Carrying value of unsold cemetery inventory Carrying value of plant,
property and equipment, including funeral home buildings and land, as well as cemetery buildings and equipment A B C D A B C D ($ in millions) Financial data as of March 31, 2019 Significant asset base book value to service net debt and merchandise
liability
Initiatives Driving Improved
Performance Improving Sales Productivity Revenue Expenses Establishment of KPIs and New Focused Recruiting Strategy Address Misaligned Incentive Structure and Poor Recruiting Strategy Sales Productivity Improving sales personnel retention and sales
productivity Establishment of sales and marketing KPIs to install accountability and enhance productivity Daily sales calls focused on accountability involving divisional, regional and local teams Focused recruiting strategy based on addressable
market opportunity, ROI and asset tier CRM analytics to improve location funnel and conversion metrics Implementation of GM structure driving accountability at the asset level SWAT approach targeting underperformance at high value properties
Eliminated the following misaligned incentives: Area sales managers’ salaries and bonuses Annual sales trip Triple override bonus Other local bonuses High turnover and on-boarding costs per hire were a net drain on resources After
“freezing” the broken hiring process, management introduced a new On-boarding Program for 2019 Experiencing lower churn in 2019 as a result of improved recruiting and on-boarding
Initiatives Driving Improved
Performance Cost Reductions Initiated a comprehensive vendor/supplier review that resulted in material changes to key vendors: payroll, health benefits, insurance, credit & collections, etc. Rationalizing employee base across the field and
corporate Identified over $30M in costs across corporate G&A, Sales and Field operations with more to come Improving Corporate Exp. Relative to Peers 2018 Corporate Expense / Revenue Improving Corporate Exp. Relative to Peers
Experienced Management Team Now In
Place Joe Redling President and Chief Executive Officer 25+ years experience, including significant experience as a senior executive in consumer businesses undergoing significant change / turnarounds Team in Place Jim Ford SVP & Chief Operating
Officer Joined StoneMor in March 2018 Over 30 years experience in the deathcare industry Lindsay Granson National Vice President of Sales & Marketing Joined StoneMor in 2017 Promoted to VP of Sales & Mktg in November 2018 Over 10 years
experience Gina Mack Vice President of Human Resources Joined StoneMor in 2007 Over 20 years experience Austin So General Counsel, Chief Legal Officer & Secretary Joined StoneMor in 2016 17 years experience Joined StoneMor in 2018 or 2019 Garry
Herdler SVP & Chief Financial Officer Joined StoneMor on April 25, 2019 Over 27 years experience as CFO, in PE ops consulting, capital markets, retail & turnarounds
Summary and Q&A Focus on Goals for
Performance Improvement à Align Management Team à Execute Strategy 1. Improve Cash Flow & Liquidity P 2.Optimize Capital Structure PP 3. Strategic Balance Sheet / Portfolio Review P 5. Set and Align Goals and Cadence;
Execute 4. Improve Performance thru Cost Reductions & Revenue Enhancement
Appendix
Refinance Revolving Credit Facility and
Senior Unsecured Bonds and $57.5 MM Equity Injection ($ in thousands) Illustrative Sources and Uses Pro Forma Capitalization Includes ~$10 million for existing letters of credit and ~$6 million to secure credit card program Includes $10 million
additional draw made on April 26, 2019 per note 17 of StoneMor's 10-Q for the 1st quarter ended March 31, 2019 Other debt is composed of notes payable – acquisition debt and insurance & vehicle financing Adjustment does not reflect
write-off of deferred financing fees or transaction expenses
StoneMor (NYSE:STON)
Historical Stock Chart
From Jun 2024 to Jul 2024
StoneMor (NYSE:STON)
Historical Stock Chart
From Jul 2023 to Jul 2024