COLLATERAL AGREEMENT dated as of June 27, 2019 by and among STONEMOR PARTNERS L.P., the other Grantors from time to time party hereto, and WILMINGTON TRUST, NATIONAL ASSOCIATION, as Collateral Agent

Exhibit 4.3

EXECUTION VERSION

 

 

 

COLLATERAL AGREEMENT

dated as of

June 27, 2019

by and among

STONEMOR PARTNERS L.P.,

the other Grantors from time to time party hereto,

and

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Collateral Agent

 

 

 

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  

 

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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 Agent’s 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 Grantor’s 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  

 

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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   

 

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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 ▇▇▇ 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 Grantor’s 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

 

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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

 

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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 ▇▇▇ 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.

 

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“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 ▇▇▇ 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 person’s 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 person’s capacity as an officer of such Grantor and not in such person’s individual capacity.

 

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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

 

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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 Grantor’s 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 Grantor’s 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 Grantor’s organizational documents, as amended, as filed with such Grantor’s 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 Grantor’s federal employer identification number is, and if such Grantor is a registered organization, such Grantor’s 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.

 

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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 Agent’s 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 Grantor’s 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.

 

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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.

 

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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 Agent’s 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 Agent’s security interest

 

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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 Agent’s 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 Grantor’s 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 Grantor’s reasonable and good faith business judgment, each Grantor will collect and enforce, at such Grantor’s 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

 

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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 Agent’s 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 ▇▇▇▇ 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.

 

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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 Agent’s 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

 

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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 Grantor’s 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 Grantor’s 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

 

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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 Grantor’s 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 Grantor’s 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 Agent’s 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

 

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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 bank’s 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 Grantor’s 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

 

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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 Agent’s 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;

 

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  (ii)

permit the Collateral Agent, by the Collateral Agent’s 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 Grantor’s 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 Grantor’s rights under all licenses and all franchise agreements shall inure to the Collateral Agent’s 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 Grantor’s Inventory directly to any person, including without limitation persons who have previously purchased such Grantor’s Inventory from such Grantor and in connection with any such sale or other enforcement of the Collateral Agent’s 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.

 

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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 bank’s 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 Agent’s 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 Agent’s rights under this Article VIII shall be subject to compliance with

 

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applicable Cemetery Laws, including requirements pertaining to the placement of proceeds of any Grantor’s 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

 

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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 Agent’s 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 Grantor’s 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 Agent’s sole discretion to perfect and to maintain the perfection and priority of the Collateral Agent’s 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 Agent’s sole discretion to perfect and

 

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to maintain the perfection and priority of the Collateral Agent’s 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 Agent’s 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 Agent’s 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.

 

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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 Grantor’s 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.

 

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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

 

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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 Grantor’s receipt of written notice of the Collateral Agent’s 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, ▇▇▇ 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 Grantor’s 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

 

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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

 

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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]

 

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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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇

Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇

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.
   ▇▇▇▇▇▇▇▇▇ Memorial Funeral Home, Inc.
   ▇▇▇▇▇▇▇▇▇ Memorial Gardens, Inc.
   ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Funeral Home, Inc.
   Forest Lawn Gardens, Inc.
   Forest Lawn Memorial Chapel, Inc.
   Forest Lawn Memory Gardens, Inc.
   ▇▇▇▇ Haven Memorial Park LLC
   ▇▇▇▇ Haven Memorial Park Subsidiary, Inc.
   Henlopen Memorial Park LLC
   Henlopen Memorial Park Subsidiary LLC
   ▇▇▇▇▇ Memorial Park LLC
   ▇▇▇▇▇ Memorial Park Subsidiary, Inc.
   Juniata Memorial Park LLC
   KIRIS LLC
   KIRIS Subsidiary, Inc.
   ▇▇▇▇ & Nice, Inc.
   ▇▇▇▇ & Nice Suburban Chapel, Inc.
   Lakewood/▇▇▇▇▇▇▇▇ Cemetery LLC
   Lakewood/▇▇▇▇▇▇▇▇ 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.
   ▇▇▇▇▇▇ [Virginia] LLC
   ▇▇▇▇▇▇ [Virginia] Subsidiary, Inc.
   ▇▇▇▇▇▇▇▇ ▇▇▇▇ Cemetery LLC
   ▇▇▇▇▇▇▇▇ ▇▇▇▇ 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 ▇▇▇▇▇▇▇.▇▇▇, Inc.
   Plymouth Warehouse Facilities LLC
   Prince ▇▇▇▇▇▇ 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
   ▇▇▇▇▇▇▇ Memorial Cemetery LLC
   ▇▇▇▇▇▇▇ 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.
   ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Funeral Home, Inc.
   ▇▇▇▇▇▇▇ LLC
   ▇▇▇▇▇▇▇ 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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇

  Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
  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/ ▇▇▇▇▇▇ ▇. ▇’▇▇▇▇▇▇▇                

Name: ▇▇▇▇▇▇ ▇. ▇’▇▇▇▇▇▇▇

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 Grantor’s 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 Grantor’s 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 Grantor’s 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

[PATENT/TRADEMARK/COPYRIGHT] REGISTRATIONS AND APPLICATIONS

[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 Assignee’s 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 Agent’s 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:                                                        
  ▇▇▇▇▇ ▇▇▇▇▇▇▇, 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 Payor’s 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 Agent’s 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
By:  

 

Name:
Title:

 

D-9

Schedule to Intercompany Note

Document Metadata

Filed: June 28th, 2019