EXHIBIT 10.26
ROSE HILLS COMPANY
FIRST AMENDMENT TO
CREDIT AGREEMENT
Reference is made to that certain Credit Agreement, dated as of November
19, 1996 (as amended through the date hereof, the "Credit Agreement"), by and
among ROSE HILLS HOLDINGS CORP., a Delaware corporation (formerly known as Tudor
Holdings Company) ("Holdings"), ROSE HILLS COMPANY, a Delaware corporation
(formerly known as Tudor Acquisition Corp.) ("Borrower"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT
PARTNERS L.P. (as successor to ▇▇▇▇▇▇▇, Sachs & Co.), as syndication agent and
arranging agent (in such capacities, "Syndication Agent" and "Arranging Agent",
respectively), THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO (each
individually referred to herein as a "Lender" and collectively as "Lenders") and
THE BANK OF NOVA SCOTIA ("Scotiabank") as administrative agent for Lenders (in
such capacity, "Administrative Agent"), which Credit Agreement is hereby amended
by this FIRST AMENDMENT, dated as of January 12, 2001 (this "First Amendment").
Capitalized terms used herein not otherwise defined herein or otherwise amended
hereby shall have the meanings ascribed thereto in the Credit Agreement.
RECITALS:
WHEREAS, Holdings, Borrower and the Lenders have agreed to amend the
Credit Agreement, subject to the terms and conditions set forth herein to (i)
allow Borrower to sell and purchase certain assets and to grant a conservation
easement, (ii) allow the Borrower to enter into certain subleases and (iii)
allow Borrower to calculate its financial covenants without regard to SAB 101
(as defined below).
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT
1.1 Amendments to Section 1: Certain Defined Terms.
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Section 1.1 of the Credit Agreement is hereby amended by adding
thereto the following definitions in proper alphabetical order:
"Cliff Area" means those certain lands contained within Sycamore
Canyon consisting of old claywork property.
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"Colton Property" means that certain property located on ▇▇▇▇ ▇. ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
"Colton Sublease" means that certain sublease agreement between
Borrower and Grupo Deco America Corporation, to be entered into in 2001,
whereby Borrower shall sublease to Grupo Deco America Corporation the
Colton Property for an initial term of two and one-half years (renewable in
increments thereafter in accordance with the prime lease) in the
approximate amount of $45,000 per year and 10% of gross receipts.
"Dark Canyon" means 156 acres of undeveloped permitted cemetery lands
in the county of Los Angeles.
"First Amendment" means the First Amendment dated January 12, 2001 to
this Agreement by and among Holdings, Borrower, Lenders as of the date of
such amendment and the Agents.
"First Amendment Closing Date" has the meaning assigned to that term
in the First Amendment.
"Habitat Authority" means the ▇▇▇▇▇▇ Hills Landfill Native Habitat
Preservation Authority.
"Pet Cemetery" means eight acres of land located at the entrance to
Sycamore Canyon which is owned by the Habitat Authority, and that Borrower
desires to develop into a pet cemetery.
"Property Exchange" means that certain agreement for the transfer of
real property by and between Borrower and Habitat Authority, to be entered
into in 2001, whereby (i) Borrower shall acquire from Habitat Authority fee
title to the Pet Cemetery, (ii) Borrower shall grant to Habitat Authority a
conservation easement on and over a portion of Dark Canyon and (iii)
Habitat Authority shall acquire from Borrower fee title to the Cliff Area.
"San ▇▇▇▇▇▇▇▇ Lease" means that certain lease agreement between
Borrower and Grupo Deco America Corporation, to be entered into in 2001,
whereby Borrower shall lease to Grupo Deco America Corporation the San
▇▇▇▇▇▇▇▇ Property for an initial term of three years (renewable in five
year increments thereafter) in the approximate amount of $100,000 per year
and 10% of the annual revenue, with a minimum guarantee of $100,000.
"San ▇▇▇▇▇▇▇▇ Property" means that certain property located on ▇▇▇▇ ▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
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"Sycamore Canyon" means an environmentally sensitive coastal canyon
that is approximately 1.5 miles in length.
1.2 Amendments to Section 1.2: Accounting Terms; Utilization of GAAP for
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Purposes of Calculations Under Agreement.
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Section 1.2 of the Credit Agreement is hereby amended by adding the
following paragraph at the conclusion thereof:
"Notwithstanding any of the foregoing to the contrary, after the First
Amendment Closing Date, calculations of all financial covenants set
forth in Section 7.6 herein (other than for the purpose of determining
the Pricing Premium and Pricing Reduction) shall not give effect to
the interpretation of Staff Accounting Bulletin No. 101 ("SAB 101") or
any Statement of Financial Accounting Standards applied as a result of
interpreting SAB 101; provided, however, that Borrower shall provide
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the Lenders with reconciliation statements setting forth the
differences between any financial statements delivered pursuant to
Section 6.1 that give effect to the interpretation of SAB 101 and any
Compliance Certificate delivered to Lenders pursuant to Subsection
6.1(b)(iii) that demonstrates compliance with the financial covenants
set forth in Section 7.6."
1.3 Amendments to Section 7: Negative Covenants.
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A. Subsection 7.2A of the Credit Agreement is hereby amended by
deleting the word "and" at the conclusion of Subsection 7.2A(vii), by deleting
the "." at the conclusion of Subsection 7.2(A)(viii) and replacing it with ";
and" and by adding the following new paragraph (ix) at the conclusion thereof:
"(ix) Borrower may grant a conservation easement to Habitat
Authority on and over a portion of Dark Canyon."
B. Section 7.7 of the Credit Agreement is hereby amended by deleting
the word "and" at the conclusion of Subsection 7.7(vi), by deleting the "." at
the conclusion of Subsection 7.7(vii) and replacing it with ";" and by adding
the following new paragraphs (viii) and (ix) at the conclusion thereof:
"(viii) so long as no Potential Event of Default or Event of
Default shall have occurred and be continuing or would result
therefrom, Borrower and its Subsidiaries may enter into the
Property Exchange; provided, that simultaneous with Borrower's
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acquisition of Pet Cemetery, Borrower shall take all such actions
as may be requested by Administrative Agent (including the
execution and delivery of a Mortgage) to cause Pet
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Cemetery to become and remain subject to a First Priority Lien in
favor of Administrative Agent for the benefit of Lenders; and
(ix) Borrower may enter into the San ▇▇▇▇▇▇▇▇ Lease and the
Colton Sublease."
SECTION 2. CONDITIONS PRECEDENT TO EFFECTIVENESS
2.1 The effectiveness of the amendments set forth at Section 1 hereof are
subject to the satisfaction, or waiver, of the following conditions on or before
the date hereof (the "First Amendment Closing Date"):
(a) The Borrower, Holdings and Requisite Lenders shall have indicated
their consent by the execution and delivery of the signature pages hereof to the
Administrative Agent.
(b) As of the First Amendment Closing Date, the representations and
warranties contained herein and in the other Loan Documents shall be true,
correct and complete in all respects on and as of the First Amendment Closing
Date to the same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to an earlier
date, in which case such representations and warranties shall have been true,
correct and complete in all respects on and as of such earlier date.
(c) As of the First Amendment Closing Date, no event shall have
occurred and be continuing that would constitute an Event of Default or a
Default.
(d) The Agents shall have received all fees and other amounts due and
payable on or prior to the First Amendment Closing Date, including, to the
extent invoiced, reimbursement or other payment of all legal and other out-of-
pocket expenses required to be reimbursed or paid by the Borrower hereunder or
under any other Loan Document.
(e) The Agents and Lenders shall have received such other documents
and information regarding Credit Parties and the Amended Agreement as Agents or
Lenders may reasonably request.
SECTION 3. REPRESENTATIONS AND WARRANTIES
3.1 In order to induce Lenders to enter into this Amendment, each
applicable Loan Party represents and warrants to each Lender, as of the date
hereof and upon giving effect to this Amendment, that the representations and
warranties contained in each of the Loan Documents is true, correct and
complete in all respects on and as of the date hereof to the same extent as
though made on and as of that date, except to the extent such representations
and warranties
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specifically relate to an earlier date, in which case such representations and
warranties shall have been true, correct and complete in all respects on and as
of such earlier date.
SECTION 4. ACKNOWLEDGMENT AND CONSENT
4.1 Each of Rose Hills Holdings Corp., RH Mortuary Corporation, Rose
Hills, Inc., RH Satellite Properties, Corp., A.L. Cemetery, Harbor Lawn Memorial
Park, Inc., Colton Funeral Chapel, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ Covina Mortuary,
Inc., ▇▇▇▇▇▇ Service Corporation, ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Mortuaries, Grove Colonial
Mortuary, Inc., ▇▇▇▇ Funeral Directors, Inc., ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Mortuary,
Inc., San ▇▇▇▇▇▇▇▇ Mortuary, Inc., White Funeral Home, Inc., Rose Hills
Mortuary, Inc. and Rose Hills Mortuary, L.P., has (i) guarantied the Obligations
and (ii) created Liens in favor of Lenders on certain Collateral to secure its
obligations under the Holdings Guaranty and Subsidiary Guaranty. Each of Rose
Hills Holdings Corp., RH Mortuary Corporation, Rose Hills, Inc., RH Satellite
Properties, Corp., A.L. Cemetery, Harbor Lawn Memorial Park, Inc., Colton
Funeral Chapel, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ Covina Mortuary, Inc., ▇▇▇▇▇▇ Service
Corporation, ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Mortuaries, Grove Colonial Mortuary, Inc., ▇▇▇▇
Funeral Directors, Inc., ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Mortuary, Inc., San ▇▇▇▇▇▇▇▇
Mortuary, Inc., White Funeral Home, Inc., Rose Hills Mortuary, Inc. and Rose
Hills Mortuary, L.P., are collectively referred to herein as the "Credit Support
Parties", and the Holdings Guaranty, the Holdings Pledge Agreement, the
Subsidiary Guaranty and the Subsidiary Pledge Agreement are collectively
referred to herein as the "Credit Support Documents".
4.2 Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of the Credit Agreement and this Amendment and consents to
the amendment of the Credit Agreement effected pursuant to this Amendment. Each
Credit Support Party hereby confirms that each Credit Support Document to which
it is a party or otherwise bound and all Collateral encumbered thereby will
continue to guarantee or secure, as the case may be, to the fullest extent
possible the payment and performance of all Guarantied Obligations under the
Holdings Guaranty and Subsidiary Guaranty and Secured Obligations under the
Holdings Pledge Agreement and Subsidiary Pledge Agreement, as the case may be
(in each case as such terms are defined in the applicable Credit Support
Document), including without limitation the payment and performance of all such
Guarantied Obligations under each of the Holdings Guaranty and Subsidiary
Guaranty and of all such Secured Obligations under the Holdings Pledge Agreement
and Subsidiary Pledge Agreement, as the case may be, in respect of the
Obligations of Borrower now or hereafter existing under or in respect of the
Amended Agreement.
4.3 Each Credit Support Party acknowledges and agrees that any of the
Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in the
Amended Agreement and the Credit Support Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the Amendment Closing Date to the same extent as though made on and as of
that date, except to the extent such representations and
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warranties specifically relate to an earlier date, in which case they were true,
correct and complete in all material respects on and as of such earlier date.
4.4 Each Credit Support Party acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Credit Support Party is not required by the terms of the Credit Agreement
or any other Loan Document to consent to the amendments to the Credit Agreement
effected pursuant to this Amendment and (ii) nothing in the Credit Agreement,
this Amendment or any other Loan Document shall be deemed to require the consent
of such Credit Support Party to any future amendments to the Credit Agreement.
SECTION 5. MISCELLANEOUS
5.1 This First Amendment shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of Lenders. No Loan Party's
rights or obligations hereunder or any interest therein may be assigned or
delegated by any Loan Party without the prior written consent of all Lenders.
5.2 In case any provision in or obligation hereunder shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
5.3 On and after the First Amendment Closing Date, each reference in the
Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words
of like import referring to the Credit Agreement, and each reference in the
other Loan Documents to the "Credit Agreement", "thereunder", "thereof" or words
of like import referring to the Credit Agreement shall mean and be a reference
to the Credit Agreement as amended by this Amendment.
5.4 Except as specifically amended by this First Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and effect and
are hereby ratified and confirmed.
5.5 The execution, delivery and performance of this First Amendment shall
not, except as expressly provided herein, constitute a waiver of any provision
of, or operate as a waiver of any right, power or remedy of any Agent or Lender
under, the Credit Agreement or any of the other Loan Documents.
5.6 Section headings herein are included herein for convenience of
reference only and shall not constitute a part hereof for any other purpose or
be given any substantive effect.
5.7 THIS FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
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CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
5.8 This First Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument.
As set forth herein, this First Amendment shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Borrower, Holdings and Agents of written or telephonic notification of such
execution and authorization of delivery thereof.
[The remainder of this page is intentionally left blank.]
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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 date first written above.
BORROWER: ROSE HILLS COMPANY
By:____________________________
Name:
Title:
CREDIT SUPPORT
PARTIES: ROSE HILLS HOLDINGS CORP.
By:____________________________
Name:
Title:
RH MORTUARY CORPORATION
By:____________________________
Name:
Title:
ROSE HILLS, INC.
By:____________________________
Name:
Title:
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RH SATELLITE PROPERTIES, CORP.
By:____________________________
Name:
Title:
A.L. CEMETERY
By:____________________________
Name:
Title:
HARBOR LAWN MEMORIAL
PARK, INC.
By:____________________________
Name:
Title:
COLTON FUNERAL CHAPEL, INC.
By:____________________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ COVINA
By:____________________________
Name:
Title:
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▇▇▇▇▇▇ SERVICE CORPORATION
By:____________________________
Name:
Title:
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ MORTUARIES
By:____________________________
Name:
Title:
GROVE COLONIAL MORTUARY, INC.
By:____________________________
Name:
Title:
▇▇▇▇ FUNERAL DIRECTORS, INC.
By:____________________________
Name:
Title:
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ MORTUARY, INC.
By:____________________________
Name:
Title:
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SAN ▇▇▇▇▇▇▇▇ MORTUARY, INC.
By:____________________________
Name:
Title:
WHITE FUNERAL HOME, INC.
v
ROSE HILLS MORTUARY, INC.
v
ROSE HILLS MORTUARY, L.P.
By:____________________________
Name:
Title:
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SYNDICATION AGENT, ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.
ARRANGING AGENT AND
A LENDER:
By:__________________________
Authorized Signatory
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ADMINISTRATIVE AGENT AND THE BANK OF NOVA SCOTIA
A LENDER:
By:____________________________
Name:
Title:
13
LENDER: FIRST UNION NATIONAL BANK
By:____________________________
Name:
Title:
14
INDOSUEZ CAPITAL FUNDING III, LIMITED
By: Indosuez Capital as Portfolio Advisor
By:____________________________
Name:
Title:
15
CERES FINANCE LTD.
By: INVESCO Senior Management, Inc.
As Sub-Managing Agent
By:____________________________
Name:
Title:
16
FLOATING RATE PORTFOLIO
By: INVESCO Senior Management, Inc.
As Attorney in fact
By:____________________________
Name:
Title:
17
AMARA-1 FINANCE, LTD.
By: INVESCO Senior Management, Inc.
As Sub-Advisor
By:____________________________
Name:
Title:
18
AVALON CAPITAL LTD.
By: INVESCO Senior Management, Inc.
As Portfolio Advisor
By:____________________________
Name:
Title:
19
CHARTER VIEW PORTFOLIO
By: INVESCO Senior Management, Inc.
As Investment Advisor
By:____________________________
Name:
Title:
20
AERIES FINANCE-II LTD.
By: INVESCO Senior Management, Inc.
As Sub-Managing Agent
By:____________________________
Name:
Title:
21
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR
FLOATING RATE FUND, INC.
By:____________________________
Name:
Title:
22
▇▇▇▇▇▇▇ ▇▇▇▇▇ GLOBAL INVESTMENT
SERIES: INCOME STRATEGIES PORTFOLIO
By: ▇▇▇▇▇▇ ▇▇▇▇▇ Investment Managers, L.P.
as Investment Advisor
By:____________________________
Name:
Title:
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▇▇▇▇▇▇▇ ▇▇▇▇▇ PRIME RATE PORTFOLIO
By: ▇▇▇▇▇▇ ▇▇▇▇▇ Investment Managers, L.P.
as Investment Advisor
By:____________________________
Name:
Title:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
PRIME INCOME TRUST
By:____________________________
Name:
Title:
25
NEW YORK LIFE INSURANCE COMPANY
By:____________________________
Name:
Title:
26
LENDER: ▇▇▇▇▇ ▇▇▇▇▇
By:____________________________
Name:
Title:
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