EXHIBIT 10.27
ROSE HILLS COMPANY
SECOND 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 SECOND AMENDMENT, dated as of April 27, 2001 (this "Second 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
the Borrower to enter into certain subleases and (ii) allow Scotiabank to extend
its Revolving Loan Commitment to April 1, 2003.
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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A. Section 1.1 of the Credit Agreement is hereby amended by adding
thereto the following definitions in proper alphabetical order:
"San ▇▇▇▇▇▇▇▇ Purchase Option" means an option granted to Grupo
Deco America to purchase the San ▇▇▇▇▇▇▇▇ Property in an amount of no
less than $650,000 upon the expiration of the initial five-year term
of the San ▇▇▇▇▇▇▇▇ Lease on terms and conditions reasonably
satisfactory to the Agents.
"Second Amendment" means the Second Amendment dated April 27,
2001 to this Agreement by and among Holdings, Borrower, Lenders as of
the date of such amendment and the Agents.
"Second Amendment Closing Date" has the meaning assigned to that
term in the Second Amendment.
B. Section 1.1 of the Credit Agreement is hereby amended by deleting
the definitions of "Clean-Down Period" and "Revolving Loan Commitment
Termination Date" in their entirety and replacing them with the following:
"Clean-Down Period" means a period of thirty consecutive days during
which no more than $0 in aggregate principal amount of the sum of the
Revolving Loans and Swing Line Loans is outstanding at any time during such
period. A Clean-Down Period shall be deemed to have occurred on the last
day of any such period.
"Revolving Loan Commitment Termination Date" means November 1, 2001;
provided, however, that with respect to the Revolving Loan Commitment
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provided by Scotiabank, the "Revolving Loan Commitment Termination Date"
shall mean April 1, 2003; provided, further, however, that on the Second
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Amendment Closing Date, Scotiabank's Revolving Loan Commitment shall be
$10,000,000.
1.2 Amendments to Section 2.4B(iii): Mandatory Prepayments.
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Subsection 2.4B(iii)(h) of the Credit Agreement is hereby amended by
deleting such subsection in its entirety and replacing it with the
following:
"(h) Prepayments of Revolving Loans and Swing Line Loans during a
------------------------------------------------------------
Clean-Down Period. It being understood that the Borrower has met any
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Clean-Down Period requirement for the year 2001, if on December 1 of each
year commencing on December 1, 2002, a Clean-Down Period shall not have
occurred since January 30 of such year, Borrower shall prepay all
outstanding Revolving Loans and/or Swing Line Loans in an amount necessary
to reduce the sum of the aggregate outstanding principal amount of
Revolving Loans and Swing Line Loans to $0, which amount may not be
exceeded until the Clean-Down Period for such year has ended. Borrower
shall notify the Administrative Agent of the occurrence of a Clean-Down
Period."
1.3 Amendments to Section 3: Letters of Credit.
--------------------------------------------
Section 3.1 of the Credit Agreement is hereby amended by deleting
Subsection 3.1A(ii) in its entirety and replacing it with the foregoing:
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"(ii) any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed $1,000,000; or"
1.4 Amendments to Section 7: Negative Covenants.
-------------------------------------------
Section 7.7 of the Credit Agreement is hereby amended by deleting the word
"and" at the conclusion of Subsection 7.7(viii), by deleting the "." at the
conclusion of Subsection 7.7(ix) and replacing it with ";" and by adding the
following new paragraphs (x) and (xi) at the conclusion thereof
"(x) Borrower may grant the San ▇▇▇▇▇▇▇▇ Purchase Option and may sell
the San ▇▇▇▇▇▇▇▇ Property in connection therewith; provided that the
--------
Borrower shall apply the Net Asset Sale Proceeds of any such sale to prepay
the Loans notwithstanding any contrary provisions set forth in Subsection
2.4B(iii)(a), in the manner set forth in Subsections 2.4B(iv)(b) and
2.4B(iv)(c); and
(xi) Borrower may sell and sublease the properties described on
Schedule 7.7(xi); provided, that in the event of a sale, the consideration,
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terms and conditions of such sale shall be reasonably satisfactory to the
Agents; provided, further, that Borrower shall apply the Net Asset Sale
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Proceeds of any sale (together with all periodic payments received on any
notes received in lieu of cash proceeds) to prepay the Loans
notwithstanding any contrary provisions set forth in Subsection
2.4B(iii)(a), in the manner set forth in Subsections 2.4B(iv)(b) and
2.4B(iv)(c)."
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 "Second Amendment Closing Date"):
(a) The Borrower, Holdings, Scotiabank and Requisite Lenders shall have
indicated their consent by the execution and delivery of the signature pages
hereof to the Administrative Agent.
(b) The Agents shall have received an opinion of counsel to the Borrower in
form and substance reasonably satisfactory to the Agents.
(c) As of the Second 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 Second 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
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and complete in all respects on and as of such earlier date.
(d) As of the Second Amendment Closing Date, no event shall have occurred
and be continuing that would constitute an Event of Default or a Default.
(e) Scotiabank shall have received a new Revolving Note to reflect the
extension of the Revolving Loan Commitment Termination Date.
(f) The Agents shall have received all fees and other amounts due and
payable on or prior to the Second 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.
(g) The Agents and Lenders shall have received such other documents and
information regarding Credit Parties and the Credit 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 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
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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
Credit Agreement, as amended hereby.
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
Credit Agreement, as amended hereby 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 Second 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 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 Second 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
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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 Second 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 Second 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 Second 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 SECOND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
5.8 This Second 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 Second 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.
[Remainder of page 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:
RH SATELLITE PROPERTIES, CORP.
By:____________________________
Name:
Title:
S-2
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:
▇▇▇▇▇▇ SERVICE CORPORATION
By:____________________________
Name:
Title:
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ MORTUARIES
By:____________________________
Name:
Title:
S-3
GROVE COLONIAL MORTUARY, INC.
By:____________________________
Name:
Title:
▇▇▇▇ FUNERAL DIRECTORS, INC.
By:____________________________
Name:
Title:
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ MORTUARY, INC.
By:____________________________
Name:
Title:
SAN ▇▇▇▇▇▇▇▇ MORTUARY, INC.
By:____________________________
Name:
Title:
WHITE FUNERAL HOME, INC.
By:____________________________
Name:
Title:
ROSE HILLS MORTUARY, INC.
By:____________________________
Name:
Title:
ROSE HILLS MORTUARY, L.P.
By:____________________________
Name:
Title:
S-4
SYNDICATION AGENT, ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.
ARRANGING AGENT AND
A LENDER:
By:__________________________
Authorized Signatory
S-5
ADMINISTRATIVE AGENT AND THE BANK OF NOVA SCOTIA
A LENDER:
By:____________________________
Name:
Title:
S-6
LENDER: FIRST UNION NATIONAL BANK
By:____________________________
Name:
Title:
S-7
INDOSUEZ CAPITAL FUNDING III, LIMITED
By: Indosuez Capital as Portfolio Advisor
By:____________________________
Name:
Title:
S-8
CERES FINANCE LTD.
By: INVESCO Senior Management, Inc.
As Sub-Managing Agent
By:____________________________
Name:
Title:
S-9
FLOATING RATE PORTFOLIO
By: INVESCO Senior Management, Inc.
As Attorney in fact
By:____________________________
Name:
Title:
S-10
AMARA-1 FINANCE, LTD.
By: INVESCO Senior Management, Inc.
As Sub-Advisor
By:____________________________
Name:
Title:
S-11
AVALON CAPITAL LTD.
By: INVESCO Senior Management, Inc.
As Portfolio Advisor
By:____________________________
Name:
Title:
S-12
CHARTER VIEW PORTFOLIO
By: INVESCO Senior Management, Inc.
As Investment Advisor
By:____________________________
Name:
Title:
S-13
AERIES FINANCE-II LTD.
By: INVESCO Senior Management, Inc.
As Sub-Managing Agent
By:____________________________
Name:
Title:
S-14
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR
FLOATING RATE FUND, INC.
By:____________________________
Name:
Title:
S-15
[Intentionally omitted.]
S-16
[Intentionally omitted.]
S-17
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
PRIME INCOME TRUST
By:____________________________
Name:
Title:
S-18
▇▇▇▇▇ ▇▇▇▇▇
By:____________________________
Name:
Title:
S-19
HIGHLAND CAPITAL MANAGEMENT
By:____________________________
Name:
Title:
S-20
Schedule 7.7(xi)
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Sale/Sublease of Properties
"Grove Colonial Mortuary" means that certain mortuary located in San
Bernardino, CA.
"Grove Colonial Mortuary Transaction" means either (i) a sublease by
the Borrower of the Grove Colonial Mortuary in the approximate amount of
$48,000 per year and 5% of the annual revenue in excess of $650,000 or (ii)
a sale of the Grove Colonial Mortuary for consideration and on terms and
conditions reasonably satisfactory to the Agents.
"Home of Peace Memorial Park" means that certain cemetery located in
Los Angeles, CA.
"▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Mortuary" means that certain mortuary located in
Ontario, CA.
"▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Mortuary Sublease" means either (i) a sublease
agreement between Borrower and Grupo Deco America Corporation whereby
Borrower shall sublease to Grup Deco America Corporation the ▇▇▇▇▇▇▇▇▇▇-
▇▇▇▇▇▇▇▇ Mortuary for a term expiring in May 2003 in the approximate amount
of $48,000 per year and 5% of the annual revenue or (ii) a sale of the
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Mortuary for consideration and on terms and conditions
reasonably satisfactory to the Agents.
"▇-▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Mortuaries" means that certain
mortuary located in West Hollywood, CA.
"Home of Peace Memorial Park and ▇-▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇
Mortuary Transaction" means either (i) the bundled sale of both locations
for $1.0 million ($150,000 in cash and a seller financed note for
$850,000), or alternatively, (ii) an individual sale of either the Home of
Peace Memorial Park and/or the ▇-▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Mortuaries
for consideration and on terms and conditions reasonably satisfactory to
the Agents.