SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

Exhibit 10.1

SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

This SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (the “Second Amendment”) dated April 30, 2009, is by and among StoneMor GP LLC, a Delaware limited liability company (the “General Partner”), StoneMor Partners L.P., a Delaware limited partnership (the “Partnership”), StoneMor Operating LLC, a Delaware limited liability company (the “Operating Company”), the Subsidiaries of the Operating Company set forth on the signature pages hereto (together with the Operating Company, each individually a “Borrower” and collectively, the “Borrowers” and together with the General Partner and the Partnership, each individually a “Credit Party” and collectively, the “Credit Parties”), the existing and joining lenders party hereto (collectively, the “Lenders”), and Bank of America, N.A., a national banking association, as Administrative Agent for the benefit of the Lenders (in such capacity, the “Administrative Agent”).

BACKGROUND

A. Pursuant to that certain Amended and Restated Credit Agreement, dated August 15, 2007, by and among the parties hereto, as amended by that certain First Amendment to Amended and Restated Credit Agreement, dated November 2, 2007 (as amended, modified or otherwise supplemented from time to time, the “Credit Agreement”), the existing Lenders agreed, inter alia , to extend to the Borrowers (i) a revolving credit facility in the maximum aggregate principal amount of Twenty-Five Million Dollars ($25,000,000), and (ii) an acquisition facility in the maximum aggregate principal amount of Forty Million Dollars ($40,000,000).

B. Borrowers have requested, inter alia , an increase in (i) the size of the Revolving Credit Facility to a maximum aggregate principal amount of Thirty-Five Million Dollars ($35,000,000), with the ability to request further increases thereto in a maximum aggregate principal amount of Ten Million Dollars ($10,000,000), and (ii) the size of the Acquisition Facility to a maximum aggregate principal amount of One Hundred Two Million Eight Hundred Fifty Thousand Dollars ($102,850,000), with the ability to request further increases thereto in a maximum aggregate principal amount of Fifty-Seven Million Dollars ($57,000,000).

C. The commitments for the requested increases being provided pursuant to this Second Amendment are, in part, being provided by the new Lenders party hereto.

D. The existing Lenders are willing to agree to such increases and certain additional amendments, on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

1. Definitions .

(a) General Rule . Except as expressly set forth herein, all capitalized terms used and not defined herein shall have the respective meanings ascribed thereto in the Credit Agreement.

 

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(b) Additional Definitions . The following additional definitions are hereby added to Section 1.01 of the Credit Agreement to read in their entirety as follows:

“ Consolidated Fixed Charge Coverage Ratio ” means, as of any date of determination, the ratio of (a) Consolidated EBITDA, less any cash dividends or distributions made by the Partnership to (b) Consolidated Fixed Charges, each as measured for the most recently completed Measurement Period.

“ Consolidated Fixed Charges ” means, for any period, the sum of (a) the aggregate principal amount of all regularly scheduled principal payments, redemptions or similar acquisitions for value of outstanding Consolidated Funded Indebtedness for such period (but excluding any prepayments or early redemptions or similar acquisitions for value) and (b) Consolidated Interest Charges with respect to Consolidated Funded Indebtedness for such period. All calculations of Consolidated Fixed Charges shall additionally be adjusted on a Pro Forma Basis.

“ Equivalent Disposition ” means the Disposition by an Borrower to any Person (other than another Borrower) of (i) assets constituting a business unit, (ii) all or a substantial part of the business of any Borrower, or (iii) sufficient capital stock or other Equity Interests of any Borrower so that, after giving effect to such Disposition such Person is no longer a Subsidiary.

“ Eurodollar Unavailability Period ” means any period of time during which a notice delivered to the Borrower in accordance with Section 3.03 shall remain in force and effect.

“ Exclusive Management Agreement ” means an agreement pursuant to which a Borrower obtains an exclusive right to manage and control a funeral home or cemetery business of any other Person for a term of not less than one (1) year.

“ LIBOR Floor ” means 2.00% per annum.

“ Maintenance Capital Expenditures ” means Capital Expenditures of the Partnership and any of its Subsidiaries other than Capital Expenditures representing amounts paid in connection with (a) improvements which enhance (as opposed to maintain) the value of property, (b) the purchase or construction of mausoleums and (c) Permitted Acquisitions.

“ Maturing Senior Notes ” means the 7.66% Senior Secured Series A Notes of the Credit Parties due September 20, 2009, in an aggregate principal amount of $80,000,000, issued and originally sold on September 20, 2004 pursuant to, and in accordance with, the Note Purchase Agreement.

“ Prime Rate ” means the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.” The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

 

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“ Second Amendment ” means the Second Amendment to this Agreement dated April 30, 2009.

“ Second Amendment Effective Date ” means the date on which the Second Amendment is effective in accordance with its terms.

“ 2007 Senior Notes ” means (a) the 11.00% Senior Secured Series B Notes of the Credit Parties due August 15, 2012, in an aggregate principal amount of $35,000,000, originally sold on August 15, 2007, and (b) the 11.00% Senior Secured Series C Notes of the Credit Parties due August 15, 2012, in an aggregate principal amount of $17,500,000, originally sold on December 21, 2007, each issued pursuant to, and in accordance with, the Note Purchase Agreement.

(c) Amended Definitions . The following definitions from Section 1.01 of the Credit Agreement are hereby amended and restated to read in their entirety as follows:

“ Applicable Rate ” means the applicable percentage per annum set forth below for Eurodollar Rate Loans, Letter of Credit Fees and Base Rate Loans, as determined by reference to the Consolidated Leverage Ratio as set forth in the most recent Compliance Certificate at any time received by the Administrative Agent (a) on the Closing Date, or (b) thereafter pursuant to Section 6.02(b):

 

Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio shall become effective as of the first Business Day immediately following the applicable Start Date; provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then Pricing Level 3 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered (until the first Business Day after the date which such Compliance Certificate is actually delivered which demonstrates another Pricing Level is applicable). Notwithstanding anything to the contrary contained in this definition, the determination of the Applicable Rate for any period shall be subject to the provisions of Section 2.10(b) and (c).

“ Base Rate ” means, for any day, a rate per annum equal to the highest of (a) the Prime Rate for such day, (b) the sum of 0.50% plus the Federal Funds Rate for such day and (c) except during a Eurodollar Unavailability Period, the Eurodollar Rate plus 1.00%.

 

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“ Commitment Fee Rate ” means, at any time, the percentage per annum set forth below for the Commitment Fee, as determined by reference to the Consolidated Leverage Ratio as set forth in the most recent Compliance Certificate at any time received by the Administrative Agent (a) on the Closing Date, or (b) thereafter pursuant to Section 6.02(b):

 

Any increase or decrease in the Commitment Fee Rate resulting from a change in the Consolidated Leverage Ratio shall become effective as of the first Business Day immediately following the applicable Start Date; provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then Pricing Level 3 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered (until the first Business Day after the date which such Compliance Certificate is actually delivered which demonstrates another Pricing Level is applicable). Notwithstanding anything to the contrary contained in this definition, the determination of the Commitment Fee Rate for any period shall be subject to the provisions of Section 2.10(b) and (c).

“ Eurodollar Rate ” means: (a) for any Interest Period with respect to a Eurodollar Rate Loan, the greater of (i) the rate per annum equal to (A) the British Bankers Association LIBOR Rate as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) (“BBA LIBOR”), at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period or (B) if such published rate is not available at such time for any reason, the rate determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank Eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period and (ii) the LIBOR Floor.

(b) For any interest rate calculation with respect to a Base Rate Loan, the rate per annum equal to (i) BBA LIBOR, at approximately 11:00 a.m., London time

 

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two Business Days prior to the date of determination (provided that if such day is not a London Business Day, the next preceding London Business Day) for Dollar deposits being delivered in the London interbank market for a term of one month commencing that day or (ii) if such published rate is not available at such time for any reason, the rate determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the date of determination in same day funds in the approximate amount of the Base Rate Loan being made, continued or converted by Bank of America and with a term equal to one month would be offered by Bank of America’s London Branch to major banks in the London interbank Eurodollar market at their request at the date and time of determination.

“ Senior Secured Notes ” means (a) the Maturing Senior Notes, (b) the 2007 Senior Notes, and (c) any Future Senior Secured Notes.

(d) Amendment to Definition of “Consolidated EBITDA” . The definition of “Consolidated EBITDA” set forth in Section 1.01 of the Credit Agreement is hereby amended by (i) replacing the two references, in the first proviso of such definition, to “Permitted Acquisitions” with references to “Permitted Acquisitions or Equivalent Dispositions” and (ii) amending and restating in its entirety Subsection (h), as follows:

“(h) reasonable fees, costs and expenses incurred in connection with the Transaction, the restructuring of the Existing Credit Agreement and the Note Purchase Agreement, the Second Amendment and the related amendment to the Note Purchase Agreement, and the refinancing of the Maturing Senior Notes;”

(e) Amendment to Definition of “Consolidated Interest Charges” . The definition of “Consolidated Interest Charges” set forth in Section 1.01 of the Credit Agreement is hereby amended by replacing the references to “Permitted Acquisitions” with references to “Permitted Acquisitions or Equivalent Dispositions”.

(f) Amendment to Definition of “Consolidated Net Income” . The definition of “Consolidated Net Income” set forth in Section 1.01 of the Credit Agreement is hereby amended by adding the following immediately after “for any period” in the first line of the definition: “, subject to determinations expressly required to made on a Pro Forma Basis”.

(g) Amendment to Definition of “Investment” . The definition of “Investment” set forth in Section 1.01 of the Credit Agreement is hereby amended by adding the following immediately preceding the period at the end of the definition: “, or (d) any Exclusive Management Agreement”.

(h) Amendment to Definition of “Permitted Acquisition” . The definition of “Permitted Acquisition” set forth in Section 1.01 of the Credit Agreement is hereby amended by replacing “or (b)” with “(b) rights from a Domestic Person under any Exclusive Management Agreement, or (c)”.

(i) Amendment to Definition of “Pro Forma Basis” . The definition of “Pro Forma Basis” set forth in Section 1.01 of the Credit Agreement is hereby amended by replacing “a net asset value of Perpetual Care Trusts multiplied by ten-year Treasury Rate plus 150 basis points and Merchandise Trusts multiplied by five-year Treasury Rate plus 150 basis

 

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points” in clause (b) of such definition with the following: “the net asset value thereof multiplied by the yield to maturity of the Barclays Aggregate Bond Index plus 200 basis points (or if such index is not available, a replacement index and margin that is selected by the Operating Company and reasonably satisfactory to the Administrative Agent), but in any case, not less than 5% per annum or more than 7% per annum.

2. Amendment to Section 2.01 . Subsection (a) of Section 2.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:

(a) The Acquisition Borrowings . Subject to the terms and conditions set forth herein, each Acquisition Lender severally agrees to make Acquisition Loans to the Borrowers from time to time, on any Business Day during the Availability Period for the Acquisition Facility, in an aggregate amount not to exceed such Acquisition Lender’s Acquisition Commitment. Each Acquisition Borrowing shall consist of Acquisition Loans made simultaneously by the Acquisition Lenders in accordance with their respective Applicable Percentage of the Acquisition Facility. Amounts borrowed under this Section 2.01(a) and repaid or prepaid may not be reborrowed. Acquisition Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

3. Amendment to Section 2.10 . Subsection (a) of Section 2.10 of the Credit Agreement is hereby amended and restated in its entirety as follows:

(a) All computations of interest for Base Rate Loans shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a) , bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

4. Amendments to Section 2.14 and 2.15 . Subsection (e) of each of Section 2.14 and Section 2.15 of the Credit Agreement is hereby amended by adding the following sentence at the end of each subsection: “In addition, the Borrowers will pay any recording taxes on account of the above described increase (to the extent not previously paid by the Borrowers).”

5. Amendment to Section 2.15 . Subsection (a) of Section 2.15 of the Credit Agreement is hereby amended and restated in its entirety as follows:

(a) Request for Increase . Provided there exists no Default, upon notice to the Administrative Agent (which shall promptly notify the Acquisition Lenders), the Borrowers may from time to time, request an increase in the Acquisition Facility by an amount (for all such requests) not exceeding Fifty-Seven Million Dollars ($57,000,000); provided that any such request for an increase shall be in a minimum amount of Five Million Dollars ($5,000,000). At the time of sending

 

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such notice, the Borrowers (in consultation with the Administrative Agent) shall specify the time period within which each Acquisition Lender is requested to respond (which shall in no event be less than ten (10) Business Days from the date of delivery of such notice to the Acquisition Lenders).

6. Amendment to Section 3.02 . Section 3.02 of the Credit Agreement is hereby amended and restated in its entirety as follows:

3.02 Illegality . If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrowers through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans or, if such notice relates to the unlawfulness or asserted unlawfulness of charging interest based on the Eurodollar Rate, to make Base Rate Loans as to which the interest rate is determined with reference to the Eurodollar Rate shall be suspended until such Lender notifies the Administrative Agent and the Borrowers that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrowers shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender and Base Rate Loans as to which the interest rate is determined with reference to the Eurodollar Rate to Base Rate Loans as to which the rate of interest is not determined with reference to the Eurodollar Rate, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans or Base Rate Loan. Notwithstanding the foregoing and despite the illegality for such a Lender to make, maintain or fund Eurodollar Rate Loans or Base Rate Loans as to which the interest rate is determined with reference to the Eurodollar Rate, that Lender shall remain committed to make Base Rate Loans as to which the interest rate is not determined with reference to the Eurodollar Rate and shall be entitled to recover interest at the Base Rate. Upon any such prepayment or conversion, the Borrowers shall also pay accrued interest on the amount so prepaid or converted.

7. Amendment to Section 3.03 . Section 3.03 of the Credit Agreement is hereby amended and restated in its entirety as follows:

3.03 Inability to Determine Rates . If the Required Lenders determine that for any reason in connection with any request for a Loan or a conversion to or continuation thereof that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Loan, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan or in connection with a Base Rate Loan, or (c) the

 

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Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan or in connection with a Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Borrowers and each Lender. Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans and Base Rate Loans as to which the interest rate is determined with reference to the Eurodollar Rate shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrowers may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein. Notwithstanding the foregoing, that Lenders shall remain committed to make Base Rate Loans as to which the interest rate is not determined by reference to the Eurodollar Rate and shall be entitled to recover interest at the Base Rate.

8. Amendment to Section 6.11 . Subsection (a) of Section 6.11 of the Credit Agreement is hereby amended and restated in its entirety as follows:

(a) The proceeds of the Acquisition Loans shall be utilized by the Borrowers (i) to finance Permitted Acquisitions and related transaction costs, (ii) to finance the purchase and construction of mausoleums and related costs, and (iii) to refinance the Maturing Senior Notes.

9. Amendment to Section 7.1 1. Section 7.11 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

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Financial Covenants .

(a) Minimum EBITDA . Permit Consolidated EBITDA for any Measurement Period to be less than the sum of (i) $39,000,000 plus (ii) 80% of the aggregate of all Consolidated EBITDA for each Permitted Acquisition completed after the Second Amendment Effective Date (the “Permitted Acquisition Step-Up”).

(b) Minimum Consolidated Fixed Charge Coverage Ratio . Permit the Consolidated Fixed Charge Coverage Ratio for any Measurement Period ending in any year set forth below, to be less than the ratio set forth to the right of such year.

 

(c) Consolidated Leverage Ratio . Permit the Consolidated Leverage Ratio for (i) any of the first four Measurement Periods ending on or after the Second Amendment Effective Date, to be greater than 3.75 to 1.0, or (ii) any Measurement Period not described in (i) above, to be greater than 3.50 to 1.0.

 

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(d) Maximum Maintenance Capital Expenditures . Permit the Maintenance Capital Expenditures for any Measurement Period ending in any year set forth below to exceed the amount set forth to the right of such year.

 

(e) SFAS 15 and 159 . For the purposes of the calculation of any financial covenant in this Section 7.11, any election by a Credit Party to measure an item of Indebtedness using fair value (as permitted by Statement of Financial Accounting Standards Nos. 15 and 159) shall be disregarded and such determination shall be made as if such election had not been made.

10. Amendment and Restatement of Schedules and Exhibits . Each of the Schedules and Exhibits (other than Exhibit G) to the Credit Agreement, are hereby amended, restated and replaced by the Schedules and Exhibits attached to this Second Amendment.

11. Post-Closing Covenant . Not later than August 31, 2009, the Borrower StoneMor Illinois LLC shall resolve its delinquent property tax issues with respect to its real property in a manner reasonably satisfactory to the Collateral Agent.

12. Representations and Warranties . Each Credit Party hereby represents and warrants to the Administrative Agent and the Lenders that, as to such Credit Party:

(a) Representations . Each of the representations and warranties of or as to such Credit Party contained in the Credit Agreement and the other Credit Documents are true and correct in all material respects on and as of the date hereof as if made on and as of the date hereof, except to the extent such representation or warranty was made as of a specific date;

(b) Power and Authority . (i) Such Credit Party has the power and authority under the laws of its jurisdiction of organization and under its organizational documents to enter into and perform this Second Amendment and any other documents which the Administrative Agent requires such Credit Party to deliver hereunder (this Second Amendment and any such additional documents delivered in connection with the Second Amendment are herein referred to as the “Second Amendment Documents”); and (ii) all actions, corporate or otherwise, necessary or appropriate for the due execution and full performance by such Credit Party of the Second Amendment Documents have been adopted and taken and, upon their execution, the Credit Agreement, as amended by this Second Amendment and the other Second Amendment Documents will constitute the valid and binding obligations of such Credit Party enforceable in accordance with their respective terms, except as such enforcement may be limited by any Debtor Relief Law from time to time in effect which affect the enforcement of creditors rights in general and the availability of equitable remedies;

(c) No Violation . The making and performance of the Second Amendment Documents will not (i) contravene, conflict with or result in a breach or default under any applicable law, statute, rule or regulation, or any order, writ, injunction, judgment,

 

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ruling or decree of any court, arbitrator or governmental instrumentality, (ii) contravene, constitute a default under, conflict or be inconsistent with or result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of the property or assets of any Credit Party pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, credit agreement or any other agreement or instrument to which any Credit Party is a party or by which it or any of its property or assets are bound or to which it may be subject or (iii) contravene or violate any provision of the certificate of incorporation, by-laws, certificate of partnership, partnership agreement, certificate of limited liability company, limited liability company agreement or equivalent organizational document, as the case may be, any Credit Party;

(d) No Default . Immediately prior to and after giving effect to this Second Amendment, no Default or Event of Default has occurred and is continuing;

(e) No Material Adverse Effect . No Material Adverse Effect has occurred since December 31, 2008; and

(f) Organizational Documents . There have been no changes in the organizational documents of the Credit Parties since August 15, 2007 (or such later date as any such organizational documents were initial adopted), except as described on Annex 1 hereto, certified copies of which have been (i) previously provided to the Administrative Agent or (ii) are attached to the Secretary’s Certificate described in Subsection 10(h) below.

13. Conditions to Effectiveness of Amendment . This Second Amendment shall be effective upon the Administrative Agent’s receipt of the following, each in form and substance reasonably satisfactory to the Administrative Agent:

(a) Second Amendment . This Second Amendment, duly executed by the Credit Parties and the Lenders, together with updated Schedules and Exhibits to the Credit Agreement, as referenced in Section 8 hereof;

(b) Amendment to Intercreditor Agreement . A duly executed first amendment to the Intercreditor Agreement;

(c) Amendment to Note Purchase Agreement and Notes . A duly executed copy of the Second Amendment to Amended and Restated Note Purchase Agreement, dated as of the date hereof, by and among the Credit Parties and the Purchasers (the “NPA Second Amendment”), amending the Note Purchase Agreement, together with copies of the 2007 Senior Notes issued thereunder on the date hereof, if any;

(d) Notes . Notes, duly executed by the Borrowers, for each Lender requesting one;

(e) Financing Statements . Continuation statements in form appropriate for filing to extend and update existing financing statements;

(f) Appraisals and Field Exam . Appraisals for the Borrowers’ properties described on Annex 2 hereto and a completed filed exam of the Borrowers;

 

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(g) Real Property Documents . Modifications with respect to each of the Mortgages, affidavits of no change, bring-down title policies and endorsements and such other related real estate documents as reasonably requested;

(h) Secretary’s Certificate . A master secretary’s certificate for each Credit Party, attaching customary deliveries;

(i) Good Standing Certificates . Subsistence or good standing certificates, and any applicable foreign qualification certificates, for each Credit Party;

(j) Legal Opinions . The legal opinion of Blank Rome with respect to the Credit Parties and opinions of local counsel to the Borrowers in the various states in which the Borrowers operate;

(k) UCC Lien Searches . UCC lien searches of recent date against each of the Credit Parties;

(l) Compliance Certificate . A Compliance Certificate prepared as of the date of this Second Amendment with respect to the Measurement Period ending December 31, 2008;

(m) Borrowing Base Certificate . A Borrowing Base Certificate prepared as of the date of this Second Amendment;

(n) Committed Loan Notice . A Committed Loan Notice for each Loan being requested to be made on the date of this Second Amendment;

(o) Insurance Certificates . Current certificates, or other evidence as may be reasonably requested, of liability and property insurance, listing the Collateral Agent as additional insured, loss payee and mortgagee, as applicable;

(p) Other Fees and Expenses . Payment to the Administrative Agent, in immediately available funds, of all amounts necessary to reimburse the Administrative Agent for the reasonable fees and costs incurred by the Administrative Agent in connection with the preparation and execution of this Second Amendment and any other Credit Document, including, without limitation, all fees and costs incurred by the Administrative Agent’s attorneys;

(q) Consent and Waivers . Copies of any consents or waivers necessary in order for the Credit Parties to comply with or perform any of its covenants, agreements or obligations contained in any agreement which are required as a result of any Credit Party’s execution of this Second Amendment, if any; and

(r) Other Documents and Actions . Such additional agreements, instruments, documents, writings and actions as the Administrative Agent may reasonably request.

14. No Waiver; Ratification . The execution, delivery and performance of this Second Amendment shall not (a) operate as a waiver of any right, power or remedy of the Lenders under the Credit Agreement, any Credit Document or any Second Amendment Document and the agreements and documents executed in connection therewith or (b) constitute

 

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a waiver of any provision thereof. Except as expressly modified hereby, all terms, conditions and provisions of the Credit Agreement and the other Credit Documents shall remain in full force and effect and are hereby ratified and confirmed by the Credit Parties. Nothing contained herein constitutes an agreement or obligation by the Administrative Agent or the Lenders to grant any further amendments to any of the Credit Documents.

15. Acknowledgments . To induce the Administrative Agent and the Lenders to enter into this Second Amendment, the Credit Parties acknowledge, agree, warrant, and represent that:

(a) Acknowledgment of Obligations; Collateral; Waiver of Claims . (i) the Credit Documents are valid and enforceable against, and all of the terms and conditions of the Credit Documents are binding on, the Credit Parties; (ii) the liens and security interests granted to the Collateral Agent, on behalf of the Secured Parties, by the Credit Parties pursuant to the Credit Documents are valid, legal and binding, properly recorded or filed and first priority perfected liens and security interests (subject to Permitted Liens); and (iii) the Credit Parties hereby waive any and all defenses, set offs and counterclaims which they, whether jointly or severally, may have or claim to have against each of the Secured Parties as of the date hereof.

(b) No Waiver of Existing Defaults . No Default or Event of Default exists immediately before or immediately after giving effect to this Second Amendment. Nothing in this Second Amendment nor any communication between any Secured Party, any Credit Party or any of their respective officers, agents, employees or representatives shall be deemed to constitute a waiver of (i) any Default or Event of Default arising as a result of the foregoing representation proving to be false or incorrect in any material respect, or (ii) any rights or remedies which any Secured Party has against any Credit Party under the Credit Agreement or any other Credit Document and/or applicable law, with respect to any such Default or Event of Default arising as a result of the foregoing representation proving to be false or incorrect in any material respect.

16. Joinder of New Lenders . Each new Lender signing this Second Amendment hereby acknowledges and agrees, by its execution and delivery of this Second Amendment, that it joins the Credit Agreement as a Lender thereunder, subject to all the rights and responsibilities of a Lender thereunder. Each new Lender (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Second Amendment and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements which would be applicable to an assignee under Section 11.06(b)(iii), (v) and (vi) of the Credit Agreement, (iii) from and after the date of this Second Amendment, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of its Commitments, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by its Commitments and either it, or the Person exercising discretion in making its decision to acquire its Commitments, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Second Amendment and to purchase its Commitments, (vi) it has, independently and without reliance upon the Administrative Agent or any other Secured Party, and based on such documents and

 

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information as it has deemed appropriate, made its own credit analysis and decision to enter into this Second Amendment and to provide its Commitments, and (vii) if it is a Foreign Lender, it has provided to the Administrative Agent any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by it; and (b) agrees that (i) it will, independently and without reliance upon the Administrative Agent or any other Secured Party, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Documents.

17. Reallocation of Loans . On the Second Amendment Effective Date, in order to effectuate any reallocations of Loans necessary to reflect the revised Commitments of the Lenders:

(a) The Borrowers shall prepay (with the proceeds of Revolving Credit Loans received on such date) any Revolving Credit Loans outstanding on the Second Amendment Effective Date (and pay any additional amounts required pursuant to Section 3.05 ) to the extent necessary to keep the outstanding Revolving Credit Loans ratable with any revised Applicable Revolving Credit Percentages arising from any nonratable increase in the Revolving Credit Commitments under the Second Amendment; and

(b) The Borrowers shall prepay any Acquisition Loans (with the proceeds of Acquisition Loans received on such date) outstanding on the Second Amendment Effective Date (and pay any additional amounts required pursuant to Section 3.05 ) to the extent necessary to keep the outstanding Acquisition Loans ratable with any revised Applicable Acquisition Percentages arising from any nonratable increase in the Acquisition Commitments under the Second Amendment.

18. Binding Effect . This Second Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

19. Governing Law . This Second Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without reference to the choice of law doctrine of the Commonwealth of Pennsylvania.

20. Headings . The headings of the sections of this Second Amendment are inserted for convenience only and shall not be deemed to constitute a part of this Second Amendment.

21. Counterparts . This Second Amendment may be executed in any number of counterparts with the same affect as if all of the signatures on such counterparts appeared on one document and each counterpart shall be deemed an original. Delivery of an executed counterpart of a signature page of this Second Amendment by telecopy or by electronic means shall be effective as delivery of a manually executed counterpart of this Second Amendment.

22. Consent to NPA Second Amendment . To the extent that consent of the Lenders is required, the Lenders hereby consent to the NPA Second Amendment.

 

13

IN WITNESS WHEREOF, the parties hereto, by their respective duly authorized officers, have executed this Second Amendment to Amended and Restated Credit Agreement as of the date first above written.

 

Borrowers’ Signature Page to Second Amendment to Amended and Restated Credit Agreement

Additional Credit Parties

Alleghany Memorial Park Subsidiary, Inc.

Altavista Memorial Park Subsidiary, Inc.

Arlington Development Company

Augusta Memorial Park Perpetual Care Company

Bethel Cemetery Association

Beth Israel Cemetery Association of Woodbridge, New Jersey

Birchlawn Burial Park Subsidiary, Inc.

Cedar Hill Funeral Home, Inc.

Cemetery Investments Subsidiary, Inc.

Clover Leaf Park Cemetery Association

Columbia Memorial Park Subsidiary, Inc.

Cornerstone Family Insurance Services, Inc.

Cornerstone Family Services of New Jersey, Inc.

Cornerstone Family Services of West Virginia Subsidiary, Inc.

Covenant Acquisition Subsidiary, Inc.

Crown Hill Cemetery Association

Eloise B. Kyper Funeral Home, Inc.

Glen Haven Memorial Park Subsidiary, Inc.

Henlopen Memorial Park Subsidiary, Inc.

Henry Memorial Park Subsidiary, Inc.

Highland Memorial Park, Inc.

Hillside Memorial Park Association, Inc.

KIRIS Subsidiary, Inc.

Lakewood/Hamilton Cemetery Subsidiary, Inc.

Lakewood Memory Gardens South Subsidiary, Inc.

Laurel Hill Memorial Park Subsidiary, Inc.

Laurelwood Holding Company

Legacy Estates, Inc.

Locustwood Cemetery Association

Loewen [Virginia] Subsidiary, Inc.

Lorraine Park Cemetery Subsidiary, Inc.

Modern Park Development Subsidiary, Inc.

Northlawn Memorial Gardens

Oak Hill Cemetery Subsidiary, Inc.

Ohio Cemetery Holdings, Inc.

Osiris Holding Finance Company

Osiris Holding of Maryland Subsidiary, Inc.

Osiris Holding of Rhode Island Subsidiary, Inc.

Osiris Management, Inc.

Osiris Telemarketing Corp.

 

By:		/s/ Paul Waimberg
		Paul Waimberg, as Vice President of Finance for each of the above-named Credit Parties

Borrowers’ Signature Page to Second Amendment to Amended and Restated Credit Agreement

Perpetual Gardens.Com, Inc.

PVD Acquisitions Subsidiary, Inc.

Rockbridge Memorial Gardens Subsidiary Company

Rose Lawn Cemeteries Subsidiary, Incorporated

Roselawn Development Subsidiary Corporation

Russell Memorial Cemetery Subsidiary, Inc.

Shenandoah Memorial Park Subsidiary, Inc.

Sierra View Memorial Park

Southern Memorial Sales Subsidiary, Inc.

Springhill Memory Gardens Subsidiary, Inc.

Star City Memorial Sales Subsidiary, Inc.

Stephen R. Haky Funeral Home, Inc.

Stitham Subsidiary, Incorporated

StoneMor Alabama Subsidiary, Inc.

StoneMor California, Inc.

StoneMor California Subsidiary, Inc.

StoneMor Georgia Subsidiary, Inc.

StoneMor Hawaii Subsidiary, Inc.

StoneMor North Carolina Funeral Services, Inc.

StoneMor Ohio Subsidiary, Inc.

StoneMor Tennessee Subsidiary, Inc.

StoneMor Washington, Inc.

Sunset Memorial Gardens Subsidiary, Inc.

Sunset Memorial Park Subsidiary, Inc.

Temple Hill Subsidiary Corporation

The Valhalla Cemetery Subsidiary Corporation

Virginia Memorial Service Subsidiary Corporation

W N C Subsidiary, Inc.

Wicomico Memorial Parks Subsidiary, Inc.

Willowbrook Management Corp.

 

By:		/s/ Paul Waimberg
		Paul Waimberg, as Vice President of Finance for each of the above-named Credit Parties

 

Borrowers’ Signature Page to Second Amendment to Amended and Restated Credit Agreement

Alleghany Memorial Park LLC

Altavista Memorial Park LLC

Bedford County Memorial Park LLC

Birchlawn Burial Park LLC

Blue Ridge Memorial Gardens LLC

Cemetery Investments LLC

Cemetery Management Services, L.L.C.

Cemetery Management Services of Mid-Atlantic States, L.L.C.

Cemetery Management Services of Ohio, L.L.C.

Cemetery Management Services of Pennsylvania, L.L.C.

Chartiers Cemetery LLC

CMS West LLC

CMS West Subsidiary LLC

Columbia Memorial Park LLC

Cornerstone Family Services of West Virginia LLC

Cornerstone Funeral and Cremation Services LLC

Covenant Acquisition LLC

Glen Haven Memorial Park LLC

Green Lawn Memorial Park LLC

Henlopen Memorial Park LLC

Henry Memorial Park LLC

J.V. Walker LLC

Juniata Memorial Park LLC

KIRIS LLC

Lakewood/Hamilton Cemetery LLC

Lakewood Memory Gardens South LLC

Laurel Hill Memorial Park LLC

Laurelwood Cemetery LLC

Loewen [Virginia] LLC

Lorraine Park Cemetery LLC

Melrose Land LLC

Modern Park Development LLC

Mount Lebanon Cemetery LLC

Mt. Airy Cemetery LLC

Oak Hill Cemetery LLC

Osiris Holding of Maryland LLC

Osiris Holding of Pennsylvania LLC

Osiris Holding of Rhode Island LLC

Prospect Hill Cemetery LLC

PVD Acquisitions LLC

Riverside Cemetery LLC

Riverview Memorial Gardens LLC

Rockbridge Memorial Gardens LLC

Rolling Green Memorial Park LLC

 

By:		/s/ Paul Waimberg
		Paul Waimberg, as Vice President of Finance for each of the above-named Credit Parties

 

Borrowers’ Signature Page to Second Amendment to Amended and Restated Credit Agreement

Rose Lawn Cemeteries LLC

Roselawn Development LLC

Russell Memorial Cemetery LLC

Shenandoah Memorial Park LLC

Southern Memorial Sales LLC

Springhill Memory Gardens LLC

Star City Memorial Sales LLC

Stitham LLC

StoneMor Alabama LLC

StoneMor Arkansas Subsidiary LLC

StoneMor Cemetery Products LLC

StoneMor Colorado LLC

StoneMor Colorado Subsidiary LLC

StoneMor Florida Subsidiary LLC

StoneMor Georgia LLC

StoneMor Hawaii LLC

StoneMor Hawaiian Joint Venture Group 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 Missouri LLC

StoneMor Missouri Subsidiary LLC

StoneMor North Carolina LLC

StoneMor North Carolina Subsidiary LLC

StoneMor Ohio LLC

StoneMor Oregon LLC

StoneMor Oregon Subsidiary LLC

StoneMor Pennsylvania LLC

StoneMor Pennsylvania Subsidiary LLC

StoneMor Puerto Rico LLC

StoneMor Puerto Rico Subsidiary LLC

StoneMor South Carolina LLC

StoneMor South Carolina Subsidiary LLC

StoneMor Washington Subsidiary LLC

 

By:		/s/ Paul Waimberg
		Paul Waimberg, as Vice President of Finance for each of the above-named Credit Parties

 

Borrowers’ Signature Page to Second Amendment to Amended and Restated Credit Agreement

Sunset Memorial Gardens LLC

Sunset Memorial Park LLC

Temple Hill LLC

The Coraopolis Cemetery LLC

The Prospect Cemetery LLC

The Valhalla Cemetery Company LLC

Tioga County Memorial Gardens LLC

Tri-County Memorial Gardens LLC

Twin Hills Memorial Park and Mausoleum LLC

Virginia Memorial Service LLC

WNCI LLC

Westminster Cemetery LLC

Wicomico Memorial Parks LLC

Woodlawn Memorial Gardens LLC

Woodlawn Memorial Park LLC

Woodlawn Memorial Park Subsidiary LLC

 

By:		/s/ Paul Waimberg
		Paul Waimberg, as Vice President of Finance for each of the above-named Credit Parties

 

Borrowers’ Signature Page to Second Amendment to Amended and Restated Credit Agreement

Administrative Agent’s Signature Page to Second Amendment to Amended and Restated Credit Agreement

Lender’s Signature Page to Second Amendment to Amended and Restated Credit Agreement

 

Lender’s Signature Page to Second Amendment to Amended and Restated Credit Agreement

 

Lender’s Signature Page to Second Amendment to Amended and Restated Credit Agreement

 

Lender’s Signature Page to Second Amendment to Amended and Restated Credit Agreement

 

Lender’s Signature Page to Second Amendment to Amended and Restated Credit Agreement

 

Lender’s Signature Page to Second Amendment to Amended and Restated Credit Agreement

 

Lender’s Signature Page to Second Amendment to Amended and Restated Credit Agreement

 

Lender’s Signature Page to Second Amendment to Amended and Restated Credit Agreement

SCHEDULE 2.01

COMMITMENTS

AND APPLICABLE PERCENTAGES

 

SCHEDULE 11.02

ADMINISTRATIVE AGENT’S OFFICE,

CERTAIN ADDRESSES FOR NOTICES

STONEMOR OPERATING LLC:

311 Veterans Highway, Suite B

Levittown, PA 19056

Attention: William Shane, President

Telephone: (215) 826-2800

Fax: (215) 826-2851

Electronic Mail: wshane@stonemor.com

Website Address: http://www.stonemor.com

U.S. Taxpayer Identification Number: 90-0182025

ADMINISTRATIVE AGENT:

Lender (Including Swingline) :

Bank of America, N.A.

Four Penn Center - Suite 1100

1600 JFK Blvd

Mail Code: PA7-188-11-01

Philadelphia PA 19103

Attention: Kenneth Wood

Telephone: 267.675.0209

Fax: 212.548.8941

Electronic Mail: kenneth.g.wood@bankofamerica.com

Administrative Agent’s Office :

(for payments and Requests for Credit Extensions):

Bank of America, N.A.

One Independence Center

101 N Tryon St.

Mail Code: NC1-001-04-39

Charlotte, NC 28255-0001

Attention: Brian Greuling

Telephone: 980.386.3767

Fax: 704.683-9368

Electronic Mail: brian.t.greuling@bankofamerica.com

Account No.: 136-621-225-0600

Bank of America, New York, NY

Ref: Stonemor Operating

ABA# 026009593

Account Name: Corporate Credit Services, Charlotte, NC

Other Notices as Administrative Agent :

(Financial Reporting, Borrowing Bases, Compliance Certificates, etc)

Bank of America, N.A.

Agency Management

231 South LaSalle Street

Mail Code: IL1-231-10-41

Chicago, IL 60604

Attention: Laura Call

Telephone: 312.828.3559

Fax: 312.828.3559

Electronic Mail: laura.call@bankofamerica.com

With a copy to:

Bank of America, N.A.

Four Penn Center - Suite 1100

1600 JFK Blvd

Mail Code: PA7-188-11-01

Philadelphia PA 19103

Attention: Kenneth Wood

Telephone: 267.675.0209

Fax: 212.548.8941

Electronic Mail: kenneth.g.wood@bankofamerica.com

L/C ISSUER:

Standby Letters of Credit:

Bank of America,