StoneMor Partners L.P. (NYSE:STON) Files An 8-K Entry into a Material Definitive Agreement

ME Staff 8-k
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StoneMor Partners L.P. (NYSE:STON) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01

On September29, 2017, StoneMor Operating LLC (the Operating
Company), a wholly-owned subsidiary of StoneMor Partners L.P.
(the Partnership), the Subsidiaries (as defined in the Amended
Credit Agreement) of the Operating Company (together with the
Operating Company, Borrowers), the Lenders party thereto and
Capital One, National Association (Capital One), as
Administrative Agent (in such capacity, the Administrative
Agent), entered into the Fourth Amendment to Credit Agreement
(the Fourth Amendment) which further amended the Credit Agreement
(as previously amended by that certain First Amendment to Credit
Agreement dated as of March15, 2017, Second Amendment and Limited
Waiver dated July26, 2017 and Third Amendment and Limited Waiver
effective August15, 2017, the Original Credit Agreement and, as
further amended by the Fourth Amendment, the Amended Credit
Agreement), dated as of August4, 2016, among the Borrowers, the
Lenders, Capital One, as Administrative Agent, Issuing Bank and
Swingline Lender, Citizens Bank of Pennsylvania, as Syndication
Agent, and TD Bank, N.A. and Raymond James Bank, N.A., as
Co-Documentation Agents. Capitalized terms not otherwise defined
herein have the same meanings as specified in the Amended Credit
Agreement.

The Fourth Amendment amends certain terms of the Original Credit
Agreement to:

reduce the amount of the Revolving Commitments from
$210,000,000 to $200,000,000;
prior to the date on which the Partnership shall have
achieved, as of the last day of any fiscal quarter after the
effective date of the Fourth Amendment, a Consolidated
Leverage Ratio of less than 4.00:1.00 for the four
consecutive fiscal quarters ending on such date: (a)limit
Revolving Credit Availability to (i)the lesser of the
Borrowing Base, which is equal to the sum of 80% of accounts
receivable outstanding less than 120 days plus 40% of the
book value, net of depreciation, of property, plant and
equipment, and the aggregate Revolving Commitments of the
Lenders at such time, minus (ii)the aggregate outstanding
amount of Revolving Credit Exposures of the Lenders and (b)in
the event the sum of the aggregate principal amount of all of
the Revolving Credit Exposures of the Lenders exceeds the
Borrowing Base then in effect, require the Borrowers to
immediately prepay borrowings in an amount so that the
Revolving Credit Availability is at least $0;
amend the Maximum Consolidated Leverage Ratio to provide that
such ratio shall be no greater than 4.25:1.00 for the period
January1, 2017 through June30, 2017, 4.50:1.00 for the period
July1, 2017 through December31, 2017, 4.25:1.00 for the
period January1, 2018 through December31, 2018 and 4.00:1.00
for periods commencing January1, 2019 and thereafter, subject
to the right under the Amended Credit Agreement to increase
the Consolidated Leverage Ratio any time after January1, 2019
to a maximum of 4.25:1.00 in connection with the consummation
of a Designated Acquisition;
amend the definition of Consolidated EBITDA, which is used in
the calculation of various financial covenants, to (A)permit
the Partnership to add back the following: (i) non-cash
compensation or other expense arising from equity
compensation awards; (ii), non-cash items determined in good
faith by the Partnerships Financial Officer; (iii)unrealized
losses (less unrealized gains) and non-cash expenses


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arising from or attributable to the early termination of
any Swap Agreement; (iv)non-recurring cash expenses,
losses, costs and charges subject to limits of $14.3
million for the period ended June30, 2017, $12.0 million
for the period ended September30, 2017 and the periods
ending December31, 2017,March31, 2018 and June30, 2018,
$4.0 million for the period ending September30, 2018 and
$2.0 million for the periods ending thereafter;
(v)non-recurring cash expenses, costs and charges relating
to the ongoing SEC investigation and related actions,
ongoing class action litigation and any other non-ordinary
course of business legal matters in an aggregate amount for
all periods not to exceed $5,000,000; and (vi)certain cash
expenses, costs and charges with respect to liability or
casualty events to the extent insurance or indemnity
recovery from a third party is actually received or is
reasonably expected to be received within 90 days following
the end of the applicable period; and (B)require the
Partnership to subtract the following: (i)non-cash items
increasing Consolidated Net Income for the applicable
period; (ii)federal, state, local and foreign income tax
credits or refunds during such period; (iii)certain cash
payments made during the applicable period in respect of
any noncash accrual, reserve or other non-cash charge that
is accounted for in a prior period which was added to
Consolidated Net Income to determine Consolidated EBITDA
for such prior period and which does not otherwise reduce
Consolidated Net Income for the current period; and (iv)the
amount of any insurance or indemnity recovery not so
received within the 90 day period (or such longer period)
set forth above and any recovery payments which are made by
third parties within the 90 day period (or such longer
period) set forth above, in each case to the extent added
back to consolidated net income in the prior period;

amend the definition of Consolidated Leverage Ratio to permit
the Partnership to deduct from Indebtedness the aggregate
amount of all unrestricted cash and Cash Equivalents of the
Partnership and its Subsidiaries in accounts subject to a
first priority, perfected lien (subject to certain permitted
liens) in favor of the Administrative Agent in an amount not
to exceed $5,000,000;
add provisions relating to a Fixed Charge Coverage Ratio
that:
establish a minimum Consolidated Fixed Charge Coverage Ratio
(as described below), as of the last day of any fiscal
quarter, commencing on September30, 2017, determined for the
period of four (4)consecutive fiscal quarters ending on such
date, of 1.20:1.00 for the four fiscal quarter period ending
on such measurement date;


define Consolidated Fixed Charge Ratio as the ratio of
(i)Consolidated EBITDA for the four fiscal quarter period
ending on the applicable measurement date, minus (x)the
aggregate of all expenditures by the Partnership and its
Subsidiaries for a specified period which are included in
Maintenance Capital Expenditures or Growth Capital
Expenditures


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reflected in the consolidated statement of cash flows of
the Partnership, but excluding any such expenditures to the
extent financed from the proceeds of Indebtedness (other
than Revolving Loans) or insurance proceeds or other
similar recoveries paid on account of the loss of or damage
to the assets being replaced or restored or other assets
and that are made during such period, (y)any federal,
state, local and foreign taxes paid by the Partnership and
its Subsidiaries during such period (net of any tax credits
or refunds during such period), and (z)all Restricted
Payments (which includes distributions) paid in cash by the
Partnership during such period, to (ii)Consolidated Fixed
Charges for the four fiscal quarter period ending on such
measurement date; and

define Consolidated Fixed Charges as the sum of
(i)Consolidated Interest Expense paid or payable in cash plus
(ii)the aggregate amount of all scheduled principal payments
with respect to all Consolidated Funded Indebtedness, but
excluding any such payments to the extent refinanced through
the incurrence of additional Indebtedness permitted under the
Amended Credit Agreement;
extend the deadline by which the Operating Company is
required to deliver to the Administrative Agent the
Partnerships unaudited financial statements for the quarter
ended September30, 2017 to no later than forty-five (45)days
after the date on which the Partnership files with the U.S.
Securities and Exchange Commission its Quarterly Report on
Form 10-Q for the fiscal quarter ended June30, 2017, but in
any event not later than January31, 2018;
require that, until the Partnership shall have achieved, for
two consecutive fiscal quarters, as of the last day of any
fiscal quarter after the effective date of the Fourth
Amendment, a Consolidated Leverage Ratio of less than
4.00:1.00 for the period of four (4)consecutive fiscal
quarters ending on such date, the Operating Company continue
to deliver to the Administrative Agent certain financial
statements within 35 days after the end of each month for the
previous month and year-to-date, certified by a Financial
Officer of the Operating Company, and include with the
financial statements so delivered a cash flow forecast for
the next twelve (12)months following the end of such month;
amend the definition of Applicable Rate to remove the
provision that Category 5 automatically applies until the
Operating Company has delivered to the Administrative Agent
the Partnerships unaudited financial statements for the
quarter ended March31, 2017;


amend the definition of Permitted Acquisition to require
that, with respect to any such transaction, the
Administrative Agent have consented in writing to such
acquisition, such consent not to be unreasonably withheld,
and either (i)the consideration for such acquisition be
solely Equity Interests of the Partnership or net cash
proceeds from the sale or issuance of Equity Interests of
the Partnership (other than Disqualified Equity Interests)
or (ii)on a Pro Forma Basis, the Consolidated


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Leverage Ratio, recomputed as of the last day of the most
recently ended fiscal quarter of the Partnership for which
Financials are available, as if such acquisition (and any
related incurrence or repayment of Indebtedness being
deemed to be amortized over the applicable testing period
in accordance with its terms, to the extent applicable) had
occurred on the first day of the relevant period, be not
greater than 3.75:1.00; and

amend the definition of Pro Forma Basis to provide that, for
purposes of any calculations required by the definition of
Permitted Acquisition, the aggregate outstanding principal
balance of the Revolving Loans will be deemed to be the
aggregate outstanding principal balance of the Revolving
Loans on the date of the related Permitted Acquisition (or
other applicable event).

The foregoing description of the Fourth Amendment is a summary
and is qualified in its entirety by reference to the Fourth
Amendment, a copy of which is filed as Exhibit 10.1 hereto and
incorporated by reference herein.


Item 1.01 		Creation of a Direct Financial Obligation or
Obligation under an Off-Balance Sheet Arrangement of a
Registrant

The information set forth under Item 1.01 of this Current Report
on Form 8-K is incorporated by reference herein.


Item 1.01 		Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers

On September29, 2017, Leo J. Pound resigned as Acting Chief
Operating Officer of StoneMor GP LLC (StoneMor GP), the general
partner of StoneMor Partners L.P. (the Partnership). Mr.Pound was
appointed Acting Chief Operating Officer effective April16, 2017
to assist with the day-to-day operations of the business,
including efforts to complete the Partnerships review of certain
financial statements and the ongoing restructuring and
enhancement of its operations. During his tenure, the Partnership
appointed a new chief executive officer and chief financial
officer, completed the review of prior financial statements and
filed its Annual Report on Form 10-K for the fiscal year ended
December31, 2016. Having actively assisted the Partnership in
completing these various objectives, Mr.Pound will continue in
his role as an active member of the Board of Directors of
StoneMor GP and resume his service as a member of its Audit
Committee. In connection with Mr.Pounds reappointment to the
Audit Committee, the StoneMor GP Board of Directors reconstituted
the Audit Committee to continue the service of Allen R. Freedman
and Howard L. Carver.


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Item 1.01

(d) 		Exhibits.


Exhibit Number


Description

10.1 Fourth Amendment to Credit Agreement, dated as of September
29, 2017. *

* 		Filed herewith


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STONEMOR PARTNERS LP Exhibit
EX-10.1 2 d455704dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 EXECUTION VERSION FOURTH AMENDMENT TO CREDIT AGREEMENT This FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”),…
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About StoneMor Partners L.P. (NYSE:STON)

StoneMor Partners L.P. owns and operates cemeteries and funeral homes. The Company operates through two segments: Cemetery Operations and Funeral Homes. Its Cemetery Operations segment sells interment rights, caskets, burial vaults, cremation niches, markers and other cemetery related merchandise. Its Funeral Homes segment offers a range of services, including family consultation, final expense insurance products, the removal and preparation of remains, provision of caskets and related funeral merchandise, the use of funeral home facilities for visitation, worship and performance of funeral services, and transportation services. It sells cemetery products and services both at the time of death, which it refers to as at-need, and prior to the time of death, which it refers to as pre-need. It operates approximately 310 cemeteries in over 30 states and Puerto Rico, and approximately 100 funeral homes in over 20 states and Puerto Rico.