UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 19, 2014

 

 

StoneMor Partners L.P.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-32270   80-0103159

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

311 Veterans Highway, Suite B, Levittown, PA 19056

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (215) 826-2800

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 1.01 Entry into a Material Definitive Agreement.

Private Placement of Common Units

On May 21, 2014, StoneMor Partners L.P., a Delaware limited partnership (the “Partnership”), sold to American Cemeteries Infrastructure Investors, LLC, a Delaware limited liability company (“ACII”), 2,255,947 common units (the “Common Units”) representing limited partner interests in the Partnership (the “Purchased Units”) at an aggregate purchase price of $55.0 million (i.e., $24.38 per Purchased Unit) pursuant to a Common Unit Purchase Agreement (the “Common Unit Purchase Agreement”), dated May 19, 2014, by and between the Partnership and ACII. In connection with the consummation of this private placement transaction, on May 21, 2014, the Partnership and ACII also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) providing ACII with certain registration rights as described below.

The following is a summary of certain provisions of the Common Unit Purchase Agreement and the Registration Rights Agreement. This summary is qualified in its entirety by reference to the Common Unit Purchase Agreement and the Registration Rights Agreement which are incorporated by reference in their entirety hereto and which are attached to this Current Report on Form 8-K as Exhibits 10.1 and 4.1, respectively.

Common Unit Purchase Agreement

Pursuant to the Common Unit Purchase Agreement, commencing with the quarter ending June 30 2014, ACII is entitled to receive distributions equal to those paid on the Common Units generally. Through the quarterly distribution payable for the quarter ending June 30, 2018, such distributions may be paid in cash, Common Units issued to ACII in lieu of cash distributions (the “Distribution Units”), or a combination of cash and Distribution Units, as determined by the Partnership in its sole discretion. If the Partnership elects to pay distributions through the issuance of Distribution Units, the number of Common Units to be issued in connection with a quarterly distribution will be the quotient of (A) the amount of the quarterly distribution paid on the Common Units by (B) the volume-weighted average price of the Common Units for the thirty (30) trading days immediately preceding the date a quarterly distribution is declared with respect to the Common Units. Beginning with the quarterly distribution payable with respect to the quarter ending September 30, 2018, the Purchased Units will receive cash distributions on the same basis as all other Common Units and the Partnership will no longer have the ability to elect to pay quarterly distributions in kind through the issuance of Distribution Units.

Under the Common Unit Purchase Agreement, the Purchased Units are also subject to a lock up period (the “Lock-Up Period”) ending on July 1, 2018. During the Lock-Up Period, ACII may not directly or indirectly (a) offer for sale, sell, pledge or otherwise dispose of the Purchased Units, (b) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of the Purchased Units, or (c) publicly disclose the intention to do any of the foregoing. However, ACII may transfer the Purchased Units to any affiliate or any investment fund or other entity controlled or managed by ACII who agrees to be bound by the terms of the Common Unit Purchase Agreement. Distribution Units are not subject to the Lock-Up Period.

The Common Unit Purchase Agreement also includes various representations, warranties, covenants, indemnification and other provisions, which are customary for a transaction of this nature.

The Partnership offered and sold the Purchased Units in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Act”), pursuant to Section 4(a)(2) of the Act. The Partnership relied on this exemption from registration based in part on representations made by ACII in the Common Unit Purchase Agreement.

Registration Rights Agreement

Pursuant to the Registration Rights Agreement, the Partnership is required to file a shelf registration statement (the “Distribution Unit Registration Statement”) with the Securities and Exchange Commission (the “SEC”) on or prior to June 5, 2014 to register the offer and sale by ACII of a good faith estimate of the total number

 

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of Distribution Units that may be issued to ACII under the Common Unit Purchase Agreement, and use its commercially reasonable efforts to cause the Distribution Unit Registration Statement to be declared effective as soon as practicable thereafter. After July 1, 2018, ACII shall have the right to require the Partnership to prepare and file with the SEC a shelf registration statement (a “Demand Registration Statement”) to register the offer and sale of (a) the Purchased Units purchased by ACII pursuant to the Common Unit Purchase Agreement or (b) Distribution Units issued to ACII pursuant to the Common Unit Purchase Agreement but not included in the Distribution Unit Registration Statement.

The Registration Rights Agreement also includes piggy-back registration rights as well as indemnification and other provisions, which are customary for a transaction of this nature.

Relationship with ACII

ACII is an affiliate of American Infrastructure Funds, L.L.C., an investment adviser registered with SEC. Robert B. Hellman, Jr., a director of StoneMor GP LLC, a Delaware limited liability company and the general partner of the Partnership (“StoneMor GP”), is a managing member of American Infrastructure Funds, L.L.C. and he is affiliated with entities that own membership interests in ACII and the entity that is the manager of ACII. Mr. Hellman is also the sole Trustee (the “Trustee”) under a Trust (the “Trust”) established pursuant to a Voting and Investment Trust Agreement by and between ACII and Mr. Hellman, as Trustee, dated as of May 9, 2014, for the benefit of ACII. See Item 8.01 of this Current Report on Form 8-K for additional information about transactions involving the Trustee and the Trust, which information is incorporated by reference in this Item 1.01.

Amendment of Credit Agreement

On May 22, 2014, the Partnership entered into the Fourth Amendment (the “Fourth Amendment”) to Third Amended and Restated Credit Agreement, as amended (the “Credit Agreement”), with StoneMor GP, StoneMor Operating LLC as a Borrower (the “Operating Company”), subsidiaries of the Operating Company as additional Borrowers, the Lenders identified therein, and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer. Capitalized terms which are used but not defined in this Current Report on Form 8-K shall have the meanings ascribed to such terms in the Fourth Amendment or the Credit Agreement, as applicable.

In connection with the Archdiocese Transaction and the SCI Acquisition previously reported on Current Reports on Form 8-K filed with the SEC on October 2, 2013 and April 8, 2014, respectively, under the Fourth Amendment, the Lenders consented to the closing of these transactions, subject to the satisfaction of certain conditions precedent. Under the Credit Agreement, the amount of aggregate consideration the Partnership may pay for a Permitted Acquisition, without Required Lender approval, is $10.0 million on an individual basis and $50.0 million when aggregated with the total Aggregate Consideration paid by or on behalf of the Partnership for all other Permitted Acquisitions which closed within the immediately preceding 365 days. The consideration that the Partnership is obligated to pay pursuant to the terms of the Archdiocese Transaction and the SCI Acquisition exceeds the foregoing limits.

The Fourth Amendment also increased the maximum Consolidated Leverage Ratio to 4.000 to 1.0 for any period and amended the definition of Consolidated EBITDA to, among other things, remove existing balance sheet adjustments and replace them with certain cash flow statement adjustments.

In addition, the Fourth Amendment includes certain conforming changes to reflect the consent to the Archdiocese Transactions and the SCI Acquisitions, as well as various representations, warranties and other provisions customary for a transaction of this nature. The foregoing summary of the Fourth Amendment is not intended to be complete and is qualified in its entirety by reference to the Fourth Amendment, a copy of which is attached hereto as Exhibit 10.2 and is incorporated by reference herein.

Some of the Lenders and their respective affiliates engaged in, and may in the future engage in, investment banking and other commercial dealings with the Partnership and its affiliates for which they received, and will receive, the payment of their customary fees and expenses.

 

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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On May 22, 2014, the Partnership entered into the Fourth Amendment. The terms of the Fourth Amendment are described under the heading “Amendment of Credit Agreement” in Item 1.01 of this Current Report on Form 8-K, which description is incorporated in its entirety by reference in this Item 2.03.

 

Item 3.02 Unregistered Sales of Equity Securities.

The information set forth under the heading “Private Placement of Common Units” in Item 1.01 of this Current Report on Form 8-K is incorporated in its entirety by reference in this Item 3.02.

 

Item 8.01 Other Events.

On May 21, 2014, Cornerstone Family Services LLC, a Delaware limited liability company (“CFS”), and its direct and indirect subsidiaries: CFSI LLC, a Delaware limited liability company (“CFSI”), and StoneMor GP completed a series of transactions to streamline the ownership structure of CFSI and StoneMor GP. As a result of such transactions described below, (i) Mr. Hellman, as Trustee of the Trust, for the pecuniary benefit of ACII, has exclusive voting and investment power over approximately 67.03% of membership interests in StoneMor GP Holdings LLC, a Delaware limited liability company (“GP Holdings”), formerly known as CFSI, (ii) Lawrence Miller, the President and Chief Executive Officer and a director of StoneMor GP, William Shane, Allen Freedman, and Martin Lautman, directors of StoneMor GP, Michael Stache and Robert Stache, retired executive officers of StoneMor GP, and two family partnerships affiliated with Messrs. Miller and Shane, as applicable, collectively hold approximately 32.97% of membership interests in GP Holdings; and (iii) StoneMor GP has become a wholly-owned subsidiary of GP Holdings.

Prior to this reorganization, (i) CFSI owned 100% of Class A membership interests, and Messrs. Miller, Shane, M. Stache and B. Stache, owned 100% of Class B membership interests in StoneMor GP, and (ii) Mr. Hellman, as the sole member of Gen4 Trust Advisor LLC, a Delaware limited liability company, along with MDC IV Trust U/T/A November 30, 2010, MDC IV Associates Trust U/T/A November 30, 2010, and Delta Trust U/T/A November 30, 2010 (collectively, the “MDC IV Liquidating Trusts,” of which Gen4 Trust Advisor LLC acts as trust advisor ), directly and indirectly shared beneficial ownership of 90.8% of membership interests in CFS, 10.1% of membership interests in CFSI and, indirectly through CFS, 85% of membership interests in CFSI. In addition, (i) Messrs. Miller’s and Shane’s family partnerships and Mr. Lautman owned membership interests in CFS, and (ii) Messrs. Miller and Shane, their respective family partnerships and Messrs. Lautman, Freedman, Michael Stache and Robert Stache owned membership interests in CFSI. After the reorganization, as described above, Messrs. Hellman (in his capacity as Trustee), Miller and Shane (and their respective family partnerships), Freedman, Lautman, Michael Stache and Robert Stache continue to beneficially own interests in StoneMor GP.

The reorganization was completed through a series of mergers, as a result of which: (i) CFS Merger Sub, LLC, a wholly-owned subsidiary of ACII, merged with and into CFS (the “CFS Merger”), with CFS surviving the merger, (ii) CFSI Merger Sub, LLC, a wholly-owned subsidiary of ACII, merged with and into CFSI (the “CFSI Merger”), with CFSI surviving the merger; and (iii) CFS merged with and into CFSI, with CFSI surviving the merger (“CFS-CFSI Merger”) and changing its name to GP Holdings. In connection with the CFS Merger and CFSI Merger, each holder of membership interests in CFS and CFSI had the right to elect to retain all of its CFS and/or CFSI units, as applicable, or to receive cash merger consideration of $1.4412484 per unit in the CFS Merger or $30.001868 per unit in the CFSI Merger. The Trustee of the Trust was issued new CFS and CFSI units, for the pecuniary benefit of ACII, equal to the aggregate number of CFS and CFSI units with respect to which members of CFS and CFSI were entitled to receive their respective aggregate cash merger consideration. After the effective time of the CFS-CFSI Merger, the holders of Class B membership interests in StoneMor GP contributed their Class B membership interests in StoneMor GP, as well as CFSI units (including CFS units that were converted into CFSI units in connection with the CFS-CFSI Merger) that they and their affiliates elected to retain in the CFS Merger and CFSI Merger, in exchange for common units in GP Holdings, which constitute, approximately 32.06%, computed on a fully diluted basis, of the membership interests in GP Holdings. Upon the consummation of the CFS-CFSI Merger and these contributions, GP Holdings became the owner of 100% of the membership interests of StoneMor GP.

On May 21, 2014, in connection with the transactions described above, the members of GP Holdings entered into the Amended and Restated Limited Liability Company Agreement of GP Holdings, pursuant to which

 

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the Trustee has the right, among other matters, to designate all of the directors of GP Holdings, provided that Messrs. Miller and Shane (so long as either is a member of GP Holdings) acting collectively have the right to designate one director (the “Founder Director”), which Founder Director is Lawrence Miller so long as he either serves as the Chief Executive Officer of StoneMor GP or desires to serve as a director of GP Holdings and thereafter will be William Shane. The initial directors of GP Holdings are Robert B. Hellman, Jr., Jon Contos, Vice President of American Infrastructure Funds, L.L.C., and Lawrence Miller.

On May 21, 2004, GP Holdings, as the sole member, entered into the Second Amended and Restated Limited Liability Company Agreement (the “Second Amended and Restated LLC Agreement”) of StoneMor GP, which amended and restated the Amended and Restated Limited Liability Company Agreement of StoneMor GP, LLC, dated September 20, 2004, as amended. The Second Amended and Restated LLC Agreement provides for only one class of membership interests: Class A to reflect the contribution of Class B members interests as described above. Also, under the Second Amended and Restated LLC Agreement, current members of the board of directors of StoneMor GP will continue to serve as directors of StoneMor GP. GP Holdings, as the sole member of StoneMor GP, is entitled to elect all directors of StoneMor GP, except that Messrs. Miller and Shane acting collectively have the right to designate one director (a “Founder Director”). The Founder Director is Lawrence R. Miller so long as he serves as the Chief Executive Officer of StoneMor GP or desires to serve as a director of StoneMor GP and thereafter will be William R. Shane. This summary of certain provisions of the Second Amended and Restated LLC Agreement is qualified in its entirety by reference to the Second Amended and Restated LLC Agreement which is incorporated by reference in its entirety hereto and attached to this Current Report on Form 8-K as Exhibit 99.1.

Please see below risk factors from the Partnership’s Form 10-K for the fiscal year ended December 31, 2013 updated to reflect provisions of the Second Amended and Restated LLC Agreement.

Our general partner and its affiliates have conflicts of interest and limited fiduciary duties, which may permit them to favor their own interests to your detriment.

StoneMor GP Holdings LLC, or GP Holdings, as the sole member of our general partner, owns all of the Class A units of our general partner. Conflicts of interest may arise between GP Holdings and its affiliates, including our general partner, on the one hand, and us and our unitholders, on the other hand. As a result of these conflicts, our general partner may favor its own interests and the interests of its affiliates over the interests of the unitholders. These conflicts include, among others, the following situations:

 

    The board of directors of our general partner is elected by GP Holdings, except that Messrs. Miller and Shane acting collectively have the right to designate one director who will be Lawrence R. Miller so long as he serves as the Chief Executive Officer of StoneMor GP or desires to serve as a director of StoneMor GP and thereafter will be William R. Shane. Although our general partner has a fiduciary duty to manage us in good faith, the directors of our general partner also have a fiduciary duty to manage our general partner in a manner beneficial to GP Holdings, as the sole member of our general partner. By purchasing common units, unitholders will be deemed to have consented to some actions and conflicts of interest that might otherwise constitute a breach of fiduciary or other duties under applicable law.

 

    Our partnership agreement limits the liability of our general partner, reduces its fiduciary duties and restricts the remedies available to unitholders for actions that might, without the limitations, constitute breaches of fiduciary duty.

 

    Our general partner determines the amount and timing of asset purchases and sales, capital expenditures, borrowings, issuances of additional limited partner interests and reserves, each of which can affect the amount of cash that is distributed to unitholders.

 

    Our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf.

 

    Our general partner controls the enforcement of obligations owed to us by our general partner and its affiliates.

 

    In some instances, our general partner may cause us to borrow funds or sell assets outside of the ordinary course of business in order to permit the payment of distributions, even if the purpose or effect of the borrowing is to make distributions in respect of incentive distribution rights.

 

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Holders of our common units have limited voting rights and are not entitled to elect our general partner or its directors, which could reduce the price at which the common units will trade.

Unitholders have only limited voting rights on matters affecting our business and, therefore, limited ability to influence management’s decisions regarding our business. Unitholders did not select our general partner or elect the board of directors of our general partner and will have no right to select our general partner or elect its board of directors in the future. We are not required to have a majority of independent directors on our board. The board of directors of our general partner, including the independent directors, is not chosen by our unitholders. GP Holdings, as the sole member of StoneMor GP, is entitled to elect all directors of StoneMor GP, except that Messrs. Miller and Shane acting collectively have the right to designate one director. As a result of these limitations, the price at which the common units will trade could be diminished because of the absence or reduction of a takeover premium in the trading price.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits:

 

Exhibit
No.

  

Description

  4.1    Registration Rights Agreement, dated as of May 21, 2014, by and between StoneMor Partners L.P. and American Cemeteries Infrastructure Investors, LLC.
10.1    Common Unit Purchase Agreement, dated as of May 19, 2014, by and between StoneMor Partners L.P. and American Cemeteries Infrastructure Investors, LLC.
10.2    Fourth Amendment to Third Amended and Restated Credit Agreement, dated May 22, 2014, by and among StoneMor GP LLC, StoneMor Partners L.P., StoneMor Operating LLC, its Subsidiaries, the Lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.
99.1    Second Amended and Restated Limited Liability Company Agreement of StoneMor GP LLC, dated as of May 21, 2014, by StoneMor GP Holdings, LLC.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

STONEMOR PARTNERS L.P.
By:   StoneMor GP LLC
  its general partner
By:  

/s/ Timothy K. Yost

Name:   Timothy K. Yost
Title:   Chief Financial Officer

Date: May 23, 2014


EXHIBIT INDEX

 

Exhibit
No.

  

Description

  4.1    Registration Rights Agreement, dated as of May 21, 2014, by and between StoneMor Partners L.P. and American Cemeteries Infrastructure Investors, LLC.
10.1    Common Unit Purchase Agreement, dated as of May 19, 2014, by and between StoneMor Partners L.P. and American Cemeteries Infrastructure Investors, LLC.
10.2    Fourth Amendment to Third Amended and Restated Credit Agreement, dated May 22, 2014, by and among StoneMor GP LLC, StoneMor Partners L.P., StoneMor Operating LLC, its Subsidiaries, the Lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.
99.1    Second Amended and Restated Limited Liability Company Agreement of StoneMor GP LLC, dated as of May 21, 2014, by StoneMor GP Holdings, LLC.

Exhibit 4.1

Execution Version

REGISTRATION RIGHTS AGREEMENT

BY AND AMONG

STONEMOR PARTNERS L.P.

AND

AMERICAN CEMETERIES INFRASTRUCTURE INVESTORS, LLC


TABLE OF CONTENTS

 

ARTICLE

        I   
   DEFINITIONS      1   

Section 1.01

   Definitions      1   

Section 1.02

   Registrable Securities      3   

ARTICLE

        II   
   REGISTRATION RIGHTS      3   

Section 2.01

   Registration.      3   

Section 2.02

   Underwritten Offerings      5   

Section 2.03

   Piggyback Rights      5   

Section 2.04

   Delay Rights      7   

Section 2.05

   Sale Procedures      7   

Section 2.06

   Cooperation by Selling Investors      10   

Section 2.07

   Expenses      10   

Section 2.08

   Indemnification      10   

Section 2.09

   Rule 144 Reporting      13   

Section 2.10

   Transfer or Assignment of Registration Rights      13   

ARTICLE

        III   
   MISCELLANEOUS      14   

Section 3.01

   Communications      14   

Section 3.02

   Successor and Assigns      14   

Section 3.03

   Assignment of Rights      14   

Section 3.04

   Specific Performance      14   

Section 3.05

   Counterparts      15   

Section 3.06

   Headings      15   

Section 3.07

   Governing Law      15   

Section 3.08

   Waiver of Jury Trial      15   

Section 3.09

   Severability of Provisions      15   

Section 3.10

   Entire Agreement      15   

Section 3.11

   Amendment      15   

Section 3.12

   No Presumption      15   

Section 3.13

   Obligations Limited to Parties to Agreement      16   

Section 3.14

   Interpretation      16   

 

i


REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”) is made and entered into as of May 21, 2014, by and among StoneMor Partners L.P., a Delaware limited partnership (the “ Partnership ”), and American Cemeteries Infrastructure Investor, LLC (the “ Investor ”).

WHEREAS, this Agreement is made in connection with the Closing of the offer and sale of the Purchased Units and Distribution Units pursuant to the Common Unit Purchase Agreement, dated as of May 19, 2014, by and among the Partnership and the Investor (the “ Unit Purchase Agreement ”); and

WHEREAS, the Partnership has agreed to provide the registration and other rights set forth in this Agreement for the benefit of the Investor pursuant to the Unit Purchase Agreement.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each party hereto, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions . Capitalized terms used herein without definition shall have the meanings given to them in the Unit Purchase Agreement. The terms set forth below are used herein as so defined:

Affiliate ” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

Agreement ” has the meaning specified therefor in the introductory paragraph of this Agreement.

Closing Date ” means the date of the closing of the sale of the Purchased Units pursuant to the Unit Purchase Agreement.

Commission ” means the U.S. Securities and Exchange Commission.

Demand Notice ” has the meaning specified therefor in Section 2.01(b) of this Agreement.

Demand Registration Statement ” has the meaning specified therefor in Section 2.01(b) of this Agreement.

Demand Registration Statement Effectiveness Period ” has the meaning specified therefor in Section 2.01(b) of this Agreement.


Distribution Units ” means any common units issued to the Investor in lieu of quarterly cash distributions payable on the Purchased Units pursuant to the Unit Purchase Agreement.

Distribution Unit Registration Statement ” has the meaning specified therefor in Section 2.01(a) of this Agreement.

Distribution Unit Registration Statement Effectiveness Period ” has the meaning specified therefor in Section 2.01(a) of this Agreement.

General Partner ” means StoneMor GP LLC, a Delaware limited liability company.

Investor ” has the meaning specified therefor in the introductory paragraph of this Agreement.

Lock-Up Period ” means a period commencing on the Closing Date and ending on July 1, 2018.

Losses ” has the meaning specified therefor in Section 2.08(a) of this Agreement.

Partnership ” has the meaning specified therefor in the introductory paragraph of this Agreement.

Person ” means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.

Purchased Units ” means the common units purchased by the Investor pursuant to the Unit Purchase Agreement.

Registrable Securities ” means (i) the Purchased Units held by the Investor upon the expiration of the Lock-Up Period pursuant to the Unit Purchase Agreement and (ii) any Distribution Units issued to the Investor pursuant to the Unit Purchase Agreement.

Registration Expenses ” has the meaning specified therefor in Section 2.07(b) of this Agreement.

Registration Statement ” means a shelf registration statement of the Partnership filed with the Commission on Form S-3 (or any successor form or other appropriate form under the Securities Act) for an offering to be made on a continuous or delayed basis pursuant to Rule 415 (or any similar rule that may be adopted by the Commission) covering the Registrable Securities, as applicable.

Selling Expenses ” has the meaning specified therefor in Section 2.07(b) of this Agreement.

Selling Investor ” means the Investor or any successor or permitted assignee of the Investor who has requested that Registrable Securities be registered for sale pursuant to this Agreement.

 

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Selling Investor Indemnified Persons ” has the meaning specified therefor in Section 2.08(a) of this Agreement.

Underwritten Offering ” means an offering (including an offering pursuant to a Registration Statement) in which Registrable Securities are sold to an underwriter on a firm commitment basis for reoffering to the public or an offering that is a “bought deal” with one or more investment banks.

Unit Purchase Agreement ” has the meaning specified therefor in the recitals of this Agreement.

Section 1.02 Registrable Securities . Any Registrable Security will cease to be a Registrable Security (a) when a registration statement covering such Registrable Security becomes or has been declared effective by the Commission and such Registrable Security has been sold or disposed of pursuant to such effective registration statement; (b) when such Registrable Security has been disposed of pursuant to any section of Rule 144 (or any similar provision then in effect) under the Securities Act; (c) when such Registrable Security is held by the Partnership or one of its subsidiaries; (d) when such Registrable Security has been sold or disposed of in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of such securities pursuant to Section 2.10 hereof; or (e) when such Registrable Security becomes eligible for resale without restriction and, in the event the Partnership is not in compliance with the requirements of Rule 144(c), without the need for current public information pursuant to any section of Rule 144 (or any similar provision then in effect) under the Securities Act.

ARTICLE II

REGISTRATION RIGHTS

Section 2.01 Registration .

(a) Within fifteen (15) days following the Closing Date, the Partnership shall prepare and file a registration statement under the Securities Act to permit the public resale of a good faith estimate of the total number of Distribution Units that may be issued to the Investor pursuant to the Unit Purchase Agreement. The registration statement filed by the Partnership pursuant to this Section 2.01(a) (the “ Distribution Unit Registration Statement ”) shall be on Form S-3 or such appropriate registration form of the Commission as shall be selected by the Partnership so long as such form permits the continuous offering of the Distribution Units pursuant to Rule 415 of the Securities Act or such other rule as is then applicable at the then prevailing market prices. The Partnership shall use its commercially reasonable efforts to cause the Distribution Unit Registration Statement to be declared effective as soon as practicable thereafter. The Partnership shall use its commercially reasonable efforts to cause the Distribution Unit Registration Statement to be effective, supplemented and amended to the extent necessary to ensure that it is available for the resale of all Distribution Units covered by the Distribution Unit Registration Statement by the Investor until the date when all Distribution Units covered by such Distribution Unit Registration Statement have ceased to be Registrable Securities pursuant to Section 1.02 of this Agreement (the “ Distribution Unit Registration Statement Effectiveness Period ”). The Distribution Unit Registration Statement when effective

 

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(including the documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus contained in such Distribution Unit Registration Statement, in the light of the circumstances under which a statement is made). As soon as practicable following the date that the Distribution Unit Registration Statement becomes effective, but in any event within two (2) Business Days of such date, the Partnership shall provide the Investor with written notice of the effectiveness of the Distribution Unit Registration Statement.

(b) Demand Registration .

(i) At any time following the expiration of the Lock-Up Period, the Investor shall have the option and right, exercisable by delivering a written notice to the Partnership (a “ Demand Notice ”), to require the Partnership to prepare and file a registration statement under the Securities Act (a “ Demand Registration Statement ”) to permit the public resale of (a) the Purchased Units purchased by the Investor pursuant to the Unit Purchase Agreement, or (b) Distribution Units issued to the Investor pursuant to the Unit Purchase Agreement, but not included in the Distribution Unit Registration Statement filed pursuant to Section 2.01(a) above. Any Demand Registration Statement shall be on Form S-3 or such appropriate registration form of the Commission as shall be selected by the Partnership so long as such form permits the continuous offering of the Purchased Units and Distribution Units, as applicable, pursuant to Rule 415 of the Securities Act or such other rule as is then applicable at the then prevailing market prices. The Partnership shall use its commercially reasonable efforts to cause any Demand Registration Statement to be declared effective as soon as practicable thereafter. The Partnership shall use its commercially reasonable efforts to cause any Demand Registration Statement to be effective, supplemented and amended to the extent necessary to ensure that it is available for the resale of all Registrable Securities covered by such Demand Registration Statement by a Selling Investor until the date when all Registrable Securities covered by such Demand Registration Statement have ceased to be Registrable Securities pursuant to Section 1.02 of this Agreement (the “ Demand Registration Statement Effectiveness Period ”). Any Demand Registration Statement when effective (including the documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus contained in such Demand Registration Statement, in the light of the circumstances under which a statement is made). As soon as practicable following the date that the Demand Registration Statement becomes effective, but in any event within two (2) Business Days of such date, the Partnership shall provide the Investor with written notice of the effectiveness of the Demand Registration Statement.

(ii) The Partnership shall not be required to comply with any Demand Notice at any time that a Registration Statement relating to the subject Registrable Securities is effective.

 

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(iii) the Partnership shall not be required to comply with any Demand Notice that is received within 180 calendar days after the effectiveness of any Demand Registration Statement.

(iv) Any Demand Notice shall specify: (i) the approximate aggregate number of Registrable Securities requested to be registered for sale in such Demand Notice, (ii) the intended method of disposition in connection with such Demand Notice, to the extent then known and (iii) the identity of each Selling Investor.

Section 2.02 Underwritten Offerings .

(a) At any time following the expiration of the Lock-Up Period, the Investor shall have the right to require the Partnership to conduct an Underwritten Offering of all or a portion of Registrable Securities in accordance with Section 2.01 and this Section 2.02 ; provided, however , that the Partnership shall not be required to effect more than two (2) Underwritten Offerings solely on behalf of any Selling Investor pursuant to Section 2.01 and this Section 2.02 ; and provided, further , that the Partnership shall not be required to effect more than one (1) Underwritten Offering solely on behalf of any Selling Investor pursuant to Section 2.01 and this Section 2.02 in any twelve (12) month period.

(b) In the event that a Selling Investor elects to dispose of such Selling Investor’s Registrable Securities pursuant to an Underwritten Offering pursuant to Section 2.02(a) , the Partnership shall be entitled to select the underwriters, and the Selling Investors and the Partnership shall enter into an underwriting agreement in customary form, which shall include, among other provisions, representations, covenants, indemnities and other rights and obligations as are customary in underwriting agreements for firm commitment offerings of securities. No Selling Investor may participate in such Underwritten Offering unless such Selling Investor agrees to sell its Registrable Securities on the basis provided in such underwriting agreement and completes and executes all questionnaires, powers of attorney, indemnities and other documents reasonably required under the terms of such underwriting agreement. The Partnership’s management may but shall not be required to participate in a roadshow or similar marketing effort in connection with any Underwritten Offering effected solely on behalf of a Selling Investor pursuant to Section 2.02(a) hereof.

Section 2.03 Piggyback Rights .

(a) If the Partnership proposes to file, on its own behalf, a Registration Statement under the Securities Act on Form S-1 or S-3 or similar forms available for use by the Partnership, other than pursuant to Section 2.01 of this Agreement or on Form S-8 in connection with a dividend reinvestment, employee stock purchase, option or similar plan or on Form S-4 in connection with a merger, consolidation or reorganization, the Partnership shall give written notice to the Investor at least ten (10) days before the filing with the Commission of such Registration Statement. Such notice shall offer to include in such filing all or a portion of the Registrable Securities owned by any Selling Investor. If a Selling Investor desires to include all or a portion of its Registrable Securities in such Registration Statement, it shall give written notice to the Partnership within three (3) business days after the date of receipt of such offer specifying the amount of Registrable Securities to be registered (for purposes of this

 

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Section 2.03 , “ Specified Securities ”). The Partnership shall thereupon include in such filing the Specified Securities, subject to priorities in registration set forth in this Agreement, and subject to its right to withdraw such filing, and shall use its commercially reasonable efforts to effect the registration under the Securities Act of the Specified Securities.

(b) The right of a Selling Investor to have Specified Securities included in any Registration Statement in accordance with the provisions of this Section 2.03 shall be subject to the following conditions:

(i) The Partnership shall have the right to require that the Selling Investor agree to refrain from offering or selling any common units of the Partnership that it owns which are not included in any such Registration Statement in accordance with this Section 2.03 for any reasonable time period, not to exceed ninety (90) days, as may be specified by any managing underwriter of the offering to which such Registration Statement relates.

(ii) If (A) a registration pursuant to this Section 2.03 involves an underwritten offering of the securities being registered to be distributed (on a firm commitment basis) by or through one or more underwriters of recognized standing under underwriting terms appropriate for such a transaction and (B) the managing underwriter of such underwritten offering shall inform the Partnership and the Selling Investors by letter of its belief that the amount of Specified Securities requested to be included in such registration exceeds the amount which can be sold in (or during the time of) such offering within a price range acceptable to the Partnership and the Selling Investors, then the Partnership will include in such registration such amount of securities which the Partnership is so advised can be sold in (or during the time of) such offering as follows: first , the securities being offered by the Partnership for its own account; second , the Specified Securities; and third , the securities of the Partnership, if any, proposed to be included in the registration by any other holders of the Partnership’s securities (whether or not such holders have contractual rights to include such securities in the registration).

(iii) If a registration pursuant to this Section 2.03 involves an Underwritten Offering by or through one or more underwriters, the Partnership shall be entitled to select the underwriters, and the Selling Investors and the Partnership shall enter into an underwriting agreement in customary form, which shall include, among other provisions, representations, covenants, indemnities and other rights and obligations as are customary in underwriting agreements for firm commitment offerings of securities. No Selling Investor may participate in such Underwritten Offering unless such Selling Investor agrees to sell its Registrable Securities on the basis provided in such underwriting agreement and completes and executes all questionnaires, powers of attorney, indemnities and other documents reasonably required under the terms of such underwriting agreement.

The Partnership shall furnish any Selling Investor with such number of copies of the prospectus as such Selling Investor may reasonably request in order to facilitate the sale and distribution of its Specified Securities.

(c) Notwithstanding the foregoing, the Partnership in its sole discretion may determine not to file the registration statement or proceed with the offering as to which the notice specified in Section 2.03(a) is given without liability to any Selling Investor.

 

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Section 2.04 Delay Rights . Notwithstanding anything to the contrary contained herein, the Partnership may, upon written notice to a Selling Investor whose Registrable Securities are included in a registration statement contemplated by this Agreement, suspend such Selling Investor’s use of any prospectus which is a part of the registration statement (in which event the Selling Investor shall discontinue sales of the Registrable Securities pursuant to the registration statement contemplated by this Agreement but may settle any sales of Registrable Securities made prior to such notice) if (a) the Partnership is pursuing an acquisition, merger, reorganization, disposition or other similar transaction and the Partnership determines in good faith that the Partnership’s ability to pursue or consummate such a transaction would be materially adversely affected by any required disclosure of such transaction in the registration statement or (b) the Partnership has experienced some other material non-public event the disclosure of which at such time, in the good faith judgment of the Partnership, would materially adversely affect the Partnership; provided , however , in no event shall a Selling Investor be suspended from selling Registrable Securities pursuant to a registration statement for a period that exceeds an aggregate of 60 days in any 180-day period or 105 days in any 365-day period, in each case, exclusive of days covered by any lock-up agreement executed by the Selling Investor in connection with any underwritten offering. Upon disclosure of such information or the termination of the condition described above, the Partnership shall provide prompt notice to the Selling Investor whose Registrable Securities are included in the Registration Statement or other registration statement contemplated by this Agreement, and shall promptly terminate any suspension of sales it has put into effect and shall take such other reasonable actions to permit registered sales of Registrable Securities as contemplated in this Agreement.

Section 2.05 Sale Procedures . In connection with its obligations under this Article II , the Partnership will, as expeditiously as possible:

(a) prepare and file with the Commission such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep the Registration Statement effective for the Distribution Unit Registration Statement Effectiveness Period or the Demand Registration Statement Effectiveness Period, as applicable, and as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by the Registration Statement until the date when such Registrable Securities have ceased to be Registrable Securities pursuant to Section 1.02 of this Agreement;

(b) furnish to any Selling Investor (i) as far in advance as reasonably practicable before filing the Registration Statement or any other registration statement contemplated by this Agreement or any supplement or amendment thereto, upon request, copies of reasonably complete drafts of all such documents proposed to be filed (including exhibits and each document incorporated by reference therein to the extent then required by the rules and regulations of the Commission and to the extent not publicly available), and provide the Selling Investor the opportunity to object to any information pertaining to such Selling Investor and its plan of distribution that is contained therein and make the corrections reasonably requested by such Selling Investor with respect to such information prior to filing the Registration Statement or such other registration statement or supplement or amendment thereto, and (ii) such number of copies of the Registration Statement or such other registration statement and the prospectus included therein and any supplements and amendments thereto as such Selling Investor may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities covered by such Registration Statement or other registration statement;

 

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(c) if applicable, use its commercially reasonable efforts to register or qualify the Registrable Securities covered by the Registration Statement or any other registration statement contemplated by this Agreement under the securities or blue sky laws of such jurisdictions as a Selling Investor shall reasonably request; provided , however , that the Partnership will not be required to qualify generally to transact business in any jurisdiction where it is not then required to so qualify or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject;

(d) promptly notify a Selling Investor, at any time when a prospectus relating thereto is required to be delivered by such Selling Investor under the Securities Act, of (i) the filing of the Registration Statement or any other registration statement contemplated by this Agreement or any prospectus or prospectus supplement to be used in connection therewith, or any amendment or supplement thereto, and, with respect to such Registration Statement or any other registration statement or any post-effective amendment thereto, when the same has become effective; and (ii) the receipt of any written comments from the Commission with respect to any filing referred to in clause (i) and any written request by the Commission for amendments or supplements to the Registration Statement or any other registration statement or any prospectus or prospectus supplement thereto;

(e) immediately notify any Selling Investor, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (i) the happening of any event as a result of which the prospectus or prospectus supplement contained in the Registration Statement or any other registration statement contemplated by this Agreement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus contained therein, in the light of the circumstances under which a statement is made); (ii) the issuance or express threat of issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any other registration statement contemplated by this Agreement, or the initiation of any proceedings for that purpose; or (iii) the receipt by the Partnership of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction. Following the provision of such notice, the Partnership agrees, as promptly as practicable and subject to the procedures set forth under Section 2.04 of the Agreement, to amend or supplement the prospectus or prospectus supplement or take other appropriate action so that the prospectus or prospectus supplement does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing and to take such other commercially reasonable action as is necessary to remove a stop order, suspension, threat thereof or proceedings related thereto;

(f) upon request and subject to appropriate confidentiality obligations, furnish to the Selling Investor copies of any and all transmittal letters or other correspondence with the Commission or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to such offering of Registrable Securities;

 

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(g) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;

(h) cause all such Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange or nationally recognized quotation system on which similar securities issued by the Partnership are then listed;

(i) use its commercially reasonable efforts to cause the Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Partnership to enable the Selling Investor to consummate the disposition of such Registrable Securities;

(j) provide a transfer agent and registrar for all Registrable Securities covered by such registration statement not later than the effective date of such registration statement;

(k) enter into customary agreements and take such other actions as are reasonably requested by a Selling Investor or the underwriters, if any, in order to expedite or facilitate the disposition of such Registrable Securities; and

(l) if requested by a Selling Investor, (i) incorporate in a prospectus supplement or post-effective amendment such information as such Selling Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering and (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment.

The Partnership will not name a Selling Investor as an underwriter as defined in Section 2(a)(11) of the Securities Act in any Registration Statement without such Selling Investor’s consent. If the staff of the Commission requires the Partnership to name the Selling Investor as an underwriter as defined in Section 2(a)(11) of the Securities Act, and such Selling Investor does not consent thereto, then such Selling Investor’s Registrable Securities shall not be included on the Registration Statement and the Partnership shall have no further obligations hereunder with respect to Registrable Securities held by such Selling Investor.

Each Selling Investor, upon receipt of notice from the Partnership of the happening of any event of the kind described in subsection (e) of this Section 2.05 , shall forthwith discontinue offers and sales of the Registrable Securities by means of a prospectus or prospectus supplement until such Selling Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by subsection (e) of this Section 2.05 or until it is advised in writing by the Partnership that the use of the prospectus may be resumed and has received copies of any additional or supplemental filings incorporated by reference in the prospectus, and, if so directed

 

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by the Partnership, such Selling Investor will deliver to the Partnership (at the Partnership’s expense) all copies in their possession or control, other than permanent file copies then in such Selling Investor’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.

Section 2.06 Cooperation by Selling Investors . The Partnership shall have no obligation to include Registrable Securities of a Selling Investor in the Registration Statement who has failed to timely furnish such information that the Partnership determines, after consultation with its counsel, is reasonably required in order for the registration statement, prospectus or prospectus supplement, as applicable, to comply with the Securities Act.

Section 2.07 Expenses .

(a) Expenses . The Partnership will pay all reasonable Registration Expenses as determined in good faith. Each Selling Investor shall pay its pro rata share of all Selling Expenses in connection with any sale of its Registrable Securities hereunder. In addition, except as otherwise provided in Section 2.08 hereof, the Partnership shall not be responsible for legal fees incurred by a Selling Investor in connection with the exercise of such Selling Investor’s rights hereunder.

(b) Certain Definitions . “ Registration Expenses ” means all expenses incident to the Partnership’s performance under or compliance with this Agreement to effect the registration of Registrable Securities on the Registration Statement pursuant to Section 2.01 and the disposition of such Registrable Securities, including, without limitation, all registration, filing, securities exchange listing and NYSE fees, all registration, filing, qualification and other fees and expenses of complying with securities or blue sky laws, fees of transfer agents and registrars, all word processing, duplicating and printing expenses, any transfer taxes and the fees and disbursements of counsel to the Partnership and independent public accountants for the Partnership. “ Selling Expenses ” means all selling commissions or similar fees or arrangements allocable to the sale of the Registrable Securities.

Section 2.08 Indemnification .

(a) By the Partnership . In the event of a registration of any Registrable Securities under the Securities Act pursuant to this Agreement, the Partnership will indemnify and hold harmless a Selling Investor thereunder, its directors, officers, managers, employees and agents and each Person, if any, who controls such Selling Investor within the meaning of the Securities Act and the Exchange Act, and its directors, officers, employees or agents (collectively, the “ Selling Investor Indemnified Persons ”), against any losses, claims, damages, expenses or liabilities (including reasonable attorneys’ fees and expenses) (collectively, “ Losses ”), joint or several, to which such Selling Investor Indemnified Person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact (in the case of any prospectus, in light of the circumstances under which such statement is made) contained in the Registration Statement or any other registration statement contemplated by this Agreement, any preliminary prospectus, prospectus supplement, free writing prospectus or final prospectus contained therein,

 

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or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in light of the circumstances under which they were made) not misleading, and will reimburse the Selling Investor Indemnified Person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Loss or actions or proceedings; provided , however , that the Partnership will not be liable in any such case if and to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by or on behalf of such Selling Investor Indemnified Person in writing specifically for use in the Registration Statement or any other registration statement contemplated by this Agreement, any preliminary prospectus, prospectus supplement, free writing prospectus or final prospectus contained therein, or any amendment or supplement thereof. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Selling Investor Indemnified Person, and shall survive the transfer of such securities by such Selling Investor.

(b) By Each Selling Investor . Each Selling Investor agrees severally and not jointly to indemnify and hold harmless the Partnership, the General Partner, its directors, officers, managers, employees and agents and each Person, if any, who controls the Partnership within the meaning of the Securities Act or of the Exchange Act, and its directors, officers, managers, employees and agents, to the same extent as the foregoing indemnity from the Partnership to any Selling Investor, but only with respect to information regarding such Selling Investor furnished in writing by or on behalf of such Selling Investor expressly for inclusion in the Registration Statement or any other registration statement contemplated by this Agreement, any preliminary prospectus, prospectus supplement, free writing prospectus or final prospectus contained therein, or any amendment or supplement thereof, or in the case of an omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in light of the circumstances under which they were made) not misleading, if and to the extent that a Selling Holder failed to provide any information requested by the Partnership in writing for inclusion in the foregoing documents; provided , however , that the liability of the Selling Investor shall not be greater in amount than the dollar amount of the proceeds (net of any Selling Expenses) received by such Selling Investor from the sale of the Registrable Securities giving rise to such indemnification.

(c) Limitation on Damages . Notwithstanding anything to the contrary in this Agreement, in no event shall any party hereunder be entitled to recovery of or indemnification for any special, consequential (including lost profits) or punitive damages.

(d) Notice . Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability that it may have to any indemnified party other than under this Section 2.08 . In any action brought against any indemnified party, it shall notify the indemnifying party of the commencement thereof. The indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to such indemnified party of its

 

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election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 2.08 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided , however , that, (i) if the indemnifying party has failed to assume the defense or employ counsel reasonably acceptable to the indemnified party or (ii) if the defendants in any such action include both the indemnified party and the indemnifying party and counsel to the indemnified party shall have concluded that there may be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying party, or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, then the indemnified party shall have the right to select one separate counsel who shall be reasonably satisfactory to such indemnifying party and to assume such legal defense and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other reasonable expenses related to such participation to be reimbursed by the indemnifying party as incurred. Notwithstanding any other provision of this Agreement, no indemnifying party shall settle any action brought against any indemnified party with respect to which such indemnified party is entitled to indemnification hereunder without the consent of the indemnified party, unless the settlement thereof imposes no liability or obligation on, and includes a complete and unconditional release from all liability of, the indemnified party.

(e) Contribution . If the indemnification provided for in this Section 2.08 is held by a court or government agency of competent jurisdiction to be unavailable to any indemnified party or is insufficient to hold them harmless in respect of any Losses, then each such indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Loss in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of such indemnified party on the other in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations; provided , however , that in no event shall such Selling Investor be required to contribute an aggregate amount in excess of the dollar amount of proceeds (net of Selling Expenses) received by such Selling Investor from the sale of Registrable Securities giving rise to such indemnification. The relative fault of the indemnifying party on the one hand and the indemnified party on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact has been made by, or relates to, information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this paragraph were to be determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to herein. The amount paid by an indemnified party as a result of the Losses referred to in the first sentence of this paragraph shall be deemed to include any legal and other expenses reasonably incurred by such indemnified party in connection with investigating or defending any Loss that is the subject of this paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who is not guilty of such fraudulent misrepresentation.

 

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(f) Other Indemnification . The provisions of this Section 2.08 shall be in addition to any other rights to indemnification or contribution that an indemnified party may have pursuant to law, equity, contract or otherwise.

Section 2.09 Rule 144 Reporting . With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Registrable Securities to the public without registration, the Partnership agrees to use its commercially reasonable efforts, until the disposition by the Selling Investors of all Registrable Securities, to:

(a) make and keep public information regarding the Partnership available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after the date hereof;

(b) file with the Commission in a timely manner all reports and other documents required of the Partnership under the Securities Act and the Exchange Act at all times from and after the date hereof; and

(c) so long as a Selling Investor owns any Registrable Securities, furnish, unless otherwise available via EDGAR, to such Selling Investor forthwith upon request a copy of the most recent annual or quarterly report of the Partnership, and such other reports and documents so filed as such Selling Investor may reasonably request in availing itself of any rule or regulation of the Commission allowing such Selling Investor to sell any such securities without registration, subject to restrictions during the Lock-Up Period set forth in the Unit Purchase Agreement.

Section 2.10 Transfer or Assignment of Registration Rights . The rights to cause the Partnership to register Registrable Securities granted to the Investor by the Partnership under this Article II may be transferred or assigned by the Investor to one or more transferees or assignees of Registrable Securities; provided , however , that (a) the Partnership is given written notice prior to any said transfer or assignment, stating the name and address of each such transferee or assignee and identifying the securities with respect to which such registration rights are being transferred or assigned, and (b) each such transferee or assignee assumes in writing responsibility for its portion of the obligations of a Selling Investor under this Agreement. In addition, if, after the effectiveness of the Registration Statement, the Investor distributes its Registrable Securities, except for the Purchased Units during the Lock-Up Period, to its owners or such owners transfer such Registrable Securities to their respective Affiliates, pledgees, or donees (such persons, “Distributees”), the Investor will identify such Distributees to the Partnership in writing and the Partnership shall use its commercially reasonable efforts to supplement or amend the Registration Statement to reflect such Distributees as “selling unitholders” thereunder so as to permit the sale under the Registration Statement of the Registrable Securities by the then holders thereof, provided , that the Partnership shall not be required to file with the Commission, and pay the Registration Expenses associated with, more than one such amendment or supplement in any six (6) month period.

 

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ARTICLE III

MISCELLANEOUS

Section 3.01 Communications . All notices and other communications provided for or permitted hereunder shall be made in writing by facsimile, electronic mail, courier service or personal delivery:

(a) if to the Investor:

American Cemeteries Infrastructure Investors, LLC

950 Tower Lane, Suite 800

Foster City, CA 94404

Attention: Robert Hellman

Fax: 650-854-0853

(b) if to a transferee of the Investor, to such transferee at the address provided pursuant to Section 2.10 above; and

(c) if to the Partnership:

StoneMor Partners L.P.

311 Veterans Highway, Suite B

Levittown, PA 19056

Attention: Lawrence Miller

Telephone: 215-826-2800

Email: lmill@stonemor.com

All such notices and communications shall be deemed to have been received at the time delivered by hand, if personally delivered; when receipt acknowledged, if sent via facsimile or sent via Internet electronic mail; and when actually received, if sent by courier service or any other means.

Section 3.02 Successor and Assigns . This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties, including subsequent holder of Registrable Securities to the extent permitted herein.

Section 3.03 Assignment of Rights . All or any portion of the rights and obligations of the Investor under this Agreement may be transferred or assigned by the Investor only in accordance with Section 2.10 hereof.

Section 3.04 Specific Performance . Damages in the event of breach of this Agreement by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, in addition to and without limiting any other remedy or right it may have, will have the right to an injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of the parties hereto hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right will not preclude any such Person from pursuing any other rights and remedies at law or in equity that such Person may have.

 

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Section 3.05 Counterparts . This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.

Section 3.06 Headings . The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

Section 3.07 Governing Law . THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF LAWS OF ANY JURISDICTION OTHER THAN THOSE OF THE STATE OF DELAWARE.

Section 3.08 Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING BETWEEN THE PARTIES HERETO ARISING OUT OF OR RELATED TO THIS AGREEMENT.

Section 3.09 Severability of Provisions . Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting or impairing the validity or enforceability of such provision in any other jurisdiction.

Section 3.10 Entire Agreement . This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the rights granted by the Partnership set forth herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

Section 3.11 Amendment . This Agreement may be amended only by means of a written amendment signed by the Partnership and the Investor; provided , however , that no such amendment shall materially and adversely affect the rights of the Selling Investors hereunder without the consent of such Selling Investors obtained by the Investor.

Section 3.12 No Presumption . If any claim is made by a party relating to any conflict, omission or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular party or its counsel.

 

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Section 3.13 Obligations Limited to Parties to Agreement . Each of the Parties hereto covenants, agrees and acknowledges that no Person other than the Investor (and its permitted transferees and assignees as Selling Investors) and the Partnership shall have any obligation hereunder and that, except as otherwise provided in Section 2.08 , notwithstanding that one or more of the Selling Investors may be a corporation, partnership or limited liability company, no recourse under this Agreement or under any documents or instruments delivered in connection herewith or therewith shall be had against any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of the Partnership or any Selling Investor or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable Law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the Selling Investors or the Partnership or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, as such, for any obligations of the Selling Investor or the Partnership, as applicable, under this Agreement or any documents or instruments delivered in connection herewith or therewith or for any claim based on, in respect of or by reason of such obligation or its creation, except in each case for any transferee or assignee of the Investor hereunder.

Section 3.14 Interpretation . Article and Section references to this Agreement, unless otherwise specified. All references to instruments, documents, contracts and agreements are references to such instruments, documents, contracts and agreements as the same may be amended, supplemented and otherwise modified from time to time, unless otherwise specified. The word “including” shall mean “including but not limited to.”

[Signature pages to follow]

 

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IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first above written.

 

STONEMOR PARTNERS L.P.
By:  

StoneMor GP LLC,

its General Partner

 
By:  

/s/ Lawrence Miller

Name:   Lawrence Miller
Title:   President and Chief Executive Officer

Signature Page to Registration Rights Agreement


AMERICAN CEMETERIES INFRASTRUCTURE INVESTORS, LLC:
By:   AIM Universal Holdings, LLC,
  its Manager
By:  

/s/ Robert B. Hellman, Jr.

Name:   Robert B. Hellman, Jr.
Title:   Authorized Person

Signature Page to Registration Rights Agreement

Exhibit 10.1

 

 

COMMON UNIT PURCHASE AGREEMENT

by and between

STONEMOR PARTNERS L.P.

and

AMERICAN CEMETERIES INFRASTRUCTURE INVESTORS, LLC

 

 


TABLE OF CONTENTS

ARTICLE I

 

DEFINITIONS

     1   

Section 1.1

   Definitions      1   
ARTICLE II   
AGREEMENT TO SELL AND PURCHASE      4   

Section 2.1

   Sale and Purchase      4   

Section 2.2

   Closing      4   

Section 2.3

   Deliveries by the Partnership      4   

Section 2.4

   Purchaser Deliveries      5   

Section 2.5

   Conditions to the Closing      5   
ARTICLE III   
REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP      6   

Section 3.1

   Existence      6   

Section 3.2

   Purchased Units; Capitalization      6   

Section 3.3

   No Conflict      7   

Section 3.4

   Authority      7   

Section 3.5

   Approvals      7   

Section 3.6

   Compliance with Laws      8   

Section 3.7

   Due Authorization      8   

Section 3.8

   Valid Issuance; No Options or Preemptive Rights      8   

Section 3.9

   No Registration Rights      8   

Section 3.10

   Periodic Reports      9   

Section 3.11

   Litigation      9   

Section 3.12

   No Side Agreements      9   

Section 3.13

   No Registration Required      9   

Section 3.14

   MLP Status      9   
ARTICLE IV   
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER      9   

Section 4.1

   Existence, Capacity, Authorization and Enforceability      9   

Section 4.2

   No Conflict      10   

Section 4.3

   Certain Fees      10   

Section 4.4

   No Side Agreements      10   

Section 4.5

   Investment      10   

Section 4.6

   Nature of Purchaser      11   

Section 4.7

   Restricted Securities      11   

Section 4.8

   Legend; Restrictive Notation      11   

Section 4.9

   Reliance on Exemptions      12   

 

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ARTICLE V   
COVENANTS      12   

Section 5.1

   Taking of Necessary Action      12   

Section 5.2

   Purchaser Lock-Up      12   

Section 5.3

   Shelf Registration Statement      13   
ARTICLE VI   
INDEMNIFICATION      13   

Section 6.1

   Indemnification by the Partnership      13   

Section 6.2

   Indemnification by Purchaser      14   

Section 6.3

   Indemnification Procedure      14   
ARTICLE VII   
MISCELLANEOUS      15   

Section 7.1

   Certain Special Allocations of Book and Taxable Income      15   

Section 7.2

   Interpretation and Severability      15   

Section 7.3

   Survival of Provisions      16   

Section 7.4

   No Waiver; Modifications in Writing      16   

Section 7.5

   Binding Effect; Assignment      16   

Section 7.6

   Communications      17   

Section 7.7

   Removal of Legend      17   

Section 7.8

   Entire Agreement      17   

Section 7.9

   Termination      18   

Section 7.10

   Governing Law      18   

Section 7.11

   Waiver of Jury Trial      18   

Section 7.12

   Execution in Counterparts      19   

 

Exhibit A

      Additional Limited Partner Certificate

 

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COMMON UNIT PURCHASE AGREEMENT

This COMMON UNIT PURCHASE AGREEMENT, dated as of May 19, 2014 (this “ Agreement ”), is by and between STONEMOR PARTNERS L.P., a Delaware limited partnership (the “ Partnership ”), and American Cemeteries Infrastructure Investors, LLC (the “ Purchaser ”).

WHEREAS, the Partnership desires to issue and sell to the Purchaser, and the Purchaser desires to purchase from the Partnership, certain common units representing limited partner interests in the Partnership (“ Common Units ”) in accordance with the provisions of this Agreement; and

WHEREAS, the Partnership and the Purchaser are entering into a registration rights agreement (the “ Registration Rights Agreement ”), pursuant to which the Partnership is agreeing to provide the Purchaser with certain registration rights with respect to the Common Units and Distribution Units acquired pursuant hereto.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Partnership and the Purchaser hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions . As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated:

Affiliate ” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

Agreement ” has the meaning set forth in the introductory paragraph.

Business Day ” means a day other than (i) a Saturday or Sunday or (ii) any day on which banks located in New York, New York are authorized or obligated to close.

Closing ” has the meaning specified in Section 2.2.

Closing Date ” has the meaning specified in Section 2.2.

Commission ” means the United States Securities and Exchange Commission.

Common Unit Price ” means $24.38.

Common Units ” has the meaning specified in the recitals.


Delaware LP Act ” means the Delaware Revised Uniform Limited Partnership Act.

Distribution Units ” means any Common Units issued in kind as a distribution pursuant to Section 3.2.

Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

General Partner ” means StoneMor GP LLC, a Delaware limited liability company and the general partner of the Partnership.

Governmental Authority ” means, with respect to a particular Person, any country, state, county, city and political subdivision in which such Person or such Person’s Property is located or that exercises valid jurisdiction over any such Person or such Person’s Property, and any court, agency, department, commission, board, bureau or instrumentality of any of them and any monetary authority that exercises valid jurisdiction over any such Person or such Person’s Property. Unless otherwise specified, all references to Governmental Authority herein with respect to the Partnership mean a Governmental Authority having jurisdiction over the Partnership, its Subsidiaries or any of their respective Properties.

Indemnified Party ” has the meaning specified in Section 6.3.

Indemnifying Party ” has the meaning specified in Section 6.3.

Knowledge ” shall mean, with respect to any party, the actual knowledge of the managers, directors or executive officers of such party or such party’s managing member, as applicable.

Law ” means any federal, state, local or foreign order, writ, injunction, judgment, settlement, award, decree, statute, law, rule or regulation.

Lien ” means any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including any lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes.

Material Adverse Effect ” means a material adverse effect on (i) the financial condition, business, assets or results of operations of the Partnership Entities and their Subsidiaries, taken as a whole, and (ii) the ability of the Partnership to perform its obligations under the Operative Documents in full. Notwithstanding the foregoing, a “Material Adverse Effect” shall not include any effect resulting or arising from: (a) any change in general economic conditions in the industries or markets in which any of the Partnership Entities and their Subsidiaries operate that do not have a disproportionate effect on the Partnership Entities and their Subsidiaries, taken as a whole; (b) any engagement in hostilities pursuant to a declaration of war, or the occurrence of any military or terrorist attack; (c) changes in GAAP or other accounting principles, except to the extent such change has a disproportionate effect on the Partnership Entities and their Subsidiaries, taken as a whole; or (d) the announcement and pendency of the transactions contemplated hereby.

 

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NYSE ” means The New York Stock Exchange, Inc.

Operating Company ” means StoneMor Operating LLC, a Delaware limited liability company.

Operative Documents ” means, collectively, this Agreement, the Registration Rights Agreement and any amendments, supplements, continuations or modifications thereto.

Outstanding ” has the meaning set forth in the Partnership Agreement.

Partnership ” has the meaning set forth in the introductory paragraph.

Partnership Agreement ” means the Second Amended and Restated Agreement of Limited Partnership of the Partnership dated September 9, 2008, including any amendments thereto.

Partnership Entities ” and each a “ Partnership Entity ” means the General Partner, the Partnership, and the Operating Company.

Partnership Related Parties ” has the meaning specified in Section 6.2.

Person ” means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other form of entity.

Per Unit Capital Amount ” has the meaning set forth in the Partnership Agreement.

Property ” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

Purchase Price ” means $55.0 million.

Purchased Units ” means the number of Common Units equal to the Purchase Price hereto divided by the Common Unit Price.

Purchaser ” has the meaning set forth in the introductory paragraph.

Purchaser Related Parties ” has the meaning specified in Section 6.1.

Record Date ” has the meaning specified in the Partnership Agreement.

Registration Rights Agreement ” has the meaning set forth in the recitals hereto.

Representatives ” of any Person means the Affiliates, officers, directors, managers, employees, agents, counsel, accountants, investment bankers and other representatives of such Person.

 

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Securities Act ” means the Securities Act of 1933, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

Subsidiary ” has the meaning set forth in Rule 405 of the rules and regulations promulgated under the Securities Act.

Unrealized Gain ” has the meaning set forth in the Partnership Agreement.

ARTICLE II

AGREEMENT TO SELL AND PURCHASE

Section 2.1 Sale and Purchase . Subject to the terms and conditions hereof, the Partnership hereby agrees to issue and sell to the Purchaser and the Purchaser hereby agrees to purchase from the Partnership, its respective Purchased Units, and the Purchaser agrees to pay the Partnership the Common Unit Price for each Purchased Unit.

Section 2.2 Closing . Subject to the terms and conditions hereof, the closing of the transactions contemplated under this Agreement (the “ Closing ”) shall take place on May 21, 2014 (or another date mutually agreed to by the parties; the “ Closing Date ”). The parties agree that the Closing may occur via delivery of .pdf of facsimile copies of the documents referred to herein.

Section 2.3 Deliveries by the Partnership . At the Closing, subject to the terms and conditions hereof, the Partnership will deliver, or cause to be delivered, to the Purchaser:

(a) evidence of issuance of the Purchased Units credited to a book-entry account maintained by the transfer agent, bearing the restrictive notations set forth in Section 4.8, and meeting the requirements of the Partnership Agreement, free and clear of any Liens, other than transfer restrictions under the Partnership Agreement and applicable federal and state securities laws;

(b) a certificate of the Secretary of State of the State of Delaware, dated a recent date, to the effect that each of the Partnership Entities is in good standing;

(c) a certificate, dated the Closing Date and signed by the President and Chief Executive Officer and the Chief Financial Officer of the General Partner, on behalf of the Partnership, in their capacities as such, stating that:

(i) the Partnership has performed and complied in all material respects with the covenants and agreements contained in this Agreement that are required to be performed and complied with by the Partnership on or prior to the Closing Date; and

(ii) the representations and warranties of the Partnership contained in this Agreement are, individually and in the aggregate, true and correct in all material respects as of the Closing Date (except that representations and warranties made as of a specific date shall be required to be true and correct as of such date only); and

 

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(d) the Registration Rights Agreement.

Section 2.4 Purchaser Deliveries . At the Closing, subject to the terms and conditions hereof, the Purchaser will deliver, or cause to be delivered, to the Partnership:

(a) payment to the Partnership of the Purchase Price by wire transfer of immediately available funds to an account designated by Partnership;

(b) a certificate, dated the Closing Date and signed by a representative of the Purchaser, on behalf of the Purchaser, stating that:

(i) the Purchaser has performed and complied in all material respects with the covenants and agreements contained in this Agreement that are required to be performed and complied with by the Purchaser on or prior to the Closing Date; and

(ii) the representations and warranties of the Purchaser contained in this Agreement are, individually and in the aggregate, true and correct as of the Closing Date (except that representations and warranties made as of a specific date shall be required to be true and correct as of such date only);

(c) the Registration Rights Agreement; and

(d) an application requesting admission as an Additional Limited Partner (as that term is defined in the Partnership Agreement) in substantially the form attached hereto as Exhibit A , which shall have been duly executed by such Purchaser.

Section 2.5 Conditions to the Closing .

(a) The Reorganization . Each of (i) the merger of CFS Merger Sub, LLC, a Delaware limited liability company, with and into Cornerstone Family Services LLC, a Delaware limited liability company (“ CFS ”), with CFS surviving the merger (“ CFS Merger ”), (ii) the merger of CFSI Merger Sub, LLC, a Delaware limited liability company, with and into CFSI LLC, a Delaware limited liability company (“ CFSI ”), with CFSI surviving the merger (“ CFSI Merger ”), (iii) the merger of CFS with and into CFSI, with CFSI surviving the merger and changing its name to StoneMor GP Holdings LLC (“ CFS-CFSI Merger ”), (iv) the contribution by the members of the General Partner other than CFSI of their membership interests in the GP to CFSI in exchange for units in CFSI (such contribution and collectively with the CFS Merger, the CFSI Merger and the CFS-CFSI Merger, the “ Reorganization ”) shall have occurred prior to the Closing Date.

(b) NYSE Listing . On or prior to the Closing Date, the Purchased Units and a good faith estimate of the total number of Distribution Units that may be issued to the Purchaser pursuant to this Agreement shall have been approved for listing on the NYSE, subject to official notice of issuance.

(c) Representations and Warranties . The Partnership and the Purchaser shall have performed and complied in all material respects with the covenants and agreements contained in this Agreement. The representations and warranties of the Partnership and the Purchaser

 

5


contained in this Agreement shall be true and correct when made and as of the Closing Date, in each case as though made at and as of the Closing Date (except that representations and warranties made as of a specific date shall be required to be true and correct as of such date only); provided , however , that no representations and warranties shall be deemed to be untrue or incorrect to the extent that the Purchaser (in case of the Partnership’s representations and warranties) and the Partnership (in case of the Purchaser’s representations and warranties) had Knowledge of such inaccuracy at the date hereof or as of the Closing Date, as applicable.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP

The Partnership represents and warrants to the Purchaser as follows:

Section 3.1 Existence . Each of the Partnership Entities has been duly formed and is validly existing as a limited liability company or limited partnership, as the case may be, in good standing under the laws of its jurisdiction of formation with all limited liability company or limited partnership power and authority necessary to own or hold its properties and to conduct the businesses in which it is engaged, and, in the case of the General Partner, to act as the general partner of the Partnership.

Section 3.2 Purchased Units; Capitalization .

(a) Except as set forth in this Section 3.2, the Purchased Units have those rights, preferences, privileges and restrictions governing the Common Units as set forth in the Partnership Agreement.

(b) Commencing with the quarter ending June 30, 2014, the holders of Purchased Units as of an applicable Record Date shall be entitled to receive distributions in an amount equal to the distribution paid on all of the Common Units. Through the quarterly distribution payable with respect to the quarter ending June 30, 2018, such distributions may be paid in cash, in Distribution Units or a combination thereof, as determined by the Partnership in its sole discretion. If the Partnership elects to pay distributions through the issuance of Distribution Units, the number of Common Units to be issued in connection with a quarterly distribution shall be the quotient of (A) the amount of the quarterly distribution paid on the Common Units by (B) the volume-weighted average price of the Common Units for the thirty (30) trading days immediately preceding the date a quarterly distribution is declared with respect to the Common Units; provided that fractional shares of Common Units shall not be issued to any person (each fractional share of a Common Unit shall be rounded down to the next lower whole Common Unit and the remaining amount of the distribution will be paid in cash, or at the Partnership’s option, it may round the number of Common Units up to the next higher whole Common Unit). Beginning with the quarterly distribution payable with respect to the quarter ending September 30, 2018, the Purchased Units will receive distributions on the same basis as all other Common Units and the Partnership will no longer have the ability to elect to pay quarterly distributions in kind through the issuance of Distribution Units.

 

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(c) As of the date hereof and prior to the issuance and sale of the Purchased Units, the issued and outstanding limited partner interests of the Partnership consist of 23,712,550 Common Units. All outstanding Common Units have been duly authorized and validly issued in accordance with the Partnership Agreement and are fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in Sections 17-303, 17-607 and 17-804 of the Delaware LP Act).

(d) The Common Units are listed on the NYSE, and the Partnership has not received any notice of delisting.

Section 3.3 No Conflict . None of the offering, issuance and sale by the Partnership of the Purchased Units and the application of the proceeds therefrom, the execution, delivery and performance of the Operative Documents by the Partnership, or the consummation of the transactions contemplated hereby or thereby (i) conflicts or will conflict with, or constitutes or will constitute a violation of, the certificate or agreement of limited partnership, certificate of formation, limited liability company agreement or other organizational documents of the Partnership Entities, (ii) conflicts or will conflict with, or constitutes or will constitute a breach or violation of or a default under (or an event that, with notice or lapse of time or both, would constitute such a breach or violation of or default under), any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which any Partnership Entity or any material Subsidiary of a Partnership Entity is a party, by which any of them is bound or to which any of their respective properties or assets is subject, (iii) violates or will violate any statute, law, ordinance, regulation, order, judgment, decree or injunction of any court or governmental agency or body to which any Partnership Entity or any material Subsidiary of a Partnership Entity, or any of their respective properties or assets may be subject or (iv) will result in the creation or imposition of any Lien upon any property or assets of any Partnership Entity or any material Subsidiary of any Partnership Entity, which conflicts, breaches, violations, defaults or Liens, in the case of clauses (ii), (iii) or (iv), would, individually or in the aggregate, have a Material Adverse Effect.

Section 3.4 Authority . The Partnership has all requisite power and authority to issue, sell and deliver the Purchased Units, in accordance with and upon the terms and conditions set forth in this Agreement and the Partnership Agreement. All partnership or limited liability company action, as the case may be, required to be taken by the General Partner and the Partnership for the authorization, issuance, sale and delivery of the Purchased Units, the execution and delivery of the Operative Documents and the consummation of the transactions contemplated hereby and thereby has been validly taken. No approval from the holders of outstanding Common Units is required under the Partnership Agreement or the rules of the NYSE in connection with the Partnership’s issuance and sale of the Purchased Units to the Purchaser.

Section 3.5 Approvals . No permit, consent, approval, authorization, order, registration, filing or qualification (“ consent ”) of or with any court, governmental agency or body having jurisdiction over any of the Partnership Entities or any material Subsidiary of any Partnership Entity, or any of their respective properties is required in connection with the offering and sale of the Purchased Units in the manner contemplated by this Agreement, the execution, delivery and performance of this Agreement by the Partnership Entities, or the

 

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consummation of the transactions contemplated by this Agreement, except for such consents (i) required under the Securities Act and state securities or “Blue Sky” laws or (ii) that, if not obtained, would not, individually or in the aggregate, have a Material Adverse Effect.

Section 3.6 Compliance with Laws . As of the date hereof, neither the Partnership nor any of its Subsidiaries is in violation of any Law applicable to the Partnership or its Subsidiaries, except as would not, individually or in the aggregate, have a Material Adverse Effect. The Partnership and its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would not, individually or in the aggregate, have a Material Adverse Effect, and neither the Partnership nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit, except where such potential revocation or modification would not, individually or in the aggregate, have a Material Adverse Effect.

Section 3.7 Due Authorization . Each of the Operative Documents has been duly and validly authorized and has been or, with respect to the Operative Documents to be delivered at the Closing Date, will be, validly executed and delivered by the Partnership or the General Partner, as the case may be, and constitutes, or will constitute (assuming the due authorization, execution and delivery by the other party thereto), the legal, valid and binding obligations of the Partnership or the General Partner as the case may be, enforceable in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors’ rights generally or by general principles of equity, including principles of commercial reasonableness, fair dealing and good faith.

Section 3.8 Valid Issuance; No Options or Preemptive Rights . The Purchased Units to be issued and sold by the Partnership to the Purchaser hereunder have been duly authorized in accordance with the Partnership Agreement and, when issued and delivered to the Purchaser against payment therefor pursuant to this Agreement, will be validly issued in accordance with the Partnership Agreement, fully paid (to the extent required under the Partnership Agreement) and non-assessable (except as such nonassessability may be affected by matters described in Sections 17-303, 17-607 and 17-804 of the Delaware LP Act). The holders of outstanding Common Units are not entitled to statutory, preemptive or other similar contractual rights to subscribe for Common Units other than as provided in the Partnership Agreement; and no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, partnership securities or ownership interests in the Partnership are outstanding, except as provided for in the Partnership Agreement or grants outstanding under an employee benefit plan.

Section 3.9 No Registration Rights . Except as disclosed in the Partnership’s reports filed under the Exchange Act and as contemplated by this Agreement, the Partnership Agreement and the Registration Rights Agreement, there are no contracts, agreements or understandings between the Partnership and any Person granting such Person the right to require the Partnership to file a registration statement under the Securities Act with respect to any securities of the Partnership or to require the Partnership to add such securities to any securities registered or to be registered pursuant to any registration statement filed by or required to be filed by the Partnership under the Securities Act.

 

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Section 3.10 Periodic Reports . The Partnership has filed all forms, reports, schedules and statements required to be filed by it under the Exchange Act since May 1, 2013 (the “SEC Documents”) and when they were filed with the Commission, each such form, report, schedule and statement (i) conformed in all material respects to the requirements of the Exchange Act, and (ii) did not knowingly contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made therein, not misleading; provided the Purchaser did not have Knowledge of such untrue statement or omission as of the date of such filing with the Commission.

Section 3.11 Litigation . Except as disclosed in the Partnership’s reports filed under the Exchange Act, as of the date hereof, there are no legal or governmental proceedings pending to which any Partnership Entity is a party or to which any Property or asset of any Partnership Entity is subject that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or which challenge the validity of any of the Operative Documents or the right of any Partnership Entity to enter into any of the Operative Documents or to consummate the transactions contemplated hereby and thereby and, to the knowledge of the Partnership, no such proceedings are threatened by Governmental Authorities or others.

Section 3.12 No Side Agreements . There are no agreements by, among or between the Partnership or any of its Affiliates, on the one hand, and any Purchaser or any of their Affiliates, on the other hand, with respect to the transactions contemplated hereby other than the Operative Documents nor promises or inducements for future transactions between or among any of such parties.

Section 3.13 No Registration Required . Assuming the accuracy of the representations and warranties of the Purchaser contained in Section 4.5 and Section 4.6, the issuance and sale of the Purchased Units and the Distribution Units pursuant to this Agreement is exempt from registration requirements of the Securities Act, and neither the Partnership nor, to the knowledge of the Partnership, any authorized Representative acting on its behalf has taken or will take any action hereafter that would cause the loss of such exemption.

Section 3.14 MLP Status . The Partnership is properly treated as a partnership for United States federal income tax purposes and more than 90% of the Partnership’s current gross income is qualifying income under 7704(d) of the Internal Revenue Code of 1986, as amended.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser hereby represents and warrants to the Partnership that:

Section 4.1 Existence, Capacity, Authorization and Enforceability . The Purchaser (i) is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization and (ii) has the requisite power, and has all material governmental licenses, authorizations, consents and approvals necessary to own its Properties and carry on its business as its business is now being conducted. The Purchaser has all requisite limited liability company or other similar entity power and authority to execute, deliver and perform its obligations under

 

9


this Agreement and the Registration Rights Agreement and to consummate the transactions contemplated thereby. All limited liability company action required to be taken by the Purchaser for the execution and delivery of the Operative Documents and the consummation of the transactions contemplated hereby and thereby has been validly taken. Each of the Operative Documents has been duly and validly authorized and has been or, with respect to the Operative Documents to be delivered at the Closing Date, will be, validly executed and delivered by the Purchaser, and constitutes, or will constitute (assuming the due authorization, execution and delivery by the other party thereto), the legal, valid and binding obligations of the Purchaser, enforceable in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors’ rights generally or by general principles of equity, including principles of commercial reasonableness, fair dealing and good faith.

Section 4.2 No Conflict . The execution, delivery and performance of this Agreement and the Registration Rights Agreement by the Purchaser and the consummation by the Purchaser of the transactions contemplated hereby and thereby will not (a) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any material agreement to which the Purchaser is a party or by which the Purchaser is bound or to which any of the property or assets of the Purchaser is subject, (b) violate any statute, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Purchaser or the property or assets of the Purchaser, or (c) conflict with or result in any violation of the provisions of the organizational documents of the Purchaser, except in the cases of clauses (a) and (b), for such conflicts, breaches, violations or defaults as would not prevent the consummation of the transactions contemplated by this Agreement and the Registration Rights Agreement and the performance of the Purchaser’s obligations under the Operative Agreements.

Section 4.3 Certain Fees . No fees or commissions are or will be payable by the Purchaser to brokers, finders, or investment bankers with respect to the purchase of any of the Purchased Units or the consummation of the transactions contemplated by this Agreement. The Purchaser agrees that it will indemnify and hold harmless the Partnership from and against any and all claims, demands, or liabilities for broker’s, finder’s, placement, or other similar fees or commissions incurred by such Purchaser in connection with the purchase of the Purchased Units or the consummation of the transactions contemplated by this Agreement.

Section 4.4 No Side Agreements . There are no other agreements by, among or between the Purchaser and any of its Affiliates, on the one hand, and the Partnership or any of its Affiliates, on the other hand, with respect to the transactions contemplated hereby other than the Operative Documents nor promises or inducements for future transactions between or among any of such parties.

Section 4.5 Investment . The Purchased Units and Distribution Units are being acquired for the Purchaser’s own account, not as a nominee or agent, and with no present intention of distributing the Purchased Units or Distribution Units or any part thereof, and the Purchaser has no present intention of selling or granting any participation in or otherwise distributing the same in any transaction in violation of the securities laws of the United States or any state, without prejudice, subject however, to the Purchaser’s right at all times to sell or otherwise dispose of all or any part of the Purchased Units and Distribution Units under a

 

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registration statement under the Securities Act and applicable state securities laws or under an exemption from such registration available thereunder (including, without limitation, if available, Rule 144 promulgated thereunder). If the Purchaser should in the future decide to dispose of any of the Purchased Units and Distribution Units, the Purchaser understands and agrees (a) that it may do so only in compliance with the Securities Act and applicable state securities law, as then in effect, including a sale contemplated by any registration statement pursuant to which such securities are being offered, or pursuant to an exemption from the Securities Act, and (b) that stop-transfer instructions to that effect will be in effect with respect to such securities.

Section 4.6 Nature of Purchaser . The Purchaser represents and warrants to, and covenants and agrees with, the Partnership that (a) the Purchaser is an “accredited investor” as defined in Rule 501 of Regulation D promulgated by the Commission pursuant to the Securities Act, (b) by reason of its business and financial experience, the Purchaser has such knowledge, sophistication and experience in making similar investments and in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Purchased Units and Distribution Units, is able to bear the economic risk of such investment and, at the present time, would be able to afford a complete loss of such investment, and (c) it is acquiring the Purchased Units and Distribution Units only for its own account and not for the account of others, for investment purposes and not on behalf of any other account or Person or with a view to, or for offer or sale in connection with, any distribution thereof. The Purchaser acknowledges that it (a) has access to the SEC Documents, (b) has been provided a reasonable opportunity to ask questions of and receive answers from Representatives of the Partnership or the General Partner regarding such matters and (c) has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to the acquisition of the Purchased Units and Distribution Units.

Section 4.7 Restricted Securities . The Purchaser understands that the Purchased Units are, and the Distribution Units will be, characterized as “restricted securities” under the federal securities Laws inasmuch as they are being, or will be, as applicable, acquired from the Partnership in a transaction not involving a public offering and that under such Laws and applicable regulations such securities may be resold without registration under the Securities Act only in certain limited circumstances.

Section 4.8 Legend; Restrictive Notation . The Purchaser understands that the certificates evidencing the Purchased Units or the book-entry account maintained by the transfer agent evidencing ownership of the Purchased Units, as applicable, will bear the legend or restrictive notation required by the Partnership Agreement as well as the following legends or restrictive notations:

(a) “These securities have not been registered under the Securities Act or the securities laws of any state or other jurisdiction. These securities may not be sold or offered for sale, pledged or hypothecated except pursuant to an effective registration statement under the Securities Act or pursuant to an exemption from registration thereunder which, in the opinion of counsel for the holder, which counsel and opinion are reasonably satisfactory to the counsel for the Partnership, is available, in each case in accordance with all applicable securities laws of the states or other jurisdictions, and in the case of a transaction exempt from registration, such securities may only be transferred if the transfer agent for such securities has received documentation satisfactory to it that such transaction does not require registration under the Securities Act.”

 

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(b) “The securities represented hereby are subject to certain restrictions on transfer pursuant to a private transaction set forth in Section 5.2 of that certain Common Unit Purchase Agreement dated as of May 19, 2014 among the issuer of such securities (the “Partnership”) and the other party or parties named therein. A copy of the provisions of such agreement setting forth such restrictions on transfer is on file with the secretary of the General Partner of the Partnership. For the avoidance of doubt, such restrictions do not create any limitations or otherwise affect in any manner any transaction that is not a private transaction. For example, such restrictions do not apply to any resale pursuant to a registration statement.”

The Purchaser understands that the certificates evidencing the Distribution Units or the book-entry account maintained by the transfer agent evidencing ownership of the Distribution Units, as applicable, will bear the legend or restrictive notation required by the Partnership Agreement as well as the legends or restrictive notations set forth in Section 4.8(a)

Section 4.9 Reliance on Exemptions . The Purchaser understands that the Purchased Units and Distribution Units are being offered and sold to the Purchaser in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Partnership is relying upon the truth and accuracy of, and Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire the Purchased Units and the Distribution Units.

ARTICLE V

COVENANTS

Section 5.1 Taking of Necessary Action . Each of the parties hereto shall use its commercially reasonable efforts promptly to take or cause to be taken all action and promptly to do or cause to be done all things necessary, proper or advisable under applicable Law and regulations to consummate and make effective the transactions between the Partnership and the Purchaser contemplated by this Agreement related specifically to the acquisition of the Purchased Units and the Distribution Units. Without limiting the foregoing, each of the Partnership and the Purchaser shall use its commercially reasonable efforts to make all filings and obtain all consents of Governmental Authorities that may be necessary or, in the reasonable opinion of the Partnership and the Purchaser, as the case may be, advisable for the consummation of the transactions contemplated by the Operative Documents.

Section 5.2 Purchaser Lock-Up . For a period commencing on the Closing Date and ending on July 1, 2018 (the “ Lock-Up Period ”), the Purchaser agrees not to, directly or indirectly, (a) offer for sale, sell, pledge or otherwise dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future of) the Purchased Units, (b) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of the Purchased Units, whether any such transaction described in clause (a) or (b) above is to be

 

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settled by delivery of Common Units or other securities, in cash or otherwise, or (c) publicly disclose the intention to do any of the foregoing. Notwithstanding the foregoing, the Purchaser may transfer the Purchased Units to any Affiliate or any investment fund or other entity controlled or managed by the Purchaser who agrees to be bound by the terms of this Agreement pursuant to the requirements of section 7.5 of the Agreement. For avoidance of doubt, if Distribution Units are issued to the holders of Common Units, such Distribution Units will not be subject to the Purchaser Lock-Up.

Section 5.3 Shelf Registration Statement . Within fifteen (15) days following the Closing Date, the Partnership shall prepare and file a registration statement under the Securities Act to permit the public resale of a good faith estimate of the total number of Distribution Units that may be issued to the Purchaser pursuant to Section 3.2(b) . The registration statement filed by the Partnership pursuant to this Section 5.3 (the “ Registration Statement ”) shall be on Form S-3 or such appropriate form of the Commission as shall be selected by the Partnership so long as such form permits the continuous offering of the Distribution Units pursuant to Rule 415 of the Securities Act or such other rule as is then applicable at the then prevailing market prices. The Partnership shall use its commercially reasonable efforts to cause the Registration Statement to be declared effective as soon as practicable thereafter. The Partnership shall use its commercially reasonable efforts to cause the Registration Statement to be effective, supplemented and amended to the extent necessary to ensure that it is available for the resale of the Distribution Units covered by the Registration Statement by the Purchaser in accordance with the Registration Rights Agreement. The Registration Statement when effective (including the documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus contained in such Registration Statement, in the light of the circumstances under which a statement is made). As soon as practicable following the date that the Registration Statement becomes effective, but in any event within two (2) Business Days of such date, the Partnership shall provide the Purchaser with written notice of the effectiveness of the Registration Statement.

ARTICLE VI

INDEMNIFICATION

Section 6.1 Indemnification by the Partnership . The Partnership agrees to indemnify the Purchaser and its Representatives (collectively, “ Purchaser Related Parties ”) from, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of action, and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising out of, or in any way related to the breach of any of the representations, warranties or covenants of the Partnership contained herein, provided that such claim for indemnification relating to a breach of the representations or warranties is made prior to the expiration of such representations or warranties to the extent applicable; and provided further, that no Purchaser Related Party shall be entitled to recover special, consequential or punitive damages under this Section 6.1.

 

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Section 6.2 Indemnification by Purchaser . The Purchaser agrees to indemnify the Partnership, the General Partner and their respective Representatives (collectively, “ Partnership Related Parties ”) from, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of action, and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising out of, or in any way related to the breach of any of the representations, warranties or covenants of such Purchaser contained herein, provided that such claim for indemnification relating to a breach of the representations and warranties is made prior to the expiration of such representations and warranties to the extent applicable; and provided further, that no Partnership Related Party shall be entitled to recover special, consequential or punitive damages under this Section 6.2.

Section 6.3 Indemnification Procedure . Promptly after any Partnership Related Party or Purchaser Related Party (hereinafter, the “ Indemnified Party ”) has received notice of any indemnifiable claim hereunder, or the commencement of any action, suit or proceeding by a third person, which the Indemnified Party believes in good faith is an indemnifiable claim under this Agreement, the Indemnified Party shall give the indemnitor hereunder (the “ Indemnifying Party ”) written notice of such claim or the commencement of such action, suit or proceeding, but failure to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability it may have to such Indemnified Party hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure. Such notice shall state the nature and the basis of such claim to the extent then known. The Indemnifying Party shall have the right to defend and settle, at its own expense and by its own counsel who shall be reasonably acceptable to the Indemnified Party, any such matter as long as the Indemnifying Party pursues the same diligently and in good faith. If the Indemnifying Party undertakes to defend or settle, it shall promptly notify the Indemnified Party of its intention to do so, and the Indemnified Party shall cooperate with the Indemnifying Party and its counsel in all commercially reasonable respects in the defense thereof and the settlement thereof. Such cooperation shall include, but shall not be limited to, furnishing the Indemnifying Party with any books, records and other information reasonably requested by the Indemnifying Party and in the Indemnified Party’s possession or control. Such cooperation of the Indemnified Party shall be at the cost of the Indemnifying Party. After the Indemnifying Party has notified the Indemnified Party of its intention to undertake to defend or settle any such asserted liability, and for so long as the Indemnifying Party diligently pursues such defense, the Indemnifying Party shall not be liable for any additional legal expenses incurred by the Indemnified Party in connection with any defense or settlement of such asserted liability; provided, however, that the Indemnified Party shall be entitled (i) at its expense, to participate in the defense of such asserted liability and the negotiations of the settlement thereof and (ii) if (A) the Indemnifying Party has failed to assume the defense or employ counsel reasonably acceptable to the Indemnified Party or (B) if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and

 

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counsel to the Indemnified Party shall have concluded that there may be reasonable defenses available to the Indemnified Party that are different from or in addition to those available to the Indemnifying Party or if the interests of the Indemnified Party reasonably may be deemed to conflict with the interests of the Indemnifying Party, then the Indemnified Party shall have the right to select one separate counsel who shall be reasonably acceptable to the Indemnifying Party and to assume such legal defense and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the Indemnifying Party as incurred. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not settle any indemnified claim without the consent of the Indemnified Party, unless the settlement thereof imposes no liability or obligation on, and includes a complete release from liability of, and does not include any admission of wrongdoing or malfeasance by, the Indemnified Party. The remedies provided for in this Article VI are cumulative and are not exclusive of any remedies that may be available to a party at law or in equity or otherwise.

ARTICLE VII

MISCELLANEOUS

Section 7.1 Certain Special Allocations of Book and Taxable Income . To the extent that the Common Unit Price differs from the Per Unit Capital Amount as of the Closing Date for a then Outstanding Common Unit after taking into account the issuance of the Purchased Units, the General Partner intends to specially allocate Partnership items of book and taxable income, gain, loss or deduction to the Purchaser so that the Per Unit Capital Amount with respect to their Purchased Units are equal to the Per Unit Capital Amounts with respect to other Common Units (and thus to assure fungibility of all Common Units). Such special allocations will occur upon the earlier to occur of any taxable period of the Partnership ending upon, or after, (a) an event described in Section 5.5(d) of the Partnership Agreement or a sale of all or substantially all of the assets of the Partnership occurring after the date of the issuance of the Purchased Units, or (b) the transfer of the Purchased Units to a Person that is not an Affiliate of the Purchaser, in which case, such allocation shall be made only with respect to the Purchased Units so transferred. To the maximum extent permissible, the special allocations resulting from clause (a) will be made through allocations of Unrealized Gain.

Section 7.2 Interpretation and Severability. Article, Section, Schedule, and Exhibit references are to this Agreement, unless otherwise specified. All references to instruments, documents, contracts, and agreements are references to such instruments, documents, contracts, and agreements as the same may be amended, supplemented, and otherwise modified from time to time, unless otherwise specified. The word “including” shall mean “including but not limited to.” Whenever any party has an obligation under the Operative Documents, the expense of complying with that obligation shall be an expense of such party unless otherwise specified. Whenever any determination, consent, or approval is to be made or given by the Purchaser, such action shall be in such Purchaser’s sole discretion unless otherwise specified in this Agreement. If any provision in the Operative Documents is held to be illegal, invalid, not binding, or unenforceable, such provision shall be fully severable and the Operative Documents shall be construed and enforced as if such illegal, invalid, not binding, or unenforceable provision had never comprised a part of the Operative Documents, and the remaining provisions shall remain in full force and effect. The Operative Documents have been reviewed and negotiated by sophisticated parties with access to legal counsel and shall not be construed against the drafter.

 

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Section 7.3 Survival of Provisions . The representations and warranties set forth in Sections 3.2, 3.3, 3.5, 3.8, 3.13, 3.14, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8 and 4.9 hereunder shall survive the execution and delivery of this Agreement indefinitely, and the other representations and warranties set forth herein shall survive for a period of twelve (12) months following the Closing Date regardless of any investigation made by or on behalf of the Partnership or any Purchaser. The covenants made in this Agreement or any other Operative Document shall survive the Closing of the transactions described herein and remain operative and in full force and effect. All indemnification obligations of the Partnership and the Purchaser pursuant to this Agreement and the provisions of Article VI shall remain operative and in full force and effect unless such obligations are expressly terminated in a writing by the parties, regardless of any purported general termination of this Agreement.

Section 7.4 No Waiver; Modifications in Writing .

(a) Delay . No failure or delay on the part of any party in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to a party at law or in equity or otherwise.

(b) Amendments and Waivers . Except as otherwise provided herein, no amendment, waiver, consent, modification, or termination of any provision of this Agreement or any other Operative Document shall be effective unless signed by each of the parties hereto or thereto affected by such amendment, waiver, consent, modification, or termination. Any amendment, supplement or modification of or to any provision of this Agreement or any other Operative Document, any waiver of any provision of this Agreement or any other Operative Document, and any consent to any departure by the Partnership from the terms of any provision of this Agreement or any other Operative Document shall be effective only in the specific instance and for the specific purpose for which made or given. Except where notice is specifically required by this Agreement, no notice to or demand on the Partnership in any case shall entitle the Partnership to any other or further notice or demand in similar or other circumstances.

Section 7.5 Binding Effect; Assignment .

(a) Binding Effect . This Agreement shall be binding upon the Partnership, the Purchaser, and their respective successors and permitted assigns. Except as expressly provided in this Agreement, this Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors and permitted assigns.

(b) Assignment of Rights . Subject to the terms of this Agreement, all or any portion of the rights and obligations of the Purchaser under this Agreement may be transferred by the Purchaser by delivery of the transferee’s agreement to be bound by the Operative Documents and a revised Exhibit  A attached hereto. Upon the expiration of the Lock-Up Period set forth in

 

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Section 5.2 of this Agreement, all or any portion of the rights and obligations of the Purchaser under this Agreement may be transferred by the Purchaser to any Affiliate of the Purchaser without the consent of the Partnership. No portion of the rights and obligations of the Purchaser under this Agreement may be transferred by the Purchaser during the Lock-Up Period without the written consent of the Partnership (which consent shall not be unreasonably withheld by the Partnership).

Section 7.6 Communications . All notices and demands provided for hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, telecopy, air courier guaranteeing overnight delivery or personal delivery to the following addresses:

(a) If to the Purchaser:

American Cemeteries Infrastructure Investors, LLC

950 Tower Lane, Suite 800

Foster City, CA 94404

Attention: Robert Hellman

Fax: 650-854-0853

(b) If to the Partnership:

StoneMor Partners L.P.

301 Veterans Highway, Suite B

Levittown, PA 19056

Attention: Lawrence Miller

Telephone: (215) 826-2800

or to such other address as the Partnership or the Purchaser may designate in writing. All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; at the time of transmittal, if sent via electronic mail; upon actual receipt if sent by certified mail, return receipt requested, or regular mail, if mailed; when receipt acknowledged, if sent via facsimile; and upon actual receipt when delivered to an air courier guaranteeing overnight delivery.

Section 7.7 Removal of Legend . The Purchaser may request the Partnership to remove the legends described in Section 4.8 from the certificates evidencing the Purchased Units by submitting to the Partnership such certificates, together with an opinion of counsel, which counsel and opinion are reasonably satisfactory to the Partnership, to the effect that such legend is no longer required under the Securities Act or applicable state laws, as the case may be. The Partnership shall cooperate with the Purchaser to effect the removal of such legend.

Section 7.8 Entire Agreement . This Agreement, the other Operative Documents and the other agreements and documents referred to herein are intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or the other Operative Documents with respect to the rights granted by the Partnership or any of its Affiliates or the Purchaser or any of its Affiliates set forth

 

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herein or therein. This Agreement, the other Operative Documents and the other agreements and documents referred to herein or therein supersede all prior agreements and understandings between the parties with respect to such subject matter.

Section 7.9 Termination .

(a) Notwithstanding anything herein to the contrary, this Agreement may be terminated at any time at or prior to the Closing by any party, upon a breach in any material respect by the other party of any covenant or agreement set forth in this Agreement, which breach has not been cured, or which breach by its nature cannot be cured, prior to the Closing Date, provided in any such case that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained herein; provided, however, that no party shall have the right to terminate this Agreement pursuant to this Section 7.9 unless the breach of covenants or agreements, together with all other such breaches, would entitle the party receiving the benefit of such covenants or agreements not to consummate the transactions contemplated by this Agreement under Section 2.5.

(b) Notwithstanding anything herein to the contrary, this Agreement shall automatically terminate at any time at or prior to the Closing if a statute, rule, order, decree or regulations shall have been enacted or promulgated, of if any action shall have been taken by any Governmental Authority of competent jurisdiction that permanently restrains, permanently precludes, permanently enjoins or otherwise permanently prohibits the consummation of the transactions contemplated by this Agreement or makes the transactions contemplated by this Agreement illegal.

(c) In the event of the termination of this Agreement as provided in this Section 7.9, this Agreement shall forthwith become null and void. In the event of such a termination, there shall be no liability on the part of any party hereto, except as set forth in Article VI of this Agreement; provided that nothing herein shall relieve any party from any liability or obligation with respect to fraud or the willful and material breach of a covenant or agreement contained herein. In the case of fraud or willful and material breach of a covenant or agreement contained herein, then the parties hereto shall be entitled to all remedies available at law or in equity. For purposes of this Agreement, “willful and material breach” means a deliberate act or failure to act, which act or failure to act constitutes in and of itself a material breach of this Agreement that the breaching party had Knowledge would or would reasonably be expected to breach its obligations under this Agreement.

Section 7.10 Governing Law . This Agreement will be construed in accordance with and governed by the laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware.

Section 7.11 Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING BETWEEN THE PARTIES HERETO ARISING OUT OF OR RELATED TO THE OPERATIVE DOCUMENTS.

 

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Section 7.12 Execution in Counterparts . This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.

[Signature pages follow.]

 

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IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of the date first above written.

 

STONEMOR PARTNERS L.P.
By:   StoneMor GP LLC,
  its General Partner
By:  

/s/ Lawrence Miller

Name:   Lawrence Miller
Title:   President and Chief Executive Officer

Signature Page to Common Unit Purchase Agreement


AMERICAN CEMETERIES INFRASTRUCTURE INVESTORS, LLC:
By:   AIM Universal Holdings, LLC
  its Manager
By:  

/s/ Robert B. Hellman, Jr.

Name:   Robert B. Hellman, Jr.
Title:   Authorized Person

Signature Page to Common Unit Purchase Agreement


Exhibit A – Form of Additional Limited Partner Certificate

The undersigned (the “ Investor ”) hereby applies for issuance in the name of the Investor of the Common Units evidenced hereby.

The Investor (a) requests admission as an Additional Limited Partner and agrees to comply with and be bound by, and hereby executes, the Second Amended and Restated Agreement of Limited Partnership of StoneMor Partners L.P. (the “ Partnership ”), as amended, supplemented or restated to the date hereof (the “ Partnership Agreement ”), (b) represents and warrants that the Investor has all right, power and authority and, if an individual, the capacity necessary to enter into the Partnership Agreement, (c) appoints the General Partner of the Partnership and, if a Liquidator shall be appointed, the Liquidator of the Partnership as the Investor’s attorney-in-fact to execute, swear to, acknowledge and file any document, including, without limitation, the Partnership Agreement and any amendment thereto and the Certificate of Limited Partnership of the Partnership and any amendment thereto, necessary or appropriate for the Investor’s admission as an Additional Limited Partner and as a party to the Partnership Agreement, (d) gives the powers of attorney provided for in the Partnership Agreement, (e) makes the waivers and gives the consents and approvals contained in the Partnership Agreement. Capitalized terms not defined herein have the meanings assigned to such terms in the Partnership Agreement, and (f) certifies to the Partnership that the Investor (including, to the best of the Investor’s knowledge, any person for whom the Investor will hold the Common Units) is an Eligible Citizen. Capitalized terms not defined herein have the meanings assigned to such terms in the Partnership Agreement.

Date:                      

 

 

   

 

Social Security or other identifying number     Signature of Investor

 

   

 

Purchase Price including commissions, if any     Name and Address of Investor

Type of Entity (check one):

 

¨    Individual   ¨    Partnership   ¨    Corporation
¨    Trust   ¨    Other (specify)     

Nationality (check one):

 

¨   U.S. Citizen, Resident or Domestic Entity
¨   Foreign Corporation   ¨   Non-resident Alien    

If the U.S. Citizen, Resident or Domestic Entity box is checked, the following certification must be completed.

Exhibit A to the Unit Purchase Agreement


Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the “ Code ”), the Partnership must withhold tax with respect to certain transfers of property if a holder of an interest in the Partnership is a foreign person. To inform the Partnership that no withholding is required with respect to the undersigned interestholder’s interest in it, the undersigned hereby certifies the following (or, if applicable, certifies the following on behalf of the interestholder).

Complete Either A or B:

 

A. Individual Interestholder

 

  1. I am not a non-resident alien for purposes of U.S. income taxation.

 

  2. My U.S. taxpayer identification number (Social Security Number) is                      .

 

  3. My home address is                                                                                                      .

 

B. Partnership, Corporation or Other Interestholder

 

  1.                      is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Code and Treasury Regulations).

 

  2. The interestholder’s U.S. employer identification number is                      .

 

  3. The interestholder’s office address and place of incorporation (if applicable) is                      .

 

  4. The interestholder’s year end for tax reporting purposes is:                      .

The interestholder agrees to notify the Partnership within sixty (60) days of the date the interestholder becomes a foreign person.

The interestholder understands that this certificate may be disclosed to the Internal Revenue Service by the Partnership and that any false statement contained herein could be punishable by fine, imprisonment or both.

Under penalties of perjury, I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete and, if applicable, I further declare that I have authority to sign this document on behalf of:

 

                                                                                  

Name of Interestholder

 

                                                                                  

Signature and Date

 

                                                                                  

Title (if applicable)

Exhibit A to the Unit Purchase Agreement


Note: If the Investor is a broker, dealer, bank, trust company, clearing corporation, other nominee holder or an agent of any of the foregoing, and is holding for the account of any other person, this application should be completed by an officer thereof or, in the case of a broker or dealer, by a registered representative who is a member of a registered national securities exchange or a member of the Financial Industry Regulatory Authority, or, in the case of any other nominee holder, a person performing a similar function. If the Investor is a broker, dealer, bank, trust company, clearing corporation, other nominee owner or an agent of any of the foregoing, the above certification as to any person for whom the Investor will hold the Common Units shall be made to the best of the Investor’s knowledge.

Exhibit A to the Unit Purchase Agreement

Exhibit 10.2

EXECUTION VERSION

FOURTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT

This FOURTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “ Fourth Amendment ”) dated May 22, 2014, 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 Lenders party hereto, 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 ”), and as Swing Line Lender and L/C Issuer.

BACKGROUND

A. Pursuant to that certain Third Amended and Restated Credit Agreement, entered into on January 19, 2012, by and among the Credit Parties, the lenders party thereto (the “ Lenders ”) and the Administrative Agent, as amended by a First Amendment dated February 19, 2013, a Second Amendment dated May 8, 2013, and a Third Amendment dated June 18, 2013 (as so amended, and as amended, restated, modified or otherwise supplemented from time to time, the “ Credit Agreement ”), the Lenders agreed, inter alia , to extend to the Borrowers a revolving credit facility in the maximum aggregate principal amount of One Hundred Forty Million Dollars ($140,000,000). Capitalized terms used, but not otherwise defined, herein shall have the meanings given to them in the Credit Agreement.

B. The Borrowers have requested that the Lenders agree to amend certain provisions of the Credit Agreement and consent to certain acquisition transactions.

C. The Lenders party hereto are willing to agree to such amendments and consent to such transactions on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, at the request of the Credit Parties, and based on the representations set forth below, the Lenders hereto agree as follows:

1. Definitions .

(a) 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.

(b) The following terms set forth in Section 1.01 of the Credit Agreement are hereby amended and restated in their entirety as follows:

Committed Loan Notice ” means a notice of (a) a Revolving Credit Borrowing, (b) a conversion of Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, in each case pursuant to Section 2.02(a) , which shall be

 

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substantially in the form of Exhibit A or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of a Borrower.

Consolidated EBITDA ” means, for any period, an amount equal to Consolidated Net Income of the Partnership and its Subsidiaries, plus , in each case to the extent actually deducted in determining Consolidated Net Income for such period, without duplication, (a) consolidated interest expense of the Partnership and its Subsidiaries, (b) provision for income taxes, (c) depreciation and amortization expense, (d) non-cash cost for Cemetery Property and real property sold, (e) any extraordinary losses, (f) losses from sales of assets other than inventory and Cemetery Property and real property sold in the ordinary course of business, (g) other non-cash items (including, without limitation, unit-based compensation), (h) reasonable fees, costs and expenses, without duplication, incurred in connection with (i) this Agreement and the other Credit Documents, including any amendment, restatement, supplement or other modification of this Agreement or any of the other Credit Documents, and (ii) to the extent permitted hereunder, (A) the issuance of Equity Interests and debt securities by the Partnership, and (B) the refinancing of High Yield Notes with the proceeds of Future High Yield Notes (including the refinancing that occurred in 2013), including prepaid interest and early redemption premium (it being agreed that the addback described in this clause (h) shall be permitted with respect to each amendment or other transaction described in this clause (h) irrespective of whether such amendment or transaction is actually consummated), and (i) reasonable fees, costs and expenses, without duplication, incurred in connection with any Permitted Acquisition or any unsuccessful attempt by the Partnership or its Subsidiaries to make an acquisition (including an acquisition structured as an Exclusive Management Agreement), irrespective of whether such acquisition would have constituted a Permitted Acquisition had such acquisition been consummated, minus , in each case to the extent actually included in determining Consolidated Net Income for such period, without duplication, (i) any extraordinary gains, (ii) gains from sales of assets other than inventory and Cemetery Property and real property sold in the ordinary course of business, (iii) the amount of non-cash gains during such period (other than as a result of deferral of purchase price with respect to notes or installment sales contracts received in connection with sales of Cemetery Property); and (iv) other non-cash gains. Consolidated EBITDA shall be adjusted for the following: (x) “Change in Deferred Selling and Obtaining Costs”, and (y) “Change in Deferred Cemetery Revenue, net” as each such term is presented in the consolidated statement of cash flows of the Partnership; provided that, all calculations of Consolidated EBITDA shall additionally be adjusted on a Pro Forma Basis to account for any Permitted Acquisitions or Equivalent Dispositions then being consummated, if applicable, as well as any other Permitted Acquisitions or Equivalent Dispositions consummated, on or after the first day of any related Calculation Period or Measurement Period, as applicable (as if consummated on the first day of such applicable Calculation Period or Measurement Period), and provided further , that, for purposes of calculating the

 

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Permitted Acquisition Step-Up, Consolidated EBITDA for a Permitted Acquisition required by Section 7.11(a) shall be calculated (A) using the above method (including adjustments on a Pro Forma Basis) with respect to the Person or assets so acquired and (B) for the trailing 12 month period ending on the last day of the month immediately preceding the date of such Permitted Acquisition. Notwithstanding anything to the contrary contained in this Agreement, Consolidated EBITDA shall exclude any amounts or adjustments (positive or negative) which would otherwise be attributable to the Archdiocese Transaction to the extent related to any period ending on or prior to Archdiocese Closing Date.

Eurodollar Rate ” means:

(a) for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the London Interbank Offered Rate (“ LIBOR ”) or a comparable or successor rate, which rate is approved by the Administrative Agent, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) 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; and

(b) for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to LIBOR, at or about 11:00 a.m., London time determined two Business Days prior to such date for U.S. Dollar deposits with a term of one month commencing that day;

provided that to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied in a manner consistent with market practice; provided , further that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent.

Subsidiary ” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person; provided , however , that Archdiocese Holdco shall not constitute a “Subsidiary” of a Credit Party for the purposes of this Agreement and the other Credit Documents. Unless otherwise specified, all references herein to a “ Subsidiary ” or to “ Subsidiaries ” shall refer to a Subsidiary or Subsidiaries of the Partnership.

Swing Line Loan Notice ” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b) , which shall be substantially in the form of Exhibit B or such

 

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other form as approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approve by the Administrative Agent), appropriately completed and signed by a Responsible Officer of a Borrower.

(c) The following terms set forth below are hereby added to Section 1.01 of the Credit Agreement in their entirety as follows:

Archdiocese ” means the Archdiocese of Philadelphia, an archdiocese organized and existing under and governed by Canon Law of the Roman Catholic Church and recognized by the Commonwealth of Pennsylvania as a nonprofit religious organization.

Archdiocese Closing Date ” means the date on which the term of the Archdiocese Lease commences pursuant to Section 1.4 of the Archdiocese Lease.

Archdiocese Holdco ” means Philadelphia Catholic Cemeteries, LLC, a Delaware limited liability company.

Archdiocese Lease ” means that certain Lease Agreement, dated as of September 26, 2013, among the Archdiocese and the Operating Company, StoneMor Pennsylvania LLC, StoneMor Pennsylvania Subsidiary LLC and the Partnership (as amended by Amendment No. 1 to Lease Agreement, dated as of March 20, 2014, and as further amended, restated, modified or supplemented from time to time).

Archdiocese Management Agreement ” means that certain Management Agreement, dated as of September 26, 2013, among the Archdiocese and the Operating Company, StoneMor Pennsylvania LLC, StoneMor Pennsylvania Subsidiary LLC and the Partnership (as amended, restated, modified or supplemented from time to time).

Archdiocese Transaction ” means the transactions evidenced by the Archdiocese Transaction Documents.

Archdiocese Transaction Documents ” means the Archdiocese Lease, the Archdiocese Management Agreement and the various related transaction documents entered into among the Archdiocese and the Operating Company, StoneMor Pennsylvania LLC, StoneMor Pennsylvania Subsidiary LLC and the Partnership (as amended, restated, modified or supplemented from time to time).

LIBOR ” has the meaning specified in the definition of Eurodollar Rate.

SCI Acquisition ” means the transactions evidenced by the SCI Purchase Agreements.

SCI Purchase Agreements ” means (i) that certain Asset Sale Agreement, dated as of April 2, 2014, by and among the Operating Company, StoneMor North Carolina LLC, a North Carolina limited liability company, StoneMor North

 

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Carolina Subsidiary LLC, a North Carolina limited liability company, Laurel Hill Memorial Park LLC, a Virginia limited liability company, Laurel Hill Memorial Park Subsidiary, Inc., a Virginia corporation, StoneMor Pennsylvania LLC, a Pennsylvania limited liability company, and StoneMor Pennsylvania Subsidiary LLC, a Pennsylvania limited liability company, and S.E. Cemeteries of North Carolina, Inc., a North Carolina corporation, Clinch Valley Memorial Cemetery, Inc., a Virginia corporation, and S.E. Acquisition of Pennsylvania, Inc., a Pennsylvania corporation, and (ii) that certain Asset Sale Agreement, dated as of April 2, 2014, by and among the Operating Company, StoneMor Florida LLC, a Florida limited liability company, StoneMor Florida Subsidiary LLC, a Florida limited liability company, StoneMor North Carolina LLC, a North Carolina limited liability company, StoneMor North Carolina Subsidiary LLC, a North Carolina limited liability company, and StoneMor North Carolina Funeral Services, Inc., a North Carolina corporation, Loewen [Virginia] LLC, a Virginia limited liability company, Loewen [Virginia] Subsidiary, Inc., a Virginia corporation, Rose Lawn Cemeteries LLC, a Virginia limited liability company, Rose Lawn Cemeteries Subsidiary, Incorporated, a Virginia corporation, StoneMor Pennsylvania LLC, a Pennsylvania limited liability company, StoneMor Pennsylvania Subsidiary LLC, a Pennsylvania limited liability company, and CMS West Subsidiary LLC, a Pennsylvania limited liability company, and S.E. Funeral Homes of Florida, LLC, a Florida limited liability company, S.E. Cemeteries of Florida, LLC, a Florida limited liability company, S.E. Combined Services of Florida, LLC, a Florida limited liability company, S.E. Cemeteries of North Carolina, Inc., a North Carolina corporation, S.E. Funeral Homes of North Carolina, Inc., a North Carolina corporation, Montlawn Memorial Park, Inc., a North Carolina corporation, S.E. Cemeteries of Virginia, LLC, a Virginia limited liability company, SCI Virginia Funeral Services, Inc. a Virginia corporation, George Washington Memorial Park, Inc., a Pennsylvania corporation, Sunset Memorial Park Company, a Pennsylvania corporation, and S.E. Mid-Atlantic Inc., a Maryland corporation (each as amended, restated, modified or supplemented from time to time).

(d) The definition of “ Assignment and Assumption ” set forth in Section 1.01 of the Credit Agreement is hereby amended by replacing the phrase “MarkitClear or other” with the phrase “use of an”.

(e) The definition of “ Indebtedness ” set forth in Section 1.01 of the Credit Agreement is hereby amended by inserting the following after the last sentence thereof:

Notwithstanding anything to the contrary contained in this Agreement, the obligations of the applicable Credit Parties under the Archdiocese Lease, as in effect on the Archdiocese Closing Date, shall not constitute Indebtedness.

2. Amendment to Section 2.02(a) . Subparagraph (a) of Section 2.02 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(a) Each Revolving Credit Borrowing, each conversion of Revolving Credit Loans from one Type to the other, and each continuation of Eurodollar Rate

 

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Loans shall be made upon a Borrower’s irrevocable notice to the Administrative Agent, which may be given by (A) telephone, or (B) a Committed Loan Notice; provided that any telephonic notice must be confirmed immediately by delivery to the Administrative Agent of a Committed Loan Notice. Each such Committed Loan Notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $250,000 in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c) , each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $250,000 in excess thereof. Each Committed Loan Notice shall specify (i) whether a Borrower is requesting a Revolving Credit Borrowing, a conversion of Revolving Credit Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which Revolving Credit Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If such Borrower fails to specify a Type of Loan in a Committed Loan Notice or if such Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Revolving Credit Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If a Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. Notwithstanding anything to the contrary herein, a Swing Line Loan may not be converted to a Eurodollar Rate Loan.

3. Amendment to Section 2.04(b) . Subparagraph (b) of Section 2.04 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(b) Each Swing Line Borrowing shall be made upon the Borrowers’ irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by (A) telephone, or (B) a Committed Loan Notice; provided that any telephonic notice must be confirmed immediately by delivery to the Administrative Agent of a Committed Loan Notice. Each such Committed Loan Notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the requested borrowing date and shall specify (i) the amount to be borrowed, which shall be a minimum of $100,000, and (ii) the requested borrowing date, which shall be a Business Day. Promptly after receipt by the Swing Line Lender of any Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by

 

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telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the first proviso to the first sentence of Section 2.04(a) , or (B) that one or more of the applicable conditions specified in Article IV is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to such Borrower at its office either by (i) crediting the requested account of a Borrower on the books of the Swing Line Lender in immediately available funds, or (ii) wire transfer of such funds in accordance with instructions provided to (and reasonably acceptable to) the Swing Line Lender by such Borrower.

4. Amendment to Section 2.05(a) . Clause (A) of the proviso of subparagraph (i) of Section 2.05(a) of the Credit Agreement is hereby amended by inserting the phrase “in a form reasonably acceptable to the Administrative Agent and be” following the words “such notice must be”.

5. Amendment to Section 7.02(f) . Subparagraph (f) of Section 7.02 of the Credit Agreement is hereby amended by replacing the phrase “Eight Million Dollars ($8,000,000)” with “Ten Million Dollars ($10,000,000)”.

6. Amendment to Section 7.03(h)(v) . The proviso of subparagraph (v) of Section 7.03(h) of the Credit Agreement is hereby amended and restated in its entirety as follows:

provided , however , that the Aggregate Consideration paid by or on behalf of the Borrowers for (A) any Permitted Acquisitions occurring before March 31, 2014, (B) the Archdiocese Transaction, and (C) the SCI Acquisition shall be disregarded in determining the total Aggregate Consideration paid by or on behalf of the Borrowers for any Permitted Acquisitions which have closed in the immediately preceding 365 days for the purposes of this subparagraph (v);

7. Amendment to Section 7.03(h)(vi) . The proviso of subparagraph (vi) of Section 7.03(h) of the Credit Agreement is hereby deleted.

8. Amendment to Section 7.03 . Section 7.03 of the Credit agreement is hereby amended by deleting the word “and” at the end of subparagraph (n) thereof, renumbering the existing subparagraph (o) as subparagraph (p) and inserting a new subparagraph (o) as follows:

(o) Non-economic Equity Interest in Archdiocese Holdco, on the terms set forth in the Operating Agreement, in the form of Exhibit F to the Archdiocese Lease, between the Archdiocese and one or more of the Credit Parties (as amended, restated, modified or supplemented from time to time, in each case in a manner which could not reasonably be expected to be adverse in any material respect to the interests of the Lenders); and

 

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9. Amendment to Section 7.11(a) . Subparagraph (a) Section 7.11 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(a) Minimum EBITDA . Permit Consolidated EBITDA for any Measurement Period to be less than the sum of (i) $57,822,000 plus (ii) 80% of the aggregate of all Consolidated EBITDA for each Permitted Acquisition (other than the Archdiocese Transaction) completed after March 31, 2013 (the “ Permitted Acquisition Step-Up ”).

10. Amendment to Section 7.11(c) . Subparagraph (c) Section 7.11 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(c) Maximum Consolidated Leverage Ratio . Permit the Consolidated Leverage Ratio to be greater than 4.000 to 1.0 for any period.

11. Amendment to Section 11.02(b) . Subparagraph (b) of Section 11.02 of the Credit Agreement is hereby amended by inserting a comma following the words “including e-mail” and inserting the phrase “FpML messaging,” thereafter.

12. Amendment to Section 11.02(c) . Subparagraph (c) of Section 11.02 of the Credit Agreement is hereby amended by inserting the phrase “or notices through the Platform, any other electronic platform or electronic messaging service, or” following the words “Borrower Materials” in the last sentence thereof.

13. Amendment to Section 11.02(e) . Subparagraph (e) of Section 11.02 of the Credit Agreement is hereby amended by replacing the words “or electronic” with the word “notices,” in the first sentence thereof.

14. Amendment to Section 11.17 . Section 11.17 of the Credit Agreement is hereby amended and restated in its entirety as follows:

The words “execute,” “execution,” “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby (including without limitation Assignment and Assumptions, amendments or other modifications, Committed Loan Notices, Swingline Loan Notices, waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the Pennsylvania Electronic Transactions Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that notwithstanding anything contained

 

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herein to the contrary the Administrative Agent is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it.

15. Consent to Permitted Acquisitions . Subject to the representations and conditions set forth below, the Lenders hereby consent to (i) the Archdiocese Transaction on the terms set forth in the Archdiocese Transaction Documents, and (ii) the SCI Acquisition (together with the Archdiocese Transaction, the “ Acquisitions ”) on the terms set forth in the SCI Purchase Agreements, each in substantially the form provided to the Lenders and in effect on the date hereof; provided , however , that the foregoing agreement and consent shall not extend to any amendment or other modification of the Archdiocese Transaction Documents or the SCI Purchase Agreements which would either (a) increase the Aggregate Consideration for the Archdiocese Transaction or SCI Acquisition, or (b) cause the Archdiocese Transaction or SCI Acquisition not to meet the requirements set forth in the definition of “Permitted Acquisition” or Section 7.03(h) (other than (x) solely with respect to the Archdiocese Transaction, subparagraph (viii) thereof, and (y) in each case, subparagraph (v) thereof) of the Credit Agreement.

16. Representations and Warranties .

(a) Each Credit Party hereby represents and warrants to the Administrative Agent and the Lenders that, as to such Credit Party:

(i) 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;

(ii) Power and Authority . (A) 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 Fourth Amendment and any other documents which the Administrative Agent requires such Credit Party to deliver hereunder (this Fourth Amendment and any such additional documents delivered in connection with the Fourth Amendment are herein referred to as the “ Fourth Amendment Documents ”); and (B) all actions, corporate or otherwise, necessary or appropriate for the due execution and full performance by such Credit Party of the Fourth Amendment Documents have been adopted and taken and, upon their execution, the Credit Agreement, as amended by this Fourth Amendment and the other Fourth 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;

(iii) No Violation . The making and performance of the Fourth Amendment Documents will not (A) contravene, conflict with or result in a breach or default under any applicable law, statute, rule or regulation, or any order, writ, injunction, judgment, ruling or decree of any court, arbitrator or governmental instrumentality, (B) 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

 

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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 (C) 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;

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

(v) No Material Adverse Effect . No Material Adverse Effect has occurred since December 31, 2013; and

(vi) Organizational Documents . There have been no changes in the organizational documents of the Credit Parties since January 19, 2012 (or such later date as any such organizational documents were initially adopted), except as previously disclosed to the Administrative Agent in writing, certified copies of which have been previously provided to the Lenders.

(b) On and as of the closing date of each of the Acquisitions (each, an “ Acquisition Closing Date ”), as applicable, each Credit Party hereby represents and warrants to the Administrative Agent and the Lenders as follows:

(i) Representations . All representations and warranties contained in the Credit Agreement and in the other Credit Documents are true and correct in all material respects with the same effect as though such representations and warranties had been made on the Acquisition Closing Date (both before and after giving effect thereto), unless stated to relate to a specific earlier date, in which case such representations and warranties are true and correct in all material respects as of such earlier date;

(ii) No Contingent Liabilities . Such Acquisition will not include or result in any contingent liabilities that could reasonably be expected to be material to the business, financial condition, operations or prospects of the Partnership, or the Partnership and its Subsidiaries taken as a whole; and

(iii) No Default . Immediately before and immediately after giving pro forma effect to (A) the Archdiocese Transaction, no Default will occur or be continuing, and (B) the SCI Acquisition, on a Pro Forma Basis (for the related Calculation Period), no Default will occur or be continuing.

17. No Waiver of Existing Defaults . To induce the Lenders to enter into this Fourth Amendment, the Credit Parties acknowledge, agree, warrant, and represent that nothing in this Fourth 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 representations and warranties set forth in Section 16 proving to be false or incorrect in any material respect, or

 

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(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 representations and warranties set forth in Section 16 proving to be false or incorrect in any material respect.

18. Waiver of Claims . 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.

19. Conditions to Effectiveness of Amendment .

(a) This Fourth Amendment, other than the consents set forth in Section 15, shall be effective upon the Administrative Agent’s receipt of the following, each in form and substance reasonably satisfactory to the Administrative Agent (the “ Fourth Amendment Effective Date ”):

(i) Fourth Amendment . This Fourth Amendment, duly executed by the Credit Parties and Lenders constituting the Required Lenders;

(ii) Fourth Amendment Fees . Payment to the Administrative Agent, in immediately available funds, of all amounts owing to the Administrative Agent for its own account, or the account of the Lenders party hereto, under the fee letter relating hereto;

(iii) 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 Fourth Amendment and any other document provided for herein, including, without limitation, all fees and costs incurred by the Administrative Agent’s attorneys;

(iv) 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 Fourth Amendment, if any; and

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

(b) The consents set forth in Section 15 of this Fourth Amendment shall be effective, as to each Acquisition, upon the Administrative Agent’s receipt of the following, as to such Acquisition, as applicable, each in form and substance reasonably satisfactory to the Administrative Agent:

(i) Lien Searches and Payoff Letters . Lien search requests, payoff letters and proofs of filing of (or agreements to file upon receipt of funds) UCC-3 terminations, mortgage releases and other releases, as applicable, with respect to any Indebtedness owed by or liens held against the cemeteries leased pursuant to the Archdiocese Lease or any assets acquired pursuant to the SCI Purchase Agreements, as applicable, and any other pay-off letters or terminations delivered in connection with the consummation of such Acquisition;

 

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(ii) Copies of Consent, Approvals and Waivers . Copies of any consents, approvals and orders delivered by (A) the Archdiocese to the applicable Credit Parties pursuant to the Archdiocese Transaction Documents, including all necessary consents, approvals and orders of any Governmental Authority, (B) Seller (as such term is defined in each of the SCI Purchase Agreements) to the applicable Credit Parties pursuant to the SCI Purchase Agreements, and (C) any consents or waivers necessary in order for the applicable 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 the Archdiocese Transaction Documents, or the SCI Purchase Agreements, as applicable, in each case including any necessary consents, approvals and orders of any Governmental Authority;

(iii) Transaction Documents . Fully-executed copies of the (A) the Archdiocese Transaction Documents, or (B) the SCI Purchase Agreements, as applicable, each together with any amendments or other modifications and all schedules and exhibits thereto;

(iv) Joinder Documents . With respect to the SCI Acquisition, that certain Joinder to Third Amended and Restated Credit Agreement and Credit Documents by and among Kirk & Nice, Inc., and Kirk & Nice Suburban Chapel, Inc. (together, the “ New Borrowers ”), and the other Credit Parties, in favor of the Lenders and the Administrative Agent, and such other related joinder documents (together, the “ Joinder Documents ”) as reasonably requested by the Administrative Agent;

(v) Real Estate Documents . With respect to each Acquisition, as applicable, Mortgages, title policies and endorsements, surveys, flood insurance and such other related real estate documents as reasonably requested by the Administrative Agent in accordance with the Credit Agreement;

(vi) Legal Opinions . With respect to (A) the Archdiocese Transaction, legal opinions with respect to those Credit Parties that are acquiring assets as part of the Archdiocese Transaction or are otherwise party to the Archdiocese Transaction Documents, as to such matters pertaining to the leasehold Mortgages as reasonably requested by the Administrative Agent, and (B) the SCI Acquisition, legal opinions with respect to the New Borrowers and those Credit Parties that are acquiring assets as part of the SCI Acquisition, as to such matters pertaining to the Joinder Documents and Mortgages as reasonably requested by the Administrative Agent;

(vii) Secretary’s Certificate . With respect to the SCI Acquisition, a master secretary’s certificate, attaching customary deliveries, for the New Borrowers;

(viii) Good Standing Certificates . With respect to (A) the Archdiocese Transaction, subsistence or good standing certificates for the jurisdiction of organization for each of the Credit Parties party to the Archdiocese Transaction Documents, the Archdiocese and Archdiocese Holdco, and (B) the SCI Acquisition, subsistence or good standing certificates for the jurisdiction of organization for each of the Credit Parties party to the SCI Purchase Agreements and the New Borrowers;

 

12


(ix) Updated Schedules . Updated schedules to the Credit Documents to reflect the transactions related to the applicable Acquisition, as required under Section 7.03(h)(iv) of the Credit Agreement;

(x) Pro Forma Compliance Certificate . A duly executed certificate of Responsible Officer attaching a pro forma Compliance Certificate, as required under Section 7.03(h)(viii) of the Credit Agreement, with respect to the SCI Acquisition;

(xi) Approval Package and Appraisals . Approval packages and all appraisals, if any, as required under Section 7.03(h)(vii) of the Credit Agreement with respect to such Acquisition;

(xii) 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 such Acquisition, including, without limitation, all fees and costs incurred by the Administrative Agent’s attorneys; and

(xiii) Other Documents and Actions . Such additional agreements, instruments, documents, writings and actions as the Administrative Agent may reasonably request in connection with such Acquisition.

20. No Waiver; Ratification . The execution, delivery and performance of this Fourth Amendment shall not (a) operate as a waiver of any right, power or remedy of the Lenders under the Credit Agreement or any other Credit Document and the agreements and documents executed in connection therewith or (b) constitute 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 each of the Credit Parties. Nothing contained herein constitutes an agreement or obligation by the Administrative Agent or the Lenders to grant any further consent under the Credit Agreement or any of the other Credit Documents.

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

22. Governing Law . This Fourth 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.

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

24. Counterparts . This Fourth Amendment may be executed in any number of counterparts with the same effect 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

 

13


of a signature page of this Fourth Amendment by telecopy or by electronic means shall be effective as delivery of a manually executed counterpart of this Fourth Amendment.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK, SIGNATURE PAGES FOLLOW]

 

14


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

 

General Partner:
STONEMOR GP LLC
By:  

/s/ Timothy K. Yost

Name:   Timothy K. Yost
Title:   Chief Financial Officer
Partnership:
STONEMOR PARTNERS L.P.
By:   STONEMOR GP LLC
  its General Partner
By:  

/s/ Timothy K. Yost

Name:   Timothy K. Yost
Title:   Chief Financial Officer
Operating Company:
STONEMOR OPERATING LLC
By:  

/s/ Timothy K. Yost

Name:   Timothy K. Yost
Title:   Chief Financial Officer

Borrowers’ Signature Page to Fourth Amendment


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.

Bronswood Cemetery, Inc.

Cedar Hill Funeral Home, Inc.

Cemetery Investments Subsidiary, Inc.

Chapel Hill Associates, Inc.

Chapel Hill Funeral Home, 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.

Covington Memorial Funeral Home, Inc.

Covington Memorial Gardens, Inc.

Crown Hill Cemetery Association

Eloise B. Kyper Funeral Home, Inc.

Forest Lawn Gardens, Inc.

Forest Lawn Memorial Chapel, Inc.

Forest Lawn Memory Gardens, Inc.

Glen Haven Memorial Park Subsidiary, Inc.

Henry Memorial Park Subsidiary, Inc.

Highland Memorial Park, Inc.

Hillside Memorial Park Association, Inc.

Kingwood Memorial Park Association

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.

 

By:  

/s/ Frank Milles

  Vice President, except President of Bethel Cemetery Association

Borrowers’ Signature Page to Fourth Amendment


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.

Perpetual Gardens.Com, Inc.

Prince George Cemetery Corporation

PVD Acquisitions Subsidiary, Inc.

Rockbridge Memorial Gardens Subsidiary Company

Rose Lawn Cemeteries Subsidiary, Incorporated

Roselawn Development Subsidiary Corporation

Russell Memorial Cemetery Subsidiary, Inc.

SCI Puerto Rico Funeral and Cemetery Services, Inc., name changed to StoneMor Puerto Rico Cemetery And Funeral, 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/ Frank Milles

  Vice President

Borrowers’ Signature Page to Fourth Amendment


Alleghany Memorial Park LLC

Altavista Memorial Park LLC

Birchlawn Burial Park LLC

Cemetery Investments LLC

Cemetery Management Services, L.L.C.

Cemetery Management Services of Mid-Atlantic States, L.L.C., name changed to Cornerstone Trust Management Services LLC

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

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

Henlopen Memorial Park LLC

Henlopen Memorial Park Subsidiary LLC

Henry Memorial Park LLC

Juniata Memorial Park LLC

KIRIS LLC

Lakewood/Hamilton Cemetery LLC

Lakewood Memory Gardens South LLC

Laurel Hill Memorial Park LLC

Loewen [Virginia] LLC

Lorraine Park Cemetery LLC

Modern Park Development LLC

Oak Hill Cemetery LLC

Osiris Holding of Maryland LLC

Osiris Holding of Pennsylvania LLC

Osiris Holding of Rhode Island LLC

Plymouth Warehouse Facilities LLC

PVD Acquisitions LLC

Rockbridge Memorial Gardens LLC

Rolling Green Memorial Park LLC

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

 

By:  

/s/ Frank Milles

  Vice President

Borrowers’ Signature Page to Fourth Amendment


StoneMor Cemetery Products LLC

StoneMor Colorado LLC

StoneMor Colorado Subsidiary LLC

StoneMor Florida LLC StoneMor Florida Subsidiary LLC

StoneMor Georgia LLC

StoneMor Hawaii LLC

StoneMor Hawaiian Joint Venture Group LLC

StoneMor Holding of Pennsylvania LLC

StoneMor Illinois LLC

StoneMor Illinois Subsidiary LLC

StoneMor Indiana LLC

StoneMor Indiana Subsidiary LLC

StoneMor Iowa LLC

StoneMor Iowa Subsidiary LLC

StoneMor Kansas LLC

StoneMor Kansas Subsidiary LLC

StoneMor Kentucky LLC

StoneMor Kentucky Subsidiary LLC

StoneMor Michigan LLC

StoneMor Michigan Subsidiary LLC

StoneMor Mississippi LLC

StoneMor Mississippi Subsidiary LLC

StoneMor Missouri LLC

StoneMor Missouri Subsidiary LLC

StoneMor North Carolina LLC

StoneMor North Carolina Subsidiary LLC

StoneMor Ohio LLC

StoneMor Oklahoma LLC

StoneMor Oklahoma Subsidiary 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/ Frank Milles

  Vice President

Borrowers’ Signature Page to Fourth Amendment


Sunset Memorial Gardens LLC

Sunset Memorial Park LLC

Temple Hill LLC

The Valhalla Cemetery Company LLC

Tioga County Memorial Gardens LLC

Virginia Memorial Service LLC

WNCI LLC

Wicomico Memorial Parks LLC

Woodlawn Memorial Park Subsidiary LLC

 

By:  

/s/ Frank Milles

  Vice President

Borrowers’ Signature Page to Fourth Amendment


BANK OF AMERICA, N.A., as
Administrative Agent
By:  

/s/ Christine Trotter

Name:   Christine Trotter
Title:   Assistant Vice President

Administrative Agent’s Signature Page to Fourth Amendment


BANK OF AMERICA, N.A., as a Lender,
L/C Issuer and Swing Line Lender
By:  

/s/ Kenneth G. Wood

Name:   Kenneth G. Wood
Title:   Senior Vice President

Lender’s Signature Page to Fourth Amendment


TD BANK, N.A.
By:  

/s/ Susan Schwartz

Name:   Susan Schwartz
Title:   Vice President

Lender’s Signature Page to Fourth Amendment


CAPITAL ONE, N.A.
By:  

/s/ Allison Sardo

Name:   Allison Sardo
Title:   Senior Vice President

Lender’s Signature Page to Fourth Amendment


TRISTATE CAPITAL BANK
By:  

/s/ Kent Nelson

Name:   Kent Nelson
Title:   Senior Vice President

Lender’s Signature Page to Fourth Amendment


FOX CHASE BANK
By:  

/s/ Paula Pyfer

Name:   Paula Pyfer
Title:   Senior Vice President

Lender’s Signature Page to Fourth Amendment


RAYMOND JAMES BANK, FSB
By:  

/s/ Scott G. Axelrod

Name:   Scott G. Axelrod
Title:   Vice President

Lender’s Signature Page to Fourth Amendment

Exhibit 99.1

Execution Version

 

 

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

STONEMOR GP LLC,

A DELAWARE LIMITED LIABILITY COMPANY

DATED AS OF

MAY 21, 2014

 

 


TABLE OF CONTENTS

 

 

Page

 
ARTICLE I   
DEFINITIONS AND CONSTRUCTION   

Section 1.1

   Definitions      1   

Section 1.2

   Rules of Construction      5   
ARTICLE II   
ORGANIZATION   

Section 2.1

   Formation of the Company      6   

Section 2.2

   Company Name      6   

Section 2.3

   Term      7   

Section 2.4

   Purposes and Powers      7   

Section 2.5

   Place of Business, Agent and Office of the Company      7   

Section 2.6

   Title to Company Assets      7   
ARTICLE III   
CAPITAL AND CAPITAL CONTRIBUTIONS   

Section 3.1

   Membership Interests and Units      8   

Section 3.2

   Capital Contribution      8   

Section 3.3

   Sole Member      8   

Section 3.4

   Pledge of Membership Interests      8   

Section 3.5

   Issuance of Additional Units      8   

Section 3.6

   Subsequent Capital Contributions      8   

Section 3.7

   Loans to the Company      9   

Section 3.8

   General Provisions regarding Capital Contributions      9   

Section 3.9

   Limitation on Liability      9   
ARTICLE IV   
DISTRIBUTIONS   

Section 4.1

   Distributions Generally      9   

Section 4.2

   Tax Liability Distributions      9   

Section 4.3

   Distributions on Dissolution and Winding Up      10   

Section 4.4

   Limitation on Distributions and Redemptions      10   

Section 4.5

   Withholding of Taxes      10   

ARTICLE V

[RESERVED]

  

  

ARTICLE VI   
COMPENSATION OF THE SOLE MEMBER   

Section 6.1

   Compensation of the Sole Member      10   

 

i


ARTICLE VII   
MANAGEMENT   

Section 7.1

   Management of the Company’s Affairs      11   

Section 7.2

   Number; Qualification; Election; Tenure      11   

Section 7.3

   Notice      12   

Section 7.4

   Regular Meetings      12   

Section 7.5

   Special Meetings      12   

Section 7.6

   Action by Consent of the Board      13   

Section 7.7

   Telephonic Meetings      13   

Section 7.8

   Quorum; Voting Requirement      13   

Section 7.9

   Committees      13   

Section 7.10

   Vacancies; Increases in the Number of Directors      14   

Section 7.11

   Removal      15   

Section 7.12

   Compensation of Directors      15   

Section 7.13

   Restrictions on the Board of Directors’ Authority      15   

Section 7.14

   Certain Matters Requiring Board Approval      15   

Section 7.15

   Management of Operating Company      16   
ARTICLE VIII   
OFFICERS   

Section 8.1

   Elected Officers      16   

Section 8.2

   Election and Term of Office      17   

Section 8.3

   Chairman of the Board      17   

Section 8.4

   President and Chief Executive Officer      17   

Section 8.5

   Chief Operating Officer and Vice Presidents      17   

Section 8.6

   Chief Financial Officer and Assistant Treasurers      17   

Section 8.7

   Secretary and Assistant Secretaries      18   

Section 8.8

   Removal      18   

Section 8.9

   Vacancies      18   

Section 8.10

   Compensation      18   

Section 8.11

   Powers of Attorney      18   

Section 8.12

   Delegation of Authority      18   
ARTICLE IX   
STANDARDS OF CONDUCT, LIABILITY AND INDEMNIFICATION   

Section 9.1

   Standards of Conduct and Fiduciary Duties      18   

Section 9.2

   Liability and Exculpation      19   

Section 9.3

   Indemnification      19   
ARTICLE X   
TAXES   

Section 10.1

   Tax Returns      20   

Section 10.2

   Tax Elections      21   

 

ii


ARTICLE XI   
[RESERVED]   
ARTICLE XII   
BOOKS OF ACCOUNT, RECORDS AND REPORTS   

Section 12.1

   Preparation and Maintenance of Books and Records      21   

Section 12.2

   Company Documentation Requirements      21   

Section 12.3

   Fiscal Year      22   

Section 12.4

   Company Funds      22   

Section 12.5

   Statements      22   
ARTICLE XIII   
DISSOLUTION AND TERMINATION OF THE COMPANY   

Section 13.1

   Dissolution      22   

Section 13.2

   Winding Up and Liquidation      23   

Section 13.3

   No Recourse      23   

Section 13.4

   No Deficit Contribution Obligation      23   
ARTICLE XIV   
AMENDMENTS; POWER OF ATTORNEY   

Section 14.1

   Amendments Generally      23   

Section 14.2

   Certain Amendments      23   
ARTICLE XV   
MISCELLANEOUS   

Section 15.1

   No Registration of Units      24   

Section 15.2

   Exhibits      24   

Section 15.3

   Severability      24   

Section 15.4

   Successors and Assigns      24   

Section 15.5

   Governing Law      24   

Section 15.6

   Counterparts      24   

Section 15.7

   No Third Party Beneficiaries      24   

Section 15.8

   Notices      24   

Section 15.9

   Entire Agreement; Interpretation      25   

 

Schedules and Exhibits :

 

  

SCHEDULE A

     Schedule of the Sole Member   

EXHIBIT A

     Form of Unit Certificate   

 

iii


SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

STONEMOR GP LLC

A DELAWARE LIMITED LIABILITY COMPANY

This SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of STONEMOR GP LLC, a Delaware limited liability company (the “ Company ”), dated as of May 21, 2014 (the “ Effective Date ”), is adopted, executed and agreed to, for good and valuable consideration, by the Sole Member (as defined below).

WHEREAS, the Company and its then members entered into that certain Amended and Restated Limited Liability Company Agreement dated September 20, 2004 (as amended from time to time thereafter, the “ Original Agreement ”); and

WHEREAS, as a result of a reorganization involving the Company and its direct and indirect owners, StoneMor GP Holdings LLC owns 100% of the Membership Interests in the Company and is the Sole Member of the Company.

NOW, THEREFORE, the Sole Member hereby amends and restates the Original Agreement in its entirety to read as follows:

ARTICLE I

DEFINITIONS AND CONSTRUCTION

Section 1.1 Definitions . The following definitions shall be applicable to the terms set forth below as used in this Agreement:

ACII ” shall mean American Infrastructure Cemeteries Investors, LLC, a Delaware limited liability company, and any successor thereto.

Act ” shall mean the Delaware Limited Liability Company Act (Delaware General Corporations Code Sections 18-101, et seq.), as it may be amended from time to time, and any corresponding provisions of succeeding law. All references in this Agreement to provisions of the Act shall be deemed to refer, if applicable, to their successor statutory provisions to the extent appropriate in light of the context herein in which such references are used.

Additional Member ” shall have the meaning set forth in Section 3.5 .

Affiliate ” shall mean, with respect to any person or entity, any other person or entity that directly or indirectly controls, or is controlled by, or is under common control with, such first party. For the purposes of this definition, “ Control ” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.


Agreement ” shall mean this Second Amended and Restated Limited Liability Company Agreement of StoneMor GP LLC, as the same may be amended, supplemented or restated from time to time in accordance with the terms hereof.

Assignee ” shall mean any Person to whom Units have been Transferred in a manner permitted under this Agreement.

Audit Committee ” shall have the meaning set forth in Section 7.9(b) .

Available Cash ” shall mean all cash held and owned by the Company less any reserve for the working capital and other foreseeable future needs of the Company, as determined by the Board.

Board ” shall have the meaning set forth in Section 7.1 .

Business Day ” shall mean any day, other than a Saturday, Sunday, or federal or Pennsylvania legal holiday.

Capital Contribution ” shall mean the amount of money and/or the fair market value of any property (net of any liabilities encumbering such property that the Company is considered to assume or take subject to under Code Section 752) contributed to the capital of the Company.

Certificate of Formation ” shall mean the certificate of formation for the Company as originally filed in the Office of the Secretary of State of the State of Delaware, as such certificate may be amended from time to time.

Class A Units ” shall have the meaning set forth in Section 3.1 .

Code ” shall mean the Internal Revenue Code of 1986, as amended. All references in this Agreement to provisions of the Code shall be deemed to refer, if applicable, to their successor statutory provisions to the extent appropriate in light of the context herein in which such references are used.

Commission ” shall mean the Securities and Exchange Commission.

Common Units ” shall have the meaning set forth in the Partnership Agreement.

Company ” shall mean the limited liability company continuing under this Agreement, notwithstanding changes in its membership.

Compensation Committee ” shall have the meaning set forth in Section 7.9(c) .

Conflicts Committee ” shall have the meaning set forth in Section 7.9(d) .

 

2


Cumulative Assumed Tax Liability ” shall mean, as of any Fiscal Year, the product of (a) the U.S. federal taxable income, a liquidation event, a qualified public offering, the receipt of a guaranteed payment for services by the Sole Member, the issuance of Units to the Sole Member, or the forfeiture or repurchase of Units from the Sole Member) allocated to the Sole Member in such Fiscal Year and all prior Fiscal Years less the U.S. federal taxable loss allocated the Sole Member in such Fiscal Year and all prior Fiscal Years, multiplied by (b) the highest applicable U.S. federal, state and local income tax rate applicable to an individual resident in New York with respect to the character of U.S. federal taxable income or loss allocated by the Company to the Sole Member (e.g., capital gains or losses, dividends, ordinary income, etc.) during each applicable Fiscal Year.

Director ” or “ Directors ” shall have the meaning set forth in Section 7.2(a) .

Dissolution Event ” shall have the meaning set forth in Section 13.1 .

Effective Date ” shall have the meaning set forth in the preamble to this Agreement.

Founders ” shall mean Lawrence Miller and William R. Shane, individually, and shall not include their respective estates, heirs, legatees or other Transferees.

General Partner Interest ” shall have the meaning set forth in the Partnership Agreement.

GP Parent” shall mean StoneMor GP Holdings LLC, a Delaware limited liability company formerly known as CFSI LLC.

Group Member ” shall have the meaning set forth in the Partnership Agreement.

Incentive Distribution Right ” shall have the meaning set forth in the Partnership Agreement.

Incentive Plans ” shall mean any plan or arrangement pursuant to which the Company or the Partnership may compensate its directors, officers, employees, consultants or service providers.

Indemnitee ” shall mean (a) any Person who is or was an Affiliate of the Company (including the Sole Member), (b) any Person who is or was an officer, Director, fiduciary or trustee of the Company or any Affiliate of the Company, (c) any Person who is or was serving at the request of the Board as an officer, director, member, partner, fiduciary or trustee of another Person; provided , that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services; and (d) any Person the Board designates as an “Indemnitee” for purposes of this Agreement.

Independent Director ” shall mean a Director who is not (a) a security holder, officer or employee of the Company, (b) an officer, director or employee of any Affiliate of the Company or (c) a holder of any ownership interest in the Partnership Group other than Common Units and who also meets the independence standards required of directors who serve on an audit committee of a board of directors established by the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder and by the New York Stock Exchange or any national securities exchange on which the Common Units are listed.

 

3


Membership Interest ” shall mean the property interest, as opposed to the personal interest, of the Sole Member in the Company and as a holder of Units, including rights to distributions (liquidating or otherwise), allocations, information, all other rights, benefits and privileges enjoyed by the Sole Member (under the Act, this Agreement or otherwise) by virtue of the Units held by the Sole Member; and all obligations, duties and liabilities imposed on the Sole Member (under the Act, this Agreement, or otherwise) by virtue of the Units held by the Sole Member.

Nominating and Governance Committee ” shall have the meaning set forth in Section 7.9(e) .

Officers ” shall have the meaning set forth in Section 8.1 .

Operating Company ” shall mean StoneMor Operating LLC, a Delaware limited liability company, and any successor thereto.

Original Agreement ” shall have the meaning set forth in the recitals of this Agreement.

Partnership ” shall mean StoneMor Partners, L.P., a Delaware limited partnership, of which the Company is the general partner.

Partnership Agreement ” shall mean the Amended and Restated Agreement of Limited Partnership of the Partnership, as the same may be amended, supplemented or restated from time to time.

Partnership Group ” shall have the meaning set forth in the Partnership Agreement.

Person ” shall mean an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.

Reserves ” shall mean the amount of reserves determined by the Board to provide for the future conduct of the business of the Company, including to provide for any future capital contributions to, or other investments in, the Partnership. In determining the amount of reserves, the Board shall exclude the amount of any anticipated expenses of the Company in its capacity as the general partner of the Partnership for which the Company is entitled to be reimbursed pursuant to the Partnership Agreement.

Securities Act ” shall have the meaning set forth in Section 15.1 .

Sole Member ” shall mean StoneMor GP Holdings LLC, a Delaware limited liability company and any successor thereto or any other Person that becomes the Sole Member of the Company.

Spouse ” shall mean the spouse by marriage, whether statutory or common law, of a Person.

 

4


Tax ” or “ Taxes ” shall mean any tax, charge, fee, levy, deficiency or other assessment of whatever kind or nature, including but not limited to, any net income, gross income, profits, gross receipts, excise, or withholding tax imposed by or on behalf of any government authority, together with any interest, penalties or additions to tax.

Tax Distribution ” shall mean for any Fiscal Year, the excess, if any, of (a) the Cumulative Assumed Tax Liability of the Sole Member as of such Fiscal Year, over (b) the amount of distributions made to the Sole Member pursuant to Section 4.1 during such Fiscal Year and all prior Fiscal Years plus the amount of distributions made to the Sole Member pursuant to Section 4.2 with respect to all prior Fiscal Years.

Tax Distribution Date ” shall mean, with respect to each Fiscal Year, March 15 of the first Fiscal Year following the end of such Fiscal Year.

Tax Return ” shall mean any return, election, declaration, report, schedule, return, document, opinion or statement, including any amendments or attachments thereof, which are required to be submitted to any governmental agency having authority to assess taxes.

Transfer ” (and related words) shall mean any sale, assignment, gift (outright or in trust), hypothecation, pledge, encumbrance, mortgage, exchange or other disposition, whether voluntary or involuntary, by operation of law or otherwise, of any Units.

Transferee ” shall mean a Person who receives Units by means of a Transfer.

Treasury Regulations ” shall mean the federal income tax regulations as promulgated by the U.S. Treasury Department, as such regulations may be in effect from time to time. All references in this Agreement to provisions of the Treasury Regulations shall be deemed to refer, if applicable, to their successor regulatory provisions to the extent appropriate in light of the context herein in which such references are used.

Trustee ” shall mean Robert B. Hellman, Jr., in his capacity as Trustee under the Voting and Investment Trust Agreement for the benefit of ACII, and each Transferee of membership interests of ACII directly or indirectly (in a chain of title) from the Trustee, in each case so long as such Person is a member of ACII. For the avoidance of doubt, all references to the Trustee in this Agreement shall be deemed to refer to the Trustee acting in his capacity as the trustee under the Voting and Investment Agreement for the benefit of ACII and not individually.

Unit ” shall mean a Class A Unit.

Voting and Investment Trust Agreement ” shall mean that certain Voting and Investment Trust Agreement dated as of May 9, 2014 by and between ACII and the Trustee for the benefit of ACII, as amended, supplemented or restated from time to time.

Section 1.2 Rules of Construction . The following provisions shall be applied wherever appropriate herein:

(a) terms defined in Section 1.1 have the meanings assigned to them in that Section for purposes of this Agreement;

 

5


(b) “herein,” “hereby,” “hereunder,” “hereof,” “hereto” and other equivalent words shall refer to this Agreement as an entirety and not solely to the particular portion of this Agreement in which any such word is used;

(c) “including” means “including without limitation” and is a term of illustration and not of limitation;

(d) all definitions set forth herein shall be deemed applicable whether the words defined are used herein in the singular or the plural;

(e) unless otherwise expressly provided, any term defined herein by reference to any other document shall be deemed to be amended herein to the extent that such term is subsequently amended in such document;

(f) references herein to other documents and agreements shall mean such documents and agreements as amended and restated from time to time;

(g) wherever used herein, any pronoun or pronouns shall be deemed to include both the singular and plural and to cover all genders;

(h) neither this Agreement nor any other agreement, document or instrument referred to herein or executed and delivered in connection herewith shall be construed against any Person as the principal draftsperson hereof or thereof;

(i) the section headings appearing in this Agreement are inserted only as a matter of convenience and in no way define, limit, construe or describe the scope or extent of such Section, or in any way affect this Agreement; and

(j) any references herein to a particular Section, Article, Exhibit or Schedule (other than in connection with the Code, the Regulations or the Act) means a Section or Article of, or an Exhibit or Schedule to, this Agreement unless another agreement is specified.

ARTICLE II

ORGANIZATION

Section 2.1 Formation of the Company . Pursuant to and under the Act, the Company was formed as a Delaware limited liability company under the laws of the State of Delaware by the filing of the Certificate of Formation with the Office of the Secretary of State of Delaware. The rights and liabilities of the Sole Member shall be determined pursuant to the Act and this Agreement. To the extent that the rights or obligations of the Sole Member are different by reason of any provision of this Agreement than they would be in the absence of such provision, this Agreement shall, to the extent permitted by the Act, control.

Section 2.2 Company Name . The name of the Company is “ StoneMor GP LLC .” The business of the Company shall be conducted under such name or under such other name or names as the Board may determine from time to time.

 

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Section 2.3 Term . The term of the Company commenced on April 2, 2004, which was the date of filing of the Certificate of Formation and, unless and until the Company is dissolved or merged out of existence, shall continue indefinitely.

Section 2.4 Purposes and Powers .

(a) The purposes of the Company are to act as the general partner of the Partnership as described in the Partnership Agreement and to engage in any lawful business or activity related to the foregoing as the Board shall determine. The Company shall possess and may exercise all the powers and privileges granted by the Act, by any other law or by this Agreement, together with any powers incidental thereto, including such powers and privileges as are necessary or appropriate to the conduct, promotion or attainment of the business, purposes or activities of the Company.

(b) The Sole Member hereby specifically consents to and approves the execution and delivery by the appropriate Officers on behalf of the Company of all loan agreements, guarantees, notes, security agreements or other documents or instruments, if any, as required by any lender providing funds to the Company, the Partnership or the Operating Company and ancillary documents contemplated thereby.

Section 2.5 Place of Business, Agent and Office of the Company . The principal business office of the Company shall be at 311 Veterans Highway, Suite B, Levittown, Pennsylvania, 19056. The Board may at any time and from time to time (i) establish a different principal business office for the Company within or outside of the Commonwealth of Pennsylvania and (ii) establish such additional offices of the Company within or outside the Commonwealth of Pennsylvania as it may from time to time determine to be necessary or appropriate for the conduct of the Company’s or the Partnership’s business and affairs. The Company shall establish a registered office in the State of Delaware, and shall register as a foreign limited liability company and take such other actions as the Board determines to be necessary or appropriate to allow the Company to conduct business in such jurisdictions as the Board determines to be necessary or appropriate. The Company shall designate initial agents for the service of process in the State of Delaware and such other jurisdictions as the Board determines to be necessary or appropriate, and shall maintain the names and business addresses of such agents in the books and records of the Company. The Company may from time to time change the designation of any such party who is to serve as such agent and may provide for additional agents for service in such other jurisdictions as the Board determines to be necessary or appropriate.

Section 2.6 Title to Company Assets . Title to the Company’s assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Company as an entity, and the Sole Member shall not have any ownership interest in such Company assets or any portion thereof. Title to any or all of the Company’s assets may be held in the name of the Company or one or more of its Affiliates or one or more nominees, as the Board may determine. All Company assets shall be recorded as the property of the Company in its books and records, regardless of the name in which record title to such Company assets is held.

 

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ARTICLE III

CAPITAL AND CAPITAL CONTRIBUTIONS

Section 3.1 Membership Interests and Units . The Membership Interests in the Company shall be represented by one class of units (“ Units ”) referred to herein as “Class A Units” with such Units having the rights, powers and privileges as set forth in this Agreement. Ownership of Units shall be evidenced by one or more Unit certificates in the form of Exhibit A attached hereto, but the status of a holder of Units as the Sole Member of the Company shall be exclusively evidenced and determined by entry in the books and records of the Company.

Section 3.2 Capital Contribution . Prior to the Effective Date, the Sole Member made an initial Capital Contribution to the Company.

Section 3.3 Sole Member . As of the Effective Date, the Sole Member owns the number of Class A Units set forth in Schedule A . All such Units and all other Membership Interests issued pursuant to, and in accordance with, the requirements of this Article III shall be fully paid and non-assessable Membership Interests, except as such non-assessability may be affected by Section 18-607 of the Act.

Section 3.4 Pledge of Membership Interests . Any provision to the contrary contained in the Agreement notwithstanding, the Membership Interests may be pledged to any lender or lenders as collateral for the indebtedness, liabilities or obligations of the Company to such lender or lenders, and any such pledged Membership Interests shall be subject to such lender’s or lenders’ rights under any collateral documentation governing or pertaining to such pledge. The pledge of such Membership Interests shall not cause the Sole Member to cease to be the Sole Member or to cease to have the power to exercise any rights or powers of the Sole Member.

Section 3.5 Issuance of Additional Units .

(a) Subject to the approval of the Sole Member, the Company may issue an unlimited number of additional Class A Units to any Person at any time for such consideration as the Board deems appropriate.

(b) If any additional Units are issued hereunder to any Person who is not the Sole Member, any such Person (and such Person’s Spouse, as applicable) shall, as a condition to admission as an additional member (an “ Additional Member ”), execute and acknowledge such instruments as the Board determines to be necessary or appropriate to effect the admission of such Person as an Additional Member, including, without limitation, the written agreement by such Person (and such Person’s Spouse, as applicable) to become a party to, and be bound by, the provisions of this Agreement. Upon the admission of any Additional Member, the Schedule of the Sole Member attached hereto as Schedule A shall be amended to reflect the admission of such Additional Member.

Section 3.6 Subsequent Capital Contributions . Except as may be required under applicable law, the Sole Member shall not be required to make any subsequent Capital Contribution to the Company.

 

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Section 3.7 Loans to the Company . The Sole Member, directly or through an Affiliate, may at any time or from time to time lend funds to the Company with the consent of the Board. Any such loan shall be repayable by the Company to the Sole Member (or its Affiliate, if applicable) at such date or dates as they may agree, and shall bear interest and carry such other terms as they may agree at a fair market interest rate and terms for similar loans between unaffiliated parties. The Sole Member expressly agrees and acknowledges that nothing in this Section 3.7 shall be deemed to require or otherwise obligate the Sole Member to make any such loan to the Company. A loan by the Sole Member to the Company shall not increase the interest of the Sole Member in the capital of the Company and shall not entitle the Sole Member to any increased share in the Company’s capital, profits or losses.

Section 3.8 General Provisions regarding Capital Contributions . Except as otherwise expressly provided in this Agreement (a) the Sole Member shall have no right to demand or receive a return of its Capital Contribution, (b) under circumstances requiring hereunder a return of any Capital Contribution, the Sole Member shall have no right to demand or receive property other than cash, and (c) the Sole Member shall not receive any interest, salary or draw with respect to its Capital Contribution or its capital account. An unrepaid Capital Contribution is not a liability of the Company or of the Sole Member.

Section 3.9 Limitation on Liability . Except as otherwise required under the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and neither the Sole Member nor any Assignee shall be personally liable for or otherwise obligated with respect to any such debt, obligation or liability of the Company by reason of being the Sole Member or Assignee. The Sole Member and any Assignees agree that the rights, duties and obligations of the Sole Member and Assignees in their capacities as such are only as set forth in this Agreement and as otherwise arise under the Act. Furthermore, the Sole Member and any Assignees agree that the existence of any rights of the Sole Member or Assignee, or the exercise or forbearance from exercise of any such rights shall not create any duties or obligations of the Sole Member or Assignees in their capacities as such, nor shall such rights be construed to enlarge or otherwise alter in any manner the duties and obligations of the Sole Member or Assignees.

ARTICLE IV

DISTRIBUTIONS

Section 4.1 Distributions Generally . Within 10 days after the Company’s receipt from the Partnership of any distribution with respect to the General Partner Interest or the Incentive Distribution Rights, the Company shall distribute all Available Cash to the Sole Member. The Company may, with Board approval, make such other distributions to the Sole Member at such times as determined by the Board. The Company may distribute securities or other Company property in kind. The fair market value of securities or other Company property distributed in kind shall be determined by the Board as of the date any such distribution is elected.

Section 4.2 Tax Liability Distributions . Notwithstanding anything to the contrary in this Article IV , the Company shall, to the extent of Available Cash, make cash distributions to the Sole Member on the Tax Distribution Date with respect to each Fiscal Year to the extent of the required Tax Distribution, if any, of the Sole Member for such Fiscal Year. In addition, the

 

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Company may make advance distributions to the Sole Member on a quarterly basis based upon estimates of the required Tax Distribution in a manner sufficient to permit the Sole Member to satisfy its quarterly estimated tax payment obligations and if the sum of the amount of quarterly tax distributions exceeds the amount of the Tax Distribution the Sole Member shall promptly refund such excess to the Company upon such notice. If on a Tax Distribution Date (or date of a quarterly estimated distribution) there is not sufficient Available Cash to distribute to the Sole Member the full amount of the Sole Member’s Tax Distribution (or quarterly estimate thereof), distributions shall be made to the Sole Member to the extent of the Available Cash, and the Company shall make future distributions as soon as Available Cash becomes available to pay the remaining portion of the Sole Member’s required Tax Distribution (or quarterly estimate thereof).

Section 4.3 Distributions on Dissolution and Winding Up . Upon the dissolution and winding up of the Company, the proceeds of liquidation after the payment of creditors as specified in Section 13.2 shall be distributed to the Sole Member.

Section 4.4 Limitation on Distributions and Redemptions . Notwithstanding any other provision to the contrary in this Agreement, the Company shall not make a distribution to the Sole Member if such distribution would violate the Act or other applicable law, and the Company shall not be obligated to make any dividend or distribution (other than actual or necessary Tax distributions) in respect of, and shall not make any dividend or distribution (other than actual or necessary Tax distributions) in respect of, any Units to the extent (i) such dividend or distribution is prohibited by any agreements, documents or instruments relating to or otherwise evidencing any outstanding indebtedness for borrowed money of the Company or (ii) the Company is prohibited from receiving or obtaining any dividends or distributions from any of its subsidiaries for such purposes under any such agreements, documents or instruments.

Section 4.5 Withholding of Taxes . The Company will withhold Taxes from distributions to the extent required to do so by applicable law. Any amounts so withheld and paid or required to be paid to a Taxing authority will be treated as if they had been distributed to the Sole Member.

ARTICLE V

[RESERVED]

ARTICLE VI

COMPENSATION OF THE SOLE MEMBER

Section 6.1 Compensation of the Sole Member . Except as expressly provided in any written agreement between the Company and the Sole Member, the Sole Member shall not receive any compensation from the Company for services provided to the Company in its capacity as the Sole Member.

 

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ARTICLE VII

MANAGEMENT

Section 7.1 Management of the Company’s Affairs .

(a) As provided in this Agreement, all management powers over the business and affairs of the Company shall be vested exclusively in a board of directors (the “ Board ”) and, subject to the direction of the Board, the Officers. The Officers and Directors shall constitute “managers” of the Company within the meaning of the Act; provided , however , that the Sole Member has certain consent rights expressly set forth under Section 3.5 , Section 7.2 , Section 7.11 , Section 13.1 , Section 13.2 and Section 14.1 .

(b) Subject to the consent rights of the Sole Member expressly set forth in Section 7.1(a) , neither the Sole Member nor any Assignee, in its capacity as such, shall have any management power over the business and affairs of the Company or actual or apparent authority to enter into contracts on behalf of, or to otherwise bind, the Company.

(c) Except as otherwise specifically provided in this Agreement, the authority and functions of the Board on the one hand and of the Officers on the other shall be identical to the authority and functions of the board of directors and officers, respectively, of a corporation organized under the General Corporation Law of the State of Delaware. Thus, except as otherwise specifically provided in this Agreement, the business and affairs of the Company shall be managed under the direction of the Board, and the day-to-day activities of the Company shall be conducted on the Company’s behalf by the Officers, who shall be agents of the Company. In addition to the powers that now or hereafter can be granted to managers under the Act and to all other powers granted under any other provision of this Agreement, the Board of Directors (subject to Section 7.13 and Article XIV ) and the Officers (subject to Section 7.14 , Article VIII and the direction of the Board) shall have full power and authority to do all things on such terms as they may determine to conduct, or cause to be conducted, the business and affairs of the Company.

Section 7.2 Number; Qualification; Election; Tenure .

(a) The number of directors constituting the Board shall be at least three and no more than nine (each a “ Director ” and collectively, the “ Directors ”). Such number shall be fixed from time to time pursuant to a resolution adopted by a majority of the Directors. A Director need not be the Sole Member. Each Director shall serve as a member of the Board until the earlier of his resignation, death or removal from office or until his or her successor is duly elected and qualified. The number of Directors constituting the Board as of the Effective Date shall be eight and the Directors as of the Effective Date shall be the following individuals:

 

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Lawrence Miller

William R. Shane

Howard L. Carver

Allen R. Freedman

Robert B. Hellman, Jr.

Martin R. Lautman, Ph.D.

Fenton R. Talbott

Howard T. Slayen

(b) Annually, the successor to each Director shall be elected to hold office for a term expiring at the first anniversary of such election. To be elected as a Director, a natural person must (i)(A) be elected in accordance with Section 7.10 or (B) have been properly nominated for a position as a Director in accordance with Section 7.2(c) and (ii) other than the Founder Director, be elected by the Sole Member. The Sole Member shall be entitled to elect all of the members of the Board; provided however , the Founders acting collectively shall have the right to designate one Director (the “ Founder Director ”), which Founder Director shall be Lawrence Miller so long as he either serves as the Chief Executive Officer of the Company or desires to serve as a Director and thereafter shall be William R. Shane. For the avoidance of doubt, the only Persons eligible to serve as the Founder Director are the Founders, and if there is a vacancy in the Founder Director’s seat, the rights of the Founder Director hereunder shall be inapplicable.

(c) Before each election of Directors is to be held, the Board shall nominate its slate of persons to be presented for election at such meeting. Other nominations for Directors may be made by the Sole Member, but the Sole Member nominations must be in writing, in proper form and delivered to the Secretary of the Company not less than ten days prior to the election. To be in proper form, the Sole Member nomination must set forth in writing as to each person whom the Sole Member proposes to nominate for election or re-election as a Director all information relating to such person as is required to be disclosed in solicitations of proxies for election of Directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, and Rule 14a-11 thereunder (or any successor rule promulgated thereunder).

Section 7.3 Notice . Written notice of all regular meetings of the Board must be given to all Directors at least five calendar days prior to the regular meeting of the Board and two Business Days prior to any special meeting of the Board. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice of such meeting. A meeting may be held at any time without notice if all the Directors are present or if those not present waive notice of the meeting either before or after such meeting.

Section 7.4 Regular Meetings . The board shall meet at least quarterly, and a regular meeting of the Board shall be held without notice other than this Section 7.4 annually. The Board may, by resolution, provide the time and place for the holding of additional regular meetings without other notice than such resolution.

Section 7.5 Special Meetings . Special Meetings of the Board may be called at any time at a request of the Chairman or of any three Directors.

 

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Section 7.6 Action by Consent of the Board . Any action required or permitted to be taken at a meeting of the Board, including at the annual meeting, may be taken without a meeting if a written consent setting forth the action so taken is signed by the number of Directors as is required by this Agreement for approval of the action in question. Such consent may be in one instrument or in several instruments, and shall have the same force and effect as a vote of the Directors at a meeting duly called and held.

Section 7.7 Telephonic Meetings . Directors may participate in any meeting of the Board through the use of any means of conference telephones or similar communications equipment as long as all persons participating can hear one another. A Director so participating shall be deemed to be present in person at the meeting.

Section 7.8 Quorum; Voting Requirement . A majority of the Directors, present in person or participating in accordance with Section 7.7 , shall constitute a quorum for the transaction of business, but if at any meeting of the Board there shall be less than a quorum present, a majority of the Directors present may adjourn the meeting from time to time without further notice. Except as otherwise provided in this Agreement, an act by the majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board. The Directors present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough Directors to leave less than a quorum.

Section 7.9 Committees .

(a) The Board may establish committees of the Board. Any such committee, to the extent provided in the resolution of the Board or in this Agreement, shall have and may exercise all powers and authority of the Board in the management of the business and affairs of the Company; but no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the Sole Member, any action or matter expressly required by this Agreement or the Act to be submitted to the Sole Member for approval; (ii) or adopting, amending or repealing any provision of this Agreement.

(b) The Board shall have an audit committee comprised of three (3) Directors (the “ Audit Committee ”), all of whom shall be Independent Directors. The Audit Committee shall establish a written audit committee charter in accordance with the rules and regulations of the New York Stock Exchange or any national securities exchange on which the Common Units are listed from time to time, and the Securities and Exchange Commission, as amended from time to time. The Audit Committee shall review the financial statements of the Company and the Partnership, review the external financial reporting of the Partnership, recommend engagement of the Partnership’s independent auditors, review procedures for internal auditing and the adequacy of the Partnership’s internal accounting controls and perform such other related functions as may be directed by the Board from time to time. Each member of the Audit Committee shall satisfy the rules and regulations of the New York Stock Exchange or any national securities exchange on which the Common Units are listed from time to time and the Securities and Exchange Commission, as amended from time to time, pertaining to qualification for service on an audit committee.

 

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(c) The Board shall have a compensation committee comprised of three (3) Directors (the “ Compensation Committee ”). The Compensation Committee shall be charged with such matters pertaining to the compensation of Directors, Officers and other personnel of the Company, the review, approval and administration of any Incentive Plans put in place by the Company or the Partnership and such other related matters as may be directed by the Board from time to time.

(d) The Board shall have a conflicts committee comprised of no fewer than two Directors (the “ Conflicts Committee ”), all of whom shall be Independent Directors. The Conflicts Committee may review, and approve or disapprove, transactions in which a potential conflict of interest exists or arises between the Company, or any of its Affiliates (other than a Group Member), on the one hand, and any Group Member, any Partner (as defined in the Partnership Agreement) or any Assignee (as defined in the Partnership Agreement), all in accordance with the applicable provisions of the Partnership Agreement. Any matter approved by the Conflicts Committee in accordance with the provisions, and subject to the limitations, of the Partnership Agreement, shall not be deemed to be a breach of any fiduciary or other duties owed by the Board or any Director to the Company or the Sole Member.

(e) The Board shall have a nominating and governance committee comprised of three (3) Directors (the “ Nominating and Governance Committee ”). The Nominating and Governance Committee shall be charged with such matters pertaining to recommending Director nominees for election to the Board, advising the Board with respect to appropriate governance practices and such other related matters as may be directed by the Board from time to time. At the direction of the Board, the Nominating and Governance Committee may be combined with the Compensation Committee and the membership of both such committees may comprise the same Directors.

(f) At every meeting of a committee, the presence of a majority of all the members thereof shall constitute a quorum and the affirmative vote of a majority of the members present shall be necessary for the adoption by the committee of any resolution. Any committee may fix the time and place of its meetings unless the Board shall otherwise provide. Notice of such meetings shall be given to each member of the committee at least two calendar days prior to any meeting. The Board shall have power at any time to fill vacancies in, or to change the membership of, any committee. Nothing herein shall be deemed to prevent the Board from appointing one or more committees consisting in whole or in part of persons who are not Directors; provided , however , that no such committee shall have or may exercise any authority of the Board.

Section 7.10 Vacancies; Increases in the Number of Directors . Unless otherwise provided by this Agreement, vacancies and newly created directorships resulting from any increase in the authorized number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or a sole remaining Director, or the Sole Member; and any Director so chosen shall hold office until their successor shall be duly elected and qualified or until their earlier death, resignation or removal.

 

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Section 7.11 Removal . Subject to the next sentence any Director may be removed, with or without cause, by the Sole Member. The Founder Director may be removed, with or without cause, only by the Founders; provided , however , that the Sole Member may remove the Founder Director if the then serving Founder Director has committed an act of moral turpitude that is harmful to the Company and the other Founder is not able or willing to serve or has committed an act of moral turpitude that is harmful to the Company.

Section 7.12 Compensation of Directors . Except as expressly provided in any written agreement between the Company and a Director or by resolution of the Board, no Director shall receive any compensation from the Company for services provided to the Company in its capacity as a Director, except that each Director shall be compensated for attendance at Board meetings at rates of compensation as from time to time established by the Board; provided, however , that the Directors who are also employees of the Company or any Affiliate thereof shall receive no compensation for their services as Directors or committee members. In addition to the foregoing, the members of the Conflicts Committee shall receive such additional compensation as from time to time established by the Board. All the Directors shall be entitled to be reimbursed for out-of-pocket costs and expenses incurred in the course of their service as Directors.

Section 7.13 Restrictions on the Board of Directors’ Authority . Except as otherwise specifically provided in this Agreement or by resolution of the Board, (i) no Director or group of Directors shall have any actual or apparent authority to enter into contracts on behalf of, or to otherwise bind, the Company, nor to take any action in the name of or on behalf of the Company or conduct any business of the Company other than by action of the Board taken in accordance with the provisions of this Agreement, and (ii) no Director shall have the power or authority to delegate to any Person such Director’s rights and powers as a Director to manage the business and affairs of the Company.

Section 7.14 Certain Matters Requiring Board Approval . Except for transactions between or among the Company and one or more Group Members, or between or among two or more Group Members, and except as otherwise directed by the Board, the Company shall neither take nor cause or permit any Group Member to take any of the following actions without the approval of the Board:

(a) any Transfer of any interest in any Group Member;

(b) any consolidation or merger of the Company with or into any other Person, or any liquidation, dissolution or winding-up of the Company;

(c) (i) any consolidation or merger of any Group Member with or into any other Person, (ii) any sale by any Group Member of all or substantially all of its assets or (iii) any liquidation, dissolution or winding-up of any Group Member;

(d) any issuance of any equity securities of any Group Member, or any securities convertible into equity securities of any Group Member, other than in connection with any Incentive Plan;

(e) any acquisition by the Company or any Group Member of any stock or assets of another entity or of capital assets, in a single transaction or a series of related transactions in any 12-month period, for an aggregate purchase price in excess of $2,500,000;

 

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(f) any incurrence by the Company or any Group Member of funded debt in a principal amount in excess of $2,500,000;

(g) any capital expenditure or commitment therefor by the Company or any Group Member in excess of $1,000,000;

(h) any approval of the annual budget for the Company or any Group Member; and

(i) any selection of the firm of independent public accountants that will audit the financial statements of the Company or any Group Member.

Section 7.15 Management of Operating Company .

(a) For so long as GP Parent is the Sole Member, each Director agrees to take such action as a Director as may be necessary to cause the Partnership to elect the following persons as members of the board of directors of the Operating Company: (A) three persons designated by GP Parent, (B) Lawrence Miller (for so long as he shall be an officer of the Company), and (C) such other persons designated by GP Parent.

(b) Following a liquidation of GP Parent, and for so long as the Trustee, ACII or their respective Affiliates hold more than 50% of the then outstanding Units, each Director agrees to take such action as a Director as may be necessary to cause the Partnership to elect the following persons as members of the board of directors of the Operating Company: (A) three persons designated by the Trustee, ACII or their respective Affiliates, (B) Lawrence Miller (for so long as he shall be an officer of the Company), and (C) such other persons designated by the Trustee, ACII or their respective Affiliates.

(c) If any of GP Parent, the Trustee, ACII or their respective Affiliates exercise their respective rights under this Section 7.15 , the Directors agree to take such actions as may be necessary to cause the Partnership to elect the additional persons designated by GP Parent, the Trustee, ACII or their respective Affiliates, as the case may be, as members of the board of directors of the Operating Company and to amend the limited liability company agreement of the Operating Company as may be necessary in connection therewith.

ARTICLE VIII

OFFICERS

Section 8.1 Elected Officers . The officers of the Company (the “ Officers ”) shall be selected by, and serve at the pleasure of, the Board. The Officers shall carry on the day to day activities of the Company and shall have such other authority and duties delegated to each of them, respectively, by the Board from time to time. The Officers shall be a Chairman of the Board, a President and Chief Executive Officer, a Chief Financial Officer, a Chief Operating Officer, a Secretary and such other officers (including Executive Vice Presidents, Senior Vice Presidents and Vice Presidents) as the Board from time to time may elect in accordance with this Article VIII . The Chairman of the Board shall be chosen from among the Directors. All Officers shall each have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article VIII . Any Person may be selected by the Board to hold multiple offices. The Board may from time to time elect such other officers (including

 

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one or more Vice Presidents, Controllers, Assistant Secretaries and Assistant Treasurers) as it determines to be necessary or appropriate for the conduct of the business of the Company. Such other officers and agents shall have such duties and shall hold their offices for such terms as shall be provided in this Agreement or as may be prescribed by the Board.

Section 8.2 Election and Term of Office . The Officers of the Company shall be elected annually by the Board at the regular meeting of the Board held after the annual election of Directors. If the election of Officers shall not be held at such meeting, such election shall be held as soon thereafter as convenient. Each Officer shall hold office until such person’s successor shall have been duly elected and shall have qualified or until such person’s death or until he shall resign or be removed pursuant to Section 8.8 .

Section 8.3 Chairman of the Board . The Chairman of the Board shall preside at all meetings of the Board. The Board may also elect a Vice Chairman to act in the place of the Chairman upon his absence or inability to act. The Chairman of the Board shall have the power to enter into binding contracts on behalf of the Company.

Section 8.4 President and Chief Executive Officer . The President and Chief Executive Officer shall be responsible for the general management of the affairs of the Company and shall perform all duties incidental to such person’s office that may be required by law and all such other duties as are properly required of him by the Board. He shall make reports to the Board and the Sole Member and shall see that all orders and resolutions of the Board and of any committee thereof are carried into effect. The President and Chief Executive Officer, if he is also a Director, shall, in the absence of or because of the inability to act of the Chairman of the Board or any Vice Chairman elected by the Board, perform all duties of the Chairman of the Board and preside at all meetings of the Board.

Section 8.5 Chief Operating Officer and Vice Presidents . The Chief Operating Officer and each Executive Vice President and Senior Vice President and any other Vice President shall have such powers and shall perform such duties as shall be assigned to him by the Board.

Section 8.6 Chief Financial Officer and Assistant Treasurers . The Chief Financial Officer shall act as the Chief Financial Officer of the Company and shall exercise general supervision over the receipt, custody and disbursement of corporate funds. The Chief Financial Officer shall cause the funds of the Company to be deposited in such banks as may be authorized by the Board, or in such banks as may be designated as depositories in the manner provided by resolution of the Board. The Chief Financial Officer shall, in general, perform all duties incident to the office of the Chief Financial Officer and shall have such further powers and duties and shall be subject to such directions as may be granted or imposed from time to time by the Board. Assistant Treasurers shall have such of the authority and perform such of the duties of the Chief Financial Officer as may be provided in this Agreement or assigned to them by the Board or the Chief Financial Officer. Assistant Treasurers shall assist the Chief Financial Officer in the performance of the duties assigned to the Chief Financial Officer, and in assisting the Chief Financial Officer, each Assistant Treasurer shall for such purpose have the powers of the Chief Financial Officer. During the Chief Financial Officer’s absence or inability to act, the Chief Financial Officer’s authority and duties shall be possessed by such Assistant Treasurer or Assistant Treasurers as the Board may designate.

 

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Section 8.7 Secretary and Assistant Secretaries . The Secretary shall keep or cause to be kept, in one or more books provided for that purpose, the minutes of all meetings of the Board, the committees of the Board and written consents of the Sole Member. The Secretary shall see that all notices are duly given in accordance with the provisions of this Agreement and as required by law; shall be custodian of the records and the seal of the Company and affix and attest the seal to all documents to be executed on behalf of the Company under its seal; and shall see that the books, reports, statements, certificates and other documents and records required by law to be kept and filed are properly kept and filed; and in general, shall perform all the duties incident to the office of Secretary and such other duties as from time to time may be assigned to the Secretary by the Board. Assistant Secretaries shall have such of the authority and perform such of the duties of the Secretary as may be provided in this Agreement or assigned to them by the Board or the Secretary. Assistant Secretaries shall assist the Secretary in the performance of the duties assigned to the Secretary, and in assisting the Secretary, each Assistant Secretary shall for such purpose have the powers of the Secretary. During the Secretary’s absence or inability to act, the Secretary’s authority and duties shall be possessed by such Assistant Secretary or Assistant Secretaries as the Board may designate.

Section 8.8 Removal . Any Officer elected by the Board may be removed by the affirmative vote of a majority of the Board. No elected Officer shall have any contractual rights against the Company for compensation by virtue of such election beyond the date of the election of such person’s successor, such person’s death, such person’s resignation or such person’s removal, whichever event shall first occur, except as otherwise provided in an employment contract or under an employee deferred compensation plan.

Section 8.9 Vacancies . A newly created elected office and a vacancy in any elected office because of death, resignation or removal may be filled by the Board for the unexpired portion of the term at any meeting of the Board.

Section 8.10 Compensation . The Officers shall receive such compensation for their services as may be designated by the Compensation Committee. In addition, the Officers shall be entitled to be reimbursed for out-of-pocket costs and expenses incurred in the course of their service hereunder.

Section 8.11 Powers of Attorney . The Company may grant powers of attorney or other authority as appropriate to establish and evidence the authority of the Officers and other Persons.

Section 8.12 Delegation of Authority . Unless otherwise provided by this Agreement or by resolution of the Board, no Officer shall have the power or authority to delegate to any Person such Officer’s rights and powers as an Officer to manage the business and affairs of the Company.

ARTICLE IX

STANDARDS OF CONDUCT, LIABILITY AND INDEMNIFICATION

Section 9.1 Standards of Conduct and Fiduciary Duties .

(a) In causing the Company to make a determination or take or decline to take any action in its capacity as the general partner of the Partnership as opposed to in its individual

 

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capacity, an Indemnitee shall act in accordance with Article VII of the Partnership Agreement and shall not be subject to any other or different standards imposed by this Agreement or any other agreement contemplated hereby or under the Act or any other law, rule or regulation.

(b) In causing the Company to make a determination or take or decline to take any action in its individual capacity as opposed to in its capacity as the general partner of the Partnership, then, unless another express standard is provided for in this Agreement, an Indemnitee shall act in good faith and shall not be subject to any other or different standards imposed by this Agreement, any other agreement contemplated hereby or under the Act or any other law, rule or regulation. In order for a determination or other action affecting the Company to be in “good faith” for purposes of this Agreement, an Indemnitee must reasonably believe that the determination or other action is in the best interests of the Company.

(c) To the extent that, at law or in equity, an Indemnitee has duties (including fiduciary duties) and liabilities relating thereto to the Company, to the Partnership, or to the Sole Member, an Indemnitee acting under this Agreement shall not be liable to the Company, the Partnership or to the Sole Member for its good faith reliance on the provisions this Agreement. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of an Indemnitee otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Indemnitee.

Section 9.2 Liability and Exculpation .

(a) Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall be liable for monetary damages to the Company, the Partnership, the Sole Member or any Assignee, for losses sustained or liabilities incurred as a result of any act or omission of an Indemnitee unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter in question, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or gross negligence or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was criminal.

(b) An Indemnitee shall be fully protected in relying in good faith upon the books and records of the Company, the books and records of the Partnership, and upon such information, opinions, reports or statements presented to the Company by any Person as to matters the Indemnitee believes are within such other Person’s professional or expert competence, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses or any other facts pertinent to the existence and amount of assets from which distributions to the Sole Member might properly be paid.

Section 9.3 Indemnification .

(a) To the fullest extent permitted by law but subject to the limitations expressly provided in this Agreement, all Indemnitees shall be indemnified and held harmless by the Company from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which any Indemnitee may be involved, or is

 

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threatened to be involved, as a party or otherwise, by reason of its status as an Indemnitee; provided , that the Indemnitee shall not be indemnified and held harmless if there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Section 9.3 , the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or gross negligence or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful.

(b) To the fullest extent permitted by law, expenses (including legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant to this Section 9.3 in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Company prior to a determination that the Indemnitee is not entitled to be indemnified upon receipt by the Company of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined that the Indemnitee is not entitled to be indemnified as authorized in this Section 9.3 .

(c) The Company may purchase and maintain insurance, to the extent and in such amounts as the Company determines to be reasonable, on behalf of Indemnitees and such other Persons as the Company shall determine, against any liability that may be asserted against or expenses that may be incurred by any such Indemnitees or other Persons in connection with the activities of the Company or such Indemnitees. The Company may enter into indemnity contracts with Indemnitees or other Persons and adopt written procedures pursuant to which arrangements are made for the advancement of expenses and the funding of obligations and containing such other procedures regarding indemnification as the Board determines are necessary or appropriate.

(d) The indemnification provided by this Section 9.3 shall be in addition to any other rights to which an Indemnitee may be entitled under any agreement, pursuant to any consent by the Sole Member, as a matter of law or otherwise, both as to actions in the Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity, and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee.

ARTICLE X

TAXES

Section 10.1 Tax Returns . The Sole Member shall prepare and timely file (on behalf of the Company) all federal, state and local Tax Returns required to be filed by the Company. The Sole Member shall furnish to the Company all pertinent information in its possession relating to the Company’s operations that is necessary to enable the Company’s Tax Returns to be timely prepared and filed. The Company shall bear the costs of the preparation and filing of its Tax Returns. The Sole Member shall take no other action with respect to the Company’s Taxes without the authorization of the Board, other than such action as may be required by applicable law or permitted by this Agreement. Any cost or expense incurred by the Sole Member in connection with duties with respect to Company’s Taxes, including the preparation for or pursuance of administrative or judicial proceedings, shall be paid by the Company.

 

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Section 10.2 Tax Elections .

(a) The Company shall make the following elections on the appropriate tax returns:

(i) to adopt the calendar year as the Company’s fiscal year;

(ii) to adopt the accrual method of accounting; and

(iii) any other election the Board determines to be necessary or appropriate.

(b) The Company shall be treated as an entity disregarded as separate from the Sole Member pursuant to Treasury Regulation § 301.7701-3. Neither the Company nor the Sole Member shall make an election for the Company to be regarded as an association or corporation for federal income tax purposes and no provision of this Agreement shall be construed to sanction or approve such an election.

ARTICLE XI

[RESERVED]

ARTICLE XII

BOOKS OF ACCOUNT, RECORDS AND REPORTS

Section 12.1 Preparation and Maintenance of Books and Records . The Company shall prepare and maintain records and books of account covering such matters relative to the Company’s business as are usually entered into records and books of account maintained by limited liability companies engaged in businesses of like character. The Company’s books and records shall be maintained in accordance with partnership accounting practices and procedures and shall incorporate such method of tax accounting as the Board determines is permissible and would be in the best interests of the Company.

Section 12.2 Company Documentation Requirements . The Company shall keep at its principal office the following:

(a) A current list of the full name and last known business or residence address of the Sole Member and each Assignee (if any) set forth in alphabetical order together with the capital contribution of the Sole Member and each Assignee;

(b) Copies of the Company’s federal, state and local income tax or information returns and reports, if any, for the six most recent taxable years;

(c) A copy of the Certificate of Formation and all amendments thereto;

(d) Copies of this Agreement and all amendments thereto;

(e) The books and records of the Company as they relate to the business affairs and operations of the Company for the current and the four most recent fiscal years; and

(f) Any other books and records that the Company is required to maintain under the Act or other applicable law.

 

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Section 12.3 Fiscal Year . The Fiscal Year of the Company shall be the calendar year unless, for U.S. federal income tax purposes, another fiscal year is required. The Company shall have the same fiscal year for U.S. federal income tax purposes and for accounting purposes.

Section 12.4 Company Funds . The funds of the Company shall be deposited in such bank account or accounts, or invested in such interest-bearing or non-interest-bearing investments, as shall be designated by the Board. All withdrawals from any such bank accounts shall be made by the duly authorized agent or agents of the Company.

Section 12.5 Statements .

(a) The Company shall cause to be prepared at least annually, at Company expense, the information related to the Company’s business activities necessary for the preparation of the Sole Member’s federal and state income tax returns, and upon the written request of the Sole Member, the Company shall send or cause to be sent such information relevant for the Sole Member to the Sole Member within 90 days after the end of each taxable year, unless the Company reasonably determines there is good reason to defer the sending of such information, but in no event shall such information be sent to the Sole Member later than 180 days after the end of the taxable year. If the Company deems it required or desirable, a copy of the Company’s federal, state and/or local income tax or information returns for that year shall also be sent to the Sole Member along with such information.

(b) The Company shall provide to the Sole Member such annual or other periodic reports on its business and financial affairs as may be required under the Act, other applicable law, or as otherwise deemed appropriate by the Board.

(c) In addition to the information, reports and statements furnished to the Sole Member pursuant to Sections 12.5(a) and 12.5(b) , the Company shall obtain an annual audit of the Company certified to by an independent certified public accountant, which shall be transmitted by the Company to the Sole Member within three months after the close of each Fiscal Year, containing, at a minimum:

(i) a balance sheet of the Company as of the beginning and close of such Fiscal Year;

(ii) a statement of Company profits and losses for such Fiscal Year; and

(iii) a statement of the Sole Member’s capital account as of the close of such Fiscal Year, and changes therein during such Fiscal Year.

ARTICLE XIII

DISSOLUTION AND TERMINATION OF THE COMPANY

Section 13.1 Dissolution . The death, dissolution, bankruptcy, expulsion or removal of the Sole Member shall not cause the dissolution of the Company, and upon any such event the

 

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business of the Company shall continue to be conducted pursuant to the terms of this Agreement. The Company shall be dissolved and its affairs wound up on the happening of any of the following events (herein each a “ Dissolution Event ”):

(a) By an election by the Sole Member to dissolve the Company;

(b) The entry of a decree of judicial dissolution of the Company pursuant to Section 18-802 of the Act; or

(c) The occurrence of any event that makes it unlawful for the business of the Company to be carried on or for the Sole Member to carry on such business in a limited liability company form.

Section 13.2 Winding Up and Liquidation . Upon the occurrence of a Dissolution Event, the Sole Member (the “ Liquidator ”) shall cause a full accounting of the assets and liabilities of the Company to be taken and shall cause the assets to be liquidated and the business of the Company to be wound up as promptly as possible. To the extent permitted by the Act, the proceeds of such liquidation shall be applied, first, to creditors in satisfaction of liabilities of the Company (whether by payment or by making of reasonable provision for payment), including any loans to the Company by the Sole Member, and any remaining assets of the Company shall be distributed in accordance with Section 4.3 . The Sole Member shall continue to share distributions, profits, losses and allocations during the period of liquidation in accordance with Articles III and IV . Except as otherwise authorized by the Board, the Liquidator shall not be entitled to any special compensation for serving as the liquidator of the Company.

Section 13.3 No Recourse . The Sole Member shall look solely to the assets of the Company for the return of its Capital Contributions. No holder of an interest in the Company shall have any right to demand or receive property other than cash upon dissolution, winding up and termination of the Company.

Section 13.4 No Deficit Contribution Obligation . The Sole Member shall have no any obligation, upon a liquidation, to make any Capital Contribution for purposes of eliminating or diminishing any negative balance in the Sole Member’s capital account.

ARTICLE XIV

AMENDMENTS; POWER OF ATTORNEY

Section 14.1 Amendments Generally . Subject to Section 14.2 , any provision of this Agreement may be amended pursuant to any amendment that is approved by the Sole Member.

Section 14.2 Certain Amendments . Any amendment to Sections 7.2(b) and 7.11 , as it pertains to the designation of or removal of the Founder Director or to the definition of “Founders”, shall require the prior written consent of the Founder Director.

 

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ARTICLE XV

MISCELLANEOUS

Section 15.1 No Registration of Units . The Sole Member acknowledges that the Units held by the Sole Member may be securities and that such Units have been issued without registration under the Securities Act of 1933, as amended (the “ Securities Act ”), or registration or qualification under any state securities or “ Blue Sky ” laws, in reliance on exemptions from those registration and qualification provisions. The Sole Member also agrees that, in the absence of an applicable exemption from registration and qualification, neither the Units, nor any interest therein may be transferred without registration under the Securities Act and registration or qualification under applicable state securities or “ Blue Sky ” laws.

Section 15.2 Exhibits . Each of the Schedules and Exhibits attached to this Agreement are incorporated herein by reference and expressly made a part of this Agreement for all purposes. References to any Schedules and Exhibit in this Agreement shall be deemed to include this reference and incorporation.

Section 15.3 Severability . If any provision of this Agreement or portion thereof, or the application of such provision or portion thereof to any Person or circumstance, shall be held invalid, the remainder of this Agreement, or the application of such provision or portion thereof to Persons or circumstances other than those to which it is held invalid, shall not be affected thereby.

Section 15.4 Successors and Assigns . Except as otherwise herein provided, this Agreement shall be binding upon and inure to the benefit of the parties hereto, their respective heirs executors, administrators and successors, and all other persons hereafter having or holding an interest in this Company, whether as Assignees, Transferees, Additional Members or otherwise.

Section 15.5 Governing Law . This Agreement and the rights of the parties hereunder shall be governed by and construed in accordance with the internal laws, and not the laws pertaining to choice or conflict of laws, of the State of Delaware. The Sole Member consents to the exclusive jurisdiction of the federal and state courts located in Wilmington, Delaware with respect to any litigation arising under or related to this Agreement. All Units and the certificates representing the same shall be deemed a “security” or “securities” governed by Article 8 of the Uniform Commercial Code, as in effect from time to time in all relevant jurisdictions.

Section 15.6 Counterparts . This Agreement may be executed by original or facsimile signature in one or more counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same instrument.

Section 15.7 No Third Party Beneficiaries . Except for the rights of an Indemnitee, the provisions of this Agreement shall not be for the benefit of, nor shall they be enforceable by, any Person who is not an Assignee or a party to this Agreement.

Section 15.8 Notices . Except as expressly provided otherwise in this Agreement, all notices, requests, or consents provided for or permitted to be given under this Agreement must be in writing and must be given either by depositing that writing in the United States mail,

 

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addressed to the Person, postage prepaid, and registered or certified with return receipt requested, or by delivering that writing to the Person in person, by courier, or by facsimile transmission. If mailed or delivered by courier, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, or when deposited with a reputable overnight courier, addressed to the Person at its address as it appears in the records of the Company. If given by facsimile transmission, such notice shall be deemed to be given when upon receipt of confirmation of a successful facsimile transmission to the facsimile number of the Person as it appears in the records of the Company. If given personally or otherwise than by mail, courier or facsimile transmission, such notice shall be deemed to be given when either handed to the Person or delivered to the Person’s address as it appears in the records of the Company. All notices, requests, and consents to be given to the Sole Member must be sent or delivered to the address given for the Sole Member as reflected in this Agreement or such other address as the Sole Member may specify by written notice to the Company. Whenever any notice is required to be given by law or this Agreement, a written waiver thereof, signed by the Person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.

Section 15.9 Entire Agreement; Interpretation . This Agreement contains the entire understanding between the parties with respect to the subject matter hereof and supersedes any prior understandings between them with respect to said subject matter, and specifically, but without limiting the foregoing, supercedes and replaces that certain Amended and Restated Limited Liability Company Agreement of StoneMor GP LLC dated as of September 20, 2004, as amended from time to time. There are no representations, agreements, arrangements or understandings, oral or written, between and among the parties hereto relating to the subject matter of this Agreement that are not fully expressed herein. This Agreement is not to be interpreted for or against the Sole Member or the Company, and no Person will be deemed the draftsperson of this Agreement.

(SIGNATURE PAGES FOLLOW)

 

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IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and Restated Limited Liability Company Agreement effective as of the Effective Date.

 

SOLE MEMBER:
STONEMOR GP HOLDINGS LLC
  By:  

/s/ Lawrence Miller

  Name:   Lawrence Miller
  Title:  

President and Chief Executive

Officer

   

 

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SCHEDULE A

SOLE MEMBER

 

Name & Address

  

Number and Class of Units

StoneMor GP Holdings LLC    100 Class A Units


EXHIBIT A

NON-NEGOTIABLE UNIT CERTIFICATE FOR

UNITS IN STONEMOR GP LLC

“This Certificate and the Units represented hereby are subject to a certain Second Amended and Restated Limited Liability Company Agreement dated as of May 21, 2014, and any amendment thereto, a copy of which agreement is on file at the principal place of business of the Company, and, except as otherwise provided in said agreement, any sale, gift, pledge, assignment, bequest, transfer, transfer in trust, mortgage, alienation, hypothecation, encumbering or disposition of Units in any manner whatsoever, voluntarily or involuntarily, including, without limitation, any attachment, assignment for the benefit of creditors or transfer by operation of law or otherwise, or any transfer as a result of any voluntary or involuntary legal proceedings, execution, sale, bankruptcy, insolvency, or otherwise of this Certificate or the Units represented hereby in violation of said agreement shall be invalid.”

 

Certificate No.                 Class A Units

StoneMor GP LLC, a Delaware limited liability company (the “Company”), hereby certifies that             (the “Holder”) is the registered owner of the above referenced Units in the Company. This Certificate is issued pursuant to the Second Amended and Restated Limited Liability Company Agreement of the Company, dated as of May 21, 2014, as the same may be amended, modified or supplemented from time to time (the “Limited Liability Company Agreement”). The rights, powers, preferences, restrictions and limitations of the Units represented hereby are set forth in, and the Certificate and the Units represented hereby are issued and shall in all respects be subject to, the terms and provisions of, the Limited Liability Company Agreement. THE UNITS REPRESENTED BY THIS CERTIFICATE ARE NONTRANSFERABLE EXCEPT AS EXPRESSLY PROVIDED IN THE LIMITED LIABILITY COMPANY AGREEMENT. By acceptance of this Certificate for the above referenced Units, and as a condition to being entitled to any rights and/or benefits with respect to the Units evidenced hereby, the Holder hereof (including any transferee hereof) is deemed to have agreed, whether or not such Holder is admitted to the Company as a member of the Company with respect to the Units evidenced hereby, to comply with and be bound by all the terms and conditions of the Limited Liability Company Agreement.

 

Date:                                   StoneMor GP LLC
     

By:

  

 

      Name:   
     

Title:

   President and Chief Executive Officer
     

By:

  

 

      Name:   
     

Title:

   Secretary or Assistant Secretary