Exhibit 10.1

COMMON STOCK PURCHASE AGREEMENT

by and among

STONEMOR INC.

AXAR CAPITAL MANAGEMENT, LP

and

THE PURCHASERS PARTY HERETO

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Table of Contents

 

                 Page  

ARTICLE I DEFINITIONS

     4        Section 1.01   

Definitions

     4        Section 1.02   

Accounting Procedures and Interpretation

     7  

ARTICLE II AGREEMENT TO SELL AND PURCHASE

     8        Section 2.01   

Sale and Purchase

     8        Section 2.02   

Closing

     8        Section 2.03   

Purchasers Closing Conditions; Deliveries by the Company

     8        Section 2.04   

Company Closing Conditions; Purchaser Deliveries

     9  

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     9        Section 3.01   

Existence

     9        Section 3.02   

Capitalization

     9        Section 3.03   

No Conflict

     10        Section 3.04   

Authority

     10        Section 3.05   

Approvals

     10        Section 3.06   

Compliance with Laws

     11        Section 3.07   

Due Authorization

     11        Section 3.08   

Valid Issuance; No Options or Preemptive Rights

     11        Section 3.09   

Periodic Reports

     11        Section 3.10   

Litigation

     11        Section 3.11   

No Registration Required

     12        Section 3.12   

Transfer Taxes

     12        Section 3.13   

No Material Adverse Change; Absence of Changes; Operations in the Ordinary
Course

     12        Section 3.14   

Books and Records; Sarbanes-Oxley Compliance

     12  

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

     13        Section 4.01   

Existence, Capacity, Authorization and Enforceability

     13        Section 4.02   

No Conflict

     13        Section 4.03   

Certain Fees

     14        Section 4.04   

Investment

     14        Section 4.05   

Nature of Purchasers

     14        Section 4.06   

Restricted Securities

     14        Section 4.07   

Reliance on Exemptions

     15        Section 4.08   

Ownership of Series A Preferred Stock

     15  

ARTICLE V COVENANTS

     15        Section 5.01   

Use of Proceeds

     15        Section 5.02   

Disclosure of Transaction

     15        Section 5.03   

Rights Offering

     15        Section 5.04   

Further Assurances

     15  

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ARTICLE VI INDEMNIFICATION

     16        Section 6.01   

Indemnification by the Company

     16        Section 6.02   

Indemnification by the Purchasers

     16        Section 6.03   

Indemnification Procedure

     16        Section 6.04   

Tax Matters

     17  

ARTICLE VII TERMINATION

     18        Section 7.01   

Termination

     18        Section 7.02   

Effect of Termination

     19  

ARTICLE VIII MISCELLANEOUS

     19        Section 8.01   

Expenses

     19        Section 8.02   

Interpretation and Severability

     19        Section 8.03   

Survival of Provisions

     20        Section 8.04   

No Waiver; Modifications in Writing

     20        Section 8.05   

Binding Effect

     21        Section 8.06   

Non-Disclosure

     21        Section 8.07   

Communications

     21        Section 8.08   

Entire Agreement

     22        Section 8.09   

Governing Law; Submission to Jurisdiction

     22        Section 8.10   

Waiver of Jury Trial

     22        Section 8.11   

Exclusive Remedy

     23        Section 8.12   

No Recourse Against Others

     23        Section 8.13   

No Third-Party Beneficiaries

     24        Section 8.14   

Relationship with Commitment Letter

     24        Section 8.15   

Execution in Counterparts

     24  

SCHEDULE A – Form of Purchase Allocation

SCHEDULE B – Exchange Allocation

 

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COMMON STOCK PURCHASE AGREEMENT

This COMMON STOCK PURCHASE AGREEMENT, dated as of May 27, 2020 (this
“Agreement”), is entered into by and among STONEMOR INC., a Delaware Corporation
(the “Company”), Axar Capital Management, LP, a Delaware limited partnership
(the “Investment Manager” or “Axar”), the accounts managed by Axar set forth on
Schedule B hereto and one or more accounts managed by Axar hereafter designated
by it (the “Purchasers”).

WHEREAS, Axar executed a Commitment Letter, dated April 1, 2020 (the “Commitment
Letter”), pursuant to which the Investment Manager committed funds and accounts
managed by it to purchase (i) for $8.8 million, shares of Series A Preferred
Stock of the Company that would be exchanged for shares of Common Stock in
connection with a rights offering to be conducted by the Company at a price of
$0.73 per share of Common Stock and (ii) for $8.2 million, shares of Common
Stock that were not purchased by other holders of the Company’s Common Stock in
connection with the rights offering at a price of $0.73 per share of Common
Stock;

WHEREAS, as contemplated by the Commitment Letter, certain of the Purchasers
acquired the Series A Preferred Stock for $8.8 million pursuant to the Series A
Preferred Stock Purchase Agreement, dated April 3, 2020;

WHEREAS, since the date of the public announcement of the planned rights
offering, the Common Stock has traded in the NYSE at a significant discount to
the agreed rights offering price of $0.73 per share, making it unlikely that any
shares will be issued to stockholders of the Company other than to Axar
Affiliates pursuant to the Commitment Letter;

WHEREAS, the failure of the Company to obtain a cash equity investment of
$8.2 million on or prior to July 31, 2020 would constitute an event of default
under the Indenture; and

WHEREAS, in order to satisfy the requirements of the Commitment Letter and the
Indenture, the Company desires to issue and sell to the Purchasers, and the
Purchasers desire to purchase from the Company, shares of Common Stock, in
accordance with the provisions of this 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, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01    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

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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. For the avoidance of doubt, for purposes of this
Agreement, any fund or account managed, advised or subadvised, directly or
indirectly, by a Purchaser or its Affiliates, shall be considered an Affiliate
of such Purchaser.

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

“Board” means the board of directors of the Company.

“Closing” has the meaning specified in Section 2.02.

“Closing Date” has the meaning specified in Section 2.02.

“Commission” means the United States Securities and Exchange Commission.

“Commitment Letter” has the meaning specified in the Recitals.

“Common Stock” has the meaning specified in Section 3.02(a).

“Company” has the meaning specified in the introductory paragraph.

“Company SEC Documents” means the Company’s forms, registration statements,
reports, schedules and statements filed by it or its predecessor registrant,
StoneMor Partners L.P., under the Exchange Act or the Securities Act, as
applicable.

“Contract” means any contract, agreement, indenture, note, bond, mortgage, deed
of trust, loan, instrument, lease, license, commitment or other arrangement,
understanding, undertaking, commitment or obligation, whether written or oral.

“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.

“Exchange Consideration” has the meaning specified in Section 2.01.

“Exchanged Shares” has the meaning specified in Section 2.01.

“Funding Obligation” means an amount equal to the Purchase Price multiplied by
the number of Purchased Shares to be purchased by a Purchaser in exchange for
cash as set forth opposite such Purchaser’s name on the Purchase Allocation.

“GAAP” means generally accepted accounting principles in the United States of
America as of the date hereof, consistently applied during the periods involved;
provided, that for the financial statements of the Company prepared as of a
certain date, GAAP referenced therein shall be GAAP as of the date of such
financial statements.

“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

 

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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 Company mean a Governmental Authority having jurisdiction over
the Company, its Subsidiaries or any of their respective Properties.

“Indemnified Party” has the meaning specified in Section 6.03.

“Indemnifying Party” has the meaning specified in Section 6.03.

“Indenture” means the Indenture, dated June 27, 2019, as supplemented, with
respect to StoneMor Partners L.P.’s 9.875%/11.500% Senior Secured PIK Toggle
Notes due 2024.

“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.

“Lead Purchaser” means Axar Capital Management, LP or its designee.

“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 (a) on the business,
property, operations, assets, liabilities (actual or contingent), operating
results, prospects or financial condition of the Company and its Subsidiaries,
taken as a whole, (b) on the ability of the Company or its Subsidiaries, as
applicable, to perform any of their obligations under the Transaction Documents
or (c) on the validity or enforceability of any of the Transaction Documents or
the rights and remedies of the Purchasers thereunder

“NYSE” means The New York Stock Exchange, Inc.

“Organizational Documents” means, as applicable, an entity’s agreement or
certificate of limited partnership, limited liability company agreement,
certificate of formation, certificate or articles of incorporation, bylaws or
other similar organizational documents.

“Outside Date” has the meaning specified in Section 7.01(b)(ii).

“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.

 

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

“Purchase Allocation” has the meaning specified in Section 2.04(c).

“Purchased Shares” has the meaning specified in Section 2.01.

“Purchase Price” has the meaning specified in Section 2.01.

“Purchasers” has the meaning specified in the introductory paragraph.

“Purchaser Related Parties” has the meaning specified in Section 6.01.

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

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

“Series A Preferred Stock” means the Series A Preferred Stock, par value $0.01
per share, of the Company.

“Subsidiary” means, as to any Person, any corporation or other entity of which:
(a) such Person or a Subsidiary of such Person is a general partner or, in the
case of a limited liability company, the managing member or manager thereof;
(b) at any of the outstanding equity interest having by the terms thereof
ordinary voting power to elect a majority of the board of directors or similar
governing body of such corporation or other entity (irrespective of whether or
not at the time any equity interest of any other class or classes of such
corporation or other entity shall have or might have voting power by reason of
the happening of any contingency) is at the time directly or indirectly owned or
controlled by such Person or one or more of its Subsidiaries; or (c) any
corporation or other entity as to which such Person consolidates for accounting
purposes.

“Transaction Documents” means, collectively, this Agreement and the Commitment
Letter, each as amended to date, and any and all other agreements or instruments
executed and delivered by the Company hereunder.

Section 1.02    Accounting Procedures and Interpretation. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements of the Company and certificates and reports as to
financial matters required to be furnished to the Purchasers hereunder shall be
prepared, in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited statements, as permitted by Form 10-Q promulgated by the
Commission) and in compliance as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the Commission with respect thereto.

 

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ARTICLE II

AGREEMENT TO SELL AND PURCHASE

Section 2.01    Sale and Purchase. Subject to the terms and conditions hereof,
(i) the Company hereby agrees to issue and sell to each Purchaser and each
Purchaser hereby agrees to purchase from the Company, for cash, the number of
shares of Common Stock set forth opposite such Purchaser’s name on the Purchase
Allocation delivered by Axar not less than two Business Days prior to the
Closing Date (the “Purchased Shares”), for a cash purchase price of $0.73 per
share of Common Stock (the “Purchase Price”) and (ii) the Company hereby agrees
to issue and sell to each Purchaser set forth on Schedule B and each such
Purchaser hereby agrees to purchase from the Company, in exchange for the
surrender of shares of Series A Preferred Stock, the number of shares of Common
Stock set forth opposite such Purchaser’s name on Schedule B (the “Exchanged
Shares”) at an exchange ratio of 68,493.15 shares of Common Stock for each share
of Series A Preferred Stock surrendered, the equivalent of a price of $0.73 per
share of Common Stock (the “Exchange Consideration”).

Section 2.02    Closing. Subject to the terms and conditions hereof, the closing
of the transactions contemplated under this Agreement (the “Closing”) shall take
place on the second business day following the date that all conditions of the
parties required to be satisfied pursuant to Article II have been satisfied (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 2.03    Purchasers Closing Conditions; Deliveries by the Company. The
obligation of the Purchasers to consummate the transactions contemplated by this
Agreement is subject to the following conditions (any of which may be waived by
the Lead Purchaser in its sole discretion):

(a)    Delivery to the Lead Purchaser of a certificate of the Secretary of the
Company, dated as of the Closing Date, certifying as to and attaching Board
resolutions authorizing the execution and delivery of this Agreement and the
transactions contemplated thereby;

(b)    Delivery to the Lead Purchaser of evidence that the Purchased Shares and
the Exchanged Shares have been approved for listing on the NYSE;

(c)    Delivery to the Lead Purchaser of confirmation by a representative of the
Company’s transfer agent that such transfer agent has all the information and
materials necessary for the Company to issue the Purchased Shares and the
Exchanged Shares credited to book-entry accounts maintained by the Company, free
and clear of any Liens;

(d)    Delivery to the Lead Purchaser of a duly executed amendment to the
existing registration rights agreement, by and among the Company, StoneMor GP,
LLC and certain affiliates of Axar that provides that the Purchased Shares and
the Exchanged Shares are registrable securities thereunder; and

 

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(e)    The representations and warranties of the Company shall be true and
correct in all material respects (other than the representation and warranty set
forth in Section 3.02(a), which shall be true and correct in all but de minimus
respects, and the representations and warranties set forth in Sections 3.02(b)
and 3.03 or that are qualified by Material Adverse Effect shall be true and
correct in all respects), and the Lead Purchaser shall have received a
certificate of an officer of the Company to such effect.

Section 2.04    Company Closing Conditions; Purchaser Deliveries. The obligation
of the Company to consummate the transactions contemplated by this Agreement is
subject to the satisfaction of the following conditions (any of which may be
waived by the Company in its sole discretion) :

(a)    Payment at Closing of the Purchasers’ Funding Obligations by wire
transfer of immediately available funds to an account designated by Company;

(b)    Delivery to the Company of instruments reasonably satisfactory to the
Company for the surrender of the Series A Preferred Stock to the Company for
cancellation;

(c)    Delivery to the Company of a completed schedule, the form of which is
attached hereto as Schedule A, setting forth the number of shares of Common
Stock opposite each Purchaser’s name that each Purchaser agrees to purchase from
the Company for the Purchase Price (the “Purchased Allocation”); and

(d)    The representations and warranties of each Purchaser set forth in Article
IV shall be true and correct in all material respect on as of the Closing Date
as if made on such date, and the Company shall have received a certificate of an
officer of the Lead Purchaser to such effect.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Purchasers as follows:

Section 3.01    Existence. The Company is a corporation duly formed, validly
existing and in good standing under the Laws of the state of Delaware and has
full corporate power and authority necessary to own or hold its properties and
to conduct the businesses in which it is engaged.

Section 3.02    Capitalization.

(a)    As of the date hereof and prior to the issuance and sale of the Purchased
Shares and the Exchanged Shares, the issued and outstanding shares of capital
stock of the Company consist of 176 shares of Series A Preferred Stock and
94,506,848 common stock, par value $0.01 per share (“Common Stock”). All
outstanding shares of Common Stock have been duly authorized, are validly issued
and are fully paid and nonassessable.

 

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(b)    The Common Stock is listed on the NYSE. The Company has received
notification from the New York Stock Exchange that, subject to the approval of
the listing thereof as set forth in Section 2.03(b) hereof, the Company may
issue the Purchased Shares and the Exchanged Shares to the Purchasers without
stockholder approval or completion of the rights offering contemplated by the
Commitment Letter, and such notification remains in full force and effect.

Section 3.03    No Conflict. None of the offering, issuance and sale by the
Company of the Purchased Shares or the Exchanged Shares and the application of
the proceeds therefrom, the execution, delivery and performance of this
Agreement by the Company, or the consummation of the transactions contemplated
hereby (i) conflicts or will conflict with, or constitutes or will constitute a
violation of, the Organizational Documents of the Company, (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 the Company or any of its Subsidiary 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 the Company or any of its Subsidiaries, 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 the Company or any of its
Subsidiaries, 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 3.04    Authority. The Company has all requisite corporate power and
authority to issue, sell and deliver the Purchased Shares and the Exchanged
Shares, in accordance with and upon the terms and conditions set forth in this
Agreement and the Organizational Documents. This Agreement has been duly
approved by the Board, including the unanimous approval of the independent
directors of the Company. All corporate actions required to be taken by the
Company for the authorization, issuance, sale and delivery of the Purchased
Shares and the Exchanged Shares, the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby has been validly
taken. No approval from the holders of outstanding shares of Common Stock is
required under applicable Law, the Organizational Documents or the rules of the
NYSE in connection with the Company’s issuance and sale of the Purchased Shares
or the Exchanged Shares to the Purchasers.

Section 3.05    Approvals. No permit, consent, approval, authorization, order,
registration, filing or qualification (“consent”) of or with any court,
governmental agency or body having jurisdiction over the Company or any of its
Subsidiaries, or any of their respective properties is required in connection
with the offering and sale of the Purchased Shares or the Exchanged Shares in
the manner contemplated by this Agreement, the execution, delivery and
performance of this Agreement by the Company, or the 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.

 

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Section 3.06    Compliance with Laws. As of the date hereof, neither the Company
nor any of its Subsidiaries is in violation of any Law applicable to the Company
or its Subsidiaries, except as would not, individually or in the aggregate, have
a Material Adverse Effect. The Company 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 Company 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 3.07    Due Authorization. This Agreement has been duly and validly
authorized and has been validly executed and delivered by the Company and
constitutes (assuming the due authorization, execution and delivery by each
other party hereto) the legal, valid and binding obligations of the Company
enforceable in accordance with its 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 3.08    Valid Issuance; No Options or Preemptive Rights. The Purchased
Shares and the Exchanged Shares to be issued and sold by the Company to the
Purchasers hereunder have been duly authorized in accordance with the
Organizational Documents and, when issued and delivered to the Purchasers
against the consideration therefor pursuant to this Agreement, will be validly
issued in accordance with the Organizational Documents, fully paid and
non-assessable. 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, voting or ownership interests in the Company are
outstanding, except as provided for in the Organizational Documents or grants
outstanding under an employee benefit plan.

Section 3.09    Periodic Reports. The Company has filed all forms, reports,
schedules and statements required to be filed by it under the Securities Act and
the Exchange Act since December 31, 2018 and when they were filed with the
Commission, or to the extent corrected or updated by a subsequent amendment or
restatement filed with the Commission, then as so corrected or updated, each
such form, report, schedule and statement (i) conformed in all material respects
to the requirements of the Securities Act and 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
that none of the Purchasers had Knowledge of such untrue statement or omission
as of the date of such filing, or amendment thereto or restatement thereof, with
the Commission.

Section 3.10    Litigation. Except (i) for proceedings of which each Purchaser
or any of its Representatives is aware, or (ii) as disclosed in the Company’s
SEC Documents filed as of the date hereof, there are no legal or governmental
proceedings pending to which the Company or any of its Subsidiaries is a party
or to which any Property or asset of the Company or its Subsidiaries is subject
that could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect or which challenge the validity of this Agreement or the
right of the

 

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Company to enter into this Agreement or to consummate the transactions
contemplated hereby and, to the Knowledge of the Company, no such proceedings
are threatened by Governmental Authorities or others.

Section 3.11    No Registration Required. Assuming the accuracy of the
representations and warranties of the Purchasers contained in Section 4.04 and
Section 4.05, the issuance and sale of the Purchased Shares and the Exchanged
Shares pursuant to this Agreement is exempt from registration requirements of
the Securities Act, and neither the Company nor, to the knowledge of the
Company, any authorized Representative acting on its behalf has taken or will
take any action hereafter that would cause the loss of such exemption.

Section 3.12    Transfer Taxes. All stock transfer or other taxes (other than
income or similar taxes) which are required to be paid in connection with the
sale and transfer of the Purchased Shares and Exchanged Shares to be issued to
each Purchaser hereunder have been or will be fully paid or provided for by the
Company, and all laws imposing such taxes have been or will be complied with.

Section 3.13    No Material Adverse Change; Absence of Changes; Operations in
the Ordinary Course. Except as expressly set forth in the Company SEC Documents,
since December 31, 2018 through the date hereof no Material Adverse Effect has
occurred. The Company is not in default under the Indenture. Neither the Company
nor any of its Subsidiaries has taken any steps to seek protection pursuant to
any law or statute relating to bankruptcy insolvency, reorganization,
receivership, liquidation or winding up nor does the Company have any knowledge
or reason to believe that any of its or any of its Subsidiaries’ respective
creditors intend to initiate involuntary bankruptcy proceedings or any actual
knowledge of any fact that would reasonably lead a creditor to do so. The
Company and its Subsidiaries, individually and on a consolidated basis, are not
as of the date hereof and, after giving effect to the transactions contemplated
by this Agreement, will not be Insolvent. Since December 31, 2019, and other
than the transactions contemplated by the Transaction Documents, the Company and
its Subsidiaries have conducted its business in the ordinary course of business,
preserved intact its existence and business organization, permits, goodwill and
business relationships with all material customers, suppliers, licensors,
distributors and others having significant business relationships with the
Company and its Subsidiaries.

Section 3.14    Books and Records; Sarbanes-Oxley Compliance.

(a)    Except as set forth in the Company SEC Documents, the Company maintains
systems of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of the Company consolidated financial statements in
conformity with GAAP and to maintain accountability for its assets and
liabilities, (iii) access to the assets or incurrence of liabilities is
permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets and liabilities
is compared with existing assets and liabilities at reasonable intervals and
appropriate action is taken with respect to any differences.

 

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(b)    The Company has established and maintains disclosure controls and
procedures (to the extent required by and as defined in Rules 13a- 15(e) and
15d-15(e) under the Exchange Act), which are designed to provide reasonable
assurance that material information required to be disclosed by the Company in
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and communicated to the Company’s management, including its principal
executive officer and principal financial officer, as appropriate, to allow for
timely decisions regarding required disclosure. The Company or its predecessor
registrant, StoneMor Partners L.P., has carried out evaluations of the
effectiveness of its disclosure controls and procedures as of the end of the
most recently completed fiscal quarter covered by the Company’s or such
predecessor registrant’s periodic reports filed with the Commission, and such
disclosure controls and procedures are, except as described in the Company SEC
Documents, effective in all material respects to perform the functions for which
they were established.

(c)    The Company and its directors or officers, in their capacities as such,
are in compliance with all applicable provisions of the Sarbanes-Oxley Act of
2002 and the rules and regulations promulgated in connection therewith.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

Each of the Purchasers, severally but not jointly and solely with respect to
itself, represents and warrants to the Company that:

Section 4.01    Existence, Capacity, Authorization and Enforceability. Such
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. Such Purchaser has all requisite limited liability company or
other similar entity power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. All limited liability company action required to be taken by such
Purchaser for the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby has been validly taken. This Agreement
has been duly and validly authorized and has been validly executed and delivered
by such Purchaser, and constitutes (assuming the due authorization, execution
and delivery by the other party hereto), the legal, valid and binding
obligations of such Purchaser, enforceable in accordance with its 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 4.02    No Conflict. The execution, delivery and performance of this
Agreement by such Purchaser and the consummation by such Purchaser of the
transactions contemplated hereby 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 such Purchaser is a party or by
which such Purchaser is bound or to which any of the property or assets of such
Purchaser is subject, (b) violate any statute, order, rule or regulation of any
court or governmental

 

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agency or body having jurisdiction over such Purchaser or the property or assets
of such Purchaser, or (c) conflict with or result in any violation of the
provisions of the organizational documents of such 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 performance of such Purchaser’s obligations under this
Agreement.

Section 4.03    Certain Fees. No fees or commissions are or will be payable by
such Purchaser to brokers, finders, or investment bankers with respect to the
acquisition of any of the Purchased Shares or the Exchanged Shares or the
consummation of the transactions contemplated by this Agreement. Such Purchaser
agrees that it will indemnify and hold harmless the Company 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 acquisition of the Purchased Shares or Exchanged Shares or the consummation
of the transactions contemplated by this Agreement.

Section 4.04    Investment. The Purchased Shares and the Exchanged Shares are
being acquired for such Purchaser’s own account, not as a nominee or agent, and
with no present intention of distributing the Purchased Shares or the Exchanged
Shares or any part thereof, and such 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. If such Purchaser should in the future decide to
dispose of any of the Purchased Shares or the Exchanged Shares, such Purchaser
understands and agrees (a) that it may do so only in compliance with the
Securities Act, Exchange 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 4.05    Nature of Purchasers. Such Purchaser represents and warrants to,
and covenants and agrees with, the Company that (a) such 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, such 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 Shares and the Exchanged Shares, 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
Shares and the Exchanged Shares 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 other than the Rights Offering. Such Purchaser acknowledges
that it (i) has access to the Company SEC Documents, (ii) has been provided a
reasonable opportunity to ask questions of and receive answers from
Representatives of the Company regarding such matters and (iii) 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
Shares and the Exchanged Shares.

Section 4.06    Restricted Securities. Such Purchaser understands that the
Purchased Shares and the Exchanged Shares are characterized as “restricted
securities” under the federal securities Laws in as much as they are being, or
will be, as applicable, acquired from the

 

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Company 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 4.07    Reliance on Exemptions. Such Purchaser understands that the
Purchased Shares and the Exchanged Shares are being offered and sold to such
Purchaser in reliance upon specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying upon the truth and accuracy of, and such Purchaser’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of such Purchaser to acquire
the Purchased Shares and the Exchanged Shares.

Section 4.08    Ownership of Series A Preferred Stock. Each Purchaser set forth
on Schedule B has good and valid title to the shares of Series A Preferred Stock
opposite such Purchaser’s name on Schedule B, free and clear of any Liens (other
than arising under the applicable securities laws).

ARTICLE V

COVENANTS

Section 5.01    Use of Proceeds The Company will use the proceeds from the sale
of the Purchased Shares for general corporate purposes.

Section 5.02    Disclosure of Transaction In compliance with the Exchange Act,
the Company shall file a Current Report on Form 8-K or an Annual Report for the
fiscal year ended December 31, 2019 on Form 10-K, in either case, describing the
terms of the transactions contemplated by this Agreement in the form required by
the Exchange Act and attaching this Agreement as an exhibit to such filing.

Section 5.03    Rights Offering. In the event that the transactions contemplated
hereby are not consummated, the Company shall file a registration statement on
Form S-1 to effect a rights offering, subject to the terms and conditions in the
Commitment Letter, resulting in proceeds to the Company of not less than
$17,000,000, whereby the Company will distribute, at no charge, one purchase
right (each, a “Right”) per each four shares of Common Stock to each holder of
shares of the Common Stock outstanding and held of record as of a record date to
be set by the Board (the “Rights Offering”). Each Right will entitle the holder
thereto to purchase one share of Common Stock, which shall be payable by shares
(or fraction thereof) of Series A Preferred Stock (valued at the stated value
thereof) or $0.73 in cash. The Company shall use its best efforts to complete
any required Rights Offering as provided in the Commitment Letter as promptly as
practicable with an Expiration Time (as defined in the Commitment Letter) of no
later than July 24, 2020.

Section 5.04    Further Assurances. Each of the Company and the Purchasers shall
use its respective reasonable best efforts to obtain all approvals and consents
required by or necessary to consummate the transactions contemplated by this
Agreement and the Commitment

 

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Letter. Each of the Company and the Purchasers agrees to execute and deliver all
such documents or instruments, to take all appropriate action and to do all
other things it determines to be necessary, proper or advisable under applicable
Laws and regulations or as otherwise reasonably requested by the other to
consummate the transactions contemplated by this Agreement.

ARTICLE VI

INDEMNIFICATION

Section 6.01    Indemnification by the Company. The Company agrees to indemnify
each 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 Company 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 6.01.

Section 6.02    Indemnification by the Purchasers. Each Purchaser agrees to
indemnify the Company and its Representatives (collectively, “Company 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 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 Company Related Party shall be entitled to recover
special, consequential or punitive damages under this Section 6.02.

Section 6.03    Indemnification Procedure.

(a)    A claim for indemnification for any matter not involving a Third-Party
Claim may be asserted by notice to the party from whom indemnification is
sought; provided, however, that failure to so notify the indemnifying party
shall not preclude the indemnified party from any indemnification which it may
claim in accordance with this Article VI, except as otherwise provided in
Section 6.01.

 

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(b)    As soon as reasonably practicable after any Purchaser Related Party or
Company 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 (each a “Third-Party Claim”), the
Indemnified Party shall give the indemnitor hereunder (the “Indemnifying Party”)
written notice of such Third-Party Claim, 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 Third-Party 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, and in no event later than ten (10) days,
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 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, within ten (10) Business Days of when
the Indemnified Party provides written notice of a Third-Party Claim, failed to
assume the defense or employ counsel reasonably acceptable to the Indemnified
Party and to notify the Indemnified Party of such assumption or (B) 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 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 a separate counsel 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 and unconditional release from liability of, and does not
include any admission of wrongdoing or malfeasance by, the Indemnified Party or
its Affiliates. The remedies provided for in this Section 6.03 are cumulative
and are not exclusive of any remedies that may be available to a party at law or
in equity or otherwise.

Section 6.04    Tax Matters. All indemnification payments under this Article VI
shall be adjustments to each Purchaser’s Purchase Price except as otherwise
required by applicable Law.

 

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ARTICLE VII

TERMINATION

Section 7.01    Termination. This Agreement may be terminated at any time prior
to the Closing:

(a)    By the mutual written consent of the Company and the Lead Purchaser;

(b)    By the Lead Purchaser by written notice to the Company if:

(i)    The Purchasers are not then in material breach of any provision of this
Agreement and there has been a breach, inaccuracy in or failure to perform any
representation, warranty, covenant or agreement made by the Company pursuant to
this Agreement that would give rise to the failure of any of the conditions
specified in Article II and such breach, inaccuracy or failure has not been
cured by the Company within three days of the Company’s receipt of written
notice of such breach from the Lead Purchaser; or

(ii)    any of the conditions set forth in Section 2.03 shall not have been, or
if it becomes apparent that any of such conditions will not be, fulfilled by
June 19, 2020 (the “Outside Date”), unless such failure shall be due to the
failure of the Purchasers to perform or comply with any of the covenants,
agreements or conditions hereof to be performed or complied with by them prior
to the Closing;

(c)    by the Company by written notice to the Lead Purchaser if:

(i)    the Company is not then in material breach of any provision of this
Agreement and there has been a breach, inaccuracy in or failure to perform any
representation, warranty, covenant or agreement made by a Purchaser pursuant to
this Agreement that would give rise to the failure of any of the conditions
specified in Article II and such breach, inaccuracy or failure has not been
cured by such Purchaser within three days of the Purchaser’s’ receipt of written
notice of such breach from the Company; or

(ii)    any of the conditions set forth in Section 2.04 shall not have been, or
if it becomes apparent that any of such conditions will not be, fulfilled by the
Outside Date, unless such failure shall be due to the failure of the Company to
perform or comply with any of the covenants, agreements or conditions hereof to
be performed or complied with by it prior to the Closing; or

(d)    by the Lead Purchaser or the Company in the event that (i) there shall be
any Law that makes consummation of the transactions contemplated by this
Agreement illegal or otherwise prohibited or (ii) any Governmental Authority
shall have issued an order restraining or enjoining the transactions
contemplated by this Agreement, and such order shall have become final and
non-appealable.

 

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Section 7.02    Effect of Termination. In the event of the termination of this
Agreement in accordance with this Article VII, this Agreement shall forthwith
become void and there shall be no liability on the part of any party hereto
except:

(a)    as set forth in this Article VII and Section 5.03 and Article VIII
hereof; and

(b)    that nothing herein shall relieve any party hereto from liability for any
willful breach of any provision hereof.

ARTICLE VIII

MISCELLANEOUS

Section 8.01    Expenses. Promptly following receipt of an invoice therefor, the
Company shall reimburse the Lead Purchaser and its Affiliates for its
out-of-pocket expenses (including without limitation, fees and expenses of
outside counsel) incurred by the Lead Purchaser and its Affiliates with the
transactions contemplated by this Agreement; provided, that for U.S. federal
income tax purposes, the reimbursements described in Section 8.01 (a) are, and
will be treated by the parties as, adjustments to the Purchase Price paid by the
Purchasers for the Purchased Shares; provided, further, the Lead Purchaser and
its Affiliates shall not be entitled to reimbursement of their out-of-pocket
expenses in connection with the Rights Offering, if conducted.

Section 8.02    Interpretation and Severability. Article, Section, Schedule and
Exhibit references in this Agreement are references to the corresponding
Article, Section, Schedule or Exhibit to this Agreement, unless otherwise
specified. All Exhibits and Schedules to this Agreement are hereby incorporated
and made a part hereof as if set forth in full herein and are an integral part
of this Agreement. 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” and shall not be construed to limit any general
statement that it follows to the specific or similar items or matters
immediately following it. Whenever the Company has an obligation under the
Transaction Documents, the expense of complying with that obligation shall be an
expense of the Company unless otherwise specified. Any reference in this
Agreement to “$” shall mean U.S. dollars. Whenever any determination, consent or
approval is to be made or given by a Purchaser, such action shall be in such
Purchaser’s sole discretion, unless otherwise specified in this Agreement. If
any provision in the Transaction Documents is held to be illegal, invalid, not
binding or unenforceable, (a) such provision shall be fully severable and the
Transaction Documents shall be construed and enforced as if such illegal,
invalid, not binding or unenforceable provision had never comprised a part of
the Transaction Documents, and the remaining provisions shall remain in full
force and effect so long as this Agreement as so modified continues to express,
without material change, the original intentions of the parties as to the
subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties.
The parties will endeavor in good

 

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faith negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes as close as
possible to that of the prohibited, invalid or unenforceable provision(s), and
(b) the parties hereto shall negotiate in good faith to modify the Transaction
Documents so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible. When calculating the period of time before which, within which or
following which any act is to be done or step taken pursuant to the Transaction
Documents, the date that is the reference date in calculating such period shall
be excluded. If the last day of such period is a non-Business Day, the period in
question shall end on the next succeeding Business Day. Any words imparting the
singular number only shall include the plural and vice versa. The words such as
“herein,” “hereinafter,” “hereof” and “hereunder” refer to this Agreement as a
whole and not merely to a subdivision in which such words appear unless the
context otherwise requires. The provision of a Table of Contents, the division
of this Agreement into Articles, Sections and other subdivisions and the
insertion of headings are for convenience of reference only and shall not affect
or be utilized in construing or interpreting this Agreement.

Section 8.03    Survival of Provisions. The representations and warranties set
forth in Section 3.01, Section 3.02, Section 3.04, Section 3.05, Section 3.08,
Section 4.01, Section 4.03 and Section 4.05 hereunder shall survive the
execution and delivery of this Agreement indefinitely, (B) the representations
and warranties set forth in Section 3.12 shall survive until the date that is 60
days after the expiration of the applicable statute of limitation and (C) the
other representations and warranties set forth herein shall survive for a period
of eighteen (18) months following the date hereof, regardless of any
investigation made by or on behalf of the Company or the Purchasers. The
covenants made in this Agreement or any other Transaction Document shall survive
the Closing and remain operative and in full force and effect regardless of
acceptance of any of the Purchased Shares and payment therefor and repayment,
conversion or repurchase thereof.

Section 8.04    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)    Specific Waiver. Except as otherwise provided herein, no amendment,
waiver, consent, modification or termination of any provision of any Transaction
Document shall be effective against a Purchaser unless signed by such Purchaser.
Any amendment, supplement or modification of or to any provision of any
Transaction Document, any waiver of any provision of any Transaction Document
and any consent to any departure by the Company from the terms of any provision
of any Transaction 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 Company
in any case shall entitle the Company to any other or further notice or demand
in similar or other

 

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circumstances. Any investigation by or on behalf of any party shall not be
deemed to constitute a waiver by the party taking such action of compliance with
any representation, warranty, covenant or agreement contained herein.

Section 8.05    Binding Effect. This Agreement shall be binding upon the
Company, each of the Purchasers 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.

Section 8.06    Non-Disclosure. The Company agrees that the Purchasers may
(i) publicize their ownership in the Company, as well as the identity of the
Company, the size of the investment and its pricing terms on its internet site
or in marketing materials, press releases, published “tombstone” announcements
or any other print or electronic medium or in any regulatory filing and
(ii) display the Company’s logo in conjunction with any such reference.

Section 8.07    Communications. All notices and demands provided for hereunder
shall be in writing and shall be given by registered or certified mail, return
receipt requested, email, air courier guaranteeing overnight delivery or
personal delivery to the following addresses:

(a)     If to a Purchaser, to the address set forth on Schedule A, with a copy
to (which shall not constitute notice):

Schulte Roth & Zabel LLP

919 Third Avenue

New York, NY 10022

Attention: Stuart D. Freedman

Email: stuart.freedman@srz.com

(b)     If to the Company:

StoneMor Inc.

3600 Horizon Boulevard

Trevose, PA 19053

Attention: Austin So

Email: aso@stonemor.com

with a copy (which shall not constitute notice):

Duane Morris LLP

30 South 17th Street

Philadelphia, PA 19103

Attention: Thomas G. Spencer

Email: tgspencer@duanemorris.com

or to such other address as the Company or the Purchasers 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; upon actual receipt if
sent by certified or registered mail, return

 

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receipt requested, or regular mail, if mailed; upon actual receipt of the
overnight courier copy, upon actual receipt if sent via email; and upon actual
receipt when delivered to an air courier guaranteeing overnight delivery.

Section 8.08    Entire Agreement. This Agreement, the Commitment Letter, the
other Transaction 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, the other
Transaction Documents or the other agreements and documents referred to herein
with respect to the rights granted by the Company or any of its Affiliates or
the Purchasers or any of their respective Affiliates set forth herein or
therein.

Section 8.09    Governing Law; Submission to Jurisdiction. This Agreement, and
all claims or causes of action (whether in contract or tort) that may be based
upon, arise out of or relate to this Agreement or the negotiation, execution or
performance of this Agreement (including any claim or cause of action based
upon, arising out of or related to any representation or warranty made in or in
connection with this Agreement), will be construed in accordance with and
governed by the laws of the State of New York without regard to principles of
conflicts of laws. Any action against any party relating to the foregoing shall
be brought in any federal or state court of competent jurisdiction located
within the State of New York, and the parties hereto hereby irrevocably submit
to the non-exclusive jurisdiction of any federal or state court located within
the State of New York over any such action. The parties hereby irrevocably
waive, to the fullest extent permitted by applicable Law, any objection which
they may now or hereafter have to the laying of venue of any such dispute
brought in such court or any defense of inconvenient forum for the maintenance
of such dispute. Each of the parties hereto agrees that a judgment in any such
dispute may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by Law.

Section 8.10    Waiver of Jury Trial. THE PARTIES TO THIS AGREEMENT EACH HEREBY
WAIVES, AND AGREES TO CAUSE ITS AFFILIATES TO WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (a) ARISING UNDER THIS AGREEMENT OR (b) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT
OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY
OR OTHERWISE. THE PARTIES TO THIS AGREEMENT EACH HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

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Section 8.11    Exclusive Remedy.

(a)    Each party hereto hereby acknowledges and agrees that the rights of each
party to consummate the transactions contemplated hereby are special, unique and
of extraordinary character and that, if any party violates or fails or refuses
to perform any covenant or agreement made by it herein, the non-breaching party
may be without an adequate remedy at law. If any party violates or fails or
refuses to perform any covenant or agreement made by such party herein, the
non-breaching party subject to the terms hereof, may institute and prosecute an
action in any court of competent jurisdiction to enforce specific performance of
such covenant or agreement or seek any other equitable relief.

(b)    The sole and exclusive remedy for the Purchasers for any and all claims
arising under, out of, or related to this Agreement or the transactions
contemplated hereby, excluding for the avoidance of doubt, the failure of any of
the representations or warranties contained in any Transaction Document other
than this Agreement to be true and correct as of the date made, shall be the
rights of indemnification set forth in Article VI only, and no Purchaser will
have any other entitlement, remedy or recourse, whether in contract, tort or
otherwise, it being agreed that all of such other remedies, entitlements and
recourse are expressly waived and released by the Purchasers to the fullest
extent permitted by Law. Notwithstanding anything in the foregoing to the
contrary, nothing in this Agreement shall limit or otherwise restrict a fraud
claim brought by any party hereto or the right to seek specific performance
pursuant to Section 8.11(a).

Section 8.12    No Recourse Against Others.

(a)    All claims, obligations, liabilities or causes of action (whether in
contract or in tort, in law or in equity, or granted by statute) that may be
based upon, in respect of, arise under, out or by reason of, be connected with
or relate in any manner to this Agreement, or the negotiation, execution or
performance of this Agreement (including any representation or warranty made in,
in connection with, or as an inducement to, this Agreement), may be made only
against (and are expressly limited to) the Company and the Purchasers. No Person
other than the Company or the Purchasers, including no member, partner,
stockholder, Affiliate or Representative thereof, nor any member, partner,
stockholder, Affiliate or Representative of any of the foregoing, shall have any
liability (whether in contract or in tort, in law or in equity, or granted by
statute) for any claims, causes of action, obligations or liabilities arising
under, out of, in connection with or related in any manner to this Agreement or
based on, in respect of or by reason of this Agreement or its negotiation,
execution, performance or breach; and, to the maximum extent permitted by Law,
each of the Company and the Purchasers hereby waives and releases all such
liabilities, claims, causes of action and obligations against any such third
Person.

(b)    Without limiting the foregoing, to the maximum extent permitted by Law,
(i) each of the Company and the Purchasers hereby waives and releases any and
all rights, claims, demands or causes of action that may otherwise be available
at law or in equity, or granted by statute, to avoid or disregard the entity
form of the other or otherwise impose liability of the other on any third
Person, whether granted by statute or based on theories of equity, agency,
control, instrumentality, alter ego, domination, sham, single business
enterprise, piercing the veil, unfairness, undercapitalization or otherwise; and
(ii) each of the Company and the Purchasers disclaims any reliance upon any
third Person with respect to the performance of this Agreement or any
representation or warranty made in, in connection with or as an inducement to
this

 

23

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Section 8.13    No Third-Party Beneficiaries. Nothing in this Agreement, express
or implied, is intended to or shall confer upon any Person, other than the
Company, the Purchasers, for purposes of Section 8.11 only, any member, partner,
stockholder, Affiliate or Representative of the Company or the Purchasers, or
any member, partner, stockholder, Affiliate or Representative of any of the
foregoing, any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.

Section 8.14    Relationship with Commitment Letter. This Agreement is intended
by the parties to effectuate the investment in the Company by the Purchasers
contemplated by the Commitment Letter and to amend the terms of the Commitment
Letter as described herein, and the obligations of the parties under the
Commitment Letter shall terminate upon consummation of the transactions
contemplated by this Agreement. In the event that the Closing does not occur by
the Outside Date, or if this Agreement is terminated without the Closing having
occurred, the Company shall promptly initiate the Rights Offering and the
parties to the Commitment Letter shall be obligated, subject to the terms and
conditions thereof, to consummate the transactions contemplated thereby.

Section 8.15    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.]

 

24

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

 

STONEMOR INC.

By:   /s/ Joseph M. Redling Name:   Joseph M. Redling Title:   President and
Chief Executive Officer

[Signature Page to Common Stock Purchase Agreement]

--------------------------------------------------------------------------------

AXAR

AXAR CAPITAL MANAGEMENT LP

By:   /a/ Andrew M. Axelrod Name:   Andrew Axelrod Title:   Authorized Signatory

[Signature Page to Common Stock Purchase Agreement]

--------------------------------------------------------------------------------

PURCHASERS

AXAR CL SPV LLC

By:   Axar Capital Management LP   its Investment Manager By:   /a/ Andrew M.
Axelrod

Name:

 

Andrew Axelrod

Title:

 

Authorized Signatory

BLACKWELL PARTNERS LLC – SERIES E, solely with respect to the assets for which
Axar Capital Management LP acts as its Investment Manager

By:

 

Axar Capital Management LP

 

its Investment Manager

By:   /a/ Andrew M. Axelrod Name:   Andrew Axelrod Title:   Authorized Signatory

STAR V PARTNERS LLC

By:

 

Axar Capital Management LP

 

its Investment Manager

By:   /a/ Andrew M. Axelrod Name:   Andrew Axelrod Title:   Authorized Signatory

[Signature Page to Common Stock Purchase Agreement]

--------------------------------------------------------------------------------

Schedule A

Purchase Allocation

 

Purchaser and Address

   Purchased Shares      Funding Obligation  

            

                                                                 
                                                          

 

 

    

 

 

 

            

                                  

 

 

    

 

 

 

            

                                  

 

 

    

 

 

 

            

                                  

 

 

    

 

 

 

--------------------------------------------------------------------------------

Schedule B

Exchange Allocation

 

Purchaser and Address

   Exchanged Shares      Series A Preferred
Shares to be
Surrendered   AXAR CL SPV LLC
c/o Axar Capital Management, LP
1330 Avenue of the Americas, 30th Floor
New York, NY 10019
Attention: Andrew Axelrod
E-mail: aaxelrod@axarcapital.com      8,082,192        118     

 

 

    

 

 

  BLACKWELL PARTNERS LLC – Series E
c/o Axar Capital Management, LP
1330 Avenue of the Americas, 30th Floor
New York, NY 10019
Attention: Andrew Axelrod
E-mail: aaxelrod@axarcapital.com      2,054,795        30     

 

 

    

 

 

  STAR V PARTNERS LLC
c/o Axar Capital Management, LP
1330 Avenue of the Americas, 30th Floor
New York, NY 10019
Attention: Andrew Axelrod
E-mail: aaxelrod@axarcapital.com      1,917,808        28