Exhibit 10.2

STONEMOR PARTNERS L.P.

STONEMOR GP LLC

and

THE PURCHASERS NAMED ON SCHEDULE A

HERETO

 

 

REGISTRATION RIGHTS AGREEMENT

Dated June 27, 2019

 

 

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TABLE OF CONTENTS

 

ARTICLE I. DEFINITIONS

     1  

Section 1.01

 

Definitions

     1  

Section 1.02

 

Registrable Securities

     5  

ARTICLE II. REGISTRATION RIGHTS

     5  

Section 2.01

 

Shelf Registration

     5  

Section 2.02

 

Piggyback Registration

     7  

Section 2.03

 

Underwritten Offering

     9  

Section 2.04

 

Further Obligations

     10  

Section 2.05

 

Cooperation by Holders

     14  

Section 2.06

 

Restrictions on Public Sale by Holders of Registrable Securities

     14  

Section 2.07

 

Expenses

     15  

Section 2.08

 

Indemnification

     15  

Section 2.09

 

Rule 144 Reporting

     18  

Section 2.10

 

Transfer or Assignment of Registration Rights

     18  

Section 2.11

 

Limitation on Subsequent Registration Rights

     18  

ARTICLE III. MISCELLANEOUS

     19  

Section 3.01    

 

Communications

     19  

Section 3.02

 

Binding Effect

     20  

Section 3.03

 

Assignment of Rights

     20  

Section 3.04

 

Recapitalization, Exchanges, Etc. Affecting Units

     20  

Section 3.05

 

Aggregation of Registrable Securities

     20  

Section 3.06

 

Specific Performance

     20  

Section 3.07

 

Counterparts

     20  

Section 3.08

 

Governing Law, Submission to Jurisdiction

     20  

Section 3.09

 

Waiver of Jury Trial

     21  

Section 3.10

 

Entire Agreement

     21  

Section 3.11

 

Amendment

     21  

Section 3.12

 

No Presumption

     21  

Section 3.13

 

Obligations Limited to Parties to Agreement

     22  

Section 3.14

 

Interpretation

     22  

 

SCHEDULE A - Purchaser Name; Notice and Contact Information

     A-1  

SCHEDULE B – Purchasers Deemed to have Delivered the Piggyback Opt-out Notice

     B-1  

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REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT, dated as of June 27, 2019 (this
“Agreement”), is entered into by and among STONEMOR PARTNERS L.P., a Delaware
limited partnership (the “Partnership”), STONEMOR GP, LLC, a Delaware limited
liability company (the “General Partner”), and each of the Persons set forth on
Schedule A hereto (the “Purchasers”).

WHEREAS, this Agreement is made in connection with the closing of the issuance
and sale of the Series A Preferred Units (the date of such closing, the “Closing
Date”) pursuant to the Series A Preferred Unit Purchase Agreement, dated as of
the date hereof, by and among the Partnership and the Purchasers (the “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 Purchasers pursuant to the
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 is hereby acknowledged, the parties hereby agree as follows:

ARTICLE I.

DEFINITIONS

Section 1.01    Definitions. As used in this Agreement, 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” (including, with correlative meanings, “controlled by” and “under
common control with”) 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. 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 of this
Agreement.

“Average VWAP” per Common Unit or per share of Common Stock, as applicable, over
a certain period shall mean the arithmetic average of the VWAP per Common Unit
or per share of Common Stock for each Trading Day in such period.

“Axar” means Axar Capital Management LP or its designee.

“Business Day” means any day other than a Saturday, Sunday, any federal legal
holiday or day on which banking institutions in the State of New York or
Commonwealth of Pennsylvania are authorized or required by law or other
governmental action to close.

 

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“C-Corporation” means a corporation to be called “StoneMor Inc.”, which
immediately following the C-Corporation Conversion, is the direct or indirect
holder of 100% of the partnership interests in the Partnership, or,
alternatively, substantially all of the assets and businesses owned and operated
immediately prior to the C-Corporation Conversion.

“C-Corporation Conversion” means the consummation of the transactions
contemplated by the Amended & Restated Merger and Reorganization Agreement,
dated as of the date hereof, by and among the Partnership, the General Partner,
StoneMor GP Holdings LLC and Hans Merger Sub, LLC, as such agreement may be
amended from time to time after the date hereof (it being understood that
references to the Partnership herein shall refer, mutatis mutandis, to the
C-Corporation from and after the C-Corporation Conversion and unless otherwise
provided herein or the context otherwise requires).

“Closing Date” has the meaning set forth in the Recitals of this Agreement.

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

“Common Stock” means the common stock, par value $.01 per share, of the
C-Corporation to be issued upon the completion of the C-Corporation Conversion
to Holders of Series A Preferred Units and Common Units.

“Common Units” means the common units representing limited partner interests in
the Partnership and having the rights and obligations specified in the
Partnership Agreement.

“Effective Date” means, with respect to any Registration Statement, the date of
effectiveness thereof.

“Effectiveness Period” has the meaning specified in Section 2.01(a)(ii).

“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” has the meaning set forth in the preamble.

“Holder” means the record holder of any Registrable Securities.

“Holder Underwriter Registration Statement” has the meaning specified in
Section 2.04(q).

“Included Registrable Securities” has the meaning specified in Section 2.02(a).

“Initiating Holder” has the meaning specified in Section 2.03(b).

“Losses” has the meaning specified in Section 2.08(a).

“Managing Underwriter” means, with respect to any Underwritten Offering, the
book running lead manager of such Underwritten Offering.

 

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“Mangrove Partners” means Mangrove Partners or its designee.

“National Securities Exchange” means an exchange registered with the Commission
under Section 6(a) of the Exchange Act (or any successor to such Section) and
any other securities exchange (whether or not registered with the Commission
under Section 6(a) (or successor to such Section) of the Exchange Act) that the
General Partner, or the C-Corporation from and after the C-Corporation
Conversion, shall designate as a National Securities Exchange for purposes of
this Agreement.

“Other Holder” has the meaning specified in Section 2.02(a).

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

“Partnership Agreement” means the Third Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of the date hereof, as amended.

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

“Piggyback Notice” has the meaning specified in Section 2.02(a).

“Piggyback Opt-Out Notice” has the meaning specified in Section 2.02(a).

“Piggyback Registration” has the meaning specified in Section 2.02(a).

“Purchase Agreement” has the meaning set forth in the Recitals of this
Agreement.

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

“Registrable Securities” means (i) the Common Units or Common Stock, as the case
may be, issuable upon conversion of the Series A Preferred Units, (ii) the
Common Units and Common Stock otherwise owned by the Purchasers and their
controlled Affiliates and (iii) any capital stock of the Partnership, or the
C-Corporation from and after the C-Corporation Conversion, issued or issuable
with respect to the securities set forth in the immediately preceding clause
(i) or (ii), in each case as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, without regard to any
limitations on conversions of the Series A Preferred Units, all of which are
subject to the rights provided herein until such time as such securities cease
to be Registrable Securities pursuant to Section 1.02.

“Registrable Securities Required Voting Percentage” means 60% of the outstanding
Registrable Securities voting together as a single class on an as-converted
basis.

“Registration” means any registration pursuant to this Agreement, including
pursuant to a Registration Statement or a Piggyback Registration.

“Registration Expenses” has the meaning specified in Section 2.07(a).

 

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“Registration Statement” has the meaning specified in Section 2.01(a)(i).

“SEC Guidance” means (i) any publicly-available written or oral guidance of the
Commission staff, or any comments, requirements or requests of the Commission
staff and (ii) the Securities Act.

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

“Selling Expenses” has the meaning specified in Section 2.07(a).

“Selling Holder” means a Holder who is selling Registrable Securities pursuant
to a Registration Statement.

“Selling Holder Indemnified Persons” has the meaning specified in
Section 2.08(a).

“Series A Preferred Units” means the Series A Preferred Units representing
limited partner interests in the Partnership and having the rights and
obligations specified in the Partnership Agreement to be issued and sold to the
Purchasers pursuant to the Purchase Agreement.

“Target Effective Date” means May 1, 2020, or, if earlier, thirty (30) days
after the consummation of the C-Corporation Conversion.

“Trading Day” means a day on which the principal National Securities Exchange on
which the Common Units are listed or admitted to trading is open for the
transaction of business or, if such Common Units are not listed or admitted to
trading on any National Securities Exchange, a day on which banking institutions
in New York City generally are open.

“Underwriter” means, with respect to any Underwritten Offering, the underwriters
of such Underwritten Offering.

“Underwritten Offering” means an offering (including an offering pursuant to a
Registration Statement) in which Common Units or Common Stock 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.

“VWAP” per Common Unit or per share of Common Stock on any Trading Day shall
mean the per Common Unit or per share of Common Stock volume-weighted average
price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “DM
<equity> AQR” (or its equivalent successor if such page is not available) in
respect of the period from the scheduled open of trading until the scheduled
close of trading of the primary trading session on such Trading Day (or if such
volume-weighted average price is unavailable, the closing price of one Common
Unit or share of Common Stock on such Trading Day as reported on the New York
Stock Exchange’s website or the website of the National Securities Exchange upon
which the Common Units or Common Stock are listed). If the VWAP cannot be
calculated for the Common Units or Common Stock on a particular date on any of
the foregoing bases, the VWAP of the Common Units or Common Stock on such date
shall be the fair market value as mutually determined in

 

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good faith by the Partnership and the Holders of the Registrable Securities
Required Voting Percentage in a commercially reasonable manner.

“WKSI” means a well-known seasoned issuer (as defined in the rules and
regulations of the Commission).

Section 1.02    Registrable Securities. Any Registrable Security will cease to
be a Registrable Security upon the earliest to occur of the following: (a) when
a registration statement covering such Registrable Security (including the Form
S-4 to be filed by the General Partner (or an alternative registration in
accordance with the terms of the C-Corporation Conversion) in connection with
the C-Corporation Conversion) 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 (excluding transfers or assignments by a Holder to an Affiliate
or to another Holder or any of its Affiliates or to any assignee or transferee
to whom the rights under this Agreement have been transferred pursuant to
Section 2.10) 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 direct or indirect 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, and (e) when the Holder
of a Registrable Security (i) may sell without restriction pursuant to Rule 144
(including, without limitation, the public information requirement in Rule
144(c)) and (ii) holds, together with such Holder’s Affiliates, less than
$5.0 million of Common Units or Common Stock (determined by multiplying the
number of Common Units or Common Stock owned by the Average VWAP for the
preceding thirty (30) Trading Days), as applicable. For the avoidance of doubt,
the provisions of this Section 1.02 do not modify the transfer restrictions
applicable to the Holders set forth in the Partnership Agreement.

ARTICLE II.

REGISTRATION RIGHTS

Section 2.01    Shelf Registration.

(a)        Shelf Registration Statements.

(i)        The Partnership shall use its reasonable best efforts to (i) prepare
and file an initial registration statement under the Securities Act (or an
amendment to the Registration Statement filed pursuant to Section 2.01(a)(i)) to
permit the resale of the Registrable Securities from time to time as permitted
by Rule 415 (or any similar provision adopted by the Commission then in effect)
of the Securities Act (a “Registration Statement”) and (ii) cause such initial
Registration Statement or such amendment to become effective no later than the
Target Effective Date for the Registrable Securities.

(ii)        The Partnership will use its reasonable best efforts to cause the
Registration Statements filed pursuant to Section 2.01(a) to be continuously
effective under the Securities Act, with respect to any Holder, until the
earlier to occur of the following: (A) the date as of which the Holders may sell
all of the Registrable Securities covered by such

 

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Registration Statement without restriction or limitation pursuant to Rule 144
and without the requirement to be in compliance with Rule 144(c)(1) (or any
successor thereto) promulgated under the Securities Act and (B) the date on
which the Holders shall have sold all of the Registrable Securities covered by
such Registration Statement (the “Effectiveness Period”). A Registration
Statement filed pursuant to Section 2.01(a) shall be on such appropriate
registration form of the Commission as shall be selected by the Partnership;
provided that, if the Partnership is then eligible, it shall file such
Registration Statement on Form S-3; provided further that, in the event that
Form S-3 is not available for the registration of the resale of Registrable
Securities hereunder, the Partnership shall undertake to register the
Registrable Securities on Form S-3 as soon as such form is available, provided
that the Partnership shall maintain the effectiveness of the Registration
Statement then in effect until such time as a Registration Statement on Form S-3
covering the Registrable Securities has been declared effective by the
Commission. A Registration Statement when declared 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 (and, 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 a
Registration Statement becomes effective, but in any event within two
(2) Business Days of such date, the Partnership shall provide the Holders with
written notice of the effectiveness of such Registration Statement. By 9:30 a.m.
New York time on the second (2nd) Business Day following the Effective Date of
any Registration Statement, the Partnership shall file with the Commission in
accordance with Rule 424 under the Securities Act the final prospectus to be
used in connection with sales pursuant to such Registration Statement. In no
event shall the Partnership include any securities other than Registrable
Securities on any Registration Statement without the prior written consent of
the Holders of at least the Registrable Securities Required Voting Percentage.

(iii)        Notwithstanding the registration obligations set forth in
Section 2.01(a), if the staff of the Commission informs the Partnership that all
of the Registrable Securities cannot, as a result of the application of Rule 415
of the Securities Act, be registered for resale as a secondary offering on a
single registration statement, the Partnership shall promptly inform each of the
Holders thereof and use its reasonable best efforts to file amendments to the
Registration Statement as required by the staff of the Commission, covering the
maximum number of Registrable Securities permitted to be registered by the staff
of the Commission, on Form S-3 or such other form available to register for
resale the Registrable Securities as a secondary offering; provided, however,
that prior to filing such amendment, the Partnership shall use diligent efforts
to advocate with the staff of the Commission for the registration of all of the
Registrable Securities in accordance with the SEC Guidance, including without
limitation, Compliance and Disclosure Interpretation 612.09. Notwithstanding any
other provision of this Agreement, if the staff of the Commission or any SEC
Guidance sets forth a limitation on the number of Registrable Securities
permitted to be registered on a particular Registration Statement as a secondary
offering (and notwithstanding that the Partnership used diligent efforts to
advocate with the staff of the Commission for the registration of all or a
greater portion of Registrable

 

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Securities), unless otherwise directed in writing by a Holder as to its
Registrable Securities, the Partnership shall reduce Registrable Securities on a
pro rata basis based on the total number of Registrable Securities held by such
Holders. In the event of a cutback hereunder, the Partnership shall give the
Holder at least five (5) Business Days prior written notice along with the
calculations as to such Holder’s allotment. In the event the Partnership amends
the Registration Statement in accordance with the foregoing, the Partnership
will use its reasonable best efforts to file with the Commission as soon as
permitted by the SEC Guidance one or more additional Registration Statements on
Form S-3 or such other form available to register for resale those Registrable
Securities that were not registered for resale on the initial (or prior
additional) Registration Statement and cause such registration statements to be
declared effective on or prior to the ninetieth (90th) day immediately following
the filing of such Registration Statement.

(b)        Delay Rights. Notwithstanding anything to the contrary contained
herein, the Partnership may, upon written notice to any Selling Holder whose
Registrable Securities are included in a Registration Statement (a “Delay
Notice”), suspend such Selling Holder’s use of any prospectus which is a part of
such Registration Statement (in which event the Selling Holder shall suspend
sales of the Registrable Securities pursuant to such Registration Statement) if
(i) the Partnership is pursuing an acquisition, merger, reorganization,
disposition or other similar transaction and the Partnership determines in good
faith and on the advice of counsel that the Partnership’s ability to pursue or
consummate such a transaction would be materially and adversely affected by any
required disclosure of such transaction in such Registration Statement or
(ii) 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 and adversely affect the Partnership (each, a “Grace Period”);
provided, however, that in no event shall the Selling Holders be suspended from
selling Registrable Securities pursuant to such Registration Statement for a
period that exceeds thirty (30) consecutive Trading Days or an aggregate of 75
Trading Days in any 365-day period. Each Delay Notice will notify the Holders of
the dates on which the Grace Period begins and the first day of any Grace Period
must be at least five (5) Trading Days after the last day of any prior Grace
Period. Upon the termination of the condition described above, the Partnership
shall provide prompt notice to the Selling Holders whose Registrable Securities
are included in such Registration Statement, and shall promptly terminate any
suspension of sales it has put into effect and shall take such other actions
necessary or appropriate to permit registered sales of Registrable Securities as
contemplated in this Agreement. For purposes of determining the length of a
Grace Period above, the Grace Period shall begin on and include the date the
Holders receive the Delay Notice and shall end on and include the later of the
date the Holders receive a written notice of the end of such Grace Period
pursuant to the immediately preceding sentence and the date referred to in such
notice. Notwithstanding anything to the contrary, the Partnership shall cause
its transfer agent to deliver unlegended Common Units to a transferee of a
Holder in connection with any sale of Registrable Securities with respect to
which a Holder has entered into a contract for sale, prior to such Holder’s
receipt of the Delay Notice and for which such Purchaser has not yet settled,
unless the Partnership and its counsel determine that such sale may violate the
Securities Act.

Section 2.02    Piggyback Registration.

 

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(a)        Participation. If at any time the Partnership proposes to file (i) a
Registration Statement (other than a Registration Statement contemplated by
Section 2.01(a)) on behalf of any other Holder who has registration rights
related to an Underwritten Offering undertaken pursuant to Section 2.03 (“Other
Holder”), or (ii) a prospectus supplement relating to the sale of Common Units
by any Other Holders to an effective “automatic” registration statement, so long
as the Partnership is a WKSI at such time or, whether or not the Partnership is
a WKSI, so long as the Registrable Securities were previously included in the
underlying shelf Registration Statement or are included on an effective
Registration Statement, or in any case in which Holders may participate in such
offering without the filing of a post-effective amendment, in each case, for the
sale of Common Units by Other Holders in an Underwritten Offering undertaken
pursuant to Section 2.03, then the Partnership shall give not less than six
(6) Business Days’ notice (including notification by electronic mail) (the
“Piggyback Notice”) of such proposed Underwritten Offering to each Holder
(together with its Affiliates) owning Registrable Securities and such Piggyback
Notice shall offer such Holder the opportunity to include in such Underwritten
Offering such number of Registrable Securities (the “Included Registrable
Securities”) as such Holder may request in writing (a “Piggyback Registration”);
provided, however, that the Partnership shall not be required to offer such
opportunity (A) to such Holders if the Holders, together with their Affiliates,
do not offer a minimum of $5 million of Registrable Securities, in the aggregate
(determined by multiplying the number of Registrable Securities owned by the
Average VWAP for the thirty (30) Trading Days preceding the date of such
notice), or such lesser amount if it constitutes the remaining holdings of the
Holder and its Affiliates, or, (B) to such Holders if the Partnership has been
advised by the Managing Underwriter that the inclusion of Registrable Securities
for sale for the benefit of such Holders will have an adverse effect on the
price, timing or distribution of the Common Units in such Underwritten Offering,
in which case the amount of Registrable Securities to be offered for the
accounts of Holders shall be determined based on the provisions of
Section 2.02(b). Each Piggyback Notice shall be provided to Holders on a
Business Day in accordance with the notice provisions of Section 3.01 and
receipt of such notice shall be confirmed and kept confidential by the Holders
until either (x) such proposed Underwritten Offering has been publicly announced
by the Partnership or (y) the Holders have received notice from the Partnership
that such proposed Underwritten Offering has been abandoned, which the
Partnership shall provide to the Holders reasonably promptly after the final
decision to abandon a proposed Underwritten Offering has been made. Each such
Holder will have five (5) Business Days (or two (2) Business Days in connection
with any overnight or bought Underwritten Offering) after such Piggyback Notice
has been delivered to request in writing to the Partnership the inclusion of
Registrable Securities in the Underwritten Offering. If no request for inclusion
from a Holder is received by the Partnership within the specified time, such
Holder shall have no further right to participate in such Underwritten Offering.
If, at any time after giving written notice of the Partnership’s intention to
undertake an Underwritten Offering and prior to the pricing of such Underwritten
Offering, such Underwritten Offering is terminated or delayed pursuant to the
provisions of this Agreement, the Partnership may, at its election, give written
notice of such determination to the Selling Holders and, (1) in the case of a
termination of such Underwritten Offering, shall be relieved of its obligation
to sell any Included Registrable Securities in connection with such terminated
Underwritten Offering, and (2) in the case of a determination to delay such
Underwritten Offering, shall be permitted to delay offering any Included
Registrable Securities for the same period as the delay in the Underwritten
Offering. Any Selling Holder shall have the right to withdraw such Selling
Holder’s request for inclusion of such Selling Holder’s Registrable

 

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Securities in such Underwritten Offering by giving written notice to the
Partnership of such withdrawal at least one Business Day prior to the time of
pricing of such Underwritten Offering. Any Holder may deliver written notice (a
“Piggyback Opt-Out Notice”) to the Partnership requesting that such Holder not
receive notice from the Partnership of any proposed Underwritten Offering;
provided, however, that such Holder may later revoke any such Piggyback Opt-Out
Notice in writing. Following receipt of a Piggyback Opt-Out Notice from a Holder
(unless subsequently revoked), the Partnership shall not be required to deliver
any notice to such Holder pursuant to this Section 2.02(a) and such Holder shall
no longer be entitled to participate in Underwritten Offerings pursuant to this
Section 2.02(a), unless such Piggyback Opt-Out Notice is revoked by such Holder.
The Holders, if any, listed on Schedule B shall each be deemed to have delivered
a Piggyback Opt-Out Notice as of the date hereof.

(b)        Priority of Piggyback Registration. If the Managing Underwriter or
Underwriters of any proposed Underwritten Offering for Other Holders advise the
Partnership that the total amount of Registrable Securities that Holders intend
to include in such offering exceeds the number that can be sold in such offering
without being likely to have an adverse effect on the price, timing or
distribution of the Common Units or Common Stock offered or the market for the
Common Units or Common Stock, then the Partnership shall include the number of
Common Units or Common Stock that such Managing Underwriter or Underwriters
advise the Partnership can be sold without having such adverse effect, with such
number to be allocated (i) first, to the Common Units or Common Stock requested
to be included therein by the Initiating Holder and (ii) second, pro rata among
the Holders who are exercising piggyback registration rights pursuant to this
Section 2.02 related to such offering (based, for each such Holder, on the
percentage derived by dividing (x) the number of Common Units or Common Stock
proposed to be sold by such Holder in such Underwritten Offering by (y) the
aggregate number of Common Units or Common Stock proposed to be sold by all
Holders in such Underwritten Offering).

Section 2.03    Underwritten Offering.

(a)        Purchaser Demand Rights. From and after the Target Effective Date, if
Axar or Mangrove Partners or any of their respective Affiliates elect to dispose
of Registrable Securities under a Registration Statement pursuant to an
Underwritten Offering and either (i) reasonably expect gross proceeds of at
least $10 million from such Underwritten Offering (together with any Registrable
Securities to be disposed of by a Selling Holder who has elected to participate
in such Underwritten Offering pursuant to Section 2.02) or (ii) reasonably
expect gross proceeds of at least $5 million from such Underwritten Offering
(together with any Registrable Securities to be disposed of by a Selling Holder
who has elected to participate in such Underwritten Offering pursuant to
Section 2.02) and such Registrable Securities represent 100% of the
then-outstanding Registrable Securities held by the applicable Selling Holder
and its Affiliates, the Partnership shall, at the written request of such
Selling Holder(s), enter into an underwriting agreement in a form as is
customary in Underwritten Offerings of securities by the Partnership with the
Managing Underwriter or Underwriters selected by such Selling Holder (and
reasonably approved by the Partnership, such approval not to be unreasonably
withheld, delayed or conditioned), which shall include, among other provisions,
indemnities to the effect and to the extent provided in Section 2.08, and shall
take all such other reasonable actions as are requested by the Managing
Underwriter or Underwriters in order to expedite or facilitate the disposition
of such Registrable Securities; provided, however, that the Partnership shall
have no obligation to facilitate or participate in,

 

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including entering into any underwriting agreement for more than (i) three (3)
Underwritten Offerings requested by Axar and (ii) two (2) Underwritten Offerings
requested by Mangrove Partners (which shall not occur within 180 days of each
other).

(b)        General Procedures. In connection with any Underwritten Offering
contemplated by Section 2.02 or Section 2.03(a), the underwriting agreement into
which each Selling Holder and the Partnership shall enter shall contain such
representations, covenants, indemnities (subject to Section 2.08) and other
rights and obligations as are customary in Underwritten Offerings of securities
by the Partnership. No Selling Holder shall be required to make any
representations or warranties to or agreements with the Partnership or the
Underwriters other than representations, warranties or agreements regarding such
Selling Holder’s authority to enter into such underwriting agreement and to
sell, and its ownership of, the securities being registered on its behalf, its
intended method of distribution and any other representation required by law. If
any Selling Holder disapproves of the terms of an Underwritten Offering
contemplated by this Section 2.03, such Selling Holder may elect to withdraw
therefrom by notice to the Partnership and the Managing Underwriter; provided,
however, that such withdrawal must be made at least one Business Day prior to
the time of pricing of such Underwritten Offering to be effective; provided,
further, that in the event the Managing Underwriter or Underwriters of any
proposed Underwritten Offering advise the Partnership that the total amount of
Registrable Securities that Holders intend to include in such offering exceeds
the number that can be sold in such offering without being likely to have an
adverse effect on the price, timing or distribution of the Registrable
Securities offered or the market for the Common Units, and the amount of
Registrable Securities requested to be included in such Underwritten Offering by
the Holder that initiated such Underwritten Offering pursuant to Section 2.03(a)
(the “Initiating Holder”) is reduced by 30% or more, the Initiating Holder will
have the right to withdraw from such Underwritten Offering by delivering notice
to the Partnership at least one Business Day prior to the time of pricing of
such Underwritten Offering, in which case the Partnership will have no
obligation to proceed with such Underwritten Offering and such Underwritten
Offering, whether or not completed, will not decrease the number of Underwritten
Offerings the Initiating Holder shall have the right and option to request under
this Section 2.03. No such withdrawal or abandonment shall affect the
Partnership’s obligation to pay Registration Expenses.

Section 2.04    Further Obligations. In connection with its obligations under
this Article II, the Partnership will:

(a)        promptly prepare and file with the Commission such amendments and
supplements to a Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective at
all times during the Effectiveness Period 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 such Registration Statement;

(b)        if a prospectus supplement will be used in connection with the
marketing of an Underwritten Offering under a Registration Statement and the
Managing Underwriter at any time shall notify the Partnership in writing that,
in the sole judgment of such Managing Underwriter, inclusion of detailed
information to be used in such prospectus supplement is of material importance
to the success of such Underwritten Offering, the Partnership shall use its
reasonable best efforts to include such information in such prospectus
supplement;

 

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(c)        furnish to each Selling Holder (i) as far in advance as reasonably
practicable, but in any event at least five (5) Business Days, before filing a
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 provide each such
Selling Holder the opportunity to object to any information pertaining to such
Selling Holder and its plan of distribution that is contained therein and, to
the extent timely received, make the corrections reasonably requested by such
Selling Holder with respect to such information prior to filing such
Registration Statement or such other registration statement and the prospectus
included therein or any supplement or amendment thereto, and (ii) such number of
copies of such Registration Statement or such other registration statement and
the prospectus included therein and any supplements and amendments thereto as
such Persons may reasonably request in order to facilitate the resale or other
disposition of the Registrable Securities covered by such Registration Statement
or other registration statement;

(d)        if applicable, use its reasonable best efforts to promptly register
or qualify the Registrable Securities covered by any Registration Statement or
any other registration statement contemplated by this Agreement under the
securities or blue sky laws of such jurisdictions as the Selling Holders or, in
the case of an Underwritten Offering, the Managing Underwriter, 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;

(e)        promptly notify each Selling Holder, at any time when a prospectus
relating thereto is required to be delivered by any of them under the Securities
Act, of (i) the filing of a 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 a 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 any such Registration Statement or
any other registration statement or any prospectus or prospectus supplement
thereto;

(f)        promptly notify each Selling Holder, at any time when a prospectus
relating thereto is required to be delivered by any of them under the Securities
Act, of (i) the happening of any event as a result of which the prospectus or
prospectus supplement contained in a 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 threat
of issuance by the Commission of any stop order suspending the effectiveness of
a 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

 

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Registrable Securities for sale under the applicable securities or blue sky laws
of any jurisdiction. Following the provision of such notice, the Partnership
agrees to, as promptly as practicable, 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 action as is reasonably necessary to remove a
stop order, suspension, threat thereof or proceedings related thereto;

(g)        upon request and subject to appropriate confidentiality obligations,
furnish to each Selling Holder 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;

(h)        in the case of an Underwritten Offering, furnish, or use its
reasonable efforts to cause to be furnished, upon request, (i) an opinion of
counsel for the Partnership addressed to the Underwriters, dated the date of the
closing under the applicable underwriting agreement and (ii) a “comfort letter”
addressed to the Underwriters, dated the pricing date of such Underwritten
Offering and a letter of like kind dated the date of the closing under the
applicable underwriting agreement, in each case, signed by the independent
public accountants who have certified the Partnership’s financial statements
included or incorporated by reference into the applicable registration
statement, and each of the opinion and the “comfort letter” shall be in
customary form and covering substantially the same matters with respect to such
registration statement (and the prospectus and any prospectus supplement) as
have been customarily covered in opinions of issuer’s counsel and in
accountants’ letters delivered to the Underwriters in Underwritten Offerings of
securities by the Partnership and such other matters as such Underwriters may
reasonably request;

(i)        otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission;

(j)        make available to the appropriate representatives of the Managing
Underwriter during normal business hours access to such information and
Partnership personnel as is reasonable and customary to enable such parties to
establish a due diligence defense under the Securities Act; provided, however,
that the Partnership need not disclose any non-public information to any such
representative unless and until such representative has entered into a
confidentiality agreement with the Partnership;

(k)        use its reasonable best efforts to cause all 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;

(l)        use its reasonable best efforts to cause 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 Holders to consummate the disposition of such Registrable
Securities;

 

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(m)        provide a transfer agent and registrar for all Registrable Securities
covered by any Registration Statement not later than the Effective Date of such
Registration Statement;

(n)        enter into customary agreements and take such other actions as are
reasonably requested by the Selling Holders or the Underwriters, if any, in
order to expedite or facilitate the disposition of Registrable Securities
(including making appropriate officers of the Partnership and the General
Partner available to participate in customary marketing activities);

(o)        if reasonably requested by a Selling Holder, (i) incorporate in a
prospectus supplement or post-effective amendment such information as such
Selling Holder 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;

(p)        if reasonably required by the Partnership’s transfer agent, the
Partnership shall promptly deliver any authorizations, certificates and
directions required by the transfer agent which authorize and direct the
transfer agent to transfer Registrable Securities without legend upon sale by
the Holder of such Registrable Securities under a Registration Statement; and

(q)        if any Holder could reasonably be deemed to be an “underwriter,” as
defined in Section 2(a)(11) of the Securities Act, in connection with a
Registration Statement and any amendment or supplement thereof (a “Holder
Underwriter Registration Statement”), then the Partnership will reasonably
cooperate with such Holder in allowing such Holder to conduct customary
“underwriter’s due diligence” with respect to the Partnership and satisfy its
obligations in respect thereof. In addition, at any Holder’s request, the
Partnership will furnish to such Holder, on the date of the effectiveness of the
Holder Underwriter Registration Statement and thereafter from time to time on
such dates as such Holder may reasonably request (provided that such request
shall not be more frequently than on an annual basis unless such Holder is
offering Registrable Securities pursuant to a Holder Underwriter Registration
Statement), (i) a “comfort letter”, dated such date, from the Partnership’s
independent certified public accountants in form and substance as has been
customarily given by independent certified public accountants to underwriters in
Underwritten Offerings of securities by the Partnership, addressed to such
Holder, (ii) an opinion, dated as of such date, of counsel representing the
Partnership for purposes of the Holder Underwriter Registration Statement, in
form, scope and substance as has been customarily given in Underwritten
Offerings of securities by the Partnership, accompanied by standard “10b-5”
negative assurance for such offerings, addressed to such Holder and (iii) a
standard officer’s certificate from the chief executive officer or chief
financial officer, or other officers serving such functions, of the General
Partner addressed to the Holder, as has been customarily given by such officers
in Underwritten Offerings of securities by the Partnership. The Partnership will
also use its reasonable efforts to provide such Holder with an opportunity to
review and comment upon any such Holder Underwriter Registration Statement, and
any amendments and supplements thereto, prior to its filing with the Commission.

 

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(r)        make generally available to its security holders as soon as
practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with, and in the
manner provided by, the provisions of Rule 158 under the Securities Act)
covering a twelve-month period beginning not later than the first day of the
Partnership’s fiscal quarter next following the applicable Effective Date of a
Registration Statement.

Notwithstanding anything to the contrary in this Section 2.04, the Partnership
will not name a Holder as an underwriter (as defined in Section 2(a)(11) of the
Securities Act) in any Registration Statement or Holder Underwriter Registration
Statement, as applicable, without such Holder’s prior written consent. If the
staff of the Commission requires the Partnership to name any Holder as an
underwriter (as defined in Section 2(a)(11) of the Securities Act), and such
Holder does not consent thereto, then such Holder’s Registrable Securities shall
not be included on the applicable Registration Statement, and the Partnership
shall have no further obligations hereunder with respect to Registrable
Securities held by such Holder, unless such Holder has not had an opportunity to
conduct customary underwriter’s due diligence as set forth in subsection (q) of
this Section 2.04 with respect to the Partnership at the time such Holder’s
consent is sought.

Each Selling Holder, upon receipt of notice from the Partnership of the
happening of any event of the kind described in subsection (f) of this
Section 2.04, shall forthwith discontinue offers and sales of the Registrable
Securities by means of a prospectus or prospectus supplement until such Selling
Holder’s receipt of the copies of the supplemented or amended prospectus
contemplated by subsection (f) of this Section 2.04 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 by the Partnership, such
Selling Holder will, or will request the Managing Underwriter or Managing
Underwriters, if any, to 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 Holder’s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.

From and after the C-Corp Conversion, the General Partner shall assume all of
the obligations of the Partnership set forth in this Agreement.

Section 2.05    Cooperation by Holders. The Partnership shall have no obligation
to include Registrable Securities of a Holder in a Registration Statement or in
an Underwritten Offering pursuant to Section 2.03(a) if such Holder has failed
to timely furnish such information that the Partnership determines, after
consultation with its counsel, is reasonably required in order for any
registration statement or prospectus supplement, as applicable, to comply with
the Securities Act. To the extent the Partnership requires any information from
any Holder for inclusion in a Registration Statement, it shall deliver a written
notice to such Holder requesting such Holder to deliver such information within
five (5) Business Days of the receipt by such Holder of such written notice.

Section 2.06    Restrictions on Public Sale by Holders of Registrable
Securities. Each Holder of Registrable Securities who is participating in an
Underwritten Offering and is included in a Registration Statement agrees to
enter into a customary letter agreement with underwriters providing that such
Holder will not effect any public sale or distribution of Registrable Securities

 

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during the 45 calendar day period beginning on the date of a prospectus or
prospectus supplement filed with the Commission with respect to the pricing of
such Underwritten Offering; provided, however, that, notwithstanding the
foregoing, (i) the duration of the foregoing restrictions shall be no longer
than the duration of the shortest restriction imposed by the Underwriters on the
Partnership or the officers, directors or any other Affiliate of the Partnership
on whom a restriction is imposed (and in any event, no more than 45 calendar
days), (ii) any release shall be made pro rata to all Holders subject to similar
lock-up agreements and (iii) the restrictions set forth in this Section 2.06
shall not apply to any Registrable Securities that are included in such
Underwritten Offering by such Holder.

Section 2.07    Expenses.

(a)        Certain Definitions. “Registration Expenses” shall not include
Selling Expenses but otherwise means all expenses incident to the Partnership’s
performance under or compliance with this Agreement to effect the Registration
of Registrable Securities on a Registration Statement pursuant to Section 2.01,
a Piggyback Registration pursuant to Section 2.02, or an Underwritten Offering
pursuant to Section 2.03, and the disposition of such Registrable Securities,
including, without limitation, all costs and expenses related to any roadshows
conducted in connection with the marketing of any Underwritten Offering, all
registration, filing, securities exchange listing and National Securities
Exchange fees, all registration, filing, qualification and other fees and
expenses of complying with securities or blue sky laws, fees of the Financial
Industry Regulatory Authority, fees of transfer agents and registrars, all word
processing, duplicating and printing expenses, and the fees and disbursements of
counsel and independent public accountants for the Partnership, including the
expenses of any special audits or “cold comfort” letters required by or incident
to such performance and compliance. Registration Expenses shall also include the
reasonable fees and expenses of one outside legal counsel to the Selling
Holders. “Selling Expenses” means all underwriting fees, discounts and selling
commissions and transfer taxes allocable to the sale of the Registrable
Securities.

(b)        Expenses. The Partnership will pay all reasonable Registration
Expenses, as determined in good faith, in connection with a Shelf Registration,
a Piggyback Registration or an Underwritten Offering, whether or not any sale is
made pursuant to such Shelf Registration, Piggyback Registration or Underwritten
Offering. Each Selling Holder 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 2.07(a) and Section 2.08, the
Partnership shall not be responsible for professional fees (including legal
fees) incurred by Holders in connection with the exercise of such Holders’
rights hereunder.

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 each Selling Holder thereunder, its directors,
officers, managers, partners, employees, members, representatives and agents and
each Person, if any, who controls such Selling Holder within the meaning of the
Securities Act and the Exchange Act, and their respective directors, officers,
managers, partners, employees, members, representatives or agents (collectively,
the “Selling Holder Indemnified Persons”), against any losses, claims, damages,

 

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expenses or liabilities (including reasonable attorneys’ fees and expenses)
(collectively, “Losses”), joint or several, to which such Selling Holder
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
(i) 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 (which, for the avoidance of doubt, includes
documents incorporated by reference in) the applicable Registration Statement or
other registration statement contemplated by this Agreement, any preliminary
prospectus, prospectus supplement or final prospectus contained therein, or any
amendment or supplement thereof, or any free writing prospectus relating
thereto, or any filing made in connection with the qualification of the offering
under the securities or other “blue sky” laws of any jurisdiction in which
Registrable Securities are offered, 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 or (ii) any violation or alleged violation by the Partnership of this
Agreement, the Securities Act or the Exchange Act, and will reimburse such
Selling Holder Indemnified Person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating, defending or
resolving 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 solely upon an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity with
information furnished by such Selling Holder Indemnified Person in writing
specifically for use in the applicable Registration Statement or other
registration statement, or prospectus supplement, as applicable. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Selling Holder Indemnified Person, and shall survive the
transfer of such securities by such Selling Holder.

(b)        By Each Selling Holder. Each Selling Holder agrees severally and not
jointly or jointly and severally to indemnify and hold harmless the Partnership,
the General Partner and the General Partner’s directors, officers, employees and
agents and each Person, who, directly or indirectly, controls the Partnership
within the meaning of the Securities Act or of the Exchange Act to the same
extent as the foregoing indemnity from the Partnership to the Selling Holders,
but only with respect to Losses incurred solely and to the extent of information
regarding such Selling Holder furnished in writing by or on behalf of such
Selling Holder expressly for inclusion in a Registration Statement or any other
registration statement contemplated by this Agreement, any preliminary
prospectus, prospectus supplement or final prospectus contained therein, or any
amendment or supplement thereto or any free writing prospectus relating thereto;
provided, however, that the liability of each Selling Holder shall not be
greater in amount than the dollar amount of the proceeds (net of any Selling
Expenses) received by such Selling Holder from the sale of the Registrable
Securities giving rise to such indemnification.

(c)        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 to so 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(c), except to the
extent that the indemnifying party is materially prejudiced by such failure. In
any action brought against any indemnified party, it shall notify the
indemnifying party of the commencement thereof. The

 

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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 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 satisfactory 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 a separate counsel 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 may be entitled to indemnification
hereunder without the prior written consent of the indemnified party, unless the
settlement thereof imposes no liability or obligation on, includes a complete
and unconditional release from liability of, and does not contain any admission
of wrongdoing by, the indemnified party.

(d)        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 Losses in such proportion
as is appropriate to reflect the relative fault of the indemnifying party, on
the one hand, and of the indemnified party, on the other hand, 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 any Selling Holder be required to contribute an aggregate amount in excess
of the dollar amount of proceeds (net of Selling Expenses) received by such
Selling Holder 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 in writing, 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, defending or resolving 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)

 

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shall be entitled to contribution from any Person who is not guilty of such
fraudulent misrepresentation.

(e)        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 resale of
the Registrable Securities without registration, the Partnership agrees to use
its reasonable best efforts 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
(or any similar provision then in effect), 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 Holder owns any Registrable Securities, furnish (i) to the
extent accurate, forthwith upon request, a written statement of the Partnership
that it has complied with the reporting requirements of Rule 144 under the
Securities Act (or any similar provision then in effect), the Securities Act and
the Exchange Act and (ii) unless otherwise available via the Commission’s EDGAR
filing system, to such Holder 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 Holder may reasonably request in availing itself of
any rule or regulation of the Commission allowing such Holder to sell any such
securities without registration.

Section 2.10    Transfer or Assignment of Registration Rights. The rights to
cause the Partnership to register Registrable Securities under this Article II
may be transferred or assigned by each Holder to one or more transferees or
assignees of Registrable Securities or securities convertible into Registrable
Securities; provided, however, that (a) unless any such transferee or assignee
is an Affiliate of, and after such transfer or assignment continues to be an
Affiliate of, such Holder, the amount of Registrable Securities or securities
convertible into Registrable Securities transferred or assigned to such
transferee or assignee shall represent at least $5 million of Registrable
Securities (on an as-converted basis where applicable (determined by multiplying
the number of Registrable Securities (on an as-converted basis) owned by the
Average VWAP for the ten (10) Trading Days preceding the date of such transfer
or assignment)), or such lesser amount if it constitutes the remaining holdings
of the Holder and its Affiliates, (b) 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 (c) each such
transferee or assignee assumes in writing responsibility for its portion of the
obligations of such transferring Holder under this Agreement.

Section 2.11    Limitation on Subsequent Registration Rights. From and after the
date hereof, the Partnership shall not, without the prior written consent of the
Holders of at least the

 

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Registrable Securities Required Voting Percentage, enter into any agreement with
any current or future holder of any securities of the Partnership that would
allow such current or future holder to require the Partnership to include
securities in any Registration Statement filed by the Partnership for Other
Holders on a basis other than pari passu with, or expressly subordinate to, the
piggyback rights of the Holders of Registrable Securities hereunder; provided,
that in no event shall the Partnership enter into any agreement that would
permit another holder of securities of the Partnership to participate on a pari
passu basis (in terms of priority of cut-back based on advice of underwriters)
with a Purchaser requesting registration or takedown in an Underwritten Offering
pursuant to Section 2.03(a).

ARTICLE III.

MISCELLANEOUS

Section 3.01    Communications. All notices, demands and other communications
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, personal delivery or (in the case of any notice given by the
Partnership to the Purchasers) email to the following addresses:

 

  (a)

If to the Purchasers, to the addresses set forth on Schedule A.

 

  (b)

If to the Partnership or the General Partner:

StoneMor Partners L.P.

3600 Horizon Blvd.

Trevose, PA 19053

Attention: General Counsel

Email: aso@stonemor.com

with a copy to (which shall not constitute notice):

Vinson & Elkins L.L.P.

1001 Fannin Street

Suite 2500

Houston TX 77002-6760

Attention: David Oelman

Facsimile: (713) 615-5620

Email: doelman@velaw.com

or to such other address as the Partnership or the Purchasers may designate to
each other in writing from time to time or, if to a transferee or assignee of
the Purchasers or any transferee or assignee thereof, to such transferee or
assignee at the address provided pursuant to Section 2.10. 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 receipt requested, or regular mail, if mailed; upon
actual receipt of the facsimile or email copy, if sent via facsimile or email;
and upon actual receipt when delivered to an air courier guaranteeing overnight
delivery.

 

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Section 3.02    Binding Effect. This Agreement shall be binding upon the
Partnership, each of the Purchasers and their respective successors and
permitted assigns, including subsequent Holders of Registrable Securities to the
extent permitted herein. 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 3.03    Assignment of Rights. Except as provided in Section 2.10,
neither this Agreement nor any of the rights, benefits or obligations hereunder
may be assigned or transferred, by operation of law or otherwise, by any party
hereto without the prior written consent of the other party.

Section 3.04    Recapitalization, Exchanges, Etc. Affecting Units. The
provisions of this Agreement shall apply to the full extent set forth herein
with respect to any and all units of the Partnership or any successor or assign
of the Partnership (whether by merger, acquisition, consolidation,
reorganization, sale of assets or otherwise) that may be issued in respect of,
in exchange for or in substitution of, the Registrable Securities, and shall be
appropriately adjusted for combinations, unit splits, recapitalizations, pro
rata distributions of units and the like occurring after the date of this
Agreement.

Section 3.05    Aggregation of Registrable Securities. All Registrable
Securities held or acquired by Persons who are Affiliates of one another shall
be aggregated together for the purpose of determining the availability of any
rights under this Agreement.

Section 3.06    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 seek 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.

Section 3.07    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 3.08    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 Delaware 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 Delaware, and the parties hereto hereby

 

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irrevocably submit to the non-exclusive jurisdiction of any federal or state
court located within the State of Delaware 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 3.09    Waiver of Jury Trial. THE PARTIES TO THIS AGREEMENT EACH HEREBY
WAIVE, AND AGREE TO CAUSE THEIR 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.

Section 3.10    Entire Agreement. This Agreement, the Purchase Agreement and the
other agreements and documents referred to herein and therein 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 in the Purchase Agreement with respect
to the rights granted by the Partnership or any of its Affiliates or the
Purchasers or any of their respective Affiliates set forth herein or therein.
This Agreement, the Purchase Agreement 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 3.11    Amendment. This Agreement may be amended only by means of a
written amendment signed by the Partnership and the Holders of at least the
Registrable Securities Required Voting Percentage; provided, however, that no
such amendment shall adversely affect the rights of any Holder hereunder without
the consent of such Holder. Any amendment, supplement or modification of or to
any provision of this Agreement, any waiver of any provision of this Agreement,
and any consent to any departure by the Partnership or any Holder from the terms
of any provision of this Agreement shall be effective only in the specific
instance and for the specific purpose for which such amendment, supplement,
modification, waiver or consent has been made or given.

Section 3.12    No Presumption. This Agreement has 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 3.13    Obligations Limited to Parties to Agreement. Each of the parties
hereto covenants, agrees and acknowledges that, other than as set forth herein,
no Person other than the Purchasers, the Holders, their respective permitted
assignees and the Partnership shall have any obligation hereunder and that,
notwithstanding that one or more of such Persons may be a corporation,
partnership or limited liability company, no recourse under this Agreement or
under any documents or instruments delivered in connection herewith shall be had
against any former, current or future director, officer, employee, agent,
general or limited partner, manager, member, stockholder or Affiliate of any of
such Persons or their respective permitted assignees, 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
such Persons or any of their respective assignees, 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 such Persons or their respective permitted assignees under this
Agreement or any documents or instruments delivered in connection herewith or
for any claim based on, in respect of or by reason of such obligation or its
creation, except, in each case, for any assignee of any Purchaser or a Holder
hereunder.

Section 3.14    Interpretation. Article, Section and Schedule references in this
Agreement are references to the corresponding Article, Section or Schedule to
this Agreement, unless otherwise specified. All 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 Partnership has an obligation
under this Agreement, the expense of complying with that obligation shall be an
expense of the Partnership 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 Holder, such action shall be in such
Holder’s sole discretion, unless otherwise specified in this Agreement. If any
provision in this Agreement is held to be illegal, invalid, not binding or
unenforceable, (a) such provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid, not binding or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions shall remain in full force and effect, and (b) the parties
hereto shall negotiate in good faith to modify this Agreement 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 this Agreement, 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. 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

 

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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.

[Remainder of Page Left Intentionally Blank]

 

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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/ Joseph M. Redling

Name: Joseph M. Redling

Title: President and Chief Executive Officer

 

STONEMOR GP, LLC

 

By: STONEMOR GP HOLDINGS, LLC, its sole member

 

By:  

/s/ Joseph M. Redling

Name: Joseph M. Redling

Title: President and Chief Executive Officer

[Signature page to Registration Rights Agreement]

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PURCHASERS AXAR SMP SPV LLC By: Axar Capital Management LP, its Investment
Manager By:  /s/ Andrew Axelrod                                 Name: Andrew
Axelrod Title: Authorized Signatory STAR V PARTNERS LLC By: Axar Capital
Management LP, its Investment Manager By:  /s/ Andrew
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:  /s/ Andrew
Axelrod                                 Name: Andrew Axelrod Title: Authorized
Signatory

[Signature page to Registration Rights Agreement]

 

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/s/ David Miller

 

David Miller

[Signature page to Registration Rights Agreement]

 

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MANGROVE PARTNERS MPF INVESTCO 6, LLC By: The Mangrove Partners Fund (Cayman
Drawdown), L.P., its sole member By: Mangrove Partners, its investment manager
By:  /s/ Ward Dietrich                                     Name: Ward Dietrich
Title: Authorized Person MPF INVESTCO 7, LLC By: The Mangrove Partners i-Feeder
1, Ltd., its sole member By: Mangrove Partners, its investment manager By:  /s/
Ward Dietrich                                     Name: Ward Dietrich Title:
Authorized Person MPF INVESTCO 8, LLC By: The Mangrove Partners Fund (Cayman),
Ltd., its sole member By: Mangrove Partners, its investment manager By:  /s/
Ward Dietrich                                     Name: Ward Dietrich Title:
Authorized Person

[Signature page to Registration Rights Agreement]

 

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THE MANGROVE PARTNERS FUND, L.P. By: Mangrove Partners, its investment manager
By:  /s/ Ward Dietrich                                     Name: Ward Dietrich
Title: Authorized Person

THE MANGROVE PARTNERS FUND

(CAYMAN PARTNERSHIP), L.P.

By: Mangrove Partners, its investment manager By:  /s/ Ward
Dietrich                                     Name: Ward Dietrich Title:
Authorized Person

[Signature page to Registration Rights Agreement]

 

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SCHEDULE A

Purchaser Name; Notice and Contact Information

 

Purchaser    Contact Information

SMP 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

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

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

David Miller

  

1451 Brandywine lane

Wayne, PA 19087

Email: david@chesterbrookfinancial.com

MPF InvestCo 6, LLC

  

c/o Mangrove Partners

645 Madison Avenue, 14th Floor

New York, NY 10022

Attention: Ward Dietrich

Email: WDietrich@MangrovePartners.com

MPF InvestCo 7, LLC

  

c/o Mangrove Partners

645 Madison Avenue, 14th Floor

New York, NY 10022

Attention: Ward Dietrich

Email: WDietrich@MangrovePartners.com

MPF InvestCo 8, LLC

  

c/o Mangrove Partners

645 Madison Avenue, 14th Floor

New York, NY 10022

Attention: Ward Dietrich

Email: WDietrich@MangrovePartners.com

The Mangrove Partners Fund, L.P.

  

c/o Mangrove Partners

645 Madison Avenue, 14th Floor

New York, NY 10022

Attention: Ward Dietrich

Email: WDietrich@MangrovePartners.com

 

A-1

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The Mangrove Partners Fund (Cayman

Partnership), L.P.

  

c/o Mangrove Partners

645 Madison Avenue, 14th Floor

New York, NY 10022

Attention: Ward Dietrich

Email: WDietrich@MangrovePartners.com

 

A-2

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SCHEDULE B

PURCHASERS DEEMED TO HAVE DELIVERED THE PIGGYBACK OPT-OUT

NOTICE

None.

 

B-1