<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>3
<FILENAME>nov28ex41.txt
<DESCRIPTION>EXHIBIT 4.1
<TEXT>
                                                                     Exhibit 4.1
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                        SERVICE CORPORATION INTERNATIONAL



     $50,000,000 Floating Rate Series A Senior Notes due November 28, 2011

     $150,000,000 Floating Rate Series B Senior Notes due November 28, 2011




                          -----------------------------
                             NOTE PURCHASE AGREEMENT
                          -----------------------------





                             Dated November 28, 2006





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<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

1.    AUTHORIZATION OF NOTES..................................................1

2.    SALE AND PURCHASE OF NOTES..............................................2

3.    CLOSING.................................................................2

4.    CONDITIONS TO CLOSING...................................................2

      4.1.   Representations and Warranties...................................2
      4.2.   Performance; No Default..........................................2
      4.3.   Compliance Certificates..........................................3
      4.4.   Opinions of Counsel..............................................3
      4.5.   Purchase Permitted By Applicable Law, Etc........................3
      4.6.   Sale of Other Notes..............................................4
      4.7.   Payment of Special Counsel Fees..................................4
      4.8.   Guaranty Agreement...............................................4
      4.9.   Sharing Agreement................................................4
      4.10.  Other Financing Arrangements.....................................4
      4.11.  Consummation of Merger...........................................4
      4.12.  Private Placement Number.........................................4
      4.13.  Changes in Corporate Structure...................................5
      4.14.  Funding Instructions.............................................5
      4.15.  Offeree Letter...................................................5
      4.16.  Proceedings and Documents........................................5

5.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................5

      5.1.   Organization; Power and  Authority...............................5
      5.2.   Authorization, Etc...............................................6
      5.3.   Disclosure.......................................................6
      5.4.   Organization and Ownership of Shares of Subsidiaries;
             Affiliates; Restrictive Agreements...............................6
      5.5.   Financial Statements; Material Liabilities.......................7
      5.6.   Compliance with Laws, Other Instruments, Etc.....................7
      5.7.   Governmental Authorizations, Etc.................................8
      5.8.   Litigation; Observance of Agreements, Statutes and Orders........8
      5.9.   Taxes............................................................8
      5.10.  Title to Property; Leases........................................9
      5.11.  Licenses, Permits, Etc...........................................9
      5.12.  Compliance with ERISA............................................9
      5.13.  Private Offering by the Company.................................10
      5.14.  Use of Proceeds; Margin Regulations.............................11
      5.15.  Existing Indebtedness; Future Liens.............................11
      5.16.  Foreign Assets Control Regulations, Etc.........................11
      5.17.  Status under Certain Statutes...................................12
      5.18.  Environmental Matters...........................................12

                                       i

<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

                                                                            PAGE

      5.19.  Ranking of Obligations..........................................13

6.    REPRESENTATIONS OF THE PURCHASERS......................................13

      6.1.   Purchase for Investment.........................................13
      6.2.   Source of Funds.................................................13

7.    INFORMATION AS TO COMPANY..............................................15

      7.1.   Financial and Business Information..............................15
      7.2.   Officer's Certificate...........................................18
      7.3.   Visitation......................................................18

8.    PAYMENT AND PREPAYMENT OF THE NOTES....................................19

      8.1.   Maturity........................................................19
      8.2.   Optional Prepayments............................................19
      8.3.   Prepayment of Notes Upon Change in Control......................19
      8.4.   Allocation of Partial Prepayments...............................21
      8.5.   Maturity; Surrender, Etc........................................21
      8.6.   Purchase of Notes...............................................21
      8.7.   Interest Rate and Interest Payment Dates........................21
      8.8.   Yield Protection and Illegality.................................23

9.    AFFIRMATIVE COVENANTS..................................................26

      9.1.   Compliance with Law.............................................26
      9.2.   Insurance.......................................................26
      9.3.   Maintenance of Properties.......................................27
      9.4.   Payment of Taxes and Claims.....................................27
      9.5.   Corporate Existence, Etc........................................27
      9.6.   Books and Records...............................................27
      9.7.   Additional Subsidiary Guarantors................................28
      9.8.   Priority of Obligations.........................................28

10.   NEGATIVE COVENANTS.....................................................28

      10.1.  Indebtedness....................................................28
      10.2.  Limitations on Liens............................................31
      10.3.  Limit on Preferred Equity Issuance..............................31
      10.4.  Limitations on Sale/Leaseback Transactions......................32
      10.5.  Fundamental Changes; Line of Business...........................32
      10.6.  Investments, Loans, Advances, Guarantees and Acquisitions.......33
      10.7.  Limitation on Asset Sales.......................................35
      10.8.  Swap Agreements.................................................36
      10.9.  Restricted Payments.............................................36
      10.10. Transactions with Affiliates....................................38
      10.11. Restrictive Agreements; Maintenance of Most Favored Lender
             Status..........................................................38
      10.12. Financial Covenants.............................................39

                                       ii

<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

                                                                            PAGE

      10.13. Terrorism Sanctions Regulations.................................40

11.   EVENTS OF DEFAULT......................................................40

12.   REMEDIES ON DEFAULT, ETC...............................................43

      12.1.  Acceleration....................................................43
      12.2.  Other Remedies..................................................43
      12.3.  Rescission......................................................44
      12.4.  No Waivers or Election of Remedies, Expenses, Etc...............44

13.   REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES..........................44

      13.1.  Registration of Notes...........................................44
      13.2.  Transfer and Exchange of Notes..................................44
      13.3.  Replacement of Notes............................................45

14.   PAYMENTS ON NOTES......................................................45

      14.1.  Place of Payment................................................45
      14.2.  Home Office Payment.............................................46
      14.3.  Record Date.....................................................46

15.   EXPENSES, ETC..........................................................46

      15.1.  Transaction Expenses............................................46
      15.2.  Survival........................................................47

16.   SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT...........47

17.   AMENDMENT AND WAIVER...................................................47

      17.1.  Requirements....................................................47
      17.2.  Solicitation of Holders of Notes................................47
      17.3.  Binding Effect, etc.............................................48
      17.4.  Notes Held by Company, etc......................................48

18.   NOTICES................................................................48

19.   REPRODUCTION OF DOCUMENTS..............................................49

20.   CONFIDENTIAL INFORMATION...............................................49

21.   SUBSTITUTION OF PURCHASER..............................................50

22.   MISCELLANEOUS..........................................................51

      22.1.  Successors and Assigns..........................................51
      22.2.  Payments Due on Non-Business Days...............................51
      22.3.  Accounting Terms................................................51
      22.4.  Severability....................................................51
      22.5.  Construction, etc...............................................51

                                      iii

<PAGE>

                               TABLE OF CONTENTS
                                  (continued)
                                                                            PAGE

      22.6.  Counterparts....................................................52
      22.7.  Governing Law...................................................52
      22.8.  Jurisdiction and Process; Waiver of Jury Trial..................52

                                       iv

<PAGE>

Schedule A          --    Information Relating to Purchasers

Schedule B          --    Defined Terms

Schedule 4.8        --    Initial Guarantors

Schedule 5.3        --    Disclosure Materials

Schedule 5.4        --    Subsidiaries of the Company and Ownership of
                          Subsidiary Stock

Schedule 5.5        --    Financial Statements

Schedule 5.8        --    Material Litigation

Schedule 5.15       --    Existing Indebtedness

Schedule 10.2       --    Existing Liens

Schedule 10.6       --    Existing Investments

Schedule 10.7             Merger-Related Asset Sales

Schedule            --    Restrictive Agreements
10.11(a)

Exhibit 1(a)        --    Form of Series A Floating Rate Senior Note due
                          November 28, 2011

Exhibit 1(b)        --    Form of Series B Floating Rate Senior Note due
                          November 28, 2011

Exhibit             --    Form of Opinion of Special Counsel for the Company
4.4(a)(i)

Exhibit             --    Form of Opinion of General Counsel for the Company
4.4(a)(ii)

Exhibit             --    Form of Opinion of Special Iowa Counsel to certain of
4.4(a)(iii)               the Initial Guarantors

Exhibit 4.4(b)      --    Form of Opinion of Special Counsel for the Purchasers

Exhibit 4.8         --    Form of Guaranty Agreement

Exhibit 4.9         --    Form of Sharing Agreement

v

<PAGE>

                        Service Corporation International
                               1929 Allen Parkway
                              Houston, Texas 77019
                            Facsimile: (713) 525-5596
      $50,000,000 Floating Rate Series A Senior Notes due November 28, 2011
     $150,000,000 Floating Rate Series B Senior Notes due November 28, 2011





                                                               November 28, 2006



To Each of The Purchasers Listed in
Schedule A Hereto:

Ladies and Gentlemen:

     SERVICE CORPORATION INTERNATIONAL,  a Texas corporation (together with its
permitted successors and assigns hereunder, the "COMPANY"),  agrees with each of
the purchasers  whose names appear at the end hereof (each,  a "PURCHASER"  and,
collectively, the "PURCHASERS") as follows:

1.   AUTHORIZATION OF NOTES.

     The Company will authorize the issue and sale of:

          (a) $50,000,000 aggregate principal amount of its Floating Rate Series
     A  Senior  Notes  due  November  28,  2011   (including   any   amendments,
     restatements or modifications  from  time  to  time, the  "SERIES A NOTES",
     such term to  include  any  such  notes  issued  in  substitution  therefor
     pursuant to Section 13 of this Agreement); and

          (b)  $150,000,000  aggregate  principal  amount of its  Floating  Rate
     Series B Senior  Notes due  November 28, 2011  (including  any  amendments,
     restatements or modifications from time to time, the "SERIES B NOTES", such
     term to include any such notes issued in substitution  therefor pursuant to
     Section 13 of this  Agreement  and,  together with the Series A Notes,  the
     "NOTES").  The Series A Notes and the Series B Notes shall be substantially
     in the forms set out in Exhibit 1(a) and Exhibit 1(b),  respectively,  with
     such changes  therefrom,  if any, as may be approved by the  Purchasers and
     the Company. Certain capitalized and other terms used in this Agreement are
     defined in Schedule B; and  references to a "Schedule" or an "Exhibit" are,
     unless  otherwise  specified,  to a Schedule or an Exhibit attached to this
     Agreement.

<PAGE>

2.   SALE AND PURCHASE OF NOTES.

     Subject to the terms  and  conditions of this  Agreement,  the Company will
issue and sell to each  Purchaser  and each  Purchaser  will  purchase  from the
Company, at the Closing provided for in Section 3, Notes in the principal amount
and in the Series specified  opposite such Purchaser's name in Schedule A at the
purchase  price  of  100%  of the  principal  amount  thereof.  The  Purchasers'
obligations  hereunder  are several and not joint  obligations  and no Purchaser
shall have any liability to any Person for the performance or non-performance of
any obligation by any other Purchaser hereunder.

3.   CLOSING.

     The sale and purchase  of the Notes to be purchased by each Purchaser shall
occur at the offices of Bingham  McCutchen  LLP, 399 Park Avenue,  New York,  NY
10022-4689,  at 10:00  A.M.,  New York Time,  at a closing  (the  "CLOSING")  on
November  28,  2006 or on such  other  Business  Day  thereafter  on or prior to
November 28, 2006 as may be agreed upon by the Company and the Purchasers  (such
date,  the  "CLOSING  DATE").  At the Closing the Company  will  deliver to each
Purchaser  the Notes to be purchased  by such  Purchaser in the form of a single
Note (of each Series,  if such Purchaser is purchasing Notes of both Series) (or
such  greater  number of Notes in  denominations  of at least  $100,000  as such
Purchaser may request) dated the Closing Date and registered in such Purchaser's
name (or in the name of its nominee),  against delivery by such Purchaser to the
Company  or its  order  of  immediately  available  funds in the  amount  of the
purchase price therefor by wire transfer of immediately  available funds for the
account of the Company to account number  0010-126-6337  at JPMorgan Chase Bank,
N.A.,  Houston,  Texas  ABA No.  021-000-021  Credit:  SCI  Funeral  &  Cemetery
Purchasing  Cooperative,  Inc.  Reference:  Note Purchase  Agreement.  If at the
Closing the Company shall fail to tender such Notes to any Purchaser as provided
above in this Section 3, or any of the  conditions  specified in Section 4 shall
not have been fulfilled to such Purchaser's satisfaction,  such Purchaser shall,
at its election,  be relieved of all further  obligations  under this Agreement,
without  thereby  waiving any rights such  Purchaser  may have by reason of such
failure or such nonfulfillment.

4.   CONDITIONS TO CLOSING.

     Each  Purchaser's  obligation to purchase and pay for the  Notes to be sold
to  such  Purchaser  at the  Closing  is  subject  to the  fulfillment  to  such
Purchaser's  satisfaction,  prior  to  or  at  the  Closing,  of  the  following
conditions:

     4.1. REPRESENTATIONS AND WARRANTIES.

     The  representations  and warranties of the Company in this Agreement shall
be correct when made and at the time of the Closing.

     4.2. PERFORMANCE; NO DEFAULT.

     The Company  shall  have  performed and complied  with all  agreements  and
conditions contained in this Agreement required to be performed or complied with
by it prior to or at the Closing and after  giving  effect to the issue and sale
of the Notes (and the  application of the

                                       2

<PAGE>

proceeds thereof as contemplated by Section 5.14) no Default or Event of Default
shall have occurred and be  continuing.  Neither the Company nor any  Subsidiary
shall have entered into any  transaction  since the date of the Memorandum  that
would have been  prohibited  by Section 10 had such Section  applied  since such
date.

     4.3. COMPLIANCE CERTIFICATES.

          (a) OFFICER'S  CERTIFICATE.  The Company shall have  delivered to such
     Purchaser an Officer's Certificate, dated the Closing Date, certifying that
     the conditions specified in Sections 4.1, 4.2 and 4.13 have been fulfilled.

          (b) SECRETARY'S CERTIFICATE.  The Company shall have delivered to such
     Purchaser a certificate of its Secretary or Assistant Secretary,  dated the
     Closing Date,  certifying as to the resolutions  attached thereto and other
     corporate proceedings relating to the authorization, execution and delivery
     of the Notes and this Agreement.

          (c) INITIAL GUARANTORS' SECRETARY'S  CERTIFICATE.  Each of the Initial
     Guarantors shall have delivered to each Purchaser a certificate  certifying
     as to the  resolutions  attached  thereto  and  other  corporate  or  other
     proceedings  relating to the authorization,  execution and delivery by such
     Initial Guarantor of the Guaranty Agreement.

     4.4. OPINIONS OF COUNSEL.

     Such  Purchaser  shall  have  received  opinions  in  form  and   substance
satisfactory  to such  Purchaser,  dated  the  Closing  Date (a) (i) from  Locke
Liddell  & Sapp  LLP,  counsel  for  the  Company  and  certain  of the  Initial
Guarantors,  covering  the matters set forth in Exhibit  4.4(a)(i)  and covering
such other  matters  incident to the  transactions  contemplated  hereby as such
Purchaser  or its  counsel  may  reasonably  request  (and  the  Company  hereby
instructs its counsel to deliver such opinion to the Purchasers),  (ii) James M.
Shelger,  general  counsel to the  Company  covering  the  matters  set forth in
Exhibit  4.4(a)(ii) and covering such other matters incident to the transactions
contemplated hereby as such Purchaser or its counsel may reasonably request (and
the  Company  hereby  instructs  its  counsel  to  deliver  such  opinion to the
Purchasers) and (iii) from Davis, Brown,  Koehn, Shors & Roberts,  P.C., special
Iowa  counsel to certain of the  Initial  Guarantors,  covering  the matters set
forth in Exhibit  4.4(a)(iii)  and covering such other  matters  incident to the
transactions contemplated hereby as such Purchaser or its counsel may reasonably
request (and the Company hereby instructs its counsel to deliver such opinion to
the  Purchasers)  and (b) from Bingham  McCutchen LLP, the  Purchasers'  special
counsel in  connection  with such  transactions,  substantially  in the form set
forth in  Exhibit  4.4(b)  and  covering  such other  matters  incident  to such
transactions as such Purchaser may reasonably request.

     4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC.

     On  the  Closing  Date  such  Purchaser's  purchase  of Notes  shall (a) be
permitted  by the laws  and  regulations  of each  jurisdiction  to  which  such
Purchaser is subject, without recourse to provisions (such as section 1405(a)(8)
of the New York  Insurance  Law)  permitting  limited  investments  by insurance
companies without restriction as to the character of the particular  investment,
(b) not violate any applicable law or regulation (including, without limitation,
Regulation  T, U or X of the Board of Governors of the Federal  Reserve  System)
and (c) not

                                       3

<PAGE>

subject such Purchaser to any tax, penalty or liability under or pursuant to any
applicable law or  regulation,  which law or regulation was not in effect on the
date hereof. If requested by such Purchaser,  such Purchaser shall have received
an Officer's Certificate certifying as to such matters of fact as such Purchaser
may  reasonably  specify to enable such  Purchaser  to  determine  whether  such
purchase is so permitted.

      4.6.  SALE OF OTHER NOTES.

      Contemporaneously with the Closing  the Company  shall sell to  each other
Purchaser and each other  Purchaser  shall purchase the Notes to be purchased by
it at the Closing as specified in Schedule A.

      4.7.  PAYMENT OF SPECIAL COUNSEL FEES.

      Without limiting the  provisions of  Section 15.1,  the Company shall have
paid on or before the Closing Date the fees,  charges and  disbursements  of the
Purchasers'  special counsel  referred to in Section 4.4 to the extent reflected
in a statement of such counsel rendered to the Company at least one Business Day
prior to the Closing.

      4.8.  GUARANTY AGREEMENT.

      Each of the Persons  identified  on Schedule 4.8 hereto (all such Persons,
collectively, the "INITIAL GUARANTORS") shall have executed and delivered to the
Purchasers a Guaranty  Agreement  (as may be amended,  restated or modified from
time to time, the "GUARANTY  AGREEMENT"),  substantially  in the form of Exhibit
4.8.

      4.9.  SHARING AGREEMENT.

      The Company, the Initial Guarantors,  the Purchasers and all Persons party
to the Credit Agreement shall have executed the Sharing Agreement, substantially
in the form of Exhibit 4.9, among themselves and the others parties thereto, and
such Sharing Agreement shall be in full force and effect as of the Closing Date.

      4.10. OTHER FINANCING ARRANGEMENTS.

      The Company shall have  consummated the  transactions  contemplated by the
Credit  Agreement  and the Public Note  Agreement,  and the  Company  shall have
delivered to each Purchaser true and correct copies of the Credit  Agreement and
the Public Note Agreement,  each as in effect on the Closing Date,  certified as
such by a Responsible Officer.

      4.11. CONSUMMATION OF MERGER.

      All conditions precedent to the consummation of the Merger shall have been
satisfied (with the filing of the merger  certificate to occur immediately after
funding of the purchase of the Notes),  and the Company shall have  delivered to
each Purchaser a true and correct copy of the Merger Documents,  as in effect on
the Closing Date, certified as such by a Responsible Officer.

                                       4

<PAGE>

      4.12. PRIVATE PLACEMENT NUMBER.

      A Private  Placement  Number  issued by  Standard & Poor's  CUSIP  Service
Bureau (in  cooperation  with the SVO) shall have been  obtained  each Series of
Notes.

      4.13. CHANGES IN CORPORATE STRUCTURE.

      The Company shall not have changed its  jurisdiction of  incorporation  or
organization,  as applicable,  or been a party to any merger or consolidation or
succeeded to all or any substantial  part of the liabilities of any other entity
(other than as a result of the Merger),  at any time  following  the date of the
most recent financial statements referred to in Schedule 5.5.

      4.14. FUNDING INSTRUCTIONS.

      At least three  Business  Days prior to the Closing Date,  each  Purchaser
shall have received  written  instructions  signed by a  Responsible  Officer on
letterhead  of the Company  confirming  the  information  specified in Section 3
including (a) the name and address of the transferee  bank, (b) such  transferee
bank's ABA number and (c) the account  name and number  into which the  purchase
price for the Notes is to be deposited.

      4.15. OFFEREE LETTER.

      JPMorgan  Securities Inc. and Merrill Lynch & Co. shall have  delivered to
the Company,  its counsel,  each of the Purchasers and the  Purchasers'  special
counsel an offeree letter, in form and substance  satisfactory to each Purchaser
and the Company,  confirming the manner of the offering of the Notes by JPMorgan
Securities Inc. and Merrill Lynch & Co.

      4.16. PROCEEDINGS AND DOCUMENTS.

      All corporate and other  proceedings in connection  with the  transactions
contemplated  by this  Agreement and all documents and  instruments  incident to
such  transactions  shall be reasonably  satisfactory  to such Purchaser and its
special counsel,  and such Purchaser and its special counsel shall have received
all such counterpart originals or certified or other copies of such documents as
such Purchaser or such special counsel may reasonably request.

5.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY.(,)

      The Company  represents  and warrants to each  Purchaser  that,  as of the
Closing Date and after giving effect to the Merger:

      5.1.  ORGANIZATION; POWER AND AUTHORITY.

      Each of the Company and the Initial  Guarantors is a corporation  or other
entity duly organized,  validly  existing and in good standing under the laws of
its jurisdiction of organization,  and is duly qualified as a foreign entity and
is in good standing in each jurisdiction in which such qualification is required
by law,  other  than  those  jurisdictions  as to  which  the  failure  to be so
qualified  or in good  standing  could not,  individually  or in the  aggregate,
reasonably be expected to have a Material  Adverse  Effect.  Each of the Company
and the Initial Guarantors has the

                                       5

<PAGE>

corporate or other organizational power and authority to own or hold under lease
the properties it purports to own or hold under lease,  to transact the business
it  transacts  and  proposes to  transact,  and in the case of the  Company,  to
execute and deliver this  Agreement and the Notes and to perform the  provisions
hereof and thereof  and, in the case of each Initial  Guarantor,  to execute and
deliver the Guaranty Agreement and to perform the provisions thereof.

      5.2.  AUTHORIZATION, ETC.

          (a) This  Agreement  and the Notes  have been duly  authorized  by all
      necessary  corporate action on the part of the Company, and this Agreement
      constitutes,  and upon  execution  and  delivery  thereof each  Note  will
      constitute,   a  legal,   valid  and  binding  obligation of  the  Company
      enforceable  against the Company in  accordance  with its terms, except as
      such   enforceability   may  be  limited  by  (i)  applicable  bankruptcy,
      insolvency, reorganization, moratorium or other similar laws affecting the
      enforcement of creditors' rights generally and (ii) general  principles of
      equity  (regardless  of whether such  enforceability  is  considered  in a
      proceeding in equity or at law).

          (b) The Guaranty  Agreement has been duly  authorized by all necessary
      corporate action on the part of each Initial Guarantor party thereto,  and
      the Guaranty Agreement constitutes the legal, valid and binding obligation
      of such Initial  Guarantor enforceable  against such Initial  Guarantor in
      accordance with its terms, except as such enforceability may be limited by
      (i) applicable bankruptcy, insolvency, reorganization, moratorium or other
      similar laws affecting the enforcement of creditors' rights  generally and
      (ii)   general   principles   of  equity   (regardless  of  whether   such
      enforceability is considered in a proceeding in equity or at law).

      5.3.  DISCLOSURE.

      The  Company,  through its agents,  JPMorgan  Securities  Inc. and Merrill
Lynch & Co.,  has  delivered  to each  Purchaser  a copy of a Private  Placement
Memorandum,   dated  September,   2006  (the  "MEMORANDUM"),   relating  to  the
transactions  contemplated  hereby.  The  Memorandum  fairly  describes,  in all
material respects,  the general nature of the business and principal  properties
of the Company and its  Subsidiaries.  This  Agreement,  the  Memorandum and the
documents,  certificates or other writings  delivered to the Purchasers by or on
behalf of the Company in connection with the  transactions  contemplated  hereby
and identified in Schedule 5.3, and the financial  statements listed in Schedule
5.5 (this  Agreement,  the Memorandum and such documents,  certificates or other
writings and such  financial  statements  delivered to each  Purchaser  prior to
September  27,  2006  being  referred  to,  collectively,   as  the  "DISCLOSURE
DOCUMENTS"), taken as a whole, do not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein
not misleading in light of the circumstances  under which they were made. Except
as disclosed in the Disclosure  Documents,  since  December 31, 2005,  there has
been no change in the financial condition,  operations,  business, properties or
prospects of the Company or any Subsidiary  except changes that  individually or
in the aggregate  could not  reasonably  be expected to have a Material  Adverse
Effect.  There is no fact known to the Company that could reasonably be expected
to have a Material  Adverse  Effect that has not been set forth herein or in the
Disclosure Documents.

                                       6

<PAGE>

      5.4.  ORGANIZATION  AND  OWNERSHIP  OF SHARES OF SUBSIDIARIES; AFFILIATES;
RESTRICTIVE AGREEMENTS.

          (a)  Schedule  5.4  contains  (except as noted  therein)  complete and
      correct  lists (i) of the  Company's  Subsidiaries,  showing,  as to  each
      Subsidiary, the  correct  name thereof,  the jurisdiction of its organiza-
      tion,  and the percentage  of shares of each class of its capital stock or
      similar Equity Interests  outstanding  owned by the Company and each other
      Subsidiary, (ii) of the Company's Affiliates, other than Subsidiaries, and
      (iii) of the Company's directors and senior officers.

          (b) All of the  outstanding  shares of capital stock or similar Equity
      Interests  of each  Subsidiary shown in Schedule 5.4 as being owned by the
      Company and its Subsidiaries have been validly issued,  are fully paid and
      nonassessable  and are owned by the Company or another Subsidiary free and
      clear of any Lien (except as otherwise disclosed in Schedule 5.4).

          (c) Each  Subsidiary  identified in Schedule 5.4 is a  corporation  or
      other legal entity duly  organized,  validly existing and in good standing
      under the laws of its jurisdiction of  organization, and is duly qualified
      as a foreign corporation  or other legal entity and is in good standing in
      each  jurisdiction in which such  qualification  is required by law, other
      than those  jurisdictions as to which the failure to be so qualified or in
      good standing could not, individually  or in the aggregate,  reasonably be
      expected to have a Material  Adverse Effect.  Each such Subsidiary has the
      corporate  or other  power and  authority to own or hold  under  lease the
      properties  it  purports  to own or hold under lease and to  transact  the
      business it transacts and proposes to transact.

          (d) No  Subsidiary  is a party to, or otherwise  subject to any legal,
      regulatory,  contractual or other  restriction (other than this Agreement,
      the agreements listed on Schedule 5.4 and customary limitations imposed by
      corporate  law  or  similar  statutes)  restricting the  ability  of  such
      Subsidiary  to pay  dividends  out of  profits or make any  other  similar
      distributions  of profits to the  Company or any of its Subsidiaries  that
      owns  outstanding  shares of capital stock or similar Equity  Interests of
      such Subsidiary.

      5.5.  FINANCIAL STATEMENTS; MATERIAL LIABILITIES.

      The  Company  has  delivered  to each  Purchaser  copies of the  financial
statements  of the Company and its  Subsidiaries  listed on Schedule 5.5. All of
said  financial  statements  (including  in each case the related  schedules and
notes)  fairly  present in all  material  respects  the  consolidated  financial
position  of  the  Company  and  its  Subsidiaries  as of the  respective  dates
specified in such Schedule and the consolidated  results of their operations and
cash flows for the  respective  periods so specified  and have been  prepared in
accordance with GAAP consistently applied throughout the periods involved except
as set forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments). The Company and its Subsidiaries do
not have any  Material  liabilities  that are not  disclosed  on such  financial
statements or otherwise disclosed in the Disclosure Documents.

                                       7

<PAGE>

      5.6.  COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.

      The  execution,  delivery  and  performance  by (a)  the  Company  of this
Agreement, the Notes and the Sharing Agreement and (b) each Initial Guarantor of
the Guaranty Agreement and the Sharing Agreement will not (i) contravene, result
in any breach of, or  constitute a default  under,  or result in the creation of
any Lien in respect of any property of the Company or any Subsidiary  under, any
indenture,  mortgage, deed of trust, loan, purchase or credit agreement,  lease,
corporate charter or by-laws,  or any other agreement or instrument to which the
Company or any  Subsidiary is bound or by which the Company or any Subsidiary or
any of their respective properties may be bound or affected,  (ii) conflict with
or result in a breach  of any of the  terms,  conditions  or  provisions  of any
order,  judgment,  decree,  or ruling of any court,  arbitrator or  Governmental
Authority  applicable  to the  Company or any  Subsidiary  or (iii)  violate any
provision  of any  statute  or  other  rule or  regulation  of any  Governmental
Authority applicable to the Company or any Subsidiary.

      5.7.  GOVERNMENTAL AUTHORIZATIONS, ETC.

      No  consent,  approval or  authorization  of, or  registration,  filing or
declaration with, any Governmental  Authority is required in connection with the
execution,  delivery or  performance by (a) the Company of this  Agreement,  the
Notes or the Sharing  Agreement  or (b) any Initial  Guarantor  of the  Guaranty
Agreement or the Sharing Agreement.

      5.8.  LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.

          (a) Except as disclosed on Schedule 5.8, there are no actions,  suits,
      investigations or proceedings pending or, to the knowledge of the Company,
      threatened  against  or  affecting the  Company or any  Subsidiary  or any
      property  of the  Company  or any Subsidiary  in any court or  before  any
      arbitrator  of any kind or before or by any Governmental  Authority  that,
      individually  or in the aggregate,  could reasonably be expected to have a
      Material Adverse Effect.

          (b) Neither the Company  nor any  Subsidiary  is in default  under any
      term of any agreement or  instrument to which it is a party or by which it
      is bound, or any order, judgment, decree or  ruling of any court, arbitra-
      tor or  Governmental  Authority or is in violation of any applicable  law,
      ordinance, rule or regulation (including without limitation  Environmental
      Laws or the USA Patriot Act) of any Governmental  Authority, which default
      or  violation,  individually  or in  the  aggregate,  could reasonably  be
      expected to have a Material Adverse Effect.

      5.9.  TAXES.

      The  Company  and its  Subsidiaries  have filed all tax  returns  that are
required to have been filed in any  jurisdiction,  and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties,  assets, income or franchises, to the extent such
taxes and  assessments  have  become due and payable and before they have become
delinquent,  except for any taxes and assessments (i) the amount of which is not
individually or in the aggregate  Material or (ii) the amount,  applicability or
validity of which is  currently  being  contested  in good faith by  appropriate
proceedings  and with respect to which the

                                       8

<PAGE>

Company or a Subsidiary,  as the case may be, has established  adequate reserves
in  accordance  with GAAP.  The  Company  knows of no basis for any other tax or
assessment that could  reasonably be expected to have a Material Adverse Effect.
The  charges,  accruals  and  reserves  on the  books  of the  Company  and  its
Subsidiaries in respect of federal,  state or other taxes for all fiscal periods
are  adequate.  The  federal  income  tax  liabilities  of the  Company  and its
Subsidiaries have been finally determined (whether by reason of completed audits
or the  statute  of  limitations  having  run)  for all  fiscal  years up to and
including the fiscal year ended December 31, 1998.

      5.10. TITLE TO PROPERTY; LEASES.

      The Company and its  Subsidiaries  have good and sufficient title to their
respective  properties  that  individually  or in the  aggregate  are  Material,
including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been  acquired by the Company or
any Subsidiary  after said date (except as sold or otherwise  disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited by
this  Agreement.  All leases that  individually or in the aggregate are Material
are valid  and  subsisting  and are in full  force  and  effect in all  material
respects.

      5.11. LICENSES, PERMITS, ETC.

          (a) The Company  and its  Subsidiaries  own or possess  all  licenses,
      permits, franchises,  authorizations,   patents,  copyrights,  proprietary
      software, service marks,  trademarks and trade names,  or rights  thereto,
      that individually or in the aggregate are Material, without known conflict
      with the rights of others.

          (b) To the best knowledge of the Company, no product or service of the
      Company or any of its  Subsidiaries  infringes in any material respect any
      license, permit, franchise,  authorization, patent, copyright, proprietary
      software,  service mark, trademark, trade name or other right owned by any
      other Person.

          (c)  To the  best  knowledge  of the  Company,  there  is no  Material
      violation  by  any  Person  of  any right  of  the  Company  or any of its
      Subsidiaries with respect to any patent, copyright,  proprietary software,
      service  mark,  trademark,  trade name or other right owned or used by the
      Company or any of its Subsidiaries.

      5.12. COMPLIANCE WITH ERISA.

          (a)  The  Company  and  each  ERISA   Affiliate   have   operated  and
      administered  each Plan in compliance  with all applicable laws except for
      such  instances  of  noncompliance  as have not  resulted in and could not
      reasonably be expected to result in a Material Adverse Effect. Neither the
      Company nor any ERISA  Affiliate  has  incurred any  liability pursuant to
      Title I or IV of ERISA  (other than  benefit  liabilities in excess of the
      fair market value of plan  assets) or the penalty or excise tax provisions
      of the Code relating to employee  benefit plans (as  defined  in section 3
      of ERISA), and no event,  transaction  or condition has occurred or exists
      that could reasonably be expected to result in the  incurrence of any such
      liability by the Company or any ERISA  Affiliate, or in the  imposition of
      any Lien on any of the rights,  properties or assets of the Company or any

                                       9

<PAGE>

      ERISA  Affiliate, in either case  pursuant to Title I or IV of ERISA or to
      such penalty or excise tax  provisions or to section  401(a)(29) or 412 of
      the Code or section 4068 of ERISA, other than such liabilities or Liens as
      would not be individually or in the aggregate Material.

          (b) The present value of the aggregate benefit  liabilities under each
      of the Plans (other than  Multiemployer Plans),  determined as of December
      31, 2005 on the basis of the  assumptions used for  purposes of  Financial
      Accounting  Standards Board Statement No. 87, did not exceed the aggregate
      current  value  of the assets  of such  Plan  allocable  to  such  benefit
      liabilities  by more than $30,000,000  in the case of any  single  Plan or
      $40,000,000 in the aggregate for all Plans. The term "benefit liabilities"
      has the meaning  specified in section 4001 of ERISA and the terms "current
      value" and  "present  value"  have the  meaning  specified in section 3 of
      ERISA.

          (c) The Company and its ERISA Affiliates have not incurred  withdrawal
      liabilities  (and are not  subject to  contingent  withdrawal liabilities)
      under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
      individually or in the aggregate are Material.

          (d) The expected postretirement benefit obligation, other than pension
      obligations  (in each case  determined as of the last day of the Company's
      most recently  ended fiscal year in accordance with  Financial  Accounting
      Standards   Board   Statement  No.  106,   without regard  to  liabilities
      attributable  to  continuation  coverage  mandated by section 4980B of the
      Code) of the Company and its Subsidiaries is not Material.

          (e) The execution and delivery of this  Agreement and the issuance and
      sale of the  Notes  hereunder  will not  involve  any transaction  that is
      subject to the  prohibitions of section 406 of ERISA or in connection with
      which a tax could be imposed pursuant to section  4975(c)(1)(A)-(D) of the
      Code.  The  representation  by the Company to each  Purchaser in the first
      sentence of this  Section  5.12(e) is made in reliance upon and subject to
      the accuracy of such  Purchaser's  representation in Section 6.2 as to the
      sources  of the  funds  used to pay the  purchase price of the Notes to be
      purchased by such Purchaser.

      5.13. PRIVATE OFFERING BY THE COMPANY.

      Neither the Company nor anyone  acting on its behalf has offered the Notes
or any similar  Securities for sale to, or solicited any offer to buy any of the
same from, or otherwise  approached or negotiated in respect  thereof with,  any
Person  other  than  the  Purchasers  and not more  than 40 other  Institutional
Investors,  each of which  has been  offered  the  Notes at a  private  sale for
investment.  Neither the Company nor anyone  acting on its behalf has taken,  or
will take,  any action that would  subject the  issuance or sale of the Notes to
the  registration  requirements  of  Section 5 of the  Securities  Act or to the
registration  requirements  of any securities or blue sky laws of any applicable
jurisdiction.

      5.14. USE OF PROCEEDS; MARGIN REGULATIONS.

      The Company  will apply the proceeds of the sale of the Notes as set forth
in the "Sources and Uses" section of the Memorandum.  Except for the purchase of
all of the  outstanding  Equity

                                       10

<PAGE>

Interests of Alderwoods in connection with the transactions  contemplated by the
Merger  Documents  (which  Equity   Interests,   after  giving  effect  to  such
transactions, will be delisted and not available for trading by the Company), no
part of the proceeds from the sale of the Notes hereunder will be used, directly
or indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal  Reserve System
(12 CFR 221),  or for the  purpose  of  buying or  carrying  or  trading  in any
securities, in each case under such circumstances as to involve the Company in a
violation of Regulation X of said Board (12 CFR 224) or to involve any broker or
dealer in a violation of  Regulation T of said Board (12 CFR 220).  Margin stock
does not constitute more than 25% of the value of the consolidated assets of the
Company and its Subsidiaries and the Company does not have any present intention
that margin stock will constitute more than 25% of the value of such assets.  As
used in this  Section,  the  terms  "margin  stock"  and  "purpose  of buying or
carrying" shall have the meanings assigned to them in said Regulation U.

      5.15. EXISTING INDEBTEDNESS; FUTURE LIENS.

          (a) Except as described  therein,  Schedule 5.15 sets forth a complete
      and correct  list of all  outstanding Indebtedness  of the Company and its
      Subsidiaries  as of  the  Closing  Date (including  a  description  of the
      obligors  and  obligees,   principal  amount  outstanding  and  collateral
      therefor,  if any, and Guaranty thereof, if any).  Neither the Company nor
      any  Subsidiary  is in default  and no waiver of default is  currently  in
      effect, in the payment of any principal of or interest on any Indebtedness
      of the Company or such  Subsidiary and no event or  condition  exists with
      respect to any  Indebtedness of the Company or any  Subsidiary  that would
      permit (or that with notice or the lapse of time, or both,  would  permit)
      one or more  Persons to cause such  Indebtedness to become due and payable
      before  its stated  maturity  or before its  regularly scheduled  dates of
      payment.

          (b) Except as disclosed in Schedule 5.15, neither  the Company nor any
      Subsidiary  has agreed or consented to cause or permit in the future (upon
      the happening of a contingency or otherwise) any of its property,  whether
      now owned or hereafter acquired,  to be subject to a Lien not permitted by
      Section 10.2.

          (c) Neither the Company nor any Subsidiary is a party to, or otherwise
      subject  to  any  provision   contained  in,  any  instrument   evidencing
      Indebtedness  of the Company or such  Subsidiary, any  agreement  relating
      thereto or any other agreement (including, but not limited to, its charter
      or other organizational document) which limits the amount of, or otherwise
      imposes  restrictions on the  incurring of,  Indebtedness  of the Company,
      except as specifically indicated in Schedule 5.15.

      5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC.

          (a) Neither the sale of the Notes by the Company hereunder nor its use
      of the  proceeds  thereof  will violate the Trading with the Enemy Act, as
      amended,  or any of the foreign assets  control  regulations of the United
      States Treasury  Department (31 CFR, Subtitle B, Chapter V, as amended) or
      any enabling legislation or executive order relating thereto.

                                       11

<PAGE>

          (b) Neither the Company nor any Subsidiary  (i) is a Person  described
      or  designated in the Specially  Designated Nationals and Blocked  Persons
      List of the  Office  of  Foreign  Assets  Control or in  Section  1 of the
      Anti-Terrorism  Order or (ii) engages in any dealings or transactions with
      any  such Person. The Company  and  its Subsidiaries are in compliance, in
      all material respects, with the USA Patriot Act.

          (c) No part of the proceeds from the sale of the Notes  hereunder will
      be used,  directly or  indirectly,  for any  payments to any  governmental
      official or  employee,  political  party,  official of a political  party,
      candidate  for  political  office,  or anyone  else acting in an  official
      capacity,  in order to  obtain,  retain or direct business  or obtain  any
      improper  advantage,  in violation  of the United States  Foreign  Corrupt
      Practices  Act of 1977,  as  amended,  assuming in all cases that such Act
      applies to the Company.

      5.17. STATUS UNDER CERTAIN STATUTES.

      Neither the Company nor any Subsidiary is subject to regulation  under the
Investment  Company Act of 1940, as amended,  the Public Utility Holding Company
Act of 2005, as amended,  the ICC  Termination  Act of 1995, as amended,  or the
Federal Power Act, as amended.

      5.18. ENVIRONMENTAL MATTERS.

          (a) Neither the Company nor any  Subsidiary has knowledge of any claim
      or has  received  any  notice of any  claim,  and no  proceeding  has been
      instituted raising any claim against  the Company or any  of  its  Subsid-
      iaries or any of their  respective  real properties now or formerly owned,
      leased or operated by any of them or other  assets, alleging any damage to
      the environment or violation of any Environmental  Laws,  except,  in each
      case, such as could not  reasonably  be  expected  to result in a Material
      Adverse Effect.

          (b) Neither the Company nor any  Subsidiary has knowledge of any facts
      which would give rise to any claim,  public or private,  of  violation  of
      Environmental Laws or damage to the environment emanating from,  occurring
      on or in any way related to real properties now or formerly owned,  leased
      or  operated by any of  them or to other  assets or their  use, except, in
      each case,  such as  could  not  reasonably  be  expected  to result  in a
      Material Adverse Effect.

          (c) Neither the Company nor any  Subsidiary  has stored any  Hazardous
      Materials on real properties now or formerly owned,  leased or operated by
      any of them and has not  disposed of any  Hazardous Materials  in a manner
      contrary  to any  Environmental Laws in each case in any manner that could
      reasonably be expected to result in a Material Adverse Effect; and

          (d) All buildings on all real properties now owned, leased or operated
      by  the  Company  or  any  Subsidiary  are in compliance  with  applicable
      Environmental Laws, except where failure to comply could not reasonably be
      expected to result in a Material Adverse Effect.

                                       12

<PAGE>

      5.19. RANKING OF OBLIGATIONS.

      The  Company's  payment  obligations  under this  Agreement and the Notes,
will,  upon the execution and delivery of this Agreement and the issuance of the
Notes, rank at least PARI PASSU, without preference or priority,  with all other
unsecured  and  unsubordinated  Indebtedness  of the  Company  except  for  such
Indebtedness  which is  mandatorily  preferred by law and not by contract.  Each
Guarantor's   payment  obligations  under  the  Guaranty  Agreement  will,  upon
execution  and  delivery of the  Guaranty  Agreement,  rank at least pari passu,
without  preference or priority,  with all other  unsecured  and  unsubordinated
Indebtedness of such Guarantor except for such Indebtedness which is mandatorily
preferred by law and not by contract.

6.    REPRESENTATIONS OF THE PURCHASERS.

      6.1.  PURCHASE FOR INVESTMENT.

      Each Purchaser  severally  represents  that it is purchasing the Notes for
its  own  account  or for  one or  more  separate  accounts  maintained  by such
Purchaser  or for the account of one or more pension or trust funds and not with
a view to the  distribution  thereof,  PROVIDED  that  the  disposition  of such
Purchaser's or their  property shall at all times be within such  Purchaser's or
their  control.  Each  Purchaser  understands  that  the  Notes  have  not  been
registered  under  the  Securities  Act and  may be  resold  only if  registered
pursuant  to the  provisions  of the  Securities  Act  or if an  exemption  from
registration  is  available,  except  under  circumstances  where  neither  such
registration  nor such an  exemption is required by law, and that the Company is
not required to register the Notes.

      6.2.  SOURCE OF FUNDS.

      Each  Purchaser  severally  represents  that at least one of the following
statements is an accurate representation as to each source of funds (a "SOURCE")
to be used by such  Purchaser  to pay the  purchase  price  of the  Notes  to be
purchased by such Purchaser hereunder:

          (a) the Source is an "insurance  company general account" (as the term
      is  defined  in  the  United  States   Department  of  Labor's  Prohibited
      Transaction  Exemption ("PTE") 95-60) in respect of which the reserves and
      liabilities  (as  defined  by the  annual  statement  for  life  insurance
      companies  approved  by the NAIC (the  "NAIC  ANNUAL  STATEMENT")) for the
      general account  contract(s)  held by or on behalf of any employee benefit
      plan  together  with the amount of the  reserves  and  liabilities for the
      general  account  contract(s)  held by or on behalf  of any other employee
      benefit plans  maintained  by the same  employer (or affiliate  thereof as
      defined in PTE 95-60) or by the same employee organization  in the general
      account do not  exceed 10% of the total reserves  and  liabilities  of the
      general account (exclusive of separate account liabilities)  plus  surplus
      as set forth  in  the NAIC  Annual  Statement  filed with such Purchaser's
      state of domicile; or

          (b) the  Source is a separate  account  that is  maintained  solely in
      connection with such Purchaser's fixed contractual obligations under which
      the amounts  payable,  or credited,  to any  employee benefit plan (or its
      related  trust) that has any interest in such  separate account (or to any
      participant or beneficiary of such plan (including any

                                       13

<PAGE>

      annuitant)) are not  affected in  any manner by the investment performance
      of the separate account; or

          (c) the  Source is either (i) an  insurance  company  pooled  separate
      account,  within the  meaning  of PTE  90-1  or  (ii)  a  bank  collective
      investment  fund, within the meaning of PTE 91-38 and, except as disclosed
      by  such Purchaser  to the Company in writing pursuant to this clause (c),
      no employee benefit plan or group of plans maintained by the same employer
      or employee  organization  beneficially  owns more than 10% of all  assets
      allocated to such pooled separate account or collective  investment  fund;
      or

          (d) the Source  constitutes assets of an "investment fund" (within the
      meaning  of  Part V of PTE  84-14 (the  "QPAM  EXEMPTION"))  managed  by a
      "qualified  professional  asset manager" or "QPAM"  (within the meaning of
      Part V of the QPAM  Exemption), no employee benefit plan's assets that are
      included in such  investment  fund, when  combined  with the assets of all
      other  employee  benefit  plans  established  or  maintained  by  the same
      employer or by an affiliate  (within the meaning of Section V(c)(1) of the
      QPAM Exemption) of such employer or by the same employee organization  and
      managed  by such QPAM, exceed 20% of the total client  assets  managed  by
      such QPAM, the  conditions of Part I(c) and (g) of the QPAM  Exemption are
      satisfied, neither the QPAM nor a Person  controlling or controlled by the
      QPAM (applying  the  definition  of  "control" in Section V(e) of the QPAM
      Exemption) owns a 5% or more interest in the Company and (i) the identity
      of such QPAM and (ii) the names of all employee benefit plans whose assets
      are included in such investment fund have been disclosed to the Company in
      writing pursuant to this clause (d); or

          (e) the Source  constitutes  assets of a "plan(s)" (within the meaning
      of  Section IV of  PTE 96-23 (the "INHAM  EXEMPTION")) managed  by an "in-
      house  asset  manager" or "INHAM" (within  the  meaning of  Part IV of the
      INHAM  Exemption), the  conditions of Part I(a),  (g) and (h) of the INHAM
      Exemption  are  satisfied, neither the INHAM nor a Person  controlling  or
      controlled by the INHAM  (applying the  definition of "control" in Section
      IV(d) of the  INHAM  Exemption) owns a 5% or more  interest in the Company
      and (i) the  identity of such INHAM and (ii) the  name(s) of the  employee
      benefit plan(s) whose assets  constitute the Source have been disclosed to
      the Company in writing pursuant to this clause (e); or

          (f) the Source is a governmental plan; or

          (g) the Source is one or more employee  benefit  plans,  or a separate
      account or  trust fund comprised  of one or more  employee  benefit plans,
      each of which has been identified  to the  Company in writing  pursuant to
      this clause (g); or

          (h) the Source does not include  assets of any employee  benefit plan,
      other than a plan exempt from the coverage of ERISA.

As used in this Section 6.2, the terms  "employee  benefit plan,"  "governmental
plan," and "separate  account"  shall have the respective  meanings  assigned to
such terms in section 3 of ERISA.

                                       14

<PAGE>

7.    INFORMATION AS TO COMPANY.

      7.1.  FINANCIAL AND BUSINESS INFORMATION.

      The Company shall deliver to each holder of Notes that is an Institutional
Investor:

          (a) QUARTERLY  STATEMENTS -- within 45 days (or such shorter period as
      is 15  days  greater  than  the  period applicable  to the  filing  of the
      Company's Quarterly Report on Form 10-Q (the "FORM 10-Q") with the SEC (or
      that would be so applicable  if the  Company  were  subject to such filing
      requirements))  after  the  end of each  quarterly  fiscal  period in each
      fiscal year of the Company (other than the last quarterly fiscal period of
      each such fiscal year), duplicate copies of,

               (i)  a  consolidated   balance  sheet  of  the  Company  and  its
          Subsidiaries as at the end of such quarter, and

               (ii) consolidated  statements of income, changes in shareholders'
          equity and cash flows of the  Company and its  Subsidiaries,  for such
          quarter  and (in the case of the  second and third  quarters)  for the
          portion of the fiscal year ending with such quarter,

      setting  forth  in each  case in  comparative  form  the  figures  for the
      corresponding  periods in the  previous  fiscal  year,  all in  reasonable
      detail, prepared in accordance with GAAP applicable to quarterly financial
      statements  generally,  and  certified  by a Senior  Financial  Officer as
      fairly presenting, in all material respects, the financial position of the
      companies  being  reported  on and their  results of  operations  and cash
      flows,  subject to changes resulting from year-end  adjustments,  PROVIDED
      that  delivery  within the time  period  specified  above of copies of the
      Company's Form 10-Q prepared in compliance with the requirements  therefor
      and filed with the SEC shall be deemed to satisfy the requirements of this
      Section  7.1(a),  PROVIDED,  FURTHER,  that the Company shall be deemed to
      have made such  delivery  of such Form 10-Q if it shall have  timely  made
      such Form 10-Q  available on "EDGAR" and on its home page on the worldwide
      web (at the date of this Agreement located at: http//www.sci-corp.com) and
      shall have  given  each  Purchaser  notice of such  availability  on EDGAR
      (which  notice may be provided in the  certificate  referred to in Section
      7.2)  and  on its  home  page  in  connection  with  each  delivery  (such
      availability   and  notice   thereof  being  referred  to  as  "ELECTRONIC
      DELIVERY");

          (b) ANNUAL  STATEMENTS -- within 90 days (or such shorter period as is
      15 days greater than the period applicable  to the filing of the Company's
      Annual Report on Form 10-K (the "FORM 10-K")  with  the SEC (or that would
      be so applicable if the Company were subject to such filing requirements))
      after the end of each fiscal year of the Company, duplicate copies of

               (i)  a  consolidated   balance  sheet  of  the  Company  and  its
          Subsidiaries as at the end of such year, and

               (ii) consolidated  statements of income, changes in shareholders'
          equity and cash flows of the  Company  and its  Subsidiaries  for such
          year,

                                       15

<PAGE>
      setting  forth  in each  case in  comparative  form  the  figures  for the
      previous  fiscal year,  all in reasonable  detail,  prepared in accordance
      with GAAP, and accompanied by

                    (A) an opinion thereon of independent  public accountants of
               recognized national standing, which opinion shall state that such
               financial  statements  present fairly, in all material  respects,
               the financial  position of the companies  being reported upon and
               their results of operations and cash flows and have been prepared
               in  conformity  with  GAAP,  and  that  the  examination  of such
               accountants in connection with such financial statements has been
               made in accordance with generally  accepted  auditing  standards,
               and that such audit provides a reasonable  basis for such opinion
               in the circumstances, and

                    (B) a certificate of such accountants stating that they have
               reviewed this Agreement and stating  further  whether,  in making
               their  audit,  they have become  aware of any  condition or event
               that then  constitutes a Default or an Event of Default,  and, if
               they are aware  that any such  condition  or event  then  exists,
               specifying  the nature and period of the  existence  thereof  (it
               being  understood  that such  accountants  shall  not be  liable,
               directly or  indirectly,  for any failure to obtain  knowledge of
               any Default or Event of Default  unless such  accountants  should
               have obtained  knowledge thereof in making an audit in accordance
               with generally  accepted auditing  standards or did not make such
               an audit),

      PROVIDED that the delivery  within the time period  specified above of the
      Company's  Form 10-K for such fiscal  year  (together  with the  Company's
      annual report to  shareholders,  if any,  prepared  pursuant to Rule 14a-3
      under the  Exchange  Act)  prepared in  accordance  with the  requirements
      therefor  and  filed  with  the  SEC,   together  with  the   accountant's
      certificate   described   in   clause   (B)   above   (the   "ACCOUNTANTS'
      CERTIFICATE"), shall be deemed to satisfy the requirements of this Section
      7.1(b),  PROVIDED,  FURTHER, that the Company shall be deemed to have made
      such  delivery of such Form 10-K if it shall have  timely made  Electronic
      Delivery  thereof,  in which event the Company shall  separately  deliver,
      concurrently with such Electronic Delivery, the Accountants' Certificate;

          (c) SEC AND OTHER REPORTS -- promptly upon their  becoming  available,
      one  copy  of (i) each  financial  statement,  report,  notice  or   proxy
      statement  sent by the Company or any  Subsidiary to its principal lending
      banks as a whole (excluding information sent to such banks in the ordinary
      course of administration of a bank facility, such as information  relating
      to pricing and borrowing availability) or to its public securities holders
      generally,  and (ii) each regular or  periodic  report, each  registration
      statement (without exhibits except as expressly requested by such holder),
      and each prospectus and all amendments thereto filed by the Company or any
      Subsidiary  with  the SEC and  of all  press releases and other statements
      made  available generally by the Company or any  Subsidiary  to the public
      concerning developments  that  are Material;  PROVIDED, that  the  Company
      shall be deemed to have made such  delivery of such copy if it shall  have
      timely made Electronic Delivery thereof;

                                       16

<PAGE>

          (d) NOTICE OF DEFAULT  OR EVENT OF  DEFAULT  --  promptly,  and in any
      event within five days after a Responsible  Officer becoming  aware of the
      existence  of any Default or Event of Default or that any Person has given
      any notice or taken any action with respect to a claimed default hereunder
      or that any Person has given any notice or  taken  any action with respect
      to a claimed default of the type referred to in Section  11(f),  a written
      notice  specifying  the  nature and period of  existence  thereof and what
      action the Company is taking or proposes to take with respect thereto;

          (e) ERISA MATTERS -- promptly, and in any event within five days after
      a Responsible  Officer  becoming aware of any of the following,  a written
      notice  setting forth the nature  thereof and the action, if any, that the
      Company or an ERISA Affiliate proposes to take with respect thereto:

               (i) with respect to any Plan, any reportable event, as defined in
          section  4043(c) of ERISA and the regulations  thereunder  (other than
          the Merger and the transactions  contemplated  thereunder),  for which
          notice thereof has not been waived pursuant to such  regulations as in
          effect on the date hereof; or

               (ii)  the  taking  by the  PBGC of  steps  to  institute,  or the
          threatening  by the  PBGC of the  institution  of,  proceedings  under
          section 4042 of ERISA for the  termination of, or the appointment of a
          trustee to administer,  any Plan, or the receipt by the Company or any
          ERISA Affiliate of a notice from a Multiemployer Plan that such action
          has been taken by the PBGC with respect to such Multiemployer Plan; or

               (iii) any event,  transaction  or condition  that could result in
          the incurrence of any liability by the Company or any ERISA  Affiliate
          pursuant  to Title I or IV of  ERISA  or the  penalty  or  excise  tax
          provisions of the Code relating to employee  benefit plans,  or in the
          imposition  of any Lien on any of the rights,  properties or assets of
          the Company or any ERISA Affiliate  pursuant to Title I or IV of ERISA
          or such penalty or excise tax  provisions,  if such liability or Lien,
          taken together with any other such liabilities or Liens then existing,
          could reasonably be expected to have a Material Adverse Effect;

          (f) NOTICES FROM GOVERNMENTAL  AUTHORITY -- promptly, and in any event
      within 30 days of receipt  thereof, copies of any notice to the Company or
      any Subsidiary from any federal or state  Governmental  Authority relating
      to  any  order, ruling,  statute  or  other law  or regulation  that could
      reasonably be expected to have a Material Adverse Effect;

          (g) REQUESTED  INFORMATION -- with reasonable  promptness,  such other
      data  and  information relating  to  the  business,  operations,  affairs,
      financial  condition,  assets or properties  of the  Company or any of its
      Subsidiaries  (including,  but  without limitation,  actual  copies of the
      Company's  Form  10-Q and Form  10-K) or relating  to the  ability  of the
      Company to perform its obligations hereunder, under the  Notes  and  under
      the Sharing  Agreement as from time to time may be reasonably requested by
      any such holder of Notes; and

                                       17

<PAGE>

          (h) INTEREST  RATE NOTICE -- Promptly,  and in any event within 5 days
      of any  change in the Prime Rate (to the  extent  there are any Prime Rate
      Loans  outstanding) and  within  5 days  after  the  commencement  of  any
      Interest Period, evidence in reasonable detail (which shall not be binding
      on the  holders of the  Notes) of the  computation  of the  interest  rate
      applicable to such Interest Period (including with such computation a copy
      of the  applicable Bloomberg page "Currency BBAM 1" relied upon in setting
      such rate)  and  specifying  the  next  succeeding  Interest Payment Date.
      Unless any  holder  of  Notes  delivers  written  objection  to  any  such
      computation to the  Company  within  45  days  of  receipt  thereof,  such
      computation shall be binding on the  holders of the Notes for the  related
      Interest Period (except in the case of manifest error).

      7.2. OFFICER'S CERTIFICATE.

      Each set of financial  statements  delivered to a holder of Notes pursuant
to Section  7.1(a) or Section  7.1(b) shall be accompanied by a certificate of a
Senior  Financial  Officer  setting  forth  (which,  in the  case of  Electronic
Delivery  of any such  financial  statements,  shall be by  separate  concurrent
delivery of such certificate to each holder of Notes):

          (a)  COVENANT  COMPLIANCE  --  the  information   (including  detailed
      calculations) required  in order to  establish  whether the Company was in
      compliance with the requirements of Section 9.7, 10.1,  10.4,  10.6, 10.7,
      10.9,  and 10.12, during the  quarterly  or annual  period  covered by the
      statements  then being  furnished  (including  with  respect  to each such
      Section,  where applicable,  the  calculations  of the  maximum or minimum
      amount,  ratio or percentage,  as the case may be,  permissible  under the
      terms  of such  Sections, and the  calculation  of the  amount,  ratio  or
      percentage then in existence); and

          (b) EVENT OF DEFAULT -- a statement that such Senior Financial Officer
      has reviewed the relevant terms hereof and has made, or caused to be made,
      under his or her  supervision, a review of the transactions and conditions
      of the Company and its Subsidiaries from the beginning of the quarterly or
      annual period covered by the  statements then being  furnished to the date
      of the  certificate  and that such  review  shall not have  disclosed  the
      existence  during such period of any condition or event that constitutes a
      Default or an Event of Default or, if any such  condition or event existed
      or exists  (including,  without  limitation,  any such  event or condition
      resulting from the failure of the Company or any Subsidiary to comply with
      any  Environmental Law),  specifying  the nature  and period of  existence
      thereof and what action the  Company  shall have taken or proposes to take
      with respect thereto.

      7.3.  VISITATION.

      The Company shall permit the  representatives of each holder of Notes that
is an Institutional Investor:

          (a) NO DEFAULT -- if no Default or Event of Default  then  exists,  at
      the  expense  of  such  holder  and  upon  reasonable  prior notice to the
      Company, to visit  the  principal  executive office  of  the  Company,  to
      discuss  the  affairs,  finances  and  accounts  of  the  Company  and its
      Subsidiaries  with the  Company's  officers,  and (with the consent of the

                                       19

<PAGE>

      Company, which consent will not be unreasonably  withheld) its independent
      public accountants,  and (with the consent of the Company,  which  consent
      will not  be  unreasonably  withheld)  to  visit  the  other  offices  and
      properties  of  the Company  and each  Subsidiary,  all at such reasonable
      times and as often as may be reasonably requested in writing; and

          (b) DEFAULT -- if a Default or Event of Default  then  exists,  at the
      expense of the  Company  to  visit  and  inspect  any of  the  offices  or
      properties of  the  Company  or  any  Subsidiary,  to  examine  all  their
      respective books of account,  records,  reports and other papers,  to make
      copies and extracts  therefrom, and to discuss their  respective  affairs,
      finances  and  accounts  with  their respective officers  and  independent
      public  accountants  (and by this  provision  the Company  authorizes said
      accountants  to discuss the  affairs, finances and accounts of the Company
      and its Subsidiaries), all at such times and as often as may be requested.

8.    PAYMENT AND PREPAYMENT OF THE NOTES.

      8.1.  MATURITY.

      As provided therein, the entire unpaid principal balance of each Series of
Notes shall be due and payable on the stated maturity date thereof.

      8.2.  OPTIONAL PREPAYMENTS.

      The Company may not prepay the outstanding principal balance of the Series
B Notes in whole or in part on or before the first  anniversary  of the  Closing
Date. At any time,  in the case of the Series A Notes,  or at any time after the
first  anniversary  of the Closing Date, in the case of the Series B Notes,  the
Company may, at its option,  upon notice as provided below,  prepay all, or from
time to time any part  of,  the  Series  A Notes  and the  Series B Notes,  in a
principal  amount not less than  $1,000,000,  at 100% of the principal amount so
prepaid,  and, if any interest on any Note is being  calculated  by reference to
the LIBO Rate and such prepayment is made on any date other than the last day of
the  applicable  Interest  Period for such Note,  any Breakage Cost Indemnity in
respect  thereof.  The  Company  will  give each  holder of Notes to be  prepaid
hereunder written notice of each optional  prepayment under this Section 8.2 not
less than (a) 15 Business Days in the case of any  LIBOR-Based  Loan and (b) one
(1) Business  Day in the case of any Prime Rate Loan,  and not more than 30 days
prior to the date fixed for such prepayment. Each such notice shall specify such
date,  the aggregate  principal  amount and Series of the Notes to be prepaid on
such date,  the principal  amount of each Note held by such holder to be prepaid
(determined  in  accordance  with Section  8.4),  the interest to be paid on the
prepayment date with respect to such principal  amount being prepaid,  and shall
affirm the  Company's  obligation  to pay the  Breakage  Cost  Indemnity to each
holder of the Notes to be prepaid,  if  applicable,  upon receipt from each such
holder of the  certificates  contemplated  by  Section  8.8(b).  Notwithstanding
anything  in this  Section  8.2 to the  contrary,  however,  the Company may not
prepay any of the Notes  pursuant  to this  Section 8.2 unless the Term Loan has
been paid in full.

                                       19

<PAGE>

     8.3. PREPAYMENT OF NOTES UPON CHANGE IN CONTROL.

          (a)  NOTICE  OF CHANGE IN  CONTROL.  The  Company  will,  within  five
     Business  Days after any  Responsible  Officer  obtaining  knowledge of the
     occurrence of any Change in Control,  give written notice of such Change in
     Control to each holder of Notes.  Such notice shall contain and  constitute
     an offer by the Company to prepay Notes as  described  in clause  8.3(b) of
     this Section 8.3 and shall be accompanied by the  certificate  described in
     clause (e) of this Section 8.3.

          (b) OFFER TO PREPAY NOTES.  The offer to prepay Notes  contemplated by
     clause (a) of this Section 8.3 shall be an offer to prepay,  in  accordance
     with and subject to this  Section  8.3,  all, but not less than all, of the
     Notes of each Series  held by each  holder (in this case only,  "holder" in
     respect of any Note  registered  in the name of a nominee  for a  disclosed
     beneficial  owner shall mean such beneficial  owner) on a date specified in
     such offer (the "CHANGE IN CONTROL PREPAYMENT DATE"), which date shall be a
     Business Day, that is not less than 30 days and not more than 60 days after
     the date of such offer (if the Change in Control  Prepayment Date shall not
     be specified in such offer, the Change in Control  Prepayment Date shall be
     the Business Day on or immediately following the 45th day after the date of
     such offer).

          (c) ACCEPTANCE;  REJECTION.  A holder of Notes may reject the offer to
     prepay  made  pursuant  to this  Section  8.3 by  causing  a notice of such
     rejection  to be  delivered  to the Company not less than 10 Business  Days
     before the applicable  Change in Control  Prepayment  Date specified in the
     applicable  notice provided under Section 8.3(b).  A failure by a holder of
     Notes to respond to an offer to prepay made  pursuant  to this  Section 8.3
     shall be deemed to constitute an acceptance of such offer by such holder.

          (d) PREPAYMENT. Prepayment of the Notes to be prepaid pursuant to this
     Section  8.3  shall be at 100% of the  principal  amount  of such  Notes so
     prepaid,  together with  interest on such Notes  accrued to the  applicable
     Change in Control  Prepayment Date and Breakage Cost Indemnity,  if any, in
     respect of all Notes to be prepaid.  Each  prepayment of Notes  pursuant to
     this  Section  8.3  shall  be  made on the  applicable  Change  in  Control
     Prepayment Date.

          (e) OFFICER'S CERTIFICATE.  Each offer to prepay the Notes pursuant to
     this  Section  8.3  shall  be  accompanied  by an  original  or a copy of a
     certificate,  executed  by a Senior  Financial  Officer of the  Company and
     dated  the date of such  offer,  specifying:  (i) the  proposed  Change  in
     Control  Prepayment  Date;  (ii) that such offer is made  pursuant  to this
     Section 8.3; (iii) the principal amount of each Note offered to be prepaid;
     (iv) the  interest  that would be due on each Note offered to be prepaid as
     of the Change in Control  Prepayment  Date; (v) that the conditions of this
     Section 8.3 have been fulfilled;  and (vi) in reasonable detail, the nature
     and date of the Change in Control  (including,  if known, the name or names
     of the Person or Persons acquiring control).

          (f) NOTICE CONCERNING STATUS OF HOLDERS OF NOTES.  Promptly after each
     Change  in  Control  Prepayment  Date  and the  making  of all  prepayments
     contemplated  on such Change in Control  Prepayment Date under this Section
     8.3 (and,  in any event,

                                       20

<PAGE>

     within 30 days  thereafter),  the Company  shall  deliver to each holder of
     Notes a certificate  signed by a Senior Financial Officer containing a list
     of the  then-current  holders of Notes (together with their  addresses) and
     setting forth as to each such holder the  outstanding  principal  amount of
     Notes held by such holder at such time.

     8.4. ALLOCATION OF PARTIAL PREPAYMENTS.

      In the case of each partial  prepayment  of the Notes  pursuant to Section
8.2, the principal  amount of the Notes to be prepaid  shall be allocated  among
all of the Notes (or, if such  prepayment is to be made on or prior to the first
anniversary of the Closing Date,  allocated  among all of the Series A Notes) at
the time outstanding in proportion, as nearly as practicable,  to the respective
unpaid principal amounts thereof not theretofore called for prepayment.

     8.5. MATURITY; SURRENDER, ETC.

     In the case of each  prepayment  of Notes  pursuant to this  Section 8, the
principal  amount of each Note to be  prepaid  shall  mature  and become due and
payable on the date fixed for such  prepayment  (which shall be a Business Day),
together with interest on such  principal  amount  accrued to such date, and the
Breakage Cost Indemnity, if applicable, payable to each holder of Notes that has
delivered to the Company the certificate  contemplated by Section 8.8(b),  on or
prior to such date (and the Company shall promptly pay Breakage Cost  Indemnity,
if  applicable,  to each  holder of Notes that shall  deliver  such  certificate
within 60 days  thereafter).  From and after such date, unless the Company shall
fail to pay such  principal  amount when so due and payable,  together  with the
interest and Breakage Cost  Indemnity,  if any, as  aforesaid,  interest on such
principal  amount shall cease to accrue.  Any Note paid or prepaid in full shall
be  surrendered  to the Company and cancelled and shall not be reissued,  and no
Note shall be issued in lieu of any prepaid principal amount of any Note.

     8.6. PURCHASE OF NOTES.

     The Company will not and will not permit any Affiliate to purchase, redeem,
prepay or otherwise  acquire,  directly or  indirectly,  any of the  outstanding
Notes except upon the payment or prepayment of the Notes in accordance  with the
terms of this  Agreement  and the Notes.  The Company will  promptly  cancel all
Notes  acquired by it or any Affiliate  pursuant to any payment or prepayment of
Notes  pursuant to any provision of this Agreement and no Notes may be issued in
substitution or exchange for any such Notes.

     8.7. INTEREST RATE AND INTEREST PAYMENT DATES.

          (a) INTEREST RATE.  Subject to Section 8.7(d),  Section  8.7(f)(i) and
     Section  8.8(a),  the  outstanding  principal  amount  of the Notes of each
     Series shall bear interest, for each Interest Period applicable thereto, at
     the relevant  LIBO Rate, as  determined  in this Section  8.7(a),  for such
     Interest  Period.  The  determination  of the applicable LIBO Rate shall be
     made by the Company in accordance with the terms hereof.  The Company shall
     provide such  determination  to the holders of the Notes in accordance with
     the provisions of Section 7.1(h),  but the failure of the Company to notify
     the  holders  of the Notes of any such  determination  shall not affect the
     obligations  of the  Company  hereunder.  While  an  Event  of  Default  is
     continuing, interest on the Notes shall be

                                       21

<PAGE>

     payable at the rate set forth in Section  8.7(f)(i) and shall be payable on
     each  Interest  Payment Date (or such shorter  intervals as interest may be
     paid under the Credit Agreement in such circumstances).

          (b) CALCULATION OF INTEREST. Interest on the Notes shall be calculated
     on the  basis of a 360 day  year and the  actual  number  of days  elapsed,
     calculated as to each Interest Period or other period during which interest
     accrues from and  including the first day thereof to but excluding the last
     day thereof.

          (c) PAYMENT OF INTEREST.  Subject to Section 8.7(a),  interest on each
     Note shall be payable on each Interest Payment Date.

          (d) INABILITY TO DETERMINE  LIBO RATE. If, prior to the first Business
     Day of any Interest Period,  the basis for determining the LIBO Rate ceases
     to be reported on Bloomberg page "Currency BBAM 1"(and JPMorgan Chase Bank,
     N.A., is not quoting the rate contemplated by clause (ii) of the definition
     of "LIBO Rate") and if the Required  Holders,  or their  designated  agent,
     shall have reasonably  determined (which  determination shall be conclusive
     and binding upon the Company)  that, by reason of  circumstances  affecting
     the relevant  market,  other adequate and reasonable means do not exist for
     ascertaining the interest rate applicable to Dollar loans to major banks in
     the London Interbank  Eurodollar market for such Interest Period,  then the
     Required  Holders shall  forthwith give notice  thereof to the Company.  If
     such notice is given,  (i) the interest rate  applicable to all LIBOR-Based
     Loans for such  Interest  Period  shall be the Prime Rate,  determined  and
     effective as of the first day of such Interest Period,  (ii) each reference
     herein and in the Notes to the "LIBO Rate" for any Interest Period shall be
     deemed thereafter to be a reference to the Prime Rate, and (iii) subject to
     Section 8.7(e) below,  such substituted rate shall thereafter be determined
     by the Required  Holders in accordance with the terms hereof.  Until notice
     contemplated  by Section 8.7(e) is furnished by the Required  Holders,  the
     LIBO Rate  (defined  without  giving  effect to clause (ii) of this Section
     8.7(d)) shall not apply to any LIBOR-Based Loan.

          (e)  REINSTATEMENT  OF LIBO  RATE.  If  there  has been at any time an
     interest  rate  substituted  for the LIBO Rate in  accordance  with Section
     8.7(a) or Section 8.7(d) and if in the  reasonable  opinion of the Required
     Holders, the circumstances  causing such substitution have ceased, then the
     Required  Holders  shall  promptly  notify  the  Company in writing of such
     cessation,  and on the first day of the next succeeding Interest Period the
     LIBO Rate shall be determined as originally  defined hereby.  Nevertheless,
     thereafter  the provisions of Section 8.7(a) and Section 8.7(d) above shall
     continue to be effective.

          (f) DEFAULT RATE; OVERDUE AMOUNTS.

               (i)  INCREASE  IN  INTEREST  RATE;  EVENT  OF  DEFAULT.  Upon the
          occurrence   and  during  the   continuance   (but  only   during  the
          continuance) of an Event of Default, the outstanding  principal amount
          of each Note shall bear  interest  from and  including the date of the
          occurrence of such Event of Default to, but  excluding,  the date when
          no Event of Default shall be continuing,  at a rate per annum equal to
          the Default Rate.

                                       22

<PAGE>

               (ii) INTEREST AND OTHER AMOUNTS.  Any overdue payment of interest
          on the  outstanding  principal  amount  of any  Notes,  and any  other
          overdue amount payable in accordance with the terms of this Agreement,
          the Notes or the Guaranty Agreement (regardless of whether the failure
          to make such  payment  constitutes  an Event of  Default),  shall bear
          interest,  payable on demand, for each day from and including the date
          payment thereof was due to the date of actual  payment,  at a rate per
          annum  equal to the  Default  Rate  (but  without  duplication  of the
          Default Rate payable under Section 8.7(f)(i)).

     8.8. YIELD PROTECTION AND ILLEGALITY.

          (a) ILLEGALITY.

               (i)  Notwithstanding  any other provision of this Agreement,  if,
          after the Closing Date,  any change in any law or regulation or in the
          interpretation  thereof by any Governmental Authority charged with the
          administration  or  interpretation  thereof shall make it unlawful for
          any holder of the Notes to  maintain  any  LIBOR-Based  Loan,  then by
          written notice to the Company:

                    (A) such holder  shall  promptly  notify the Company of such
               circumstances,  including a description of and the effective date
               of such law, regulation or interpretation  (which notice shall be
               withdrawn whenever such circumstances no longer exist);

                    (B) such holder may require that all outstanding LIBOR-Based
               Loans  held by it be  converted  to Prime  Rate  Loans  that bear
               interest at the Prime Rate,  in which event all such  LIBOR-Based
               Loans  shall  be  converted  automatically  to Prime  Rate  Loans
               bearing  interest  at the  Prime  Rate as of the  effective  date
               specified in such notice; and

                    (C) such notice  shall cease to be effective at such time as
               it shall no longer be unlawful  for such  holder to maintain  any
               LIBOR-Based  Loan and,  effective as of the first day of the next
               succeeding  Interest  Period,  the Notes  shall bear  interest in
               accordance with the provisions of Section 8.7(a);

               (ii) For purposes of this Section 8.8(a), a notice to the Company
          by a holder  of any Note  shall  be  effective  on the last day of the
          Interest Period during which such notice is given unless the effective
          date  specified in such notice is an earlier date (which  earlier date
          may be specified only if required by such change in law, regulation or
          interpretation),  in which event such notice  shall be effective as of
          such earlier date. If any such  conversion to the Prime Rate occurs on
          a day which is not the last day of an  Interest  Period,  the  Company
          shall pay to such  holder  such  amounts,  if any,  as may be required
          pursuant to Section 8.8(b).

          (b) BREAKAGE  COST  INDEMNITY.  The Company  agrees to indemnify  each
     holder of the Notes for,  and  promptly to pay to each such holder upon the
     written request of such

                                       23

<PAGE>

     holder,  any  amounts  required to  compensate  such holder for any losses,
     costs or expenses sustained or incurred by such holder arising out of:

               (i)  any  event  (including  any  acceleration  of the  Notes  in
          accordance  with Section 12.1 and any prepayment of the Notes pursuant
          to Sections 8.2 or 8.3) which results in:

                    (A) such  holder  receiving  any  amount on  account  of the
               principal of any Note prior to the end of the Interest  Period in
               effect therefor, or

                    (B) the conversion of any  LIBOR-Based  Loan to a Prime Rate
               Loan other than on the last day of the Interest  Period in effect
               therefor, or

               (ii) the failure by the Company to pay any amount in respect of a
          payment or prepayment required to be made hereunder on the date due in
          respect of any LIBOR-Based Loan,

      including,  without  limitation,  any loss,  cost or expense  incurred  by
reason of the liquidation or reemployment of deposits or other funds acquired by
such holder to fund or maintain such LIBOR-Based Loans.

      A certificate of any such holder of the Notes setting forth, in reasonable
detail,  the calculations of any amount or amounts which such holder is entitled
to receive  pursuant to this  Section  8.8(b) and the basis  therefor,  shall be
delivered to the Company and shall be prima facie evidence of such amount absent
manifest  error  unless  the  Company  notifies  such  holder in  writing to the
contrary within 30 days after such certificate is delivered to the Company.  The
provisions of this Section  8.8(b) shall remain  operative and in full force and
effect   regardless  of  prepayment  of  the  Notes,  the  consummation  of  the
transactions  contemplated hereby, the repayment of any Notes, the invalidity or
unenforceability of any other term or provision of this Agreement,  the Notes or
the  Guaranty  Agreement or any  investigation  made by or on behalf of any such
holder.

          (c) RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES.

               (i)  Notwithstanding  any other provision of this  Agreement,  if
          after the Closing Date any change in  applicable  law or regulation or
          in the  interpretation or  administration  thereof by any Governmental
          Authority charged with the  interpretation  or administration  thereof
          (whether  or not having  the force of law)  shall  change the basis of
          taxation of payments to any holder of the Notes of the principal of or
          interest  on any  LIBOR-Based  Loan made by such holder or any fees or
          expenses or  indemnities  payable  hereunder  (other  than  changes in
          respect of  franchise  taxes or taxes  imposed on or  measured  by the
          gross revenues or net income of any such holder,  in each case imposed
          by the  United  States of America  or the  jurisdiction  in which such
          holder is organized or has its  principal  office or by any  political
          subdivision or taxing authority therein),  or shall impose,  modify or
          deem applicable any reserve,  special  deposit or similar  requirement
          against  assets of,  deposits  with or for the  account  of, or credit
          extended by, any holder, or

                                       24

<PAGE>

          LIBOR-Based Loans made by any holder, and the collective result of the
          foregoing  shall be to increase  the cost to any such holder of making
          or maintaining any  LIBOR-Based  Loan on the basis of the LIBO Rate or
          to reduce the amount of any sum  received  or  receivable  by any such
          holder hereunder or under the Notes (whether of principal, interest or
          otherwise)  by an amount  deemed by such holder to be  material,  then
          such holder shall deliver to the Company a  certificate  setting forth
          such  additional  amount or amounts as will compensate such holder for
          such additional costs incurred or reduction suffered.

               (ii) If,  after the Closing  Date,  any holder of the Notes shall
          have reasonably determined that

                    (A) the adoption of any law, rule, regulation,  agreement or
               guideline  applicable to such holder regarding  capital adequacy,
               or any  amendment  or other  modification  to or of any such law,
               rule, regulation, agreement or guideline (whether such law, rule,
               regulation,  agreement or guideline was originally adopted before
               or after the Closing Date),

                    (B) any change in the  interpretation  or  administration of
               any law,  rule,  regulation,  agreement  or  guideline  regarding
               capital  adequacy  applicable to such holder by any  Governmental
               Authority  charged  with  the  interpretation  or  administration
               thereof, or

                    (C)  compliance  by any holder with any request or directive
               regarding  capital  adequacy  (whether or not having the force of
               law) of any Governmental Authority issued after the Closing Date,

          has or would have the effect of increasing  the cost to such holder of
          making or maintaining its investment in the Notes or reducing the rate
          of return on such holder's  capital as a consequence of the Notes to a
          level below that which such holder  could have  achieved  but for such
          applicability,   adoption,   change   or   compliance   (taking   into
          consideration such holder's policies with respect to capital adequacy)
          by an amount  deemed by such holder to be  material,  then such holder
          shall  deliver  to  the  Company  a  certificate  setting  forth  such
          additional  amount or amounts as will  compensate  such holder for any
          such reduction suffered.

               (iii) The certificate of any holder of the Notes delivered to the
          Company  pursuant  to clause  (i) or (ii) above  shall set  forth,  in
          reasonable  detail, the calculation of the amount or amounts necessary
          to compensate such holder as specified in clause (i) or (ii) above and
          the  basis   therefor   (which  shall  include   notice  of  the  law,
          regulations, guidelines, request or any interpretation thereof, of any
          Governmental  Authority  (whether or not having the force of law),  as
          applicable,  giving rise to such increased  costs or  reductions)  and
          shall be prima facie  evidence of such amount  absent  manifest  error
          unless the Company  notifies  such  holder in writing to the  contrary
          within 30 days of the delivery of such certificate. The Company agrees
          to pay such  holder  the amount  shown as due on

                                       25

<PAGE>

          any such  certificate  delivered by it within five Business Days after
          the Company's receipt of the same.

               (iv)  Failure  or delay on the part of any holder of the Notes to
          demand  compensation  for any increased  costs or reduction in amounts
          received or  receivable  or reduction  in return on capital  shall not
          constitute a waiver of such holder's right to demand such compensation
          with respect to any Interest  Period;  provided that the Company shall
          not be required  to  compensate  any holder of Notes  pursuant to this
          Section for any increased  costs or reductions  incurred more than 270
          days prior to the date that such  holder  notifies  the Company of any
          event  referred  to in the  foregoing  clause (ii) giving rise to such
          increased costs or reductions and of such holder's  intention to claim
          compensation  therefor;  provided  further  that, if such event giving
          rise to such increased costs or reductions is retroactive, the 270-day
          period  referred  to above  shall be extended to include the period of
          retroactive  effect  thereof.  The  protection of this Section  8.8(c)
          shall  be  available  to  such  holder   regardless  of  any  possible
          contention of the  invalidity  or  inapplicability  of the law,  rule,
          regulation,  agreement,  guideline or other  change or condition  that
          shall have occurred or been imposed.

9.   AFFIRMATIVE COVENANTS.

     The Company covenants that so long as any of the Notes are outstanding:

     9.1. COMPLIANCE WITH LAW.

     Without  limiting  Section 10.13,  the Company will, and will cause each of
its Subsidiaries to, comply with all laws,  ordinances or governmental  rules or
regulations  to which each of them is subject,  including,  without  limitation,
ERISA, the USA Patriot Act and Environmental  Laws, and will obtain and maintain
in effect all licenses, certificates, permits, franchises and other governmental
authorizations  necessary to the ownership of their respective  properties or to
the conduct of their respective businesses, in each case to the extent necessary
to ensure that non-compliance  with such laws,  ordinances or governmental rules
or  regulations  or failures  to obtain or  maintain  in effect  such  licenses,
certificates,  permits,  franchises and other governmental  authorizations could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

     9.2. INSURANCE.

     The Company will,  and will cause each of its  Subsidiaries  to,  maintain,
with financially sound and reputable  insurers,  insurance with respect to their
respective  properties and businesses against such casualties and contingencies,
of  such  types,  on such  terms  and in such  amounts  (including  deductibles,
co-insurance  and  self-insurance,  if adequate  reserves  are  maintained  with
respect  thereto)  as is  customary  in the  case  of  entities  of  established
reputations engaged in the same or a similar business and similarly situated.

                                       26

<PAGE>

     9.3. MAINTENANCE OF PROPERTIES.

     The Company will, and will cause each of its  Subsidiaries to, maintain and
keep, or cause to be maintained and kept,  their  respective  properties in good
repair, working order and condition (other than ordinary wear and tear), so that
the business carried on in connection therewith may be properly conducted at all
times,  PROVIDED  that this  Section  9.3 shall not  prevent  the Company or any
Subsidiary  from  discontinuing  the operation and the maintenance of any of its
properties  if such  discontinuance  is desirable in the conduct of its business
and the Company has concluded that such discontinuance  could not,  individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

     9.4. PAYMENT OF TAXES AND CLAIMS.

     The Company will, and will cause each of its  Subsidiaries to, file all tax
returns  required to be filed in any  jurisdiction  and to pay and discharge all
taxes  shown  to be due  and  payable  on such  returns  and  all  other  taxes,
assessments,  governmental  charges,  or levies  imposed on them or any of their
properties, assets, income or franchises, to the extent the same have become due
and payable and before they have become delinquent and all claims for which sums
have become due and payable  that have or might become a Lien on  properties  or
assets of the Company or any  Subsidiary,  PROVIDED that neither the Company nor
any Subsidiary need pay any such tax,  assessment,  charge, levy or claim if (i)
the amount,  applicability  or validity  thereof is  contested by the Company or
such Subsidiary on a timely basis in good faith and in appropriate  proceedings,
and the Company or a Subsidiary has established  adequate  reserves  therefor in
accordance  with GAAP on the books of the Company or such Subsidiary or (ii) the
nonpayment  of all such taxes,  assessments,  charges,  levies and claims in the
aggregate could not reasonably be expected to have a Material Adverse Effect.

     9.5. CORPORATE EXISTENCE, ETC.

     Subject to Section 10.5, the Company will at all times preserve and keep in
full force and effect its  corporate  existence.  Subject to  Sections  10.5 and
10.7,  the Company will at all times  preserve and keep in full force and effect
the  corporate  existence of each of its  Subsidiaries  (unless  merged into the
Company or a Subsidiary in accordance  with the  provisions of Section 10.5) and
all rights and  franchises of the Company and its  Subsidiaries  unless,  in the
good faith  judgment of the Company,  the  termination of or failure to preserve
and keep in full force and effect such corporate  existence,  right or franchise
could not, individually or in the aggregate, have a Material Adverse Effect.

     9.6. BOOKS AND RECORDS.

     The Company  will,  and will cause each of its  Subsidiaries  to,  maintain
proper books of record and account in  conformity  with GAAP and all  applicable
requirements  of  any   Governmental   Authority   having  legal  or  regulatory
jurisdiction over the Company or such Subsidiary, as the case may be.

                                       27

<PAGE>


     9.7. ADDITIONAL SUBSIDIARY GUARANTORS.

     If any Domestic  Subsidiary  is formed or acquired  after the Closing Date,
the Company  will,  within ten  Business  Days,  notify the holders of the Notes
thereof  and  promptly,  and in any event  within 20  Business  Days  after such
formation or acquisition,  cause such Subsidiary (a) to execute a joinder to the
Guaranty  Agreement  and to become a party to the Sharing  Agreement  and (b) to
deliver  such  opinions  of  counsel,  certificates,   accompanying  authorizing
resolutions  and  corporate  or similar  documents,  and such other  agreements,
instruments and other documents in respect of such Subsidiary's execution of the
joinder to the Guaranty  Agreement and becoming a party to the Sharing Agreement
as are  required  pursuant  to the  terms of the  Guaranty  Agreement  or as the
Required  Holders may  reasonably  request,  each of the  foregoing  in form and
substance reasonably  satisfactory to the Required Holders. If, on any date, the
aggregate  combined  revenues  of all Foreign  Subsidiaries  for the four fiscal
quarters  of the  Company  then  most  recently  ended  exceed  20% of the total
consolidated  revenue  of the  Company  and its  Subsidiaries  for  such  period
(calculated,  in each case, in accordance  with GAAP) or the aggregate  combined
assets of all Foreign  Subsidiaries,  measured  on such date,  exceed 20% of the
total  consolidated  assets of the Company and its  Subsidiaries  (calculated in
accordance with GAAP), measured on such date, the Company shall promptly, and in
any event  within  30 days of a  Responsible  Officer  becoming  aware  that the
revenues or assets of its Foreign  Subsidiaries  meet the  conditions  specified
above,  cause one or more of said Foreign  Subsidiaries (a) to execute a joinder
to the Guaranty Agreement and to become a party to the Sharing Agreement and (b)
to deliver  such  opinions of counsel,  certificates,  accompanying  authorizing
resolutions  and  corporate  or similar  documents,  and such other  agreements,
instruments and other documents in respect of such Subsidiary's execution of the
joinder to the Guaranty  Agreement and becoming a party to the Sharing Agreement
as are  required  pursuant  to the  terms of the  Guaranty  Agreement  or as the
Required  Holders may  reasonably  request,  each of the  foregoing  in form and
substance  reasonably  satisfactory to the Required  Holders,  such that,  after
giving  effect to such joinder to the  Guaranty  Agreement,  both the  aggregate
combined revenue and the aggregate  combined assets  (determined in each case in
accordance  with GAAP),  of all Foreign  Subsidiaries  that have not  executed a
joinder to the Guaranty  Agreement,  is less than 20% of the total  consolidated
revenue and total assets of the Company and all of its Subsidiaries.

     9.8. PRIORITY OF OBLIGATIONS.

     The Company will ensure that (a) its  obligations  under this Agreement and
the Notes, and (b) each Guarantor's  obligations  under the Guaranty  Agreement,
will at all times rank at least PARI PASSU, without preference or priority, with
all other  unsecured  and  unsubordinated  Indebtedness  of the  Company or such
Guarantor, respectively.

10.  NEGATIVE COVENANTS.

     The Company covenants that so long as any of the Notes are outstanding:

                                       28

<PAGE>

     10.1. INDEBTEDNESS.

      The  Company  will not,  and will not permit any  Subsidiary  to,  create,
incur, assume or permit to exist any Indebtedness, except:

          (a)  Indebtedness created under this Agreement and the Notes;

          (b)  Indebtedness  in respect of the  Revolving  Borrowings  permitted
     under  the  Credit  Agreement,   in  an  aggregate  amount  not  to  exceed
     $400,000,000 at any time,  Indebtedness under the Term Loans (PROVIDED that
     the aggregate  amount of the  Indebtedness in respect of the Term Loans and
     the  Notes  does not  exceed  $350,000,000  outstanding  at any  time)  and
     Indebtedness  of the Company arising from the issuance of notes pursuant to
     the Public Note Agreement  related to the Merger in an aggregate amount not
     to exceed $500,000,000;

          (c)  Indebtedness  existing  on the  Closing  Date  and set  forth  on
     Schedule  5.15  and  extensions,  renewals  and  replacements  of any  such
     Indebtedness  that do not  increase  the  outstanding  principal  amount or
     change the  parties  directly  or  indirectly  responsible  for the payment
     thereof;  PROVIDED  that any such  refinancing  Indebtedness  (A)  shall be
     unsecured  and (B) shall not mature  before the earlier of (x) the maturity
     date of the  Indebtedness  refinanced and (y) the date six months following
     the Revolving Maturity Date;

          (d)  Indebtedness  of  the  Company  to  any  Subsidiary  and  of  any
     Subsidiary  to  the  Company  or  any  other   Subsidiary;   PROVIDED  that
     Indebtedness  of any  Subsidiary  that is not a Guarantor to the Company or
     any other  Guarantor  shall be subject to the  restrictions  on investments
     contained in Sections 10.6(c) and 10.6(d) below;

          (e)  Unsecured  Guarantees  by  the  Company  of  Indebtedness  of any
     Subsidiary and unsecured Guarantees by any Guarantor of Indebtedness of any
     other Guarantor,  to the extent said  Indebtedness is permitted  hereunder;
     PROVIDED  that no  Guarantor  or any other  Subsidiary  may  guarantee  any
     Indebtedness  under  the  Public  Note  Agreement  or  under  any  document
     identified  on Schedule  5.15 to the extent that such  Guarantee was not in
     effect on the Closing Date;

          (f)  Indebtedness of the Company or any Subsidiary  incurred after the
     Closing  Date under leases  (collectively,  the  "TRANSPORTATION  EQUIPMENT
     LEASES") of motor vehicles (including off-road vehicles) and aircraft;

          (g) (A)  Indebtedness of the Company or any Subsidiary  incurred after
     the Closing Date to finance the acquisition, construction or improvement of
     any fixed or capital assets,  including  Capital Lease  Obligations and any
     Indebtedness assumed in connection with the acquisition of any such assets,
     or secured by a Lien on any such assets prior to the  acquisition  thereof,
     and extensions,  renewals and replacements of any such Indebtedness that do
     not  increase  the  outstanding  principal  amount  or change  the  parties
     directly  or  indirectly   responsible   for  the  payment   thereof,   (B)
     Attributable  Debt (as  defined  below) of the  Company  or any  Subsidiary
     incurred after the date hereof pursuant to Sale and Leaseback  Transactions
     permitted  under Section 10.4 and (C)

                                       29

<PAGE>

     Indebtedness  represented by seller notes executed by the Company  incurred
     after the date hereof in connection with Permitted  Acquisitions;  PROVIDED
     that (x) the  Indebtedness  in clause  (A) hereof is  incurred  prior to or
     within 120 days (or such longer  period if  necessary  solely to obtain any
     permits  or  licenses   required  in  connection  with  such   acquisition,
     construction  or improvement)  after such  acquisition or the completion of
     such construction or improvement and (y) the aggregate  principal amount of
     the  Indebtedness  permitted  by this clause (g) in excess of  Attributable
     Debt shall not exceed  $75,000,000 at any time  outstanding.  "ATTRIBUTABLE
     DEBT"  means,  with  respect  to any Sale and  Leaseback  Transaction,  the
     present  value  (computed  in  accordance  with GAAP as if the  obligations
     incurred  in  connection  with such  Sale and  Leaseback  Transaction  were
     Capital  Lease  Obligations)  of the total  obligations  of the  lessee for
     rental  payments  during the remaining  term of the lease  included in such
     Sale and Leaseback  Transaction  (including any period for which such lease
     has been  extended).  In the case of any lease which is  terminable  by the
     lessee upon payment of a penalty  (including any fee, however  denominated,
     paid upon  termination),  the Attributable  Debt shall be the lesser of (i)
     the Attributable Debt determined  assuming  termination upon the first date
     such lease may be  terminated  (in which case the  Attributable  Debt shall
     also  include  the  amount of such  penalty  or fee,  but no rent  shall be
     considered as required to be paid under such lease  subsequent to the first
     date upon which it may be so  terminated)  and (ii) the  Attributable  Debt
     determined  assuming no such  termination.  Any  determination  of any rate
     implicit  in the terms of the  lease  included  in such Sale and  Leaseback
     Transaction made in accordance with generally accepted financial  practices
     by the Company shall be binding and conclusive absent manifest error;

          (h) Unsecured  Indebtedness incurred under a credit facility by one or
     more Canadian  Subsidiaries  of the Company,  so long as each such Canadian
     Subsidiary  guarantees  the  Indebtedness  in  respect of the Notes and the
     aggregate  principal amount of such  Indebtedness  permitted by this clause
     (h) does not exceed $100,000,000 at any time outstanding;

          (i)  Unsecured  Indebtedness  of any  Subsidiary,  PROVIDED  that  the
     aggregate principal amount of all Indebtedness permitted by this clause (i)
     shall not exceed an aggregate  principal  amount of  $5,000,000 at any time
     outstanding;

          (j)  Obligations  incurred in connection with covenants not to compete
     to the extent  such  obligations  are treated as  indebtedness  under GAAP,
     PROVIDED that the aggregate principal amount of all Indebtedness  permitted
     by this clause (j) shall not exceed an aggregate  amount of  $50,000,000 at
     any time outstanding;

          (k)  Indebtedness  of any  Subsidiary of the Company in existence (but
     not incurred or created in connection  with the  acquisition by the Company
     or any other  Subsidiary of the Company  thereof) on the date on which such
     Subsidiary is acquired by the Company, PROVIDED (i) neither the Company nor
     any of its other  Subsidiaries  has any  obligation  with  respect  to such
     Indebtedness,  (ii) none of the  properties  of the  Company  or any of its
     other Subsidiaries is bound with respect to such Indebtedness and (iii) the
     Company is in compliance with the financial  covenants contained in Section
     10.12 after giving effect to such acquisition; and

                                       30

<PAGE>

          (l) Unsecured  Indebtedness  of the Company not permitted by any other
     clause of this  Section  10.1;  PROVIDED  that (A) no  Default  or Event of
     Default exists at the time of, or is created as a result of, the incurrence
     of such  Indebtedness,  (B) for all  Indebtedness in excess of $50,000,000,
     such  Indebtedness does not have a maturity date before the date six months
     following  the  maturity  date of the  Notes,  and (C)  the  terms  of such
     unsecured  Indebtedness  are not more  restrictive  than the  terms of this
     Agreement.

     10.2. LIMITATIONS ON LIENS

     The Company will not, and will not permit any Subsidiary to, create, incur,
assume  or  permit  to exist  any Lien on any  property  or asset  now  owned or
hereafter  acquired by it, or assign or sell any income or  revenues  (including
accounts receivable) or rights in respect of any thereof, except:

          (a) Permitted Encumbrances;

          (b) Any Lien on any property or asset of the Company or any Subsidiary
     existing on the Closing Date and set forth on Schedule 10.2;  PROVIDED that
     (i) such Lien shall not apply to any other property or asset of the Company
     or any  Subsidiary  and (ii) such Lien shall secure only those  obligations
     which it secures on the Closing Date;

          (c)  Any  Lien  existing  on  any  property  or  asset  prior  to  the
     acquisition  thereof by the  Company or any  Subsidiary  or existing on any
     property or asset of any Person that becomes a Subsidiary after the Closing
     Date prior to the time such Person becomes a Subsidiary;  PROVIDED that (i)
     such Lien is not created in  contemplation  of or in  connection  with such
     acquisition or such Person becoming a Subsidiary,  as the case may be, (ii)
     such Lien shall not apply to any other property or assets of the Company or
     any  Subsidiary  and (iii) such Lien shall  secure  only those  obligations
     which it secures on the date of such  acquisition  or the date such  Person
     becomes a Subsidiary, as the case may be;

          (d) Liens on  property  subject to  Transportation  Equipment  Leases,
     PROVIDED  that the  Indebtedness  secured by any  Transportation  Equipment
     Lease does not exceed the cost of acquiring the property  subject  thereto;
     and

          (e) Liens on fixed or capital assets acquired, constructed or improved
     by the  Company or any  Subsidiary;  PROVIDED  that (i) such  Liens  secure
     Indebtedness permitted under Section 10.1 above (other than Section 10.1(a)
     or Section 10.1(b)),  (ii) such Liens and the Indebtedness  secured thereby
     are  incurred  prior  to or  within  120 days (or  such  longer  period  if
     necessary  solely to obtain any permits or licenses  required in connection
     with such acquisition,  construction or improvement) after such acquisition
     or  the  completion  of  such   construction  or  improvement,   (iii)  the
     Indebtedness  secured  thereby  does  not  exceed  the  cost of  acquiring,
     constructing  or improving such fixed or capital assets and (iv) such Liens
     shall not  apply to any other  property  or  assets of the  Company  or any
     Subsidiary.

                                       31

<PAGE>

     10.3. LIMIT ON PREFERRED EQUITY ISSUANCE.

     The  Company  will not,  nor will it permit any  Subsidiary  to,  issue any
Preferred  Stock,  other  than (a)  Preferred  Stock of the  Company  issued (i)
without  any   mandatory   redemption   provisions   or  (ii)  pursuant  to  any
shareholders'  rights plan of the Company; and (b) Preferred Stock issued by any
Subsidiary to the extent,  and only to the extent,  that such Preferred Stock is
owned by the Company or another Subsidiary.

     10.4. LIMITATIONS ON SALE/LEASEBACK TRANSACTIONS.

     The Company will not, and will not permit any of its Subsidiaries to, enter
into any Sale and  Leaseback  Transaction;  PROVIDED  that the Company may enter
into  (a)  Sale  and  Leaseback   Transactions  if  the  aggregate   outstanding
Attributable  Debt in respect of Sale and  Leaseback  Transactions  permitted by
this clause (a) shall at no time exceed  $125,000,000 and (b) any Transportation
Equipment  Lease; and PROVIDED,  FURTHER that all  Attributable  Debt associated
with any such Sale and Leaseback Transaction shall be treated as Indebtedness of
the Company or any such Subsidiary,  as applicable,  and shall be subject to the
limitations of the covenant described in Section 10.1 above.

     10.5. FUNDAMENTAL CHANGES; LINE OF BUSINESS.

          (a) The Company will not, and will not permit any Subsidiary to, merge
     into or  consolidate  with any other Person,  or permit any other Person to
     merge into or consolidate  with it, or sell,  transfer,  lease or otherwise
     dispose  of (in one  transaction  or in a series  of  transactions)  assets
     (including capital stock of Subsidiaries) constituting all or substantially
     all the assets of the Company and its Subsidiaries on a consolidated  basis
     (whether now owned or hereafter  acquired),  or, in the case of the Company
     or any  Guarantor,  liquidate  or  dissolve,  except  that,  if at the time
     thereof and immediately  after giving effect thereto no Default or Event of
     Default shall have occurred and be continuing  (i) any Subsidiary may merge
     into the Company in a  transaction  in which the  Company is the  surviving
     corporation,  (ii) any Subsidiary may merge into any other  Subsidiary in a
     transaction  in which  the  surviving  entity  is a  Subsidiary;  PROVIDED,
     however,  that (A) no Guarantor may merge into a Foreign Subsidiary (unless
     prior to such merger,  such Guarantor was also a Foreign  Subsidiary),  and
     (B) after giving effect to such transaction,  the surviving Subsidiary is a
     Guarantor if either of such Subsidiaries was previously a Guarantor,  (iii)
     any permitted asset  disposition  involving the sale of a Subsidiary may be
     effected  by a merger of such  Subsidiary,  (iv) any  Subsidiary  may sell,
     transfer,  lease or  otherwise  dispose of its assets to the  Company or to
     another  Subsidiary;  PROVIDED,  however,  that (A) no Guarantor  may sell,
     transfer,  lease  or  otherwise  dispose  of  its  assets  to  any  Foreign
     Subsidiary (unless prior to such sale, transfer,  lease or disposition such
     Guarantor  was also a Foreign  Subsidiary),  and (B) after giving effect to
     such transaction, the surviving Subsidiary is a Guarantor if either of such
     Subsidiaries  was  previously  a  Guarantor,  and  (v) any  Subsidiary  may
     liquidate  or dissolve if the  Company  determines  in good faith that such
     liquidation  or  dissolution is in the best interests of the Company and is
     not  materially  disadvantageous  to the holders of the Notes;  PROVIDED in
     each  case  that  any  such  merger  involving  any  Person  that  is not a

                                       32

<PAGE>

     Wholly-Owned  Subsidiary  immediately  prior to such  merger  shall  not be
     permitted   unless  also   permitted  by  Section   10.6  below   regarding
     restrictions on investments.

          (b) The Company will not, and will not permit any of its  Subsidiaries
     to, engage to any material  extent in any business other than businesses of
     the type conducted by the Company and its  Subsidiaries on the Closing Date
     and businesses reasonably related thereto.

     10.6. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS.

      The  Company  will not,  and will not permit any of its  Subsidiaries  to,
purchase, hold or acquire (including pursuant to any merger with any Person that
was not a  Wholly-Owned  Subsidiary  prior to such  merger) any  capital  stock,
evidences of Indebtedness or securities (including any option,  warrant or other
right to acquire any of the  foregoing) of, make or permit to exist any loans or
advances  to,  guarantee  any  obligations  of,  or make or  permit to exist any
investment or any other interest in, any other Person,  or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person constituting a business unit, except:

          (a) Permitted Investments;

          (b) Investments, guarantees and loans existing on the Closing Date and
     set forth on Schedule 10.6;

          (c) In addition to the investments,  guarantees and loans described in
     clause (b) above, investments by the Company and its Subsidiaries in Equity
     Interests in their  respective  Subsidiaries;  PROVIDED  that the aggregate
     amount of  investments  made under this  clause  (c), by the Company or any
     Subsidiary in Subsidiaries that are not Guarantors, together with all loans
     and advances and Guarantees  made in addition to those described in clauses
     (d) and (f) below by the Company or any Subsidiary to Subsidiaries that are
     not Guarantors, shall not exceed $30,000,000 at any time outstanding;

          (d) In addition to the investments,  guarantees and loans described in
     clause (b) above,  loans or advances made by the Company to any  Subsidiary
     or made by any Subsidiary to the Company or any other Subsidiary;  PROVIDED
     that the  amount of such  loans and  advances  made by the  Company  or any
     Subsidiary  to  Subsidiaries   that  are  not  Guarantors,   together  with
     investments and Guarantees made pursuant to clauses (c) above and (f) below
     by the Company or any Subsidiary to  Subsidiaries  that are not Guarantors,
     shall not exceed $30,000,000 at any time outstanding;

          (e) obligations of the Company to any Subsidiary, or of any Subsidiary
     to the Company or any other  Subsidiary,  arising from the  management  and
     investment of cash on a pooled basis in the ordinary course of business;

          (f) Guarantees  constituting  Indebtedness  permitted by Section 10.1;
     PROVIDED that (A) a Subsidiary  shall not guarantee any Indebtedness of the
     Company unless such  Subsidiary  also has Guaranteed the obligations of the
     Company in respect of the Notes,  (B) no  Subsidiary  shall  guarantee  any
     Indebtedness  under  the  Public  Note  Agreement  or

                                       33

<PAGE>

     under  any  document  identified  on  Schedule  5.15  (to the  extent  such
     Guarantee in respect of a document  identified  on Schedule 5.15 was not in
     effect on the Closing  Date),  and (C) the  aggregate  principal  amount of
     Indebtedness of Subsidiaries  that are not Guarantors that is Guaranteed by
     the Company or any Guarantor  pursuant to this Section 10.6,  together with
     investments  and loans and advances made by the Company or any Guarantor to
     Subsidiaries that are not Guarantors pursuant to clauses (c) and (d) above,
     shall  not  exceed  $30,000,000  at  any  time  outstanding  (exclusive  of
     investments, guarantees and loans described in clause (b) above);

          (g) Guarantees by the Company of accounts  payable of  Subsidiaries in
     the ordinary course of business;

          (h)  investments   received  in  connection  with  the  bankruptcy  or
     reorganization of, or settlement of delinquent  accounts and disputes with,
     customers and suppliers, in each case in the ordinary course of business;

          (i) investments in perpetual care trusts, pre-need trusts or similar
      transactions made (A) in the ordinary course of such Person's business and
      (B) subject to applicable federal, state or local regulations;

          (j)  Permitted  Acquisitions  for  consideration  consisting of common
     stock of the Company,  and other  consideration to the extent the amount or
     fair market value of such other  consideration  paid by the Company and its
     Subsidiaries  therefor (including  Indebtedness assumed pursuant to Section
     10.1 above) does not exceed (i) $50,000,000 for any single  acquisition and
     (ii) $100,000,000 for all acquisitions within a 12 month period;

          (k) Equity Interests and debt obligations  owned by the Company or any
     Subsidiary following an asset disposition permitted under Section 10.7;

          (l) Equity Interests in Persons owned by the Company or any Subsidiary
     following  the sale of Equity  Interests in  Subsidiaries  in  transactions
     constituting  permitted  asset  dispositions  under  Section 10.7 and other
     investments in joint ventures engaged in businesses  reasonably  related to
     the business of the Company; PROVIDED that no investment shall be permitted
     pursuant  to this  clause  (l) that,  together  with all other  investments
     permitted  under  this  clause  (l),  would at any time  have a book  value
     exceeding $50,000,000 in the aggregate;

          (m)  investments  not  permitted  by any other  clause of this Section
     10.6; PROVIDED that no investment shall be made pursuant to this clause (m)
     that,  together with all other investments made pursuant to this clause (m)
     after the Closing Date, would exceed $10,000,000 in the aggregate; and

          (n)  other  investments  not  permitted  by any  other  clause of this
     Section 10.6; PROVIDED that both before and immediately after giving effect
     to any such investment,  the Company has at least  $50,000,000 in liquidity
     in the form of Permitted  Investments  and at least  $150,000,000  of total
     liquidity,  including (A) unrestricted cash, (B) Permitted  Investments and
     (C) the difference  between the aggregate  Revolving Loan  Commitments

                                       34

<PAGE>

     (as defined in the Credit  Agreement)  under the revolving  credit facility
     available thereunder as of such date and the aggregate loans and letters of
     credit outstanding under such revolving credit facility as of such date.

     10.7. LIMITATION ON ASSET SALES.

     The Company will not, and will not permit any of its Subsidiaries to, sell,
transfer,  lease  or  otherwise  dispose  of any  asset,  including  any  Equity
Interest,  owned by it, nor will the Company permit any of its  Subsidiaries  to
issue any additional Equity Interest in such Subsidiary, except:

          (a)  sales of  inventory  (including  parcels  in  developed  cemetery
     properties),  used or surplus  equipment and Permitted  Investments  in the
     ordinary course of business;

          (b) sales,  transfers and dispositions to the Company or a Subsidiary;
     PROVIDED  that  any such  sales,  transfers  or  dispositions  involving  a
     Subsidiary that is not a Guarantor shall be made in compliance with Section
     10.10 below regarding restrictions on transactions with Affiliates;

          (c)  following  the  completion  of the sales  described in clause (d)
     below,  sales,  transfers,  leases and other  dispositions of assets (other
     than accounts  receivable or inventory)  the sale of which is not otherwise
     permitted by any other clause of this Section  10.7;  PROVIDED that (i) the
     aggregate book value of all assets sold,  transferred or otherwise disposed
     of in reliance  upon this clause (c)  subsequent  to the Closing Date shall
     not exceed 20% of the result of (x) the proforma  consolidated total assets
     of the Company and its Subsidiaries as of June 30, 2006, as provided in the
     Form 8-K filed with the SEC on September 19, 2006 PLUS any increase in such
     consolidated   total  assets  resulting  from  Permitted   Acquisitions  of
     Subsidiaries after the Closing Date (with each such increase to be measured
     as of the date of such Permitted  Acquisition)  MINUS (y) as of any date of
     calculation,   pre-need   funeral  and  cemetery   receivables   and  trust
     investments, cemetery perpetual care trust investments,  insurance invested
     assets  and any  similar  categories  of  assets  as  would be shown on the
     consolidated  balance sheet of the Company and its  Subsidiaries as of such
     date (which figure,  for the avoidance of doubt,  shall include any amounts
     in respect of such assets which may result from Permitted  Acquisitions  of
     Subsidiaries  after the Closing  Date) (and the Company and the  Purchasers
     hereby agree that, as of September 19, 2006, such calculation of clause (x)
     MINUS clause (y) will result in a total amount equal to $5,124,504,000.00),
     (ii) all sales, transfers, leases and other dispositions permitted pursuant
     to this  clause  (c) shall be made for fair  value and (iii) the  aggregate
     non-cash  consideration  received in connection with all such  transactions
     shall not exceed $400,000,000; and

          (d) asset sales for an aggregate  consideration  of up to $500,000,000
     contemplated  by the Company as a result of the Merger (the nature of which
     asset sales is described in Schedule  10.7),  whether or not such sales are
     required by the Federal  Trade  Commission,  the  proceeds of which will be
     applied,   in  part,  to  permanently   reduce  the  aggregate   amount  of
     Indebtedness outstanding in respect of the Term Loans.

                                       35

<PAGE>

     For purposes of Section 10.6 and this Section 10.7, any  transaction  which
is a "like kind  exchange"  under Section 1031 of the Code shall be considered a
disposition (if the Company or any Subsidiary  receives cash  consideration upon
the completion thereof) or an acquisition (if the Company or any Subsidiary pays
cash consideration upon the completion thereof) only upon the completion of such
transaction, and then only to the extent of the cash received or paid.

     10.8. SWAP AGREEMENTS.

      The  Company  will not,  and will not permit any of its  Subsidiaries  to,
enter into any Swap Agreement,  except Swap Agreements entered into (a) to hedge
or mitigate risks (including foreign exchange risks) to which the Company or any
Subsidiary has actual exposure (other than in respect of Equity Interests of, or
Indebtedness of, the Company or any of its Subsidiaries), and (b) to effectively
cap, collar or exchange  interest rates (from fixed to floating rates,  from one
floating  rate to  another  floating  rate or  otherwise)  with  respect  to any
interest-bearing liability or investment of the Company or any Subsidiary.

     10.9. RESTRICTED PAYMENTS.

          (a) The Company will not, and will not permit any of its  Subsidiaries
     to, declare or make, or agree to pay or make,  directly or indirectly,  any
     Restricted  Payment  except (i) that any Subsidiary may make any Restricted
     Payment to the Company or any other  Subsidiary  (PROVIDED that neither the
     Company nor any Guarantor may make any  Restricted  Payment to a Subsidiary
     that is not a Guarantor)  and (ii) as otherwise  provided  herein.  As used
     herein,  "RESTRICTED  PAYMENT"  means any  dividend  or other  distribution
     (whether in cash,  securities or other property) with respect to any Equity
     Interests  in the Company or any  Subsidiary,  or any  payment  (whether in
     cash, securities or other property),  including any sinking fund or similar
     deposit, on account of the purchase, redemption,  retirement,  acquisition,
     cancellation  or  termination  of any such Equity  Interests or any option,
     warrant or other right to acquire any such  Equity  Interests.  On any date
     that the Leverage Ratio, calculated as of such date, is greater than 3.5 to
     1.0, and so long as no Default or Event of Default  exists at the time,  or
     is created as a result of any such  dividend,  the  Company may declare and
     pay  dividends  with  respect  to  its  Equity   Interests  not  to  exceed
     $40,000,000 in the aggregate in the twelve month period  preceding the date
     of  such  proposed  dividend  (including  such  proposed  dividend  in  the
     calculation of such aggregate amount). On any date that the Leverage Ratio,
     calculated  as of such  date,  is less than or equal to 3.5 to 1.0,  and so
     long as no Default or Event of Default  exists at the time or is created as
     a  result  of any  dividend,  share  repurchase  or share  redemption,  the
     provisions  of this  section  will not apply to restrict  dividends,  share
     repurchases or share redemptions.

          (b)  Notwithstanding  the above,  on any date that the Leverage Ratio,
     calculated as of such date, is greater than 3.5 to 1.0 but less than 4.0 to
     1.0, so long as (i) there are no outstanding  Revolving Borrowings and (ii)
     the  Term  Loans  have  been  paid in full,  the  Company  may  make  share
     repurchases   of  its  Common  Stock  in  a  total  amount  not  to  exceed
     $100,000,000 in the aggregate after the Closing Date.

                                       36

<PAGE>

          (c) The Company will not,  nor will it permit any of its  Subsidiaries
     to,  make or agree to make,  directly or  indirectly,  any payment or other
     distribution  (whether in cash, securities or other property) in respect of
     principal  of or  interest  on any  Indebtedness,  or any  payment or other
     distribution (whether in cash, securities or other property), including any
     sinking fund or similar  deposit,  on account of the purchase,  redemption,
     retirement,  defeasance,  acquisition,  cancellation  or termination of any
     Indebtedness, except:

               (i) payment of Indebtedness created under this Agreement;

               (ii)  regularly   scheduled  and  other  mandatory  interest  and
          principal   payments   as  and  when  due  in  respect  of  any  other
          Indebtedness  permitted in accordance  with the  provisions of Section
          10.1;

               (iii)  refinancings of Indebtedness  permitted in accordance with
          the  provisions  of Section  10.1,  including the payment of customary
          fees, costs and expenses in connection therewith;

               (iv) the payment of secured  Indebtedness  that  becomes due as a
          result of the  voluntary  sale or transfer  of the  property or assets
          securing  such  Indebtedness  to the extent  such sale or  transfer is
          permitted under Section 10.7 above;

               (v) the  payment of  Indebtedness  of any Person  acquired by the
          Company or any Subsidiary that exists on the date of such acquisition;
          PROVIDED  that such Person  becomes a  Subsidiary  as a result of such
          acquisition;

               (vi) payment of Indebtedness  that matures prior to the Revolving
          Maturity Date; PROVIDED there are no outstanding  Revolving Borrowings
          at the time of any such payment and immediately after giving effect to
          any such payment;

               (vii)  payment of  Indebtedness  that matures after the Revolving
          Maturity Date;  PROVIDED that (A) no Indebtedness  described in clause
          (vi)  above is  outstanding,  other than (1)  non-public  Indebtedness
          disclosed  on  Schedule  5.15 (and,  for the  purposes  of this clause
          (vii),  non-public  Indebtedness  shall not include  any  Indebtedness
          incurred by the Company pursuant to a transaction in which the sale of
          such  Indebtedness to the ultimate  purchasers  thereof is exempt from
          registration  under the Securities Act pursuant to Rule 144A under the
          Securities  Act (17  C.F.R.  ss.230.144A)  as such rule may be amended
          from time to time) or (2) other non-public Indebtedness incurred after
          the Closing Date in an aggregate amount not to exceed $10,000,000, and
          (B) there are no outstanding Revolving Borrowings;

               (viii) prepayments and redemptions of Indebtedness of the Company
          or any  Subsidiary  with  proceeds of any  issuance and sale of common
          stock of the Company;

                                       37

<PAGE>

               (ix) exchanges of  Indebtedness  of the Company or any Subsidiary
          for common stock of the Company;

               (x)  other  prepayments  by the  Company  or any  Subsidiary  not
          permitted by any other clause of this Section  10.9;  PROVIDED that no
          such  prepayment or redemption  shall be made if (i) as of the date of
          such proposed prepayment or redemption,  the Leverage Ratio is greater
          than or equal to 3.5 to 1.00 and the  Company  or any  Subsidiary  has
          made other prepayments  permitted under this clause (x) (including the
          proposed  prepayment) in excess of $200,000,000  in the aggregate,  or
          (ii) as of the date of such  proposed  prepayment or  redemption,  the
          Leverage  Ratio  is less  than  3.5 to 1.00  and  the  Company  or any
          Subsidiary has made such other prepayments permitted under this clause
          (x) (including the proposed  prepayment) in excess of  $400,000,000 in
          the aggregate  (inclusive of the aggregate  amount of prepayments  and
          redemptions  made under clause (x)(i)),  in each case so long as there
          are no outstanding Revolving Borrowings; and

               (xi)  prepayment of the Term Loans,  the Revolving  Borrowings or
          the Alderwoods Debt in accordance with the terms thereof.

     10.10. TRANSACTIONS WITH AFFILIATES.

     The Company will not, and will not permit any Subsidiary to, sell, lease or
otherwise  transfer any  property or assets to, or purchase,  lease or otherwise
acquire  any  property  or  assets  from,  or  otherwise  engage  in  any  other
transactions  with,  any of  its  Affiliates,  except  (a)  transactions  in the
ordinary  course of  business  at prices  and on terms and  conditions  not less
favorable  to the  Company  or such  Subsidiary  than  could be  obtained  on an
arm's-length  basis from unrelated third parties,  (b)  transactions  between or
among the Company and one or more Subsidiaries that are Guarantors not involving
any other Affiliate, (c) any investment,  loan or advance involving a Subsidiary
that is permitted  under Section 10.6, (d) any Restricted  Payment  permitted by
Section  10.9  and  (e)  issuances  of  Equity   Interests  of  the  Company  in
satisfaction of obligations under retirement plans.

     10.11. RESTRICTIVE AGREEMENTS; MAINTENANCE OF MOST FAVORED LENDER STATUS.

          (a) The Company will not, and will not permit any of its  Subsidiaries
     to,  directly  or  indirectly,  enter  into,  incur or  permit to exist any
     agreement or other  arrangement  that  prohibits,  restricts or imposes any
     condition  upon (i) the ability of the Company or any Subsidiary to create,
     incur or permit to exist any Lien upon any of its properties or assets,  or
     (ii) the ability of any Subsidiary to pay dividends or other  distributions
     with  respect to any shares of its capital  stock or to make or repay loans
     or  advances  to  the  Company  or any  other  Subsidiary  or to  Guarantee
     Indebtedness of the Company or any other  Subsidiary that are, in each case
     in this clause  (ii),  more  restrictive  than that which  exists as of the
     Closing  Date;   PROVIDED  that  the  foregoing  shall  not  apply  to  (A)
     restrictions  and  conditions  imposed  by law or by  this  Agreement,  (B)
     restrictions  and  conditions  existing  on the date hereof  identified  on
     Schedule  10.11(a) (but,  subject to the following clause (C), this Section
     10.11(a)  shall apply to any  extension  or renewal of

                                       38

<PAGE>

     or  any  amendment  or  modification  expanding  the  scope  of,  any  such
     restriction or commitment),  (C) restrictions  and conditions  contained in
     any extension,  renewal,  replacement,  amendment or  modification  of each
     indenture  (including any supplemental  indentures entered into pursuant to
     the terms  thereof) to which the Company is a party on the Closing Date and
     which are identified on Schedule 10.11(a), so long as such restrictions and
     conditions  are not more  restrictive  than  those in the  indenture  being
     extended,   renewed,  replaced,  amended  or  modified  and  (D)  customary
     restrictions and conditions contained in agreements relating to the sale of
     a Subsidiary  pending such sale,  PROVIDED such restrictions and conditions
     apply only to the Subsidiary  that is to be sold and such sale is otherwise
     permitted hereunder.

          (b) If at any time on or after the Closing  Date,  the  Company  shall
     enter into any  amendment or other  modification  of the Credit  Agreement,
     which amendment or modification  contains one or more Additional  Covenants
     or Additional  Defaults,  the terms of this  Agreement  shall,  without any
     further  action on the part of the  Company  or any of the  holders  of the
     Notes,  be deemed to be amended  automatically  to include each  Additional
     Covenant and each  Additional  Default  contained in any such  amendment or
     modification. The Company further covenants to promptly execute and deliver
     at its expense  (including,  without  limitation,  the fees and expenses of
     counsel for the holders of the Notes) an  amendment  to this  Agreement  in
     form and substance  satisfactory  to the Required  Holders  evidencing  the
     amendment  of this  Agreement  to include  such  Additional  Covenants  and
     Additional  Defaults,  provided  that the  execution  and  delivery of such
     amendment  shall  not  be a  precondition  to  the  effectiveness  of  such
     amendment as provided for in this Section 10.11(b), but shall merely be for
     the  convenience  of  the  parties  hereto.  As  used  herein,  "ADDITIONAL
     COVENANT" means any affirmative or negative covenant or similar restriction
     contained  in  any  amendment  or  modification  of  the  Credit  Agreement
     applicable  to the Company or any  Subsidiary  (regardless  of whether such
     provision is labeled or otherwise  characterized as a covenant) the subject
     matter  of  which  either  (i) is  similar  to (or the same as) that of any
     covenant  in  Section  10 of  this  Agreement,  but  contains  one or  more
     provisions,  percentages,  amounts,  formulas or definitions  that are more
     restrictive  than those set forth herein or more  beneficial to the lenders
     under the Credit Agreement (and such covenant or similar  restriction shall
     be  deemed  an  Additional  Covenant  only  to the  extent  that it is more
     restrictive  or more  beneficial to such lenders) or (ii) is different from
     the  subject  matter of any  covenant in Section 10 of this  Agreement  and
     "ADDITIONAL  DEFAULT" means any provision contained in the Credit Agreement
     which permits the lenders  thereunder  to  accelerate  (with the passage of
     time or  giving  of  notice or both)  the  maturity  thereof  or  otherwise
     requires the Company or any Subsidiary to purchase the  Indebtedness  under
     the Credit  Agreement prior to the stated maturity thereof and which either
     (i) is similar to any Default or Event of Default  contained  in Section 11
     of  this  Agreement,  but  contains  one or more  provisions,  percentages,
     amounts,  formulas  or  definitions  that  are more  restrictive  or have a
     shorter  grace period than those set forth herein or is more  beneficial to
     the lenders under the Credit  Agreement (and such provision shall be deemed
     an Additional Default only to the extent that it is more restrictive, has a
     shorter  grace  period or is more  beneficial  to such  lenders) or (ii) is
     different  from the  subject  matter  of any  Default  or Event of  Default
     contained in Section 11 of this Agreement.

                                       39

<PAGE>


     10.12. FINANCIAL COVENANTS.

          (a) The Company will not permit the Leverage Ratio,  determined at the
     end of any fiscal quarter  occurring in a period set forth below, to exceed
     the ratio set forth below opposite such period.

       =======================================================================
              TIME PERIOD                                     RATIO
       =======================================================================
       Closing Date through and including June            5.50 to 1.00
       30, 2007
       -----------------------------------------------------------------------
       July 1, 2007 through and including                 5.25 to 1.00
       December 31, 2007
       -----------------------------------------------------------------------
       January 1, 2008 through and including June         5.00 to 1.00
       30, 2008
       -----------------------------------------------------------------------
       July 1, 2008 through and including                 4.75 to 1.00
       December 31, 2008
       -----------------------------------------------------------------------
       January 1, 2009 through and including              4.25 to 1.00
       December 31, 2009
       -----------------------------------------------------------------------
       January 1, 2010 through and including              3.75 to 1.00
       December 31, 2010
       -----------------------------------------------------------------------
       January 1, 2011 and thereafter                     3.50 to 1.00
       =======================================================================

          (b) The Company will not permit the ratio of EBITDA, for any period of
     four  consecutive  fiscal  quarters of the Company ending in any period set
     forth below,  to Consolidated  Interest  Expense for such period to be less
     than the ratio set forth below opposite such period.

       =======================================================================
              TIME PERIOD                                     RATIO
       =======================================================================
       Closing Date through and including                 2.50 to 1.00
       December 31, 2008
       -----------------------------------------------------------------------
       January 1, 2009 through and including June         2.75 to 1.00
       30, 2010
       -----------------------------------------------------------------------
       July 1, 2010 and thereafter                        3.00 to 1.00
       =======================================================================


     10.13. TERRORISM SANCTIONS REGULATIONS.

     The  Company  will not and will not permit any  Subsidiary  to (a) become a
Person described or designated in the Specially Designated Nationals and Blocked
Persons  List of the  Office of  Foreign  Assets  Control or in Section 1 of the
Anti-Terrorism Order or (b) engage in any dealings or transactions with any such
Person.

                                       40

<PAGE>

11.  EVENTS OF DEFAULT.

     An "EVENT OF DEFAULT"  shall exist if any of the  following  conditions  or
events shall occur and be continuing:

          (a) the Company  defaults in the payment of any  principal or Breakage
     Cost Indemnity,  if any, on any Note when the same becomes due and payable,
     whether at maturity or at a date fixed for  prepayment or by declaration or
     otherwise; or

          (b) the Company  defaults  in the payment of any  interest on any Note
     for more than five Business Days after the same becomes due and payable; or

          (c) the Company  defaults in the performance of or compliance with any
     term contained in Section 7.1(d) or Section 10; or

          (d) the Company  defaults in the performance of or compliance with any
     term contained  herein (other than those referred to in Sections 11(a), (b)
     and (c)), or any  Guarantor  defaults in the  performance  of or compliance
     with any term of the  Guaranty  Agreement  and such default is not remedied
     within 30 days after the  earlier of (i) a  Responsible  Officer  obtaining
     actual  knowledge  of such default and (ii) the Company  receiving  written
     notice of such default  from any holder of a Note (any such written  notice
     to be identified as a "notice of default" and to refer specifically to this
     Section 11(d)); or

          (e) any  representation or warranty made in writing by or on behalf of
     the Company or by any officer of the Company in this  Agreement or by or on
     behalf of any Guarantor or by any officer of such Guarantor in the Guaranty
     Agreement or in any writing  furnished in connection with the  transactions
     contemplated  hereby or thereby  proves to have been false or  incorrect in
     any material respect on the date as of which made; or

          (f) (i) the Company or any  Subsidiary  is in default (as principal or
     as guarantor or other surety) in the payment of any principal of or premium
     or  interest  on any  Indebtedness  that  is  outstanding  in an  aggregate
     principal  amount  of at  least  $15,000,000  beyond  any  period  of grace
     provided with respect thereto,  or (ii) the Company or any Subsidiary is in
     default in the  performance of or compliance  with any term of any evidence
     of any  Indebtedness  in an aggregate  outstanding  principal  amount of at
     least $15,000,000 or of any mortgage, indenture or other agreement relating
     thereto or any other condition exists, and as a consequence of such default
     or condition such  Indebtedness has become, or has been declared (or one or
     more  Persons are  entitled to declare  such  Indebtedness  to be), due and
     payable before its stated maturity or before its regularly  scheduled dates
     of payment,  or (iii) as a consequence of the occurrence or continuation of
     any event or condition  (other than the passage of time or the right of the
     holder of Indebtedness to convert such Indebtedness into Equity Interests),
     (x) the Company or any Subsidiary has become obligated to purchase or repay
     Indebtedness  before its regular maturity or before its regularly scheduled
     dates of payment in an aggregate  outstanding  principal amount of at least
     $15,000,000,  or (y) one or more

                                       41

<PAGE>

     Persons  have the right to  require  the  Company or any  Subsidiary  so to
     purchase or repay such Indebtedness; or

          (g) the Company or any  Subsidiary  (i) is  generally  not paying,  or
     admits in writing its  inability to pay, its debts as they become due, (ii)
     files,  or consents by answer or otherwise  to the filing  against it of, a
     petition for relief or  reorganization or arrangement or any other petition
     in bankruptcy,  for  liquidation  or to take  advantage of any  bankruptcy,
     insolvency,  reorganization,   moratorium  or  other  similar  law  of  any
     jurisdiction,  (iii) makes an assignment  for the benefit of its creditors,
     (iv) consents to the appointment of a custodian, receiver, trustee or other
     officer  with  similar  powers  with  respect to it or with  respect to any
     substantial part of its property,  (v) is adjudicated as insolvent or to be
     liquidated,  or (vi) takes  corporate  action for the purpose of any of the
     foregoing; or

          (h) a court or other Governmental  Authority of competent jurisdiction
     enters an order  appointing,  without  consent by the Company or any of its
     Subsidiaries, a custodian,  receiver, trustee or other officer with similar
     powers with  respect to it or with respect to any  substantial  part of its
     property,  or  constituting an order for relief or approving a petition for
     relief  or  reorganization  or any  other  petition  in  bankruptcy  or for
     liquidation or to take advantage of any bankruptcy or insolvency law of any
     jurisdiction, or ordering the dissolution, winding-up or liquidation of the
     Company or any of its  Subsidiaries,  or any such  petition  shall be filed
     against the Company or any of its  Subsidiaries and such petition shall not
     be dismissed within 60 days; or

          (i) a final judgment or judgments for the payment of money aggregating
     in excess of  $15,000,000  are rendered  against one or more of the Company
     and its  Subsidiaries  and which  judgments  are not,  within 30 days after
     entry  thereof,  bonded,  discharged or stayed pending  appeal,  or are not
     discharged  within 30 days after the  expiration of such stay or any action
     shall be legally  taken by a judgment  creditor  to attach or levy upon any
     assets of the Company or any Subsidiary to enforce any such judgment;

          (j) either of the Guaranty  Agreement or the Sharing  Agreement is not
     or ceases to be effective  against any  Guarantor for any period of 15 days
     or more or is alleged by the  Company or any  Guarantor  to be  ineffective
     against any Guarantor for any reason  unless,  in each case, the Company is
     in compliance  with Section 9.7 without such  Guarantor  continuing to be a
     Guarantor; or

          (k) if (i)  any  Plan  shall  fail  to  satisfy  the  minimum  funding
     standards  of ERISA or the Code  for any  plan  year or part  thereof  or a
     waiver of such standards or extension of any amortization  period is sought
     or  granted  under  section  412 of the  Code,  (ii) a notice  of intent to
     terminate  any Plan shall have been or is  reasonably  expected to be filed
     with the PBGC or the PBGC shall have  instituted  proceedings  under  ERISA
     section 4042 to terminate  or appoint a trustee to  administer  any Plan or
     the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
     may become a subject of any such  proceedings,  (iii) the aggregate "amount
     of unfunded benefit liabilities" (within the meaning of section 4001(a)(18)
     of  ERISA)  under  all  Plans,  determined  in  accordance

                                       42

<PAGE>

     with Financial Accounting Standards Board Statement No. 87 (as in effect at
     such time, or any replacement thereof), shall exceed $50,000,000,  (iv) the
     Company  or any  ERISA  Affiliate  shall  have  incurred  or is  reasonably
     expected to incur any  liability  pursuant to Title I or IV of ERISA or the
     penalty or excise tax  provisions of the Code relating to employee  benefit
     plans,  (v)  the  Company  or  any  ERISA  Affiliate   withdraws  from  any
     Multiemployer  Plan  resulting in a "withdrawal  liability" as such term is
     defined in Part 1 of  Subtitle E of Title IV of ERISA,  or (vi) the Company
     or any Subsidiary  establishes or amends any employee  welfare benefit plan
     that  provides  post-employment  welfare  benefits  in a manner  that would
     increase the liability of the Company or any Subsidiary thereunder; and any
     such event or events  described in clauses (i) through  (vi) above,  either
     individually  or  together  with any  other  such  event or  events,  could
     reasonably be expected to have a Material Adverse Effect.

As used in  Section  11(k),  the terms  "EMPLOYEE  BENEFIT  PLAN" and  "EMPLOYEE
WELFARE BENEFIT PLAN" shall have the respective  meanings assigned to such terms
in section 3 of ERISA.

12.  REMEDIES ON DEFAULT, ETC.

     12.1. ACCELERATION.

          (a) If an Event of Default  with  respect to the Company  described in
     Section  11(g) or (h) (other than an Event of Default  described  in clause
     (i) of Section 11(g) or described in clause (vi) of Section 11(g) by virtue
     of the fact that such clause  encompasses  clause (i) of Section 11(g)) has
     occurred,  all  the  Notes  then  outstanding  shall  automatically  become
     immediately  due and  payable  without  notice of intent to  accelerate  or
     notice of acceleration.

          (b) If any other Event of Default has occurred and is continuing,  the
     Required  Holders may at any time at their option,  by notice or notices to
     the Company  (other than notice of intent to  accelerate  which the Company
     hereby  waives),  declare all the Notes then  outstanding to be immediately
     due and payable.

          (c) If any Event of  Default  described  in  Section  11(a) or (b) has
     occurred  and is  continuing,  any  holder or  holders of Notes at the time
     outstanding  affected by such Event of Default  may at any time,  at its or
     their  option,  by notice or notices to the  Company  (other than notice of
     intent to  accelerate  which the Company  hereby  waives),  declare all the
     Notes held by it or them to be immediately due and payable.

     Upon any Notes  becoming due and payable under this Section  12.1,  whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes,  plus (x) all accrued and unpaid interest
thereon (including,  but not limited to, interest accrued thereon at the Default
Rate)  and (y)  the  Breakage  Cost  Indemnity  determined  in  respect  of such
principal  amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest, notice of intent to accelerate or further notice (other than the notice
described in Section  8.8(b) with respect to Breakage  Cost  Indemnity),  all of
which are hereby waived. The Company acknowledges, and the parties hereto agree,
that each holder of a Note has the right to maintain

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<PAGE>

its investment in the Notes free from repayment by the Company (except as herein
specifically  provided  for) and that the  provision for payment of any Breakage
Cost  Indemnity  by the  Company in the event that the Notes are  prepaid or are
accelerated  as a  result  of an  Event  of  Default,  is  intended  to  provide
compensation for the deprivation of such right under such circumstances.

     12.2. OTHER REMEDIES.

     If any  Default or Event of Default has  occurred  and is  continuing,  and
irrespective of whether any Notes have become or have been declared  immediately
due and  payable  under  Section  12.1,  the  holder  of any  Note  at the  time
outstanding  may  proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate  proceeding,  whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof,  or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.

      12.3. RESCISSION.

      At any time after any Notes have been declared due and payable pursuant to
Section 12.1(b) or (c), the Required Holders,  by written notice to the Company,
may  rescind  and annul any such  declaration  and its  consequences  if (a) the
Company  has paid all  overdue  interest  on the  Notes,  all  principal  of and
Breakage Cost  Indemnity,  if any, on any Notes that are due and payable and are
unpaid  other  than by  reason of such  declaration,  and all  interest  on such
overdue  principal  and  Breakage  Cost  Indemnity,  if any,  and (to the extent
permitted by applicable  law) any overdue  interest in respect of the Notes,  at
the Default  Rate,  (b) neither the Company nor any other Person shall have paid
any amounts which have become due solely by reason of such declaration,  (c) all
Events of Default and  Defaults,  other than  non-payment  of amounts  that have
become  due solely by reason of such  declaration,  have been cured or have been
waived  pursuant to Section  17, and (d) no judgment or decree has been  entered
for the payment of any monies due pursuant hereto or to the Notes. No rescission
and  annulment  under this Section 12.3 will extend to or affect any  subsequent
Event of Default or Default or impair any right consequent thereon.

      12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.

      No course of dealing and no delay on the part of any holder of any Note in
exercising  any right,  power or remedy  shall  operate  as a waiver  thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy  conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right,  power or remedy  referred to herein or therein
or now or  hereafter  available  at law,  in equity,  by  statute or  otherwise.
Without  limiting the  obligations  of the Company under Section 15, the Company
will pay to the holder of each Note on demand  such  further  amount as shall be
sufficient  to cover all costs  and  expenses  of such  holder  incurred  in any
enforcement or collection under this Section 12, including,  without limitation,
reasonable attorneys' fees, expenses and disbursements.

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<PAGE>

13.   REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

      13.1. REGISTRATION OF NOTES.

      The Company  shall keep at its principal  executive  office a register for
the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each  transferee of one or more Notes shall be  registered in such  register.
Prior to due presentment for registration of transfer,  the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes  hereof,  and the Company  shall not be affected by any
notice or knowledge to the  contrary.  The Company shall give to any holder of a
Note  that is an  Institutional  Investor  promptly  upon  request  therefor,  a
complete and correct copy of the names and addresses of all  registered  holders
of Notes.

      13.2. TRANSFER AND EXCHANGE OF NOTES.

      Upon  surrender  of any  Note to the  Company  at the  address  and to the
attention of the designated  officer (all as specified in Section 18(iii)),  for
registration  of  transfer  or  exchange  (and in the  case of a  surrender  for
registration  of transfer  accompanied by a written  instrument of transfer duly
executed by the  registered  holder of such Note or such holder's  attorney duly
authorized in writing and  accompanied by the relevant  name,  address and other
information for notices of each transferee of such Note or part thereof), within
ten Business Days  thereafter,  the Company  shall  execute and deliver,  at the
Company's  expense  (except  as  provided  below),  one or more  new  Notes  (as
requested by the holder thereof) of the same Series in exchange therefor,  in an
aggregate  principal  amount  equal  to  the  unpaid  principal  amount  of  the
surrendered  Note.  Each such new Note shall be  payable to such  Person as such
holder may request and shall be  substantially  in the form of the Note for such
Series set forth in Exhibit 1(a) or Exhibit  1(b), as the case may be. Each such
new Note shall be dated and bear interest from the date to which  interest shall
have been paid on the surrendered Note or dated the date of the surrendered Note
if no interest shall have been paid thereon.  The Company may require payment of
a sum  sufficient  to cover any  stamp tax or  governmental  charge  imposed  in
respect  of any such  transfer  of  Notes.  Notes  shall not be  transferred  in
denominations  of less than  $100,000,  PROVIDED that if necessary to enable the
registration  of transfer by a holder of its entire  holding of Notes,  one Note
may  be in a  denomination  of  less  than  $100,000.  Any  transferee,  by  its
acceptance of a Note registered in its name (or the name of its nominee),  shall
be deemed to have made the  representation  set forth in Section 6.2 and to have
become a party to the Sharing  Agreement  (and each other  Lender (as defined in
the Sharing  Agreement)  shall be entitled to rely on such deemed joinder to the
Sharing Agreement.

      13.3. REPLACEMENT OF NOTES.

      Upon  receipt by the Company at the address  and to the  attention  of the
designated officer (all as specified in Section 18(iii)) of evidence  reasonably
satisfactory  to it of the  ownership  of and the loss,  theft,  destruction  or
mutilation of any Note (which evidence shall be, in the case of an Institutional
Investor,  notice from such  Institutional  Investor of such  ownership and such
loss, theft, destruction or mutilation), and

                                        45

<PAGE>

          (a) in the case of loss, theft or destruction, of indemnity reasonably
     satisfactory  to it  (PROVIDED  that if the holder of such Note is, or is a
     nominee  for,  an  original  Purchaser  or another  holder of a Note with a
     minimum net worth of at least  $100,000,000  or a  Qualified  Institutional
     Buyer,  such Person's own unsecured  agreement of indemnity shall be deemed
     to be satisfactory), or

          (b) in  the  case  of  mutilation,  upon  surrender  and  cancellation
     thereof,

within ten  Business  Days  thereafter,  the  Company at its own  expense  shall
execute and deliver,  in lieu thereof, a new Note of the same Series,  dated and
bearing  interest from the date to which  interest  shall have been paid on such
lost,  stolen,  destroyed  or  mutilated  Note or dated  the date of such  lost,
stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

14.   PAYMENTS ON NOTES.

      14.1. PLACE OF PAYMENT.

      Subject to Section 14.2,  payments of principal,  Breakage Cost Indemnity,
if any,  and  interest  becoming  due and  payable on the Notes shall be made in
Houston, Texas at the principal office of the Company in such jurisdiction.  The
Company may at any time, by notice to each holder of a Note, change the place of
payment  of the  Notes so long as such  place of  payment  shall be  either  the
principal office of the Company in such  jurisdiction or the principal office of
a bank or trust company in such jurisdiction.

      14.2. HOME OFFICE PAYMENT.

      So long as any  Purchaser or its nominee  shall be the holder of any Note,
and  notwithstanding  anything  contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Breakage Cost  Indemnity,  if any, and interest by the method and at the address
specified for such purpose below such Purchaser's name in Schedule A, or by such
other method or at such other address as such Purchaser  shall have from time to
time  specified  to the  Company  in  writing  for  such  purpose,  without  the
presentation  or surrender  of such Note or the making of any notation  thereon,
except  that upon  written  request of the  Company  made  concurrently  with or
reasonably  promptly  after  payment  or  prepayment  in full of any Note,  such
Purchaser shall surrender such Note for cancellation,  reasonably promptly after
any such  request,  to the Company at its principal  executive  office or at the
place of payment most  recently  designated  by the Company  pursuant to Section
14.1. Prior to any sale or other  disposition of any Note held by a Purchaser or
its nominee,  such Purchaser  will, at its election,  either endorse thereon the
amount of principal  paid  thereon and the last date to which  interest has been
paid thereon or surrender such Note to the Company in exchange for a new Note or
Notes  pursuant to Section  13.2.  The Company  will afford the benefits of this
Section  14.2 to any  Institutional  Investor  that is the  direct  or  indirect
transferee of any Note  purchased by a Purchaser  under this  Agreement and that
has made the same agreement relating to such Note as the Purchasers have made in
this Section 14.2.

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<PAGE>

      14.3. RECORD DATE.

      Any   provision  set  forth  herein  or  in  the  Notes  to  the  contrary
notwithstanding,  the Company  shall make each payment of principal and interest
on any Note to the Person who is, on the second  Business Day  preceding the due
date for such payment, registered as the holder thereof at the close of business
on such second Business Day.

15.   EXPENSES, ETC.

      15.1. TRANSACTION EXPENSES.

      Whether or not the transactions  contemplated hereby are consummated,  the
Company will pay all costs and expenses (including reasonable attorneys' fees of
a special counsel and, if reasonably required by the Required Holders,  local or
other  counsel)  incurred by the  Purchasers  and each other holder of a Note in
connection with such transactions and in connection with any amendments, waivers
or  consents  under or in respect of this  Agreement,  the Notes,  the  Guaranty
Agreement or the Sharing  Agreement  (whether or not such  amendment,  waiver or
consent becomes effective),  including,  without  limitation:  (a) the costs and
expenses  incurred in enforcing or defending (or  determining  whether or how to
enforce or defend) any rights  under this  Agreement,  the Notes,  the  Guaranty
Agreement  or the Sharing  Agreement or in  responding  to any subpoena or other
legal process or informal  investigative  demand issued in connection  with this
Agreement,  the Notes, the Guaranty  Agreement or the Sharing  Agreement,  or by
reason  of being a holder of any Note,  (b) the  costs and  expenses,  including
financial  advisors'  fees,  incurred  in  connection  with  the  insolvency  or
bankruptcy of the Company or any  Subsidiary or in connection  with any work-out
or restructuring of the  transactions  contemplated  hereby and by the Notes and
(c) the costs and expenses  incurred in  connection  with the initial  filing of
this Agreement and all related documents and financial  information with the SVO
PROVIDED,  that such costs and  expenses  under this clause (c) shall not exceed
$5,000. The Company will pay, and will save each Purchaser and each other holder
of a Note harmless from,  all claims in respect of any fees,  costs or expenses,
if any,  of brokers  and  finders  (other  than  those,  if any,  retained  by a
Purchaser or other holder in connection with its purchase of the Notes).

      15.2. SURVIVAL.

      The  obligations  of the Company  under this  Section 15 will  survive the
payment or transfer of any Note,  the  enforcement,  amendment  or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.

16.   SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

      All  representations  and  warranties  contained  herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by any  Purchaser  of any Note or portion  thereof or  interest  therein and the
payment of any Note, and may be relied upon by any subsequent  holder of a Note,
regardless  of any  investigation  made  at any  time  by or on  behalf  of such
Purchaser  or any  other  holder  of a Note.  All  statements  contained  in any
certificate  or  other  instrument  delivered  by or on  behalf  of the  Company
pursuant to this Agreement shall be deemed representations and warranties of the
Company under this

                                        47

<PAGE>

Agreement.  Subject to the  preceding  sentence,  this  Agreement  and the Notes
embody the entire  agreement and  understanding  between each  Purchaser and the
Company and supersede all prior  agreements and  understandings  relating to the
subject matter hereof.

17.   AMENDMENT AND WAIVER.

      17.1. REQUIREMENTS.

      This  Agreement  and the Notes may be amended,  and the  observance of any
term  hereof  or  of  the  Notes  may  be  waived   (either   retroactively   or
prospectively),  with (and only with) the written consent of the Company and the
Required  Holders,  except  that  (a)  no  amendment  or  waiver  of  any of the
provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof,  or any defined term (as it
is used therein),  will be effective as to any Purchaser  unless consented to by
such Purchaser in writing,  and (b) no such amendment or waiver may, without the
written  consent  of the  holder of each Note at the time  outstanding  affected
thereby, (i) subject to the provisions of Section 12 relating to acceleration or
rescission,  change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest  or of the  Breakage  Cost  Indemnity  on, the Notes,  (ii)  change the
percentage  of the  principal  amount  of the  Notes  the  holders  of which are
required  to consent to any such  amendment  or  waiver,  or (iii)  amend any of
Sections 8, 11(a), 11(b), 12, 17 or 20.

      17.2. SOLICITATION OF HOLDERS OF NOTES.

          (a)  SOLICITATION.  The Company  will provide each holder of the Notes
     (irrespective  of the  amount of Notes  then  owned by it) with  sufficient
     information,  sufficiently  far in  advance  of  the  date  a  decision  is
     required, to enable such holder to make an informed and considered decision
     with respect to any proposed amendment, waiver or consent in respect of any
     of the provisions hereof or of the Notes. The Company will deliver executed
     or true and correct copies of each  amendment,  waiver or consent  effected
     pursuant to the provisions of this Section 17 to each holder of outstanding
     Notes promptly following the date on which it is executed and delivered by,
     or receives the consent or approval of, the requisite holders of Notes.

          (b) PAYMENT.  The Company will not directly or indirectly pay or cause
     to be paid any  remuneration,  whether by way of supplemental or additional
     interest,  fee or otherwise,  or grant any security or provide other credit
     support, to any holder of Notes as consideration for or as an inducement to
     the entering  into by any holder of Notes of any waiver or amendment of any
     of the terms and provisions hereof unless such remuneration is concurrently
     paid,  or  security  is  concurrently   granted  or  other  credit  support
     concurrently  provided,  on the same terms, ratably to each holder of Notes
     then  outstanding  even if such  holder did not  consent to such  waiver or
     amendment.

      17.3. BINDING EFFECT, ETC.

      Any  amendment  or waiver  consented  to as  provided  in this  Section 17
applies  equally to all holders of Notes and is binding  upon them and upon each
future  holder of any Note and upon the Company  without  regard to whether such
Note has been marked to indicate such amendment or waiver.  No such amendment or
waiver will extend to or affect any obligation,  covenant,

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<PAGE>

agreement, Default or Event of Default not expressly amended or waived or impair
any right consequent thereon.  Neither any course of dealing between the Company
and the holder of any Note nor any delay in exercising  any rights  hereunder or
under any Note  shall  operate  as a waiver of any  rights of any holder of such
Note. As used herein,  the term "this  Agreement" and  references  thereto shall
mean this Agreement as it may from time to time be amended or supplemented.

      17.4. NOTES HELD BY COMPANY, ETC.

      Solely for the purpose of determining whether the holders of the requisite
percentage of the aggregate principal amount of Notes then outstanding  approved
or  consented  to any  amendment,  waiver  or  consent  to be given  under  this
Agreement  or the Notes,  or have  directed  the  taking of any action  provided
herein  or in the  Notes to be taken  upon the  direction  of the  holders  of a
specified   percentage  of  the  aggregate   principal   amount  of  Notes  then
outstanding,  Notes  directly or  indirectly  owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.

      17.5. RELEASE OF GUARANTORS.

      Notwithstanding  any contrary  provision in this  Agreement,  the Guaranty
Agreement  or the  Sharing  Agreement,  if (a)  any  Guarantor  is no  longer  a
Subsidiary  and (b) at the time such  Guarantor  ceases to be a  Subsidiary,  no
Event of  Default  then  exists,  then  such  Guarantor  shall be  automatically
released from its obligations under the Guaranty Agreement, without any need for
any formal action by the holders of the Notes, and the holders of the Notes will
confirm  such  release  by a notice to the  Company  upon  receipt  of a request
therefor.

18.   NOTICES.

      All notices and communications  provided for hereunder shall be in writing
and sent (a) by telecopy if the sender on the same day sends a  confirming  copy
of such notice by a recognized overnight delivery service (charges prepaid),  or
(b) by  registered  or certified  mail with return  receipt  requested  (postage
prepaid),  or (c) by a  recognized  overnight  delivery  service  (with  charges
prepaid) or (d) in respect of any notice to be sent pursuant to Sections 7.1(a),
7.1(b),  7.1(c),  7.1(g), 7.1(h), or 7.2, by means of the Company's posting such
information   through  an  Electronic   Distribution   Service  (and  sending  a
notification  of such  posting  via  e-mail to each  holder of Notes  that is an
Institutional Investor at such holder's e-mail address as provided in Schedule A
or by any subsequent  holder of the Notes to the Company in accordance  with the
provisions  of this  Section 18 (or,  if any such  holder has not so provided an
e-mail  address to the  Company,  then such  notification  shall be  provided as
required under clause (a) above)). Any such notice (if not sent via e-mail) must
be sent:

               (i) if to any  Purchaser  or its  nominee,  to such  Purchaser or
          nominee at the address  specified for such  communications in Schedule
          A, or at such other  address as such  Purchaser or nominee  shall have
          specified to the Company in writing,

               (ii) if to any other  holder of any Note,  to such holder at such
          address as such other  holder  shall have  specified to the Company in
          writing, or

                                        49

<PAGE>

               (iii) if to the Company,  to the Company at its address set forth
          at the  beginning  hereof to the  attention of  Treasurer,  or at such
          other  address as the Company  shall have  specified  to the holder of
          each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

19.   REPRODUCTION OF DOCUMENTS.

      This  Agreement and all documents  relating  thereto,  including,  without
limitation,  (a)  consents,  waivers and  modifications  that may  hereafter  be
executed,  (b) documents  received by any  Purchaser at the Closing  (except the
Notes  themselves),  and  (c)  financial  statements,   certificates  and  other
information  previously  or hereafter  furnished  to any  Purchaser or any other
holder of Notes,  may be  reproduced  by such  Purchaser or such other holder of
Notes by any photographic,  photostatic,  electronic,  digital, or other similar
process  and such  Purchaser  or such  other  holder  of Notes may  destroy  any
original document so reproduced.  The Company agrees and stipulates that, to the
extent permitted by applicable law, any such reproduction shall be admissible in
evidence as the  original  itself in any judicial or  administrative  proceeding
(whether  or  not  the  original  is  in  existence  and  whether  or  not  such
reproduction  was made by such  Purchaser  or such other  holder of Notes in the
regular  course  of  business)  and  any   enlargement,   facsimile  or  further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 19 shall not  prohibit  the  Company  or any other  holder of Notes from
contesting  any such  reproduction  to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.

20.   CONFIDENTIAL INFORMATION.

      For the  purposes of this  Section 20,  "CONFIDENTIAL  INFORMATION"  means
information  delivered  to any  Purchaser  or any other holder of Notes by or on
behalf of the Company or any  Subsidiary  in  connection  with the  transactions
contemplated  by or otherwise  pursuant to this Agreement that is proprietary in
nature and that was clearly marked or labeled or otherwise adequately identified
when received by such Purchaser as being confidential information of the Company
or such  Subsidiary,  PROVIDED that such term does not include  information that
(a) was publicly known or otherwise known to such Purchaser prior to the time of
such  disclosure,  (b)  subsequently  becomes  publicly  known through no act or
omission by such Purchaser or any Person acting on such Purchaser's  behalf, (c)
otherwise  becomes known to such Purchaser other than through  disclosure by the
Company or any Subsidiary or (d) constitutes  financial  statements delivered to
such Purchaser  under Section 7.1 that are otherwise  publicly  available.  Each
Purchaser will maintain the confidentiality of such Confidential  Information in
accordance  with  procedures  adopted by such Purchaser in good faith to protect
confidential information of third parties delivered to such Purchaser,  PROVIDED
that such Purchaser may deliver or disclose Confidential  Information to (i) its
directors,  officers,  employees, agents, attorneys, trustees and affiliates (to
the extent  such  disclosure  reasonably  relates to the  administration  of the
investment  represented  by its Notes),  (ii) its  financial  advisors and other
professional   advisors  who  agree  to  hold   confidential   the  Confidential
Information substantially in accordance with the terms of this Section 20, (iii)
any other holder of any Note, (iv) any Institutional  Investor to which it sells
or offers to sell such Note or any part thereof or any participation therein (if
such  Person  has agreed in writing  prior to its  receipt of such  Confidential
Information  to be bound by the  provisions  of

                                        50

<PAGE>

this  Section  20), (v) any Person from which it offers to purchase any security
of the  Company  (if such  Person has agreed in writing  prior to its receipt of
such Confidential Information to be bound by the provisions of this Section 20),
(vi) any federal or state  regulatory  authority having  jurisdiction  over such
Purchaser, (vii) the NAIC or the SVO or, in each case, any similar organization,
or any nationally  recognized  rating agency that requires access to information
about such Purchaser's investment portfolio, or (viii) any other Person to which
such  delivery or  disclosure  may be  necessary  or  appropriate  (w) to effect
compliance with any law, rule, regulation or order applicable to such Purchaser,
(x) in response to any subpoena or other legal process,  (y) in connection  with
any  litigation to which such Purchaser is a party or (z) if an Event of Default
has occurred and is  continuing,  to the extent such  Purchaser  may  reasonably
determine  such delivery and  disclosure to be necessary or  appropriate  in the
enforcement  or for  the  protection  of the  rights  and  remedies  under  such
Purchaser's  Notes and this Agreement.  Each holder of a Note, by its acceptance
of a Note,  will be deemed to have  agreed to be bound by and to be  entitled to
the benefits of this Section 20 as though it were a party to this Agreement.  On
reasonable  request by the Company in connection with the delivery to any holder
of a Note of  information  required to be  delivered  to such holder  under this
Agreement or  requested  by such holder  (other than a holder that is a party to
this  Agreement or its nominee),  such holder will enter into an agreement  with
the Company embodying the provisions of this Section 20.

21.   SUBSTITUTION OF PURCHASER.

      Each  Purchaser  shall  have  the  right  to  substitute  any  one  of its
Affiliates  as the  purchaser  of the  Notes  that  it has  agreed  to  purchase
hereunder,  by written  notice to the  Company,  which notice shall be signed by
both such Purchaser and such Affiliate, shall contain such Affiliate's agreement
to be bound by this Agreement and shall contain a confirmation by such Affiliate
of the accuracy with respect to it of the  representations  set forth in Section
6.  Upon  receipt  of such  notice,  any  reference  to such  Purchaser  in this
Agreement  (other  than in this  Section  21),  shall be deemed to refer to such
Affiliate in lieu of such original  Purchaser.  In the event that such Affiliate
is so  substituted  as a  Purchaser  hereunder  and  such  Affiliate  thereafter
transfers  to  such  original  Purchaser  all of the  Notes  then  held  by such
Affiliate, upon receipt by the Company of notice of such transfer, any reference
to such Affiliate as a "Purchaser" in this Agreement (other than in this Section
21),  shall no longer be deemed to refer to such  Affiliate,  but shall refer to
such original  Purchaser,  and such original  Purchaser shall again have all the
rights of an original holder of the Notes under this Agreement.

22.   MISCELLANEOUS.

      22.1. SUCCESSORS AND ASSIGNS.

      All covenants and other  agreements  contained in this  Agreement by or on
behalf  of any of the  parties  hereto  bind and inure to the  benefit  of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.

      22.2. PAYMENTS DUE ON NON-BUSINESS DAYS.

      Anything in this  Agreement or the Notes to the  contrary  notwithstanding
(but  without  limiting  the  requirement  in Section 8.5 that the notice of any
optional  prepayment  specify  a

                                        51

<PAGE>

Business Day as the date fixed for such prepayment), any payment of principal of
or Breakage Cost Indemnity or interest on any Note,  including the maturity date
of such Note,  that is due on a date other than a Business  Day shall be made on
the next  succeeding  Business Day (or the immediately  preceding  Business Day,
with  respect to certain  instances  described  in the  definition  of  Interest
Payment Date),  and shall include the additional days elapsed in the computation
of the interest payable on such next succeeding Business Day.

      22.3. ACCOUNTING TERMS.

      All accounting  terms used herein which are not expressly  defined in this
Agreement have the meanings  respectively given to them in accordance with GAAP.
Except as otherwise  specifically  provided herein,  (a) all  computations  made
pursuant to this  Agreement  shall be made in accordance  with GAAP, and (b) all
financial  statements  shall be  prepared  in  accordance  with GAAP;  PROVIDED,
HOWEVER,  that if the Company notifies the holders of the Notes that the Company
requests an amendment  to any  provision  hereof to eliminate  the effect of any
change occurring after the Closing Date in GAAP or in the application thereof on
the operation of such provision (or if the Required Holders request an amendment
to any provision hereof for such purpose), regardless of whether any such notice
is given before or after such change in GAAP or in the application thereof, then
such  provision  shall be  interpreted  on the  basis of GAAP as in  effect  and
applied  immediately  before such change shall have become  effective until such
notice  shall  have been  withdrawn  or such  provision  amended  in  accordance
herewith.

      22.4. SEVERABILITY.

      Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction  shall,  as to such  jurisdiction,  be ineffective to the extent of
such  prohibition  or  unenforceability   without   invalidating  the  remaining
provisions  hereof,  and  any  such  prohibition  or   unenforceability  in  any
jurisdiction  shall (to the full  extent  permitted  by law) not  invalidate  or
render unenforceable such provision in any other jurisdiction.

      22.5. CONSTRUCTION, ETC.

      Each  covenant   contained  herein  shall  be  construed  (absent  express
provision to the contrary) as being independent of each other covenant contained
herein,  so that  compliance  with any one  covenant  shall not (absent  such an
express  contrary  provision)  be  deemed to  excuse  compliance  with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which  such  Person  is  prohibited  from  taking,  such  provision  shall be
applicable whether such action is taken directly or indirectly by such Person.

      For the avoidance of doubt,  all  Schedules and Exhibits  attached to this
Agreement shall be deemed to be a part hereof.

      22.6. COUNTERPARTS.

      This  Agreement  may be  executed in any number of  counterparts,  each of
which  shall be an  original  but all of which  together  shall  constitute  one
instrument.  Each  counterpart  may consist of a number of copies  hereof,  each
signed by less than all, but together signed by all, of the parties hereto.

                                        52

<PAGE>

     22.7. GOVERNING LAW.

      This Agreement shall be construed and enforced in accordance with, and the
rights of the  parties  shall be  governed  by, the law of the State of New York
excluding  choice-of-law  principles  of the law of such State that would permit
the application of the laws of a jurisdiction other than such State.

     22.8. JURISDICTION AND PROCESS; WAIVER OF JURY TRIAL.

          (a) The Company irrevocably submits to the non-exclusive  jurisdiction
     of any New York State or federal court sitting in the Borough of Manhattan,
     The City of New York, over any suit, action or proceeding arising out of or
     relating to this Agreement or the Notes. To the fullest extent permitted by
     applicable law, the Company irrevocably waives and agrees not to assert, by
     way of motion, as a defense or otherwise,  any claim that it is not subject
     to the  jurisdiction  of any such court,  any objection  that it may now or
     hereafter  have to the  laying  of the  venue of any such  suit,  action or
     proceeding  brought  in any such  court and any claim  that any such  suit,
     action or  proceeding  brought  in any such  court has been  brought  in an
     inconvenient forum.

          (b) The Company  consents to process  being  served by or on behalf of
     any  holder  of Notes in any  suit,  action  or  proceeding  of the  nature
     referred to in Section  22.8(a) by mailing a copy thereof by  registered or
     certified  mail  (or  any  substantially  similar  form of  mail),  postage
     prepaid,  return  receipt  requested,  to it at its  address  specified  in
     Section 18 or at such other  address of which such  holder  shall then have
     been  notified  pursuant  to said  Section.  The  Company  agrees that such
     service upon receipt (i) shall be deemed in every respect effective service
     of process upon it in any such suit,  action or proceeding  and (ii) shall,
     to the fullest extent  permitted by applicable law, be taken and held to be
     valid personal service upon and personal  delivery to it. Notices hereunder
     shall be conclusively  presumed received as evidenced by a delivery receipt
     furnished by the United States Postal  Service or any reputable  commercial
     delivery service.

          (c) Nothing in this  Section 22.8 shall affect the right of any holder
     of a Note to serve  process in any manner  permitted  by law,  or limit any
     right that the  holders  of any of the Notes may have to bring  proceedings
     against the  Company in the courts of any  appropriate  jurisdiction  or to
     enforce in any lawful manner a judgment obtained in one jurisdiction in any
     other jurisdiction.

          (d) The  parties  hereto  hereby  waive  trial  by jury in any  action
     brought  on or with  respect  to this  Agreement,  the  Notes or any  other
     document executed in connection herewith or therewith.

     22.9. INTEREST RATE LIMITATION.

          (a)  Notwithstanding  anything  herein  to the  contrary,  in no event
     whatsoever  shall the amount  contracted  for,  charged,  paid or otherwise
     agreed  to be paid to or  received  by the  holder of any Note for the use,
     forbearance  or  detention  of money  under this  Agreement,  the  Guaranty
     Agreement  or  the  Sharing  Agreement  or  otherwise  exceed

                                   53

<PAGE>

     the maximum  non-usurious  rate  pursuant to  applicable  law (the "MAXIMUM
     RATE"),  and if at any time  the  interest  rate  applicable  to any  Note,
     together  with all fees,  charges  and other  amounts  which are treated as
     interest in respect of such Note under  applicable  law  (collectively  the
     "CHARGES"),  shall exceed the Maximum Rate, the rate of interest payable in
     respect  of such Note  hereunder,  together  with all  Charges  payable  in
     respect  thereof,  shall be limited to the Maximum  Rate and, to the extent
     lawful, the interest and Charges that would have been payable in respect of
     such Note but were not payable as a result of the operation of this Section
     22.9 shall be cumulated and the interest and Charges payable to such holder
     of Notes in respect of other Notes or periods  shall be increased  (but not
     above the Maximum Rate therefor) until such cumulated amount, together with
     interest  thereon at the Default Rate to the date of repayment,  shall have
     been  received by such holder of Notes.  Anything  in this  Agreement,  the
     Guaranty   Agreement   or   the   Sharing   Agreement   to   the   contrary
     notwithstanding, the Company shall not be required to pay unearned interest
     and shall  never be  required  to pay  interest  at a rate in excess of the
     Maximum Rate, and if the effective  rate of interest which would  otherwise
     be payable  under this  Agreement,  the  Guaranty  Agreement or the Sharing
     Agreement  would exceed the Maximum  Rate,  or if any holder of Notes shall
     receive any unearned  interest or shall  receive  monies that are deemed to
     constitute  interest  which would  increase the effective  rate of interest
     payable by the Company under this Agreement,  the Guaranty Agreement or the
     Sharing  Agreement  to a rate in excess of the Maximum  Rate,  then (a) the
     amount of interest  which would  otherwise be payable by the Company  under
     this Agreement,  the Guaranty  Agreement or the Sharing  Agreement shall be
     reduced to the amount  allowed under  applicable  law, and (b) any unearned
     interest  paid by the Company or any interest paid by the Company in excess
     of the  Maximum  Rate shall be  credited  on the  principal  of (or, if the
     principal amount shall have been paid in full, refunded to the Company). It
     is  further  agreed  that,  without   limitation  of  the  foregoing,   all
     calculations of the rate of interest contracted for, charged or received by
     any holder of Notes under this  Agreement,  the  Guaranty  Agreement or the
     Sharing  Agreement,  are made for the purpose of  determining  whether such
     rate exceeds the Maximum Rate, and shall be made by  amortizing,  prorating
     and  spreading  in equal parts during the period of the full stated term of
     the obligations  evidenced by the Notes all interest at any time contracted
     for, charged or received by such holder of Notes in connection therewith.

                   [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK.
                              NEXT PAGE IS SIGNATURE PAGE.]

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<PAGE>

      If you are in  agreement  with  the  foregoing,  please  sign  the form of
agreement  on a  counterpart  of this  Agreement  and return it to the  Company,
whereupon this Agreement  shall become a binding  agreement  between you and the
Company.

                                    Very truly yours,

                                    SERVICE CORPORATION INTERNATIONAL


                                    By: /s/ Eric D. Tanzberger
                                      ----------------------------------
                                       Name: Eric D. Tanzberger
                                       Title: Senior Vice President and Chief
                                              Financial Officer


This Agreement is hereby
accepted and agreed to as
of the date thereof.

[PURCHASER SIGNATURE BLOCKS OMITTED]




                   [Signature Page to Note Purchase Agreement]

<PAGE>


                                   SCHEDULE B

                                  DEFINED TERMS

      As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:

      "ACCOUNTANT'S CERTIFICATE" is defined in Section 7.1(b).

      "ADDITIONAL COVENANT" is defined in Section 10.11(b).

      "ADDITIONAL DEFAULT" is defined in Section 10.11(b).

      "AFFILIATE"  means, at any time, and with respect to any Person, any other
Person  that  at  such  time  directly  or   indirectly   through  one  or  more
intermediaries  Controls,  or is Controlled by, or is under common Control with,
such first Person,  and,  with respect to the Company,  shall include any Person
beneficially owning or holding, directly or indirectly, 10% or more of any class
of  voting  or  Equity  Interests  of  the  Company  or  any  Subsidiary  or any
corporation of which the Company and its Subsidiaries  beneficially own or hold,
in the aggregate,  directly or indirectly, 10% or more of any class of voting or
Equity  Interests.  As used in this definition,  "Control" means the possession,
directly or  indirectly,  of the power to direct or cause the  direction  of the
management  and policies of a Person,  whether  through the  ownership of voting
securities,  by contract or  otherwise.  Unless the  context  otherwise  clearly
requires,  any reference to an "Affiliate" is a reference to an Affiliate of the
Company.

      "THIS AGREEMENT" is defined in Section 17.3.

      "ALDERWOODS" means Alderwoods Group, Inc., a Delaware corporation.

      "ALDERWOODS DEBT" means the Indebtedness and all other obligations created
and existing  pursuant to that certain  Credit  Agreement,  dated  September 17,
2003,  by  and  among  Alderwoods,   as  borrower,  Bank  of  America,  NA.,  as
administrative  agent  thereunder and the other lenders party  thereto,  and all
related documents.

     "ANTI-TERRORISM  ORDER" means  Executive  Order No. 13,224 of September 24,
2001,  Blocking  Property and Prohibiting  Transactions with Persons Who Commit,
Threaten to Commit or Support  Terrorism,  66 U.S. Fed. Reg. 49, 079 (2001),  as
amended.

      "ATTRIBUTABLE DEBT" is defined in Section 10.1(g).

      "BREAKAGE COST INDEMNITY"  means in connection with each  LIBOR-Based Loan
the amount, if any, due pursuant to the terms of Section 8.8(b).

      "BUSINESS DAY" means (a) with respect to any determination of the Interest
Period with respect to any LIBOR-Based  Loan, a London Business Day, and (b) for
all other  purposes,  any day other than a Saturday,  a Sunday or a day on which
commercial  banks in New  York,  New York or  Houston,  Texas  are  required  or
authorized to be closed.

                                   Schedule B-1


<PAGE>

      "CANADIAN  SUBSIDIARY"  means any Subsidiary  organized  under the laws of
Canada or any province thereof.

      "CAPITAL LEASE  OBLIGATIONS"  means, as to any Person,  the obligations of
such  Person  to pay  rent  or  other  amounts  under  any  lease  of (or  other
arrangement  conveying  the  right  to use)  real  or  personal  property,  or a
combination  thereof,  which  obligations  are  required  to be  classified  and
accounted  for as capital  leases on a balance  sheet of such Person under GAAP,
and the  amount of such  obligations  shall be the  capitalized  amount  thereof
determined in accordance with GAAP.

      "CASH INTEREST EXPENSE" means interest expense determined under GAAP, less
amortization of deferred loan costs and original issue discounts.

      "CHANGE IN CONTROL" means (a) the  acquisition  of ownership,  directly or
indirectly,  beneficially  or of  record,  by any  Person or group  (within  the
meaning of the Exchange Act) of Equity Interests  representing  more than 25% of
the aggregate  ordinary  voting power  represented by the issued and outstanding
Equity Interests of the Company (including Equity Interests referenced in clause
(d) below);  (b) occupation of a majority of the seats (other than vacant seats)
on the board of  directors  of the  Company  by  persons  who were  neither  (i)
nominated  by the  board of  directors  of the  Company  nor (ii)  appointed  by
directors so nominated;  (c) the  acquisition of direct or indirect  Control (as
such term is defined  in the  definition  of  Affiliate)  of the  Company by any
Person or  group,  or (d) any event  that  gives  holders  of  preferred  Equity
Interests or other securities issued pursuant to any  shareholders'  rights plan
of the Company the right to purchase  or to convert  such  securities  into such
amount of voting  Equity  Interests  of the  Company as,  when so  purchased  or
converted  and added to the Equity  Interests  referred to in clause (a) of this
definition held by such holders,  would result in such holders holding more than
25% of the aggregate voting Equity Interests of the Company.

      "CHANGE IN CONTROL PREPAYMENT DATE" is defined in Section 8.3(b).

      "CHARGES" is defined in Section 22.9.

      "CLOSING" is defined in Section 3.

      "CLOSING DATE" is defined in Section 3.

      "CODE"  means the Internal  Revenue Code of 1986,  as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.

      "COMPANY" is defined in the first paragraph of this Agreement.

      "CONFIDENTIAL INFORMATION" is defined in Section 20.

      "CONSOLIDATED  INTEREST  EXPENSE"  means,  for any period,  Cash  Interest
Expense  (including  imputed  interest  expense  in  respect  of  Capital  Lease
Obligations)  paid by the  Company  and its  Subsidiaries  during  such  period;
PROVIDED,  HOWEVER,  that for the  period of four  fiscal  quarters  ending  (a)
December  31,  2006,  Consolidated  Interest  Expense  shall be deemed to be the
amount thereof for the quarter  ending on such date  multiplied by four, (b) for
the period of

                                  Schedule B-2

<PAGE>

four fiscal quarters ending March 31, 2007,  Consolidated Interest Expense shall
be deemed to be the amount  thereof  for the  immediately  preceding  two fiscal
quarters  multiplied  by two,  and (c) for the  period of four  fiscal  quarters
ending June 30, 2007,  Consolidated  Interest  Expense shall be deemed to be the
amount thereof for the immediately preceding three fiscal quarters multiplied by
four-thirds (4/3).

      "CONSOLIDATED  OPERATING  INCOME"  means,  for any period,  the  operating
income or loss of the Company and its Subsidiaries for such period determined on
a consolidated basis in accordance with GAAP.

      "CREDIT  AGREEMENT"  means  that  certain  Credit  Agreement,  dated as of
November  28,  2006,   among  the  Company,   JPMorgan  Chase  Bank,   N.A.,  as
Administrative Agent, the lenders from time to time party thereto, and the other
Persons party thereto, as amended, restated,  supplemented or otherwise modified
and in effect from time to time (except as otherwise specified herein).

      "DEFAULT" means an event or condition the occurrence or existence of which
would,  with the lapse of time or the giving of notice or both,  become an Event
of Default.

      "DEFAULT  RATE"  means,  at any time in respect of any Note,  that rate of
interest that is equal to the greater of (a) 2% per annum above the LIBO Rate or
(b) 2% per annum  above the Prime Rate,  regardless  of whether the LIBO Rate or
the Prime Rate is otherwise in effect at such time.

      "DISCLOSURE DOCUMENTS" is defined in Section 5.3.

      "DOLLARS" or "$" means lawful money of the United States of America.

      "DOMESTIC   SUBSIDIARY"  means  any  Subsidiary  that  is  not  a  Foreign
Subsidiary.

      "EBITDA" means, for any period,  without duplication,  for the Company and
its Subsidiaries, Consolidated Operating Income plus:

          (a) losses (or minus  gains) on sales of fixed  assets,  to the extent
     included in Consolidated  Operating Income, and impairments,  to the extent
     included in operating expenses; plus

          (b)  depreciation  (to the extent  included in operating  expenses and
     excluding amortization of deferred loan costs); plus

          (c) non-cash stock  compensation  expense/amortization  (to the extent
     included in operating expenses); plus

          (d) rent  expense in any period to the extent of the  portion  thereof
     determined,  subsequent  to such period,  to constitute  principal  paid in
     respect  of  capitalized  leases,  rather  than  rent  paid in  respect  of
     operating leases; plus

                                  Schedule B-3

<PAGE>

          (e) actual Merger-related, non-recurring cash expenses incurred to the
     extent  included in  operating  expenses and not to exceed  $60,000,000  in
     aggregate, including expenses incurred within the first 24 months after the
     Closing Date,  such as severance of management and  employees,  termination
     costs and  buyouts  of  contracts  and  lease  agreements,  conversions  of
     computer  systems and  networks,  transfer of documents  and other  assets,
     legal and advisory  fees  directly  related to the Merger,  and other items
     reasonably  incurred of a similar nature and non-cash  merger expenses that
     would not otherwise be included in other non-cash  addbacks to Consolidated
     Operating Income; plus

          (f) royalty  income  received  from American  Memorial Life  Insurance
     Company; minus

          (g) any losses attributable to surety premiums; minus

          (h) Pro Forma Divested EBITDA (or plus Pro Forma Divested  EBITDA,  if
     such figure is negative,  in each case to the extent previously included in
     Consolidated Operating Income); plus

          (i) EBITDA (or minus  EBITDA,  if such figure is negative) of acquired
     operations  for such period in respect of the time during such period which
     preceded  the  acquisition,  in each  case  to the  extent  not  previously
     included in Consolidated Operating Income; plus

          (j)  EBITDA  (or  minus  EBITDA,   if  such  figure  is  negative)  of
     discontinued operations still owned; plus

          (k) to the extent received or made by the Company or any Subsidiary in
     cash, net cash flow from (or minus net cash flow to) non-consolidated joint
     ventures (to the extent not included in Consolidated Operating Income);

      PROVIDED, HOWEVER, that EBITDA for the fiscal quarter ended March 31, 2006
shall be deemed to have been  $117,683,000,  EBITDA for the fiscal quarter ended
June 30,  2006  shall be deemed to have been  $109,851,000,  and  EBITDA for the
fiscal  quarter  ended   September  30,  2006  shall  be  deemed  to  have  been
$118,634,000  (in each case,  EBITDA  with  respect to such  fiscal  quarters is
subject to change to reflect  financial  information as a result of acquisitions
(other than the  Merger)  and  divestitures  occurring  after the Closing  Date,
calculated in accordance with the provisions of this definition), and, PROVIDED,
FURTHER that the  calculation of EBITDA for the fiscal  quarter ending  December
31, 2006 shall be  computed  as if  Alderwoods  had become a  Subsidiary  of the
Company on the first day of such fiscal quarter.

      "ELECTRONIC DELIVERY" is defined in Section 7.1(a).

      "ELECTRONIC  DISTRIBUTION  SERVICE"  means  IntraLinks(R)  or a comparable
internet document posting and distribution  service accessible by the holders of
the Notes.

      "ENVIRONMENTAL LAWS" means any and all federal,  state, local, and foreign
statutes,  laws, regulations,  ordinances,  rules,  judgments,  orders, decrees,
permits, concessions,  grants,

                                  Schedule B-4

<PAGE>

franchises,  licenses,  agreements  or  governmental  restrictions  relating  to
pollution and the protection of the  environment or the release of any materials
into the  environment,  including  but not limited to those related to Hazardous
Materials.

      "EQUITY INTERESTS" means shares of capital stock,  partnership  interests,
membership  interests in a limited liability company,  beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other  rights  entitling  the holder  thereof to purchase or acquire any such
equity interest.

      "ERISA"  means the Employee  Retirement  Income  Security Act of 1974,  as
amended from time to time, and the rules and regulations  promulgated thereunder
from time to time in effect.

      "ERISA   AFFILIATE"   means  any  trade  or   business   (whether  or  not
incorporated)  that is treated as a single  employer  together  with the Company
under section 414 of the Code.

      "EXCHANGE ACT" means the Securities  Exchange Act of 1934, as amended from
time to time, and the rules and regulations  promulgated thereunder from time to
time in effect.

      "EVENT OF DEFAULT" is defined in Section 11.

      "FOREIGN  SUBSIDIARY"  means any Subsidiary  organized under the laws of a
jurisdiction  other  than  the  United  States  or  any of  its  territories  or
possessions or any political  subdivision  thereof.  For the avoidance of doubt,
the  Commonwealth  of Puerto  Rico is, for the  purposes of Section  9.7,  not a
territory, possession or political subdivision of the United States.

      "FORM 10-K" is defined in Section 7.1(b).

      "FORM 10-Q" is defined in Section 7.1(a).

      "GAAP" means generally  accepted  accounting  principles as in effect from
time to time in the United States of America.

      "GOVERNMENTAL AUTHORITY" means

          (a) the government of

               (i) the United States of America or any State or other  political
          subdivision thereof, or

               (ii)  any  other   jurisdiction  in  which  the  Company  or  any
          Subsidiary conducts all or any part of its business,  or which asserts
          jurisdiction over any properties of the Company or any Subsidiary, or

          (b) any entity exercising executive, legislative, judicial, regulatory
     or administrative functions of, or pertaining to, any such government.

                                  Schedule B-5


<PAGE>

      "GUARANTEE"  means, with respect to any Person, any obligation (except the
endorsement  in the ordinary  course of business of negotiable  instruments  for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness,  dividend or other  obligation  of any other Person in any manner,
whether  directly or  indirectly,  including  (without  limitation)  obligations
incurred through an agreement, contingent or otherwise, by such Person:

          (a) to  purchase  such  indebtedness  or  obligation  or any  property
     constituting security therefor;

          (b) to advance or supply funds (i) for the purchase or payment of such
     indebtedness  or  obligation,  or (ii) to maintain  any working  capital or
     other  balance  sheet  condition or any income  statement  condition of any
     other  Person or  otherwise  to  advance  or make  available  funds for the
     purchase or payment of such indebtedness or obligation;

          (c)  to  lease  properties  or  to  purchase  properties  or  services
     primarily  for the purpose of assuring  the owner of such  indebtedness  or
     obligation  of the  ability  of any  other  Person to make  payment  of the
     indebtedness or obligation; or

          (d) otherwise to assure the owner of such  indebtedness  or obligation
     against loss in respect thereof.

In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.

      "GUARANTORS" means, collectively,  each of the Initial Guarantors together
with each Subsidiary which becomes a Guarantor  pursuant to the terms of Section
9.7.

      "GUARANTY AGREEMENT" is defined in Section 4.8.

      "HAZARDOUS  MATERIAL"  means any and all  pollutants,  toxic or  hazardous
wastes or other  substances  that might pose a hazard to health and safety,  the
removal  of which may be  required  or the  generation,  manufacture,  refining,
production, processing, treatment, storage, handling, transportation,  transfer,
use, disposal, release,  discharge,  spillage, seepage or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law including,
but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar
restricted, prohibited or penalized substances.

      "HOLDER"  means,  with  respect  to any Note the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.

      "INDEBTEDNESS"  of  any  Person  means,  without   duplication,   (a)  all
obligations  of such Person for  borrowed  money or with  respect to deposits or
advances of any kind,  (b) all  obligations  of such Person  evidenced by bonds,
debentures,  notes or similar  instruments,  (c) all  obligations of such Person
upon which interest  charges are  customarily  paid, (d) all obligations of such
Person under  conditional sale or other title retention  agreements  relating to
property acquired by such Person,  (e) all obligations of such Person in respect
of the  deferred  purchase

                                  Schedule B-6

<PAGE>

price of property or services  (excluding  current  accounts payable incurred in
the ordinary course of business),  (f) all Indebtedness of others secured by (or
for which the holder of such  Indebtedness has an existing right,  contingent or
otherwise,  to be secured  by) any Lien on  property  owned or  acquired by such
Person,  whether or not the Indebtedness  secured thereby has been assumed,  (g)
all Guarantees by such Person of Indebtedness  of others,  (h) all Capital Lease
Obligations of such Person,  (i) all  obligations,  contingent or otherwise,  of
such  Person as an account  party in respect of letters of credit and letters of
guaranty,  (j) all  obligations,  contingent  or  otherwise,  of such  Person in
respect of bankers' acceptances,  (k) all obligations,  contingent or otherwise,
of such Person in respect of  securitization  transactions and (l) all synthetic
lease  obligations  of such  Person.  The  Indebtedness  of any Person (i) shall
include the Indebtedness of any other entity (including any partnership in which
such Person is a general  partner) to the extent such Person is liable  therefor
as a result of such Person's  ownership  interest in or other  relationship with
such entity,  except to the extent the terms of such  Indebtedness  provide that
such Person is not liable therefor,  but (ii) shall not include any Guarantee or
other contingent liability, direct or indirect, with respect to bonds, indemnity
agreements and similar arrangements  provided to assure that the Company and its
Subsidiaries  will fully perform  their  obligations  in respect of  prearranged
funeral  and  cemetery   services  and  goods  and/or   construction  of  burial
facilities.

      "INHAM EXEMPTION" is defined in Section 6.2(e).

      "INITIAL GUARANTORS" is defined in Section 4.8.

      "INSTITUTIONAL INVESTOR" means (a) any Purchaser of a Note, (b) any holder
of a Note holding  (together with one or more of its Affiliates) more than 5% of
the  aggregate  principal  amount of the Notes then  outstanding,  (c) any bank,
trust company, savings and loan association or other financial institution,  any
pension plan,  any  investment  company,  any insurance  company,  any broker or
dealer,  or any other similar  financial  institution  or entity,  regardless of
legal form, and (d) any Related Fund of any holder of any Note.

      "INTEREST  PAYMENT DATE" means each  quarterly  anniversary of the Closing
Date; provided,  that (a) if any Interest Payment Date would otherwise fall on a
day other than a Business Day, such Interest  Payment Date shall instead fall on
the next succeeding  Business Day unless such next succeeding Business Day would
fall in the next calendar month, in which case such Interest  Payment Date shall
instead  fall on the  next  preceding  Business  Day,  and  (b) if the  relevant
calendar  month  does not  contain  a day that  numerically  corresponds  to the
Closing Date, the related  Interest  Payment Date shall be the last Business Day
of the last calendar month of such Interest Period.

      "INTEREST  PERIOD" means (a) as to any LIBOR-Based  Loan,  initially,  the
three  month  period  commencing  on the  Closing  Date and  ending on the first
Interest Payment Date thereafter and, after such initial  Interest Period,  each
period commencing on the last day of the preceding Interest Period and ending on
the first Interest Payment Date  thereafter,  and (b) as to any Prime Rate Loan,
the  three  month  period  commencing  on  the  date  of the  conversion  of any
LIBOR-Based  Loan to a Prime Rate Loan or, in the case of a  continuation  of an
existing Prime Rate Loan, on the last day of the immediately  preceding Interest
Period  applicable  thereto,  and  ending on the  first  Interest  Payment  Date
thereafter;  PROVIDED, HOWEVER, that (i) in no event may any

                                  Schedule B-7

<PAGE>

Interest  Period end after the maturity date of the applicable Note and (ii) any
changes in the rate of interest  applicable to a Prime Rate Loan  resulting from
changes in the Prime Rate shall  take place  immediately  regardless  of whether
such change shall occur during such Interest Period.  Interest shall accrue from
and including  the first day of an Interest  Period to but excluding the earlier
of the last day of the Interest Period and the day on which the Notes are repaid
or prepaid in full.

      "INTEREST RATE MARGIN" means, at any time, with respect to the calculation
of interest on any Note, 2.00% per annum.

      "LEVERAGE RATIO" means, on any date, the ratio of the  consolidated  total
Indebtedness of the Company and its Subsidiaries, calculated as of such date, to
EBITDA for the period of four fiscal  quarters of the Company then most recently
ended;  PROVIDED that, as of any date on which the Company and its  Subsidiaries
have Indebtedness  outstanding  which, if prepaid on such date, would be subject
to a premium or penalty in respect of such prepayment,  then consolidated  total
Indebtedness  of the Company and its  Subsidiaries  shall be  calculated  net of
unrestricted  cash on hand of the  Company  and its  Subsidiaries  in  excess of
$25,000,000.

      "LIBOR-BASED  LOAN" means an extension of credit hereunder  evidenced by a
Note which bears interest at the LIBO Rate.

      "LIBO RATE"  means,  with  respect to the  applicable  Interest  Period as
determined for any LIBOR-Based Loan, the sum of (a) the Interest Rate Margin for
such  LIBOR-Based  Loan and (b) (i) the  rate per  annum  (rounded  upwards,  if
necessary,  to the next higher  1/100th of 1%),  equal to the  offered  rate for
deposits in Dollars,  for a period of time  comparable to such Interest  Period,
which appears on the Bloomberg page  "Currency  BBAM 1" as of 11:00 a.m.  London
time on the day that is two London  Business Days prior to the first day of such
Interest  Period,  or (ii) if such rate ceases to be reported in accordance with
the above  definition on Bloomberg  Page  "Currency  BBAM 1," the rate per annum
quoted by JPMorgan Chase Bank, N.A. at  approximately  11:00 A.M. (New York City
time) on the first Business Day of such Interest  Period for loans in Dollars to
major banks in the London interbank eurodollar market for a period equal to such
Interest  Period,  commencing on the first day of such Interest Period and in an
amount comparable to the principal amount thereof.

      "LIEN" means, with respect to any asset, (a) any mortgage,  deed of trust,
lien, pledge, hypothecation,  encumbrance, charge or security interest in, on or
of such asset,  (b) the interest of a vendor or a lessor  under any  conditional
sale  agreement,  capital lease or title  retention  agreement (or any financing
lease having  substantially  the same economic  effect as any of the  foregoing)
relating to such asset and (c) in the case of securities,  any purchase  option,
call or similar right of a third party with respect to such securities.

      "LONDON BUSINESS DAY" means a day on which dealings in Dollars are carried
on in the London inter-bank eurodollar market.

      "MARKETED  EBITDA" means the trailing  12-month EBITDA figure disclosed to
potential buyers preceding the sale of an operation or a Subsidiary.

                                  Schedule B-8

<PAGE>

      "MATERIAL"  means  material  in  relation  to  the  business,  operations,
affairs,  financial condition,  assets,  properties, or prospects of the Company
and its Subsidiaries taken as a whole.

      "MATERIAL  ADVERSE  EFFECT"  means a  material  adverse  effect on (a) the
business, operations,  affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to  perform  its  obligations  under  this  Agreement  and the  Notes  or of any
Guarantor to perform its obligations  under the Guaranty  Agreement,  or (c) the
validity  or  enforceability  of  this  Agreement,  the  Notes  or the  Guaranty
Agreement.

      "MAXIMUM RATE" is defined in Section 22.9.

      "MEMORANDUM" is defined in Section 5.3.

      "MERGER"  means the  merger  of a direct  Wholly-Owned  Subsidiary  of the
Company with and into Alderwoods,  where Alderwoods is the surviving Person as a
direct,  Wholly-Owned  Subsidiary  of the Company,  pursuant to the terms of the
Merger Documents.

      "MERGER  DOCUMENTS"  means the  Agreement  and Plan of Merger  dated as of
April  2,  2006,  among  the  Company,   Alderwoods  and  Coronado   Acquisition
Corporation and all related documents.

      "MOODY'S" means Moody's Investors Service, Inc.

      "MULTIEMPLOYER  PLAN"  means any Plan that is a  "multiemployer  plan" (as
such term is defined in section 4001(a)(3) of ERISA).

      "NAIC" means the National  Association of Insurance  Commissioners  or any
successor thereto.

      "NAIC ANNUAL STATEMENT" is defined in Section 6.2(a).

      "NOTES" is defined in Section 1(b).

      "OFFICER'S  CERTIFICATE" means a certificate of a Senior Financial Officer
or of any other  officer of the  Company  whose  responsibilities  extend to the
subject matter of such certificate.

      "PBGC"  means the Pension  Benefit  Guaranty  Corporation  referred to and
defined in ERISA or any successor thereto.

      "PERMITTED  ACQUISITION" means any acquisition (by merger or otherwise) by
the Company or a Subsidiary  of all or  substantially  all the assets of, or all
the Equity  Interests  in, a Person or division or line of business of a Person,
if (a) immediately  after giving effect thereto,  no Default has occurred and is
continuing or would result therefrom,  (b) the business of such acquired Person,
or such acquired business,  is reasonably related to the business of the Company
on the date  hereof,  (c) the  requirements  of  Section  9.7  shall  have  been
satisfied  within the time periods  specified  therein,  (d) the Company and the
Subsidiaries are in compliance, on a pro forma basis after giving effect to such
acquisition,  with  Section  10.12 to the  extent  then

                                  Schedule B-9

<PAGE>

applicable,  as if such  acquisition  had  occurred on the first day of the most
recently ended relevant  period for testing  compliance with such Section 10.12,
(e) such  acquisition  has been  approved by all  necessary  corporate and other
action by the  Person so  acquired  or the  Person  selling  the assets or other
property so acquired  by the Company or such  Subsidiary  and (f) in the case of
any acquisition in which the aggregate consideration paid by the Company and the
Subsidiaries  exceeds  $10,000,000,  the Company has delivered to the holders of
the Notes an Officer's  Certificate to the effect set forth in clauses (a), (b),
(c),  (d) and (e) above,  together  with all  financial  information  reasonably
requested by the Required  Holders relating to the Person or assets acquired and
reasonably detailed calculations  demonstrating  satisfaction of the requirement
set forth in clause (d) above.

      "PERMITTED ENCUMBRANCES" means:

          (a) liens  imposed  by law for taxes that are not yet due or are being
     contested in good faith,  with adequate  reserves,  and the failure of such
     contest could not  reasonably  be expected to result in a Material  Adverse
     Effect;

          (b) carriers', warehousemen's,  mechanics', materialmen's, repairmen's
     and other like  liens  imposed by law,  arising in the  ordinary  course of
     business and securing obligations that are not overdue by more than 30 days
     or are being  contested  in good  faith,  with  adequate  reserves  and the
     failure of such  contest  could not  reasonably  be expected to result in a
     Material Adverse Effect;

          (c) pledges and deposits  made in the  ordinary  course of business in
     compliance  with workers'  compensation,  unemployment  insurance and other
     social security laws or regulations;

          (d)  deposits  to secure the  performance  of bids,  trade  contracts,
     leases,  statutory obligations,  surety and appeal bonds, performance bonds
     and other obligations of a like nature, in each case in the ordinary course
     of business;

          (e) judgment  liens in respect of judgments  that do not constitute an
     Event of Default; and

          (f)  easements,   zoning   restrictions,   rights-of-way  and  similar
     encumbrances  on real  property  imposed by law or arising in the  ordinary
     course of business that do not secure any monetary  obligations  and do not
     materially  detract  from the value of the  affected  property or interfere
     with the ordinary conduct of business of the Company or any Subsidiary;

      PROVIDED that the term "Permitted Encumbrances" shall not include any lien
securing  Indebtedness,  and for the purposes of this  definition,  Indebtedness
shall include  Guarantees or other contingent  liabilities of the Company or any
Subsidiary,  direct or indirect, with respect to bonds, indemnity agreements and
similar  arrangements  provided to assure that the Company and its  Subsidiaries
will fully  perform  their  obligations  in respect of  prearranged  funeral and
cemetery services and goods and/or construction of burial facilities.

      "PERMITTED INVESTMENTS" means:

                                  Schedule B-10

<PAGE>

          (a)  direct  obligations  of,  or  obligations  the  principal  of and
     interest on which are  unconditionally  guaranteed by, the United States of
     America or Canada (or by any agency thereof to the extent such  obligations
     are backed by the full faith and credit of the United  States of America or
     Canada), in each case maturing within one year from the date of acquisition
     thereof;

          (b) investments in commercial  paper maturing within 270 days from the
     date of  acquisition  thereof and having,  at such date of  acquisition,  a
     rating  of A2 or better by S&P,  P2 or  better by  Moody's,  or R1 "mid" or
     better by Dominion Bond Rating Service, Ltd.;

          (c) investments in certificates of deposit,  banker's  acceptances and
     time deposits (including eurodollar deposits) maturing within 180 days from
     the date of acquisition thereof issued or guaranteed by or placed with, and
     money  market  deposit  accounts  issued or offered by, any bank which is a
     Lender (as such term is defined in the Credit  Agreement)  or any  domestic
     office of any commercial bank organized under the laws of the United States
     of America or Canada or any State or Province  thereof which has a combined
     capital and surplus and undivided profits of not less than $500,000,000;

          (d) fully collateralized repurchase agreements with a term of not more
     than 30 days for securities  described in clause (a) above and entered into
     with a financial  institution  satisfying the criteria  described in clause
     (c) above;

          (e) money  market funds that (i) comply with the criteria set forth in
     Securities and Exchange  Commission Rule 2a-7 under the Investment  Company
     Act of 1940,  (ii) are rated AAA by S&P or Aaa by  Moody's  and (iii)  have
     portfolio assets of at least $5,000,000,000;

          (f)   investments  in  corporate  debt   securities   (including  loan
     participations)   that  (i)  mature   within  60  days  from  the  date  of
     acquisition,  and (ii) are  rated BBB or better by S&P or Baa2 or better by
     Moody's at the date of acquisition;

          (g)  investments  in municipal  securities or auction rate  securities
     that are rated AA or better  by S&P or Aa or  better by  Moody's,  PROVIDED
     that the Company has the right to put such securities back to the issuer or
     seller thereof at least once every 60 days; and

          (h) other  investments  in an amount not to exceed  $10,000,000 in the
     aggregate   outstanding  at  any  one  time  by  Foreign   Subsidiaries  in
     certificates of deposit,  banker's  acceptances and time deposits (or other
     substantially  similar investments)  maturing within 180 days from the date
     of  acquisition  thereof  issued or guaranteed by or placed with, and money
     market deposit accounts (or other  substantially  similar deposit accounts)
     issued or offered by, any foreign  commercial  bank not organized under the
     laws of the United  States of  America  or Canada or any State or  Province
     thereof.

      "PERSON" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership,  Governmental Authority
or other entity.

                                  Schedule B-11

<PAGE>

      "PLAN"  means an  "employee  benefit  plan" (as defined in section 3(3) of
ERISA)  subject to Title I of ERISA that is or, within the preceding five years,
has been established or maintained, or to which contributions are or, within the
preceding  five years,  have been made or required to be made, by the Company or
any ERISA  Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability.

      "PREFERRED  STOCK"  means any class of capital  stock of a Person  that is
preferred over any other class of capital stock (or similar Equity Interests) of
such  Person as to the  payment of  dividends  or the payment of any amount upon
liquidation or dissolution of such Person.

      "PRIME RATE" means,  at any time, a rate per annum equal to the sum of the
Interest Rate Margin at such time plus the rate of interest  publicly  announced
at such time by JPMorgan Chase Bank, N.A. (or its successor) in New York City as
its "base" or "prime" rate.

      "PRIME RATE LOAN" means an  extension of credit  hereunder  evidenced by a
Note which bears interest at the Prime Rate.

      "PRO FORMA  DIVESTED  EBITDA"  equals  the total  "Marketed  EBITDA"  from
divested  operations  included in EBITDA in the preceding  four quarters  before
consideration of divestures.

      "PROPERTY" or "PROPERTIES" means, unless otherwise  specifically  limited,
real or  personal  property  of any  kind,  tangible  or  intangible,  choate or
inchoate.

      "PTE" is defined in Section 6.2(a).

      "PUBLIC NOTE AGREEMENT" shall mean that certain Senior Indenture, dated as
of February 1, 1993,  and the  supplemental  indentures  entered  into  pursuant
thereto  on October 3,  2006,  in  respect  of which the  Company  has issued an
aggregate amount of $500,000,000 of its Senior Notes.

      "PURCHASER" is defined in the first paragraph of this Agreement.

      "QPAM EXEMPTION" is defined in Section 6.2(d).

      "QUALIFIED  INSTITUTIONAL  BUYER"  means any  Person  who is a  "qualified
institutional  buyer"  within  the  meaning  of such  term as set  forth in Rule
144A(a)(1) under the Securities Act.

      "RELATED FUND" means,  with respect to any holder of any Note, any fund or
entity  that (a)  invests in  Securities  or bank  loans,  and (b) is advised or
managed by such  holder,  the same  investment  advisor as such  holder or by an
affiliate of such holder or such investment advisor.

      "REQUIRED  HOLDERS" means, at any time, the holders of at least a majority
in principal  amount of the Notes at the time  outstanding  (exclusive  of Notes
then owned by the Company or any of its Affiliates).

      "RESPONSIBLE  OFFICER"  means any Senior  Financial  Officer and any other
officer  of the  Company  with  responsibility  for  the  administration  of the
relevant portion of this Agreement.

                                  Schedule B-12

<PAGE>

      "RESTRICTED PAYMENT" is defined in Section 10.9(a).

      "REVOLVING  BORROWINGS"  shall  have the  meaning  given  such term in the
Credit Agreement.

      "REVOLVING  MATURITY  DATE" shall have the meaning  given such term in the
Credit Agreement as in effect on the date hereof.

      "SALE AND LEASEBACK TRANSACTION" means any arrangement whereby the Company
or any Subsidiary shall sell or transfer any property, real or personal, used or
useful  in  its  business,  whether  now  owned  or  hereinafter  acquired,  and
thereafter  rent or lease such property from the buyer or transferee of the sold
or transferred  property,  intending to use such property for  substantially the
same purpose or purposes.

      "S&P" means Standard & Poor's Ratings Services.

      "SEC" means the Securities  and Exchange  Commission of the United States,
or any successor thereto.

      "SECURITIES"  or  "SECURITY"  shall have the meaning  specified in Section
2(1) of the Securities Act.

      "SECURITIES ACT" means the Securities Act of 1933, as amended from time to
time, and the rules and regulations  promulgated thereunder from time to time in
effect.

      "SENIOR FINANCIAL  OFFICER" means the chief financial  officer,  principal
accounting officer, treasurer or comptroller of the Company.

      "SERIES" means any one or more of the series of Notes issued hereunder.

      "SERIES A NOTES" is defined in Section 1(a).

      "SERIES B NOTES" is defined in Section 1(b).

      "SHARING AGREEMENT" means the Sharing Agreement,  dated as of November 28,
2006, among the banks and financial  institutions party thereto,  the holders of
the Notes,  JPMorgan Chase Bank, N.A., as Agent for the lenders under the Credit
Agreement,  and each of the lenders  party  thereto,  as such  agreement  may be
amended, modified, supplemented or restated from time to time in accordance with
the provisions thereof.

      "SOURCE" is defined in Section 6.2.

      "SUBSIDIARY" means, as to any Person, any other Person in which such first
Person or one or more of its  Subsidiaries  or such first Person and one or more
of its Subsidiaries  owns sufficient  equity or voting interests to enable it or
them  (as a group)  ordinarily,  in the  absence  of  contingencies,  to elect a
majority of the  directors  (or Persons  performing  similar  functions) of such
second Person,  and any partnership or joint venture if more than a 50% interest
in the profits or capital  thereof is owned by such first  Person or one or more
of its  Subsidiaries  or such

                                  Schedule B-13

<PAGE>

first Person and one or more of its  Subsidiaries  (unless such  partnership  or
joint venture can and does  ordinarily  take major business  actions without the
prior  approval of such Person or one or more of its  Subsidiaries).  Unless the
context  otherwise  clearly  requires,  any  reference  to a  "Subsidiary"  is a
reference to a Subsidiary of the Company.

      "SVO" means the Securities  Valuation  Office of the NAIC or any successor
to such Office.

      "SWAP  AGREEMENT"  means any agreement with respect to any swap,  forward,
future or derivative  transaction or option or similar agreement  involving,  or
settled by reference to, one or more rates, currencies,  commodities,  equity or
debt  instruments or securities,  or economic,  financial or pricing  indices or
measures  of  economic,  financial  or  pricing  risk or  value  or any  similar
transaction or any combination of these  transactions;  PROVIDED that no phantom
stock or similar  plan  providing  for  payments  only on  account  of  services
provided by current or former directors,  officers,  employees or consultants of
the Company or its Subsidiaries shall be a Swap Agreement.

      "TERM  LOAN"  means the term loans  made to the  Company  pursuant  to the
Credit Agreement.

      "TRANSPORTATION EQUIPMENT LEASES" is defined in Section 10.1(f).

      "USA  PATRIOT  ACT" means  United  States  Public Law 107-56,  Uniting and
Strengthening  America by Providing  Appropriate Tools Required to Intercept and
Obstruct  Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the  rules  and  regulations  promulgated  thereunder  from  time to time in
effect.

      "WHOLLY-OWNED  SUBSIDIARY"  means, at any time, any Subsidiary one hundred
percent of all of the Equity Interests (except directors' qualifying shares) and
voting  interests  of which are owned by any one or more of the  Company and the
Company's other Wholly-Owned Subsidiaries at such time.

                                  Schedule B-14


<PAGE>
</TEXT>
</DOCUMENT>
