Exhibit 10.1

STONEMOR OPERATING LLC

CORNERSTONE FAMILY SERVICES

WEST VIRGINIA SUBSIDIARY, INC.

OSIRIS HOLDING OF MARYLAND SUBSIDIARY, INC.

$150,000,000 10 1/4% Senior Notes due 2017

PURCHASE AGREEMENT

November 18, 2009

BANC OF AMERICA SECURITIES LLC

    As Representative of the Initial Purchasers

c/o Banc of America Securities LLC

One Bryant Park

New York, New York 10036

Ladies and Gentlemen:

Introductory. StoneMor Operating LLC, a Delaware limited liability company (the
“Company”), Cornerstone Family Services West Virginia Subsidiary, Inc., a West
Virginia corporation (“Cornerstone Co”), and Osiris Holding of Maryland
Subsidiary, Inc., a Maryland corporation (“Osiris Co”, and together with the
Company and Cornerstone Co, the “Issuers”), each of which is a wholly-owned
subsidiary of StoneMor Partners L.P., a Delaware limited partnership (the
“Parent”), as joint and several obligors, propose to issue and sell to the
several Initial Purchasers named in Schedule A (the “Initial Purchasers”),
acting severally and not jointly, the respective amounts set forth in such
Schedule A, of $150,000,000 aggregate principal amount of the Issuers’ 10  1/4%
Senior Notes due 2017 (the “Notes”). Banc of America Securities LLC has agreed
to act as the representative of the several Initial Purchasers (the
“Representative”) in connection with the offering and sale of the Securities (as
defined below).

The Securities will be issued pursuant to an indenture (the “Indenture”), to be
dated as of the Closing Date (as defined in Section 2 hereof), among the
Issuers, the Initial Guarantors (as defined below) and Wilmington Trust Company,
as trustee (the “Trustee”). The Notes will be issued only in book-entry form in
the name of Cede & Co., as nominee of The Depository Trust Company (the
“Depositary”) pursuant to a letter of representations, to be dated on or before
the Closing Date (the “DTC Agreement”), among the Issuers, the Trustee and the
Depositary.

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The holders of the Notes will be entitled to the benefits of a registration
rights agreement, to be dated as of the Closing Date (the “Registration Rights
Agreement”), among the Issuers, the Initial Guarantors and the Initial
Purchasers, pursuant to which the Issuers and the Initial Guarantors may be
required to file with the Commission (as defined below), under the circumstances
set forth therein, (i) a registration statement under the Securities Act (as
defined below) relating to another series of debt securities of the Issuers with
terms substantially identical to the Notes (the “Exchange Notes”) to be offered
in exchange for the Notes (the “Exchange Offer”) and (ii) a shelf registration
statement pursuant to Rule 415 of the Securities Act relating to the resale by
certain holders of the Notes, and in each case, to use their commercially
reasonable efforts to cause such registration statements to be declared
effective. All references herein to the Exchange Notes and the Exchange Offer
are only applicable if the Issuers and the Initial Guarantors (as defined below)
are in fact required to consummate the Exchange Offer pursuant to the
Registration Rights Agreement.

For purposes of this Agreement, a “Business Day” means any day other than a
Saturday or Sunday or other day on which banking institutions in New York City
are authorized or required by law to close.

The payment of principal of, premium, if any, and interest on the Notes and the
Exchange Notes will be fully and unconditionally guaranteed on a senior
unsecured basis, jointly and severally, by (i) the Parent and (ii) the Company’s
subsidiaries listed on Schedule B hereto (collectively, the “Subsidiary
Guarantors”; and together with the Parent, the “Initial Guarantors”) pursuant to
their guarantees (the “Guarantees”). The Parent’s and each Subsidiary
Guarantor’s respective successors and assigns and any subsidiary of the Parent
formed or acquired after the Closing Date that executes an additional guarantee
(together with the Initial Guarantors, the “Guarantors”) in accordance with the
terms of the Indenture and such subsidiary’s successors and assigns, shall be
deemed to be a Guarantor. The Notes and the Guarantees attached thereto are
herein collectively referred to as the “Securities”; and the Exchange Notes and
the Guarantees attached thereto are herein collectively referred to as the
“Exchange Securities.”

The Issuers understand that the Initial Purchasers propose to make an offering
of the Securities on the terms and in the manner set forth herein and in the
Pricing Disclosure Package (as defined below) and agrees that the Initial
Purchasers may resell, subject to the conditions set forth herein, all or a
portion of the Securities to purchasers (the “Subsequent Purchasers”) on the
terms set forth in the Pricing Disclosure Package (the first time when sales of
the Securities are made is referred to as the “Time of Sale”). The Securities
are to be offered and sold to or through the Initial Purchasers without being
registered with the Securities and Exchange Commission (the “Commission”) under
the Securities Act of 1933 (as amended, the “Securities Act,” which term, as
used herein, includes the rules and regulations of the Commission promulgated
thereunder), in reliance upon exemptions therefrom. Pursuant to the terms of the
Securities and the Indenture, investors who acquire the Securities shall be
deemed to have agreed that the Securities may only be resold or otherwise
transferred, after the date hereof, if such Securities are registered for sale
under the Securities Act or if an exemption from the registration requirements
of the Securities Act is available (including the exemptions afforded by Rule
144A under the Securities Act (“Rule 144A”) or Regulation S under the Securities
Act (“Regulation S”)).

 

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The Issuers have prepared and delivered to the Initial Purchasers copies of a
Preliminary Offering Memorandum, dated November 10, 2009 (the “Preliminary
Offering Memorandum”), and have prepared and delivered to the Initial Purchasers
copies of a Pricing Supplement, dated November 18, 2009 in the form attached
hereto as Annex II (the “Pricing Supplement”), describing the terms of the
Securities, each for use by the Initial Purchasers in connection with its
solicitation of offers to purchase the Securities. The Preliminary Offering
Memorandum and the Pricing Supplement are herein referred to as the “Pricing
Disclosure Package.” Promptly after this Purchase Agreement (the “Agreement”) is
executed and delivered, the Issuers will prepare and deliver to the Initial
Purchasers a final offering memorandum dated the date hereof (the “Final
Offering Memorandum”).

All references herein to the terms “Pricing Disclosure Package” and “Final
Offering Memorandum” shall be deemed to mean and include all information, if
any, filed under the Securities Exchange Act of 1934 (as amended, the “Exchange
Act,” which term, as used herein, includes the rules and regulations of the
Commission promulgated thereunder) prior to the Time of Sale and incorporated by
reference in the Pricing Disclosure Package (including the Preliminary Offering
Memorandum) or the Final Offering Memorandum (as the case may be), and all
references herein to the terms “amend,” “amendment” or “supplement” with respect
to the Final Offering Memorandum shall be deemed to mean and include all
information, if any, filed under the Exchange Act after the Time of Sale and
incorporated by reference in the Final Offering Memorandum.

On November 12, 2009, Parent filed with the Commission a preliminary prospectus
supplement, pursuant to Rule 424(b) under the Act relating to the underwritten
public offering by the Parent of 1,275,000 additional common units (the “Common
Units”) representing limited partner interests in the Parent (plus an additional
191,250 Common Units issuable upon exercise of the underwriter’s option to
purchase additional Common Units) (the “Public Equity Offering”).

In connection with the transactions described herein, Stonemor GP LLC, the
Parent and certain of the Parent’s subsidiaries will enter into an amendment to
their existing Amended and Restated Credit Agreement dated August 15, 2007, by
and among the Company, as Borrower, various subsidiaries thereof as additional
Borrowers, the Parent and StoneMor GP LLC, as guarantors, Bank of America, N.A.,
as administrative agent, swingline lender and L/C issuer, and the other lenders
named therein to become effective upon consummation of the offering of the
Securities. Any reference herein to the “Amended and Restated Credit Facility”
shall be deemed to refer to the Amended and Restated Credit Facility existing as
of the date of this Agreement or the Closing Date, as applicable.

In connection with the transactions described herein, Stonemor GP LLC, the
Parent and certain of the Parent’s subsidiaries will enter into an amendment to
their Amended and Restated Note Purchase Agreement, dated as of August 15, 2007
(the “Note Purchase Agreement”), to become effective upon consummation of the
offering of the Securities. Any reference herein to the “Note Purchase
Agreement” shall be deemed to refer to the Note Purchase Agreement existing as
of the date of this Agreement or the Closing Date, as applicable.

 

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The Issuers and the Initial Guarantors hereby confirm their agreements with the
Initial Purchasers as follows:

SECTION 1. Representations and Warranties. Each of the Issuers and the Initial
Guarantors, jointly and severally, hereby represents, warrants and covenants to
each Initial Purchaser that, as of the date hereof and as of the Closing Date
(references in this Section 1 to the “Offering Memorandum” are to (x) the
Pricing Disclosure Package in the case of representations and warranties made as
of the date hereof and (y) the Final Offering Memorandum in the case of
representations and warranties made as of the Closing Date):

(a) No Registration Required. Subject to compliance by the Initial Purchasers
with the representations and warranties set forth in Section 2 hereof and with
the procedures set forth in Section 7 hereof, it is not necessary in connection
with the offer, sale and delivery of the Securities to the Initial Purchasers
and to each Subsequent Purchaser in the manner contemplated by this Agreement
and the Offering Memorandum to register the Securities under the Securities Act
or, until such time as the Exchange Securities are issued pursuant to an
effective registration statement, to qualify the Indenture under the Trust
Indenture Act of 1939, as amended (the “Trust Indenture Act,” which term, as
used herein, includes the rules and regulations of the Commission promulgated
thereunder).

(b) No Integration of Offerings or General Solicitation. Neither the Issuers,
the Initial Guarantors nor any of their respective affiliates (as such term is
defined in Rule 501 under the Securities Act) (each, an “Affiliate”), nor any
person acting on its or any of their behalf (other than the Initial Purchasers
and their Affiliates, as to whom the Issuers and the Initial Guarantors make no
representation or warranty) has, directly or indirectly, solicited any offer to
buy or offered to sell, or will, directly or indirectly, solicit any offer to
buy or offer to sell, in the United States or to any United States citizen or
resident, any security which is or would be integrated with the sale of the
Securities in a manner that would require the Securities to be registered under
the Securities Act. None of the Issuers, the Initial Guarantors, or any of their
respective Affiliates, or any person acting on its or any of their behalf (other
than the Initial Purchasers and their Affiliates, as to whom the Issuers and the
Initial Guarantors make no representation or warranty) has engaged or will
engage, in connection with the offering of the Securities, in any form of
general solicitation or general advertising within the meaning of Rule 502 under
the Securities Act. With respect to those Securities sold in reliance upon
Regulation S, (i) none of the Issuers, the Initial Guarantors, their respective
Affiliates or any person acting on its or their behalf (other than the Initial
Purchasers and their Affiliates, as to whom the Issuers and Initial Guarantors
make no representation or warranty) has engaged or will engage in any directed
selling efforts within the meaning of Regulation S and (ii) each of the Issuers,
the Initial Guarantors and their respective Affiliates and any person acting on
its or their behalf (other than the Initial Purchasers and their Affiliates, as
to whom the Issuers and Initial Guarantors make no representation or warranty)
has complied and will comply with the offering restrictions set forth in
Regulation S.

(c) Eligibility for Resale under Rule 144A. When issued on the Closing Date, the
Securities will be eligible for resale pursuant to Rule 144A and will not be of
the same class as securities listed on a national securities exchange registered
under Section 6 of the Exchange Act or quoted in a U.S. automated interdealer
quotation system.

 

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(d) The Pricing Disclosure Package and Offering Memorandum. Neither the Pricing
Disclosure Package, as of the Time of Sale, nor the Final Offering Memorandum,
as of its date or (as amended or supplemented in accordance with Section 3(a)
hereof, as applicable) as of the Closing Date, contains or will contain an
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that this representation,
warranty and agreement shall not apply to statements in or omissions from the
Pricing Disclosure Package, the Final Offering Memorandum or any amendment or
supplement thereto made in reliance upon and in conformity with information
furnished to the Issuers in writing by any Initial Purchaser through the
Representative expressly for use in the Pricing Disclosure Package, the Final
Offering Memorandum or amendment or supplement thereto, as the case may be. The
Pricing Disclosure Package contains, and the Final Offering Memorandum will
contain, all the information specified in, and meeting the requirements of, Rule
144A. Neither the Issuers or Parent have distributed and will not distribute,
prior to the later of the Closing Date and the completion of the Initial
Purchasers’ distribution of the Securities, any offering material in connection
with the offering and sale of the Securities other than the Pricing Disclosure
Package and the Final Offering Memorandum.

(e) Issuers Additional Written Communications. The Issuers have not prepared,
made, used, authorized, approved or distributed and will not prepare, make, use,
authorize, approve or distribute any written communication that constitutes an
offer to sell or solicitation of an offer to buy the Securities other than
(i) the Pricing Disclosure Package, (ii) the Final Offering Memorandum and
(iii) any electronic road show or other written communications, in each case
used in accordance with Section 3(a) hereof. Each such communication by the
Issuers or their agents and representatives pursuant to clause (iii) of the
preceding sentence (each, an “Issuers Additional Written Communication”), when
taken together with the Pricing Disclosure Package, did not as of the Time of
Sale, and at the Closing Date will not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that this representation, warranty and agreement
shall not apply to statements in or omissions from each such Issuers Additional
Written Communication made in reliance upon and in conformity with information
furnished to the Issuers or the Initial Guarantors in writing by the Initial
Purchasers through the Representative expressly for use in any Issuers
Additional Written Communication.

(f) The Purchase Agreement. This Agreement has been duly authorized, executed
and delivered by each Issuer and each Initial Guarantor, and is a valid and
binding agreement of, each Issuer and each Initial Guarantor.

(g) The Registration Rights Agreement and DTC Agreement. The Registration Rights
Agreement has been duly authorized and, on the Closing Date, will have been duly
executed and delivered by, and, assuming the due authorization, execution and

 

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delivery thereof by the Initial Purchasers, will constitute a valid and binding
agreement of, each Issuer and each Initial Guarantor, enforceable in accordance
with its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles (regardless of whether enforcement is considered in a proceeding in
equity or at law) and except as rights to indemnification may be limited by
applicable law. The DTC Agreement has been duly authorized and, on the Closing
Date, will have been duly executed and delivered by, and, assuming the due
authorization, execution and delivery thereof by the other parties thereto, will
constitute a valid and binding agreement of, each Issuer, enforceable in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles (regardless of whether enforcement is considered in a
proceeding in equity or at law).

(h) Authorization of the Notes, the Guarantees and the Exchange Notes. The Notes
to be purchased by the Initial Purchasers from the Issuers will on the Closing
Date be in substantially the form contemplated by the Indenture, have been duly
authorized for issuance and sale pursuant to this Agreement and the Indenture
and, at the Closing Date, will have been duly executed by the Issuers and, when
issued and authenticated by the Trustee in the manner provided for in the
Indenture and delivered against payment of the purchase price therefor, will
constitute valid and binding obligations of each Issuer, enforceable against
each Issuer in accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles (regardless of whether enforcement is considered in
an proceeding in equity or at law) and will be entitled to the benefits of the
Indenture. The Exchange Notes have been duly and validly authorized for issuance
by the Issuers, and when issued and authenticated by the Trustee in accordance
with the terms of the Indenture and delivered in the Exchange Offer contemplated
by the Registration Rights Agreement, will constitute valid and binding
obligations of each Issuer, enforceable against the Issuers in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or affecting
enforcement of the rights and remedies of creditors or by general equitable
principles (regardless of whether enforcement is considered in a proceeding in
equity or at law) and will be entitled to the benefits of the Indenture. The
Guarantees of the Notes on the Closing Date and the Guarantees of the Exchange
Notes when issued will be in substantially the respective forms contemplated by
the Indenture and have been duly authorized for issuance pursuant to this
Agreement and the Indenture; the Guarantees of the Notes, at the Closing Date,
will have been duly executed by each of the Initial Guarantors and, when the
Indenture has been duly authorized, executed and delivered by the Issuers and
the Trustee and when the Notes have been authenticated by the Trustee in the
manner provided for in the Indenture and issued and delivered against payment of
the purchase price therefor, the Guarantees of the Notes will constitute valid
and binding agreements of the Initial Guarantors; and, when the Indenture has
been duly authorized, executed and delivered by the Issuers and the Trustee and
when the Exchange Notes have been authenticated by the Trustee in the manner
provided for in the Indenture and issued and delivered

 

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in accordance with the Registration Rights Agreement, the Guarantees of the
Exchange Notes will constitute valid and binding agreements of the Initial
Guarantors, in each case, enforceable in accordance with their terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles (regardless
of whether enforcement is considered in a proceeding in equity or at law) and
will be entitled to the benefits of the Indenture.

(i) Authorization of the Indenture. The Indenture has been duly authorized by
each Issuer and each Initial Guarantor and, at the Closing Date, will have been
duly executed and delivered by each Issuer and each Initial Guarantor and,
assuming the due authorization, execution and delivery thereof by the Trustee,
will constitute a valid and binding agreement of each Issuer and each Initial
Guarantor, enforceable against each Issuer and each Initial Guarantor in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles (regardless of whether enforcement is considered in a
proceeding in equity or at law).

(j) Description of the Securities, the Indenture and the Registration Rights
Agreement. The Securities, the Exchange Securities, the Indenture and the
Registration Rights Agreement will conform in all material respects to the
respective statements relating thereto contained in the Offering Memorandum.

(k) Independent Accountants. Deloitte & Touche LLP, which expressed its opinion
with respect to the financial statements (which term as used in this Agreement
includes the related notes thereto) filed with the Commission and included in
the Offering Memorandum is an independent registered public accounting firm
within the meaning of the Securities Act, the Exchange Act and the rules of the
Public Company Accounting Oversight Board, and any non-audit services provided
by Deloitte & Touche LLP to the Issuers or any of the Initial Guarantors have
been approved by the Audit Committee of the Board of Directors of Stonemor GP
LLC.

(l) Preparation of the Financial Statements. The historical financial statements
included in the Offering Memorandum, together with the related schedules and
notes, present fairly in all material respects the financial condition, results
of operations and cash flows of the Parent and its consolidated subsidiaries or
the entities or the assets purported to be shown thereby on the basis stated
therein at the dates indicated and the statements of operations, partners’
equity and statement of cash flows of the Parent and its consolidated
subsidiaries or of the entities or the assets purported to be shown thereby for
the periods specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the periods involved, except as may be stated in the notes
thereto. The audited financial data set forth in the Offering Memorandum under
the captions “Summary–Summary Historical Consolidated Financial and Operating
Data” and “Selected Historical Consolidated Financial and Operating Data” is
accurately presented in all material respects and prepared on a basis consistent
with that of the audited financial statements from which it has been derived.

 

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(m) Formation and Qualification of Parent. The Parent (A) has been duly
organized and is validly existing as a limited partnership in good standing
under the Delaware Revised Uniform Limited Partnership Act (the “Delaware LP
Act”) and (B) has all limited partnership power and authority necessary to own,
lease and operate its properties and to conduct its business and to enter into
and perform its obligations under this Agreement, the Registration Rights
Agreement, the Securities, the Exchange Securities and the Indenture (the
“Transaction Documents”), in each case in clause (B) in all material respects as
described in the Offering Memorandum; and Parent is duly qualified as a foreign
limited partnership to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not have a material
adverse change on the consolidated financial position, partners’ equity, results
of operations, business or prospects of the Parent and its subsidiaries taken as
a whole (a “Material Adverse Effect”).

(n) Formation and Qualification of the Issuers. The Company has been duly
organized and is validly existing as a limited liability company in good
standing under the Delaware Limited Liability Company Act (the “Delaware LLC
Act”). Cornerstone Co has been duly incorporated and is validly existing as a
corporation in good standing under the West Virginia Business Corporation Act.
Osiris Co has been duly incorporated and is validly existing as a corporation in
good standing under Maryland General Corporation Law. Each Issuer has all
limited liability company or corporate power and authority necessary to own,
lease and operate its properties and to conduct its business and to enter into
and perform its obligations under this Agreement and the Transaction Documents,
in the case of each Issuer, in all material respects as described in the
Offering Memorandum. Each Issuer is duly qualified as a foreign limited
liability company or corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.

(o) Formation and Qualification of the Subsidiary Guarantors. Each Subsidiary
Guarantor (A) has been duly organized and is validly existing as a limited
liability company or a corporation in good standing under the laws of the
jurisdiction of its incorporation or organization, and (B) has all limited
liability company power and corporate power and authority necessary to own,
lease and operate its properties and to conduct its business, in each case in
clause (B) in all material respects as described in the Offering Memorandum;
each of the Subsidiary Guarantors is duly qualified as a foreign limited
liability company or corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except where
the failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.

 

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(p) Ownership of the Company. The Parent is the sole member of the Company with
a 100% membership interest in the Company; such membership interest is duly
authorized and validly issued in accordance with the limited liability company
agreement of the Company (as the same may be amended or restated at or prior to
the Closing Date or at the Time of Sale, the “Operating Company Operating
Agreement”) and is fully paid (to the extent required under the Operating
Company Operating Agreement) and nonassessable (except as such nonassessability
may be affected by Section 18–607 of the Delaware LLC Act); and the Parent owns
such membership interest free and clear of all liens, encumbrances, security
interests, equities, charges and other claims (except as described in the
Offering Memorandum or liens created pursuant to the Amended and Restated Credit
Facility, the Note Purchase Agreement and related guarantee (the “Note
Guarantee”) or the Company’s Senior Secured Series B Notes and Senior Secured
Series C Notes (the “Series B Notes” and “Series C Notes”).

(q) Ownership of Cornerstone Co and Osiris Co. The Company owns, directly or
indirectly, 100% of the outstanding capital stock of each of Cornerstone Co and
Osiris Co; all such stock is duly authorized and validly issued in accordance
with the certificate or articles of incorporation and bylaws of each of
Cornerstone Co and Osisris Co and is fully paid and nonassessable; and the
Company directly or indirectly owns all such stock free and clear of all liens,
encumbrances, security interests, equities, charges and other claims (except as
described in the Offering Memorandum or liens created pursuant to the Amended
and Restated Credit Facility, Note Purchase Agreement, Note Guarantee, the
Series B Notes or Series C Notes).

(r) Ownership of the Subsidiary Guarantors. The Company directly or indirectly
owns 100% of the outstanding capital stock or outstanding membership interests,
as applicable, of each Subsidiary Guarantor; provided that the nonprofit
cemeteries identified on Schedule C hereto do not have any owners; all such
stock and membership interests are duly authorized and validly issued in
accordance with the applicable certificate or articles of incorporation,
certificate of formation, bylaws and limited liability company agreement of each
Subsidiary Guarantor (collectively, the “Guarantors Charter Documents” and, as
to each individual Subsidiary Guarantor, the “Guarantor Charter Documents”) and
are fully paid (to the extent required under the applicable Guarantor Charter
Document) and nonassessable; and the owners own all such stock and membership
interests free and clear of all liens, encumbrances, security interests,
equities, charges and other claims (except as described in the Offering
Memorandum or liens created pursuant to the Amended and Restated Credit
Facility, Note Purchase Agreement, Note Guarantee, the Series B Notes or Series
C Notes).

(s) Capitalization. At September 30, 2009, on a consolidated basis, after giving
pro forma effect to the issuance and sale of the Securities pursuant hereto and
the Public Equity Offering, the Parent would have the outstanding capitalization
as set forth in the Offering Memorandum under the caption “Capitalization”
(other than for subsequent issuances of equity interests, if any, pursuant to
employee benefit plans described in the Offering Memorandum or upon exercise of
outstanding options or warrants described in the Offering Memorandum).

 

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(t) No Conflicts. Assuming the amendments to the Amended and Restated Credit
Facility and the Note Purchase Agreement are effective at or prior to the
Closing Date, none of the offering, issuance and sale by the Issuers of the
Notes, the execution, delivery and performance of this Agreement and the
Transaction Documents by the Issuers and the Initial Guarantors that are parties
hereto and thereto, the consummation of the transactions contemplated hereby and
thereby, and the use of proceeds from the sale of the Securities as described in
the Offering Memorandum under the caption “Use of Proceeds” (i) conflicts or
will conflict with or constitutes or will constitute a violation of the
agreement of limited partnership, limited liability company agreement,
certificate or articles of incorporation, certificate of limited partnership or
certificate of formation or bylaws or other organizational documents of the
Issuers or the Initial Guarantors, (ii) conflicts or will conflict with or
constitutes or will constitute a breach or violation of, or a default under (or
an event which, with notice or lapse of time or both, would constitute such a
default), any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Issuers or the Initial Guarantors is a
party or by which any of them or any of their respective properties may be
bound, (iii) violates or will violate any statute, law or regulation generally
applicable to the operation of cemeteries and funeral homes, or any order,
judgment, decree or injunction of any court or governmental agency or body
directed to the Issuers or the Initial Guarantors or any of their properties in
a proceeding to which any of them or their property is or was a party, or
(iv) results or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Issuers or the Initial Guarantors
(other than as described in the Offering Memorandum or liens created pursuant to
the Amended and Restated Credit Facility, Note Purchase Agreement, Note
Guarantee, the Series B Notes or Series C Notes), which conflicts, breaches,
violations, defaults or liens, in the case of clauses (ii), (iii) or (iv), would
have, individually or in the aggregate, a Material Adverse Effect.

(u) No Consents. Assuming the accuracy of the representations, warranties and
covenants of the Initial Purchasers set forth herein and except for (i) such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Securities Act or the securities laws of the several states
of the United States with respect to the Issuers’ and Initial Guarantors’
obligations under the Registration Rights Agreement and the purchase and
distribution of the Securities by the Initial Purchasers, (ii) such consents
that have been, or prior to the Closing Date and the Time of Sale will be,
obtained, (iii) such consents that, if not obtained, would not, individually or
in the aggregate, have a Material Adverse Effect, and (iv) as disclosed in the
Offering Memorandum, no consent, approval, authorization or order of, or filing
or registration with, any court or governmental agency or body having
jurisdiction over the Issuers or the Initial Guarantors or any of their
respective properties is required in connection with the offering, issuance and
sale by the Issuers of the Notes, the execution, delivery and performance of
this Agreement and the Transaction Documents by the Issuers and the Initial
Guarantors, as applicable, or the consummation of the transactions contemplated
hereby and thereby.

(v) No Default. None of the Issuers or Initial Guarantors (i) is in violation of
its certificate or agreement of limited partnership, limited liability company
agreement, certificate or articles of incorporation, certificate of limited
partnership or certificate of formation, or bylaws or other organizational
documents, (ii) is in default, and no event

 

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has occurred which, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is bound or
to which any of its properties or assets is subject or (iii) is in violation of
any law, statute, ordinance, administrative or governmental rule or regulation
generally applicable to the operation of cemeteries and funeral homes or of any
order, judgment, decree or injunction of any court or governmental agency or
body having jurisdiction over it, which default or violation in the case of
clause (ii) or (iii), would, if continued, have a Material Adverse Effect, or
could materially impair the ability of the Issuers or Initial Guarantors to
perform their obligations under this Agreement or the Transaction Documents. To
the knowledge of the Issuers and the Initial Guarantors, no third party to any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which any of the Issuers or Initial Guarantors is a party or by
which any of them is bound or to which any of their properties is subject, is in
default under any such agreement, which default would, if continued, have a
Material Adverse Effect.

(w) Legal Proceedings. Except as described in the Offering Memorandum, there are
no legal or governmental proceedings pending or, to the knowledge of the Issuers
or the Initial Guarantors, threatened against the Parent or any of its
subsidiaries, or to which the Parent or any of its subsidiaries is a party, or
to which any of their respective properties is subject, that are required by the
Exchange Act to be disclosed in an annual report on Form 10-K which are not so
disclosed in the Offering Memorandum or could reasonably be expected to result
in a Material Adverse Effect, or which might materially and adversely affect the
consummation of the transactions contemplated in this Agreement or by the
Transaction Documents; and there are no agreements, contracts, indentures,
leases or other instruments that are required by the Exchange Act to be
disclosed in an annual report on Form 10-K which are not so disclosed in the
Offering Memorandum.

(x) Permits. Each of the Parent and its subsidiaries has, or at the Closing Date
or at the Time of Sale will have, such permits, consents, licenses, franchises,
certificates and authorizations of governmental or regulatory authorities
(“permits”) as are necessary to own its properties and to conduct its business
in the manner described in the Offering Memorandum, subject to such
qualifications as may be set forth in the Offering Memorandum and except for
such permits which, if not obtained, would not, individually or in the
aggregate, have a Material Adverse Effect; except as set forth in the Offering
Memorandum, each of the Issuers, the Parent and each of their subsidiaries has,
or at the Closing Date or at the Time of Sale will have, fulfilled and performed
all its material obligations with respect to such permits which are or will be
due to have been fulfilled and performed by such date and no event has occurred
that would prevent the permits from being renewed or reissued or which allows,
or after notice or lapse of time would allow, revocation or termination thereof
or results in any impairment of the rights of the holder of any such permit,
except for such non-renewals, non-issues, revocations, terminations and
impairments that would not, individually or in the aggregate, have a Material
Adverse Effect; and except as described in the Offering Memorandum, none of such
permits contains, or at the Closing Date or at the Time of Sale will contain,
any restriction that is materially burdensome to the Parent and its subsidiaries
considered as a whole.

 

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(y) Title to Properties. At the Closing Date and at the Time of Sale, the
Company and its operating subsidiaries will have good and marketable title to
all real property and good title to all personal property described in the
Offering Memorandum to be owned by the Company and its operating subsidiaries,
in each case free and clear of all liens, claims, security interests and other
encumbrances except (i) as described, and subject to the limitations contained,
in the Offering Memorandum, (ii) that arise under the Amended and Restated
Credit Facility, Note Purchase Agreement, Note Guarantee, Series B Notes or
Series C Notes and (iii) as do not materially affect the value of all such
properties taken as a whole and do not materially interfere with the use of such
properties taken as a whole as they have been used in the past and are proposed
to be used in the future as described in the Offering Memorandum; provided that,
with respect to any real property and buildings held under lease by the Company
and its operating subsidiaries, such real property and buildings are or will be
held or to be held under valid and subsisting and enforceable leases with such
exceptions as do not materially interfere with the use of the properties of the
Parent and its subsidiaries taken as a whole as they have been used in the past
as described in the Offering Memorandum and are proposed to be used in the
future as described in the Offering Memorandum.

(z) Tax Returns. Each of the Parent and its subsidiaries has filed (or has
obtained extensions with respect to) all material federal, state and local
income and franchise tax returns required to be filed through the date of this
Agreement, which returns are correct and complete in all material respects, and
has timely paid all taxes due thereon, other than those (i) that are being
contested in good faith and for which adequate reserves have been established in
accordance with generally accepted accounting principles or (ii) that, if not
paid, would not have a Material Adverse Effect.

(aa) “Investment Company”. None of the Issuers is now, and after the sale of the
Securities to be sold by the Issuers hereunder and the application of the net
proceeds from such sale as described in the Offering Memorandum under the
caption “Use of Proceeds,” will be an “investment company” or a company
“controlled by” an “investment company” within the meaning of the Investment
Company Act of 1940, as amended (the “Investment Company Act,” which term, as
used herein, includes the rules and regulations of the Commission promulgated
thereunder).

(bb) Insurance. The Parent and its subsidiaries maintain insurance covering
their properties, operations, personnel and businesses against such losses and
risks and in such amounts as is reasonably adequate for the conduct of their
respective businesses and the value of their respective properties and as is
customary for companies engaged in similar businesses in similar industries.
None of the Parent or its subsidiaries have received notice from any insurer or
agent of such insurer that substantial capital improvements or other
expenditures will have to be made in order to continue such insurance and all
such insurance is outstanding and duly in force on the date hereof and will be
outstanding and duly in force on the Closing Date and the Time of Sale.

(cc) No Price Stabilization or Manipulation. The Issuers have not taken,
directly or indirectly, any action designed to or that would constitute or that
might reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security of the
Parent or the Issuers to facilitate the sale or resale of the Securities.

 

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(dd) Solvency. Each of the Issuers and the Initial Guarantors is, and
immediately after the Closing Date will be, Solvent. As used herein, the term
“Solvent” means, with respect to any person on a particular date, that on such
date (i) the present fair market value (or present fair saleable value) of the
assets of such person is greater than the total amount required to pay the
liabilities (including contingent liabilities) of such person on its total
existing debts as they become absolute and matured, (ii) such person is able to
realize upon its assets and pay its debts and other liabilities, including
contingent obligations, as they mature and become due in the ordinary course of
business and (iii) such person does not have unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
such person is engaged.

(ee) Compliance with Sarbanes-Oxley. The Parent is in compliance in all material
respects with all applicable provisions of the Sarbanes-Oxley Act of 2002 (the
“Sarbanes-Oxley Act”) and the rules and regulations promulgated in connection
therewith.

(ff) Accounting Controls and Disclosure Controls. The Issuers, the Parent and
their subsidiaries maintain a system of internal accounting controls sufficient
to provide reasonable assurances that (1) transactions are executed in
accordance with management’s general or specific authorization; (2) transactions
are recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (3) access to assets is permitted only in accordance
with management’s general or specific authorization; and (4) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
Except as described in the Offering Memorandum, since the end of the Parent’s
most recent audited fiscal year, there has been (I) no material weakness in the
Parent’s internal control over financial reporting (whether or not remediated)
and (II) no change in the Parent’s internal control over financial reporting
that has materially affected, or is reasonably likely to materially affect, the
Parent’s internal control over financial reporting. The Parent and its
consolidated subsidiaries employ disclosure controls and procedures that are
designed to ensure that information required to be disclosed by the Parent in
the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Commission’s rules and forms, and is accumulated and communicated to the
Parent’s management, including its principal executive officer or officers and
principal financial officer or officers, as appropriate, to allow timely
decisions regarding disclosure.

(gg) Environmental Compliance. At the Closing Date and the Time of Sale, the
Issuers, the Parent and its subsidiaries (i) are in compliance with any and all
applicable federal, state and local laws and regulations relating to the
protection of human health and safety and the environment or imposing liability
or standards of conduct concerning any Hazardous Materials (as defined below
(“Environmental Laws”), (ii) have received all permits required of them under
applicable Environmental Laws to conduct their respective

 

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businesses, (iii) are in compliance with all terms and conditions of any such
permits and (iv) do not have any liability in connection with the release into
the environment of any Hazardous Material, except where such noncompliance with
Environmental Laws, failure to receive required permits, failure to comply with
the terms and conditions of such permits or liability would not, individually or
in the aggregate, have a Material Adverse Effect. The term “Hazardous Material”
means (A) any “hazardous substance” as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
(B) any “hazardous waste” as defined in the Resource Conservation and Recovery
Act, as amended, (C) any petroleum or petroleum product, (D) any polychlorinated
biphenyl and (E) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material, waste or substance regulated under or within the meaning of
any other Environmental Law.

(hh) No Labor Dispute. Except as disclosed in the Offering Memorandum, no labor
dispute with the employees of the Parent or its subsidiaries exists or, to the
knowledge of the Issuers and the Initial Guarantors, is imminent or threatened
that is reasonably likely to result in a Material Adverse Effect.

(ii) Certain Relationships and Related Transactions. No relationship, direct or
indirect, exists between or among the Parent or any of its subsidiaries on the
one hand, and any director, officer, member, unitholder, customer or supplier of
the Parent or any of its subsidiaries, on the other hand, which is required by
the Exchange Act to be described in an annual report on Form 10-K which is not
so disclosed in the Offering Memorandum. There are no outstanding loans,
advances (except advances for business expenses in the ordinary course of
business) or guarantees of indebtedness by the Parent or any of its subsidiaries
to or for the benefit of any of the officers or directors of the Parent or any
of its subsidiaries or any of their respective family members.

(jj) Foreign Corrupt Practices Act. Neither the Parent nor any of its
subsidiaries nor, to the knowledge of the Issuers and the Initial Guarantors,
any director, officer, agent, employee, affiliate or other person associated
with or acting on behalf of the Parent or any of its subsidiaries, has used any
partnership, limited liability company or corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from partnership, limited liability
company or corporate funds; violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.

(kk) Money Laundering Laws. The operations of the Parent and its subsidiaries
are and have been conducted at all times in material compliance with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines issued, administered or enforced by any
governmental agency (collectively, the “Money Laundering Laws”) and no action,
suit or proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Parent or any of its subsidiaries with
respect to the Money Laundering Laws is pending or, to the best knowledge of the
Issuers or the Initial Guarantors, threatened.

 

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(ll) OFAC. Neither the Parent nor any of its subsidiaries nor, to the knowledge
of the Issuers and the Initial Guarantors, the Parent, any director, officer,
agent, employee, affiliate or person acting on behalf of the Parent or any of
its subsidiaries is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and
the Issuers and the Parent will not directly or indirectly use the proceeds of
the offering, or lend, contribute or otherwise make available such proceeds to
any subsidiary, joint venture partner or other person or entity, for the purpose
of financing the activities of any person currently subject to any U.S.
sanctions administered by OFAC.

(mm) Statistical and Market-Related Data. Any statistical and market-related
data included in the Offering Memorandum are based on or derived from sources
that the Issuers and the Initial Guarantors believe to be reliable and accurate
in all material respects.

(nn) Regulation S. The Issuers and the Initial Guarantors and their respective
affiliates and all persons acting on their behalf (other than the Initial
Purchasers and their affiliates, as to whom the Issuers and the Initial
Guarantors make no representation) have complied with and will comply with the
offering restrictions requirements of Regulation S in connection with the
offering of the Securities outside the United States and, in connection
therewith, the Offering Memorandum will contain the disclosure required by Rule
902. The Securities sold in reliance on Regulation S will be represented upon
issuance by a temporary global security that may not be exchanged for definitive
securities until the expiration of the 40-day restricted period referred to in
Rule 903 of the Securities Act and only upon certification of beneficial
ownership of such Securities by non-U.S. persons or U.S. person who purchased
such Securities in transactions that were exempt from the registration
requirements of the Securities Act.

Any certificate signed by an officer of the Issuers or any Initial Guarantor and
delivered to the Initial Purchasers or to counsel for the Initial Purchasers
shall be deemed to be a representation and warranty by the Issuers or such
Initial Guarantor to the Initial Purchasers as to the matters set forth therein.

SECTION 2. Purchase, Sale and Delivery of the Securities.

(a) The Securities. Each of the Issuers and the Initial Guarantors agrees to
issue and sell to the Initial Purchasers, severally and not jointly, all of the
Securities, and the Initial Purchasers, severally and not jointly, agree to
purchase from the Issuers and the Initial Guarantors the aggregate principal
amount of Securities set forth opposite their names on Schedule A, at a purchase
price of 94.352% of the principal amount thereof payable on the Closing Date, in
each case, on the basis of the representations, warranties and agreements herein
contained, and upon the terms, subject to the conditions thereto, herein set
forth.

(b) The Closing Date. Delivery of certificates for the Securities in global form
to be purchased by the Initial Purchasers and payment therefor shall be made at
the offices of Vinson & Elkins LLP, 666 Fifth Avenue, New York, New York 10103
(or such other place as may be agreed to by the Company and the Representative)
at 9:00 a.m. New York City time, on November 24, 2009, or such other time and
date as the Representative shall designate by notice to the Issuers (the time
and date of such closing are called the “Closing Date”). The Issuers hereby
acknowledge that circumstances under which the Representative may provide notice
to postpone the Closing Date as originally scheduled include, but are in no way
limited to, any determination by the Issuers or the Initial Purchasers to
recirculate to investors copies of an amended or supplemented Offering
Memorandum or a delay as contemplated by the provisions of Section 17 hereof.

 

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(c) Delivery of the Securities. The Issuers shall deliver, or cause to be
delivered, the Securities to the Representative for the accounts of the several
Initial Purchasers through the facilities of the Depository at the Closing Date
against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor. The certificates for the
Securities shall be in such denominations and registered in the name of Cede &
Co., as nominee of the Depositary, pursuant to the DTC Agreement, and shall be
made available for inspection on the Business Day preceding the Closing Date at
a location in New York City, as the Representative may designate. Time shall be
of the essence, and delivery at the time and place specified in this Agreement
is a further condition to the obligations of the Initial Purchasers.

(d) Initial Purchasers as Qualified Institutional Buyers. Each Initial Purchaser
severally and not jointly represents and warrants to, and agrees with, the
Issuers and the Initial Guarantors that:

(i) it will offer and sell Securities only to persons who it reasonably believes
are “qualified institutional buyers” within the meaning of Rule 144A (“Qualified
Institutional Buyers”) in transactions meeting the requirements of Rule 144A and
outside the United States to persons who it reasonably believes are “non-U.S.
persons” (within the meaning of Regulation S) in compliance with Regulation S;

(ii) it is a Qualified Institutional Buyer; and

(iii) it will not offer or sell Securities by any form of general solicitation
or general advertising, including but not limited to the methods described in
Rule 502(c) under the Securities Act or by any directed selling efforts within
the meaning of Regulation S.

SECTION 3. Additional Covenants. Each of the Issuers and the Initial Guarantors
further covenants and agrees with each Initial Purchaser as follows:

(a) Preparation of Final Offering Memorandum; Initial Purchasers’ Review of
Proposed Amendments and Supplements and Issuers Additional Written
Communications. As promptly as practicable following the Time of Sale and in any
event not later than the second Business Day following the date hereof, the
Issuers will prepare and deliver to the Initial Purchasers the Final Offering
Memorandum, which shall consist of the Preliminary Offering Memorandum as
modified only by the information contained in the Pricing Supplement and such
other immaterial information approved by the Representative. The Issuers will
not amend or supplement the Preliminary Offering Memorandum or the Pricing
Supplement. The Issuers will not amend or supplement the Final Offering
Memorandum prior to the Closing Date unless the Representative shall previously
have been furnished a copy of the proposed amendment or supplement at least two
Business Days prior to the proposed use or filing, and shall not have objected
to such amendment or supplement. Before making, preparing, using, authorizing,
approving or distributing any Issuers Additional Written Communication, the
Issuers will furnish to the Representative a copy of such written communication
for review and will not make, prepare, use, authorize, approve or distribute any
such written communication to which the Representative reasonably objects.

 

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(b) Amendments and Supplements to the Final Offering Memorandum and Other
Securities Act Matters. If at any time prior to the Closing Date (i) any event
shall occur or condition shall exist as a result of which any of the Pricing
Disclosure Package as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (ii) it is necessary to amend or
supplement any of the Pricing Disclosure Package to comply with law, the Issuers
and the Initial Guarantors will immediately notify the Initial Purchasers
thereof and forthwith prepare and (subject to Section 3(a) hereof) furnish to
the Initial Purchasers such amendments or supplements to any of the Pricing
Disclosure Package as may be necessary so that the statements in any of the
Pricing Disclosure Package as so amended or supplemented will not, in the light
of the circumstances under which they were made, be misleading or so that any of
the Pricing Disclosure Package will comply with all applicable law. If, prior to
the completion of the placement of the Securities by the Initial Purchasers with
the Subsequent Purchasers, any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Final Offering Memorandum,
as then amended or supplemented, in order to make the statements therein, in the
light of the circumstances when the Final Offering Memorandum is delivered to a
Subsequent Purchaser, not misleading, or if in the judgment of the
Representative or counsel for the Initial Purchasers it is otherwise necessary
to amend or supplement the Final Offering Memorandum to comply with law, the
Issuers and the Initial Guarantors agree to promptly prepare (subject to
Section 3(a) hereof), and furnish at their own expense to the Initial
Purchasers, amendments or supplements to the Final Offering Memorandum so that
the statements in the Final Offering Memorandum as so amended or supplemented
will not, in the light of the circumstances at the Closing Date and at the time
of sale of Securities, be misleading or so that the Final Offering Memorandum,
as amended or supplemented, will comply with all applicable law.

(c) Copies of the Offering Memorandum. The Issuers agree to furnish the Initial
Purchasers, without charge, as many copies of the Pricing Disclosure Package and
the Final Offering Memorandum and any amendments and supplements thereto as they
shall reasonably request.

(d) Blue Sky Compliance. Each of the Issuers and the Initial Guarantors shall
cooperate with the Representative and counsel for the Initial Purchasers to
qualify or register (or to obtain exemptions from qualifying or registering) all
or any part of the Securities for offer and sale under the securities laws of
the several states of the United States, the provinces of Canada or any other
jurisdictions designated by the Representative, shall comply with such laws and
shall continue such qualifications, registrations and exemptions in effect so
long as required for the distribution of the Securities. None of the Issuers or
any of the Initial Guarantors shall be required to qualify as a foreign
corporation or to take any action that would subject it to general service of
process in any such jurisdiction where it is not presently qualified or where it
would be subject to taxation as a foreign corporation. The Issuers will advise
the Representative promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Securities for offering,
sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, each of the Issuers
and the Initial Guarantors shall use its commercially reasonable efforts to
obtain the withdrawal thereof at the earliest possible moment.

 

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(e) Use of Proceeds. The Issuers shall apply the net proceeds from the sale of
the Securities sold by them in the manner described under the caption “Use of
Proceeds” in the Pricing Disclosure Package.

(f) The Depositary. The Issuers will cooperate with the Initial Purchasers and
use their commercially reasonable efforts to permit the Securities to be
eligible for clearance and settlement through the facilities of the Depositary.

(g) Additional Issuer Information. Prior to the completion of the placement of
the Securities by the Initial Purchasers with the Subsequent Purchasers, the
Parent shall file, on a timely basis, with the Commission and the Nasdaq
National Market all reports and documents required to be filed under Section 13
or 15 of the Exchange Act.

(h) Agreement Not To Offer or Sell Additional Securities. During the period of
90 days following the date hereof, the Issuers will not, without the prior
written consent of Banc of America Securities LLC (which consent may be withheld
at the sole discretion of Banc of America Securities LLC), directly or
indirectly, sell, offer, contract or grant any option to sell, pledge, transfer
or establish an open “put equivalent position” within the meaning of Rule 16a-1
under the Exchange Act, or otherwise dispose of or transfer, or announce the
offering of, or file any registration statement under the Securities Act in
respect of, any debt securities of the Issuers or securities exchangeable for or
convertible into debt securities of the Issuers (other than as contemplated by
this Agreement and to register the Exchange Securities). For the avoidance of
doubt, this paragraph (h) shall not affect the ability of the Parent or its
subsidiaries to borrow amounts under the Amended and Restated Credit Facility.

(i) Future Reports to the Initial Purchasers. Solely to the extent required by
the Indenture and within the deadlines specified therein, at any time when the
Parent is not subject to Section 13 or 15 of the Exchange Act and any Securities
or Exchange Securities remain outstanding, the Parent will furnish to the
Representative and, upon request, to each of the other Initial Purchasers:
(i) copies of the Annual Report of the Parent containing the balance sheet of
the Parent as of the close of such fiscal year and statements of income,
Partners’ capital and cash flows for the year then ended and the opinion thereon
of the Parent’s independent public or certified public accountants; (ii) copies
of each proxy statement, Annual Report on Form 10-K, Quarterly Report on Form
10-Q, Current Report on Form 8-K or other report filed by the Parent with the
Commission, the Financial Industry Regulatory Authority (“FINRA”) or any
securities exchange; and (iii) copies of any report or communication of the
Parent mailed generally to holders of its equity interests or debt securities
(including the holders of the Securities), if, in each case, such documents are
not filed with the Commission within the time periods specified by the
Commission’s rules and regulations under Section 13 or 15 of the Exchange Act.

 

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(j) No Integration. The Issuers agree that it will not and will cause its
Affiliates not to make any offer or sale of securities of the Issuers of any
class if, as a result of the doctrine of “integration” referred to in Rule 502
under the Securities Act, such offer or sale would render invalid (for the
purpose of (i) the sale of the Securities by the Issuers to the Initial
Purchasers, (ii) the resale of the Securities by the Initial Purchasers to
Subsequent Purchasers or (iii) the resale of the Securities by such Subsequent
Purchasers to others) the exemption from the registration requirements of the
Securities Act provided by Section 4(2) thereof or by Rule 144A or by Regulation
S thereunder or otherwise.

(k) No Restricted Resales. During the period of one year after the Closing Date,
the Issuers will not, and will not permit any of their affiliates (as defined in
Rule 144 under the Securities Act) to resell any of the Notes which constitute
“restricted securities” under Rule 144 that have been reacquired by any of them.

(l) Legended Securities. Each certificate for a Note will bear the legend
substantially to the effect of that contained in “Notice to Investors” in the
Offering Memorandum for the time period and upon the other terms stated in the
Offering Memorandum.

Banc of America Securities LLC, the Representative on behalf of the several
Initial Purchasers, may, in its sole discretion, waive in writing the
performance by the Issuers or any Initial Guarantor of any one or more of the
foregoing covenants or extend the time for their performance.

SECTION 4. Payment of Expenses. Each of the Issuers and the Initial Guarantors
agrees to pay all costs, fees and expenses incurred in connection with the
performance of its obligations hereunder and in connection with the transactions
contemplated hereby, including, without limitation, (i) all expenses incident to
the issuance and delivery of the Securities (including all printing and
engraving costs), (ii) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Securities to the Initial
Purchasers, (iii) all fees and expenses of the Issuers’ and the Initial
Guarantors’ counsel, independent public or certified public accountants and
other advisors, (iv) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Pricing
Disclosure Package and the Final Offering Memorandum (including financial
statements and exhibits), and all amendments and supplements thereto, this
Agreement, the Registration Rights Agreement, the Indenture, the DTC Agreement
and the Notes and Guarantees, (v) all filing fees and expenses incurred by the
Issuers, the Initial Guarantors or the Initial Purchasers in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Securities for offer and sale under the
securities laws of the several states of the United States, the provinces of
Canada or other jurisdictions designated by the Initial Purchasers (including,
without limitation, the cost of preparing, printing and mailing preliminary and
final blue sky or legal investment memoranda and any related supplements to the
Pricing Disclosure Package or the Final Offering Memorandum, (vi) the fees and
expenses of the Trustee, including the fees and disbursements of counsel for the
Trustee in connection with the Indenture, the Securities and the Exchange
Securities, (vii) any fees payable in connection with the rating of the
Securities or the Exchange Securities with the ratings agencies, (viii) any
filing fees incident to the review by FINRA, if any, of the terms of the sale of
the Securities or the Exchange Securities, (ix) all fees

 

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and expenses (including reasonable fees and expenses of counsel) of the Issuers
and the Initial Guarantors in connection with approval of the Securities by the
Depositary for “book-entry” transfer, and the performance by the Issuers and the
Initial Guarantors of their respective other obligations under this Agreement
and (x) its own expenses incident to the “road show” for the offering of the
Securities and 50% of the cost of any chartered airplane or other
transportation. Except as provided in this Section 4 and Sections 6, 8 and 9
hereof, the Initial Purchasers shall pay their own expenses, including the fees
and disbursements of their counsel.

SECTION 5. A. Conditions of the Obligations of the Initial Purchasers. The
obligations of the several Initial Purchasers to purchase and pay for the
Securities as provided herein on the Closing Date shall be subject to the
accuracy of the representations and warranties on the part of the Issuers and
the Initial Guarantors set forth in Section 1 hereof as of the date hereof and
as of the Closing Date as though then made and to the timely performance by the
Issuers and the Initial Guarantors of their covenants and other obligations
hereunder, and to each of the following additional conditions:

(a) Accountants’ Comfort Letter. On the date hereof, the Initial Purchasers
shall have received from Deloitte & Touche LLP, the independent registered
public accounting firm for the Issuers, a “comfort letter” dated the date hereof
addressed to the Initial Purchasers, in form and substance satisfactory to the
Representative, covering the financial information in the Pricing Disclosure
Package and other customary matters. In addition, on the Closing Date, the
Initial Purchasers shall have received from such accountants, a “bring-down
comfort letter” dated the Closing Date addressed to the Initial Purchasers, in
form and substance satisfactory to the Representative, in the form of the
“comfort letter” delivered on the date hereof, except that (i) it shall cover
the financial information in the Final Offering Memorandum and any amendment or
supplement thereto and (ii) procedures shall be brought down to a date no more
than 5 days prior to the Closing Date.

(b) No Material Adverse Effect or Ratings Agency Change. For the period from and
after the date of this Agreement and prior to the Closing Date:

(i) in the judgment of the Representative there shall not have occurred any
Material Adverse Effect; and

(ii) there shall not have occurred any downgrading, nor shall any notice have
been given of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible change, in
the rating accorded any securities or indebtedness of the Issuers or the Initial
Guarantors by any “nationally recognized statistical rating organization” as
such term is defined for purposes of Rule 436 under the Securities Act.

(c) Opinion of Special Counsel for the Issuers and Initial Guarantors. On the
Closing Date the Initial Purchasers shall have received the favorable opinion
and a negative assurance letter of each of (i) Vinson & Elkins LLP, special
counsel for the Issuers and Initial Guarantors, dated as of such Closing Date,
the form of which is attached as Exhibit A-1; and (ii) Blank Rome, LLP, special
counsel for the Issuers and the Guarantors,

 

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dated the Closing Date; the form of which is attached as Exhibit A-2. On the
Closing Date, the Initial Purchasers shall have also received reliance and
opinion letters from local counsels to certain Issuers and Initial Guarantors,
dated as of the Closing Date, whereby such local counsels allow the Initial
Purchasers to rely on the opinions delivered by such local counsels in
connection with the Amended and Restated Credit Facility and provide certain
other opinions.

(d) Opinion of Counsel for the Initial Purchasers. On the Closing Date the
Initial Purchasers shall have received the favorable opinion and negative
assurance letter of Cahill Gordon & Reindel LLP, counsel for the Initial
Purchasers, dated as of such Closing Date, with respect to such matters as may
be reasonably requested by the Initial Purchasers.

(e) Officers’ Certificate. On the Closing Date the Initial Purchasers shall have
received a written certificate executed by the Chairman of the Board, Chief
Executive Officer or President of each Issuer and each Initial Guarantor and the
Chief Financial Officer or Chief Accounting Officer of each Issuer and each
Initial Guarantor, dated as of the Closing Date, to the effect set forth in
Section 5(b)(ii) hereof, and further to the effect that:

(i) for the period from and after the date of this Agreement and prior to the
Closing Date there has not occurred any Material Adverse Effect;

(ii) the representations, warranties and covenants of the Issuers and the
Initial Guarantors set forth in Section 1 hereof were true and correct as of the
date hereof and are true and correct as of the Closing Date with the same force
and effect as though expressly made on and as of the Closing Date; and

(iii) the Issuers and the Initial Guarantors have complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date.

(f) Indenture; Registration Rights Agreement. The Issuers and the Initial
Guarantors shall have executed and delivered the Indenture and the Initial
Purchasers shall have received executed copies thereof. The Issuers and the
Initial Guarantors shall have executed and delivered the Registration Rights
Agreement and the Initial Purchasers shall have received such executed
counterparts.

(g) Amended Note Purchase Agreement. Concurrently with the Closing, the
amendment to the Note Purchase Agreement shall have become effective.

(h) Amended and Restated Credit Facility. Concurrently with the Closing, the
amendment to the Amended and Restated Credit Facility shall have become
effective.

(i) Additional Documents. On or before the Closing Date, the Initial Purchasers
and counsel for the Initial Purchasers shall have received such information,
documents and opinions as they may reasonably require for the purposes of
enabling them to pass upon the issuance and sale of the Securities as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.

 

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If any condition specified in this Section 5A is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Representative
by notice to the Issuers at any time on or prior to the Closing Date, which
termination shall be without liability on the part of any party to any other
party, except that Sections 4, 6, 8, 9, 12 and 16 hereof shall at all times be
effective and shall survive such termination.

B. Conditions of the Obligations of the Issuers and the Initial Guarantors. The
obligations of the several Issuers to issue and sell the Securities as provided
herein on the Closing Date shall be subject to the following additional
conditions:

(a) Amended Note Purchase Agreement. Concurrently with the Closing, the
amendment to the Amended Note Purchase Agreement shall have become effective.

(b) Amended and Restated Credit Facility. Concurrently with the Closing, the
amendment to the Amended and Restated Credit Facility shall have become
effective.

If any condition specified in this Section 5B is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Issuers by
notice to the Representative at any time on or prior to the Closing Date, which
termination shall be without liability on the part of any party to any other
party, except that Sections 4, 6, 8, 9, 12 and 16 hereof shall at all times be
effective and shall survive such termination.

SECTION 6. Reimbursement of Initial Purchasers’ Expenses. If this Agreement is
terminated by the Representative pursuant to Section 5A (other than pursuant to
clauses (g) and (h) thereof) or clauses (i), (v) or (vi) of Section 10 hereof,
including if the sale to the Initial Purchasers of the Securities on the Closing
Date is not consummated because of any refusal, inability or failure on the part
of the Issuers to perform any agreement herein or to comply with any provision
hereof, the Issuers agree to reimburse the Initial Purchasers, severally, upon
demand for all out-of-pocket expenses that shall have been reasonably incurred
by the Initial Purchasers in connection with the proposed purchase and the
offering and sale of the Securities, including, without limitation, fees and
disbursements of counsel, printing expenses, travel expenses, postage, facsimile
and telephone charges.

SECTION 7. Offer, Sale and Resale Procedures. The Initial Purchasers, on the one
hand, and each of the Issuers and each of the Initial Guarantors, on the other
hand, hereby agree to observe the following procedures in connection with the
offer and sale of the Securities:

(a) Offers and sales of the Securities will be made only by the Initial
Purchasers or Affiliates thereof qualified to do so in the jurisdictions in
which such offers or sales are permitted to be made. Each such offer or sale
shall only be made to persons whom the offeror or seller reasonably believes to
be Qualified Institutional Buyers or non-U.S. persons outside the United States
to whom the offeror or seller reasonably believes offers and sales of the
Securities may be made in reliance upon Regulation S upon the terms and
conditions set forth in Annex I hereto, which Annex I is hereby expressly made a
part hereof.

 

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(b) The Securities will be offered by approaching prospective Subsequent
Purchasers on an individual basis. No general solicitation or general
advertising (within the meaning of Rule 502 under the Securities Act) will be
used in the United States in connection with the offering of the Securities.

(c) With respect to Securities offered and sold in reliance upon Regulation S,
no direct selling efforts within the meaning of Regulation S will be used and
the other offering restrictions set forth in Regulation S will be complied with.

(d) Upon original issuance by the Issuers, and until such time as the same is no
longer required under the applicable requirements of the Securities Act, the
Securities (and all securities issued in exchange therefor or in substitution
thereof, other than the Exchange Securities) shall bear the legend substantially
in the form of that contained in “Notice to Investors” in the Offering
Memorandum for the time period and upon the other terms stated in the Offering
Memorandum.

Following the sale of the Securities by the Initial Purchasers to Subsequent
Purchasers pursuant to the terms hereof, the Initial Purchasers shall not be
liable or responsible to the Issuers for any losses, damages or liabilities
suffered or incurred by the Issuers, including any losses, damages or
liabilities under the Securities Act, arising from or relating to any resale or
transfer of any Security by Subsequent Purchasers.

SECTION 8. Indemnification.

(a) Indemnification of the Initial Purchasers. The Issuers and the Initial
Guarantors, jointly and severally, agrees to indemnify and hold harmless each
Initial Purchaser, its directors, officers and employees, and each person, if
any, who controls any Initial Purchaser within the meaning of the Securities Act
and the Exchange Act against any loss, claim, damage, liability or expense, as
incurred, to which such Initial Purchaser, director, officer, employee or
controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Issuers), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based: (i) upon any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary Offering
Memorandum, the Pricing Supplement, any Issuers Additional Written Communication
or the Final Offering Memorandum (or any amendment or supplement thereto), or
the omission or alleged omission therefrom of a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; or (ii) in whole or in part upon any inaccuracy
in the representations and warranties of any of the Issuers or the Initial
Guarantors contained herein; or (iii) in whole or in part upon any failure of
any of the Issuers or the Initial Guarantors to perform its obligations
hereunder or under law; or (iv) any act or failure to act or any alleged act or
failure to act by any Initial Purchaser in connection with, or relating in any
manner to, the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon any matter covered by clause (i) above, provided that the Issuers and
the Initial Guarantors shall not be liable under this clause (iv) to the extent
that a court of competent jurisdiction shall have determined by a final judgment
that such loss,

 

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claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Initial Purchaser
through its gross negligence or willful misconduct; and to reimburse each
Initial Purchaser and each such director, officer, employee or controlling
person for any and all expenses (including the fees and disbursements of counsel
chosen by Banc of America Securities LLC) as such expenses are reasonably
incurred by such Initial Purchaser or such director, officer, employee or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the foregoing indemnity agreement shall not
apply to any loss, claim, damage, liability or expense to the extent, but only
to the extent, arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Issuers by the Initial
Purchasers through the Representative expressly for use in the Preliminary
Offering Memorandum, the Pricing Supplement, any Issuers Additional Written
Communication or the Final Offering Memorandum (or any amendment or supplement
thereto). The indemnity agreement set forth in this Section 8(a) shall be in
addition to any liabilities that any of the Issuers or the Initial Guarantors
may otherwise have.

(b) Indemnification of the Issuers and the Initial Guarantors. Each Initial
Purchaser agrees, severally and not jointly, to indemnify and hold harmless each
Issuer, each Initial Guarantor, each of their respective directors and each
person, if any, who controls the Issuers or any Initial Guarantor within the
meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Issuers, any Initial
Guarantor or any such director or controlling person may become subject, under
the Securities Act, the Exchange Act, or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Initial Purchaser), insofar as such loss, claim, damage, liability or expense
(or actions in respect thereof as contemplated below) arises out of or is based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Offering Memorandum, the Pricing Supplement, any
Issuers Additional Written Communication or the Final Offering Memorandum (or
any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Preliminary Offering Memorandum, the Pricing Supplement, any Issuers Additional
Written Communication or the Final Offering Memorandum (or any amendment or
supplement thereto), in reliance upon and in conformity with written information
furnished to the Issuers by such Initial Purchaser through the Representative
expressly for use therein; and to reimburse the Issuers, any Initial Guarantor
and each such director or controlling person for any and all expenses (including
the fees and disbursements of counsel) as such expenses are reasonably incurred
by the Issuers, any Initial Guarantor or such director or controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action. Each of the Issuers and
the Initial Guarantors hereby acknowledges that only information that the
Initial Purchasers through the Representative have furnished to the Issuers
expressly for use in the Preliminary Offering Memorandum, the Pricing
Supplement, any Issuers Additional Written Communication or the Final Offering
Memorandum (or any amendment or supplement thereto) are the statements set forth
in the second and third sentences of the fifth paragraph and the statements set
forth under the sixth paragraph under the

 

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caption “Plan of Distribution” in the Preliminary Offering Memorandum and the
Final Offering Memorandum. The indemnity agreement set forth in this
Section 8(b) shall be in addition to any liabilities that each Initial Purchaser
may otherwise have.

(c) Notifications and Other Indemnification Procedures. Promptly after receipt
by an indemnified party under this Section 8 of notice of the commencement of
any action, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section 8, notify the indemnifying
party in writing of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party hereunder for contribution or otherwise than under the
indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with local counsel), approved by the
indemnifying party (Banc of America Securities LLC in the case of Sections 8(b)
and 9 hereof), representing the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action, in each of which
cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.

(d) Settlements. The indemnifying party under this Section 8 shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by this Section 8, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid

 

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request, (ii) such indemnifying party shall have received notice of the terms of
such settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in
any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or could have
been sought hereunder by such indemnified party, unless such settlement,
compromise or consent (i) includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such action,
suit or proceeding and (ii) does not include any statements as to or any
findings of fault, culpability or failure to act by or on behalf of any
indemnified party.

SECTION 9. Contribution. If the indemnification provided for in Section 8 hereof
is for any reason held to be unavailable to or otherwise insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Issuers and the Initial Guarantors, on the one
hand, and the Initial Purchasers, on the other hand, from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Issuers and the Initial Guarantors,
on the one hand, and the Initial Purchasers, on the other hand, in connection
with the statements or omissions or inaccuracies in the representations and
warranties herein which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Issuers and the Initial Guarantors, on the one hand,
and the Initial Purchasers, on the other hand, in connection with the offering
of the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Issuers, and the total discount received by the Initial Purchasers bear to
the aggregate initial offering price of the Securities. The relative fault of
the Issuers and the Initial Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact or any such inaccurate
or alleged inaccurate representation or warranty relates to information supplied
by the Issuers and the Initial Guarantors, on the one hand, or the Initial
Purchasers, on the other hand, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission or inaccuracy.

The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8 hereof, any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8 hereof with respect to notice of commencement of any action shall
apply if a claim for contribution is to be made under this Section 9; provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under Section 8 hereof for purposes of
indemnification.

 

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The Issuers, the Initial Guarantors and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purposes) or by any other method of allocation which does
not take account of the equitable considerations referred to in this Section 9.

Notwithstanding the provisions of this Section 9, the Initial Purchasers shall
not be required to contribute any amount in excess of the discount received by
such Initial Purchaser in connection with the Securities distributed by it. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11
of the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Initial Purchasers’
obligations to contribute pursuant to this Section 9 are several, and not joint,
in proportion to their respective commitments as set forth opposite their names
in Schedule A. For purposes of this Section 9, each director, officer and
employee of an Initial Purchaser and each person, if any, who controls an
Initial Purchaser within the meaning of the Securities Act and the Exchange Act
shall have the same rights to contribution as such Initial Purchaser, and each
director of the Issuers or any Initial Guarantor, and each person, if any, who
controls the Issuers or any Initial Guarantor with the meaning of the Securities
Act and the Exchange Act shall have the same rights to contribution as the
Issuers and the Initial Guarantors.

SECTION 10. Termination of this Agreement. Prior to the Closing Date, this
Agreement may be terminated by the Representative by notice given to the Issuers
if at any time: (i) trading or quotation in any of the Parent’s securities shall
have been suspended or limited by the Commission or by the Nasdaq Stock Market;
(ii) trading in securities generally on either the Nasdaq Stock Market or the
NYSE shall have been suspended or limited, or minimum or maximum prices shall
have been generally established on any of such quotation system or stock
exchange by the Commission or FINRA; (iii) a general banking moratorium shall
have been declared by any of federal, New York or Delaware authorities;
(iv) there shall have occurred any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any change in the United
States or international financial markets, or any substantial change or
development involving a prospective substantial change in United States’ or
international political, financial or economic conditions, as in the judgment of
the Representative is material and adverse and makes it impracticable or
inadvisable to proceed with the offering sale or delivery of the Securities in
the manner and on the terms described in the Pricing Disclosure Package or to
enforce contracts for the sale of securities; (v) in the judgment of the
Representative there shall have occurred any Material Adverse Effect; or
(vi) the Parent or its subsidiaries shall have sustained a loss by strike, fire,
flood, earthquake, accident or other calamity of such character as in the
judgment of the Representative may interfere materially with the conduct of the
business and operations of the Parent regardless of whether or not such loss
shall have been insured. Any termination pursuant to this Section 10 shall be
without liability on the part of (i) the Issuers or any Initial Guarantor to any
Initial Purchaser, except that the Issuers and the Initial Guarantors shall be
obligated to reimburse the expenses of the Initial Purchasers pursuant to
Sections 4 and 6 hereof, (ii) any Initial Purchaser to the Issuers, or (iii) any
party hereto to any other party except that the provisions of Sections 8, 9, 12
and 16 hereof shall at all times be effective and shall survive such
termination.

 

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SECTION 11. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the
Issuers, the Initial Guarantors, their respective officers and the several
Initial Purchasers set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of any Initial Purchaser, the Issuers, any Initial Guarantor or any of their
partners, officers or directors or any controlling person, as the case may be,
and will survive delivery of and payment for the Securities sold hereunder and
any termination of this Agreement.

SECTION 12. Notices. All communications hereunder shall be in writing and shall
be mailed, hand delivered, couriered or facsimiled and confirmed to the parties
hereto as follows:

If to the Initial Purchasers:

Banc of America Securities LLC

One Bryant Park

New York, New York 10036

Facsimile: 212-901-7897

Attention: Legal Department

with a copy to:

Cahill Gordon & Reindel LLP

80 Pine Street

New York, New York 10005

Facsimile: 212-269-5420

Attention: Mr. Luis R. Penalver, Esq.

If to the Issuers or the Initial Guarantors:

StoneMor Partners L.P.

311 Veterans Highway, suite B

Levittown, Pennsylvania 19056

Facsimile: 215-826-2853

Attention: William R. Shane

with a copy to:

Vinson & Elkins LLP

666 Fifth Avenue

New York, New York 10103

Facsimile: 212-237-0100

Attention: Ms. Caroline Blitzer, Esq.

Any party hereto may change the address or facsimile number for receipt of
communications by giving written notice to the others.

 

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SECTION 13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, and to the benefit of the indemnified parties
referred to in Sections 8 and 9 hereof, and in each case their respective
successors, and no other person will have any right or obligation hereunder. The
term “successors” shall not include any Subsequent Purchaser or other purchaser
of the Securities as such from any of the Initial Purchasers merely by reason of
such purchase.

SECTION 14. Authority of the Representative. Any action by the Initial
Purchasers hereunder may be taken by the Representative on behalf of the Initial
Purchasers, and any such action taken by the Representative shall be binding
upon the Initial Purchasers.

SECTION 15. Partial Unenforceability. The invalidity or unenforceability of any
section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other section, paragraph or provision hereof. If any
section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.

SECTION 16. Governing Law Provisions

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED IN SUCH STATE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.

SECTION 17. Default of One or More of the Several Initial Purchasers. If any one
or more of the several Initial Purchasers shall fail or refuse to purchase
Securities that it or they have agreed to purchase hereunder on the Closing
Date, and the aggregate principal amount of Securities which such defaulting
Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase
does not exceed 10% of the aggregate principal amount of the Securities to be
purchased on such date, the other Initial Purchasers shall be obligated,
severally, in the proportions that the principal amount of Securities set forth
opposite their respective names on Schedule A bears to the aggregate principal
amount of Securities set forth opposite the names of all such non-defaulting
Initial Purchasers, or in such other proportions as may be specified by the
Initial Purchasers with the consent of the non-defaulting Initial Purchasers, to
purchase the Securities which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase on the Closing Date. If any
one or more of the Initial Purchasers shall fail or refuse to purchase
Securities and the aggregate principal amount of Securities with respect to
which such default occurs exceeds 10% of the aggregate principal amount of
Securities to be purchased on the Closing Date, and arrangements satisfactory to
the Initial Purchasers and the Company for the purchase of such Securities are
not made within 48 hours after such default, this Agreement shall terminate
without liability of any party to any other party except that the provisions of
Sections 4, 6, 8, 9, 12 and 16 hereof shall at all times be effective and shall
survive such termination. In any such case either the Initial Purchasers or the
Company shall have the right to postpone the Closing Date, as the case may be,
but in no event for longer than seven days in order that the required changes,
if any, to the Final Offering Memorandum or any other documents or arrangements
may be effected.

 

29

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As used in this Agreement, the term “Initial Purchaser” shall be deemed to
include any person substituted for a defaulting Initial Purchaser under this
Section 17. Any action taken under this Section 17 shall not relieve any
defaulting Initial Purchaser from liability in respect of any default of such
Initial Purchaser under this Agreement.

SECTION 18. No Advisory or Fiduciary Responsibility. Each of the Issuers and the
Initial Guarantors acknowledges and agrees that: (i) the purchase and sale of
the Securities pursuant to this Agreement, including the determination of the
offering price of the Securities and any related discounts and commissions, is
an arm’s-length commercial transaction between the Issuers and the Initial
Guarantors, on the one hand, and the several Initial Purchasers, on the other
hand, and the Issuers and the Initial Guarantors are capable of evaluating and
understanding and understand and accept the terms, risks and conditions of the
transactions contemplated by this Agreement; (ii) in connection with each
transaction contemplated hereby and the process leading to such transaction each
Initial Purchaser is and has been acting solely as a principal and is not the
agent or fiduciary of the Issuers, the Initial Guarantors or their respective
affiliates, unitholders, stockholders, creditors or employees or any other
party; (iii) no Initial Purchaser has assumed or will assume an advisory or
fiduciary responsibility in favor of the Issuers or the Initial Guarantors with
respect to any of the transactions contemplated hereby or the process leading
thereto (irrespective of whether such Initial Purchaser has advised or is
currently advising the Issuers or the Initial Guarantors on other matters) or
any other obligation to the Issuers and the Initial Guarantors except the
obligations expressly set forth in this Agreement; (iv) the several Initial
Purchasers and their respective affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Issuers and
the Initial Guarantors and that the several Initial Purchasers have no
obligation to disclose any of such interests by virtue of any fiduciary or
advisory relationship; and (v) the Initial Purchasers have not provided any
legal, accounting, regulatory or tax advice with respect to the offering
contemplated hereby and the Issuers and the Initial Guarantors have consulted
their own legal, accounting, regulatory and tax advisors to the extent they
deemed appropriate.

This Agreement supersedes all prior agreements and understandings (whether
written or oral) between the Issuers, the Initial Guarantors and the several
Initial Purchasers, or any of them, with respect to the subject matter hereof.
The Issuers and the Initial Guarantors hereby waive and release, to the fullest
extent permitted by law, any claims that the Issuers and the Initial Guarantors
may have against the several Initial Purchasers with respect to any breach or
alleged breach of fiduciary duty.

SECTION 19. General Provisions. This Agreement constitutes the entire agreement
of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof. This Agreement may be executed in two or
more counterparts, each one of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. Delivery
of an executed counterpart of a signature page to this Agreement by telecopier,
facsimile or other electronic transmission (i.e., a “pdf” or “tif”) shall be
effective as delivery of a manually executed counterpart thereof. This Agreement
may not be amended or modified unless in writing by all of the parties hereto,
and no condition herein (express or implied) may be waived unless waived in
writing by each party whom the condition is meant to benefit. The section
headings herein are for the convenience of the parties only and shall not affect
the construction or interpretation of this Agreement.

 

30

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If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Issuers the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.

 

Very truly yours, STONEMOR PARTNERS L.P. By:   StoneMor GP LLC, its   general
partner By:  

/s/ William R. Shane

Name:   William R. Shane Title:   Executive Vice President and   Chief Financial
Officer STONEMOR OPERATING LLC By:  

/s/ William R. Shane

Name:   William R. Shane Title:   Executive Vice President and   Chief Financial
Officer

CORNERSTONE FAMILY SERVICES

WEST VIRGINIA SUBSIDIARY, INC.

By:  

/s/ Paul Waimberg

Name:   Paul Waimberg Title:   Vice President

OSIRIS HOLDING OF MARYLAND

SUBSIDIARY, INC.

By:  

/s/ Paul Waimberg

Name:   Paul Waimberg Title:   Vice President

 

31

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Alleghany Memorial Park Subsidiary, Inc. Altavista Memorial Park Subsidiary,
Inc. Arlington Development Company Augusta Memorial Park Perpetual Care Company
Birchlawn Burial Park Subsidiary, Inc. Cedar Hill Funeral Home, Inc. Cemetery
Investments Subsidiary, Inc. Columbia Memorial Park Subsidiary, Inc. Cornerstone
Family Insurance Services, Inc. Cornerstone Family Services of New Jersey, Inc.
Cornerstone Family Services of West Virginia Subsidiary, Inc. Covenant
Acquisition Subsidiary, Inc. Eloise B. Kyper Funeral Home, Inc. Glen Haven
Memorial Park Subsidiary, Inc. Henlopen Memorial Park Subsidiary, Inc. Henry
Memorial Park Subsidiary, Inc. KIRIS Subsidiary, Inc. Lakewood/Hamilton Cemetery
Subsidiary, Inc. Lakewood Memory Gardens South Subsidiary, Inc. Laurel Hill
Memorial Park Subsidiary, Inc. Laurelwood Holding Company Legacy Estates, Inc.
Loewen [Virginia] Subsidiary, Inc. Lorraine Park Cemetery Subsidiary, Inc.
Modern Park Development Subsidiary, Inc. Oak Hill Cemetery Subsidiary, Inc.
Osiris Holding Finance Company Osiris Holding of Maryland Subsidiary, Inc.
Osiris Holding of Rhode Island Subsidiary, Inc. Osiris Management, Inc. Osiris
Telemarketing Corp. Perpetual Gardens.Com, Inc. By:  

/s/ Paul Waimberg

Paul Waimberg, as Vice President of Finance for each of the above-named Initial
Guarantors

 

32

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PVD Acquisitions Subsidiary, Inc. Rockbridge Memorial Gardens Subsidiary Company
Rose Lawn Cemeteries Subsidiary, Incorporated Roselawn Development Subsidiary
Corporation Russell Memorial Cemetery Subsidiary, Inc. Shenandoah Memorial Park
Subsidiary, Inc. Sierra View Memorial Park Southern Memorial Sales Subsidiary,
Inc. Springhill Memory Gardens Subsidiary, Inc. Star City Memorial Sales
Subsidiary, Inc. Stephen R. Haky Funeral Home, Inc. Stitham Subsidiary,
Incorporated StoneMor Alabama Subsidiary, Inc. StoneMor California, Inc.
StoneMor California Subsidiary, Inc. StoneMor Georgia Subsidiary, Inc. StoneMor
Hawaii Subsidiary, Inc. StoneMor North Carolina Funeral Services, Inc. StoneMor
Ohio Subsidiary, Inc. StoneMor Tennessee Subsidiary, Inc. StoneMor Washington,
Inc. Sunset Memorial Gardens Subsidiary, Inc. Sunset Memorial Park Subsidiary,
Inc. Temple Hill Subsidiary Corporation The Valhalla Cemetery Subsidiary
Corporation Virginia Memorial Service Subsidiary Corporation W N C Subsidiary,
Inc. Wicomico Memorial Parks Subsidiary, Inc. Willowbrook Management Corp. By:  

/s/ Paul Waimberg

Paul Waimberg, as Vice President of Finance for each of the above-named Initial
Guarantors

 

33

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Alleghany Memorial Park LLC Altavista Memorial Park LLC Birchlawn Burial Park
LLC Cemetery Investments LLC Cemetery Management Services, L.L.C. Cemetery
Management Services of Mid-Atlantic States, L.L.C. Cemetery Management Services
of Ohio, L.L.C. Cemetery Management Services of Pennsylvania, L.L.C. CMS West
LLC CMS West Subsidiary LLC Columbia Memorial Park LLC Cornerstone Family
Services of West Virginia LLC Cornerstone Funeral and Cremation Services LLC
Covenant Acquisition LLC Glen Haven Memorial Park LLC Henlopen Memorial Park LLC
Henry Memorial Park LLC Juniata Memorial Park LLC KIRIS LLC Lakewood/Hamilton
Cemetery LLC Lakewood Memory Gardens South LLC Laurel Hill Memorial Park LLC
Loewen [Virginia] LLC Lorraine Park Cemetery LLC Modern Park Development LLC Oak
Hill Cemetery LLC Osiris Holding of Maryland LLC Osiris Holding of Pennsylvania
LLC Osiris Holding of Rhode Island LLC PVD Acquisitions LLC Rockbridge Memorial
Gardens LLC Rolling Green Memorial Park LLC Rose Lawn Cemeteries LLC Roselawn
Development LLC Russell Memorial Cemetery LLC Shenandoah Memorial Park LLC
Southern Memorial Sales LLC Springhill Memory Gardens LLC Star City Memorial
Sales LLC Stitham LLC StoneMor Alabama LLC StoneMor Arkansas Subsidiary LLC By:
 

/s/ Paul Waimberg

Paul Waimberg, as Vice President of Finance for each of the above-named Initial
Guarantors

 

34

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StoneMor Cemetery Products LLC StoneMor Colorado LLC StoneMor Colorado
Subsidiary LLC StoneMor Florida Subsidiary LLC StoneMor Georgia LLC StoneMor
Hawaii LLC StoneMor Hawaiian Joint Venture Group LLC StoneMor Holding of
Pennsylvania LLC StoneMor Illinois LLC StoneMor Illinois Subsidiary LLC StoneMor
Indiana LLC StoneMor Indiana Subsidiary LLC StoneMor Iowa LLC StoneMor Iowa
Subsidiary LLC StoneMor Kansas LLC StoneMor Kansas Subsidiary LLC StoneMor
Kentucky LLC StoneMor Kentucky Subsidiary LLC StoneMor Michigan LLC StoneMor
Michigan Subsidiary LLC StoneMor Missouri LLC StoneMor Missouri Subsidiary LLC
StoneMor North Carolina LLC StoneMor North Carolina Subsidiary LLC StoneMor Ohio
LLC StoneMor Oregon LLC StoneMor Oregon Subsidiary LLC StoneMor Pennsylvania LLC
StoneMor Pennsylvania Subsidiary LLC StoneMor Puerto Rico LLC StoneMor Puerto
Rico Subsidiary LLC StoneMor South Carolina LLC StoneMor South Carolina
Subsidiary LLC StoneMor Washington Subsidiary LLC Sunset Memorial Gardens LLC
Sunset Memorial Park LLC Temple Hill LLC The Valhalla Cemetery Company LLC Tioga
County Memorial Gardens LLC Virginia Memorial Service LLC WNCI LLC Wicomico
Memorial Parks LLC Woodlawn Memorial Park Subsidiary LLC By:  

/s/ Paul Waimberg

Paul Waimberg, as Vice President of Finance for each of the above-named Initial
Guarantors

 

35

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The foregoing Purchase Agreement is hereby confirmed and accepted by the Initial
Purchasers as of the date first above written.

 

BANC OF AMERICA SECURITIES LLC   Acting on behalf of itself and as the
Representative of the several Initial Purchasers By:   Banc of America
Securities LLC By:  

/s/ John Cokinos

Name:   John Cokinos Title:   Managing Director

 

36

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SCHEDULE A

 

Initial Purchasers

   Aggregate Principal
Amount of Securities to be
Purchased

Banc of America Securities LLC

   $ 116,250,000

Raymond James & Associates, Inc.

     26,250,000

TD Securities (USA) LLC

     7,500,000

Total

   $ 150,000,000

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

SCHEDULE B

Alleghany Memorial Park Subsidiary, Inc.

Altavista Memorial Park Subsidiary, Inc.

Arlington Development Company

Augusta Memorial Park Perpetual Care Company

Birchlawn Burial Park Subsidiary, Inc.

Cedar Hill Funeral Home, Inc.

Cemetery Investments Subsidiary, Inc.

Columbia Memorial Park Subsidiary, Inc.

Cornerstone Family Insurance Services, Inc.

Cornerstone Family Services of New Jersey, Inc.

Cornerstone Family Services of West Virginia Subsidiary, Inc.

Covenant Acquisition Subsidiary, Inc.

Eloise B. Kyper Funeral Home, Inc.

Glen Haven Memorial Park Subsidiary, Inc.

Henlopen Memorial Park Subsidiary, Inc.

Henry Memorial Park Subsidiary, Inc.

KIRIS Subsidiary, Inc.

Lakewood/Hamilton Cemetery Subsidiary, Inc.

Lakewood Memory Gardens South Subsidiary, Inc.

Laurel Hill Memorial Park Subsidiary, Inc.

Laurelwood Holding Company

Legacy Estates, Inc.

Loewen [Virginia] Subsidiary, Inc.

Lorraine Park Cemetery Subsidiary, Inc.

Modern Park Development Subsidiary, Inc.

Oak Hill Cemetery Subsidiary, Inc.

Osiris Holding Finance Company

Osiris Holding of Maryland Subsidiary, Inc.

Osiris Holding of Rhode Island Subsidiary, Inc.

Osiris Management, Inc.

Osiris Telemarketing Corp.

Perpetual Gardens.Com, Inc.

PVD Acquisitions Subsidiary, Inc.

Rockbridge Memorial Gardens Subsidiary Company

Rose Lawn Cemeteries Subsidiary, Incorporated

Roselawn Development Subsidiary Corporation

Russell Memorial Cemetery Subsidiary, Inc.

Shenandoah Memorial Park Subsidiary, Inc.

Sierra View Memorial Park

Southern Memorial Sales Subsidiary, Inc.

Springhill Memory Gardens Subsidiary, Inc.

Star City Memorial Sales Subsidiary, Inc.

Stephen R. Haky Funeral Home, Inc.

Stitham Subsidiary, Incorporated

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

StoneMor Alabama Subsidiary, Inc.

StoneMor California, Inc.

StoneMor California Subsidiary, Inc.

StoneMor Georgia Subsidiary, Inc.

StoneMor Hawaii Subsidiary, Inc.

StoneMor North Carolina Funeral Services, Inc.

StoneMor Ohio Subsidiary, Inc.

StoneMor Tennessee Subsidiary, Inc.

StoneMor Washington, Inc.

Sunset Memorial Gardens Subsidiary, Inc.

Sunset Memorial Park Subsidiary, Inc.

Temple Hill Subsidiary Corporation

The Valhalla Cemetery Subsidiary Corporation

Virginia Memorial Service Subsidiary Corporation

W N C Subsidiary, Inc.

Wicomico Memorial Parks Subsidiary, Inc.

Willowbrook Management Corp.

Alleghany Memorial Park LLC

Altavista Memorial Park LLC

Birchlawn Burial Park LLC

Cemetery Investments LLC

Cemetery Management Services, L.L.C.

Cemetery Management Services of Mid-Atlantic States, L.L.C.

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

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

CMS West LLC

CMS West Subsidiary LLC

Columbia Memorial Park LLC

Cornerstone Family Services of West Virginia LLC

Cornerstone Funeral and Cremation Services LLC

Covenant Acquisition LLC

Glen Haven Memorial Park LLC

Henlopen Memorial Park LLC

Henry Memorial Park LLC

Juniata Memorial Park LLC

KIRIS LLC

Lakewood/Hamilton Cemetery LLC

Lakewood Memory Gardens South LLC

Laurel Hill Memorial Park LLC

Loewen [Virginia] LLC

Lorraine Park Cemetery LLC

Modern Park Development LLC

Oak Hill Cemetery LLC

Osiris Holding of Maryland LLC

Osiris Holding of Pennsylvania LLC

Osiris Holding of Rhode Island LLC

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

PVD Acquisitions LLC

Rockbridge Memorial Gardens LLC

Rolling Green Memorial Park LLC

Rose Lawn Cemeteries LLC

Roselawn Development LLC

Russell Memorial Cemetery LLC

Shenandoah Memorial Park LLC

Southern Memorial Sales LLC

Springhill Memory Gardens LLC

Star City Memorial Sales LLC

Stitham LLC

StoneMor Alabama LLC

StoneMor Arkansas Subsidiary LLC

StoneMor Cemetery Products LLC

StoneMor Colorado LLC

StoneMor Colorado Subsidiary LLC

StoneMor Florida Subsidiary LLC

StoneMor Georgia LLC

StoneMor Hawaii LLC

StoneMor Hawaiian Joint Venture Group LLC

StoneMor Holding of Pennsylvania LLC

StoneMor Illinois LLC

StoneMor Illinois Subsidiary LLC

StoneMor Indiana LLC

StoneMor Indiana Subsidiary LLC

StoneMor Iowa LLC

StoneMor Iowa Subsidiary LLC

StoneMor Kansas LLC

StoneMor Kansas Subsidiary LLC

StoneMor Kentucky LLC

StoneMor Kentucky Subsidiary LLC

StoneMor Michigan LLC

StoneMor Michigan Subsidiary LLC

StoneMor Missouri LLC

StoneMor Missouri Subsidiary LLC

StoneMor North Carolina LLC

StoneMor North Carolina Subsidiary LLC

StoneMor Ohio LLC

StoneMor Oregon LLC

StoneMor Oregon Subsidiary LLC

StoneMor Pennsylvania LLC

StoneMor Pennsylvania Subsidiary LLC

StoneMor Puerto Rico LLC

StoneMor Puerto Rico Subsidiary LLC

StoneMor South Carolina LLC

StoneMor South Carolina Subsidiary LLC

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

StoneMor Washington Subsidiary LLC

Sunset Memorial Gardens LLC

Sunset Memorial Park LLC

Temple Hill LLC

The Valhalla Cemetery Company LLC

Tioga County Memorial Gardens LLC

Virginia Memorial Service LLC

WNCI LLC

Wicomico Memorial Parks LLC

Woodlawn Memorial Park Subsidiary LLC

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

SCHEDULE C

Bethel Cemetery Association

Beth Israel Cemetery Association of Woodbridge, New Jersey

Clover Leaf Park Cemetery Association

Crown Hill Cemetery Association

Highland Memorial Park, Inc.

Hillside Memorial Park Association, Inc.

Locustwood Cemetery Association

Northlawn Memorial Gardens

Ohio Cemetery Holdings, Inc.

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

EXHIBIT A-1

Opinion of Vinson & Elkins LLP, special counsel for the Issuers and the Initial
Guarantors, to be delivered pursuant to Section 5A(c)(i) of the Purchase
Agreement.

FORM OF OPINION OF VINSON & ELKINS L.L.P.

1. The Parent has been duly formed and is validly existing as a limited
partnership in good standing under the Delaware LP Act with all limited
partnership power and authority necessary to own, lease or operate its
properties and to conduct its business and to enter into and perform its
obligations under this Agreement, the Registration Rights Agreement, the
Securities, the Indenture and the Exchange Securities, in each case in all
material respects as described in the Pricing Disclosure Package and Final
Offering Memorandum.

2. The Company has been duly formed and is validly existing as a limited
liability company in good standing under the Delaware LLC Act with all limited
liability company power and authority necessary to own, lease or operate its
properties and to conduct its business and to enter into and perform its
obligations under this Agreement and the Transaction Documents, in each case in
all material respects as described in the Pricing Disclosure Package and the
Final Offering Memorandum.

3. The Parent is the sole member of the Company with a 100% membership interest
in the Company; such membership interest has been duly authorized and validly
issued in accordance with the limited liability company agreement of the Company
(the “Operating Company Operating Agreement”) and is fully paid (to the extent
required under the Operating Company Operating Agreement) and nonassessable
(except as such nonassessability may be affected by Section 18-607 of the
Delaware LLC Act); and the Parent owns such membership interest free and clear
of all liens, encumbrances, security interests, charges and other claims (except
as described in the Pricing Disclosure Package and the Final Offering
Memorandum) (i) in respect of which a financing statement under the Uniform
Commercial Code of the State of Delaware naming the Parent as debtor is on file
as of a recent date in the office of the Secretary of State of the State of
Delaware or (ii) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the Delaware LLC Act
and those created pursuant to the Amended and Restated Credit Facility, the Note
Purchase Agreement, the Note Guarantee or the Series B Notes and Series C Notes.

4. This Agreement has been duly authorized, executed and delivered by the Parent
and the Company.

5. The Indenture has been duly authorized, executed and delivered by the Parent
and the Company and (assuming the due authorization, execution and delivery
thereof by the other parties thereto) constitutes a valid and binding agreement
of the Issuers and the Initial Guarantors, enforceable against each of them in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws relating to or affecting the enforcement of the rights and
remedies of creditors generally, by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing (the “Enforceability
Exceptions”).

 

Exhibit A

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6. The Registration Rights Agreement has been duly authorized, executed and
delivered by the Parent and the Company and (assuming the due authorization,
execution and delivery thereof by the other parties thereto) constitutes a valid
and binding agreement of the Issuers and the Initial Guarantors, enforceable
against each of them in accordance with its terms, except as the enforcement
thereof may be limited by the Enforceability Exceptions and except as rights to
indemnification and contribution may be limited by applicable law.

7. The Notes are substantially in the form contemplated by the Indenture, have
been duly authorized by the Company for issuance and sale pursuant to this
Agreement and the Indenture and, when executed by the Company and authenticated
by the Trustee in the manner provided in the Indenture (assuming the due
authorization, execution and delivery of the Indenture by the Trustee and the
other Issuers and the due authorization, execution and delivery of the Notes by
the other Issuers) and delivered against payment of the purchase price therefor,
will constitute valid and binding obligations of the Issuers, enforceable
against the Issuers in accordance with their terms, except as the enforcement
thereof may be limited by the Enforceability Exceptions, and will be entitled to
the benefits of the Indenture.

8. The Exchange Notes have been duly and validly authorized for issuance by the
Company, and assuming the due authorization, execution and delivery of the
Indenture and the Registration Rights Agreement by the parties thereto (other
than the Parent and the Company) and the due authorization, execution and
delivery of the Exchange Notes by the other Issuers, the Exchange Notes if and
when issued and authenticated in accordance with the terms of the Indenture, the
Registration Rights Agreement and the Exchange Offer, will constitute valid and
binding obligations of the Issuers, enforceable against the Issuers in
accordance with their terms, except as the enforcement thereof may be limited by
the Enforceability Exceptions, and will be entitled to the benefits of the
Indenture.

9. Assuming that the Indenture has been duly authorized, executed and delivered
by the parties thereto and the Notes and the Exchange Notes have been issued and
authenticated in the manner provided for in the Indenture and delivered against
payment of the purchase price therefor (in the case of the Notes) or in exchange
for the Notes as provided in the Registration Rights Agreement (in the case of
the Exchange Notes), the Guarantees of the Notes and the Exchange Notes, will
constitute valid and binding agreements of the Initial Guarantors, enforceable
in accordance with their terms, except as the enforcement thereof may be limited
by the Enforceability Exceptions, and will be entitled to the benefits of the
Indenture.

10. The Securities, the Indenture and the Registration Rights Agreement conform
in all material respects to the descriptions thereof contained in the Pricing
Disclosure Package and the Final Offering Memorandum.

11. The execution and delivery of this Agreement, the Registration Rights
Agreement, the DTC Agreement, the Notes, the Exchange Notes and the Indenture by
the Issuers and the Initial Guarantors, as applicable, and the performance by
the Issuers and the Initial Guarantors of their respective obligations
thereunder (other than performance under the indemnification

 

Exhibit A

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

provisions of this Agreement and the Registration Rights Agreement, as to which
no opinion need be rendered) (i) will not result in the violation of the
agreement of limited partnership, limited liability company agreement,
certificate of limited partnership or certificate of formation or other
organizational documents of the Parent or the Company; or (ii) will not result
in a violation of the Delaware LP Act, the Delaware LLC Act, or federal law,
which violation, in the case of clause (ii) would reasonably be expected to have
a Material Adverse Effect, or could materially impair the ability of the Parent
or the Company to perform their obligations under this Agreement; provided,
however, that no opinion is expressed pursuant to this paragraph 11 with respect
to securities and other anti-fraud statutes, rules or regulations.

12. Assuming the accuracy of the representations, warranties and covenants of
the Issuers, the Initial Guarantors and the Initial Purchasers contained in this
Agreement (including compliance with the offer, sale and resale procedures set
forth in Section 7 of this Agreement) and except for (i) such consents,
approvals, authorizations, registrations or qualifications (each, a “Consent”)
as may be required under the Securities Act or the securities laws of the
several states of the United States with respect to the Issuers’ and Initial
Guarantors’ obligations under the Registration Rights Agreement, (ii) such
Consents that have been obtained, (iii) such Consents that, if not obtained,
would not, individually or in the aggregate, have a Material Adverse Effect, and
(iv) as disclosed in the Pricing Disclosure Package and the Final Offering
Memorandum, no consent of any governmental authority under the Delaware LP Act,
the Delaware LLC Act, the DGCL or federal law is required for the Issuers’ and
the Initial Guarantors’ execution, delivery and performance of this Agreement
and the Transaction Documents or the issuance and delivery of the Securities or
the consummation of the transactions contemplated hereby and thereby.

13. The statements in the Pricing Disclosure Package and the Final Offering
Memorandum under the captions “Description of the Notes,” and “Certain United
States Federal Income and Estate Tax Considerations,” insofar as they purport to
constitute descriptions of agreements or summaries of matters of law or legal
conclusions are accurate in all material respects.

14. None of the Issuers is an “investment company” within the meaning of the
Investment Company Act of 1940, as amended (the “Investment Company Act”), and
after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in the Pricing Disclosure
Package and the Final Offering Memorandum, will not be an “investment company”
within the meaning of the Investment Company Act.

15. Assuming the accuracy of the representations, warranties and covenants of
the Issuers, the Initial Guarantors and the Initial Purchasers contained in this
Agreement (including compliance with the offer, sale and resale procedures set
forth in this Agreement), no registration of the Notes or the Guarantees under
the Securities Act, and no qualification of an indenture under the Trust
Indenture Act with respect thereto, is required in connection with the purchase
of the Securities by the Initial Purchasers or the initial resale of the
Securities by the Initial Purchasers in the manner contemplated by this
Agreement and the Pricing Disclosure Package and the Final Offering Memorandum.
We express no opinion, however, as to when or under what circumstances any
Securities initially sold by the Initial Purchasers may be reoffered or resold.

 

Exhibit A

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In addition, such counsel shall state that they have participated in conferences
with officers and other representatives of the Issuers and the Initial
Guarantors, representatives of the independent public accountants of the Issuers
and the Initial Guarantors and representatives and legal counsel of the Initial
Purchasers, at which the contents of the Pricing Disclosure Package and Final
Offering Memorandum and related matters were discussed, and although such
counsel did not independently verify, is not passing upon and does not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Pricing Disclosure Package and Final Offering Memorandum
(except to the extent specified in paragraph 13 above), based upon the
participation described above (relying as to factual matters in respect to the
determination of materiality to the extent such counsel deems reasonable upon
statements of fact made to such counsel by representatives of the Parent), no
facts have come to the attention of such counsel which lead them to believe
that:

(A) the Pricing Disclosure Package (other than (i) the financial statements
included therein, including the notes and schedules thereto and auditors’
reports thereon (ii) the other financial and accounting data included therein,
as to which such counsel need express no belief) as of          P.M., New York
time, on November     , 2009, contained an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or

(B) the Final Offering Memorandum (other than (i) the financial statements
included therein, including the notes and schedules thereto and auditors’
reports thereon, and (ii) the other financial and accounting data included
therein, as to which such counsel need express no belief) as of its issue date
and as of the Closing Date contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

In rendering such opinion, such counsel may (A) rely in respect of matters of
fact upon certificates of officers and employees of the Issuers and the Initial
Guarantors and upon information obtained from public officials, (B) assume that
all documents submitted to them as originals are authentic, that all copies
submitted to them conform to the originals thereof, and that the signatures on
all documents examined by them are genuine, (C) state that their opinion is
limited to federal laws, the laws of the State of New York, the Delaware LP Act,
the Delaware LLC Act and the DGCL, (D) state that they express no opinion with
respect to any permits to own or operate any real or personal property,
(E) state that they express no opinion with respect to state or local taxes or
tax statutes to which any of the limited partners of the Partnership or any of
the Partnership Entities may be subject, or (F) with respect to the opinions
expressed in paragraphs 1 and 2 as to the valid existence of each of the Parent
and the Company, base their opinions solely on certificates provided by the
Secretary of State of the State of Delaware.

 

Exhibit A

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EXHIBIT A-2

Opinion of Blank Rome LLP, special counsel for the Issuers and the Initial
Guarantors, to be delivered pursuant to Section 5A(c)(ii) of the Purchase
Agreement.

 

Phone:   (215) 569-5500 Fax:   (215) 569-5555

November     , 2009

Banc of America Securities LLC

Raymond James & Associates, Inc.

TD Securities (USA) LLC

c/o Banc of America Securities LLC

One Bryant Park

New York, New York 100360

 

  Re: StoneMor Partners L.P.

Ladies and Gentlemen:

We have acted as special counsel to StoneMor Partners L.P., a Delaware limited
partnership (the “Partnership”), StoneMor GP LLC, a Delaware limited liability
company and the general partner of the Partnership (the “General Partner”),
StoneMor Operating LLC, a Delaware limited liability company (the “Operating
Company”), and each of the entities listed on Annex I to this opinion (each
listed entity, individually, a “Local Operating Subsidiary” and, collectively,
the “Local Operating Subsidiaries”) in connection with the transactions
contemplated by that certain Purchase Agreement dated November 18, 2009 (the
“Purchase Agreement”) by and among (i) the Partnership, (ii) the Operating
Company, (iii) Cornerstone Family Services of West Virginia Subsidiary, Inc., a
West Virginia corporation, (iv) the other subsidiaries of the Partnership party
thereto, (v) Osiris Holding of Maryland Subsidiary, Inc., a Maryland
corporation, and (vi) the purchasers listed on Schedule A thereto (the
“Purchasers”). Capitalized terms used but not defined herein shall have the same
meanings given to them in the Purchase Agreement.

The General Partner, the Partnership, the Operating Company, and the Local
Operating Subsidiaries are referred to herein, collectively, as the “StoneMor
Entities” and each, individually, as a “StoneMor Entity.” The Local Operating
Subsidiaries identified as limited liability companies on Annex I to this
opinion are referred to, collectively, as the “Local Operating LLCs” and each,
individually, as a “Local Operating LLC.” The Local Operating Subsidiaries
identified as corporations on Annex I to this opinion are referred to herein,
collectively, as the “Local Operating Corporations” and each, individually, as a
“Local Operating Corporation.” This opinion is being delivered to you pursuant
to Section 5A(c) of the Purchase Agreement.

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Although as counsel to the StoneMor Entities we have advised them in connection
with certain matters that they have referred to us, our services are limited to
the specific matters so referred. Consequently, we do not have knowledge of many
transactions in which the StoneMor Entities are engaged or of their day-to-day
operations.

In connection with this opinion, we have examined copies of the following
documents (the “Reviewed Documents”):

(a) the Second Amended and Restated Agreement of Limited Partnership, dated
September 9, 2008, as the same may be amended or restated at or prior to the
date hereof (the “Partnership Agreement”);

(b) the operating agreements, respectively, of the General Partner, as the same
may be amended or restated at or prior to the date hereof (the “General Partner
Operating Agreement”), and of the Operating Company, as the same may be amended
or restated at or prior to the date hereof (the “Operating Company Operating
Agreement”);

(c) the Final Offering Memorandum;

(d) the Purchase Agreement;

(e) the Registration Rights Agreement;

(f) the Indenture;

(g) the Notes;

(h) the Fourth Amendment to the Amended and Restated Credit Agreement dated
November [    ] 2009 (the “Credit Amendment”);

(i) the Fourth Amendment to the Amended and Restated Note Purchase Agreement
dated November [    ] 2009 (the “NPA Amendment”);

(j) Resolutions of the Board of Directors, managers, members and shareholders,
as applicable, of each StoneMor Entity;

(k) the certificate or articles of incorporation and bylaws of each Local
Operating Corporation (“Local Operating Charter Documents”), as certified by the
secretary or another officer of such Local Operating Corporation;

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(l) the certificate of formation and limited liability company agreement of each
Local Operating LLC (“Local Operating LLC Charter Documents”), as certified by
the secretary or another officer of such Local Operating LLC;

(m) a good standing or subsistence certificate issued by the office of the
Secretary of State or similar official of the jurisdiction of formation or
incorporation, and where applicable, foreign qualification, as the case may be,
of each StoneMor Entity, as described on Annex II hereto (collectively, the
“Entity Certificates”);

(n) the certificate of formation of each of the General Partner, the Partnership
and the Operating Company; and

(o) the officer’s certificate of the StoneMor Entities attached hereto as Annex
III relating to certain of the factual assumptions made in this opinion letter
(the “Officer’s Certificate”).

We have also examined originals, or copies certified or otherwise identified, of
records of the StoneMor Entities, including, without limitation, stock and unit
ledgers or record books of the Local Operating Subsidiaries as furnished to us
by these entities, certificates and confirmations of public officials and of
representatives of the StoneMor Entities. In giving the opinions set forth
below, we have relied upon the certificates of officers or other representatives
of the StoneMor Entities, as well as the representations and warranties of the
StoneMor Entities given pursuant to or in connection with any of the Reviewed
Documents with respect to the accuracy and completeness of matters of both fact
and the factual portion of mixed questions of fact and law contained in such
certificates or Reviewed Documents. We have also assumed and relied upon the
accuracy and completeness, as to matters of both fact and the factual portion of
mixed questions of fact and law, of the Entity Certificates. As to certificates
and confirmations given by public officials (including, without limitation, the
Entity Certificates), we have assumed that the same have been properly given,
were fully accurate when given, and have remained fully accurate through the
date hereof. In making our examination, we have assumed that all signatures on
documents examined by us are genuine, all documents submitted to us as originals
are authentic and complete, and all documents submitted to us as certified or
electronic copies are true and correct copies of such documents.

The opinions expressed in paragraph 2 below as to the due qualification of the
General Partner, the Partnership and the Operating Company, are based solely
upon the certificates of good standing or subsistence issued by the office of
the Secretary of State or similar official of the applicable jurisdiction,
copies of which have been provided to the Purchasers. The opinions expressed in
paragraph 1 below as to existence and good standing or subsistence, as
applicable, of the Local Operating Subsidiaries are based solely upon the
applicable Entity Certificates, copies of which have been provided to the
Purchasers.

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For purposes of the opinions set forth in paragraphs 3 and 4 below, we have not
made any independent investigation whatsoever other than a review of (i) the
Officer’s Certificate, (ii) the stock ledger or the membership unit ledger, as
applicable, of each Local Operating Subsidiary, (iii) the minute books of the
Local Operating Subsidiaries, (iv) the Local Operating Corporation Charter
Documents and the Local Operating LLC Charter Documents, and (v) sections of the
corporate statutes of the States of Delaware, Florida or New Jersey, or the
Commonwealth of Pennsylvania, as applicable, that specifically address the due
and valid issuance of the stock of a corporation.

Whenever an opinion in this opinion letter, with respect to the existence or
absence of facts, is given to our knowledge, or to the best of our knowledge, or
with reference to matters of which we are aware or which are known to us, or
with similar qualification, it is intended to signify that during the course of
our representation of the StoneMor Entities in connection with the transactions
contemplated by the Credit Amendment and the NPA Amendment (collectively, the
“Transaction Documents”), no information came to the attention of those
attorneys in this law firm who have actively represented the StoneMor Entities
in connection with the transactions contemplated by the Transaction Documents
which gave those attorneys actual knowledge of any inaccuracy of our opinions as
to the existence or absence of those facts. Other than our document examination
as described, we have not undertaken any independent investigation to determine
the existence or absence of any facts or to examine any documents, and no
inference as to our knowledge of the existence or absence of those facts or any
other documents should be drawn from our representation of the StoneMor Entities
in connection with the transactions contemplated by the Transaction Documents or
otherwise. Except as specifically described in this opinion letter, we have not
made an independent search of the books and records of any entity or the public
records of any jurisdiction, or inquiry of the Secretary of State or other
public officials of any jurisdiction. We have made such examination as we have
deemed appropriate in connection with rendering the opinions contained herein;
however, we make no representation as to the sufficiency of our investigation
for your purposes.

Based on the foregoing, and subject to the further limitations, qualifications,
exceptions and assumptions set forth herein, we are of the opinion that:

1. Existence of Local Operating Subsidiaries. Each Local Operating Corporation
identified as a Pennsylvania corporation on Annex I hereto is a corporation
subsisting under the laws of the Commonwealth of Pennsylvania, and each Local
Operating LLC identified as a Pennsylvania limited liability company on Annex I
hereto is a limited liability company subsisting under the laws of the
Commonwealth of Pennsylvania. Each Local Operating Corporation identified as a
Delaware corporation on Annex I hereto is a corporation validly existing and in
good standing under the laws of the State of Delaware, and each Local Operating
LLC identified as a Delaware limited liability company on Annex I hereto is a
limited liability company validly existing and in good standing under the laws
of the State of Delaware. Each Local Operating Corporation identified as a New
Jersey corporation on Annex I hereto is a corporation

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validly existing and in good standing under the laws of the State of New Jersey,
and each Local Operating LLC identified as a New Jersey limited liability
company on Annex I hereto is a limited liability company validly existing and in
good standing under the laws of the State of New Jersey. Each Local Operating
LLC identified as a Florida limited liability company on Annex I hereto is a
limited liability company validly existing and has an active status under the
laws of the State of Florida. Each Local Operating Subsidiary is qualified in
the foreign jurisdictions listed opposite its name on Annex II.

2. Qualification of the General Partner, the Partnership and the Operating
Company. The General Partner, the Partnership and the Operating Company are each
in good standing under the laws of the State of Delaware. The General Partner is
qualified and registered as a foreign limited liability company in the States of
Florida and New Jersey and the Commonwealth of Pennsylvania. The Partnership and
the Operating Company are each qualified and registered as a foreign limited
liability company in the State of New Jersey and the Commonwealth of
Pennsylvania.

3. Ownership of Local Operating Corporations. All stock of each Local Operating
Corporation has been duly authorized and is validly issued in accordance with
the Operating Corporation Charter Documents of such Local Operating Corporation
and is fully paid and nonassessable.

4. Ownership of Local Operating LLCs. All membership units of each Local
Operating LLC have been duly authorized and are validly issued in accordance
with the Operating LLC Charter Documents of such Local Operating LLC, and are
fully paid to the extent required in the Operating LLC Charter Documents of such
Local Operating LLC.

5. Power and Authority. Each StoneMor Entity that owns or holds properties or
conducts business in the States of Delaware, Florida or New Jersey, or the
Commonwealth of Pennsylvania, has all requisite corporate, limited liability
company or partnership, as the case may be, power and authority necessary to own
or hold such properties, to be liable for its obligations and to conduct such
business under the laws of such jurisdiction, in each case, in all material
respects as described in the Final Offering Memorandum. Each StoneMor Entity
that is a party to the Transaction Documents has all requisite corporate,
limited liability company or limited partnership, as the case may be, power and
authority to enter into the Transaction Documents and perform the transactions
contemplated thereby.

6. Authorization, Execution and Delivery. Each of the Transaction Documents, the
Purchase Agreement, Registration Rights Agreement, Indenture and the Notes has
been duly authorized, executed and delivered by each of the Local Operating
Subsidiaries that is a party thereto and that is identified on Annex I as an
entity organized under the laws of the Commonwealth of Pennsylvania or the
States of Delaware, New Jersey or Florida. The Partnership, the General Partner
and the Operating Company have duly authorized, executed and delivered the
Transaction Documents.

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7. Enforceability of Other Agreements.

(a) The NPA Amendment governed by the laws of the State of New York is a valid
and legally binding agreement of the StoneMor Entities party thereto,
enforceable against such StoneMor Entities in accordance with its terms; and

(b) The Credit Amendment governed by the laws of the Commonwealth of
Pennsylvania is a valid and legally binding agreement of the StoneMor Entities
party thereto, enforceable against such StoneMor Entities in accordance with its
terms.

With respect to each agreement described in this paragraph 7, the enforceability
thereof may be limited by (A) bankruptcy, insolvency, fraudulent transfer,
fraudulent conveyance, reorganization, moratorium and similar laws relating to
or affecting creditors’ rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law), (B) public policy and applicable law relating to fiduciary
duties and indemnification and contribution and an implied covenant of good
faith and fair dealing, and (C) the additional limitations, qualifications,
exceptions and assumptions expressed herein.

8. No Conflicts. None of the offering and issuance by the Issuers of the Notes
being delivered at the Closing Time, the execution, delivery and performance of
the Purchase Agreement, Registration Rights Agreement, Indenture, Notes and the
Transaction Documents by the StoneMor Entities that are parties thereto, or the
consummation of the transactions contemplated thereby (including the use of the
proceeds from the issuance of the Notes as described in the Final Offering
Memorandum under the caption “Use of Proceeds”), will conflict with, result in a
breach, default or violation (and no event has occurred that, with notice or
lapse of time or otherwise, would constitute such an event) or imposition of any
lien, charge or encumbrance upon any property or assets of the StoneMor Entities
pursuant to, (i) the Local Operating Corporation Charter Documents or Local
Operating LLC Charter Documents, (ii) any agreement, lease or other instrument
known to us (excluding the General Partner Operating Agreement, the Partnership
Agreement, and the Operating Company Operating Agreement) to which any of the
StoneMor Entities or their properties may be bound, (iii) any order, judgment,
decree or injunction known to us of any court or governmental agency or body of
the United States, the States of Delaware, Florida, New Jersey or New York, or
the Commonwealth of Pennsylvania to which any of the StoneMor Entities or any of
their properties is subject, or (iv) laws generally applicable to the operation
of cemeteries and funeral homes (“Applicable Law”) of the United States or the
States of Delaware, Florida, New Jersey or New York, or the Commonwealth of
Pennsylvania (other than any federal or state securities laws or broker/dealer
laws of the foregoing jurisdictions, as to which we express no opinion), which
breaches, violations or defaults, in the case of clauses (ii), (iii) or (iv),
would reasonably be expected to have a Material Adverse Effect or materially
impair the ability of the StoneMor Entities, taken as a whole, to perform their
obligations under the Purchase Agreement, Registration Rights Agreement,
Indenture, Notes or the Transaction Documents or any documents related to the
Transaction Documents to which they are a party. None of the performance of the
Purchase Agreement, Registration Rights Agreement,

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Indenture, Notes or the Transaction Documents by the StoneMor Entities that are
parties thereto, or the consummation of the transactions contemplated thereby
will conflict with or result in a breach, default or violation of their
certificate of limited partnership, limited partnership agreement, certificate
of formation, operating or limited liability company agreement, certificate or
articles of incorporation or bylaws, as applicable.

9. No Consents. Except for (i) such Consents required under the federal
securities laws or state securities or “Blue Sky” laws, as to which we express
no opinion, (ii) such Consents that have been obtained or made, (iii) such
Consents that (A) are of a routine or administrative nature, (B) are not
customarily obtained or made prior to the consummation of the transactions such
as those contemplated by the Purchase Agreement, Registration Rights Agreement,
Indenture, Notes and the Transaction Documents and (C) are expected in the
reasonable judgment of the General Partner to be obtained in the ordinary course
of business subsequent to the consummation of the transactions contemplated by
the Purchase Agreement, Registration Rights Agreement, Indenture, Notes or the
Transaction Documents, or (iv) such Consents as disclosed in the Final Offering
Memorandum, no consent, approval, authorization, or order of, or filing or
registration with (“Consent”), any governmental authority under the Applicable
Laws of the States of Delaware, Florida, New Jersey or New York, or the
Commonwealth of Pennsylvania, is required in connection with the offering and
issuance of the Notes, the Final Offering Memorandum, the execution, delivery
and performance of the Purchase Agreement, Registration Rights Agreement,
Indenture, Notes and the Transaction Documents by the StoneMor Entities that are
parties thereto or the consummation by the StoneMor Entities of the transactions
contemplated thereby.

10. Permits. To our knowledge, each of the StoneMor Entities has such permits,
consents, licenses, franchises, certificates and authorizations of governmental
or regulatory authorities (“Permits”) required under Applicable Law to own its
properties and operate its cemetery and funeral home businesses, subject to such
qualifications as may be set forth in the Final Offering Memorandum and except
for such Permits which, if not obtained, would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.

11. Legal or Regulatory Proceedings. To our knowledge, there are no pending
actions, suits or proceedings against the StoneMor Entities and none of the
StoneMor Entities has received any notice of proceedings relating to the
compliance with Cemetery/Funeral Home Laws which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
reasonably be expected to have Material Adverse Effect. For purposes of this
opinion letter, “Cemetery/Funeral Home Laws” means any laws, statutes, rules or
regulations promulgated in the States of Delaware, Florida or New Jersey, or the
Commonwealth of Pennsylvania, which relate to the operation of a cemetery
company, the sale of cemetery goods on a pre-need or at-need basis, the
establishment, funding or maintenance of a statutorily mandated trust with
regard to such pre-need or at-need sales or perpetual care, the operation of a
funeral home company or the sale of funeral home services.

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12. Descriptions in the Preliminary Offering Memorandum and the Final Offering
Memorandum. The statements in the Preliminary Offering Memorandum and the Final
Offering Memorandum under the caption “Business – Regulation” are accurate in
all material respects.

The opinions contained herein are subject to the following additional
limitations, qualifications, exceptions and assumptions:

(a) We express no opinion as to the enforceability of any indemnification or
contribution provisions in any of the Reviewed Documents to the extent the
rights to indemnification or contribution provided for therein are violative of
any law, rule or regulation (including any securities law, rule or regulation)
or public policy relating thereto.

(b) We have assumed, without any independent investigation or verification of
any kind, that each of the parties (other than the StoneMor Entities) to any of
the Reviewed Documents is duly organized and validly existing, and that each of
the parties (other than the StoneMor Entities) to any of the Reviewed Documents
has the power and authority (corporate or otherwise) to enter into and perform
each of the Reviewed Documents, and that each of the Reviewed Documents has been
duly authorized by each of the parties thereto (other than the StoneMor
Entities), executed and delivered by each of the parties thereto, and that each
of the Reviewed Documents constitutes the legal, valid and binding obligations
of all parties thereto (other than the StoneMor Entities).

(c) For purposes of our opinions contained in paragraphs 3 and 4 above, we have
assumed that (i) each holder of shares or membership units (each, a “Holder”)
gave value for the shares or membership units held by such Holder, (ii) each
Holder has taken delivery of such shares or membership units, and (iii) no
Holder has any notice of an adverse claim with respect to such shares or
membership units other than those adverse claims described in those paragraphs.

(d) We express no opinion herein whatsoever regarding the following:

(i) the validity, enforceability or effectiveness of the following contractual
provisions to the extent included in the Transaction Documents: (A) provisions
which authorize self-help; (B) provisions which purport to establish evidentiary
standards; (C) provisions which purport to render ineffective any waiver or
modification not in writing; (D) provisions related to the waiver of rights or
remedies (including, without limitation, waivers of notices and hearing, waivers
of defenses, waivers of jury trials, waivers of rights of marshaling, waivers of
exemptions and stays of execution and waivers (or tolling) of statutes of
limitations) to the extent any such right or remedy cannot be waived as a matter
of law or public policy or the delay or omission of enforcement thereof;
(E) provisions purporting to waive any objection to the laying of venue or any
claim that an action or proceeding has been brought in an inconvenient forum;
(F) agreements by any party to the Credit Amendment (“Credit Party”) or any
party to the NPA

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Amendment (“Note Purchase Party”) to submit to the jurisdiction of a particular
court or appoint an agent for the acceptance of service of process;
(G) provisions which purport to permit any purchaser of a participation interest
to set off or apply any deposit, property or indebtedness with respect to any
participation interest, or which purport to cause any purchaser or assignee of
any Credit Party or Note Purchase Party to take free of defenses, claims or
rights of offset or recoupment on the part of any Credit Party or Note Purchase
Party; (H) provisions which purport to permit any Credit Party or Note Purchase
Party, as the case may be, to set off or apply any deposit, property or
indebtedness with respect to any indebtedness, obligations or other liabilities
of any Credit Party or Note Purchase Party, as the case may be, that are
unmatured or unliquidated; (I) the effect of the law of any jurisdiction wherein
any Credit Party or Note Purchase Party may be located or wherein the
enforcement of any of the Transaction Documents may be sought that limits the
rates of interest legally chargeable or collectible; (J) provisions stating that
all rights or remedies of any party are cumulative and may be enforced in
addition to any other right or remedy and that the election of a particular
remedy does not preclude recourse to one or more remedies; (K) provisions
imposing prepayment charges, late payment charges or an increase in interest
rate upon delinquency in payment or the occurrence of a default or liquidated
damages which do not bear a sufficient relationship to actual damages and could
be determined to constitute a penalty; (L) provisions appointing any Credit
Party or Note Purchase Party (or any agent of any Credit Party or Note Purchase
Party) as attorney-in-fact for any Credit Party or Note Purchase Party;
(M) provisions increasing any Credit Party’s or Note Purchase Party’s
obligations based upon increased costs, taxes, capital adequacy requirements or
the like; (N) provisions allowing the institution of judicial or nonjudicial
proceedings or the exercise of any other rights, without notice to the person or
entity against whom enforcement is sought; (O) provisions relating to payment of
costs of indemnity, court costs, attorneys’ fees and expenses which may be
chargeable or recoverable in any judicial proceedings in excess of those which
are actually incurred and would be reasonable, or relating to interest or
interest rates after judgment is obtained in excess of the maximum rate
permitted by applicable law; (P) provisions which purport to entitle any Credit
Party or Note Purchase Party to accelerate any of the indebtedness, liabilities
or other obligations of any Credit Party or Note Purchase Party, or other
exercise of rights or remedies, upon the occurrence of a non-material breach or
violation; (Q) provisions purporting to deny any Credit Party’s or Note Purchase
Party’s responsibility or insulate such Credit Party or Note Purchase Party from
liability for environmental conditions or activities or breaches of
environmental laws, rules or regulations to the extent such responsibility or
obligation may be imposed upon such Note Purchase Party under applicable law;
(R) confession of judgment or ejectment provisions; (S) provisions authorizing
the appointment of a receiver; (T) severability provisions; (U) provisions
(including, without limitation, to the extent applicable, indemnification and
contribution provisions, releases of claims and liability limitations) which may
be limited by the application of constitutional or public policy principles,
standards of unconscionability, or requirements of commercial reasonableness and
good faith; (V) any provisions in which the parties agree to agree or cooperate
with respect to any matter, at some time in the future or which incorporate by
reference agreements to be entered into in the future; or (W) provisions which
relate to choice of law; or

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(ii) the enforceability of any particular provision of any of the Transaction
Documents relating to remedies after default. However, notwithstanding the
preceding qualification, in our judgment, subject to the other exceptions,
exclusions, limitations, assumptions and qualifications set forth in this
opinion and subject to the fact that there may be economic consequences arising
out of any procedural or other delay, the possible unenforceability of any
particular provisions of the Transaction Documents as to remedies after default
does not render the provisions of the Transaction Documents, taken as a whole,
inadequate for the practical realization of the principal legal rights and
benefits contemplated by the Transaction Documents.

(e) We express no opinion as to the applicability to any of the Reviewed
Documents of Section 548 of the Bankruptcy Code (11 U.S.C. Section 548) or of
Florida, Delaware, New Jersey, New York or Pennsylvania law relating to
fraudulent transfers and obligations.

(f) We have assumed that all natural persons acting on behalf of any party to
the Reviewed Documents have the legal capacity to do so.

(g) We have assumed that each party to the Reviewed Documents (other than the
General Partner, the Partnership, and the Operating Company and the Local
Operating Subsidiaries identified on Annex I as an entity organized under the
laws of the Commonwealth of Pennsylvania or the States of Delaware, Florida, New
Jersey or New York) is duly qualified to transact business in the States of
Delaware, Florida, New Jersey or New York, or the Commonwealth of Pennsylvania,
or is not or was not required at any relevant time by applicable law to be so
qualified as a result of its activities in the States of Delaware, Florida, New
Jersey or New York, or the Commonwealth of Pennsylvania.

(h) We express no opinion regarding any provision of any of the Reviewed
Documents relating to waivers or which are in the nature of waivers, including,
without limitation, any purported waiver under any of the Reviewed Documents or
any purported consent thereunder, relating to the rights of any party
(including, without limitation, marshaling of assets, choice of or consent to
venue, forum or jurisdiction, reinstatement, rights of subrogation, contribution
and/or indemnity, right to trial by jury, arbitration of disputes, statutes of
limitations and rights of redemption), or duties owing to it, existing as a
matter of law or equity, and any provision which purports to waive any right or
claim of offset, or any right to assert any defense or counterclaim, or any
provision which provides for the transfer of a document or instrument free and
clear from all offsets, counterclaims and defenses against the assignor.

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(i) In addition, and without limiting the foregoing, we point out that the
internal laws of the States of Delaware, Florida, New Jersey, New York and the
internal laws of the Commonwealth of Pennsylvania law may (i) in certain
circumstances permit oral amendments, consents and waivers to written contracts
despite contractual provisions to the contrary, and (ii) render unenforceable,
or limit the enforceability of, certain provisions of documents which are in the
nature of a “forum selection clause,” an “arbitration clause,” an agreement to
submit future disputes to mandatory arbitration, or an agreement to submit in
the future to the jurisdiction of a court outside the States of Delaware,
Florida, New Jersey or New York, or the Commonwealth of Pennsylvania.

(j) We express no opinion with respect to the creation, perfection or priority
of any security in or lien on any collateral.

The opinions expressed herein are (A) limited to the internal laws of the States
of Delaware, Florida, New Jersey and New York, and the Commonwealth of
Pennsylvania which in our experience are normally applicable to transactions of
this type, excepting therefrom county, municipal and local ordinances and
regulations, and (B) intended to express no opinion with respect to state or
local taxes, tax statutes or securities laws, rules or regulations to which any
of the limited partners of the Partnership or any of the StoneMor Entities may
be subject. We render no opinion herein whatsoever regarding the compliance
with, or any governmental or regulatory filing, approval, authorization, license
or consent required by or under, any (A) federal or state health or
environmental law, (B) federal or state antitrust law, (C) federal or state
taxation law, (D) federal or state worker health or safety, subdivision,
building code, use and occupancy, zoning or permitting or land use matter,
(E) federal or state patent, trademark or copyright law (including, but not
limited to, any filings and registrations of any patent, trademark or copyright
with any governmental authority), (F) federal or state labor or employment law
(including, but not limited to, pension and employee benefit law, rule or
regulation), or (G) laws applicable to powers of attorney.

This opinion letter shall be understood and interpreted in accordance with (i)
the Legal Opinion Principles issued by the Committee on Legal Opinions of the
American Bar Association’s Section of Business Law, as published in 53 Business
Lawyer 831 (May 1998), (ii) the Statement on the Role of Customary Practice in
the Preparation and Understanding of Third-Party Legal Opinions, as published in
63 Business Lawyer 1277 (2008) and (iii) the Legal Opinion Accord of the
American Bar Association Section of Business Law (1991). As a consequence, it is
subject to a number of qualifications, exceptions, definitions, limitations on
coverage and other limitations, all as more particularly described in the
foregoing, in addition to the qualifications, exceptions and limitations
specifically set forth herein and this opinion should be read in conjunction
therewith. In the event of any inconsistency between the qualifications,
exceptions and limitations in any of the foregoing and those specifically set
forth herein, the more restrictive qualifications, exceptions and limitations
shall control.

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This opinion is strictly limited to the matters stated herein and no other or
more extensive opinion is intended, implied or to be inferred beyond the matters
expressly stated herein. This opinion is not a guaranty and should not be
construed or relied on as such.

This opinion is given as of its date and is limited to the laws specified
herein, as now in effect, and to facts and circumstances of which we now have
knowledge, and we express no opinion as to the effect of applicable laws and
court decisions which may hereafter be enacted, promulgated or made and which
may limit or render unenforceable certain rights and remedies under any of the
Reviewed Documents or any other documents referred to herein. We assume no
obligation to supplement this opinion to reflect any facts or circumstances that
hereafter come to our attention or any changes in law that hereafter occur.

Each of the StoneMor Entities, the Purchasers, Vinson & Elkins LLP and Cahill
Gordon & Reindel LLP are hereby authorized to rely upon this opinion in
connection with the transactions contemplated by the Transaction Documents and
Purchase Agreement as if such opinion were addressed and delivered to them on
the date hereof. Subject to the foregoing, no other use or distribution of this
opinion may be made, and no other persons may rely on this opinion, without our
prior written consent.

 

Very truly yours, BLANK ROME LLP

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Annex I

 

Local Operating LLC

  

Local Operating Corporation

Cemetery Management Services, L.L.C., a Delaware limited liability company   
Cornerstone Family Insurance Services, Inc., a Delaware corporation Cemetery
Management Services of Mid-Atlantic States, L.L.C., a Delaware limited liability
company    Henlopen Memorial Park Subsidiary, Inc., a Delaware corporation
Cemetery Management Services of Ohio, L.L.C., a Delaware limited liability
company    Osiris Holding Finance Company, a Delaware corporation Cemetery
Management Services of Pennsylvania, L.L.C., a Delaware limited liability
company    Perpetual Gardens.Com, Inc., a Delaware corporation Cornerstone
Funeral and Cremation Services LLC, a Delaware limited liability company   
Arlington Development Company, a New Jersey corporation Glen Haven Memorial Park
LLC, a Delaware limited liability company    Cornerstone Family Services of New
Jersey, Inc., a New Jersey corporation Henlopen Memorial Park LLC, a Delaware
limited liability company    Legacy Estates, Inc., a New Jersey corporation
Lorraine Park Cemetery LLC, a Delaware limited liability company    Osiris
Management, Inc., a New Jersey corporation Osiris Holding of Maryland LLC, a
Delaware limited liability company    Eloise B. Kyper Funeral Home, Inc., a
Pennsylvania corporation WNCI LLC, a Delaware limited liability company   
Laurelwood Holding Company, a Pennsylvania corporation StoneMor Florida
Subsidiary LLC, a Florida limited liability company    Stephen R. Haky Funeral
Home, Inc., a Pennsylvania corporation CMS West LLC, a Pennsylvania limited
liability company    CMS West Subsidiary LLC, a Pennsylvania limited liability
company   

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Local Operating LLC

  

Local Operating Corporation

Juniata Memorial Park LLC, a Pennsylvania limited liability company    Osiris
Holding of Pennsylvania LLC, a Pennsylvania limited liability company    Rolling
Green Memorial Park LLC, a Pennsylvania limited liability company    StoneMor
Cemetery Products LLC, a Pennsylvania limited liability company    StoneMor
Holding of Pennsylvania LLC, a Pennsylvania limited liability company   
StoneMor Pennsylvania LLC, a Pennsylvania limited liability company    StoneMor
Pennsylvania Subsidiary LLC, a Pennsylvania limited liability company    Tioga
County Memorial Gardens LLC, a Pennsylvania limited liability company   
Woodlawn Memorial Park Subsidiary LLC, a Pennsylvania limited liability company
  

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Annex II

 

Entity

  

State

Arlington Development Company, a New Jersey corporation    New Jersey Cemetery
Management Services, L.L.C., a Delaware limited liability company    Delaware
Cemetery Management Services of Mid-Atlantic States, L.L.C., a Delaware limited
liability company    Connecticut

Delaware

New Jersey

Cemetery Management Services of Pennsylvania, L.L.C., a Delaware limited
liability company    Delaware

Pennsylvania

CMS West LLC, a Pennsylvania limited liability company    Pennsylvania CMS West
Subsidiary LLC, a Pennsylvania limited liability company    Pennsylvania
Cornerstone Family Insurance Services, Inc., a Delaware corporation    Alabama

Arkansas

Delaware

Maryland

Pennsylvania

South
Carolina

Virginia

Cornerstone Family Services of New Jersey, Inc., a New Jersey corporation    New
Jersey Cornerstone Funeral and Cremation Services LLC, a Delaware limited
liability company    Delaware

Ohio

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Entity

  

State

Eloise B. Kyper Funeral Home, Inc., a Pennsylvania corporation    Pennsylvania
Glen Haven Memorial Park LLC, a Delaware limited liability company    Delaware

Maryland

Henlopen Memorial Park LLC, a Delaware limited liability company    Delaware
Henlopen Memorial Park Subsidiary, Inc., a Delaware corporation    Delaware
Juniata Memorial Park LLC, a Pennsylvania limited liability company   
Pennsylvania Laurelwood Holding Company, a Pennsylvania corporation   
Pennsylvania Legacy Estates, Inc., a New Jersey corporation    New Jersey
Lorraine Park Cemetery LLC, a Delaware limited liability company    Delaware

Maryland

Osiris Holding Finance Company, a Delaware corporation    Delaware

Pennsylvania

Osiris Holding of Maryland LLC, a Delaware limited liability company    Delaware

Maryland

Osiris Holding of Pennsylvania LLC, a Pennsylvania limited liability company   
Pennsylvania Osiris Management, Inc., a New Jersey corporation    New Jersey

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Entity

  

State

Rolling Green Memorial Park LLC, a Pennsylvania limited liability company   
Pennsylvania Stephen R. Haky Funeral Home, Inc., a Pennsylvania corporation   
Pennsylvania StoneMor Florida Subsidiary LLC, a Florida limited liability
company    Florida StoneMor Cemetery Products LLC, a Pennsylvania limited
liability company    Pennsylvania StoneMor Holding of Pennsylvania LLC, a
Pennsylvania limited liability company    Pennsylvania StoneMor Pennsylvania
LLC, a Pennsylvania limited liability company    Pennsylvania StoneMor
Pennsylvania Subsidiary LLC, a Pennsylvania limited liability company   
Pennsylvania Tioga County Memorial Gardens LLC, a Pennsylvania limited liability
company    Pennsylvania WNCI LLC, a Delaware limited liability company   
Delaware

Maryland

Woodlawn Memorial Park Subsidiary LLC, a Pennsylvania limited liability company
   Pennsylvania

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Annex III

OFFICER’S CERTIFICATE

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ANNEX I

Resale Pursuant to Regulation S or Rule 144A. Each Initial Purchaser understands
that:

Such Initial Purchaser agrees that it has not offered or sold and will not offer
or sell the Securities in the United States or to, or for the benefit or account
of, a U.S. Person (other than a distributor), in each case, as defined in
Rule 902 of Regulation S (i) as part of its distribution at any time and
(ii) otherwise until 40 days after the later of the commencement of the offering
of the Securities pursuant hereto and the Closing Date, other than in accordance
with Regulation S or another exemption from the registration requirements of the
Securities Act. Such Initial Purchaser agrees that, during such 40-day
restricted period, it will not cause any advertisement with respect to the
Securities (including any “tombstone” advertisement) to be published in any
newspaper or periodical or posted in any public place and will not issue any
circular relating to the Securities, except such advertisements as are permitted
by and include the statements required by Regulation S.

Such Initial Purchaser agrees that, at or prior to confirmation of a sale of
Securities by it to any distributor, dealer or person receiving a selling
concession, fee or other remuneration during the 40-day restricted period
referred to in Rule 903 of Regulation S, it will send to such distributor,
dealer or person receiving a selling concession, fee or other remuneration a
confirmation or notice to substantially the following effect:

“The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and may not be
offered and sold within the United States or to, or for the account or benefit
of, U.S. persons (i) as part of your distribution at any time or (ii) otherwise
until 40 days after the later of the date the Securities were first offered to
persons other than distributors in reliance upon Regulation S and the Closing
Date, except in either case in accordance with Regulation S under the Securities
Act (or in accordance with Rule 144A under the Securities Act or to accredited
investors in transactions that are exempt from the registration requirements of
the Securities Act), and in connection with any subsequent sale by you of the
Securities covered hereby in reliance on Regulation S under the Securities Act
during the period referred to above to any distributor, dealer or person
receiving a selling concession, fee or other remuneration, you must deliver a
notice to substantially the foregoing effect. Terms used above have the meanings
assigned to them in Regulation S under the Securities Act.”

 

Annex I-1

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Such Initial Purchaser agrees that the Securities offered and sold in reliance
on Regulation S will be represented upon issuance by a global security that may
not be exchanged for definitive securities until the expiration of the 40-day
restricted period referred to in Rule 903 of Regulation S and only upon
certification of beneficial ownership of such Securities by non-U.S. persons or
U.S. persons who purchased such Securities in transactions that were exempt from
the registration requirements of the Securities Act.

 

Annex I-2

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ANNEX II

PRICING SUPPLEMENT

 

Annex II-1

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PRICING SUPPLEMENT    STRICTLY CONFIDENTIAL

$150,000,000

LOGO [g48023g72h24.jpg]

StoneMor Operating LLC

Cornerstone Family Services of West Virginia Subsidiary, Inc.

Osiris Holding of Maryland Subsidiary, Inc.

10 1/4% Senior Notes due 2017

November 18, 2009

 

This Pricing Supplement is qualified in its entirety by reference to the
Preliminary Offering Memorandum dated November 10, 2009. The information in this
Pricing Supplement supplements the Preliminary Offering Memorandum and
supersedes the information in the Preliminary Offering Memorandum to the extent
inconsistent with the information in the Preliminary Offering Memorandum.

The Notes have not been registered under the Securities Act of 1933, as amended
(the “Securities Act”), and are being offered only to qualified institutional
buyers pursuant to Rule 144A under the Securities Act and outside the United
States to non-U.S. persons in accordance with Regulation S under the Securities
Act.

Terms Applicable to the 10 1/4% Senior Notes due 2017

 

Issuers:   

StoneMor Operating LLC

Cornerstone Family Services of West Virginia Subsidiary, Inc.

Osiris Holding of Maryland Subsidiary, Inc.

Title of Securities:    10 1/4% Senior Notes due 2017 (the “Notes”). Principal
Amount:    $150,000,000 Gross Proceeds:    $146,028,000 Maturity Date:   
December 1, 2017. Issue Price:    97.352% plus any accrued interest, if any,
from November 24, 2009. Coupon:    10.250%

 

Annex II-1

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Yield to Maturity:    10.750% Interest Payment Dates:    June 1 and December 1
of each year, commencing June 1, 2010. Record Dates:    May 15 and November 15
of each year. Trade Date:    November 18, 2009. Settlement Date:    November 24,
2009 (T+4). Distribution:    144A and Regulation S with registration rights as
set forth in the Preliminary Offering Memorandum Original Issue Discount    The
notes will be issued with original issue discount, or OID, for U.S. federal
income tax purposes. Sole Book-Running Manager:    Banc of America Securities
LLC Co-Managers:   

Raymond James & Associates, Inc.

TD Securities (USA) LLC

Guarantees:    The notes will be guaranteed on a senior unsecured basis by
StoneMor Partners L.P. and its existing and future wholly owned subsidiaries
(other than the Issuers) that guarantee, or are borrowers under, StoneMor
Partners L.P.’s credit agreement. Optional Redemption:   

At any time prior to December 1, 2013, the Issuers may, on one or more
occasions, redeem all or any portion of the Notes, upon not less than 30 nor
more than 60 days’ notice, at a redemption price equal to 100% of the principal
amount of the Notes redeemed, plus the Applicable Premium as of the date of
redemption, including accrued and unpaid interest to the redemption date.

 

At any time or from time to time on or after December 1, 2013, the Issuers, at
their option, may redeem the Notes, in whole or in part, at the redemption
prices (expressed as percentages of principal amount) set forth below, together
with accrued and unpaid interest thereon, if any, to the redemption date, if
redeemed during the 12-month period beginning December 1 of the years indicated
below:

 

Year

   Redemption Price  

2013

   105.125 % 

2014

   102.563 % 

2015 and thereafter

   100.000 % 

 

Annex II-2

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Notwithstanding the foregoing, at any time or from time to time prior to
December 1, 2012, the Issuers, at their option, may redeem up to 35% of the
aggregate principal amount of the Notes issued under the Indenture (including
any Additional Notes) with the net cash proceeds of one or more Qualified Equity
Offerings at a redemption price equal to 110.250% of the principal amount of the
Notes to be redeemed, plus accrued and unpaid interest thereon, if any, to the
date of redemption; provided that (1) at least 65% of the aggregate principal
amount of Notes issued under the Indenture (including any Additional Notes)
remains outstanding immediately after the occurrence of such redemption and
(2) the redemption occurs within 90 days of the date of the closing of any such
Qualified Equity Offering.

 

“Applicable Premium” means, with respect to any Note on any redemption date, the
greater of: (1) 1.0% of the principal amount of the Note; or

 

(2) the excess of: (a) the present value at such redemption date of (i) the
redemption price of the Note at December 1, 2013, plus (ii) all required
interest payments due on the note through December 1, 2013 (excluding accrued
and unpaid interest due on the Note to the redemption date), computed at a
discount on the basis of semi-annual compounding using a discount rate equal to
the Treasury Rate as of such redemption date plus 50 basis points; over (b) the
principal amount of such Note.

 

“Treasury Rate” means, as of any redemption date, the yield to maturity as of
such redemption date of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
business days prior to the redemption date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from the redemption date to December 1, 2013;
provided, however, that if the period from the redemption date to December 1,
2013 is less than one year, the weekly average yield on actually traded United
States Treasury securities adjusted to a constant maturity of one year shall be
used.

 

Annex II-3

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Change of Control:    Upon the occurrence of a change of control, the Issuers
must offer to repurchase the notes for a cash price equal to 101% of the
principal amount of the notes, plus accrued and unpaid interest to the date of
repurchase. CUSIP and ISIN Numbers:   

86184B AA0 (144ACUSIP)

U8603C AA2 (Reg S CUSIP)

  

US86184BAA08 (144A ISIN)

USU8603CAA28 (Reg S ISIN).

Change to the Preliminary Offering Memorandum:    The following change will be
made to the Preliminary Offering Memorandum.   

Amendment to Existing Credit Agreement

 

The fifth paragraph under the “Amendment to Existing Credit Agreement” section
of “Description of Other Indebtedness” is hereby deleted and superseded in its
entirety by the following paragraph:

 

The Credit Agreement is expected to amend the Consolidated Leverage Ratio
covenant such that the Consolidated Leverage Ratio shall not exceed 4.00 to 1.00
for any most recently completed four fiscal quarters through and including
December 31, 2009, 3.75 to 1.00 for any period of most recently completed four
fiscal quarters ending between January 1, 2010 and December 31, 2010, inclusive,
or 3.65 to 1.00 for any most recently completed four fiscal quarters ending
thereafter.

 

 

Other information (including net proceeds of the offering and other financial
information) presented in the Preliminary Offering Memorandum is deemed to have
changed to the extent affected by the changes described herein.

This material is confidential and is for your information only and is not
intended to be used by anyone other than you. This information does not purport
to be a complete description of these securities or the offering. Please refer
to the Preliminary Offering Memorandum for a complete description.

This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction.

Any disclaimers or other notices that may appear below are not applicable to
this communication and should be disregarded. Such disclaimers were
automatically generated as a result of this communication being sent via
Bloomberg or another email system.

 

Annex II-4