STOCK PURCHASE AGREEMENT
 
by and among
 
NORTHSTAR CEMETERY SERVICES OF CALIFORNIA, LLC,
 
NORTHSTAR MEMORIAL GROUP, LLC
 
LIFEMARK GROUP
 
and
 
CAPITAL SOUTHWEST CORPORATION
 
 
 
Dated as of April 29, 2010
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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TABLE OF CONTENTS
 
Page
ARTICLE I
DEFINITIONS
1
Section 1.1
Definitions
1
ARTICLE II
PURCHASE AND SALE
8
Section 2.1
Purchase and Sale
8
Section 2.2
Purchase Price
8
Section 2.3
Closing
8
Section 2.4
Indebtedness and Net Asset Adjustments.
8
Section 2.5
Seller's Closing Deliveries
10
Section 2.6
Buyer’s Closing Deliveries
11
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
12
Section 3.1
Corporate Organization.
12
Section 3.2
Capitalization.
13
Section 3.3
Authority; No Violation.
14
Section 3.4
Consents and Approvals
14
Section 3.5
Reports; Regulatory Matters.
15
Section 3.6
Financial Statements.
16
Section 3.7
Broker's Fees
16
Section 3.8
Absence of Certain Changes or Events.
16
Section 3.9
Legal Proceedings.
17
Section 3.10
Taxes and Tax Returns
18
Section 3.11
Employee Matters.
19
Section 3.12
Compliance With Applicable Law.
22
Section 3.13
Certain Contracts.
23
Section 3.14
Inventories, Accounts Receivable
24
Section 3.15
Preneed Agreements, Trust Accounts and Insurance.
25
Section 3.16
Real Property
26
Section 3.17
Assets
26
Section 3.18
Grave Spaces
27
Section 3.19
Intellectual Property
27
Section 3.20
Environmental Liability.
27
Section 3.21
Insurance
28
Section 3.22
Intercompany Accounts and Agreements.
28
Section 3.23
INTENTIONALLY LEFT BLANK
29
Section 3.24
Indebtedness
29
Section 3.25
Inventory of Cemeteries
29
Section 3.26
Volume
29
Section 3.27
Accuracy of Information Furnished
29
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT
29
Section 4.1
Organization
29
Section 4.2
Authority; No Violation.
30
Section 4.3
Consents and Approvals
30
Section 4.4
Brokers
30

 
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Section 4.5
Financing
31
Section 4.6
Solvency
31
Section 4.7
Acquisition of Shares for Investment
31
Section 4.8
Due Diligence by Parent and Buyer
31
Section 4.9
Ability to Evaluate Investment
31
Section 4.10
Investment Risk
32
Section 4.11
Purchase for Own Account
32
Section 4.12
Investor Status
32
Section 4.13
No Solicitation
32
Section 4.14
HSR Act
32
ARTICLE V
COVENANTS
32
Section 5.1
Conduct of Businesses Prior to the Closing Date
32
Section 5.2
Forbearances
32
Section 5.3
Buyer Forbearances
35
Section 5.4
Access; Information
35
Section 5.5
Notices of Certain Events; Supplemental Information.
35
Section 5.6
Pre-Closing Arrangements
36
Section 5.7
Regulatory Matters.
36
Section 5.8
Confidentiality
38
Section 5.9
Post-Closing Cooperation.
38
Section 5.10
Satisfaction of Indebtedness
39
Section 5.11
Exclusivity of Representations; Investigations by Buyer.
39
Section 5.12
Excluded Assets.
40
Section 5.13
Director and Officer Indemnification
40
Section 5.14
Company Benefits Plans
41
Section 5.15
Assumption and Satisfaction of Excluded Liabilities
41
Section 5.16
Real Estate Agreements.
41
ARTICLE VI
CONDITIONS TO CLOSING
41
Section 6.1
Conditions to Each Party's Obligation
41
Section 6.2
Conditions to Obligations of Buyer
42
Section 6.3
Conditions to Obligations of Seller
43
ARTICLE VII
TERMINATION
43
Section 7.1
Termination.
43
Section 7.2
Obligations upon Termination
44
ARTICLE VIII
TAX MATTERS
44
Section 8.1
Seller’s Responsibility for Taxes
44
Section 8.2
Straddle Periods
45
Section 8.3
Indemnification Procedures
45
Section 8.4
Tax Returns.
46
Section 8.5
Cooperation and Exchange of Information
47
Section 8.6
Tax Sharing
47
Section 8.7
Transfer Taxes
47
Section 8.8
Tax Returns
47
Section 8.9
Miscellaneous.
48
ARTICLE IX
INDEMNIFICATION
48
Section 9.1
Survival
48
Section 9.2
Indemnification by Seller
48

 
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Section 9.3
Indemnification by Buyer and Parent
49
Section 9.4
Certain Limitations.
49
Section 9.5
Third Party Claim Procedures
50
Section 9.6
Direct Claims
51
ARTICLE X
MISCELLANEOUS
51
Section 10.1
Expenses
51
Section 10.2
Notices
51
Section 10.3
Interpretation
52
Section 10.4
Counterparts
53
Section 10.5
Entire Agreement
53
Section 10.6
Governing Law
53
Section 10.7
Publicity
53
Section 10.8
Assignment; Third Party Beneficiaries.
53
Section 10.9
Arbitration
54
Section 10.10
Specific Performance
55
Section 10.11
Guarantee of Parent
55

 
 

    EXHIBIT A -   March 31, 2010 Balance Sheet  EXHIBIT B -   Definition of
Parcel V      SCHEDULES:         
Schedule 1.1
Excluded Assets
Schedule 1.2
Excluded Liabilities
Schedule 2.4(b)
Preliminary Net Asset Calculation
Schedule 3.1(a)
Foreign Qualifications; Names
Schedule 3.1(c)
Subsidiary Foreign Qualifications
Schedule 3.2(a)
Distribution
Schedule 3.2(b)
List of all Subsidiaries
Schedule 3.3(b)
No Violation
Schedule 3.5
Proceedings
Schedule 3.5(b)
Company Regulatory Agreements
Schedule 3.6(a)
Financial Statements
Schedule 3.8(b)
Absence of Changes
Schedule 3.9(a)
Legal Proceedings
Schedule 3.11(a)
Employee Benefit Plans
Schedule 3.11(b)
Benefit Plan Compliance
Schedule 3.11(c)
Acceleration of Benefits
Schedule 3.11(d)
Unions
Schedule 3.11(f)
Employees of the Company and its Subsidiaries
Schedule 3.12(a)
Permits
Schedule 3.13(a)
Company Contracts
Schedule 3.13(d)
Reinsurance Contracts
Schedule 3.15(b)
Trust Funds
Schedule 3.15(c)
Preneed Agreement Insurance

 
 
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Schedule 3.16
Real Property
Schedule 3.17
Assets
Schedule 3.19
Intellectual Property
Schedule 3.20(a)
Environmental Permits
Schedule 3.20(b)
Environmental Compliance
Schedule 3.20(d)
Environmental Orders, Etc.
Schedule 3.22
Intercompany Accounts and Agreements
Schedule 3.24
Indebtedness
Schedule 3.25
Inventory
Schedule 3.26
Volume
Schedule 5.12
Distribution

 
 
 
 
 
 
 
 
 
iv
 
 

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STOCK PURCHASE AGREEMENT
 
This STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of April 29, 2010, is
made and entered into by and among NorthStar Memorial Group, LLC, a Delaware
limited liability company ("Parent"), NorthStar Cemetery Services of California,
LLC, a Delaware limited liability company or its Affiliate ("Buyer"), Lifemark
Group, a Nevada corporation (the "Company"), and  Capital Southwest Corporation,
a Texas corporation ("Seller").
 
WITNESSETH:
 
WHEREAS, Seller owns one hundred percent (100%) of the issued and outstanding
shares of capital stock (the "Shares") of the Company;
 
WHEREAS, Parent desires that Buyer acquire from Seller, and Seller desires to
sell to Buyer, all of the Shares, on the terms and subject to the conditions set
forth in this Agreement;
 
NOW, THEREFORE, in consideration of the representations, warranties, covenants
and agreements contained in this Agreement, the parties hereby agree as follows:
 
ARTICLE I

 
DEFINITIONS

 
Section 1.1 Definitions.  In this Agreement, the following terms have the
meanings specified or referred to in this Section 1.1 and shall be equally
applicable to both the singular and plural forms.
 
"Adjustment Amount" means the amount by which the Net Assets delivered at
Closing to Buyer varies from $82,964,998.  If the Adjustment Amount is a
negative number, the Purchase Price will be decreased, as provided in Section
2.4(e).  If the Adjustment Amount is a positive number, the Purchase Price will
be increased, as provided in Section 2.4(e).
 
"Affiliate" means, with respect to any Person, any other Person which, at the
time of determination, directly or indirectly, through one or more
intermediaries, Controls, is Controlled by or is under Common Control with such
Person.
 
"Affiliated Group" means any affiliated group within the meaning of Section
1504(a) of the Code or any similar group defined under a similar provision of
state, local or non-U.S. Law.
 
"Agreement" has the meaning set forth in the preamble.
 
"Bankruptcy and Equity Exception" has the meaning set forth in Section 3.3(a).
 
"Basket" has the meaning set forth in Section 9.4(a).
 
"Business Day" means any day other than a Saturday, a Sunday or any other day on
which commercial banks are not generally open for business in Houston, Texas.
 
 
 
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"Buyer" has the meaning set forth in the preamble.
 
"Buyer Disclosure Schedule" has the meaning set forth in Article IV.
 
"Buyer Indemnitees" has the meaning set forth in Section 9.2.
 
"California Consumer Consent" has the meaning set forth in Section 3.4.
 
"Closing" has the meaning set forth in Section 2.3.
 
"Closing Date" has the meaning set forth in Section 2.3.
 
"Closing Date Balance Sheet" has the meaning set forth in Section 2.4(c).
 
"Closing Date Cash Payment" has the meaning set forth in Section 2.2.
 
"Code" means the Internal Revenue Code of 1986, as amended.
 
"Company" has the meaning set forth in the preamble.
 
"Company Benefit Plans" has the meaning set forth in Section 3.11(a).
 
"Company Bylaws" has the meaning set forth in Section 3.1(b).
 
"Company Charter" has the meaning set forth in Section 3.1(b).
 
"Company Common Stock" has the meaning set forth in Section 3.2(a).
 
"Company Contract" has the meaning set forth in Section 3.13(a).
 
"Company Disclosure Schedule" has the meaning set forth in Article III.
 
"Company Financial Statements" has the meaning set forth in Section 3.6(a).
 
"Company Intellectual Property Rights" has the meaning set forth in Section
3.19.
 
"Company Regulatory Agreement" has the meaning set forth in Section 3.5(b).
 
"Confidential Information" means any information concerning the business and
affairs of the Company and its Subsidiaries that is known to Seller prior to the
Closing or becomes known to Seller following the Closing in connection with this
Agreement except for any such information (i) that is already available to the
public or (ii) becomes available to the public not in violation of Section 5.8
of this Agreement.
 
 "Consent" means any approval, consent, ratification, waiver or other
authorization, including, but not limited to, any Governmental Authorization.
 
"Control" means, as to any Person, the ownership or possession, directly or
indirectly, through one or more intermediaries, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. The terms "Controlled
by" and "under Common Control with" have correlative meanings.
 
 
 
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"Controlled Group Liability" means any and all liabilities (i) under Title IV of
ERISA, (ii) under Section 302 of ERISA, (iii) under Sections 412 and 4971 of the
Code, and (iv) as a result of a failure to comply with the continuation coverage
requirements of Section 601 et seq. of ERISA and section 4980B of the Code.
 
"Distribution" has the meaning set forth in Section 5.12(a).
 
"Distribution Costs" has the meaning set forth in Section 5.12(b).
 
"Employees" has the meaning set forth in Section 5.2(c).
 
"End Date" has the meaning set forth in Section 7.1(a)(iii).
 
"ERISA" has the meaning set forth in Section 3.11(a).
 
"ERISA Affiliate" means any entity if it would have ever been considered a
single employer with the Company under ERISA Section 4001(b) or part of the same
"controlled group" as the Company for purposes of ERISA Section 302(d)(8)(C) or
Code Sections 414(b), (c) or (n), or a member of an affiliated service group for
purposes of Code Section 414(m).
 
"Estimated Distribution Costs" means an amount equal to $1,248,040, such amount
being the estimated amount of all costs and expenses (including, but not limited
to, all Taxes, transfer taxes, filing fees, recording fees or otherwise) that
have been or will be incurred by the Company or its Subsidiaries associated
with, arising out of or relating to the Distribution.
 
"Excluded Assets" means those assets of the Company and its Subsidiaries, as
more particularly described on Schedule 1.1 of the Company Disclosure Schedule,
that shall be distributed to Seller prior to the Closing in accordance with
Section 5.12.
 
"Excluded Liabilities" means those liabilities of the Company and its
Subsidiaries, as more particularly described on Schedule 1.2, which shall be
assumed by Seller on the Closing Date.
 
"Excluded Representations" has the meaning set forth in Section 9.1.
 
"Existing Permits" has the meaning set forth in Section 3.12(a).
 
"GAAP" means United States generally accepted accounting principles applied on a
consistent basis.
 
"Governmental Entity" has the meaning set forth in Section 3.4.
 
"Hazardous Materials" means any substances:  (i) the presence of which requires
special handling or management, or the release of which may require
investigation or remediation under any Law; (ii) which is or has been identified
as a potential hazardous material, hazardous waste, hazardous substance,
pollutant or contaminant under any applicable Law; or (iii) which is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic, reactive or otherwise dangerous or hazardous to health or the
environment and is subject to regulation by any Governmental Entity.
 
 
 
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"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
 
"Indebtedness" means any (a) obligations relating to indebtedness for borrowed
money, including any bank overdraft, (b) obligations evidenced by a bond, note,
debenture or similar instrument, (c) obligations as lessee under leases required
to be capitalized in accordance with GAAP, (d) obligations in respect of
reimbursement obligations related to banker’s acceptances or letters of credit,
(e) obligations for the deferred purchase price of property or services (other
than current accounts payable to suppliers and similar accrued liabilities
incurred in the Ordinary Course that are included in the calculation of Net
Assets), (f) indebtedness or obligations of the types referred to in the
preceding clauses (a) through (e) of any other Person secured by any Lien on any
assets of the Company or any of its Subsidiaries, even though the Company and
its Subsidiaries have not assumed or otherwise become liable for the payment
thereof, (g) obligations in the nature of guarantees of obligations of the type
described in clauses (a) through (f) above of any other Person, and (j)
liabilities under any synthetic lease, Tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where the
transaction is considered indebtedness for borrowed money for federal income Tax
purposes but is classified as an operating lease in accordance with GAAP for
financial reporting purposes.
 
"Indemnified Party" has the meaning set forth in Section 9.5.
 
"Indemnifying Party" has the meaning set forth in Section 9.5.
 
"Intellectual Property" means patents, trademarks, service marks, trade names,
copyrights, software, trade secrets and other proprietary rights and processes.
 
"Interim Financial Statements" has the meaning set forth in Section 3.6(a).
 
"Knowledge of Seller" means, as to a particular matter, the actual knowledge of
any Harley Forrey, Charles Hotchkiss, Maria Flores, Lisa Sanchez, Andy Bryant,
Michael Rogers, Gordon Swallow, and Anthony Kan.
 
"Law" means and includes any applicable statutes, common laws, rules,
ordinances, regulations, codes, orders, judgments, injunctions, writs, decrees,
governmental guidelines or interpretations having the force of law or bylaws, in
each case, of a Governmental Entity.
 
"Lien" means and includes any lien, pledge, mortgage, security interest, claim
lease, charge, option, right of first refusal, easement, servitude, transfer
restriction under any shareholder or similar agreement, or any other
encumbrance, restriction or limitation whatsoever.
 
"Losses" has the meaning set forth in Section 9.2.
 
 
 
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"Material Adverse Effect" has the meanings set forth in Section 3.8(a).
 
"Net Assets" means total assets of the Company and its Subsidiaries less total
liabilities determined in accordance with GAAP, including but not limited to
current accounts payable to suppliers and similar accrued liabilities incurred
in the Ordinary Course but excluding Excluded Assets and Excluded Liabilities.
 
"Neutral Auditor" has the meaning set forth in Section 2.4(d).
 
"Ordinary Course" means the ordinary course of business consistent with past
custom and practice (including with respect to quantity, amount and frequency).
 
"Owned Properties" has the meaning set forth in Section 3.16.
 
"Parcel V" has the meaning set forth in Exhibit B.
 
"Parcel V Costs" has the meaning set forth in Section 5.16.
 
"Parent" has the meaning set forth in the Preamble.
 
"Permit" means any license, franchise, permit, concession, approval,
registration, filing, certificates or other authorization from, of or with a
Governmental Entity.
 
"Permitted Encumbrances" means exceptions, encumbrances, encroachments,
overlaps, protrusions, boundary line disputes or other matters shown in the
shown in the title reports and surveys delivered to Buyer prior to the date
hereof other than Buyer’s written objections delivered to Seller on or prior to
the date hereof.
 
"Permitted Liens" means Liens (i) for current Taxes or other governmental
charges not yet due or payable, (ii) mechanics liens and similar liens for
labor, materials, or supplies provided with respect to Real Property incurred in
the Ordinary Course for work not yet completed and for amounts that are not yet
due and payable as of the Closing Date, (iii) zoning, building codes, and other
land use laws regulating the use or occupancy of Real Property or the activities
conducted thereon which are imposed by any Governmental Entity having
jurisdiction over Real Property and are not violated by the current use or
occupancy of such Real Property and are reflected on the title reports and that
do not, individually or in the aggregate, materially impair the current use,
occupancy, or value of, or the marketability or title in, such Real Property,
and (iv) Permitted Encumbrances.
 
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or other entity or Governmental Entity.
 
"Post-Closing Tax Period" means any Tax period beginning on the Closing Date or,
where required by applicable Law, including, but not limited to, pursuant to
Treasury Regulation Section 1.1502-76(b)(1)(ii)(A), at the close of business on
the Closing Date, and with respect to any Straddle Period, the portion of such
Straddle Period beginning on the Closing Date; provided that if any Post-Closing
Tax Period begins at the close of business on the Closing Date pursuant to
applicable Law, the applicable portion of any Straddle Period shall be deemed to
begin at the close of business on the Closing Date.
 
 
 
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"Pre-Closing Tax Period" means any Tax period ending at the close of business on
the day preceding the Closing Date or, where required by applicable Law, at the
close of business on the Closing Date, and with respect to any Straddle Period,
the portion of such Straddle Period ending at the close of business on the day
preceding the Closing Date; provided that if any Pre-Closing Tax Period ends at
the close of business on the Closing Date pursuant to applicable Law, the
applicable portion of any Straddle Period shall be deemed to end at the close of
business on the Closing Date.
 
"Preneed Agreement" means any funeral or cemetery preneed contract generated in
the operation of the Company or any of its Subsidiaries providing for the future
delivery of funeral or cemetery merchandise (including interment rights) or
services, that is unfulfilled in whole or in part as of the date of this
Agreement.
 
"Preneed Shortfall Amount" means, with respect to each of the Preneed Agreements
(whether funded by trust or insurance) to which the Company or any of its
Subsidiaries is a party or is otherwise liable or obligated thereunder, the
amount by which (i) the amount that either (A) has been paid for the insurance
policy or (B) placed in trust, in each case as of the Closing Date, with respect
to such Preneed Agreement is less than (ii) the amount legally or contractually
required to either (A) be paid for the insurance policy or (B) placed in trust,
as applicable, with respect to such Preneed Agreement plus the amount of any
withdrawal made from such trusts that was not in compliance with applicable law
plus an amount equal to the earnings on such amounts if such funds had been
properly deposited or retained on such account, which, for purposes of
calculating the Preneed Shortfall Amount, such earnings shall be equal to a five
percent (5%) per annum return, compounding annually, accruing on such funds from
the date on which such funds should have been deposited or were improperly
withdrawn, as applicable.
 
"Purchase Price" has the meaning set forth in Section 2.2.
 
"Real Estate Swap" has the meaning set forth in Section 5.9(b).
 
"Real Property" has the meaning set forth in Section 3.16.
 
"Regulatory Agencies" has the meaning set forth in Section 3.5(a).
 
"Regulatory Laws" means any Law enacted by any Governmental Entity relating to
antitrust matters, insurance, death care, or regulating competition.
 
"Representative" means any Person's Affiliates, directors, officers, employees,
agents, advisors, attorneys, accountants, consultants and representatives of
such Person's agents and advisors.
 
"Securities Act" means the Securities Act of 1933, as amended.
 
"Seller" has the meaning set forth in the preamble.
 
 
 
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"Seller Indemnitees" has the meaning set forth in Section 9.3.
 
"Shares" has the meaning set forth in the recitals.
 
"Straddle Period" means any taxable period that begins before the Closing Date
and ends on or after the Closing Date; provided, however, that if pursuant to
applicable Law, any Pre-Closing Tax Period ends, and any Post-Closing Tax Period
begins, at the close of business on the Closing Date, a Straddle Period shall
mean any taxable period beginning on or before the Closing Date and ending after
the Closing Date.
 
"Subsidiary" of any Person means another Person more than 50% of the total
combined voting power of all classes of capital stock or other voting interests
of which, or more than 50% of the equity securities of which, is owned directly
or indirectly by such first Person.
 
"Tax" or "Taxes" means (i) all federal, state, local, and foreign income,
excise, gross receipts, gross income, ad valorem, profits, gains, property,
capital, sales, transfer, use, payroll, employment, severance, withholding,
duties, intangibles, franchise, backup withholding, value added and other taxes,
charges, levies or like assessments together with all penalties and additions to
tax and interest thereon and (ii) any liability for the payment of any amounts
of the type described in clause (i) of this definition as a result of being a
member of an affiliated, consolidated, combined or unitary group for any period,
as a result of any Tax sharing or Tax allocation agreement, arrangement or
understanding, or as a result of being liable for another Person's Taxes as a
transferee or successor, by contract or otherwise.
 
"Tax Contest" has the meaning set forth in Section 8.5.
 
"Tax Return" means any federal, state, local or foreign (including any other
governmental subdivision or taxing authority) tax return, report or similar
statement, and any declaration, statement, claim for refund, report, schedule,
form, or information return, or any amendment to any of the foregoing, relating
to Taxes and all attachments thereto, as well as any records or documents that
are required to be kept or maintained by applicable Law.
 
"Tax Sharing Agreements" means any and all existing Tax sharing, allocation,
indemnification, or similar agreements, provisions, or arrangements (whether or
not written) between or among Seller or any of its respective Affiliates (other
than the Company or its Subsidiaries), on the one hand, and the Company or its
Subsidiaries on the other hand.
 
"Third Party Claim" has the meaning set forth in Section 9.5.
 
"Third Party Consents" means the consents, waivers, approvals, authorizations
and permits required to be obtained under any Company Contract with third
parties or from any Governmental Entities or Regulatory Entities in order to
consummate the transactions contemplated hereunder.
 
"Transaction Expenses" means any and all (a) legal, accounting, tax, consulting,
financial advisory, and other professional or transaction related costs, fees
and expenses incurred by, or for the benefit of, the Company or its Subsidiaries
or Seller in connection with this Agreement or in investigating, pursuing or
completing the transactions contemplated hereby or by the term sheet dated
December 23, 2009 between the parties (including any amounts owed to any
consultants, auditors, accountants, attorneys, brokers or investment bankers),
and (b) payments, bonuses or severances that become due or are otherwise
required to be paid as a result of or in connection with the Closing or as a
result of any change of control or other similar provisions other than those
severances that are expressly set forth and designated on Schedule 3.11(a) of
the Company Disclosure Schedule.
 
 
 
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"Transfer Taxes" means any real property transfer or gains, real property
excise, sales, use, transfer, value added, stock transfer and stamp taxes, any
transfer, recording, registration and other fees, and any similar Taxes which
become payable in connection with the transactions contemplated by this
Agreement.
 
"Trust Funds" has the meaning set forth in Section 3.15(b).
 
ARTICLE II

 
PURCHASE AND SALE

 
Section 2.1 Purchase and Sale.  On the Closing Date, subject to the terms and
conditions of this Agreement, Seller shall sell, transfer and deliver to Buyer,
and Buyer shall purchase from Seller, the Shares, free and clear of all Liens.
 
Section 2.2 Purchase Price.  Subject to the Adjustment Amount, the aggregate
purchase price for the Shares shall be $84,750,000 (the "Purchase Price").  The
Purchase Price (subject to reduction pursuant to Section 2.4(a) below) less an
amount equal to the Estimated Distribution Costs (such net amount, the "Closing
Date Cash Payment") shall be paid by Buyer to Seller at Closing by wire transfer
of immediately available funds to the account specified in writing by Seller.
 
Section 2.3 Closing.  Unless this Agreement shall have been terminated pursuant
to Article VII and subject to the satisfaction or waiver of each of the
conditions set forth in Article VI, the closing of the sale and purchase of the
Shares (the "Closing") shall take place at 11:00 a.m., Dallas time, on the fifth
Business Day after the last to be fulfilled or waived of the conditions set
forth in Article VI (other than any such condition required to be performed at
the Closing), at the offices of Locke Lord Bissell & Liddell LLP, 2200 Ross
Avenue, Suite 2200, Dallas, Texas 75201, unless another date, time or place is
agreed to in writing by the parties hereto.  The actual date and time of the
Closing are herein referred to as the "Closing Date."  For all purposes, the
Closing shall be deemed to have occurred at 12:01 a.m. on the Closing Date.
 
Section 2.4 Indebtedness and Net Asset Adjustments.
 
(a) Seller will fully pay and discharge all Indebtedness (except for any
Indebtedness of the type referred to in clause (c) of the definition thereof and
Indebtedness of the type referred to in clauses (f) and (g) of the definition
thereof to the extent such Indebtedness relates to the Indebtedness referred to
in clause (c) thereof) and any prepayment penalties or other fees and expenses
associated with such payment, before the Closing Date.  Buyer may, at its
option, elect to assume any such Indebtedness by providing Seller written notice
of its election to assume it, in which case the Purchase Price shall be reduced
by the amount necessary to pay such Indebtedness, including interest due but not
yet payable and any pre-payment penalties.
 
 
 
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(b) The parties will prepare and agree on a preliminary Net Assets calculation
based on the balance sheet of the Company as of March 31, 2010 ("Preliminary
Calculation").  A copy of the Preliminary Calculation as of March 31, 2010 is
attached hereto as Schedule 2.4(b).  This Preliminary Calculation is provided
solely by way of example and will be used as the basis for preparing the Net
Assets calculation under the Closing Date Balance Sheet as set forth below.
 
(c) Within ninety (90) days after the Closing, Buyer shall cause the Company to
prepare and deliver to Seller a balance sheet of the Company as of the Closing
Date, including a computation of Indebtedness, Net Assets and the Adjustment
Amount, each as of the Closing Date (collectively, the "Closing Date Balance
Sheet").  The Closing Date Balance Sheet shall be prepared in accordance with
this Agreement and GAAP applied in a manner consistent with the preparation of
the balance sheet attached hereto as Exhibit A except that Net Assets shall not
include the items expressly excluded from the definition thereof.  Following the
delivery of the Closing Date Balance Sheet to Seller, the Company and Buyer
shall afford Seller and its Representatives a reasonable opportunity to examine
the Closing Date Balance Sheet, and such supporting schedules, analyses,
including the audit work papers, and other underlying records or documentation
as are reasonably necessary to determine the accuracy of the Closing Date
Balance Sheet.  Buyer and the Company shall reasonably cooperate with Seller and
its Representatives in such examination, including providing answers to
questions asked by Seller and its Representatives reasonably necessary to
determine the accuracy of the Closing Date Balance Sheet.
 
(d) If within thirty (30) days following delivery of the Closing Date Balance
Sheet Seller does not object in writing thereto, then the final, binding and
conclusive Adjustment Amount shall be as computed on such Closing Date Balance
Sheet.  If Seller does object in writing to the computation within such 30-day
period, then Seller and Buyer shall negotiate in good faith and attempt to
resolve their disagreement.  Should such negotiations not result in an agreement
on the final, binding and conclusive Adjustment Amount within twenty (20) days
following the receipt by the Buyer of the Seller’s objection, then the issues
set forth in such objection and unresolved by the parties shall be submitted to
an independent accounting firm of national reputation mutually acceptable to
Seller and Buyer (the "Neutral Auditor").  If Seller and Buyer are unable to
agree on the Neutral Auditor, then Seller and Buyer shall request the American
Arbitration Association to appoint the Neutral Auditor.  All fees and expenses
relating to appointment of the Neutral Auditor and the work, if any, to be
performed by the Neutral Auditor will be borne equally by Seller and
Buyer.  During the review by the Neutral Auditor, each party shall furnish to
the Neutral Auditor such work papers and other documents and information
relating to such objections as the Neutral Auditor may request and are available
to that party or its Subsidiaries (or its independent public accountants) and
will be afforded the opportunity to present to the Neutral Auditor any material
relating to the determination of the matters in dispute and to discuss such
determination with the Neutral Auditor.  The Neutral Auditor will deliver to
Seller and Buyer a written determination (such determination to include a
worksheet setting forth all material calculations used in arriving at such
determination and to be based solely on information provided to the Neutral
Auditor by Seller and Buyer, or their respective Affiliates) of the Adjustment
Amount within thirty (30) days of the engagement of the Neutral Auditor, which
determination will be final, binding and conclusive on the parties.
 
 
 
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(e) Promptly following the establishment of the final, binding and conclusive
Adjustment Amount, the parties shall account to each other as provided for in
this Section 2.4(e).  If the Adjustment Amount is negative, Buyer shall be
entitled to receive a payment from Seller, in cash, in an amount equal to such
negative amount.  If the Adjustment Amount is positive, Seller shall be entitled
to receive a payment from Buyer, in cash, in an amount equal to such positive
amount.  Any such payment shall be due and payable within five (5) Business Days
after the establishment of the final, binding and conclusive Adjustment Amount.
 
Section 2.5 Seller's Closing Deliveries.  At the Closing, Seller shall deliver
or cause to be delivered to Buyer:
 
(a) certificates representing the Shares, duly endorsed in blank or with stock
powers duly endorsed in blank, in proper form for transfer;
 
(b) certificates duly executed by Seller, each dated as of the Closing Date,
certifying as to Seller's compliance with the conditions set forth in
Sections 6.2(a) and 6.2(b);
 
(c) the written resignations of those directors of the Company and its
Subsidiaries from their positions as directors of the Company or such
Subsidiaries as identified in writing by Buyer;
 
(d) the written resignations of those trustees of the Trust Funds as identified
in writing by Buyer;
 
(e) a good standing certificate (or its equivalent) of the Seller, the Company
and each of the Company’s Subsidiaries issued by the applicable secretary of
state, in each case certified as of a reasonably current date;
 
(f) a receipt evidencing Seller's receipt of the Closing Date Cash Payment, duly
executed by Seller;
 
(g) certified copies of the articles of incorporation and bylaws of the Seller,
the Company and the Company’s Subsidiaries and the authorizing resolutions and
incumbency certificates of the Company for this Agreement and the transactions
contemplated hereby.
 
(h) the original stock transfer and corporate minute books (or their equivalent)
of the Company and its Subsidiaries;
 
 
 
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(i) payoff and release letters from the holders of the Indebtedness set forth on
Schedule 3.24 of the Company Disclosure Schedule that (i) reflect the amounts
required in order to pay in full such Indebtedness, (ii) provide that, upon
payment in full of the amounts indicated, all Liens with respect to the assets
of the Company or any of its Subsidiaries shall be terminated and of no further
force and effect, and (iii) authorize Seller, upon payment in full of such
amounts, to record and file releases of such Liens and UCC-3 termination
statements with respect to the financing statements filed against the assets of
the Company or any of its Subsidiaries by the holders of such Liens;
 
(j) all Third Party Consents, if any;
 
(k) a copy of the applicable documents, including but not limited to quitclaim
deeds of transference of the Owned Property included in the Excluded Assets, in
forms reasonably satisfactory to Buyer, duly executed by the Company and Seller
distributing the Excluded Assets to Seller;
 
(l) a non-foreign person affidavit from Seller certifying that Seller is not a
foreign person, in a form that satisfies the requirements of Section 1445 of the
Code and the Treasury Regulations promulgated thereunder;
 
(m) any other items to be delivered by the Company or any Subsidiary or the
Seller under the terms of this Agreement;
 
(n) evidence of transfer or dissolution of Skylawn Reinsurance Company, Ltd.;
and
 
(o) instruments of assumption for Excluded Liabilities as Buyer may reasonably
request, in form reasonably satisfactory to Buyer and its counsel, to effectuate
the assumption of the Excluded Liabilities by Seller.
 
Section 2.6 Buyer’s Closing Deliveries.  At the Closing, Buyer shall deliver or
cause to be delivered to Seller, unless otherwise noted:
 
(a) the Closing Date Cash Payment by wire transfer of immediately available
funds to the account specified by Seller prior to the Closing;
 
(b) a certificate duly executed by an authorized officer of each of Buyer and
Parent, dated as of the Closing Date, certifying as to Buyer’s and Parent's
compliance with the conditions set forth in Sections 6.3(a) and 6.3(b);
 
(c) a good standing certificate (or its equivalent) of Buyer and Parent issued
by the Secretary of State of the State of Delaware as of a reasonably current
date; and
 
(d) Copies of the authorizing resolutions and incumbency certificates of Parent
and Buyer for this Agreement and the transaction contemplated hereby.
 
 
 
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ARTICLE III

 
REPRESENTATIONS AND WARRANTIES OF SELLER

 
Subject to and as qualified by items disclosed in the disclosure schedule (the
"Company Disclosure Schedule") delivered by Seller to Buyer contemporaneously
with the execution of this Agreement (which schedule sets forth, among other
things, items the disclosure of which is necessary or appropriate either in
response to an express disclosure requirement contained in a provision hereof or
as an exception to one or more representations or warranties contained in this
Article III, or to one or more of Seller's covenants contained herein, provided,
however, that disclosure in any section of such schedule shall apply only to the
indicated Section of this Agreement except, with respect to a section in Article
III, to the extent that it is reasonably apparent on the face of such disclosure
that such disclosure is relevant to another Section of Article III of this
Agreement notwithstanding the absence of an appropriate cross reference
thereto), Seller hereby represents and warrants to Buyer, as of the date hereof
and as of the Closing Date, as follows:
 
Section 3.1 Corporate Organization.
 
(a) The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Nevada.  The Company has the requisite
power and authority to own or lease all of its properties and assets and to
carry on its business as it is now being conducted, and is duly licensed or
qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification
necessary.  Schedule 3.1(a) of the Company Disclosure Schedule lists all of the
jurisdictions in which the Company or any Subsidiary is qualified to do business
as a foreign corporation.  Schedule 3.1(a) of the Company Disclosure Schedule
sets forth the names under which the Company has conducted the business of the
Company or any Subsidiary.  The Seller is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Texas.  The
Seller has the requisite power and authority to own or lease all of its
properties and assets and to carry on its business as it is now being conducted.
 
(b) True, complete and correct copies of the articles of incorporation of the
Company and each Subsidiary (the "Company Charter"), and the bylaws of the
Company and each Subsidiary (the "Company Bylaws"), as in effect as of the date
of this Agreement, have previously been delivered to Buyer.
 
(c) Each Subsidiary of the Company (i) is duly incorporated or duly formed, as
applicable to each such Subsidiary, and validly existing and, if applicable, in
good standing under the laws of its jurisdiction of organization, (ii) has the
requisite power and authority or other power and authority to own or lease all
of its properties and assets and to carry on its business as it is now being
conducted and (iii) except where the failure to be so licensed or qualified
would not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect on the Company, is duly licensed or
qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification
necessary.  Schedule 3.1(c) of the Company Disclosure Schedule lists all of the
jurisdictions in which each Subsidiary of the Company is qualified to do
business as a foreign corporation.
 
 
 
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(d) The minute books of the Company previously made available to Buyer contain
true and correct records of all meetings and other corporate actions held or
taken by its shareholders and Board of Directors.
 
Section 3.2 Capitalization.
 
(a) Except as may be modified in connection with the Distribution as set forth
on Schedule 3.2(a) of the Company Disclosure Schedule, the authorized capital
stock of the Company consists of 2,000,000 shares of common stock, $1.00 par
value per share (the "Company Common Stock"), of which 1,449,026 shares are
issued and outstanding and constitute the Shares.  All of the issued and
outstanding shares of Company Common Stock have been duly authorized and validly
issued and are fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof.  No bonds, debentures,
notes or other indebtedness having the right to vote on any matters on which
shareholders of the Company may vote are issued or outstanding.  Except for this
Agreement, the Company and Seller do not have and are not bound by any
outstanding subscriptions, options, warrants, calls, rights, commitments or
agreements of any character calling for the sale, purchase or issuance of, or
the payment of any amount based on, any shares of Company Common Stock, or any
other equity securities of the Company or any securities representing the right
to purchase or otherwise receive any shares of Company Common Stock, or other
equity securities of the Company.  Except for this Agreement and as set forth on
Schedule 3.2(a) of the Company Disclosure Schedule, there are no contractual
obligations of Seller, the Company or any of its Subsidiaries (i) to repurchase,
redeem or otherwise acquire any shares of capital stock of the Company or any
equity security of the Company or its Subsidiaries  or any securities
representing the right to purchase or otherwise receive any shares of capital
stock or any other equity security of the Company or its Subsidiaries, or (ii)
that give any person the right to receive any economic benefit or right similar
to or derived from the economic benefits and rights accruing to holders of
Company Common Stock, or other equity securities of the Company. Seller is the
record and beneficial owner of 100% of the issued and outstanding Company Common
Stock, free and clear of all Liens.  There are no restrictions upon the voting
or transfer of any shares or other equity interests pursuant to the Company
Charter or Company Bylaws, any Law or any agreement to which Seller or the
Company is a party.  Upon delivery of and payment for the Shares at the Closing
as herein provided, good and valid title to the Shares will pass to Buyer, free
and clear of all Liens, other than any Liens arising from acts of Buyer.
 
(b) Schedule 3.2(b) of the Company Disclosure Schedule is a complete and
accurate list of all Subsidiaries of the Company.  Except for any director
qualifying shares as set forth on Schedule 3.2(b) of the Company Disclosure
Schedule and the shares of Lifemark Group Pte Limited, a Hong Kong private
limited company currently owned by Andy Bryant but as to which application has
been made to transfer the shares to the Company or an Affiliate thereof, all of
the issued and outstanding shares of capital stock or other equity ownership
interests of each Subsidiary of the Company are owned by the Company, directly
or indirectly, free and clear of any Liens and all of such shares or equity
ownership interests are duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights.  No Subsidiary of the Company has
or is bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the purchase or issuance
of any shares of capital stock or any other equity security of such Subsidiary
or any securities representing the right to purchase or otherwise receive any
shares of capital stock or any other equity security of such Subsidiary.
 
 
 
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Section 3.3 Authority; No Violation.
 
(a) Each of the Seller and Company has full power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby.  The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly approved and
adopted by the Board of Directors of Seller and Company, as applicable.  No
other corporate proceedings on the part of Seller or Company are necessary to
approve this Agreement or to consummate the transactions contemplated
hereby.  This Agreement has been duly and validly executed and delivered by
Seller and Company and (assuming due authorization, execution and delivery by
Buyer) constitutes the valid and binding obligations of Seller and Company,
enforceable against Seller and Company in accordance with their terms (except as
may be limited by bankruptcy, insolvency, fraudulent transfer, moratorium,
reorganization or similar laws of general applicability relating to or affecting
the rights of creditors generally and subject to general principles of equity
(the "Bankruptcy and Equity Exception")).
 
(b) Neither the execution and delivery of this Agreement by Seller or Company,
nor the consummation by Seller or Company of the transactions contemplated
hereby, nor compliance by Seller or Company with any of the terms or provisions
of this Agreement will (i) violate any provision of the articles of
incorporation or bylaws of Seller, the Company Charter or Company Bylaws, (ii)
assuming that the consents, approvals and filings referred to in Section 3.4 are
duly obtained and/or made, violate any Law, judgment, order, injunction or
decree applicable to Seller, the Company, any of its Subsidiaries or any of
their respective properties or assets or (iii) except as set forth in Schedule
3.3(b) of the Company Disclosure Schedule, violate, conflict with, result in a
breach of any provision of, constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, result in the
termination of or a right of termination or cancellation under, or result in the
creation of any Lien upon any of the respective properties or assets of Seller,
the Company or any of its Subsidiaries under, any Company Contract.
 
Section 3.4 Consents and Approvals.  Except for any notices or filings required
under the HSR Act, any notice required to the California Department of Consumer
Affairs (the "California Consumer Consent"), and any filing required by the
Securities Act or any applicable stock exchange, no consents or approvals of or
filings or registrations with any foreign, federal or state insurance or other
regulatory, self-regulatory or enforcement authorities or any courts,
administrative agencies or commissions or other governmental authorities or
instrumentalities (each a "Governmental Entity") are necessary in connection
with the execution and delivery by Seller and Company of this Agreement or the
consummation by Seller and Company of the transactions contemplated by this
Agreement.
 
 
 
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Section 3.5 Reports; Regulatory Matters.
 
(a) The Company and its Subsidiaries have in all material respects timely filed
or furnished, as applicable, all reports, registrations, statements and
certifications, together with any amendments required to be made with respect
thereto, that they were required to file or furnish, as applicable, since
January 1, 2006 with (i) any state regulatory authority, (ii) any foreign
regulatory authority, and (iii) any self-regulatory authority, (collectively,
"Regulatory Agencies") and with each other applicable Governmental Entity, and
all other reports and statements required to be filed or furnished by them since
January 1, 2006, including any report or statement required to be filed pursuant
to the Laws or Regulatory Laws of any Regulatory Agency or Governmental Entity,
and have paid all fees and assessments due and payable in connection therewith
except those that are being contested in good faith. Except as set forth in
Schedule 3.5(a) of the Company Disclosure Schedule, no Regulatory Agency or
other Governmental Entity has pending any proceeding, enforcement action or, to
the Knowledge of Seller, investigation into the business, disclosures or
operations of the Company or any of its Subsidiaries.  Since January 1, 2006,
there have been no formal, or to the Knowledge of Seller informal, inquiries or
unresolved stop orders by, or disagreements or disputes with, any Regulatory
Agency or other Governmental Entity with respect to the business, operations,
policies or procedures of the Company or any of its Subsidiaries  (other than
normal inquiries made by a Regulatory Agency or other Governmental Entity in the
Ordinary Course).
 
(b) Neither the Company nor any of its Subsidiaries is subject to any
cease-and-desist or other order or enforcement action issued by, or is a party
to any written agreement, consent agreement or memorandum of understanding with,
or is a party to any commitment letter or similar undertaking to, or is subject
to any order or directive by, or has been ordered to pay any civil money penalty
by, or has been since January 1, 2007 a recipient of any supervisory letter
from, or since January 1, 2007 has adopted any policies, procedures or board
resolutions at the request or suggestion of, any Regulatory Agency or other
Governmental Entity that currently restricts or affects in any material respect
the conduct of its business, other than those of general application that apply
to similarly situated companies (each item in this sentence, a "Company
Regulatory Agreement") and other than those set forth on Schedule 3.5(b) of the
Company Disclosure Schedule, nor, except for those set forth on Schedule 3.5(b)
of the Company Disclosure Schedule, has either of the Company or any of its
Subsidiaries  been advised in writing since January 1, 2007 by any Regulatory
Agency or other Governmental Entity that it is considering issuing, initiating,
ordering, or requesting any such Company Regulatory Agreement.
 
 
 
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Section 3.6 Financial Statements.
 
(a) Except as disclosed in Schedule 3.6(a) of the Company Disclosure Schedule,
Seller has delivered to the Buyer (i) the audited consolidated financial
statements of the Company and its Subsidiaries for the years ended March 31,
2010 (to be delivered to Buyer prior to Closing), March 31, 2009 and March 31,
2008, (ii) the unaudited internally generated financial statements for the year
ended March 31, 2010 and (iii) the unaudited interim consolidated financial
statements of the Company and its Subsidiaries for such interim months ended
greater than fifteen (15) days prior to Closing (the "Interim Financial
Statements"), each of which is attached to Schedule 3.6(a) of the Company
Disclosure Schedule (collectively, the financial statements in clauses (i), (ii)
and (iii) the "Company Financial Statements"), each of which have been prepared
in conformity with GAAP (except that the unaudited financial statements do not
reflect normal year end adjustments, none of which are material and adverse, and
are not accompanied by footnotes) consistently applied during the periods
involved, except as otherwise disclosed in the notes thereto.  The Company
Financial Statements are true, correct and complete and fairly present the
financial position of the Company and its Subsidiaries as of the dates thereof
and the results of their operations and cash flows for the periods then ended,
on a basis consistent with the books and records of the Company and its
Subsidiaries, subject, in the case of the unaudited interim consolidated
financial statements, to normal year-end adjustments, none of which are
material.
 
(b) Neither the Company nor any of its Subsidiaries has any, and to the
Knowledge of Seller, there is no reasonable basis for any, liability or
obligation of any nature whatsoever (whether known, unknown, absolute, accrued,
contingent, asserted, unasserted or otherwise and whether due or to become due),
except for those (i) liabilities that are reflected or reserved against on the
balance sheet dated March 31, 2010 (including any notes thereto), (ii)
liabilities incurred in the Ordinary Course since March 31, 2010, and (iii)
liabilities for Transaction Expenses.
 
Section 3.7 Broker's Fees.  Other than Raymond James & Associates, Inc., whose
fees will be paid by the Seller, none of the Seller, the Company nor any of its
Subsidiaries nor any of their respective officers or directors has employed any
broker or finder or incurred any liability for any broker's fees, commissions or
finder's fees in connection with the transactions contemplated by this
Agreement.
 
Section 3.8 Absence of Certain Changes or Events.
 
(a) Since March 31, 2009, no event or events have occurred or condition or
conditions exist that have had or would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect on the Company. As
used in this Agreement, the term "Material Adverse Effect" means, with respect
to the Company, a material adverse effect on (i) the financial condition,
results of operations or business of the Company and its Subsidiaries taken as a
whole (provided, however, that, a "Material Adverse Effect" shall not be deemed
to include effects to the extent resulting from (A) changes, after the date
hereof, in statutory or regulatory accounting requirements applicable to
companies in the industries in which the Company and its Subsidiaries operate,
(B) changes, after the date hereof, in laws, rules, regulations or the
interpretation of laws, rules or regulations by Governmental Entities applicable
to companies in the industries in which the Company and its
Subsidiaries  operate, (C) actions or omissions taken with the prior written
consent of the other party or expressly required by this Agreement, (D) changes,
after the date hereof, in global, national or regional political conditions
(including acts of terrorism or war) or changes in general business or economic
conditions (including changes in the condition of capital markets), (E) any
failure, in and of itself, by the Company to achieve any internal or published
industry projections, forecasts or estimates for any period, and (F) the
disclosure of the fact that Buyer is the prospective acquirer of the Company or
the announcement of the execution of this Agreement, or (ii) the ability of
Seller to timely consummate the transactions contemplated by this Agreement; and
the term "Material Adverse Effect" with respect to Buyer means a material
adverse effect on the ability of Buyer to consummate the transactions
contemplated by this Agreement; provided, however, that the facts,
circumstances, events or changes set forth in clauses (A), (B) and (D) above may
be taken into account in determining whether there is or has been a Material
Adverse Effect with respect to the Company if and only to the extent that such
act, development, occurrence, circumstance, event or change has a
disproportionate impact on the Company and/or its Subsidiaries, relative to the
other participants in the industries in which the Company and/or its
Subsidiaries operate.
 
 
 
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(b) Since March 31, 2009 through and including the date of this Agreement, the
Company and its Subsidiaries have not, except as set forth on Schedule 3.8(b) of
the Company Disclosure Schedule, taken any of the actions contemplated under
Section 5.2.
 
(c) Since March 31, 2009 through and including the date of this Agreement, the
Company and its Subsidiaries have carried on their respective businesses in all
material respects in the Ordinary Course.
 
(d) Since March 31, 2009 through and including the date of this Agreement,
neither the Company nor any of its Subsidiaries has (i) changed any Tax or
financial accounting methods, principles or practices of the Company or its
Subsidiaries affecting its assets, liabilities or businesses, including any
reserving, renewal or residual method, practice or policy, or (ii) except for
distributions by wholly owned Subsidiaries of the Company to the Company or
another wholly owned Subsidiary of the Company, made or declared any
distribution in cash or kind to its shareholder or shareholders or repurchased
any shares of its capital stock or other equity interests.
 
Section 3.9 Legal Proceedings.
 
(a) Except as set forth in Schedule 3.9(a) of the Company Disclosure Schedule,
and except for litigation arising in the Ordinary Course (none of which
individually involved asserted damages of more than $25,000 or all such claims
in the aggregate not exceeding $100,000), none of the Company nor any of its
Subsidiaries is a party to any, and there are no pending or, to the Knowledge of
Seller, threatened, legal, administrative, arbitral or other proceedings,
claims, actions, suits, governmental or regulatory investigations of any nature
against the Company or any of its Subsidiaries or to which any of their assets
are subject, and no such proceedings, claims, actions, suits or investigations
disclosed in Schedule 3.9(a) of the Company Disclosure Schedule could reasonably
be expected to result, individually or in the aggregate, in a Material Adverse
Effect with respect to the Company.
 
 
 
 
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(b) There is no judgment, settlement agreement, order, injunction, decree or
regulatory restriction imposed upon the Company, any of its Subsidiaries or the
assets of the Company or any of its Subsidiaries.
 
(c) There are no pending or, to the Knowledge of Seller, threatened, legal,
administrative, arbitral or other proceedings, claims, actions, suits,
governmental or regulatory investigations of any nature against the Seller that
purport to affect the legality, validity or enforceability of this Agreement or
the consummation of the transactions contemplated by this Agreement.
 
Section 3.10 Taxes and Tax Returns.  Except as set forth in Schedule 3.10 of the
Company Disclosure Schedule:
 
(a) Each of the Company and its Subsidiaries has duly and timely filed
(including all applicable extensions) all Tax Returns required to be filed by it
on or prior to the date of this Agreement (all such Tax Returns being accurate
and complete in all material respects), and has paid all Taxes (whether or not
shown on any Tax Return) that are due and owing.
 
(b) No claim has ever been made in writing by an authority in a jurisdiction
where the Company or any of its Subsidiaries does not file Tax Returns that it
is or may be subject to taxation by that jurisdiction.
 
(c) The unpaid Taxes of the Company and its Subsidiaries (i) did not as of the
date of the Interim Financial Statements exceed the reserve for Tax liability
(excluding any reserve for deferred Taxes established to reflect the timing
differences between book and Tax income) set forth on the face of the balance
sheets (rather than in any notes thereto) contained in the Interim Financial
Statements and (ii) will not, as of the Closing Date, exceed the reserve for Tax
liability (excluding any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) included in the Closing Date
Balance Sheet.
 
(d) There are no outstanding extensions or waivers of any statute of limitations
filed with any Governmental Entity responsible for assessing or collecting Taxes
in respect of any Tax Return which includes the Company or any of its
Subsidiaries.
 
(e) Neither the Company nor any Subsidiary has any liability for the Taxes of
any Person (other than Taxes of the Company and any Subsidiary) (i) under
Treasury Regulation Section 1.1502-6 (or any similar provision of state, local,
or foreign law), (ii) as  a transferee or successor, or (iii) by contract or
agreement.
 
 
 
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(f) The Company and its Subsidiaries have withheld and paid all amounts required
by Law or by agreement to be withheld from the wages, salaries and other
payments to any employee, independent contractor, other service provider,
creditor, stockholder, or other third party, and is not liable for any Taxes or
any penalty for failure to withhold or pay such amounts.
 
(g) The Company is not and has not been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in section 897(c)(1)(A)(ii) of the Code.
 
(h) There are no disputes, investigations or audits pending, or to the Knowledge
of Seller, threatened, nor any written claims asserted, for Taxes or assessments
upon either of the Company or any of its Subsidiaries  for which such Company
does not have reserves that are adequate under GAAP.
 
(i) Neither of the Company nor any of its Subsidiaries is currently the
beneficiary of any extension of time within which to file any Tax Return or is a
party to or is bound by any Tax Sharing Agreement (other than such an agreement
or arrangement exclusively between or among each of the Company and its
Subsidiaries).
 
(j) Within the past two years (or otherwise as part of a "plan (or series of
related transactions)" within the meaning of Section 355(e) of the Code neither
of the Company nor any of its Subsidiaries has been a "distributing corporation"
or a "controlled corporation" in a distribution intended to qualify under
Section 355 of the Code.
 
(k) There are no Liens for Taxes, other than Permitted Liens, on the assets of
the Company or any of its Subsidiaries.
 
(l) There are no powers of attorney that are currently in force with respect to
any matter relating to Taxes that will continue in effect after the Closing
Date.
 
(m) There are no outstanding rulings or requests for rulings with any
Governmental Entity addressed, directly or indirectly, to either of the Company
or any of its Subsidiaries that are, or if issued, would be binding on either of
the Company or any of its Subsidiaries for any Post-Closing Tax Period
 
(n) Neither the Company nor any of its Subsidiaries is a party to any agreement,
contract, arrangement, or plan that has resulted or would result, separately or
in the aggregate, in the payment of any ‘‘excess parachute payment’’ within the
meaning of Section 280G of the Code (or any corresponding provision of state,
local, or non-U.S. Tax law).
 
Section 3.11 Employee Matters.
 
 
 
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(a) Schedule 3.11(a) of the Company Disclosure Schedule sets forth a true,
complete and correct list of each "employee benefit plan" as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), whether or not subject to ERISA, and each employment, consulting,
bonus, incentive or deferred compensation, vacation, stock option or other
equity-based, severance, termination, retention, change of control,
profit-sharing, fringe benefit or other similar plan, program, agreement or
commitment, whether written or unwritten, for the benefit of any employee,
former employee, director or former director of the Company or any of its
Subsidiaries (i) entered into, maintained or contributed to by the Company or
any of its Subsidiaries, or (ii) to which the Company or any of its
Subsidiaries  is obligated to contribute, or with respect to which the Company
or any of its Subsidiaries  has any liability, direct or indirect, contingent or
otherwise (including any liability arising out of an indemnification, guarantee,
hold harmless or similar agreement), or (iii) that otherwise provides benefits
to any current, former or future employee, officer or director of the Company or
any of its Subsidiaries  or to any beneficiary or dependent thereof (such plans,
programs, agreements and commitments, herein referred to as the "Company Benefit
Plans").  With respect to each Company Benefit Plan, the Company has delivered
or made available to Buyer a true, correct and complete copy of: (i) each
writing constituting a part of such Company Benefit Plan; (ii) the three most
recent Annual Reports (Form 5500 Series) and accompanying schedule, if any;
(iii) the current summary plan description and any material modifications
thereto, if any; and (iv) the most recent IRS determination letter, if
applicable.  Except as specifically provided in the foregoing documents
delivered or made available to Buyer, or as disclosed in Schedule 3.11(a), there
are no amendments to any Company Benefit Plan that have been adopted or approved
nor has the Company undertaken to make any such amendments or to adopt or
approve any new Company Benefit Plan.
 
(b) Except as set forth on Schedule 3.11(b) of the Company Disclosure Schedule,
(i) the Company Benefit Plans have been operated and administered in all
material respects in accordance with their terms and with applicable Law; (ii)
each Company Benefit Plan intended to be "qualified" within the meaning of
Section 401(a) of the Code (a "Qualified Plan"), has received a favorable
determination letter from the Internal Revenue Service that has not been
revoked, and has pending an application for such determination from the Internal
Revenue Service with respect to those provisions for which the remedial
amendment period under Section 401(b) of the Code has not expired (if
applicable), and no circumstances exist and no events have occurred that could
adversely affect the qualified status of any Qualified Plan or the related
trust; (iii) no Company Benefit Plan is subject to Title IV or Section 302 of
ERISA or Section 412, 430, 436, or 4971 of the Code (a "Seller DB Plan"); (iv)
no Company Benefit Plan provides material benefits, including, without
limitation, death or medical benefits (whether or not insured), with respect to
current or former employees or directors of the Company or its Subsidiaries
beyond their retirement or other termination of service, other than (A)
continuation coverage mandated the Consolidated Omnibus Reconciliation Act of
1985, as amended, or similar state Law, in each case, at no expense to the
Company or its Subsidiaries, or (B) death benefits or retirement benefits under
any Qualified Plan; (v) no Controlled Group Liability has been incurred by the
Company, any of its Subsidiaries or any of their respective ERISA Affiliates
that has not been satisfied in full, and, without limiting the generality of the
foregoing, neither the Company nor any of its Subsidiaries, nor any of their
respective ERISA Affiliates, has engaged in any transaction described in Section
4069 or 4204 or 4212 of ERISA; (vi) neither the Company nor any of its
Subsidiaries nor any of their ERISA Affiliates contributes to a "multiemployer
plan" (as such term is defined in Section 3(37) of ERISA) or a plan that has two
or more contributing sponsors at least two of whom are not under common control,
within the meaning of Section 4063 of ERISA; (vii) all required, declared or
discretionary (in accordance with historical practices) payments, premiums,
contributions, reimbursements or accruals with respect to the Company Benefit
Plans in respect of current or prior plan years have been paid or accrued in
accordance with GAAP; (viii) there is no pending or, to the Knowledge of Seller,
threatened or anticipated claim (other than routine claims for benefits) by, on
behalf of or against the Company Benefit Plans or any trusts related thereto
which could reasonably be expected to result in any material liability of the
Company or any of its Subsidiaries, (ix) each Company Benefit Plan that is an
employee welfare benefit plan under Section 3(1) of ERISA is either (X) funded
through an insurance company contract and is not a "welfare benefit fund" within
the meaning of Section 419 of the Code or (Y) is unfunded, and (x) no Company
Benefit Plan is intended to meet the requirements of Code Section
501(c)(9).  There has been no communication to employees by the Seller, the
Company or any Subsidiaries that could reasonably be interpreted to promise or
guarantee employees of the Company and its Subsidiaries retiree health or life
insurance or other retiree death benefits.
 
 
 
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(c) Except as set forth on Schedule 3.11(c) of the Company Disclosure Schedule,
neither the execution or delivery of this Agreement nor the consummation of the
transactions contemplated by this Agreement will, either alone or in conjunction
with any other event, (i) result in any material payment or benefit becoming due
or payable, or required to be provided, to any director, employee or independent
contractor of the Company or any of its Subsidiaries or to such individuals in
the aggregate, (ii) materially increase the amount or value of any benefit or
compensation otherwise payable or required to be provided to any such director,
employee or independent contractor, (iii) result in the acceleration of the time
of payment, vesting, exercisability or funding of any such benefit or
compensation, (iv) result in any material limitation on the right of the Company
or any of its Subsidiaries  to amend, merge or, terminate any Company Benefit
Plan or related trust, or (v) be considered a change in control for any purpose
under any Company Benefit Plan or related trust. No Company Benefit Plan
provides for (A) the reimbursement of excise Taxes under Section 4999 of the
Code or any income Taxes under the Code or (B) payments that would be
non-deductible under Code Sections 162(m) or 280G.
 
(d) Except as set forth on Schedule 3.11(d) of the Company’s Disclosure
Schedule, no labor organization or group of employees of the Company or any of
its Subsidiaries has made a pending demand for recognition or certification, and
there are no representation or certification proceedings or petitions seeking a
representation proceeding presently pending or threatened to be brought or
filed, with the National Labor Relations Board or any other labor relations
tribunal or authority.  Except as set forth on Schedule 3.11(d), there are no
material organizing activities, strikes, work stoppages, slowdowns, lockouts,
arbitrations or grievances, or other material labor disputes pending or, to the
Knowledge of Seller, threatened against or involving the Company or any of its
Subsidiaries.
 
 
 
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(e) The Company and its Subsidiaries do not maintain any material Company
Benefit Plans (i) outside of the U.S. or (ii) for the benefit of any individual
whose principal place of employment is outside of the U.S.
 
(f) Schedule 3.11(f) of the Company’s Disclosure Schedule lists all employees of
the Company and its Subsidiaries as of December 31, 2009 and, the wages paid to
such employees in 2009. As of the date hereof, neither the Company nor its
Subsidiaries has increased, nor has any such party agreed to increase, salaries
or other compensation to employees from the wages listed on Schedule 3.11(f).
 
(g) The Company and its Subsidiaries have acted in accordance with applicable
Law when classifying a person as an independent contractor or as a self-employed
person.
 
(h) The Company and its Subsidiaries have complied with the Worker Adjustment
and Retraining Notification Act and all similar state laws.
 
(i) No liability under Title IV of ERISA has been or to the Knowledge of Seller,
is expected to be incurred by the Company or any of its Subsidiaries.  Without
limiting the generality of the foregoing, (A) no current or former employee of
the Company or any of its Subsidiaries participates or previously participated
in a Seller DB Plan, (B) the Seller has not taken any action to terminate a
Seller DB Plan and Seller has no intention of terminating a Seller DB Plan prior
to, or during the 120 days following, the Closing Date; and (C) neither the
Seller, nor the Company, nor any of their ERISA Affiliates currently has, or has
had during the six (6) year period prior to the date hereof, any liability under
Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code.
 
Section 3.12 Compliance With Applicable Law.
 
(a) Schedule 3.12(a) of the Company’s Disclosure Schedule sets forth a full,
complete and accurate list of all Permits held by, or required or necessary to
be held by, the Company or any of its Subsidiaries in connection with the
current conduct of the business and operations of the Company and its
Subsidiaries (the "Existing Permits").  All the Existing Permits are, and as of
the Closing will be, in full force and effect.  Except as set forth in Schedule
3.12(a) of the Company Disclosure Schedule, the consummation of the transactions
contemplated hereby will not conflict with the terms of, result in default
under, or violate the terms of, any Existing Permit or result in the termination
of, or require any consent or other action pursuant to, any of the Existing
Permits.
 
(b) The Company and its Subsidiaries are not in default under any Law applicable
to the Company or any of its Subsidiaries, including without limitation the
Federal Trade Commission’s Funeral Industry Practices Regulation, and neither
the Seller nor the Company has received any written notice of any alleged
noncompliance relating to the Company or its Subsidiaries since March 31, 2007.
 
 
 
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(c) The Company and each of its Subsidiaries has properly administered in all
material respects all accounts for which it acts as a fiduciary, including
accounts for which it serves as a trustee, agent, custodian, personal
representative, guardian, or conservator in accordance with the terms of the
governing documents and applicable Law.  None of the Company, any of its
Subsidiaries, or any director or officer or any employee of the Company or of
any of its Subsidiaries has committed any breach of trust or fiduciary duty with
respect to any such fiduciary account and the accountings for each such
fiduciary account are true and correct in all material respects and accurately
reflect in all material respects the assets of such fiduciary account.
 
Section 3.13 Certain Contracts.
 
(a) Schedule 3.13(a) of the Company Disclosure Schedule sets forth a complete
and accurate list of each of the following contracts and other agreements (each
a "Company Contract") to which the Company or any of its Subsidiaries is bound
or is a party, other than contracts related to the Distribution, which will be
disclosed in Schedule 5.12 of the Company Disclosure Schedule:
 
(i) equipment leases and lease purchase agreements with a remaining term of at
least one year and remaining aggregate payments in excess of $25,000 under which
the Company or any of its Subsidiaries is lessor or lessee, and any pledges,
conditional sale or title retention agreements, and security agreements;
 
(ii) any agreement containing a non-compete or client or customer non-solicit
requirement or other provision that restricts the conduct of, or the manner of
conducting, any line of business in any geographic area, or upon consummation of
the transactions contemplated hereby could restrict the ability of the Company
or any of its Subsidiaries to engage in any line of business in any geographic
area;
 
(iii) any agreement that obligates either of the Company or any of its
Subsidiaries to conduct business on an exclusive or preferential basis with any
third party or upon consummation of the transactions contemplated hereby will
obligate Buyer, the Company or any of their respective Subsidiaries to conduct
business with any third party on an exclusive or preferential basis;
 
(iv) any agreement with or to a labor union or guild (including any collective
bargaining agreement);
 
(v) any joint venture or partnership agreement;
 
(vi) any indenture, credit agreement, loan agreement, guarantee or other
agreement relating to Indebtedness of the Company or any of its Subsidiaries, or
of any third party for which the Company or its Subsidiaries is a guarantor or
is otherwise liable that will remain in effect after the Closing;
 
 
 
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(vii) any agreement that requires the Company or any of its Subsidiaries  to
make an investment in any Person in an amount in excess of $50,000;
 
(viii) any agreement that provides for the indemnification of any officer,
director or employee of the Company or any of its Subsidiaries;
 
(ix) any merchandise supply agreements, which such agreements (A) are exclusive,
or (B) involve annual payments of more than $50,000;
 
(x) any third party cemetery maintenance, management, sales or administrative
services agreements; and
 
(xi) any agreement that would prevent, materially delay or materially impede the
Company's ability to consummate the transactions contemplated by this Agreement.
 
(b) Seller has delivered, or made available to Buyer true, correct and complete
copies of all Company Contracts (other than the Preneed Agreements), including
any and all modifications or amendments thereto.
 
(c)  (i) Each Company Contract is valid and binding on the Company or its
Subsidiaries, as applicable, enforceable against the parties thereto in
accordance with its terms, and is in full force and effect, subject to the
Bankruptcy and Equity Exception, (ii) the Company and each of its Subsidiaries
and, to the Knowledge of Seller, each other party thereto has duly performed all
obligations required to be performed by it to date under the Company Contract
and (iii) no event or condition exists that constitutes or, after notice or
lapse of time or both, will constitute, a breach, violation or default on the
part of the Company or any of its Subsidiaries or, to the Knowledge of Seller,
any other party thereto under any such Company Contract.  No written notice of
default or termination has been received under any Company Contract.  There are
no disputes pending or, to the Knowledge of Seller, threatened with respect to
any Company Contract.
 
(d) Except as set forth on Schedule 3.13(d) of the Company’s Disclosure
Schedule, no event or circumstance has occurred, or will occur by reason of the
execution of this Agreement or the consummation of any of the transactions
contemplated hereby that, with notice or lapse of time or both, would constitute
any event of default thereunder or would result in a termination thereof or
would allow the other party to make any material modification or amendment
thereto or exercise other material right thereunder.
 
Section 3.14 Inventories, Accounts Receivable.  The inventories of the Company
as shown on the Company Financial Statements are reflected at cost.  All
accounts receivable of the Company represent bona fide sales actually made in
the Ordinary Course and, subject to the allowance for doubtful accounts set
forth in the Company Financial Statements, are, in the aggregate, collectible in
the Ordinary Course, and to the Knowledge of Seller, without set off or
counterclaim. The Company has good and valid title to the accounts receivable
free and clear of all Liens.
 
 
 
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Section 3.15 Preneed Agreements, Trust Accounts and Insurance.
 
(a) The Company and its Subsidiaries have complied in all material respects with
the terms and conditions of the Preneed Agreements and all Laws and Regulatory
Laws related thereto.  The forms of each of the Preneed Agreements are in
compliance in all material respects with all Laws and Regulatory Laws related
thereto.  To the Knowledge of Seller, no other party to any Preneed Agreement is
in default or breach of any Preneed Agreement.  All funds received by the
Company and its Subsidiaries in connection with Preneed Agreements have been,
and as of the Closing will be, set aside in compliance with all Laws and
Regulatory Laws related thereto.
 
(b) The funds (including interest) received in respect of each of the trust
funded Preneed Agreements, as well as all funds designated for endowment or
perpetual care (collectively, the "Trust Funds"), have been deposited, held,
administered and reported in conformity with the terms of the Preneed
Agreements, the interment rights agreements and applicable Laws and Regulatory
Laws, and all Taxes related thereto have been paid or properly remitted.  All
withdrawals from and investment and other uses of the Trust Funds have been made
in accordance with all applicable Laws and Regulatory Laws.  All such Trust
Funds are fully identified on Schedule 3.15(b) of the Company Disclosure
Schedule, including a list of each trust account, the location of each and the
amount held in trust and the obligation of the Company with respect
thereto.  Seller made available to Buyer copies of all trust agreements, copies
of the December 31, 2009 bank statements related to such trusts and copies of
the most recent audit or other report furnished to or prepared by the state
regulatory agency which oversees such trusts. At Closing, the amount in each of
the Trust Funds will equal or exceed the amounts reflected on their respective
December 31, 2009 bank statements, subject to market gains and reductions for
market losses, withdrawals and deposits made in the Ordinary Course.
 
(c) For those Preneed Agreements that are funded by insurance, all insurance
policies required to fund those Preneed Agreements are in force and all premiums
for such policies that are required to be paid prior to the date hereof have
been paid, except as set forth on Schedule 3.15(c) of the Company Disclosure
Schedule.  All such insurance policies are fully identified on Schedule 3.15(c)
of the Company Disclosure Schedule.
 
(d) The market value of the accounts, trusts or other deposits held pursuant to
each of the Preneed Agreements is equal to or greater than the current cost of
performing such Preneed Agreement.  All liabilities for undelivered funeral or
cemetery merchandise are recorded at the current cost to deliver such
merchandise.  The Company and/or its Subsidiaries are current, and as of the
Closing will be current, with respect to all commissions collected on behalf of
or payable to commissioned sales Persons in respect of each of the Preneed
Agreements.
 
 
 
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Section 3.16 Real Property.  Schedule 3.16 of the Company Disclosure Schedule
sets forth a correct and complete list of all real properties owned, leased or
otherwise used by the Company and its Subsidiaries along with a designation as
to whether the property is owned or leased.  The applicable Company or one of
its Subsidiaries (a) has good and marketable title to all the properties and
assets reflected as being owned in Schedule 3.16 of the Company Disclosure
Schedule by such Company or one of its Subsidiaries or acquired after the date
thereof (the "Owned Properties"), free and clear of all Liens, except for
Permitted Liens on or set forth on Schedule 3.16 and (b) is the lessee of all
leasehold estates described in Schedule 3.16 of the Company Disclosure Schedule
(except for leases that have expired by their terms since the date thereof)
(collectively with the Owned Properties, the "Real Property"), free and clear of
all Liens, except for Permitted Liens, and is in possession of the properties
purported to be leased thereunder, and each such lease is valid, without default
thereunder by the lessee or, to the Knowledge of Seller, the lessor.  Except as
set forth on Schedule 3.16 of the Company Disclosure Schedule, with respect to
the Real Property:
 
(a) no portion of the Real Property is subject to any pending condemnation
proceeding or proceeding by any Governmental Entity materially adverse to the
Real Property and to the Knowledge of Seller, there is no threatened
condemnation or proceeding with respect thereto;
 
(b) the structures, improvements and fixtures at or upon the Real Property are
in good operating condition for their intended use in all material respects
subject to the provision of usual and customary maintenance and repair performed
in the Ordinary Course with respect to similar properties of like age and
construction;
 
(c) other than the Real Property leases set forth on Schedule 3.16 of the
Company Disclosure Schedule, there are no contracts or agreements to which the
Company or any of its Subsidiaries is a party or by which any of the Real
Property is bound, granting to any Person the right of use or occupancy of any
portion of the Real Property; and
 
(d) the existing improvements and the continuation of each of the businesses
presently being conducted on the Real Property is in compliance with all zoning
Laws in all material respects, and to the Knowledge of Seller, there are no
pending changes in any zoning or similar Laws that would reasonably be expected
to render any part of the businesses of the Company or its Subsidiaries as
presently conducted illegal or uneconomical;
 
Section 3.17 Assets.  Schedule 3.17 of the Company Disclosure Schedule sets
forth a correct and complete list, as of March 31, 2010, of all material
tangible personal property owned, leased or used by the Company or its
Subsidiaries, including without limitation all furniture, fixtures, equipment
and vehicles.  The Company and its Subsidiaries have good and marketable title
to all of the material tangible personal property used by them, free and clear
of all Liens, except for Permitted Liens. Such assets are in good operating
condition and repair (subject in all cases to ordinary wear and tear) as
necessary for the uses for which they are used in the business of the Company
and its Subsidiaries and, together with the Real Property, will constitute all
the assets, properties, interests in properties and rights necessary to permit
the Company and its Subsidiaries to carry on their business after the Closing as
the same is now being conducted.
 
 
 
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Section 3.18 Grave Spaces.  The Company has properly maintained and at Closing
will have in its possession detailed records describing each burial in any of
its cemeteries, showing the date of burial (with respect to the Hayward Chapel
of the Chimes Memorial Park and Funeral Home, only of such burial occurred after
1960), the name of the person buried and the location of such burial.
 
Section 3.19 Intellectual Property.  Schedule 3.19 of the Company Disclosure
Schedule sets forth correct and complete lists all of the patents, trademarks,
service marks, trade names, copyrights, whether registered or unregistered,
owned by the Company and/or its Subsidiaries and all such material rights and
other proprietary rights that are licensed to the Company and/or its
Subsidiaries, other than any software licenses (collectively the "Company
Intellectual Property Rights").  The Company Intellectual Property Rights
together with any software licenses held by the Company or its Subsidiaries
constitute all of the intellectual property and other proprietary rights
necessary to conduct the business of the Company and its Subsidiaries as now
conducted.  The Company or its Subsidiaries own and possess all right, title and
interest in the Company Intellectual Property Rights owned by the Company and/or
its Subsidiaries, free and clear of any Liens other than Permitted Liens.  To
the Knowledge of Seller, no Person has infringed or is infringing any of the
Company Intellectual Property Rights and the Company has not entered into any
agreement to indemnify any other party against any charge of infringement of any
of the Company Intellectual Property Rights.  Neither the Company nor any of its
Subsidiaries violates or infringes any intellectual property right of any other
Person, and neither the Company nor any of its Subsidiaries has received any
written communication alleging that it violates or infringes the Intellectual
Property of any other Person.  Neither the Company nor any of its Subsidiaries
has been sued for infringing any Intellectual Property of another Person.  There
is no claim or demand of any Person pertaining to, or any proceeding which is
pending or, to the Knowledge of Seller, threatened, that challenges the rights
of the Company or any of its Subsidiaries in respect of the Company Intellectual
Property Rights, or that claims that any default exists under any Company
Intellectual Property Rights.  None of the Company Intellectual Property Rights
are subject to any outstanding order, ruling, decree, judgment or stipulation by
or with any court, tribunal, arbitrator, or other Governmental Entity.
 
Section 3.20 Environmental Liability.
 
(a) The Company or its Subsidiaries possess all material environmental Permits
and approvals necessary for the Company and its Subsidiaries to conduct their
business as the is now being conducted.  Set forth on Schedule 3.20(a) of the
Company Disclosure Schedule is a complete and accurate list of all environmental
Permits possessed by the Company and/or its Subsidiaries.
 
(b) Except as set forth on Schedule 3.20(b) of the Company Disclosure Schedule,
neither the Company nor its Subsidiaries has engaged in or permitted any
operations or activities upon, or any use or occupancy of, the Real Property, or
any portion thereof, resulting in the storage, emission, release, discharge,
dumping or disposal of any Hazardous Materials on, under, in or about the Real
Property, in violation of any applicable environmental laws in any material
respect. Except as set forth on Schedule 3.20(b) of the Company Disclosure
Schedule or as otherwise identified in the Reports, to the Knowledge of Seller,
there are no Hazardous Materials present on or under any Real Property in
quantities or concentrations that exceed applicable standards established under
applicable Laws.
 
 
 
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(c) There are no legal, administrative, arbitral or other proceedings, claims,
actions, causes of action or notices with respect to any environmental, health
or safety matters or any private or governmental environmental, health or safety
investigations or remediation activities of any nature, whether relating to the
Real Property or otherwise, seeking to impose, or, to the Knowledge of Seller,
that are reasonably likely to result in, any material liability (including
without limitation STRICT LIABILITY) or obligation of the Company or any of its
Subsidiaries arising under Law, including any local, state or federal
environmental, health or safety statute, regulation or ordinance, or any other
requirement of any Governmental Entity, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, and
any similar state laws, pending or, to the Knowledge of Seller, threatened
against the Company or any of its Subsidiaries.
 
(d) Except as set forth in Schedule 3.20(d) of the Company Disclosure Schedule,
neither the Company nor any of its Subsidiaries is subject to any agreement,
order, judgment, decree, letter or memorandum by or with any Governmental Entity
or third party imposing any material liability or obligation with respect to any
of the foregoing.
 
Section 3.21 Insurance.  The Company and its Subsidiaries maintain insurance in
such amounts, and in respect of such risks, as are prudent for the business
conducted by them.  A copy of all of the Company and its Subsidiaries’ insurance
contracts and policies (including without limitation policies providing
property, casualty, liability, director & officer, and workers’ compensation
coverage) have been delivered or made available to Buyer, are in full force and
effect and will continue to be renewed and/or maintained so as to be in full
force and effect up to the Closing Date.
 
Section 3.22 Intercompany Accounts and Agreements.
 
(a) Schedule 3.22 of the Company Disclosure Schedule contains a complete list of
all existing material intercompany arrangements between Seller and its
Affiliates (other than the Company and its Subsidiaries), on the one hand, and
the Company or its Subsidiaries, on the other hand.  The parties thereto have
complied with the terms and conditions of all agreements listed in Schedule 3.22
of the Company Disclosure Schedule.
 
(b) No executive officer or director of Seller or any of its Subsidiaries or the
Company or any of its Subsidiaries owns, leases or licenses or is an Affiliate
of any person that owns, leases or licenses any assets which are used by the
Company or any of its Subsidiaries to conduct its business as it is currently
conducted.  Except as set forth in Schedule 3.22 of the Company Disclosure
Schedule and except for any employment agreement or other benefit or
compensation arrangements to which the Company or any of its Subsidiaries is a
party, neither the Company nor any Subsidiary is a party to any agreement,
arrangement or other understanding with any executive officer or director of the
Company or any of its Subsidiaries.
 
 
 
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Section 3.23 INTENTIONALLY LEFT BLANK
 
Section 3.24 Indebtedness.  Except as set forth on Schedule 3.24 of the
Disclosure Schedule, which schedule sets forth the Indebtedness of the Company
and its Subsidiaries, the Company and its Subsidiaries do not have any
Indebtedness and are not liable for any Indebtedness of any other Person.
 
Section 3.25 Inventory of Cemeteries.  The real property owned by the Company
and the saleable inventories of interment spaces, niches, lawn crypts, mausoleum
spaces and undeveloped acreage as of March 31, 2010 is as set forth on Schedule
3.25 of the Company’s Disclosure Schedule.
 
Section 3.26 Volume.  The number of funerals, by type, cremations, interments,
entombments and burials by location of the business for each of 2009, 2008 and
2007 are as set forth on Schedule 3.26 of the Company’s Disclosure Schedule.
 
Section 3.27 Accuracy of Information Furnished.  No representation, statement,
or information contained in this Agreement (including, the Company Disclosure
Schedule) or any agreement or document executed at the Closing in connection
herewith by the Company or the Seller contains any untrue statement of a
material fact or omits any material fact necessary to make the information
contained therein not misleading.
 
ARTICLE IV

 
REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT

 
Subject to and as qualified by items disclosed in the disclosure schedule (the
"Buyer Disclosure Schedule") delivered by Buyer and Parent contemporaneously
with the execution of this Agreement (which schedule sets forth, among other
things, items the disclosure of which is necessary or appropriate either in
response to an express disclosure requirement contained in a provision hereof or
as an exception to one or more representations or warranties contained in this
Article IV, or to one or more of Buyer’s or Parent's covenants contained herein,
provided, however, that disclosure in any section of such schedule shall apply
only to the indicated Section of this Agreement except, with respect to a
Section in Article IV, to the extent that it is reasonably apparent on the face
of such disclosure that such disclosure is relevant to another Section of
Article IV of this Agreement notwithstanding the absence of an appropriate cross
reference thereto). Each of Buyer and Parent jointly and severally hereby
represents and warrants, as of the date hereof and as of the Closing Date, to
Seller as follows:
 
Section 4.1 Organization.  Buyer is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Delaware.  Parent is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware.  Each of
Parent and Buyer has the requisite power and authority to own or lease all of
its properties and assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the character or location
of the properties and assets owned or leased by it makes such licensing or
qualification necessary.
 
 
 
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Section 4.2 Authority; No Violation.
 
(a) Each of Parent and Buyer has full power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby.  The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly approved and adopted
by the members of the Buyer and the Executive Committee of Parent and no other
company proceedings on the part of Buyer or Parent are necessary to approve this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by Buyer and Parent and
(assuming due authorization, execution and delivery by Seller) constitutes the
valid and binding obligation of Buyer and Parent, enforceable against each of
them it in accordance with its terms (subject to the Bankruptcy and Equity
Exception).
 
(b) Neither the execution and delivery of this Agreement by Buyer and Parent,
nor the consummation by Buyer and Parent of the transactions contemplated
hereby, nor compliance by Buyer and Parent with any of the terms or provisions
of this Agreement, will (i) violate any provision of either of their constituent
documents, (ii) assuming that the consents, approvals and filings referred to in
Section 4.3 are duly obtained and/or made, violate any Law, judgment, order,
injunction or decree applicable to Buyer or Parent, or any of their respective
properties or assets or (iii) violate, conflict with, result in a breach of any
provision of, constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, result in the termination of
or a right of termination or cancellation under, or result in the creation of
any Lien upon any of the properties or assets of Buyer or Parent under any of
the terms, conditions or provisions of any note, bond, mortgage, indenture, deed
of trust, license, lease, franchise, permit, agreement or other instrument or
obligation to which Buyer or Parent is a party or by which any of their
respective properties or assets is bound or affected.
 
Section 4.3 Consents and Approvals.  Except for any notices or filings required
under the HSR Act and except for the California Consumer Consent, no consents or
approvals of or filings or registrations with any Governmental Entity are
necessary in connection with the consummation by Buyer or Parent of the
transactions contemplated by this Agreement. No consents or approvals of or
filings or registrations with any Governmental Entity are necessary in
connection with the execution and delivery by Buyer or Parent of this Agreement.
 
Section 4.4 Brokers.  Neither Buyer nor any of its officers or directors nor any
Person acting on its behalf has employed any broker or finder or incurred any
liability for any broker's fees, commissions or finder's fees in connection with
the transactions contemplated by this Agreement.
 
 
 
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Section 4.5 Financing.  Parent and Buyer have sufficient sources of financing in
order to consummate the transactions contemplated by this Agreement and to
fulfill their respective obligations hereunder, including payment to Seller of
the Closing Date Cash Payment.
 
Section 4.6 Solvency.  Immediately after giving effect to the transactions
contemplated by this Agreement and the closing of any financing obtained by
Buyer or any of its Affiliates in order to effect the transactions contemplated
by this Agreement, each of Buyer and Parent shall be able to pay their
respective debts as they become due and shall own property having a fair
saleable value greater than the amounts required to pay its debts (including a
reasonable estimate of the amount of all contingent liabilities).  Immediately
after giving effect to the transactions contemplated by this Agreement and the
closing of any financing to be obtained by Buyer or any of its Affiliates in
order to effect the transactions contemplated by this Agreement, each of Buyer
and Parent shall have adequate capital to carry on its business.  No transfer of
property is being made and no obligation is being incurred in connection with
the transactions contemplated by  this Agreement and the closing of any
financing to be obtained by Buyer or any of its Affiliates in order to effect
the transactions contemplated by this Agreement with the intent to hinder, delay
or defraud either present or future creditors of Buyer or Parent.
 
Section 4.7 Acquisition of Shares for Investment.  Buyer is acquiring the Shares
for investment purposes and not with a view toward, or for offer or sale in
connection with, any distribution thereof in violation of the Securities Act, or
any applicable state securities Laws.  Buyer acknowledges that the Shares have
not been registered under the Securities Act or under any state securities laws,
and that Buyer cannot offer for sale, sell, pledge, transfer, or otherwise
dispose of the Shares without registration under the Securities Act and any
applicable state securities laws, except pursuant to an exemption from such
registration available thereunder.
 
Section 4.8 Due Diligence by Parent and Buyer.  Each of Parent and Buyer
acknowledges that it has conducted to its satisfaction an independent
investigation of the financial condition, results of operations, assets,
liabilities, properties and projected operations of the Company and, in making
its determination to proceed with the transactions contemplated by this
Agreement.  Each of Parent and Buyer has relied solely on the results of its own
independent investigation and the representations and warranties of the Seller
set forth in Article III, including the Schedules hereto (and any updates
thereto).  Each of Parent and Buyer acknowledges that neither the Company,
Seller nor any of Seller's Affiliates, nor any other Person, has made any
representation or warranty whatsoever, express or implied (including any implied
warranty or representation as to the value or condition of the Company),
regarding the Company or other matters beyond those expressly given in Article
III of this Agreement.
 
Section 4.9 Ability to Evaluate Investment.  Each of Parent and Buyer is able to
evaluate the merits and risks of an investment in the Shares by reason of
Buyer’s and Parent's knowledge and experience in financial and business
matters.  Each of Parent and Buyer acknowledges that it has had full access to
the books and records of the Company and that each of Parent and Buyer has the
necessary financial and business background to understand the financial standing
of the Company represented in the books and records, or have consulted with
someone with such expertise, and that they recognize that this purchase involves
financial risks.
 
 
 
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Section 4.10 Investment Risk.  Each of Parent and Buyer understands that an
investment in the Shares is speculative and involves a high degree of risk and
that each of Parent and Buyer is able to bear the economic risk of an investment
in the Shares.
 
Section 4.11 Purchase for Own Account.  Buyer is purchasing the Shares solely
for its own account, for investment, and not with a present intent to sell or
distribute all or any of the Shares or any part thereof or interest therein.
 
Section 4.12 Investor Status.  At the time Parent was offered the Shares, Parent
was and at the Closing Date hereof, each of Buyer and Parent is an "accredited
investor" as defined in Rule 501(a) under the Securities Act.
 
Section 4.13 No Solicitation.  The offering of the Shares in the Company to
Parent and Buyer was made only through direct, personal communication among
Parent, Buyer and a duly authorized representative of Seller and not through
public solicitation or advertising.
 
Section 4.14 HSR Act.  Parent and Buyer hereby represent and warrant that (a)
Evergreen Real Estate Partners LLC "controls" Parent within the meaning of 16
C.F.R. § 801.1(b); (b) Evergreen Real Estate Partners LLC is "controlled"
(within the meaning of 16 C.F.R. § 801.1(b)) by a state board; (c) the state
board is the "ultimate parent entity" (as defined in 16 C.F.R. § 801.1(a)(3)) of
Evergreen Real Estate Partners LLC and Parent; and (d) the state board is a
"state agency."  The acquisition of the voting securities of the Company by
Buyer is exempt from the reporting requirements of the HSR Act, pursuant to
Section 7A(c)(4) of the HSR Act.  The filing of a Premerger Notification Report
Form under the HSR Act with respect to the transactions contemplated by this
Agreement is not required.
 
ARTICLE V

 
COVENANTS

 
Section 5.1 Conduct of Businesses Prior to the Closing Date.  Except as
expressly permitted by this Agreement or with the prior written consent of
Buyer, during the period from the date of this Agreement to the Closing Date,
Seller shall cause the Company and each of its Subsidiaries to (i) conduct its
business in the Ordinary Course and in compliance in all material respects with
all applicable Laws, (ii) use commercially reasonable efforts to maintain and
preserve intact its business organization and management and advantageous
business relationships with its customers, suppliers and others having business
dealings with it and retain the services of its officers and key employees,
(iii) cooperate with Buyer as reasonably necessary and take no action that is
intended to or would reasonably be expected to adversely affect or materially
delay the ability of Seller or Buyer to obtain any necessary approvals of any
Regulatory Agency or other Governmental Entity required for the transactions
contemplated hereby or of Seller, the Company, or Buyer to perform its covenants
and agreements under this Agreement or to consummate the transactions
contemplated hereby and (iv) not take any action which might cause any
representation or warranty under Article III to become untrue.
 
Section 5.2 Forbearances.  Without limiting the generality of Section 5.1 above,
during the period from the date of this Agreement to the Closing Date, except as
set forth in Schedule 5.2 of the Company Disclosure Schedule or as otherwise
permitted by this Agreement, the Company shall not and the Seller shall not
permit the Company or any of its Subsidiaries to, without the prior written
consent of Buyer, which consent shall not be unreasonably withheld or delayed:
 
 
 
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(a) incur any indebtedness for borrowed money (other than short-term borrowings
in the Ordinary Course under the Company’s existing revolving credit facility),
or assume, guarantee, endorse or otherwise as an accommodation become
responsible for the obligations of any other individual, corporation or other
entity;
 
(b)  (i) adjust, split, subdivide, combine or reclassify any of its capital
stock or issue or authorize the issuance of any other securities in respect of,
in lieu of or in substitution for shares of capital stock; (ii) make, declare or
pay any dividend (whether in cash, stock or other securities or property), or
make any other distribution on, or directly or indirectly redeem, purchase or
otherwise acquire, directly or indirectly any shares of its capital stock or of
any of its Subsidiaries or of Seller or any of its Affiliates or any securities
or obligations convertible (whether currently convertible or convertible only
after the passage of time or the occurrence of certain events) into or
exchangeable for any shares of its or their capital stock (except dividends paid
by any of the Subsidiaries of such Company to such Company or to any of its
wholly-owned Subsidiaries); (iii) grant any stock options, stock appreciation
rights, restricted shares, restricted stock units, deferred equity units, awards
based on the value of such Company's or Subsidiary's capital stock or other
equity-based award with respect to shares of such Company's or Subsidiary's
capital stock, or grant any individual, corporation or other entity any right to
acquire any shares of its capital stock; or (iv) issue any additional shares of
capital stock or other securities;
 
(c)  (i) increase in any manner the compensation or benefits including severance
benefits of any of the current or former directors, officers or employees of a
Company or its Subsidiaries (collectively, "Employees"), (ii) pay any pension,
severance or retirement benefits to Employees, (iii) become a party to,
establish, amend, commence, participate in, terminate or commit itself to the
adoption of any stock option plan or other stock-based compensation plan,
compensation (including any employee co-investment fund), severance, pension,
retirement, profit-sharing, welfare benefit, or other employee benefit plan or
agreement or employment agreement with or for the benefit of any Employee (or
newly hired employees), (iv) accelerate the vesting of any long-term incentive
compensation under any Company Benefit Plans, or (v) agree, amend or enter into
any collective bargaining agreement with any labor organization, union or
association;
 
(d) sell, transfer, pledge, lease, grant, license, mortgage, encumber or
otherwise dispose of any of its properties or assets to any Person other than a
Subsidiary, or create any Lien of any kind with respect to any such property or
asset other than a Permitted Lien, or cancel, release or assign any indebtedness
to any such Person or any claims held by any such Person, in each case other
than in the Ordinary Course or pursuant to contracts in force at the date of
this Agreement;
 
 
 
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(e) enter into any new line of business or change in any material respect its
operating policies, except as required by applicable Law;
 
(f) transfer ownership, or grant any license or other rights, to any person or
entity of or in respect of any Company Intellectual Property Rights;
 
(g) acquire (whether by merger, consolidation or acquisition of stock or assets
or otherwise) any corporation, partnership or other business organization or
division thereof or make any material investment either by purchase of stock or
securities, contributions to capital, property transfers, or purchase of any
property or assets of any other Person;
 
(h) amend the Company Charter or Company Bylaws (or comparable organizational
documents), or terminate, amend or waive any provisions of any confidentiality
or standstill agreements in place with any third parties;
 
(i)  (i) amend or otherwise modify, or violate the terms of, or terminate, any
Company Contract, (ii) create, renew or amend any agreement or contract or,
except as may be required by applicable Law, other binding obligation of the
Company or its Subsidiaries  containing (A) any material restriction on the
ability of it or its Subsidiaries to conduct its business as it is presently
being conducted or (B) any material restriction on the ability of the Company or
their Affiliates to engage in any type of activity or business or (iii) enter
into any new, or amend any existing, contract, agreement or arrangement with any
Affiliate;
 
(j) commence or settle any claim, action or proceeding, except for settling any
claim, action or proceeding in excess of $50,000 individually or $100,000 in the
aggregate;
 
(k) take any action or willfully fail to take any action that is intended, or
may reasonably be expected, to result in any of the conditions to this Agreement
set forth in Article VI not being satisfied;
 
(l) make, change or revoke any material election related to Taxes (unless
required by applicable Law), settle or compromise any material Tax liability or
agree to any adjustment of any material Tax attribute, enter into any closing
agreement related to Tax, consent to any extension or waiver of the limitations
period applicable to any Tax claim or assessment, or change any taxable period
or any Tax accounting method, fail to file any Tax Return when due or fail to
cause such Tax Returns when filed to be complete and accurate in all material
respects;
 
(m) make any capital expenditure in excess of $25,000 in the aggregate or enter
into any contract or commitment therefor;
 
(n) enter into any contract for the purchase, sale or lease of real property
other than the sale of cemetery inventory in the Ordinary Course;
 
 
 
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(o) fail to keep in force insurance policies providing insurance coverage with
respect to the assets, operations and activities of the Company or any of its
Subsidiaries  as currently in effect;
 
(p) agree to take, make any commitment to take, or adopt any resolutions of its
board of directors in support of, any of the actions prohibited by, or any
material action in furtherance of any of the actions prohibited by, this Section
5.2; or
 
(q) change any investments in the Trust Funds.
 
Section 5.3 Buyer Forbearances.  Except as expressly permitted by this Agreement
or with the prior written consent of Seller or the Company, during the period
from the date of this Agreement to the Closing Date, Buyer shall not knowingly,
and shall not permit any of its Subsidiaries to, take any action that would, or
willfully fail to take any action that is intended to, result in any of the
conditions set forth in Article VI not being satisfied.
 
Section 5.4 Access; Information.  Upon reasonable notice and subject to
applicable Laws relating to the confidentiality of information, Seller shall
cause the Company and each of its Subsidiaries to, afford to the officers,
employees, accountants, counsel, advisors, agents and other Representatives of
Buyer, reasonable access, during normal business hours during the period prior
to the Closing Date, to all its personnel (including for training,
benefits-transition and related purposes), properties, books, contracts,
commitments and records, and, during such period, the Company shall, and shall
cause each of its Subsidiaries  to, make available to Buyer and its
Representatives (i) a copy of each report, schedule, registration statement and
other document filed or received by it during such period pursuant to the
requirements of insurance Laws (other than reports or documents that such party
is not permitted to disclose under applicable Law) and (ii) all other
information concerning its business, operations, properties and personnel as
Buyer may reasonably request. Neither Seller, the Company, nor any of its
Subsidiaries, shall be required to provide access to or to disclose information
where such access or disclosure would jeopardize the attorney-client privilege
of such party or contravene any Law entered into prior to the date of this
Agreement.  The parties shall make appropriate substitute disclosure
arrangements under circumstances in which the restrictions of the preceding
sentence apply.  All information disclosed under this Section 5.4 shall remain
subject to the confidentiality agreement, dated as of November 24, 2008, by and
between Raymond James & Associates, Inc., on behalf of the Company and Buyer.
 
Section 5.5 Notices of Certain Events; Supplemental Information.
 
(a) Buyer and Seller shall promptly advise the other of any change or event (i)
having or reasonably likely to have a Material Adverse Effect on Buyer or the
Company, respectively, or (ii) that it believes would or reasonably likely would
cause or constitute a breach of any of its representations, warranties or
covenants contained in this Agreement; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties (or remedies with respect thereto) or the conditions
to the obligations of the parties under this Agreement.
 
 
 
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(b) At any time, and from time to time, prior to the Closing, Seller shall
supplement or amend the Company Disclosure Schedule with respect to any material
fact, matter or circumstance that Seller learns of and that is required to make
each representation and warranty set forth in Article III accurate as of the
date such supplement or amendment is made (the "Updated Schedules").  Buyer may
elect to accept the Updated Schedules and proceed to a Closing and in such
circumstance such Updated Schedules shall amend the Company Disclosure Schedule
as if disclosed on the date of this Agreement for the purposes of any
indemnification rights existing under Article IX hereto.  In the event Buyer
does not elect to accept the Updated Schedules, such Updated Schedules shall not
be effective to amend the Company Disclosure Schedule or the representations and
warranties thereto.
 
Section 5.6 Pre-Closing Arrangements.  All of the intercompany arrangements
between Seller and its Subsidiaries and Affiliates (other than the Company and
its Subsidiaries), on the one hand, and the Company or its Subsidiaries, on the
other hand, will be terminated immediately prior to the Closing and all
intercompany balances previously disclosed to Buyer between Seller and its
respective Affiliates (other than the Company and its Subsidiaries), on the one
hand, and the Company or its Subsidiaries, on the other hand shall be written
off.
 
Section 5.7 Regulatory Matters.
 
(a) Subject to the terms and conditions of this Agreement, each party will use
its commercially reasonable efforts to take, or cause to be taken, all actions,
to file, or cause to be filed, all documents and to do, or cause to be done, all
things necessary, proper or advisable to consummate the transactions
contemplated by this Agreement, including preparing and filing as promptly as
practicable all documentation to effect all necessary filings, consents,
waivers, approvals, authorizations, permits or orders from all third parties and
Governmental Entities.
 
(b) Each of Buyer and Seller shall, upon request, furnish to the other all
information concerning itself, its Subsidiaries, directors, officers and
shareholders and such other matters as may be reasonably necessary or advisable
in connection with any statement, filing, notice or application made by or on
behalf of Buyer, Seller, the Company, or any of their respective Subsidiaries to
any Governmental Entity in connection with the transactions contemplated by this
Agreement.
 
(c) If any objections are asserted with respect to the transactions contemplated
hereby under any Law or if any suit is instituted (or threatened to be
instituted) by any applicable Governmental Entity or any private party
challenging any of the transactions contemplated hereby as violative of any Law
or which would otherwise prevent, materially impede or materially delay the
consummation of the transactions contemplated hereby, Buyer, on the one hand,
and Seller and the Company, on the other hand, shall use their commercially
reasonable efforts to (x) take, or cause to be taken, all other actions and (y)
do, or cause to be done, all other things necessary, proper or advisable to
consummate and make effective the transactions contemplated hereby, including
taking all such further action as may be necessary to resolve such objections,
if any, as any state antitrust enforcement authorities or competition
authorities of any other nation or other jurisdiction may assert under any Law
with respect to the transactions contemplated hereby, and to avoid or eliminate
each and every impediment under any Law that may be asserted by any Governmental
Entity with respect to the transactions contemplated by this Agreement so as to
enable the Closing to occur as soon as reasonably practicable (and in any event
no later than the End Date), in each case as may be
 
 
 
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required in order to avoid the entry of, or to effect the dissolution of, any
injunction, temporary restraining order or other order in any suit or proceeding
which would otherwise have the effect of preventing the Closing or delaying the
Closing beyond the End Date; provided that neither the Company nor any of its
Subsidiaries shall become subject to, or consent or agree to or otherwise take
any action with respect to, any requirement, condition, understanding, agreement
or order of a Governmental Entity to sell, to hold separate or otherwise dispose
of, or to conduct, restrict, operate, invest or otherwise change the assets or
business of the Company or any of their Affiliates, unless such requirement,
condition, understanding, agreement or order is binding on the Company only in
the event that the Closing occurs. Notwithstanding anything to the contrary in
this Section 5.7 or elsewhere in this Agreement, Buyer shall not be required to
agree to or accept (but in their discretion may agree to or accept), and Seller
shall not, and shall not permit the Company, without the prior written consent
of Buyer, to, agree to or accept, unless requested to do so by Buyer (subject to
the proviso to the immediately preceding sentence) any condition sought by any
Governmental Entity or other person in connection with any consent or approval
required to complete or otherwise in connection with the transactions
contemplated by this Agreement that (A) seeks to prohibit or limit the ownership
or operation by the Company, its Subsidiaries, Buyer or any of their Affiliates
of the business or assets of any of them, or to compel the Company or Buyer or
any of their Affiliates to dispose of or hold separate any significant portion
of their business or assets as a result of the transactions contemplated hereby,
(B) seeks to impose limitations on the ability of Buyer to acquire, hold, or
exercise rights of direct or indirect ownership of the Company or any of its
Subsidiaries, including the right to vote the capital stock of the Company on
all matters properly presented to the shareholders of the Company and the rights
to declare or pay dividends on any capital stock of the Company or any of its
Subsidiaries, or (C) seeks to prohibit Buyer or any of its Subsidiaries from
effectively controlling in any material respect the business or operations of
Buyer, the Company or any of their respective Subsidiaries and their Affiliates.
 
(d) Subject to Section 5.7(c), in the event that any administrative or judicial
action or proceeding is instituted (or threatened to be instituted) by a
Governmental Entity or private party challenging the transaction contemplated by
this Agreement, or any other agreement contemplated hereby, Seller and Buyer
each shall cooperate in all respects with each other and use its respective
commercially reasonable efforts to contest and resist any such action or
proceeding and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement.
 
(e) Buyer and Seller and the Company shall promptly advise the other upon
receiving any communication from any Governmental Entity the consent or approval
of which is required for consummation of the transactions contemplated by this
Agreement that causes such party to believe that there is a reasonable
likelihood that any requisite Regulatory Approval will not be obtained or that
the receipt of any such approval may be materially delayed.
 
 
 
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(f) In furtherance and not in limitation of the covenants of the parties
contained in Section 5.7(a), (c) or (d), with respect to the Third Party
Consents, costs paid to any third party with respect to Third Party Consents,
other than Seller’s attorney fees, shall be borne solely by Buyer.
 
Section 5.8 Confidentiality.  Unless required by Seller to comply with Law,
Seller agrees not to disclose or use, and use its commercially reasonable
efforts to cause its Representatives not to disclose or use, any Confidential
Information.  Unless required by Seller to comply with Law, Seller will deliver
promptly to Buyer or destroy, at the request and option of Buyer, all tangible
embodiments (and all copies) of the Confidential Information that are in its
possession.  In the event that Seller or any of its Representatives is requested
or required pursuant to written or oral question or request for information or
documents in any legal proceeding, interrogatory, subpoena, civil investigation
demand, or similar process to disclose any Confidential Information, Seller will
notify Buyer promptly of the request or requirement so that Buyer, at its
expense, may seek an appropriate protective order or waive compliance with the
provisions of this Section 5.8.  If, in the absence of a protective order or the
receipt of a waiver hereunder, Seller is, on the advice of counsel, compelled by
Law to disclose any Confidential Information, Seller may disclose the
Confidential Information to the tribunal; provided, however, that Seller shall
use its commercially reasonable efforts to obtain, at the request and sole
expense of Buyer, an order or other assurance that confidential treatment will
be accorded to such portion of the Confidential Information required to be
disclosed as Buyer shall designate.  The foregoing covenant shall apply to
Seller commencing on the Closing Date and will continue until the third
anniversary thereof.  Notwithstanding anything to the contrary contained in this
Section 5.8, Seller shall be permitted to make any disclosure of Confidential
Information permitted by Section 10.7 or as may be required by the Securities
Act or the rules and regulations of any applicable stock exchange; provided that
to the extent not prohibited by Law, copies of all such communications are
supplied to Buyer within a reasonable period in advance of filing.
 
Section 5.9 Post-Closing Cooperation.
 
(a) Without limiting the terms of Section 8.5 hereof with respect to Tax
matters, following the Closing the parties shall provide each other and their
respective Representatives reasonable access to such and to such of their
respective legal, accounting, financial and audit personnel as shall be
necessary for financial reporting and accounting matters or to prepare documents
required to be filed with Governmental Entities.  In addition, following the
Closing, Seller and its Subsidiaries shall use reasonable efforts to cooperate
with, and to cause their independent public accountants to cooperate (at Buyer’s
sole expense) with, Buyer and its Representatives in preparing any financial
statements of the Company and its Subsidiaries for any pre-Closing period.
 
 
 
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(b) Buyer shall use its commercially reasonable efforts following the Closing to
cooperate with Seller (at Seller’s sole expense) to complete the transfer of the
real property described on Section 5.9(b) of the Company Disclosure Schedule for
real property of similar value to a trust in a transaction intended to qualify
as a tax-free exchange under Section 1031 of the Code (the "Real Estate
Swap").  If, on or before March 31, 2011, the Real Estate Swap has not occurred
because Seller has been unable to identify to Buyer exchangeable real property
which is reasonably acceptable to Buyer, Seller shall pay to the owner of the
real estate described on Schedule 5.9(b) of the Company Disclosure Schedule the
fair market value of such property based on the appraised value of the property
as of the date of the appraisal and such property shall be transferred to
Seller.  The appraisals shall be conducted by an appraiser selected by Seller
that is reasonably acceptable to Buyer.  The cost of the appraisals shall be
borne by Buyer.
 
Section 5.10 Satisfaction of Indebtedness.  Subject to Section 2.4(a), Seller
shall assume or satisfy in full all of the outstanding Indebtedness prior to or
at the Closing, except for any Indebtedness of the type referred to in
clause (c) of the definition thereof and Indebtedness of the type referred to in
clauses (f) and (g) of the definition thereof to the extent such Indebtedness
relates to the Indebtedness referred to in clause (c) thereof.
 
Section 5.11 Exclusivity of Representations; Investigations by Buyer.
 
(a) In connection with the investigation by Parent and Buyer of the Company and
its Subsidiaries and their businesses and operations, Parent and Buyer and their
respective Representatives have received from Seller and/or the Company or their
respective Representatives certain projections and other forecasts of future
revenue, future results of operations (or any component thereof), future cash
flows (or any component thereof) or future financial condition (or any component
thereof) for the Company and its Subsidiaries.  Parent and Buyer acknowledge and
agree that (i) there are uncertainties inherent in attempting to make such
projections and forecasts; (ii) each of Parent and Buyer is familiar with such
uncertainties; and (iii) each of Parent and Buyer is taking full responsibility
for making its own evaluations of the adequacy and accuracy of all projections
and forecasts of future revenue, future results of operations (or any component
thereof), future cash flows (or any component thereof) or future financial
condition  (or any component thereof) so furnished to it or its Representatives.
 
(b) Each of Parent and Buyer agrees that, except for the representations and
warranties made by Seller that are expressly set forth in Article III of this
Agreement or any other agreement delivered in connection with this Agreement,
none of Seller, the Company, any of its Subsidiaries or any of their respective
Affiliates or Representatives has made and shall not be deemed to have made to
any of Parent, Buyer or their respective Affiliates or Representatives any
representation or warranty of any kind.  Without limiting the generality of the
foregoing, each of Parent and Buyer agrees that none of Seller, the Company, any
of its Subsidiaries or any of their respective Affiliates or Representatives
(including Raymond James & Associates, Inc.) makes or has made any
representation or warranty to Parent, Buyer or to any of their respective
Representatives or Affiliates with respect to  any projections or forecasts of
future revenue, future results of operations (or any component thereof), future
cash flows (or any component thereof) or future financial condition  (or any
component thereof) of the Company or any of its Subsidiaries heretofore or
hereafter delivered to or made available to Parent, Buyer or their respective
Representatives or Affiliates.
 
 
 
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Section 5.12 Excluded Assets.
 
(a) Prior to the Closing, Seller will cause the Company to distribute the
Excluded Assets to it in accordance with the steps set out in Schedule 5.12 of
the Company Disclosure Schedule (the "Distribution").  Notwithstanding anything
to the contrary contained herein, Seller makes no representation or warranty,
express or implied, to Parent or Buyer relating to the Excluded Assets,
including any representation or warranty regarding any Subsidiary created to
hold the Excluded Assets.  Each of Parent and Buyer hereby consents for all
purposes under this Agreement including Sections 5.1 and 5.2 to Seller taking
all steps reasonably necessary to consummate the Distribution, including the
steps set out in Schedule 5.12 of the Company Disclosure Schedule.  Furthermore,
the description of the steps to be taken necessary to conduct the Distribution
shall be deemed incorporated into all Sections of the Company Disclosure
Schedule.
 
(b) Notwithstanding anything to the contrary contained herein, the parties
hereto acknowledge and agree that the responsibility for all costs and expenses
(including, but not limited to, all Taxes, transfer taxes, filing fees,
recording fees or otherwise) incurred by the Company or its Subsidiaries,
whether before, on or after the Closing Date, associated with, arising out of or
relating to the Distribution (the "Distribution Costs") shall be the
responsibility of the Seller.  In furtherance of the foregoing, to the extent
the actual amount of the Distribution Costs exceeds the amount of the Estimated
Distribution Costs that are deducted from the Purchase Price, the Seller shall
pay the Company the amount of such difference.  Any payment by the Seller of
such difference shall be outside of the indemnification provisions contained in
Article IX and shall not be subject to any limitations as to time or amount set
forth in Section 9.4 hereof.  Any such payment shall be due and payable within
five (5) Business Days after delivery of reasonable evidence regarding
same.  Seller and Buyer agree to treat all payments made by Seller under this
Section 5.12 as adjustments to the Purchase Price.
 
Section 5.13 Director and Officer Indemnification.  Until the sixth anniversary
of the Closing, Buyer shall not, and shall not permit the Company or any of its
Subsidiaries to, amend, repeal or otherwise modify the Company Charter and
Company Bylaws or the certificate of incorporation or bylaws of any of the
Company’s Subsidiaries in any manner that would affect adversely the
indemnification rights thereunder of individuals who at and at any time prior to
the Closing Date were directors, officers, employees or agents of the Company or
any of its Subsidiaries; provided, however, that in the event Parent or Buyer
elects to merge or consolidate the Company or any Subsidiary into an entity
formed by Parent or Buyer, such action will not be deemed to be a violation of
this provision provided that the surviving entity provides indemnification to
directors and officers to the fullest extent permitted under the laws of the
jurisdiction of the surviving entity.  Parent and Buyer agree to give Seller at
least three days prior written notice of any such merger or consolidation.
 
 
 
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Section 5.14 Company Benefits Plans.  Buyer shall freeze the Company's ESOP and,
prior to Closing, make a determination of how to administer the ESOP following
the Closing.  Buyer shall not assume any other Company Benefit Plan.
 
Section 5.15 Assumption and Satisfaction of Excluded
Liabilities.  Notwithstanding anything to the contrary contained herein,
effective as of the Closing Date, Seller hereby agrees to retain and assume the
Excluded Liabilities and agrees to satisfy in full the Excluded Liabilities as
they become due and payable.
 
Section 5.16 Real Estate Agreements.
 
(a) The parties agree with respect to the San Mateo development plan, the
Company has already paid $350,000 with respect to planners, consultants and
other third party fees.  Seller hereby agrees to pay up to $150,000 of
additional costs and expenses relating to the approval of the development plan
submitted by the Company to San Mateo County, all as required by San Mateo
County.  Any costs and expenses in excess of $150,000 to be paid by Seller shall
be borne by Buyer.  Buyer acknowledges and agrees that notwithstanding any
provision in this Agreement to the contrary, Seller has made no representation
or warranty as to the number of acres of land that may be approved by San Mateo
County for cemetery or mausoleum development or the development density or
features that may be allowed.
 
(b) In an effort to close the transaction on terms acceptable  to Seller, Buyer
agrees to close the transaction notwithstanding the title issues on Parcel V as
described on Schedule 3.16.  Upon execution of  this Agreement, Seller agrees to
immediately commence and actively prosecute a quiet title action to obtain
marketable title to Parcel V.  In the event title is vested in Seller, Seller
shall execute whatever documents Buyer reasonably requests to vest the title
with Buyer, or its affiliates.  Any costs associated with the quiet title action
and the vesting of title with Buyer, including, but not limited to, any cost
associated with a reissuance of any title insurance policy, shall be the sole
responsibility of Seller (the "Parcel V Costs").
 
ARTICLE VI

 
CONDITIONS TO CLOSING

 
Section 6.1 Conditions to Each Party's Obligation.  The respective obligations
of the parties to effect the transactions contemplated hereby shall be subject
to the satisfaction at or prior to the Closing Date of the following conditions:
 
(a) No Injunctions or Restraints; Illegality.  No order, injunction or decree
issued by any court or agency of competent jurisdiction or other Law preventing
or making illegal the consummation of any of the transactions contemplated by
this Agreement shall be in effect.
 
(b) California Consumer Consent.  The California Consumer Consent shall have
been obtained and remains in full force and effect.
 
 
 
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(c) No Litigation:  There shall not be pending any suit, action or proceeding by
or before the Closing Date by or before any Governmental Entity challenging or
seeking to restrain or prohibit the consummation of the transactions
contemplated by this Agreement or seeking damages in connection therewith.

 
Section 6.2 Conditions to Obligations of Buyer.  The obligation of Buyer to
effect the transactions contemplated hereby is also subject to the satisfaction,
or waiver by Buyer, at or prior to the Closing Date, of the following
conditions:
 
(a) Representations and Warranties.  The representations and warranties of
Seller set forth in this Agreement shall be true and correct in all material
respects (except for those representations and warranties which are qualified by
materiality which shall be true and correct in all respects) as of the date of
this Agreement and as of the Closing Date as though made on and as of the
Closing Date (except that representations and warranties that by their terms
speak specifically as of the date of this Agreement or another date shall be
true and correct as of such date); and Buyer shall have received a certificate
signed on behalf of Seller by the Chief Executive Officer or the Chief Financial
Officer of Seller to the foregoing effect.
 
(b) Performance of Obligations of Seller.  Seller shall have complied in all
material respects with the covenants and agreements to be performed by or
complied with under this Agreement at or prior to the Closing Date; and Buyer
shall have received a certificate signed on behalf of Seller by the Chief
Executive Officer or the Chief Financial Officer of Seller to such effect.
 
(c) No Material Adverse Effect.  There shall not have been any event or
condition since the date of this Agreement which, individually or in the
aggregate, has had or is reasonably likely to have a Material Adverse Effect on
the Company.
 
(d) Transfer of Excluded Assets.  The Distribution shall have been completed at
or prior to the Closing.
 
(e) Consents.  Receipt of Government Authorization.
 
(f) Resignations – Directors and Officers.  Resignations of all directors and
officers of Company and each of its Subsidiaries.
 
(g) Resignations - Trustees.  Resignations of the trustees of all preneed trusts
and endowment care funds.
 
(h) Closing Deliveries.  Each of the items required to be executed and delivered
to Buyer pursuant to Section 2.5 shall have been so executed and delivered or
ready to be delivered.
 
 
 
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Section 6.3 Conditions to Obligations of Seller.  The obligation of Seller to
effect the transactions contemplated hereby is also subject to the satisfaction
or waiver by Seller, at or prior to the Closing Date, of the following
conditions:
 
(a) Representations and Warranties.  The representations and warranties of Buyer
and Parent set forth in this Agreement shall be true and correct in all material
respects (except for those representations and warranties which are qualified by
materiality which shall be true and correct in all respects) as of the date of
this Agreement and as of the Closing Date as though made on and as of the
Closing Date (except that representations and warranties that by their terms
speak specifically as of the date of this Agreement or another date shall be
true and correct as of such date); and Seller shall have received a certificate
signed on behalf of each of Buyer and Parent by the Chief Executive Officer or
the Chief Financial Officer of Buyer and Parent, as applicable, to the foregoing
effect.
 
(b) Performance of Obligations of Buyer and Parent.  Buyer and Parent shall have
performed in all material respects the obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and Seller shall have
received a certificate signed on behalf of Buyer and Parent by each of their
respective Chief Executive Officers or Chief Financial Officers to such effect.
 
(c) Closing Deliveries.  Each of the items required to be executed and delivered
to Seller pursuant to Section 2.6 shall have been so executed and delivered or
ready to be delivered.
 
(d) Consents.  Receipt of all Government Authorization.
 
(e) Appointment – Trustees.  Buyer shall have appointed successor trustees of
all preneed trusts and endowment care funds.
 
(f) Appointment – Directors and Officers.  Buyer shall have appointed successor
directors and officers of Company and each of its Subsidiaries.
 
ARTICLE VII

 
TERMINATION

 
Section 7.1 Termination.
 
(a) This Agreement may be terminated on or prior to the Closing Date only as
follows:
 
(i) by mutual written consent of Buyer and Seller;
 
(ii) by either Seller or Buyer, if any Governmental Entity that must grant a
Regulatory Approval to complete the transactions contemplated hereby has denied
approval thereof and such denial has become final and nonappealable or any
Governmental Entity of competent jurisdiction shall have issued a final and
nonappealable order, injunction or decree permanently enjoining or otherwise
prohibiting or making illegal the consummation of the transactions contemplated
by this Agreement;
 
 
 
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(iii) by either Seller or Buyer, if the Closing Date shall not have occurred on
or before June 30, 2010 unless extended by mutual agreement of Seller and Buyer
(the "End Date");  provided, that either Buyer or Seller shall have the right to
extend the said date by up to thirty (30) days, if necessary, to allow for
receipt of regulatory approvals to satisfy the conditions to closing set forth
in Article VI; provided, however, that the right to terminate this Agreement
pursuant to this section shall not be available to any party if the failure of
the Closing to occur by such date shall be due to the failure of the party
seeking to terminate this Agreement to perform or observe the covenants and
agreements of such party set forth in this Agreement; or
 
(iv) by either Seller or Buyer (provided that the terminating party is not then
in material breach of any representation, warranty, covenant or other agreement
contained herein), if there shall have been a breach of any of the covenants or
agreements or any of the representations or warranties set forth in this
Agreement on the part of Seller, in the case of a termination by Buyer, or
Buyer, in the case of a termination by Seller, which breach, either individually
or in the aggregate, would result in, if occurring or continuing on the Closing
Date, the failure of the conditions set forth in Section 6.2 or 6.3, as the case
may be, and which is not cured within 14 days following written notice to the
party committing such breach or by its nature or timing cannot be cured within
such time period.
 
(b) The termination of this Agreement shall be effectuated by the delivery of a
written notice of such termination from the party terminating this Agreement to
the other party.
 
Section 7.2 Obligations upon Termination.  In the event that this Agreement
shall be terminated pursuant to Section 7.1, all obligations of the parties
hereto under this Agreement shall terminate and this Agreement shall become null
and avoid and of no further force and effect, except (a) for the provisions of
this Section 7.2 and Sections 10.2, 10.3, 10.5 and 10.6 and (ii) that nothing
herein will relieve any party from liability for any breach of this Agreement.
 
ARTICLE VIII

 
TAX MATTERS

 
Section 8.1 Seller’s Responsibility for Taxes.  Notwithstanding anything in this
Agreement to the contrary, Seller shall be liable for and shall bear and pay,
reimburse, indemnify and hold harmless Buyer and its Affiliates (including the
Company and all of its Subsidiaries) for, from and against any and all
liabilities for Taxes (or payments in respect of Taxes) that arise out of,
relate to or are attributable to (a) Taxes imposed on, allocated to or incurred
or payable by the Company or any of its Subsidiaries  for any Pre-Closing Tax
Period (b) any Taxes imposed under Treasury Regulation Section 1.1502-6(a) (or
under any similar provision of Law) with respect to a consolidated, combined,
unitary, affiliated or other Tax group that included the Company or any of its
Subsidiaries  in a Pre-Closing Tax Period, (c) Taxes incurred by the Company and
the Subsidiaries with respect to the Distribution; (d) breaches or inaccuracies
of the representations and warranties or the
 
 
 
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covenants set forth in this Agreement that relate to Tax matters; (e) any and
all Taxes of any Person imposed on either of the Company or any of its
Subsidiaries  as a transferee or successor, by contract, or otherwise to the
extent such tax is related to a Pre-Closing Tax Period; and (f) any open
reasonable fees and expenses (including attorney's, accountant's and other
professional's fees) incurred in connection with any claim, investigation,
review, proceeding, negotiation related to the matters set forth in clauses (a)
through (f) above; provided, however, Seller shall have no obligation to pay for
or indemnify Buyer and its Affiliates with respect to any amounts described in
clauses (a) through (f) to the extent such amounts are included on the Closing
Date Balance Sheet.  Subject to the limitations in Section 9.4,  Seller shall
reimburse Buyer for any Taxes of the Company or its Subsidiaries that are the
responsibility of Seller pursuant to this Section 8.1 within fifteen (15) days
after the payment of such Taxes by Buyer, the Company or its Subsidiaries.
 
Section 8.2 Straddle Periods.  In the case of Taxes (other than Transfer Taxes
which shall be the Buyer’s obligation in all cases and Taxes related to the
Distribution which shall be Seller's obligation in all cases) that are payable
with respect to a Straddle Period, the portion of any such Tax that is allocable
to the portion of the Straddle Period that is a Pre-Closing Tax Period shall be:
 
(a) in the case of Taxes that are either (i) based upon or related to income or
receipts, or (ii) imposed in connection with any sale or other transfer or
assignment of property (real or personal, tangible or intangible), deemed equal
to the amount which would be payable if the taxable year ended on the day
preceding the Closing Date or on the Closing Date, as applicable (an interim
closing of the books);
 
(b) in the case of Taxes imposed on a periodic basis, deemed to be the amount of
such Taxes for the entire period (or, in the case of such Taxes determined on an
arrears basis, the amount of such Taxes for the immediately preceding period),
multiplied by a fraction the numerator of which is the number of calendar days
in the period ending on and including the day preceding the Closing Date or the
period ending on and including the Closing Date, as applicable and the
denominator of which is the number of calendar days in the entire period; and
 
(c) in the case of Taxes based upon gross premiums deemed equal to the amount
that would be payable with respect to the premiums written as of the day
preceding the Closing Date or as of the Closing Date, as applicable.
 
Notwithstanding the foregoing, a Tax shall not be allocable to the portion of
the period ending on and including the day preceding the Closing Date to the
extent, and solely to the extent, that such Taxes have been accounted for as a
liability on the Closing Date Balance Sheet.
 
Section 8.3 Indemnification Procedures.  Any claim for indemnification under
Section 8.1 shall be made in accordance with procedures and limitations on
indemnification set forth in Article IX of this Agreement.
 
 
 
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Section 8.4 Tax Returns.
 
(a) Seller shall prepare and timely file or cause to be prepared and timely
filed:
 
(i) all income Tax Returns for the Company and its Subsidiaries  for all
Pre-Closing Tax Periods that are filed on a consolidated, combined, or unitary
basis, regardless of when such Tax Returns are required to be filed. Such Tax
Returns, as they relate to the Company or any of its Subsidiaries, shall be
consistent with past practice, except as required by applicable Law; and
 
(ii) all other Tax Returns for the Company and its Subsidiaries  for Tax periods
that end before the Closing Date and that are required to be filed on or prior
to the day before the Closing Date (taking into account any valid extensions).
Such Tax Returns shall be consistent with past practice, except as required by
applicable Law.
 
(b) Buyer shall prepare (through Hood & Strong) and timely file, or cause to be
prepared and timely filed, Tax Returns for the Company and its Subsidiaries  for
Tax periods that end on or before the day before the Closing Date that are not
described in Section 8.4(a) and not filed on or prior to the Closing Date. Such
Tax Returns shall be prepared in a manner consistent with past practice, except
as required by applicable Law or as would not have a material adverse impact on
Seller.  Seller shall have the right to review and comment upon such Tax Returns
prior to filing and the parties shall cooperate with one another in the
preparation of such Tax Returns.
 
(c) Buyer shall prepare and timely file, or cause to be prepared and timely
filed, all Tax Returns for the Company and its Subsidiaries  for all Straddle
Periods. Such Tax Returns shall be prepared by Hood & Strong in a manner
consistent with past practice, except as required by applicable Law or as would
not have a material adverse impact on Seller.  Seller shall have the right to
review and comment upon such Tax Returns prior to filing and the parties shall
cooperate with one another in the preparation of such Tax Returns.
 
(d) Buyer shall prepare and timely file, or cause the Company and its
Subsidiaries  to prepare and timely file, all Tax Returns required to be filed
by or with respect to the Company and its Subsidiaries for any Tax period
beginning on or after the Closing Date.
 
(e) Seller shall not enter into any settlement or compromise related to any
Taxes which settlement or compromise could reasonably be expected to have a
material adverse impact on the Company, its Subsidiaries, Buyer or any of its
Affiliates without obtaining prior written consent of Buyer, which consent shall
not be unreasonably withheld or delayed.
 
 
 
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(f) Buyer shall not enter into (or cause the Company or any Subsidiary to enter
into) any settlement or compromise related to Taxes which settlement or
compromise could reasonably be expected to have a material adverse effect on
Seller without obtaining prior written consent of Seller, which consent will not
be unreasonably withheld or delayed.
 
Section 8.5 Cooperation and Exchange of Information.  Buyer and Seller shall,
and shall cause their respective Affiliates to, provide each other with such
cooperation and information as either of them or their respective Affiliates
reasonably may request of the other in filing any Tax Return, amended Tax
Return, or claim for refund, determining a liability for Taxes or a right to a
refund of Taxes, determining the amount of any loss or credit attributable to
the Company or its Subsidiaries, or participating in or conducting any Tax
audit, examination, assessment or proceeding ("Tax Contest"). Such cooperation
and information shall include, to the extent reasonably requested, providing
copies of relevant Tax Returns or portions thereof, together with accompanying
schedules, related work papers and documents relating to rulings or other
determinations by Tax authorities. Each party and its Affiliates shall make its
employees available on a basis mutually convenient to both parties to provide
explanations of any documents or information provided hereunder. Each of Buyer
and Seller shall, and shall cause its respective Affiliates to, retain all Tax
Returns, schedules and work papers, records and other documents in its
possession relating to Tax matters of the Company and its Subsidiaries  for each
Tax period first ending after the Closing Date and for all prior years until the
later of (i) the expiration of the statute of limitations of the years to which
such Tax Returns and other documents relate, without regard to extension except
to the extent notified in writing of such extensions for the respective Tax
periods, or (ii) three years following the due date (without extension) for such
Tax Returns. Any information obtained under this Section 8.5 shall be kept
confidential except as may be otherwise necessary in connection with the filing
of Tax Returns or claims for refund or in conducting a Tax Contest or as
otherwise may be required by Law, regulation, or the rules of any stock
exchange.
 
Section 8.6 Tax Sharing.  All intercompany balances due with respect to any and
all existing Tax Sharing Agreements will be paid in full and settled immediately
before the Closing Date, and all such Tax Sharing Agreements shall be terminated
as of the Closing Date and, after the Closing Date, the Company and its
Subsidiaries shall not be bound thereby or have any liability thereunder.
 
Section 8.7 Transfer Taxes.  Notwithstanding any provision of this Agreement to
the contrary, all Transfer Taxes shall be borne solely by Buyer.  Seller will,
at its own expense, file all necessary Tax Returns and other documentation with
respect to all such Taxes and fees, and, if required by applicable Law, Buyer
will, and will cause its Affiliates to, join in the execution of any such Tax
Returns and other documentation.
 
Section 8.8 Tax Returns.  Buyer and Seller agree that Seller shall be entitled
to all Tax refunds to which the Company and its Subsidiaries are entitled for
all Pre-Closing Tax Periods except to the extent that such Tax refunds are
reflected in the Adjustment Amount.  Buyer agrees to cooperate and to cause the
Company and its Subsidiaries to cooperate with Seller in making all Tax filings
necessary to obtain such refunds and shall pay or cause the Company or its
Subsidiaries, as applicable, to pay the amount of such Tax refunds to Seller
promptly following the receipt thereof except to the extent that such Tax
refunds are reflected in the Adjustment Amount.  The portion of any Tax refund
for a Pre-Closing Tax Period that is attributable to a Straddle Period shall be
determined using the principles set forth in Section 8.6.
 
 
 
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Section 8.9 Miscellaneous.
 
(a) Seller and Buyer agree to treat all payments made by either of them to or
for the benefit of the other under the indemnity provisions of this Agreement as
adjustments to the Purchase Price.
 
(b) Buyer shall not cause the Company or any Subsidiary to waive or extend any
statute of limitations for Taxes with regard to Tax Returns filed for any
Pre-Closing Tax Period without the prior written consent of Seller, not to be
unreasonably withheld or delayed.
 
(c) Notwithstanding  anything herein provided to the contrary, the provisions of
this Article VIII shall survive indefinitely.
 
ARTICLE IX

 
INDEMNIFICATION

 
Section 9.1 Survival.  The representations and warranties of the parties
contained in this Agreement or in any certificate or other writing delivered
pursuant hereto or in connection herewith shall survive the Closing until the
15-month anniversary of the Closing Date; provided, however, that (a) the
representations and agreements (collectively, the "Excluded Representations")
made in Sections 3.1 (Organization), 3.2 (Capitalization), 3.3 (Authority; No
Violation), 3.6(c) (Financial Statements), 3.10 (Taxes and Tax Returns) and
3.11(i) (Employee Matters), 3.17 (Assets), 8.1 (Seller’s Responsibility for
Taxes), 5.15 (Satisfaction of Excluded Liabilities) and 5.16 (Real Estate
Agreements) shall survive the Closing indefinitely and (b) the representations
made in Section 4.2(a) shall survive the Closing indefinitely.  Except for the
Excluded Representations, the covenants and agreements of the parties contained
in this Agreement or in any certificate or other writing delivered pursuant
hereto or in connection herewith shall survive the Closing until the 15-month
anniversary of the Closing Date or for the period explicitly specified
therein.  Notwithstanding the preceding sentences, any breach of representation
or warranty or any covenant or agreement in respect of which indemnity may be
sought under this Agreement shall survive the time at which it would otherwise
terminate pursuant to the preceding sentences, if the indemnified party shall
have given to the indemnifying party notice of the inaccuracy or breach or other
matter giving rise to such right of indemnity prior to such time.
 
Section 9.2 Indemnification by Seller.  Seller shall defend, indemnify and hold
harmless Buyer, its Affiliates, and, after the Closing, the Company and its
Subsidiaries, and their respective officers, directors, employees, agents,
advisors and other Representatives (collectively, the "Buyer Indemnitees") from
and against, and pay or reimburse the Buyer Indemnitees for, any and all damage,
loss, liability, expense, action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, injunction, judgment, order, decree, ruling,
due, penalty, fine, cost, amount paid in settlement, obligation, Tax, lien,
expense and fee, including court costs (including reasonable expenses of
investigation, enforcement and collection, reasonable attorneys’ accountants’
and other professional fees and expenses incurred in connection with any
litigation) whether or not involving a Third Party Claim (collectively,
"Losses"), resulting from or arising out of (a) any inaccuracy in or breach of
any representation or warranty of Seller or the Company in this Agreement, (b)
any failure of Seller or any Affiliate or, prior to the Closing Date, the
Company or any of its Subsidiaries, to perform any covenant or agreement under
this Agreement, (c) any liability arising out of or relating to any Excluded
Assets, including, but not limited to, the Company’s ownership of the Excluded
Assets and the transfer of the Excluded Assets to Seller or its designee and (d)
any Excluded Liability.
 
 
 
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Section 9.3 Indemnification by Buyer and Parent.  Buyer and Parent shall jointly
and severally defend, indemnify and hold harmless Seller and its officers,
directors, employees, agents, advisers and representatives (collectively, the
"Seller Indemnitees") from and against, and pay or reimburse the Seller
Indemnities for, any and all Losses resulting from or arising out of (a) any
inaccuracy in or breach of any representation or warranty of Buyer in this
Agreement, and (b) any failure of Buyer to perform any covenant or agreement
under this Agreement.
 
Section 9.4 Certain Limitations.
 
(a) After the Closing, Seller shall not be required to indemnify the Buyer
Indemnitees for Losses under Sections 8.1 and 9.2(a) or 9.2(b) until the
aggregate amount of all such Losses exceeds $500,000 (the "Basket"), in which
event Seller shall be responsible for the amount of such Losses in excess of the
Basket; provided, however, that the Basket shall not apply with respect to any
Excluded Representation, any liability arising out of or relating to any
Excluded Asset or Excluded Liability or fraud on the part of Seller.
 
(b) Buyer and Parent shall not be required to indemnify the Seller Indemnitees
for Losses under Section 9.3 until the aggregate amount of all such Losses
exceeds the Basket, in which event Buyer and Parent shall be responsible for the
amount of such Losses in excess of the Basket; provided, however, the Basket
shall not apply with respect to any fraud on the part of Buyer or Parent.
 
(c) With respect to Seller’s obligation under Section 8.1, 9.2(a) and 9.2(b),
except as otherwise provided in Section 9.4(d), the aggregate maximum liability
of Seller shall be equal to $34,000,000.  For the avoidance of doubt, except as
permitted by Section 9.4, a Buyer Indemnitee shall not be entitled to
indemnification under Section 9.2(a) and 9.2(b) once the aggregate amount of
claims paid under Section 9.2 exceeds $34,000,000.
 
(d) With respect to Seller’s obligation for breaches of the Excluded
Representations, the aggregate maximum liability of Seller shall be equal to the
Purchase Price.  For the avoidance of doubt, and by way of example only, a Buyer
Indemnitee shall not be permitted to bring a claim under either Section 9.2(a)
for breaches of Sections 3.2, 3.3, 3.6(c) and 3.17 once the aggregate amount of
claims paid under Section 9.2 equals the Purchase Price.
 
 
 
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(e) The Buyer Indemnitees shall have no rights to claims for indemnification
under Section 9.2 with respect to any breach of any representation or warranty
of Seller to which Buyer or Parent had Knowledge prior to the Closing.
 
(f) IN NO EVENT SHALL ANY PARTY BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT,
PUNITIVE, OR EXEMPLARY DAMAGES, LOST PROFIT, PROVIDED, HOWEVER, THAT THIS
SECTION 9.4(f) SHALL NOT LIMIT A PARTY’S RIGHT TO RECOVERY UNDER THIS ARTICLE IX
FOR ANY SUCH DAMAGES TO THE EXTENT SUCH PARTY IS REQUIRED TO PAY SUCH DAMAGES TO
A THIRD PARTY IN CONNECTION WITH A MATTER FOR WHICH SUCH PARTY IS OTHERWISE
ENTITLED TO INDEMNIFICATION UNDER THIS ARTICLE IX.
 
(g) The liability of Seller for all Losses shall be reduced by the net amount
of  any proceeds of insurance actually received by a Buyer Indemnitee from
non-Affiliate third parties in connection with a claim for indemnification by
such Buyer Indemnitee (but only to the extent insurance proceeds are actually
received by a Buyer Indemnitee within one (1) year of the Buyer Indemnitee’s
submission to its insurer(s) of its claim and appropriate supporting
documentation, unless the Buyer Indemnitee fails to diligently attempt
throughout such one (1) year period to collect promptly such insurance
proceeds).  If a Buyer Indemnitee receives such insurance payment subsequent to
such one (1) year period and following indemnification by Seller, Buyer
Indemnitee shall remit to Seller the amount so paid by the insurance company but
not in excess of the indemnification payment by Seller.
 
Section 9.5 Third Party Claim Procedures.  In the case of any claim asserted by
a third party (a "Third Party Claim") against a party entitled to
indemnification under this Agreement (an "Indemnified Party"), notice shall be
given by the Indemnified Party to the party required to provide indemnification
(the "Indemnifying Party") promptly after such Indemnified Party has actual
knowledge of such Third Party Claim, and the Indemnified Party shall permit the
Indemnifying Party (at the expense of such Indemnifying Party and so long as the
Indemnifying Party acknowledges in writing its obligation to indemnify, subject
to the limitations contained in Section 9.4, the Indemnified Party for Losses
related to such Third Party Claim) to assume the defense of such Third Party
Claim, provided that (a) counsel for the Indemnifying Party who shall conduct
the defense of such Third Party Claim shall be reasonably satisfactory to the
Indemnified Party, and the Indemnified Party may participate in such defense at
such Indemnified Party's expense, and (b) the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its indemnification obligation under this Agreement except to the extent that
such failure results in a lack of actual notice to the Indemnifying Party and
such Indemnifying Party is materially prejudiced as a result of such failure to
be given notice. The notice provided to the Indemnifying Party shall describe
the Third Party Claim in reasonable detail, and shall indicate the amount
(estimated, if necessary) of the Losses that has been or may be suffered.  If
the Indemnifying Party does not assume the defense of such Third Party Claim
within twenty (20) days of notice thereof, the Indemnified Party shall be
entitled to assume and control such defense in any manner it reasonably may deem
appropriate.  In the event the Indemnifying Party has assumed the defense of
such Third Party Claim within twenty (20) days of notice thereof, the
Indemnified Party shall not consent to the entry of any judgment or enter into
any settlement without the prior written consent of the Indemnifying Party
(which consent shall not be unreasonably withheld or delayed).  Except with the
prior written consent of the Indemnified Party, which consent shall not be
unreasonably withheld or delayed, no Indemnifying Party, in the defense of any
such Third Party Claim, shall consent to entry of any judgment or enter into any
settlement that provides for injunctive or other nonmonetary relief affecting
the Indemnified Party or that does not include as an unconditional term thereof
the giving by each claimant or plaintiff to such Indemnified Party of an
irrevocable release from all liability and wrongdoing with respect to such Third
Party Claim. Seller and Buyer shall cooperate in the defense of any Third Party
Claim subject to this Article IX and the records of each shall be reasonably
available to the other with respect to such defense.
 
 
 
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Section 9.6 Direct Claims.  In any case in which an Indemnified Party seeks
indemnification hereunder which does not involve a Third Party Claim, the
Indemnified Party shall notify the Indemnifying Party in writing of any Losses
that such Indemnified Party claims are subject to indemnification under the
terms hereof.  The failure of the Indemnified Party to exercise promptness in
such notification shall not amount to a waiver of such claim unless and only to
the extent that such Indemnifying Party is materially prejudiced as a result of
such failure to be given notice.
 
ARTICLE X

 
MISCELLANEOUS

 
Section 10.1 Expenses.  Each party hereto shall pay its own expenses including
without limitation, fees and expenses of its agents, Representatives, counsel,
auditors, and accountants incidental to the preparation of this Agreement and
carrying out the transactions contemplated herein.  The Seller shall be
responsible for all of the Company’s and its Subsidiaries’ Transaction Expenses
("Company’s Transaction Expenses").  The Seller shall be deemed to have paid the
Company’s Transaction Expenses if such expenses were (i) paid or payable
directly by the Seller, (ii) paid in full by the Company prior to the Closing
Date, or (iii) accrued on the Closing Date Balance Sheet as a current liability
and such current liability is part of the Net Asset calculation.
 
Section 10.2 Notices.  All notices and other communications in connection with
this Agreement shall be in writing and shall be deemed given if delivered
personally, sent via facsimile (with answer-back confirmation), mailed by
registered or certified mail (return receipt requested) or delivered by an
express courier (with confirmation) to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
 
(a) if to Seller, to:
 
Capital Southwest Corporation
12900 Preston Road at LBJ
Suite 700
Dallas, Texas 75230
Attention: President
Fax: (972) 233-7362
 
with a copy to (which copy shall not constitute notice):
 
Locke Lord Bissell & Liddell LLP
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201
Attention:  Gina E. Betts
Fax:  (214) 740-8800
 
 
 
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(b) if to Buyer, to:
 
NorthStar Cemetery Services of California, LLC
1900 St. James Place
Suite 200
Houston, Texas 77056
Attention: Mark Hamilton
Fax:  (713) 343-5443
 
with a copy to (which copy shall not constitute notice):
 
Finn Dixon & Herling LLP
177 Broad Street, 15th Floor
Stamford, Connecticut 06901-2048
Attention:  Timothy A. Birch, Esq.
Fax:  (203) 325-5001
 
Any party may change the address to which notices, claims, demands and other
communications hereunder are to be delivered by giving the other parties notice
in the manner set forth herein.
 
Section 10.3 Interpretation.  When a reference is made in this Agreement to
Articles, Sections, Exhibits or Schedules, such reference shall be to an Article
or Section of or Exhibit or Schedule to this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Except as otherwise expressly provided herein,
all references to "dollars" or "$" shall be deemed references to the lawful
money of the United States of America. Unless otherwise indicated, the word
"day" shall be interpreted as a calendar day. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." The words "hereof," "herein,"
"hereby," and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole (including any exhibits
hereto and schedules delivered herewith) and not to any particular provisions of
this Agreement. Whenever used in this Agreement, any noun or pronoun shall be
deemed to include the plural as well as the singular and to cover all genders.
The Company Disclosure Schedule and the Buyer Disclosure Schedule, as well as
all other schedules and all exhibits hereto, shall be deemed part of this
Agreement and included in any reference to this Agreement. This Agreement shall
not be interpreted or construed to require any person to take any action, or
fail to take any action, if to do so would violate any applicable law.
 
 
 
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Section 10.4 Counterparts.  This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each of the parties
and delivered to the other party, it being understood that each party need not
sign the same counterpart. Either party may deliver its signed counterpart of
this Agreement to the other party by means of facsimile or any other electronic
medium, and such delivery will have the same legal effect as hand delivery of an
originally executed counterpart.
 
Section 10.5 Entire Agreement.  This Agreement (including the documents executed
in connection herewith at Closing) constitute the entire agreement and supersede
all prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter of this Agreement, including, but not
limited to, that certain Letter of Intent dated December 23, 2009, executed by
the parties hereto.
 
Section 10.6 Governing Law.  This Agreement shall be deemed to be made in and in
all respects shall be interpreted, governed and construed in accordance with the
internal laws of the State of Texas applicable to contracts made and
wholly-performed within such state, without regard to any applicable conflicts
of law principles.
 
Section 10.7 Publicity.  Neither Seller nor Buyer shall, and neither Seller nor
Buyer shall permit any of its Subsidiaries to, issue or cause the publication of
any press release or other public announcement with respect to, or otherwise
make any public statement concerning, the transactions contemplated by this
Agreement without the prior consent (which consent shall not be unreasonably
withheld or delayed) of Buyer, in the case of a proposed announcement or
statement by Seller, or Seller, in the case of a proposed announcement or
statement by Buyer; provided, however, that (i) either party may, without the
prior consent of the other party (but after prior consultation with the other
party to the extent practicable under the circumstances) issue or cause the
publication of any press release or other public announcement to the extent
required by Law or by the rules and regulations of any applicable stock exchange
and (ii) that either party may issue a press release or make a public
announcement that discloses only information previously made available to the
public pursuant to Section 10.7 or otherwise made available to the public
without violating the terms of this Agreement .
 
Section 10.8 Assignment; Third Party Beneficiaries.
 
(a) Neither this Agreement nor any of the rights, interests or obligations under
this Agreement shall be assigned by either of the parties (other than by Buyer
by operation of law in a merger of Buyer) without the prior written consent of
the other party; provided, however, the Buyer may (and the Company may after
Closing) (i) assign any or all of its rights and interests hereunder to one or
more Affiliates, (ii) designate one or more of its Affiliates to perform its
obligations hereunder, (iii) collaterally assign any or all of its rights
hereunder to one or more lenders of the Buyer and/or the Company and (iv) assign
its rights hereunder in connection with the sale of all or substantially all of
its business or assets (whether by merger, sale of stock or assets,
recapitalization or otherwise).  Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
each of the parties and their respective successors and assigns.  This Agreement
(including the documents and instruments referred to in this Agreement) is not
intended to and does not confer upon any person other than the parties hereto
any rights or remedies under this Agreement, except that the provisions of
Section 5.16 shall inure to the benefit of and enforceable by the current and
former directors, officers, employees and agents of the Company and its
Subsidiaries that are covered by the terms thereof.
 
 
 
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(b) The representations and warranties in this Agreement are the product of
negotiations among the parties hereto and are for the sole benefit of the
parties hereto. Any inaccuracies in such representations and warranties are
subject to waiver by the parties hereto in accordance with this Agreement
without notice or liability to any other person. In some instances, the
representations and warranties in this Agreement may represent an allocation
among the parties hereto of risks associated with particular matters regardless
of the knowledge of any of the parties hereto.  Consequently, persons other than
the parties hereto may not rely upon the representations and warranties in this
Agreement as characterizations of actual facts or circumstances as of the date
of this Agreement or as of any other date.
 
Section 10.9 Arbitration.  Except for actions requesting temporary, preliminary
or permanent injunctive relief or specific performance or for the determination
of the Adjustment Amount as provided in Section 2.4, the parties hereto agree
that any claim, action, dispute or controversy of any kind ("Dispute") arising
out of or relating to this Agreement or concerning any aspect of performance by
any party hereto under the terms of this Agreement, shall be settled exclusively
and finally by arbitration in accordance with this Section 10.9.
 
(a) Rules and Procedures.  Such arbitration shall be governed by and conducted
pursuant to the Federal Arbitration Act (including case law), except as
expressly provided otherwise in this Agreement.  The making, validity,
construction, and interpretation of this Section 10.9, and all procedural
aspects of the arbitration conducted pursuant hereto, shall be decided by the
arbitrators.  Except as modified by this Agreement, the arbitration shall be
conducted in accordance with the Federal Arbitration Act and, to the extent an
issue is not addressed by the federal law of arbitration, by the Commercial
Arbitration Rules (including the Optional Procedures for Large, Complex
Commercial Disputes) of the American Arbitration Association (collectively, the
"Rules").
 
(b) Discovery.  The arbitrators shall permit discovery and rule on matters of
confidentiality as they determine is appropriate in the circumstances.
 
(c) Venue.  All arbitration proceedings hereunder shall be conducted in Dallas,
Texas or such other location as approved by each party to the Dispute.
 
(d) Arbitrators.  All arbitration proceedings hereunder shall be before a panel
of three arbitrators consisting of Persons (which can include lawyers), having
at least ten (10) years of experience arbitrating complex commercial
disputes.  Within thirty (30) days of the notice of initiation of the
arbitration procedure, each side to the dispute shall select one arbitrator.  If
any side to the dispute fails to select an arbitrator within the required time,
the other side to the dispute that has selected an arbitrator shall select two
arbitrators.  The two arbitrators so selected shall select a third arbitrator,
failing agreement on which, the third arbitrator shall be selected in accordance
with the Rules.
 
 
 
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(e) Limitations on Arbitrators.  The arbitrators shall have authority to
interpret and apply the terms and conditions of this Agreement and to order any
remedy allowed by this Agreement, including specific performance of this
Agreement, but may not change any term or condition of this Agreement, deprive
any party of a remedy expressly provided hereunder, or provide any right or
remedy that has been excluded hereunder. Notwithstanding the foregoing, in
connection with each Dispute, each of the parties thereto shall submit their
respective claims and positions thereunder (the "Claims").
 
(f) Transcripts and Decisions.  The parties shall request that final decision of
the arbitrators be in writing, set forth the reasons for such final
decision.  To the fullest extent permitted by Law, the arbitration proceeding
and the arbitrators’ decision and award shall be maintained in confidence by the
parties and the parties shall instruct the arbitrators to likewise maintain such
matters in confidence.
 
(g) Fees and Awards.  The fees and expenses of the arbitrators shall be borne
equally by Buyer and Seller, but the decision of the arbitrators may include
such award of the arbitrators’ expenses and of other costs to the prevailing
side as the arbitrators may determine.
 
(h) Binding Nature.  The decision and award of the arbitrators shall be binding
upon the parties and final and nonappealable to the maximum extent permitted by
law, and judgment thereon may be entered in a court of competent jurisdiction
and enforced by any party as a final judgment of such court.
 
Section 10.10 Specific Performance.  The parties hereto agree that irreparable
damage would occur if any provision of this Agreement were not performed in
accordance with the terms hereof, and, accordingly, that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof,
in addition to any other remedy to which they are entitled at law or in equity.
 
Section 10.11 Guarantee of Parent.  Parent shall cause Buyer to perform all of
its obligations under this Agreement and hereby unconditionally and irrevocably
guarantees, covenants and agrees to be jointly and severally liable with the
Buyer for the due and punctual performance of each and every obligation of the
Buyer arising under this Agreement and with respect to the transactions
contemplated hereby.
 
[Remainder of Page Intentionally Left Blank]
 
 
 
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly executed as of the date first above written.
 
 

 
NORTHSTAR CEMETERY SERVICES OF
CALIFORNIA, LLC
         
 
By:
/s/ W. Mark Hamilton        W. Mark Hamilton,        Chairman and Chief
Executive Officer                              NORTHSTAR MEMORIAL GROUP, LLC   
                  By:  /s/ W. Mark Hamilton        W. Mark Hamilton, President 
      and Chief Executive Officer                      LIFEMARK GROUP           
            /s/ Andy Bryant        Andy Bryant, President                     
CAPITAL SOUTHWEST CORPORATION                        /s/ Gary L. Martin       
Gary L. Martin, President and        Chief Executive Officer   

 
 
                                                                           
 
 
 

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EXHIBIT A
 
March 31, 2010 Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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EXHIBIT B
 
Definition of Parcel V
 
 

  Order Number: NCS-427172-CC    Page Number: 13 

 

2 CHAINS; THENCE SOUTH 88° 30' WEST 1 CHAIN AND 52 LINKS; THENCE SOUTH 78° WEST
1 CHAIN AND 1 LINK; THENCE SOUTH 50° 30' WEST 1 CHAIN AND 31 LINKS; THENCE SOUTH
3° 15' WEST 14 CHAINS AND 95 LINKS; THENCE SOUTH 33° 15' EAST 3 CHAINS AND 32
LINKS TO THE NORTHERLY BOUNDARY OF S.K. WILSEY'S TRACT; THENCE SOUTH 71° 15'
WEST 6 CHAINS AND 52 LINKS TO THE PLACE OF BEGINNING.

APN: PORTION OF
056-550-020                                                                

PARCEL V-1:

ALL THOSE LANDS DESIGNATED AS "SKYLAWN MEMORIAL GARDENS 143.78 ACS. +", AS SHOWN
ON MAP ENTITLED "RECORD OF SURVEY ON BOUNDARY OF SKYLAWN MEMORIAL GARDENS SAN
MATEO COUNTY, CALIFORNIA", WHICH MAP WAS FILED IN THE OFFICE OF THE RECORDER OF
THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA ON OCTOBER 28, 1959 IN BOOK 4 OF
LICENSED LAND SURVEYORS MAPS AT PAGE 66.

EXCEPTING THEREFROM ALL THAT PORTION THEREOF AS SHOWN ON THE CERTAIN MAP
ENTITLED "MAP OF SKYLAWN MEMORIAL GARDENS, SAN MATEO COUNTY, CALIF." WHICH MAP
WAS FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SAN MATEO, STATE OF
CALIFORNIA ON JUNE 12, 1959 IN BOOK 51 OF MAPS, AT PAGE 32, BEING PARCEL V-2,
BELOW.

ALSO EXCEPTING THEREFROM ALL THAT PORTION THEREOF CONVEYED TO THE STATE OF
CALIFORNIA BY DEED RECORDED MARCH 22, 2000 AS INSTRUMENT NO. 2000-33261, SAN
MATEO COUNTY OFFICIAL RECORDS.

APN: PORTION OF 056-550-030

PARCEL V-2:

ALL THAT LAND SHOWN ON THE CERTAIN MAP ENTITLED "MAP OF SKYLAWN MEMORIAL GARDENS
SAN MATEO COUNTY, CALIF." WHICH MAP WAS FILED IN THE OFFICE OF THE RECORDER OF
THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA ON JUNE 12, 1959 IN BOOK 51 OF
MAPS, AT PAGE 32.

APN: PORTION OF 056-550-030

PARCEL VI:
 
 
 
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FROM A POINT OF BEGINNING BEING THE MOST WESTERLY POST ON A LINE RUNNING DUE
EAST AND WEST 2 CHAINS AND 19 LINKS LONG (ALSO PART OF THE DIVISION LINE BETWEEN
SECTIONS 11 AND 14) SET BY THE SAN FRANCISCO WATER DEPARTMENT AT THE
SOUTHEASTERLY CORNER OF THE PARCEL OF LAND DESIGNATED BY THE SAN MATEO COUNTY
ASSESSOR'S OFFICE AS PARCEL NO. 056-370-060; THENCE NORTH 13 CHAINS AND 50
LINKS; THENCE NORTH 39° 45' WEST 35 CHAINS AND 71 LINKS; THENCE NORTH 20° 20'
EAST 4 CHAINS; THENCE NORTH 60° 40' WEST 11 CHAINS AND 4 LINKS  THENCE SOUTH 30
CHAINS AND 9 LINKS; THENCE EAST 20 CHAINS; THENCE SOUTH 16 CHAINS AND 23 LINKS
TO TROWELL'S NORTHERLY CORNER; THENCE ALONG SAID TROWELL'S EASTERLY BOUNDARY AS
FOLLOWS: SOUTH 22° 30' EAST 4 CHAINS 8.8 LINKS (269.79') THENCE EAST (ALONG THE
DIVISION BETWEEN SECTIONS 11 AND 14) 8 CHAINS 78.2 LINKS (579.62') TO THE POINT
OF BEGINNING.

TOGETHER WITH THAT CERTAIN REAL PROPERTY DESCRIBED AS FOLLOWS:

BEGINNING AT A STAKE ON THE SOUTHWEST CORNER OF THE LAND SOLD BY ONE, ALFRED

 
 
 
 
 
 
 

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