Document:

exv10w1

 

Exhibit 10.1

Stewart Enterprises, Inc.

and the Guarantors

Listed on Schedule A hereto

$250,000,000

$125,000,000 3.125% Senior Convertible Notes due July 15, 2014

$125,000,000 3.375% Senior Convertible Notes due July 15, 2016

Purchase Agreement

dated June 21, 2007

Merrill Lynch, Pierce, Fenner & Smith Incorporated

Banc of America Securities LLC

BNP Paribas Securities Corp.

Calyon Securities (USA) Inc.

Capital One Southcoast, Inc.

SunTrust Capital Markets, Inc.

U.S. Bancorp Investments, Inc.

 

 

Table of Contents

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	Section 1.	 	Representations and Warranties	 	 	3	 
	 
	 	(a)	 	No Registration Required	 	 	3	 
	 
	 	(b)	 	No Integration of Offerings or General Solicitation	 	 	3	 
	 
	 	(c)	 	Eligibility for Resale Under Rule 144A	 	 	4	 
	 
	 	(d)	 	Disclosure Package and Final Offering Memorandum	 	 	4	 
	 
	 	(e)	 	Incorporated Documents	 	 	4	 
	 
	 	(f)	 	The Purchase Agreement	 	 	5	 
	 
	 	(g)	 	The Registration Rights Agreement	 	 	5	 
	 
	 	(h)	 	The DTC Letter of Representations	 	 	5	 
	 
	 	(i)	 	Authorization of the Notes and the Guarantees	 	 	5	 
	 
	 	(j)	 	Authorization of the Indentures	 	 	6	 
	 
	 	(k)	 	Authorization of Common Stock	 	 	6	 
	 
	 	(l)	 	Descriptions of Notes and the Indentures	 	 	6	 
	 
	 	(m)	 	No Material Adverse Change	 	 	6	 
	 
	 	(n)	 	Independent Accountants	 	 	7	 
	 
	 	(o)	 	Preparation of the Financial Statements	 	 	7	 
	 
	 	(p)	 	Incorporation and Good Standing of the Company and its Subsidiaries	 	 	7	 
	 
	 	(q)	 	Capitalization and Other Capital Stock Matters	 	 	8	 
	 
	 	(r)	 	Stock Exchange Listing	 	 	8	 
	 
	 	(s)	 	Non-Contravention of Existing Instruments; No Further Authorizations or	 	 	 	 
	 
	 	 	 	Approvals Required	 	 	8	 
	 
	 	(t)	 	No Material Actions or Proceedings	 	 	9	 
	 
	 	(u)	 	Intellectual Property Rights	 	 	9	 
	 
	 	(v)	 	All Necessary Permits, Etc	 	 	10	 
	 
	 	(w)	 	Title to Properties	 	 	10	 
	 
	 	(x)	 	Tax Law Compliance	 	 	10	 
	 
	 	(y)	 	Company Not an “Investment Company”	 	 	10	 
	 
	 	(z)	 	Insurance	 	 	11	 
	 
	 	(aa)	 	No Price Stabilization or Manipulation	 	 	11	 
	 
	 	(bb)	 	Solvency	 	 	11	 
	 
	 	(cc)	 	No Unlawful Contributions or Other Payments	 	 	11	 
	 
	 	(dd)	 	Accounting Controls and Disclosure Controls	 	 	11	 
	 
	 	(ee)	 	Compliance with the Sarbanes-Oxley Act	 	 	12	 
	 
	 	(ff)	 	Compliance with Environmental Laws	 	 	12	 
	 
	 	(gg)	 	ERISA Compliance	 	 	13	 
	 
	 	(hh)	 	Taxes; Fees	 	 	13	 
	 
	 	(ii)	 	No Labor Disputes	 	 	13	 
	 
	 	(jj)	 	No Default in Indebtedness	 	 	14	 
	 
	 	(kk)	 	Excluded Domestic Subsidiaries	 	 	14	 
	 
	 	 	 	 	 	 	 	 
	Section 2.	 	Purchase, Sale and Delivery of the Securities	 	 	14	 
	 
	 	(a)	 	The Securities	 	 	14	 
	 
	 	(b)	 	Delivery of Securities; Payment	 	 	14	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	(c)	 	Denominations; Registration	 	 	15	 
	 
	 	(d)	 	Initial Purchasers as Qualified Institutional Buyers	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	Section 3.	 	Additional Covenants	 	 	15	 
	 
	 	(a)	 	Notice and Effect of Material Events	 	 	15	 
	 
	 	(b)	 	Amendments and Supplements to the Offering Memorandum	 	 	15	 
	 
	 	(c)	 	Copies of the Disclosure Package and the Final Offering Memorandum	 	 	16	 
	 
	 	(d)	 	Blue Sky Compliance	 	 	16	 
	 
	 	(e)	 	Use of Proceeds	 	 	16	 
	 
	 	(f)	 	Depositary	 	 	16	 
	 
	 	(g)	 	Additional Issuer Information	 	 	17	 
	 
	 	(h)	 	Restriction on Sale of Securities	 	 	17	 
	 
	 	(i)	 	Future Reports to the Initial Purchasers	 	 	17	 
	 
	 	(j)	 	No Integration	 	 	18	 
	 
	 	(k)	 	Legended Securities	 	 	18	 
	 
	 	(l)	 	PORTAL	 	 	18	 
	 
	 	(m)	 	Rating of Securities	 	 	18	 
	 
	 	(n)	 	Reservation of Shares of Common Stock	 	 	18	 
	 
	 	(o)	 	No Other Offering Documents	 	 	18	 
	 
	 	 	 	 	 	 	 	 
	Section 4.	 	Payment of Expenses	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	Section 5.	 	Conditions of the Obligations of the Initial Purchasers	 	 	19	 
	 
	 	(a)	 	Accountants’ Comfort Letter	 	 	19	 
	 
	 	(b)	 	No Material Adverse Change or Ratings Agency Change	 	 	20	 
	 
	 	(c)	 	Opinion of Counsel for the Company and the Guarantors	 	 	20	 
	 
	 	(d)	 	Opinion of Local Counsel for the Guarantors	 	 	20	 
	 
	 	(e)	 	Opinion of Special Counsel for the Company and the Guarantors	 	 	20	 
	 
	 	(f)	 	Opinion of Counsel for the Initial Purchasers	 	 	20	 
	 
	 	(g)	 	Officers’ Certificate	 	 	20	 
	 
	 	(h)	 	Bring-down Comfort Letter	 	 	21	 
	 
	 	(i)	 	PORTAL Listing	 	 	21	 
	 
	 	(j)	 	Registration Rights Agreement	 	 	21	 
	 
	 	(k)	 	Lock-up Agreements	 	 	21	 
	 
	 	(l)	 	Additional Documents	 	 	21	 
	 
	 	 	 	 	 	 	 	 
	Section 6.	 	Reimbursement of Initial Purchasers’ Expenses	 	 	21	 
	 
	 	 	 	 	 	 	 	 
	Section 7.	 	Offer, Sale and Resale Procedures	 	 	22	 
	 
	 	(a)	 	Offers and Sales Only to Qualified Institutional Buyers	 	 	22	 
	 
	 	(b)	 	No General Solicitation	 	 	22	 
	 
	 	(c)	 	Restrictions on Transfer	 	 	22	 
	 
	 	 	 	 	 	 	 	 
	Section 8.	 	Indemnification	 	 	22	 
	 
	 	(a)	 	Indemnification of the Initial Purchasers	 	 	22	 
	 
	 	(b)	 	Indemnification of the Company, the Guarantors and each of their	 	 	 	 
	 
	 	 	 	Directors and Officers	 	 	23	 

ii

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	(c)	 	Notifications and Other Indemnification Procedures	 	 	24	 
	 
	 	(d)	 	Settlements	 	 	25	 
	 
	 	 	 	 	 	 	 	 
	Section 9.	 	Contribution	 	 	25	 
	 
	 	 	 	 	 	 	 	 
	Section 10.	 	Termination of this Agreement	 	 	26	 
	 
	 	 	 	 	 	 	 	 
	Section 11.	 	Representations and Indemnities to Survive Delivery	 	 	27	 
	 
	 	 	 	 	 	 	 	 
	Section 12.	 	Notices	 	 	27	 
	 
	 	 	 	 	 	 	 	 
	Section 13.	 	Successors	 	 	28	 
	 
	 	 	 	 	 	 	 	 
	Section 14.	 	Partial Unenforceability	 	 	28	 
	 
	 	 	 	 	 	 	 	 
	Section 15.	 	Governing Law; Consent to Jurisdiction	 	 	28	 
	 
	 	(a)	 	Governing Law Provisions	 	 	28	 
	 
	 	(b)	 	Consent to Jurisdiction	 	 	29	 
	 
	 	 	 	 	 	 	 	 
	Section 16.	 	Default of One or More of the Several Initial Purchasers	 	 	29	 
	 
	 	 	 	 	 	 	 	 
	Section 17.	 	No Advisory or Fiduciary Relationship	 	 	30	 
	 
	 	 	 	 	 	 	 	 
	Section 18.	 	General Provisions	 	 	30	 

	 	 	 	 	 
	SCHEDULE A

	 	-
	 	List of Guarantors
	SCHEDULE B

	 	-
	 	Initial Purchasers
	SCHEDULE C

	 	-
	 	Pricing Term Sheet
	SCHEDULE D

	 	-
	 	Subsidiaries of Stewart Enterprises, Inc.
	SCHEDULE E

	 	-
	 	Excluded Domestic Subsidiaries
	SCHEDULE F

	 	-
	 	Local Counsel for the Guarantors
	SCHEDULE G

	 	-
	 	List of Persons Subject to Lock-Up
	EXHIBIT A

	 	-
	 	Form of Registration Rights Agreement
	EXHIBIT B

	 	-
	 	Form of Opinion of Counsel for the Company
	EXHIBIT C

	 	-
	 	Form of Opinion of Local Counsel for the Company
	EXHIBIT D

	 	-
	 	Form of Opinion of Special Counsel for the Company
	EXHIBIT E

	 	-
	 	Form of Lock-Up Agreement

iii

 

Purchase Agreement

June 21, 2007

MERRILL LYNCH & CO.

MERRILL LYNCH, PIERCE, FENNER & SMITH

                    INCORPORATED

BANC OF AMERICA SECURITIES LLC

BNP PARIBAS SECURITIES CORP.

CALYON SECURITIES (USA) INC.

CAPITAL ONE SOUTHCOAST, INC.

SUNTRUST CAPITAL MARKETS, INC.

U.S. BANCORP INVESTMENTS, INC.

           as Initial Purchasers

c/o MERRILL LYNCH, PIERCE, FENNER & SMITH

                    INCORPORATED

4 World Financial Center

New York, NY 10018

Ladies and Gentlemen:

          Stewart Enterprises, Inc., a Louisiana corporation (the “Company”), proposes to issue
and sell to Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill
Lynch”) and each of the other initial purchasers named in Schedule B (collectively, the
“Initial Purchasers,” which term shall also include any initial purchaser substituted as
provided in Section 16 hereof), acting severally and not jointly, the respective amounts set forth
in such Schedule B of $125,000,000 aggregate principal amount of the Company’s 3.125%
Senior Convertible Notes due July 15, 2014 (the “2014 Notes”) and $125,000,000 aggregate
principal amount of the Company’s 3.375% Senior Convertible Notes due July 15, 2016 (the “2016
Notes” and, together with the 2014 Notes, the “Notes”). Merrill Lynch has agreed to
act as representative of the several Initial Purchasers in connection with the offering and sale of
the Notes.

          The Notes will be issued pursuant to separate indentures to be dated as of June 27, 2007 (each
an “Indenture” and collectively, the “Indentures”), between the Company and U.S.
Bank National Association, as trustee (the “Trustee”). Notes issued in book-entry form
will be issued in the name of Cede & Co., as nominee of The Depository Trust Company (the
“Depositary”) pursuant to a blanket letter of representations (the “DTC Letter of
Representations”), between the Company and the Depositary.

          The Notes are convertible, subject to certain conditions as described in the Final Offering
Memorandum (as defined below), prior to maturity (unless previously redeemed or otherwise
purchased) into cash and shares of Class A Common Stock, no par value, of the Company (the
“Common Stock”) in accordance with the terms of the Notes and the Indentures, at the
initial conversion rate of 90.4936 shares of Common Stock per $1,000 principal amount of

 

 

Notes in the case of the 2014 Notes and at the initial conversion rate of 90.4936 shares of
Common Stock per $1,000 principal amount of Notes in the case of the 2016 Notes.

          The holders of the Notes will be entitled to the benefits of a registration rights agreement,
to be dated as of June 27, 2007 (the “Registration Rights Agreement”), among the Company,
the Guarantors party thereto and the Initial Purchasers, substantially in the form of Exhibit
A attached hereto, pursuant to which the Company and the Guarantors will agree to file, within
90 days of the Closing Date (as defined below), a shelf registration statement (the
“Registration Statement”) with the Securities and Exchange Commission (the
“Commission”) registering the resale of the Notes and the shares of Common Stock issuable
upon conversion of the Notes under the Securities Act of 1933, as amended (the “Securities
Act”, which term, as used herein, includes the rules and regulations of the Commission
promulgated thereunder).

          The payment of principal of, premium and Additional Interest and Special Interest (each, as
defined in the respective Indentures), if any, and interest on the Notes will be fully and
unconditionally guaranteed on a senior unsubordinated and unsecured basis, jointly and severally by
the Guarantors as defined in the Indentures (collectively, the “Guarantors”), pursuant to
their guarantees (the “Guarantees”). Each of the Guarantors as of the date of this
Agreement is listed in Schedule A attached hereto. The Notes and the Guarantees attached
thereto are herein collectively referred to as the “Securities.”

          The Company understands that the Initial Purchasers propose to make an offering of the
Securities on the terms and in the manner set forth herein and in the Offering Memorandum (as
defined below) and agrees that the Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers (the “Subsequent
Purchasers”) at any time after the date of this Agreement. The Securities are to be offered
and sold to or through the Initial Purchasers without being registered with the Commission under
the Securities Act, in reliance upon exemptions therefrom. The terms of the Securities and the
Indentures will require that investors that acquire Securities expressly agree that Securities may
only be resold or otherwise transferred, after the date hereof, if such Securities are registered
for sale under the Securities Act or if an exemption from the registration requirements of the
Securities Act is available (including the exemptions afforded by Rule 144A under the Securities
Act (“Rule 144A”)).

          The Company has (a) prepared and delivered to each Initial Purchaser copies of (i) a
preliminary offering memorandum dated June 20, 2007 and (ii) a pricing term sheet dated June 21,
2007, attached hereto as Schedule C, which includes the pricing terms and other information
with respect to the Securities and other matters not included in the Preliminary Offering
Memorandum (as defined below) (the “Pricing Term Sheet”) and (b) has prepared and will
deliver to each Initial Purchaser, as promptly as practicable prior to the Closing Date, copies of
a final offering memorandum dated June 21, 2007 (the “Final Offering Memorandum”), each for
use by the Initial Purchasers in connection with their solicitation of offers to purchase the
Securities.

          As used herein, “Offering Memorandum” shall mean, with respect to any date or time
referred to in this Agreement, the most recent offering memorandum (whether the Preliminary
Offering Memorandum or the Final Offering Memorandum, or any amendment or

2

 

supplement to either such document), including exhibits thereto and any documents incorporated
therein by reference, which has been prepared and delivered by the Company to the Initial
Purchasers in connection with their solicitation of offers to purchase the Securities.

          All references in this Agreement to financial statements and schedules and other information
which is “contained,” “included,” or “stated” in the Offering Memorandum (or other references of
like import) shall be deemed to mean and include all such financial statements and schedules and
other information incorporated by reference in the Offering Memorandum; and all references in this
Agreement to amendments or supplements to the Offering Memorandum shall be deemed to mean and
include the filing of any document under the Securities Exchange Act of 1934, as amended (the
“Exchange Act,” which term, as used herein, includes the rules and regulations of the
Commission promulgated thereunder), that is incorporated or deemed to be incorporated by reference
in the Offering Memorandum.

          The preliminary offering memorandum dated June 20, 2007, as amended and supplemented
immediately prior to the Applicable Time (as defined below), including any documents filed under
the Exchange Act prior to the Applicable Time and incorporated by reference therein, is referred to
herein as the “Preliminary Offering Memorandum,” and the Preliminary Offering Memorandum
together with the Pricing Term Sheet are collectively referred to herein as the “Disclosure
Package.”

          “Applicable Time” shall mean 5:30 P.M. (Eastern Time) on June 21, 2007 or such other
time as agreed by the Company and Merrill Lynch.

          The Company hereby confirms its agreements with the Initial Purchasers as follows:

          Section 1. Representations and Warranties. The Company and each of the Guarantors
hereby jointly and severally represent, warrant and covenant to each Initial Purchaser as of the
Applicable Time and as of the Closing Date as follows:

     (a) No Registration Required. Subject to compliance by the Initial Purchasers with the
representations and warranties set forth in Section 2 hereof and with the procedures set
forth in Section 7 hereof, it is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchasers and to each Subsequent Purchaser and
the conversion of the Securities into Common Stock, in each case in the manner contemplated
by this Agreement, the Disclosure Package and the Final Offering Memorandum to register the
Securities or the Common Stock under the Securities Act or to qualify the Indentures under
the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act,” which term,
as used herein, includes the rules and regulations of the Commission promulgated
thereunder).

     (b) No Integration of Offerings or General Solicitation. Neither the Company nor any
Guarantor has, directly or indirectly, solicited any offer to buy or offered to sell, and
will not, directly or indirectly, solicit any offer to buy or offer to sell, in the United
States or to any United States citizen or resident, any security which is or would be
integrated with the sale of the Securities in a manner that would require the Securities to

3

 

be registered under the Securities Act. None of the Company, the Guarantors, their
respective affiliates (as such term is defined in Rule 501 under the Securities Act) (each,
an “Affiliate”), or any person acting on their behalf (other than the Initial
Purchasers, as to whom neither the Company nor any Guarantor makes any representation or
warranty) has engaged or will engage, in connection with the offering of the Securities, in
any form of general solicitation or general advertising within the meaning of Rule 502 under
the Securities Act.

     (c) Eligibility for Resale Under Rule 144A. The Securities are eligible for resale
pursuant to Rule 144A and are not of the same class as securities of the Company or any
subsidiary of the Company listed on a national securities exchange registered under Section
6 of the Exchange Act or quoted in a U.S. automated interdealer quotation system.

     (d) Disclosure Package and Final Offering Memorandum. As of the Applicable Time,
neither (x) the Disclosure Package nor (y) any individual Supplemental Offering Materials
(as defined below), when considered together with the Disclosure Package, included any
untrue statement of a material fact or omitted to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were
made, not misleading.

     “Supplemental Offering Materials” means any “written communication” (within the
meaning of the Securities Act) prepared by or on behalf of the Company, or used or referred
to by the Company, that constitutes an offer to sell or a solicitation of an offer to buy
the Securities other than the Offering Memorandum or amendments or supplements thereto
(including the Pricing Term Sheet), including, without limitation, any road show materials
relating to the Securities that constitutes such a written communication.

     As of its issue date and as of the Closing Date, the Final Offering Memorandum will not
include an untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they
were made, not misleading.

     The representations and warranties in this subsection shall not apply to statements in
or omissions from the Disclosure Package or the Final Offering Memorandum made in reliance
upon and in conformity with written information furnished to the Company by any Initial
Purchaser through Merrill Lynch expressly for use therein. The Company has not distributed,
and will not distribute, prior to the later of the Closing Date and the completion of the
Initial Purchasers’ distribution of the Securities, any offering material in connection with
the offering and sale of the Securities other than the Disclosure Package and the Final
Offering Memorandum.

     (e) Incorporated Documents. The documents incorporated or deemed to be incorporated by
reference in the Disclosure Package and the Final Offering Memorandum at the time they were
or hereafter are filed with the Commission complied and will comply in all material respects
with the requirements of the Exchange Act, and, when read together, at the Applicable Time
with the other information in the Disclosure

4

 

Package, and at the Closing Date with the Disclosure Package and the Final Offering
Memorandum, did not and will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements
therein not misleading.

     (f) The Purchase Agreement. This Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company and each Guarantor,
enforceable in accordance with its terms, except as rights to indemnification hereunder may
be limited by applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable principles and except
as rights to indemnification under the Registration Rights Agreement may be limited by
applicable law.

     (g) The Registration Rights Agreement. At the Closing Date, the Registration Rights
Agreement will have been duly authorized, executed and delivered by, and will be a valid and
binding agreement of the Company and each Guarantor, enforceable in accordance with its
terms, except as the rights to indemnification thereunder may be limited by applicable law
and except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.

     (h) The DTC Letter of Representations. At the Closing Date, the DTC Letter of
Representations will have been duly authorized, executed and delivered by, and (assuming the
due authorization, execution and delivery thereof by the other parties thereto) will be a
valid and binding agreement of the Company, enforceable in accordance with its terms except
as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles.

     (i) Authorization of the Notes and the Guarantees. (i) The Notes to be purchased by
the Initial Purchasers from the Company are in the form contemplated by the Indentures, have
been duly authorized for issuance and sale pursuant to this Agreement and the Indentures
and, at the Closing Date, will have been duly executed by the Company and, when
authenticated in the manner provided for in the applicable Indenture and delivered against
payment of the purchase price therefor, will constitute valid and binding agreements of the
Company, enforceable in accordance with their terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general equitable
principles and will be entitled to the benefits of the Indenture; and (ii) the Guarantees
are in the respective forms contemplated by the applicable Indenture, have been duly
authorized for issuance and sale pursuant to this Agreement and the applicable Indenture
and, at the Closing Date, will have been duly executed by each of the Guarantors and, when
the Notes have been authenticated in the manner provided for in the applicable Indenture and
delivered against payment of the purchase price therefor, will constitute valid and binding
agreements of the Guarantors, enforceable in accordance with their terms, except as the
enforcement thereof may be

5

 

limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general equitable
principles and will be entitled to the benefits of the applicable Indenture.

     (j) Authorization of the Indentures. Each of the Indentures has been duly authorized
by the Company and by each Guarantor and, at the Closing Date, will have been duly executed
and delivered by the Company and each Guarantor and will constitute a valid and binding
agreement of the Company and each Guarantor, enforceable against the Company and each
Guarantor in accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable principles.

     (k) Authorization of Common Stock. Upon issuance and delivery of the Securities in
accordance with this Agreement and the Indentures, the Securities will be convertible at the
option of the holders thereof in accordance with the terms of the Securities and the
Indentures; the shares of Common Stock, if any, issuable upon conversion of the Securities
have been duly authorized and reserved for issuance upon such conversion by all necessary
corporate action and such shares, when issued upon such conversion, will be validly issued
and will be fully paid and non-assessable; no holder of such shares will be subject to
personal liability by reason of being such a holder; and the issuance of such shares upon
such conversion will not be subject to the preemptive or other similar rights of any
securityholder of the Company.

     (l) Descriptions of Notes and the Indentures. The Notes, the Guarantees, the
Indentures and the Common Stock conform in all material respects to the respective
statements relating thereto contained in the Disclosure Package and the Final Offering
Memorandum.

     (m) No Material Adverse Change. Except as otherwise disclosed in the Disclosure
Package and the Final Offering Memorandum, subsequent to the respective dates as of which
information is given in the Disclosure Package and the Final Offering Memorandum: (i) there
has been no material adverse change, or any development that could reasonably be expected to
result in a material adverse change, in the condition, financial or otherwise, or in the
earnings, business, operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries, considered as one entity
(any such change is called a “Material Adverse Change”); (ii) the Company and its
subsidiaries, considered as one entity, have not incurred any material liability or
obligation, indirect, direct or contingent, not in the ordinary course of business nor
entered into any material transaction or agreement not in the ordinary course of business;
and (iii) there has been no dividend or distribution of any kind declared, paid or made on
any class of capital stock, nor any redemptions or repurchases of capital stock, by the
Company or any of its subsidiaries, except for the regular quarterly dividend declared by
the Company on June 20, 2007 and dividends paid by a subsidiary to the Company or other
subsidiaries, or redemptions or repurchases of capital stock by subsidiaries of the Company
that were wholly owned before and after such redemptions or repurchases.

6

 

     (n) Independent Accountants. PricewaterhouseCoopers LLP (the “Independent
Accountants”), who have expressed their opinion with respect to the financial statements
(which term as used in this Agreement includes the related notes thereto) and supporting
schedules filed with the Commission and included or incorporated by reference in the
Disclosure Package and the Final Offering Memorandum, are independent registered public
accountants with respect to the Company within the meaning of Regulation S-X under the
Exchange Act.

     (o) Preparation of the Financial Statements. (i) The financial statements of the
Company, together with the related schedules and notes, incorporated by reference in the
Disclosure Package and the Final Offering Memorandum present fairly the consolidated
financial position of the Company and its subsidiaries as of and at the dates indicated and
the results of their operations and cash flows for the periods specified and comply as to
form with the applicable requirements of the Securities Act. Such financial statements have
been prepared in conformity with generally accepted accounting principles as applied in the
United States and have been applied on a consistent basis throughout the periods involved,
except as may be expressly stated in the related notes thereto.

     (p) Incorporation and Good Standing of the Company and its Subsidiaries. Each of the
Company, the Guarantors and the Significant Subsidiaries (as defined below) has been duly
incorporated or organized and is validly existing as a corporation or other organization in
good standing under the laws of the jurisdiction of its incorporation or organization and
has corporate or organizational power and authority to own, lease and operate its properties
and to conduct its business as described in the Disclosure Package and the Final Offering
Memorandum and to enter into and perform its obligations under each of this Agreement, the
Registration Rights Agreement, the DTC Letter of Representations, the Securities and the
Indentures to which it is a party. Each subsidiary of the Company that is not a Guarantor
or a Significant Subsidiary has been duly incorporated or organized and is validly existing
as a corporation or organization in good standing under the laws of the jurisdiction of its
incorporation or organization and has corporate or organizational power and authority to
own, lease and operate its properties and to conduct its business as described in the
Disclosure Package and the Final Offering Memorandum, except for such instances as would not
individually or in the aggregate result in a Material Adverse Change. Each of the Company
and each subsidiary is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing would not,
individually or in the aggregate, result in a Material Adverse Change. All of the issued
and outstanding capital stock of each corporate subsidiary has been duly authorized and
validly issued, is fully paid and nonassessable and is owned by the Company, directly or
through subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance or claim, except as described in Schedule D hereto. The Company does
not own or control, directly or indirectly, any corporation, association or other entity
other than the subsidiaries listed in Schedule D hereto and other than its funeral
and cemetery merchandise and services and perpetual care trust funds. As used in this
Agreement, “Significant Subsidiaries” means

7

 

any subsidiary of the Company that would constitute a “significant subsidiary” within
the meaning of Article 1 of Regulation S-X of the Securities Act; provided, however, that
for the purposes of this definition, 5% shall be substituted for 10% in each place that it
appears in such definition. Such Significant Subsidiaries are listed on Schedule D.

     (q) Capitalization and Other Capital Stock Matters. The authorized, issued and
outstanding capital stock of the Company is as set forth in the financial statements,
including the schedules and notes, included in the Disclosure Package and the Final Offering
Memorandum (other than for subsequent issuances of capital stock, if any, pursuant to this
Agreement, pursuant to employee benefit plans, stock incentive plans or director
compensation plans described in the Disclosure Package and the Final Offering Memorandum or
upon exercise of outstanding convertible securities, options or warrants described in the
Disclosure Package and the Final Offering Memorandum). All of the outstanding shares of
Common Stock of the Company have been, and will continue to be, duly authorized and validly
issued, are fully paid and nonassessable and have been issued in compliance with federal and
state securities laws. None of the outstanding shares of Common Stock of the Company were,
or will be, issued in violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive rights, rights of first refusal or
other rights to purchase, or equity or debt securities convertible into or exchangeable or
exercisable for, any capital stock of the Company or any of the subsidiaries of the Company,
other than those accurately described in the Disclosure Package and the Final Offering
Memorandum and the documents incorporated by reference therein.

     (r) Stock Exchange Listing. The Common Stock is registered pursuant to Section 12(b)
of the Exchange Act and is listed on the NASDAQ Global Select Market, and the Company has
taken no action designed to, or likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act or delisting the Common Stock from the NASDAQ
Global Select Market, nor has the Company received any notification that the Commission or
the National Association of Securities Dealers, Inc. (the “NASD”) is contemplating
terminating such registration or listing.

     (s) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
Required. Neither the Company nor any of its subsidiaries is in violation of its charter or
by-laws or is in default (or, with the giving of notice or lapse of time, would be in
default) (“Default”) under any indenture, mortgage, loan or credit agreement, note,
contract, franchise, lease, license or other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject (each, an
“Existing Instrument”), except for such Defaults as would not, individually or in
the aggregate, result in a Material Adverse Change. The Company’s and each Guarantor’s
execution, delivery and performance of this Agreement, the Registration Rights Agreement,
the DTC Letter of Representations, the Indentures and the documentation relating to the
convertible note hedge and warrant transactions described in the Disclosure Package and the
Final Offering Memorandum (the “Convertible Note Hedge and Warrant Confirmations”)
to which it is a party, and the issuance and delivery of the Securities, or

8

 

the consummation of the transactions contemplated hereby and thereby and by the
Disclosure Package and the Final Offering Memorandum have been duly authorized by all
necessary corporate action and (i) will not result in any violation of the provisions of the
charter or by-laws of the Company or any subsidiary, (ii) will not conflict with or
constitute a breach of, or Default or a Debt Repayment Triggering Event (as defined below)
under, or result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to, or require the
consent of any other party to, any Existing Instrument, except for such conflicts, breaches,
Defaults, liens, charges or encumbrances as would not, individually or in the aggregate,
result in a Material Adverse Change and (iii) will not result in any violation of any law,
administrative regulation or administrative or court decree applicable to the Company or any
subsidiary. No consent, approval, authorization or other order of, or registration or
filing with, any court or other governmental or regulatory authority or agency, is required
for the Company’s or each Guarantor’s execution, delivery and performance of this Agreement,
the Registration Rights Agreement, the DTC Letter of Representations, the Indentures, the
Convertible Note Hedge and Warrant Confirmations or the issuance and delivery of the
Securities, or consummation of the transactions contemplated hereby and thereby and by the
Disclosure Package and the Final Offering Memorandum, except such as have been obtained or
made by the Company or the Guarantors and are in full force and effect under the Securities
Act, the Trust Indenture Act and applicable state securities or blue sky laws and except
such as may be required by federal and state securities laws or the Trust Indenture Act with
respect to the Company’s or each Guarantor’s obligations under the Registration Rights
Agreement. As used herein, a “Debt Repayment Triggering Event” means any event or
condition which gives, or with the giving of notice or lapse of time would give, the holder
of any note, debenture or other evidence of indebtedness (or any person acting on such
holder’s behalf) the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any of its subsidiaries.

     (t) No Material Actions or Proceedings. Except as otherwise disclosed in the
Disclosure Package and the Final Offering Memorandum, there are no legal or governmental
actions, suits or proceedings pending or, to the best of the Company’s knowledge, (i)
threatened against or affecting the Company or any of its subsidiaries or (ii) which have as
the subject thereof any property owned or leased by, the Company or any of its subsidiaries,
where in any such case described in clause (i) or (ii) (A) there is a reasonable possibility
that such action, suit or proceeding might be determined adversely to the Company or such
subsidiary and (B) any such action, suit or proceeding, if so determined adversely, would
reasonably be expected to result in a Material Adverse Change or adversely affect the
consummation of the transactions contemplated by this Agreement and by the Disclosure
Package and the Final Offering Memorandum in the “Use of Proceeds” section.

     (u) Intellectual Property Rights. The Company and its subsidiaries own, possess or
license sufficient trademarks, trade names, patent rights, copyrights, licenses, approvals,
trade secrets and other similar rights (collectively, “Intellectual Property
Rights”) reasonably necessary to conduct their businesses as now conducted, and the
expected expiration of any of such Intellectual Property Rights would not result in a

9

 

Material Adverse Change. Neither the Company nor any of its subsidiaries has received
any notice of infringement or conflict with asserted Intellectual Property Rights of others,
which infringement or conflict, if the subject of an unfavorable decision, ruling or filing
would result in a Material Adverse Change, and neither the Company nor any of its
subsidiaries is in default under the terms of any license or similar agreement related to
any Intellectual Property Rights necessary to conduct their business as now conducted or
contemplated where such default would result in a Material Adverse Change.

     (v) All Necessary Permits, Etc. The Company and each of its subsidiaries possess all
material valid and current certificates, authorizations or permits issued by the appropriate
municipal, state, federal or foreign regulatory agencies or bodies necessary to conduct
their respective businesses and neither the Company nor any subsidiary has received any
notice of proceedings relating to the revocation or modification of, or non-compliance with,
any such license, certificate, authorization or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, could result in a Material
Adverse Change.

     (w) Title to Properties. The Company and each of its subsidiaries has good and
marketable title to all their real and personal properties and assets reflected as owned in
the financial statements referred to in Section 1(o) above (or elsewhere in the Disclosure
Package and the Final Offering Memorandum), in each case free and clear of any security
interests, mortgages, liens, encumbrances, equities, claims and other defects, except as
disclosed in the financial statements or in the Disclosure Package and the Final Offering
Memorandum and such as would not individually or in the aggregate result in a Material
Adverse Change. The real property, improvements, equipment and personal property held under
lease by the Company or any of its subsidiaries are held under valid and enforceable leases,
except as would not individually or in the aggregate result in a Material Adverse Change.

     (x) Tax Law Compliance. The Company and its subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns and have paid all taxes shown on
such returns required to be paid by any of them and, if due and payable, any related or
similar assessment, fine or penalty levied against any of them, except for immaterial
filings, taxes, assessments, fines and penalties. The Company and each Guarantor has made
adequate charges, accruals and reserves in the applicable financial statements referred to
in Section 1 above in respect of all federal, state and foreign income and franchise taxes
for all periods as to which the tax liability of the Company or any of its subsidiaries has
not been finally determined.

     (y) Company Not an “Investment Company”. The Company is not, and after the issuance of
the Securities and application of the net proceeds therefrom as described in the Disclosure
Package and the Final Offering Memorandum will not be, an “investment company” within the
meaning of Investment Company Act of 1940, as amended (the “Investment Company
Act”), and will conduct its business in a manner so that it will not become subject to
the Investment Company Act.

10

 

     (z) Insurance. Each of the Company and its subsidiaries are, and at the Closing Date
will be, insured by recognized, financially sound institutions with policies in such amounts
and with such deductibles and covering such risks as are generally deemed adequate and
customary for their businesses including, but not limited to, policies covering real and
personal property owned or leased by the Company and its subsidiaries against theft, damage,
destruction, acts of vandalism and earthquakes, except as would not result in a Material
Adverse Change. The Company has no reason to believe that it or any subsidiary will not be
able (i) to renew its existing material insurance coverage as and when such policies expire
or (ii) to obtain comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that would not result in
a Material Adverse Change. Neither of the Company nor any subsidiary has been denied any
material insurance coverage which it has sought or for which it has applied.

     (aa) No Price Stabilization or Manipulation. Neither the Company nor any Guarantor has
taken or will take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities.

     (bb) Solvency. The Company and each Guarantor is, and after giving effect to the
transactions contemplated hereby or in the Disclosure Package and the Final Offering
Memorandum will be, Solvent. As used herein, the term “Solvent” means, with respect
to the Company and each Guarantor on a particular date, that on such date: (1) the fair
value of its assets (both at fair market value and at present fair saleable value on an
orderly basis) is in excess of the total amount of its probable liabilities, including,
without duplication, contingent obligations of the Company or such Guarantor, as
appropriate; and (2) it is then able and expects to be able to pay its debts and
liabilities, including its contingent liabilities, as they mature; and (3) it has capital
not unreasonably small to carry on its business as conducted and as proposed to be
conducted.

     (cc) No Unlawful Contributions or Other Payments. Neither the Company nor any of its
subsidiaries nor, to the best of the Company’s or any Guarantor’s knowledge, any employee,
director or agent of the Company or any subsidiary, has made any contribution or other
payment to any official of, or candidate for, any federal, state or foreign office in
violation of any material law or of the character necessary to be disclosed in the
Disclosure Package and the Final Offering Memorandum in order to make the statements therein
not misleading.

     (dd) Accounting Controls and Disclosure Controls. The Company and each of its
subsidiaries maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with management’s
general or specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted accounting
principles as applied in the United States and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to any

11

 

differences. Except as described in the Disclosure Package and Final Offering
Memorandum, since the end of the Company’s most recent audited fiscal year, there has been
(A) no material weakness in the Company’s internal control over financial reporting (whether
or not remediated) and (B) no change in the Company’s internal control over financial
reporting that has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting. The Company and its consolidated
subsidiaries employ disclosure controls and procedures that are designed to ensure that
information required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Commission’s rules and forms, and is accumulated and communicated
to the Company’s management, including its principal executive officer or officers and
principal financial officer or officers, as appropriate, to allow timely decisions regarding
disclosure.

     (ee) Compliance with the Sarbanes-Oxley Act. There is and has been no failure on the
part of the Company or any of the Company’s directors or officers, in their capacities as
such, to comply in all material respects with any provision of the Sarbanes-Oxley Act of
2002 and the rules and regulations promulgated in connection therewith, including Section
402 related to loans and Sections 302 and 906 related to certifications.

     (ff) Compliance with Environmental Laws. Except as would not, individually or in the
aggregate, result in a Material Adverse Change (i) neither the Company nor any of its
subsidiaries is in violation of any applicable federal, state, local or foreign law or
regulation relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including without limitation, laws and regulations relating
to emissions, discharges, releases or threatened releases of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum and petroleum
products (collectively, “Materials of Environmental Concern”), or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Materials of Environmental Concern (collectively, “Environmental
Laws”), which violation includes, but is not limited to, noncompliance with any permits
or other governmental authorizations required for the operation of the business of the
Company or its subsidiaries under applicable Environmental Laws, or noncompliance with the
terms and conditions thereof, nor has the Company or any of its subsidiaries received any
written communication, whether from a governmental authority responsible for enforcing
applicable Environmental Laws, citizens’ group, employee or otherwise, that alleges that the
Company or any of its subsidiaries is in violation of any Environmental Law; (ii) there is
no claim, action or cause of action filed with a court or governmental authority, no
investigation with respect to which the Company or any Guarantor has received written
notice, and no written notice by any person or entity alleging potential liability for
investigatory costs, cleanup costs, governmental responses costs, natural resources damages,
property damages, personal injuries, attorneys’ fees or penalties arising out of, based on
or resulting from the presence, or release into the environment, of any Material of
Environmental Concern at any location owned, leased or operated by the Company or any of its
subsidiaries, now or in the past (collectively, “Environmental Claims”), pending or,
to the best of the Company’s or any Guarantor’s knowledge, threatened

12

 

against the Company or any of its subsidiaries or any person or entity whose liability
for any Environmental Claim the Company or any of its subsidiaries has retained or assumed
either contractually or by operation of law; and (iii) to the best of the Company’s or any
Guarantor’s knowledge, there are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the release, emission,
discharge, presence or disposal of any Material of Environmental Concern, that could
reasonably be expected to result in a violation of any applicable Environmental Law or form
the basis of a potential Environmental Claim against the Company or any of its subsidiaries
or against any person or entity whose liability for any Environmental Claim the Company or
any of its subsidiaries has retained or assumed either contractually or by operation of
law.

     (gg) ERISA Compliance. The Company and its subsidiaries and any “employee benefit
plan” (as defined under the Employee Retirement Income Security Act of 1974, as amended, and
the regulations and published interpretations thereunder (collectively, “ERISA”))
established or maintained by the Company, its subsidiaries or their “ERISA Affiliates” (as
defined below) are in compliance in all material respects with ERISA, except as would not
individually or in the aggregate result in a Material Adverse Change. “ERISA
Affiliate” means, with respect to the Company or a subsidiary, any member of any group
of organizations described in Sections 414 of the Internal Revenue Code of 1986, as amended,
and the regulations and published interpretations thereunder (the “Code”) of which
the Company or such subsidiary is a member. No “reportable event” (as defined under Section
4043 of ERISA) has occurred or is reasonably expected to occur with respect to any “employee
benefit plan” established or maintained by the Company, its subsidiaries or any of their
ERISA Affiliates. No “employee benefit plan” established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates, if such “employee benefit plan” were
terminated, would have any “amount of unfunded benefit liabilities” (as defined under
Section 4001(a)(18) of ERISA). Neither the Company, its subsidiaries nor any of their ERISA
Affiliates has incurred or reasonably expects to incur any liability under (i) Title I or
Title IV of ERISA or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee
benefit plan” established or maintained by the Company, its subsidiaries or any of their
ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so
qualified and nothing has occurred, whether by action or failure to act, which would cause
the loss of such qualification.

     (hh) Taxes; Fees. There are no stamp or other issuance or transfer taxes or duties or
other similar fees or charges required to be paid in connection with the execution and
delivery of this Agreement or the issuance or sale by the Company of the Securities.

     (ii) No Labor Disputes. No material labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is imminent; and the
Company is not aware of any existing, threatened or imminent labor disturbance by the
employees of any of its principal customers, suppliers, manufacturers or contractors that
would result in a Material Adverse Change.

13

 

     (jj) No Default in Indebtedness. No event of default exists under any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or instrument
constituting Indebtedness (as defined in the Indentures) of the Company.

     (kk) Excluded Domestic Subsidiaries. Each of the domestic subsidiaries of the Company
in existence on the date hereof that is not a Guarantor in respect of the Securities, is
listed on Schedule E, and individually and in the aggregate constituted less than 5%
of the Company’s consolidated assets and less than 5% of the Company’s consolidated revenue
in fiscal 2006.

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

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

     (a) The Securities. The Company agrees to issue and sell to the several Initial
Purchasers, severally and not jointly, all of the Securities upon the terms herein set
forth. On the basis of the representations, warranties and agreements herein contained, and
upon the terms but subject to the conditions herein set forth, the Initial Purchasers agree,
severally and not jointly, to purchase from the Company the aggregate principal amount of
Securities set forth opposite their names on Schedule B, at a purchase price of 98%
of the principal amount of the 2014 Notes and 98% of the principal amount of the 2016 Notes.

     (b) Delivery of Securities; Payment. Payment of the purchase price for, and delivery
of certificates for, the Securities shall be made at the offices of Sidley Austin LLP, 787
Seventh Avenue, New York, New York 10019, or at such other place as shall be agreed upon by
Merrill Lynch and the Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the
pricing occurs after 4:30 P.M. (Eastern time) on any given day) business day after the date
hereof (unless postponed in accordance with the provisions of Section 16), or such other
time not later than ten business days after such date as shall be agreed upon by Merrill
Lynch and the Company (such time and date of payment and delivery being herein called
“Closing Date”).

     Payment shall be made to the Company by wire transfer of immediately available funds to
a bank account designated by the Company, against delivery to Merrill Lynch for the
respective accounts of the Initial Purchasers of certificates for the Securities to be
purchased by them. It is understood that each Initial Purchaser has authorized Merrill
Lynch, for its account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Securities which it has agreed to purchase. Merrill Lynch, individually and
not as representative of the Initial Purchasers, may (but shall not be obligated to) make
payment of the purchase price for the Securities to be purchased by any Initial Purchaser
whose funds have not been received by the Closing Date, but such payment shall not relieve
such Initial Purchaser from its obligations hereunder.

14

 

     (c) Denominations; Registration. The certificates for the Securities shall be in such
denominations permitted under the Indentures and registered in the name of Cede & Co., as
nominee of the Depository, pursuant to the DTC Letter of Representations, and shall be made
available for inspection on the business day preceding the Closing Date at a location in New
York City, as the Initial Purchasers may designate.

     (d) Initial Purchasers as Qualified Institutional Buyers. Each Initial Purchaser
severally and not jointly represents and warrants to, and agrees with, the Company that it
is a “qualified institutional buyer” within the meaning of Rule 144A (a “Qualified
Institutional Buyer”) and an “accredited investor” within the meaning of Rule 501 under
the Securities Act (an “Accredited Investor”).

          Section 3. Additional Covenants. The Company and each of the Guarantors further
jointly and severally covenant and agree with each Initial Purchaser as follows:

     (a) Notice and Effect of Material Events. The Company and the Guarantors will
immediately notify the Initial Purchasers, and confirm such notice in writing, of (x) any
filing made by the Company and the Guarantors of information relating to the offering of the
Securities with any securities exchange or any other regulatory body in the United States or
any other jurisdiction, and (y) prior to the completion of the placement of the offered
Securities by the Initial Purchasers as evidenced by a notice in writing from the Initial
Purchasers to the Company, any material changes in or affecting the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise which (i) make the statements in the Disclosure
Package or the Final Offering Memorandum false or misleading or (ii) are not disclosed in
the Disclosure Package and the Final Offering Memorandum. In such event or if during such
time any event shall occur as a result of which it is necessary, in the reasonable opinion
of any of the Company, its counsel, the Initial Purchasers or counsel for the Initial
Purchasers, to amend or supplement the Final Offering Memorandum in order that the Final
Offering Memorandum not include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading in the light
of the circumstances then existing, the Company and the Guarantors will forthwith amend or
supplement the Final Offering Memorandum by preparing and furnishing to the Initial
Purchasers an amendment or amendments of, or a supplement or supplements to, the Final
Offering Memorandum (in form and substance satisfactory in the reasonable opinion of counsel
for the Initial Purchasers) so that, as so amended or supplemented, the Final Offering
Memorandum will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a Subsequent Purchaser, not
misleading.

     (b) Amendments and Supplements to the Offering Memorandum. The Company and the
Guarantors will advise the Initial Purchasers promptly of any proposal to amend or
supplement the Final Offering Memorandum (including any filings with the Commission made
pursuant to the Exchange Act) and will not effect such amendment or supplement without the
consent of the Initial Purchasers, not to be unreasonably withheld. Neither the consent of
the Initial Purchasers, nor the Initial Purchasers’

15

 

delivery of any such amendment or supplement, shall constitute a waiver of any of the
conditions set forth in Section 5 hereof. If at any time prior to the completion of the
placement of the Securities by the Initial Purchasers, the Company or any Guarantor has
issued or shall have issued any written communication, which would be deemed a “free writing
prospectus” as defined in Rule 405 of the Securities Act if the placement of the Securities
contemplated by this Agreement were conducted as a public offering made pursuant to a
registration statement filed with the Commission under the Securities Act (a
“Supplemental Offering Document”), and there occurred or occurs an event or
development as a result of which such Supplemental Offering Document conflicted or would
conflict with the information contained in the Disclosure Package or the Final Offering
Memorandum or included or would include an untrue statement of a material fact or omitted or
would omit to state a material fact necessary in order to make the statements therein, in
the light of the circumstances prevailing at that subsequent time, not misleading, the
Company and the Guarantors will promptly notify the Initial Purchasers and will promptly
amend or supplement, at its own expense, such Supplemental Offering Document to eliminate or
correct such conflict, untrue statement or omission.

     (c) Copies of the Disclosure Package and the Final Offering Memorandum. The Company
agrees to furnish the Initial Purchasers, without charge, as many copies of the Disclosure
Package and the Final Offering Memorandum and any amendments and supplements thereto as they
shall have reasonably requested.

     (d) Blue Sky Compliance. The Company shall cooperate with the Initial Purchasers and
counsel for the Initial Purchasers to qualify or register the Securities for sale under (or
obtain exemptions from the application of) the Blue Sky or state securities laws of those
jurisdictions designated by the Initial Purchasers, shall comply with such laws and shall
continue such qualifications, registrations and exemptions in effect so long as required for
the sale of the Securities to the Subsequent Purchasers. The Company shall not be required
to qualify as a foreign corporation or to take any action that would subject it to general
service of process in any such jurisdiction where it is not presently qualified or where it
would be subject to taxation as a foreign corporation. The Company will advise the Initial
Purchasers promptly of the suspension of the qualification or registration of (or any such
exemption relating to) the Securities for offering, sale or trading in any jurisdiction or
any initiation or threat of any proceeding for any such purpose, and in the event of the
issuance of any order suspending such qualification, registration or exemption, the Company
shall use its reasonable best efforts to obtain the withdrawal thereof at the earliest
possible moment.

     (e) Use of Proceeds. The Company shall apply the net proceeds from the sale of the
Securities sold by it in the manner described under the caption “Use of Proceeds” in the
Disclosure Package and the Final Offering Memorandum.

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

16

 

     (g) Additional Issuer Information. Prior to the completion of the placement of the
Securities by the Initial Purchasers with the Subsequent Purchasers, the Company shall file,
on a timely basis, with the Commission and the NASDAQ Global Select Market all reports and
documents required to be filed under Section 13 or 15 of the Exchange Act. Additionally, at
any time when the Company is not subject to Section 13 or 15 of the Exchange Act, for the
benefit of holders and beneficial owners from time to time of Securities, the Company shall
furnish, at its expense, upon request, to holders and beneficial owners of Securities and
prospective purchasers of Securities information (“Additional Issuer Information”)
satisfying the requirements of subsection (d)(4) of Rule 144A.

     (h) Restriction on Sale of Securities. Except as otherwise contemplated by the
Disclosure Package and the Final Offering Memorandum, during a period of 90 days from the
date of the Final Offering Memorandum (the “Lock-up Period”), the Company will not,
without the prior written consent of Merrill Lynch, (i) offer, pledge, sell, announce the
intention to sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for the sale of, lend or
otherwise transfer or dispose of any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for or repayable with Common Stock, or file any
registration statement under the Securities Act with respect to any of the foregoing or (ii)
enter into any swap or other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequences of ownership of the Common Stock, or
any securities convertible into or exercisable or exchangeable for or repayable with Common
Stock, whether any such swap or transaction described in clause (i) above or this clause
(ii) is to be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) shares of Common Stock to be
issued upon conversion of the Securities, (B) the Convertible Note Hedge and Warrant
Confirmations and any transactions in the Company’s securities contemplated thereby, (C) the
Company’s issuance of stock options, restricted stock or other stock-based compensation to
the Company’s directors and employees pursuant to any existing employee benefit plans, stock
incentive plans or director compensation plans of the Company, (D) the Company’s issuance of
shares of Common Stock to directors and employees of the Company upon the vesting of
restricted stock or the exercise of options outstanding on the date hereof under existing
employee benefit plans, stock incentive plans or director compensation plans of the Company,
(E) securities issued or to be issued by the Company in connection with a merger,
acquisition or other business combination, provided that the recipients of such securities
shall enter into lock-up agreements for the balance of the Lock-up Period, (F) the filing of
a registration statement on Form S-8 to register shares of Common Stock to be issued under
any existing employee benefit plans, stock incentive plans or director compensation plans of
the Company or (G) the filing of a registration statement on Form S-4 to register shares of
Common Stock.

     (i) Future Reports to the Initial Purchasers. If such documents are not publicly
available on the Commission’s web site described under the caption “Incorporation of Certain
Documents by Reference” in the Disclosure Package and the Final Offering Memorandum, for so
long as any Securities remain outstanding, the

17

 

Company will furnish to Merrill Lynch (i) as soon as practicable after the end of each
fiscal year, copies of the Annual Report of the Company containing the balance sheet of the
Company as of the close of such fiscal year and statements of income, stockholders’ equity
and cash flows for the year then ended and the opinion thereon of the Company’s independent
public or certified public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly Report on
Form 10-Q, Current Report on Form 8-K or other report filed by the Company with the
Commission, the NASD or any securities exchange; and (iii) as soon as available, copies of
any report or communication of the Company mailed generally to holders of its capital stock
or debt securities (including the holders of the Securities).

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

     (k) Legended Securities. Each certificate for a Note will bear the legend contained in
“Transfer Restrictions” in the Disclosure Package and the Final Offering Memorandum for the
time period and upon the other terms stated in the Disclosure Package and the Final Offering
Memorandum.

     (l) PORTAL. The Company will use its reasonable best efforts to cause such Securities
when issued to be eligible for the National Association of Securities Dealers, Inc. PORTALTM
market (the “PORTAL market”).

     (m) Rating of Securities. The Company shall take all reasonable action necessary to
enable either or both of Standard & Poor’s Ratings Services, a division of McGraw Hill, Inc.
(“S&P”), and Moody’s Investor Services, Inc. (“Moody’s”) to provide their
respective credit ratings to the Securities at or prior to the time of their initial
issuance.

     (n) Reservation of Shares of Common Stock. The Company shall reserve and keep
available at all times, free of preemptive rights, shares of Common Stock for the purpose of
enabling the Company to satisfy any obligations to issue shares of Common Stock upon
conversion of the Securities.

     (o) No Other Offering Documents. The Company and each Guarantor represents and agrees
that, unless it obtains the prior consent of Merrill Lynch, and each Initial Purchaser
represents and agrees that, unless it obtains the prior consent of the Company and the
Guarantors, it has not made and will not make any offer relating to the Securities by means
of any Supplemental Offering Materials.

18

 

          Merrill Lynch, on behalf of the several Initial Purchasers, may, in its sole discretion, waive
in writing the performance by the Company of any one or more of the foregoing covenants or extend
the time for their performance.

          Section 4. Payment of Expenses. The Company and each of the Guarantors jointly and
severally agree to pay all costs, fees and expenses incurred in connection with the performance of
its obligations hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the Securities
(including all printing and engraving costs and “road show” costs), (ii) all necessary issue,
transfer and other stamp taxes in connection with the issuance and sale of the Securities to the
Initial Purchasers, (iii) all fees and expenses of the Company’s and the Guarantors’ counsel,
independent public or certified public accountants and other advisors, (iv) all costs and expenses
incurred in connection with the preparation, printing, filing, shipping and distribution of the
Disclosure Package and the Final Offering Memorandum (including any financial statements and
exhibits), and all amendments and supplements thereto, this Agreement, the Registration Rights
Agreement, the Indentures, the DTC Letter of Representations, and the Notes and the Guarantees, (v)
all filing fees, attorneys’ fees and expenses incurred by the Company, the Guarantors or the
Initial Purchasers in connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Securities for offer and sale under the
Blue Sky laws and, if requested by the Initial Purchasers, preparing and printing a “Blue Sky
Survey” or memorandum, and any supplements thereto, advising the Initial Purchasers of such
qualifications, registrations and exemptions, (vi) the fees and expenses of the Trustee, including
the fees and disbursements of counsel for the Trustee in connection with the Indentures and the
Securities, (vii) any fees payable in connection with the rating of the Securities with the ratings
agencies and the listing of the Securities with the PORTAL market, (viii) any filing fees incident
to, and any reasonable fees and disbursements of counsel to the Initial Purchasers in connection
with the review by the NASD, if any, of the terms of the sale of the Securities, (ix) all fees and
expenses (including reasonable fees and expenses of counsel) of the Company and the Guarantors in
connection with approval of the Securities by the Depositary for “book-entry” transfer, and (x) the
performance by the Company and the Guarantors of their respective other obligations under this
Agreement. Except as provided in this Section 4, Section 6, Section 8 and Section 9 hereof, the
Initial Purchasers shall pay their own expenses, including the fees and disbursements of their
counsel.

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

     (a) Accountants’ Comfort Letter. On the date hereof the Initial Purchasers shall have
received from the Independent Accountants a letter dated the date hereof addressed to the
Initial Purchasers, in form and substance satisfactory to the Initial Purchasers, containing
statements and information of the type ordinarily included in accountant’s “comfort letters”
to the Initial Purchasers with respect to the audited and

19

 

unaudited financial statements and certain financial information contained in the
Disclosure Package and the Final Offering Memorandum.

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

     (i) in the reasonable judgment of the Initial Purchasers there shall not have
occurred any Material Adverse Change; and

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

     (c) Opinion of Counsel for the Company and the Guarantors. On the Closing Date, the
Initial Purchasers shall have received the opinion of Jones, Walker, Waechter, Poitevent,
Carrère and Denègre L.L.P., counsel for the Company and the Guarantors, dated as of such
Closing Date, the form of which is attached as Exhibit B.

     (d) Opinion of Local Counsel for the Guarantors. On the Closing Date, the Initial
Purchasers shall have received an opinion of those local counsel for the Guarantors listed
on Schedule F, dated as of such Closing Date, the form of which is attached as
Exhibit C.

     (e) Opinion of Special Counsel for the Company and the Guarantors. On the Closing
Date, the Initial Purchasers shall have received the opinion of Davis Polk & Wardwell,
counsel for the Company and the Guarantors, dated as of such Closing Date, the form of which
is attached as Exhibit D.

     (f) Opinion of Counsel for the Initial Purchasers. On the Closing Date, the Initial
Purchasers shall have received the favorable opinion of Sidley Austin LLP, counsel for the
Initial Purchasers, dated as of such Closing Date, with respect to such matters as may be
requested by the Initial Purchasers.

     (g) Officers’ Certificate. On the Closing Date the Initial Purchasers shall have
received a written certificate executed by the Chairman of the Board, Chief Executive
Officer, Chief Operating Officer, President or Vice President of the Company and each of the
Guarantors and the Chief Financial Officer, Chief Accounting Officer, Treasurer, or
Assistant Treasurer, Secretary or Assistant Secretary of the Company and each of the
Guarantors, dated as of the Closing Date, to the effect set forth in subsection (b)(ii) of
this Section 5, and further to the effect that:

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

20

 

     (ii) the representations, warranties and covenants of the Company and such
Guarantors set forth in Section 1 of this Agreement are true and correct with the
same force and effect as though expressly made on and as of the Closing Date; and

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

     (h) Bring-down Comfort Letter. On the Closing Date, the Initial Purchasers shall have
received from the Independent Accountants, a letter dated such date, in form and substance
reasonably satisfactory to the Initial Purchasers, to the effect that they reaffirm the
statements made in the letter furnished by them pursuant to subsection (a) of this Section
5, except that the specified date referred to therein for the carrying out of procedures
shall be no more than three business days prior to the Closing Date.

     (i) PORTAL Listing. At the Closing Date, the Securities shall have been designated for
trading on the PORTAL market.

     (j) Registration Rights Agreement. The Company and the Guarantors shall have entered
into the Registration Rights Agreement and the Initial Purchasers shall have received
executed counterparts thereof.

     (k) Lock-up Agreements. On or prior to the date of this Agreement, Merrill Lynch shall
received an agreement substantially in the form of Exhibit E hereto signed by the persons
listed in Schedule G hereto.

     (l) Additional Documents. On or before the Closing Date, the Initial Purchasers and
counsel for the Initial Purchasers shall have received such information, documents and
opinions as they may reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Securities as contemplated herein, or in order to evidence the
accuracy of any of the representations and warranties, or the satisfaction of any of the
conditions or agreements, herein contained, including but not limited to, a certificate from
the Chief Financial Officer computing and certifying the estimated future backlog of the
Company.

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

          Section 6. Reimbursement of Initial Purchasers’ Expenses. If this Agreement is
terminated by the Initial Purchasers pursuant to Section 5, or if the sale to the Initial
Purchasers of the Securities on the Closing Date is not consummated because of any refusal,
inability or failure on the part of the Company or any Guarantor to perform any agreement herein or
to comply with any provision hereof, the Company and the Guarantors jointly and severally agree to
reimburse the Initial Purchasers (or such Initial Purchasers as have terminated this

21

 

Agreement with respect to themselves), severally, upon demand for all reasonable out-of-pocket
expenses that shall have been incurred by the Initial Purchasers in connection with the proposed
purchase and the offering and sale of the Securities, including but not limited to reasonable fees
and disbursements of counsel, printing expenses, travel expenses, postage, facsimile and telephone
charges.

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

     (a) Offers and Sales Only to Qualified Institutional Buyers. Offers and sales of the
Securities will be made only by the Initial Purchasers or Affiliates thereof qualified to do
so in the jurisdictions in which such offers or sales are made and only in the manner
contemplated by the Offering Memorandum. Each such offer or sale shall only be made to
persons whom the offeror or seller reasonably believes to be qualified institutional buyers
(as defined in Rule 144A under the Securities Act), upon the terms and conditions
contemplated by the Disclosure Package and the Final Offering Memorandum.

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

     (c) Restrictions on Transfer. The transfer restrictions and other provisions set forth
in the Offering Memorandum under the caption “Transfer Restrictions,” including the legend
required thereby shall apply to the Securities, except as otherwise agreed by the Company
and Merrill Lynch. Following the sale of the Securities by the Initial Purchasers to
Subsequent Purchasers pursuant to the terms hereof, the Initial Purchasers shall not be
liable or responsible to the Company or any Guarantor for any losses, damages or liabilities
suffered or incurred by the Company or such Guarantor, including any losses, damages or
liabilities under the Securities Act, arising from or relating to any resale or transfer of
any Security by such Subsequent Purchaser or subsequent transferee.

          Section 8. Indemnification.

     (a) Indemnification of the Initial Purchasers. The Company and each of the Guarantors
jointly and severally agree to indemnify and hold harmless each Initial Purchaser, its
directors, officers and employees and each person, if any, who controls any Initial
Purchaser within the meaning of the Securities Act and the Exchange Act against any loss,
claim, damage, liability or expense, as incurred, to which such Initial Purchaser, director,
officer, employee or controlling person may become subject, under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is effected with
the written consent of the Company and/or any Guarantor sought to be bound), insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based (i) upon any untrue statement or alleged untrue statement
of a material fact contained in the Disclosure Package or the

22

 

Final Offering Memorandum (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; or
(ii) in whole or in part upon any inaccuracy in the representations and warranties of the
Company or any Guarantor contained herein; or (iii) in whole or in part upon any failure of
the Company or any Guarantor to perform its obligations hereunder or under law; or (iv) any
act or failure to act or any alleged act or failure to act by any Initial Purchaser in
connection with, or relating in any manner to, the offering contemplated hereby, and which
is included as part of or referred to in any loss, claim, damage, liability or action
arising out of or based upon any matter covered by clause (i) above, provided that the
Company and the Guarantors shall not be liable under this clause (iv) to the extent that a
court of competent jurisdiction shall have determined by a final judgment that such loss,
claim, damage, liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Initial Purchaser through its gross negligence or
willful misconduct, and to reimburse each Initial Purchaser and each such director, officer,
employee or controlling person for any and all expenses (including the fees and
disbursements of counsel chosen by Merrill Lynch) as such expenses are reasonably incurred
by such Initial Purchaser or such director, officer, employee or controlling person in
connection with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the foregoing indemnity
agreement shall not apply to any loss, claim, damage, liability or expense to the extent,
but only to the extent, arising out of or based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company by the Initial Purchasers expressly for use in
the Disclosure Package or the Final Offering Memorandum (or any amendment or supplement
thereto). The indemnity agreement set forth in this Section 8 shall be in addition to any
liabilities that the Company or the Guarantors may otherwise have.

     (b) Indemnification of the Company, the Guarantors and each of their Directors and
Officers. Each Initial Purchaser agrees, severally and not jointly, to indemnify and hold
harmless the Company, the Guarantors and each of their directors, officers and employees,
and each person, if any, who controls the Company or the Guarantors within the meaning of
the Securities Act or the Exchange Act, against any loss, claim, damage, liability or
expense, as incurred, to which the Company, the Guarantors or any such director, officer,
employee or controlling person may become subject, under the Securities Act, the Exchange
Act, or other federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with the written
consent of such Initial Purchaser), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or is based upon
any untrue or alleged untrue statement of a material fact contained in the Disclosure
Package or the Final Offering Memorandum (or any amendment or supplement thereto), or arises
out of or is based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Disclosure Package or the
Final Offering

23

 

Memorandum (or any amendment or supplement thereto), in reliance upon and in conformity
with written information furnished to the Company by the Initial Purchasers expressly for
use therein; and to reimburse the Company, the Guarantors or any such director, officer or
controlling person for any legal and other expenses as such expenses are reasonably incurred
by the Company, the Guarantors or any such director, officer or controlling person in
connection with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action. Each of the Company and the Guarantors hereby
acknowledges that the only information that the Initial Purchasers have furnished to the
Company expressly for use in the Disclosure Package or the Final Offering Memorandum (or any
amendment or supplement thereto) are the statements set forth (1) in the third sentence of
the second paragraph under the caption “Plan of Distribution, (2) in the third sentence of
the first paragraph under the subheading “New Issue of Notes,” (3) in the second, third and
fourth sentences of the first paragraph and in the second paragraph under the subheading
“Price Stabilization and Short Positions” but only insofar as such information relates to
the Initial Purchasers and (4) in the first and second sentence under the subheading
“Electronic Distribution,” in each case, under the caption “Plan of Distribution” in the
Disclosure Package and the Final Offering Memorandum; and the Initial Purchasers confirm
that such statements are correct. The indemnity agreement set forth in this Section 8 shall
be in addition to any liabilities that each Initial Purchaser may otherwise have.

     (c) Notifications and Other Indemnification Procedures. Promptly after receipt by an
indemnified party under this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an indemnifying
party under this Section 8, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party for contribution or otherwise under the
indemnity agreement contained in this Section 8 or to the extent it is not prejudiced as a
proximate result of such failure. In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate in and, to the
extent that it shall elect, jointly with all other indemnifying parties similarly notified,
by written notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants in any such
action include both the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that a conflict may arise between the positions of the
indemnifying party and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of such indemnifying party’s election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party will not be
liable to such indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such

24

 

indemnified party in connection with the defense thereof unless (i) the indemnified
party shall have employed separate counsel in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel (together with local counsel),
approved by the indemnifying party (Merrill Lynch or the Company, as the case may be, in the
case of Section 8 and Section 9), representing the indemnified parties who are parties to
such action) or (ii) the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a reasonable time after
notice of commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.

     (d) Settlements. The indemnifying party under this Section 8 shall not be liable for
any settlement of any proceeding effected without its written consent, but if settled with
such consent or if there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party against any loss, claim, damage, liability or
expense by reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel as contemplated by Section 8 hereof,
the indemnifying party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding in respect
of which any indemnified party is or could have been a party and indemnity was or could have
been sought hereunder by such indemnified party, unless such settlement, compromise or
consent includes an unconditional release of such indemnified party from all liability on
claims that are the subject matter of such action, suit or proceeding.

          Section 9. Contribution. If the indemnification provided for in Section 8 is for any
reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified
party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative benefits received by the
Company and the Guarantors on the one hand, and the Initial Purchasers, on the other hand, from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative fault of the
Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in
connection with the statements or omissions or inaccuracies in the representations and warranties
herein which resulted in such losses, claims, damages, liabilities or expenses, as well as any
other relevant equitable considerations. The relative benefits received by the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in connection with the
offering of the Securities pursuant to this Agreement shall be

25

 

deemed to be in the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received by the Company and
the Guarantors, and the total discount received by the Initial Purchasers bear to the aggregate
initial offering price of the Securities. The relative fault of the Company and the Guarantors, on
the one hand, and the Initial Purchasers, on the other hand, shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Company or the Guarantors, on the
one hand, or the Initial Purchasers, on the other hand, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.

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

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

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

          Section 10. Termination of this Agreement. Prior to the Closing Date, this Agreement
may be terminated by the Initial Purchasers by notice given to the Company if at any time (i)
trading or quotation in any of the Company’s securities shall have been suspended or limited by the
Commission or by the NASDAQ Global Select Market, or trading in securities generally on either the
NASDAQ Global Select Market or the New York Stock Exchange shall

26

 

have been suspended or limited, or minimum or maximum prices shall have been generally
established on any of such stock exchanges by the Commission or the NASD; (ii) a general banking
moratorium shall have been declared by any of federal, New York, Louisiana or California
authorities; (iii) there shall have occurred any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any change in the United States or
international financial markets, or any substantial change or development involving a prospective
substantial change in United States’ or international political, financial or economic conditions,
as in the judgment of the Initial Purchasers is material and adverse and makes it impracticable to
market the Securities in the manner and on the terms described in the Disclosure Package and the
Final Offering Memorandum or to enforce contracts for the sale of securities; (iv) in the
reasonable judgment of the Initial Purchasers there shall have occurred any Material Adverse
Change; or the Company or any Guarantor shall have sustained a loss by fire, strike, flood,
earthquake, accident or other calamity of such character as in the reasonable judgment of the
Initial Purchasers, may interfere materially with the conduct of the business and operation of the
Company or the Guarantors, considered as one entity, regardless of whether or not such loss shall
have been insured, or (v) a material disruption has occurred in commercial banking or securities
settlement or clearance services in the United States. Any termination pursuant to this Section 10
shall be without liability on the part of (a) the Company or any Guarantor to any Initial
Purchaser, except that the Company and any Guarantor shall be obligated to reimburse the expenses
of the Initial Purchasers pursuant to Section 4 and to the extent applicable Section 6 hereof, (b)
any Initial Purchaser to the Company or any Guarantor, or (c) of any party hereto to any other
party except that the provisions of Section 8 and Section 9 shall at all times be effective and
shall survive such termination.

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

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

If to the Initial Purchasers:

Merrill Lynch & Co.

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

4 World Financial Center

New York, NY 10080

Facsimile: 212-449-3207

Attention: Global Origination Counsel Group

27

 

with a copy to:

Sidley Austin LLP

787 Seventh Avenue

New York, NY 10019

Facsimile: 212-839-5599

Attention: Robert Mandell

If to the Company:

Stewart Enterprises, Inc.

1333 S. Clearview Parkway

Jefferson, LA 70121

Facsimile: 504-729-1407

Attention: Thomas M. Kitchen, Chief Financial Officer

with a copy to:

Jones, Walker, Waechter, Poitevent,

Carrère and Denègre, L.L.P.

201 St. Charles Avenue

New Orleans, LA 70170-5100

Telecopier No.: (504) 582-8012

Attention: L. Richards McMillan, II, Esq.

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

          Section 13. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto, including any substitute Initial Purchasers pursuant to Section 16 hereof,
and to the benefit of the employees, officers and directors and controlling persons referred to in
Section 8 and Section 9, and in each case their respective successors, and no other person will
have any right or obligation hereunder. The term “successors” shall not include any purchaser of
the Securities as such from any of the Initial Purchasers merely by reason of such purchase.

          Section 14. Partial Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity or enforceability
of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of
this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to make it valid and
enforceable.

          Section 15. Governing Law; Consent to Jurisdiction.

     (a) Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL

28

 

LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH
STATE.

     (b) Consent to Jurisdiction. Any legal suit, action or proceeding arising out of or
based upon this Agreement or the transactions contemplated hereby (“Related
Proceedings”) may be instituted in the federal courts of the United States of America
located in the City and County of New York or the courts of the State of New York in each
case located in the City and County of New York (collectively, the “Specified
Courts”), and each party irrevocably submits to the non-exclusive jurisdiction (except
for proceedings instituted in regard to the enforcement of a judgment of any such court (a
“Related Judgment”), as to which such jurisdiction is non-exclusive) of such courts
in any such suit, action or proceeding. Service of any process, summons, notice or document
by mail to such party’s address set forth above shall be effective service of process for
any suit, action or other proceeding brought in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any suit, action or other
proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not
to plead or claim in any such court that any such suit, action or other proceeding brought
in any such court has been brought in an inconvenient forum.

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

          As used in this Agreement, the term “Initial Purchaser” shall be deemed to include any
person substituted for a defaulting Initial Purchaser under this Section 16. Any action taken
under this Section 16 shall not relieve any defaulting Initial Purchaser from liability in respect
of any default of such Initial Purchaser under this Agreement.

29

 

          Section 17. No Advisory or Fiduciary Relationship. The Company acknowledges and
agrees that (a) the purchase and sale of the Securities pursuant to this Agreement, including the
determination of the offering price of the Securities and any related discounts and commissions, is
an arm’s-length commercial transaction between the Company and the Guarantors, on the one hand, and
the several Initial Purchasers, on the other hand, (b) in connection with the offering contemplated
hereby and the process leading to such transaction each Initial Purchaser is and has been acting
solely as a principal and is not the agent or fiduciary of the Company or any of the Guarantors, or
its stockholders, creditors, employees or any other party, (c) no Initial Purchaser has assumed or
will assume an advisory or fiduciary responsibility in favor of the Company or any of the
Guarantors with respect to the offering contemplated hereby or the process leading thereto
(irrespective of whether such Initial Purchaser has advised or is currently advising the Company or
any of the Guarantors on other matters) and no Initial Purchaser has any obligation to the Company
or any of the Guarantors with respect to the offering contemplated hereby except the obligations
expressly set forth in this Agreement, (d) the Initial Purchasers and their Affiliates may be
engaged in a broad range of transactions that involve interests that differ from those of the
Company and the Guarantors, and (e) no Initial Purchaser has provided any legal, accounting,
regulatory or tax advice with respect to the offering contemplated hereby and the Company and the
Guarantors have consulted their own legal, accounting, regulatory and tax advisors to the extent
they deemed appropriate.

          Section 18. General Provisions. This Agreement constitutes the entire agreement of
the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter hereof. This
Agreement may be executed in two or more counterparts, each one of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same instrument. This
Agreement may not be amended or modified unless in writing by all of the parties hereto, and no
condition herein (express or implied) may be waived unless waived in writing by each party whom the
condition is meant to benefit. The Table of Contents and the section headings herein are for the
convenience of the parties only and shall not affect the construction or interpretation of this
Agreement.

30

 

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

	 	 	 	 	 
	 	Very truly yours,

STEWART ENTERPRISES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Thomas M. Kitchen 	 
	 	 	Title:  	Senior Executive Vice President
and Chief Financial Officer 	 
	 

GUARANTORS:

KILGORE-GREEN FUNERAL HOME, INC.

S.E. CEMETERIES OF ALABAMA, INC.

S.E. COMBINED SERVICES OF ALABAMA, INC.

S.E. FUNERAL HOMES OF ALABAMA, INC.

FOREST HILLS CEMETERY, INC.

GRIFFIN-LEGGETT INSURANCE AGENCY, INC.

GRIFFIN-LEGGETT, INC.

GROSS FUNERAL HOME, INC.

S.E. FUNERAL HOMES OF ARKANSAS, INC.

ALL SOULS MORTUARY, INC.

ASHES TO ASHES, INC.

ASSUMPTION MORTUARY, INC.

BARSTOW FUNERAL HOMES, INC.

BUCHHEIM FAMILY, INC.

CALVARY MORTUARY OF LOS ANGELES, CALIFORNIA, INC.

CATALINA CHANNEL CREMATION SOCIETY

CATHOLIC MORTUARY SERVICES, INC.

DeYOUNG MEMORIAL CHAPEL, INC.

DILDAY BROTHERS HUNTINGTON VALLEY MORTUARY

HOLY CROSS MORTUARY OF CULVER CITY, CALIFORNIA, INC.

HOLY CROSS MORTUARY OF POMONA, CALIFORNIA, INC.

HOPSON MORTUARY, INC.

LASSILA FUNERAL CHAPELS, INC.

LOMBARD & CO.

N.D. DAVIS & ASSOCIATES, INC.

QUEEN OF HEAVEN MORTUARY, INC.

RESURRECTION MORTUARY, INC.

RIVER CITIES FUNERAL CHAPEL, INC.

S.E. ACQUISITION OF CALIFORNIA, INC.

S.E. ACQUISITION OF DELANO, CALIFORNIA, INC.

31

 

S.E. ACQUISITION OF GLENDALE, CALIFORNIA, INC.

S.E. ACQUISITION OF LANCASTER, CALIFORNIA, INC.

S.E. ACQUISITION OF LOS OSOS MORTUARY AND MEMORIAL PARK, INC.

S.E. ACQUISITION OF OAKHURST, CALIFORNIA, INC.

S.E. ACQUISITION OF OROVILLE, CALIFORNIA, INC.

SAN DIEGO CEMETERY ASSOCIATION

SAN FERNANDO MISSION MORTUARY, INC.

SANTA BARBARA FUNERAL SERVICES, INC.

SANTA CLARA MORTUARY, INC.

SCOVERN MORTUARY, A CALIFORNIA CORPORATION

SDCA HOLDINGS, INC.

SIMPLICITY PLAN OF CALIFORNIA, INC.

STEWART PRE-NEED SERVICES, INC.

STRICKLIN/SNIVELY MORTUARY

VICTOR V. DESROSIER, INC.

WALLACE E. WHITE & HOWARD J. CALLANAN, INC.

SENTINEL CREMATION SOCIETIES, INC.

A.P. BOZA FUNERAL HOME, INC.

ALL FAITHS MEMORIAL PARK, INC.

ARLINGTON MEMORIAL PARK CEMETERY AND FUNERAL HOME, INC.

BALDWIN-FAIRCHILD FUNERAL HOMES, INC.

BAY AREA CREMATORY, INC.

S.E. BD TAMPA, INC.

BRUCE OCALA FUNERAL HOME, INC.

CEMETERY MANAGEMENT, INC.

CHAPEL HILL CEMETERY, INC.

CURRY & SON FUNERAL HOME, INC.

S.E. DCG TAMPA, INC.

FLORIDA HILLS MEMORIAL GARDENS, INC.

GARDEN OF MEMORIES, INC.

GLEN HAVEN MEMORIAL PARK, INC.

GOOD SHEPHERD MEMORIAL GARDENS, INC.

HIGHLAND MEMORY GARDENS, INC.

HUBBELL FUNERAL HOME AND CREMATORY, INC.

KICLITER FUNERAL HOME, INC.

MADCEM OF FLORIDA, INC.

MEMORIAL PARK CEMETERY, INC.

MEMORIAL SUNSET PARK, INC.

OAKLAWN PARK CEMETERY AND FUNERAL HOME, INC.

ROBERTS FUNERAL HOME, INC.

ROYAL PALM MEMORIAL GARDENS, INC.

SEMORAN FUNERAL HOME, INC.

SOUTH DADE-PALMS MEMORIAL PARK, INC.

SYLVAN ABBEY MEMORIAL PARK, INC.

THE SIMPLICITY PLAN, INC.

TURNER CREMATORY, INC.

32

 

TURNER FUNERAL HOMES, INC.

WALSH & WOOD FUNERAL HOME, INC.

WOODLAWN MEMORY GARDENS, INC.

WOODLAWN PARK CEMETERY COMPANY

CHEATHAM HILL MEMORIAL PARK, INC.

EASTLAWN CORPORATION

GARNER FAMILY FUNERAL HOME, INC.

HAISTEN FUNERAL HOME OF HENRY COUNTY, INC.

HAISTEN FUNERAL HOMES, INC.

HIGGINS AND SON FUNERAL HOME, INC.

HOLLY HILL MEMORIAL PARK, INC.

ROSEHAVEN FUNERAL HOME & CEMETERY, INC.

S.E. ACQUISITION OF LITHONIA, GEORGIA, INC.

S.E. FUNERAL HOMES OF ILLINOIS, INC.

KNUTSON FUNERAL HOMES, INC.

PAULEY FUNERAL HOME, INC.

RUNYAN MANGOLD, INC.

ACME MAUSOLEUM CORPORATION

ENDURING MEMORIES, INC.

EMPRESAS STEWART — CEMENTERIOS, INC.

EMPRESAS STEWART — FUNERARIAS, INC.

LAKE LAWN METAIRIE FUNERAL HOME (JOINT VENTURE)

S.E. AUSTRALIA, INC.

S.E. CEMETERIES OF LOUISIANA, INC.

S.E. FUNERAL HOMES OF LOUISIANA, INC.

S.E. SOUTH-CENTRAL, INC.

STEWART ENTERPRISES (EUROPE) INC.

STEWART RESOURCE CENTER, INC.

STEWART SERVICES, INC.

BOUNDS FUNERAL HOME, INC.

CEDAR HILL CEMETERY COMPANY, INC.

CREST LAWN MEMORIAL GARDENS, INC.

DRUID RIDGE CEMETERY COMPANY

FORT LINCOLN CEMETERY, INC.

FORT LINCOLN FUNERAL HOME, INC.

GALLERY GRANITE CORPORATION

HILLCREST MEMORIAL CEMETERY, INC.

HINES-RINALDI FUNERAL HOME, INC.

JOHN M. TAYLOR FUNERAL HOME, INC.

LOUDON PARK CEMETERY COMPANY

LOUDON PARK FUNERAL HOME, INC.

NATIONAL HARMONY MEMORIAL PARK, INC.

PARKLAWN, INC.

PARK WOOD MANAGEMENT COMPANY

S.E. MID-ATLANTIC, INC.

SIMPLE TRIBUTE OF MARYLAND, INC.

33

 

THE PARKWOOD CEMETERY COMPANY

WILLIAM W. CHAMBERS, INC.

LAKEWOOD MEMORIAL PARK, INC.

D.W. NEWCOMER’S SONS, INC.

DWN PROPERTIES, INC.

FUNERAL SECURITY PLANS, INC.

THE LINCOLN MEMORIAL PARK CEMETERY ASSOCIATION

S.E.N.S. OF NEVADA, INC.

RENO MEMORIAL, INC.

S.E. ACQUISITION OF NEVADA, INC.

S.E. ACQUISITION OF RENO, NEVADA, INC.

GORNY & GORNY PATERSON-CLIFTON MORTUARY

S.E. ACQUISITION OF CLIFTON, NEW JERSEY, INC.

S.E. ACQUISITION OF SANTA FE, NEW MEXICO, INC.

C.J. APPLEGATE AND SONS, INC.

CORNELL & DAGGETT, INC.

GARDINIER COLLETTI MEMORIAL HOME, INC.

MURPHY FUNERAL SERVICE, INC.

OTTO REDANZ FUNERAL HOME, INC.

S.E. ACQUISITION OF FREDONIA, NEW YORK, INC.

STRONG & BURNS FUNERAL HOME, INC.

CATAWBA MEMORIAL PARK, INC.

EVANS FUNERAL HOME, INC.

GARRETT — HILLCREST, INC.

MCLAURIN’S FUNERAL HOME, INC.

MONTLAWN MEMORIAL PARK, INC.

S.E. CEMETERIES OF NORTH CAROLINA, INC.

S.E. FUNERAL HOMES OF NORTH CAROLINA, INC.

AMLING/SCHROEDER FUNERAL SERVICE, INC.

CASCADE CREMATORY, INC.

CHAPEL OF THE ROSES, INC.

CHAPEL OF THE VALLEY FUNERAL HOME, INC.

DUTTON, INC.

S.E. GREENWOOD, INC.

J.P. FINLEY AND SON MORTUARY, INC.

S.E. BEND NR, INC.

S.E. ACQUISITION OF MYRTLE CREEK, OREGON, INC.

S.E. ACQUISITION OF OREGON, INC.

S.E. ACQUISITION OF REEDSPORT, OREGON, INC.

SUNSET HILLS MEMORIAL PARK

S.E. BEND TDHM, INC.

BENJAMIN FRANKLIN P. M., INC.

GEORGE WASHINGTON MEMORIAL PARK, INC.

KIRK & NICE SUBURBAN CHAPEL, INC.

KIRK & NICE, INC.

PET HAVEN, INC.

34

 

S.E. ACQUISITION OF PENNSYLVANIA, INC.

SUNSET MEMORIAL PARK COMPANY

DUNBAR FUNERAL HOME

S.E. CEMETERIES OF SOUTH CAROLINA, INC.

S.E. COMBINED SERVICES OF SOUTH CAROLINA, INC.

S.E. FUNERAL HOMES OF SOUTH CAROLINA, INC.

MONTE VISTA BURIAL PARK, INC.

MT. JULIET MEMORIAL GARDENS, INC.

NAVE FUNERAL HOME OF LEBANON, INC.

S.E. COMBINED SERVICES OF TENNESSEE, INC.

S.E. FUNERAL HOMES OF TENNESSEE, INC.

THE NASHVILLE HISTORIC CEMETERY ASSOCIATION, INC.

ABBEY PLAN OF TEXAS, INC.

BELEW FUNERAL HOME, INC.

EMERALD HILLS FUNERAL CORPORATION

GUARDIAN CREMATION SOCIETY, INC.

LYONS FUNERAL HOME, INC.

PASADENA FUNERAL HOME, INC.

S.E. FUNERAL HOMES OF TEXAS, INC.

S.E. CEMETERIES OF TEXAS, INC.

SIMPLICITY PLAN OF TEXAS, INC.

CLINCH VALLEY MEMORIAL CEMETERY, INC.

EVERLY FUNERAL HOMES, INCORPORATED

EVERLY PEP, INC.

MONTICEI.LO MEMORY GARDENS, INC.

S.E. CEMETERIES OF VIRGINIA, INC.

S.E. FUNERAL HOMES OF VIRGINIA, INC.

CREMATION SOCIETY NORTHWEST, INC.

E.R. BUTTERWORTH & SONS

S.E.E.S. OF VANCOUVER, INC.

S.E. ACQUISITION OF WASHINGTON, INC.

BARTLETT-BURDETTE-COX FUNERAL HOME, INC.

CASDORPH & CURRY FUNERAL HOME, INC.

EASTERN CEMETERY ASSOCIATES, INC.

KANAWHA PLAZA PARTNERSHIP

KLINGEL-CARPENTER MORTUARY, INC.

LOI CHARLESTON, INC.

NATIONAL EXCHANGE TRUST, LTD.

NATIONAL FUNERAL SERVICES, INCORPORATED

S.E. ACQUISITION OF MALDEN, WEST VIRGINIA, INC.

S.E. CEMETERIES OF WEST VIRGINIA, INC.

S.E. FUNERAL HOMES OF WEST VIRGINIA, INC.

WILSON FUNERAL HOME, INC.

35

 

	 	 	 	 	 
	 

	 	 	 	 
	S.E. CEMETERIES OF WISCONSIN, INC.	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name: Thomas M. Kitchen	 	 
	 

	 	Title: Authorized Signatory	 	 

36

 

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

MERRILL LYNCH & CO.

MERRILL LYNCH, PIERCE, FENNER & SMITH

INCORPORATED

BANC OF AMERICA SECURITIES LLC

BNP PARIBAS SECURITIES CORP.

CALYON SECURITIES (USA) INC.

CAPITAL ONE SOUTHCOAST, INC.

SUNTRUST CAPITAL MARKETS, INC.

U.S. BANCORP INVESTMENTS, INC.

	 	 	 	 	 
	 

	 	 	 	 
	By:

	 	MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name: Justin Walter	 	 
	 

	 	Title: Vice President	 	 

For itself and as Representative of the other Initial Purchasers named in Schedule B hereto.

37

 

SCHEDULE A

LIST OF GUARANTORS

	 	 	 
	 	 	Jurisdiction of
	Subsidiary	 	Organization
	KILGORE-GREEN FUNERAL HOME, INC.

	 	ALABAMA
	S.E. CEMETERIES OF ALABAMA, INC.

	 	ALABAMA
	S.E. COMBINED SERVICES OF ALABAMA, INC.

	 	ALABAMA
	S.E. FUNERAL HOMES OF ALABAMA, INC.

	 	ALABAMA
	FOREST HILLS CEMETERY, INC.

	 	ARKANSAS
	GRIFFIN-LEGGETT INSURANCE AGENCY, INC.

	 	ARKANSAS
	GRIFFIN-LEGGETT, INC.

	 	ARKANSAS
	GROSS FUNERAL HOME, INC.

	 	ARKANSAS
	S.E. FUNERAL HOMES OF ARKANSAS, INC.

	 	ARKANSAS
	ALL SOULS MORTUARY, INC.

	 	CALIFORNIA
	ASHES TO ASHES, INC.

	 	CALIFORNIA
	ASSUMPTION MORTUARY, INC.

	 	CALIFORNIA
	BARSTOW FUNERAL HOMES, INC.

	 	CALIFORNIA
	BUCHHEIM FAMILY, INC.

	 	CALIFORNIA
	CALVARY MORTUARY OF LOS ANGELES, CALIFORNIA, INC.

	 	CALIFORNIA
	CATALINA CHANNEL CREMATION SOCIETY

	 	CALIFORNIA
	CATHOLIC MORTUARY SERVICES, INC.

	 	CALIFORNIA
	DeYOUNG MEMORIAL CHAPEL, INC.

	 	CALIFORNIA
	DILDAY BROTHERS HUNTINGTON VALLEY MORTUARY

	 	CALIFORNIA
	HOLY CROSS MORTUARY OF CULVER CITY, CALIFORNIA, INC.

	 	CALIFORNIA
	HOLY CROSS MORTUARY OF POMONA, CALIFORNIA, INC.

	 	CALIFORNIA
	HOPSON MORTUARY, INC.

	 	CALIFORNIA
	LASSILA FUNERAL CHAPELS, INC.

	 	CALIFORNIA
	LOMBARD & CO.

	 	CALIFORNIA
	N.D. DAVIS & ASSOCIATES, INC.

	 	CALIFORNIA
	QUEEN OF HEAVEN MORTUARY, INC.

	 	CALIFORNIA
	RESURRECTION MORTUARY, INC.

	 	CALIFORNIA
	RIVER CITIES FUNERAL CHAPEL, INC.

	 	CALIFORNIA
	S.E. ACQUISITION OF CALIFORNIA, INC.

	 	CALIFORNIA
	S.E. ACQUISITION OF DELANO, CALIFORNIA, INC.

	 	CALIFORNIA
	S.E. ACQUISITION OF GLENDALE, CALIFORNIA, INC.

	 	CALIFORNIA
	S.E. ACQUISITION OF LANCASTER, CALIFORNIA, INC.

	 	CALIFORNIA
	S.E. ACQUISITION OF OAKHURST, CALIFORNIA, INC.

	 	CALIFORNIA

Sched A -1 

 

	 	 	 
	 	 	Jurisdiction of
	Subsidiary	 	Organization
	S.E. ACQUISITION OF LOS OSOS MORTUARY AND MEMORIAL PARK,
INC.

	 	CALIFORNIA
	S.E. ACQUISITION OF OROVILLE, CALIFORNIA, INC.

	 	CALIFORNIA
	SAN DIEGO CEMETERY ASSOCIATION

	 	CALIFORNIA
	SAN FERNANDO MISSION MORTUARY, INC.

	 	CALIFORNIA
	SANTA BARBARA FUNERAL SERVICES, INC.

	 	CALIFORNIA
	SANTA CLARA MORTUARY, INC.

	 	CALIFORNIA
	SCOVERN MORTUARY, A CALIFORNIA CORPORATION

	 	CALIFORNIA
	SDCA HOLDINGS, INC.

	 	CALIFORNIA
	SIMPLICITY PLAN OF CALIFORNIA, INC.

	 	CALIFORNIA
	STEWART PRE-NEED SERVICES, INC.

	 	CALIFORNIA
	STRICKLIN/SNIVELY MORTUARY

	 	CALIFORNIA
	VICTOR V. DESROSIER, INC.

	 	CALIFORNIA
	WALLACE E. WHITE & HOWARD J. CALLANAN, INC.

	 	CALIFORNIA
	SENTINEL CREMATION SOCIETIES, INC.

	 	DELAWARE
	A.P. BOZA FUNERAL HOME, INC.

	 	FLORIDA
	ALL FAITHS MEMORIAL PARK, INC.

	 	FLORIDA
	ARLINGTON MEMORIAL PARK CEMETERY AND FUNERAL HOME, INC.

	 	FLORIDA
	BALDWIN-FAIRCHILD FUNERAL HOMES, INC.

	 	FLORIDA
	BAY AREA CREMATORY, INC.

	 	FLORIDA
	S.E. BD TAMPA, INC.

	 	FLORIDA
	BRUCE OCALA FUNERAL HOME, INC.

	 	FLORIDA
	CEMETERY MANAGEMENT, INC.

	 	FLORIDA
	CHAPEL HILL CEMETERY, INC.

	 	FLORIDA
	CURRY & SON FUNERAL HOME, INC.

	 	FLORIDA
	S.E. DCG TAMPA, INC.

	 	FLORIDA
	FLORIDA HILLS MEMORIAL GARDENS, INC.

	 	FLORIDA
	GARDEN OF MEMORIES, INC.

	 	FLORIDA
	GLEN HAVEN MEMORIAL PARK, INC.

	 	FLORIDA
	GOOD SHEPHERD MEMORIAL GARDENS, INC.

	 	FLORIDA
	HIGHLAND MEMORY GARDENS, INC.

	 	FLORIDA
	HUBBELL FUNERAL HOME AND CREMATORY, INC.

	 	FLORIDA
	KICLITER FUNERAL HOME, INC.

	 	FLORIDA
	MADCEM OF FLORIDA, INC.

	 	FLORIDA
	MEMORIAL PARK CEMETERY, INC.

	 	FLORIDA
	MEMORIAL SUNSET PARK, INC.

	 	FLORIDA
	OAKLAWN PARK CEMETERY AND FUNERAL HOME, INC.

	 	FLORIDA
	ROBERTS FUNERAL HOME, INC.

	 	FLORIDA
	ROYAL PALM MEMORIAL GARDENS, INC.

	 	FLORIDA
	SEMORAN FUNERAL HOME, INC.

	 	FLORIDA
	SOUTH DADE-PALMS MEMORIAL PARK, INC.

	 	FLORIDA
	SYLVAN ABBEY MEMORIAL PARK, INC.

	 	FLORIDA

Sched A -2 

 

	 	 	 
	 	 	Jurisdiction of
	Subsidiary	 	Organization
	THE SIMPLICITY PLAN, INC.

	 	FLORIDA
	TURNER CREMATORY, INC.

	 	FLORIDA
	TURNER FUNERAL HOMES, INC.

	 	FLORIDA
	WALSH & WOOD FUNERAL HOME, INC.

	 	FLORIDA
	WOODLAWN MEMORY GARDENS, INC.

	 	FLORIDA
	WOODLAWN PARK CEMETERY COMPANY

	 	FLORIDA
	CHEATHAM HILL MEMORIAL PARK, INC.

	 	GEORGIA
	EASTLAWN CORPORATION

	 	GEORGIA
	GARNER FAMILY FUNERAL HOME, INC.

	 	GEORGIA
	HAISTEN FUNERAL HOME OF HENRY COUNTY, INC.

	 	GEORGIA
	HAISTEN FUNERAL HOMES, INC.

	 	GEORGIA
	HIGGINS AND SON FUNERAL HOME, INC.

	 	GEORGIA
	HOLLY HILL MEMORIAL PARK, INC.

	 	GEORGIA
	ROSE HAVEN FUNERAL HOME & CEMETERY, INC.

	 	GEORGIA
	S.E. ACQUISITION OF LITHONIA, GEORGIA, INC.

	 	GEORGIA
	S.E. FUNERAL HOMES OF ILLINOIS, INC.

	 	ILLINOIS
	KNUTSON FUNERAL HOMES, INC.

	 	IOWA
	PAULEY FUNERAL HOME, INC.

	 	IOWA
	RUNYAN MANGOLD, INC.

	 	KANSAS
	ACME MAUSOLEUM CORPORATION

	 	LOUISIANA
	ENDURING MEMORIES, INC.

	 	LOUISIANA
	EMPRESAS STEWART — CEMENTERIOS, INC.

	 	LOUISIANA
	EMPRESAS STEWART — FUNERARIAS, INC.

	 	LOUISIANA
	LAKE LAWN METAIRIE FUNERAL HOME (JOINT VENTURE)

	 	LOUISIANA
	S.E. AUSTRALIA, INC.

	 	LOUISIANA
	S.E. CEMETERIES OF LOUISIANA, INC.

	 	LOUISIANA
	S.E. FUNERAL HOMES OF LOUISIANA, INC.

	 	LOUISIANA
	S.E. SOUTH-CENTRAL, INC.

	 	LOUISIANA
	STEWART ENTERPRISES (EUROPE) INC.

	 	LOUISIANA
	STEWART RESOURCE CENTER, INC.

	 	LOUISIANA
	STEWART SERVICES, INC.

	 	LOUISIANA
	BOUNDS FUNERAL HOME, INC.

	 	MARYLAND
	CEDAR HILL CEMETERY COMPANY, INC.

	 	MARYLAND
	CREST LAWN MEMORIAL GARDENS, INC.

	 	MARYLAND
	DRUID RIDGE CEMETERY COMPANY

	 	MARYLAND
	FORT LINCOLN CEMETERY, INC.

	 	MARYLAND
	FORT LINCOLN FUNERAL HOME, INC.

	 	MARYLAND
	GALLERY GRANITE CORPORATION

	 	MARYLAND
	HILLCREST MEMORIAL CEMETERY, INC.

	 	MARYLAND
	HINES-RINALDI FUNERAL HOME, INC.

	 	MARYLAND
	JOHN M. TAYLOR FUNERAL HOME, INC.

	 	MARYLAND
	LOUDON PARK CEMETERY COMPANY

	 	MARYLAND
	LOUDON PARK FUNERAL HOME, INC.

	 	MARYLAND

Sched A -3 

 

	 	 	 
	 	 	Jurisdiction of
	Subsidiary	 	Organization
	NATIONAL HARMONY MEMORIAL PARK, INC.

	 	MARYLAND
	PARKLAWN, INC.

	 	MARYLAND
	PARKWOOD MANAGEMENT COMPANY

	 	MARYLAND
	S.E. MID-ATLANTIC, INC.

	 	MARYLAND
	SIMPLE TRIBUTE OF MARYLAND, INC.

	 	MARYLAND
	THE PARKWOOD CEMETERY COMPANY

	 	MARYLAND
	WILLIAM W. CHAMBERS, INC.

	 	MARYLAND
	LAKEWOOD MEMORIAL PARK, INC.

	 	MISSISSIPPI
	D.W. NEWCOMER’S SONS, INC.

	 	MISSOURI
	DWN PROPERTIES, INC.

	 	MISSOURI
	FUNERAL SECURITY PLANS, INC.

	 	MISSOURI
	THE LINCOLN MEMORIAL PARK CEMETERY ASSOCIATION

	 	NEBRASKA
	S.E.N.S. OF NEVADA, INC.

	 	NEVADA
	S.E. ACQUISITION OF NEVADA, INC.

	 	NEVADA
	S.E. ACQUISITION OF RENO, NEVADA, INC.

	 	NEVADA
	S.E.N.S. OF NEVADA, INC.

	 	NEVADA
	GORNY & GORNY PATERSON-CLIFTON MORTUARY

	 	NEW JERSEY
	S.E. ACQUISITION OF CLIFTON, NEW JERSEY, INC.

	 	NEW JERSEY
	S.E. ACQUISITION OF SANTA FE, NEW MEXICO, INC.

	 	NEW MEXICO
	C.J. APPLEGATE AND SONS, INC.

	 	NEW YORK
	CORNELL & DAGGETT, INC.

	 	NEW YORK
	GARDINIER COLLETTI MEMORIAL HOME, INC.

	 	NEW YORK
	MURPHY FUNERAL SERVICE, INC.

	 	NEW YORK
	OTTO REDANZ FUNERAL HOME, INC.

	 	NEW YORK
	S.E. ACQUISITION OF FREDONIA, NEW YORK, INC.

	 	NEW YORK
	STRONG & BURNS FUNERAL HOME, INC.

	 	NEW YORK
	CATAWBA MEMORIAL PARK, INC.

	 	NORTH CAROLINA
	EVANS FUNERAL HOME, INC.

	 	NORTH CAROLINA
	GARRETT — HILLCREST, INC.

	 	NORTH CAROLINA
	MCLAURIN’S FUNERAL HOME, INC.

	 	NORTH CAROLINA
	MONTLAWN MEMORIAL PARK, INC.

	 	NORTH CAROLINA
	S.E. CEMETERIES OF NORTH CAROLINA, INC.

	 	NORTH CAROLINA
	S.E. FUNERAL HOMES OF NORTH CAROLINA, INC.

	 	NORTH CAROLINA
	AMLING SCHROEDER FUNERAL SERVICE, INC.

	 	OREGON
	CASCADE CREMATORY, INC.

	 	OREGON
	CHAPEL OF THE ROSES, INC.

	 	OREGON
	CHAPEL OF THE VALLEY FUNERAL HOME, INC.

	 	OREGON
	DUTTON, INC.

	 	OREGON
	S.E. GREENWOOD, INC.

	 	OREGON
	J.P. FINLEY AND SON MORTUARY, INC.

	 	OREGON
	S.E. BEND NR, INC.

	 	OREGON
	S.E. ACQUISITION OF MYRTLE CREEK, OREGON, INC.

	 	OREGON
	S.E. ACQUISITION OF OREGON, INC.

	 	OREGON

Sched A -4 

 

	 	 	 
	 	 	Jurisdiction of
	Subsidiary	 	Organization
	S.E. ACQUISITION OF REEDSPORT, OREGON, INC.

	 	OREGON
	SUNSET HILLS MEMORIAL PARK

	 	OREGON
	S.E. BEND TDHM, INC.

	 	OREGON
	BENJAMIN FRANKLIN P. M., INC.

	 	PENNSYLVANIA
	GEORGE WASHINGTON MEMORIAL PARK, INC.

	 	PENNSYLVANIA
	KIRK & NICE SUBURBAN CHAPEL, INC.

	 	PENNSYLVANIA
	KIRK & NICE, INC.

	 	PENNSYLVANIA
	PET HAVEN, INC.

	 	PENNSYLVANIA
	S.E. ACQUISITION OF PENNSYLVANIA, INC.

	 	PENNSYLVANIA
	SUNSET MEMORIAL PARK COMPANY

	 	PENNSYLVANIA
	DUNBAR FUNERAL HOME

	 	SOUTH CAROLINA
	S.E. CEMETERIES OF SOUTH CAROLINA, INC.

	 	SOUTH CAROLINA
	S.E. COMBINED SERVICES OF SOUTH CAROLINA, INC.

	 	SOUTH CAROLINA
	S.E. FUNERAL HOMES OF SOUTH CAROLINA, INC.

	 	SOUTH CAROLINA
	MONTE VISTA BURIAL PARK, INC.

	 	TENNESSEE
	MT. JULIET MEMORIAL GARDENS, INC.

	 	TENNESSEE
	NAVE FUNERAL HOME OF LEBANON, INC.

	 	TENNESSEE
	S.E. COMBINED SERVICES OF TENNESSEE, INC.

	 	TENNESSEE
	S.E. FUNERAL HOMES OF TENNESSEE, INC.

	 	TENNESSEE
	THE NASHVILLE HISTORIC CEMETERY ASSOCIATION, INC.

	 	TENNESSEE
	ABBEY PLAN OF TEXAS, INC.

	 	TEXAS
	BELEW FUNERAL HOME, INC.

	 	TEXAS
	EMERALD HILLS FUNERAL CORPORATION

	 	TEXAS
	GUARDIAN CREMATION SOCIETY, INC.

	 	TEXAS
	LYONS FUNERAL HOME, INC.

	 	TEXAS
	PASADENA FUNERAL HOME, INC.

	 	TEXAS
	S.E. FUNERAL HOMES OF TEXAS, INC.

	 	TEXAS
	S.E. CEMETERIES OF TEXAS, INC.

	 	TEXAS
	SIMPLICITY PLAN OF TEXAS, INC.

	 	TEXAS
	CLINCH VALLEY MEMORIAL CEMETERY, INC.

	 	VIRGINIA
	EVERLY FUNERAL HOMES, INCORPORATED

	 	VIRGINIA
	EVERLY PFP, INC.

	 	VIRGINIA
	MONTICELLO MEMORY GARDENS, INC.

	 	VIRGINIA
	S.E. CEMETERIES OF VIRGINIA, INC.

	 	VIRGINIA
	S.E. FUNERAL HOMES OF VIRGINIA, INC.

	 	VIRGINIA
	CREMATION SOCIETY NORTHWEST, INC.

	 	WASHINGTON
	E.R. BUTTERWORTH & SONS

	 	WASHINGTON
	S.E.E.S. OF VANCOUVER, INC.

	 	WASHINGTON
	S.E. ACQUISITION OF WASHINGTON, INC.

	 	WASHINGTON
	BARTLETT-BURDETTE-COX FUNERAL HOME, INC.

	 	WEST VIRGINIA
	CASDORPH & CURRY FUNERAL HOME, INC.

	 	WEST VIRGINIA
	EASTERN CEMETERY ASSOCIATES, INC.

	 	WEST VIRGINIA
	KANAWHA PLAZA PARTNERSHIP

	 	WEST VIRGINIA

Sched A -5 

 

	 	 	 
	 	 	Jurisdiction of
	Subsidiary	 	Organization
	KLINGEL-CARPENTER MORTUARY, INC.

	 	WEST VIRGINIA
	LOI CHARLESTON, INC.

	 	WEST VIRGINIA
	NATIONAL EXCHANGE TRUST, LTD.

	 	WEST VIRGINIA
	NATIONAL FUNERAL SERVICES, INCORPORATED

	 	WEST VIRGINIA
	S.E. ACQUISITION OF MALDEN, WEST VIRGINIA, INC.

	 	WEST VIRGINIA
	S.E. CEMETERIES OF WEST VIRGINIA, INC.

	 	WEST VIRGINIA
	S.E. FUNERAL HOMES OF WEST VIRGINIA, INC.

	 	WEST VIRGINIA
	WILSON FUNERAL HOME, INC.

	 	WEST VIRGINIA
	S.E. CEMETERIES OF WISCONSIN, INC.

	 	WISCONSIN

Sched A -6 

 

SCHEDULE B

INITIAL PURCHASERS

	 	 	 	 	 	 	 	 	 
	 	 	Principal	 	 	Principal	 
	 	 	Amount of	 	 	Amount of	 
	Initial Purchasers	 	2014 Notes	 	 	2016 Notes	 
	Merrill Lynch, Pierce, Fenner & Smith
Incorporated
	 	$	75,000,000	 	 	$	75,000,000	 
	Banc of America Securities LLC
	 	 	37,500,000	 	 	 	37,500,000	 
	BNP Paribas Securities Corp.
	 	 	2,500,000	 	 	 	2,500,000	 
	Calyon Securities (USA) Inc.
	 	 	2,500,000	 	 	 	2,500,000	 
	Capital One Southcoast, Inc.
	 	 	2,500,000	 	 	 	2,500,000	 
	SunTrust Capital Markets, Inc.
	 	 	2,500,000	 	 	 	2,500,000	 
	U.S. Bancorp Investments, Inc.
	 	 	2,500,000	 	 	 	2,500,000	 
	 
	 	 	 	 	 	 
	Total
	 	$	125,000,000	 	 	$	125,000,000	 
	 
	 	 	 	 	 	 

Sched B -1 

 

SCHEDULE C

PRICING TERM SHEET

Sched C -1 

 

SCHEDULE D

SUBSIDIARIES OF STEWART ENTERPRISES, INC.

PART I- ALL SUBSIDIARIES OF STEWART ENTERPRISES, INC.

	 	 	 
	 	 	Jurisdiction of
	Subsidiary	 	Organization
	KILGORE-GREEN FUNERAL HOME, INC.

	 	ALABAMA
	S.E. CEMETERIES OF ALABAMA, INC.

	 	ALABAMA
	S.E. COMBINED SERVICES OF ALABAMA, INC.

	 	ALABAMA
	S.E. FUNERAL HOMES OF ALABAMA, INC.

	 	ALABAMA
	FOREST HILLS CEMETERY, INC.

	 	ARKANSAS
	GRIFFIN-LEGGETT INSURANCE AGENCY, INC.

	 	ARKANSAS
	GRIFFIN-LEGGETT, INC.

	 	ARKANSAS
	GROSS FUNERAL HOME, INC.

	 	ARKANSAS
	REST HILLS MEMORIAL PARK, INC.

	 	ARKANSAS
	S.E. FUNERAL HOMES OF ARKANSAS, INC.

	 	ARKANSAS
	ALL SOULS MORTUARY, INC.

	 	CALIFORNIA
	ASHES TO ASHES, INC.

	 	CALIFORNIA
	ASSUMPTION MORTUARY, INC.

	 	CALIFORNIA
	BARSTOW FUNERAL HOMES, INC.

	 	CALIFORNIA
	BUCHHEIM FAMILY, INC.

	 	CALIFORNIA
	CALVARY MORTUARY OF LOS ANGELES, CALIFORNIA, INC.

	 	CALIFORNIA
	CATALINA CHANNEL CREMATION SOCIETY

	 	CALIFORNIA
	CATHOLIC MORTUARY SERVICES, INC.

	 	CALIFORNIA
	DeYOUNG MEMORIAL CHAPEL, INC.

	 	CALIFORNIA
	DILDAY BROTHERS HUNTINGTON VALLEY MORTUARY

	 	CALIFORNIA
	HOLY CROSS MORTUARY OF CULVER CITY, CALIFORNIA,
INC.

	 	CALIFORNIA
	HOLY CROSS MORTUARY OF POMONA, CALIFORNIA, INC.

	 	CALIFORNIA
	HOPSON MORTUARY, INC.

	 	CALIFORNIA
	LASSILA FUNERAL CHAPELS, INC.

	 	CALIFORNIA
	LOMBARD & CO.

	 	CALIFORNIA
	N.D. DAVIS & ASSOCIATES, INC.

	 	CALIFORNIA
	QUEEN OF HEAVEN MORTUARY, INC.

	 	CALIFORNIA
	RESURRECTION MORTUARY, INC.

	 	CALIFORNIA

Sched D -1 

 

	 	 	 
	 	 	Jurisdiction of
	Subsidiary	 	Organization
	RIVER CITIES FUNERAL CHAPEL, INC.

	 	CALIFORNIA
	S.E. ACQUISITION OF CALIFORNIA, INC.

	 	CALIFORNIA
	S.E. ACQUISITION OF DELANO, CALIFORNIA, INC.

	 	CALIFORNIA
	S.E. ACQUISITION OF GLENDALE, CALIFORNIA, INC.

	 	CALIFORNIA
	S.E. ACQUISITION OF LANCASTER, CALIFORNIA, INC.

	 	CALIFORNIA
	S.E. ACQUISITION OF LOS OSOS MORTUARY AND
MEMORIAL PARK, INC.

	 	CALIFORNIA
	S.E. ACQUISITION OF OAKHURST, CALIFORNIA, INC.

	 	CALIFORNIA
	S.E. ACQUISITION OF OROVILLE, CALIFORNIA, INC.

	 	CALIFORNIA
	SAN DIEGO CEMETERY ASSOCIATION

	 	CALIFORNIA
	SAN FERNANDO MISSION MORTUARY, INC.

	 	CALIFORNIA
	SANTA BARBARA FUNERAL SERVICES, INC.

	 	CALIFORNIA
	SANTA CLARA MORTUARY, INC.

	 	CALIFORNIA
	SCOVERN MORTUARY, A CALIFORNIA CORPORATION

	 	CALIFORNIA
	SDCA HOLDINGS, INC.

	 	CALIFORNIA
	SIMPLICITY PLAN OF CALIFORNIA, INC.

	 	CALIFORNIA
	STEWART PRE-NEED SERVICES, INC.

	 	CALIFORNIA
	STRICKLIN/SNIVELY MORTUARY

	 	CALIFORNIA
	VICTOR V. DESROSIER, INC.

	 	CALIFORNIA
	WALLACE E. WHITE & HOWARD J. CALLANAN, INC.

	 	CALIFORNIA
	SENTINEL CREMATION SOCIETIES, INC.

	 	DELAWARE
	A.P. BOZA FUNERAL HOME, INC.

	 	FLORIDA
	ALL FAITHS MEMORIAL PARK, INC.

	 	FLORIDA
	ARLINGTON MEMORIAL PARK CEMETERY AND FUNERAL
HOME, INC.

	 	FLORIDA
	BALDWIN-FAIRCHILD FUNERAL HOMES, INC.

	 	FLORIDA
	BAY AREA CREMATORY, INC.

	 	FLORIDA
	BRUCE OCALA FUNERAL HOME, INC.

	 	FLORIDA
	CEMETERY MANAGEMENT, INC.

	 	FLORIDA
	CHAPEL HILL CEMETERY, INC.

	 	FLORIDA
	CURRY & SON FUNERAL HOME, INC.

	 	FLORIDA
	FLORIDA HILLS MEMORIAL GARDENS, INC.

	 	FLORIDA
	GARDEN OF MEMORIES, INC.

	 	FLORIDA
	GLEN HAVEN MEMORIAL PARK, INC.

	 	FLORIDA
	GOOD SHEPHERD MEMORIAL GARDENS, INC.

	 	FLORIDA
	HIGHLAND MEMORY GARDENS, INC.

	 	FLORIDA
	HUBBELL FUNERAL HOME AND CREMATORY, INC.

	 	FLORIDA
	KICLITER FUNERAL HOME, INC.

	 	FLORIDA
	MADCEM OF FLORIDA, INC.

	 	FLORIDA
	MEMORIAL PARK CEMETERY, INC.

	 	FLORIDA
	MEMORIAL SUNSET PARK, INC.

	 	FLORIDA
	OAKLAWN PARK CEMETERY AND FUNERAL HOME, INC.

	 	FLORIDA
	ROBERTS FUNERAL HOME, INC.

	 	FLORIDA

Sched D -2 

 

	 	 	 
	 	 	Jurisdiction of
	Subsidiary	 	Organization
	ROYAL PALM MEMORIAL GARDENS, INC.

	 	FLORIDA
	S.E. BD TAMPA, INC.

	 	FLORIDA
	S.E. DCG TAMPA, INC.

	 	FLORIDA
	SEMORAN FUNERAL HOME, INC.

	 	FLORIDA
	SOUTH DADE-PALMS MEMORIAL PARK, INC.

	 	FLORIDA
	SYLVAN ABBEY MEMORIAL PARK, INC.

	 	FLORIDA
	THE SIMPLICITY PLAN, INC.

	 	FLORIDA
	TURNER CREMATORY, INC.

	 	FLORIDA
	TURNER FUNERAL HOMES, INC.

	 	FLORIDA
	WALSH & WOOD FUNERAL HOME, INC.

	 	FLORIDA
	WOODLAWN MEMORY GARDENS, INC.

	 	FLORIDA
	WOODLAWN PARK CEMETERY COMPANY

	 	FLORIDA
	CHEATHAM HILL MEMORIAL PARK, INC.

	 	GEORGIA
	EASTLAWN CORPORATION

	 	GEORGIA
	GARNER FAMILY FUNERAL HOME, INC.

	 	GEORGIA
	HAISTEN FUNERAL HOME OF HENRY COUNTY, INC.

	 	GEORGIA
	HAISTEN FUNERAL HOMES, INC.

	 	GEORGIA
	HIGGINS AND SON FUNERAL HOME, INC.

	 	GEORGIA
	HOLLY HILL MEMORIAL PARK, INC.

	 	GEORGIA
	ROSE HAVEN FUNERAL HOME & CEMETERY, INC.

	 	GEORGIA
	S.E. ACQUISITION OF LITHONIA, GEORGIA, INC.

	 	GEORGIA
	S.E. FUNERAL HOMES OF ILLINOIS, INC.

	 	ILLINOIS
	KNUTSON FUNERAL HOMES, INC.

	 	IOWA
	PAULEY FUNERAL HOME, INC.

	 	IOWA
	RUNYAN MANGOLD, INC.

	 	KANSAS
	ACME MAUSOLEUM CORPORATION

	 	LOUISIANA
	EMPRESAS STEWART — CEMENTERIOS, INC.

	 	LOUISIANA
	EMPRESAS STEWART — FUNERARIAS, INC.

	 	LOUISIANA
	ENDURING MEMORIES, INC.

	 	LOUISIANA
	HEAVEN’S PETS AT LAKELAWN METAIRIE, LLC (JOINT
VENTURE)

	 	LOUISIANA
	LAKE LAWN METAIRIE FUNERAL HOME (JOINT VENTURE)

	 	LOUISIANA
	LAKE LAWN PARK, INC.

	 	LOUISIANA
	S.E. AUSTRALIA, INC.

	 	LOUISIANA
	S.E. CEMETERIES OF LOUISIANA, INC.

	 	LOUISIANA
	S.E. FUNERAL HOMES OF LOUISIANA, INC.

	 	LOUISIANA
	S.E. SOUTH-CENTRAL, INC.

	 	LOUISIANA
	STEWART ENTERPRISES (EUROPE) INC.

	 	LOUISIANA
	STEWART RESOURCE CENTER, INC.

	 	LOUISIANA
	STEWART SERVICES, INC.

	 	LOUISIANA
	BOUNDS FUNERAL HOME, INC.

	 	MARYLAND
	CEDAR HILL CEMETERY COMPANY, INC.

	 	MARYLAND
	CREST LAWN MEMORIAL GARDENS, INC.

	 	MARYLAND

Sched D -3 

 

	 	 	 
	 	 	Jurisdiction of
	Subsidiary	 	Organization
	DRUID RIDGE CEMETERY COMPANY

	 	MARYLAND
	FORT LINCOLN CEMETERY, INC.

	 	MARYLAND
	FORT LINCOLN FUNERAL HOME, INC.

	 	MARYLAND
	GALLERY GRANITE CORPORATION

	 	MARYLAND
	HILLCREST MEMORIAL CEMETERY, INC.

	 	MARYLAND
	HINES-RINALDI FUNERAL HOME, INC.

	 	MARYLAND
	JOHN M. TAYLOR FUNERAL HOME, INC.

	 	MARYLAND
	LOUDON PARK CEMETERY COMPANY

	 	MARYLAND
	LOUDON PARK FUNERAL HOME, INC.

	 	MARYLAND
	NATIONAL HARMONY MEMORIAL PARK, INC.

	 	MARYLAND
	PARKLAWN, INC.

	 	MARYLAND
	PARKWOOD MANAGEMENT COMPANY

	 	MARYLAND
	S.E. MID-ATLANTIC, INC.

	 	MARYLAND
	SIMPLE TRIBUTE OF MARYLAND, INC.

	 	MARYLAND
	THE PARKWOOD CEMETERY COMPANY

	 	MARYLAND
	WILLIAM W. CHAMBERS, INC.

	 	MARYLAND
	LAKEWOOD MEMORIAL PARK, INC.

	 	MISSISSIPPI
	D.W. NEWCOMER’S SONS, INC.

	 	MISSOURI
	DWN PROPERTIES, INC.

	 	MISSOURI
	FUNERAL SECURITY PLANS, INC.

	 	MISSOURI
	THE LINCOLN MEMORIAL PARK CEMETERY ASSOCIATION

	 	NEBRASKA
	WEST LAWN CEMETERY

	 	NEBRASKA
	STEWART CEMENTERIOS PUERTO RICO HOLDING I B.V.

	 	NETHERLANDS
	STEWART CEMENTERIOS PUERTO RICO HOLDING II B.V.

	 	NETHERLANDS
	STEWART FUNERARIAS PUERTO RICO HOLDING I B.V.

	 	NETHERLANDS
	STEWART FUNERARIAS PUERTO RICO HOLDING II B.V.

	 	NETHERLANDS
	STEWART INTERNATIONAL (NETHERLANDS) B.V.

	 	NETHERLANDS
	STEWART SIMPLICITY PLAN OF PUERTO RICO HOLDING I
B.V.

	 	NETHERLANDS
	STEWART SIMPLICITY PLAN OF PUERTO RICO HOLDING II
B.V.

	 	NETHERLANDS
	STEWART WORLDWIDE N.V.

	 	NETHERLANDS ANTILLES
	RENO MEMORIAL, INC.

	 	NEVADA
	S.E. ACQUISITION OF NEVADA, INC.

	 	NEVADA
	S.E. ACQUISITION OF RENO, NEVADA, INC.

	 	NEVADA
	S.E.N.S. OF NEVADA, INC.

	 	NEVADA
	GORNY & GORNY PATERSON-CLIFTON MORTUARY

	 	NEW JERSEY
	S.E. ACQUISITION OF CLIFTON, NEW JERSEY, INC.

	 	NEW JERSEY
	S.E. ACQUISITION OF SANTA FE, NEW MEXICO, INC.

	 	NEW MEXICO
	C.J. APPLEGATE AND SONS, INC.

	 	NEW YORK
	CORNELL & DAGGETT, INC.

	 	NEW YORK

Sched D -4 

 

	 	 	 
	 	 	Jurisdiction of
	Subsidiary	 	Organization
	GARDINIER COLLETTI MEMORIAL HOME, INC.

	 	NEW YORK
	MURPHY FUNERAL SERVICE, INC.

	 	NEW YORK
	OTTO REDANZ FUNERAL HOME, INC.

	 	NEW YORK
	S.E. ACQUISITION OF FREDONIA, NEW YORK, INC.

	 	NEW YORK
	STRONG & BURNS FUNERAL HOME, INC.

	 	NEW YORK
	CATAWBA MEMORIAL PARK, INC.

	 	NORTH CAROLINA
	EVANS FUNERAL HOME, INC.

	 	NORTH CAROLINA
	FINE FINISHES, INC.

	 	NORTH CAROLINA
	GARRETT — HILLCREST, INC.

	 	NORTH CAROLINA
	MCLAURIN’S FUNERAL HOME, INC.

	 	NORTH CAROLINA
	MONTLAWN MEMORIAL PARK, INC.

	 	NORTH CAROLINA
	S.E. CEMETERIES OF NORTH CAROLINA, INC.

	 	NORTH CAROLINA
	S.E. FUNERAL HOMES OF NORTH CAROLINA, INC.

	 	NORTH CAROLINA
	TAYLOR M. SIMPSON CO.

	 	NORTH CAROLINA
	AMLING SCHROEDER FUNERAL SERVICE, INC.

	 	OREGON
	CASCADE CREMATORY, INC.

	 	OREGON
	CHAPEL OF THE ROSES, INC.

	 	OREGON
	CHAPEL OF THE VALLEY FUNERAL HOME, INC.

	 	OREGON
	DUTTON, INC.

	 	OREGON
	J.P. FINLEY AND SON MORTUARY, INC.

	 	OREGON
	S.E. ACQUISITION OF MYRTLE CREEK, OREGON, INC.

	 	OREGON
	S.E. ACQUISITION OF OREGON, INC.

	 	OREGON
	S.E. ACQUISITION OF REEDSPORT, OREGON, INC.

	 	OREGON
	S.E. BEND NR, INC.

	 	OREGON
	S.E. BEND TDHM, INC.

	 	OREGON
	S.E. GREENWOOD, INC.

	 	OREGON
	SUNSET HILLS MEMORIAL PARK

	 	OREGON
	BENJAMIN FRANKLIN P. M., INC.

	 	PENNSYLVANIA
	GEORGE WASHINGTON MEMORIAL PARK, INC.

	 	PENNSYLVANIA
	KIRK & NICE SUBURBAN CHAPEL, INC.

	 	PENNSYLVANIA
	KIRK & NICE, INC.

	 	PENNSYLVANIA
	PET HAVEN, INC.

	 	PENNSYLVANIA
	S.E. ACQUISITION OF PENNSYLVANIA, INC.

	 	PENNSYLVANIA
	SUNSET MEMORIAL PARK COMPANY

	 	PENNSYLVANIA
	EMPRESAS STEWART — CEMENTERIOS

	 	PUERTO RICO
	EMPRESAS STEWART — FUNERARIAS

	 	PUERTO RICO
	THE SIMPLICITY PLAN OF PUERTO RICO

	 	PUERTO RICO
	DUNBAR FUNERAL HOME

	 	SOUTH CAROLINA
	S.E. CEMETERIES OF SOUTH CAROLINA, INC.

	 	SOUTH CAROLINA
	S.E. COMBINED SERVICES OF SOUTH CAROLINA, INC.

	 	SOUTH CAROLINA
	S.E. FUNERAL HOMES OF SOUTH CAROLINA, INC.

	 	SOUTH CAROLINA
	MONTE VISTA BURIAL PARK, INC.

	 	TENNESSEE
	MT. JULIET MEMORIAL GARDENS, INC.

	 	TENNESSEE

Sched D -5 

 

	 	 	 
	 	 	Jurisdiction of
	Subsidiary	 	Organization
	NAVE FUNERAL HOME OF LEBANON, INC.

	 	TENNESSEE
	S.E. COMBINED SERVICES OF TENNESSEE, INC.

	 	TENNESSEE
	S.E. FUNERAL HOMES OF TENNESSEE, INC.

	 	TENNESSEE
	THE NASHVILLE HISTORIC CEMETERY ASSOCIATION, INC.

	 	TENNESSEE
	ABBEY PLAN OF TEXAS, INC.

	 	TEXAS
	BELEW FUNERAL HOME, INC.

	 	TEXAS
	EMERALD HILLS FUNERAL CORPORATION

	 	TEXAS
	GUARDIAN CREMATION SOCIETY, INC.

	 	TEXAS
	INVESTORS TRUST, INC.

	 	TEXAS
	LYONS FUNERAL HOME, INC.

	 	TEXAS
	PASADENA FUNERAL HOME, INC.

	 	TEXAS
	S.E. CEMETERIES OF TEXAS, INC.

	 	TEXAS
	S.E. FUNERAL HOMES OF TEXAS, INC.

	 	TEXAS
	SIMPLICITY PLAN OF TEXAS, INC.

	 	TEXAS
	CLINCH VALLEY MEMORIAL CEMETERY, INC.

	 	VIRGINIA
	EVERLY FUNERAL HOMES, INCORPORATED

	 	VIRGINIA
	EVERLY PFP, INC.

	 	VIRGINIA
	MONTICELLO MEMORY GARDENS, INC.

	 	VIRGINIA
	S.E. CEMETERIES OF VIRGINIA, INC.

	 	VIRGINIA
	S.E. FUNERAL HOMES OF VIRGINIA, INC.

	 	VIRGINIA
	CREMATION SOCIETY NORTHWEST, INC.

	 	WASHINGTON
	E.R. BUTTERWORTH & SONS

	 	WASHINGTON
	S.E. ACQUISITION OF WASHINGTON, INC.

	 	WASHINGTON
	S.E.E.S. OF VANCOUVER, INC.

	 	WASHINGTON
	BARTLETT-BURDETTE-COX FUNERAL HOME, INC.

	 	WEST VIRGINIA
	CASDORPH & CURRY FUNERAL HOME, INC.

	 	WEST VIRGINIA
	EASTERN CEMETERY ASSOCIATES, INC.

	 	WEST VIRGINIA
	KANAWHA PLAZA PARTNERSHIP

	 	WEST VIRGINIA
	KLINGEL-CARPENTER MORTUARY, INC.

	 	WEST VIRGINIA
	LOI CHARLESTON, INC.

	 	WEST VIRGINIA
	NATIONAL EXCHANGE TRUST, LTD.

	 	WEST VIRGINIA
	NATIONAL FUNERAL SERVICES, INCORPORATED

	 	WEST VIRGINIA
	S.E. ACQUISITION OF MALDEN, WEST VIRGINIA, INC.

	 	WEST VIRGINIA
	S.E. CEMETERIES OF WEST VIRGINIA, INC.

	 	WEST VIRGINIA
	S.E. FUNERAL HOMES OF WEST VIRGINIA, INC.

	 	WEST VIRGINIA
	WILSON FUNERAL HOME, INC.

	 	WEST VIRGINIA
	S.E. CEMETERIES OF WISCONSIN, INC.

	 	WISCONSIN

Sched D -6 

 

PART II- NON-WHOLLY OWNED SUBSIDIARIES

	 	 	 
	Company	 	State of Organization
	1. Lake Lawn Park, Inc.
	 	Louisiana
	 
	 	 
	2. Rest Hills Memorial Park, Inc.
	 	Arkansas
	 
	 	 
	3. Heaven’s Pets at Lakelawn Metairie, LLC
	 	Louisiana

PART III- SUBSIDIARY STOCK SUBJECT TO LIENS, ETC.

A. The following subsidiaries’ outstanding capital stock is subject to a security interest,
mortgage, pledge, lien, encumbrance or claim under that certain Amended and Restated Credit
Agreement, among the Company, Empresas Stewart-Cementerios, and Empresas Stewart-Funerarias, as
Borrow, Bank of America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and L/C
Issuer, Suntrust Bank, as Syndication Agent, Calyon New York Branch, as Documentation Agent and the
other lenders party thereto, dated as of November 19, 2004 (the “Senior Secured Credit Facility”):

      1.

	 	 	 
	Significant Subsidiaries	 	State of Incorporation
	Woodlawn Park Cemetery Co., Inc.

	 	Florida
	S.E. Funeral Homes of Texas, Inc.

	 	Texas
	S.E. Cemeteries of Texas, Inc.

	 	Texas
	D.W. Newcomer’s Sons, Inc.

	 	Missouri
	S.E. South-Central, Inc.

	 	Louisiana
	S.E. Mid-Atlantic, Inc.

	 	Maryland

     2. All other domestic subsidiaries of the Company (except as set forth in Sections B, C and D
below) and 65% of the voting securities of Stewart Worldwide N.V.

B. The following subsidiaries’ outstanding capital stock is subject to a security interest,
mortgage, pledge, lien encumbrance of claim under the Senior Secured Credit Facility and as
follows:

     1. Subsidiary with a prior lien in connection with Seller Financed Indebtedness:

          Lombard & Co. (Deed of Trust)

C. The following Subsidiaries’ outstanding capital stock is subject to a security interest,
mortgage, pledge, lien, encumbrance or claim as follows:

Sched D -7 

 

     1. Subsidiaries Encumbered by a Previous Stock Pledge:

          Simple Tribute of Maryland, Inc.

D. The following subsidiaries’ outstanding capital stock is subject to a security interest,
mortgage, pledge, lien, encumbrance or claim under the Senior Secured Credit Facility but certain
minority ownership cannot be pledged:

	 	1.	 	Non-wholly owned subsidiaries:
	 
	 	 	 	Lake Lawn Park, Inc. (1.6% minority ownership; 98.4% pledged)
	 
	 	 	 	Rest Hills Memorial Park, Inc. (.5% minority ownership; 95.5% pledged)
	 
	 	 	 	Heaven’s Pets at Lakelawn Metairie, LLC (40% minority ownership; 60% pledged)

PART IV- LIST OF SIGNIFICANT SUBSIDIARIES

	 	 	 	 	 
	 

	 	Woodlawn Park Cemetery Co., Inc.
	 	FL
	 
	 	 	 	 
	 

	 	S.E. Funeral Homes of Texas, Inc.
	 	TX
	 
	 	 	 	 
	 

	 	S.E. Cemeteries of Texas, Inc.
	 	TX
	 
	 	 	 	 
	 

	 	D.W. Newcomer’s Sons, Inc.
	 	MO
	 
	 	 	 	 
	 

	 	S.E. South-Central, Inc.
	 	LA
	 
	 	 	 	 
	 

	 	S.E. Mid-Atlantic, Inc.
	 	MD

Sched D -8 

 

SCHEDULE E

EXCLUDED DOMESTIC SUBSIDIARIES

	 	 	 
	Company	 	State of Organization
	1. Investor’s Trust, Inc.

	 	Texas
	 
	 	 
	2. West Lawn Cemetery

	 	Nebraska
	 
	 	 
	3. Lake Lawn Park, Inc.

	 	Louisiana
	 
	 	 
	4. Rest Hills Memorial Park, Inc.

	 	Arkansas
	 
	 	 
	5. Heaven’s Pets at Lakelawn Metairie, LLC

	 	Louisiana
	 
	 	 
	6. Fine Finishes, Inc.

	 	North Carolina
	 
	 	 
	7. Taylor M. Simpson Co.

	 	North Carolina

Sched E -1 

 

SCHEDULE F

LOCAL COUNSEL OF GUARANTORS

	 	 	 	 	 
	LOCAL COUNSEL	 	STATE	 	SUBSIDIARIES
	SHEPPARD MULLIN RICHTER & HAMPTON, LLP

FOUR EMBARCADERO CENTER, 17TH FLOOR

SAN FRANCISCO, CA 94111-4106

PH: (415) 774-2942

FAX: (415) 434-3947

(CA Main Opinion)

	 	California
	 	All Souls Mortuary, Inc.

Barstow Funeral Homes, Inc.

Buchheim Family, Inc.

Calvary Mortuary of Los Angeles, California, Inc.

DeYoung Memorial Chapel, Inc.

Dilday Brothers Huntington Valley Mortuary

Holy Cross Mortuary of Culver City, California, Inc.

Lassila Funeral Chapels, Inc.

Lombard & Co.

N.D. Davis & Associates, Inc.

Queen of Heaven Mortuary, Inc.

River Cities Funeral Chapel, Inc.

S.E. Acquisition of Glendale, California, Inc.

S.E. Acquisition of Lancaster, California, Inc.

S.E. Acquisition of Los Osos Mortuary and Memorial

San Diego Cemetery Association

San Fernando Mission Mortuary, Inc.

Simplicity Plan of California, Inc.

Stricklin/Snively Mortuary

Victor V. Desrosier, Inc.

Wallace E. White & Howard J. Callanan, Inc.
	 
	 	 	 	 
	LAW OFFICES OF DOUGLAS O. MEYER

5550 TOPANGA CANYON BOULEVARD

SUITE 200

WOODLAND HILLS, CA 91367

PH: (818) 703-7969

FAX: (818) 888-2904

(CA Regulatory Opinion)

	 	California
	 	All Souls Mortuary, Inc.

Barstow Funeral Homes, Inc.

Buchheim Family, Inc.

Calvary Mortuary of Los Angeles, California, Inc.

DeYoung Memorial Chapel, Inc.

Dilday Brothers Huntington Valley Mortuary

Holy Cross Mortuary of Culver City, California, Inc.

Lassila Funeral Chapels, Inc.

Lombard & Co.

N.D. Davis & Associates, Inc.

Queen of Heaven Mortuary, Inc.

River Cities Funeral Chapel, Inc.

S.E. Acquisition of Glendale, California, Inc.

S.E. Acquisition of Lancaster, California, Inc.

S.E. Acquisition of Los Osos Mortuary and Memorial

San Diego Cemetery Association

San Fernando Mission Mortuary, Inc.

Simplicity Plan of California, Inc.

Stricklin/Snively Mortuary

Victor V. Desrosier, Inc.

Wallace E. White & Howard J. Callanan, Inc.

Sched F -1 

 

	 	 	 	 	 
	LOCAL COUNSEL	 	STATE	 	SUBSIDIARIES
	GRAY-ROBINSON, P.A.

301 EAST PINE ST., SUITE 1400

ORLANDO, FL 32801

PH: (407) 843-8880

FAX: (407) 244-5690

	 	Florida
	 	A.P. Boza Funeral Home, Inc.

All Faiths Memorial Park, Inc.

Arlington Memorial Park Cemetery and Funeral Home,
Inc.

Baldwin-Fairchild Funeral Homes, Inc.

Bruce Ocala Funeral Home, Inc.

Chapel Hill Cemetery, Inc.

Curry & Son Funeral Home, Inc.

Florida Hills Memorial Gardens, Inc.

Garden of Memories, Inc.

Glen Haven Memorial Park, Inc.

Good Shepherd Memorial Gardens, Inc.

Highland Memory Gardens, Inc.

Madcem of Florida, Inc.

Memorial Park Cemetery, Inc.

Memorial Sunset Park, Inc.

Oaklawn Park Cemetery and Funeral Home, Inc.

Roberts Funeral Home, Inc.

Royal Palm Memorial Gardens, Inc.

Semoran Funeral Home, Inc.

South Dade-Palms Memorial Park, Inc.

Sylvan Abbey Memorial Park, Inc.

Turner Funeral Homes, Inc.

Woodlawn Memory Gardens, Inc.

Woodlawn Park Cemetery Company
	 
	 	 	 	 
	JONES, WALKER, WAECHTER, POITEVENT, CARRERE

& DENEGRE L.L.P.

201 ST. CHARLES AVENUE

NEW ORLEANS, LA 70170

PH: (504) 582-8462

FAX: (504) 582-8583

	 	Louisiana
	 	Acme Mausoleum Corporation

S.E. Cemeteries of Louisiana, Inc.

S.E. South-Central, Inc.

S.E. Funeral Homes of Louisiana, Inc.
	 
	 	 	 	 
	CROUCH & RAMEY, LLP

FOUNTAIN PLACE

1445 ROSS AVE – SUITE 2300 

DALLAS TX 75202

PH: (214) 922-7100 direct: (214) 922-7115

FAX: (214) 922-7101

	 	Texas
	 	Emerald Hills Funeral Corporation

Pasadena Funeral Home, Inc.

S.E. Cemeteries of Texas, Inc.

S.E. Funeral Homes of Texas, Inc.
	 
	 	 	 	 
	OBER KALER GRIMES & SHRIVER

120 EAST BALTIMORE STREET

BALTIMORE, MD 21202-1643

PH: (800) 638-6547

PH: (410) 347-7394

FAX: (410) 263-7594

	 	Maryland
	 	Bounds Funeral Home, Inc.

Cedar Hill Cemetery Company, Inc.

Crest Lawn Memorial Gardens, Inc.

Druid Ridge Cemetery Company

Fort Lincoln Cemetery, Inc.

Fort Lincoln Funeral Home, Inc.

Hillcrest Memorial Cemetery, Inc.

Hines-Rinaldi Funeral Home, Inc.

John M. Taylor Funeral Home, Inc.

Loudon Park Cemetery Company

Loudon Park Funeral Home, Inc.

National Harmony Memorial Park, Inc.

Parklawn, Inc.

S.E. Mid-Atlantic, Inc.

The Parkwood Cemetery Company

Sched F -2 

 

	 	 	 	 	 
	LOCAL COUNSEL	 	STATE	 	SUBSIDIARIES
	BLACKWELL SANDERS PEPER MARTIN

2300 MAIN STREET, SUITE 1100

KANSAS CITY, MO 64108

PH: (816) 983-8145 (DIRECT)

PH: (816) 983-8000

FAX: (816) 983-8080

OR

13710 FNB PARKWAY, SUITE 200

P.O. BOX 542090

OMAHA, NE 68154-8090

PH: (402) 964-5000

FAX: (402) 964-5050

	 	Missouri
	 	D.W. Newcomer’s Sons, Inc.

Sched F -3 

 

SCHEDULE G

LIST OF PERSONS SUBJECT TO LOCK-UP

1. Frank B. Stewart, Jr.- Chairman of the Board

2. Alden J. McDonald, Jr.- Director

3. James W. McFarland- Director

4. Ronald H. Patron- Director

5. Michael O. Read- Director

6. Ashton J. Ryan, Jr.- Director

7. Thomas J. Crawford- President, Chief Executive Officer and Director

8. Thomas M. Kitchen- Senior Executive Vice President, Chief Financial Officer and
Director

9. Brent F. Heffron- Executive Vice President and President- Eastern Division

10. G. Kenneth Stephens, Jr.- Executive Vice President and President- Western Division

11. Lawrence B. Hawkins- Executive Vice President and President- Investors Trust, Inc.

12. Randall L. Stricklin- Senior Vice President and President- Corporate Development

13. Kenneth G. Myers, Jr.- Senior Vice President of Finance

14. Lisa T. Winningkoff- Vice President and Senior Administrative Officer

15. Lewis J. Derbes, Jr.- Vice President, Secretary and Treasurer

16. Angela M. Lacour- Vice President, Corporate Controller and Chief Accounting Officer

Sched G -1 

 

EXHIBIT A

REGISTRATION RIGHTS AGREEMENT

Ex A -1 

 

EXHIBIT B

FORM OF OPINION OF COUNSEL FOR THE COMPANY

          Opinion of counsel for the Company to be delivered pursuant to Section 5 of the Purchase
Agreement.

          (i) The Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Louisiana. Each Subsidiary of the Company
incorporated or formed in Louisiana (the “Louisiana Subsidiaries”) has been duly
incorporated and is validly existing as a corporation in good standing under the laws of the
State of Louisiana.

          (ii) Each of the Company and the Louisiana Subsidiaries listed in Schedule F (the
“Louisiana Material Jurisdiction Guarantors”) has the corporate power and authority
to own, lease and operate its properties and to conduct its business as described in the
Disclosure Package and the Final Offering Memorandum and to enter into and perform its
obligations under the Purchase Agreement, the Registration Rights Agreement, the Indentures,
the Securities and the DTC Letter of Representations to the extent each is a party thereto.

          (iii) To such counsel’s best knowledge and following due inquiry of appropriate
representatives of the Company, each of the Company and the Louisiana Material Jurisdiction
Guarantors is duly qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing would not,
individually or in the aggregate, result in a Material Adverse Change.

          (iv) Each domestic Significant Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Disclosure Package and the Final Offering
Memorandum and, to our best knowledge and following due inquiry of appropriate
representatives of the Company, is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the conduct of
business, except for such jurisdictions where the failure to so qualify or to be in good
standing would not, individually or in the aggregate, result in a Material Adverse Change.

          (v) Each of Empresas Stewart-Cementerios and Empresas Stewart-Funerarias, foreign
Subsidiaries of the Company, is a civil partnership duly organized, and validly existing
under the laws of Puerto Rico, has full power and authority to own, lease and operate its
properties and to conduct its business as described in the Disclosure Package and the Final
Offering Memorandum, and, to our best knowledge following due inquiry of appropriate
representatives of the Company, is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such

Ex B -1 

 

qualification is required, whether by reason of the ownership or leasing of property or
the conduct of business, except for such jurisdictions where the failure to so qualify or to
be in good standing would not, individually or in the aggregate, result in a Material
Adverse Change.

          (vi) All of the issued and outstanding capital stock of each Significant Subsidiary has
been duly authorized and validly issued, is fully paid and non-assessable and is owned of
record by the Company, directly or through subsidiaries, and, to our best knowledge, free
and clear of any security interest, mortgage, pledge, lien, encumbrance or any pending or
threatened claim except as may be disclosed on Schedule D of the Purchase Agreement.

          (vii) All of the outstanding shares of Common Stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and, to the best of such
counsel’s knowledge, have been issued in compliance with the registration and qualification
requirements of federal and state securities laws.

          (viii) No stockholder of the Company or any other person has any preemptive right,
right of first refusal or other similar right to subscribe for or purchase securities of the
Company arising by operation of the charter or by-laws of the Company or the Louisiana
Business Corporation Law or, to the best of such counsel’s knowledge and following due
inquiry of appropriate representatives of the Company, otherwise.

          (ix) Each of the Purchase Agreement and the Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and each Material Jurisdiction Guarantor
(defined below).

          (x) Each of the Indentures has been duly authorized, executed and delivered by the
Company and each Material Jurisdiction Guarantor.

          (xi) The Notes have been duly authorized by the Company for issuance and sale pursuant
to the Purchase Agreement and the applicable Indenture.

          (xii) The Guarantees have been duly authorized by each Material Jurisdiction Guarantor
for issuance and sale pursuant to the Purchase Agreement and the applicable Indenture.

          (xiii) The Common Stock issuable upon conversion of the Securities has been duly
authorized for issuance by all necessary corporate action on the part of the Company and,
when issued and delivered upon conversion of the Securities in accordance with the
provisions of the applicable Indenture and the Securities, will be validly issued, fully
paid and nonassessable.

          (xiv) The documents incorporated by reference in the Disclosure Package and the Final
Offering Memorandum (other than the financial statements and supporting schedules therein,
as to which no opinion need be rendered), when they were filed with the Commission, complied
as to form in all material respects with the requirements of the Exchange Act.

Ex B -2 

 

          (xv) The statements in the Disclosure Package and the Final Offering Memorandum under
the captions “Risk Factors” (other than the two risk factors relating to taxation of the
Notes and the risk factor relating to convertible note hedge and warrant transactions, each
under the heading “Risk Factors- Risks Related to the Notes”) and “Description of Capital
Stock,” insofar as such statements constitute matters of law, summaries of legal matters,
the Company’s charter or by-law provisions, documents or legal proceedings, or legal
conclusions, have been reviewed by us and fairly present and summarize, in all material
respects, the matters referred to therein. The Registration Rights Agreement conforms in
all material respects to the descriptions thereof contained in the Disclosure Package and
the Final Offering Memorandum.

          (xvi) No consent, approval, authorization or other order of, or registration or filing
with, any court or other governmental or regulatory authority or agency, is required for the
Company’s execution, delivery and performance of the Purchase Agreement, the Registration
Rights Agreement, the DTC Letter of Representations, the Indentures and the documentation
relating to the convertible note hedge and warrant transactions described in the Disclosure
Package and the Final Offering Memorandum (the “Convertible Note Hedge and Warrant
Confirmations”), the issuance and delivery of the Securities or the issuance and
delivery of shares of Common Stock upon conversion of the Securities, or consummation of the
transactions contemplated thereby and by the Disclosure Package and the Final Offering
Memorandum, except such as have been obtained or made by the Company and are in full force
and effect under the Securities Act, applicable state securities or blue sky laws and except
such as may be required by federal and state securities laws with respect to the Company’s
obligations under the Registration Rights Agreement.

          (xvii) No consent, approval, authorization or other order of, or registration or filing
with, any court or other governmental or regulatory authority or agency, is required for any
Louisiana Material Jurisdiction Guarantor’s execution, delivery and performance of the
Purchase Agreement, the Indentures or the Guarantees under any laws, rules or regulations of
the State of Louisiana generally applicable to (x) the operations of each Louisiana Material
Jurisdiction Guarantor in the State of Louisiana relating to the operation of funeral homes,
cemeteries and crematoria and the provision of related goods and services (the
“Operations”), or (y) transactions of the type contemplated by the Guarantee entered
into by each Louisiana Material Jurisdiction Guarantor, except such as have been obtained or
made by each Louisiana Material Jurisdiction Guarantor and are in full force and effect.

          (xviii) The execution and delivery of the Purchase Agreement, the Registration Rights
Agreement, the DTC Letter of Representations, the Securities, the Indentures and the
Convertible Note Hedge and Warrant Confirmations by the Company and the performance by the
Company of its obligations thereunder (other than performance by the Company of its
obligations under the indemnification sections of the Purchase Agreement and the
Registration Rights Agreement, as to which no opinion need be rendered) (i) have been duly
authorized by all necessary corporate action on the part of the Company; (ii) will not
result in any violation of the provisions of the charter or by-laws of the Company; (iii)
assuming the application of proceeds as described in “Use of

Ex B -3 

 

Proceeds” in the Disclosure Package and the Final Offering Memorandum, will not
constitute a breach of, or Default or a Debt Repayment Triggering Event under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to the Company’s senior secured credit
facility, or to our best knowledge, any other material Existing Instrument; or (iv) to our
best knowledge, will not result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company.

          (xix) The execution and delivery of the Purchase Agreement, the Indentures, the
Registration Rights Agreement and the Guarantees (collectively, the “Guarantor
Transaction Documents”) and the performance by each Louisiana Subsidiary of its
obligations thereunder (i) have been duly authorized by all necessary corporate action on
the part of each Louisiana Material Jurisdiction Guarantor; (ii) will not result in any
violation of the provisions of the charter or by-laws of any Louisiana Material Jurisdiction
Guarantor; (iii) will not result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of any Louisiana Material Jurisdiction Guarantor
under, and, to the best knowledge of such counsel, will not result in any violation of, in
each case, any laws, rules or regulations of the State of Louisiana generally applicable to
(x) the Operations or (y) transactions of the type contemplated by the Guarantor Transaction
Documents.

          (xx) The Company is not, and after the issuance of the Securities and application of
the net proceeds therefrom as described in the Disclosure Package and the Final Offering
Memorandum will not be, an “investment company” within the meaning of the Investment Company
Act.

          (xxi) To our best knowledge and following due inquiry of appropriate representatives of
the Company, the Company is not in violation of its charter or by-laws or any law,
administrative regulation or administrative or court decree applicable to the Company nor is
the Company in Default in the performance or observance of any obligation, agreement,
covenant or condition contained in any material Existing Instrument known to us, except in
each such case for such violations or Defaults as would not, individually or in the
aggregate, result in a Material Adverse Change.

          (xxii) Assuming the accuracy of the representations, warranties and covenants of the
Company and the Initial Purchasers contained in the Purchase Agreement, no registration of
the Notes, the Guarantees or the Common Stock issuable upon conversion of the Securities
under the Securities Act, and no qualification of the Indentures under the Trust Indenture
Act with respect thereto, is required in connection with the purchase of the Securities by
the Initial Purchasers or the initial resale of the Securities by the Initial Purchasers to
Qualified Institutional Buyers pursuant to Rule 144A under the Securities Act of 1933 in the
manner contemplated by the Purchase Agreement, the Disclosure Package and the Final Offering
Memorandum. Such counsel need express no opinion, however, as to when or under what
circumstances any Securities initially sold by the Initial Purchasers may be reoffered or
resold.

Ex B -4 

 

     In addition, such counsel shall state that they have participated in conferences with officers
and other representatives of the Company, representatives of the independent public or certified
public accountants for the Company and with representatives of the Initial Purchasers at which the
contents of the Disclosure Package and the Final Offering Memorandum, and any supplements or
amendments thereto, and related matters were discussed and, although such counsel is not passing
upon and does not assume any responsibility for, and has not made any independent verification of,
the accuracy, completeness or fairness of the statements contained in the Disclosure Package and
the Final Offering Memorandum (other than as specified above), and any supplements or amendments
thereto, on the basis of the foregoing, nothing has come to their attention that would lead them to
believe that the Disclosure Package, as of the Applicable Time, included an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading,
or that the Final Offering Memorandum, as of its date or as of the Closing Date, included or
includes an untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading (it being understood that such counsel need express no statement as to
the financial statements or other financial data derived therefrom, included or incorporated by
reference in the Disclosure Package and the Final Offering Memorandum or any amendments or
supplements thereto).

     In rendering such opinion, such counsel may rely as to matters involving the application of
laws of any jurisdiction other than the laws of the State of Louisiana or the federal law of the
United States, to the extent they deem proper and specified in such opinion, upon the opinion
(which shall be dated the Closing Date, shall be satisfactory in form and substance to the Initial
Purchasers, shall expressly state that the Initial Purchasers may rely on such opinion as if it
were addressed to them and shall be furnished to the Initial Purchasers) of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel for the Initial
Purchasers; provided, however, that such counsel shall further state that they believe that they
and the Initial Purchasers are justified in relying upon such opinion of other counsel, and as to
matters of fact, to the extent they deem proper, on certificates of responsible officers of the
Company and public officials.

     Specifically, and not by way of limitation, such counsel may state that as to the matters
addressed therein pertaining to the laws of the respective jurisdictions addressed therein, such
counsel has relied upon the opinions of special local counsel, given pursuant to Section 5(d) of
the Purchase Agreement, in the jurisdictions and with respect to the Guarantors listed on Schedule
F (Local Counsel for the Guarantors) (together with each Significant Subsidiary, the “Material
Jurisdiction Guarantors”).

     Such counsel may also state that whenever such counsel’s opinion is given with respect to the
existence or absence of facts (or legal conclusions which necessarily are based upon the existence
or absence of facts) and is indicated to be based on such counsel’s knowledge, it is intended to
signify that, during the course of such counsel’s representation of the Company in connection with
the offering of the Notes, no information has come to the conscious awareness of any attorney in
such counsel’s firm who has had active involvement with such representations that would give any
such person actual knowledge of the existence or absence of such facts, and that except to the
extent expressly set forth, such counsel has not undertaken any independent

Ex B -5 

 

investigation to determine or verify the existence or absence of facts, and no inference as to such
counsel’s knowledge or the existence or absence of such facts should be drawn from its
representation of the Company.

Ex B -6 

 

EXHIBIT C

FORM OF OPINION OF LOCAL COUNSEL FOR THE GUARANTOR

          Opinion of counsel for the Guarantor to be delivered pursuant to Section 5 of the Purchase
Agreement.

          (i) The Guarantor is a [corporation] [limited liability company] [limited partnership]
and is validly existing as a [corporation] [limited liability company] [limited partnership]
in good standing under the laws of the state of [___] (the “State”).

          (ii) The Guarantor has full [corporate] power and authority to own, lease and operate
its properties and to conduct its business as described in the Disclosure Package and the
Final Offering Memorandum and to enter into and perform its obligations under the
Indentures, the Purchase Agreement, the Registration Rights Agreement and the documents
evidencing the Guarantee entered into by the Guarantor (collectively, the “Guarantor
Transaction Documents”).

          (iii) Each of the Guarantor Transaction Documents has been duly authorized by the
Guarantor.

          (iv) The Guarantees entered into by the Guarantor have been duly authorized for
issuance and sale pursuant to the Purchase Agreement and the Indentures.

          (v) No consent, approval, authorization or other order of, or registration or filing
with, any court or other governmental or regulatory authority or agency, is required for the
Guarantor’s execution, delivery and performance of any of the Guarantor Transaction
Documents under any laws, rules or regulations of the State generally applicable to (x) the
operations of the Guarantor in the State relating to the operation of funeral homes,
cemeteries and crematoria and the provision of related goods and services (the
“Operations”) or (y) transactions of the type contemplated by the Guarantee entered
into by the Guarantor, except such as have been obtained or made by the Guarantor and are in
full force and effect.

          (vi) The execution and delivery of each of the Guarantor Transaction Documents and the
performance by the Guarantor of its obligations thereunder (i) have been duly authorized by
all necessary [corporate] action on the part of the Guarantor; (ii) will not result in any
violation of the provisions of the charter or by-laws of the Guarantor; (iii) will not
result in the creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Guarantor under, and, to the best knowledge of such counsel, will not result
in any violation of, in each case, any laws, rules or regulations of the State generally
applicable to (x) the Operations or (y) transactions of the type contemplated by the
Guarantor Transaction Documents.

     Counsel may state that its opinion does not address federal or state securities laws.

Ex C -1 

 

EXHIBIT D

FORM OF OPINION OF SPECIAL COUNSEL FOR THE COMPANY

          (i) Each of the Indentures, assuming the due authorization, execution and delivery
thereof by the Company, the Guarantors and the Trustee thereunder, constitutes a valid and
binding agreement of the Company and each of the Guarantors, enforceable against the Company
and each of the Guarantors in accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
or other similar laws relating to or affecting the rights and remedies of creditors or by
general principles of equity.

          (ii) When executed by the Company (assuming due authorization thereof by the Company)
and authenticated by the Trustee in the manner provided in the applicable Indenture and
delivered against payment of the purchase price therefor, the Notes will constitute valid
and binding obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws relating to or affecting
enforcement of the rights and remedies of creditors or by general principles of equity and
will be entitled to the benefits of the applicable Indenture.

          (iii) When the Notes have been authenticated in the manner provided for in the
applicable Indenture and delivered against payment of the purchase price therefor (assuming
the Guarantees have been duly authorized, executed and delivered by the Guarantors) the
Guarantees will constitute valid and binding agreements of the Guarantors, enforceable in
accordance with their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws relating
to or affecting the rights and remedies of creditors or by general equitable principles and
will be entitled to the benefits of the applicable Indenture.

          (iv) The Securities and the Indentures conform in all material respects to the
descriptions thereof contained in the Disclosure Package and the Final Offering Memorandum.

          (v) The statements in the Disclosure Package and the Final Offering Memorandum under
the captions “Material U.S. Federal Income Tax Considerations,” “Purchase of Convertible
Note Hedge and Sale of Warrant Transactions,” “Transfer Restrictions” and in the two risk
factors relating to taxation of the Notes and the risk factor relating to the convertible
note hedge and warrant transactions, each under the heading “Risk Factors- Risks Related to
the Notes,” insofar as such statements constitute matters of law, summaries of legal
matters, documents or legal proceedings, or legal conclusions, have been reviewed by us and
fairly present and summarize, in all material respects, the matters referred to therein.

Ex D -1 

 

EXHIBIT E

FORM OF LOCK-UP AGREEMENT

MERRILL LYNCH & CO.

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

c/o Merrill Lynch, Pierce, Fenner & Smith

Incorporated

4 World Financial Center

New York, New York 10080

			
	      RE:	 	Proposed Offering by Stewart Enterprises, Inc.

Dear Sirs:

     The undersigned, an executive officer and/or director of Stewart Enterprises, Inc., a
Louisiana corporation (the “Company”), understands that Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) and certain other co-managers, for
whom Merrill Lynch is acting as representative, propose to enter into a Purchase Agreement (the
“Purchase Agreement”) with the Company, providing for the offering (the
“Offering”), pursuant to Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act”), of Senior Convertible Notes due 2014 and Senior Convertible Notes due
2016 of the Company. Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Purchase Agreement.

     In recognition of the benefit that the Offering will confer upon the undersigned as an officer
and/or director of the Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned hereby agrees with Merrill Lynch and
Banc of America Securities LLC (“Banc of America”) that, during a period of 90 days from
the date of the Purchase Agreement, the undersigned will not, without the prior written consent of
Merrill Lynch and Banc of America, directly or indirectly, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant for the sale of, or lend or otherwise dispose of or transfer any shares of
the Class A common stock, no par value, of the Company (the “Common Stock”) or any
securities convertible into or exchangeable or exercisable for or repayable with Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned
has or hereafter acquires the power of disposition, or file, or request, demand or cause to be
filed, any registration statement under the Securities Act with respect to any of the foregoing
(collectively, the “Lock-Up Securities”) or (ii) enter into any swap or any other agreement
or any transaction that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Lock-Up Securities, whether any such swap or transaction is to be
settled by delivery of Common Stock or other securities, in cash or otherwise.

     Notwithstanding the foregoing, nothing contained in this lock-up agreement shall prohibit the
undersigned from effecting: (A) the sale of shares of Common Stock pursuant to any 10b5-1 plan
established by the undersigned pursuant to Rule 10b5-1 under the Exchange Act and in

Ex E -1 

 

effect on the date of the Final Offering Memorandum, (B) any acquisition of stock options,
restricted stock or other stock-based compensation from the Company pursuant to any existing
employee benefit plans, stock incentive plans or director compensation plans of the Company, (C)
any acquisition of shares of Common Stock upon the vesting of restricted stock or issued by the
Company to the undersigned upon the exercise of options outstanding on the date hereof, including
by means of a cashless exercise, and transfers of shares of Common Stock to the Company in
satisfaction of any tax withholding obligation of the undersigned or in payment of the exercise
price for any stock option exercised by the undersigned under existing employee benefit plans,
stock incentive plans or director compensation plans of the Company, (D) transfers of shares of
Common Stock or options to purchase the Common Stock made as a bona fide gift or gifts, provided
that the donee or donees thereof agree to be bound by the restrictions set forth herein, or (E)
transfers of shares of Common Stock or options to purchase the Common Stock made to any trust for
the direct or indirect benefit of the undersigned or the immediate family of the undersigned,
provided that the trustee of the trust agrees to be bound by the restrictions set forth herein, and
provided further that any such transfer shall not involve a disposition for value.

     The undersigned also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of the Lock-Up Securities except in
compliance with the foregoing restrictions.

Very truly yours,

Signature:                                         

Print Name:

Ex E -2exv10w2

 

Exhibit 10.2

Confirmation of OTC Convertible Note Hedge

	 	 	 	 	 
	Date:

	 	June 21, 2007	 	 
	 
	 	 	 	 
	To:	 	Stewart Enterprises, Inc. (“Counterparty”)
	 

	 	Attention:
	 	Thomas M. Kitchen, Chief Financial Officer
	 

	 	Facsimile No.:
	 	(504) 729-1407
	 

	 	Telephone No.:
	 	(504) 729-1425
	 
	 	 	 	 
	From:	 	Merrill Lynch International (“MLI”)
	 
	 	 	 	 
	 

	 	Address:
	 	Merrill Lynch International
	 

	 	 	 	Merrill Lynch Financial Centre
	 

	 	 	 	2 King Edward Street
	 

	 	 	 	London EC1A 1HQ
	 

	 	Attention:
	 	Manager, Fixed Income Settlements
	 

	 	Facsimile No.:
	 	44 207 995 2004
	 

	 	Telephone No.:
	 	44 207 995 3769

MLI Reference:

Dear Sir / Madam:

     The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the above-referenced transaction entered into among Counterparty, MLI and Merrill
Lynch, Pierce, Fenner & Smith Incorporated (the “Agent” or “MLPFS”) on the Trade Date specified
below (the “Transaction”). This Confirmation constitutes a “Confirmation” as referred to in
the Agreement specified below.

     The definitions and provisions contained in the 2000 ISDA Definitions (the “Swap
Definitions”) and the 2002 ISDA Equity Derivatives Definitions (the “Equity
Definitions” and, together with the Swap Definitions, the “Definitions”), in each case
as published by the International Swaps and Derivatives Association, Inc. are incorporated into
this Confirmation. In the event of any inconsistency between the Swap Definitions and the Equity
Definitions, the Equity Definitions will govern, and in the event of any inconsistency between the
Definitions and this Confirmation, this Confirmation will govern. References herein to a
“Transaction” shall be deemed to be references to a “Share Option Transaction” for purposes of the
Equity Definitions and a “Swap Transaction” for the purposes of the Swap Definitions.

     This Confirmation evidences a complete binding agreement between you and us as to the terms of
the Transaction to which this Confirmation relates. This Confirmation (notwithstanding anything to
the contrary herein), shall be subject to, and form part of, an agreement in the 1992 form of the
ISDA Master Agreement (Multicurrency Cross Border) (the “Master Agreement” or
“Agreement”) as if we had executed an agreement in such form (but without any Schedule and
with the elections specified in the “ISDA Master Agreement” Section of this Confirmation) on the
Trade Date. In the event of any inconsistency between the provisions of that Agreement and this
Confirmation, this Confirmation will prevail for the purpose of this Transaction. The parties
hereby agree that the Transaction evidenced by this Confirmation shall be the only Transaction
subject to and governed by the Agreement.

     The parties acknowledge that this Confirmation is entered into on the date hereof with the
understanding that the provisions of the Note Indenture (as defined below) that are referred to
herein will conform to the descriptions thereof in the Offering Memorandum dated June 21, 2007 (the
“Offering Memorandum”) relating to the Reference Notes (as defined below). The parties agree that
in the event of any inconsistency between the Note

 

 

Indenture and Offering Memorandum, the parties will amend this Confirmation in good faith to
preserve the intent of the parties.

     The terms of the particular Transaction to which this Confirmation relates
are as follows:

     General Terms:

	 	 	 	 	 
	Trade Date:	 	June 21, 2007
	 
	 	 	 	 
	Effective Date:	 	The date of issuance of the Reference Notes.
	 
	 	 	 	 
	Option Style:	 	Modified American, as described under “Settlement Terms” below.
	 
	 	 	 	 
	Option Type:	 	Call
	 
	 	 	 	 
	Seller:	 	MLI
	 
	 	 	 	 
	Buyer:	 	Counterparty
	 
	 	 	 	 
	Shares:	 	The shares of Class A common stock, no par value, of
Counterparty (Security Symbol: “STEI”) or such other securities
or property into which the Reference Notes are convertible on
the date of determination.
	 
	 	 	 	 
	Number of Options:	 	The number of Convertible Notes in denominations of USD1,000
principal amount issued by Counterparty on the closing date for
the initial issuance of the Convertible Notes.
	 
	 	 	 	 
	Number of Shares:	 	The product of the Number of Options, the Applicable Percentage
and the Conversion Rate (as defined in the Note Indenture).
	 
	 	 	 	 
	Premium:	 	 $27,500,000.00.
	 
	 	 	 	 
	Premium Payment Date:	 	The date of issuance of the Reference Notes.
	 
	 	 	 	 
	Exchange:	 	NASDAQ
	 
	 	 	 	 
	Related Exchange(s):	 	All Exchanges
	 
	 	 	 	 
	Reference Notes:	 	3.125%. Convertible Senior Notes due 2014 of Counterparty
	 
	 	 	 	 
	Applicable Percentage:	 	100%. For the avoidance of doubt, the Calculation Agent shall,
as it deems necessary, take into account the Applicable
Percentage in determining or calculating any delivery or
payment obligations hereunder, whether upon a Conversion Date
(as defined below) or otherwise.
	 
	 	 	 	 
	Note Indenture:	 	The indenture, dated as of closing of the issuance of the
Reference Notes, between Counterparty and U.S. Bank, N.A., as
trustee relating to the Reference Notes, as the same may be
amended, modified or supplemented from time to time. Certain
defined terms used herein have the meanings assigned to them

Confirmation OTC Convertible Note Hedge

- 2 -

 

	 	 	 	 	 
	 

	 	 	 	in the Note Indenture.
	Procedures for Exercise:	 	 
	 
	 	 	 	 
	Potential Exercise Dates:	 	Each Conversion Date.
	 
	 	 	 	 
	Conversion Date:	 	Each “conversion date” for any Reference Note pursuant to the
terms of the Note Indenture occurring before the Expiration
Date.
	 
	 	 	 	 
	Required Exercise on Conversion 

Dates:	 	On each Conversion Date, a number of Options equal to the
number of Convertible Notes in denominations of $1,000
principal amount submitted for conversion on such Conversion
Date in accordance with the terms of the Note Indenture shall
be automatically exercised.
	 
	 	 	 	 
	Exercise Period:	 	The period from and excluding the Effective Date to and
including the Expiration Date.
	 
	 	 	 	 
	Expiration Date:	 	The earliest of (i) the maturity date of the Reference Notes,
(ii) the first day on which none of such Reference Notes remain
outstanding, whether by virtue of conversion, issuer repurchase
or otherwise and (iii) the occurrence of an Additional
Termination Event and designation of an Early Termination Date
hereunder in respect of the termination of the Transaction in
whole but not in part.
	 
	 	 	 	 
	Multiple Exercise:	 	Applicable, as provided above under “Required Exercise on
Conversion Dates”.
	 
	 	 	 	 
	Minimum Number of Options:	 	Zero
	 
	 	 	 	 
	Maximum Number of Options:	 	Number of Options
	 
	 	 	 	 
	Automatic Exercise:	 	As provided above under “Required Exercise on Conversion Dates”.
	 
	 	 	 	 
	Exercise Notice:	 	Notwithstanding the exercise of any Options hereunder, Buyer
shall be entitled to receive the deliveries provided under
“Settlement Terms” below only if Buyer shall have notified
Seller in writing prior to 5:00 PM, New York City time, on the
“Business Day”, as defined in the Note Indenture, prior to the
first Scheduled Trading Day of the “Conversion Reference
Period”, as defined in the Note Indenture, relating to the
Convertible Notes converted on the Conversion Date relating to
the relevant Exercise Date (such time, the “Notice Deadline”)
of (i) the number of Options being exercised, (ii) the
scheduled settlement date under the Note Indenture for the
Convertible Notes converted on the Conversion Date occurring on
the Exercise Date for such exercise and (iii) the applicable
“Cash Percentage”, as defined in the Note Indenture, for such
Convertible Notes; provided that, notwithstanding the
foregoing, such notice (and the related automatic exercise of
Options) shall be effective if given after the relevant Notice
Deadline but prior to 5:00 PM New York City time, on the fifth
Exchange Business Day of such “Conversion Reference Period”, as
defined in the Note Indenture, in which event the Calculation
Agent shall have the right to adjust the Delivery Obligation
(as defined below) as appropriate to reflect the additional
costs (including, but not limited to, hedging mismatches and
market losses) and reasonable expenses incurred by Seller in
connection with its hedging activities (including the unwinding
of any hedge position) as a result of its not having received
such notice prior to the applicable Notice Deadline.
Notwithstanding the foregoing, in respect of Options with a
related Exercise Date on or after the 42nd “Scheduled Trading
Day”, as defined in the Note Indenture, occurring prior to the
“Maturity Date”, as defined in the Note

Confirmation OTC Convertible Note Hedge

- 3 -

 

	 	 	 	 	 
	 

	 	 	 	Indenture, then, in
lieu of the notice described in the preceding sentence, Buyer
shall notify Seller of the applicable “Cash Percentage”, as
defined in the Note Indenture, in respect of the “Conversion
Reference Period” for such Convertible Notes on the date it
notifies the “Trustee”, as defined in the Note Indenture,
thereof; provided that in the event that Buyer does not notify
the Trustee of the Cash Percentage pursuant to the Note
Indenture, then the notice by Buyer to Seller otherwise
required by this sentence shall be deemed to have been provided
and the applicable Cash Percentage shall be deemed to be zero.
	 
	 	 	 	 
	Seller’s Telephone Number and
Telex and/or Facsimile Number
and Contact Details for purpose
of Giving Notice:	 	Address: Merrill Lynch International

Merrill Lynch Financial Centre

2 King Edward Street

London EC1A 1HQ

Attention: Manager, Fixed Income Settlements

Facsimile No.: +44 207 995 2004

Telephone No.: +44 207 995 3769
	 
	 	 	 	 
	Settlement Terms:	 	 
	 
	 	 	 	 
	Settlement Date	 	As defined in the Note Indenture.
	 
	 	 	 	 
	Delivery Obligation:	 	In lieu of the obligations set forth in Sections 8.1 and 9.1 of
the Equity Definitions, and subject to “Exercise Notice” above,
in respect of an Exercise Date occurring on a Conversion Date,
Seller will deliver to Buyer on the related Settlement Date (x)
the product of the Applicable Percentage and a number of Shares
equal to the aggregate number of Shares, if any (and cash in
lieu of fractional shares, if any) and (y) the product of the
Applicable Percentage and the amount of cash, if any, in lieu
of the “Daily Share Amount”, as defined in the Note Indenture,
in each case, that Buyer is obligated to deliver or pay, as the
case may be, to the holder(s) of the Convertible Notes
converted on such Conversion Date pursuant to Section 4.02 or
Section 4.12 of the Note Indenture (such Shares and cash,
collectively, the “Convertible Obligation”).
	 
	 	 	 	 
	Other Applicable Provisions:	 	To the extent Seller is obligated to deliver Shares hereunder,
the provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except
that the Representation and Agreement contained in Section 9.11
of the Equity Definitions shall be modified by excluding any
representations therein relating to restrictions, obligations,
limitations or requirements under applicable securities laws as
a result of the fact that Buyer is the issuer of the Shares)
and 9.12 of the Equity Definitions will be applicable as if
“Physical Settlement” applied to the Transaction.
	 
	 	 	 	 
	Adjustments:	 	 
	 
	 	 	 	 
	Method of Adjustment:	 	Calculation Agent Adjustment; provided that, notwithstanding
Section 11.2 of the Equity Definitions, the terms of this
Transaction shall be adjusted in a manner corresponding to the
adjustments of the Conversion Rate of the Reference Notes as
provided in the Note Indenture.
	 
	 	 	 	 
	Potential Adjustment Event:	 	Notwithstanding Section 11.2(e) of the Equity Definitions, a
“Potential Adjustment Event” means the occurrence of an event
or condition set forth in Section 4.06 of the Note Indenture.
	 
	 	 	 	 
	Extraordinary Events:	 	 
	 
	 	 	 	 
	Merger Events:	 	Notwithstanding Section 12.1(b) of the Equity Definitions, a
“Merger Event”

Confirmation OTC Convertible Note Hedge

- 4 -

 

	 	 	 	 	 
	 

	 	 	 	means the occurrence of any event or condition
to which Section 4.10(a) of the Note Indenture applies.
	 
	 	 	 	 
	Consequences for Merger Events:	 	 
	 
	 	 	 	 
	 

	 	Share-for-Share:
	 	The Transaction will be adjusted in a manner corresponding to
the adjustments to the Reference Notes as provided in the Note
Indenture.
	 
	 	 	 	 
	 

	 	Share-for-Other:
	 	The Transaction will be adjusted in a manner corresponding to
the adjustments to the Reference Notes as provided in the Note
Indenture.
	 
	 	 	 	 
	 

	 	Share-for-Combined:
	 	The Transaction will be adjusted in a manner corresponding to
the adjustments to the Reference Notes as provided in the Note
Indenture.
	 
	 	 	 	 
	Notice of Merger Consideration:	 	Upon the occurrence of a Merger Event that causes the Shares to
be converted into the right to receive more than a single type
of consideration (determined based in part upon any form of
stockholder election), Buyer shall reasonably promptly (but in
any event prior to the third Exchange Business Day prior to the
effective date of such Merger Event) notify the Calculation
Agent of the weighted average of the types and amounts of
consideration received by the holders of Shares entitled to
receive cash, securities or other property or assets with
respect to or in exchange for such Shares in any Merger Event
who affirmatively make such an election.
	 
	 	 	 	 
	Tender Offer:	 	Applicable, subject to “Consequences of Tender Offers” below.
Notwithstanding Section 12.1(d) of the Equity Definitions,
“Tender Offer” means the occurrence of any event or condition
set forth in Section 4.06(e) of the Note Indenture.
	 
	 	 	 	 
	Consequences of Tender Offers:	 	The Transaction will be adjusted in a manner corresponding to
the adjustments to the Reference Notes as provided in the Note
Indenture.
	 
	 	 	 	 
	Nationalization, Insolvency and
Delisting:	 	Not Applicable
	 
	 	 	 	 
	Additional Disruption Events:	 	 
	 
	 	 	 	 
	 

	 	Change in Law:
	 	Not Applicable
	 
	 	 	 	 
	 

	 	Failure to Deliver:
	 	Not Applicable.
	 
	 	 	 	 
	 

	 	Insolvency Filing:
	 	Not Applicable
	 
	 	 	 	 
	 

	 	Hedging Disruption

Event:
	 	Not Applicable
	 
	 	 	 	 
	 

	 	Increased Cost of
Hedging:
	 	Not Applicable
	 
	 	 	 	 
	 

	 	Loss of Stock Borrow:
	 	Not Applicable
	 
	 	 	 	 
	 

	 	Increased Cost of
Stock Borrow:
	 	Not Applicable

Confirmation OTC Convertible Note Hedge

- 5 -

 

	 	 	 	 	 
	Non-Reliance:	 	Applicable
	 
	 	 	 	 
	Agreements and Acknowledgments
Regarding Hedging Activities:	 	Applicable
	 
	 	 	 	 
	Additional Acknowledgments:	 	Applicable

Additional Agreements, Representations and Covenants 

	1.	 	Buyer hereby represents and warrants to Seller, on each day from the Trade Date to and
including the earlier of (i) July 27, 2007 and (ii) the date by which Seller is able to
initially complete a hedge of its position relating to this Transaction, that:

	 	a.	 	it will effect (and cause any “affiliated purchaser” (as defined in Rule 10b-18
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) to effect) any purchases, direct or indirect (including by means of any
cash-settled or other derivative instrument), of Shares or any security convertible
into or exchangeable or exercisable for Shares solely through Agent in a manner that
would not cause any purchases by Seller of its hedge in connection with this
Transaction not to comply applicable securities laws;
	 
	 	b.	 	it will not engage in, or be engaged in, any “distribution,” as such term is
defined in Regulation M promulgated under the Exchange Act, other than a distribution
meeting the requirements of the exceptions set forth in sections 101(b)(10) and
102(b)(7) of Regulation M (it being understood that Buyer makes no representation
pursuant to this clause in respect of any action or inaction taken by Seller or any
initial purchaser of the Reference Notes); and
	 
	 	c.	 	Buyer has publicly disclosed all material information necessary for Buyer to be
able to purchase or sell Shares in compliance with applicable federal securities laws.

	2.	 	If Buyer would be obligated to pay cash (other than payment of the Premium) to, or receive
cash from, Seller pursuant to the terms of this Agreement for any reason without having had
the right (other than pursuant to this paragraph (2)) to elect to deliver or receive Shares in
satisfaction of such payment obligation, then Buyer may elect (by giving notice to Seller no
later than 8 a.m. New York time on the Exchange Business Day immediately following the date of
occurrence of the event giving rise to such payment obligation) that such payment obligation
shall be satisfied by the delivery of a number of Shares (or, if the Shares have been
converted into other securities or property in connection with an Extraordinary Event, a
number or amount of such other securities or property as a holder of Shares would be entitled
to receive upon the consummation or closing of such Extraordinary Event) having a cash value
equal to the amount of such payment obligation. Such number or amount of Shares or other
securities or property to be delivered shall be determined by the Calculation Agent to be the
number of Shares or number or amount of such other securities or property that could be
purchased or sold, as applicable, over a reasonable period of time with the cash equivalent of
such payment obligation). Settlement relating to any delivery of Shares or other securities or
property pursuant to this paragraph (2) shall occur within a reasonable period of time.
Notwithstanding anything herein or in the Agreement to the contrary, the aggregate number of
Shares that Counterparty may be required to deliver to MLI under this Transaction shall not
exceed 10,000,000 Shares, as adjusted by the Calculation Agent to account for any subdivision,
stock-split, stock combination, reclassification or similar dilutive or anti-dilutive event
with respect to the Shares.

	3.	 	Counterparty is not, and after giving effect to the Transaction contemplated hereby, will not
be, an “investment company” as such term is defined in the Investment Company Act of 1940, as
amended.

Confirmation OTC Convertible Note Hedge

- 6 -

 

	4.	 	As of the Trade Date and each date on which a payment or delivery is made by Counterparty
hereunder, (i) the assets of Counterparty at their fair valuation exceed the liabilities of
Counterparty, including contingent liabilities; (ii) the capital of Counterparty is adequate
to conduct its business; and (iii) Counterparty has the ability to pay its debts and other
obligations as such obligations mature and does not intend to, or believe that it will, incur
debt or other obligations beyond its ability to pay as such obligations mature.

	5.	 	The representations and warranties set forth in Section 1 of the Purchase Agreement (as
defined below) are hereby deemed to be repeated to MLI as if set forth herein.

	6.	 	Seller hereby represents and warrants to Buyer that the Premium paid hereunder was determined
as a result of the application of models and procedures regularly employed by Seller in
similar arm’s-length transactions with companies entering into derivative transactions on
their own stock and was determined independently of any underwriting or other services
provided to Buyer in connection with the issuance of the Reference Notes.

Additional Termination Events: 

The occurrence of an Amendment Event or a Repayment Event shall be an Additional Termination Event
with respect to which the Transaction is the sole Affected Transaction and Counterparty is the sole
Affected Party, except that Counterparty (in addition to Seller) shall be entitled to designate an
Early Termination Date in respect of such Additional Termination Event if Counterparty provides
Seller such representations, warranties and covenants with respect to securities laws as Seller may
reasonably request; provided that in the case of a Repayment Event, the Transaction shall be
subject to termination only in respect of the number of Convertible Notes that cease to be
outstanding in connection with or as a result of such Repayment Event:

	1.	 	“Amendment Event” means that the Counterparty, without MLI’s consent, amends,
modifies, supplements or obtains a waiver of (a) any term of the Note Indenture (as in effect
prior to such amendment, modification, supplement or waiver) or the Reference Notes relating
to the principal amount, coupon, maturity, repurchase obligation of the Counterparty or
redemption right of the Counterparty, (b) any term relating to conversion of the Reference
Notes, including, without limitation, any changes to the conversion price, conversion
settlement dates or conversion conditions or (c) any term that would require consent of the
holders of 100% of the principal amount of the Reference Notes to amend.

	2.	 	“Repayment Event” means that (a) any Reference Notes are repurchased (whether in
connection with or as a result of a fundamental change or change of control, howsoever
defined, or for any other reason) by the Counterparty, (b) any Reference Notes are delivered
to the Counterparty in exchange for delivery of any property or assets of the Counterparty or
any of its subsidiaries (howsoever described), other than as a result of and in connection
with a Conversion Date, (c) any principal of any of the Reference Notes is repaid prior to the
Final Maturity Date (as defined in the Note Indenture) (whether following acceleration of the
Reference Notes or otherwise), provided that no payments of cash made in respect of the
conversion of a Reference Note shall be deemed a payment of principal under this clause (c),
(d) any Reference Notes are exchanged by or for the benefit of the holders thereof for any
other securities of the Counterparty or any of its Affiliates (or any other property, or any
combination thereof) pursuant to any exchange offer or similar transaction or (e) any of the
Reference Notes is surrendered by Counterparty to the trustee for cancellation, other than
registration of a transfer of such Reference Notes or as a result of and in connection with a
Conversion Date.

	3.	 	Initial Purchase Event. If an Initial Purchase Event (as defined below) occurs, this
Transaction shall terminate automatically in its entirety and, notwithstanding anything to the
contrary herein, only the payments specified below shall be required hereunder in connection
with such Initial Purchase Event.
	 
	 	 	“Initial Purchase Event” means that the transactions contemplated by the Purchase
Agreement shall fail to close for any reason by the closing date for the offering of the
Reference Notes as specified in the Purchase Agreement.

Confirmation OTC Convertible Note Hedge

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	 	 	If an Initial Purchase Event occurs due to a breach of the Purchase Agreement by
Counterparty, then all payments previously made hereunder shall be returned to the person
making such payment, including the Premium, less an amount equal to the product of (a)
11,311,700 Shares, (b) 0.30 and (c) an amount equal to the excess, if any, of the closing
price of the Shares on the Trade Date over the closing price of the Shares on the date of
the Termination Event (the “Break Expense”); provided that any negative amount shall
be replaced by zero and provided further that to the extent the Premium has not been paid,
Buyer shall promptly pay Seller the Break Expense. Seller and Buyer agree that actual
damages would be difficult to ascertain under these circumstances and that the amount of
liquidated damages resulting from the determination in the preceding sentence is a good
faith estimate of such damages and not a penalty.
	 
	 	 	If an Initial Purchase Event occurs for any reason other than due to a breach of the
Purchase Agreement by Counterparty, then all payments previously made hereunder, including
the Premium, promptly shall be returned to the person making such payment and no payments
shall be required hereunder in connection with such Initial Purchase Event.

Staggered Settlement: 

If Seller determines reasonably and in good faith that the number of Shares required to be
delivered to Buyer hereunder on any Settlement Date would exceed 9.1% of all outstanding Shares,
then Seller may, by notice to Buyer on or prior to such Settlement Date (a “Nominal Settlement
Date”), elect to deliver the Shares comprising the related Net Share Settlement Amount on two
or more dates (each, a “Staggered Settlement Date”) or at two or more times on the Nominal
Settlement Date as follows:

	1.	 	in such notice, Seller will specify to Buyer the related Staggered Settlement Dates (each of
which will be on or prior to such Nominal Settlement Date, but not more than 30 days prior to
such Nominal Settlement Date) or delivery times and how it will allocate the Shares it is
required to deliver hereunder among the Staggered Settlement Dates or delivery times; and

	2.	 	the aggregate number of Shares that Seller will deliver to Buyer hereunder on all such
Staggered Settlement Dates or delivery times will equal the number of Shares that Seller would
otherwise be required to deliver on such Nominal Settlement Date.

Buyer agrees to credit all such early deliveries against Seller’s obligations hereunder in the
direct order in which such obligations arise. No such early delivery of Shares will accelerate or
otherwise affect any of Buyer’s obligations to Seller hereunder.

Disposition of Hedge Shares: 

Counterparty hereby agrees that if, in the reasonable judgment of Seller or Buyer based on advice
of counsel, the Shares acquired by Seller for the purpose of hedging its obligations pursuant to
the Transaction (the “Hedge Shares”) cannot be sold in the U.S. public market by Seller
without registration under the Securities Act, Counterparty shall, at its election: (i) in order to
allow Seller to sell the Hedge Shares in a registered offering, make available to Seller an
effective registration statement under the Securities Act to cover the resale of such Hedge Shares
and (a) enter into an agreement, in form and substance satisfactory to Seller, substantially in the
form of an underwriting agreement for a registered offering, (b) provide accountant’s “comfort”
letters in customary form for registered offerings of equity securities, (c) provide disclosure
opinions of nationally recognized outside counsel to Counterparty reasonably acceptable to Seller,
(d) provide other customary opinions, certificates and closing documents customary in form for
registered offerings of equity securities and (e) afford Seller a reasonable opportunity to conduct
a “due diligence” investigation with respect to Counterparty customary in scope for underwritten
offerings of equity securities; provided, however, that if Seller, in its sole reasonable
discretion, is not satisfied with access to due diligence materials, the results of its due
diligence investigation, or the procedures and documentation for the registered offering referred
to above, then clause (ii) or clause (iii) of this Section shall apply at the election of
Counterparty; (ii) in order to allow Seller to sell the Hedge Shares in a private placement, enter
into a private placement agreement substantially similar to private placement purchase agreements
customary for private

Confirmation OTC Convertible Note Hedge

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placements of equity securities, in form and substance satisfactory to Seller, including customary
representations, covenants, blue sky and other governmental filings and/or registrations,
indemnities to Seller, due diligence rights (for Seller or any designated buyer of the Hedge Shares
from Seller), opinions and certificates and such other documentation as is customary for private
placements agreements, all reasonably acceptable to Seller (in which case, the Calculation Agent
shall make any adjustments to the terms of the Transaction that are necessary to compensate Seller
for any discount from the public market price of the Shares incurred on the sale of Hedge Shares in
a private placement; provided that any such adjustment shall not reduce the number of Shares
otherwise required to be delivered pursuant to “Delivery Obligation” above by more than 19%);or
(iii) purchase the Hedge Shares from Seller at the VWAP Price on such Exchange Business Days, and
in the amounts, requested by Seller. “VWAP Price” means, on any Exchange Business Day, the
per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on
Bloomberg page STEI.Q <equity> AQR (or any successor thereto) in respect of the period from
9:30 a.m. to 4:00 p.m. (New York City time) on such Exchange Business Day (or if such
volume-weighted average price is unavailable, the market value of one Share on such Exchange
Business Day, as determined by the Calculation Agent using a volume-weighted method).

Conversion Rate Adjustment Notices

In connection with any adjustments to the Conversion Rate under the terms of the Note Indenture,
Counterparty shall provide to MLI a copy of the notice of adjustment required to be delivered to
the Trustee pursuant to Section 4.08 of the Note Indenture concurrently with filing of such notice
with the Trustee.

	 	 	 	 	 
	Compliance with 

Securities Laws:	 	Each party represents and agrees that, in connection with this Transaction and all related or
contemporaneous sales and purchases of Shares by either party, Buyer, or in the case of Seller,
the person(s) that directly influences the specific trading decisions of Seller, has complied and
will comply with the applicable provisions of the Securities Act of 1933, as amended (the
“Securities Act”), and the Exchange Act, and the rules and regulations each thereunder,
including, without limitation, Section 9(a) of, and Rules 10b-5 and 13e and Regulation M under,
the Exchange Act; provided that each party shall be entitled to rely conclusively on any
information communicated by the other party concerning such other party’s market activities.
	 
	 	 	 	 
	 	 	Each party acknowledges that the offer and sale of the Transaction to it is intended to be exempt
from registration under the Securities Act by virtue of Section 4(2) thereof. Accordingly, Buyer
represents and warrants to Seller that (i) it has the financial ability to bear the economic risk
of its investment in the Transaction and is able to bear a total loss of its investment, (ii) it
is an “accredited investor” as that term is defined in Regulation D as promulgated under the
Securities Act and (iii) the disposition of the Transaction is restricted under this
Confirmation, the Securities Act and state securities laws.
	 
	 	 	 	 
	 	 	Buyer further represents:
	 
	 	 	 	 
	 	 	(a) Buyer is not entering into this Transaction to create actual or apparent trading activity in
the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress
or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable
for Shares);
	 
	 	 	 	 
	 	 	(b) Buyer acknowledges that as of the date hereof and without limiting the generality of Section
13.1 of the Equity Definitions, Seller is not making any representations or warranties with
respect to the treatment of the Transaction under FASB Statements 149 or 150, EITF Issue No.
00-19 (or any successor issue statements) or under FASB’s Liabilities & Equity Project.
	 
	 	 	 	 
	Account Details:
	 	 	 	 
	 

	 	Account for payments to Buyer:
	 	SunTrust Bank

Confirmation OTC Convertible Note Hedge

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	 	 	 	Atlanta, Georgia
	 

	 	 	 	ABA #061000104
	 

	 	 	 	Credit Stewart Enterprises, Inc
	 

	 	 	 	 1000032706300
	 

	 	 	 	SWIFT Code (for international wires): SNTRUS3A
	 
	 	 	 	 
	 

	 	Account for payment to Seller:
	 	JP Morgan Chase Bank, New York
	 

	 	 	 	ABA 021000021
	 

	 	 	 	FAO: MLI EQUITY DERIVATIVES
	 

	 	 	 	Acct: 066213118
	 
	 	 	 	 
	 

	 	Accounts for deliveries of Shares:
	 	To be advised
	 
	 	 	 	 
	Bankruptcy Rights:	 	In the event of Buyer’s bankruptcy, Seller’s rights in connection with this Transaction shall not
exceed those rights held by common shareholders. For the avoidance of doubt, the parties
acknowledge and agree that Seller’s rights with respect to any other claim arising from this
Transaction prior to Buyer’s bankruptcy shall remain in full force and effect and shall not be
otherwise abridged or modified in connection herewith.
	 
	 	 	 	 
	Set-Off:	 	Each party waives any and all rights it may have to set-off, whether arising under any agreement,
applicable law or otherwise.
	 
	 	 	 	 
	Collateral:	 	None.
	 
	 	 	 	 
	Transfer:	 	Buyer shall have the right to assign its rights and delegate its obligations hereunder with
respect to any portion of this Transaction, subject to Seller’s consent, such consent not to be
unreasonably withheld; provided that such assignment or transfer shall be subject to receipt by
Seller of opinions and documents reasonably satisfactory to Seller and effected on terms
reasonably satisfactory to the Seller with respect to any legal and regulatory requirements
relevant to the Seller; provided further that Buyer shall not be released from its obligation to
deliver any Exercise Notice or its obligations pursuant to “Disposition of Hedge Shares”,
“Repurchase Notices” or “Conversion Rate Adjustment Notices” above.
	 
	 	 	 	 
	 	 	Seller may transfer any of its rights or delegate its obligations under this Transaction with the
prior written consent of Buyer, which consent shall not be unreasonably withheld.
	 
	 	 	 	 
	Regulation:	 	Seller is regulated by The Securities and Futures Authority Limited.

Matters Relating to Agent: 

	1.	 	MLPFS will be responsible for the operational aspects of the Transactions effected through
it, such as record keeping, reporting, and confirming Transactions to Buyer and Seller;

	2.	 	Unless Buyer is a “major U.S. institutional investor,” as defined in Rule 15a-6 of the
Exchange Act, neither Buyer nor Seller will contact the other without the direct involvement
of MLPFS;

	3.	 	MLPFS’s sole role under this Agreement and with respect to any Transaction is as an agent of
Buyer and Seller on a disclosed basis and MLPFS shall have no responsibility or liability to
Buyer or Seller hereunder except for gross negligence or willful misconduct in the performance
of its duties as agent. MLPFS is authorized to act as agent for Buyer, but only to the extent
expressly required to satisfy the requirements of Rule 15a-6 under the Exchange Act in respect
of the Options described hereunder. MLPFS shall have no authority to act as agent for Buyer
generally or with respect to transactions or other matters governed by this Agreement, except
to the extent expressly required to satisfy the requirements of Rule 15a-6 or in

Confirmation OTC Convertible Note Hedge

- 10 -

 

	 	 	accordance with express instructions from Buyer.

ISDA Master Agreement: 

With respect to the Agreement, Seller and Counterparty each agree as follows:

“Specified Entity” means in relation to Seller and in relation to Counterparty for purposes of this
Transaction: Not applicable.

The definition of “Specified Transaction” in Section 14 of this Agreement is hereby amended by
adding the text “commodity transaction, credit derivative transaction, repurchase or reverse
purchase transaction, securities lending transaction, futures transaction, prime brokerage or
margin lending transaction” after the words “foreign exchange transaction” in the sixth line
thereof and by replacing the words “any other similar transaction” in the eighth line thereof with
the text “any other transaction between the parties”. “Specified Transaction” shall exclude any
default under a Specified Transaction if caused solely by the general unavailability of the
currency in which payments under such Specified Transaction are denominated due to exchange
controls or other governmental action.

The “Cross Default” provisions of Section 5(a)(vi) of the Agreement will not apply to
Seller and will not apply to Counterparty.

The “Credit Event Upon Merger” provisions of Section 5(b)(iv) of the Agreement will not
apply to Seller and will not apply to Counterparty.

The “Automatic Early Termination” provision of Section 6(a) of the Agreement will not apply
to Seller or to Counterparty.

Payments on Early Termination. For the purpose of Section 6(e) of the Agreement: (i) Loss
shall apply; and (ii) the Second Method shall apply.

“Termination Currency” means USD.

Tax Representations.

	(a)	 	Payer Representations. For the purpose of Section 3(e) of the Agreement, each party
represents to the other party that it is not required by any applicable law, as modified by
the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to
make any deduction or withholding for or on account of any Tax from any payment (other than
interest under Section 2(e), 6(d)(ii), or 6(e) of the Agreement) to be made by it to the other
party under the Agreement. In making this representation, each party may rely on (i) the
accuracy of any representations made by the other party pursuant to Section 3(f) of the
Agreement, (ii) the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of
the Agreement, and the accuracy and effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii) of the Agreement, and (iii) the satisfaction of the
agreement of the other party contained in Section 4(d) of the Agreement; provided that it will
not be a breach of this representation where reliance is placed on clause (ii) above and the
other party does not deliver a form or document under Section 4(a)(iii) of the Agreement by
reason of material prejudice to its legal or commercial position.

	(b)	 	Payee Representations. For the purpose of Section 3(f) of the Agreement, each party makes the
following representations to the other party:
	 
	 	 	(i)      MLI represents that it is a company organized under the laws of England and Wales.
	 
	 	 	(ii)      MLI represents that it is a “non-withholding foreign partnership” for United States
Federal income tax purposes and each partner of MLI is a “non-U.S. branch of a foreign
person” for purposes of section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations
and a “foreign person” for purposes of section 1.6041-4(a)(4) of the United States Treasury
Regulations.

Confirmation OTC Convertible Note Hedge

- 11 -

 

	 	 	(iii)      MLI represents that no partner of MLI is (i) a bank that has entered into this
Agreement in the ordinary course of its trade or business of making loans, as described in
section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), (ii) a
10% shareholder of Counterparty within the meaning of Code section 871(h)(3)(B), or (iii) a
controlled foreign corporation with respect to Counterparty within the meaning of Code
section 881(c)(3)(C).
	 
	 	 	(iv)      Counterparty represents that it is a corporation incorporated in Louisiana.

Delivery Requirements. For the purpose of Sections 4(a)(i) and (ii) of the
Agreement, each party agrees to deliver the following documents:

	(a)	 	Tax forms, documents or certificates to be delivered are:
	 
	 	 	MLI agrees to complete (accurately and in a manner reasonably satisfactory to Counterparty),
execute, and deliver to Counterparty, United States Internal Revenue Service Form W-8 IMY
and all required attachments, or any successor of such form(s): (i) before the first payment
date under this agreement; (ii) promptly upon reasonable demand by Counterparty; and (iii)
promptly upon learning that any such Form previously provided by MLI has become obsolete or
incorrect.
	 
	 	 	Counterparty agrees to complete (accurately and in a manner reasonably satisfactory to MLI),
execute, and deliver to MLI, United States Internal Revenue Service Form W-9 or W-8 BEN, or
any successor of such form(s): (i) before the first payment date under this agreement; (ii)
promptly upon reasonable demand by MLI; and (iii) promptly upon learning that any such
form(s) previously provided by Counterparty has become obsolete or incorrect.
	 
	(b)	 	Other documents to be delivered:

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Covered by
	Party Required to	 	 	 	 	 	Section 3(d)
	Deliver Document	 	Document Required to be Delivered	 	When Required	 	Representation
	Counterparty

	 	Evidence of the authority and
true signatures of each official
or representative signing this
Confirmation
	 	Upon or before
execution and
delivery of this
Confirmation
	 	Yes
	 
	 	 	 	 	 	 
	Counterparty

	 	Certified copy of the resolution
of the Board of Directors or
equivalent document authorizing
the execution and delivery of
this Confirmation and such other
certificates as Seller shall
reasonably request
	 	Upon or before
execution and
delivery of this
Confirmation
	 	Yes
	 
	 	 	 	 	 	 
	Seller

	 	Guarantee of its Credit Support
Provider, substantially in the
form of Exhibit A attached
hereto, together with evidence
of the authority and true
signatures of the signatories,
if applicable
	 	Upon or before
execution and
delivery of this
Confirmation
	 	Yes

Additional Notice Requirements. Counterparty hereby agrees to promptly deliver to Seller a copy of
all notices and other communications required or permitted to be given to the holders of any
Reference Notes pursuant to the terms of the Note Indenture on the dates so required or permitted
in the Note Indenture and all other notices given and other communications made by Counterparty in
respect of the Reference Notes to holders of any Reference Notes. Counterparty further covenants to
Seller that it shall promptly notify Seller of each Conversion Date, Amendment Event (including in
such notice a detailed description of any such amendment) and Repayment Event (identifying in such
notice the nature of such Repayment Event and the principal amount at maturity of Reference
Notes being paid).

Confirmation OTC Convertible Note Hedge

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Addresses for Notices. For the purpose of Section 12(a)of the Agreement:

Address for notices or communications to Seller for all purposes:

	 	 	 	 	 
	 

	 	Address:
	 	Merrill Lynch International
	 

	 	 	 	Merrill Lynch Financial Centre
	 

	 	 	 	2 King Edward Street
	 

	 	 	 	London EC1A 1HQ
	 
	 	 	 	 
	 

	 	Attention:
	 	Manager, Fixed Income Settlements
	 

	 	Facsimile No.:
	 	44 207 995 2004
	 

	 	Telephone No.:
	 	44 207 995 3769

Additionally, a copy of all notices pursuant to Sections 5, 6, and 7 as
well as any changes to Counterparty’s address, telephone number or facsimile number should be sent
to:

	 	 	 	 	 
	 

	 	Address:
	 	GMI Counsel
	 

	 	 	 	Merrill Lynch World Headquarters
	 

	 	 	 	4 World Financial Center
	 

	 	 	 	New York, New York 10080
	 
	 	 	 	 
	 

	 	Attention:
	 	Global Equity Derivatives
	 

	 	Facsimile No.:
	 	(212) 449-6576
	 

	 	Telephone No.:
	 	(212) 449-6309

Address for notices or communications to Counterparty for all purposes:

	 	 	 	 	 
	 

	 	Address:
	 	Stewart Enterprises, Inc.
	 

	 	 	 	1333 S. Clearview Parkway
	 

	 	 	 	Jefferson, LA 70121
	 

	 	Attention:
	 	Thomas M. Kitchen, Chief Financial Officer
	 

	 	Facsimile No.:
	 	(504) 729-1407
	 

	 	Telephone No.:
	 	(504) 729-1425

In addition, in the case of notices or communications relating to Section 5, 6,
11 or 13 of this Agreement, a second copy of any such notice or communication shall
be addressed to the attention of Counterparty’s General Counsel as follows:

	 	 	 	 	 
	 

	 	Address:
	 	Jones, Walker, Waechter, Poitevent,
	 

	 	 	 	Carrère and Denègre, L.L.P.
	 

	 	 	 	201 St. Charles Avenue
	 

	 	 	 	New Orleans, LA 70170-5100
	 

	 	Attention:
	 	Dionne M. Rousseau
	 

	 	Facsimile No.:
	 	(504) 589-8338
	 

	 	Telephone No.:
	 	(504) 582-8338

Process Agent. For the purpose of Section 13(c) of the Agreement, Seller appoints as its Process
Agent:

	 	 	 	 	 
	 

	 	Address:
	 	Merrill Lynch, Pierce, Fenner & Smith Incorporated
	 
	 	 	 	 
	 

	 	 	 	222 Broadway, 16th Floor
	 

	 	 	 	New York, New York 10038
	 

	 	Attention:
	 	Litigation Department
	 
	 	 	 	 
	 	 	Counterparty does not appoint a Process Agent.

	 	 	 
	Multibranch Party.

	 	For the purpose of Section 10(c) of the Agreement:
	 

	 	Neither Seller nor Counterparty

Confirmation OTC Convertible Note Hedge

- 13 -

 

	 	 	 
	 

	 	is a Multibranch Party.
	 
	 	 
	Calculation Agent.

	 	Seller; provided that all determinations made by the
Calculation Agent shall be made in good faith and in a
commercially reasonable manner. Following any
calculation by the Calculation Agent hereunder, upon a
prior written request by Buyer, the Calculation Agent
will provide to Buyer by e-mail to the e-mail address
provided by Buyer in such a prior written request a
report (in a commonly used file format for the storage
and manipulation of financial data) displaying in
reasonable detail the basis for such calculation; and
provided further that no transferee of the Transaction
in accordance with the terms of this Confirmation that
is not an affiliate of MLI shall act as Calculation
Agent with respect to such transferred Transaction
without the prior consent of Buyer, such consent not to
be unreasonably withheld.

Credit Support Document.

Seller: Guarantee of ML&Co. in the form attached hereto as Exhibit A.

Counterparty: Not Applicable

Credit Support Provider.

With respect to Seller: ML&Co.

With respect to Counterparty: Not Applicable.

Governing Law. This Confirmation will be governed by, and construed in accordance with, the laws of
the State of New York.

Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any
right it may have to a trial by jury in respect of any suit, action or proceeding relating to this
Transaction. Each party (i) certifies that no representative, agent or attorney of the other party
has represented, expressly or otherwise, that such other party would not, in the event of such a
suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and
the other party have been induced to enter into this Transaction, as applicable, by, among other
things, the mutual waivers and certifications provided herein.

Netting of Payments. The provisions of Section 2(c) of the Agreement shall not be
applicable to this Transaction.

Basic Representations. Section 3(a) of the Agreement is hereby amended by the deletion of
“and” at the end of Section 3(a)(iv); the substitution of a semicolon for the period at the
end of Section 3(a)(v) and the addition of Sections 3(a)(vi), as follows:

Eligible Contract Participant; Line of Business. Each party agrees and represents that it is an
“eligible contract participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act, as
amended (“CEA”), this Agreement and the Transaction thereunder are subject to individual
negotiation by the parties and have not been executed or traded on a “trading facility” as defined
in Section 1a(33) of the CEA, and it has entered into this Confirmation and this Transaction in
connection with its business or a line of business (including financial intermediation), or the
financing of its business.

Acknowledgements:

	(a)	 	The parties acknowledge and agree that there are no other representations, agreements or
other undertakings of the parties in relation to this Transaction, except as set forth in this
Confirmation.

     (b) The parties hereto intend for:

Confirmation OTC Convertible Note Hedge

- 14 -

 

	 	(i)	 	Seller to be a “financial institution” as defined in Section 101(22) of Title
11 of the United States Code (the “Bankruptcy Code”) and this Transaction to be
a “securities contract” as defined in Section 741(7) of the Bankruptcy Code and a “swap
agreement” as defined in Section 101(53C) of the Bankruptcy Code, qualifying for the
protections of, among other sections, Sections 362(b)(6), 362 (b)(17), 546(e), 546(g),
555 and 560 of the Bankruptcy Code;
	 
	 	(ii)	 	a party’s right to liquidate this Transaction and to exercise any other
remedies upon the occurrence of any Event of Default under the Agreement with respect
to the other party to constitute a “contractual right” as defined in the Bankruptcy
Code;
	 
	 	(iii)	 	all payments for, under or in connection with this Transaction, all payments
for the Shares and the
transfer of such Shares to constitute “settlement payments” as defined in the
Bankruptcy Code.

Amendment of Section 6(d)(ii). Section 6(d)(ii) of the Agreement is modified by deleting
the words “on the day” in the second line thereof and substituting therefore “on the day that is
three Local Business Days after the day.” Section 6(d)(ii) is further modified by deleting
the words “two Local Business Days” in the fourth line thereof and substituting therefore “three
Local Business Days.”

Amendment of Definition of Reference Market-Makers. The definition of “Reference Market-Makers” in
Section 14 is hereby amended by adding in clause (a) after the word “credit” and before the
word “and” the words “or to enter into transactions similar in nature to the Transaction.”

Consent to Recording. Each party consents to the recording of the telephone conversations of
trading and marketing personnel of the parties and their Affiliates in connection with this
Confirmation. To the extent that one party records telephone conversations (the “Recording Party”)
and the other party does not (the “Non-Recording  Party”), the Recording Party shall in the
event of any dispute, make a complete and unedited copy of such party’s tape of the entire day’s
conversations with the Non-Recording Party’s personnel available to the Non-Recording Party. The
Recording Party’s tapes may be used by either party in any forum in which a dispute is sought to be
resolved and the Recording Party will retain tapes for a consistent period of time in accordance
with the Recording Party’s policy unless one party notifies the other that a particular transaction
is under review and warrants further retention.

Disclosure. Each party hereby acknowledges and agrees that Seller has authorized Counterparty to
disclose this Transaction and any related hedging transaction between the parties if and to the
extent that Counterparty reasonably determines (after consultation with Seller) that such
disclosure is required by law or by the rules of any relevant securities exchange or trading
platform. Notwithstanding the foregoing, effective from the date of commencement of discussions
concerning the Transaction, Counterparty and each of its employees, representatives, or other
agents may disclose to any and all persons, without limitation of any kind, the tax treatment and
tax structure of the Transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to Counterparty relating to such tax treatment and tax structure.

Severability. If any term, provision, covenant or condition of this Confirmation, or the
application thereof to any party or circumstance, shall be held to be invalid or unenforceable in
whole or in part for any reason, the remaining terms, provisions, covenants, and conditions hereof
shall continue in full force and effect as if this Confirmation had been executed with the invalid
or unenforceable provision eliminated, so long as this Confirmation as so modified continues to
express, without material change, the original intentions of the parties as to the subject matter
of this Confirmation and the deletion of such portion of this Confirmation will not substantially
impair the respective benefits or expectations of parties to this Agreement; provided, however,
that this severability provision shall not be applicable if any provision of Section 2,
5, 6 or 13 of the Agreement (or any definition or provision in Section
14 to the extent that it relates to, or is used in or in connection with any such Section)
shall be so held to be invalid or unenforceable.

Affected Parties. For purposes of Section 6(e) of the Agreement, each party shall be deemed
to be an Affected
Party in connection with Illegality and any Tax Event.

[Signatures follow on separate page]

Confirmation OTC Convertible Note Hedge

- 15 -

 

Please confirm that the foregoing correctly sets forth the terms of our agreement by
executing the copy of this Confirmation enclosed for that purpose and returning it to us.

	 	 	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 	 	 
	 	 	MERRILL LYNCH INTERNATIONAL
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

Confirmed as of the date first above
written:

STEWART ENTERPRISES, INC.

	 	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 

Acknowledged and agreed as to matters to the Agent:

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

Solely in its capacity as Agent hereunder

	 	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 

 

 

EXHIBIT A

GUARANTEE OF MERRILL LYNCH & CO., INC.

     FOR VALUE RECEIVED, receipt of which is hereby acknowledged, MERRILL LYNCH & CO., INC., a
corporation duly organized and existing under the laws of the State of Delaware (“ML & Co.”),
hereby unconditionally guarantees to Stewart Enterprises, Inc. (the “Company”), the due and
punctual payment of any and all amounts payable by Merrill Lynch International, a company organized
under the laws of England and Wales (“ML”), under the terms of the Confirmation of OTC Convertible
Note Hedge between the Company and ML (ML as Seller), dated as of June 21, 2007 (the
“Confirmation”), including, in case of default, interest on any amount due, when and as the same
shall become due and payable, whether on the scheduled payment dates, at maturity, upon declaration
of termination or otherwise, according to the terms thereof. In case of the failure of ML
punctually to make any such payment, ML & Co. hereby agrees to make such payment, or cause such
payment to be made, promptly upon demand made by the Company to ML & Co.; provided, however that
delay by the Company in giving such demand shall in no event affect ML & Co.’s obligations under
this Guarantee. This Guarantee shall remain in full force and effect or shall be reinstated (as
the case may be) if at any time any payment guaranteed hereunder, in whole or in part, is rescinded
or must otherwise be returned by the Company upon the insolvency, bankruptcy or reorganization of
ML or otherwise, all as though such payment had not been made.

     ML & Co. hereby agrees that its obligations hereunder shall be unconditional, irrespective of
the validity, regularity or enforceability of the Confirmation; the absence of any action to
enforce the same; any waiver or consent by the Company concerning any provisions thereof; the
rendering of any judgment against ML or any action to enforce the same; or any other circumstances
that might otherwise constitute a legal or equitable discharge of a guarantor or a defense of a
guarantor. ML covenants that this guarantee will not be discharged except by complete payment of
the amounts payable under the Confirmation. This Guarantee shall continue to be effective if ML
merges or consolidates with or into another entity, loses its separate legal identity or ceases to
exist.

     ML & Co. hereby waives diligence; presentment; protest; notice of protest, acceleration, and
dishonor; filing of claims with a court in the event of insolvency or bankruptcy of ML; all demands
whatsoever, except as noted in the first paragraph hereof; and any right to require a proceeding
first against ML.

     ML & Co. hereby certifies and warrants that this Guarantee constitutes the valid obligation of
ML & Co. and complies with all applicable laws.

     This Guarantee shall be governed by, and construed in accordance with, the laws of the State
of New York.

     This Guarantee becomes effective concurrent with the effectiveness of the Confirmation,
according to its terms.

 

 

     IN WITNESS WHEREOF, ML & Co. has caused this Guarantee to be executed in its corporate name by
its duly authorized representative.

	 	 	 	 	 	 	 
	 	 	MERRILL LYNCH & CO., INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:

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