Document:

Asset Purchase and Sale Agreement

 Exhibit 10.2 
 ASSET PURCHASE AND SALE AGREEMENT 
 This ASSET PURCHASE AND SALE AGREEMENT
(“Agreement”) dated this 28th day of September, 2006, is made by and among STONEMOR
OPERATING LLC, a Delaware limited liability company (“StoneMor LLC”), joined herein by STONEMOR MICHIGAN LLC, a Michigan limited liability company (“Buyer LLC”) and STONEMOR MICHIGAN
SUBSIDIARY LLC, a Michigan limited liability company (“Buyer NQ Sub” and individually and collectively with StoneMor LLC and Buyer LLC, “Buyer”), and SCI FUNERAL SERVICES, INC., an Iowa
corporation (“Parent”), SCI MICHIGAN FUNERAL SERVICES, INC., a Michigan corporation (“SCI Michigan”, and together with Parent, “SCI”), and HAWES, INC., a Michigan
corporation (“Seller”). 
 W I T N E S S E T
H: 
 WHEREAS, Seller owns and operates that cemetery business which is listed on Exhibit A attached
hereto (such location listed on Exhibit A referred to herein as the “Location,” and the business conducted at the Location referred to individually and collectively as the “Business”);

 WHEREAS, SCI Michigan provides certain sales, accounting and other administrative services for the
Business conducted at the Location pursuant to a Marketing and Accounting Services Agreement with the Seller, dated July 30, 1993, as amended from time to time (the “Management Agreement”); and 
 WHEREAS, the parties desire to provide for the purchase, sale and transfer of the Business, including certain of the personal
property located at, used in connection with, or arising out of, such 

 ASSET PURCHASE AND SALE AGREEMENT 

 
Business, together with the real estate utilized in the Business, in exchange for cash and other consideration, upon the terms and subject to the conditions
herein set forth; and 
 WHEREAS, this Agreement sets forth the terms and conditions to which the parties have agreed;

 WHEREAS, simultaneously herewith Buyer and Hillcrest Memorial Company are entering into a transaction
to purchase cemetery businesses in Michigan (the “Hillcrest Transaction”), and affiliates of Buyer and Parent are entering into a transaction to purchase funeral, cremation and cemetery businesses in this and other
jurisdictions (the “Dignity II and III Transactions”); 
 NOW, THEREFORE, in
consideration of the premises and the mutual covenants, agreements, representations and warranties herein contained, the parties, intending to be legally bound hereby, agree as follows: 
 ARTICLE I 
 Purchase and Sale 
 Section 1.1 Transfer of Acquired Assets. Subject to the terms and conditions of this Agreement, and except as
provided in Section 1.2, Seller and SCI do hereby agree to (or, if applicable, cause their Affiliates to) sell, transfer, convey, assign and deliver to Buyer, and Buyer does hereby agree to purchase and accept from Seller and SCI (or their
Affiliates, if applicable), free and clear of all Liens and Liabilities (other than the Assumed Liabilities (as defined below)), all right, title and interest to the following property and rights located at, used in connection with, arising out of
or relating to the Business (collectively, the “Acquired Assets”): 
 (a) The real property described
in Schedule 1.1(a) to this Agreement, together with all buildings, structures, improvements, fixtures, easements, benefits and rights and appurtenances benefiting, belonging or pertaining thereto, (the “Owned Real
Property”); 
 (b) All furniture, equipment, tools, supplies and other tangible personal property owned or used
by Seller or SCI exclusively or primarily in the operation of the Business as of 

  

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the date hereof or acquired between the date hereof and the Effective Time, including, without limitation, those items listed on Schedule 1.1(b) to
this Agreement; 
 (c) All vehicles listed on Schedule 1.1(c) to this Agreement; 
 (d) All crypts, urns, vaults, monuments, grave spaces, mausoleum spaces, niches, lawn crypts, supplies and other merchandise inventory of
the Business (“Inventory”), including, without limitation, the items stored for customers at the cemeteries included in the Business, plus or minus any changes to such Inventory which result from the ordinary course of
operation of the Business, consistent with past practices, subsequent to the date(s) of such listing(s) and until the Effective Time (and specifically limited to the rights permitted by or provided under applicable Laws with regard to merchandise
designated as being “stored” for customers under Pre-/At-Need Contracts (as defined below)), and all Services in Progress (as hereinafter defined); 
 (e) All benefits, rights and entitlements of or relating to the Business under and in all contracts, agreements, leases, licenses and
commitments listed on Schedule 1.1(e) to this Agreement (“Business Contracts”); 
 (f) All
benefits, rights and entitlements under any leases for any real property at the Location or otherwise exclusively or primarily related to the Business (whether Seller is lessee or lessor thereunder) (“Real Property Leases”),
including, without limitation, those listed on Schedule 1.1(f) to this Agreement, together with any security deposits held or paid on account of any of the Real Property Leases (the real property leased by Seller or SCI as a lessee or
sublessee under the Real Property Leases being referred to herein as “Leased Real Property” and, together with the Owned Real Property, the “Real Property”); 
 (g) All benefits, rights and entitlements under all of the Contracts, engagements and commitments, written or oral, relating to the
provision or sale by the Business of at-need or preneed cemetery or cremation merchandise, properties or services and all deposits, prepaid amounts, insurance policies and trust funds relating to such Contracts, engagements and commitments,
including, without limitation, those items listed on Schedule 1.1(g) to this Agreement, plus or minus any similar items entered into or obtained in the ordinary course of the operation of the Business subsequent to the date(s) of the
listing(s) on Schedule 1.1(g) until the Effective Time (collectively, the “Pre-/At-Need Contracts” and, together with the Business Contracts and the Real Property Leases, the “Assumed
Contracts”); 
 (h) All of the Permits of each of Seller and SCI necessary for the ownership, operation,
maintenance or presently planned expansion (by Seller or SCI) of the Business, to the extent transferable; 
 (i)
Intentionally omitted; 
 (j) All utility and other deposits previously paid to and/or held by third parties in connection
with the operation of the Business as of the Effective Time; 
 (k) All accounts and notes receivable generated in or relating
to the operation of the Business (“Receivables”), including, without limitation, those listed on Schedule 1.1(k) to 

  

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this Agreement, plus or minus any changes in such receivables which result from the ordinary course of the operation of the Business, consistent with past
practices, subsequent to the date(s) of the listing(s) on Schedule 1.1(k) until the Effective Time, but specifically excluding pending trust claims specified in Section 5.5(b)(ii) and pending insurance claims; 
 (l) All of the Seller’s and SCI’s rights and incidents of interest in and to causes of action, suits, proceedings, judgments,
claims and demands of any nature, whenever maturing or asserted, relating to or arising directly or indirectly out of any of the Acquired Assets or the Business, but specifically excluding pending trust claims specified in Section 5.5(b)(ii)
and pending insurance claims; and 
 (m) All goodwill associated with the Business, together with all lists of present or
former customers of the Business, all business books, documents, records, files, databases and reports relating to the Acquired Assets and reasonably necessary for Buyer to continue the Business (collectively, “Seller
Records”) (whether or not the Seller Records are physically located at the Location), the telephone numbers and listings for the Business, and all Intellectual Property owned and/or used by the Seller and/or SCI exclusively or
primarily in connection with the Business (“Business Intellectual Property”), including, without limitation, all right, title and interest in and the right to use the trademarks, service marks and trade names for the Location
as listed on Exhibit A hereto. All Seller Records not physically located at the Location shall be copied and, at the election of Buyer, either delivered in person to a representative of Buyer at the location where such Seller Records are held
on the Closing Date or shipped to Buyer by Seller and/or SCI at Buyer’s expense by such delivery service selected by Buyer. All requests and other communications from Buyer to Seller or SCI regarding Seller Records, either before or after the
Closing, shall be directed to Michael Lehmann, Service Corporation International, 1929 Allen Parkway, Houston, Texas 77219, fax: (713) 525-7372. 
 Except as specifically provided in Section 1.2, it is intended that the assets, properties and rights of the Business to be sold to Buyer pursuant to this Agreement shall include all of the assets, properties and
rights reflected in the Schedules relating to the subsections of Section 1.1, other than those assets, properties and rights that may have been disposed of in the ordinary course of business prior to the Effective Time, but including all
similar assets, properties and rights of the Business that may have been acquired in the ordinary course of business since the dates of the listings in the Schedules relating to the subsections of Section 1.1 until the Effective Time.

 Section 1.2 Excluded Assets. Neither Seller nor SCI shall transfer, convey or assign to Buyer, and Buyer shall not
purchase, the following assets (collectively, the “Excluded Assets”): (a) non-preneed related cash and cash equivalents, (b) computers, computer software and information 

  

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and similar rights (provided, however, that none of the Seller Records shall be deemed to be an Excluded Asset, whether or not contained or stored in or on
the hard drive of any computers or on any computer system or server, disk or any other electronic media), (c) corporate records, minutes and records of shareholders’ and directors’ meetings of Seller or SCI, (d) any pending trust
claims specified in Section 5.5(b)(ii) and any pending insurance claims, (e) those items specifically identified in Schedule 1.1(b) as being subject to a corporate lease or otherwise excluded from the sale of the Acquired Assets hereunder;
and (f) all other assets of Seller or SCI which are not used exclusively or primarily in the ownership, operation or maintenance of the Business and which are not necessary to the continued operation of the Business in a manner consistent with
the Seller’s and SCI’s past practices, including training, promotional materials, procedure and policy manuals. 
 Section 1.3
Consideration for Acquired Assets Payable at the Closing. On the terms and subject to the conditions of this Agreement, Buyer, in consideration for the transfer and delivery to it of the Acquired Assets as herein provided, will,
in addition to the assumption of liabilities set forth in Section 1.5(a) below, pay to Seller at the Closing (as defined below) the sum of Four Hundred Forty Six Thousand Dollars ($446,000) (the “Closing Purchase Price”)
in cash (“Cash Purchase Price”), to be delivered by bank wire transfer to such account as Seller and SCI shall designate to Buyer in writing at least three business days prior to the Closing Date. 
 Section 1.4 Intentionally Omitted. 
 Section 1.5 Liabilities. 
 (a) Assumed Liabilities. From and after the Effective Time,
Buyer agrees to assume and perform the liabilities and obligations of the Business (“Assumed Liabilities”) under and pursuant to the terms and conditions of any Assumed Contract, but only to the extent such obligations arise,
accrue or first become due after the Effective Time under the terms of the Assumed Contracts; provided, however, that Buyer will not assume or be responsible for any such liabilities or obligations which arise from any breach or
default by Seller and/or SCI under any Assumed Contract that occurs prior to the Effective Time or that arises out of or relates to events or circumstances that occur or exist prior to the Effective Time, all of which liabilities and obligations
will constitute Retained Liabilities (as defined 

  

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herein). Notwithstanding anything to the contrary contained in this Agreement or any document delivered in connection herewith, Buyer’s obligations in
respect of the Assumed Liabilities will not extend beyond the extent to which Seller and/or SCI were obligated in respect thereof and will be subject to Buyer’s right to contest in good faith the nature and extent of any liability or obligation
(but such right to contest shall not affect Buyer’s indemnification responsibilities under Section 8.4(a)(iii)). 
 (b) Retained Liabilities. Except as provided in Section 1.5(a) hereof, each of Seller and SCI will retain, and Buyer will not assume or be responsible or liable with respect to, any Liabilities of the Business that precede the
Effective Time (except as specifically provided in subclause (vii) of this Section 1.5(b)), whether or not arising out of or relating to the conduct of Seller and/or SCI or associated with or arising from any of the Acquired Assets,
whether fixed or contingent or known or unknown (collectively, the “Retained Liabilities”), including, without limitation, the following: 
 (i) Liabilities relating to any Excluded Asset; 
 (ii) Liabilities of Seller and/or SCI that constitute trade payables; 
 (iii) Liabilities of Seller and/or SCI arising under or relating to any Assumed Contract to the extent such Liabilities relate to periods
prior to the Effective Time or arise from any breach or default by Seller and/or SCI (or any of their Affiliates) under any Assumed Contract that occurs prior to the Effective Time or that arises out of or relates to events or circumstances that
occur or exist prior to the Effective Time; 
 (iv) Liabilities of Seller and/or SCI arising under or relating to any Contract
other than an Assumed Contract; 
 (v) Liabilities with respect to (A) any Employee Plan maintained, sponsored,
contributed to or participated in by Seller and/or SCI or any of their Affiliates for the benefit of or relating to any current or former employee of the Business (“Seller Employee Plan”) and the amendment to or the
termination of any Seller Employee Plan, or (B) any person at any time employed by Seller or SCI or any of their Affiliates (including, without limitation, any such person who fails to accept an offer of employment by Buyer or any of its
Affiliates), and any such person’s spouse, children, other dependents or beneficiaries, with respect to any such person’s employment or termination of employment by Seller or SCI or any of their Affiliates including, without limitation,
claims arising under health, medical, dental, disability or other benefit plan for products, supplies or services provided or rendered prior to the Effective Time; 
 (vi) Seller’s or SCI’s deferred sales commissions; 
 (vii) Liabilities of Seller or SCI, based in whole or in part on violations of Law or environmental conditions occurring or existing prior
to the Closing and arising out of or relating to Environmental Requirements, except to the extent that such Liabilities are identified in the Environmental Reports; 
  

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 (viii) Except as otherwise specifically provided in this Agreement, all Liabilities of
Seller or SCI for any Tax for (A) operations of the Business prior to the Effective Time; (B) the transfer of the Acquired Assets; and (C) income earned by the Pre-Need Trust Funds and the Endowment Care Funds (as each of these terms
is defined in Section 5.4) prior to delivery thereof to Buyer’s Trustee pursuant to Section 5.5 below to the extent such income (1) is not taxable to the applicable trusts as independent taxpayer entities, and (2) is
withdrawn by or for any Seller or SCI or otherwise distributed to any Seller or SCI (whether such withdrawal or distribution is made before or after the Effective Time); and 
 (ix) Liabilities of Seller or SCI arising out of or relating to any Proceeding to which Seller or SCI is a party on the date of this
Agreement and relating to the Business or any of the matters referenced on Schedule 1.5(b)(ix) except for Liabilities for actions/business changes at the Business that may be required after Closing pursuant to or arising from the Michigan
monument builder’s class action claim which is identified on Schedule 1.5(b)(ix); and 
 (x) Liabilities arising
out of the management of Seller or SCI’s Business by SCI; and 
 (xi) Liabilities relating to any claims arising in
connection with monument sales by the Seller or SCI prior to the Closing. 
 Section 1.6 Post-Closing Adjustments to Purchase
Price. 
 (a) Audit Report. Seller, SCI and Buyer acknowledge that Harper & Pearson Company, P.C.
(the “Independent Auditor”) is currently performing a financial audit and review of the Business and that the report of the Independent Auditor with respect to such audit and review (the “Audit
Report”) is expected to be delivered to Buyer within 30 days after the Closing Date. For purposes of this Agreement, the term “Base Gross AR Amount” means the aggregate amount of the gross accounts receivable of
the Business as of the Closing Date (excluding any trust claims specified in Section 5.5(b)(ii) and any pending insurance claims), as reflected in the Audit Report (without regard to any allowance for doubtful accounts or other reserve in
respect of accounts receivable of the Business), and the term “Base Net Merchandise Trust Amount” means the Net Transferred Merchandise Trust Amount minus the aggregate amount of the Merchandise Liabilities of all of
the cemeteries included in the Business, as of the Effective Time. Buyer shall deliver a copy of the Audit Report to Seller and SCI within 15 days after receiving the Audit Report. No later than ten (10) days after the Closing Date, SCI shall
deliver to Buyer a detailed statement of Merchandise Liabilities as of the Effective Time of each of the cemeteries included in the Business. 
 (b) Accounts Receivable Adjustment. If the Base Gross AR Amount is less than $712,900, then, subject to Section 1.6(e), the Purchase Price shall be decreased by, and Seller shall pay to Buyer, an amount
equal to the discounted present value of the amount by which the Base Gross AR Amount is less than $750,417, using a discount rate of .065 and a discount period of three (3) years. If the Base Gross AR Amount is greater than $787,900, then,
subject to Section 1.6(e), the Purchase Price shall be increased by, and Buyer shall pay to Seller, an amount equal to the discounted present value of the amount by which the Base 

  

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Gross AR Amount is greater than $750,417, using a discount rate of .065 and a discount period of three (3) years. If the Base Gross AR Amount is greater
than or equal to $712,900, but less than or equal to $787,900, then no adjustment shall be made to the Purchase Price, and no amount shall be due by any party hereto, under this Section 1.6(b). 
 (c) Merchandise Trust Adjustment. If the Base Net Merchandise Trust Amount is less than $991,900, then, subject to
Section 1.6(e), the Purchase Price shall be decreased by, and Seller shall pay to Buyer, the discounted present value of the amount by which the Base Net Merchandise Trust Amount is less than $1,044,105, using a discount rate of .065 and a
discount period of ten (10) years. If the Base Net Merchandise Trust Amount is greater than $1,096,300, then, subject to Section 1.6(e), the Purchase Price shall be increased by, and Buyer shall pay to Seller, an amount equal to the
discounted present value of the amount by which the Base Net Merchandise Trust Amount is greater than $1,044,105, using a discount rate of .065 and a discount period of ten (10) years. If the Base Net Merchandise Trust Amount is greater than or
equal to $991,900 but less than or equal to $1,096,300, then no adjustment shall be made to the Purchase Price, and no amount shall be due by any party hereto, under this Section 1.6(c). 
 (d) Endowment Care Trust Adjustment. If the Transferred Endowment Care Trust Amount is less than $751,247, then, subject to
Section 1.6(e), the Purchase Price shall be decreased by, and Seller shall pay to Buyer, the Net Endowment Care Adjustment Amount. If the Transferred Endowment Care Trust Amount is greater than $751,247, then, subject to Section 1.6(e),
the Purchase Price shall be increased by, and Buyer shall pay to Seller, the Net Endowment Care Adjustment Amount. 
 (e)
Net Purchase Price Adjustment Amount. The Purchase Price adjustment amounts provided for in Sections 1.6(b), (c) and (d), if any, shall all be aggregated and netted against each other such that either (i) a single amount shall be
payable to Buyer by Seller and no amount shall be payable by Buyer to Seller under this Section 1.6, (ii) a single amount shall be payable to Seller and SCI by Buyer, and no amount shall be payable by Seller to Buyer under this
Section 1.6, or (iii) no amount shall be payable by any party hereto under either this Section 1.6. By way of example only, if $150,000 is payable by Seller to Buyer pursuant to Section 1.6(b), $50,000 is payable by Seller to
Buyer pursuant to Section 1.6(c) and $100,000 is payable by Buyer to Seller and SCI pursuant to Section 1.6(d), then Seller shall pay to Buyer, in accordance with Section 1.6(f), an amount equal to $100,000 (i.e., $150,000 +
$50,000 - $100,000). 
 (f) Payment of Purchase Price Adjustment Amounts. Any payment due under Section 1.6(e) by
Seller on the one hand or Buyer on the other hand shall be paid in full, in cash, no later than seventy-five (75) days after the Closing Date, or, if later than such time, twenty (20) days after the date that the Audit Report is delivered
to Buyer. Any amounts not paid within such time period shall accrue interest from the Closing Date through the date of payment at the prime rate as reported in The Wall Street Journal, Eastern Edition for the date of the Audit Report.

 (g) Tax Treatment. Any payments made pursuant to this Section 1.6 shall be treated by Seller and Buyer as
adjustments to the Purchase Price for all Tax purposes. 
  

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 Section 1.7 Prorations; Services in Progress; Transaction Taxes. 
 (a) Seller and SCI shall be responsible for all Taxes arising as a result of the operation of the Business or ownership of the Acquired
Assets prior to the Effective Time. At Closing, all real and personal property Taxes shall be prorated between Seller and SCI on the one hand and Buyer on the other hand on a per diem basis. Seller and SCI shall also be responsible for all Taxes on
income earned by the Pre-Need Trust Funds and the Endowment Care Funds (which are to be transferred to Buyer) prior to delivery thereof to Buyer’s Trustee pursuant to Section 5.5 below to the extent such income (A) is not taxable to
the applicable trusts as independent taxpayer entities, and (B) is withdrawn by or for Seller or SCI or otherwise distributed to Seller or SCI (whether such withdrawal or distribution is made before or after the Effective Time), and Seller and
SCI shall make all applicable estimated Tax payments to the relevant Taxing Authorities associated with such income. For purposes of determining the amount of Taxes owed by Seller and SCI with respect to the Pre-Need Trust Funds and the Endowment
Care Funds, the amount of such Taxes shall be computed as if the tax year of such funds ended on the date of the Final Trust Delivery (as defined in Section 5.5(e) below). 
 (b) The parties shall cooperate in transferring from the Seller or SCI, as applicable, to Buyer all water, electrical, gas and other
utility services provided to or benefiting the Real Property, and as and to whatever extent billings are received by any party relating to services utilized both before the Effective Time (for which Seller and SCI shall be jointly and severally
responsible) and after the Effective Time (for which Buyer shall be responsible), the parties will cooperate to make appropriate adjustments and reimbursements between them to accomplish the proper allocation of such billings. 
 (c) All revenues from and direct costs for merchandise paid to third parties in the ordinary course of business associated with Services
in Progress will be allocated to Buyer. For purposes of this Agreement, “Services in Progress” means any “at need” cemetery related services for which a Contract has been entered into, but which have not been
completed as of the Effective Time. For purposes of this Agreement, such cemetery related services are complete when the body or remains have been cremated or interred. 
 (d) Except as set forth in Sections 1.7(e) and (f) below, Seller and SCI shall be responsible, jointly and severally, for the timely
payment of, and shall indemnify and hold harmless Buyer against, all sales, use, value added, documentary, stamp, gross receipts, registration, transfer (including, without limitation, real estate), conveyance, excise and other similar Taxes and
fees (collectively, “Transfer Taxes”) arising out of or in connection with or attributable to (i) the transfer of the Acquired Assets and (ii) the transactions contemplated by this Agreement. Seller and SCI shall
prepare and timely file all Tax Returns required to be filed in respect of such Transfer Taxes. Seller and SCI shall be responsible, jointly and severally, for filing all required notices related to bulk sales laws and shall indemnify and hold
harmless Buyer against all Taxes or other Losses that Buyer become liable for as a result of the Seller’s and/or SCI’s failure to file any applicable bulk sales notices or pay any of its Taxes. 
 (e) The parties shall share in the payment of any recording and other similar fees arising out of or in connection with or attributable to
the transactions contemplated by this 

  

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Agreement in accordance with the normal practices in the applicable states in which the various Acquired Assets are located; provided, however,
that Seller shall pay for the recording of the release of any Lien (other than Permitted Encumbrances) with respect to any Acquired Asset. 
 (f) Except to the extent that any Transfer Tax amounts are included in the amounts paid by Buyer pursuant to Section 1.3(a)(ii), Buyer shall be responsible for the timely payment of, and shall indemnify and hold
harmless Seller and SCI against, all Transfer Taxes arising out of or in connection with or attributable to the transfer of the vehicles listed on Schedule 1.1(c) to this Agreement. Buyer shall prepare and timely file all Tax Returns required to be
filed in respect of such Transfer Taxes. 
 Section 1.8 Allocation of Closing Purchase Price. 
 (a) On or prior to the Closing Date, Buyer and Seller and SCI shall mutually agree upon a written statement (the “Statement of
Allocation”) setting forth an allocation of the Closing Purchase Price (“Purchase Price Allocation”) (which for such purpose shall be increased by the amount of the liabilities assumed by Buyer). The Statement of
Allocation shall include: (i) the assets to be purchased by each of Buyer LLC and Buyer NQ Sub; (ii) the portion of the Closing Purchase Price that will be paid by or on behalf of Buyer LLC and Buyer NQ Sub to acquire the Acquired Assets,
and (iii) an allocation of the portion of the Closing Purchase Price paid by or on behalf of each of Buyer LLC and Buyer NQ Sub (“Purchased Acquired Assets Allocation”) among each of the respective categories of Acquired
Assets that are purchased. Buyer, Seller and SCI agree that each of the allocations required to be prepared pursuant to this Section 1.8 shall be prepared in accordance with the provisions of Section 1060 of the Code, the Treasury
Regulations promulgated thereunder and any similar provisions of state, local or foreign law, as applicable. 
 (b) All
federal, state, local and foreign income Tax Returns of Seller, SCI and Buyer shall be filed consistently with the information set forth on the Statement of Allocation. Moreover, Seller, SCI and Buyer further agree to file IRS Form 8594 (and any
corresponding form required to be filed by a state or local Taxing Authority) in a manner that is consistent with the Purchased Acquired Assets Allocation. Seller, SCI and Buyer agree to promptly provide each other with any information necessary to
complete such Tax Returns and IRS Form 8594 (and any corresponding form required to be filed by a state or local Taxing Authority). Seller, SCI and Buyer shall not take any position on a Tax Return, tax proceeding or audit that is inconsistent with
any information set forth on the Statement of Allocation. 
 Section 1.9 Effective Time. The Effective Time of the
transfer of the Acquired Assets shall be 12:01 a.m. on the Closing Date. 
  

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 ARTICLE II 
 Closing 
 Section 2.1 Closing. The closing of the
transaction provided for in this Agreement (the “Closing”) shall take place at the offices of Buyer’s counsel, Blank Rome LLP, One Logan Square, Philadelphia, PA 19103, on September 28, 2006 (the
“Closing Date”), or at such other location, time and date as the parties shall mutually agree. In the event of any postponement thereof, all references in this Agreement to the Closing Date shall be deemed to
refer to the time and to the date to which the Closing Date shall have been so postponed as herein provided. 
 Section 2.2
Instruments of Conveyance and Transfer. At the Closing, each of Seller and SCI, as applicable, shall deliver to Buyer such special warranty deeds, leases, bills of sale, endorsements, assignments, title
affidavits and other documents reasonably requested by the Title Company (as defined in Section 5.7), and such other instruments of transfer, conveyance and assignment as may be reasonably requested by Buyer, in forms reasonably satisfactory to
Buyer, in order to more fully vest in Buyer good and marketable title to the Acquired Assets. Each of Seller and SCI, as applicable, shall take all such steps as may be reasonably requested by Buyer to put Buyer in actual possession and control of
the Acquired Assets and the Business as of the Closing. 
 ARTICLE III 
 Representations and Warranties by Seller and SCI 
 Each of Seller and
SCI, jointly and severally, hereby represent and warrant to Buyer, both as of the date hereof and as of the Effective Time, as follows: 
 Section 3.1 Organization; Standing; Authorization; Capacity. Each of Seller and SCI is a corporation or limited liability company, as applicable, duly organized, validly existing and in good standing under the laws of
its state of formation as designated in the introductory paragraph of this agreement, with all requisite power and authority to own the Acquired Assets and to conduct the 

  

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Business as it is now being conducted and is presently proposed (by Seller and SCI) to be conducted. Each of Seller and SCI is duly qualified to conduct
business and is in good standing in each jurisdiction in which the nature of its business or location of its properties makes such qualification necessary, except where the failure to be so qualified would not reasonably be expected to have a
Material Adverse Effect. The execution, delivery and performance of this Agreement by each of Seller and SCI has been duly and effectively authorized by all necessary action on the part of Seller and SCI, including authorization by the board of
directors of each of Seller and SCI, and no further action or Consent is required in connection with such execution, delivery and performance of this Agreement by Seller or SCI. This Agreement has been duly executed and delivered by Seller and SCI,
and constitutes the valid and binding obligation of each of Seller and SCI, enforceable against Seller and SCI in accordance with its terms. 
 Section 3.2 Financial Information. The unaudited income and expense statements for the Business for the twelve month periods ending December 31, 2003, 2004 and 2005 (collectively, the “Income
Statements”), copies of which are attached hereto as Schedule 3.2, accurately reflect in all material respects the income and expenses of such Location for the periods covered. 
 Section 3.3 Tax Matters. 
 (a) (i) each of Seller and SCI has properly and timely filed all Tax Returns required to be filed by it; (ii) each of Seller and SCI has paid all Taxes required to be paid by it (whether or not shown on a Tax
Return); and (iii) there are no encumbrances for Taxes on the Acquired Assets other than for Taxes not yet due and payable. 
 (b) Each of Seller and SCI has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, shareholder or other person for all periods for
which the statutory period of limitations for the assessment of such Tax has not yet expired and all IRS Forms W-2 and 1099 (and other applicable forms required to be filed by a state or local Taxing Authority) required with respect thereto have
been properly completed and timely filed. 
 (c) Neither the Seller nor SCI is a “foreign person” as such term is
defined in Section 1445(f)(3) of the Code. 
  

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 (d) All amounts received by Seller or SCI on sales by the Business which are required
under applicable state law to be trusted have been deposited in trust and all Tax Returns required to be filed concerning such trusts and the income from such trusts have been filed through all fiscal years ending prior to the Closing Date.

 Section 3.4 No Violation. Neither the execution and delivery of this Agreement by the Seller or SCI nor the
performance of their respective obligations hereunder or thereunder will, subject to receipt of all Required Consents, (a) violate, conflict with or result in a breach of any Law, (b) violate, conflict with or result in a breach or
termination of, or otherwise give any contracting party additional rights or compensation under, or the right to terminate or accelerate, or constitute (with notice or lapse of time, or both) a default under the terms of any organizational documents
(i.e., charter, bylaws, operating agreement, partnership agreement or similar document), any note, deed, lease, instrument, permit, security agreement, mortgage, commitment, contract, agreement, order, judgment, decree, license or other instrument
or agreement, whether written or oral, express or implied, including, without limitation, the Assumed Contracts, to which Seller and/or SCI is a party or by which any of the Acquired Assets or the Business is bound, or (c) result in the
creation or imposition of any Liens with respect to the Acquired Assets or the Business. 
 Section 3.5 Status of Acquired
Assets. 
 (a) Title to Acquired Assets. Seller has fee simple title to the Owned Real Property, a valid
leasehold interest in the Leased Real Property and good and marketable title to all of the Acquired Assets, subject to no Liens, except for Permitted Encumbrances and as otherwise disclosed in Schedule 3.5. At the Closing, Buyer will acquire
fee simple title to the Owned Real Property, a valid leasehold interest in the Leased Real Property and good and marketable title to all of the Acquired Assets, in each case free and clear of any and all Liens except Permitted Encumbrances. Other
than as disclosed in Schedule 3.5, neither Seller nor SCI has entered into any Contract granting rights to third parties in any real or personal property of Seller or SCI included in the Acquired Assets, and no Person has any right to
possession or occupancy of any of the Acquired Assets. 
 (b) Condition of Acquired Assets. The Real Property and the
tangible Acquired Assets that are reasonably necessary for the operation of the Business are in operating condition and reasonable repair (subject to normal wear and tear) and are sufficient to permit Buyer to conduct the Business as presently
conducted. 
  

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 Section 3.6 Improvements. To the Knowledge of Seller and SCI, no municipal or other
governmental improvements affecting the Real Property are in the course of construction or installation, and no such improvement has been ordered to be made; and any municipal or other governmental improvements affecting the Real Property which have
been constructed or installed have been paid for and will not hereafter be assessed (except with respect to any currently recorded assessments which are to become due after the Closing), and all assessments heretofore made have been paid in full,
other than any recorded assessments which are to become due after the Closing; and neither Seller nor SCI has entered into any private contractual obligations relating to the installation of or connection to any sanitary sewers, storm sewers or any
other improvements. 
 Section 3.7 Real Property Approvals. To the Knowledge of Seller and SCI, all permanent
certificates of occupancy and all other licenses, permits, authorizations, consents, certificates and approvals required by all Governmental Authorities having jurisdiction and the requisite certificates of the local board of fire underwriters (or
other body exercising similar functions), if applicable, have been issued for the Real Property, have been paid for, and are in full force and effect. 
 Section 3.8 Zoning. Except as disclosed on the letters delivered by the zoning code enforcement officers for the municipality where the Real Property is located, neither Seller nor SCI has
received notice from any Governmental Authority that: (i) any parcel of the Real Property is not in compliance with current zoning and use classifications under the respective municipal zoning ordinance governing such Real Property;
(ii) any cemetery use at or on the Real Property is not a permitted use or an existing non-conforming use thereunder; and (iii) the current construction, operation and use of the buildings and other improvements constituting the Real
Property violate any zoning, subdivision, building or similar law, ordinance, order, regulation or recorded plat or any certificate of occupancy issued for the Real Property. 
  

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 Section 3.9 No Violations Relating to Real Property. No portion of the Real
Property, and no current use of the Real Property, is in violation of any applicable Law, except where such violation would not have a Material Adverse Effect. Neither Seller nor SCI has received notice of any presently outstanding and uncured
violations of any building, housing, safety or fire ordinances with respect to the Real Property. 
 Section 3.10 Real Estate
Taxes. Neither Seller nor SCI has received notice of any proceeding pending for the adjustment of the assessed valuation of all or any portion of the Real Property. To the Knowledge of Seller and SCI, there is no abatement, reduction or
deferral in effect with respect to all or any portion of the real estate Taxes or assessments applicable to the Real Property. 
 Section
3.11 Eminent Domain. Neither Seller nor SCI has received any notice of any condemnation proceeding or other proceedings in the nature of eminent domain (“Taking”) in connection with the Real Property and,
to the Knowledge of Seller and SCI, no Taking has been threatened. 
 Section 3.12 Inventory. Seller has good and
marketable title to the Inventories free and clear of any and all Liens (other than a customer’s rights in items being stored for such customer). The Inventory does not consist of any material amount of items that are obsolete or damaged or
items held on consignment. Neither Seller nor SCI has acquired or committed to acquire or produce Inventory for sale which is not of a quality usable in the ordinary course of business within a reasonable period of time and consistent with past
practice. 
 Section 3.13 Litigation. No Proceeding before any Governmental Authority, mediator or arbitrator is pending
or, to the Knowledge of Seller and SCI, threatened, involving Seller and/or SCI wherein a judgment, decree, order, settlement or other resolution would have a Material Adverse Effect, or which would prevent the carrying out of this Agreement,
declare unlawful the transactions 

  

 15 

 
contemplated by this Agreement, cause such transactions to be rescinded, or require Buyer to divest itself of any of the Acquired Assets or the Business. To
the Knowledge of Seller and SCI, no facts or circumstances or other events have occurred that can reasonably be expected to give rise to any such Proceeding. 
 Section 3.14 Court Orders and Decrees. There is not outstanding or, to the Knowledge of Seller and SCI, threatened any order, writ, injunction or decree of any Governmental Authority, mediator or
arbitrator against or affecting Seller or SCI, relating to any of the Acquired Assets or the Business. 
 Section 3.15 Trade
Names. The Location name set forth on Exhibit A constitutes the only trade name held for use or used by the Seller and/or SCI in connection with the Business and, other than such trade name, there are no
Trademarks that are material to the Business. Seller and/or SCI has the legal right to use the Location name set forth on Exhibit A, as used by Seller and/or SCI in connection with the Business, without the Consent of any other Person.

 Section 3.16 Preneed and Trust Accounts and Contracts. 
 (a) All monies paid to Seller or SCI for the benefit of the Business in respect of the Pre-/At-Need Contracts have been, and as of the
Closing will be, set aside and identified as set forth in Schedule 1.1(g). Each of Seller and SCI has complied with the terms and conditions of the Pre-/At-Need Contracts. Neither Seller nor SCI is in default or breach of any Pre-/At-Need
Contract. 
 (b) The amounts (including interest) held in trust in respect of each of the Pre-/At-Need Contracts, including,
without limitation, perpetual care funds, endowment care funds, extended care funds, and merchandise trust funds (collectively, the “Trust Funds”), are held in conformity with all applicable Laws. All of Seller’s and
SCI’s required contributions to, withdrawals from and investment and other uses of the Trust Funds have been made in accordance with all applicable Laws, and each of Seller and SCI will have paid as of the Closing (or will pay after Closing
when due), all commissions due and owing to commissioned sales people in respect of the Pre-/At-Need Contracts. Neither Seller nor SCI has Knowledge of any actual or alleged non-compliance on the part of Seller or SCI (or any Affiliate of Seller or
SCI) with respect to the Trust Funds. 
 (c) For those Pre-/At-Need Contracts that are funded by insurance or performance
bonds, Seller or SCI has purchased all such insurance policies and performance bonds 

  

 16 

 
required to legally fund or secure all such Pre-/At-Need Contracts, and no future premiums or other amounts remain to be paid, except for those instances
where, pursuant to the terms of such insurance policies or performance bonds and in the ordinary course of business, the policies or performance bonds specify payment of premiums or other amounts over time. All such insurance policies and
performance bonds are fully identified on Schedule 1.1(g). 
 (d) All of the Trust Funds are interest bearing trust
accounts or other investment accounts that are permissible under applicable Laws. All of the Trust Funds are identified and described under Schedule 1.1(g), which Schedule also attaches copies of any and all trust agreements entered into
by either Seller or SCI and a list of the financial institutions described therein. 
 Section 3.17
Contracts. Except for the Assumed Contracts (copies of which have been delivered to Buyer), neither Seller nor SCI, nor any Affiliate of Seller or SCI, is a party to or bound by any material Contract
relating to the Acquired Assets or the Business. Except as disclosed on Schedule 3.17, all of the Assumed Contracts are in full force and effect, and there exists no default or breach thereunder by Seller or SCI or, to the Knowledge of either
Seller or SCI, other than with respect to any Pre-/At-Need Contracts, any other party thereto. Neither Seller nor SCI has received any notice (written or oral) indicating the intention of any party to any Assumed Contract to amend, modify, rescind
or terminate such Assumed Contract. All of the Assumed Contracts are in full force and effect and are enforceable against the Seller and/or SCI and any of their Affiliates that is a party thereto and, to the Knowledge of Seller and SCI, against all
other parties thereto in accordance with their terms and applicable Laws. 
 Section 3.18 Licenses and Permits. Except
as set forth on Schedule 3.18, either the Seller or SCI holds all of the Permits required to own, operate and maintain the Business under any applicable Law as currently conducted or proposed (by Seller and/or SCI) to be conducted
(“Existing Permits”), and all Existing Permits are, and as of immediately prior to the Closing will be, in full force and effect. To the Knowledge of Seller and SCI, except as set forth on Schedule 3.18, there are no
material restrictions on Buyer’s ability to replace or renew any of the Existing Permits. Each of 

  

 17 

 
Seller and SCI is in compliance with all Existing Permits, except where the failure to be in compliance would not have a Material Adverse Effect. 

Section 3.19 Consents. Each of Seller and SCI has, or will have prior to the Closing, obtained, satisfied or
made all Consents (the “Required Consents”) that are required to be obtained, satisfied or made pursuant to any Laws, Permits, Assumed Contracts or other agreements by which Seller or SCI, or any of their properties or
business assets, including, without limitation, the Acquired Assets, are bound in connection with (a) the execution and delivery of this Agreement by Seller or SCI, or (b) the sale and transfer to Buyer of the Acquired Assets, including,
without limitation, the Assumed Contracts and, if transferable to Buyer under applicable Law, the Existing Permits. 
 Section 3.20
Compliance with Laws. The Business presently is conducted, and the Acquired Assets and their respective uses are, in compliance with all Laws applicable to them, including, without limitation, the funding of
or maintaining of all Trust Funds in compliance with applicable Laws or to the posting of performance bonds in lieu thereof, except where the failure to so comply would not have a Material Adverse Effect. Neither Seller nor SCI has received any
written notice of any administrative, civil or criminal investigation or audit by any Governmental Authority relating to, or which could result in a Material Adverse Effect. Neither Seller nor SCI have restricted customers from purchasing monuments
from outside vendors or restricted vendors from installing monuments at Roseland Memorial Gardens. 
 Section 3.21 OSHA or
ADA. There is no Proceeding pending with respect to Seller or SCI, and, to the Knowledge of Seller and SCI, no charge or claim has been made against Seller or SCI that has not been dismissed, discharged or otherwise
fully resolved, under the Occupational Safety and Health Act (“OSHA”) or the Americans with Disabilities Act (“ADA”) pertaining to the facilities and operations of the Business. 
  

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 Section 3.22 Labor Relations. Neither Seller nor SCI is a party
to any collective bargaining or union Contract and neither the Seller nor SCI is aware of any current union organization effort with respect to employees of the Business. There are no pending or unresolved unfair labor practice complaints from or
with respect to any employees of the Business. Since December 31, 2005, neither Seller nor SCI has received any written notice of any strikes, slowdowns, work stoppages, lockouts or threats thereof, by or with respect to any employees of the
Business. Since December 31, 2005, neither Seller nor SCI has had an “employment loss” within the meaning of the WARN Act or any similar Law. 
 Section 3.23 Employees and Independent Contractors. Schedule 3.23 sets forth a list of all employees of the Business, together with (a) their titles or
responsibilities, (b) their salaries or wages during the 2005 calendar year, (c) their dates of hire, (d) any employment or severance agreements with them, and (e) any outstanding loans or advances made to them. Except as limited
by any employment Contracts listed in Schedule 3.23 and except for any limitations of general application which may be imposed under applicable employment Laws, either Seller or SCI has the right to terminate the employment of each employee
of the Business at will and without incurring any penalty or liability other than Retained Liabilities. Each of the Seller and SCI is in compliance with all Laws respecting employment practices, except where the failure to so comply would not have a
Material Adverse Effect. To the Knowledge of Seller and SCI, no employee of the Business has provided to Seller or SCI (or any Affiliate of Seller or SCI) written notice of such employee’s intent to terminate his or her employment with the
Business after the date hereof. 
 Section 3.24 No Brokers. Neither Seller nor SCI, nor any Person
acting on behalf of Seller or SCI, has agreed to pay to any Person any commission, finder’s or investment banking fee, or similar payment in connection with this Agreement or the transactions contemplated thereby, nor has 

  

 19 

 
Seller, SCI or any Person acting on behalf of Seller or SCI, taken any action on which a claim for any such payment could be based. 
 Section 3.25 Accounts Receivable. None of the Receivables have been sold and/or factored. All Receivables
arising since December 31, 2005, represent bona fide claims of Seller and SCI against debtors of the Business for sales made, services performed or other charges or valid consideration arising on or before the date hereof. All such Receivables
are valid and enforceable claims for payment consistent with past practices, without, to the Knowledge of Seller and SCI, setoff or counterclaim. 
 Section 3.26 Operations in Ordinary Course of Business. Since December 31, 2005, Seller and SCI have operated and conducted the Business in the ordinary and usual course consistent with past
practices. Since December 31, 2005, there has been no material adverse change in the financial condition, assets, liabilities, or operations of the Business, nor have any events occurred, nor to the Knowledge of Seller and SCI do there exist
any circumstances, which would constitute, either before or after the Closing, any such change. Without limiting the generality of the foregoing and except as set forth on Schedule 3.26, since December 31, 2005, neither the Seller nor
SCI has: 
 (a) sold, assigned, leased or transferred any of their assets, which are material to the Business singly or in the
aggregate, other than assets sold or disposed of in the ordinary course of business, consistent with past practice; 
 (b)
canceled, terminated, amended, modified or waived any material term of any Contract relating to the Business to which either of them is a party or by which either of them or any of their assets is bound providing for aggregate annual revenues to
Seller or SCI in excess of $25,000; 
 (c) (i) increased the base compensation payable or to become payable to any of its
employees or independent contractors, except for normal periodic increases in such base compensation in the ordinary course of business, consistent with past practice, (ii) increased the sales commission rate payable or to become payable to any
of its employees or independent contractors except in the ordinary course of business consistent with past practices (including, without limitation, past practices with respect to amounts and timing), (iii) granted, made or accrued any loan,
bonus, fee, incentive compensation (excluding sales commissions), service award or other like benefit, contingently or otherwise, to or for the 

  

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benefit of any of its employees or independent contractors, except in the ordinary course of business consistent with past practices (including, without
limitation, past practices with respect to amounts and timing), or (iv) entered into any new employment, collective bargaining or consulting agreement or caused or suffered any written or oral termination, cancellation or amendment thereof
(except for Assumed Contracts or with respect to any employee at will without a written agreement); 
 (d) executed any lease
for real or personal property for the Business or incur any Liability therefor except as otherwise disclosed herein; 
 (e)
suffered any damage, destruction or loss (whether or not covered by insurance) affecting the Business or any assets used in the Business that exceeds $25,000 in any one instance or $100,000 in the aggregate; or 
 (f) mortgaged or pledged, or otherwise made or suffered any Lien (other than any Permitted Encumbrance) on, any material asset of the
Business or group of assets that are material in the aggregate to the Business. 
 Section 3.27 Investment Company Act.
Neither Seller nor SCI is, or has at any time been, an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended. 
 Section 3.28 Public Utility Holding Company Act. Neither Seller nor SCI is, or has at any time been, a “holding company,”
or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company,” within the meaning of the Public Utility
Holding Company Act of 1935, as amended. 
 Section 3.29 Compliance with Cemetery Laws. In connection with the ownership
and operation of the Business, each of Seller and SCI has complied in all material respects with all applicable Laws governing the operation of cemeteries, the provision of cemetery services and the sale of cemetery merchandise. Furthermore, with
respect to the ownership and operation of the Business, there are no pending or, to the Knowledge of Seller and SCI, threatened claims or suspensions against Seller and/or SCI, by any Person related to the operation of cemeteries, the provision of
cemetery services and the sale of cemetery merchandise. 
  

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 Section 3.30 Full Disclosure. None of the representations and
warranties made by Seller or SCI in this Agreement (including the Schedules hereto) or in any document delivered to Buyer by or on behalf of Seller or SCI pursuant to Section 7.1, contains any untrue statement of a material fact, or omits any
material fact necessary to make any of them, in light of the circumstances in which it was made, not misleading. 
 Section 3.31 No
Other Representations or Warranties. Except as expressly stated in this Agreement, Seller and SCI make no other representation or warranty of any kind whatsoever. 
 ARTICLE IV 
 Representations and Warranties of Buyer 
 Buyer hereby represents and warrants to Seller and SCI, both as of the date hereof and as of the Effective Time, as follows: 
 Section 4.1 Authority. 
 (a) Each of StoneMor LLC and Buyer LLC is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation. Buyer NQ Sub is a corporation duly
organized, validly existing and in good standing under the laws of the jurisdiction of its formation. The execution, delivery and performance of this Agreement by StoneMor LLC and each Buyer LLC and Buyer NQ Sub, have been duly authorized and
consented to by the Board of Managers or the Board of Directors of such Person (as the case may be), and no other or additional consent or authorization on the part of such Person is required in connection therewith. The consummation of the
transactions contemplated by this Agreement will not result in a breach, violation or default by StoneMor LLC, Buyer LLC or Buyer NQ Sub of or under any judgment, decree or Contract applicable to any of them except to the extent that any such
breach, violation or default would not reasonably be expected to have a material adverse effect on the ability of StoneMor LLC, Buyer LLC and Buyer NQ Sub to perform their obligations hereunder. 
 (b) Upon execution and delivery hereof, this Agreement shall constitute the valid and binding obligation of StoneMor LLC, Buyer LLC and
Buyer NQ Sub, enforceable against each of them in accordance with its terms. 
 Section 4.2 Intentionally Omitted.

  

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 Section 4.3 No Brokers. Neither Buyer, nor any Person acting on
behalf of Buyer, has agreed to pay a commission, finder’s or investment banking fee, or similar payment in connection with this Agreement or any matter related hereto to any Person, nor has any such Person taken any action on which a claim for
any such payment could be based. 
 Section 4.4 Knowledge of Seller Breach. None of the Buyer Representatives (as
defined below) have actual knowledge of a breach by Seller or SCI of any representation or warranty contained in Article III, or any covenant or agreement to be performed or complied with by Seller or SCI in accordance with this Agreement prior to
the Effective Time. For purposes of this Section 4.4, the term “Buyer Representative” means William R. Shane, Paul Waimberg, Frank Milles, Michael Stache, Gregg Strom, Alan Fisher, Ken Lee, Penny Casey and Tim Yost, and such persons
shall be deemed to have actual knowledge of any breach referred to in the preceding sentence of which any individual assigned by a third-party representative or advisor of Buyer to provide substantial services in connection with the transaction
contemplated hereby has actual knowledge. 
 Section 4.5 No Other Representations or Warranties. Except as expressly
stated in this Agreement, Buyer makes no other representation or warranty of any kind whatsoever. 
 ARTICLE V 
 Covenants 
 Section 5.1
Access to Business. From and after the date of this Agreement, Seller and SCI will give Buyer and its representatives full and free access to all properties, Contracts, books and records of the Business so that Buyer may have
full opportunity to make such investigation as it shall desire to make of the affairs of the Business, including, without limitation, the conduct of any environmental investigations or assessments, provided that (i) such investigation or
assessment shall not unreasonably interfere with the operations of the Business, and (ii) prior to Buyer or any of its representatives or contractors contacting the Location or Location personnel, Buyer shall first 

  

 23 

 
communicate with and receive approval from Michael Lehmann, which approval shall not be unreasonably withheld. Seller and SCI agree to furnish to
Buyer and its representatives all data and information concerning the Acquired Assets and the Business that may be reasonably requested by them to conduct a complete and thorough due diligence review of the Acquired Assets, the Business and the
employees of the Business. 
 Section 5.2 Conduct of Business Pending Closing. From and after the date of this Agreement
until the Closing, and except as otherwise permitted by this Agreement or as consented to by Buyer in writing, each of Seller and SCI covenant that: 
 (a) Seller and SCI will conduct the Business only in the ordinary course consistent with past practices, which shall include, without limitation, compliance in all material respects with all applicable Laws and the
maintenance in force of all insurance policies; 
 (b) Seller and SCI shall maintain the Acquired Assets in their current
state of repair, excepting normal wear and tear and use their commercially reasonable efforts to protect the goodwill of the Business and to maintain for the Business the current relationships with suppliers and customers of the Business and others
having business relations with the Business; 
 (c) Seller and SCI shall use their commercially reasonable efforts to ensure
that key employees and key independent contractors continue their association with the Business through the Closing Date; and 
 (d) Neither Seller nor SCI shall engage in any practice, take, fail to take, or omit any action, or enter into any transaction, (i) of the kind described in Section 3.26 or (ii) which would make any of the representations and
warranties in Article III not true. 
 Section 5.3 Consents and Licenses. Each of Seller and SCI
will use its commercially reasonable efforts to obtain, satisfy or make, prior to the Closing, all Required Consents. 
 Section 5.4
Buyer’s Trustee and Endowment Care and Pre-Need Trust Funds. Buyer shall, prior to Closing, (i) secure all licenses, permits and other governmental authorizations and approvals required by the State of Michigan as a
prerequisite to Buyer selling Pre-/At-Need Contracts or accepting funds paid by customers toward Pre-/At-Need Contracts with the Business; and (ii) select and formally designate a trustee or trustees (“Buyer’s
Trustee”) that is qualified under 

  

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applicable Laws to receive all bank, trust or other funds or accounts, excluding insurance premium payments, containing amounts that have been received by
Seller or SCI prior to the Effective Time pursuant to Pre-/At-Need Contracts for pre-need cemetery merchandise and/or services to be provided by the Business (“Pre-Need Trust Funds”), or which are being held as endowment
care, perpetual care, extended care or similar trust funds (“Endowment Care Funds”), or which are being held as pre-construction trust funds (“Pre-construction Trust Funds”) (all herein collectively
the “Trust Funds”). At or prior to Closing, Buyer shall confirm in writing to Seller its compliance with the above requirements. On the Closing Date, all amounts held in the Trust Funds shall be transferred for safekeeping to
Buyer’s Trustee, provided that certain amounts shall be transferred to Buyer’s Trustee after Closing pursuant to Section 5.5. Buyer agrees that all such amounts will be held, administered and withdrawn in accordance with state and
federal law. 
 Section 5.5 Delivery of Trust Funds. 
 (a) Within the first five (5) business days following the Closing, Seller and SCI shall cause the trustees that hold the Trust Funds
(“Seller’s Trustees”) to deliver to Buyer’s Trustee, by wire transfer in accordance with the instructions from Buyer and/or Buyer’s Trustee, amounts from each of the various Trust Funds equal to approximately 90% of
the Closing Date balances thereof (the “Initial Trust Delivery”). 
 (b) For a period of
not more than 60 days after the Closing Date, Seller and SCI shall continue to make (i) deposits to the undelivered portion of the Trust Funds (the “Retained Trust Funds”) as legally and contractually required with
respect to payments upon Pre-/At-Need Contracts received by Seller and/or SCI after the Closing, and (ii) withdrawals from the Retained Trust Funds for legally and contractually allowed amounts with respect to Pre-/At-Need Contracts serviced by
Seller and/or SCI or other appropriate withdrawals, all in accordance with Seller’s and/or SCI’s historical practices in those regards and consistent with applicable Laws. 
 (c) Also during the 60-day period referenced in (b) above, Seller and/or SCI shall cause to be computed and retained/withdrawn from
the Retained Trust Funds (for payment to the applicable Taxing Authorities) such Taxes as are due on income earned (and recognized) by the Pre-Need Trust Funds and the Endowment Care Funds prior to their delivery to Buyer’s Trustee. 

(d) Notwithstanding anything to the contrary, but except as contemplated/allowed in (c) preceding, after the Closing, neither
Seller nor SCI shall be entitled to receive any 

  

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amounts from, or with respect to, the Endowment Care Funds or the Pre-construction Trust Funds. 
 (e) On or before the 60th day following Closing, Seller and/or SCI shall cause to be delivered to Buyer’s Trustee, by wire transfer in accordance with instructions from Buyer and/or Buyer’s Trustee, the remaining Trust Funds (the
“Final Trust Delivery”, and herein together with the Initial Trust Delivery, the “Post-Closing Trust Delivery”), and shall contemporaneously provide to StoneMor a written reconciliation of the amounts
making up the Post-Closing Trust Delivery, including designation of the specific Pre-/At-Need Contracts to which the various delivered amounts are attributable. From and after the date of delivery of the Final Trust Delivery, neither Seller nor SCI
shall be entitled to any further withdrawals from the Trust Funds, and any further deposits made by Seller and/or SCI to the Trust Funds shall not be considered as additions to the Post-Closing Trust Delivery for other purposes thereof. 

(f) For a period of no more than 60 days after the Closing Date, Buyer shall permit Seller and SCI reasonable access to the books and
records of the Business as shall be reasonably necessary for Seller and SCI to properly make the Post-Closing withdrawals and deposits to the Retained Trust Funds as are contemplated in (b) above. 
 Section 5.6 Cooperation Regarding Publicity. Neither Seller, SCI nor Buyer shall make any press release or other public announcement
or filing regarding the transactions contemplated herein without prior consultation and coordination with the other party(ies) hereto, so that the business interests of all are properly served. Notwithstanding the foregoing or anything else to the
contrary, Seller, SCI and each of their respective Affiliates on the one hand, and Buyer and its Affiliates on the other hand, may make one or more public announcements or filings in connection with the transactions contemplated by this Agreement to
the extent that such announcement or filing is reasonably required for the party making such announcement or filing (or any of such party’s Affiliates) to avoid Liability under applicable Laws; provided, however, that the party making
such announcement or filing shall notify the other party(ies) hereto, if reasonably possible, at least three business days prior to making such filing. 
 Section 5.7 Title to Real Estate. Buyer has obtained (and provided copies to Seller and SCI), one-half at Buyer’s expense and one-half at Seller’s expense, commitments for title
insurance in an aggregate amount equal to the portion of the Closing Purchase Price deemed allocated to the 

  

 26 

 
Real Property as reflected on the Statement of Allocation from Fidelity National Title Company (the “Title Company”), showing title
to the Owned Real Property to be held in fee simple and good, marketable and vested in Seller subject to the liens, claims and encumbrances, easements, rights-of-way, reservations, restrictions, outstanding mineral interests and other matters
affecting the Real Property or the title thereto identified on Schedule 3.5 as Permitted Encumbrances. At Closing or soon thereafter as practicable, the Title Company shall issue, one-half at Buyer’s expense and one-half at Seller’s
expense, its title insurance policy(ies) consistent with its previous title commitment(s) approved by Buyer. 
 Section 5.8
Inspections. Buyer, Seller and SCI acknowledge that Buyer has performed and obtained inspections and surveys of the Real Property at Buyer’s expense. 
 Section 5.9 Intentionally omitted. 
 Section 5.10 Satisfaction of Pre-Closing Covenants. Seller, SCI and Buyer shall use their commercially reasonable efforts to satisfy at or prior to Closing all of the
covenants and agreements to be performed or complied with by each of them, respectively, pursuant to this Agreement at or prior to Closing. 
 Section 5.11 Post Closing Access. 
 (a) For a period of eight (8) years from the Closing
Date, Seller and SCI shall retain and make available to Buyer for any lawful purpose, upon reasonable notice and at reasonable times, Seller’s and SCI’s Tax records, general ledger and other books of original entry, and original payroll
records with respect to periods prior to the Effective Time. If either Seller or SCI ceases to conduct operations prior to the end of such eight-year period, Seller or SCI, as applicable, shall give Buyer 60 days’ prior written notice and an
opportunity to accept (without charge to Buyer) from Seller or SCI, as applicable, a transfer of such books and records, and if Buyer elects not to accept such books and records, the Seller’s or SCI’s obligations under this paragraph
(a) shall cease. 
 (b) For a period of eight (8) years from the Closing Date, Buyer shall retain and make available
to Seller and SCI for any lawful purpose, upon reasonable notice and at reasonable times, the books and records of the Business with respect to periods prior to the Effective Time and to actions and events after the Effective Time, to the extent
they relate to periods prior to the Effective Time. If Buyer ceases to conduct operations prior to the end of 

  

 27 

 
such eight-year period, Buyer shall give Seller and SCI 60 days’ prior written notice and an opportunity to accept (without charge to Seller or SCI)
from Buyer a transfer of such books and records from Buyer, and if Seller and SCI elect not to accept such books and records, Buyer’s obligations under this paragraph (b) shall cease. 
 (c) After the Closing, for a period of 30 days, Buyer shall provide and allow each of Seller and SCI reasonable access, at such times as
are mutually agreed upon in advance by Seller and SCI, as applicable, and Buyer, to the facilities in which the Business is conducted as reasonably necessary to collect and remove the Excluded Assets; provided, however, Buyer’s employees
shall not be obligated to physically assist in the collection and removal of Excluded Assets and in no event shall such collection and removal of Excluded Assets unreasonably disrupt or interfere with the operations of the Business, and provided,
further that, Seller and SCI, jointly and severally, shall fully indemnify Buyer for any and all Losses arising from or relating to Seller’s or SCI’s collection and removal of the Excluded Assets. 
 Section 5.12 Tax Matters. 
 (a) Seller and SCI shall be responsible for preparing and filing, at Seller’s and SCI’s expense, as applicable, within the times and in the manner prescribed by law (subject, however, to filing under any
extension) all Tax Returns of Seller and SCI, as applicable, for all Tax periods. 
 (b) Seller, SCI and Buyer shall cooperate
fully, as and to the extent reasonably requested by the other party, in connection with any Tax proceeding relating to: (i) the Acquired Assets; (ii) the Business; or (iii) the transactions contemplated by this Agreement. Such
cooperation shall include the retention and (upon the other party’s request) the provision of records and information which are reasonably relevant to any Tax audit, litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any material provided hereunder. Seller and SCI agree to retain all books and records with respect to Tax matters pertinent to Seller relating to any taxable period beginning
before the Closing Date until the longer of (x) sixty (60) days after the expiration of the statute of limitations of the respective taxable periods or (y) eight years, and to abide by all record retention agreements entered into with
any Taxing Authority. 
 (c) Seller, SCI and Buyer agree, upon request, to use their commercially reasonable efforts to obtain
any ruling, certificate or other document from any Taxing Authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed solely with respect to the transactions contemplated by this Agreement.

 Section 5.13 Employees. 
 (a) Buyer may, but shall not be obligated to, offer employment to any employees of the Business on such terms and conditions as Buyer may
determine. Seller and SCI shall retain all obligations and liabilities arising on or prior to the Closing in respect of their current and former employees under any and all employee benefit plans, policies or practices of each of Seller or SCI or
any of their Affiliates and applicable Laws. Prior to the Closing, Buyer shall notify the Seller and SCI, as applicable, of those employees of the Business to whom Buyer expects to make an offer of employment. Buyer shall not assume or otherwise be

  

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responsible for any obligation or liability of employee benefit plans, policies or practices of the Seller or SCI or any of their Affiliates, or from any
employee’s employment with or termination of employment by Seller or SCI or any Affiliate of Seller or SCI at or prior to the Closing. 
 (b) Each of Seller and SCI (or any of their Affiliates), as applicable, shall be responsible for providing health benefit continuation coverage under Section 162(k) and Section 4980B of the Code with respect
to (i) any former employee of Seller or SCI (or any of their Affiliates) and any other qualified beneficiary under any group health plan who as of the Closing is receiving or is eligible to receive such continuation coverage, and (ii) any
employee of the Seller or SCI (or any of their Affiliates) and any qualified beneficiary with respect to such employee. 
 (c)
Seller and SCI shall be responsible for, and shall comply with, any and all WARN Act obligations relating to periods prior to Closing or associated with, or incurred as a result of, the transactions contemplated by this Agreement. 
 Section 5.14 No Solicitation; Notification. 
 (a) No Solicitation. Prior to Closing, neither Seller nor SCI shall, and Seller and SCI each shall cause their representatives
(including, without limitation, investment bankers, attorneys and accountants), employees, directors, members, partners and other Affiliates not to, directly or indirectly, enter into, solicit, initiate, conduct or continue any discussions or
negotiations with, or encourage or respond to any inquiries or proposals by, or participate in any negotiations with, or provide any information to, or otherwise cooperate in any other way with, any Person other than Buyer and its representatives
concerning any sale of all or any portion of the assets of the Business of, or of any shares of capital stock or other units of equity interests in, either Seller or SCI, or any merger, consolidation, recapitalization, liquidation, dissolution or
similar transaction involving either Seller or SCI that encompasses any portion of the Business or the Acquired Assets (each such transaction being referred to herein as a “Proposed Acquisition Transaction”). Each of Seller
and SCI hereby represents and warrants that it is not now engaged in discussions or negotiations with any party other than Buyer with respect to any Proposed Acquisition Transaction. Neither Seller nor SCI shall, and each of Seller and SCI shall
cause its representatives (including, without limitation, investment bankers, attorneys and accountants), employees, directors, members, partners and other Affiliates not to, agree to release any third party from, or waive any provision of, any
confidentiality or standstill agreement that relates in any way to all or a portion of the Business. 
 (b)
Notification. Seller and SCI each shall (i) immediately notify Buyer if any written offer, inquiry or proposal is made or given to Seller or SCI (or any of their Affiliates) with respect to any Proposed Acquisition Transaction, and
(ii) promptly provide Buyer with a copy of any such offer, proposal or inquiry; provided, however, that no such notice hereunder shall relieve Seller or SCI of its respective obligations under Section 5.14(a). 
 Section 5.15 Confidentiality. The parties acknowledge that the transactions described herein are of a
confidential nature and shall not be disclosed except to consultants, advisors, lenders 

  

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or other financial sources and Affiliates, or as required by Law, until such time as the parties make a public announcement regarding the transaction as
provided hereunder. In connection with the negotiation of this Agreement, the preparation for the consummation of the transactions contemplated hereby, and the performance of obligations hereunder, each party acknowledges that it has had, and will
continue to have, access to confidential information relating to the other party. Each party shall treat such information as confidential, preserve the confidentiality thereof and not disclose such information, except to its advisors, consultants
and other representatives and to Affiliates, or as required by Law, in connection with the transactions contemplated hereby. Notwithstanding the foregoing, Buyer may disclose this Agreement and the information and data in Buyer’s possession in
connection herewith to its lenders, but shall advise them of the requirement to maintain the confidentiality of such information and data. This Section 5.15 shall not apply to any information that is (a) in the public domain through no
fault on the part of the receiving party hereto or any of their Affiliates or the employees, agents or representatives of such party or any of its Affiliates, or (b) learned or discovered through any independent source that is not obligated to
maintain such information as confidential. Because of the difficulty of measuring economic loss as a result of a breach of the foregoing covenants in this Section 5.15, and because of the immediate and irreparable damage that would be caused
for which there may be no other adequate remedy at law, the parties hereto agree that, in the event of a breach by any of them of the foregoing covenants in this Section 5.15, such covenants may be enforced against them by injunction or
restraining order. 
 Section 5.16 Cooperation Regarding Financial Information. After the Closing, without limiting the
generality of any other provision of this Agreement, and without further consideration, Seller and SCI shall, and shall cause their respective Affiliates to, provide reasonable cooperation (including reasonable access to Seller’s and SCI’s
files, records and employees) to Buyer and its agents and representatives (including Buyer’s external auditors) in connection with the preparation of 

  

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financial statements and financial information and disclosures relating to the Business and the Acquired Assets, including, without limitation, disclosures
required under Items 2.01 and 9.01 of Form 8-K adopted by the Securities and Exchange Commission, including all requirements for pro forma financial information. 
 Section 5.17 Further Assurances. From time to time after the Closing, at the request of Buyer, and without further consideration but at no cost to Seller or SCI, Seller and SCI will execute and
deliver such additional documents and will take such other actions as Buyer reasonably may request to more fully and absolutely convey, assign, transfer, deliver and vest in Buyer title to the Acquired Assets and the Business and to otherwise carry
out the terms of this Agreement. 
 Section 5.18 Notice of Breaches. Each of the Seller and SCI
shall give prompt notice to Buyer of (a) the occurrence, or failure to occur, of any event, which occurrence or failure causes or would reasonably be expected to cause any representation or warranty of Seller or SCI contained in this Agreement
or in any Exhibit or Schedule hereto to be untrue or inaccurate, (b) any Material Adverse Effect, and (c) any failure of Seller or SCI or any of their respective Affiliates, shareholders or representatives to comply with, perform or
satisfy any covenant, condition or agreement to be complied with, performed by or satisfied by them under this Agreement or any Exhibit or Schedule hereto; and if after receiving such disclosure Buyer shall elect to proceed with the Closing, such
disclosure shall be deemed to cure, and shall relieve Seller and SCI of any Liability with respect to any breach of, or failure to satisfy, any representation, warranty, covenant, condition or agreement hereunder to the extent such breach or failure
was fully and accurately described in such disclosure. 
 ARTICLE VI 
 Conditions Precedent to Closing 
 Section 6.1 Conditions to
Seller and SCI Closing. The obligations of Seller and SCI to consummate the transactions contemplated by this Agreement are subject to the satisfaction on or 

  

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before the Closing of the following conditions, any one or more of which may be waived by Seller and SCI at their option: 
 (a) the representations and warranties of Buyer contained in this Agreement shall be true and correct, both on the date of this Agreement
and at and as of the Closing, except for representations or warranties made as of some other specified date, which as of the Closing shall remain true and correct as of such specified date; 
 (b) Buyer shall have discharged, performed or complied with, in all material respects, all covenants and agreements contemplated by this
Agreement to be performed or complied with by Buyer at or prior to the Closing; and 
 (c) Buyer shall have delivered, or
caused to be delivered, to Seller and SCI each of the documents required by Section 7.2. and 
 (d) The Dignity II and
III Transaction and the Hillcrest Transaction shall have closed or closing is contemplated in the near term. 
 Section 6.2
Conditions to Buyer Closing. The obligations of Buyer to consummate the transactions contemplated by this Agreement are subject to the satisfaction on or before the Closing of the following conditions, any
one or more of which may be waived by Buyer at its option: 
 (a) the representations and warranties of Seller and SCI
contained in this Agreement shall be true and correct, both on the date of this Agreement and at and as of the Closing, except for representations or warranties made as of some other specified date, which as of the Closing shall remain true and
correct as of such specified date; 
 (b) Seller and SCI shall have discharged, performed or complied with, in all material
respects, all covenants and agreements contemplated by this Agreement to be performed or complied with by Seller and/or SCI at or prior to the Closing; 
 (c) Seller and SCI shall have delivered, or caused to be delivered, to Buyer each of the documents required by Section 7.1; 
 (d) Buyer shall have obtained financing for the cash portion of the Closing Purchase Price on terms satisfactory to Buyer in Buyer’s
reasonable discretion; 
 (e) There shall have been no material adverse change in the condition (financial, physical or
otherwise), assets, commercial relationships, business or operations of the Business or the Acquired Assets from and after December 31, 2005; 
 (f) No Law, order or judgment shall have been enacted, entered, issued or promulgated by any Governmental Authority, arbitrator or mediator, which challenges, or seeks to prohibit, restrict or enjoin the consummation
of the transactions contemplated hereby, nor shall there be pending or threatened, any action, suit or proceeding by or before any 

  

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Governmental Authority, arbitrator or mediator, challenging any of the transactions contemplated by this Agreement, seeking monetary relief by reason of the
consummation of such transactions or seeking to effect any material divestiture or to revoke or suspend any material Contract or Permit of the Business by reason of any or all of the transactions contemplated by this Agreement; 
 (g) Buyer shall have obtained all required Permits for the operation of the Business; 
 (h) All Required Consents shall have been made, obtained or given, including without limitation, those of Buyer’s existing lenders,
and such Consents shall be in full force and effect; 
 (i) Seller and SCI shall have terminated the Management Agreement;

 (j) The Dignity II and III Transaction and the Hillcrest Transaction shall have closed or closing is contemplated in the
near term; and 
 (k) Buyer shall have received written assurance from its auditors that audited financial statements for each
of the Seller and SCI Michigan (covering only the portions of the Business owned and operated by each) sufficient, in the opinion of Deloitte & Touche, to permit StoneMor Partners L.P. to satisfy its disclosure obligations under Items 2.01
and 9.01 of Form 8-K adopted by the Securities and Exchange Commission, including all requirements for pro forma financial information, will be received within thirty (30) days after the date of the Closing. 
 ARTICLE VII 
 Closing Deliveries

 Section 7.1 Seller’s and SCI’s Closing Deliveries. At the Closing, Seller and SCI will deliver to
Buyer the following documents, duly executed as required, and each in form and substance reasonably acceptable to Buyer and its counsel: 
 (a) motor vehicle transfer/tax forms transferring the automobiles comprised in the Acquired Assets to Buyer, free and clear of all Liens (one for each automobile) and duly endorsed certificates of title for the
automobiles evidencing that title to such vehicles are held in Buyer and are free and clear of all Liens (one for each automobile); provided, however, that as to all such vehicles which are covered by leases from Wheels, Inc., as
referenced above, Buyer recognizes that Wheels, Inc. will cause new certificates of title to be issued and delivered to Buyer after Closing according to the standard procedures of the applicable states regarding such matters; 
 (b) Intentionally Omitted; 
  

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 (c) a bill of sale conveying the applicable Acquired Assets to Buyer, in form and
substance reasonably acceptable to Buyer; 
 (d) an Assignment and Assumption Agreement assigning to Buyer all of the Assumed
Contracts; 
 (e) an assignment agreement assigning to Buyer (and/or to Buyer’s Trustee, as appropriate), all Trust
Funds, insurance policies and Receivables related to the Pre-/At-Need Contracts (other than those specified in Section 5.5); 
 (f) a certificate of Seller and SCI, to the effect that the conditions set forth in Sections 6.2(a), (b) and (f) hereof have been satisfied; 
 (g) a certificate of each of Seller and SCI to the effect that Seller or SCI, as applicable, is not a foreign person within the meaning of
Section 1445 of the Code (or any comparable law); 
 (h) Special Warranty Deeds conveying to Buyer title in fee simple to
the Owned Real Property; 
 (i) fully executed counterparts of any and all required transfer tax forms; 
 (j) such title affidavits, opinions and indemnities as may be requested by the Title Company to issue the policy to Buyer; 
 (k) all other bills of sale, deeds, leases, transfers, assignments, acts, things and assurances as may be required in the reasonable
opinion of Buyer for more perfectly and absolutely assigning, transferring, conveying, assuring to and vesting in Buyer title to the Acquired Assets free and clear of all Liens; 
 (l) copies of all Required Consents, duly executed by the Person from whom consent is required to be obtained; 
 (m) written evidence reasonably satisfactory to Buyer that the Management Agreement and any other related relationship between SCI
(including its Affiliates) and Seller related to the Location has been terminated; and 
 (n) such other documents as may be
reasonably required to consummate the transaction contemplated hereunder. 
 Section 7.2 Buyer’s Closing
Deliveries. At the Closing, Buyer will deliver to Seller and SCI the following: 
 (a) in the form and manner
specified in Section 1.3 hereof, the Closing Purchase Price, as adjusted pursuant to this Agreement; 
  

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 (b) Intentionally Omitted; 
 (c) a certificate of Buyer, signed by an executive officer thereof, to the effect that the conditions set forth in Sections 6.1(a) and
(b) hereof have been satisfied; and 
 (d) such other documents as may be reasonably required to consummate the
transaction contemplated hereunder. 
 ARTICLE VIII 
 Survival of Representations, Warranties and Covenants; Indemnification; Enforcement of Agreement 
 Section 8.1 Nature of Representations. For purposes of this Agreement, the contents of all Exhibits, certificates, Schedules, and other items incorporated herein by reference shall, in addition to the representations,
warranties and covenants made in this Agreement, constitute representations, warranties and covenants made in this Agreement by Seller, SCI or Buyer, as the case may be. 
 Section 8.2 Survival of Representations, Warranties and Covenants. The representations, warranties and covenants of the parties made in this Agreement shall survive the Closing, without regard to
any investigation by the parties with respect thereto, as follows: 
 (a) The representations and warranties set out in
Sections 3.1 (Organization, Standing; Authorization; Capacity)), 3.3 (Tax Matters), 3.5(a) (Title to Acquired Assets), 3.10 (Real Estate Taxes), 3.16(b) (Preneed and Trust Accounts and Contracts), 3.24 (No
Brokers) and 4.1 (Authority) (claims with respect to any of the foregoing representations and warranties referred to herein as “Special Claims”), and the indemnification obligations of the parties with respect to
breaches of such representations and warranties, shall survive for a period equal to the statute of limitations pertaining thereto; 
 (b) All other representations and warranties made in this Agreement, and the indemnification obligations of the parties with respect to breaches of such representations and warranties, shall survive for a period of two (2) years after
the Closing; 
 (c) Any claims, actions or suits that either the Seller and/or SCI, on the one hand, or the Buyer, on the
other hand, may have against the other that arise from any actual fraud on the part of such other party in connection with this Agreement or the transactions contemplated hereunder, shall continue in full force and effect without limitation;

 (d) All covenants and agreements made in this Agreement, and the indemnification obligations of the parties with respect to
breaches of such covenants and 

  

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agreements, shall survive for a period equal to the statute of limitations or the period of time specified herein for a particular covenant or agreement;
provided, however that the covenants contained in Section 5.17 (Further Assurances) and the indemnification obligations of the parties with respect to breaches thereof, shall survive the Closing indefinitely; and 
 (e) Notwithstanding the foregoing or anything else to the contrary, if any claim or proceeding is to be made or brought by an Indemnitee
(as defined in Section 8.8) within the applicable time period set forth above in this Section 8.2, such claim, and the representation, warranty and/or covenant alleged to have been breached in such claim or proceeding, and all
indemnification obligations of the parties with respect thereto, shall survive until the final resolution of such claim by settlement, arbitration, litigation or otherwise. 
 Section 8.3 Indemnification by Seller and SCI. 
 (a) Seller and SCI, jointly and severally, agree to indemnify and hold each Indemnitee (as defined in Section 8.8), harmless from all
Losses incurred, suffered or paid, directly or indirectly, as a result of or arising out of: 
 (i) any breach or default in
the performance by Seller or SCI of any covenant or agreement of Seller or SCI contained in this Agreement or any related document executed pursuant hereto; 
 (ii) any breach of warranty or inaccurate or erroneous representation made by Seller or SCI herein (except to the extent that a Buyer
Representative had actual knowledge thereof in breach of Section 4.4); 
 (iii) any Retained Liabilities; 
 (iv) any Taxes of Seller or SCI, including, without limitation, (A) Transfer Taxes; (B) the portion of real and personal
property Taxes for which Seller or SCI is liable for pursuant to Section 1.7.; (C) Taxes on income earned (and recognized) by the Pre-Need Trust Funds and the Endowment Care Funds prior to delivery thereof to Buyer’s Trustee; and
(D) Taxes payable by any trust (as an independent taxpayer entity) of or relating to any Seller or SCI or any Affiliate of any Seller or SCI and to any or all of the Business, including, without limitation, Taxes relating to or arising from
income earned (and recognized) by the Pre-Need Trust Funds and the Endowment Care Funds prior to the delivery thereof to Buyer’s Trustee; and 
 (v) any unpaid Taxes of any Person including under United States Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law) as a transferee or successor, by Contract or
otherwise. 
 (b) Notwithstanding anything herein to the contrary, Buyer shall have no claim for indemnification hereunder
until the total amount of all Losses incurred which would otherwise be subject to indemnification hereunder exceeds $10,000, and then only to the extent of such excess, but in no event shall the aggregate amount of all Losses subject to
indemnification under this Section 8.3 exceed the Closing Purchase Price; provided, however, that the amounts set forth in this Section 8.3(b) shall not apply to any Losses resulting from or 

  

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arising out of, directly or indirectly, (i) any Special Claims, (ii) claims under Sections 8.3(a)(i), 8.3(a)(iii) (other than the Retained
Liabilities identified in Section 1.5(b)(vii)), 8.3(a)(iv) or 8.3(a)(v) or (iii) claims arising from any actual fraud on the part of Seller and/or SCI, as to each of which Seller and SCI shall have liability for the entire amount of such
Loss without any limitation; and 
 (c) Except as provided in Section 8.7, the indemnification obligations of Seller and
SCI hereunder shall be exclusive remedy of Buyer with respect to any matter subject to indemnification hereunder. 
 (d)
Seller and SCI will be entitled to receive as a credit against any indemnification amount owing to Buyer hereunder an amount equal to the net proceeds of any insurance policy actually received by Buyer for any Loss for which Seller and/or SCI agreed
to indemnify Buyer under this Section 8.3. 
 Section 8.4 Indemnification by Buyer. 
 (a) Buyer agrees to indemnify and hold each Indemnitee (as defined in Section 8.8) harmless from all Losses incurred, suffered or
paid, directly or indirectly, as a result of or arising out of: 
 (i) any breach or default in the performance by Buyer of
any covenant or agreement of Buyer contained in this Agreement or any related document executed pursuant hereto; 
 (ii) any
breach of warranty or inaccurate or erroneous representation made by Buyer herein (except to the extent that Seller or SCI had actual knowledge thereof prior to the Closing); and 
 (iii) the failure of Buyer to fully pay and discharge as and when same are due the Assumed Liabilities or any of the obligations,
liabilities and/or duties relating to or arising from the Business from and after the Effective Time. 
 (b) Except as
provided in Section 8.7, the indemnification obligations of Buyer hereunder shall be exclusive remedy of Seller and SCI with respect to any matter subject to indemnification hereunder. 
 (c) Buyer will be entitled to receive as a credit against any indemnification amount owed to Seller or SCI hereunder an amount equal to
the net proceeds of any insurance policy actually received by Seller or SCI for a Loss for which the Buyer agreed to indemnify Seller or SCI under this Section 8.4. 
 Section 8.5 Defense of Claims; Payment. 
 (a) Any Indemnitee seeking
indemnification with respect to any actual or alleged Loss shall give notice to the applicable Indemnitor within the applicable survival period set forth in Section 8.2. If any claim, suit, demand or action is asserted or threatened by a third
party (“Claim”) after the Closing Date for which an Indemnitor may be liable under the terms 

  

 37 

 
of Article VIII, then the Indemnitee shall notify the Indemnitor within thirty (30) days after such Claim is known to the Indemnitee (provided,
however, that failure to provide such notice will not affect the Indemnitee’s rights to indemnity hereunder from Indemnitor, unless the Indemnitee can show actual material prejudice resulting from such failure and then only to the extent
of such actual material prejudice) and shall give the Indemnitor a reasonable opportunity: (i) to take part in any examination of any books and records; (ii) to conduct any proceedings or negotiations in connection therewith and necessary
or appropriate to defend the Indemnitee; (iii) to take all other required steps or proceedings to settle or defend any such Claim; and (iv) to employ counsel to contest any such Claim in the name of the Indemnitee or otherwise (except as
set forth below in Section 8.5(b)). 
 (b) If the Indemnitor intends to assume the defense of such Claim, it shall give
written notice of such intention to the Indemnitee within 15 days after Indemnitor first receives written notice of such Claim, whereupon Indemnitee shall permit, and Indemnitor shall assume, the defense of any such Claim, through counsel reasonably
satisfactory to the Indemnitee. Notwithstanding the foregoing, the Indemnitee may participate in such defense of such Claim (with one or more counsel of its own choice) at its own expense, provided, however, that if the parties to any
such Claim (including any impleaded parties) include both the Indemnitor and the Indemnitee, and the Indemnitor shall have been advised in writing by counsel for the Indemnitee that there may be one or more defenses available to the Indemnitee that
are not available to the Indemnitor or legal conflicts of interest pursuant to applicable rules of professional conduct between the Indemnitor and the Indemnitee, the Indemnitor shall not have the right to assume the defense of such Claim on behalf
of the Indemnitee and the fees and expenses of one such separate counsel employed by the Indemnitee shall be at the expense of the Indemnitor. 
 (c) If the Indemnitor fails to assume the defense of any Claim within 15 days after Indemnitor first receives written notice of such Claim, the Indemnitee may defend against such Claim in such manner as it may deem
appropriate (provided that the Indemnitor may participate in such defense at its own expense) and a recovery against the Indemnitee in such Claim for damages suffered by it in good faith, shall be conclusive in its favor against the Indemnitor.

 (d) The Indemnitor shall not, without the written consent of the Indemnitee, settle or compromise any Claim or consent to
the entry of any judgment with respect thereto which does not include, as an unconditional term thereof, the giving to the Indemnitee a release by all other participants from all liability in respect of such Claim. Unless the Indemnitor shall have
elected not to assume the defense of any claim subject to Article VIII or, after reasonable written notice of any Claim that is subject to the indemnification provisions of this Article VIII shall have failed to assume or participate in the defense
thereof, the Indemnitee may not settle or compromise such Claim without the written consent of the Indemnitor, such consent not to be unreasonably withheld. 
 (e) Upon determination of the amount due to an Indemnitee (“Indemnification Amount”) in connection with any matter
for which indemnification is sought under this Article VIII (“Indemnification Matter”) (whether by agreement between the Indemnitor and the Indemnitee or after a settlement agreement is executed or a final judgment or order
is rendered by an arbitrator or court of competent jurisdiction with respect to the 

  

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Indemnification Matter), the Indemnitor shall promptly (and in any event, not later than 10 days after such determination) pay the Indemnification Amount, in
cash, to the Indemnitee. Any Indemnification Amount that is not paid in full within 10 days after final determination of the Indemnification Amount as set forth above, such unpaid amount shall thereafter accrue interest through the date of payment
at the prime rate as reported in The Wall Street Journal, Eastern Edition for the date of such final determination. 
 Section 8.6
Dispute Resolution. 
 (a) Except as provided in Section 8.6(g), any and all disputes among the
parties to this Agreement (defined for the purpose of this provision to include their respective officers, directors, managers, members, partners, shareholders, agents and/or other Affiliates) arising out of or in connection with the negotiation,
execution, interpretation, performance or nonperformance of this Agreement and the transactions contemplated herein shall be solely and finally settled by arbitration, which shall be conducted in such city in Michigan as the parties shall mutually
agree, or if they are unable to agree, in Wilmington, Delaware, by a single arbitrator selected by the parties. The arbitrator shall be a lawyer familiar with business transactions of the type contemplated in this Agreement who shall not have been
previously employed by or affiliated with any of the parties hereto. If the parties fail to agree on the arbitrator within thirty (30) days of the date one of them invokes this arbitration provision, either party may apply to the American
Arbitration Association to make the appointment. 
 (b) The parties hereby renounce all recourse to litigation and agree that
the award of the arbitrator shall be final and subject to no judicial review. The arbitrator shall conduct the proceedings pursuant to the Commercial Arbitration Rules of the American Arbitration Association, as now or hereafter amended (the
“Rules”). 
 (c) The arbitrator shall decide the issues submitted (i) in accordance with the
provisions and commercial purposes of this Agreement, and (ii) with all substantive questions of Law determined under the Laws of the State of Delaware (without regard to its principles of conflicts of laws). The arbitrator shall promptly hear
and determine (after giving the parties due notice and a reasonable opportunity to be heard) the issues submitted and shall render a decision in writing within six (6) months after the appointment of the arbitrator. No fees shall be paid to the
arbitrator with respect to services rendered by the arbitrator after the elapse of six (6) months after the appointment of the arbitrator. 
 (d) The parties agree to facilitate the arbitration by (i) conducting arbitration hearings to the greatest extent possible on successive days, and (ii) observing strictly the time periods established by the
Rules or by the arbitrator for submission of evidence or briefs. 
 (e) The parties shall share equally the fees and expenses
of the arbitrator. 
 (f) Judgment on the award of the arbitrator may be entered in any court having jurisdiction over the
party against which enforcement of the award is being sought and the parties hereby irrevocably consent to the jurisdiction of any such court for the purpose of enforcing any such award. 
  

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 (g) The parties hereto agree that the provisions of this Section 8.6 shall not be
construed to prohibit any party from obtaining, in the proper case, specific performance or injunctive relief in any court of competent jurisdiction with respect to the enforcement of any covenant or agreement of another party to this Agreement as
provided herein. 
 Section 8.7 Enforcement of Agreement. Each party hereto acknowledges that irreparable damage would
result if this Agreement is not specifically enforced. Therefore, the covenants, agreements, rights and obligations of the parties under the Agreement, including, without limitation, their respective rights and obligations to sell and purchase the
Acquired Assets and the Business and the rights and obligations of the parties under Articles V, VIII and X, shall be enforceable by a decree of specific performance issued by any court of competent jurisdiction, and appropriate injunctive relief
may be applied for and granted in connection therewith. Each party hereto agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to
waive the defense that a remedy at law may be adequate in any action for specific performance hereunder. 
 Section 8.8
Definitions. 
 (a) In the case of a claim of indemnification brought pursuant to Section 8.3,
“Indemnitee” shall mean Buyer and Buyer’s Affiliates and the directors, officers, partners, members, managers, employees, successors and assigns of Buyer or any of its Affiliates, and in the case of a claim of
indemnification brought pursuant to 8.4, it shall mean each of Seller and SCI and their respective Affiliates and the directors, officers, partners, members, managers, employees, successors and assigns of Seller or SCI or any of their respective
Affiliates. 
 (b) In the case of a claim of indemnification brought pursuant to Section 8.3,
“Indemnitor” shall mean Seller and SCI, and in the case of a claim of indemnification brought pursuant to Section 8.4, it shall mean Buyer. 
 Section 8.9 Cooperation. If Buyer or Seller or SCI submits to an insurance carrier for any of their respective insurance policies, a claim arising from or relating to a claim or action by a third
party which may otherwise be subject to indemnification pursuant to Section 8.3 or Section 8.4, as the case may be, and if such insurance carrier agrees to defend such claim, then the defense of such 

  

 40 

 
claim shall be tendered to such insurance carrier and the rights of the parties between themselves regarding the assumption and control of such defense shall
be subject to the reasonable requirements of such insurance carrier. 
 ARTICLE IX 
 Termination of Agreement 
 Section 9.1 Termination. Except where a right to terminate this Agreement is otherwise specifically provided for herein, this Agreement may be terminated by written notice of termination at any time before the Closing
Date only as follows: 
 (a) by mutual consent of Seller, SCI and Buyer; 
 (b) by Buyer, upon written notice to Seller and SCI given at any time after December 31, 2006 if any or all of the conditions
precedent to Buyer’s obligations hereunder set forth in Section 6.2 hereof have not been met, without fault of Buyer; or 
 (c) by SCI and Seller, upon written notice to Buyer given at any time after December 31, 2006 if any or all of the conditions precedent to Seller’s and SCI’s obligations hereunder set forth in Section 6.1 hereof have not
been met, without fault of Seller or SCI. 
 Section 9.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to the provisions of Section 9.1: (a) this Agreement shall become void and have no effect, without any liability on the part of any of the parties except for the provisions of Section 5.15 and except as provided
below in this Section 9.2; (b) each party shall return all documents, work papers and other material of any other party relating to the transactions contemplated hereby, whether obtained before or after the execution hereof, to the party
furnishing the same; and (c) no confidential information received by any party with respect to the business of any other party or its Affiliates shall be disclosed to any third party, unless required by Law. Notwithstanding the foregoing or
anything else to the contrary, neither Seller nor SCI nor Buyer shall be relieved of liability under, and as provided in, this Agreement for a breach of this Agreement occurring prior to such termination, or for a breach of any provision of this
Agreement which specifically survives termination hereunder. 
  

 41 

 ARTICLE X 
 Miscellaneous 
 Section 10.1 Certain Defined Terms. The following terms
shall have the following meanings for purposes of this Agreement, which meanings shall be equally applicable to both the singular and plural forms of such terms: 
 “Affiliate” means, with respect to any Person, one who at such time controls, is controlled by, or is under common control with, such Person. 
 “Code” means the Internal Revenue Code of 1986, as amended, and all rules and regulations
promulgated thereunder. 
 “Consent” means any consent, waiver, approval, order or
authorization of, or registration, declaration or filing with or notice to, any Governmental Authority or other Person. 
 “Contract” means and includes all contracts, agreements, indentures, leases, franchises, licenses, commitments or legally binding arrangements, express or implied, written or oral.

 “Employee Plans” means all employee benefit plans as defined in
Section 3(3) of ERISA and all severance, bonus, retirement, pension, profit sharing and deferred compensation plans and other similar material, fringe or employee benefit plans, programs or arrangements, and all material employment or
compensation agreements, written or otherwise. 
 “Endowment Care Adjustment
Amount” means the product of (i) the absolute value of the difference between the Transferred Endowment Care Trust Amount and $751,247, multiplied by (ii) .05. 
 “Environmental Reports” means the Phase I and/or Phase II Environmental Assessment Reports
specifically identified on Exhibit B. 
 “Environmental Requirements” means
all applicable Laws, Permits and similar items of any Governmental Authority relating to the protection of the environment, including all requirements pertaining to reporting, licensing, permitting, investigation, and remediation of emissions,
discharges, releases, or threatened releases of Hazardous Materials. 
 “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended. 
 “Governmental
Authority” means any federal, state, local or foreign government or any subdivision, authority, department, commission, board, bureau, agency, court or other instrumentality thereof. 
 “Hazardous Materials” means any substance: (A) the presence of which requires
investigation or remediation under any Law; (B) which is or has been identified as a potential hazardous waste, hazardous substance, pollutant or contaminant under any applicable Law, or (C)

  

 42 

 
which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, reactive, or otherwise hazardous and has been identified
as regulated by any Governmental Authority. 
 “Intellectual Property” means all
intellectual property and all intellectual property and industrial property rights owned, held or used, including but not limited to (i) inventions, designs, algorithms and discoveries, know-how, methods, and processes, and all enhancements and
improvements thereto, whether patentable or unpatentable, and whether or not reduced to practice, and all patents therefor or in connection therewith, whether U.S. or foreign, and all patent applications, patent disclosures, and all divisions,
continuations, continuations-in-part, reissues, re-examinations and extensions thereof; (ii) trademarks, trade names and service marks, trade dress, logos, fictitious names, internet domain names, slogans, and symbols (collectively,
“Trademarks”), and all goodwill and similar value associated with any of the foregoing, and all applications, registrations, and renewals therefor or in connection therewith (collectively, “Trademark
Applications”); (iii) mask works, written works (excluding computer software programs and applications and documentation of or for such software programs), audio works, multimedia works, works of authorship, lists, databases and
copyrights (whether or not registered) and all registrations and applications for registration and renewals thereof, as well as moral, paternity, and integrity rights; (iv) trade secrets (as such are determined under applicable law), and other
confidential business information, including trade secret or confidential technical information, marketing plans, research, designs, plans, methods, techniques, and processes, any and all technology, supplier lists, statistical models, e-mail lists,
inventions, databases, and data, whether in tangible or intangible form and whether or not stored, compiled or memorialized physically, electronically, graphically, photographically or in writing; (v) any and all other rights to existing and
future registrations and applications for any of the foregoing and any and all rights in or under, or relating to, any of the foregoing, including, without limitation, remedies against and rights to sue for past infringements, and rights to damages
and profits due or accrued in or relating to any of the foregoing; and (vi) any and all other intangible proprietary property, information and materials and rights therein and thereto. 
 “IRS” means the United States Internal Revenue Service. 
 “Laws” means any laws, statutes, rules, regulations, ordinances, orders, codes, common laws,
arbitration awards, judgments, decrees, orders or other legal requirements of any Governmental Authority. 
 “Liability” means any direct or indirect indebtedness, liability, assessment, expense, obligation or responsibility (whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether disputed or undisputed, whether choate or inchoate, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes. 
 “Liens” means any and all liens, mortgages, security interests or other encumbrances.

 “Losses” means any and all demands, claims, assessments, judgments, losses,
liabilities, damages, costs and expenses (including interest, penalties, reasonable attorney’s fees and expenses, reasonable accounting fees and investigation costs). 
 “Material Adverse Effect” means any effect, change or circumstance that, individually or in
the aggregate with any other like effect, change or circumstance, is materially adverse to the Business 

  

 43 

 
(including with respect to any one particular Location), including, without limitation, the financial condition and the results of operations of the
Business. 
 “Merchandise Liabilities” means Seller’s and SCI’s current
cost of products and services that have been sold, but have not yet been delivered to the customer. 
 “Net Endowment
Care Adjustment Amount” means the amount equal to the present value of the future stream of ten annual payments (as though payable on the Closing Date and each of the first nine anniversaries of the Closing
Date), each equal to the Endowment Care Adjustment Amount, calculated using a discount rate of .065. 
 “Net Transferred
Merchandise Trust Amount” means the amount equal to (i) the aggregate amount transferred to Buyer’s Trustee at the Closing as part of the Initial Trust Delivery in respect of the Pre-Need Trust Funds
of the cemeteries included in the Business in accordance with Section 5.5(a), plus (ii) the aggregate amount transferred to Buyer’s Trustee as part of the Final Trust Delivery in respect of pre-need merchandise and/or services
relating to the Pre-/At-Need Contracts of the cemeteries included in the Business. 
 “Permits” means any licenses, permits, approvals, registrations, certificates (including, but not limited to, certificates of occupancy and any licensure required for the operation
of cemeteries) and other evidence of authority. 
 “Permitted Encumbrances” means (i) liens, encumbrances
or restrictions related to taxes not yet due or payable or which are being contested in good faith and for which appropriate reserves have been taken, (ii) any matters shown on the title commitment(s) not objected to by Buyer as provided for in
this Agreement or, if objected to by Buyer, later waived by Buyer as provided for in this Agreement and (iii) liens, encumbrances or restrictions that are created by Buyer. 
 “Person” means any individual, firm, corporation, partnership, trust, estate, association or
other entity. 
 “Proceeding” means any suit, action, litigation, investigation, notice of violation, audit,
arbitration, administrative hearing or any other similar proceeding. 
 “Purchase
Price” means the Closing Purchase Price plus any contingent consideration payable pursuant to Section 1.4 plus the assumption of the Assumed Liabilities by Buyer, as adjusted pursuant to and
in accordance with the terms and conditions of this Agreement. 
 “Seller’s and SCI’s Knowledge”,
“Knowledge of the Seller and SCI” or any other reference to the “Knowledge” of the Seller or SCI means the knowledge of (i) Michael Lehmann, Margie Stewart-Runnels, Eileen Farrell and Michael Smith, (ii) any
other individual who is serving as a director, officer, manager or member of Seller or SCI, and (iii) any manager of the Location, after reasonable inquiry. For purposes of this definition, the persons referenced in the immediately preceding
sentence shall be deemed to have knowledge of matters of which any individual assigned by a third-party representative or advisor of Seller or SCI to provide substantial services in connection with the transaction contemplated hereby has actual
knowledge. 
  

 44 

 “Tax” means any income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental, windfall profit, customs, vehicle, airplane, boat, vessel or other title or registration, capital stock, franchise, employees’ income
withholding, foreign or domestic withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer (including, without limitation, realty transfer and burial lot transfer), value added, alternative,
add-on minimum and other tax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever and any interest, penalty, addition or additional amount thereon imposed, assessed or collected by or under the authority of any governmental body or
payable under any tax-sharing agreement or any other Contract. 
 “Taxing
Authority” shall mean any domestic, foreign, federal, national, state, county or municipal or other local government, any subdivision, agency, commission or authority thereof, or any quasi-governmental body
exercising tax regulatory authority. 
 “Tax Return” means any return (including
any information return), report, statement, schedule, notice, form, declaration, claim for refund or other document or information filed with or submitted to, or required to be filed with or submitted to, any governmental body in connection with the
determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any law relating to any Tax, including any amendment thereto. 
 “Transferred Endowment Care Trust Amount” means the amount equal to the aggregate amount
transferred to Buyer’s Trustee at the Closing as part of the Initial Trust Delivery in respect of the Endowment Care Funds of the cemeteries included in the Business in accordance with Section 5.5(a), plus (ii) the aggregate
amount included in the Final Trust Delivery in respect of the Endowment Care Funds of the cemeteries included in the Business. 
 “WARN Act” means the Worker Adjustment and Retraining Notification Act, as the same may be amended from time to time. 
 Section 10.2 Notices. All notices and other communications required or provided for hereunder shall be in writing and shall be
deemed to be given: 
 (a) When delivered personally to the individual, or to an officer of the company, to which the notice
is directed; 
 (b) Three (3) business days after the same has been deposited in the United States mail, sent Certified
or Registered mail with Return Receipt Requested, postage prepaid and addressed as provided in this Section; or 
  

 45 

 (c) One (1) business day after the same has been deposited with a generally
recognized overnight delivery service (including United States Express Mail), with receipt acknowledged and with all charges prepaid by the sender addressed as provided in this Section. Except as specifically provided otherwise herein, notices and
other communications relating to this Agreement or the transactions contemplated hereby shall be directed as follows: 
  

	 	(1)	if to Seller or SCI, to: 

 President 
 SCI Michigan Funeral Services, Inc. 
 1929
Allen Parkway 
 Houston, Texas 77019 
 and to: 
 President 
 HAWES, Inc. 
 G-9506 North Dort Highway 
 Mt. Morris, MI 48458 
 with a copy to: 
 General Counsel 
 Service Corporation
International 
 1929 Allen Parkway 
 Houston, Texas 77019 
 and if before Closing, also with a copy to: 
 John Burleson 
 Pakis, Giotes,
Page & Burleson, P.C. 
 P.O. Box 58 
 Waco, Texas 76703-0058 
  

	 	(2)	if to Buyer, to: 

 STONEMOR
OPERATING LLC 
 Attention: Lawrence Miller, President & Chief Executive Officer 
 155 Rittenhouse Circle 
 Bristol,
Pennsylvania 19007 
 with a copy to: 
 BLANK ROME LLP 
 Attention: Lewis J. Hoch 
 One Logan Square 
 18th & Cherry Streets 
 Philadelphia, Pennsylvania 19103-6998 
 or at such other place or places or to such other person or persons as shall be
designated by like notice by any party hereto. 
  

 46 

 Section 10.3 Expenses. Subject to the terms of Section 1.3(a)(i) above, and
except as otherwise specifically provided in Sections 5.7 and 5.8 and any other provision of this Agreement, each party hereto shall pay its own expenses, including without limitation, fees and expenses of its agents, representatives, counsel,
auditors, and accountants, incidental to the consideration, negotiation, preparation and carrying out of this Agreement and the transactions contemplated hereby. 
 Section 10.4 Attorney’s Fees. In the event of any controversy, claim or dispute between or among any of the parties hereto arising out of or relating to this Agreement, or any default or
breach or alleged default or breach hereof, each party shall pay its own attorney’s fees, costs and expenses associated with any such action except as provided in Article VIII. If any party hereto shall be joined as a party in any judicial,
administrative, or other legal proceeding arising from or incidental to any obligation, conduct or action of another party hereto, the party so joined shall be entitled to be reimbursed by the other party for its reasonable attorney’s fees and
costs associated therewith. 
 Section 10.5 Assignment; Parties in Interest. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and permitted assigns. This Agreement shall not be assigned by any party hereto without the prior written consent of the other parties, except that prior to Closing, Buyer may
assign its rights and obligations hereunder to any one or more of its direct or indirect subsidiaries, provided that any such assignment shall not relieve Buyer from its obligations and liabilities hereunder. Except as provided in Article VIII,
nothing in this Agreement, expressed or implied, is intended to confer upon any third person any rights or remedies under or by reason of this Agreement. 
  

 47 

 Section 10.6 Entire Agreement; Amendment; Waiver. 
 (a) This Agreement together with the Schedules and Exhibits hereto and the other agreements and documents delivered, or to be delivered,
pursuant to Section 7.1 and Section 7.2 (all of which are hereby incorporated herein by reference) embody the whole agreement of the parties with respect to the subject matter hereof and thereof, and there are no promises, terms,
conditions, or obligations other than those contained herein and therein. All previous negotiations between the parties, either verbal or written, not herein contained are hereby withdrawn and annulled. This Agreement, together with the Schedules
and Exhibits hereto, supersedes all previous communications, representations, or agreements, either verbal or written, between the parties hereto with respect to the subject matter hereof. 
 (b) This Agreement may not be amended except by an instrument in writing signed on behalf of each party hereto. 
 (c) No provision of this Agreement may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be
effective. No waiver by any party of any provision of this Agreement in a particular instance shall be deemed to constitute a waiver of such provision thereafter unless otherwise agreed in writing and signed by the party against whom the waiver is
to be effective. 
 (d) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. 
 Section 10.7 Severability. If one or more provisions of this Agreement shall be held invalid, illegal or
unenforceable, such provision shall, to the extent possible, be modified in such manner as to be valid, legal and enforceable but so as to most nearly retain the intent of the parties, and if such modification is not possible, such provision shall
be severed from this Agreement. In either case, the balance of this Agreement shall be interpreted as if such provision were so modified or excluded, as the case may be, and shall be enforceable in accordance with its terms. 
 Section 10.8 Certain Interpretive Matters. The section and subsection headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Unless the context otherwise requires, all references in this Agreement to Sections, Articles, Exhibits or Schedules are to Sections, Articles, Exhibits
or Schedules of or to this Agreement. No provision of this Agreement will be interpreted in favor of, or 

  

 48 

 
against, any of the parties to this Agreement by reason of the extent to which any such party or its counsel participated in the drafting thereof or by
reason of the extent to which any such provision is inconsistent with any prior draft hereof or thereof. The singular form of any word used herein shall be deemed to include the plural form of such word and vice versa. References herein to feminine,
masculine or neuter gender shall be deemed to include all genders. As used herein, the words “and” and “or” shall be deemed to mean “and/or” as the context requires. The word “including” (and with correlative
meaning, the word “include”) means including without limiting the generality of any description preceding such word. 
 Section
10.9 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
 Section 10.10 Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware,
without regard to principles of conflicts of laws. 
 [Signature Pages Follow] 
  

 49 

 In Witness Whereof, the undersigned parties hereto have duly executed this Agreement on the
date first above written. 
  

			
	BUYERS:
	
	STONEMOR OPERATING LLC, a Delaware limited liability company
		
	By:	 	/s/ Paul Waimberg
	PAUL WAIMBERG, Vice President of Finance and Assistant Secretary
	
	STONEMOR MICHIGAN LLC, a Michigan limited liability company
		
	By:	 	/s/ Paul Waimberg
	PAUL WAIMBERG, Vice President of Finance
	
	STONEMOR MICHIGAN SUBSIDIARY LLC, a Michigan limited liability company
		
	By:	 	/s/ Paul Waimberg
	PAUL WAIMBERG, Vice President of Finance
	
	PARENT:
	
	SCI FUNERAL SERVICES, INC., an Iowa corporation
		
	By:	 	/s/ Michael D. Lehmann
	 Michael D. Lehmann, Vice President

 {Signatures continued on the following page} 

			
	SCI MICHIGAN:
	
	SCI MICHIGAN FUNERAL SERVICES, INC., a Michigan corporation
		
	By:	 	/s/ Michael D. Lehmann
	Michael D. Lehmann, Vice President
	
	SELLER:
	
	HAWES, INC., a Michigan corporation
		
	By:	 	/s/ Robert C. Hubble
	Robert C. Hubble, President

  

 51Asset Purchase and Sale Agreement

 Exhibit 10.3 
 ASSET PURCHASE AND SALE AGREEMENT 
 This ASSET PURCHASE AND SALE AGREEMENT
(“Agreement”) dated this 28th day of September, 2006, is made by and among STONEMOR
OPERATING LLC, a Delaware limited liability company (“StoneMor LLC”), joined herein by STONEMOR MICHIGAN LLC, a Michigan limited liability company (“Buyer LLC”) and STONEMOR MICHIGAN
SUBSIDIARY LLC, a Michigan limited liability company (“Buyer NQ Sub” and individually and collectively with StoneMor LLC and Buyer LLC, “Buyer”), and SCI FUNERAL SERVICES, INC., an Iowa
corporation (“Parent”), SCI MICHIGAN FUNERAL SERVICES, INC., a Michigan corporation (“SCI Michigan”, and together with Parent, “SCI”), and HILLCREST MEMORIAL
COMPANY, a Delaware corporation (“Seller”). 
 W I T N E S S
E T H: 
 WHEREAS, Seller owns and operates the cemetery businesses which are listed on
Exhibit A attached hereto (such locations listed on Exhibit A referred to herein as the “Locations,” and the businesses conducted at the Locations referred to individually and collectively as the
“Business”); 
 WHEREAS, SCI Michigan provides certain sales, accounting and
other administrative services for the Business conducted at the Locations pursuant to a Marketing and Accounting Services Agreement with the Seller, dated July 30, 1993, as amended from time to time (the “Management
Agreement”); and 
 WHEREAS, the parties desire to provide for the purchase, sale and transfer of the
Business, including certain of the personal property located at, used in connection with, or arising out of, such 

 ASSET PURCHASE AND SALE AGREEMENT 

 
Business, together with the real estate utilized in the Business, in exchange for cash and other consideration, upon the terms and subject to the conditions
herein set forth; and 
 WHEREAS, this Agreement sets forth the terms and conditions to which the parties have agreed;

 WHEREAS, simultaneously herewith Buyer and Hawes, Inc. are entering into a transaction to purchase a
cemetery business in Michigan (the “Hawes Transaction”), and affiliates of Buyer and Parent are entering into a transaction to purchase the funeral, cremation and cemetery businesses in other jurisdictions (the
“Dignity II and III Transactions”); 
 NOW, THEREFORE, in consideration of the
premises and the mutual covenants, agreements, representations and warranties herein contained, the parties, intending to be legally bound hereby, agree as follows: 
 ARTICLE I 
 Purchase and Sale 
 Section 1.1 Transfer of Acquired Assets. Subject to the terms and conditions of this Agreement, and except as
provided in Section 1.2, Seller and SCI do hereby agree to (or, if applicable, cause their Affiliates to) sell, transfer, convey, assign and deliver to Buyer, and Buyer does hereby agree to purchase and accept from Seller and SCI (or their
Affiliates, if applicable), free and clear of all Liens and Liabilities (other than the Assumed Liabilities (as defined below)), all right, title and interest to the following property and rights located at, used in connection with, arising out of
or relating to the Business (collectively, the “Acquired Assets”): 
 (a) The real property described
in Schedule 1.1(a) to this Agreement, together with all buildings, structures, improvements, fixtures, easements, benefits and rights and appurtenances benefiting, belonging or pertaining thereto, (the “Owned Real
Property”); 
 (b) All furniture, equipment, tools, supplies and other tangible personal property owned or used
by Seller or SCI exclusively or primarily in the operation of the Business as of 

  

 2 

 
the date hereof or acquired between the date hereof and the Effective Time, including, without limitation, those items listed on Schedule 1.1(b) to
this Agreement; 
 (c) All vehicles listed on Schedule 1.1(c) to this Agreement; 
 (d) All crypts, urns, vaults, monuments, grave spaces, mausoleum spaces, niches, lawn crypts, supplies and other merchandise inventory of
the Business (“Inventory”), including, without limitation, the items stored for customers at the cemeteries included in the Business, plus or minus any changes to such Inventory which result from the ordinary course of
operation of the Business, consistent with past practices, subsequent to the date(s) of such listing(s) and until the Effective Time (and specifically limited to the rights permitted by or provided under applicable Laws with regard to merchandise
designated as being “stored” for customers under Pre-/At-Need Contracts (as defined below)), and all Services in Progress (as hereinafter defined); 
 (e) All benefits, rights and entitlements of or relating to the Business under and in all contracts, agreements, leases, licenses and
commitments listed on Schedule 1.1(e) to this Agreement (“Business Contracts”); 
 (f) All
benefits, rights and entitlements under any leases for any real property at the Location or otherwise exclusively or primarily related to the Business (whether Seller is lessee or lessor thereunder) (“Real Property Leases”),
including, without limitation, those listed on Schedule 1.1(f) to this Agreement, together with any security deposits held or paid on account of any of the Real Property Leases (the real property leased by Seller or SCI as a lessee or
sublessee under the Real Property Leases being referred to herein as “Leased Real Property” and, together with the Owned Real Property, the “Real Property”); 
 (g) All benefits, rights and entitlements under all of the Contracts, engagements and commitments, written or oral, relating to the
provision or sale by the Business of at-need or preneed cemetery or cremation merchandise, properties or services and all deposits, prepaid amounts, insurance policies and trust funds relating to such Contracts, engagements and commitments,
including, without limitation, those items listed on Schedule 1.1(g) to this Agreement, plus or minus any similar items entered into or obtained in the ordinary course of the operation of the Business subsequent to the date(s) of the
listing(s) on Schedule 1.1(g) until the Effective Time (collectively, the “Pre-/At-Need Contracts” and, together with the Business Contracts and the Real Property Leases, the “Assumed
Contracts”); 
 (h) All of the Permits of each of Seller and SCI necessary for the ownership, operation,
maintenance or presently planned expansion (by Seller or SCI) of the Business, to the extent transferable; 
 (i)
Intentionally omitted; 
 (j) All utility and other deposits previously paid to and/or held by third parties in connection
with the operation of the Business as of the Effective Time; 
 (k) All accounts and notes receivable generated in or relating
to the operation of the Business (“Receivables”), including, without limitation, those listed on Schedule 1.1(k) to 

  

 3 

 
this Agreement, plus or minus any changes in such receivables which result from the ordinary course of the operation of the Business, consistent with past
practices, subsequent to the date(s) of the listing(s) on Schedule 1.1(k) until the Effective Time, but specifically excluding pending trust claims specified in Section 5.5(b)(ii) and pending insurance claims; 
 (l) All of the Seller’s and SCI’s rights and incidents of interest in and to causes of action, suits, proceedings, judgments,
claims and demands of any nature, whenever maturing or asserted, relating to or arising directly or indirectly out of any of the Acquired Assets or the Business, but specifically excluding pending trust claims specified in Section 5.5(b)(ii)
and pending insurance claims; and 
 (m) All goodwill associated with the Business, together with all lists of present or
former customers of the Business, all business books, documents, records, files, databases and reports relating to the Acquired Assets and reasonably necessary for Buyer to continue the Business (collectively, “Seller
Records”) (whether or not the Seller Records are physically located at either of the Locations), the telephone numbers and listings for the Business, and all Intellectual Property owned and/or used by the Seller and/or SCI
exclusively or primarily in connection with the Business (“Business Intellectual Property”), including, without limitation, all right, title and interest in and the right to use the trademarks, service marks and trade names
for the Location as listed on Exhibit A hereto. All Seller Records not physically located at the Location shall be copied and, at the election of Buyer, either delivered in person to a representative of Buyer at the location where such Seller
Records are held on the Closing Date or shipped to Buyer by Seller and/or SCI at Buyer’s expense by such delivery service selected by Buyer. All requests and other communications from Buyer to Seller or SCI regarding Seller Records, either
before or after the Closing, shall be directed to Michael Lehmann, Service Corporation International, 1929 Allen Parkway, Houston, Texas 77219, fax: (713) 525-7372. 
 Except as specifically provided in Section 1.2, it is intended that the assets, properties and rights of the Business to be sold to Buyer pursuant to this Agreement shall include all of the assets, properties and
rights reflected in the Schedules relating to the subsections of Section 1.1, other than those assets, properties and rights that may have been disposed of in the ordinary course of business prior to the Effective Time, but including all
similar assets, properties and rights of the Business that may have been acquired in the ordinary course of business since the dates of the listings in the Schedules relating to the subsections of Section 1.1 until the Effective Time.

 Section 1.2 Excluded Assets. Neither Seller nor SCI shall transfer, convey or assign to Buyer, and Buyer shall not
purchase, the following assets (collectively, the “Excluded Assets”): (a) non-preneed related cash and cash equivalents, (b) computers, computer software and information 

  

 4 

 
and similar rights (provided, however, that none of the Seller Records shall be deemed to be an Excluded Asset, whether or not contained or stored in or on
the hard drive of any computers or on any computer system or server, disk or any other electronic media), (c) corporate records, minutes and records of shareholders’ and directors’ meetings of Seller or SCI, (d) any pending trust
claims specified in Section 5.5(b)(ii) and any pending insurance claims, (e) those items specifically identified in Schedule 1.1(b) as being subject to a corporate lease or otherwise excluded from the sale of the Acquired Assets hereunder;
and (f) all other assets of Seller or SCI which are not used exclusively or primarily in the ownership, operation or maintenance of the Business and which are not necessary to the continued operation of the Business in a manner consistent with
the Seller’s and SCI’s past practices, including training, promotional materials, procedure and policy manuals. 
 Section 1.3
Consideration for Acquired Assets Payable at the Closing. On the terms and subject to the conditions of this Agreement, Buyer, in consideration for the transfer and delivery to it of the Acquired Assets as herein provided, will,
in addition to the assumption of liabilities set forth in Section 1.5(a) below, pay to Seller at the Closing (as defined below) the sum of Nine Hundred Fourteen Thousand Dollars ($914,000) (the “Closing Purchase Price”)
in cash (“Cash Purchase Price”), to be delivered by bank wire transfer to such account as Seller and SCI shall designate to Buyer in writing at least three business days prior to the Closing Date. 
 Section 1.4 Intentionally Omitted. 
 Section 1.5 Liabilities. 
 (a) Assumed Liabilities. From and after the Effective Time, Buyer agrees to assume and perform the liabilities and obligations of the Business (“Assumed Liabilities”) under and pursuant
to the terms and conditions of any Assumed Contract, but only to the extent such obligations arise, accrue or first become due after the Effective Time under the terms of the Assumed Contracts; provided, however, that Buyer will not
assume or be responsible for any such liabilities or obligations which arise from any breach or default by Seller and/or SCI under any Assumed Contract that occurs prior to the Effective Time or that arises out of or relates to events or
circumstances that occur or exist prior to the Effective Time, all of which liabilities and obligations will constitute Retained Liabilities (as defined 

  

 5 

 
herein). Notwithstanding anything to the contrary contained in this Agreement or any document delivered in connection herewith, Buyer’s obligations in
respect of the Assumed Liabilities will not extend beyond the extent to which Seller and/or SCI were obligated in respect thereof and will be subject to Buyer’s right to contest in good faith the nature and extent of any liability or obligation
(but such right to contest shall not affect Buyer’s indemnification responsibilities under Section 8.4(a)(iii)). 
 (b) Retained Liabilities. Except as provided in Section 1.5(a) hereof, each of Seller and SCI will retain, and Buyer will not assume or be responsible or liable with respect to, any Liabilities of the Business that precede the
Effective Time (except as specifically provided in subclause (vii) of this Section 1.5(b)), whether or not arising out of or relating to the conduct of Seller and/or SCI or associated with or arising from any of the Acquired Assets,
whether fixed or contingent or known or unknown (collectively, the “Retained Liabilities”), including, without limitation, the following: 
 (i) Liabilities relating to any Excluded Asset; 
 (ii) Liabilities of Seller and/or SCI that constitute trade payables; 
 (iii) Liabilities of Seller and/or SCI arising under or relating to any Assumed Contract to the extent such Liabilities relate to periods
prior to the Effective Time or arise from any breach or default by Seller and/or SCI (or any of their Affiliates) under any Assumed Contract that occurs prior to the Effective Time or that arises out of or relates to events or circumstances that
occur or exist prior to the Effective Time; 
 (iv) Liabilities of Seller and/or SCI arising under or relating to any Contract
other than an Assumed Contract; 
 (v) Liabilities with respect to (A) any Employee Plan maintained, sponsored,
contributed to or participated in by Seller and/or SCI or any of their Affiliates for the benefit of or relating to any current or former employee of the Business (“Seller Employee Plan”) and the amendment to or the
termination of any Seller Employee Plan, or (B) any person at any time employed by Seller or SCI or any of their Affiliates (including, without limitation, any such person who fails to accept an offer of employment by Buyer or any of its
Affiliates), and any such person’s spouse, children, other dependents or beneficiaries, with respect to any such person’s employment or termination of employment by Seller or SCI or any of their Affiliates including, without limitation,
claims arising under health, medical, dental, disability or other benefit plan for products, supplies or services provided or rendered prior to the Effective Time; 
 (vi) Seller’s or SCI’s deferred sales commissions; 
 (vii) Liabilities of Seller or SCI, based in whole or in part on violations of Law or environmental conditions occurring or existing prior
to the Closing and arising out of or relating to Environmental Requirements, except to the extent that such Liabilities are identified in the Environmental Reports; provided that the Seller and SCI shall each remain liable for the
environmental Liabilities identified on Exhibit B until Seller, SCI or Buyers at 

  

 6 

 
Seller or SCI’s expense have remediated, to the extent required by existing governmental standards, such environmental Liabilities as noted on
Exhibit B; 
 (viii) Except as otherwise specifically provided in this Agreement, all Liabilities of Seller or SCI for
any Tax for (A) operations of the Business prior to the Effective Time; (B) the transfer of the Acquired Assets; and (C) income earned by the Pre-Need Trust Funds and the Endowment Care Funds (as each of these terms is defined in
Section 5.4) prior to delivery thereof to Buyer’s Trustee pursuant to Section 5.5 below to the extent such income (1) is not taxable to the applicable trusts as independent taxpayer entities, and (2) is withdrawn by or for
any Seller or SCI or otherwise distributed to any Seller or SCI (whether such withdrawal or distribution is made before or after the Effective Time); and 
 (ix) Liabilities of Seller or SCI arising out of or relating to any Proceeding to which Seller or SCI is a party on the date of this Agreement and relating to the Business or any of the matters referenced on
Schedule 1.5(b)(ix) except for Liabilities for actions/business changes at the Business that may be required after Closing pursuant to or arising from the Michigan monument builder’s class action claim which is identified on Schedule
1.5(b)(ix); and 
 (x) Liabilities arising out of the management of Seller or SCI’s Business by SCI; and 

(xi) Liabilities relating to any claims arising in connection with monument sales by the Seller or SCI prior to the Closing.

 Section 1.6 Post-Closing Adjustments to Purchase Price. 
 (a) Audit Report. Seller, SCI and Buyer acknowledge that Harper & Pearson Company, P.C. (the “Independent
Auditor”) is currently performing a financial audit and review of the Business and that the report of the Independent Auditor with respect to such audit and review (the “Audit Report”) is expected to be delivered
to Buyer within 30 days after the Closing Date. For purposes of this Agreement, the term “Base Gross AR Amount” means the aggregate amount of the gross accounts receivable of the Business as of the Closing Date (excluding any
trust claims specified in Section 5.5(b)(ii) and any pending insurance claims), as reflected in the Audit Report (without regard to any allowance for doubtful accounts or other reserve in respect of accounts receivable of the Business), and the
term “Base Net Merchandise Trust Amount” means the Net Transferred Merchandise Trust Amount minus the aggregate amount of the Merchandise Liabilities of all of the cemeteries included in the Business, as of the
Effective Time. Buyer shall deliver a copy of the Audit Report to Seller and SCI within 15 days after receiving the Audit Report. No later than ten (10) days after the Closing Date, SCI shall deliver to Buyer a detailed statement of Merchandise
Liabilities as of the Effective Time of each of the cemeteries included in the Business. 
 (b) Accounts Receivable
Adjustment. If the Base Gross AR Amount is less than $676,900, then, subject to Section 1.6(e), the Purchase Price shall be decreased by, and Seller shall pay to Buyer, an amount equal to the discounted present value of the amount by which
the Base Gross AR Amount is less than $712,527, using a discount rate of .065 and a discount 

  

 7 

 
period of three (3) years. If the Base Gross AR Amount is greater than $748,150, then, subject to Section 1.6(e), the Purchase Price shall be
increased by, and Buyer shall pay to Seller, an amount equal to the discounted present value of the amount by which the Base Gross AR Amount is greater than $712,527, using a discount rate of .065 and a discount period of three (3) years. If
the Base Gross AR Amount is greater than or equal to $676,900, but less than or equal to $748,150, then no adjustment shall be made to the Purchase Price, and no amount shall be due by any party hereto, under this Section 1.6(b). 
 (c) Merchandise Trust Adjustment. If the Base Net Merchandise Trust Amount is less than $3,092,700, then, subject to
Section 1.6(e), the Purchase Price shall be decreased by, and Seller shall pay to Buyer, the discounted present value of the amount by which the Base Net Merchandise Trust Amount is less than $3,255,483, using a discount rate of .065 and a
discount period of ten (10) years. If the Base Net Merchandise Trust Amount is greater than $3,418,250, then, subject to Section 1.6(e), the Purchase Price shall be increased by, and Buyer shall pay to Seller, an amount equal to the
discounted present value of the amount by which the Base Net Merchandise Trust Amount is greater than $3,255,483, using a discount rate of .065 and a discount period of ten (10) years. If the Base Net Merchandise Trust Amount is greater than or
equal to $3,092,700 but less than or equal to $3,418,250, then no adjustment shall be made to the Purchase Price, and no amount shall be due by any party hereto, under this Section 1.6(c). 
 (d) Endowment Care Trust Adjustment. If the Transferred Endowment Care Trust Amount is less than $735,546, then, subject to
Section 1.6(e), the Purchase Price shall be decreased by, and Seller shall pay to Buyer, the Net Endowment Care Adjustment Amount. If the Transferred Endowment Care Trust Amount is greater than $735,546, then, subject to Section 1.6(e),
the Purchase Price shall be increased by, and Buyer shall pay to Seller, the Net Endowment Care Adjustment Amount. 
 (e)
Net Purchase Price Adjustment Amount. The Purchase Price adjustment amounts provided for in Sections 1.6(b), (c) and (d), if any, shall all be aggregated and netted against each other such that either (i) a single amount shall be
payable to Buyer by Seller and no amount shall be payable by Buyer to Seller under this Section 1.6, (ii) a single amount shall be payable to Seller and SCI by Buyer, and no amount shall be payable by Seller to Buyer under this
Section 1.6, or (iii) no amount shall be payable by any party hereto under either this Section 1.6. By way of example only, if $150,000 is payable by Seller to Buyer pursuant to Section 1.6(b), $50,000 is payable by Seller to
Buyer pursuant to Section 1.6(c) and $100,000 is payable by Buyer to Seller and SCI pursuant to Section 1.6(d), then Seller shall pay to Buyer, in accordance with Section 1.6(f), an amount equal to $100,000 (i.e., $150,000 +
$50,000 - $100,000). 
 (f) Payment of Purchase Price Adjustment Amounts. Any payment due under Section 1.6(e) by
Seller on the one hand or Buyer on the other hand shall be paid in full, in cash, no later than seventy-five (75) days after the Closing Date, or, if later than such time, twenty (20) days after the date that the Audit Report is delivered
to Buyer. Any amounts not paid within such time period shall accrue interest from the Closing Date through the date of payment at the prime rate as reported in The Wall Street Journal, Eastern Edition for the date of the Audit Report.

  

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 (g) Tax Treatment. Any payments made pursuant to this Section 1.6 shall be
treated by Seller and Buyer as adjustments to the Purchase Price for all Tax purposes. 
 Section 1.7 Prorations; Services in
Progress; Transaction Taxes. 
 (a) Seller and SCI shall be responsible for all Taxes arising as a result
of the operation of the Business or ownership of the Acquired Assets prior to the Effective Time. At Closing, all real and personal property Taxes shall be prorated between Seller and SCI on the one hand and Buyer on the other hand on a per diem
basis. Seller and SCI shall also be responsible for all Taxes on income earned by the Pre-Need Trust Funds and the Endowment Care Funds (which are to be transferred to Buyer) prior to delivery thereof to Buyer’s Trustee pursuant to
Section 5.5 below to the extent such income (A) is not taxable to the applicable trusts as independent taxpayer entities, and (B) is withdrawn by or for Seller or SCI or otherwise distributed to Seller or SCI (whether such withdrawal
or distribution is made before or after the Effective Time), and Seller and SCI shall make all applicable estimated Tax payments to the relevant Taxing Authorities associated with such income. For purposes of determining the amount of Taxes owed by
Seller and SCI with respect to the Pre-Need Trust Funds and the Endowment Care Funds, the amount of such Taxes shall be computed as if the tax year of such funds ended on the date of the Final Trust Delivery (as defined in Section 5.5(e)
below). 
 (b) The parties shall cooperate in transferring from the Seller or SCI, as applicable, to Buyer all water,
electrical, gas and other utility services provided to or benefiting the Real Property, and as and to whatever extent billings are received by any party relating to services utilized both before the Effective Time (for which Seller and SCI shall be
jointly and severally responsible) and after the Effective Time (for which Buyer shall be responsible), the parties will cooperate to make appropriate adjustments and reimbursements between them to accomplish the proper allocation of such billings.

 (c) All revenues from and direct costs for merchandise paid to third parties in the ordinary course of business associated
with Services in Progress will be allocated to Buyer. For purposes of this Agreement, “Services in Progress” means any “at need” cemetery related services for which a Contract has been entered into, but which have
not been completed as of the Effective Time. For purposes of this Agreement, such cemetery related services are complete when the body or remains have been cremated or interred. 
 (d) Except as set forth in Sections 1.7(e) and (f) below, Seller and SCI shall be responsible, jointly and severally, for the timely
payment of, and shall indemnify and hold harmless Buyer against, all sales, use, value added, documentary, stamp, gross receipts, registration, transfer (including, without limitation, real estate), conveyance, excise and other similar Taxes and
fees (collectively, “Transfer Taxes”) arising out of or in connection with or attributable to (i) the transfer of the Acquired Assets and (ii) the transactions contemplated by this Agreement. Seller and SCI shall
prepare and timely file all Tax Returns required to be filed in respect of such Transfer Taxes. Seller and SCI shall be responsible, jointly and severally, for filing all required notices related to bulk sales laws and shall indemnify and hold
harmless Buyer against all Taxes or other Losses that Buyer become liable for as a result of the Seller’s and/or SCI’s failure to file any applicable bulk sales notices or pay any of its Taxes. 
  

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 (e) The parties shall share in the payment of any recording and other similar fees
arising out of or in connection with or attributable to the transactions contemplated by this Agreement in accordance with the normal practices in the applicable states in which the various Acquired Assets are located; provided,
however, that Seller shall pay for the recording of the release of any Lien (other than Permitted Encumbrances) with respect to any Acquired Asset. 
 (f) Except to the extent that any Transfer Tax amounts are included in the amounts paid by Buyer pursuant to Section 1.3(a)(ii), Buyer shall be responsible for the timely payment of, and shall indemnify and hold
harmless Seller and SCI against, all Transfer Taxes arising out of or in connection with or attributable to the transfer of the vehicles listed on Schedule 1.1(c) to this Agreement. Buyer shall prepare and timely file all Tax Returns required to be
filed in respect of such Transfer Taxes. 
 Section 1.8 Allocation of Closing Purchase Price. 
 (a) On or prior to the Closing Date, Buyer and Seller and SCI shall mutually agree upon a written statement (the “Statement of
Allocation”) setting forth an allocation of the Closing Purchase Price (“Purchase Price Allocation”) (which for such purpose shall be increased by the amount of the liabilities assumed by Buyer). The Statement of
Allocation shall include: (i) the assets to be purchased by each of Buyer LLC and Buyer NQ Sub; (ii) the portion of the Closing Purchase Price that will be paid by or on behalf of Buyer LLC and Buyer NQ Sub to acquire the Acquired Assets,
and (iii) an allocation of the portion of the Closing Purchase Price paid by or on behalf of each of Buyer LLC and Buyer NQ Sub (“Purchased Acquired Assets Allocation”) among each of the respective categories of Acquired
Assets that are purchased. Buyer, Seller and SCI agree that each of the allocations required to be prepared pursuant to this Section 1.8 shall be prepared in accordance with the provisions of Section 1060 of the Code, the Treasury
Regulations promulgated thereunder and any similar provisions of state, local or foreign law, as applicable. 
 (b) All
federal, state, local and foreign income Tax Returns of Seller, SCI and Buyer shall be filed consistently with the information set forth on the Statement of Allocation. Moreover, Seller, SCI and Buyer further agree to file IRS Form 8594 (and any
corresponding form required to be filed by a state or local Taxing Authority) in a manner that is consistent with the Purchased Acquired Assets Allocation. Seller, SCI and Buyer agree to promptly provide each other with any information necessary to
complete such Tax Returns and IRS Form 8594 (and any corresponding form required to be filed by a state or local Taxing Authority). Seller, SCI and Buyer shall not take any position on a Tax Return, tax proceeding or audit that is inconsistent with
any information set forth on the Statement of Allocation. 
 Section 1.9 Effective Time. The Effective Time of the
transfer of the Acquired Assets shall be 12:01 a.m. on the Closing Date. 
  

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 ARTICLE II 
 Closing 
 Section 2.1 Closing. The closing of the
transaction provided for in this Agreement (the “Closing”) shall take place at the offices of Buyer’s counsel, Blank Rome LLP, One Logan Square, Philadelphia, PA 19103, on September 28, 2006 (the
“Closing Date”), or at such other location, time and date as the parties shall mutually agree. In the event of any postponement thereof, all references in this Agreement to the Closing Date shall be deemed to
refer to the time and to the date to which the Closing Date shall have been so postponed as herein provided. 
 Section 2.2
Instruments of Conveyance and Transfer. At the Closing, each of Seller and SCI, as applicable, shall deliver to Buyer such special warranty deeds, leases, bills of sale, endorsements, assignments, title
affidavits and other documents reasonably requested by the Title Company (as defined in Section 5.7), and such other instruments of transfer, conveyance and assignment as may be reasonably requested by Buyer, in forms reasonably satisfactory to
Buyer, in order to more fully vest in Buyer good and marketable title to the Acquired Assets. Each of Seller and SCI, as applicable, shall take all such steps as may be reasonably requested by Buyer to put Buyer in actual possession and control of
the Acquired Assets and the Business as of the Closing. 
 ARTICLE III 
 Representations and Warranties by Seller and SCI 
 Each of Seller and
SCI, jointly and severally, hereby represent and warrant to Buyer, both as of the date hereof and as of the Effective Time, as follows: 
 Section 3.1 Organization; Standing; Authorization; Capacity. Each of Seller and SCI is a corporation or limited liability company, as applicable, duly organized, validly existing and in good standing under the
laws of its state of formation as designated in the introductory paragraph of this agreement, with all requisite power and authority to own the Acquired Assets and to conduct the 

  

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Business as it is now being conducted and is presently proposed (by Seller and SCI) to be conducted. Each of Seller and SCI is duly qualified to conduct
business and is in good standing in each jurisdiction in which the nature of its business or location of its properties makes such qualification necessary, except where the failure to be so qualified would not reasonably be expected to have a
Material Adverse Effect. The execution, delivery and performance of this Agreement by each of Seller and SCI has been duly and effectively authorized by all necessary action on the part of Seller and SCI, including authorization by the board of
directors of each of Seller and SCI, and no further action or Consent is required in connection with such execution, delivery and performance of this Agreement by Seller or SCI. This Agreement has been duly executed and delivered by Seller and SCI,
and constitutes the valid and binding obligation of each of Seller and SCI, enforceable against Seller and SCI in accordance with its terms. 
 Section 3.2 Financial Information. The unaudited income and expense statements for the Business for the twelve month periods ending December 31, 2003, 2004 and 2005 (collectively, the “Income
Statements”), copies of which are attached hereto as Schedule 3.2, accurately reflect in all material respects the income and expenses of such Locations for the periods covered. 
 Section 3.3 Tax Matters. 
 (a) (i) each of Seller and SCI has properly and timely filed all Tax Returns required to be filed by it; (ii) each of Seller and SCI has paid all Taxes required to be paid by it (whether or not shown on a Tax
Return); and (iii) there are no encumbrances for Taxes on the Acquired Assets other than for Taxes not yet due and payable. 
 (b) Each of Seller and SCI has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, shareholder or other person for all periods for
which the statutory period of limitations for the assessment of such Tax has not yet expired and all IRS Forms W-2 and 1099 (and other applicable forms required to be filed by a state or local Taxing Authority) required with respect thereto have
been properly completed and timely filed. 
 (c) Neither the Seller nor SCI is a “foreign person” as such term is
defined in Section 1445(f)(3) of the Code. 
  

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 (d) All amounts received by Seller or SCI on sales by the Business which are required
under applicable state law to be trusted have been deposited in trust and all Tax Returns required to be filed concerning such trusts and the income from such trusts have been filed through all fiscal years ending prior to the Closing Date.

 Section 3.4 No Violation. Neither the execution and delivery of this Agreement by the Seller or SCI nor the
performance of their respective obligations hereunder or thereunder will, subject to receipt of all Required Consents, (a) violate, conflict with or result in a breach of any Law, (b) violate, conflict with or result in a breach or
termination of, or otherwise give any contracting party additional rights or compensation under, or the right to terminate or accelerate, or constitute (with notice or lapse of time, or both) a default under the terms of any organizational documents
(i.e., charter, bylaws, operating agreement, partnership agreement or similar document), any note, deed, lease, instrument, permit, security agreement, mortgage, commitment, contract, agreement, order, judgment, decree, license or other instrument
or agreement, whether written or oral, express or implied, including, without limitation, the Assumed Contracts, to which Seller and/or SCI is a party or by which any of the Acquired Assets or the Business is bound, or (c) result in the
creation or imposition of any Liens with respect to the Acquired Assets or the Business. 
 Section 3.5 Status of Acquired
Assets. 
 (a) Title to Acquired Assets. Seller has fee simple title to the Owned Real Property, a valid
leasehold interest in the Leased Real Property and good and marketable title to all of the Acquired Assets, subject to no Liens, except for Permitted Encumbrances and as otherwise disclosed in Schedule 3.5. At the Closing, Buyer will acquire
fee simple title to the Owned Real Property, a valid leasehold interest in the Leased Real Property and good and marketable title to all of the Acquired Assets, in each case free and clear of any and all Liens except Permitted Encumbrances. Other
than as disclosed in Schedule 3.5, neither Seller nor SCI has entered into any Contract granting rights to third parties in any real or personal property of Seller or SCI included in the Acquired Assets, and no Person has any right to
possession or occupancy of any of the Acquired Assets. 
 (b) Condition of Acquired Assets. The Real Property and the
tangible Acquired Assets that are reasonably necessary for the operation of the Business are in operating condition and reasonable repair (subject to normal wear and tear) and are sufficient to permit Buyer to conduct the Business as presently
conducted. 
  

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 Section 3.6 Improvements. To the Knowledge of Seller and SCI, no
municipal or other governmental improvements affecting the Real Property are in the course of construction or installation, and no such improvement has been ordered to be made; and any municipal or other governmental improvements affecting the Real
Property which have been constructed or installed have been paid for and will not hereafter be assessed (except with respect to any currently recorded assessments which are to become due after the Closing), and all assessments heretofore made have
been paid in full, other than any recorded assessments which are to become due after the Closing; and neither Seller nor SCI has entered into any private contractual obligations relating to the installation of or connection to any sanitary sewers,
storm sewers or any other improvements. 
 Section 3.7 Real Property Approvals. To the Knowledge of Seller
and SCI, all permanent certificates of occupancy and all other licenses, permits, authorizations, consents, certificates and approvals required by all Governmental Authorities having jurisdiction and the requisite certificates of the local board of
fire underwriters (or other body exercising similar functions), if applicable, have been issued for the Real Property, have been paid for, and are in full force and effect. 
 Section 3.8 Zoning. Except as disclosed on the letters delivered by the zoning code enforcement officers for the municipalities
where the Real Property is located, neither Seller nor SCI has received notice from any Governmental Authority that: (i) any parcel of the Real Property is not in compliance with current zoning and use classifications under the respective
municipal zoning ordinance governing such Real Property; (ii) any cemetery use at or on the Real Property is not a permitted use or an existing non-conforming use thereunder; and (iii) the current construction, operation and use of the
buildings and other improvements constituting the Real Property violate any zoning, subdivision, building or similar law, ordinance, order, regulation or recorded plat or any certificate of occupancy issued for the Real Property. 
  

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 Section 3.9 No Violations Relating to Real Property. No portion of the Real
Property, and no current use of the Real Property, is in violation of any applicable Law, except where such violation would not have a Material Adverse Effect. Neither Seller nor SCI has received notice of any presently outstanding and uncured
violations of any building, housing, safety or fire ordinances with respect to the Real Property. 
 Section 3.10 Real Estate
Taxes. Neither Seller nor SCI has received notice of any proceeding pending for the adjustment of the assessed valuation of all or any portion of the Real Property. To the Knowledge of Seller and SCI, there is no abatement, reduction or
deferral in effect with respect to all or any portion of the real estate Taxes or assessments applicable to the Real Property. 
 Section
3.11 Eminent Domain. Neither Seller nor SCI has received any notice of any condemnation proceeding or other proceedings in the nature of eminent domain (“Taking”) in connection with the Real Property and,
to the Knowledge of Seller and SCI, no Taking has been threatened. 
 Section 3.12 Inventory. Seller has good and
marketable title to the Inventories free and clear of any and all Liens (other than a customer’s rights in items being stored for such customer). The Inventory does not consist of any material amount of items that are obsolete or damaged or
items held on consignment. Neither Seller nor SCI has acquired or committed to acquire or produce Inventory for sale which is not of a quality usable in the ordinary course of business within a reasonable period of time and consistent with past
practice. 
 Section 3.13 Litigation. No Proceeding before any Governmental
Authority, mediator or arbitrator is pending or, to the Knowledge of Seller and SCI, threatened, involving Seller and/or SCI wherein a judgment, decree, order, settlement or other resolution would have a Material Adverse Effect, or which would
prevent the carrying out of this Agreement, declare unlawful the transactions 

  

 15 

 
contemplated by this Agreement, cause such transactions to be rescinded, or require Buyer to divest itself of any of the Acquired Assets or the Business. To
the Knowledge of Seller and SCI, no facts or circumstances or other events have occurred that can reasonably be expected to give rise to any such Proceeding. 
 Section 3.14 Court Orders and Decrees. There is not outstanding or, to the Knowledge of Seller and SCI, threatened any order, writ, injunction or decree of any Governmental Authority, mediator or
arbitrator against or affecting Seller or SCI, relating to any of the Acquired Assets or the Business. 
 Section 3.15 Trade
Names. The Location name set forth on Exhibit A constitutes the only trade name held for use or used by the Seller and/or SCI in connection with the Business and, other than such trade name, there are no
Trademarks that are material to the Business. Seller and/or SCI has the legal right to use the Location name set forth on Exhibit A, as used by Seller and/or SCI in connection with the Business, without the Consent of any other Person.

 Section 3.16 Preneed and Trust Accounts and Contracts. 
 (a) All monies paid to Seller or SCI for the benefit of the Business in respect of the Pre-/At-Need Contracts have been, and as of the
Closing will be, set aside and identified as set forth in Schedule 1.1(g). Each of Seller and SCI has complied with the terms and conditions of the Pre-/At-Need Contracts. Neither Seller nor SCI is in default or breach of any Pre-/At-Need
Contract. 
 (b) The amounts (including interest) held in trust in respect of each of the Pre-/At-Need Contracts, including,
without limitation, perpetual care funds, endowment care funds, extended care funds, and merchandise trust funds (collectively, the “Trust Funds”), are held in conformity with all applicable Laws. All of Seller’s and
SCI’s required contributions to, withdrawals from and investment and other uses of the Trust Funds have been made in accordance with all applicable Laws, and each of Seller and SCI will have paid as of the Closing (or will pay after Closing
when due), all commissions due and owing to commissioned sales people in respect of the Pre-/At-Need Contracts. Neither Seller nor SCI has Knowledge of any actual or alleged non-compliance on the part of Seller or SCI (or any Affiliate of Seller or
SCI) with respect to the Trust Funds. 
 (c) For those Pre-/At-Need Contracts that are funded by insurance or performance
bonds, Seller or SCI has purchased all such insurance policies and performance bonds 

  

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required to legally fund or secure all such Pre-/At-Need Contracts, and no future premiums or other amounts remain to be paid, except for those instances
where, pursuant to the terms of such insurance policies or performance bonds and in the ordinary course of business, the policies or performance bonds specify payment of premiums or other amounts over time. All such insurance policies and
performance bonds are fully identified on Schedule 1.1(g). 
 (d) All of the Trust Funds are interest bearing trust
accounts or other investment accounts that are permissible under applicable Laws. All of the Trust Funds are identified and described under Schedule 1.1(g), which Schedule also attaches copies of any and all trust agreements entered into
by either Seller or SCI and a list of the financial institutions described therein. 
 Section 3.17
Contracts. Except for the Assumed Contracts (copies of which have been delivered to Buyer), neither Seller nor SCI, nor any Affiliate of Seller or SCI, is a party to or bound by any material Contract
relating to the Acquired Assets or the Business. Except as disclosed on Schedule 3.17, all of the Assumed Contracts are in full force and effect, and there exists no default or breach thereunder by Seller or SCI or, to the Knowledge of either
Seller or SCI, other than with respect to any Pre-/At-Need Contracts, any other party thereto. Neither Seller nor SCI has received any notice (written or oral) indicating the intention of any party to any Assumed Contract to amend, modify, rescind
or terminate such Assumed Contract. All of the Assumed Contracts are in full force and effect and are enforceable against the Seller and/or SCI and any of their Affiliates that is a party thereto and, to the Knowledge of Seller and SCI, against all
other parties thereto in accordance with their terms and applicable Laws. 
 Section 3.18 Licenses and Permits. Except
as set forth on Schedule 3.18, either the Seller or SCI holds all of the Permits required to own, operate and maintain the Business under any applicable Law as currently conducted or proposed (by Seller and/or SCI) to be conducted
(“Existing Permits”), and all Existing Permits are, and as of immediately prior to the Closing will be, in full force and effect. To the Knowledge of Seller and SCI, except as set forth on Schedule 3.18, there are no
material restrictions on Buyer’s ability to replace or renew any of the Existing Permits. Each of 

  

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Seller and SCI is in compliance with all Existing Permits, except where the failure to be in compliance would not have a Material Adverse Effect. 

Section 3.19 Consents. Each of Seller and SCI has, or will have prior to the Closing, obtained, satisfied or
made all Consents (the “Required Consents”) that are required to be obtained, satisfied or made pursuant to any Laws, Permits, Assumed Contracts or other agreements by which Seller or SCI, or any of their properties or
business assets, including, without limitation, the Acquired Assets, are bound in connection with (a) the execution and delivery of this Agreement by Seller or SCI, or (b) the sale and transfer to Buyer of the Acquired Assets, including,
without limitation, the Assumed Contracts and, if transferable to Buyer under applicable Law, the Existing Permits. 
 Section 3.20
Compliance with Laws. The Business presently is conducted, and the Acquired Assets and their respective uses are, in compliance with all Laws applicable to them, including, without limitation, the funding of
or maintaining of all Trust Funds in compliance with applicable Laws or to the posting of performance bonds in lieu thereof, except where the failure to so comply would not have a Material Adverse Effect. Neither Seller nor SCI has received any
written notice of any administrative, civil or criminal investigation or audit by any Governmental Authority relating to, or which could result in a Material Adverse Effect. Neither Seller nor SCI have restricted customers from purchasing monuments
from outside vendors or restricted vendors from installing monuments at Floral Gardens and Floral Lawn Memorial Gardens. 
 Section 3.21
OSHA or ADA. There is no Proceeding pending with respect to Seller or SCI, and, to the Knowledge of Seller and SCI, no charge or claim has been made against Seller or SCI that has not been dismissed,
discharged or otherwise fully resolved, under the Occupational Safety and Health Act (“OSHA”) or the Americans with Disabilities Act (“ADA”) pertaining to the facilities and operations of the Business.

  

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 Section 3.22 Labor Relations. Neither Seller nor SCI is a party
to any collective bargaining or union Contract and neither the Seller nor SCI is aware of any current union organization effort with respect to employees of the Business. There are no pending or unresolved unfair labor practice complaints from or
with respect to any employees of the Business. Since December 31, 2005, neither Seller nor SCI has received any written notice of any strikes, slowdowns, work stoppages, lockouts or threats thereof, by or with respect to any employees of the
Business. Since December 31, 2005, neither Seller nor SCI has had an “employment loss” within the meaning of the WARN Act or any similar Law. 
 Section 3.23 Employees and Independent Contractors. Schedule 3.23 sets forth a list of all employees of the Business, together with (a) their titles or
responsibilities, (b) their salaries or wages during the 2005 calendar year, (c) their dates of hire, (d) any employment or severance agreements with them, and (e) any outstanding loans or advances made to them. Except as limited
by any employment Contracts listed in Schedule 3.23 and except for any limitations of general application which may be imposed under applicable employment Laws, either Seller or SCI has the right to terminate the employment of each employee
of the Business at will and without incurring any penalty or liability other than Retained Liabilities. Each of the Seller and SCI is in compliance with all Laws respecting employment practices, except where the failure to so comply would not have a
Material Adverse Effect. To the Knowledge of Seller and SCI, no employee of the Business has provided to Seller or SCI (or any Affiliate of Seller or SCI) written notice of such employee’s intent to terminate his or her employment with the
Business after the date hereof. 
 Section 3.24 No Brokers. Neither Seller nor SCI, nor any Person
acting on behalf of Seller or SCI, has agreed to pay to any Person any commission, finder’s or investment banking fee, or similar payment in connection with this Agreement or the transactions contemplated thereby, nor has 

  

 19 

 
Seller, SCI or any Person acting on behalf of Seller or SCI, taken any action on which a claim for any such payment could be based. 
 Section 3.25 Accounts Receivable. None of the Receivables have been sold and/or factored. All Receivables
arising since December 31, 2005, represent bona fide claims of Seller and SCI against debtors of the Business for sales made, services performed or other charges or valid consideration arising on or before the date hereof. All such Receivables
are valid and enforceable claims for payment consistent with past practices, without, to the Knowledge of Seller and SCI, setoff or counterclaim. 
 Section 3.26 Operations in Ordinary Course of Business. Since December 31, 2005, Seller and SCI have operated and conducted the Business in the ordinary and usual course consistent with past
practices. Since December 31, 2005, there has been no material adverse change in the financial condition, assets, liabilities, or operations of the Business, nor have any events occurred, nor to the Knowledge of Seller and SCI do there exist
any circumstances, which would constitute, either before or after the Closing, any such change. Without limiting the generality of the foregoing and except as set forth on Schedule 3.26, since December 31, 2005, neither the Seller nor
SCI has: 
 (a) sold, assigned, leased or transferred any of their assets, which are material to the Business singly or in the
aggregate, other than assets sold or disposed of in the ordinary course of business, consistent with past practice; 
 (b)
canceled, terminated, amended, modified or waived any material term of any Contract relating to the Business to which either of them is a party or by which either of them or any of their assets is bound providing for aggregate annual revenues to
Seller or SCI in excess of $25,000; 
 (c) (i) increased the base compensation payable or to become payable to any of its
employees or independent contractors, except for normal periodic increases in such base compensation in the ordinary course of business, consistent with past practice, (ii) increased the sales commission rate payable or to become payable to any
of its employees or independent contractors except in the ordinary course of business consistent with past practices (including, without limitation, past practices with respect to amounts and timing), (iii) granted, made or accrued any loan,
bonus, fee, incentive compensation (excluding sales commissions), service award or other like benefit, contingently or otherwise, to or for the 

  

 20 

 
benefit of any of its employees or independent contractors, except in the ordinary course of business consistent with past practices (including, without
limitation, past practices with respect to amounts and timing), or (iv) entered into any new employment, collective bargaining or consulting agreement or caused or suffered any written or oral termination, cancellation or amendment thereof
(except for Assumed Contracts or with respect to any employee at will without a written agreement); 
 (d) executed any lease
for real or personal property for the Business or incur any Liability therefor except as otherwise disclosed herein; 
 (e)
suffered any damage, destruction or loss (whether or not covered by insurance) affecting the Business or any assets used in the Business that exceeds $25,000 in any one instance or $100,000 in the aggregate; or 
 (f) mortgaged or pledged, or otherwise made or suffered any Lien (other than any Permitted Encumbrance) on, any material asset of the
Business or group of assets that are material in the aggregate to the Business. 
 Section 3.27 Investment Company Act.
Neither Seller nor SCI is, or has at any time been, an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended. 
 Section 3.28 Public Utility Holding Company Act. Neither Seller nor SCI is, or has at any time been, a “holding company,”
or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company,” within the meaning of the Public Utility
Holding Company Act of 1935, as amended. 
 Section 3.29 Compliance with Cemetery Laws. In connection with the ownership
and operation of the Business, each of Seller and SCI has complied in all material respects with all applicable Laws governing the operation of cemeteries, the provision of cemetery services and the sale of cemetery merchandise. Furthermore, with
respect to the ownership and operation of the Business, there are no pending or, to the Knowledge of Seller and SCI, threatened claims or suspensions against Seller and/or SCI, by any Person related to the operation of cemeteries, the provision of
cemetery services and the sale of cemetery merchandise. 
  

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 Section 3.30 Full Disclosure. None of the representations and
warranties made by Seller or SCI in this Agreement (including the Schedules hereto) or in any document delivered to Buyer by or on behalf of Seller or SCI pursuant to Section 7.1, contains any untrue statement of a material fact, or omits any
material fact necessary to make any of them, in light of the circumstances in which it was made, not misleading. 
 Section 3.31 No
Other Representations or Warranties. Except as expressly stated in this Agreement, Seller and SCI make no other representation or warranty of any kind whatsoever. 
 ARTICLE IV 
 Representations and Warranties of Buyer 
 Buyer hereby represents and warrants to Seller and SCI, both as of the date hereof and as of the Effective Time, as follows: 
 Section 4.1 Authority. 
 (a) Each of StoneMor LLC and Buyer LLC is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation. Buyer NQ Sub is a corporation duly
organized, validly existing and in good standing under the laws of the jurisdiction of its formation. The execution, delivery and performance of this Agreement by StoneMor LLC and each Buyer LLC and Buyer NQ Sub, have been duly authorized and
consented to by the Board of Managers or the Board of Directors of such Person (as the case may be), and no other or additional consent or authorization on the part of such Person is required in connection therewith. The consummation of the
transactions contemplated by this Agreement will not result in a breach, violation or default by StoneMor LLC, Buyer LLC or Buyer NQ Sub of or under any judgment, decree or Contract applicable to any of them except to the extent that any such
breach, violation or default would not reasonably be expected to have a material adverse effect on the ability of StoneMor LLC, Buyer LLC and Buyer NQ Sub to perform their obligations hereunder. 
 (b) Upon execution and delivery hereof, this Agreement shall constitute the valid and binding obligation of StoneMor LLC, Buyer LLC and
Buyer NQ Sub, enforceable against each of them in accordance with its terms. 
 Section 4.2 Intentionally Omitted.

  

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 Section 4.3 No Brokers. Neither Buyer, nor any Person acting on
behalf of Buyer, has agreed to pay a commission, finder’s or investment banking fee, or similar payment in connection with this Agreement or any matter related hereto to any Person, nor has any such Person taken any action on which a claim for
any such payment could be based. 
 Section 4.4 Knowledge of Seller Breach. None of the Buyer Representatives (as
defined below) have actual knowledge of a breach by Seller or SCI of any representation or warranty contained in Article III, or any covenant or agreement to be performed or complied with by Seller or SCI in accordance with this Agreement prior to
the Effective Time. For purposes of this Section 4.4, the term “Buyer Representative” means William R. Shane, Paul Waimberg, Frank Milles, Michael Stache, Gregg Strom, Alan Fisher, Ken Lee, Penny Casey and Tim Yost, and such persons
shall be deemed to have actual knowledge of any breach referred to in the preceding sentence of which any individual assigned by a third-party representative or advisor of Buyer to provide substantial services in connection with the transaction
contemplated hereby has actual knowledge. 
 Section 4.5 No Other Representations or Warranties. Except as expressly
stated in this Agreement, Buyer makes no other representation or warranty of any kind whatsoever. 
 ARTICLE V 
 Covenants 
 Section 5.1
Access to Business. From and after the date of this Agreement, Seller and SCI will give Buyer and its representatives full and free access to all properties, Contracts, books and records of the Business so that Buyer may have
full opportunity to make such investigation as it shall desire to make of the affairs of the Business, including, without limitation, the conduct of any environmental investigations or assessments, provided that (i) such investigation or
assessment shall not unreasonably interfere with the operations of the Business, and (ii) prior to Buyer or any of its representatives or contractors contacting the Location or Location personnel, Buyer shall first 

  

 23 

 
communicate with and receive approval from Michael Lehmann, which approval shall not be unreasonably withheld. Seller and SCI agree to furnish to
Buyer and its representatives all data and information concerning the Acquired Assets and the Business that may be reasonably requested by them to conduct a complete and thorough due diligence review of the Acquired Assets, the Business and the
employees of the Business. 
 Section 5.2 Conduct of Business Pending Closing. From and after the date of this Agreement
until the Closing, and except as otherwise permitted by this Agreement or as consented to by Buyer in writing, each of Seller and SCI covenant that: 
 (a) Seller and SCI will conduct the Business only in the ordinary course consistent with past practices, which shall include, without limitation, compliance in all material respects with all applicable Laws and the
maintenance in force of all insurance policies; 
 (b) Seller and SCI shall maintain the Acquired Assets in their current
state of repair, excepting normal wear and tear and use their commercially reasonable efforts to protect the goodwill of the Business and to maintain for the Business the current relationships with suppliers and customers of the Business and others
having business relations with the Business; 
 (c) Seller and SCI shall use their commercially reasonable efforts to ensure
that key employees and key independent contractors continue their association with the Business through the Closing Date; and 
 (d) Neither Seller nor SCI shall engage in any practice, take, fail to take, or omit any action, or enter into any transaction, (i) of the kind described in Section 3.26 or (ii) which would make any of the representations and
warranties in Article III not true. 
 Section 5.3 Consents and Licenses. Each of Seller and SCI
will use its commercially reasonable efforts to obtain, satisfy or make, prior to the Closing, all Required Consents. 
 Section 5.4
Buyer’s Trustee and Endowment Care and Pre-Need Trust Funds. Buyer shall, prior to Closing, (i) secure all licenses, permits and other governmental authorizations and approvals required by the State of Michigan as a
prerequisite to Buyer selling Pre-/At-Need Contracts or accepting funds paid by customers toward Pre-/At-Need Contracts with the Business; and (ii) select and formally designate a trustee or trustees (“Buyer’s
Trustee”) that is qualified under 

  

 24 

 
applicable Laws to receive all bank, trust or other funds or accounts, excluding insurance premium payments, containing amounts that have been received by
Seller or SCI prior to the Effective Time pursuant to Pre-/At-Need Contracts for pre-need cemetery merchandise and/or services to be provided by the Business (“Pre-Need Trust Funds”), or which are being held as endowment
care, perpetual care, extended care or similar trust funds (“Endowment Care Funds”), or which are being held as pre-construction trust funds (“Pre-construction Trust Funds”) (all herein collectively
the “Trust Funds”). At or prior to Closing, Buyer shall confirm in writing to Seller its compliance with the above requirements. On the Closing Date, all amounts held in the Trust Funds shall be transferred for safekeeping to
Buyer’s Trustee, provided that certain amounts shall be transferred to Buyer’s Trustee after Closing pursuant to Section 5.5. Buyer agrees that all such amounts will be held, administered and withdrawn in accordance with state and
federal law. 
 Section 5.5 Delivery of Trust Funds. 
 (a) Within the first five (5) business days following the Closing, Seller and SCI shall cause the trustees that hold the Trust Funds
(“Seller’s Trustees”) to deliver to Buyer’s Trustee, by wire transfer in accordance with the instructions from Buyer and/or Buyer’s Trustee, amounts from each of the various Trust Funds equal to approximately 90% of
the Closing Date balances thereof (the “Initial Trust Delivery”). 
 (b) For a period of
not more than 60 days after the Closing Date, Seller and SCI shall continue to make (i) deposits to the undelivered portion of the Trust Funds (the “Retained Trust Funds”) as legally and contractually required with
respect to payments upon Pre-/At-Need Contracts received by Seller and/or SCI after the Closing, and (ii) withdrawals from the Retained Trust Funds for legally and contractually allowed amounts with respect to Pre-/At-Need Contracts serviced by
Seller and/or SCI or other appropriate withdrawals, all in accordance with Seller’s and/or SCI’s historical practices in those regards and consistent with applicable Laws. 
 (c) Also during the 60-day period referenced in (b) above, Seller and/or SCI shall cause to be computed and retained/withdrawn from
the Retained Trust Funds (for payment to the applicable Taxing Authorities) such Taxes as are due on income earned (and recognized) by the Pre-Need Trust Funds and the Endowment Care Funds prior to their delivery to Buyer’s Trustee. 

(d) Notwithstanding anything to the contrary, but except as contemplated/allowed in (c) preceding, after the Closing, neither
Seller nor SCI shall be entitled to receive any 

  

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amounts from, or with respect to, the Endowment Care Funds or the Pre-construction Trust Funds. 
 (e) On or before the 60th day following Closing, Seller and/or SCI shall cause to be delivered to Buyer’s Trustee, by wire transfer in accordance with instructions from Buyer and/or Buyer’s Trustee, the remaining Trust Funds (the
“Final Trust Delivery”, and herein together with the Initial Trust Delivery, the “Post-Closing Trust Delivery”), and shall contemporaneously provide to StoneMor a written reconciliation of the amounts
making up the Post-Closing Trust Delivery, including designation of the specific Pre-/At-Need Contracts to which the various delivered amounts are attributable. From and after the date of delivery of the Final Trust Delivery, neither Seller nor SCI
shall be entitled to any further withdrawals from the Trust Funds, and any further deposits made by Seller and/or SCI to the Trust Funds shall not be considered as additions to the Post-Closing Trust Delivery for other purposes thereof. 

(f) For a period of no more than 60 days after the Closing Date, Buyer shall permit Seller and SCI reasonable access to the books and
records of the Business as shall be reasonably necessary for Seller and SCI to properly make the Post-Closing withdrawals and deposits to the Retained Trust Funds as are contemplated in (b) above. 
 Section 5.6 Cooperation Regarding Publicity. Neither Seller, SCI nor Buyer shall make any press release or other public announcement
or filing regarding the transactions contemplated herein without prior consultation and coordination with the other party(ies) hereto, so that the business interests of all are properly served. Notwithstanding the foregoing or anything else to the
contrary, Seller, SCI and each of their respective Affiliates on the one hand, and Buyer and its Affiliates on the other hand, may make one or more public announcements or filings in connection with the transactions contemplated by this Agreement to
the extent that such announcement or filing is reasonably required for the party making such announcement or filing (or any of such party’s Affiliates) to avoid Liability under applicable Laws; provided, however, that the party making
such announcement or filing shall notify the other party(ies) hereto, if reasonably possible, at least three business days prior to making such filing. 
 Section 5.7 Title to Real Estate. Buyer has obtained (and provided copies to Seller and SCI), one-half at Buyer’s expense and one-half at Seller’s expense, commitments for title
insurance in an aggregate amount equal to the portion of the Closing Purchase Price deemed allocated to the 

  

 26 

 
Real Property as reflected on the Statement of Allocation from Fidelity National Title Company (the “Title Company”), showing title
to the Owned Real Property to be held in fee simple and good, marketable and vested in Seller subject to the liens, claims and encumbrances, easements, rights-of-way, reservations, restrictions, outstanding mineral interests and other matters
affecting the Real Property or the title thereto identified on Schedule 3.5 as Permitted Encumbrances. At Closing or soon thereafter as practicable, the Title Company shall issue, one-half at Buyer’s expense and one-half at Seller’s
expense, its title insurance policy(ies) consistent with its previous title commitment(s) approved by Buyer. 
 Section 5.8
Inspections. Buyer, Seller and SCI acknowledge that Buyer has performed and obtained inspections and surveys of the Real Property at Buyer’s expense. 
 Section 5.9 Intentionally omitted. 
 Section 5.10 Satisfaction of Pre-Closing Covenants. Seller, SCI and Buyer shall use their commercially reasonable efforts to satisfy at or prior to Closing all of the
covenants and agreements to be performed or complied with by each of them, respectively, pursuant to this Agreement at or prior to Closing. 
 Section 5.11 Post Closing Access. 
 (a) For a period of eight (8) years from the Closing
Date, Seller and SCI shall retain and make available to Buyer for any lawful purpose, upon reasonable notice and at reasonable times, Seller’s and SCI’s Tax records, general ledger and other books of original entry, and original payroll
records with respect to periods prior to the Effective Time. If either Seller or SCI ceases to conduct operations prior to the end of such eight-year period, Seller or SCI, as applicable, shall give Buyer 60 days’ prior written notice and an
opportunity to accept (without charge to Buyer) from Seller or SCI, as applicable, a transfer of such books and records, and if Buyer elects not to accept such books and records, the Seller’s or SCI’s obligations under this paragraph
(a) shall cease. 
 (b) For a period of eight (8) years from the Closing Date, Buyer shall retain and make available
to Seller and SCI for any lawful purpose, upon reasonable notice and at reasonable times, the books and records of the Business with respect to periods prior to the Effective Time and to actions and events after the Effective Time, to the extent
they relate to periods prior to the Effective Time. If Buyer ceases to conduct operations prior to the end of 

  

 27 

 
such eight-year period, Buyer shall give Seller and SCI 60 days’ prior written notice and an opportunity to accept (without charge to Seller or SCI)
from Buyer a transfer of such books and records from Buyer, and if Seller and SCI elect not to accept such books and records, Buyer’s obligations under this paragraph (b) shall cease. 
 (c) After the Closing, for a period of 30 days, Buyer shall provide and allow each of Seller and SCI reasonable access, at such times as
are mutually agreed upon in advance by Seller and SCI, as applicable, and Buyer, to the facilities in which the Business is conducted as reasonably necessary to collect and remove the Excluded Assets; provided, however, Buyer’s employees
shall not be obligated to physically assist in the collection and removal of Excluded Assets and in no event shall such collection and removal of Excluded Assets unreasonably disrupt or interfere with the operations of the Business, and provided,
further that, Seller and SCI, jointly and severally, shall fully indemnify Buyer for any and all Losses arising from or relating to Seller’s or SCI’s collection and removal of the Excluded Assets. 
 Section 5.12 Tax Matters. 
 (a) Seller and SCI shall be responsible for preparing and filing, at Seller’s and SCI’s expense, as applicable, within the times and in the manner prescribed by law (subject, however, to filing under any
extension) all Tax Returns of Seller and SCI, as applicable, for all Tax periods. 
 (b) Seller, SCI and Buyer shall cooperate
fully, as and to the extent reasonably requested by the other party, in connection with any Tax proceeding relating to: (i) the Acquired Assets; (ii) the Business; or (iii) the transactions contemplated by this Agreement. Such
cooperation shall include the retention and (upon the other party’s request) the provision of records and information which are reasonably relevant to any Tax audit, litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any material provided hereunder. Seller and SCI agree to retain all books and records with respect to Tax matters pertinent to Seller relating to any taxable period beginning
before the Closing Date until the longer of (x) sixty (60) days after the expiration of the statute of limitations of the respective taxable periods or (y) eight years, and to abide by all record retention agreements entered into with
any Taxing Authority. 
 (c) Seller, SCI and Buyer agree, upon request, to use their commercially reasonable efforts to obtain
any ruling, certificate or other document from any Taxing Authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed solely with respect to the transactions contemplated by this Agreement.

 Section 5.13 Employees. 
 (a) Buyer may, but shall not be obligated to, offer employment to any employees of the Business on such terms and conditions as Buyer may
determine. Seller and SCI shall retain all obligations and liabilities arising on or prior to the Closing in respect of their current and former employees under any and all employee benefit plans, policies or practices of each of Seller or SCI or
any of their Affiliates and applicable Laws. Prior to the Closing, Buyer shall notify the Seller and SCI, as applicable, of those employees of the Business to whom Buyer expects to make an offer of employment. Buyer shall not assume or otherwise be

  

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responsible for any obligation or liability of employee benefit plans, policies or practices of the Seller or SCI or any of their Affiliates, or from any
employee’s employment with or termination of employment by Seller or SCI or any Affiliate of Seller or SCI at or prior to the Closing. 
 (b) Each of Seller and SCI (or any of their Affiliates), as applicable, shall be responsible for providing health benefit continuation coverage under Section 162(k) and Section 4980B of the Code with respect
to (i) any former employee of Seller or SCI (or any of their Affiliates) and any other qualified beneficiary under any group health plan who as of the Closing is receiving or is eligible to receive such continuation coverage, and (ii) any
employee of the Seller or SCI (or any of their Affiliates) and any qualified beneficiary with respect to such employee. 
 (c)
Seller and SCI shall be responsible for, and shall comply with, any and all WARN Act obligations relating to periods prior to Closing or associated with, or incurred as a result of, the transactions contemplated by this Agreement. 
 Section 5.14 No Solicitation; Notification. 
 (a) No Solicitation. Prior to Closing, neither Seller nor SCI shall, and Seller and SCI each shall cause their representatives
(including, without limitation, investment bankers, attorneys and accountants), employees, directors, members, partners and other Affiliates not to, directly or indirectly, enter into, solicit, initiate, conduct or continue any discussions or
negotiations with, or encourage or respond to any inquiries or proposals by, or participate in any negotiations with, or provide any information to, or otherwise cooperate in any other way with, any Person other than Buyer and its representatives
concerning any sale of all or any portion of the assets of the Business of, or of any shares of capital stock or other units of equity interests in, either Seller or SCI, or any merger, consolidation, recapitalization, liquidation, dissolution or
similar transaction involving either Seller or SCI that encompasses any portion of the Business or the Acquired Assets (each such transaction being referred to herein as a “Proposed Acquisition Transaction”). Each of Seller
and SCI hereby represents and warrants that it is not now engaged in discussions or negotiations with any party other than Buyer with respect to any Proposed Acquisition Transaction. Neither Seller nor SCI shall, and each of Seller and SCI shall
cause its representatives (including, without limitation, investment bankers, attorneys and accountants), employees, directors, members, partners and other Affiliates not to, agree to release any third party from, or waive any provision of, any
confidentiality or standstill agreement that relates in any way to all or a portion of the Business. 
 (b)
Notification. Seller and SCI each shall (i) immediately notify Buyer if any written offer, inquiry or proposal is made or given to Seller or SCI (or any of their Affiliates) with respect to any Proposed Acquisition Transaction, and
(ii) promptly provide Buyer with a copy of any such offer, proposal or inquiry; provided, however, that no such notice hereunder shall relieve Seller or SCI of its respective obligations under Section 5.14(a). 
 Section 5.15 Confidentiality. The parties acknowledge that the transactions described herein are of a
confidential nature and shall not be disclosed except to consultants, advisors, lenders 

  

 29 

 
or other financial sources and Affiliates, or as required by Law, until such time as the parties make a public announcement regarding the transaction as
provided hereunder. In connection with the negotiation of this Agreement, the preparation for the consummation of the transactions contemplated hereby, and the performance of obligations hereunder, each party acknowledges that it has had, and will
continue to have, access to confidential information relating to the other party. Each party shall treat such information as confidential, preserve the confidentiality thereof and not disclose such information, except to its advisors, consultants
and other representatives and to Affiliates, or as required by Law, in connection with the transactions contemplated hereby. Notwithstanding the foregoing, Buyer may disclose this Agreement and the information and data in Buyer’s possession in
connection herewith to its lenders, but shall advise them of the requirement to maintain the confidentiality of such information and data. This Section 5.15 shall not apply to any information that is (a) in the public domain through no
fault on the part of the receiving party hereto or any of their Affiliates or the employees, agents or representatives of such party or any of its Affiliates, or (b) learned or discovered through any independent source that is not obligated to
maintain such information as confidential. Because of the difficulty of measuring economic loss as a result of a breach of the foregoing covenants in this Section 5.15, and because of the immediate and irreparable damage that would be caused
for which there may be no other adequate remedy at law, the parties hereto agree that, in the event of a breach by any of them of the foregoing covenants in this Section 5.15, such covenants may be enforced against them by injunction or
restraining order. 
 Section 5.16 Cooperation Regarding Financial Information. After the Closing, without limiting the
generality of any other provision of this Agreement, and without further consideration, Seller and SCI shall, and shall cause their respective Affiliates to, provide reasonable cooperation (including reasonable access to Seller’s and SCI’s
files, records and employees) to Buyer and its agents and representatives (including Buyer’s external auditors) in connection with the preparation of 

  

 30 

 
financial statements and financial information and disclosures relating to the Business and the Acquired Assets, including, without limitation, disclosures
required under Items 2.01 and 9.01 of Form 8-K adopted by the Securities and Exchange Commission, including all requirements for pro forma financial information. 
 Section 5.17 Further Assurances. From time to time after the Closing, at the request of Buyer, and without further consideration but at no cost to Seller or SCI, Seller and SCI will execute and
deliver such additional documents and will take such other actions as Buyer reasonably may request to more fully and absolutely convey, assign, transfer, deliver and vest in Buyer title to the Acquired Assets and the Business and to otherwise carry
out the terms of this Agreement. 
 Section 5.18 Notice of Breaches. Each of the Seller and SCI
shall give prompt notice to Buyer of (a) the occurrence, or failure to occur, of any event, which occurrence or failure causes or would reasonably be expected to cause any representation or warranty of Seller or SCI contained in this Agreement
or in any Exhibit or Schedule hereto to be untrue or inaccurate, (b) any Material Adverse Effect, and (c) any failure of Seller or SCI or any of their respective Affiliates, shareholders or representatives to comply with, perform or
satisfy any covenant, condition or agreement to be complied with, performed by or satisfied by them under this Agreement or any Exhibit or Schedule hereto; and if after receiving such disclosure Buyer shall elect to proceed with the Closing, such
disclosure shall be deemed to cure, and shall relieve Seller and SCI of any Liability with respect to any breach of, or failure to satisfy, any representation, warranty, covenant, condition or agreement hereunder to the extent such breach or failure
was fully and accurately described in such disclosure. 
 ARTICLE VI 
 Conditions Precedent to Closing 
 Section 6.1 Conditions to
Seller and SCI Closing. The obligations of Seller and SCI to consummate the transactions contemplated by this Agreement are subject to the satisfaction on or 

  

 31 

 
before the Closing of the following conditions, any one or more of which may be waived by Seller and SCI at their option: 
 (a) the representations and warranties of Buyer contained in this Agreement shall be true and correct, both on the date of this Agreement
and at and as of the Closing, except for representations or warranties made as of some other specified date, which as of the Closing shall remain true and correct as of such specified date; 
 (b) Buyer shall have discharged, performed or complied with, in all material respects, all covenants and agreements contemplated by this
Agreement to be performed or complied with by Buyer at or prior to the Closing; and 
 (c) Buyer shall have delivered, or
caused to be delivered, to Seller and SCI each of the documents required by Section 7.2. and 
 (d) The Dignity II and
III Transaction and the Hawes Transaction shall have closed or closing is contemplated in the near term. 
 Section 6.2 Conditions
to Buyer Closing. The obligations of Buyer to consummate the transactions contemplated by this Agreement are subject to the satisfaction on or before the Closing of the following conditions, any one or more of which
may be waived by Buyer at its option: 
 (a) the representations and warranties of Seller and SCI contained in this Agreement
shall be true and correct, both on the date of this Agreement and at and as of the Closing, except for representations or warranties made as of some other specified date, which as of the Closing shall remain true and correct as of such specified
date; 
 (b) Seller and SCI shall have discharged, performed or complied with, in all material respects, all covenants and
agreements contemplated by this Agreement to be performed or complied with by Seller and/or SCI at or prior to the Closing; 
 (c) Seller and SCI shall have delivered, or caused to be delivered, to Buyer each of the documents required by Section 7.1; 
 (d) Buyer shall have obtained financing for the cash portion of the Closing Purchase Price on terms satisfactory to Buyer in Buyer’s reasonable discretion; 
 (e) There shall have been no material adverse change in the condition (financial, physical or otherwise), assets, commercial
relationships, business or operations of the Business or the Acquired Assets from and after December 31, 2005; 
 (f) No
Law, order or judgment shall have been enacted, entered, issued or promulgated by any Governmental Authority, arbitrator or mediator, which challenges, or seeks to prohibit, restrict or enjoin the consummation of the transactions contemplated
hereby, nor shall there be pending or threatened, any action, suit or proceeding by or before any 

  

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Governmental Authority, arbitrator or mediator, challenging any of the transactions contemplated by this Agreement, seeking monetary relief by reason of the
consummation of such transactions or seeking to effect any material divestiture or to revoke or suspend any material Contract or Permit of the Business by reason of any or all of the transactions contemplated by this Agreement; 
 (g) Buyer shall have obtained all required Permits for the operation of the Business; 
 (h) All Required Consents shall have been made, obtained or given, including without limitation, those of Buyer’s existing lenders,
and such Consents shall be in full force and effect; 
 (i) Seller and SCI shall have terminated the Management Agreement;

 (j) The Dignity II and III Transaction and the Hawes Transaction shall have closed or closing is contemplated in the near
term; and 
 (k) Buyer shall have received written assurance from its auditors that audited financial statements for each of
the Seller and SCI Michigan (covering only the portions of the Business owned and operated by each) sufficient, in the opinion of Deloitte & Touche, to permit StoneMor Partners L.P. to satisfy its disclosure obligations under Items 2.01 and
9.01 of Form 8-K adopted by the Securities and Exchange Commission, including all requirements for pro forma financial information, will be received within thirty (30) days after the date of the Closing. 
 ARTICLE VII 
 Closing Deliveries

 Section 7.1 Seller’s and SCI’s Closing Deliveries. At the Closing, Seller and SCI will deliver to
Buyer the following documents, duly executed as required, and each in form and substance reasonably acceptable to Buyer and its counsel: 
 (a) motor vehicle transfer/tax forms transferring the automobiles comprised in the Acquired Assets to Buyer, free and clear of all Liens (one for each automobile) and duly endorsed certificates of title for the
automobiles evidencing that title to such vehicles are held in Buyer and are free and clear of all Liens (one for each automobile); provided, however, that as to all such vehicles which are covered by leases from Wheels, Inc., as
referenced above, Buyer recognizes that Wheels, Inc. will cause new certificates of title to be issued and delivered to Buyer after Closing according to the standard procedures of the applicable states regarding such matters; 
 (b) Intentionally Omitted; 
  

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 (c) a bill of sale conveying the applicable Acquired Assets to Buyer, in form and
substance reasonably acceptable to Buyer; 
 (d) an Assignment and Assumption Agreement assigning to Buyer all of the Assumed
Contracts; 
 (e) an assignment agreement assigning to Buyer (and/or to Buyer’s Trustee, as appropriate), all Trust
Funds, insurance policies and Receivables related to the Pre-/At-Need Contracts (other than those specified in Section 5.5); 
 (f) a certificate of Seller and SCI, to the effect that the conditions set forth in Sections 6.2(a), (b) and (f) hereof have been satisfied; 
 (g) a certificate of each of Seller and SCI to the effect that Seller or SCI, as applicable, is not a foreign person within the meaning of
Section 1445 of the Code (or any comparable law); 
 (h) Special Warranty Deeds conveying to Buyer title in fee simple to
the Owned Real Property; 
 (i) fully executed counterparts of any and all required transfer tax forms; 
 (j) such title affidavits, opinions and indemnities as may be requested by the Title Company to issue the policy to Buyer; 
 (k) all other bills of sale, deeds, leases, transfers, assignments, acts, things and assurances as may be required in the reasonable
opinion of Buyer for more perfectly and absolutely assigning, transferring, conveying, assuring to and vesting in Buyer title to the Acquired Assets free and clear of all Liens; 
 (l) copies of all Required Consents, duly executed by the Person from whom consent is required to be obtained; 
 (m) written evidence reasonably satisfactory to Buyer that the Management Agreement and any other related relationship between SCI
(including its Affiliates) and Seller related to the Locations has been terminated; and 
 (n) such other documents as may be
reasonably required to consummate the transaction contemplated hereunder. 
 Section 7.2 Buyer’s Closing
Deliveries. At the Closing, Buyer will deliver to Seller and SCI the following: 
 (a) in the form and manner
specified in Section 1.3 hereof, the Closing Purchase Price, as adjusted pursuant to this Agreement; 
 (b)
Intentionally Omitted; 
  

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 (c) a certificate of Buyer, signed by an executive officer thereof, to the effect that
the conditions set forth in Sections 6.1(a) and (b) hereof have been satisfied; and 
 (d) such other documents as may be
reasonably required to consummate the transaction contemplated hereunder. 
 ARTICLE VIII 
 Survival of Representations, Warranties and Covenants; Indemnification; Enforcement of Agreement 
 Section 8.1 Nature of Representations. For purposes of this Agreement, the contents of all Exhibits, certificates, Schedules, and
other items incorporated herein by reference shall, in addition to the representations, warranties and covenants made in this Agreement, constitute representations, warranties and covenants made in this Agreement by Seller, SCI or Buyer, as the case
may be. 
 Section 8.2 Survival of Representations, Warranties and Covenants. The representations, warranties and
covenants of the parties made in this Agreement shall survive the Closing, without regard to any investigation by the parties with respect thereto, as follows: 
 (a) The representations and warranties set out in Sections 3.1 (Organization, Standing; Authorization; Capacity)), 3.3 (Tax
Matters), 3.5(a) (Title to Acquired Assets), 3.10 (Real Estate Taxes), 3.16(b) (Preneed and Trust Accounts and Contracts), 3.24 (No Brokers) and 4.1 (Authority) (claims with respect to any of the foregoing
representations and warranties referred to herein as “Special Claims”), and the indemnification obligations of the parties with respect to breaches of such representations and warranties, shall survive for a period equal to
the statute of limitations pertaining thereto; 
 (b) All other representations and warranties made in this Agreement, and the
indemnification obligations of the parties with respect to breaches of such representations and warranties, shall survive for a period of two (2) years after the Closing; 
 (c) Any claims, actions or suits that either the Seller and/or SCI, on the one hand, or the Buyer, on the other hand, may have against the
other that arise from any actual fraud on the part of such other party in connection with this Agreement or the transactions contemplated hereunder, shall continue in full force and effect without limitation; 
 (d) All covenants and agreements made in this Agreement, and the indemnification obligations of the parties with respect to breaches of
such covenants and agreements, shall survive for a period equal to the statute of limitations or the period of time specified herein for a particular covenant or agreement; provided, however that the covenants 

  

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contained in Section 5.17 (Further Assurances) and the indemnification obligations of the parties with respect to breaches thereof, shall survive
the Closing indefinitely; and 
 (e) Notwithstanding the foregoing or anything else to the contrary, if any claim or
proceeding is to be made or brought by an Indemnitee (as defined in Section 8.8) within the applicable time period set forth above in this Section 8.2, such claim, and the representation, warranty and/or covenant alleged to have been
breached in such claim or proceeding, and all indemnification obligations of the parties with respect thereto, shall survive until the final resolution of such claim by settlement, arbitration, litigation or otherwise. 
 Section 8.3 Indemnification by Seller and SCI. 
 (a) Seller and SCI, jointly and severally, agree to indemnify and hold each Indemnitee (as defined in Section 8.8), harmless from all
Losses incurred, suffered or paid, directly or indirectly, as a result of or arising out of: 
 (i) any breach or default in
the performance by Seller or SCI of any covenant or agreement of Seller or SCI contained in this Agreement or any related document executed pursuant hereto; 
 (ii) any breach of warranty or inaccurate or erroneous representation made by Seller or SCI herein (except to the extent that a Buyer
Representative had actual knowledge thereof in breach of Section 4.4); 
 (iii) any Retained Liabilities; 
 (iv) any Taxes of Seller or SCI, including, without limitation, (A) Transfer Taxes; (B) the portion of real and personal
property Taxes for which Seller or SCI is liable for pursuant to Section 1.7.; (C) Taxes on income earned (and recognized) by the Pre-Need Trust Funds and the Endowment Care Funds prior to delivery thereof to Buyer’s Trustee; and
(D) Taxes payable by any trust (as an independent taxpayer entity) of or relating to any Seller or SCI or any Affiliate of any Seller or SCI and to any or all of the Business, including, without limitation, Taxes relating to or arising from
income earned (and recognized) by the Pre-Need Trust Funds and the Endowment Care Funds prior to the delivery thereof to Buyer’s Trustee; and 
 (v) any unpaid Taxes of any Person including under United States Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law) as a transferee or successor, by Contract or
otherwise. 
 (b) Notwithstanding anything herein to the contrary, Buyer shall have no claim for indemnification hereunder
until the total amount of all Losses incurred which would otherwise be subject to indemnification hereunder exceeds $20,000, and then only to the extent of such excess, but in no event shall the aggregate amount of all Losses subject to
indemnification under this Section 8.3 exceed the Closing Purchase Price; provided, however, that the amounts set forth in this Section 8.3(b) shall not apply to any Losses resulting from or arising out of, directly or indirectly,
(i) any Special Claims, (ii) claims under Sections 8.3(a)(i), 8.3(a)(iii) (other than the Retained Liabilities identified in Section 1.5(b)(vii)), 

  

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8.3(a)(iv) or 8.3(a)(v) or (iii) claims arising from any actual fraud on the part of Seller and/or SCI, as to each of which Seller and SCI shall have
liability for the entire amount of such Loss without any limitation; and 
 (c) Except as provided in Section 8.7, the
indemnification obligations of Seller and SCI hereunder shall be exclusive remedy of Buyer with respect to any matter subject to indemnification hereunder. 
 (d) Seller and SCI will be entitled to receive as a credit against any indemnification amount owing to Buyer hereunder an amount equal to the net proceeds of any insurance policy actually received by Buyer for any
Loss for which Seller and/or SCI agreed to indemnify Buyer under this Section 8.3. 
 Section 8.4 Indemnification by
Buyer. 
 (a) Buyer agrees to indemnify and hold each Indemnitee (as defined in Section 8.8) harmless from
all Losses incurred, suffered or paid, directly or indirectly, as a result of or arising out of: 
 (i) any breach or default
in the performance by Buyer of any covenant or agreement of Buyer contained in this Agreement or any related document executed pursuant hereto; 
 (ii) any breach of warranty or inaccurate or erroneous representation made by Buyer herein (except to the extent that Seller or SCI had actual knowledge thereof prior to the Closing); and 
 (iii) the failure of Buyer to fully pay and discharge as and when same are due the Assumed Liabilities or any of the obligations,
liabilities and/or duties relating to or arising from the Business from and after the Effective Time. 
 (b) Except as
provided in Section 8.7, the indemnification obligations of Buyer hereunder shall be exclusive remedy of Seller and SCI with respect to any matter subject to indemnification hereunder. 
 (c) Buyer will be entitled to receive as a credit against any indemnification amount owed to Seller or SCI hereunder an amount equal to
the net proceeds of any insurance policy actually received by Seller or SCI for a Loss for which the Buyer agreed to indemnify Seller or SCI under this Section 8.4. 
 Section 8.5 Defense of Claims; Payment. 
 (a) Any Indemnitee seeking
indemnification with respect to any actual or alleged Loss shall give notice to the applicable Indemnitor within the applicable survival period set forth in Section 8.2. If any claim, suit, demand or action is asserted or threatened by a third
party (“Claim”) after the Closing Date for which an Indemnitor may be liable under the terms of Article VIII, then the Indemnitee shall notify the Indemnitor within thirty (30) days after such Claim is known to the
Indemnitee (provided, however, that failure to provide such notice 

  

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will not affect the Indemnitee’s rights to indemnity hereunder from Indemnitor, unless the Indemnitee can show actual material prejudice resulting from
such failure and then only to the extent of such actual material prejudice) and shall give the Indemnitor a reasonable opportunity: (i) to take part in any examination of any books and records; (ii) to conduct any proceedings or
negotiations in connection therewith and necessary or appropriate to defend the Indemnitee; (iii) to take all other required steps or proceedings to settle or defend any such Claim; and (iv) to employ counsel to contest any such Claim in
the name of the Indemnitee or otherwise (except as set forth below in Section 8.5(b)). 
 (b) If the Indemnitor intends
to assume the defense of such Claim, it shall give written notice of such intention to the Indemnitee within 15 days after Indemnitor first receives written notice of such Claim, whereupon Indemnitee shall permit, and Indemnitor shall assume, the
defense of any such Claim, through counsel reasonably satisfactory to the Indemnitee. Notwithstanding the foregoing, the Indemnitee may participate in such defense of such Claim (with one or more counsel of its own choice) at its own expense,
provided, however, that if the parties to any such Claim (including any impleaded parties) include both the Indemnitor and the Indemnitee, and the Indemnitor shall have been advised in writing by counsel for the Indemnitee that there
may be one or more defenses available to the Indemnitee that are not available to the Indemnitor or legal conflicts of interest pursuant to applicable rules of professional conduct between the Indemnitor and the Indemnitee, the Indemnitor shall not
have the right to assume the defense of such Claim on behalf of the Indemnitee and the fees and expenses of one such separate counsel employed by the Indemnitee shall be at the expense of the Indemnitor. 
 (c) If the Indemnitor fails to assume the defense of any Claim within 15 days after Indemnitor first receives written notice of such
Claim, the Indemnitee may defend against such Claim in such manner as it may deem appropriate (provided that the Indemnitor may participate in such defense at its own expense) and a recovery against the Indemnitee in such Claim for damages suffered
by it in good faith, shall be conclusive in its favor against the Indemnitor. 
 (d) The Indemnitor shall not, without the
written consent of the Indemnitee, settle or compromise any Claim or consent to the entry of any judgment with respect thereto which does not include, as an unconditional term thereof, the giving to the Indemnitee a release by all other participants
from all liability in respect of such Claim. Unless the Indemnitor shall have elected not to assume the defense of any claim subject to Article VIII or, after reasonable written notice of any Claim that is subject to the indemnification provisions
of this Article VIII shall have failed to assume or participate in the defense thereof, the Indemnitee may not settle or compromise such Claim without the written consent of the Indemnitor, such consent not to be unreasonably withheld. 

(e) Upon determination of the amount due to an Indemnitee (“Indemnification Amount”) in connection with any
matter for which indemnification is sought under this Article VIII (“Indemnification Matter”) (whether by agreement between the Indemnitor and the Indemnitee or after a settlement agreement is executed or a final judgment or
order is rendered by an arbitrator or court of competent jurisdiction with respect to the Indemnification Matter), the Indemnitor shall promptly (and in any event, not later than 10 days after such determination) pay the Indemnification Amount, in
cash, to the Indemnitee. 

  

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Any Indemnification Amount that is not paid in full within 10 days after final determination of the Indemnification Amount as set forth above, such unpaid
amount shall thereafter accrue interest through the date of payment at the prime rate as reported in The Wall Street Journal, Eastern Edition for the date of such final determination. 
 Section 8.6 Dispute Resolution. 
 (a) Except as provided in Section 8.6(g), any and all disputes among the parties to this Agreement (defined for the purpose of this provision to include their respective officers, directors, managers, members,
partners, shareholders, agents and/or other Affiliates) arising out of or in connection with the negotiation, execution, interpretation, performance or nonperformance of this Agreement and the transactions contemplated herein shall be solely and
finally settled by arbitration, which shall be conducted in such city in Michigan as the parties shall mutually agree, or if they are unable to agree, in Wilmington, Delaware, by a single arbitrator selected by the parties. The arbitrator shall be a
lawyer familiar with business transactions of the type contemplated in this Agreement who shall not have been previously employed by or affiliated with any of the parties hereto. If the parties fail to agree on the arbitrator within thirty
(30) days of the date one of them invokes this arbitration provision, either party may apply to the American Arbitration Association to make the appointment. 
 (b) The parties hereby renounce all recourse to litigation and agree that the award of the arbitrator shall be final and subject to no
judicial review. The arbitrator shall conduct the proceedings pursuant to the Commercial Arbitration Rules of the American Arbitration Association, as now or hereafter amended (the “Rules”). 
 (c) The arbitrator shall decide the issues submitted (i) in accordance with the provisions and commercial purposes of this Agreement,
and (ii) with all substantive questions of Law determined under the Laws of the State of Delaware (without regard to its principles of conflicts of laws). The arbitrator shall promptly hear and determine (after giving the parties due notice and
a reasonable opportunity to be heard) the issues submitted and shall render a decision in writing within six (6) months after the appointment of the arbitrator. No fees shall be paid to the arbitrator with respect to services rendered by the
arbitrator after the elapse of six (6) months after the appointment of the arbitrator. 
 (d) The parties agree to
facilitate the arbitration by (i) conducting arbitration hearings to the greatest extent possible on successive days, and (ii) observing strictly the time periods established by the Rules or by the arbitrator for submission of evidence or
briefs. 
 (e) The parties shall share equally the fees and expenses of the arbitrator. 
 (f) Judgment on the award of the arbitrator may be entered in any court having jurisdiction over the party against which enforcement of
the award is being sought and the parties hereby irrevocably consent to the jurisdiction of any such court for the purpose of enforcing any such award. 
 (g) The parties hereto agree that the provisions of this Section 8.6 shall not be construed to prohibit any party from obtaining, in the proper case, specific performance or 

  

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injunctive relief in any court of competent jurisdiction with respect to the enforcement of any covenant or agreement of another party to this Agreement as
provided herein. 
 Section 8.7 Enforcement of Agreement. Each party hereto acknowledges that irreparable damage would
result if this Agreement is not specifically enforced. Therefore, the covenants, agreements, rights and obligations of the parties under the Agreement, including, without limitation, their respective rights and obligations to sell and purchase the
Acquired Assets and the Business and the rights and obligations of the parties under Articles V, VIII and X, shall be enforceable by a decree of specific performance issued by any court of competent jurisdiction, and appropriate injunctive relief
may be applied for and granted in connection therewith. Each party hereto agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to
waive the defense that a remedy at law may be adequate in any action for specific performance hereunder. 
 Section 8.8
Definitions. 
 (a) In the case of a claim of indemnification brought pursuant to Section 8.3,
“Indemnitee” shall mean Buyer and Buyer’s Affiliates and the directors, officers, partners, members, managers, employees, successors and assigns of Buyer or any of its Affiliates, and in the case of a claim of
indemnification brought pursuant to 8.4, it shall mean each of Seller and SCI and their respective Affiliates and the directors, officers, partners, members, managers, employees, successors and assigns of Seller or SCI or any of their respective
Affiliates. 
 (b) In the case of a claim of indemnification brought pursuant to Section 8.3,
“Indemnitor” shall mean Seller and SCI, and in the case of a claim of indemnification brought pursuant to Section 8.4, it shall mean Buyer. 
 Section 8.9 Cooperation. If Buyer or Seller or SCI submits to an insurance carrier for any of their respective insurance policies, a claim arising from or relating to a claim or action by a third
party which may otherwise be subject to indemnification pursuant to Section 8.3 or Section 8.4, as the case may be, and if such insurance carrier agrees to defend such claim, then the defense of such claim shall be tendered to such
insurance carrier and the rights of the parties between themselves 

  

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regarding the assumption and control of such defense shall be subject to the reasonable requirements of such insurance carrier. 
 ARTICLE IX 
 Termination of
Agreement 
 Section 9.1 Termination. Except where a right to terminate this Agreement is otherwise specifically
provided for herein, this Agreement may be terminated by written notice of termination at any time before the Closing Date only as follows: 
 (a) by mutual consent of Seller, SCI and Buyer; 
 (b) by Buyer, upon written notice to Seller
and SCI given at any time after December 31, 2006 if any or all of the conditions precedent to Buyer’s obligations hereunder set forth in Section 6.2 hereof have not been met, without fault of Buyer; or 
 (c) by SCI and Seller, upon written notice to Buyer given at any time after December 31, 2006 if any or all of the conditions
precedent to Seller’s and SCI’s obligations hereunder set forth in Section 6.1 hereof have not been met, without fault of Seller or SCI. 
 Section 9.2 Effect of Termination. In the event of the termination of this Agreement pursuant to the provisions of Section 9.1: (a) this Agreement shall become void and have no effect,
without any liability on the part of any of the parties except for the provisions of Section 5.15 and except as provided below in this Section 9.2; (b) each party shall return all documents, work papers and other material of any other
party relating to the transactions contemplated hereby, whether obtained before or after the execution hereof, to the party furnishing the same; and (c) no confidential information received by any party with respect to the business of any other
party or its Affiliates shall be disclosed to any third party, unless required by Law. Notwithstanding the foregoing or anything else to the contrary, neither Seller nor SCI nor Buyer shall be relieved of liability under, and as provided in, this
Agreement for a breach of this Agreement occurring prior to such termination, or for a breach of any provision of this Agreement which specifically survives termination hereunder. 
  

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 ARTICLE X 
 Miscellaneous 
 Section 10.1 Certain Defined Terms. The following terms
shall have the following meanings for purposes of this Agreement, which meanings shall be equally applicable to both the singular and plural forms of such terms: 
 “Affiliate” means, with respect to any Person, one who at such time controls, is controlled by, or is under common control with, such Person. 
 “Code” means the Internal Revenue Code of 1986, as amended, and all rules and regulations
promulgated thereunder. 
 “Consent” means any consent, waiver, approval, order or
authorization of, or registration, declaration or filing with or notice to, any Governmental Authority or other Person. 
 “Contract” means and includes all contracts, agreements, indentures, leases, franchises, licenses, commitments or legally binding arrangements, express or implied, written or oral.

 “Employee Plans” means all employee benefit plans as defined in
Section 3(3) of ERISA and all severance, bonus, retirement, pension, profit sharing and deferred compensation plans and other similar material, fringe or employee benefit plans, programs or arrangements, and all material employment or
compensation agreements, written or otherwise. 
 “Endowment Care Adjustment
Amount” means the product of (i) the absolute value of the difference between the Transferred Endowment Care Trust Amount and $735,546, multiplied by (ii) .05. 
 “Environmental Reports” means the Phase I and/or Phase II Environmental Assessment Reports
specifically identified on Exhibit C. 
 “Environmental Requirements” means
all applicable Laws, Permits and similar items of any Governmental Authority relating to the protection of the environment, including all requirements pertaining to reporting, licensing, permitting, investigation, and remediation of emissions,
discharges, releases, or threatened releases of Hazardous Materials. 
 “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended. 
 “Governmental
Authority” means any federal, state, local or foreign government or any subdivision, authority, department, commission, board, bureau, agency, court or other instrumentality thereof. 
 “Hazardous Materials” means any substance: (A) the presence of which requires
investigation or remediation under any Law; (B) which is or has been identified as a potential hazardous waste, hazardous substance, pollutant or contaminant under any applicable Law, or (C)

  

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which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, reactive, or otherwise hazardous and has been identified
as regulated by any Governmental Authority. 
 “Intellectual Property” means all
intellectual property and all intellectual property and industrial property rights owned, held or used, including but not limited to (i) inventions, designs, algorithms and discoveries, know-how, methods, and processes, and all enhancements and
improvements thereto, whether patentable or unpatentable, and whether or not reduced to practice, and all patents therefor or in connection therewith, whether U.S. or foreign, and all patent applications, patent disclosures, and all divisions,
continuations, continuations-in-part, reissues, re-examinations and extensions thereof; (ii) trademarks, trade names and service marks, trade dress, logos, fictitious names, internet domain names, slogans, and symbols (collectively,
“Trademarks”), and all goodwill and similar value associated with any of the foregoing, and all applications, registrations, and renewals therefor or in connection therewith (collectively, “Trademark
Applications”); (iii) mask works, written works (excluding computer software programs and applications and documentation of or for such software programs), audio works, multimedia works, works of authorship, lists, databases and
copyrights (whether or not registered) and all registrations and applications for registration and renewals thereof, as well as moral, paternity, and integrity rights; (iv) trade secrets (as such are determined under applicable law), and other
confidential business information, including trade secret or confidential technical information, marketing plans, research, designs, plans, methods, techniques, and processes, any and all technology, supplier lists, statistical models, e-mail lists,
inventions, databases, and data, whether in tangible or intangible form and whether or not stored, compiled or memorialized physically, electronically, graphically, photographically or in writing; (v) any and all other rights to existing and
future registrations and applications for any of the foregoing and any and all rights in or under, or relating to, any of the foregoing, including, without limitation, remedies against and rights to sue for past infringements, and rights to damages
and profits due or accrued in or relating to any of the foregoing; and (vi) any and all other intangible proprietary property, information and materials and rights therein and thereto. 
 “IRS” means the United States Internal Revenue Service. 
 “Laws” means any laws, statutes, rules, regulations, ordinances, orders, codes, common laws,
arbitration awards, judgments, decrees, orders or other legal requirements of any Governmental Authority. 
 “Liability” means any direct or indirect indebtedness, liability, assessment, expense, obligation or responsibility (whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether disputed or undisputed, whether choate or inchoate, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes. 
 “Liens” means any and all liens, mortgages, security interests or other encumbrances.

 “Losses” means any and all demands, claims, assessments, judgments, losses,
liabilities, damages, costs and expenses (including interest, penalties, reasonable attorney’s fees and expenses, reasonable accounting fees and investigation costs). 
 “Material Adverse Effect” means any effect, change or circumstance that, individually or in
the aggregate with any other like effect, change or circumstance, is materially adverse to the Business 

  

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(including with respect to any one particular Location), including, without limitation, the financial condition and the results of operations of the
Business. 
 “Merchandise Liabilities” means Seller’s and SCI’s current
cost of products and services that have been sold, but have not yet been delivered to the customer. 
 “Net Endowment
Care Adjustment Amount” means the amount equal to the present value of the future stream of ten annual payments (as though payable on the Closing Date and each of the first nine anniversaries of the Closing
Date), each equal to the Endowment Care Adjustment Amount, calculated using a discount rate of .065. 
 “Net Transferred
Merchandise Trust Amount” means the amount equal to (i) the aggregate amount transferred to Buyer’s Trustee at the Closing as part of the Initial Trust Delivery in respect of the Pre-Need Trust Funds
of the cemeteries included in the Business in accordance with Section 5.5(a), plus (ii) the aggregate amount transferred to Buyer’s Trustee as part of the Final Trust Delivery in respect of pre-need merchandise and/or services
relating to the Pre-/At-Need Contracts of the cemeteries included in the Business. 
 “Permits” means any licenses, permits, approvals, registrations, certificates (including, but not limited to, certificates of occupancy and any licensure required for the operation
of cemeteries) and other evidence of authority. 
 “Permitted Encumbrances” means (i) liens, encumbrances
or restrictions related to taxes not yet due or payable or which are being contested in good faith and for which appropriate reserves have been taken, (ii) any matters shown on the title commitment(s) not objected to by Buyer as provided for in
this Agreement or, if objected to by Buyer, later waived by Buyer as provided for in this Agreement and (iii) liens, encumbrances or restrictions that are created by Buyer. 
 “Person” means any individual, firm, corporation, partnership, trust, estate, association or
other entity. 
 “Proceeding” means any suit, action, litigation, investigation, notice of violation, audit,
arbitration, administrative hearing or any other similar proceeding. 
 “Purchase
Price” means the Closing Purchase Price plus any contingent consideration payable pursuant to Section 1.4 plus the assumption of the Assumed Liabilities by Buyer, as adjusted pursuant to and
in accordance with the terms and conditions of this Agreement. 
 “Seller’s and SCI’s Knowledge”,
“Knowledge of the Seller and SCI” or any other reference to the “Knowledge” of the Seller or SCI means the knowledge of (i) Michael Lehmann, Margie Stewart-Runnels, Eileen Farrell and Michael Smith, (ii) any
other individual who is serving as a director, officer, manager or member of Seller or SCI, and (iii) any manager of any of the Locations, in each case, after reasonable inquiry. For purposes of this definition, the persons referenced in the
immediately preceding sentence shall be deemed to have knowledge of matters of which any individual assigned by a third-party representative or advisor of Seller or SCI to provide substantial services in connection with the transaction contemplated
hereby has actual knowledge. 
  

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 “Tax” means any income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental, windfall profit, customs, vehicle, airplane, boat, vessel or other title or registration, capital stock, franchise, employees’ income
withholding, foreign or domestic withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer (including, without limitation, realty transfer and burial lot transfer), value added, alternative,
add-on minimum and other tax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever and any interest, penalty, addition or additional amount thereon imposed, assessed or collected by or under the authority of any governmental body or
payable under any tax-sharing agreement or any other Contract. 
 “Taxing
Authority” shall mean any domestic, foreign, federal, national, state, county or municipal or other local government, any subdivision, agency, commission or authority thereof, or any quasi-governmental body
exercising tax regulatory authority. 
 “Tax Return” means any return (including
any information return), report, statement, schedule, notice, form, declaration, claim for refund or other document or information filed with or submitted to, or required to be filed with or submitted to, any governmental body in connection with the
determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any law relating to any Tax, including any amendment thereto. 
 “Transferred Endowment Care Trust Amount” means the amount equal to the aggregate amount
transferred to Buyer’s Trustee at the Closing as part of the Initial Trust Delivery in respect of the Endowment Care Funds of the cemeteries included in the Business in accordance with Section 5.5(a), plus (ii) the aggregate
amount included in the Final Trust Delivery in respect of the Endowment Care Funds of the cemeteries included in the Business. 
 “WARN Act” means the Worker Adjustment and Retraining Notification Act, as the same may be amended from time to time. 
 Section 10.2 Notices. All notices and other communications required or provided for hereunder shall be in writing and shall be
deemed to be given: 
 (a) When delivered personally to the individual, or to an officer of the company, to which the notice
is directed; 
 (b) Three (3) business days after the same has been deposited in the United States mail, sent Certified
or Registered mail with Return Receipt Requested, postage prepaid and addressed as provided in this Section; or 
  

 45 

 (c) One (1) business day after the same has been deposited with a generally
recognized overnight delivery service (including United States Express Mail), with receipt acknowledged and with all charges prepaid by the sender addressed as provided in this Section. Except as specifically provided otherwise herein, notices and
other communications relating to this Agreement or the transactions contemplated hereby shall be directed as follows: 
  

	 	(1)	if to Seller or SCI, to: 

 President

 SCI Michigan Funeral Services, Inc. 
 1929 Allen Parkway 
 Houston, Texas 77019 
 and to: 
 President 
 Hillcrest Memorial Company 
 G 9506 North Dort Highway 
 Mt. Morris, MI 48458 
 with a copy to: 
 General Counsel 
 Service Corporation International 
 1929 Allen Parkway 
 Houston, Texas 77019 
 and if before Closing, also with a copy to: 
 John Burleson 
 Pakis, Giotes, Page & Burleson, P.C. 
 P.O. Box 58 
 Waco, Texas 76703-0058 
  

	 	(2)	if to Buyer, to: 

 STONEMOR OPERATING LLC 
 Attention: Lawrence Miller,
President & Chief Executive Officer 
 155 Rittenhouse Circle 
 Bristol, Pennsylvania 19007 
 with a copy to: 
 BLANK ROME LLP 
 Attention: Lewis J. Hoch 
 One Logan Square 
 18th & Cherry Streets 
 Philadelphia, Pennsylvania 19103-6998 
 or at such other place or places or to such other person or persons as shall be designated by like notice
by any party hereto. 
  

 46 

 Section 10.3 Expenses. Subject to the terms of Section 1.3(a)(i) above, and
except as otherwise specifically provided in Sections 5.7 and 5.8 and any other provision of this Agreement, each party hereto shall pay its own expenses, including without limitation, fees and expenses of its agents, representatives, counsel,
auditors, and accountants, incidental to the consideration, negotiation, preparation and carrying out of this Agreement and the transactions contemplated hereby. 
 Section 10.4 Attorney’s Fees. In the event of any controversy, claim or dispute between or among any of the parties hereto arising out of or relating to this Agreement, or any default or
breach or alleged default or breach hereof, each party shall pay its own attorney’s fees, costs and expenses associated with any such action except as provided in Article VIII. If any party hereto shall be joined as a party in any judicial,
administrative, or other legal proceeding arising from or incidental to any obligation, conduct or action of another party hereto, the party so joined shall be entitled to be reimbursed by the other party for its reasonable attorney’s fees and
costs associated therewith. 
 Section 10.5 Assignment; Parties in Interest. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and permitted assigns. This Agreement shall not be assigned by any party hereto without the prior written consent of the other parties, except that prior to Closing, Buyer may
assign its rights and obligations hereunder to any one or more of its direct or indirect subsidiaries, provided that any such assignment shall not relieve Buyer from its obligations and liabilities hereunder. Except as provided in Article VIII,
nothing in this Agreement, expressed or implied, is intended to confer upon any third person any rights or remedies under or by reason of this Agreement. 
  

 47 

 Section 10.6 Entire Agreement; Amendment; Waiver. 
 (a) This Agreement together with the Schedules and Exhibits hereto and the other agreements and documents delivered, or to be delivered,
pursuant to Section 7.1 and Section 7.2 (all of which are hereby incorporated herein by reference) embody the whole agreement of the parties with respect to the subject matter hereof and thereof, and there are no promises, terms,
conditions, or obligations other than those contained herein and therein. All previous negotiations between the parties, either verbal or written, not herein contained are hereby withdrawn and annulled. This Agreement, together with the Schedules
and Exhibits hereto, supersedes all previous communications, representations, or agreements, either verbal or written, between the parties hereto with respect to the subject matter hereof. 
 (b) This Agreement may not be amended except by an instrument in writing signed on behalf of each party hereto. 
 (c) No provision of this Agreement may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be
effective. No waiver by any party of any provision of this Agreement in a particular instance shall be deemed to constitute a waiver of such provision thereafter unless otherwise agreed in writing and signed by the party against whom the waiver is
to be effective. 
 (d) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. 
 Section 10.7 Severability. If one or more provisions of this Agreement shall be held invalid, illegal or
unenforceable, such provision shall, to the extent possible, be modified in such manner as to be valid, legal and enforceable but so as to most nearly retain the intent of the parties, and if such modification is not possible, such provision shall
be severed from this Agreement. In either case, the balance of this Agreement shall be interpreted as if such provision were so modified or excluded, as the case may be, and shall be enforceable in accordance with its terms. 
 Section 10.8 Certain Interpretive Matters. The section and subsection headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Unless the context otherwise requires, all references in this Agreement to Sections, Articles, Exhibits or Schedules are to Sections, Articles, Exhibits
or Schedules of or to this Agreement. No provision of this Agreement will be interpreted in favor of, or 

  

 48 

 
against, any of the parties to this Agreement by reason of the extent to which any such party or its counsel participated in the drafting thereof or by
reason of the extent to which any such provision is inconsistent with any prior draft hereof or thereof. The singular form of any word used herein shall be deemed to include the plural form of such word and vice versa. References herein to feminine,
masculine or neuter gender shall be deemed to include all genders. As used herein, the words “and” and “or” shall be deemed to mean “and/or” as the context requires. The word “including” (and with correlative
meaning, the word “include”) means including without limiting the generality of any description preceding such word. 
 Section
10.9 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
 Section 10.10 Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware,
without regard to principles of conflicts of laws. 
 [Signature Pages Follow] 
  

 49 

 In Witness Whereof, the undersigned parties hereto have duly executed this Agreement on the
date first above written. 
  

			
	BUYERS:
	
	STONEMOR OPERATING LLC, a Delaware limited liability company
		
	By:	 	/s/ Paul Waimberg
	PAUL WAIMBERG, Vice President of Finance and Assistant Secretary
	
	STONEMOR MICHIGAN LLC, a Michigan limited liability company
		
	By:	 	/s/ Paul Waimberg
	PAUL WAIMBERG, Vice President of Finance
	
	STONEMOR MICHIGAN SUBSIDIARY LLC, a Michigan limited liability company
		
	By:	 	/s/ Paul Waimberg
	PAUL WAIMBERG, Vice President of Finance

  

			
	PARENT:
	
	SCI FUNERAL SERVICES, INC., an Iowa corporation
		
	By:	 	/s/ Michael D. Lehmann
		 	 Michael D. Lehmann, Vice President

 {Signatures continued on the following page} 

 ASSET PURCHASE AND SALE AGREEMENT 

			
	SCI MICHIGAN:
	
	SCI MICHIGAN FUNERAL SERVICES, INC., a Michigan corporation
		
	By:	 	/s/ Michael D. Lehmann
		 	 Michael D. Lehmann, Vice President

	
	SELLER:
	
	HILLCREST MEMORIAL COMPANY, a Delaware corporation
		
	By:	 	/s/ Robert C. Hubble
		 	 Robert C. Hubble, President

  

 51

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