NOTE PURCHASE AGREEMENT

Exhibit 4.1
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SERVICE CORPORATION INTERNATIONAL



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

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




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NOTE PURCHASE AGREEMENT
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Dated November 28, 2006





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TABLE OF CONTENTS

PAGE

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

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

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

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

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

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

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

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TABLE OF CONTENTS
(continued)

PAGE

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

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

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

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

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

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

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

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

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

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

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

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TABLE OF CONTENTS
(continued)

PAGE

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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TABLE OF CONTENTS
(continued)
PAGE

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

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Schedule A -- Information Relating to Purchasers

Schedule B -- Defined Terms

Schedule 4.8 -- Initial Guarantors

Schedule 5.3 -- Disclosure Materials

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

Schedule 5.5 -- Financial Statements

Schedule 5.8 -- Material Litigation

Schedule 5.15 -- Existing Indebtedness

Schedule 10.2 -- Existing Liens

Schedule 10.6 -- Existing Investments

Schedule 10.7 Merger-Related Asset Sales

Schedule -- Restrictive Agreements
10.11(a)

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

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

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

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

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

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

Exhibit 4.8 -- Form of Guaranty Agreement

Exhibit 4.9 -- Form of Sharing Agreement

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





November 28, 2006



To Each of The Purchasers Listed in
Schedule A Hereto:

Ladies and Gentlemen:

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

1. AUTHORIZATION OF NOTES.

The Company will authorize the issue and sale of:

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

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

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2. SALE AND PURCHASE OF NOTES.

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

3. CLOSING.

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

4. CONDITIONS TO CLOSING.

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

4.1. REPRESENTATIONS AND WARRANTIES.

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

4.2. PERFORMANCE; NO DEFAULT.

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

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

4.3. COMPLIANCE CERTIFICATES.

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

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

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

4.4. OPINIONS OF COUNSEL.

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

4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC.

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

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

4.6. SALE OF OTHER NOTES.

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

4.7. PAYMENT OF SPECIAL COUNSEL FEES.

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

4.8. GUARANTY AGREEMENT.

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

4.9. SHARING AGREEMENT.

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

4.10. OTHER FINANCING ARRANGEMENTS.

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

4.11. CONSUMMATION OF MERGER.

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

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4.12. PRIVATE PLACEMENT NUMBER.

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

4.13. CHANGES IN CORPORATE STRUCTURE.

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

4.14. FUNDING INSTRUCTIONS.

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

4.15. OFFEREE LETTER.

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

4.16. PROCEEDINGS AND DOCUMENTS.

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

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

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

5.1. ORGANIZATION; POWER AND AUTHORITY.

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

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

5.2. AUTHORIZATION, ETC.

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

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

5.3. DISCLOSURE.

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

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

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

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

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

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

5.5. FINANCIAL STATEMENTS; MATERIAL LIABILITIES.

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

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5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.

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

5.7. GOVERNMENTAL AUTHORIZATIONS, ETC.

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

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

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

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

5.9. TAXES.

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

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

5.10. TITLE TO PROPERTY; LEASES.

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

5.11. LICENSES, PERMITS, ETC.

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

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

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

5.12. COMPLIANCE WITH ERISA.

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

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

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

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

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

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

5.13. PRIVATE OFFERING BY THE COMPANY.

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

5.14. USE OF PROCEEDS; MARGIN REGULATIONS.

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

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

5.15. EXISTING INDEBTEDNESS; FUTURE LIENS.

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

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

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

5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC.

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

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

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

5.17. STATUS UNDER CERTAIN STATUTES.

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

5.18. ENVIRONMENTAL MATTERS.

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

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

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

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

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5.19. RANKING OF OBLIGATIONS.

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

6. REPRESENTATIONS OF THE PURCHASERS.

6.1. PURCHASE FOR INVESTMENT.

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

6.2. SOURCE OF FUNDS.

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

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

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

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<PAGE>

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

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

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

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

(f) the Source is a governmental plan; or

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

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

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

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7. INFORMATION AS TO COMPANY.

7.1. FINANCIAL AND BUSINESS INFORMATION.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

7.2. OFFICER'S CERTIFICATE.

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

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

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

7.3. VISITATION.

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

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

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

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

8. PAYMENT AND PREPAYMENT OF THE NOTES.

8.1. MATURITY.

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

8.2. OPTIONAL PREPAYMENTS.

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

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8.3. PREPAYMENT OF NOTES UPON CHANGE IN CONTROL.

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

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

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

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

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

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

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

8.4. ALLOCATION OF PARTIAL PREPAYMENTS.

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

8.5. MATURITY; SURRENDER, ETC.

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

8.6. PURCHASE OF NOTES.

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

8.7. INTEREST RATE AND INTEREST PAYMENT DATES.

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

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

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

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

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

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

(f) DEFAULT RATE; OVERDUE AMOUNTS.

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

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

8.8. YIELD PROTECTION AND ILLEGALITY.

(a) ILLEGALITY.

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

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

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

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

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

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

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

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

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

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

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

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

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

(c) RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES.

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

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

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

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

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

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

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

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

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<PAGE>

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

(iv) Failure or delay on the part of any holder of the Notes to
demand compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital shall not
constitute a waiver of such holder's right to demand such compensation
with respect to any Interest Period; provided that the Company shall
not be required to compe