UNITED STATES DISTRICT COURTFOR THE EASTERN DISTRICT OF PENNSYLVANIA

IN RE : THE LOEWEN GROUP, INC . MASTER FILE NO. 98-CV-6740SECURITIES LITIGATION (O'Neill, Jr ., J. )

STIPULATION AND AGREEMENT OF SETTLEMEN T

1 . Lead Plaintiffs, The City of Philadelphia, through its Board of Pensions and Retirement,

Phil Schwartz, Terry Roberts, and Harley Puff (the "Lead Plaintiffs"), on their own behalf and on

behalf of the Class (as defined below), and The Loewen Group, Inc . (n/k/a Alderwoods Group,

Inc.) ("Loewen Group"), Raymond L . Loewen, and Paul Wagler (collectively "Defendants"),

have entered into this Stipulation and Agreement of Settlement (the "Stipulation"), subject to the

approval of the United States District Court for the Eastern District of Pennsylvania (the

"Court") .

WHEREAS :

a. Beginning in 1998, a series of class action complaints were filed agains t

Defendants as well as other officers and directors of Loewen Group . On April 14,

1999, Judge Thomas N. O'Neill, Jr . consolidated those actions and appointed

plaintiffs The City of Philadelphia, through its Board of Pensions and Retirement,

Phil Schwartz, Terry Roberts, Harley Puff, James McGlathery and Morton Silas as

Lead Plaintiffs, pursuant to the Private Securities Litigation Reform Act . Plaintiffs

McGlathery and Silas subsequently withdrew as Lead Plaintiffs . The Court also

appointed the law firms of Berger & Montague, P .C., Wolf Popper LLP, and

Abbey Gardy, LLP as Co-Lead Counsel for Plaintiffs and Barrack, Rodos &

Bacine as Liaison Counsel for Plaintiffs .

b. By Order dated November 9, 2005, the Court certified as representatives of the

Class defined below : The City of Philadelphia, through its Board of Pensions and

Retirement, Phil Schwartz, Terry Roberts, and Harley Puff. By the same Order, the

Court appointed the law firms of Berger & Montague, P .C., Wolf Popper LLP and

Abbey Gardy, LLP as Class Counsel and Barrack, Rodos & Bacine as Liaison

Counsel for the Class .

c . Lead Plaintiffs have alleged in the Corrected Consolidated Amended Class Actio n

Complaint (the "Complaint") that from March 5, 1997 through January 14, 1999,

(the "Class Period") Defendants caused Loewen Group -- the second largest

operator of funeral homes and cemeteries in North America and the largest operator

of funeral homes in Canada -- to disseminate materially false and misleading

statements to the public. Among other things, Lead Plaintiffs allege that

Defendants materially misstated the value of Loewen Group's business and

properties, failed to record contingent losses on put/call agreements in connection

with certain key acquisitions, and failed to properly account for imputed interest on

zero interest finance plans. Lead Plaintiffs further allege that Defendants'

statements caused the market price of Loewen Group securities to be artificially

inflated during the Class Period and that the members of the Class suffered

substantial damages from the decline in the price of Loewen Group securities .

d. By Order and Opinion dated August 18, 2004, the Court ruled on Defendants'

Motion to Dismiss the Complaint, and dismissed several of the allegations while

allowing the case to proceed as to the following allegations: i) that Defendants

misstated the value of Loewen Group's business and property; ii) that Defendants

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failed to record contingent losses on put/call agreements ; and iii) that Defendants

failed to account properly for imputed interest and zero interest finance plans .

e. On September 30, 2004, Defendants filed answers to the Complaint denying any

liability or wrongdoing in connection with the allegations of the Complaint .

f. Plaintiffs' Counsel have investigated the claims and the underlying events and

transactions alleged in the Complaint . Among other things, Plaintiffs' Counsel

have reviewed thousands of pages of documents filed with the United States

Bankruptcy Court for the District of Delaware concerning the Loewen Group

bankruptcy and related proceedings ; reviewed thousands of pages provided by

Defendants and by third parties ; consulted with various specialists familiar with

Loewen Group and its business practices ; reviewed and analyzed various publicly

available reports by and concerning Loewen Group ; interviewed ex-Loewen Group

employees and former business associates of the Company; and consulted with a

damage expert concerning the potential impact of Defendants' alleged fraudulent

statements on the price of Loewen Group's securities . Plaintiffs' Counsel have

analyzed the results of their investigation and have researched the applicable law

regarding Plaintiffs' claims against the Defendants and the Defendants' potential

defenses. Plaintiffs' Counsel have negotiated the terms of this Stipulation at arms'

length with Defendants' Counsel, under the supervision of an experienced

mediator, Magistrate Judge Charles B . Smith, with a view toward achieving the

best relief possible for the Class . Based upon their investigation, Lead Plaintiffs

and Plaintiffs' Counsel have concluded that the terms and conditions of thi s

Stipulation are fair, reasonable and adequate to, and in the best interests of, the

Class. Lead Plaintiffs and Plaintiffs' Counsel have so concluded after considering

(a) the substantial and immediate benefits that the Settlement (as defined below)

provides the Class, (b) the attendant risks of litigation, and (c) the desirability of

permitting the Settlement to be consummated under this Stipulation's terms and

provisions ; and

g. Defendants specifically deny that any of them has committed any acts o f

wrongdoing and assert that, at all relevant times, they acted in a manner they

reasonably believed to be in the best interests of Loewen Group and those persons

that purchased or held Loewen Group securities . Defendants have agreed to this

Settlement in order to eliminate the burden and expense of further litigation.

NOW THEREFORE, it is hereby STIPULATED AND AGREED, by and among th e

Parties (as defined below) to this Stipulation, through their respective attorneys, subject to

approval by the Court under Rule 23(e) of the Federal Rules of Civil Procedure and the Private

Securities Litigation Reform Act of 1995 (the "PSLRA"), in consideration of the Settlement's

benefits flowing to the Parties and the Authorized Claimants (as defined below), that all Settled

Claims (as defined below) as against the Released Parties (as defined below) shall be released

and dismissed with prejudice, upon the following terms and conditions :

DEFINITIONS

2. As used in this Stipulation, the following terms shall have the following meanings :

a. "Action" means In re The Loewen Group, Inc . Securities Litigation, Master File

No. 98-CV-6740 (E.D. Pa.) and all cases that were consolidated under that

caption/docket number.

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b. "Administration Costs" means the costs and expenses incurred for:

(i) identifying Class members and Authorized Claimants ;(ii) printing and mailing the Notice (defined below) to the Class ;(iii) distributing Settlement proceeds to Authorized Claimants ;(iv) reimbursing nominee owners for forwarding the Notice to the

beneficial owners of Loewen Group securities ;(v) fees and expenses charged by the Settlement Administrator

(defined below); and(vi) fees and expenses charged by tax attorneys and accountants in

connection with any tax work done regarding the Gross or NetSettlement Fund (defined below) .

c. "Authorized Claimant" means a Class member who submits a timely and valid

Proof of Clam and Release form to the Settlement Administrator .

d. "Class" and "Class Members" means all persons or entities who purchased or

otherwise acquired Loewen Group publicly-traded common stock, preferred

stock, call options, or Monthly Insured Preferred Securities on the open market

from March 5, 1997 through January 14, 1999, inclusive, and who were injure d

thereby and who have not properly and timely excluded themselves from the

Class. The Class excludes defendants The Loewen Group, Inc . (n/k/a

Alderwoods Group, Inc .), Raymond L . Loewen, and Paul Wagler, directors and

officers of the Loewen Group during the Class Period, members of the immediate

family of any excluded party, and any person, firm, trust, corporation, officer,

director, or other individual or entity in which any excluded party has a

controlling interest or which is related to or affiliated with any of the excluded

parties, including legal representatives, agents, affiliates, heirs, successors-in-

interest or assigns of any such excluded party . Also excluded from the Class (and

from the definition of "Class Members") are all members of the Class wh o

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properly and timely excluded themselves from the Class in accordance with the

procedures and deadlines to be established by the Court .

e. "Complaint" means the Corrected Consolidated Amended Class Action

Complaint filed by the Plaintiffs in this Action on or about August 29, 2003 .

f. "Defendants" means Loewen Group, Raymond L. Loewen and Paul Wagler .

g. "Defendants' Counsel" means the law firms of Montgomery, McCracken,

Walker & Rhoads, LLP and Jones Day .

h. "Effective Date" means the date that the Order and Final Judgment (define d

below) has been entered and the time for appeal or review of such Order and Final

Judgment has expired, or, if any appeal has been filed and not dismissed, after

such Order and Final Judgment is upheld on appeal in all material respects and is

no longer subject to review upon appeal or review by writ of certiorari .

i . "Gross Settlement Fund" means the Settlement Amount (defined below) plu s

any interest earned thereon .

j . "Net Settlement Fund" means the Gross Settlement Fund, minus (a) any taxes

on the interest earned thereon, (b) any award of attorneys' fees and expenses,

including interest on such amounts, made by the Court to Plaintiffs' Counsel or

Plaintiffs in this action, and (c) the amount of Administration Costs .

k. "Notice" means the Notice of Pendency and Proposed Settlement of Class Action

and Settlement Hearing which is to be sent to members of the Class substantially

in the form attached as Attachment 1 to Exhibit A of this Stipulation .

1 . "Order and Final Judgment" means the proposed order to be entered approving

the Settlement substantially in the form attached as Exhibit B hereto .

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m. "Parties" means Plaintiffs and the Defendants .

n. "Plaintiffs" means any and all persons or entities selected by the Court as a Lead

Plaintiff or a Class Representative .

o. "Plaintiffs' Counsel " means Plaintiffs' Lead Counsel, Plaintiffs' Liaison

Counsel and Cohen, Milstein, Hausfeld & Toll, P .L.L.C .

p. "Plaintiffs ' Lead Counsel" means the law firms of Berger & Montague, P .C.,

Wolf Popper LLP and Abbey Gardy LLP .

q. "Plaintiffs ' Liaison Counsel " means the law firm of Barrack, Rodos & Bacine .

r. "Released Parties" means the Defendants, and any or all of their respective pas t

or present subsidiaries, parents, successors and predecessors, officers, directors,

agents, representatives, employees, attorneys, insurers, investment bankers,

accountants, and any person, firm, trust, corporation, officer, director or other

individual or entity in which any Defendant has a controlling interest or which is

related to or affiliated with any of the Defendants and the representatives, trustees,

executors, administrators, heirs, successors, assigns or spouses of any of them .

s. "Preliminary Approval Order" means the order entered by the Court with

respect to the Notice, settlement hearing and administration substantially in the

form attached as Exhibit A to this Stipulation.

t. "Settled Claims" means any and all claims, debts, demands, rights or causes o f

action or liabilities whatsoever (including , but not limited to, any claims for

damages, interest, attorneys' fees, expert or consulting fees, and any other costs,

expenses or liability whatsoever), whether based on federal, state , local, statutory,

common, foreign or international law or any other law, rule or regulation, whether

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fixed or contingent, accrued or unaccrued, liquidated or unliquidated, at law or in

equity, matured or unmatured, whether class or individual in nature, including

both known claims and unknown claims, (i) that have been or could have been

asserted in the Action by the Class Members or any of them against any of the

Released Parties, or (ii) that could have been asserted in any forum by the Class

Members or any of them against any of the Released Parties which arise out of or

are based upon the allegations, transactions, facts, matters, occurrences,

representations or omissions involved, set forth, or referred to in the Complaint or

any of its predecessors .

U. "Settled Defendants ' Claims" means any and all claims, debts, demands, rights

or causes of action or liabilities whatsoever (including, but not limited to, any

claims for damages, interest, attorneys' fees, expert or consulting fees, and any

other costs, expenses or liability whatsoever), whether based on federal, state,

local, statutory, common, foreign or international law or any other law, rule or

regulation, whether fixed or contingent, accrued or unaccrued, liquidated or

unliquidated, at law or in equity, matured or unmatured, whether class or

individual in nature, including both known claims and unknown claims, that have

been or could have been asserted in this litigation or in any other forum by one or

more of the Defendants or their successors or assigns against any of the Plaintiffs,

the Class, members of the Class or their attorneys which arise out of or relate in

any way to the institution, prosecution, or settlement of this Action .

v. "Settlement" means the settlement contemplated by this Stipulation .

w. "Settlement Administrator" means Heffler, Radetich & Saitta L .L.P. ("HRS") .

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X . "Settlement Amount" means the amount stated in paragraph 4 below .

Y. "Settlement Hearing" means the hearing to be held by the Court to consider

approval of the Settlement .

Z . "Summa ry Notice" means the summary of the Notice substantially in the form

attached as Attachment 2 to Exhibit A to this Stipulation .

THE SETTLEMENT AND THE RELEASE

3 . The obligations incurred pursuant to this Stipulation shall be in full and final disposition

of the claims asserted in the Complaint and any and all Settled Claims as against all Released

Parties, as well as the Settled Defendants' Claims.

4. Within the earlier of ten business days from the Court's entry of the Preliminary

Approval Order, or April 10, 2006, Defendants will cause their insurer to pay on their behalf

$6,000,000 in cash (the "Settlement Amount") into an interest-bearing escrow account

maintained by Royal Bank, America (the "Escrow Agents") for the benefit of Plaintiffs and the

Class. No later than five business days before payment of the Settlement Amount is to be made,

Plaintiffs' Counsel shall provide Defendants' Counsel, in writing, with the following information

concerning the wire transfer of the Settlement Amount : Name of Bank to Credit, Bank ABA

Number, Bank Address, Bank Account Name, and Bank Account Number. The Settlement

Amount and any interest earned on the Settlement Amount shall constitute the Gross Settlement

Fund. In accordance with the procedures set below, as promptly as possible following the

Effective Date, the Net Settlement Fund will be allocated and distributed to all Authorized

Claimants, pursuant to further Order of the Court .

5 . On the Effective Date, Plaintiffs and all Class Members shall be deemed to have fully,

finally and forever settled and released all Settled Claims against all Released Parties . Having

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fully and finally dismissed the action with prejudice, the Plaintiffs and all Class Members shall

conclusively be deemed to have released any claims, actions, causes of action, rights or liabilities

against the Released Parties arising out of, based upon, or otherwise related in any way to the

Settled Claims . The Plaintiffs and all Class Members agree and acknowledge that the Settled

Claims may encompass claims or matters the nature of which have not yet been discovered, and

it is understood and agreed that, to the extent they may be alleged to be applicable, all

protections under California Civil Code § 1542, which reads :

A general release does not extend to claims which the creditor does notknow or suspect to exist in his or her favor at the time of executing therelease, which if known by him or her must have materially affected hissettlement with the debtor

or any similar provision of statutory or non-statutory law of any other jurisdiction, are hereby

waived. Plaintiffs and all Class Members are therefore barred and permanently enjoined from

instituting, asserting or prosecuting, either directly or indirectly, representatively, derivatively or

in any other capacity, any and all claims which they, or any of them, had, have or may have

against the Released Parties arising out of, based upon or otherwise related in any way to the

Settled Claims .

6. On the Effective Date, each Defendant shall be deemed to have released and forever

discharged the Settled Defendants' Claims and shall forever be enjoined from prosecuting such

claims against Plaintiffs, the Class, any member of the Class or their attorneys .

SUBMISSION OF SETTLEMENT TO THE COURT

7. As soon as practicable after the execution of this Stipulation, the Parties shall submit this

Stipulation, together with its exhibits to the Court, and shall apply for entry of the Preliminary

Approval Order, substantially in the form of Exhibit A attached hereto, providing for notice t o

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Class Members of the Settlement Hearing . The Preliminary Approval Order shall specifically

include provisions that, among other things, will :

a. -. direct that the Settlement Hearing be held, among other things : (i) to determine

finally whether this Action satisfies the applicable prerequisites for class action

treatment under Rules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure ;

(ii) to determine finally whether Lead Plaintiffs who have been approved as Class

Representatives are adequate representatives of the Class ; (iii) to determine finally

whether the Settlement is fair, reasonable and adequate and whether the

Stipulation and the Settlement should be finally approved by the Court pursuant to

Rule 23(e) of the Federal Rules of Civil Procedure and the PSLRA; (iv) to

determine whether the Order and Final Judgment should be entered, dismissing

the Action on the merits and with prejudice and extinguishing and releasing any

and all Settled Claims, as well as releasing the Settled Defendants' Claims ; (v) to

hear and determine any objections to the Settlement ; (vi) in the event that th e

Court approves the Settlement, to determine whether to approve Plaintiffs'

proposed plan of allocation; (vii) in the event that the Court approves the

Settlement, to determine whether to grant Plaintiffs' Counsel's application for an

award of attorneys' fees and expenses; and (viii) to rule upon such other matters

as the Court may deem necessary and appropriate ;

b. approve the Notice substantially in the form of Attachment 1 to Exhibit A hereto,

and find that such Notice constitutes the best practicable form and method of

notice to Class Members ;

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c. appoint HRS as the Settlement Administrator and direct that the Settlement

Administrator (i) cause the Notice, substantially in the form of Attachment 1 to

Exhibit A hereto, to be mailed to the purchasers of record of Loewen Group

securities at any time during the Class Period, as shown on the records maintained

by or on behalf of Loewen Group by first-class mail postage prepaid no later than

ten (10) business days after entry of the Scheduling Order ; (ii) cause the Summary

Notice, substantially in the form of Attachment 2 to Exhibit A hereto, to be

published once in the National Edition of The Wall Street Journal within ten (10)

days after the mailing of the Notice to the Class; and (iii) to provide additional

copies of the Notice to any record holder or nominee that requests such copies for

the purpose of distribution to any beneficial owners who are entitled thereto ;

d. provide that any Class Member who objects to the terms of the Stipulation, th e

proposed Settlement, the class action determination, entry of the Order and Final

Judgment approving the Settlement, the proposed plan of allocation, and/or

Plaintiffs' Counsel's application for attorneys' fees and reimbursement of

expenses, or who otherwise wishes to be heard, may appear in person or by his,

her, or its attorney at the Settlement Hearing and present any evidence or

argument that may be proper and relevant; provided, however, that no person

other than the Parties and their Counsel in this Action shall be heard, and no

papers, briefs, pleadings or other documents submitted by any such person shall

be received and considered by the Court (unless the Court in its discretion shall

thereafter otherwise direct, upon application of such person and for good cause

shown), unless no later than twenty days prior to the Settlement Hearing, (i) a

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written notice of intention to appear, (ii) a detailed statement of all of such

person's objections to any matter before the Court, and (iii) all of the grounds

therefor or the reasons for such person's desiring to appear and to be heard, as

well as all documents and writings which such person desires the Court to

consider, shall be filed by such person with the Clerk of the Court and,

simultaneously with or before such filing, shall be served by hand or overnight

delivery upon the Counsel to the Parties designated in the Scheduling Order;

e. provide that any person who would otherwise be a member of the Class who

wishes to be excluded from the Class shall send a written request for exclusion by

first-class mail to the Settlement Administrator at the address listed in the Notice

no later than twenty days before the date of the Settlement Hearing which set s

forth : (a) the name of the Action (In re The Loewen Group, Inc. Securities

Litigation, No. 98-6740 (E.D. Pa .)) ; (b) the Class Member's name, address and

telephone number, and the name and address of the record owner if different than

the Class Member's; (c) the number and type of Loewen Group securities

purchased and sold (if any) during the Class Period ; and (d) that said person

wishes to be excluded from the Class ;

f. provide that Plaintiffs' Counsel shall file all written requests for exclusion with

the Court at or before the Settlement Hearing ;

g. provide that, within five business days after the end of the period to request

exclusion from the Class, as set forth in the Notice, Plaintiffs' Lead Counsel shall

provide to Defendants' Counsel a written list of all potential Class Members who

have timely exercised their rights to be excluded from the Class . Plaintiffs' Lead

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Counsel and Defendants' Counsel will then ascertain the total number and type of

shares of Loewen Group securities traded during the Class Period by those

persons or entities requesting exclusion from the Class (the "Opt-Out Amount") .

In the event that the Opt-Out Amount is equal to or greater than an agreed upon

percentage of the total number of Loewen Group securities traded during the

Class Period, then the Defendants may in their discretion elect to withdraw from

this Settlement by providing written notice to Plaintiffs' Lead Counsel within ten

business days after receipt of the list of opt-outs . This agreed upon percentage

shall be the subject of a Supplemental Stipulation to be filed with the Court by the

Parties under seal ; and

h. provide that the Settlement Hearing may, from time to time and without further

notice to the Class Members, be continued or adjourned by order of the Court .

The Settlement Administrator shall assume and undertake the administrative

responsibility of disseminating the Notice to the Class and arranging for publication of the

Summary Notice, as required by the Preliminary Approval Order . At least ten business days

before the Settlement Hearing, the Settlement Administrator shall file an affidavit with the Court

that the Notice required by the Preliminary Approval Order has been provided to Clas s

Members .

ORDER AND FINAL JUDGMENT

9. If the Settlement (including any modification made with the written consent of the

Parties) shall be approved by the Court following the Settlement Hearing as fair, reasonable, and

adequate and in the best interests of the Class, the Parties shall jointly request the Court to ente r

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the Order and Final Judgment substantially in the form attached hereto as Exhibit B . The Order

and Final Judgment shall, among other things :

a. find that the prerequisites to a class action set forth in Rule 23(a) of the Federa l

Rules of Civil Procedure are satisfied, that those Lead Plaintiffs appointed as

Class Representatives are adequate representatives of the Class, and that the

action may properly be maintained as a class Action pursuant to Rule 23(b)(3) of

the Federal Rules of Civil Procedure, and finally certify the Class ;

b. approve the Settlement and all transactions preparatory or incident thereto, as fair ,

reasonable and adequate pursuant to Rule 23(e) of the Federal Rules of Civil

Procedure and the PSLRA ;

c. authorize and direct performance of the Settlement in accordance with all of it s

terms and conditions;

d. dismiss the Action with prejudice as against the Plaintiffs and Class Members or

any of them, without costs except as hereinafter provided, and extinguish al l

Settled Claims against the Released Parties, as well as the Settled Defendants '

Claims ;

e. determine that no Party has violated Rule 11 of the Federal Rules of Civi l

Procedure during this litigation ; and

f. reserve jurisdiction, without affecting the finality of the judgment, with respect to

all matters relating to the administration, consummation, construction and

enforcement of the Settlement and the Stipulation .

10. If the Court approves the Settlement, it will also be asked to approve Plaintiffs' propose d

plan of allocation and Plaintiffs' Counsel's application for an award of attorneys' fees an d

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expenses . The determination of these requests will not impact the finality of the Order and Final

Judgment.

ADMINISTRATION OF THE SETTLEMENT

11 . Plaintiffs' Lead Counsel shall be responsible for supervising the administration of the

Settlement and disbursement of the Net Settlement Fund by the Settlement Administrator .

Except for their obligation to cause the Settlement Amount to be paid and to cooperate in the

administration of the Settlement to the extent reasonably necessary to effectuate its terms, the

Released Parties shall have no liability, obligation or responsibility for the administration of the

Settlement or disbursement of the Net Settlement Fund. Plaintiffs' Lead Counsel shall have th e

right, but not the obligation, to waive what it deems to be formal or technical defects in any

Proofs of Claim and Release and Substitute Form W-9 (the "Proof of Claim and Release")

submitted in the interests of achieving substantial justice .

12 . Plaintiffs' Lead Counsel may expend from the Gross Settlement Fund, without further

approval from the Defendants or the Court, up to the sum of $100,000 to pay the reasonable

costs and expenses associated with the costs of identifying members of the Class, the costs of

publication, printing and mailing the Notice, reimbursements to nominee owners for forwarding

Notice(s) to their beneficial owners, and the administrative expenses incurred and fees charged

by the Settlement Administrator in connection with providing notice and processing the

submitted claims . Administrative costs in excess of $100,000 shall be paid from the Gross

Settlement Fund after the Effective Date, upon Court approval .

13 . Plaintiffs' Lead Counsel will apply to the Court, on notice to the Defendants' Counsel,

for an order (the "Class Distribution Order") approving the Settlement Administrator's

administrative determinations concerning the acceptance and rejection of the claims submitted in

compliance herewith and approving any fees and expenses not previously applied for, includin g

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the fees and expenses of the Settlement Administrator, and, if the Effective Date has occurred,

directing payment of the Net Settlement Fund to Authorized Claimants .

14. The Gross Settlement Fund, net of any Taxes (as defined below) on the income thereof,

shall be used first to pay (i) the Administration Costs and any award of the attorneys' fees and

expenses . The balance of the Gross Settlement Fund after these payments shall be the "Net

Settlement Fund" which shall be distributed to the Authorized Claimants pursuant to the terms of

the Settlement . Any sums required to be held in escrow hereunder shall be held by Royal Bank,

America as Escrow Agents for the Settlement Fund. All funds held by the Escrow Agent shall

be deemed to be in the custody of the Court and shall remain subject to the jurisdiction of the

Court until such time as the funds shall be distributed or returned to the person(s) paying the

same pursuant to this Stipulation or further order of the Court . The Escrow Agent shall invest

any funds in excess of $100,000 in short term United States Agency or Treasury Securities (or a

mutual fund invested solely in such instruments) and shall collect and reinvest all interest

accrued thereon . Any funds held in escrow in an amount of less than $100,000 may be held in an

interest bearing bank account insured by the FDIC . The parties hereto agree that the Gross

Settlement Fund is intended to be a Qualified Settlement Fund within the meaning of Treasury

Regulation § 1 .468B-1 and that the Escrow Agent, as administrator of the Gross Settlement Fund

within the meaning of Treasury Regulation § 1 .468B-2(k)(3), shall be responsible for filing tax

returns for the Gross Settlement Fund and paying from the Gross Settlement Fund any Taxes

owed with respect to the Gross Settlement Fund . In addition, the Escrow Agent shall timely

make such elections as necessary or advisable to carry out the provisions of this paragraph,

including the "relation-back election" as defined in Treasury Regulation § 1 .468B-1 to the

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earliest permi tted date . Defendants ' Counsel agree , if requested, to provide promptly to the

Escrow Agent the statement described in Treasury Regulation § 1 .468B-3(e) .

15. All (i) taxes on the income of the Gross Se ttlement Fund and (ii) expenses and costs

incurred in connection with the taxation of the Gross Settlement Fund (including, without

limitation , expenses of tax attorneys and accountants) (collectively "Taxes") shall be paid out of

the Gross Se ttlement Fund, shall be considered to be a cost of administration of the Se ttlement

and shall be timely paid by the Escrow Agent without p rior Order of the Court . Under no

circumstances shall the Released Parties have any liability or responsibili ty for the Taxes .

DISTRIBUTION TO AUTHORIZED CLAIMANTS

16. The Net Settlement Fund shall be distributed to the Authorized Claimants in accordance

with the Plan of Allocation approved by the Court . The proposed Plan of Allocation is not a

necessary term of this Stipulation and it is not a condition of this Stipulation that this or any

particular Plan of Allocation be approved. The Plan of Allocation shall be determined solely by

Plaintiffs' Lead Counsel, subject to approval by the Court. The Defendants shall have no

involvement in determining the Plan of Allocation .

17 . Each Authorized Claimant shall be allocated a pro rata share of the Net Settlement Fund

based on his or her valid claim compared to the total valid claims of all accepted claimants . This

is not a claims-made settlement . The Defendants shall not be entitled to get back any of the

Settlement monies once the Settlement becomes final . Defendants shall have no involvement in

reviewing or challenging claims .

18 . For purposes of determining the extent, if any, to which a Class Member shall be entitled

to be treated as an "Authorized Claimant", the following shall apply :

a. Each Class Member shall be required to submit a Proof of Claim and Release (see

~'t

3attached to Exhibit A), supported by such documents as are designate d

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therein, including proof of the claimant's transactions in Loewen Group

securities, or such other documents or proof as the Settlement Administrator,

subject to Plaintiffs' Lead Counsel's supervision, in its discretion, may deem

acceptable;

b. All Proofs of Claim and Release must be submitted by the date specified in th e

Notice unless such period is extended by order of the Court . Any Class Member

who fails to submit a Proof of Claim and Release by such date shall be forever

barred from receiving any payment pursuant to this Settlement (unless, by order

of the Court, a later submitted Proof of Claim and Release by such Class Member

is approved), but shall in all other respects be bound by all of the terms of this

Stipulation and the Settlement including the terms of the Order and Final

Judgment to be entered in the Action and the releases provided for in such Order

and Final Judgment and herein, and will be barred from bringing any action

against the Released Parties concerning the Settled Claims . Provided that it is

received before the motion for the Class Distribution Order is filed, a Proof of

Claim and Release shall be deemed to have been submitted when posted, if

received with a legible postmark on the envelope and if mailed by first-class mail

and addressed in accordance with the instructions thereon. In all other cases, the

Proof of Claim and Release shall be deemed to have been submitted when

actually received by the Settlement Administrator;

c. Each Proof of Claim and Release shall be submitted to and reviewed by th e

Settlement Administrator, under the supervision of Plaintiffs' Lead Counsel, who

shall determine in accordance with this Stipulation the extent, if any, to which

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each claim shall be allowed, subject to review by the Court pursuant to

subparagraph (d) below ;

d. Proofs of Claim and Release that do not meet the submission requirements may

be rejected. Prior to rejection of a Proof of Claim and Release, the Settlement

Administrator shall communicate with the Claimant in order to remedy any

curable deficiencies in the Proof of Claims and Release submitted . The

Settlement Administrator, under supervision of Plaintiffs' Lead Counsel, shall

notify, in a timely fashion and in writing, all Claimants whose Proofs of Claim

and Release they propose to reject in whole or in part, setting forth the reasons

therefore, and shall indicate in such notice that the Claimant whose claim is to be

rejected has the right to a review by the Court if the Claimant so desires and

complies with the requirements of subparagraph (e) below ;

e. If any Claimant whose claim has been rejected in whole or in part desires to

contest such rejection, the Claimant must, within thirty days after the date of

mailing of the notice required in subparagraph (d) above, serve upon the

Settlement Administrator a notice and statement of reasons indicating the

Claimant's grounds for contesting the rejection along with any supporting

documentation, and requesting a review thereof by the Court . If a dispute

concerning a claim cannot be otherwise resolved, Plaintiffs' Lead Counsel shal l

thereafter present the request for review to the Court ;

f. The administrative determinations of the Settlement Administrator accepting and

rejecting claims shall be presented to the Court for approval in the Class

Distribution Order; and

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g. Each Claimant shall be deemed to have sub itted to the jurisdiction of the Court

with respect to the Claimant 's claim, and the claim will be subject to investigation

and discovery under the Federal Rules of Ci it Procedure , provided that such

investigation and discovery shall be limited to that Claimant 's status as a Clas s

Member and the validity and amount of the Claimant's claim . No discovery shall

be allowed on the merits of the Action or Settlement in connection with

processing of the Proofs of Claim.

19. Payment pursuant to this Stipulation shall be deemed final and conclusive against all

Class Members . All Class Members whose claims are not approved by the Court, including any

Class Member who does not submit a valid proof of claim, shall be barred from participating in

distributions from the Net Settlement Fund, but otherwise shall be bound by all of the terms of

this Stipulation and the Settlement, including the terms of the Order and Final Judgment to be

entered in the Action and the releases provided for in the Order and Final Judgment and herein,

and will be barred from bringing any action against the Released Parties concerning the Settled

Claims.

20. All proceedings with respect to the administration, processing and determination of

claims authorized by this Stipulation and the determination of all controversies relating thereto ,

including disputed questions of law and fact with respect to the validity of claims, shall be

subject to the jurisdiction of the Court .

21 . The Net Settlement Fund shall be distributed to Authorized Claimants by the Settlement

Administrator only after the Effective Date and after : (i) all Claims have been processed, and all

Claimants whose Claims have been rejected or disallowed, in whole or in part, have bee n

notified and provided the opportunity to be heard concerning such rejection or disallowance ;

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(ii) all objections with respect to all rejected or disallowed claims have been resolved by the

Court, and all appeals therefrom have been resolved or the time therefore has expired; (iii) all

matters with respect to attorneys' fees, costs, and disbursements have been resolved by the Court

and all appeals therefrom have been resolved or the time therefore has expired ; and (iv) all costs

of administration have been paid .

EFFECT OF DISAPPROVAL OR TERMINATION

22. The Settlement shall be conditioned upon the entry by the Court of the Order and Final

Judgment and either (i) the final affirmance of the Order and Final Judgment on appeal or (ii) the

expiration of the time in which the Order and Final Judgment is subject to review upon appeal or

review by writ of certiorari . If these conditions are not met following the Parties' reasonable

best efforts to satisfy them, the Stipulation shall be canceled and terminated unless Counsel for

the Settling Parties mutually agree in writing to proceed with the Stipulation .

23 . Except as otherwise provided herein, if the Settlement is terminated or fails to become

effective for any reason, the terms and provisions of this Stipulation (other than this paragraph

and the relevant provisions of paragraphs 15, 24 and 25 of this stipulation) shall have no further

force or effect with respect to the Parties and shall not be deemed to prejudice the respective

positions of the Parties. The Parties will continue with all proceedings that have been stayed

given the prospect of settlement, and except as otherwise expressly provided, the Parties shall

proceed in all respects as if this Stipulation and any related orders or memoranda had not been

entered or executed .

24 . Within five business days of the termination of the Settlement as described above, the

Escrow Agent will return to the Defendants' insurer that issues the payment described in

paragraph 4 the remaining portion of the Gross Settlement Fund, including the amount s

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withdrawn in accordance with paragraph 12 herein, less any amount for Administration Costs o r

Taxes either paid out or already incurred but unpaid .

NO ADMISSION OF WRONGDOING

25 . This Stipulation, whether or not consummated, and any proceedings taken pursuant to it :

a. shall not be offered or received as evidence of the truth of any allegation or th e

validity of any claim that has been or could have been made or asserted agains t

any of the Released Parties in this Action or any other litigation, or the deficienc y

of any defense that has been or could have been asse rted in this Action or any

other litigation ;

b. shall not be offered or received as evidence of any liability, negligence , fault o r

wrongdoing on the part of any of the Released Parties , or deemed to give rise to

any presumption with respect to any liability, negligence , fault or wrongdoing on

the part of any of the Released Parties ;

c. shall not be deemed an admission or concession by any of the Released Part ies

that the consideration to be paid pursuant to the Settlement represents the amoun t

which could be or would have been recovered after trial ; and

d. shall not be offered or received as evidence, and shall not be deemed a n

admission or concession by Plaintiffs or any Class Member, that any of the

Settled Claims are without merit or that any defenses of the Released Parties with

respect thereto have any merit.

ATTORNEYS' FEES AND EXPENSE S

26. Plaintiffs' Counsel will apply to the Court for an award from the Gross Settlement Fund

of attorneys ' fees in an amount not to exceed thirty-three and V3 percent (33.3%) of the Gross

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Settlement Fund and reimbursement of expenses . The amount of the attorneys' fees and

expenses to be awarded shall be determined by the Court . The failure of the Court to award the

full amount of fees and expenses requested by Plaintiffs' Counsel shall not affect the finality of

the Stipulation . The award may be paid from the Gross Settlement Fund to Plaintiffs' Lead

Counsel and Liaison Counsel within five business days after entry by the Court of any Order

awarding attorneys' fees and expenses . Fees and expenses, as awarded by the Court will be

allocated among Plaintiffs' Counsel in a fashion, which, in their opinion, fairly compensates

Plaintiffs' Counsel for their respective contributions to the progress of, and results obtained, in

the Action . Neither the filing of objections to the award of attorneys' fees and expenses or to the

Settlement, nor any appeal from the order awarding attorneys' fees and expenses or approving

the Settlement or collateral attack on the order awarding attorneys' fees and expenses or

approving the Settlement shall delay payment of the award to Plaintiffs' Counsel ; provided,

however, that in the event the order awarding attorneys' fees and expenses is reversed on appeal

or the amount of attorneys' fees and expenses awarded by the Court is reduced on appeal,

Plaintiffs' Counsel agrees that they are jointly and severally liable to make appropriate refunds or

repayments to the Gross Settlement Fund plus accrued interest at the same net rate as is or would

have been earned by the Gross Settlement Fund . Plaintiffs' Counsel shall make the appropriate

refund or repayment within ten business days of (a) the entry of an order reducing an award of

attorneys' fees or expenses, or (b) the termination of the Settlement . Plaintiffs' Counsel agrees,

as a condition of receiving such fees and expenses, that they are subject to the orders and

jurisdiction of the United States District Court for the Eastern District of Pennsylvania for the

purpose of enforcing the provisions of this paragraph.

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MISCELLANEOUS PROVISION S

27. Each exhibit to this Stipulation is incorporated by reference .

28. The Parties acknowledge that the Settlement Amount is being paid by the Defendants'

insurer on behalf of the Defendants . Defendants each acknowledge that none of them has any

claim to any portion of the Settlement Amount in his or its own right .

29. If a case is commenced with respect to any of the Defendants (or any insurer contributing

funds to the Settlement Fund on behalf of Defendants) under Title 11 of the United States Code

(Bankruptcy), or a trustee, receiver or conservator is appointed under any similar law, and in the

event of the entry of a final order of a court of competent jurisdiction determining the transfer of

money to the Gross Settlement Fund or any portion thereof by or on behalf of a Defendant to be

a preference, voidable transfer, fraudulent transfer or similar transaction and any portion thereof

is required to be returned, and such amount is not promptly deposited to the Gross Settlement

Fund by others, then, at the election of Plaintiffs' Lead Counsel, the parties shall jointly move

the Court to vacate and set aside the releases given and Order and Final Judgment entered in

favor of the Settling Defendant pursuant to this Stipulation, which releases and Order and Final

Judgment shall be null and void, and the parties shall be restored to their respective positions in

the litigation as of the date a day prior to the date of this Stipulation and the cash amounts in th e

Gross Settlement Fund shall be returned subject to Paragraph 11 above .

30. The Parties intend that this Settlement resolve all disputes asserted or which could be

asserted by the Class Members against the Released Parties regarding the Settled Claims .

Accordingly, the Parties agree not to assert in any forum that the litigation was brought or

defended in bad faith or without a reasonable basis . The Parties shall assert no claim that any

other Party violated Rule 11 of the Federal Rules of Civil Procedure in prosecuting or defendin g

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this Action . The Parties agree that the amounts paid and the other terms of this Stipulation and

the Settlement were negotiated at arm's length in good faith by the Parties, and reflect a

settlement that was reached voluntarily after consultation with experienced legal counsel .

31 . This Stipulation may not be modified or amended, nor may any of its provisions be

waived, except by a writing signed by all Parties or their successors in interest .

32. The headings herein are used for the purpose of convenience only and are not meant to

have any legal effect.

33. In the event of any dispute with respect to the meaning, effect or interpretation of the

Stipulation or an attached exhibit or a claimed breach of the Stipulation or an attached exhibit,

the Parties hereto agree that such dispute will be adjudicated only in the Court . The Court shall

retain jurisdiction to administer the Settlement, resolving any disputes hereunder and enforcing

the terms of the Stipulation .

34. Any failure by any Party to insist upon the strict performance by any other Party of any

of the provisions of the Stipulation shall not be deemed a waiver of any of the provisions and,

notwithstanding such failure, such Party shall have the right to insist upon strict performance of

any and all provisions of the Stipulation to be performed by such other Party . The waiver by one

Party of any breach of this Stipulation by any other Party shall not be deemed a waiver of any

other prior or subsequent breach of this Stipulation .

35. This Stipulation and its exhibits constitute the entire agreement among the Parties and

supersede any and all prior agreements or understandings concerning the subject matter hereof .

36. This Stipulation may be executed in one or more counterparts . All executed counterparts

and each of them shall be deemed to be one and the same instrument .

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37. This Stipulation shall be binding upon, and shall inure to the benefit of, the Parties'

successors and assigns.

38 . The construction, interpretation, operation, effect and validity of this Stipulation, and all

documents necessary to effectuate it, shall be governed by the internal laws of the

Commonwealth of Pennsylvania, without regard to conflicts of laws, except to the extent that

federal law governs .

39. This Stipulation together with its exhibits, shall be deemed to have been mutually

prepared by .the Parties and shall not be construed against any of them by reason of authorship .

40. The Parties and their attorneys agree to cooperate fully with one another in seeking Court

approval of the Stipulation and the Settlement, and to use their best efforts to effect, as promptly

as practicable, the consummation of the Stipulation and the Settlement and the dismissal of the

Action, with prejudice and without costs to any Party, except as provided for herein .

41 . All counsel executing this Stipulation represent and warrant that they have the ful l

authority to do so on behalf of their respective clients .

DATED : 2006 SHERRIE R. AVETTBERGER ONTAGUE,

By: AA.Sherrie R . Save1622 Locust StreetPhiladelphia, PA 19103

DATED: , 2006 CHET B. WALDMANWOLF POPPER LLP

By :Chet B. Waldman845 Third AvenueNew York, NY 1002 2

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37. This Stipulation shall be binding upon, and shall inure to the benefit of, the Parties'

successors and assigns .

38. The construction, interpretation, operation, effect and validity of this Stipulation, and all

documents necessary to effectuate it, shall be governed by the internal laws of the

Commonwealth of Pennsylvania, without regard to conflicts of laws, except to the extent that

federal law governs .

39. This Stipulation together with its exhibits, shall be deemed to have been mutually

prepared by the Parties and shall not be construed against any of them by reason of authorship .

40. The Parties and their attorneys agree to cooperate fully with one another in seeking Court

approval of the Stipulation and the Settlement, and to use their best efforts to effect, as promptly

as practicable, the consummation of the Stipulation and the Settlement and the dismissal of the

Action, with prejudice and without costs to any Party, except as provided for herein .

41 . All counsel executing this Stipulation represent and warrant that they have the full

authority to do so on behalf of their respective clients .

DATED: , 2006 I SHERRIE R. SAVETTBERGER & MONTAGUE, P.C .

By :Sherrie R . Savett1622 Locust StreetPhiladelphia, PA 19103

DATED :.2006 CHET B. WALDMAN

WOLF PO PER LLP

By-Chet

Jam' ~/"B . Waldm an

845 Third AvenueNew York, NY 1002 2

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DATED : 5 /30 , 2006 KARIN E . FISCHABBEY GARDY, LLP

By : 1 .z E. x S&4Karin E. Fisch .,,,j4212 East 39th Street jtl*v r . -• /New York, NY 1001 6

Plaintiffs' Lead Counsel

DATED: 3301 2006, JEFFREY W. GOLANBARRACK, RODOS & BACINE

By : ;? ;~~V=e . Golan

3300 Two Commerce Square2001 Market StreetPhiladelphia, PA 19103

Plaintiffs' Liaison Counse l

DATED: , 2006 DAVID H . MARIONCRAIG E . ZIEGLERMONTGOMERY, McCRACKEN, WALKER

& RHOADS, LLP

By :David H. MarionCraig E . Ziegler123 South Broad StreetPhiladelphia, PA 19109

Counselfor Defendants Raymond L. Loewenand Paul Wagler

28

DATED: , 2006 KARIN E. FISCHABBEY GARDY, LLP

By :Karin E . Fisch212 East 39th StreetNew York, NY 1001 6

Plaintiffs' Lead Counsel

DATED: , 2006 JEFFREY W. GOLANBARRACK, RODOS & BACIN E

By :Jeffrey W. Golan3300 Two Commerce Square2001 Market StreetPhiladelphia, PA 1910 3

Plaint if~ js' Liaison Counsel

A0a 3 1DATED : , 2006 DAVID H. MARIONCRAIG E. ZIEGLERMONTGOMERY, McCRACKEN, WALKER& RHO S, LLP

By :av' ri n

Cri i er123 South Broad StreetPhiladelphia, PA 19109

Counsel for Defendants Raymond L . Loewenand Paul Wagler

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DATED : e, 3 b , 2006 JOHN W. EDWARDS IIJO S Y

By : OW% &"Tohn W . Edwards, I I882 Sand Hill Road

Suite 240Menlo Park , CA 9402 5

Counsel for The Loewen Group, Inc .,n/k/a Alderwoods Group, Inc .

IMANAGE 236543 . 1 88640001

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