Document:

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                                                                    Exhibit 10.3

                                                                  EXECUTION COPY

                     AMENDMENT NO. 1 TO THE CREDIT AGREEMENT

                                               Dated as of January 23, 2004

                  AMENDMENT NO. 1 TO THE CREDIT AGREEMENT (this "AMENDMENT")
among ALDERWOODS GROUP, INC., a Delaware corporation (the "BORROWER"), the
banks, financial institutions and other institutional lenders parties to the
Credit Agreement referred to below (collectively, the "LENDERS") and BANK OF
AMERICA, N.A., as Administrative Agent (in such capacity, the "ADMINISTRATIVE
AGENT").

                  PRELIMINARY STATEMENTS:

                  (1) WHEREAS, the Borrower, the Lenders and the Administrative
Agent have entered into a Credit Agreement dated as of September 17, 2003 (such
Credit Agreement, as amended, supplemented or otherwise modified through the
date hereof, the "CREDIT AGREEMENT"). Capitalized terms not otherwise defined in
this Amendment have the same meanings as specified in the Credit Agreement.

                  (2) WHEREAS, the Borrower desires to borrow up to $25 million
of senior subordinated unsecured bridge loans under a bridge facility (the
"BRIDGE FACILITY"), the proceeds of which shall be used to redeem the
Subordinated Notes;

                  (3) WHEREAS, the Borrower also desires to obtain the
flexibility to borrow up to $25 million of funds in the form of additional term
loans under the Credit Agreement, the proceeds of which shall be used solely to
prepay, refinance or repurchase or redeem (and retire), whether through a debt
tender offer or otherwise, the Seven Year Notes and under certain specified
circumstances, the Bridge Facility and certain advances under the Revolving
Credit Facility (and pay fees and expenses in connection therewith);

                  (4) WHEREAS, the Borrower also desires to obtain the ability
to prepay, refinance or repurchase or redeem (and retire), whether through a
debt tender offer or otherwise, the Seven Year Notes and refinance the Bridge
Facility in the future;

                  (5) WHEREAS, the Borrower also desires to reduce the
Applicable Rate payable in respect of the Term Loans;

                  (6) WHEREAS, the Borrower has requested that the Lenders amend
the Credit Agreement to effect the changes described above; and

                  (7) WHEREAS, the Lenders have agreed, subject to the terms and
conditions hereinafter set forth, to amend the Credit Agreement in certain
respects as set forth below;

                  NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the sufficiency and receipt of all of which is
hereby acknowledged, the parties hereto hereby agree as follows:

                          Alderwoods - Amendment No. 1

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                  SECTION 1. AMENDMENTS TO CREDIT AGREEMENT. The Credit
Agreement is, effective as of the date hereof and subject to the satisfaction of
the conditions precedent set forth in Section 2, hereby amended as follows:

                  (a) Section 1.01 of the Credit Agreement is hereby amended by
adding the following definitions in the appropriate alphabetical order:

                  "ADDITIONAL TERM AMOUNT" means an amount up to $25,000,000.

                  "ADDITIONAL TERM COMMITMENT" means, as to each Additional Term
Lender, its obligation to make Additional Term Loans to the Borrower established
pursuant to SECTION 2.14 or in one or more Assignment and Assumptions, pursuant
to which such Lender becomes a party hereto, as applicable, as such amounts may
be adjusted from time to time in accordance with this Agreement.

                  "ADDITIONAL TERM COMMITMENT EFFECTIVE DATE" has the meaning
set forth in SECTION 2.14(a).

                  "ADDITIONAL TERM FACILITY" means, at any time, the aggregate
amount of the Additional Term Lenders' Additional Term Loans at such time.

                  "ADDITIONAL TERM LENDERS" means, at any time, any Lender that
has an Additional Term Commitment or an outstanding Additional Term Loan at such
time.

                  "ADDITIONAL TERM LOAN" means an advance made by one or more
Lenders under the Additional Term Facility in accordance with the relevant
Additional Term Loan Assumption Agreement.

                  "ADDITIONAL TERM LOAN ASSUMPTION AGREEMENT" means an
additional term loan assumption agreement in form and substance reasonably
satisfactory to the Administrative Agent and the Borrower, among the Borrower,
the Administrative Agent and one or more Additional Term Lenders.

                  "ADDITIONAL TERM LOAN DRAWING PERIOD" has the meaning set
forth in SECTION 2.14(a).

                  "ADDITIONAL TERM LOAN NOTICE" has the meaning specified in
SECTION 2.14(a).

                  "BRIDGE FACILITY" means the unsecured subordinated bridge
facility in an aggregate principal amount not to exceed $25 million between Banc
of America Bridge LLC, as bridge lender, the other lenders from time to time
party thereto, and the Borrower as such facility may be amended, amended and
restated or otherwise modified from time to time in accordance with SECTION
7.17.

                  (b) Section 1.01 of the Credit Agreement is hereby further
amended by replacing subclause (a) in the definition of "Applicable Rate" in its
entirety with the following:

                           "(a) with respect to Term Loans, a percentage per
                  annum equal to (i) for Eurodollar Rate Loans, the Eurodollar
                  Rate then in effect for such Term Loans PLUS 2.75% and (ii)
                  for Base Rate Loans, the Base Rate then in effect for such
                  Term Loans PLUS 1.75 %,"

                  (c) Section 1.01 of the Credit Agreement is hereby further
amended by restating subclause (a) in the definition of "Appropriate Lender" in
its entirety to read as follows:

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                           "(a) with respect to the Term Facility, the Revolving
                  Credit Facility or the Additional Term Facility, a Lender that
                  has a Commitment with respect to such Facility at such time,".

                  (d) Section 1.01 of the Credit Agreement is hereby further
amended by restating the definition of "Commitment" in its entirety to read as
follows:

                           "COMMITMENT" means a Term Commitment, a Revolving
                  Credit Commitment or an Additional Term Commitment, as the
                  context may require.

                  (e) Section 1.01 of the Credit Agreement is hereby further
amended by restating the definition of "Facility" in its entirety to read as
follows:

                           "FACILITY" means the Term Facility, the Revolving
                  Credit Facility, the Additional Term Facility, the Swing Line
                  Sublimit or the Letter of Credit Sublimit, as the context may
                  require.

                  (f) Section 1.01 of the Credit Agreement is hereby further
amended by restating the definition of "Loan Documents" in its entirety to read
as follows:

                           "LOAN DOCUMENTS" means, collectively, (a) for
                  purposes of this Agreement and the Notes and any amendment,
                  supplement or other modification hereof or thereof and for all
                  other purposes other than for purposes of the Guaranty and the
                  Collateral Documents, (i) this Agreement, (ii) the Notes,
                  (iii) the Guaranty, (iv) the Collateral Documents, (v) the Fee
                  Letter, (vi) each Letter of Credit Application and (vii) each
                  Additional Term Loan Assumption Agreement and (b) for purposes
                  of the Guaranty and the Collateral Documents, (i) this
                  Agreement, (ii) the Notes, (iii) the Guaranty, (iv) the
                  Collateral Documents, (v) each Letter of Credit Application,
                  (vi) each Additional Term Loan Assumption Agreement, (vii) the
                  Fee Letter and (viii) each Secured Hedge Agreement.

                  (g) Section 1.01 of the Credit Agreement is hereby further
amended by restating the definition of "Related Documents" in its entirety to
read as follows:

                           "RELATED DOCUMENTS" means the Seven Year Notes
                  Indenture, the Subordinated Notes Indenture, the loan
                  documents in connection with the Bridge Facility and any loan
                  documents, indentures, instruments or similar documents
                  relating to Indebtedness that replaces, renews, extends or
                  otherwise refinances any of the foregoing.

                  (h) Section 1.01 of the Credit Agreement is hereby further
amended by restating the definition of "Secured Hedge Agreement" in its entirety
to read as follows:

                           "SECURED HEDGE AGREEMENT" means any interest rate
                  Swap Contract or foreign exchange rate Swap Contract required
                  or permitted under ARTICLE VI or VII that is entered into by
                  and between the Borrower and any Hedge Bank.

                  (i) Section 1.01 of the Credit Agreement is hereby further
amended by adding at the end of the definition of "Term Commitment" the
following language:

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                           "Unless the context shall otherwise require, after
                  the effectiveness of any Additional Term Commitment, the term
                  "TERM COMMITMENT" shall include such Additional Term
                  Commitment."

                  (j) Section 1.01 of the Credit Agreement is hereby further
amended by adding at the end of the definition of "Term Facility" the following
language:

                           "Unless the context shall otherwise require,
                  the term "TERM FACILITY" shall include the Additional Term
                  Facility."

                  (k) Section 1.01 of the Credit Agreement is hereby further
amended by adding at the end of the definition of "Term Loan" the following
language:

                           "Unless the context shall otherwise require, the term
"TERM LOAN" shall also include Additional Term Loans."

                  (l) Article II of the Credit Agreement is hereby amended by
redesignating Section 2.01(a) as Section 2.01(a)(i) and adding a new Section
2.01(a)(ii) that reads as follows:

                           "(ii) THE ADDITIONAL TERM LOANS. Subject to the terms
                  and conditions set forth in SECTION 2.14, each Additional Term
                  Lender severally agrees to make a single loan (each such loan,
                  an "ADDITIONAL TERM LOAN") to the Borrower, on any Business
                  Day selected by the Borrower pursuant to SECTION 2.14, in an
                  aggregate amount not to exceed such Lender's Additional Term
                  Commitment at such time, subject to the terms and conditions
                  described in SECTION 2.14. Amounts borrowed under this SECTION
                  2.01(a)(II) and repaid or prepaid may not be reborrowed.
                  Additional Term Loans may be Base Rate Loans or Eurodollar
                  Rate Loans, as further provided herein."

                  (m) Article II of the Credit Agreement is hereby further
amended by adding at the end thereof a new Section 2.14 to read in full as
follows:

                           "2.14. ADDITIONAL TERM LOAN COMMITMENTS. (a) The
                  Borrower may, at one time only during the term of the Term
                  Facility by written notice (the "ADDITIONAL TERM LOAN NOTICE")
                  to the Administrative Agent request Additional Term
                  Commitments which shall have the same terms as the Term
                  Commitments in an amount not to exceed the Additional Term
                  Amount from one or more Additional Term Lenders, which may
                  include any existing Lender; PROVIDED that each Additional
                  Term Lender, if not already a Lender hereunder, shall be
                  subject to the approval of the Administrative Agent which
                  approval shall not be unreasonably withheld or delayed and, if
                  withheld, the reason therefor shall be specified in writing).
                  The Additional Term Loan Notice shall set forth the amount of
                  the Additional Term Commitments being requested (which shall
                  be in a minimum amount of $5,000,000, a maximum amount of
                  $25,000,000 and in minimum increments of $1,000,000), the
                  effective date of such commitments, which shall be no less
                  than 15 days following the delivery of the Additional Term
                  Loan Notice (the "ADDITIONAL TERM COMMITMENT EFFECTIVE DATE")
                  and the drawing date of the Additional Term Loan. The Borrower
                  may elect to make a single drawing of the Additional Term Loan
                  on the date specified for such drawing in the Additional Term
                  Loan Notice during the period beginning the Additional Term
                  Commitment Effective Date through the date that is ninety days
                  thereafter (such period being the "ADDITIONAL TERM LOAN
                  DRAWING PERIOD"). During the Additional Term Loan Drawing
                  Period and prior to the date specified in the Additional Term
                  Loan Notice for the drawing of Additional Term Loans,

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                  the Borrower may request Revolving Credit Loans under SECTION
                  2.01(b) from time to time in an aggregate amount not to exceed
                  the aggregate amount of Additional Term Commitments to be used
                  solely for the purposes set forth in the immediately
                  succeeding sentence and, with respect to any repayment of the
                  Bridge Facility, subject to compliance with the Consolidated
                  Leverage Ratio requirement set forth in SECTION 7.16; PROVIDED
                  that any such Revolving Credit Borrowings shall be repaid in
                  full with the proceeds of the Additional Term Loans on the
                  date of the drawing of such Additional Term Loans. The
                  proceeds of the Additional Term Loans shall be used by the
                  Borrower solely to (i) prepay, refinance, repurchase or redeem
                  (and retire), whether through a debt tender offer or
                  otherwise, the Seven Year Notes (and pay fees and expenses in
                  connection therewith), (ii) repay the Bridge Facility upon the
                  maturity thereof so long as after giving effect to such
                  repayment there is either minimum availability under the
                  Revolving Credit Facility of at least $25,000,000, cash on
                  hand of at least $25,000,000 or a combination of cash on hand
                  and availability under the Revolving Credit Facility of at
                  least $25,000,000 or (iii) repay any Revolving Credit Loans
                  made pursuant to the immediately preceding sentence.

                           (b) The Borrower and each Additional Term Lender
                  shall execute and deliver to the Administrative Agent an
                  Additional Term Loan Assumption Agreement and such other
                  documentation as the Administrative Agent shall reasonably
                  specify to evidence the Additional Term Commitment of such
                  Additional Term Lender. The Administrative Agent shall
                  promptly notify each Lender as to the effectiveness of each
                  Additional Term Loan Assumption Agreement. Each of the parties
                  hereto hereby agrees that, upon the effectiveness of any
                  Additional Term Loan Assumption Agreement, the Additional Term
                  Loan shall be deemed to be a Term Loan for all purposes
                  hereunder and any and all terms and provisions in the Loan
                  Documents that pertain to the Term Loans shall be deemed to
                  apply to the Additional Term Loans, unless the context
                  otherwise requires. Upon the drawing of the Additional Term
                  Loans requested in the Additional Term Loan Notice,
                  amortization shall commence with respect to the Additional
                  Term Loans and shall be payable at the rates and on the dates
                  as amortization is payable on the Term Loans and the
                  amortization schedule set forth in SECTION 2.04 of this
                  Agreement shall be deemed amended to the extent necessary to
                  incorporate the amortization of the Additional Term Loans. Any
                  such deemed amendment may be memorialized in writing by the
                  Administrative Agent with the Borrower's consent (not to be
                  unreasonably withheld) and furnished to the other parties
                  hereto. Additional Term Loans shall earn interest at the same
                  rate and shall be payable on the same terms and the same dates
                  as interest on the Term Loans; PROVIDED that to the extent an
                  Additional Term Loan is made during the middle of an Interest
                  Period with respect to the Term Loans, such Additional Term
                  Loan shall accrue interest at the Base Rate through the end of
                  such Interest Period.

                           (c) As a condition precedent to the effectiveness of
                  the Additional Term Commitment, the Borrower shall deliver to
                  the Administrative Agent a certificate of each Loan Party
                  dated as of the Additional Term Commitment Effective Date
                  signed by a Responsible Officer of such Loan Party (i)
                  certifying and attaching the resolutions adopted by such Loan
                  Party approving or consenting to such Additional Term
                  Commitments and Additional Term Loans and (ii) in the case of
                  the Borrower, certifying that, before and after giving effect
                  to such Additional Term Commitments and Additional Term Loans,
                  (A) the representations and warranties contained in ARTICLE V
                  of this Agreement and in the other Loan Documents are true and
                  correct in all material respects on and as of the Additional
                  Term Commitment Effective Date, except to the extent that such
                  representations and warranties specifically refer to an
                  earlier date, in which case they are true and correct in all
                  material respects as of such earlier date, and except that for

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                  purposes of this SECTION 2.14, the representations and
                  warranties contained in subsections (a) and (b) of SECTION
                  5.05 shall be deemed to refer to the most recent statements
                  furnished pursuant to subsections (a) and (b), respectively,
                  of SECTION 6.01, and (B) no Default exists. In addition, as
                  conditions precedent to the effectiveness of the Additional
                  Term Commitment, the Borrower shall deliver all such other
                  certificates and documentation reasonably requested by the
                  Administrative Agent, including, without limitation, an
                  opinion of Jones Day or such other counsel of the Borrower
                  acceptable to the Administrative Agent, dated the Additional
                  Term Commitment Effective Date, covering such matters related
                  to the Additional Term Loans as the Administrative Agent shall
                  reasonably request."

                  (n) Section 6.03(e) is hereby amended by replacing each
reference to "Section 2.06" therein with a reference to "Section 2.05".

                  (o) Section 7.02(a)(B) of the Credit Agreement is hereby
restated in its entirety to read as follows:

                           "(B) Indebtedness evidenced by the Seven Year Notes
                  and the Subordinated Notes and Indebtedness under the Bridge
                  Facility, and any refinancings, refundings, renewals,
                  replacements or extensions thereof or indebtedness issued
                  after a repurchase or redemption (and retirement) thereof,
                  whether through a debt tender offer or otherwise, PROVIDED
                  that (i) the aggregate amount of such refinanced, refunded,
                  renewed, replaced, extended or other Indebtedness at any time
                  outstanding does not exceed $375,000,000 and (ii) the terms
                  relating to amortization, maturity, collateral (if any) and,
                  except with respect to the Bridge Facility, subordination (if
                  any), and other material terms taken as a whole, of any such
                  extending, refunding, renewing, refinancing or other
                  Indebtedness, and of any agreement entered into and of any
                  instrument issued in connection therewith, are no less
                  favorable in any material respect to the Loan Parties or the
                  Lenders than the terms of any agreement or instrument
                  governing the Indebtedness being extended, refunded or
                  refinanced and the interest rate applicable to any such
                  extending, refunding or refinancing Indebtedness does not
                  exceed the then applicable market interest rate."

                  (p) Section 7.04(b) of the Credit Agreement is hereby restated
in its entirety to read as follows:

                           "(b) any Subsidiary may Dispose of all or
                  substantially all of its assets (upon voluntary liquidation or
                  otherwise) (i) to the Borrower or to another Subsidiary;
                  PROVIDED that if the transferor in such a transaction is a
                  Guarantor, then the transferee must either be the Borrower or
                  a Guarantor or (ii) in a transaction otherwise permitted under
                  SECTION 7.05; and".

                  (q) Section 7.06(e) of the Credit Agreement is hereby amended
by adding the following language at the end thereof:

                           "and the Borrower may prepay, redeem, defease or
                  otherwise satisfy in full the entire principal amount of the
                  Subordinated Notes with the proceeds of the Bridge Facility."

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                  (r) Section 7.16 of the Credit Agreement is hereby amended by
deleting the word "and" from the end of subsection (i) thereof, replacing it
with a "," and adding a new subsection (iii) immediately following subsection
(ii) to read in full as follows:

                           "and (iii) the prepayment, redemption, defeasance or
                  satisfaction in full of the Subordinated Notes permitted under
                  SECTION 7.06(e) and any prepayment, repurchase or redemption
                  (and retirement) of the Seven Year Notes and the Bridge
                  Facility as part of a transaction permitted under SECTION
                  7.02(a)(B) or with the proceeds of Additional Term Loans in
                  accordance with SECTION 2.14(a) or with the proceeds of
                  Revolving Credit Advances (but solely to the extent Revolving
                  Credit Advances are permitted for such use in SECTION 2.14(a)
                  and this SECTION 7.16)"

                  (s) Section 7.16 of the Credit Agreement is hereby further
amended by adding the following sentence at the end thereof:

                           "The Borrower may repay the Bridge Facility at the
                  maturity thereof using proceeds of the Revolving Credit
                  Facility or cash on hand so long as after giving effect to
                  such repayment there is either minimum availability under the
                  Revolving Credit Facility of at least $25,000,000, cash on
                  hand of at least $25,000,000 or a combination of cash on hand
                  and availability under the Revolving Credit Facility of at
                  least $25,000,000; PROVIDED, that no proceeds of the Revolving
                  Credit Facility may be used for such purpose if the
                  Consolidated Leverage Ratio on the proposed date of such
                  repayment is greater than 4.25:1.00 or if the Consolidated
                  Leverage Ratio would be greater than 4.25:1.00 after giving
                  effect to any such repayment."

                  (t) Section 7.17 of the Credit Agreement is hereby amended by
adding at the end thereof the following proviso:

                           "; PROVIDED that the Borrower may cancel, terminate,
                  amend or modify any Related Document in connection with any
                  refinancing, refunding, renewal, extension, redemption or
                  repurchase (and retirement) of any Indebtedness issued under
                  or in connection with any such Related Document as part of a
                  transaction permitted under SECTION 7.02(a)(B) or SECTION
                  7.16."

                  (u) Section 7.20 of the Credit Agreement is hereby amended by
replacing the reference to "Section 7.03(c)" therein with a reference to
"Section 7.03(h)".

                  (v) Section 8.01(e) of the Credit Agreement is hereby amended
by restating the provisio at the end thereof to read in full as follows:

                           "PROVIDED that this clause (e) shall not apply to
                  Indebtedness (excluding the Seven Year Notes, the Subordinated
                  Notes and the Bridge Facility or any Indebtedness issued
                  pursuant to a refinancing, refunding, renewal, replacement,
                  extension, redemption or repurchase (and retirement) of any of
                  the foregoing) that becomes due (or for which an offer to
                  repurchase, prepay, defease or redeem such Indebtedness is
                  required to be made) as a result of a "due on sale" provision
                  in such Indebtedness that is limited to the specific property
                  being sold so long as such Indebtedness is paid when due; or".

                  SECTION 2. CONDITIONS OF EFFECTIVENESS. (a) This Amendment
shall become effective as of the date first written above (the "AMENDMENT
EFFECTIVE DATE") when the Administrative Agent shall have received counterparts
of this Amendment executed by the Borrower and the Required

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Lenders or, as to any of the Lenders, advice satisfactory to the Administrative
Agent that such Lender has executed this Amendment and the consent attached
hereto executed by each of the Loan Parties (other than the Borrower) and
Section 1 (except to the extent set forth in Section 2(b) below) shall become
effective when, and only when, the Administrative Agent shall have additionally
received all of the following documents, each such document (unless otherwise
specified) dated the Amendment Effective Date and in form and substance
satisfactory to the Administrative Agent:

                           (i) certified copies of (A) the resolutions of the
                  Board of Directors of (1) the Borrower approving this
                  Amendment and the matters contemplated hereby and thereby and
                  (2) each other Loan Party evidencing approval of the Consent
                  and the matters contemplated hereby and thereby and (B) all
                  documents evidencing other necessary corporate action and
                  governmental approvals, if any, with respect to this
                  Amendment, the Consent and the matters contemplated hereby and
                  thereby;

                           (ii) a certificate of the Secretary or an Assistant
                  Secretary of the Borrower and each other Loan Party certifying
                  (A) the names and true signatures of the officers of the
                  Borrower and such other Loan Party authorized to sign this
                  Amendment and the Consent and the other documents to be
                  delivered hereunder and thereunder, (B) that no authorization
                  or approval or other action by, and no notice to or filing
                  with, any governmental authority or regulatory body, or any
                  third party to any agreements and instruments of any Loan
                  Party is required for the due execution, delivery or
                  performance by the Loan Parties of this Amendment, (C) that
                  the representations and warranties contained in this Amendment
                  are true and correct as of the Amendment Effective Date and
                  (D) that no event has occurred and is continuing that
                  constitutes a Default;

                           (iii) an amendment fee for the account of each Lender
                  approving this Amendment on or before January 21, 2004 in an
                  amount equal to 0.10% of the aggregate amount of each such
                  Lender's Loans and Commitments; and

                           (iv) the Borrower shall have paid all reasonable
                  costs and expenses (including the reasonable fees, charges and
                  disbursements of counsel to the Administrative Agent) incurred
                  in connection with the preparation, negotiation and execution
                  of this Amendment.

                  (b) Section 1(b) of this Amendment shall become effective as
of the date (the "REPRICING AMENDMENT EFFECTIVE DATE") when (i) the Amendment
Effective Date shall have occurred and (ii) the Administrative Agent shall have
received counterparts of this Amendment executed by the Borrower and each Term
Lender, or, as to any of the Term Lenders, advice satisfactory to the
Administrative Agent that such Term Lender has executed this Amendment.

                  SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as follows:

                           (a) The execution, delivery and performance by each
         Loan Party of this Amendment and each Loan Document as amended by the
         Amendment, are within such Loan Party's corporate or other powers, have
         been duly authorized by all necessary corporate or other organizational
         action, and do not and will not (a) contravene the terms of any of such
         Person's Organization Documents; (b) conflict with or result in any
         breach or contravention of, or the creation of any Lien under, or
         require any payment to be made under (i) any material Contractual
         Obligation to which such Person is a party or affecting such Person or
         the properties of such Person or any of its Subsidiaries other than as
         contemplated hereby or (ii) any order, injunction,

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                          Alderwoods - Amendment No. 1

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         writ or decree of any Governmental Authority or any arbitral award to
         which such Person or its property is subject; or (c) violate any Law.

                           (b) This Amendment and the consent attached hereto,
         when delivered hereunder, will have been, duly executed and delivered
         by each Loan Party that is party thereto. This Amendment and the
         consent attached hereto, when so delivered will constitute, a legal,
         valid and binding obligation of such Loan Party, enforceable against
         each Loan Party that is party thereto in accordance with its terms.

                  SECTION 4. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT,
THE NOTES AND THE LOAN DOCUMENTS. (a) On and after each of the Amendment
Effective Date and the Repricing Amendment Effective Date, each reference in the
Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like
import referring to the Credit Agreement, and each reference in the Notes and
each of the other Loan Documents to "the Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement, as amended by this Amendment.

                  (b) The Credit Agreement, the Notes and each of the other Loan
Documents, as specifically amended by this Amendment, are and shall continue to
be in full force and effect and are hereby in all respects ratified and
confirmed. Without limiting the generality of the foregoing, the Collateral
Documents and all of the Collateral described therein do and shall continue to
secure the payment of all Obligations of the Loan Parties under the Loan
Documents, in each case as amended by this Amendment.

                  (c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any Lender or the Administrative Agent under any
of the Loan Documents, nor constitute a waiver of any provision of any of the
Loan Documents.

                  SECTION 5. COSTS, EXPENSES. The Borrower agrees to pay on
demand all costs and expenses of the Administrative Agent in connection with the
preparation, execution, delivery and administration, modification and amendment
of this Amendment and the other instruments and documents to be delivered
hereunder (including, without limitation, the reasonable fees and expenses of
counsel for the Administrative Agent) in accordance with the terms of SECTION
10.04 of the Credit Agreement.

                  SECTION 6. EXECUTION IN COUNTERPARTS. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.

                  SECTION 7. GOVERNING LAW. This Amendment shall be governed by,
and construed in accordance with, the laws of the State of New York.

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                          Alderwoods - Amendment No. 1

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                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.

                                       ALDERWOODS GROUP, INC.

                                       By:
                                           -------------------------------------
                                       Name: Kenneth Sloan
                                       Title: Executive Vice President and Chief
                                       Financial Officer

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                          Alderwoods - Amendment No. 1

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                                   ---------------------------------------------
                                   [Please type or print name of institution]

                                   By
                                      ------------------------------------------
                                      Title:

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                          Alderwoods - Amendment No. 1

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                                     CONSENT

                                            Dated as of January 23, 2004

                  Each of the undersigned, hereby consents to the foregoing
Amendment and hereby confirms and agrees that (a) notwithstanding the
effectiveness of such Amendment, each Loan Document to which it is a party is,
and shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects, except that, on and after the effectiveness of such
Amendment, each reference in the Loan Documents to the "Credit Agreement",
"thereunder", "thereof" or words of like import shall mean and be a reference to
the Credit Agreement, as amended by such Amendment, and (b) the Collateral
Documents to which each of the undersigned is a party and all of the Collateral
described therein do, and shall continue to, secure the payment of all of the
Secured Obligations (in each case, as defined therein).

                              Each of the Loan Parties listed on ANNEX A hereto

                              By:
                                 -----------------------------------------------
                              Name: Laurel Langford
                              Title: Responsible Officer of each of the entities
                              listed on ANNEX A hereto

                          Alderwoods - Amendment No. 1

<PAGE>

                              Each of the Loan Parties listed on ANNEX B hereto

                              By:
                                 -----------------------------------------------
                              Name: Jeffrey Lowe
                              Title: Responsible Officer of each of the entities
                              listed on ANNEX B hereto

                          Alderwoods - Amendment No. 1

<PAGE>

                           ALDERWOODS (ALABAMA), INC.

                                             By:
                                                --------------------------------
                                                Name: William Tottle
                                                Title: Vice President

                          Alderwoods - Amendment No. 1

<PAGE>

                                            ALDERWOODS (DELAWARE), INC.

                                            By:
                                                --------------------------------
                                                Name: Kenneth Sloan
                                                Title: Treasurer

                          Alderwoods - Amendment No. 1

<PAGE>

                             ALDERWOODS (TEXAS), L.P.
                             By: Alderwoods (Partner), Inc., its general partner

                             By:
                                 ---------------------------------
                             Name: Laurel Langford
                             Title: Secretary and Treasurer

                          Alderwoods - Amendment No. 1

<PAGE>

                              DIRECTORS (TEXAS), L.P.
                              By: DSP General Partner, Inc., its general partner

                              By:
                                 ----------------------------------------
                                 Name: Laurel Langford
                                 Title: Secretary and Treasurer

                          Alderwoods - Amendment No. 1

<PAGE>

                                      DOBA-HABY INSURANCE AGENCY, INC.

                                      By:
                                          ---------------------------------
                                          Name: Ronald Collins
                                          Title: Vice President

                          Alderwoods - Amendment No. 1

<PAGE>

                                     ANNEX A

ALABAMA
Advanced Planning (Alabama), Inc.

ALASKA
Alderwoods (Alaska), Inc.

ARIZONA
Alderwoods (Arizona), Inc.
Hatfield Funeral Home, Inc.
Phoenix Memorial Park Association

ARKANSAS
Alderwoods (Arkansas), Inc.

CALIFORNIA
Advance Funeral Insurance Services
Alderwoods (Texas), Inc.
Alderwoods Group (California), Inc.
Directors Succession Planning II, Inc.
Directors Succession Planning, Inc.
DSP General Partner II, Inc.
Earthman LP, Inc.
Universal Memorial Centers V, Inc.
Universal Memorial Centers VI, Inc.
Whitehurst-Lakewood Memorial Park and Funeral Service

COLORADO
Alderwoods (Colorado), Inc.

CONNECTICUT
Alderwoods (Connecticut), Inc.

DELAWARE
Administration Services, Inc.
Alderwoods (Commissioner), Inc.
Alderwoods (Mississippi), Inc.
American Burial and Cremation Centers, Inc.
H.P. Brandt Funeral Home, Inc.
Lienkaemper Chapels, Inc.
Osiris Holding Corporation

FLORIDA
Coral Ridge Funeral Home and Cemetery, Inc.

                          Alderwoods - Amendment No. 1

<PAGE>

Funeral Services Acquisition Group, Inc.
Garden Sanctuary Acquisition, Inc.
Kadek Enterprises of Florida, Inc.
Levitt Weinstein Memorial Chapels, Inc.
MHI Group, Inc.
Naples Memorial Gardens, Inc.
Osiris Holding of Florida, Inc.
Security Trust Plans, Inc.

GEORGIA
Advanced Planning of Georgia, Inc.
Alderwoods (Georgia), Inc.
Alderwoods (Georgia) Holdings, Inc.
Green Lawn Cemetery Corporation
Poteet Holdings, Inc.
Southeastern Funeral Homes, Inc.

IDAHO
Alderwoods (Idaho), Inc.

ILLINOIS
Alderwoods (Chicago Central), Inc.
Alderwoods (Chicago North), Inc.
Alderwoods (Chicago South), Inc.
Alderwoods (Illinois), Inc.
Chapel Hill Memorial Gardens & Funeral Home Ltd.
Chicago Cemetery Corporation
Elmwood Acquisition Corporation
Mount Auburn Memorial Park, Inc.
Pineview Memorial Park, Inc.
Ridgewood Cemetery Company, Inc.
Ruzich Funeral Home, Inc.
The Oak Woods Cemetery Association
Woodlawn Cemetery of Chicago, Inc.
Woodlawn Memorial Park, Inc.

INDIANA
Advance Planning of America, Inc.
Alderwoods (Indiana), Inc.
Ruzich Funeral Home, Inc.

IOWA
Alderwoods (Iowa), Inc.

KANSAS
Alderwoods (Kansas), Inc.

                          Alderwoods - Amendment No. 1

<PAGE>

KENTUCKY
Alderwoods (Partner), Inc.

LOUISIANA
Alderwoods (Louisiana), Inc.

MARYLAND
Alderwoods (Maryland), Inc.

MASSACHUSETTS
Alderwoods (Massachusetts), Inc.

MICHIGAN
Alderwoods (Michigan), Inc.
AMG, Inc.
WMP, Inc.

MINNESOTA
Alderwoods (Minnesota), Inc.

MISSISSIPPI
Family Care, Inc.
Stephens Funeral Fund, Inc.

MISSOURI
Alderwoods (Missouri), Inc.

MONTANA
Alderwoods (Montana), Inc.

NEVADA
Alderwoods (Nevada), Inc.

NEW HAMPSHIRE
Robert Douglas Goundrey Funeral Home, Inc.
St. Laurent Funeral Home, Inc.
ZS Acquisition, Inc.

NEW MEXICO
Alderwoods (New Mexico), Inc.

NEW YORK
Alderwoods (New York), Inc.
Northeast Monument Company, Inc.

                          Alderwoods - Amendment No. 1

<PAGE>

NORTH CAROLINA
Alderwoods (North Carolina), Inc.
Carothers Holding Company, Inc.
Lineberry Group Inc.
MFH, L.L.C.
Reeves, Inc.
Westminster Gardens, Inc.

OHIO
Alderwoods (Ohio) Cemetery Management, Inc.
Alderwoods (Ohio) Funeral Home, Inc.

OKLAHOMA
Alderwoods (Oklahoma), Inc.

OREGON
Alderwoods (Oregon), Inc.
The Portland Memorial, Inc.
Universal Memorial Centers I, Inc.
Universal Memorial Centers II, Inc.
Universal Memorial Centers III, Inc.

PENNSYLVANIA
Alderwoods (Pennsylvania), Inc.
Bright Undertaking Company
H. Samson, Inc.
Knee Funeral Home of Wilkinsburg, Inc.
Nineteen Thirty-Five Holdings, Inc.
Oak Woods Management Company

RHODE ISLAND
Alderwoods (Rhode Island), Inc.

SOUTH CAROLINA
Alderwoods (South Carolina), Inc.
Graceland Cemetery Development Co.

TENNESSEE
Alderwoods (Tennessee), Inc.
Eagle Financial Associates, Inc.

TEXAS
Alderwoods (Texas) Cemetery, Inc.
CHMP Holdings, Inc.
Del Rio Memorial Park, Inc.
DHFH Holdings, Inc.

                          Alderwoods - Amendment No. 1

<PAGE>

DHNC Holdings, Inc.
Directors Cemetery (Texas), Inc.
DSP General Partner, Inc.
Earthman Cemetery Holdings, Inc.
Earthman Holdings, Inc.
EDSB Holdings, Inc.
HFCC Holdings, Inc.
HFJC Holdings, Inc.
HFSC Holdings, Inc.
Panola County Restland Memorial Park, Inc.
Pioneer Funeral Plans, Inc.
Travis Land Company
Tyler Memorial Funeral Home and Chapel, Inc.
Waco Memorial Park

VIRGINIA
Alderwoods (Virginia), Inc.

WASHINGTON
Alderwoods (Washington), Inc.
Evergreen Funeral Home and Cemetery, Inc.
Green Service Corporation
S&H Properties and Enterprises, Inc.
Vancouver Funeral Chapel, Inc.

WEST VIRGINIA
Alderwoods (West Virginia), Inc.

WISCONSIN
Alderwoods (Wisconsin), Inc.
Northern Land Company, Inc.

                          Alderwoods - Amendment No. 1

<PAGE>

                                     ANNEX B

CALIFORNIA
A.L. Cemetery
Colton Funeral Chapel, Inc.
Custer Christiansen Covina Mortuary, Inc.
Dimond Service Corporation
Glasband-Malinow-Weinstein Mortuary, Inc.
Glasband-Willen Mortuaries
Grove Colonial Mortuary, Inc.
Harbor Lawn Memorial Park, Inc.
Home of Peace Memorial Park and Mausoleum, Inc.
Neel Funeral Directors, Inc.
RH Mortuary Corporation
Richardson-Peterson Mortuary, Inc.
San Fernando Mortuary, Inc.
White Funeral Home, Inc.
Workman Mill Investment Company

DELAWARE
RH Cemetery Corp.
RH Satellite Properties Corp.
Rose Hills Company
Rose Hills Holdings Corp.

                          Alderwoods - Amendment No. 1<PAGE>

                                                                    Exhibit 10.6

                              EMPLOYMENT AGREEMENT

This agreement made as of the 2nd day of January, 2004

BETWEEN:

                          ALDERWOODS GROUP CANADA INC.

                                                                 (the "Company")

                                      -And-

                                KENNETH A. SLOAN

                                                               (the "Executive")

WHEREAS:

         The Company is a wholly-owned subsidiary of Alderwoods Group, Inc.
         ("AGI"), a Delaware corporation that is the holding entity for a
         corporate group engaged in the operation of funeral homes, insurance
         and cemeteries in Canada and the United States; and

         Alderwoods Group Services Inc. and the Executive entered into an
         Employment Agreement (the "Prior Agreement") as of January 2, 2002;
         and

         Alderwoods Group Services Inc. amalgamated with Alderwoods Group
         Canada Inc. ("AGCI") on December 29, 2002; and

         The Company and the Executive wish to enter into a written Employment
         Agreement which will provide the Executive with an incentive to
         continue in his position as Executive Vice President, Chief Financial
         Officer of the Company.

IN CONSIDERATION of the mutual covenants contained herein, the parties agree as
follows:

DEFINITIONS

1.   "CHANGE IN CONTROL" means any one of the following events that occurs
     during the term of this Agreement other than pursuant to a plan of
     reorganization submitted by AGI and confirmed by the U.S. Bankruptcy Court:

     a)   the acquisition by any individual, entity or group (a "Person") of
          beneficial ownership of 30% or more of the combined voting power of
          the then-outstanding Voting Stock (as defined below) of AGI; provided,
          however, that the following acquisitions will not constitute a Change
          in Control: (1) any issuance of Voting Stock of AGI directly from AGI
          that is approved by the Incumbent Board (as defined below), (2) any
          acquisition by AGI of Voting Stock of AGI, (3) any acquisition of
          Voting Stock of AGI by any employee benefit plan (or related trust)
          sponsored or maintained by AGI or any subsidiary of AGI, or (4) any
          acquisition of Voting Stock of AGI by any Person pursuant to a
          Business Combination (as defined below) that would not constitute a
          Change in Control;

<PAGE>

     b)   the consummation of a reorganization, amalgamation, merger or
          consolidation, a sale or other disposition of all or substantially all
          of the assets of AGI, or any other transaction (each, a "Business
          Combination") in which all or substantially all of the individuals and
          entities who were the beneficial owners of Voting Stock of AGI
          immediately prior to such Business Combination beneficially own,
          directly or indirectly, immediately following such Business
          Combination less than 40% of the combined voting power of the then
          outstanding shares of Voting Stock of the entity resulting from such
          Business Combination;

     c)   individuals who, as of the effective date of this Agreement,
          constitute the Board of Directors of AGI (the "Incumbent Board") cease
          for any reason to constitute at least a majority of the Board;
          provided, however, that any individual becoming a Director subsequent
          to such Effective Date whose election, or nomination for election by
          AGI's stockholders, was approved by a vote of at least two-thirds of
          the Directors then comprising the Incumbent Board (either by a
          specific vote or by approval of the proxy statement of AGI in which
          such person is named as a nominee for director, without objection to
          such nomination) will be deemed to have been a member of the Incumbent
          Board, but excluding, for this purpose, any such individual whose
          initial assumption of office occurs as a result of an actual or
          threatened election contest with respect to the election or removal of
          Directors or other actual or threatened solicitation of proxies or
          consents by or on behalf of a Person other than the Board; or

     d)   the approval by the stockholders of AGI of a complete liquidation or
          dissolution of AGI, except pursuant to a Business Combination that
          would not constitute a Change in Control.

2.   "CONSTRUCTIVE DISCHARGE" means the termination of the Executive's
     employment by the Executive following the occurrence of one or more of the
     following events (regardless of whether any other reason, other than Just
     Cause, exists for the termination of Executive's employment):

     a)   the geographic relocation of the Executive's place of employment by
          the Company by more than 50 miles from Toronto, Ontario;

     b)   any material reduction by the Company in the Executive's job duties or
          responsibilities;

     c)   any material reduction by the Company in the Executive's level of
          compensation or benefits;

     d)   any adverse change by the Company or AGI to the Executive's title or
          function;

     e)   harassment by a representative or affiliate of the Company; or

     f)   any circumstance in which the Executive was induced by the actions of
          the Company to terminate his employment other than on a purely
          voluntary basis.

3.   "JUST CAUSE" means willful misconduct or willful neglect of duty by the
     Executive, including, but not limited to, intentional wrongful disclosure
     of confidential or proprietary information of the Company or AGI or any of
     its subsidiaries; intentional wrongful engagement in any competitive
     activity prohibited by paragraph 21; and the intentional material breach of
     any provision of this Agreement.

4.   "SERVICES" has the meaning set forth in the Management Services Agreements,
     by and between the Company and AGI and the Company and certain subsidiaries
     of AGI.

5.   "TERMINATION WITHOUT JUST CAUSE" includes, but is not limited to, any
     unilateral change in the material terms and conditions of the Executive's
     employment.

6.   "VOTING STOCK" means securities entitled to vote generally in the election
     of directors.

                                        2

<PAGE>

ENTIRE AGREEMENT

7.   The Executive and the Company agree that this Agreement represents the
     entire agreement between the parties and that any and all prior agreements,
     written or verbal, express or implied, between the parties relating to or
     in any way connected with the employment of the Executive by the Company or
     any related, associated, affiliated, predecessor or parent corporations are
     declared null and void and are superseded by the terms of this Agreement.
     There are no representations, warranties, forms, conditions, undertakings,
     or collateral agreements, express, implied or statutory between the parties
     other than as expressly set forth in this Agreement. No waiver or
     modification of this Agreement shall be valid unless in writing and duly
     executed by both the Company and the Executive.

EMPLOYMENT

8.   The Company agrees to employ the Executive, and the Executive agrees to be
     employed by the Company, in the position of Executive Vice President, Chief
     Financial Officer. The Executive also agrees that, as part of the
     Executive's duties, the Executive shall occupy and perform the office of
     Executive Vice President, Chief Financial Officer of AGI, on behalf of the
     Company, for the term of this Agreement. As used in this Agreement, the
     phrase "term of this Agreement" means the period beginning January 2, 2004
     and ending on the earlier of January 2, 2007, or the effective date of the
     termination of Executive's employment. Notwithstanding anything to the
     contrary in this Agreement, paragraph 16(b) shall survive and remain in
     effect following the term of this Agreement.

9.   The Executive agrees that he will at all times faithfully, industriously,
     and to the best of his skill, ability, and talents, perform all of the
     duties required of his position in a manner which is in the best interests
     of the Company and in accordance with the Company's objectives, and will
     devote his full working time and attention to these duties. The Executive
     acknowledges and agrees that the duties required of his position include,
     without limitation, the provision of Services on behalf of, and for the
     account of, the Company.

COMPENSATION

10.

     a)   In consideration for the Executive's continued performance of his
          duties as Executive Vice President, Chief Financial Officer, the
          Executive will receive a base salary of $290,700 U.S. per annum. The
          amount of such salary shall be subject to review and improvement on a
          periodic basis in accordance with Company practice, but in no event
          shall such amount be reduced. The Executive's base salary is payable
          in accordance with the Company's customary payroll practices and is
          subject to deductions required by applicable law.

     b)   The Company shall reimburse the Executive for all reasonable expenses
          incurred by the Executive during the term of this Agreement in the
          course of the Executive performing his duties under this Agreement.
          These reimbursements shall be consistent with the Company's policies
          in effect from time to time with respect to travel, entertainment and
          other reimbursable business expenses, subject to the Company's
          requirements applicable generally with respect to reporting and
          documentation of such expenses.

SHORT TERM INCENTIVE PLAN - ANNUAL BONUS

11.  The Executive will be entitled to participate in a short term incentive
     plan as adopted by the Company from time to time in a manner commensurate
     with his position and level of responsibility with the Company. The bonus
     payable under such plan will be paid in full within 90 days after the end
     of each year.

12.  The short term incentive plan bonus is subject to the following conditions
     and exceptions:

                                        3

<PAGE>

     a)   In order to qualify for and receive the annual bonus, the Executive
          must be employed by the Company or its successor at the time the bonus
          is paid unless the Executive is terminated (1) without Just Cause or
          (2) by reason of Constructive Discharge in compliance with paragraph
          17. If the Executive's employment is terminated without Just Cause or
          by reason of Constructive Discharge after the end of the year but
          before the bonus amount is paid, the Executive shall receive the bonus
          for that completed year calculated in accordance with terms of the
          short term incentive plan. The payment shall be made by the Company
          within seven days of the termination and will be subject to deductions
          required by applicable law. If the bonus amount has not been
          determined within seven days of the termination it will be paid in
          full within 90 days of the subject year-end.

     b)   If, before the end of a year, the Executive's employment is terminated
          by the Company or its successor without Just Cause, the bonus which
          the Executive will be entitled to receive under paragraph 16 for that
          year will be equal to the Executive's pro rata portion of the bonus
          for the year of termination (for the number of days elapsed in the
          current year), based on the achievement of the applicable performance
          criteria through the date of termination.

STOCK OPTION PLAN

13.  The Executive is eligible for participation in AGI's equity incentive plan
     or plans. Stock options will be granted to the Executive as determined by
     the Board of Directors of AGI. Nothing in this Agreement shall have any
     effect with respect to any stock option agreement or agreements made prior
     to the effective date of this Agreement.

2003-2005 EXECUTIVE STRATEGIC PLAN INCENTIVE

14.  The Executive shall participate in the 2003-2005 Executive Strategic
     Incentive Plan of Alderwoods Group Canada Inc., a copy of which shall be
     provided to the Executive.

BENEFITS

15.  The Executive will be eligible to participate in the following benefit
     plans:

          a.   GROUP BENEFITS. The Executive will participate in the Company's
               Group Benefit Plan and any other group perquisites all as in
               effect from time to time.

          b.   VEHICLE ALLOWANCE. The Executive will be entitled to a vehicle
               allowance of $600.00 per month plus operating expenses with no
               allowance for auto insurance coverage.

          c.   CLUB MEMBERSHIP. The Executive will be entitled to the amount of
               $1,000.00 per year for club memberships as directed by the
               Executive.

          d.   EXECUTIVE MEDICAL. The Executive will be entitled to participate
               in the Company's Annual Medical Program.

          e.   OTHER BENEFITS. The Executive will be entitled to participate in
               the Company's Health Services Spending Account Program.

TERMINATION OF EMPLOYMENT

16.  The parties agree that the Executive's employment under this Agreement may
     be terminated as follows:

     a.   by the Company, without notice of termination or pay in lieu thereof,
          for Just Cause;

                                        4

<PAGE>

     b.   by the Company, not following a Change in Control as set forth in
          paragraph 17 below, at its sole discretion and for any reason other
          than Just Cause upon payment to the Executive in a lump sum, within
          seven days of such termination, of an amount equal to:

          i.   24 months' base salary;

          ii.  The amount of any unpaid bonus earned by the Executive up to and
               including the date of termination calculated in accordance with
               paragraph 12(b); and

          iii. The amount of any unpaid salary or vacation earned by the
               Executive up to and including the date of termination.

          Payments identified in sub paragraphs (i) - (iii) will be subject to
          deductions required by applicable law;

     c.   by the Company for any reason other than Just Cause or by reason of
          Constructive Discharge, following a Change in Control, both in
          compliance with paragraph 17 below; or

     d.   by the Executive, for any reason, upon thirty (30) days advance
          written notice to the Company in which case the Company will have no
          further obligation to the Executive under this Agreement or otherwise
          except to pay the Executive the unpaid portion, if any, of the
          Executive's base salary payable for the period through the date of
          termination of the Executive's employment.

CHANGE IN CONTROL

17.  If a Change in Control occurs and, within two years of the effective date
     of the Change in Control, the Executive's employment is terminated by the
     Company without Just Cause or by reason of Constructive Discharge, the
     Company shall, within seven days of the date of termination, pay to the
     Executive in a lump sum the following payments:

               i.   24 months' base salary;

               ii.  The replacement value of all Executive's benefit coverage
                    including contributions to the Registered Retirement Savings
                    Plan, following the date of the Executive's termination
                    (such benefit coverage and contributions being calculated
                    over 24 months following termination);

               iii. Two times the amount of incentive pay (in an amount equal to
                    not less than the highest aggregate incentive pay earned by
                    the Executive in any of the three fiscal years immediately
                    preceding the year in which the Change in Control occurred);

               iv.  The amount of any unpaid short-term incentive bonus earned
                    by the Executive for a completed year, calculated in
                    accordance with paragraph 12; and

               v.   The amount of any unpaid salary or vacation earned by the
                    Executive up to and including the date of termination; and

               vi.  The Executive shall be allowed to exercise all stock options
                    or share appreciation rights, whether vested or not, granted
                    to the Executive, including shares with respect to which
                    such options would not otherwise be exercisable on such
                    resignation or termination.

Payments identified in paragraphs (i) - (v) will be subject to deductions
required by applicable law. Any termination of employment of the Executive by
the Company or the removal of the Executive from the office or position in the
Company or AGI that occurs (A) not more than 365 days prior to the date on which
a Change in Control occurs and

                                        5

<PAGE>

(B) following the commencement of any discussion with a third party that
ultimately results in a Change in Control will be deemed to be a termination or
removal of the Executive after a Change in Control for purposes of this
Agreement.

CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY

18.  The Executive's entitlements, if any, on termination of employment,
     voluntary resignation, Change in Control, total disability or death under
     the 2003-2005 Executive Strategic Incentive Plan of Alderwoods Group Canada
     Inc. (the "Plan") shall be determined solely in accordance with the terms
     of the Plan as in effect from time to time.

19.  In the event that it is determined (as hereinafter provided) that any
     payment (other than the Gross-Up Payments provided for in this paragraph 19
     and Annex A) or distribution by the Company, AGI or any of its affiliates
     to or for the benefit of the Executive, whether paid or payable or
     distributed or distributable pursuant to the terms of this Agreement or
     otherwise pursuant to or by reason of any other agreement, policy, plan,
     program or arrangement, including, without limitation, the lapse or
     termination of any restriction on the vesting or exercisability of any
     benefit under any of the foregoing (a "Payment"), would be subject to the
     excise tax imposed by Section 4999 of the United States Internal Revenue
     Code of 1986, as amended (the "Code") (or any successor provision thereto),
     by reason of being considered "contingent on a change in ownership or
     control," within the meaning of Section 280G of the Code (or any successor
     provision thereto) or to any similar tax imposed by U.S. state or local
     law, or any interest or penalties with respect to such tax (such tax or
     taxes, together with any such interest and penalties, being hereafter
     collectively referred to as the "Excise Tax"), then the Executive will be
     entitled to receive an additional payment or payments (collectively, a
     "Gross-Up Payment"). The Gross-Up Payment will be in an amount such that,
     after payment by the Executive of all U.S. taxes (including any interest or
     penalties imposed with respect to such taxes), including any Excise Tax
     imposed upon the Gross-Up Payment, the Executive retains an amount of the
     Gross-Up Payment equal to the Excise Tax imposed upon the Payment. For
     purposes of determining the amount of the Gross-Up Payment, the Executive
     will be considered to pay any applicable U.S. federal, state and local
     income taxes at the highest rate applicable to the Executive in effect in
     the year in which the Gross-Up Payment will be made, net of the maximum
     reduction in U.S. federal income tax that could be obtained from deduction
     of such state and local taxes.

20.  The obligations set forth in paragraph 19 will be subject to the procedural
     provisions described in Annex A.

CONFIDENTIAL INFORMATION; COMPETITIVE ACTIVITY

21.  The Executive agrees that he will not, at any time, without the prior
     written consent of the Company, disclose to any person not employed by the
     Company, or use in connection with engaging in competition with the
     Company, any confidential or proprietary information of the Company. For
     purposes of this Agreement, the term "confidential or proprietary
     information" includes all information of any nature and in any form that is
     owned by the Company and that is not publicly available (other than by
     Executive's breach of this paragraph 21) or generally known to persons
     engaged in businesses similar or related to those of the Company.
     Confidential or proprietary information will include, without limitation,
     the Company's financial matters, customers, employees, industry contracts,
     strategic business plans, product development (or other proprietary product
     data), marketing plans, and all other secrets and all other information of
     a confidential or proprietary nature. The foregoing obligations imposed by
     this paragraph 21 will not apply (i) during the Term, in the course of the
     business of and for the benefit of the Company, (ii) if such confidential
     or proprietary information has become, through no fault of the Executive,
     generally known to the public or (iii) if the Executive is required by law
     to make disclosure (after giving the Company notice and an opportunity to
     contest such requirement).

22.  In addition, the Executive agrees that while employed by the Company and
     for a period of 12 months thereafter, the Executive will not, without the
     prior written consent of the Company, which consent will not be
     unreasonably withheld:

                                        6

<PAGE>

     a.   Engage in any Competitive Activity. For purposes of this Agreement,
          "Competitive Activity" means the Executive's participation in the
          management of any business enterprise if such enterprise engages in
          substantial and direct competition with the Company and such
          enterprise's sales of any product or service competitive with any
          product or service of the Company amounted to 10% of such enterprise's
          net sales for its most recently completed fiscal year and if the
          Company's net sales of said product or service amounted to 10% of the
          Company's net sales for its most recently completed fiscal year.
          "Competitive Activity" will not include (i) the mere ownership of
          securities in any such enterprise and the exercise of rights
          appurtenant thereto or (ii) participation in the management of any
          such enterprise other than in connection with the competitive
          operations of such enterprise.

     b.   On behalf of the Executive or on behalf of any person, firm or
          company, directly or indirectly, attempt to influence, persuade or
          induce, or assist any other person in so persuading or inducing, any
          employee of the Company or any of its subsidiaries to give up, or to
          not commence, employment or a business relationship with the Company
          or any of its subsidiaries.

23.  The Executive and the Company agree that the covenants contained in
     paragraphs 21 and 22 are reasonable under the circumstances, and further
     agree that if, in the opinion of any court of competent jurisdiction, any
     such covenant is not reasonable in any respect, such court will have the
     right, power and authority to excise or modify any provision or provisions
     of such covenants as to the court will appear not reasonable and to enforce
     the remainder of the covenants as so amended. The Executive acknowledges
     and agrees that the remedy at law available to the Company for breach of
     any of his obligations under this paragraph 22 would be inadequate and that
     damages flowing from such a breach may not readily be susceptible to being
     measured in monetary terms. Accordingly, the Executive acknowledges,
     consents and agrees that, in addition to any other rights or remedies that
     the Company may have at law, in equity or under this Agreement, upon
     adequate proof of his violation of any such provision of this Agreement,
     the Company will be entitled to immediate injunctive relief and may obtain
     a temporary order restraining any threatened or further breach, without the
     necessity of proof of actual damage.

24.  For purposes of paragraphs 21, 22 and 23, the term "Company" will also
     include AGI and any subsidiary of AGI.

GENERAL

25.  The parties confirm that the provisions of this Agreement are fair and
     reasonable and that the total compensation and benefits payable under
     paragraphs 16, 17 or 18 are reasonable estimates of the damages, which
     would be suffered by the Executive. Any amount paid under paragraphs 16, 17
     or 18 shall be in full satisfaction of all claims whatsoever relating to
     the Executive's employment or for the termination of the Executive's
     employment, including claims for salary, bonus, benefits, vacation pay,
     termination pay and/or severance pay pursuant to the Ontario EMPLOYMENT
     STANDARDS ACT, as amended, including sections 57 and 58 thereof.

26.  Any payment made to the Executive under paragraphs 16, 17 or 18 of this
     Agreement shall be paid to the Executive by the Company regardless of any
     offer of alternate employment made to the Executive by the Company or by
     any other prospective employer, whether accepted by the Executive or not.
     The Executive will not be required to mitigate any damages arising from
     this Agreement and any amounts and benefits to be provided to the Executive
     hereunder shall not be reduced or set off against any amounts earned by the
     Executive from alternate employment, including self-employment, or by other
     means.

27.  Any payment other than for base salary, while employed by the Company, made
     to the Executive under this Agreement shall be made by way of a lump sum
     payment or, at the Executive's option, in such other manner as he may
     direct, less deductions required by applicable law.

28.  Where the context requires, the singular shall include the plural and the
     plural shall include the singular. Masculine pronouns shall be deemed to be
     read as feminine pronouns and VICE VERSA. Words importing persons

                                        7

<PAGE>

     shall include individuals, partnerships, associations, trusts,
     unincorporated organizations and corporations and VICE VERSA.

29.  The division of this Agreement into paragraphs and the insertion of
     headings are for the convenience of reference only and shall not affect the
     construction or interpretation of this Agreement. The terms "this
     Agreement", "hereof", "hereunder" and similar expressions refer to this
     Agreement only and not to any particular paragraph and include any
     agreement or instrument supplemental or ancillary to the Agreement.
     References herein to paragraphs are to paragraphs of this Agreement unless
     something in the subject matter or context is inconsistent therewith.

30.  All dollar amounts identified in this contract are in U.S. currency.

31.  The parties' respective rights and obligations under paragraphs 16(b), 18,
     19, 20, 21, 22, 23, 35 and 36 will survive any termination or expiration of
     this Agreement or the termination of the Executive's employment for any
     reason whatsoever.

GOVERNING LAWS

32.  This Agreement shall be governed by the laws of the Province of Ontario
     without giving effect to the principles of conflict of laws thereof. Each
     party to this Agreement hereby consents and submits himself or itself to
     the jurisdiction of the courts of the Province of Ontario for the purposes
     of any legal action or proceeding arising out of this Agreement.

SEVERABILITY

33.  All terms and covenants contained in this Agreement are severable and in
     the event that any of them is held to be invalid by any competent court in
     the Province of Ontario, the invalid provision shall be deleted and the
     balance of this Agreement shall be interpreted as if such invalid clause or
     covenant were not contained herein.

CONTINUITY

34.  This Agreement shall be binding upon and enure to the benefit of (i) the
     Executive and his heirs, executors, administrators and legal
     representatives and (ii) the Company, its related corporations, affiliates,
     and associates, and any other entity or organization which shall succeed to
     substantially all or any distinct portion of the business, divisions or
     property of the Company or its related corporations, affiliates, and
     associates, whether by means of amalgamation, merger, consolidation,
     acquisition, and/or sale of all or part of the shares or assets of the
     Company or otherwise, including by operation of law or by succession to the
     business of AGI pursuant to a Plan of Reorganization approved by a
     Bankruptcy Court. In addition, the Company will require any such successor
     expressly to assume and agree, by written agreement, to perform this
     Agreement in the same manner and to the same extent the Company would be
     required to perform if no such succession had taken place.

LEGAL ADVICE

35.  The Executive acknowledges that he has obtained or has had an opportunity
     to obtain independent legal advice in connection with this Agreement, and
     further acknowledges that he has read, understands, and agrees to be bound
     by all of the terms and conditions contained herein.

36.  The Company agrees to reimburse the Executive for all reasonable legal
     expenses incurred in connection with any dispute involving the Executive,
     the Company, its related corporations, affiliates, successors, or assigns,
     or any other third party, as between any of them, arising from the
     validity, interpretation, or enforcement of this Agreement or any of its
     terms, including all reasonable legal expenses incurred by the Executive in
     respect of any action or actions commenced by the Executive to obtain,
     enforce, or retain any right, benefit or payment provided for in this
     Agreement regardless of whether such expenses are incurred during the term
     of the Agreement or after; provided that, in regard to such matters, the
     Executive has not acted in bad faith or with no

                                        8

<PAGE>

     colorable claim of success. However, the Company shall not be required to
     reimburse the Executive for any legal costs or expenses in relation to any
     action commenced by the Company to enforce the confidentiality or
     non-competition provisions hereof and in respect of which in a court of
     competent jurisdiction the Company is the prevailing party for either
     preliminary or final remedy.

NOTICE

37.  Any demand, notice or other communication to be given in connection with
     this Agreement shall be given by personal delivery, by registered mail or
     by electronic means of communication addressed to the recipient as follows:

         TO THE EXECUTIVE:

         Kenneth A. Sloan
         3600 Yonge Street
         Suite 632
         Toronto, Ontario  M4N 3R8

         TO THE COMPANY:

         Alderwoods Group Canada Inc.
         11th Floor, Atria III
         2225 Sheppard Avenue East
         Toronto, Ontario   M2J 5C2

         Attention: Senior Vice-President, Legal  & Compliance

         WITH A COPY TO:

         Alderwoods Group, Inc.
         311 Elm Street
         Suite 1000, First Floor
         Cincinnati, OH  45202

         Attention: Senior Vice-President, Legal & Compliance

         or such other address, individual or electronic communication as may be
         designated by notice given by either party to the other.

ADDITIONAL

38.  The failure of a party to insist upon strict adherence to any term of this
     Agreement on any occasion shall not be considered a waiver of such party's
     rights or deprive such party of the right thereafter to insist upon strict
     adherence to that term or any other term of this Agreement.

39.  Nothing herein expressed or implied is intended or shall be construed to
     confer upon or give to any person, other than (1) the parties to this
     Agreement, (2) any permitted assignees of the Company and the Executive,
     and (3) AGI, as contemplated by paragraphs 8, 9, 13, 21, 22, 23 and 24, any
     rights or remedies under or by reason of this Agreement and AGI shall be a
     third party beneficiary of this Agreement.

                                                                    ...CONTINUED

                                        9

<PAGE>

IN WITNESS WHEREOF the Executive has executed and the Company has caused its
duly authorized representative to execute this Agreement as of the date set
forth on the first page of this Agreement.

                                  ALDERWOODS GROUP CANADA INC.

                                   By:
                                       -----------------------------------------
                                   Name:   Paul A. Houston

                                   Title:  President and Chief Executive Officer

WITNESS:
----------------------             ---------------------------------------------
                                                   Kenneth A. Sloan

                                       10

<PAGE>

                                     ANNEX A

EXCISE TAX GROSS-UP PROCEDURAL PROVISIONS

1.   Subject to the provisions of paragraph 5 of this Annex, all determinations
     required to be made under paragraph 18 of this Agreement and this Annex A,
     including whether an Excise Tax is payable by the Executive and the amount
     of such Excise Tax and whether a Gross-Up Payment is required to be paid by
     the Company to the Executive and the amount of such Gross-Up Payment, if
     any, will be made by a U.S. nationally recognized accounting firm (the
     "National Firm") selected by the Executive in his sole discretion. The
     Executive will direct the National Firm to submit its determination and
     detailed supporting calculations to both the Company and the Executive
     within 30 calendar days after the date of his termination of employment, if
     applicable, and any such other time or times as may be requested by the
     Company or the Executive. If the National Firm determines that any Excise
     Tax is payable by the Executive, the Company will pay the required Gross-Up
     Payment to the Executive within five business days after receipt of such
     determination and calculations with respect to any Payment to the
     Executive. If the National Firm determines that no Excise Tax is payable by
     the Executive with respect to any material benefit or amount (or portion
     thereof), it will, at the same time as it makes such determination, furnish
     the Company and the Executive with an opinion that the Executive has
     substantial authority not to report any Excise Tax on his U.S. federal,
     state or local income or other tax return with respect to such benefit or
     amount. As a result of the uncertainty in the application of Section 4999
     of the Code and the possibility of similar uncertainty regarding applicable
     U.S. state or local tax law at the time of any determination by the
     National Firm hereunder, it is possible that Gross-Up Payments that will
     not have been made by the Company should have been made (an
     "Underpayment"), consistent with the calculations required to be made
     hereunder. In the event that the Company exhausts or fails to pursue its
     remedies pursuant to paragraph 5 of this Annex and the Executive thereafter
     is required to make a payment of any Excise Tax, the Executive will direct
     the National Firm to determine the amount of the Underpayment that has
     occurred and to submit its determination and detailed supporting
     calculations to both the Company and the Executive as promptly as possible.
     Any such Underpayment will be promptly paid by the Company to, or for the
     benefit of, the Executive within five business days after receipt of such
     determination and calculations.

2.   The Company and the Executive will each provide the National Firm access to
     and copies of any books, records and documents in the possession of the
     Company or the Executive, as the case may be, reasonably requested by the
     National Firm, and otherwise cooperate with the National Firm in connection
     with the preparation and issuance of the determinations and calculations
     contemplated by paragraph 1 of this Annex. Any determination by the
     National Firm as to the amount of the Gross-Up Payment will be binding upon
     the Company and the Executive.

3.   The U.S. federal, state and local income or other tax returns filed by the
     Executive will be prepared and filed on a consistent basis with the
     determination of the National Firm with respect to the Excise Tax payable
     by the Executive. The Executive will report and make proper payment of the
     amount of any Excise Tax, and at the request of the Company, provide to the
     Company true and correct copies (with any amendments) of his federal income
     tax return as filed with the U.S. Internal Revenue Service and
     corresponding state and local tax returns, if relevant, as filed with the
     applicable taxing authority, and such other documents reasonably requested
     by the Company, evidencing such payment. If prior to the filing of the
     Executive's federal income tax return, or corresponding state or local tax
     return, if relevant, the National Firm determines that the amount of the
     Gross-Up Payment should be reduced, the Executive will within five business
     days pay to the Company the amount of such reduction.

4.   The fees and expenses of the National Firm for its services in connection
     with the determinations and calculations contemplated by paragraph 1 of
     this Annex will be borne by the Company. If such fees and expenses are
     initially paid by the Executive, the Company will reimburse the Executive
     the full amount of such fees and expenses within five business days after
     receipt from the Executive of a statement therefor and reasonable evidence
     of his payment thereof.

                                      A-1

<PAGE>

5.   The Executive will notify the Company in writing of any claim by the U.S.
     Internal Revenue Service or any other U.S. taxing authority that, if
     successful, would require the payment by the Company of a Gross-Up Payment.
     Such notification will be given as promptly as practicable but no later
     than 10 business days after the Executive actually receives notice of such
     claim and the Executive will further apprise the Company of the nature of
     such claim and the date on which such claim is requested to be paid (in
     each case, to the extent known by the Executive). The Executive will not
     pay such claim prior to the expiration of the 30-calendar-day period
     following the date on which he gives such notice to the Company or, if
     earlier, the date that any payment of amount with respect to such claim is
     due. If the Company notifies the Executive in writing prior to the
     expiration of such period that it desires to contest such claim, the
     Executive will:

          (A) provide the Company with any written records or documents in his
     possession relating to such claim reasonably requested by the Company;

          (B) take such action in connection with contesting such claim as the
     Company reasonably requests in writing from time to time, including,
     without limitation, accepting legal representation with respect to such
     claim by an attorney competent in respect of the subject matter and
     reasonably selected by the Company;

          (C) cooperate with the Company in good faith in order effectively to
     contest such claim; and

          (D) permit the Company to participate in any proceedings relating to
     such claim;

     PROVIDED, HOWEVER, that the Company will bear and pay directly all costs
     and expenses (including interest and penalties) incurred in connection with
     such contest and will indemnify and hold harmless the Executive, on an
     after-tax basis, for and against any Excise Tax or income or other tax,
     including interest and penalties with respect thereto, imposed as a result
     of such representation and payment of costs and expenses. Without limiting
     the foregoing provisions of this paragraph 5, the Company will control all
     proceedings taken in connection with the contest of any claim contemplated
     by this paragraph 5 and, at its sole option, may pursue or forego any and
     all administrative appeals, proceedings, hearings and conferences with the
     taxing authority in respect of such claim (provided, however, that the
     Executive may participate therein at his own cost and expense) and may, at
     its option, either direct the Executive to pay the tax claimed and sue for
     a refund or contest the claim in any permissible manner, and the Executive
     agrees to prosecute such contest to a determination before any
     administrative tribunal, in a court of initial jurisdiction and in one or
     more appellate courts, as the Company determines; PROVIDED, HOWEVER, that
     if the Company directs the Executive to pay the tax claimed and sue for a
     refund, the Company will advance the amount of such payment to the
     Executive on an interest-free basis and will indemnify and hold the
     Executive harmless, on an after-tax basis, from any Excise Tax or income or
     other tax, including interest or penalties with respect thereto, imposed
     with respect to such advance; and PROVIDED FURTHER, HOWEVER, that any
     extension of the statute of limitations relating to payment of taxes for
     the taxable year of the Executive with respect to which the contested
     amount is claimed to be due is limited solely to such contested amount.
     Furthermore, the Company's control of any such contested claim will be
     limited to issues with respect to which a Gross-Up Payment would be payable
     hereunder and the Executive will be entitled to settle or contest, as the
     case may be, any other issue raised by the Internal Revenue Service or any
     other taxing authority.

6.   If, after the receipt by the Executive of an amount advanced by the Company
     pursuant to paragraph 5 of this Annex, the Executive receives any refund
     with respect to such claim, the Executive will (subject to the Company's
     complying with the requirements of such paragraph 5) promptly pay to the
     Company the amount of such refund (together with any interest paid or
     credited thereon after any taxes applicable thereto). If, after the receipt
     by the Executive of an amount advanced by the Company pursuant to paragraph
     5 of this Annex, a determination is made that the Executive is not entitled
     to any refund with respect to such claim and the Company does not notify
     the Executive in writing of its intent to contest such denial or refund
     prior to the expiration of 30 calendar days after such determination, then
     such advance will be forgiven and will not be required to be repaid and the
     amount of any such advance will offset, to the

                                      A-2

<PAGE>

     extent thereof, the amount of Gross-Up Payment required to be paid by the
     Company to the Executive pursuant to paragraph 18 of this Agreement and
     this Annex A.

                                      A-3

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