10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

FORM 10-Q

(Mark One)
T	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 4, 2009

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission file number: 0-29464

ROCK OF AGES CORPORATION(Exact name of Registrant as Specified in its Charter)

Delaware	03-0153200
(State or other jurisdiction of incorporation or organization)	(I. R. S. Employer Identification Number)

560 Graniteville Road, Graniteville, Vermont,   05654
(Address of principal executive offices)         (Zip Code)

(802) 476-3121
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer o Accelerated filer o Non-accelerated filer o  Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.)  Yes o No x
 

As of May 15, 2009, 4,812,342 shares of Class A Common Stock and 2,603,721 shares of Class B Common Stock of the registrant were outstanding.

ROCK OF AGES CORPORATION

INDEX

Form 10-Q for the Quarterly Period
Ended April 4, 2009

PART I	FINANCIAL INFORMATION	PAGE NO.
Item 1.	Financial Statements
	Consolidated Balance Sheets - April 4, 2009 (Unaudited) and December 31, 2008	4
	Consolidated Statements of Operations (Unaudited) - Three Months Ended April 4, 2009 and March 29, 2008	5
	Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended April 4, 2009 and March 29, 2008	6
	Notes to Unaudited Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4.	Controls and Procedures	17
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	18
Item 6.	Exhibits	19
Signature		20

2

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part I, Item 2, contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause the results of Rock of Ages Corporation ("Rock of Ages" or the "Company") and events to differ materially from those contained in such statements. All statements other than statements of historical fact could be deemed forward-looking statements, and may include projections of revenue, gross profit, expenses, earnings or losses from operations or other financial items; any statements of the plans, strategies and objectives of the Company or its management for future operations; any statements regarding future economic conditions or performance; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions may include material weaknesses in our internal controls over financial reporting which may affect our ability to accurately report financial results; the challenge of successfully implementing our strategic plan intended to enhance our overall profitability; our ability to maintain compliance with our covenants in our credit facility; our ability to form and maintain strategic alliances with cemeteries, funeral homes and memorial retailers; uncertainties involving quarry yields and demand for Rock of Ages' dimension stone; and other risks and uncertainties described herein, including, but not limited to the items discussed in "Risk Factors That May Affect Future Results" in the Company's Annual Report on Form 10-K for the year ended December 31, 2008, filed on March 31, 2009 (the "2008 Annual Report") and in Part II, Item 1A of this report, and that are otherwise described from time to time in Rock of Ages' reports filed with the Securities and Exchange Commission  after the date of filing of this report.

We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

3

PART I: FINANCIAL INFORMATION
Item 1: Financial Statements

ROCK OF AGES CORPORATION
CONSOLIDATED BALANCE SHEETS
($ in thousands, except par value amounts) 

(Unaudited)

		April 4,		December 31,
ASSETS		2009		2008
Current assets:
Cash and cash equivalents	$	589	$	888
Trade receivables, net		8,018		13,314
Inventories		16,339		16,840
Other current assets		2,037		1,561
Assets held for sale		831		477
Total current assets		27,814		33,080
Property, plant and equipment, net		29,353		29,998
Cash surrender value of life insurance		132		132
Identified intangible assets, net		537		571
Goodwill		387		387
Long-term investments		49		25
Other long term assets		226		249
Total assets	$	58,498	$	64,442
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Borrowings under line of credit	$	4,961	$	7,428
Current maturities of long-term debt		871		517
Trade payables		1,043		1,334
Accrued expenses		1,174		2,226
Salary continuation and other post-employment benefits		689		567
Customer deposits		908		454
Total current liabilities		9,646		12,526
Long-term debt, excluding current installments		13,424		13,904
Salary continuation liability, net of current portion		5,205		5,382
Accrued pension cost		5,422		9,026
Deferred salary liability		1,544		1,523
Accrued other post-employment benefits, net of current portion		1,607		1,623
Deferred tax liabilities		27		27
Total liabilities		36,875		44,011
Stockholders' equity:
Preferred stock - $.01 par value; 2,500,000 shares authorized; No shares issued or outstanding
Common stock - Class A, $.01 par value; 30,000,000 shares authorized; 4,812,342             shares issued and outstanding as of April 4, 2009 and December 31, 2008		48		48
Common stock - Class B, $.01 par value; 15,000,000 shares authorized; 2,603,721            shares issued and outstanding as of April 4, 2009 and December 31, 2008		26		26
Additional paid-in capital		65,704		65,688
Accumulated deficit		(38,321)		(35,548)
Accumulated other comprehensive loss		(5,834)		(9,783)
Total stockholders' equity		21,623		20,431
Total liabilities and stockholders' equity	$	58,498	$	64,442

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

4

ROCK OF AGES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)
(Unaudited)

		Three Months Ended
		April 4, 2009		March 29, 2008
Net Revenues:
Quarry	$	3,124	$	4,669
Manufacturing		2,814		3,721
Total net revenues		5,938		8,390
Cost of Goods Sold:
Quarry		3,349		5,159
Manufacturing		2,710		3,365
Total cost of goods sold		6,059		8,524
Gross Profit (Loss):
Quarry		(225)		(490)
Manufacturing		104		356
Total gross profit (loss)		(121)		(134)
Selling, General and Administrative Expenses:
Quarry		547		609
Manufacturing		968		1,006
Corporate overhead		1,041		1,287
Effect of pension curtailment		95		-
Total selling, general and administrative expenses		2,651		2,902
Loss from continuing operations before interest expense and income taxes		(2,772)		(3,036)
Other income, net		(88)		(64)
Interest expense		206		357
Loss from continuing operations before income taxes		(2,890)		(3,329)
Income tax benefit		(116)		(166)
Loss from continuing operations		(2,774)		(3,163)
Loss from discontinued operations		-		(142)
Net loss	$	(2,774)	$	(3,305)
Net loss per share - basic and diluted:
Loss from continuing operations	$	(0.37)	$	(0.43)
Loss from discontinued operations		-		(0.02)
Net loss per share	$	(0.37)	$	(0.45)
Weighted average number of common shares outstanding - basic and diluted		7,416		7,416

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5

ROCK OF AGES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
( in thousands)
(Unaudited)

		Three Months Ended
		April 4,			March 29,
		2009			2008
Cash flows from operating activities:
Net loss	$	(2,774	)	$	(3,305)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
(Gain)/loss on sale of assets		(13	)		8
Depreciation, depletion and amortization		598			625
Stock compensation expense		15			4
Changes in operating assets and liabilities:
Trade receivables, net		5,287			1,000
Inventories		458			299
Other assets		(463	)		(153)
Trade payables, accrued expenses and income taxes		(1,343	)		(1,146)
Customer deposits		455			233
Salary continuation and pension		347			1
Other liabilities		21			59
Net cash provided by (used in) operating activities		2,588			(2,375)
Cash flows from investing activities:
Purchases of property, plant and equipment		(399	)		(422)
Proceeds from sale of assets, net		118			-
Proceeds from sale of retail division		-			7,717
Purchase of intangible asset		-			(179)
Net cash provided by (used in) investing activities		(281	)		7,116
Cash flows from financing activities:
Net repayments under line of credit		(2,467	)		(862)
Debt issuance costs		-			(24)
Principal payments on long-term debt		(126	)		(4,644)
Net cash used in financing activities		(2,593	)		(5,530)
Effect of exchange rate changes on cash		(13	)		(51)
Net decrease in cash and cash equivalents		(299	)		(840)
Cash and cash equivalents, beginning of period		888			1,961
Cash and cash equivalents, end of period	$	589		$	1,121
Supplemental cash flow information:
Cash paid during the period for:
Interest	$	227		$	400
Income taxes		121			149

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6

ROCK OF AGES CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 

(1)	Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and notes required by accounting principles generally accepted in the United States of America ("US GAAP") for complete financial statements are not included herein. In the opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation have been included. Results of operations for the interim periods are not necessarily indicative of the results that may be expected for a full year. The Company has historically experienced certain seasonal patterns. Generally, our net sales have been highest in the second or third quarter and lowest in the first quarter of each year due primarily to weather conditions affecting operations in Vermont and Canada and the setting of memorials in cemeteries located in northern regions. For further information, refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2008, filed on March 31, 2009 (SEC File No. 000-29464) (the "2008 Annual Report").
In this report, the terms "Company," "we," "us," or "our" mean Rock of Ages Corporation and all subsidiaries included in our consolidated financial statements.
The Company's fiscal year ends on December 31 and its fiscal quarters are the 13-week periods ending on the Saturday nearest March 31, June 30 and September 30. As a result, the first and fourth quarter may be more or less than 13 weeks, by 1 to 6 days, which can affect comparability between periods. The first quarter of 2009 has 94 days versus 89 in 2008.

(2)	Stock-Based Compensation
The following tables set forth stock option activity for the periods ended April 4, 2009 and March 29, 2008 and information on outstanding and exercisable options at such dates:

	Three Months Ended
	April 4, 2009			March 29, 2008
	Number Of Options		Weighted Average Exercise Price	Number Of Options		Weighted Average Exercise Price
Outstanding at beginning of period	324,000	$	4.06	196,000	$	6.11
Granted	20,000		2.63	-		-
Exercised	-		-	-		-
Canceled	-		-	(25,000)		(5.98)
Outstanding at end of period	344,000	$	3.98	171,000	$	6.13
Exercisable at end of period	119,000	$	5.98	146,000	$	6.16
Weighted average remaining contractual life	7.1 years			4.4 years
At April 4, 2009, the closing price of the Company's stock was less than the weighted average exercise price of the outstanding options, therefore, there was no aggregate intrinsic value of outstanding options.

7

(3) Inventories

Inventories consist of the following (in thousands):		April 4,		December 31,
		2009		2008
Raw materials	$	10,297	$	11,610
Work-in-process		1,536		1,166
Finished goods and supplies		4,506		4,064
	$	16,339	$	16,840
The finished goods and supplies inventory includes $2,062,000 of retail display inventory that is located at various retail locations and is consigned to PKDM Holdings Inc., the owner of the Company's former retail division. PKDM will be responsible for purchasing the inventory retained by the Company at its current book value, as it is sold, plus any inventory remaining after the tenth anniversary of the transaction, which was completed in January 2008.

 (4) Earnings (Loss) Per Share

Options to purchase 344,000 and 171,000 shares of Class A common stock were outstanding at April 4, 2009 and March 29, 2008, respectively, but were not included in the computation of diluted earnings (loss) per share because the effect would have been anti-dilutive.

(5)	Segment Information
The Company is organized based on the products and services it offers.  Until the time of the sale of the retail division in January 2008, Rock of Ages had three business segments: quarry, manufacturing and retail.  As of December 31, 2007 the retail division was classified as a discontinued operation. Under this organizational structure, the Company currently operates in two segments: quarry and manufacturing.
The quarry segment extracts granite from the ground and sells it to either the Company's manufacturing segment or to outside manufacturers, as well as to distributors in Europe and China. There were two quarry customers that represented approximately 38.9% of accounts receivable at April 4, 2009 and 46.1% of accounts receivable at December 31, 2008.  These receivables were backed by irrevocable letters of credit.
The manufacturing segment's principal products are granite memorials and mausoleums used primarily in cemeteries and, to a lesser extent, specialized granite products for industrial applications.
Inter-segment revenues are accounted for as if the sales were to third parties.
The following tables present unaudited segment information for the three month periods ended April 4, 2009 and March 29, 2008 (in thousands):

2009		Quarry			Manufacturing			Unallocated Corporate Overhead			Total
Total net revenues	$	3,416		$	2,814		$	-		$	6,,230
Inter-segment net revenues		(292	)		-			-			(292)
Net revenues		3,124			2,814			-			5,938
Total gross (loss) profit		(225	)		104			-			(121)
Inter-segment gross profit		-			-			-			-
Gross (loss) profit		(225	)		104			-			(121)
Selling, general and administrative expenses		547			968			1,041			2,556
Effect of pension curtailment		-			-			95			95
Loss from continuing operations before interest and taxes	$	(772	)	$	(864	)	$	(1,136	)	$	(2,772)

8

2008		Quarry		Manufacturing		Unallocated Corporate Overhead		Total
Total net revenues	$	5,262	$	3,721	$	-	$	8,983
Inter-segment net revenues		(593)		-		-		(593)
Net revenues		4,669		3,721		-		8,390
Total gross (loss) profit		(487)		353		-		(134)
Inter-segment gross profit		(3)		3		-		-
Gross (loss) profit		(490)		356		-		(134)
Selling, general and administrative expenses		609		1,006		1,287		2,902
Loss from continuing operations before interest and taxes	$	(1,099)	$	(650)	$	(1,287)	$	(3,036)
Net revenues by geographic area, based on shipping destination, for the three months ended April 4, 2009 and March 29, 2008 are as follows (in thousands):

		Three Months Ended
		April 4, 2009		March  29, 2008
Net revenues:
China	$	845	$	1,813
Italy		5		213
Other foreign countries   (excluding Canada)		75		90
		925		2,116
United States and Canada		5,013		6,274
Total net revenues	$	5,938	$	8,390

Net property, plant and equipment by geographic area are as follows (in thousands):
		April 4, 2009		December 31, 2008
United States	$	26,620	$	27,144
Canada		2,733		2,854
	$	29,353	$	29,998
(6)	Comprehensive Income (Loss)
Accumulated other comprehensive loss consists of the following components (in thousands)

		Foreign Currency Translation		Unfunded Pension Liability		Investment Available for Sale		Accumulated Other Comprehensive Loss
Balance at December 31, 2008	$	1,505	$	(11,228)	$	(60)	$	(9,783)
Changes in 2009		(97)		4,020		26		3,949
Balance at April 4, 2009	$	1,408	$	(7,208)	$	(34)	$	(5,834)
Included in other comprehensive income/loss was a reclassification adjustment of $227,000 and $85,000 in 2009 and 2008, respectively for the unfunded pension liability.

9

Comprehensive income (loss) is as follows (in thousands): 

		Three Months Ended
		April 4, 2009		March  29, 2008
Net loss	$	(2,774)	$	(3,305)
Other comprehensive income (loss):
Foreign currency translation adjustment		(97)		(284)
Unrealized gain (loss) on investment in available for sale securities		26		(73)
Pension related adjustment:
Curtailment		1,503		-
Pension liability adjustment, net of reclassification adjustment		2,517		85
Comprehensive income (loss)	$	1,175	$	(3,577)

(7)	Components of Net Periodic Benefit Cost
Components of net periodic benefit cost for the three months ended April 4, 2009 and March 29, 2008 are as follows (in thousands):

		NON-UNION PENSION BENEFITS				SALARY CONTINUATION BENEFITS				OTHER POST-EMPLOYMENT BENEFITS
		April 4, 2009		March 29, 2008		April 4, 2009		March 29, 2008		April 4, 2009		March 29, 2008
Service cost	$	65	$	79	$	-	$	-	$	1	$	2
Interest cost		387		377		84		81		26		27
Expected return on plan assets		(318)		(420)		-		-		-		-
Amortization of prior service costs		32		35		28		14		12		10
Amortization of net actuarial loss		155		26		-		-		-		-
Effect of curtailment		95		-		-		-		-		-
Net periodic benefit cost	$	416	$	97	$	112	$	95	$	39	$	39

Effective March 31, 2009, the Company's defined benefit pension plan was amended by freezing membership and future benefits in the plan.  In accordance with SFAS No. 88, "Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits" we recognized additional pension expense of $95,000 as the effect of the pension curtailment in the first quarter. Additionally, the defined benefit pension plan has been preliminarily revalued as of the date of the curtailment. The estimated effect of the curtailment and re-measurement resulted in a decrease of the projected benefit obligation of $3.8 million and a decrease in the accumulated other comprehensive loss of $4.0 million. A discount rate of 7.36% was used in the March 31, 2009 preliminary revaluation.

The Company expects to contribute $750,000 to the defined benefit pension plan during 2009. No contribution was made during the quarter ended April 4, 2009.

(8)

Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), "Business Combinations" ("SFAS No. 141(R)"). This statement improves the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. It establishes principles and requirements for how the acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree; recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This statement is effective for fiscal years beginning after December 15, 2008. SFAS No. 141(R) will have an impact on accounting for business combinations once adopted, but the effect is dependent on acquisitions subsequent to that time.

10

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities - an amendment of FASB No. 133". ("SFAS No. 161"). This statement amends SFAS No. 133 by requiring enhanced disclosures about an entity's derivative instruments and hedging activities, but does not change SFAS No. 133's scope or accounting. SFAS No. 161 requires increased qualitative, quantitative and credit-risk disclosures about the entity's derivative instruments and hedging activities. SFAS 161 is effective for fiscal years, and interim periods within those fiscal years, beginning after November 15, 2008, with earlier adoption permitted. The adoption of this standard did not have an effect on our financial position or results of operations.
In April 2008, the FASB issued FASB Staff Position 142-3, Determination of the Useful Life of Intangible Assets ("FSP FAS 142-3"), which amends the factors to be considered in renewal or extension assumptions used to determine the useful life of a recognized intangible asset.  FSP FAS 142-3 is effective for interim periods and fiscal years beginning after December 15, 2008.  We adopted FSP FAS 142-3 effective January 1, 2009. The adoption of this standard did not have an effect on our financial position or results of operations.
In June 2008, the FASB issued FSP Emerging Issues Task Force (EITF) No. 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities."  Under the FSP, unvested share-based payment awards that contain rights to receive nonforfeitable dividends (whether paid or unpaid) are participating securities, and should be included in the two-class method of computing EPS. The adoption of these standards did not have a material effect on our financial position or results of operations..
In December 2008, the FASB issued FASB Staff Position ("FSP") FAS No. 132(R)-1, "Employer's Disclosures about Postretirement Benefit Plan Assets." This FSP amends SFAS No. 132(R), "Employers' Disclosures about Pensions and Other Postretirement Benefits - An Amendment of FASB Statements No. 87, 88, and 106" to require more detailed disclosures about plan assets of a defined benefit pension or other postretirement plan, including investment strategies; major categories of plan assets; concentrations of risk within plan assets; inputs and valuation techniques used to measure the fair value of plan assets; and the effect of fair-value measurements using significant unobservable inputs on changes in plan assets for the period. FSP 132(R)-1 is effective for fiscal years ending after December 15, 2009, with earlier application permitted. We do not expect the adoption of this standard to have a material effect on our financial position or results of operations.
In April 2009, the FASB issued FSP FAS 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly".  SFAS No. 157-4 provides additional guidance for estimating fair value in accordance with FASB Statement No. 157, Fair Value Measurements, ("SFAS 157"), when the volume and level of activity for the asset or liability have significantly decreased. SFAS 157 is effective for non-financial assets and liabilities for year ends beginning on or after November 15, 2008. The adoption of this standard did not have a material effect on our financial position or results of operations.
In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, "Interim Disclosures about Fair Value of Financial Instruments" amends FASB Statement No. 107, "Disclosures about Fair Value of Financial Instruments", to require disclosures about fair value of financial instruments in interim as well as in annual financial statements.  This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in all financial statements.  This FSP is effective for interim reporting periods ending after June 15, 2009. We are currently evaluating the effect, if any, that the adoption of FAS 107-1 and APB 28-1 may have on our financial statements.
(9)	Credit Facility
In October 2007, the company entered into a new credit facility with its existing lenders, the CIT Group/Business Credit and Chittenden Trust Company (the "Lenders") that will expire in October 2012 and is secured by substantially all assets of the Company located in the United States.  The credit facility consists of an acquisition term loan line of credit of up to $30.0 million and a revolving credit facility of up to another $20.0 million based on eligible accounts receivable, inventory and certain fixed assets. Amounts outstanding were $4,961,000 and $13,991,000 as of April 4, 2009 and $9,637,000 and $14,356,000 as of March 29, 2008 on the revolving credit facility and the term loan line of credit, respectively. Availability under the revolving credit facility was $8,650,000 as of April 4, 2009. The credit facility financing agreement places restrictions on our ability to, among other things, sell assets, participate in mergers, incur debt, pay dividends, make capital expenditures, repurchase stock and make investments or guarantees, without pre-approval by the Lenders. Due to the non-cash impairment charges on the write-down of inventory and the corporate building we were in violation of the fixed charge coverage ratio covenant described below at December 31, 2008. We received a waiver of this covenant from the Lenders and amended the agreement as of March 30, 2009.
Repayment Terms. As the aggregate unpaid principal balance of the outstanding term loan is less than $17,500,000, quarterly principal payments are no longer required. The principal balance is payable in full on the expiration date of the facility in October 2012.  The Company does have the right to make voluntary pre-payments on the term loan. The revolving credit facility is paid down daily with all proceeds received by the Company.
The Company is required to repay its term loan to the extent it sells certain assets collateralizing the loan. Accordingly, the Company has classified a portion of the term loan as a current liability based on the estimated proceeds of fixed assets classified as held for sale. The current maturities of long-term debt at December 31, 2008 have been adjusted from the amount previously presented to correct for the misclassification of the term loan related to assets held for sale at that date.
Minimum Fixed Charge Coverage Ratio. The facility requires the ratio of the sum of earnings before interest, taxes, depreciation and amortization (EBITDA), to the sum of income taxes paid, capital expenditures, interest and scheduled debt repayments be at least 1.10 for the trailing twelve-month period at the end of each quarter. The Company was in compliance with this covenant at April 4, 2009.

11

Total Liabilities to Net Worth Ratio. The credit facility also requires that the ratio of our total liabilities to net worth (the "Leverage Ratio") not exceed 2.25 for the first two quarters of 2009 and 2.00 for the remainder of the term of the loan. The Leverage Ratio excludes from the calculation the change in tangible net worth directly resulting from the Company's compliance with SFAS No. 158 of $6.0 million. In relevant part, SFAS No. 158 required us to place on our books certain unrecognized and unfunded retirement liabilities beginning December 31, 2006.  As of April 4, 2009, we were in compliance with the Leverage Ratio covenant.

(10)

Income Taxes

The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for years before 2005 or Canadian tax authorities for years before 2003.
Income tax benefits in the first quarters of 2009 and 2008 result solely from losses at our Canadian subsidiary. Tax benefits are calculated based on the estimated annual effective Canadian tax rate of 31% for 2009 and 2008.
In 2005, the Company adjusted its valuation allowance to fully reserve for the entire net U.S. deferred tax asset. At each subsequent period, including at the end of the first quarter of 2009, we reached a similar conclusion, therefore we have continued to fully reserve for the entire net U.S. deferred tax asset. We will continue to assess the valuation allowance on a regular basis and may reduce the valuation allowance if and/or when the Company has taxable income from its U.S. operations.
As of April 4, 2009 and December 31, 2008, the Company had no liability under the provisions of FIN 48.
(11)	Discontinued Operations
In January 2008, the Company completed the sale of the retail division for $8,000,000 in cash less closing costs of $283,000.

Operating results from the retail division for the portion of the quarter ended March 29, 2008 during which it was owned by the Company, were as follows (in thousands):

Net sales	$    $	421
Gross loss		(116)
Pretax loss		(119)
Interest allocated		23
Net loss	$	(142)

(12)	Intangible Assets and Goodwill
In the first quarter of 2008 the Company completed the acquisition of the customer list of a former competitor for $375,000 CDN. This was accounted for in accordance with SFAS No. 142, "Goodwill and Other Intangible Assets" and, accordingly, was capitalized and is being amortized on a straight-line basis over the estimated useful life of five years. Amortization expense of $18,750 CDN and $12,500 CDN was recorded in the first quarter of 2009 and 2008, respectively.  Amortization expense is estimated to equal $75,000 CDN per year for the next four years.
We assess impairment of goodwill in accordance with the provisions of SFAS No. 142, "Goodwill and Other Intangible Assets." The provisions of SFAS No. 142 require a two-step test be performed. First, the fair value of each reporting unit is compared to its carrying value. If the fair value exceeds the carrying value, goodwill is not impaired and no further testing is performed. If the carrying value exceeds the fair value, then the implied fair value of the reporting unit's goodwill must be determined and compared to the carrying value of the goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then an impairment loss equal to the difference will be recorded.  In the first quarter of 2009, we performed our annual assessment for the quarry reporting unit. We calculated the fair value of the quarry reporting unit based on the estimated expected discounted future cash flows. Based on this analysis we concluded that there was no indication of impairment as of April 4, 2009, although there can be no assurance that goodwill will not become impaired in future periods.

(13) Fair Value Measurements

Effective January 1, 2009, the Company adopted SFAS 157 for its non-financial assets and non-financial liabilities.  Effective January 1, 2008, the Company adopted SFAS 157 for its financial assets and liabilities. SFAS 157 establishes a new framework for measuring fair value and expands disclosure requirements. SFAS 157 defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants.  The adoption of SFAS 157 did not have a material impact on our fair value measurements.

12

SFAS 157's valuation techniques are based on observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. These two types of inputs have created the following fair value hierarchy:

• Level 1-  Quoted prices for identical instruments in active markets. 

• Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant value drivers are observable.

• Level 3 - Valuations derived from valuation techniques in which significant value drivers are unobservable.

Investment securities are carried at fair value using level one inputs. The Company owns 1,000,000 shares of Family Memorials, Inc. a company that is publicly traded on the Toronto Stock Exchange. At April 3, 2009, the stock traded at $.06 per share which falls within the Level 1 fair value hierarchy in its entirety.

(14)	Subsequent Events
On April 17, 2009, Rock of Ages Canada, ("ROA Canada"), a wholly owned subsidiary of the Company signed an Asset Purchase Agreement and completed the purchase of the real and personal property comprising the Polycor Stanstead Quarry, located in Stanstead, Quebec, Canada from Carrieres Polycor, Inc. ("Polycor").  The purchase price for the quarry, building and inventory was $1.3 million CDN. This purchase was funded by ROA Canada's line of credit with the Royal Bank of Canada. In connection with the purchase, Polycor entered into an agreement that limits Polycor from owning or operating a quarry similar to the Stanstead Gray quarry within fifty kilometers of Stanstead, Quebec.  This agreement also prohibits Polycor from soliciting ROA Canada's customers for sales of gray granite. In connection with the purchase, ROA Canada entered into a 30 year supply agreement with Polycor, whereby ROA Canada must supply Polycor with standard blocks not to exceed 300 cubic meters (or 10,594 cubic feet) a month at ROA Canada's best price offered to other quarry customers less a 10% discount on first grade granite if paid within thirty days.  ROA Canada also assumed the remaining three years of supply agreements with two unrelated granite manufacturers.
On April 25, 2009, the Company concluded negotiations on new collective bargaining agreements with the two unions representing the production workforce in its quarries and manufacturing plants located in Barre, Vermont. Accordingly, effective April 25, 2009 the Company entered into three separate collective bargaining agreements: A two year agreement with the United Steelworkers covering part of the production workforce in its manufacturing plant in Barre, Vermont; a two year agreement with the Granite Cutters Association covering the remainder of the production workforce in the Company's manufacturing plant in Barre, Vermont; and a three year agreement with the United Steelworkers covering its production workforce in its Vermont quarries. The three year quarry agreement commences on April 25, 2009 and expires on April 27, 2012, and the manufacturing agreements commence on April 25, 2009 and expire on April 29, 2011. Pursuant to the agreements, wages for quarry workers remain the same in year one and increase $0.50 per hour in years two and three, and wages for manufacturing plant workers remain the same in year one and increase $0.50 per hour in year two.  The workers agreed to a modest increase in their share of health insurance premiums beginning in 2010 and the quarry worker's partner in productivity bonus plan will now be capped at the nine year average of $4,500 per person.

(15)

Assets Held For Sale

As of April 4, 2009 the Company held various assets for sale, which were no longer being used in production, totaling $831,000 compared with $477,000 at December 31, 2008.  These assets have been classified as current assets held for sale.  The estimated sales prices for the assets are expected to exceed the carrying values therefore no impairments were recognized.  Accordingly, $831,000 has been reclassified from the term loan to current maturities of long term debt since the company is required to apply the proceeds from the sale of these assets, when they are sold, against the term loan.

13

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations
Overview
Rock of Ages is an integrated quarrier and manufacturer of granite and products manufactured from granite. During the first quarter of 2009, we had two business segments:  quarry and manufacturing. The quarry division sells granite blocks to the manufacturing division and to outside manufacturers, as well as to customers outside North America. The manufacturing division's principal products are granite memorials and mausoleums used primarily in cemeteries. It also manufactures specialized granite products for industrial applications.
Historically, the Company's operations have experienced certain seasonal patterns. Generally, our net sales have been highest in the second or third quarter and lowest in the first quarter of each year due primarily to weather. Cemeteries in northern areas generally do not accept granite memorials during winter months when the ground is frozen because they cannot be properly set under those conditions. In addition, we either close or reduce the operations of our Vermont and Canadian quarries during these months because of increased operating costs attributable to adverse weather conditions. As a result, we have historically incurred a significant net loss during the first three months of each calendar year.
In the first quarter of 2009 revenues in our quarry division decreased 33% from the same period last year. We feel the decrease was in part, a timing issue as the quarry shipments in the first and fourth quarters of 2008 were unusually strong. However, even with the decrease in revenue, the gross loss decreased 54% from the same period last year.  SG&A expenses decreased 10% due to staffing reductions and other cost cutting measures. The quarry operating loss was 30% lower than the same period last year.
Revenue in our manufacturing division was $907,000 lower in the first quarter of 2009 from the same period last year. The reduction in manufacturing shipments is due to a lower beginning backlog to start the year. As a result the gross profit for the first quarter of 2009 was $250,000 lower than the same period last year. SG&A expenses were comparable with last year. The manufacturing operating loss was $214,000 higher than last year's first quarter.
Critical Accounting Policies
General
Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.
An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements.
Our critical accounting policies are as follows:  revenue recognition, impairment of long-lived assets and long-term investments, valuation of deferred tax assets, accounting for pensions and other post-employment benefits and excess inventory. There have been no material changes in the Company's critical accounting policies or changes in the methodology applied by management for critical accounting policies from what was previously disclosed in our most recent Form 10-K.

Results of Operations

The following table sets forth certain statement of operations data as a percentage of total net revenues with the exception of quarry and manufacturing gross profit and SG&A, which are shown as a percentage of their respective segment's net revenues. 

	Three Months Ended
	April 4, 2009		March 29, 2008
Net Revenues:
Quarry	52.6%		55.6%
Manufacturing	47.4%		44.4%
Total net revenues	100.0%		100.0%
Gross Profit (Loss):
Quarry	(7.2%	)	(10.5%	)
Manufacturing	3.7%		9.6%
Total gross profit (loss)	(2.0%	)	(1.6%	)
Selling, general and administrative expenses:
Quarry	17.5%		13.0%
Manufacturing	34.4%		27.0%
Corporate overhead	17.5%		15.3%
Effect of pension curtailment	1.6%		-
Total SG&A expenses	44.6%		34.6%
Loss from continuing operations before interest and income taxes	(46.6%	)	(36.2%	)
Other income, net	(1.5%	)	(0.8%	)
Interest expense	3.5%		4.3%

14

 

Loss from continuing operations before income taxes	(48.6%	)	(39.7%	)
Income tax benefit	(1.9%	)	(2.0%	)
Loss from continuing operations	(46.7%	)	(37.7%	)
Discontinued operations	-		(1.7%	)
Net loss	(46.7%	)	(39.4%	)

Three Months Ended April 4, 2009 Compared to Three Months Ended March 29, 2008

On a consolidated basis for the three-month period ended April 4, 2009, compared to the three-month period ended March 29, 2008, revenue decreased 29%, gross loss decreased 10% and total SG&A expenses decreased 9%.  The Company reported a net loss of $2.8 million in the first quarter of 2009 compared with a loss of $3.3 million for the first quarter of 2008.

Quarry Segment Analysis

Revenue in our quarry division for the three-month period ended April 4, 2009 of $3.1 million was down 33% from the three-month period ended March 29, 2008, of $4.7 million. We feel the decrease was in part, a timing issue as the quarry shipments in the first quarter of 2008 were unusually strong. The shipments in the first quarter of 2009 are on par with where we expected them to be. SG&A expenses decreased 10% due to staffing reductions and other cost cutting measures. The quarry operating loss was 30% lower than the same period last year.  

The productivity improvements such as the diamond wire sawing technology which were implemented in 2008 are showing positive results as even with the decrease in revenue, the gross loss decreased 54% or $265,000 from the same period last year.

SG&A expenses decreased 10% or $62,000 due to staffing reductions, decreased travel costs and lower bad debt expense.

Manufacturing Segment Analysis

Revenue in our manufacturing division for the three-month period ended April 4, 2009 decreased 24% or $907,000 from the three-month period ended March 29, 2008, primarily due to the lower backlog to begin the year. Due to the decreased backlog, we increased the winter layoff period for the manufacturing production personnel to improve efficiency.

Gross profit dollars from the manufacturing division decreased 71% or $252,000 and gross profit as a percentage of manufacturing revenue decreased by 6 percentage points for the three-month period ended April 4, 2009 compared to the three-month period ended March 29, 2008. These decreases were primarily the result of the overall reduced shipments due to the lower beginning backlog. 

SG&A costs for the three-month period ended April 4, 2009 for the manufacturing division decreased $38,000 or 4% compared to the three-month period ended March 29, 2008. This decrease is due primarily to the decrease in the average Canadian exchange rate.

Consolidated Items

Corporate overhead, consisting of operating costs not directly related to an operating segment, decreased 19%, or $246,000, for the three-month period ended April 4, 2009 compared to the three-month period ended March 29, 2008 due to the reduction in personnel and related costs throughout 2008. Because audit and related fees are disproportionately incurred in the first quarter, we expect lower quarterly unallocated corporate overhead expenses for the balance of 2009.

Other income, which includes rental income from non-operating properties, was up 38%, or $24,000, in the first quarter of 2009.

Effective March 31, 2009 the Company's defined benefit pension plan was amended by freezing membership and future benefits in the plan. Accordingly, we recognized an additional pension expense of $95,000 as the effect of the pension curtailment in the first quarter. If the pension plan had not been frozen, the pension expense for the year would have been $1.3 million. Because the plan was frozen, the 2009 pension expense will be $760,000, which includes the $95,000 expense for the effect of the curtailment.

15

No interest expense has been allocated to discontinued operations in 2009 and $23,000 was allocated in the first quarter of 2008. Net interest expense, including amounts allocated to discontinued operations, decreased $175,000, or 46%, for the three-month period ended April 4, 2009 compared to the three-month period ended March 29, 2008 reflecting debt repayments in January 2008 from the proceeds of the sale of the retail division and further reductions in debt throughout the year. On March 30, 2009, we reached a definitive agreement with our lenders on the conditions of the grant of a waiver from compliance with certain covenants contained in our Amended and Restated Financing Agreement. In consideration of the consents and waivers the unused line fee went from .25% to .50% and the existing interest rate pricing grid was changed and interest rates increased approximately 3%. We expect this will increase our interest expense around $400,000 for the year but due to the decreased level of debt interest expense will most likely not exceed the amount reported in 2008.

Income tax benefit was $116,000 for the three-month period ended April 4, 2009, compared to $166,000 for the same three-month period in 2008. The tax benefit reported in both periods was entirely due to our Canadian subsidiary and is less in 2009 than 2008 due to a larger first quarter loss in our Canadian subsidiary in 2008 and the effect of the decrease in the exchange rate. During the first quarter of both years we continued to fully reserve against all our U.S. deferred tax assets.

We had a loss from discontinued operations of $142,000 in the first quarter of 2008. This loss is made up of $119,000 of operating losses of the retail division that was sold on January 17, 2008 plus $23,000 of interest allocated to the discontinued operations.

Liquidity and Capital Resources

Historically, we have met our short-term liquidity requirements primarily from cash generated by operating activities and periodic borrowings under the commercial credit facilities described below. Our $50 million credit facility with our Lenders was renewed on October 24, 2007 for a term of five years.

We have historically contributed between $800,000 and $1.0 million per year to the defined benefit pension plan.  The Company is not required to make any contribution in 2009, however we expect to contribute $750,000 to the defined benefit plan this year, which, we believe, we will be able to fund either from cash from operations or borrowing under our credit facilities.  See note 9 of the Notes to Unaudited Consolidated Financial Statements.

Our primary need for capital will be to maintain and improve our quarry and manufacturing facilities.  We have approximately $2.1 million planned for capital expenditures in 2009. We believe we will be able to fund these capital expenditures either from cash from operations or borrowings under our credit facilities.

On April 17, 2009, ROA Canada signed an Asset Purchase Agreement and completed the purchase of the real and personal property comprising the Polycor Stanstead Quarry, located in Stanstead, Quebec, Canada from Carrieres Polycor, Inc. ("Polycor"). The purchase price for the quarry, building and inventory was $1.3 million CDN. This purchase was funded by ROA Canada's line of credit with the Royal Bank of Canada.

In January 2008, we received $7.7 million in net proceeds from the sale of the retail division. We applied $4.5 million of these proceeds to the long-term debt and $3.2 million to the revolving credit facility.

Cash Flows

At April 4, 2009, we had cash and cash equivalents of $589,000 and working capital of $18 million, compared to $1.1 million of cash and cash equivalents and working capital of $20.5 million at March 29, 2008.

Cash Flows from Operations. Net cash provided by operating activities was $2.6 million in the three-month period ended April 4, 2009 compared to net cash used of $2.4 million in the same three-month period of 2008. The increase in cash flow from operations is due primarily to a lower net loss in 2009 and the increase in the amount of collections on accounts receivable in the first quarter of 2009. 

Cash Flows from Investing Activities. Cash flows used in investing activities were $281,000 in the first quarter of 2009 compared to $7.1 million provided by investing activities in the three-month period ended March 29, 2008. In 2009, we purchased property, plant and equipment (PP&E) totaling $399,000 less $118,000 received on sales of assets. In the first quarter of 2008 we purchased $422,000 of PP&E and paid the remainder of $179,000 for a customer list in Canada which was offset by proceeds from the sale of the retail division totaling $7.7 million. Cash used in investing activities comes from either borrowings under our credit facilities or from operations.

Cash Flows from Financing Activities. Net cash used in financing activities in the three-month period ended April 4, 2009 was $2.6 million which consisted of repayments on the long-term debt of $126,000 and net repayments on the revolving line of credit of $2.5 million. This compares to $5.5 million used in financing activities in the three-month period ended March 29, 2008 which consisted of repayments on the long-term debt of $4.6 million, net repayments on the revolving line of credit of $862,000 and increased debt issuance costs of $24,000. 

CIT Credit Facility

We have a credit facility with the CIT Group/Business Credit and Chittenden Trust Company (the "Lenders") that is scheduled to expire in October 2012 and is secured by substantially all assets of the Company located in the United States. The facility consists of an acquisition term loan line of credit of up to $30.0 million and a revolving credit facility of up to another $20.0 million based on eligible accounts receivable, inventory and certain fixed assets.  Amounts outstanding were $4,961,000 and $13,991,000 as of April 4, 2009 and $9,637,000 and $14,356,000 as of March 29, 2008 on the revolving credit facility and the term loan line of credit, respectively. The credit facility financing agreement places restrictions on our ability to, among other things, sell assets, participate in mergers, incur debt, pay dividends, make capital expenditures, repurchase stock and make investments or guarantees, without pre-approval by the Lenders.  The financing agreement also contains certain covenants for a Minimum Fixed Charge Coverage Ratio (the "Ratio") and a limit on the Total Liabilities to Net Worth Ratio of the Company. Due to the non-cash impairment charges on the write-down of inventory and the corporate building, we were in violation of the fixed charge coverage ratio covenant at December 31, 2008. We received a waiver of this covenant from the Lenders and amended the agreement as of March 30, 2009.

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Minimum Fixed Charge Coverage Ratio. The credit facility requires the ratio of the sum of earnings before interest, taxes, depreciation and amortization (EBITDA), to the sum of income taxes paid, capital expenditures, interest and scheduled debt repayments be at least 1.10 for the trailing twelve-month period at the end of each quarter. The Company was in compliance with the Ratio covenant at April 4, 2009.

Total Liabilities to Net Worth Ratio. The credit facility also requires that the ratio of our total liabilities to net worth (the "Leverage Ratio") not exceed 2.25 for the first two quarters of 2009 and 2.00 for the remainder of the term of the loan. The Leverage Ratio excludes from the calculation the change in tangible net worth directly resulting from the Company's compliance with SFAS No. 158 of $6.0 million. In relevant part, SFAS No. 158 required us to place on our books certain unrecognized and unfunded retirement liabilities beginning December 31, 2006.  As of April 4, 2009, we were in compliance with the Leverage Ratio covenant.

Interest Rates. We can elect the interest rate under the credit facility based on the prime rate or LIBOR for both the revolving credit facility and the term loan. The revolving credit facility's rate is based on Prime plus 3% or LIBOR plus 4% with a 2% floor for LIBOR. The term loan's rate is based on Prime plus 3.5% or LIBOR plus 4.5% with a 2% floor for LIBOR.

The rates in effect as of April 4, 2009 were as follows:

		Amount	Formula	Effective Rate
Revolving Credit Facility	$	5.0 million	Prime + 3.00%	6.25%
Term Loan		14.0 million	Prime + 3.50%	6.75%

Canadian Credit Facility

The Company's Canadian subsidiary has a line of credit agreement with the Royal Bank of Canada that is renewable annually. Under the terms of this agreement, a maximum of $4.0 million CDN may be advanced based on eligible accounts receivable, eligible inventory, and tangible fixed assets.  The line of credit bears interest at the U.S. prime rate.  There was -0- outstanding as of April 4, 2009 and March 29, 2008.

Off-Balance Sheet Arrangements

With the exception of our operating leases, we do not have any off-balance sheet arrangements, and we do not have, nor do we engage in, transactions with any special purpose entities.

Item 3.	Quantitative and Qualitative Disclosures About Market Risk
The Company has financial instruments that are subject to interest rate risk, principally debt obligations under its credit facilities. Historically, the Company has not experienced material gains or losses due to interest rate changes. Based on the April 4, 2009 outstanding borrowings under the credit facility of $19.0 million, the impact of a 1% increase in the interest rates would be approximately $190,000 a year.
The Company is subject to foreign currency exchange rate risk primarily from the operations of its Canadian subsidiary. At April 4, 2009, the Canadian subsidiary had net assets of $9.5 million exposed to changes in the Canadian/U.S. dollar exchange rate.  The impact of the change in the exchange rate in the first three months of 2009 was $71,000 due to a slight decrease in the value of the Canadian dollar as compared to the U.S. dollar.
Item 4.	Controls and Procedures

Disclosure Controls and Procedures. The Company's management, with the participation of the Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), has evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the Company's CEO and CFO have concluded, that the Company's disclosure controls and procedures are effective in identifying, on a timely basis, material information required to be disclosed in our reports filed or submitted under the Exchange Act. Management has concluded that the consolidated financial statements in this Form 10-Q fairly present, in all material respects, the Company's financial position, results of operations and cash flows for the periods and dates presented.

Changes in Internal Control Over Financial Reporting. There have been no significant changes in the Company's internal control over financial reporting identified during the quarter ended April 4, 2009.

17

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings
We are a party to legal proceedings that arise from time to time in the ordinary course of our business. While the outcome of these proceedings cannot be predicted with certainty, we do not expect them to have a material adverse effect on our business or financial condition.
The Company carries insurance with coverage that it believes to be customary in its industry. Although there can be no assurance that such insurance will be sufficient to protect us against all contingencies, management believes that its insurance protection is reasonable in view of the nature and scope of our operations.
Item 1A.	Risk Factors
There have been no material changes to the risk factors previously disclosed in Part I, Item 1A of the Company's 2008 Annual Report.

 

18

Item 6.		Exhibits
	Number	Exhibits
	3.1	Amended and Restated Certificate of Incorporation of the Registrant incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-1 (File No. 333-33685) filed with the Securities and Exchange Commission on August 15, 1997 and declared effective on October 20, 1997.
	3.2	Amended and Restated By-Laws of the Registrant (as amended through November 16, 2007) incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K dated November 16, 2007.
	4	Specimen Certificate representing the Class A Common Stock incorporated by reference to Exhibit 4 to the Company's Registration Statement on Form S-1 (Registration No. 333-33685) filed with the Securities and Exchange Commission on August 15, 1997and declared effective on October 20, 1997.
	10.1	Amendment No. 1 to Supply Agreement dated as of January 16, 2009 (executed and delivered March 10, 2009) by and between Rock of Ages Corporation and PKDM Holdings, Inc. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the commission on March 11, 2009).
	10.2	First Amendment to Amended and Restated Financing Agreement dated March 30, 2009 by and between the CIT Group/Business Credit, Inc. and Carolina Quarries, Inc., Pennsylvania Granite Corp., Keith Monument Company, LLC, Rock of Ages Memorials, Inc., Sioux Falls Monument Co. and the Company (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K and filed with the Securities and Exchange Commission on March 31, 2009).
	10.3	Asset Purchase Agreement dated April 17, 2009 by and between Rock of Ages Canada, a wholly owned subsidiary of Rock of Ages Corporation and Carrieres Polycor, Inc. for the purchase of real and personal property comprising the Polycor Stanstead Quarry, located in Stanstead, Quebec. This exhibit is the original French version of the agreement.
	10.4	Asset Purchase Agreement dated April 17, 2009 by and between Rock of Ages Canada, a wholly owned subsidiary of Rock of Ages Corporation and Carrieres Polycor, Inc. for the purchase of real and personal property comprising the Polycor Stanstead Quarry, located in Stanstead, Quebec. This exhibit is an English translation of the original French agreement.
	31.1	Certification of CEO pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	Certification of CFO pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1	Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2	Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

19

SIGNATURE 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ROCK OF AGES CORPORATION
Dated: May 19, 2009	By: /s/ Laura A Plude                                                     Laura A. Plude        Vice President, Chief Financial Officer and Treasurer        (Duly Authorized Officer and Principal Financial and Accounting Officer)

20

EXHIBIT INDEX

Number	Exhibits
3.1	Amended and Restated Certificate of Incorporation of the Registrant incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-1 (File No. 333-33685) filed with the Securities and Exchange Commission on August 15, 1997 and declared effective on October 20, 1997.
3.2	Amended and Restated By-Laws of the Registrant (as amended through November 16, 2007) incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K dated November 16, 2007.
4	Specimen Certificate representing the Class A Common Stock incorporated by reference to Exhibit 4 to the Company's Registration Statement on Form S-1 (Registration No. 333-33685) filed with the Securities and Exchange Commission on August 15, 1997and declared effective on October 20, 1997.
10.1	Amendment No. 1 to Supply Agreement dated as of January 16, 2009 (executed and delivered March 10, 2009) by and between Rock of Ages Corporation and PKDM Holdings, Inc. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the commission on March 11, 2009).
10.2	First Amendment to Amended and Restated Financing Agreement dated March 30, 2009 by and between the CIT Group/Business Credit, Inc. and Carolina Quarries, Inc., Pennsylvania Granite Corp., Keith Monument Company, LLC, Rock of Ages Memorials, Inc., Sioux Falls Monument Co. and the Company (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K and filed with the Securities and Exchange Commission on March 31, 2009).
10.3	Asset Purchase Agreement dated April 17, 2009 by and between Rock of Ages Canada, a wholly owned subsidiary of Rock of Ages Corporation and Carrieres Polycor, Inc. for the purchase of real and personal property comprising the Polycor Stanstead Quarry, located in Stanstead, Quebec. This exhibit is the original French version of the agreement.
10.4	Asset Purchase Agreement dated April 17, 2009 by and between Rock of Ages Canada, a wholly owned subsidiary of Rock of Ages Corporation and Carrieres Polycor, Inc. for the purchase of real and personal property comprising the Polycor Stanstead Quarry, located in Stanstead, Quebec. This exhibit is an English translation of the original French agreement.
31.1	Certification of CEO pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of CFO pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

21

EX-10.3

 

CONVENTION DE VENTE D'ÉLÉMENTS D'ACTIF

entre

CARRIÈRES POLYCOR INC.

et

ROCK OF AGES CANADA INC.

TABLE DES MATIÈRES

1.       INTERPRÉTATION........................................................................................................... - 1 -

          1.1     Définitions.................................................................................................................. - 1 -

          1.2     Titre d'articles............................................................................................................ - 2 -

          1.3     Genre et nombre......................................................................................................... - 2 -

          1.4     Annexes..................................................................................................................... - 2 -

          1.5     Renonciation, modification.......................................................................................... - 2 -

          1.6     Lois applicables.......................................................................................................... - 2 -

2.       ACHAT ET VENTE............................................................................................................ - 2 -

3.       PRIX D'ACHAT.................................................................................................................. - 3 -

          3.1     Prix d'achat................................................................................................................. - 3 -

          3.2     Ajustements................................................................................................................ - 3 -

          3.3     Aucune prise en charge du passif................................................................................. - 3 -

4.       MODALITÉS DE PAIEMENT DU PRIX D'ACHAT........................................................... - 3 -

          4.1     Modalités de paiement................................................................................................. - 4 -

          4.2     Dépôt de garantie........................................................................................................ - 4 -

          4.3     Examen des titres........................................................................................................ - 4 -

          4.4     Vérification environnementale....................................................................................... - 5 -

          4.5     Remise du Dépôt de garantie....................................................................................... - 5 -

          4.6     Règles relatives au Dépôt de garantie et au Dépositaire................................................ - 6 -

5.       DÉCLARATIONS ET GARANTIES DU VENDEUR....................................................... - 7 -

          5.1     Déclarations et garanties quant au Vendeur................................................................. - 7 -

          5.2     Déclarations et garanties quant aux Éléments d'actif..................................................... - 7 -

          5.3     Conformité aux lois relatives à l'environnement............................................................ - 9 -

          5.4     Survie des déclarations et des garanties...................................................................... - 9 -

6.       DÉCLARATIONS ET GARANTIES DE L'ACHETEUR................................................ - 10 -

          6.1     Déclarations et garanties.......................................................................................... - 10 -

          6.2     Survie des déclarations et garanties.......................................................................... - 10 -

7.       INDEMNISATION.......................................................................................................... - 10 -

8.       ENGAGEMENTS DES PARTIES..................................................................................... - 11 -

          8.1     Engagements de l'Acheteur........................................................................................ - 11 -

          8.2     Engagements du Vendeur.......................................................................................... - 11 -

          8.3     Engagements des parties........................................................................................... - 12 -

          8.4     Survie des engagements............................................................................................ - 12 -

9.       AVIS.................................................................................................................................. - 12 -

          9.1     Avis.......................................................................................................................... - 12 -

          9.2     Date de réception des avis......................................................................................... - 13 -

10.     DISPOSITIONS GÉNÉRALES........................................................................................ - 13 -

          10.1   Frais et honoraires..................................................................................................... - 13 -

          10.2   Délais de rigueur........................................................................................................ - 13 -

CONVENTION DE VENTE D'ÉLÉMENTS D'ACTIF

ENTRE :	CARRIÈRES POLYCOR INC., une personne morale légalement constituée, ayant son siège social au 138, rue Saint-Pierre à Québec province de Québec, G1K 8B9, représentée par Charles Belzil, vice-président du conseil et chef de la direction financière de la société, dûment autorisé tel qu'il le déclare; (ci‑après le «  Vendeur  » )
ET :	ROCK OF AGES CANADA INC., une personne morale légalement constituée, ayant son siège social au 1, Place Ville-Marie, bureau 4000, à Montréal, province de Québec, H3B 4M4, représentée par Gabriel Ouellet, directeur des Finances et des Opérations, dûment autorisé tel qu'il le déclare; (ci‑après l'«  Acheteur  » )

1.         INTERPRÉTATION

1.1       Définitions

Aux fins des présentes, ainsi que dans tous les documents s'y rapportant ou y faisant référence, à moins que le contexte ne s'y oppose, les mots, termes et expressions suivants signifieront :

1.1.1    «  Acte de vente de l'Immeuble  » signifie l'acte de vente joint comme annexe 8.3 aux présentes;

1.1.2    «  convention » signifie la présente convention et toutes ses annexes, dans chaque cas telles qu'elles peuvent être amendées ou complétées de temps à autre, et les expressions «  des présentes », «  dans les présentes », « aux présentes  », « en vertu des présentes », « par les présentes » et autres expressions semblables renvoient à la présente convention; et, sauf indication contraire, les références à des paragraphes et à des articles sont des références aux paragraphes et articles de la présente convention;

1.1.3    «  Éléments d'actif » signifie les éléments d'actif décrits à l'article 2 des présentes;

1.1.4    «  Immeuble  » signifie une partie du lot 362 Canton de Stanstead, circonscription foncière de Stanstead dont la désignation apparaît au long dans l'Acte de vente de l'Immeuble, et toutes autres bâtisses ou constructions érigées sur ladite partie de lot;

1.1.5    «  Inventaire  » signifie l'inventaire de blocs de granite qui se trouve actuellement sur l'Immeuble à l'exclusion des blocs de granite vendus par le Vendeur en date du 31 mars 2009 et dont la liste apparait à l'annexe 8.2.3 des présentes; pour les fins de l'établissement du Prix d'achat de l'Inventaire, une liste des blocs de granite de catégories I, II et III est jointe à l'annexe 1.1.5 à la présente;

1.1.6    « Prix d'achat » signifie le prix d'achat des Éléments d'actif stipulé à l'article 3 ci‑après sous réserve des dispositions de l'article 4 des présentes;

1.1.7     « Vice de titres  « désigne, collectivement, (i) tout vice dans la chaîne des titres de l'Immeuble; (ii) toute charge, priorité, hypothèque, sûreté ou droit réel quelconque (sauf les servitudes d'utilité publique pouvant affecter l'Immeuble mais qui n'en empêchent pas l'utilisation ou l'exploitation), les charges mentionnées au paragraphe 5.2.1 et les droits mentionnés au paragraphe 5.2.10 si ceux-ci ne sont pas radiés dans le délai prescrit; (iii) toute disposition législative ou réglementaire fédérale, provinciale, municipale ou autre, ou droit d'un tiers qui empêche le Vendeur de disposer de l'Immeuble en faveur de l'Acheteur; et (iv) toute autorisation relative à la vente de l'Immeuble requise d'un tiers ou de toute commission, agence ou autre corps gouvernemental qui n'aurait par ailleurs pas été obtenue.

1.2       Titre d'articles

Le titre des articles ou des paragraphes n'est inséré aux présentes que pour fins de référence seulement et ne peut servir à interpréter le contenu de cette convention.

1.3       Genre et nombre

Le masculin inclut le féminin, le singulier inclut le pluriel et vice versa.

1.4       Annexes

Les documents qui suivent ont été joints en annexes à la présente convention :

Annexe 1.1.5       Inventaire

Annexe 3.1.2       Prix d'achat de l'Inventaire

Annexe 3.3         Addendum à la convention de vente d'éléments d'actif

Annexe 5.2.12     Noms commerciaux

Annexe 8.1.1       Convention d'approvisionnement

Annexe 8.2.1       Convention de non-concurrence

Annexe 8.2.3       Blocs de granite appartenant au Vendeur

Annexe 8.3         Acte de vente de l'Immeuble

1.5      Renonciation, modification

Sauf tel qu'expressément prévu dans la présente convention, aucune modification ou renonciation à la présente convention ne lie une partie à moins qu'elle ne soit consignée dans un écrit signé par la partie ainsi liée. Une renonciation à une disposition de la présente convention ne constitue pas une renonciation à quelqu'autre disposition de la présente convention et aucune renonciation à une disposition de la présente convention ne constitue une renonciation à la faire valoir dans le futur à moins d'une disposition expresse à cet effet.

1.6     Lois applicables

La présente convention est régie et interprétée conformément aux lois du Québec et aux lois du Canada qui s'y appliquent.

2.       ACHAT ET VENTE

Sous réserve des dispositions de la présente convention, le Vendeur vend à l'Acheteur qui les achète, tous les biens mobiliers et immobiliers et tous les droits corporels et incorporels décrits ci-après :

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a)    l'Immeuble;

b)    tout l'Inventaire;

c)    tous ses droits dans toute la propriété intellectuelle utilisée par le Vendeur pour l'exploitation de l'Immeuble (sauf celle qui comprend le nom «  Polycor » ) notamment, les noms «  Gris de Stanstead  « ,  «  Stanstead Grey  «,  Stantead Gray  » , «  Mistigri  » et «  Misty Grey  » ;

d)    tous ses droits dans tous les permis, certificats et licences cessibles nécessaires à l'exploitation de l'Immeuble notamment, les certificats émis par le ministère de l'Environnement, le cas échéant;

e)    tous ses droits dans tous les droits miniers, claims miniers et baux d'exploitation que le Vendeur détient en rapport avec l'exploitation de l'Immeuble.

3.         PRIX D'ACHAT

3.1       Prix d'achat

Sous réserve des conditions, représentations, garanties, engagements et modalités des présentes, le Prix d'achat pour l'acquisition des Éléments d'actif est un montant égal au total des sommes suivantes :

3.1.1     quant aux Éléments d'actif autres que l'Inventaire, une somme de UN MILLION DE DOLLARS (1 000 000 $) répartie comme suit :

a)         CENT MILLE DOLLARS (100 000 $) pour l'Immeuble;

b)        NEUF CENT MILLE DOLLARS (900 000 $) pour les droits d'exploitation des réserves de granite;

c)         quant à l'Inventaire, la somme prévue à l'annexe 3.1.2.

3.2   Ajustements

Les taxes scolaires et municipales relatives à l'Immeuble ainsi que la taxe municipale perçue auprès des exploitants de carrières font l'objet d'un ajustement en date des présentes; dans l'éventualité où d'autres ajustements étaient nécessaires, ils seront faits également en date des présentes conformément aux dispositions de l'Acte de vente de l'Immeuble.

3.3  Aucune prise en charge du passif

Sous réserve des paragraphes 4.4.1 et 4.4.2 des présentes, il est entendu entre les parties que l'Acheteur n'assume aucun passif du Vendeur, ni aucune dette ou obligation, de quelque nature qu'elle soit, relative ou non aux Éléments d'actif, y compris, sans restreindre la portée générale de ce qui précède, tout emprunt, tout compte payable, toute responsabilité fiscale pour impôts cotisés ou non, toute responsabilité découlant ou reliée directement ou indirectement à l'exploitation de l'entreprise du Vendeur sur l'Immeuble y compris toute responsabilité relative aux employés, toute responsabilité environnementale ou toute autre responsabilité et le Vendeur s'engage, par les présentes, à indemniser l'Acheteur et à le mettre à couvert de tout dommage, dépense, frais, amende, condamnation, responsabilité ou jugement relatif à tout ce qui précède conformément à l'article 7 des présentes sujet aux dispositions de l'annexe 3.3.des présentes.

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4.         MODALITÉS DE PAIEMENT DU PRIX D'ACHAT

4.1       Modalités de paiement

Le Prix d'achat est payable selon les modalités suivantes:

            4.1.1    concurremment à la signature des présentes, l'Acheteur paie au Vendeur, à titre de paiement partiel du Prix d'achat, la somme de UN MILLION DEUX CENT DIX-NEUF MILLE SIX CENT SOIXANTE-QUINZE DOLLARS et 84 ¢ (1 219 675,84 $) dont le Vendeur accuse réception et donne quittance pour autant;

            4.1.2    le solde du Prix d'achat, soit CENT MILLE DOLLARS (100 000 $), sera payable conformément aux dispositions du paragraphe 4.5 des présentes.

4.2       Dépôt de garantie

Les parties conviennent de déposer auprès de Lavery, de Billy, s.e.n.c.r.l. (le «  Dépositaire  » ), en fidéicommis, la somme de cent mille dollars (100 000 $) (le «  Dépôt de garantie  » ) qui devra être placé dans un certificat de dépôt d'une banque à charte canadienne jusqu'à ce qu'il soit remis conformément aux présentes. Le Dépôt de garanti sera versé au Vendeur lorsque l'Acte de vente de l'Immeuble sera publiée à l'index aux immeubles sans entrée adverse et selon les modalités du paragraphe 4.5 des présentes.

Tant qu'il n'aura pas été statué sur le Dépôt de garantie conformément aux dispositions des paragraphes 4.3 et 4.4, l'Acheteur ne pourra exploiter l'Immeuble étant entendu que l'Acheteur pourra exploiter l'Immeuble après ce délai et étant entendu également que le Vendeur ne pourra faire valoir son droit d'usufruit prévu dans la convention d'approvisionnement pendant cette période au cours de laquelle l'Acheteur ne peut exploiter l'Immeuble conformément à ce qui précède.

4.3       Examen des titres

L'Acheteur aura jusqu'au 31 mai 2009 pour procéder, à ses frais, à l'examen des titres de l'Immeuble. Dans le cadre de l'examen des titres, les dispositions suivantes trouveront application :

            4.3.1    Si un tel examen ne révèle aucun Vice de titres et que les charges mentionnées au paragraphe 5.2.1 et les droits mentionnés au paragraphe 5.2.10 ont été radiés dans le délai prescrit et, au plus tard le 31 mai 2009 pour ce qui est de l'usufruit et du droit de premier refus consentie à Tuiles Granit-Décor Inc. publiés au bureau de la publicité des droits de la circonscription foncière de Stanstead sous le numéro 163 847, alors le Dépôt en garantie et les intérêts courus seront remis au Vendeur sous réserve des dispositions du paragraphe 4.4 des présentes.

            4.3.2    Si, par ailleurs, un tel examen révèle un Vice de titres, y compris les charges mentionnées au paragraphe 5.2.1 et les droits mentionnés au paragraphe 5.2.10 si ceux-ci ne sont pas radiés dans le délai prescrit et, au plus tard le 31 mai 2009 pour ce qui est de l'usufruit et du droit de premier refus consentis à Tuiles Granit-Décor Inc. publiés au bureau de la publicité des droits de la circonscription foncière de Stanstead sous le numéro 163 847, alors une portion du Dépôt en garantie sera conservée par le Dépositaire jusqu'à la correction des Vices de titre ainsi révélés. La portion du Dépôt en garantie qui sera

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conservée par le Dépositaire sera déterminée raisonnablement par le Vendeur et l'Acheteur, en fonction de la nature des Vices de titres qui restent à radier et des coûts raisonnables pour garantir à l'Acheteur que le Vendeur précédera à leur correction conformément au paragraphe 4.3.3. Cependant, si le Vice de titres qui reste à radier est soit le premier refus consenti à Tuiles Granit-Décor Inc. et publié sous le numéro 163 847 ou soit le droit de premier refus consenti à Granit Bussière Inc. et publiée sous le numéro 146 212, alors la totatlité du Dépôt en garantie sera conservée par le Dépositaire jusqu'à ce que lesdits droits soient radiés à la satisfaction de l'Acheteur.

4.3.3  Dans cette éventualité où un tel examen révèle un Vice de titres, y compris les charges mentionnées au paragraphe 5.2.1 et les droits mentionnés au paragraphe 5.2.10 si ceux-ci n'ont pas été radiés dans le délai prescrit et, au plus tard le 31 mai 2009 pour ce qui est de l'usufruit et du droit de premier refus consentie à Tuiles Granit-Décor Inc. publiés au bureau de la publicité des droits de la circonscription foncière de Stanstead sous le numéro 163 847, l'Acheteur en avisera le Vendeur par écrit et ce dernier s'oblige par les présentes à remédier à ses frais au Vice de titres allégué à la satisfaction de l'Acheteur et ce, dans un délai de trente (30) jours suivant l'avis de l'Acheteur (ou tout autre délai plus long si tel Vice de titres ne peut raisonnablement pas être corrigé à l'intérieur du délai de 30 jours pourvu cependant que le Vendeur entreprenne les correctifs nécessaires et poursuive de manière diligente la correction du Vice de titres). Si le Vendeur est incapable, refuse ou néglige de corriger tel Vice de titres dans le délai imparti (ou tout autre délai convenu entre les parties), l'Acheteur pourra procéder, aux frais du Vendeur, à la correction des titres et les frais et débours encourus par l'Acheteur pour ce faire, majorés de 100 %, seront pris à même la portion du Dépôt de garantie conservé à cette fin.  Si la correction des titres ne peut se faire sans la participation du Vendeur et que ce dernier refuse ou néglige d'apporter son concours à l'Acheteur dans le délai imparti (ou tout autre délai convenu entre les parties), alors l'Acheteur pourra conserver la portion du Dépôt de garantie conservé à cette fin et il conserve par ailleurs tous ses droits aux termes de l'article 7, le cas échéant, et tous les autres droits et recours permis par la loi.

4.4     Vérification environnementale

L'Acheteur aura jusqu'au 31 mai 2009 pour procéder, à ses frais, à l'évaluation environnementale de l'Immeuble. Dans le cadre de cette évaluation, les dispositions suivantes trouveront application :

            4.4.1   Si l'évaluation environnementale révèle que l'Immeuble (i) ne requière aucune mesure corrective ou (ii) si le total des coûts de l'évaluation environnementale (y compris les rapports environnementaux Phase I et II) et des coûts des mesures correctives résultant de l'évaluation environnementale tels qu'évalués par l'expert en environnement qui a procédé à l'évaluation environnementale, sont évalués à 25 000 $ ou moins, alors ces coûts seront entièrement assumés par l'Acheteur et dans l'un et l'autre des cas, le Dépôt en garantie et les intérêts courus seront remis au Vendeur sous réserve des dispositions du paragraphe 4.3 des présentes.

4.4.2   Si, par ailleurs, le total des coûts de l'évaluation environnementale (y compris les rapports environnementaux Phase I et II) et des coûts des mesures correctives résultant de l'évaluation environnementale tels qu'évalués par l'expert en environnement qui a procédé à l'évaluation environnementale sont supérieurs à 25 000 $, alors toute somme excédent 25 000 $ sera assumée à parts égales par les parties (étant toutefois entendu que la part devant être assumée par le Vendeur ne pourra en aucun cas excéder 100 000 $) et une portion du Dépôt en garantie sera conservée par le Dépositaire jusqu'à ce que les mesures correctives aient été apportées. La portion du Dépôt en garantie qui sera conservée par le Dépositaire sera égale à la part des coûts qui doit être assumée par le Vendeur conformément à ce qui précède.

4.4.3   Si des mesures correctives de plus de 25 000 $ sont requises, alors le Vendeur et l'Acheteur travailleront de concert pour la réalisation des travaux requis pour corriger la situation.

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4.5       Remise du Dépôt de garantie

Les parties conviennent que le Dépôt de garantie sera traité selon les dispositions suivantes :

            4.5.1   Le Dépositaire est autorisé à remettre le Dépôt de garantie de même que les intérêts courus au Vendeur conformément aux dispositions des paragraphes 4.3.1 et 4.4.1 des présentes. L'Acheteur devra aviser le Dépositaire par écrit que suite à l'examen des titres et à l'évaluation environnementale, le Dépôt de garantie et les intérêts courus peuvent être remis au Vendeur.

4.5.2   Si, cependant, le Dépositaire est tenu de conserver une portion du Dépôt de garantie conformément aux dispositions des paragraphes 4.3.2 ou 4.4.2, alors le Dépositaire est autorisé à conserver le montant qui sera déterminé conformément aux dispositions des paragraphes 4.3.2 ou 4.4.2 et à remettre le solde du Dépôt de garantie de même que les intérêts courus au Vendeur. L'Acheteur devra aviser le Dépositaire par écrit du montant qui doit être conservé par lui conformément aux dispositions des paragraphes 4.3.2 ou 4.4.2.

            4.5.3   Si cependant l'examen des titres ou une législation applicable à l'Immeuble ou à l'Acheteur fait en sorte que la présente vente est nulle ou que le titre de propriété de l'Acheteur est nul, alors la présente vente sera résiliée et le Vendeur remettra le Prix d'achat à l'Acheteur et le Dépositaire est autorisé à remettre le Dépôt de garantie de même que les intérêts courus à l'Acheteur. L'Acheteur devra aviser le Dépositaire par écrit que la vente est nulle ou que son titre est nul et que le Dépositaire est autorisé à remettre le Dépôt de garantie et les intérêts courus à l'Acheteur.

            4.5.4   Si la correction des titres ne peut se faire sans la participation du Vendeur et que ce dernier refuse ou néglige d'apporter son concours tel qu'il est décrit au paragraphe 4.3, alors l'Acheteur devra en aviser par écrit le Dépositaire et le Dépositaire est autorisé à remettre le Dépôt de garantie et les intérêts courus à l'Acheteur.

Tout montant déduit du Dépôt de garantie conformément aux dispositions des paragraphes 4.3 et 4.4 des présentes diminuera d'autant le Prix d'achat.

4.6       Règles relatives au Dépôt de garantie et au Dépositaire

Les parties conviennent que le Dépôt de garantie et le Dépositaire seront assujettis aux règles suivantes :

4.6.1    le Dépositaire devra retenir le Dépôt de garantie et le remettre au Vendeur ou à l'Acheteur, selon les dispositions des présentes;

4.6.2    le Dépositaire devra déduire les frais et débours et les remettre à l'Acheteur tel que prévu aux présentes;

4.6.3    jusqu'à sa remise conformément à ce qui précède, le Dépositaire devra placer le Dépôt de garantie dans un certificat de dépôt d'une banque à charte canadienne; les intérêts et autres revenus de placement produits sur le Dépôt de garantie et tout renouvellement feront partie du Dépôt de garantie;

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4.6.4   hormis les cas de faute lourde ou de faute intentionnelle, le Dépositaire ne sera responsable dans le cadre de la présente convention, d'aucun geste ni de quelque mesure qu'il aura, de bonne foi, posé ou pris ou omis de poser ou prendre ni d'aucune erreur de fait ou de droit. Sans limiter ce qui précède, il est entendu que le Dépositaire n'encourra aucune responsabilité du fait d'un geste, d'une mesure ou d'une omission d'agir de sa part à la suite d'un avis, d'une demande, d'une renonciation, d'un consentement ou de tout autre document qui lui est remis conformément aux présentes, non seulement à l'égard de la validité des signatures qui y apparaissent et des dispositions qu'ils contiennent, mais aussi à l'égard de la véracité et de la suffisance des renseignements qui y apparaissent et que le Dépositaire croit de bonne foi être authentiques;

4.6.5   nonobstant toute disposition de la Loi relative à l'administration du bien d'autrui ou aux obligations fiduciaires, le Vendeur et l'Acheteur conviennent que les obligations du Dépositaire sont limitées à celles prévues à la présente convention et, sans limiter la généralité de ce qui précède, le Dépositaire ne sera pas tenue de souscrire des assurances, de donner quelque garantie que ce soit ou de faire toute reddition de compte à la fin de la présente convention;

4.6.6    les parties conviennent, conjointement et solidairement, de tenir indemnes et à couvert le Dépositaire de toutes réclamations, frais ou dommages subis ou encourus par le Dépositaire en relation avec l'exécution du mandat prévu aux présentes.

5.         DÉCLARATIONS ET GARANTIES DU VENDEUR

5.1       Déclarations et garanties quant au Vendeur

Le Vendeur déclare et garantit à l'Acheteur ce qui suit et reconnaît que l'Acheteur s'est fondé sur ces déclarations et garanties pour acheter les Éléments d'actif.

5.1.1   Le Vendeur a le pouvoir de posséder les Éléments d'actif et il a le pouvoir, l'autorité et le droit de conclure et d'exécuter la présente convention de même que l'Acte de vente de l'Immeuble et la Convention de non-concurrence sans autres formalités que celles déjà remplies; le Vendeur a dûment signé et livré la présente convention de même que l'Acte de vente de l'Immeuble et la Convention de non-concurrence et ces conventions établissent des obligations valides et obligatoires à l'égard du Vendeur, exécutoires conformément à leurs dispositions;

5.1.2   le Vendeur a le pouvoir d'exploiter l'Immeuble comme il le fait actuellement et bénéficie à cet égard de droits acquis lui permettant de le faire;

5.1.3   la conclusion de la présente convention, de l'Acte de vente de l'Immeuble et de la Convention de non-concurrence et les actes que suppose leur mise à exécution n'enfreindront en rien l'acte constitutif et les règlements du Vendeur, les contrats auxquels il est lié ou les lois, ordonnances et jugements auxquels le Vendeur est assujetti;

5.1.4    ni la présente convention, ni l'Acte de vente de l'Immeuble et ni la Convention de non-concurrence, ni aucun des actes que suppose leur mise à exécution n'exposera l'Acheteur à la perte, à la suspension ou à la résiliation de l'un ou l'autre des permis, licences, autorisations relatifs à l'Immeuble;

5.1.5    le Vendeur est résident canadien au sens de la Loi de l'impôt sur le revenu (Canada) et de la Loi sur les impôts (Québec).

5.2       Déclarations et garanties quant aux Éléments d'actif

5.2.1   Le Vendeur a un titre clair, bon et valable sur les Éléments d'actif, ceux-ci sont libres et quittes de toute charge, priorité, hypothèque, sûreté ou droit réel quelconque, qu'il soit publié ou non, sauf les servitudes et autres charges pouvant affecter l'Immeuble mais qui n'en empêchent pas l'utilisation et l'exploitation et sauf

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(i)    un droit d'usufruit suspensif se terminant le 23 avril 2017, en faveur de Tuiles Granit-Décor Inc. constituée aux termes d'une convention publiée au bureau de la publicité des droits de la circonscription foncière de Stanstead le 9 octobre 1990 sous le numéro 163 847 que le Vendeur s'engage à faire radier à ses frais dans un délai raisonnable suivant la date des présentes;

(ii)    un droit d'usufruit suspensif consenti en faveur de Granit Bussière Inc., afin de lui assurer un approvisionnement en granite et ce, pour une période de trente (30) ans à compter du 24 avril 1987, constituée aux termes d'une convention publiée au bureau de la publicité des droits de la circonscription foncière de Stanstead le 14 mai 1987 sous le numéro 146 212 que le Vendeur s'engage à faire radier à ses frais dans un délai de trente (30) jours des présentes;

(iii)    un acte d'hypothèque consenti par Polycor Inc., Carrières Polycor Inc., Dumas et Voyer Inc., Granilac Inc., La Compagnie Novostone Inc., Bordures Polycor Inc./Polycor Granit Curbs Inc., Polycor Granite Bussière Inc., Tuiles Polycor Inc./Polycor Tiles Inc. et Tranches Polycor Inc./Polycor Slabs Inc. en faveur de Trust Banque Nationale Inc., publié à Stanstead le 1^er juin 2007 sous le numéro 14 286 067 qui sera radiée de l'Immeuble aux frais du Vendeur concurremment à la publication de l'Acte de vente de l'Immeuble;

5.2.2    toutes les taxes et cotisations, tant générales que spéciales, scolaires et municipales et toutes les autres taxes affectant l'Immeuble ont été acquittées jusqu'au 31 décembre 2009 quant au versement de taxes municipales et jusqu'au 30 juin 2009 quant aux taxes scolaires et tous les droits de mutation ont été acquittés, le tout sans consolidation ou subrogation en faveur d'une tierce partie;

5.2.3    l'usage de l'Immeuble est conforme à tous égards importants, à toute loi, règlement et norme (tant au niveau fédéral que provincial, municipal ou autre), comprenant sans limiter la généralité de ce qui précède, ceux concernant l'environnement (à l'exception de ce qui sera révélé par l'inspection environnementale prévue aux termes des présentes (l'«  Inspection environnementale  » ) et le zonage et est conforme à toutes les dispositions législatives et réglementaires qui s'y appliquent;

5.2.4    l'Immeuble a été soustrait de la zone agricole conformément à la décisions numéro 311427 rendue par la Commission de protection du territoire agricole le 21 février 2000;

5.2.5    l'usage de l'Immeuble ne constitue pas une violation ou un défaut à l'égard d'une convention ou d'un contrat important en relation avec l'Immeuble (y compris tout bail, offre, promesse ou contrat de location, toute police d'assurance ou autre contrat), ni à l'égard de quelque jugement, décision, ordonnance, injonction, règlement, exigence ou décret d'un tribunal ou d'un arbitre ou d'une agence, d'un bureau, d'une régie, commission, ministère ou d'une autre autorité publique;

5.2.6    il n'existe à la date des présentes aucune réclamation, expropriation, procédure judiciaire ou autre, relativement à l'Immeuble ou à son exploitation, sauf tel que divulgué par écrit à l'Acheteur et accepté par écrit par celui-ci et le Vendeur s'est conformé intégralement à tout avis quelconque reçu par le Vendeur ou tout propriétaire antérieur, relativement à la non conformité de l'Immeuble, de son utilisation, ou autrement, émis par toute autorité ayant juridiction relativement à toute loi, à tout règlement ou à toute disposition législative et, par ailleurs, le Vendeur n'a reçu aucun tel avis auquel il ne s'est pas conformé, sauf tel que divulgué par écrit à l'Acheteur et accepté par écrit par ce dernier;

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5.2.7    il n'y a eu aucun travaux de construction ou de rénovation effectués sur l'Immeuble dans les trente-cinq (35) jours précédant la présente convention et pouvant donner lieu à l'inscription d'une priorité contre l'Immeuble;

5.2.8    les bâtiments et les autres structures situés sur l'Immeuble sont conformes à toutes les lois et à tous les règlements municipaux ainsi qu'à tous les autres règlements (à l'exception de ce qui sera révélé par l'Inspection environnementale) et il n'existe aucun accord restrictif, aucun règlement municipal et autre loi ou règlement qui, de quelque manière, restreint ou interdit l'utilisation de l'Immeuble, de ces bâtiments ou de ces structures comme ils sont actuellement utilisés;

5.2.9    il n'y a aucune action, poursuite, affaire en instance ou poursuite appréhendée non plus qu'il n'y a aucune menace d'action, poursuite ou procédure impliquant les Éléments d'actif devant tout tribunal, commission, agence ou autre corps gouvernemental;

5.2.10    les Éléments d'actif ne font l'objet d'aucun engagement de vente, droit de premier refus, option et il n'existe aucun droit susceptible de devenir un contrat pour l'acquisition des Éléments d'actif sauf (i) un droit de premier refus en faveur de Granit Bussière Inc. à l'égard duquel le Vendeur s'engage à obtenir la renonciation et à faire radier à ses frais dans un délai de trente (30) jours des présentes et (ii) un droit de premier refus pour l'acquisition de l'Immeuble en faveur de Tuiles Granit-Décor Inc. à l'égard duquel le Vendeur s'engage à obtenir la renonciation et à faire radier à ses frais dans un délai raisonnable suivant la date des présentes;

5.2.11    le Vendeur ne possède aucune information ni renseignement relatif aux Éléments d'actif qui, s'il était connu de l'Acheteur, pourrait raisonnablement le décourager de parfaire la transaction prévue aux présentes au prix et aux conditions décrites aux présentes;

5.2.12    la liste de tous les noms commerciaux utilisés en relation avec les Éléments d'actif est jointe à titre d'annexe 5.2.12.

5.3       Conformité aux lois relatives à l'environnement

5.3.1    Le Vendeur ne viole ni n'a violé de lois, de règlements, de politiques, de directives, de lignes directrices, d'ordonnances ni de décrets des gouvernements fédéral, provincial, municipal ou locaux à l'égard des questions d'environnement (à l'exception de ce qui sera révélé par l'Inspection environnementale) (collectivement appelées les «  Lois relatives à l'environnement  » ) ;

5.3.2    le Vendeur a enlevé de l'Immeuble tous les contaminants et toutes les sources de contamination qui ont ou peuvent avoir pour effet de contrevenir aux Lois relatives à l'environnement (à l'exception de ce qui sera révélé par l'Inspection environnementale);

5.3.3    il n'y a aucun réservoir souterrain ou hors terre dans ou sous l'Immeuble sauf ceux mentionnés au paragraphe 8.2.4 des présentes;

5.3.4    aucune ordonnance, aucun avis de correction ou d'infraction ni aucune autre demande n'a été émis en vertu des Lois relatives à l'environnement relativement à l'Immeuble;

5.3.5    le Vendeur n'a pas omis de déclarer aux autorités gouvernementales appropriées quelqu'événement qu'il est tenu de déclarer en vertu des Lois relatives à l'environnement et le Vendeur a fourni à l'Acheteur des copies exactes et complètes de tous les rapports et de toute la correspondance s'y rapportant.

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5.4       Survie des déclarations et des garanties

Les déclarations et les garanties du Vendeur contenues dans la présente convention et dans tous les documents remis en vertu de la présente convention ou visés par celle-ci survivront à la date de la présente convention pendant une durée de trois ans suivant la date des présentes.

6.         DÉCLARATIONs ET GARANTIES DE L'ACHETEUR

6.1       Déclarations et garanties

L'Acheteur déclare et garantit au Vendeur ce qui suit :

6.1.1    sous réserve de l'applicabilité de la Loi sur l'acquisition de terres agricoles par des non-résidants, l'Acheteur a le pouvoir et la capacité de conclure et de remplir ses obligations en vertu de la présente convention et de toutes les conventions, tous les contrats et tous les autres documents que l'Acheteur signe ou livre en vertu de la présente convention. L'Acheteur a dûment signé et livré tels conventions, contrats et documents et ils établissent des obligations valides et obligatoires à l'égard du Vendeur, exécutoires conformément à ses dispositions;

6.1.2    la conclusion de la présente convention de même que l'Acte de vente de l'Immeuble et les actes que suppose sa mise à exécution n'enfreindront en rien l'acte constitutif et les règlements du Vendeur, les contrats auxquels il est lié ou les lois, ordonnances et jugements auxquels le Vendeur est assujetti;

6.1.3    l'Acheteur est résident canadien au sens de la Loi de l'impôt sur le revenu (Canada) et de la Loi sur les impôts (Québec).

6.2       Survie des déclarations et garanties

Les déclarations et les garanties de l'Acheteur contenues dans la présente convention et dans tous les documents remis en vertu de la présente convention ou visés par celle-ci survivront à la date de la présente convention pendant une durée de trois ans suivant la date des présentes.

7.         Indemnisation

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Sous réserve des dispositions du paragraphe 5.4 des présentes, le Vendeur devra garder l'Acheteur indemne et à couvert de tout dommage, perte, engagement, responsabilité, réclamation, charge, déficience, coût et dépense (y compris les honoraires et déboursés, judiciaires et extra-judiciaires, d'avocats et tous les autres coûts et dépenses découlant de toute poursuite, action, enquête, réclamation ou procédure) que l'Acheteur pourrait avoir subis, supportés, encourus ou pourrait devoir payer par suite d'une violation ou d'une inexactitude des représentations, garanties, stipulations, ententes ou engagements du Vendeur en vertu des présentes; sans limiter la généralité de ce qui précède, le Vendeur s'engage à tenir indemne l'Acheteur à l'égard de tout recours de la part de Granit Bussière Inc. et Tuiles Granit-Décor Inc. en ce qui a trait à leur droit de premier refus et l'usufruit mentionnés aux paragraphes 5.2.1 et 5.2.10 des présentes.  S'il arrive qu'il soit réclamé à l'Acheteur quelque montant que ce soit pour lequel le Vendeur doit le tenir indemne aux termes de la présente convention, sauf ceux spécifiquement assumés par l'Acheteur en vertu des présentes, l'Acheteur avisera le Vendeur de cette réclamation et le Vendeur devra assister l'Acheteur dans la contestation d'une telle réclamation. Si l'Acheteur est tenu d'acquitter quelque montant que ce soit par suite d'une réclamation contestée ou non, le Vendeur sera redevable envers l'Acheteur d'un montant égal à la somme ainsi versée en capital, intérêts, pénalités, frais et accessoires ainsi que des frais encourus par l'Acheteur (y compris les honoraires et déboursés, judiciaires et extra judiciaires, raisonnables de ses avocats) concernant telle réclamation.

Toute somme payable aux termes de la présente obligation d'indemnisation ne pourra en aucun cas excéder un montant équivalent au Prix d'achat.

8.         ENGAGEMENTs DEs parties

8.1       Engagements de l'Acheteur

L'Acheteur s'engage comme suit envers le Vendeur :

8.1.1    à signer, concurremment aux présentes, une convention d'approvisionnement selon le modèle joint aux présentes à titre d'annexe 8.1.1;

8.1.2    des blocs de granite gris de Stanstead d'une dimension nette de 12-0 x 6-0 x 6-0 (82 blocs sont présentement prévus) seront fournis par l'Acheteur au Vendeur pour le projet «  Franklin D. Roosevelt » à un prix de 20 $ du pied cube dans un délai de quatre mois suivant la commande si celle-ci est faite auprès de l'Acheteur au cours des mois d'avril à août; sinon, le délai de livraison sera de six mois;

8.1.3    à payer, relativement à l'Immeuble, toutes les taxes foncières à échoir, y compris la proportion de celles-ci pour l'année courante, à compter de la date des présentes; quant à la taxe municipale perçue auprès des exploitants de carrière, le Vendeur devra rembourser à l'Acheteur sa part de telle taxe dès que l'Acheteur aura remis au Vendeur l'état de compte du 31 mai 2009 émis par la municipalité d'Ogden.

8.2       Engagements du Vendeur

Le Vendeur s'engage comme suit envers l'Acheteur :

8.2.1    à signer, concurremment aux présentes, une convention de non-concurrence en faveur de l'Acheteur selon le modèle joint aux présentes à titre d'annexe 8.2.1;

8.2.2    à la demande de l'Acheteur, à signer les documents nécessaire pour transférer à l'Acheteur tous les noms commerciaux utilisés en relation avec les Éléments d'actif dont la liste est jointe à titre d'annexe 5.2.12;

8.2.3    à procéder, à ses frais, au plus tard dans les trois (3) mois des présentes, à l'enlèvement des équipements et des blocs de granite qui appartiennent au Vendeur pour avoir été vendus par lui au 31 mars 2009 et dont une liste est jointe à titre d'annexe 8.2.3 à défaut de quoi, ceux-ci deviendront la propriété de l'Acheteur à l'expiration du délai de trois (3) mois sans compensation;

8.2.4    à procéder, à ses frais, au plus tard dans les six (6) jours des présentes, à l'enlèvement de la roulotte et des trois (3) réservoirs hors terre situés sur l'Immeuble; le Vendeur pourra les entreposer temporairement sur le terrain de l'Acheteur à Ogden (les réservoirs devant avoir été vidés au préalable) mais devra les retirer du terrain de l'Acheteur à Ogden au plus tard le 15 juin 2009;

8.2.5    à obtenir la renonciation de Granit Bussière Inc. et de Tuiles Granit-Décor Inc., ou de leurs ayants-droit respectifs, aux droits de premier refus mentionnés au paragraphe 5.2.10 des présentes et aux droits d'usufruit mentionnés au paragraphe 5.2.1 (i) et (ii) des présentes et à publier le tout au registre foncier de la circonscription de Stanstead dans le délai imparti;

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8.2.6    à faire, signer, remettre ou faire en sorte que soit faits, signées ou remis tous les autres actes, documents et choses que l'Acheteur peut de temps à autre raisonnablement exiger aux fins de donner effet à la présente convention et le Vendeur s'engage à pleinement coopérer avec l'Acheteur dans le cadre de l'examen des titres de l'Immeuble ou si l'Acheteur devait faire la démonstration de droits acquis rattachés à l'Immeuble devant tout tribunal, commission, agence ou autre corps gouvernemental, et à prendre toutes les mesures nécessaires pour mettre en application dans leur pleine mesure les ententes prévue dans la présente convention.

8.3       Engagements des parties

Les parties s'engagent l'une envers l'autre à signer, concurremment aux présentes, un acte de vente de l'Immeuble en faveur de l'Acheteur aux fins de publication au registre foncier de la circonscription foncière de Stanstead selon le modèle joint aux présentes à titre d'annexe 8.3. La présente convention et l'Acte de vente de l'Immeuble se complètent l'un l'autre et toutes les dispositions des présentes, y compris l'obligation d'indemnisation, profitent à l'Acheteur aux termes de l'Acte de vente de l'Immeuble et y sont intégrées par renvoi. Si l'Acheteur obtient un certificat de localisation relatif à l'Immeuble et que celui-ci donne une description technique plus actualisée de l'Immeuble, alors les parties s'engagent à signer une convention par laquelle la description technique actuellement prévue dans l'Acte de vente de l'Immeuble sera corrigée.

8.4       Survie des engagements

Les engagements des parties contenus dans la présente convention et dans tous les documents remis en vertu des présentes ou visés par celle-ci survivront à la date de la présente convention.

9.         AVIS

9.1       Avis

Tous avis, documents ou autres communications à être donnés aux termes des présentes devront être par écrit et seront suffisamment donnés s'ils sont livrés personnellement, par courrier recommandé ou par télécopieur (étant entendu qu'au cas de perturbation dans le service postal, tout tel avis, document ou autre communication devra être livré ou signifié personnellement ou par télécopieur), aux adresses suivantes :

9.1.1          Pour le Vendeur :

138, rue Saint-Pierre
Québec, QC  G1K 3V9

Télécopieur: (418) 692-0981

À l'attention de M. Irenée Bouchard, président du conseil et chef de la direction

9.1.2          Pour l'Acheteur :

4, rue Rock of Ages

Stanstead, QC  J0B 3E2

Télécopieur: (819) 876-2234

À l'attention de M. Gabriel Ouellet, directeur des Finances et des Opérations

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Chaque partie aux présentes aura le droit de spécifier une adresse différente de celle prévue ci-haut en donnant un avis à cet effet à l'autre partie de la façon y prévue.

9.2       Date de réception des avis

Tout avis, documents ou autres communications, si envoyé par télécopieur, sera réputé avoir été reçu le jour ouvrable suivant celui où il a été ainsi envoyé, si envoyé par courrier recommandé, le 3^ème jour suivant la date de sa mise à la poste et, si livré ou signifié personnellement, le jour de sa livraison ou de sa signification.

10.       DISPOSITIONS GÉNÉRALES

10.1     Frais et honoraires

Chaque partie paiera les honoraires de ses conseillers relatifs aux présentes et aux transactions qui en découleront ainsi qu'à leur exécution.

10.2     Délais de rigueur

Tous les délais prévus à la présente sont des délais de rigueur qui ne peuvent être prolongés que du consentement écrit de la partie à laquelle le délai bénéficie ou du Vendeur et de l'Acheteur si le délai est à leur bénéfice.

EN FOI DE QUOI, Carrières Polycor Inc. a signé la présente convention à Montréal ce 17^e jour d'avril 2009.

	CARRIÈRES POLYCOR INC.
Par :	Charles Belzil, vice-président du conseil et chef de la direction financière

EN FOI DE QUOI, Rock of Ages Canada Inc. a signé la présente convention à Montréal ce 17^e jour d'avril 2009.

	ROCK OF AGES CANADA INC.
Par :	Gabriel Ouellet, directeur des Finances et des Opérations

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EX-10.4

Sale Agreement of asset elements

between Carrieres Polycor Inc

and

Rock of Ages Canada Inc.

 

1

TABLE OF CONTENTS

1.         INTERPRETATION

            1.1              Definitions

            1.2              Titles and clauses

            1.3              Type and number

            1.4              Exhibits

            1.5              Renunciation, modification

            1.6              Applicable laws

2.         PURCHASE AND SALE

3.         PURCHASE PRICE

            3.1              Purchase price

            3.2              Adjustments

            3.3              No liability intake

4.         PURCHASE PRICE TERMS AND CONDITIONS

            4.1              Payment terms and conditions

            4.2              Guaranteed deposit

            4.3              Title search

            4.4              Environmental verification

            4.5              Guaranteed deposit remittance

            4.6              Regulations with regards to the guaranteed deposit and to the trustee

5.         SELLER DECLARATIONS AND GUARANTEES

            5.1              Seller declarations and guarantees

            5.2              Declarations and guarantees of asset elements

            5.3              Compliance with environmental relative laws

            5.4              Survival of declarations and guarantees

6.         BUYER DECLARATIONS AND GUARANTEES

            6.1              Declarations and guarantees

            6.2              Survival of declarations and guarantees

7.         COMPENSATION

8.         COMMITMENTS BETWEEN PARTIES

            8.1              Buyer' commitments

            8.2              Seller's commitments

            8.3              Party's commitments

            8.4              Follow up of commitments

9.         NOTICE

            9.1              Notice

            9.2              Receipt of notice date

10.       GENERAL PROVISIONS

            10.1          Cost and fees

            10.2          Deadline

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SALE AGREEMENT OF ASSET ELEMENTS

BETWEEN: 

CARRIERES POLYCOR INC, a legal corporate entity, with a head office situated at 138, Saint-Pierre street in Quebec, Province of Quebec, G1K 8B9, represented by Charles Belzil, vice president of the board of director and chief financial director of the company, duly authorized hereinafter called: (THE SELLER)

AND:

ROCK OF AGES CANADA INC, a legal corporate entity, with a head office situated at 1 Place Ville-Marie, bureau 4000, in Montreal, province of Quebec, H3B 4M4, represented by Gabriel Ouellet, director of finance and operations, duly authorized hereinafter called (THE BUYER)

1.               INTERPRETATION

1.1             Definitions

For the purpose of the present, and also in all documents related or referred to, unless of an opposite context, the following words, terms and expressions will signify:

1.1.1.   "Deed of sale of the immoveable property" signifies the attached deed of sale in exhibit 8.3 to the present;

1.1.2.   "Agreement" signifies the present agreement and all exhibits, in each case as they can be amended or completed from time to time, and the expressions "the presents", "in the presents", "to the presents" "in pursuance to the presents" by the presents" and other similar expressions are referred to this agreement; and, unless contrary indication, references to paragraphs and articles are references to paragraphs and articles of this agreement.

1.1.3.   "Asset elements" signifies asset elements described in article 2 of in the present;

1.1.4.   "Immoveable property" signifies part of lot 362 in Canton of Stanstead, in the Stanstead district which is fully described in the Deed of Sale of the immoveable property, and all other buildings or structures established on the said lot;

1.1.5.   "Inventory" signifies the granite blocks that are actually found on the property with the exclusion of the granite blocks sold by the Seller as of March 31, 2009 and listed on exhibit 8.2.3. of the presents; for the purpose of establishing an inventory sale price, a list of granite blocks category 1, 11, and 111 is enclosed to the present;

1.1.6.   "Purchase price" signifies the purchase price of the asset elements stipulated in article 3 below subject to the provisions of article 4 of the presents;

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1.1.7.   "Title irregularities" designate, collectively, (i) any irregularities in the chain of titles of the property;  (ii) any charge, priority, mortgage, security or any actual rights (except public utility right of way allocated to the property but does not prevent its utilization or its exploitation), charges mentioned in paragraph 5.2.1 and rights mentioned in paragraph 5.2.10 if these are not erased in a stipulated deadline;  (iii) any legislative or statutory provision federal, provincial, municipal or other, or the rights of a third party that prevent the Seller to dispose of the property in favor of the Buyer ; and (iv) any relative authorization to the sale of the property required from a third party or any commission, agency or other governmental group that was not obtained.

1.2             Titles and clauses

Titles and clauses or paragraphs are inserted to the presents only for reference purposes and cannot be used to interpreter the content of this agreement.

1.3             Type and number

The masculine include the feminine, the singular include the plural and vice versa.

1.4             Exhibits

1.5             The following documents are enclosed as exhibit to the present agreement:

Exhibit  1.1.5              Inventory

Exhibit  3.1.2              Inventory sale price

Exhibit  3.3                 Addendum to the sale agreement of asset elements

Exhibit  5.2.12            Commercial names

Exhibit  8.1.1.             Supply agreement

Exhibit  8.2.1              Non-competition agreement

Exhibit  8.2.3              Granite blocks belonging to the Seller

Exhibit  8.3                 Deed of sale of the property

1.6             Renunciation, modification

Only if expressly anticipated in the present agreement, no modification or renunciation to the present agreement will bind a party unless it is recorded in writing and signed by the binding party.  A renunciation to a provision of the present agreement does not constitute a renunciation to any other provision to the present agreement and no renunciation to a provision of the present agreement will constitute a renunciation to bring it up in the future unless of an expressed provision to this effect.

1.7             Applicable laws

The present agreement is controlled and interpreted according to Quebec and Canada applicable laws.

2.               PURCHASE AND SALE

4

      Under reserved provisions of the present agreement, the Seller sells to the Buyer all moveable and immoveable properties and all corporate and incorporate rights listed below: 

a)               Immovable property

b)               All inventory

c)               All rights in all the intellectual property used by the Seller for the exploitation of the property (except for those under the name "Polycor") notably the names "Gris de Stanstead", Stanstead Grey", "Stanstead Gray, "Mistigri" and "Misty Grey"

d)               all their rights in all permits, certificates and transferable licenses necessary to the exploitation of the property notably, certificates given by the Minister of Environment, if 

                  needed;

e)               all rights in mining rights, mining claims and exploitation leases that the Seller has with regards to the exploitation of the property.

3.               PURCHASE PRICE

3.1             Purchase price

Under conditions, restrictions, representations, guaranties, engagements and clauses of the presents, the purchase price to acquire the asset Elements is an amount equal to the total of the following amounts:

3.1.1          As for the asset elements other than the inventory, an amount of ONE MILLION DOLLARS )1 000 000 000 $) distributed as follow:

        a)      ONE HUNDRED THOUSAND DOLLARS (100 000 $) for the immoveable property

        b)      NINE HUNDRED THOUSAND DOLLARS (900 000 $) for the exploitation rights of the granite reserves

        c)      As for the inventory, the anticipated amount is in exhibit 3.1.2.

3.2           Adjustments

                School and municipal taxes with regards to the property and municipal taxes collected in favor of quarry operators are subject to an adjustment dated as of the present; in the

                eventuality that other adjustments are necessary, they will also be made as of the present date according to the provisions of the Deed of Sale of the Property.

3.3           No liability intake

Under paragraph 4.4.1 and 4.4.2 of the presents, it is understood between parties that the Buyer does not assume any liability intake from the Seller, neither debt or obligation,

of any nature it may be, related or not to asset Elements, including, without restricting the general significance of the above, any loan, accounts payable, fiscal responsibility for income taxes paid or not, any responsibility deriving or related directly or indirectly to the exploitation of the Seller's

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enterprise on the property including all responsibilities regarding employees, any environmental responsibility or any other responsibility and the Seller commits himself, by the following, to compensate the Buyer and to cover any damages, expenses, costs, finds, condemnation, responsibility or judgment with regards to all of the above according to article 7 of the presents subject to provision in exhibit 3.3 of the presents.

4.                  PURCHASE PRICE TERMS AND CONDITIONS

4.1                Payment terms and conditions

   The purchase price is payable according to the following methods of payment

4.1.1.      Jointly at the signature of the presents, the Buyer pays the Seller, as a partial payment of the Purchase Price, the sum of ONE MILLION TWO HUNDRED NINETEEN THOUSAND SIX HUNDRED SEVENTY FIVE THOUSAND DOLLARS AND 84 cents (1 219 675.84 $) of which the Buyer will acknowledge receipt and give full discharge;

4.1.2.      the balance of the purchase Price, that is ONE HUNDRED THOUSAND (100 000 $) which will be payable according to the provisions of paragraph 4.5 of the presents,

4.2             Guaranteed deposit

The parties agree to deposit in favor of Lavery, de Billy, S.E.N.C.R.L. ( the "Consignee") in trust, the sum of one hundred thousand dollars (100 000 $) (the guaranteed deposit) will have to be invested as a term deposit in a Canadian chartered bank until it is handed over according to the presents.  The guaranteed Deposit will be paid to the Seller when the Deed of sale of the property is published to the index of the properties without any adverse entries and according to the clauses of paragraph 4.5 of the presents.

As long as a decision has not been made on the guaranteed Deposit according to provisions of paragraphs 4.3 and 4.4, the Buyer cannot exploit the property being understood that the Buyer can exploit the property after this waiting period and it is also understood that the Seller cannot assert his rights of usufruct indicated in the supply agreement during this period during which the Buyer cannot exploit the property according to the above.

4.3                   Title search

The buyer will have until May 31, 2009 to proceed, at his own expense, to the examination of the property titles.  In the scope of the titles' examinations, the following provisions will apply:

4.3.1        If such an examination does not reveal any title irregularities and charges referred to in paragraph 5.2.1. and rights referred to in paragraph 5.2.10 were removed within the deadline period and, no later than May 31, 2009 for the usufruct and the first refusal right granted to Tuile Grani-Décor Inc. published at the public rights office of the district of Stanstead under number 163 847, then the guaranteed Deposit and accrued interest will be handed over to the Seller statutory under the provisions of paragraph 4.4 of the presents.

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4.3.2        However, if such an examination reveals titles irregularities, including charges referred to in paragraph 5.2.1.and rights referred to in paragraph 5.2.10 and if they are not removed within the prescribed deadline and, no later than May 31, 2009 as for the usufruct and the first refusal right granted to Tuile Grani-Décor Inc. published at the public rights office of the district of Stanstead under number 163 847, then a portion of the guaranteed Deposit will be kept by the Consignee until correction of title irregularities are revealed.  The Seller and the Buyer will reasonably determine the portion of the guaranteed Deposit that will be kept by the Consignee, according to the nature of the title irregularities that are left to cross off and reasonable costs to guarantee the Buyer that the Seller will proceed to their correction according to paragraph 4.3.3.  However, if the titles Irregularities that are left to cross off are either the first refusal right granted to Tuile Grani-Décor Inc and published under number 163 847 or the first refusal right granted to Granit Bussiere Inc and published under number 146 212, then the entire amount of the guaranteed Deposit will be kept by the Consignee until the said rights are rectified to the Buyer's satisfaction.

4.3.3        In the event that such an examination reveals title irregularities, including changes referred to in paragraph 5.2.1 and rights referred to in paragraph 5.2.10 if these were not removed within the prescribed deadline and, no later than May 31, 2009 for the usufruct and the first refusal right granted to Tuile Granit-Décor Inc. published at the public rights office of the district of Stanstead under number 163 847, the Buyer will advise the Seller in writing and the later is compelled by the following to rectify at his own cost the alleged title Irregularities to the Buyer's satisfaction and this, within 30 days following the Buyer's notice (or a longer deadline if the title Irregularities cannot reasonably be corrected within the 30 day deadline as long as the Seller undertakes the necessary corrections of the title Irregularities in a diligent manner).  If the Seller cannot, refuses or neglects to correct such title Irregularities within the time allowed (or any other time frame agreed to between parties), the Buyer can proceed, at the Seller's cost, to the correction of the titles and the related costs and expenses incurred by the Buyer, increased by 100%, will be taken from the portion of the guaranteed Deposit kept for this purpose.  If the title corrections cannot be done without the participation of the Seller and the later refuses or neglects to bring his assistance to the Buyer within the allowed time (or another deadline agreed to between parties), then the Buyer can keep the portion of the guaranteed Deposit kept for this purpose and he also will keep all his rights to article 7, if necessary, and all other rights and recourses allowed by law.

4.4              Environmental verification

The Buyer will have until May 31, 2009, to proceed, at his own expense, to the environmental evaluation of the property.  In the framework of this evaluation, the following provisions will be applicable:

4.4.1    If the environmental evaluation reveals that the property (i) does not require any corrective measure or (ii) if the total environmental costs (including environmental reports Phase 1 and 11) and the costs for corrective measures resulting from the environmental evaluation as evaluated by an environment expert that carried out the environmental evaluation, are evaluated to 25 000 $ or less, then these costs will be entirely assumed by the Buyer and in either cases, the guaranteed Deposit and accrued interests will be handed over to the Seller under the reserved provisions of paragraph 4.3 of the presents.

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4.4.2    If however, the total environmental evaluation costs (including environmental reports Phase 1 and 11) and costs for corrective measures resulting in the environmental evaluation as evaluated by an environment expert that carried out the environmental evaluation are superior to 25 000 $, then any amount exceeding 25 000 $ will be assumed in equal parts by the parties (being however understood that the portion the Seller must assumed cannot exceed in any case 100 000 $) and a portion of the guaranteed Deposit will be kept by the Consignee until corrective measures are brought.  The portion of the guaranteed Deposit that will be kept by the Consignee will be equal to the cost that the Seller will have to assume according to the above.

4.4.3    If corrective measures for more than 25 000 $ are required, then the Seller and the Buyer will work in conjunction for implementation of the required work to correct the situation.

4.5       Guaranteed Deposit remittance

The parties agree that the guaranteed Deposit will be treated according to the following provisions:

4.5.1    The Consignee is authorized to remit the guaranteed Deposit along with accrued interest to the Seller according to provisions of paragraphs 4.31 and 4.41 of the presents.  The Buyer will have to advise the Consignee in writing that following the examination of the titles and the environmental evaluation, the guaranteed Deposit and accrued interest can be remitted to the Seller.

4.5.2    If, however, the Consignee has to keep a portion of the guaranteed Deposit according to provisions of paragraphs 4.3.2 or 4.4.2, then the Consignee is authorized to keep the amount that will be determined according to provisions of paragraphs 4.3.2 or 4.4.2 and to remit the balance of the guaranteed Deposit along with accrued interests to the Seller.  The Buyer will have to advise the Consignee in writing of the amount that he must keep according to provisions of paragraphs 4.3.2 or 4.4.2.

4.5.3    If, however, the title examination or an applicable legislation of the property or to the Buyer result that the present sale is null or that the Buyer's property title is null, then the present sale will be terminated and the Seller will remit the purchase Price to the Buyer and the Consignee is authorized to remit the guaranteed Deposit along with accrued interests to the Buyer.  The Buyer will have to advise the Consignee in writing that the sale is null or that his title is null and the Consignee is authorized to remit the guaranteed Deposit and accrued interests to the Buyer.

4.5.4    If the title corrections cannot be done without the Seller's participation and the later refuses or neglects to bring his assistance as described in paragraph 4.3, then the Buyer will have to advise the Consignee in writing and the Consignee is authorized to remit the guaranteed Deposit and accrued interests to the Buyer.

Any amount deducted from the guaranteed Deposit according to provisions of paragraphs 4.3 and 4.4 of the presents will be reduced from the purchase Price.

4.6      Regulations with regards to the guaranteed deposit and to the consignee

The parties agree that the guaranteed Deposit and the Consignee are subject to the following:

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4.6.1    The Consignee will have to keep the guaranteed Deposit and remit it to the Seller or to the Buyer, according to the following provisions;

4.6.2    The Consignee will have to deduct costs and expenses and remit them to the Buyer as agreed to the presents;

4.6.3    until it is remitted as stated above, the Consignee will have to place the guaranteed Deposit into a term deposit in a Canadian chartered bank; proceeds from this guaranteed Deposit in interests and revenues and any renewal will be part of this guaranteed Deposit;

4.6.4    except in cases of a severe error or an intentional error, the Consignee will not be responsible within the present agreement, for any gesture nor for any measure that he has made, omitted to make or taken, in good faith, nor for any error without prejudice in facts and in rights.  Without limiting the above, it is understood that the Consignee will not incur any responsibility for a gesture, a measure or an omission from his part to act following a notice, a request, a renunciation, a consent or any other document that was given to him according to the presents, not only towards the validity of the signatures that appear and the provisions they hold, but also towards the veracity and the sufficiency of the information that appear and that the Consignee believe in good faith to be authentic;

4.6.5    Notwithstanding any disposition to the "Loi relative a l'administration du bien d'autruit" or to fiduciary obligations, the Seller and the Buyer agree that the Consignee's obligations are limited to the generality of the above, the Consignee is not required to subscribe to an insurance, to give any guarantee or to render an analysis of account at the end of this agreement;

4.6.6    The parties agree, severally and jointly, to indemnify and cover the Consignee from any claim costs or damages sustained or incurred by the Consignee in relation with the execution of the mandate provided to the presents.

5.        SELLER DECLARATIONS AND GUARANTEES

5.1        Declarations and guarantees for the Seller

             The Seller declares and guarantees the Buyer what follows and recognizes that the Seller based the purchase of asset elements on these declarations and guarantees.

5.1.1.   The Seller has the power to possess asset Elements and he has the power, the authority and the right to conclude and to execute the present agreement along with the Deed of sale of the Property and the non-competition agreement without other formalities than those already completed; the Seller duly signed and delivered the present agreement along with the Deed of sale of the Property and the Agreement of non-competition and these agreements establish valid and obligatory obligations towards the Buyer, enforceable according to their provisions;

5.1.2.   The Seller has the power to exploit the Property as he is actually doing and benefits from this point of view to the acquired rights allowing him to do so;

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5.1.3.   the conclusion of the present agreement, the Deed of sale of the Property and the non-competition Agreement and actions that imply their executions will not infringe in any way on the consecutive act and the Seller's agreements, contracts or laws to which he is bonded to, rulings and judgments to which the Seller is subjugated to.

5.1.4.   neither the present agreement, nor the Deed of sale of the property and nor the non-competition Agreement, nor any actions assuming their executions will expose the Seller to a loss, a suspension or the termination of either one of the permits, licenses, authorizations with regards to the property.

5.1.5.   The Seller is a Canadian resident in terms of the Canadian Income Tax Revenue Law (Canada) and the Income Tax law (Quebec).

5.2       Declarations and guarantees of asset elements

5.2.1.   The Seller has a clear title, good and valid on asset Elements, these are free and clear of any charge, priority, mortgage, safety or of any known rights, published or not, except constraints or other charges that may affect the property but does not prevent its use or exploitation and except

(i)         a suspensive usufruct right ending April 23, 2017, in favor of Tuiles Granit-Décor Inc. incorporated under terms of an agreement published at the public rights office of the district of Stanstead on October 9, 1990, under number 163 847 and that the Seller is committed to have it removed at his own cost following the date of the presents;

(ii)         a suspensive usufruct right in favor of Granit Bussiere Inc., in order to assure them a supply of granite and this, for a period of (30) years starting April 24, 1987, incorporated under an agreement published at the public rights office of the district of Stanstead on May 14, 1987 under number 146 212 and the Seller is committed to have it removed at his own expense within a deadline of thirty (30) days of the presents;

(iii)       a mortgage act agreed to by Polycor Inc., Carrieres Polycor Inc., Dumas and Voyer Inc., Granilac nc., La Compagnie Novostone Inc., Bordures Polycor Inc./Polycor Granit Curbs Inc., Polycor Granite Bussiere Inc., Tuiles Polycor Inc./Polycor Tiles Inc. and Tranches Polycor Inc./Polycor Slabs Inc. in favor of Trust National Bank Inc. published in Stanstead on June 1^st, 2007 under number 14 286 067 which will be removed from the property at the Seller's expense jointly at the publication of the Deed of sale of the property;

5.2.2.   all taxes and contributions, either general or special, school or municipal and all other taxes allocated to the property have been paid, for the payment of municipal taxes until December 31^st, 2009 and up to June 30^th, 2009 for school taxes and all transferred rights have been released, all without consolidation or subrogation in favor of a third party.

5.2.3.   the use of the property is in accordance to all important aspects, all laws, rules and standards (as at the federal, provincial levels, municipal or other), including without limiting the above, those concerning the environment (with the exception of what will be uncovered by the environmental inspection provided under the terms of the presents ("the environmental inspection") and the zoning and is in accordance to all legislative and statutory provisions applicable;

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5.2.4.   the property has been removed from the agricultural zoning in accordance with decision number 311427 rendered by the agricultural territory protection Commission on February 21, 2000;

5.2.5.   the use of the property does not constitute a violation or a default towards an agreement or an important contract in relation with the property (including any lease, offer, promise or lease contract, any insurance policy or other contract), nor with regards to any judgment, decision, ruling, demand or decree from a tribunal or an arbitrator or agency, an office, an administration, commission, ministry or any other public authority;

5.2.6.   at the date of the presents it does not exist any claim, expropriation, judiciary procedures or other, with regards to the property or to its operation, except for what is revealed in writing to the Buyer and accepted in writing by the later and the Seller has complied fully to any notice received from the Seller or any previous owners, concerning the non compliance of the property, its use, or otherwise, issued by every authority with jurisdiction in relation with any law, any rulings or any legislative provisions and, furthermore, the Seller has not received such a notice to which he has not complied to, except, as revealed in writing by the Buyer and accepted in writing by the later;

5.2.7.   there is no construction or renovation done on the property within the previous thirty five (35) days of the present agreement which could be grounds for a claim precedent against the property;

5.2.8.   buildings and other structures situated on the property are in accordance with all laws and all municipal regulations as well with all other regulations (with the exception of what will be revealed by the environmental inspection) and there are no restrictive agreement, no municipal regulation or other law or regulation that, in some way, restraint or forbid the use of the property, its buildings or its structures as they are presently used;

5.2.9.   there is no lawsuit, pursuit, pleas or apprehended pursuit nor there are no lawsuit threats, pursuit or procedures implicating asset Elements before a tribunal, commission, agency or other governmental group;

5.2.10. the asset Elements are not the object of any sale agreement, first refusal right, option and it does not exist any right susceptible to become a contract for the acquisition of asset Elements except (i) a first refusal right in favor of Garnit Bussiere Inc towards which the Seller is committed to obtain a renunciation and to have it removed at his own expense within a deadline of thirty (30) days from the presents and (ii) a first refusal right for the acquisition of the property in favor of Tuile Granit-Décor Inc towards which the Seller is committed to obtain a renunciation and to have it removed at his own expense within  a reasonable deadline following the date of the presents;

5.2.11.  the Seller does not have any information nor enquiries in relation with the asset Elements that, if they were known by the Buyer, may reasonably discourage him to complete the expected transaction to the presents at the price and conditions described to the presents;

5.2.12.  the list and commercial names used in relation with the asset Elements is enclosed under exhibit 5.2.12.

5.3          Compliance with environmental relative laws

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5.3.1.   the Seller does not violate nor has he violated laws, regulations, policies, directives, directive lines, rulings nor decrees from the federal, provincial, municipal or local governments in view of environmental questions (with the exception of what will be revealed by the environmental inspection) (collectively named "Laws relative to the environment").

5.3.2.   the Seller removed from the property all contaminants and sources of contaminants that may or can have a contravene effect to Laws relative to the environment (with the exception of what will be revealed by the environmental inspection)

5.3.3.   there is no underground or above ground reservoir on or under the property except those referred to in paragraph 8.2.4 of the presents;

5.3.4.   no decree, no corrective notice or infraction nor any other request was given under relative environmental Laws with regards to the property;

5.3.5.   the Seller did not omit to declare to appropriate governmental authorities any event that he should declare in pursuance with Laws relative to the environment and the Seller has supplied the Buyer with exact and complete copies of all related reports and correspondence.

5.4       Survival of declarations and guarantee;

The contents of declarations and guarantees of the Seller in the present agreement and in all documents supplied in pursuance to the present agreement or referred to will follow at the date of the present agreement for a duration of three years following the date of the presents;

6.          BUYER DECLARATIONS AND GUARANTEES

6.1        Declarations and guarantees

The Buyer declares and guarantees to the seller as follow:

6.1.1.   under reserved applicability of the Law on Acquisition of agricultural land by non residents, the Buyer has the power and the capacity to conclude and complete his obligations in pursuance of the present agreement and all other agreements, all contracts and all other documents that the Buyer signs or delivers in pursuance of the present agreement.  The Buyer has duly singed and delivered such agreements, contracts and documents and they establish valid and obligatory obligations towards the Seller, enforceable according to these provisions;

6.1.2.   the conclusion of the present agreement along with the Deed of sale of the property and all acts that imply their execution will not infringe on the constitutive act and regulations of the Seller, contracts to which he is bounded to or laws, rulings and judgments to which the Seller is subjugated

6.1.3.   the Buyer is a Canadian resident in terms of the Canadian Income Tax Revenue Law (Canada) and the Income Tax law (Quebec);

6.2       Survival of declarations and guarantees

The contents of declarations and guarantees of the Buyer in the present agreement and in all documents supplied in pursuance to the present agreement or referred to will follow at the date of the present agreement for a duration of three years following the date of the presents;

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7.         COMPENSATION

Under reserve of provisions in paragraph 5.4 of the presents, the Buyer will have to keep the Seller indemnified and covered against any damage, loss, commitment, responsibility, claim, charge, mistrust, cost and expense (including fees and disbursements, judicial and extra-judicial, lawyers and all other costs and expenses attributable to any legal action, inquiry action, claim or procedure) that the Buyer may have sustained, supported, incurred or may have to pay following a violation or an inaccuracy of representations, guarantees, stipulations, agreement or engagements of the Seller in pursuance of the presents;  without limiting the above, the Seller agrees to keep the Buyer indemnified against any recourse from Granit Bussiere Inc. and Tuiles Granit-Décor Inc. and this with regards to their first refusal right and the usufruct referred to in paragraphs 5.2.1 and 5.2.10 of the presents.  If there should be an amount claimed to the Buyer that should be kept indemnified by the Seller according to the terms of this agreement, except those specifically assumed by the Buyer in pursuance of the presents, the Buyer will advise the Seller of this claim and the Seller will have to assist the Buyer with a contestation of such a claim.  If the Buyer has to pay an amount whatsoever following a claim contested or not, the Seller be will indebted towards the Buyer for an equal amount paid in capital, interests, penalties, costs and accessories along with costs incurred by the Buyer (including fees and disbursements, judiciary and extra judiciary, reasonable of his lawyer) concerning such a claim.

Any amount payable according to the present compensation obligation cannot in any way exceed the amount equivalent to the purchase Price.

8.         COMMITMENTS BETWEEN PARITES

Buyer's commitments

The Buyer is committing the following toward the Seller:

8.1.1.      to sign, jointly to the presents, a supply agreement according to the example enclosed and titled exhibit 8.1.1.;

8.1.2.      Stanstead Grey blocks of a net dimension of 12-0 x 6-0 x 6-0 (82 blocks are presently foreseen) will be supplied by the Buyer to the Seller for the "Franklin D. Roosevelt" project at a price of 20 $ per cubic foot in a period of four months following the order if the order is in the hands of the Buyer during the months of April to August, otherwise, delivery will be six months;

8.1.3.      to pay, in relation with the property, all outstanding property taxes, including the tax ratio for the current year, starting from the date of the presents, as for the municipal tax perceived in favor of quarry operators, the Seller will have to reimburse the Buyer his portion of this tax as soon as the Buyer will give the Seller the May 31, 2009 statement prepared by the Municipality of Ogden.

8.2       Seller's commitments

The Seller is committing the following toward the Buyer

8.2.1.    to sign, jointly to the presents, a non-competition agreement in favor of the Buyer according to the example enclosed titled exhibit 5.2.12;

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8.2.2.   at the request of the Buyer, to sign necessary documents to transfer to the Buyer all commercial names used in relation with the asset Elements from the enclosed list titled exhibit 5.2.12;

8.2.3.   to proceed, at his own cost, no later than three (3) months from the presents, at the removal of equipments and granite blocks that belong to the Seller and that were sold by him as of March 31, 2009 which are on the enclosed list under the title exhibit 8.2.3 and if failing to do so, they will become the property of the Buyer at the expiring deadline of three (3) months without compensation;

8.2.4.   to proceed, at his own cost, no later than six (6) days from the presents, to the removal of the trailer and of the three (3) above ground reservoirs situated on the Property; the Seller can temporary store them on the Buyer's land in Ogden (the reservoirs must be previously emptied) but will have to remove them from the Buyer's land in Ogden by June 15, 2009 the latest;

8.2.5.   to obtain the renunciation or respective waivers from Granit Bussiere Inc and Tuiles Granit-Décor Inc., their first refusal rights referred to in paragraph 5.2.10 of the presents and their usufruct rights mentioned in paragraph 5.2.1 (i) and (ii) of the presents and to be entirely published in the land registry of the district of Stanstead in a limited time;

8.2.6.   to do, sign, hand over or see that all other acts, documents and things that the Buyer may require from time to time in order to bring this present agreement into effect are done, signed, handed over and the Buyer is agreeing to fully cooperate with the Seller in the framework of the examination of the property titles or if the Buyer has to demonstrate his acquired rights in connection with the Property in front of a tribunal, commission, agency or other governmental group, and to take all necessary measures to fully implement the understandings of the present agreement.

8.3        Party's commitments

The parties commit between one and the other to sign, jointly to the presents, a deed of sale of the Property in favor of the Buyer for publication in the land registry of the district of Stanstead according to the enclosed example titled exhibit 8.3.   The present agreement and the Deed of sale of the Property are a unified entity and all provisions of the presents, including the compensation obligation, benefit the Buyer to the terms of the Deed of sale of the Property and are integrated in return.   If the Buyer obtains a certificate of localization related to the property and it describes a more updated technical description of the property, then the parties agree to sign an agreement in which the updated technical description will be corrected in the Deed of sale of the Property.

8.4       Follow up of commitments

The parties' commitments contained in the present agreement and in all remitted documents pursuant or aimed to the presents will follow the date of the present agreement.

9.         NOTICE

9.1       Notice

            Any notices, documents or other communications to be given to the terms of the presents will have to be in writing and will be sufficient if personally delivered, sent by registered mail or faxed (with the understanding that in case of disruption in the postal service, such a notice, document of other communication will have to be delivered or notified personally or by fax), to the following addresses:

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9.1.1    For the Seller:

            138, rue Saint Pierre

            Quebec, QC.   G1K 3V9

                        Fax:  (418) 692-0981

                        To the attention of Mr. Irenee Bouchard, president and chief of the board of directors

9.1.2.   For the Buyer:

4 rue Rock of Ages

Stanstead, QC.  J0B 3E2

Fax:  (819) 876-2234

To the attention of Mr. Gabriel Ouellet, Director of Finances and Operations

Each party to the present will have the right to specify a different address than the above by advising the other party in an appropriate manner.

9.2        Receipt of notice date

Any notice, documents or other communications, if sent by fax, will be deemed to have been received on the following business day it was sent, if sent by registered mail, the 3^rd day following the mailing date and, if delivered or notified personally, the day of the delivery or notification.

10.       GENERAL DISPOSITIONS

10.1     Costs and fees

Each party will pay the fees of their advisors with regards to the presents and their related transaction along with their execution.

10.2     Deadline

All anticipated deadlines to the present are compulsory and can only be prolonged by the written consent of the party that will benefit from this delay or by the Seller and the Buyer if the delay is to their advantage.

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WHEREOF, Carrieres Polycor Inc has signed the present agreement in Montreal this 17^th day of April 2009.

CARRIERES POLYCOR INC

Per:      Charles Belzil, vice president of the board of directors

            and chief financial director

WHEREOF, Rock of Ages Canada Inc, has signed the present agreement in Montreal this 17^th day of April 2009

ROCK OF AGES CANADA INC

Per:      Gabriel Ouellet, director of finance and operations  

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