ROCK OF AGES CORP
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>exhibit10032205.htm
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<title>exhibit10032205</title>


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<p align="left"><b>EXHIBIT 10.1</b></p>


<p align="center"><font size=3
face="Times New Roman">March 21, 2005</font></p>

<p><font size=3 face="Times New Roman">&nbsp;</font></p>

<p><font size=3 face="Times New Roman">Rock of Ages Corporation<br>
772 Graniteville Road<br>
Barre, Vermont 05654</font></p>

<p><font size=3 face="Times New Roman">Re:&nbsp;&nbsp;&nbsp;&nbsp; <u>Financial Covenant Waivers</u></font></p>

<p><font size=3 face="Times New Roman">Gentlemen:</font></p>

<p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp; We refer to the
Financing Agreement, dated as of December 17, 1997 (as amended, the &quot;<u>Financing Agreement</u>&quot;),
among Rock of Ages Corporation, Rock of Ages Kentucky Cemeteries, LLC, Carolina
Quarries, Inc., Autumn Rose Quarries, Inc., Pennsylvania Granite Corp., Keith
Monument Company LLC, Rock of Ages Memorials Inc. and Sioux Falls Monument Co.
(collectively, the &quot;<u>Companies</u>&quot;), the lenders from time to time parties
thereto (the &quot;<u>Lenders</u>&quot;), and The CIT Group/Business Credit, Inc., as
agent for the Lenders (in such capacity, the &quot;<u>Agent</u>&quot;). Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed
thereto in the Financing Agreement.</font></p>

<p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp; In view of the Companies' projected expenses with
respect to certain matters, the Lenders agree that, notwithstanding anything to
the contrary set forth in the Financing Agreement:</font></p>

<p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp; (a)&nbsp; the expenses incurred by the Companies in
connection with the Mize note writedown and a one-time retail charge shall be
excluded from EBITDA solely for purposes of calculating Operating Cash Flow for
each fiscal quarter set forth below; <u>provided</u>, <u>however</u>, that the
aggregate amount of such expenses excluded from EBITDA for any fiscal quarter
shall not exceed the lesser of (a) the aggregate amount of such expenses
actually incurred by the Companies during the four (4) fiscal quarters ending
on the last day of such fiscal quarter or (b) the amount set forth below
opposite such fiscal quarter.</font></p>

<table border=1 cellspacing=0 cellpadding=0>
 <tr>
  <td width=264 valign=top>
  <p><font size=3
  face="Times New Roman">Fiscal Quarter Ending
  On or About</font></p>
  </td>
  <td width=336 valign=top>
  <p><font size=3
  face="Times New Roman">Maximum Exclusion From
  EBITDA</font></p>
  </td>
 </tr>
 <tr>
  <td width=264 valign=top>
  <p><font size=3 face="Times New Roman">December 31, 2004<br>
  March 31, 2005<br>
  June 30, 2005<br>
  September 30, 2005</font></p>
  </td>
  <td width=336 valign=top>
  <p><font size=3 face="Times New Roman">$1,200,000<br>
  $1,200,000<br>
  $1,200,000<br>
  $1,200,000</font></p>
  </td>
 </tr>
</table>

<p><font size=3 face="Times New Roman">&nbsp;</font></p>

<p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp; the expenses incurred by the Companies in
connection with retail growth marketing and stock option expensing shall be
excluded from EBITDA solely for purposes of calculating Operating Cash Flow for
the period beginning on January 1, 2005 and ending on September 30, 2006; <u>provided</u>,
<u>however</u>, that the aggregate amount of such expenses excluded from EBITDA
for any fiscal quarter ending during that period shall not exceed the lesser of
(a) the aggregate amount of such expenses actually incurred by the Companies
during the four (4) fiscal quarters ending on the last day of such fiscal
quarter or (b) $1,600,000.</font></p>

</div>

<hr>

<font size=3 face="Times New Roman"><br clear=all>
&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;the expenses incurred by the Companies in
connection with each of the following matters shall be excluded from Capital
Expenditures solely for purposes of calculating Operating Cash Flow for each
fiscal quarter set forth below: (a) purchase of Illinois and Kentucky real
estate for the Reynolds retail group; (b) Methuen, MA real estate purchase; (c)
purchase of Memphis, TN area real estate in connection with the acquisition of
Crone Monument LLC and Mid South Monument Company; (d) Barre, VT Welcome Center
expansion; and (e) Barre, VT Corporate Office addition; <u>provided</u>, <u>however</u>,
that the aggregate amount of such expenses excluded from Capital Expenditures
for any fiscal quarter shall not exceed the lesser of (a) the aggregate amount
of such expenses actually incurred by the Companies during the four (4) fiscal
quarters ending on the last day of such fiscal quarter or (b) the amount set
forth below opposite such fiscal quarter.</font><p>&nbsp;</p>

<table border=1 cellspacing=0 cellpadding=0>
 <tr>
  <td width=264 valign=top>
  <p><font size=3
  face="Times New Roman">Fiscal Quarter Ending
  On or About</font></p>
  </td>
  <td width=336 valign=top>
  <p><font size=3
  face="Times New Roman">Maximum Exclusion From
  Capital Expenditures</font></p>
  </td>
 </tr>
 <tr>
  <td width=264 valign=top>
  <p><font size=3 face="Times New Roman">December 31, 2004<br>
  March 31, 2005<br>
  June 30, 2005<br>
  September 30, 2005</font></p>
  </td>
  <td width=336 valign=top>
  <p><font size=3 face="Times New Roman">$2,592,000<br>
  $1,828,000<br>
  $591,000<br>
  $386,000</font></p>
  </td>
 </tr>
</table>

<p><font size=3
face="Times New Roman">&nbsp;&nbsp;&nbsp; (d)&nbsp; the expenses
incurred by the Companies in connection with the Barre, VT Corporate Office
addition shall be excluded from Capital Expenditures solely for purposes of
calculating Operating Cash Flow for the period beginning on January 1, 2005 and
ending on September 30, 2006; <u>provided</u>, <u>however</u>, that the
aggregate amount of such expenses excluded from Capital Expenditures for any
fiscal quarter ending during that period shall not exceed the lesser of (a) the
aggregate amount of such expenses actually incurred by the Companies during the
four (4) fiscal quarters ending on the last day of such fiscal quarter or (b)
$994,000.</font></p>

<p><font size=3
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp; the minimum
Operating Cash Flow Ratio required to be maintained by the Companies, on a
consolidated basis, for each period set forth below shall be the ratio set
forth below opposite such period.</font></p>

<table border=1 cellspacing=0 cellpadding=0>
 <tr>
  <td width=319 valign=top>
  <p align=center><font size=3 face="Times New Roman">Period</font></p>
  </td>
  <td width=319 valign=top>
  <p align=center><font size=3 face="Times New Roman">Minimum Operating Cash Flow Ratio</font></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p><font size=3
  face="Times New Roman">four (4) fiscal
  quarters ending on or about March 31, 2005</font></p>
  </td>
  <td width=319 valign=top>
  <p align=center><font size=3 face="Times New Roman">.71 to 1.00</font></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p><font size=3
  face="Times New Roman">four (4) fiscal
  quarters ending on or about June 30, 2005</font></p>
  </td>
  <td width=319 valign=top>
  <p align=center><font size=3 face="Times New Roman">.08 to 1.00</font></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p><font size=3
  face="Times New Roman">four (4) fiscal
  quarters ending on or about September 30, 2005</font></p>
  </td>
  <td width=319 valign=top>
  <p align=center><font size=3 face="Times New Roman">.85 to 1.00</font></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p><font size=3
  face="Times New Roman">Four (4) fiscal
  quarters ending on or about December 31, 2005, and each period of four (4)
  fiscal quarters ending thereafter</font></p>
  </td>
  <td width=319 valign=top>
  <p align=center><font size=3 face="Times New Roman">1.25 to 1.00</font></p>
  </td>
 </tr>
</table>

<p align="center"><font size=3 face="Times New Roman">&nbsp;- 2 -</font></p>

<hr>

<p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp; for purposes of calculating the Operating
Cash Flow Ratio for any period, the aggregate amount of cash tax refunds received
by the Companies, on a consolidated basis, during such period shall be added to
Operating Cash Flow for such period.</font></p>

<p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g)&nbsp; the aggregate amount of dividends paid by
all of the Companies pursuant to Clause G(iii) of Paragraph 10 of Section 7 of
the Financing Agreement shall not exceed $193,750 in any fiscal quarter or
$775,000 in any fiscal year (with no carry-over of amounts from one quarter or
one year to another), subject to all of the other requirements of such Section,
Paragraph and Clause.</font></p>

<p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp; In consideration of the waivers contained herein, the
Companies hereby agree to deliver to Agent, as soon as possible and in any
event no later than the 120th day after the date hereof (the &quot;Delivery Date&quot;),
all Real Estate Documentation (as defined in Section Four (b) of the Fifth
Amendment to the Financing Agreement) required by Agent in order for Agent to
obtain a first mortgage lien for the benefit of the Lenders on the five (5)
most valuable (determined by book value) retail locations of the Companies.
The Companies' failure to comply with the covenant contained in this paragraph
shall constitute an Event of Default. Notwithstanding the foregoing, if on or
before the Delivery Date Agent shall have received up-to-date appraisals of the
Primary Real Estate Collateral (as defined in Section Four (b) of the Fifth
Amendment to the Financing Agreement), in accordance with Section Four (a) of
the Ninth Amendment to the Financing Agreement, in form and substance
satisfactory to Agent, showing that 80% of the orderly liquidation value of the
Primary Real Estate Collateral that has been appraised is equal to at least
$34,000,000, then the Companies shall be not be required to take any further
action under this paragraph.</font></p>

<p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp; Within 60 days of the date hereof, the Companies shall
deliver to Agent an updated listing of all of the Companies' retail locations
(after giving effect to all acquisitions and dispositions heretofore made by
the Companies). Such listing shall be in such form and contain such
information and detail as shall be satisfactory to Agent and shall in any event
include the following information for each location: (a) the name and full
address; (b) whether such location is owned or leased; (c) the book value of
such location, as set forth on the Companies' balance sheet; and (d) the volume
of sales at such location for the year ended December 31, 2004. The Companies'
failure to comply with the covenant contained in this paragraph shall
constitute an Event of Default.</font></p>

<p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp; This letter shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to conflict of laws principles.</font></p>

<p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp; Except to the extent expressly set forth herein, no
other waiver or amendment of any of the terms, provisions or conditions of the
Financing Agreement is intended or implied and nothing herein shall constitute
a waiver of any existing or future Defaults or Events of Default (whether or
not the Agent or any Lender has knowledge thereof).</font></p>

<p><font size=3 face="Times New Roman">&nbsp;</font></p>

<p align=center><font
size=3 face="Times New Roman">[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]</font></p>

<p align="center">- 3 -</p>

<hr>

<p><font size=3
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp; Please indicate your
agreement with the foregoing by signing a copy of this letter and returning it
to us. This letter shall become effective upon our receipt of a fully-executed
copy hereof.</font></p>

<p>&nbsp;</p>

<table border="1" cellpadding="0" cellspacing="0" style="border-collapse: collapse; border-width: 0" bordercolor="#111111" width="100%" id="AutoNumber1">
  <tr>
    <td width="52%" style="border-style: none; border-width: medium">&nbsp;</td>
    <td width="48%" style="border-style: none; border-width: medium">Very truly
    yours,</td>
  </tr>
  <tr>
    <td width="52%" style="border-style: none; border-width: medium">&nbsp;</td>
    <td width="48%" style="border-style: none; border-width: medium">&nbsp;</td>
  </tr>
  <tr>
    <td width="52%" style="border-style: none; border-width: medium">&nbsp;</td>
    <td width="48%" style="border-style: none; border-width: medium">THE CIT
    GROUP/BUSINESS CREDIT</td>
  </tr>
  <tr>
    <td width="52%" style="border-style: none; border-width: medium">&nbsp;</td>
    <td width="48%" style="border-style: none; border-width: medium">&nbsp;</td>
  </tr>
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    <td width="52%" style="border-style: none; border-width: medium">&nbsp;</td>
    <td width="48%" style="border-style: none; border-width: medium"><u>/s/Nick
    Malatestinic<br>
    </u>Nick Malatestinic<br>
    Vice President and Team Leader</td>
  </tr>
  <tr>
    <td width="52%" style="border-style: none; border-width: medium">&nbsp;</td>
    <td width="48%" style="border-style: none; border-width: medium">&nbsp;</td>
  </tr>
  <tr>
    <td width="52%" style="border-style: none; border-width: medium">Agreed to
    by:<br>
    ROCK OF AGES CORPORATION<br>
    ROCK OF AGES KENTUCKY CEMETERIES, LLC<br>
    CAROLINA QUARRIES, INC.<br>
    AUTUMN ROSE QUARRIES, INC.<br>
    PENNSYLVANIA GRANITE CORP.<br>
    KEITH MONUMENT COMPANY LLC<br>
    ROCK OF AGES MEMORIALS, INC.<br>
    SIOUX FALLS MONUMENT CO.</td>
    <td width="48%" style="border-style: none; border-width: medium">&nbsp;</td>
  </tr>
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    <td width="52%" style="border-style: none; border-width: medium">&nbsp;</td>
    <td width="48%" style="border-style: none; border-width: medium">&nbsp;</td>
  </tr>
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    <td width="52%" style="border-style: none; border-width: medium">By: <u>/s/
    Kurt M. Swenson<br>
    </u>Name: Kurt M. Swenson<br>
    Title: Chairman and Chief Executive Officer</td>
    <td width="48%" style="border-style: none; border-width: medium">&nbsp;</td>
  </tr>
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    <td width="52%" style="border-style: none; border-width: medium">&nbsp;</td>
    <td width="48%" style="border-style: none; border-width: medium">&nbsp;</td>
  </tr>
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    <td width="52%" style="border-style: none; border-width: medium">CHITTENDEN
    TRUST COMPANY</td>
    <td width="48%" style="border-style: none; border-width: medium">&nbsp;</td>
  </tr>
  <tr>
    <td width="52%" style="border-style: none; border-width: medium">&nbsp;</td>
    <td width="48%" style="border-style: none; border-width: medium">&nbsp;</td>
  </tr>
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    <td width="52%" style="border-style: none; border-width: medium">By:<u>/s/
    John W. Kingston</u><br>
    Name: John W. Kingston<br>
    Title: Vice President</td>
    <td width="48%" style="border-style: none; border-width: medium">&nbsp;</td>
  </tr>
</table>

<p align="center"><font size=3 face="Times New Roman">&nbsp;- 4 -</font></p>

<hr>

<p align="left">&nbsp;</p>


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