EXHIBIT 10.28

EXECUTION COPY

 

CIT GROUP / BUSINESS CREDIT, INC.

11 West 42d Street

New York, New York 10036

Attn: Jeffrey Iervese

 

Rock of Ages Corporation

Carolina Quarries, Inc.

Pennsylvania Granite Corp.

Keith Monument Company LLC

Rock of Ages Memorials, Inc.

Sioux Falls Monument Co.

c/o Rock of Ages Corporation

772 Granitville Road

Barre, Vermont 05654

Attn: Chief Executive Officer

January 17, 2008

Ladies and Gentlemen:

We refer to that certain Amended and Restated Financing Agreement, dated as of
October 24, 2007 (as renewed, amended, restated or supplemented from time to
time, the "Financing Agreement"), by and among ROCK OF AGES CORPORATION ("ROA"),
CAROLINA QUARRIES, INC. ("Carolina"), PENNSYLVANIA GRANITE CORP.
("Pennsylvania"), KEITH MONUMENT COMPANY LLC ("Keith"), ROCK OF AGES MEMORIALS,
INC. ("Memorials"), SIOUX FALLS MONUMENT CO. ("Sioux Falls"; and together with
ROA, Carolina, Pennsylvania, Keith and Memorials, each individually, a
"Borrower" and collectively the "Borrowers"), each financial institution which
now is or which hereafter becomes a party thereto as a lender (collectively,
"Lenders" and each individually, a "Lender"), and THE CIT GROUP/BUSINESS CREDIT,
INC. ("CIT"), as a Lender, and as agent for Lenders (CIT, in such capacity,
"Agent"). Capitalized terms not otherwise defined herein shall have the meanings
ascribed to such terms in the Financing Agreement. Keith, Memorials and Sioux
Falls are collectively referred to hereunder as the "Sold Subsidiaries", and
ROA, Carolina and Pennsylvania are collectively referred to hereunder as the
"Continuing Borrowers").

 

The Borrowers have advised Agent that ROA intents to enter into (a) that certain
stock purchase agreement dated as of the date hereof between ROA and PKDM
Holdings, Inc. (the "Purchaser") (the "Stock Purchase Agreement"), pursuant to
which ROA will sell and Purchaser will purchase all outstanding and issued
shares of the capital stock of Memorials (the "Memorials Stock") in exchange for
the "Purchase Price" as defined and specified therein (such sale and purchase,
the "Stock Sale") and (b) an Authorized Retailer, Supply and License Agreement
(the "Supply Agreement") with Purchaser pursuant to which ROA will appoint the
Purchaser and the Sold Subsidiaries (the "Retailers") as the authorized
retailers of ROA products. The Borrowers have requested that Agent and Lenders
consent to the entry into, execution and delivery and performance of the Stock
Purchase Agreement and the Supply Agreement by ROA and the performance by ROA of
the transactions contemplated thereunder, specifically including the Stock Sale,
and to the release of the Sold Subsidiaries from all Obligations under and liens
and security interests granted pursuant to the Financing Documents and Agent and
Lenders have agreed to give their consent to such requests on the terms and
conditions set forth herein.

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Therefore, with the foregoing incorporated by reference, in each case for good
and sufficient consideration (the receipt of which is acknowledged by each), the
parties hereto agree as follows:

1.

Consent to Stock Sale. Notwithstanding anything to the contrary contained in the
Financing Agreement or any other Financing Document, specifically including
Section 10(d) of the Financing Agreement, Agent and Lenders hereby consent,
subject to the satisfaction of the conditions in the following sentence, to the
entry into, execution and delivery and performance of the Stock Purchase
Agreement and the Supply Agreement by ROA and the performance by ROA of the
transactions contemplated thereunder, specifically including the Stock Sale, and
agrees that the sale of the Memorials Stock to Purchaser shall be free and clear
of all security interest, pledges and liens in favor of Agent and/or any Lender,
all of which such securities interests, pledges and liens shall be deemed to be
automatically terminated and released immediately upon satisfaction of the
Effectiveness Conditions as defined in the following sentence without the
necessity of any further action by any party (specifically including Agent or
any Lender). However, the consents and agreements in the preceding sentence
shall be effective only upon satisfaction of the following conditions (the
"Effectiveness Conditions"): (i) title to all "Excluded Assets" (as that term is
defined in the Stock Purchase Agreement) owned or held by the Sold Subsidiaries
shall have been transferred to ROA and/or one of the other Continuing Borrowers,
and executed documentation of such transfer has been delivered to the Agent and
(ii) Agent shall have received immediately available funds in the amount of
$7,716,604 representing the entire net proceeds of the Purchase Price payable
under the Stock Purchase Agreement on the date hereof after all adjustments
thereto to be applied as a payment of the principal balance of the Revolving
Loans and/or the Term Loans outstanding under the Financing Agreement as
provided below. For the purposes of the clause (ii) of the preceeding sentence,
the "net proceeds of the Purchase Price" shall mean an amount equal to (x) the
entire gross amount of the Purchase Price payable to ROA under the Stock
Purchase Agreement upon the closing thereunder (as such Purchase Price may have
been adjusted pursuant to the terms of the Stock Purchase Agreement) minus (y)
any and all reasonable costs and expenses of ROA and the other Continuing
Borrowers incurred in connection with the to the entry into, execution and
delivery and performance of the Stock Purchase Agreement and the Supply
Agreement by ROA and the performance by ROA of the transactions contemplated
thereunder as disclosed by ROA to Agent prior to the closing on the Stock
Purchase Agreement. The payment of the Obligations from the net proceeds of the
Purchase Price shall be applied as follows: (x) the first $4,500,000 of such
Purchase Price shall be applied to repayment of the principal balance
outstanding under those Term Loans representing the Outstanding Term Loans with
a balance as of the Closing Date with a principal balance of up to $17,500,000
on such Closing Date as described in clause (c) of paragraph 2 of Section 4 of
the Financing Agreement and (y) the remaining $3,216,604 shall be applied to
repayment of the principal balance outstanding under the Revolving Loans (with
such proceeds applied first, to the repayment of the Revolving Loans accruing
interest at a per annum rate based on the Chase Bank Rate, and second, after the
repayment of all such Revolving Loans, to the repayment of the Revolving Loans
accruing interests at a per annum rate based on Libor).

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2.

Release of Sold Subsidiaries and the Assets Thereof. Notwithstanding anything to
the contrary contained in the Financing Agreement or any other Financing
Document, Agent and Lenders hereby agree that immediately upon satisfaction of
the Effectiveness Conditions, the Sold Subsidiaries shall automatically be
deemed to have been released from any and all indebtedness, obligations,
liabilities, undertakings and duties of any and every kind and nature under the
Financing Agreement and the other Financing Documents. Upon the release
described in the preceding sentence, none of the references to the Borrowers or
Companies contained in the Financing Documents, specifically including without
limitation the Financing Agreement, shall be deemed for any purposes to refer to
or include the Sold Subsidiaries. Without limiting the generality of the
foregoing, such release provided for in the first sentence of this paragraph
shall include a release by Agent and Lenders in favor of the Sold Subsidiaries
from any and all joint or several liability for any Obligations (monetary or
otherwise), including without limitation all existing and future loans
(specifically including the Revolving Loans and the Term Loans, advances or
Letter of Credit liabilities or any other liabilities and obligations incurred
at any time by anyone or more of the Borrowers under the Financing Documents,
provided, however, that this release of liability shall in no way be interpreted
to effectuate a release of any kind with respect to any indebtedness,
obligations, liabilities, undertakings and duties of any kind or nature of any
Continuing Borrower with respect to the Financing Documents (specifically
including the Obligations). Furthermore, immediately upon the effectiveness of
the release provided for in this paragraph, Agent and Lender shall be deemed to
have, automatically and without the necessity of any further action by any party
(specifically including Agent or any Lender): (i) released and terminated any
and all security interests, pledges and liens in any property or assets of the
Sold Subsidiaries granted by the Sold Subsidiaries in favor of the Agent or
Lender (specifically including any and all such security interest, pledges and
liens granted by Memorials in any of the issued and outstanding shares of the
capital stock of Keith and Sioux Falls, collectively together with the Memorials
Stock, the "Released Stock") and (ii) authorized any Sold Subsidiary, the
Purchaser and their respective attorneys and agents to file UCC-3 termination
statements terminating of record any UCC-l financing statements filed of record
in any jurisdiction by Agent or any Lender as secured party naming such Sold
Subsidiary as debtor thereunder. However, notwithstanding anything to the
contrary contained in the foregoing, the parties hereto acknowledge and agree
that no liens on or security interests in any Excluded Assets (as that term is
defined in the Stock Purchase Agreement) shall be deemed released by virtue of
any other provisions of this letter agreement, and that all such Excluded Assets
shall be deemed to have been transferred by the Sold Subsidiaries to ROA and/or
the other applicable Continuing Borrowers subject to the liens thereon granted
by Sold Subsidiaries under the Financing Documents immediately prior to the
effectiveness of any of the releases provided for in this letter agreement. At
any time from and after the effectiveness of the release provided for in this
paragraph, Agent will cause to be executed and/or delivered to the Sold
Subsidiaries any additional documents or instruments the Sold Subsidiaries may
reasonably request in order to effectuate or evidence or otherwise give public
notice of the releases and lien terminations provided for in this paragraph, and
the Sold Subsidiaries shall be authorized to file any and all such releases
and/or lien termination documents delivered by Agent hereunder with the
appropriate filing offices, provided, however, that any and all such releases
and/or documents shall be prepared, executed, delivered and recorded at
Purchaser's expense.

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3.

Return of the Released Stock. In furtherance of the foregoing, Agent has
delivered all of the stock certificates representing all of the Released Stock
that were delivered to Agent on the Closing Date (together with all instruments
of transfer and/or stock powers relating thereto delivered to Agent on the
Closing Date) to ROA's outside legal counsel, McLane Graf Raulerson & Middleton,
Professional Association ("McLane"), in escrow. Immediately upon the
satisfaction of the Effectiveness Conditions and the effectiveness of the
releases provided for in Sections 1 and 2 above, McLane shall be authorized
(automatically and without the necessity of any further action by any party
(specifically including Agent or any Lender)) to release such stock certificates
and related instruments of transfer and stock powers from escrow and to deliver
the same to ROA and/or as ROA may direct, free and clear of any security
interests, pledges and liens in favor of Agent and/or Lenders as provided for in
Section 1 and 2 above.

4.

Release by Sold Subsidiaries. In consideration of Agent's and Lenders'
agreements and conditional releases contained herein, each Sold Subsidiary
hereby forever releases and discharges Agent, each Lender and each Issuing Bank,
their respective officers, directors, employees, agents, affiliates,
representatives, successors and assigns (collectively, the "Released Parties")
from any and all claims, causes of actions, damages and liabilities of any
nature whatsoever, known or unknown, which such Sold Subsidiary ever had, now
has or might hereafter have against one or more of the Released Parties which
relates, directly or indirectly, to any of the Financing Documents or the
transactions relating thereto, to the extent that any such claim, cause of
action, damage or liability shall be based in whole or in part upon facts,
circumstances, actions or events existing on or prior to the date hereof.

 

5. Reaffirmation by Continuing Borrowers. Each Continuing Borrower hereby
acknowledges and agrees that all of the terms, conditions and provisions of the
Financing Documents are ratified and confirmed and continue unchanged and in
full force and effect and that neither the execution of this letter agreement
nor the effectiveness of any of the consents and/or the releases with respect to
the Sold Subsidiaries or the Memorials Stock provided for herein shall in any
way limit, diminish, modify or otherwise affect (i) any of the respective
obligations, indebtedness and liabilities of each Continuing Borrower to Agent
and Lenders under any of Financing Documents, (ii) the joint and several nature
of the obligations, indebtedness and liabilities of the Continuing Borrowers
under the Financing Documents, or (iii) the existence, validity, enforceability
or perfection of any security interests, pledges or liens granted by such
Continuing Borrowers to secure the Obligations under any of the Financing
Documents (other than the security interest, pledges and liens in the Memorials
Stock to the extent such security interest, pledges and liens are released in
accordance with the provisions hereof), all of which such grants are hereby
reaffirmed and confirmed and shall continue in full force and effect to secure
all such Obligations. Continuing Borrowers specifically agree and acknowledge
that the agreements and conditional releases of Agent and Lenders provided for
herein shall not be deemed to create a "course of conduct"

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or "course of dealing" that would be binding on the Agent or any Lender in the
future, and that neither the Agent nor any Lender shall have any obligations in
the future to give consent to any waivers of any provision of the Financing
Documents, whether or not relating to matters similar to those addressed herein.
Continuing Borrowers represent and warrant that, upon return to ROA of all
Excluded Assets, no assets (including without limitation any raw materials,
machinery or equipment, employment contracts, vendor or supplier contracts) used
by ROA in its manufacturing business continue to be owned by or under the
control of any Sold Subsidiary.

6.

Miscellaneous. WITHOUT LIMITING THE GENERALITY OF ANY PROVISIONS OF THE
FINANCING AGREEMENT, ALL OF THE PROVISIONS OF THE FINANCING AGREEMENT PROVIDING
FOR INDEMNITIES FROM BORROWERS TO AGENT AND LENDERS, OBLIGATIONS OF THE
BORROWERS TO REIMBURSE AGENT AND LENDERS FOR EXPENSES, SELECTION OF GOVERNING
LAW, WAIVERS (INCLUDING WAIVERS OF THE RIGHT TO JURY TRIAL) AND CONSENTS TO
JURISDICTION AND PROCEDURES FOR SERVICE OF PROCESS ARE INCORPORATED HEREIN BY
REFERENCE.

 

7.

Extensions of Deadline. Also upon execution hereof, Agent and Lenders agree to
extend the deadline for satisfaction of the conditions precedent described in
Section l(b), (c) and (d) of that certain letter dated as of October 24,2007 and
executed by ROA and agreed to by Agent and Lenders, such deadline to be extended
to February 29, 2008.

 

 

 

[Signature Pages Follow]

 

 

 

 

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IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto have
caused this letter to be executed and delivered by their proper and duly
authorized officers as of the date set forth above.

                                                                        Very
Truly Yours,

                                                                        CIT
GROUP / BUSINESS CREDIT, INC.

                                                                        As Agent
and a Lender

                                                                       

                                                                        By:
/s/_______________________

                                                                        Name:

                                                                        Title:
Assistant Vice President

                                                                       
CHITTENDEN TRUST COMPANY,

                                                                        as a
Lender

                                                                        By:
/s/_______________________

                                                                        Name:

                                                                        Title:

ACCEPTED AND AGREED:

ROCK OF AGES CORPORATION

CAROLINA QUARRIES, INC.

PENNSYLVANIA GRANITE CORP.

KEITH MONUMENT COMPANY LLC

ROCK OF AGES MEMORIALS, INC.

SIOUX FALLS MONUMENT CO.

By: /s/_______________________

Name: Kurt M. Swenson

Title: Chairman and CEO

[Signature Page to Consent Letter Re Sale of Retail Business/Stock of Memorials]

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