EXHIBIT 10.1

THE CIT GROUP/BUSINESS CREDIT, INC.
1211 Avenue of the Americas
New York, New York 10036

 

August 9, 2005

Rock of Ages Corporation
772 Graniteville Road
Barre, Vermont 05654

Re:    Tenth Amendment and Waiver

Gentlemen:

      We refer to the Financing Agreement, dated as of December 17, 1997 (as
amended, the "Financing Agreement"), among Rock of Ages Corporation, Rock of
Ages Kentucky Cemeteries, LLC, Carolina Quarries, Inc., Pennsylvania Granite
Corp., Keith Monument Company LLC, Rock of Ages Memorials Inc. and Sioux Falls
Monument Co. (collectively, the "Companies"), the lenders from time to time
parties thereto (the "Lenders"), and The CIT Group/Business Credit, Inc., as
agent for the Lenders (in such capacity, the "Agent"). Capitalized terms used
herein and not otherwise defined shall have the meanings ascribed thereto in the
Financing Agreement.
 

        1.     Waiver. You have notified us that the Operating Cash Flow Ratio
of the Companies for the four fiscal quarters ending on or about June 30, 2005
was <1.99 to 1.00>. The failure of the Companies to maintain an Operating Cash
Flow Ratio of not less than .08 to 1.00 for such period constitutes a violation
of Subparagraph 14 of Section 7 of the Financing Agreement and an Event of
Default under the Financing Agreement (the "Designated Default"). The Lenders
hereby waive the Designated Default as an Event of Default. Nothing contained
herein shall constitute a waiver by the Agent or any Lender of any other Default
or Event of Default, whether or not the Agent or any Lender has any knowledge
thereof, nor shall anything contained herein be deemed a waiver by the Agent or
any Lender of any Default or Event of Default which may occur after the date
hereof.

          2.      Amendment. (a) The Companies, the Lenders and the Agent hereby
agree that, effective as of August 15, 2005, each Applicable Increment set forth
in the definition of the term "Applicable Increment" in the Financing Agreement
shall be increased by .25%, provided, however, that in the event that the
reduction conditions, as hereinafter defined, shall have occurred, then
effective on the first day of the month during which the Agent shall have
received the audited financial statements of each Company for the fiscal year
ending on or about December 31, 2006 required to be delivered pursuant to
Paragraph 8 of Section 7 of the Financing Agreement, each such Applicable
Increment shall be automatically reduced by .25%. As used herein, the term
"reduction conditions" shall mean that (x) the Companies shall have maintained
an Operating Cash Flow Ratio for the four (4) fiscal quarters ending on or about
December 31, 2006 of not less than 1.25 to 1.00 and (y) at no time during the
period commencing on the date of this letter agreement and ending on the date of
receipt by the Agent of the audited financial statements described in the
preceding sentence shall an Event of Default have occurred and be continuing.

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                   (b)   The Companies, the Lenders and the Agent hereby agree
that, effective as of the date hereof, the Companies shall maintain an Operating
Cash Flow Ratio, on a consolidated basis, for each period set forth below of not
less than (or not worse than, in the case of a negative ratio) the ratio set
forth below, opposite such period, and Paragraph 14 of Section 7 of the
Financing Agreement is amended to so provide:

Period

 

Minimum Operating Cash Flow Ratio

two (2) fiscal quarters ending on or about September 30, 2005

.61 to 1.00

three (3) fiscal quarters ending on or about December 31, 2005

1.46 to 1.00

four (4) fiscal quarters ending on or about March 31, 2006

<1.14> to 1.00

four (4) fiscal quarters ending on or about June 30, 2006

<.30> to 1.00

four (4) fiscal quarters ending on or about September 30, 2006

.73 to 1.00

four (4) fiscal quarters ending on or about December 31, 2006, and each
consecutive period of four (4) fiscal quarters ending thereafter

1.25 to 1.00

       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.

       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).

 

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     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.

Very truly yours,   THE CIT GROUP/BUSINESS CREDIT, INC.,
as Agent and as a Lender   By: /s/Nick Malatestinic
      Name: Nick Malatestinic
      Title:    Vice President and Team Leader

 

Agreed to by:

ROCK OF AGES CORPORATION
ROCK OF AGES KENTUCKY CEMETERIES, LLC
CAROLINA QUARRIES, INC.
PENNSYLVANIA GRANITE CORP.
KEITH MONUMENT COMPANY LLC
ROCK OF AGES MEMORIALS INC.
SIOUX FALLS MONUMENT CO.

 

By:/s/Douglas S. Goldsmith
Name: Douglas S. Goldsmith
Title:    Senior Vice President/Chief Financial Officer

CHITTENDEN TRUST COMPANY, as a Lender

By: /s/ John W. Kingston
Name: John W. Kingston
Title: Vice President

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