EXHIBIT 10.1 ASSET PURCHASE AGREEMENT

EXHIBIT 10.1

ASSET PURCHASE AGREEMENT
(Rockwell Granite Company and Related Quarry Properties)

   

    ASSET PURCHASE AGREEMENT made and executed this 15th day of February, 2005, by and among CAROLINA QUARRIES, INC., a Delaware corporation, with a principal office located at 772 Graniteville Road, Graniteville, Vermont (hereinafter referred to as the "Buyer"); ROCKWELL GRANITE COMPANY, a Georgia corporation with a principal place of business at 3045 Business Park Drive, Norcross, Georgia (hereinafter referred to as the "Seller"); and GRANITE QUARRIES USA, INC., a Georgia corporation with a principal place of business at 3045 Business Park Drive, Norcross, Georgia (hereinafter referred to as the "Shareholder").

 

RECITALS:

     The Shareholder owns all of the issued and outstanding shares of capital stock of the Seller. The Buyer desires to purchase and assume, and the Seller desires to sell and assign, certain operating assets pertaining to the quarrying business owned by the Seller at the premises located in Rowan County, North Carolina and hereinafter sometimes referred to as the Rockwell Quarry. Buyer also desires to purchase the Rockwell Quarry from the Seller.

     NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements contained herein, the parties hereto hereby agree as follows:

                                                              

ARTICLE I

DEFINITIONS

     As used in this agreement, the following terms shall have the following meanings:

              (a)  The term " Affiliate " or " affiliate " means, with respect to a given person, a person who controls, is controlled by or is under common control with, such person.

              (b)  The term " Affiliated Group " has the meaning described in Section 1504 of the Code, without regard to the exceptions contained in subsection (b) thereof.

             (c) The term " Buyer Material Adverse Effect " means any change or effect that is materially adverse to the financial condition, results of operations, business, properties, assets, liabilities or prospects of Buyer, Rock of Ages Corporation, a Delaware corporation and Parent of Buyer ("Parent"), or any of Buyer's or Parent's respective Subsidiaries, taken as a whole (hereinafter referred to as the "Buyer Group").

              (d)     The term " Code " means the Internal Revenue Code of 1986, as amended.

              (e)     The term " Competing Transaction " shall mean any of the following involving the Seller (other than the transactions contemplated by this agreement): (i) any merger, consolidation, share exchange, business combination, or other similar transaction; (ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition of five percent (5%) or more of the assets of Seller in a single transaction or a series of related transactions; or (iii) any tender offer or exchange offer for twenty percent (20%) or more of the outstanding shares of capital stock of Seller or the filing of a registration statement under the Securities Act in connection therewith.

               (f)     The term " Environmental Law " means any applicable federal, state or local statutory or common law, and any applicable regulation, code, plan, order, decree, judgment, permit, license, grant, franchise, concession, restriction, agreement, requirement and injunction issued, entered, promulgated, or approved thereunder, relating to the environment, or human health or safety relating to occupational or environmental matters, including, without limitation, any law relating to emissions, discharges, releases or threatened releases of hazardous materials or substances in the environment (including, without limitation, air, surface water, groundwater and land), relating to the presence, manufacture, generation, refining, processing, distribution, use, sale, treatment, recycling, receipt, storage, disposal, transport, arranging for transportation, treatment or disposal, or handling of Hazardous Materials or substances.

               (g)     The term " ERISA " means the Employee Retirement Income Security Act of 1974, as amended.

               (h)     The term " Exchange Act " means the Securities Exchange Act of 1934, as amended.

               (i)      The term " Expenses " means all reasonable out-of-pocket expenses (including without limitation, all reasonable fees and expenses of counsel, accountants, investment bankers, experts and consultants to a party and its Affiliates) incurred by a party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this agreement, the solicitation of stockholder approvals and all other matters related to the consummation of the transactions contemplated by this agreement.

               (j)      The term " DGCL " means the Delaware General Corporation Law, as amended.

               (k)     The term " Governmental Entity " means any federal, state, local or foreign government or any agency thereof.

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               (l)      The term " Hazardous Materials " means pollutants, contaminants, or hazardous or toxic wastes, substances or materials, including, without limitation, asbestos, petroleum and its derivatives and by-products, and any other hydrocarbons, as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Toxic Substances Control Act, or any other similar Law as of the Closing Date.

               (m)     The term " HSR Act " means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

               (n)      The term " knowledge " means the actual knowledge of a person, or of its current officers and directors in the case of a corporate person, after reasonable investigation. For purposes of establishing the knowledge of a corporate person, "reasonable investigation" means the inquiry has been made of those persons employed or retained by the corporate person or its Subsidiaries who are likely to know facts of the subject matter being investigated and all files or documents in the possession of all such persons which relate to the subject matter being investigated have been reviewed. The parties hereby acknowledge, that in any event, "reasonable investigation" shall not require the party representing such fact or statement to make inquiry of customers or agents of such corporate person.

                (o)    The term " Law " means any foreign, federal, state or local law, statute, rule, ordinance, bylaw or regulation (including codes, plans, judgments, injunctions, administrative interpretations, orders or changes thereunder), including Environmental Law.

                (p)    The term " Lien " means, with respect to any assets, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not file, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).

                (q)    The term " person " means an individual, corporation, limited liability company, partnership, association, trust, unincorporated organization, other entity or group (as defined in Section 13(d) of the Exchange Act).

                (r)     The term " Securities Act " means the Securities Act of 1933, as amended.

                (s)     The term " Seller Material Adverse Effect " means any change or effect that is materially adverse to the financial condition, results of operations, businesses, properties, assets, liabilities or prospects of the Seller.

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                (t)     The term " Subsidiary " (or its plural) as used in this agreement with respect to Seller, Buyer or any other person, shall mean any corporation, limited liability company, partnership, joint venture or other legal entity of which Seller, Buyer or such other person, as the case may be (either alone or through or together with any other Subsidiary), owns, directly or indirectly, fifty percent (50%) or more of the stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity.

                (u)    The term " Taxes " means all taxes, charges, fees, levies or other assessments of whatever kind or nature, including, without limitation, all net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, withholding, payroll, employment, excise, estimated, severance, stamp, occupancy or property taxes, customs duties, fees, assessments or charges of any kind whatsoever (together within any interest and any penalties, additions to tax or additional amounts) imposed by any taxing authority (domestic or foreign) upon or payable by the party in question or any Subsidiary thereof.

                 (v)    The term " Parent " shall mean Rock of Ages Corporation, a Delaware corporation and the parent corporation of Buyer.

ARTICLE II
PURCHASE AND SALE OF ASSETS AND
ASSUMPTION OF LIABILITIES

      2.1     Purchase of Assets .

               (a) Assets. Subject to the terms and conditions of this agreement, the Seller agrees to sell, assign, transfer, convey, and deliver to the Buyer on the Closing Date (as hereinafter defined), and the Buyer agrees to purchase from the Seller on the Closing Date, the assets and properties of the Seller, including without limitation any and all right, title and interest in and to the names, "Rockwell Granite Company", "Rockwell White" and "Rockwell Pink", and any and all leasehold improvements and other interests in real estate related in any way to the Rockwell Quarry, wherever the same may be located, and all goodwill associated therewith (collectively referred to as the "Assets") including with limitation the Assets listed on Exhibit 2.1 ; provided that the Assets will not include cash and cash equivalents, accounts receivable, inventory sold prior to the Closing, or the equipment and personal property identified as "Excluded Assets" on Exhibit 2.1 (collectively referred to as the "Excluded Assets").

              (b) Rockwell Quarry. Subject to the terms and conditions of this agreement, the Seller agrees to sell, assign, transfer, convey, and deliver to the Buyer on the Closing Date, and the Buyer agrees to purchase from the Seller on the Closing Date, the real property and quarry or quarries situated thereon designated for the purposes hereof as the "Rockwell Quarry" and more specifically described in Exhibit 2.1(b) , all licenses, permits, easements and rights of way appurtenant thereto and all buildings and improvements or fixtures situated thereon, and all goodwill associated therewith, all of which for the purposes hereof are considered part of the Rockwell Quarry.

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       2.2   Liabilities and Obligations. In conjunction with the purchase of assets contemplated by Section 2.1 hereof, Buyer does hereby agree to assume and pay those liabilities and obligations of Seller on Exhibit 2.2 attached hereto, including the following categories:

               (a)  The obligations of Seller pursuant to the real and personal property leases listed on Exhibit 2.2 ;

               (b)  Permitted Encumbrances pertaining to the Rockwell Quarry, as defined and as provided in Section 4.3 (g) hereof.

Buyer shall not assume any liabilities, obligations or undertakings of Seller, or the Shareholder, of any kind or nature whatsoever, whether fixed or contingent, known or unknown to Seller, or the Shareholder, determined or determinable, except as expressly identified on Exhibit 2.2 (said liabilities identified on Exhibit 2.2 being collectively referred to as the "Assumed Liabilities"). Seller and Shareholder, jointly and severally, hereby agree to indemnify and hold Buyer harmless from and against all costs, claims, actions, debts, liabilities, obligations and undertakings of Seller and Shareholder, excepting only the Assumed Liabilities, if any.

        2.3  Bulk Sales . Buyer and Seller each hereby waive compliance by the other with any applicable provisions of the bulk sales laws of the State of North Carolina or any other applicable jurisdiction, and Seller and Shareholder hereby agree to indemnify and hold Buyer harmless from any loss, cost or damage, including without limitation reasonable attorneys fees and payments to any of Seller's creditors, incurred by Buyer because of Seller's or Buyer's noncompliance with said bulk sales laws.

        2.4  Closing .  The closing of the purchase and sale hereunder (the "Closing") shall take place at the offices of Morris, Manning & Martin, 201 South College Street, Suite 2300, Charlotte, North Carolina, at 10:00 A.M. local time, on January 31, 2005, or at such other time, date and/or place as the parties may agree. The date and time at which the Closing actually occurs is referred to as the "Closing Date".

        2.5  Determination of and Allocation of the Purchase Price .

               (a)  The purchase price for the Assets (the "Purchase Price") shall be Three Million Five Hundred Thousand Dollars ($3,500,000.00) (the "Cash Purchase Price"), plus the amount of any Assumed Liabilities scheduled on Exhibit 2.2 which are to be paid by Buyer, if any.

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               (b)  The parties agree to report the transactions contemplated by this agreement and to allocate the Purchase Price, for tax and accounting purposes in accordance with the allocations set forth on Exhibit 2.5(a) , pursuant to Section 1060 of the Code, as amended, and the permanent and temporary Treasury Regulations thereunder.

         2.6  Payment of Purchase Price and Delivery of Title to the Assets . Upon the terms and subject to the conditions of this agreement, at the Closing:

                (a)  Buyer shall deliver to Seller on the Closing Date by Buyer's certified check, its counsel's trust account check, or by wire transfer pursuant to specific wire transfer instructions provided to Buyer at least five (5) days prior to the Closing Date, the amount of the Cash Purchase Price pursuant to Section 2.5, and shall pay or assume or otherwise satisfy the Assumed Liabilities (if any) pursuant to Section 2.5, by check or other mutually acceptable means on the Closing Date, subject to any withholdings or reserves from the Purchase Price as provided for in this agreement and any Exhibits hereto.

                (b)  The Seller shall deliver to Buyer (i) bills of sale and assignment with warranties of title sufficient to satisfy title insurance requirements, limited or special warranty deeds and all other instruments necessary to transfer title to the Assets, the Rockwell Quarry and Assumed Liabilities, free and clear of all liens, claims, pledges, encumbrances, charges, options, proxies or restrictions of any kind or nature, except for Permitted Encumbrances (as hereinafter defined); (ii)the agreements listed in Article III, and (iii) funds for the payment of all sales, transfer, and similar taxes, if any, in respect to the sale, transfer and assignment of the Assets and Assumed Liabilities pursuant to this agreement, including without limitation, any transfer or gains taxes, to the extent Buyer has any liability for the collection thereof, to which the transactions contemplated hereby may be subject under the laws of North Carolina, Georgia or any other jurisdiction.

                (c)  The parties shall provide satisfactory mechanism for the payment of liabilities which are not being assumed by Buyer (the "Excluded Liabilities"), including but not limited to the Excluded Liabilities identified on Exhibit 2.6(c) .

ARTICLE III

FURTHER AGREEMENTS

       3.1  Shareholder shall execute a Noncompetition Agreement in the form attached as Exhibit 3.1 pursuant to which Shareholder shall agree not to engage in quarrying light gray or white granite within a one hundred (200) mile radius of the Rockwell Quarry for a period of five (5) years from the Closing Date.

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        3.2 Seller shall execute a Noncompetition Agreement in the form attached as Exhibit 3.1 pursuant to which Seller shall agree not to engage in quarrying light gray or white granite in North America within a two hundred (200) mile radius of the Rockwell Quarry for a period of five (5) years from the Closing Date.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

           4.1  General Statement .  The parties make the representations and warranties set forth in this Article IV. The survival of all such representations and warranties shall be in accordance with Section 9.1 hereof. All representations and warranties of the parties are made subject to the exceptions, if any, which are noted in the respective Exhibits and Schedules delivered by the parties to each other and accepted by the receiving party concurrently herewith or in accordance with Section 9.12.

           4.2  Representations and Warranties of the Buyer . Buyer makes the following representations and warranties to the Seller and Shareholder, in each case with the intention that they may rely upon the same, and covenants that the same are true and correct in all material respects on the date hereof and shall be true and correct in all material respects at the Closing Date, subject to changes therein occurring because of Buyer's conduct of its business in the ordinary course.

                  (a)  Organization and Qualification . Buyer is a Delaware corporation, duly incorporated, validly existing and in good standing under the laws of the State of Delaware; has all requisite corporate power and authority to own and lease its properties and to carry on the business in which it is presently engaged; and is duly qualified and in good standing to do business in each jurisdiction in which the nature of the business conducted by it or the ownership or leasing of its properties makes such qualification necessary, except where the failure to be so qualified will not have, individually or in the aggregate with any other failure to be so qualified, a Buyer Material Adverse Effect.

                  (b)  Authority .  Buyer has the requisite corporate power and authority to execute and deliver this agreement and the related agreements referred to herein, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this agreement by Buyer and the consummation by Buyer of the transactions contemplated hereby have been (or will have been by the Closing Date) duly authorized by all necessary corporate action and no other corporate proceedings on the part of Buyer are necessary to authorize this agreement or to consummate the transactions contemplated hereby (which Buyer shall cause to be obtained prior to Closing). This agreement has been duly executed and delivered by Buyer and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes the legal, valid and binding obligation of Buyer, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors' rights generally, and to general equitable principles.

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                   (c)  No Conflict and Consents . The execution and delivery of this agreement by Buyer does not, and the performance of this agreement by Buyer will not, (i) conflict with or violate the Articles of Incorporation or Bylaws of Buyer;
(ii) conflict with or violate any Laws applicable to Buyer or any of Buyer's Subsidiaries or by which any of their respective properties is bound or affected; or (iii) except for the consent of Buyer's lenders required under the applicable credit facility, result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the properties or assets of Buyer or any of Buyer's Subsidiaries pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other material instrument or obligation to which Buyer or any of Buyer's Subsidiaries is a party or by which Buyer or any of Buyer's Subsidiaries or any of their respective properties is bound or affected, except for any such conflict or violations described in clause (ii) or breaches or defaults described in clause (iii) that would not have a Buyer Material Adverse Effect.

                   (d)  Broker . No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this agreement based upon arrangements made by or on behalf of Buyer.

                   (e)  Sole Representations and Warranties .  The representations and warranties contained in this Section 4.2 and in the Schedules and Exhibits attached hereto and in any closing certificate delivered in connection herewith, are the only representations and warranties made by Buyer in connection with the transactions contemplated by this agreement.

     4.3   Representations and Warranties of Seller and Shareholder . Seller and Shareholder, jointly and severally, make the following representations and warranties to Parent and Buyer, in each case with the intention that they may rely upon the same, and covenant that the same are true and correct and shall be true and correct at the Closing Date, subject to changes therein occurring because of Seller's conduct of Seller's Business (as hereinafter defined) in the ordinary course:

             (a)  Organization and Qualification . Seller is a corporation duly incorporated, validly existing under the laws of the state of its incorporation, has all requisite corporate power and authority to own and lease its properties and to carry on the business in which it is presently engaged (hereinafter the business of Seller is sometimes referred to as the "Seller's Business"), and is duly qualified and in good standing to do business in each jurisdiction in which the nature of the Business conducted by it or the ownership or leasing of its properties makes such qualification necessary, except where the failure to be so qualified will not have, individually or in the aggregate with any other failure to be so qualified, a Seller Material Adverse Effect. The copies of the Articles of Incorporation and By-Laws, as amended to date, of Seller which have been delivered by Seller to Buyer, are complete and correct. Seller does not have any Subsidiaries or, if it does, all such Subsidiaries, their states of incorporation, and their relationship to Seller, are listed on Exhibit 4.3(a) . To the best of Seller's and Shareholder's knowledge, after due inquiry, all Subsidiaries of Seller are registered to do business in each state where the nature of their business activities or the location of their assets or employees makes such registration necessary.

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               (b)  Authority .  Seller has the requisite corporate power and authority to execute and deliver this agreement and the related agreements referred to herein, to perform its obligations hereunder and to consummate the transactions contemplated hereby, and the Shareholder has the requisite power and authority to do so. The execution and delivery of this agreement by Seller and the consummation by Seller of the transactions contemplated hereby have been duly authorized by all necessary corporate action, and no other corporate proceedings on the part of Seller is necessary to authorize this agreement or to consummate the transactions contemplated hereby. This agreement has been duly executed and delivered by Seller and Shareholder and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes the legal, valid and binding obligations of them respectively, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors' rights generally, and to general equitable principles.

               (c)  No Conflict and Consents . Except for such consents to assignment as are necessary for the assignment of certain agreements, the execution and delivery of this agreement by Seller or Shareholder does not, and the performance of this agreement by Seller will not, (i) conflict with or violate the Articles of Incorporation or Bylaws of Seller; (ii) conflict with or violate any Laws applicable to Seller, any of Seller's Subsidiaries or Shareholder or by which any of their respective properties is bound or affected; or (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the properties or assets of Seller, any of Seller's Subsidiaries or upon the Rockwell Quarry, pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other material instrument or obligation to which Seller, any of Seller's Subsidiaries or Shareholder, or any trust of which Shareholder is a beneficiary or trustee, is a party or by which Seller, any of Seller's Subsidiaries or Shareholder or any of their respective properties is bound or affected, except for any such conflict or violations described in clause (ii) or breaches or defaults described in clause (iii) that would not have a Seller Material Adverse Effect.

               (d)  Insurance .  Seller has maintained and will continue to maintain until the Closing Date the property, casualty, liability, extended coverage and other insurance described in Exhibit 4.3(d) attached hereto, including insurance on the Seller's Assets, including, without limitation, tangible personal property, buildings, fixtures, structures and leasehold improvements located in the Rockwell Quarry, whether owned or leased, against loss or damage by fire or other casualty, in amounts equal to or in excess of One Hundred Percent (100%) of the replacement value thereof, subject to current deductibles; all such insurance is in full force and effect on the date of this agreement, is carried in reputable companies authorized to do business in the states where such property is located and is in amounts and with coverages normally and customarily carried by similar businesses doing business in the areas where Seller does business.

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                 (e)  Financial Statements . Seller and Shareholder have furnished to Buyer true and complete balance sheets of Seller for the 2003 fiscal year and the related income statements, attached hereto Exhibit 4.3(e) (the "Financial Statements"). The balance sheet dated as of Seller's most recent fiscal year end (the "Balance Sheet Date") makes full and adequate provision for all direct and indirect material obligations and liabilities (fixed or contingent) as of such Balance Sheet Date and Seller has no direct or indirect material obligations or liabilities (fixed or contingent) not reflected or reserved against on such balance sheet. Seller's Financial Statements, taken as a whole, fairly and accurately present the financial position and results of operations of Seller, in all material respects, as of the dates and for the periods indicated and have been prepared in accordance with generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved. Seller and Shareholder have also furnished to Buyer a true and complete balance sheet of Seller for the interim period ending October 31, 2004, and the related income statements for the period then ended ("Seller's Interim Financial Statements") which are attached hereto as Exhibit 4.3(e) . Seller's Interim Financial Statements are materially complete and correct, taken as a whole, fairly and accurately present the financial position and results of operations of Seller in all material respects as of and for the period indicated and have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved; provided, that, the Interim Financials do not reflect adjustments for year-end matters, such as (by way of example) accrued depreciation and other matters affecting GAAP. Except as disclosed herein or in Seller's Interim Financial Statements, there have been no material changes (other than changes in the ordinary course of business) in Seller's obligations and liabilities since the date of Seller's most recent fiscal year end.

                   (f)  Tax Matters . With respect to Taxes:

                        (i)   Seller has filed, within the time and in the manner prescribed by law, all returns, declarations, reports, estimates, information returns and statements ("Returns") required to be filed under federal, state, local or any foreign laws and all such Returns are true, correct and complete in all material respects;

                        (ii)   Seller has, within the time and in the manner prescribed by law, paid (and until the Closing Date will, within the time and in the manner prescribed by law) pay all Taxes that are due and payable by Seller;

                        (iii)  Seller has established (and until the Closing Date will establish) on its books and records reserves (to be specifically designated as an increase to current liabilities) that are adequate for the payment of all Taxes not yet due and payable;

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                        (iv)  There are no liens for Taxes upon the Assets, except liens for Taxes not yet due;

                        (v)   Except as set forth in Exhibit 4.3(f)(v) (which shall set forth the type of return, date filed, and date of expiration of the statute of limitations), (i) the statute of limitations for the assessment of federal income taxes has expired for all federal income tax returns of Seller or such returns have been examined by the Internal Revenue Service for all periods through December 31, 1999; (ii) the statute of limitations for the assessment of state, local and foreign income taxes has expired for all applicable Returns of Seller or such Returns have been examined by the appropriate tax authorities for all periods through December 31, 1999; and (iii) no deficiency for any Taxes has been proposed, asserted or assessed against Seller which has not been resolved and paid in full;

                        (vi)  There are no outstanding waivers or comparable consents regarding the application of the statute of limitations with respect to any Taxes or Returns that have been given by Seller;

                        (vii)  Except as set forth in Exhibit 4.3(f)(vii) (which shall set forth the nature of the proceeding, the type of return, the deficiencies proposed or assessed and the amount thereof, and the taxable year in question), no federal, state, local or foreign audits or other administrative proceedings or court proceedings are presently pending or threatened with regard to any Taxes or Returns of Seller;

                        (viii) Seller is not a party to any tax-sharing or allocation agreement, nor does Seller owe any amount under any such agreement;

                         (ix)  Seller will not be liable for any Taxes under Section 4972 of the Code for contributions made to any Plans (as defined in Section 5.3(n));

                         (x)  Seller has complied (and until the Closing Date will comply) in all respects with all applicable laws, rules and regulations relating to the payment and withholding of Taxes (including, without limitation, withholding of Taxes pursuant to Sections 1441 or 1442 of the Code or similar provisions under any foreign laws) and has, within the time and in the manner prescribed by law, withheld from employee wages and paid over to the proper governmental authorities all amounts required to be so withheld and paid over under all applicable laws; and

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                        (xi)  Seller has never been (nor has it any liability for unpaid Taxes because it once was) a member of an Affiliated Group.

 

                (g)   Title to Assets, Absence of Liens and Encumbrances . Seller has good, marketable and insurable title to its Assets and to the Rockwell Quarry, and except as set forth in Exhibit 4.3(g)(i) , such title is free and clear of all Liens, claims and encumbrances and rights of other parties relating to Seller's Assets or Business, or the Rockwell Quarry. The matters set forth on Exhibit 4.3(g)(i) attached hereto which affect Seller's title to its Assets and title to the Rockwell Quarry and agreed to be accepted by Buyer are herein sometimes referred to as the "Permitted Encumbrances."  Exhibit 4.3(g)(ii) sets forth an accurate and complete description of all of Seller's real estate and interests pertaining to Seller's Business and the Rockwell Quarry, including leasehold interests. The areas being quarried on the Rockwell Quarry are entirely within the bounds of the real estate comprising the Rockwell Quarry. Seller owns or leases all assets and property required to operate its Business in the ordinary course and to the extent any thereof are leased. Seller has delivered to Buyer a copy of such lease or leases, and none of such leases will be breached or violated by the transactions contemplated by this agreement and all of such leases can be assigned to Buyer at the Closing, provided any requisite approvals are secured from the lessors thereunder, which Seller shall, with Buyer's reasonable cooperation, make all reasonable efforts to secure. Except as set forth on Exhibit 4.3(g)(iii) , no director, officer, shareholder, or employee of Seller, or any relative of any of them, owns or has owned, directly or indirectly, in whole or in part, or leases or has leased, to Seller any asset which Seller uses or has used or the use of which is necessary for Seller's Business or the operation of the Rockwell Quarry. Except as disclosed on Exhibit 2.1, the Assets are in good condition and repair and will be in good condition and repair on the Closing Date, reasonable wear and tear excepted.

                  (h)  Litigation . Except as set forth on Exhibit 4.3(h) , neither the Seller, nor the Shareholder has been notified of, and none of them is a party to, any actions, suits, proceedings or investigations (including any environmental, building or safety investigation) pertaining to them or their assets or businesses; nor do Seller or the Shareholder have any knowledge of, nor reasonable grounds to have knowledge of, any claim or state of facts which may lead to, or constitute a threat of, any investigation, claim, proceeding, or litigation, relating to Seller, Shareholder or their respective assets or businesses. There are no orders, judgments or decrees of any court or governmental agency relating to Seller or Shareholder which would prevent, impede or make illegal the consummation of the transactions contemplated herein or which would have a material adverse effect on Seller, Shareholder or their respective assets or businesses.

                   (i)  Labor and Employment Controversies . Except as set forth in Exhibit 4.3(i) , Seller is not party to any collective bargaining agreements, labor agreement, affirmative action program or other agreement or program affecting its employees or its Business. There are no material controversies between Seller and any of its employees, no unresolved labor practice proceedings or disputes or discrimination or other employment-related complaints, and no labor or employment arbitration proceedings pending or threatened relating to Seller and there are no organizational efforts presently being made or to the best of Seller's or Shareholder's actual knowledge, after due inquiry, threatened, involving any of Seller's employees involved in the Seller's Business. Seller, and to the best of Seller's or Shareholder's actual knowledge, after due inquiry, all of Seller's employees, have complied with all Laws, orders and regulations relating to the employment of labor including, without limitation, ERISA and all laws governing wages, hours, collective bargaining, the payment of social security, unemployment, withholding and similar taxes, equal employment opportunity, employment discrimination, disability, family leave, workplace health and safety, workers' compensation, and immigration and naturalization (collectively, "Employment Obligations"), and are not subject to any pending or threatened governmental or private claims, proceedings, investigations, lawsuits or other actions alleging violation of or failure to comply with any Laws; nor is Seller liable for any arrears of wages, or any taxes or penalties for failure to comply with any Laws or any judgments, orders, damage awards or other sanctions. Seller has enjoyed satisfactory employer-employee relationships with its employees, past and present. There is no claim under any Laws pending, or to the best of Seller's or Shareholder's actual knowledge, after due inquiry, threatened against Seller, nor any strike, dispute, slowdown or stoppage pending or threatened against or involving Seller.

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                  (j)  Patents, Trademarks, Etc . To the best of the Seller's or Shareholder's knowledge after due inquiry, there are no pending or threatened claims against Seller that Seller has wrongfully used or appropriated or infringed upon, any patent, trade name, trademark, servicemark, brandmark, brand name, copyright, know-how, trade secret or any license of same or registration thereof or other proprietary or trade rights of any third party. No director, officer, shareholder or employee of Seller owns or has owned, directly or indirectly, in whole or in part, any patents, trademarks, trade names, servicemarks, brandmarks, brand names, copyrights, registrations or applications or licenses therefor or interests therein which Seller has used or is using or the use of which is necessary for the Seller's Business.

                  (k) Books and Records . The financial books, records and working papers of Seller are in all material respects complete and correct, have been maintained in accordance with sound business practices, and accurately reflect the basis for its financial condition and results of its operations as set forth in its financial statements set forth in Section 4.3(e) above.

                  (l)  Permits, Authorizations, Etc . Seller has all approvals, authorizations, consents, licenses, orders and other permits of any Governmental Entity, whether federal, state or local, required to permit the operation of Seller's Business and the Rockwell Quarry as heretofore and as presently conducted. Seller has not received any notice of any license or permit which must be acquired in the future in order for Seller's Business or the Rockwell Quarry to be operated as heretofore and as presently conducted. Set forth in Exhibit 4.3(l) is a list of all licenses, permits and approvals required by Law for Seller to conduct Seller's Business and the Rockwell Quarry as presently being conducted.

                  (m)  Compliance with Law . Seller is not in violation of any Law, nor has Seller or Shareholder ever received any notice that Seller is in violation of any Law relating to Seller's Business or to the Rockwell Quarry. Seller or Shareholder have not received any notice that any of the Rockwell Quarry or the Assets are in violation of any state and local building, zoning, subdivision, land use, or other Laws. Seller or Shareholder have never received any notice of any federal, state, municipal, public zoning or other restrictions that will prevent the utilization of the Rockwell Quarry or any other property owned or leased by Seller for the purposes presently used, and there are no condemnation proceedings pending or, to the best of their knowledge, threatened against any such property. To Seller's knowledge, Seller is not in violation of any Law, including any Environmental Law or ERISA, and, to Seller's knowledge, the Rockwell Quarry and Seller's Assets are free from the presence of Hazardous Materials and are in full compliance with Environmental Laws.

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                  (n)  Employee Plans . With respect to every "employee pension plan" or "employee welfare benefit plan", as defined in ERISA, sponsored by Seller or in which any employee of Seller participates (singly, a "Plan" and collectively, the "Plans"), Seller and Shareholder have heretofore delivered to the Buyer true, correct and complete copies of:

                       (i)    the most recent Internal Revenue Service determination letters relating to each Plan which is a pension, profit-sharing, or stock bonus plan qualified (or intended to be qualified) under Section 401(c) of the Code, listed in Exhibit 4.3(n) hereto for which a determination letter was obtained;

                       (ii)   the most recent Annual Report (Form 5500 series) and accompanying schedules of each Plan currently sponsored by any of them, with respect to which the same are required, as filed pursuant to applicable law;

                       (iii)  the most recent annual, quarterly and monthly financial statements or reports for each and all Plans; and

                       (iv)  all plan documents, as amended to date, summary plan descriptions and summaries of material modifications and all plan termination documentation with respect to each Plan presently or in the past sponsored by any member of the Selling Group, except for the multi-employer plans referred to below.

With respect to each of such Plans as to which an Annual Report (Form 5500 series) is required to be filed, no liabilities as of the date of such Annual Report exist unless specifically referred to in the most recent such Annual Report, and no material change has occurred with respect to the matters covered by the last Annual Report since the date thereof. Seller and Shareholder do not know, nor have any reasonable grounds to know, of any "prohibited transaction," as such term is defined in Section 406 of ERISA and Section 4975 of the Code, which has ever been engaged in by Shareholder or Seller, or by any Plan sponsored by Seller, any trust created thereunder or any trustee, administrator or other fiduciary thereof, or which would subject such Plan or any such entity, or any party dealing with such Plan or any such trust, to the sanctions imposed by ERISA or the tax on prohibited transactions imposed by Section 4975 of the Code. There are no actions, suits or claims pending or, to the best of Seller's or Shareholder's knowledge, after due inquiry, threatened, against any of the Plans or any administrator or fiduciary thereof. Neither any of the Plans nor any of said trusts have incurred any "accumulated funding deficiency," as such term is defined in Section 302 of ERISA or Section 412(a) of the Code (whether or not waived), since the effective date of ERISA. The terms and operation of each of the Plans have complied to the extent required with the provisions of the Code and ERISA, and all reports and notices required by ERISA or the Code have been duly filed or given. Seller and Shareholder shall deliver to the Buyer a list of all of the members of the Seller's Plans subject to Title IV of ERISA and all trusts created thereunder which have been terminated, and all "reportable events," as that term is defined in Section 4043 of ERISA. Except as may be specified in Exhibit 4.3(n) hereto, none of such Plans and no such trust has been terminated, nor has any such "reportable event" occurred with respect to any such Plans since the effective date of ERISA. The present value, on a plan termination basis, of all benefits accrued under each Plan sponsored or contributed to by Seller and subject to Title IV of ERISA did not, as of the most recent valuation date, exceed the fair market value of the assets of such Plan as of such date.

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Seller has never been a sponsor of, and/or a contributing employer to, a multi-employer pension plan subject to the provisions of Section 4201, et seq ., of ERISA; or if it has, it has never incurred any withdrawal liability thereunder, nor will it incur any such liability as a result of the consummation of any of the transactions contemplated by this agreement; or if it will, at or prior to the Closing Date, it will pay or otherwise satisfy such liability in full and/or establish an escrow fund or secure a bond in an appropriate amount with respect to the same with an escrow agent and/or a bonding company reasonably satisfactory to the Buyer and in a manner agreeable to applicable law. Seller has never been a sponsor of, or a contributing employer to, a single employer pension plan subject to the provisions of Section 4041, et seq ., of ERISA; nor has it ever incurred any liability thereunder or under Section 4062, et seq ., of ERISA, nor will it incur any such liability as a result of the consummation of any of the transactions contemplated by this agreement; or if it will, at or prior to the Closing Date, it will pay or otherwise satisfy such liability in full and/or establish an escrow fund or secure a bond with respect to the same as provided in the preceding sentence.

                 (o)  Inventories . The parties acknowledge that, prior to Closing, Seller sold and transferred to its affiliate, Dorking Agencies, 645.273 cubic meters of granite in consideration of $627,043.45 (FAS Savannah) and that such sale and transfer between Seller and Dorking Agencies is consistent with the course of dealings between such affiliates. With respect to any remaining inventories of Seller, Seller makes no representations and warranties whatsoever. Any inventory remaining at the quarry shall be the property of Buyer upon the closing of the transactions contemplated herein. Seller acknowledges and agrees that Buyer shall have no responsibility to move or load an remaining inventory at the quarry after the Closing.

                 (p)  List of Properties, Contracts and Other Data . Prior to the execution of this agreement, Seller and Shareholder have delivered or will deliver to the Buyer a true and complete list (designated for purposes of this agreement as Exhibit 4.3(p) ), setting forth the following:

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                         (i)   all intellectual property, including, without limitation, patents, trademarks, trade names and copyrights, and all other proprietary information owned by Seller, and copies of all other material agreements to which Seller is a party which relate to any proprietary rights affecting its assets; and

                         (ii)  all contracts, agreements, mortgages, promissory notes, loan facilities, leases, understandings and commitments to which Seller is a party, or to which any of its assets are subject which are material to the business of Seller.

True and complete copies of all documents referred to in such list have been or will be provided to Buyer and its counsel upon their request as part of Buyer's Due Diligence (as hereinafter defined). All such documents, rights, leases, obligations and commitments are valid and enforceable in accordance with their respective terms, except as such enforceability may be affected by bankruptcy, or similar laws affecting the rights of creditors generally and by general principles of equity, for the periods stated therein and there is not, under any of them any existing default or event of default or any event which with notice and/or lapse of time, or both, would constitute a default nor will the consummation of the transactions contemplated by this agreement cause a default or constitute an event of default under any of them except to the extent that consents to assignment are required thereunder.

                  (q)  Industry and Governmental Events .  Seller and Shareholder are not aware of any future events or loss of customers or suppliers, or future legislative proposals that may materially affect Seller and/or its Business and financial affairs either prior to or subsequent to the Closing Date. Seller has never received any notice of any pending or contemplated condemnation or any change of zoning, subdivision land use, environmental or other Laws or other governmental action affecting Seller's Business or the Rockwell Quarry.

                   (r)  No Defaults . There currently are no defaults or events of default by Seller or acts or events which, with the passage of time or giving of notice, or both, could become defaults or events of defaults by Seller under any indebtedness, indenture, mortgage, deed of trust, security deed, security agreement or other instruments, contracts or agreements which would have a material adverse effect on Seller's business.

                  (s)  Brokers . No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this agreement based upon arrangements made by or on behalf of Seller or the Shareholder.

                 (t)  Reserved.

                  (u)  Reserved .

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                  (v)  Accuracy and Omissions . None of the information and documents furnished or to be furnished or made available for inspection by Seller or Shareholder pursuant to the provisions of this agreement is or will be false or misleading, or contains or will contain any material misstatement of fact or omits or will omit to state any material fact required to be stated to make the statements therein not misleading.

ARTICLE V

COVENANTS AND AGREEMENTS

        5.1    Conduct of Seller's Business Pending Closing . For the period commencing from and after the date hereof until the Closing Date or the earlier termination of this agreement (hereinafter referred to as the "Interim Period"), Seller and Shareholder covenant and agree as follows:

                 (a)  Full Access and Due Diligence . Subject to Buyer providing Seller with reasonable prior notice thereof, Buyer and its respective agents and representatives (including legal counsel and accountants) shall have full access during normal business hours, to inspect all properties, books, records, contracts and documents of the Seller used in or associated with its Business and to all of its executive and key employees (including the opportunity to meet with and discuss its Business with such employees) and to otherwise conduct such due diligence (the "Due Diligence") regarding its examination of them, Seller's Business and financial affairs as Buyer may deem reasonably necessary and appropriate. Furthermore, Buyer, its agents and representatives, shall have the opportunity to inspect, appraise and test any or all of the Seller's equipment, properties and assets as it determines in its sole discretion, at any reasonable time, and from time to time, up to the Closing Date.

                 (b)  Business in the Ordinary Course . Except as specifically permitted or required herein, during the Interim Period the Seller's Business shall be conducted in the ordinary course consistent with past practices and Seller shall not enter into any contract or commitment or engage in any transaction that could reasonably be anticipated to (separately or in the aggregate) have a Seller Material Adverse Effect. If Seller desires to engage in any transaction not in the ordinary course of business and such transaction involves consideration equal to or greater than Five Thousand Dollars ($5,000.00), it shall first obtain the prior written consent of Buyer before entering into such transaction (which consent shall not be unreasonably withheld).

                 (c)  Preservation of Business . Seller will use commercially reasonable efforts to preserve intact its Business and Assets, including the Rockwell Quarry, present operations, physical facilities and working conditions; maintain its rights and franchises; maintain and/or renew its licenses, permits, agreements, uses, and governmental approvals; retain the services of its officers and key employees except as otherwise understood between Buyer and Seller; and maintain relationships with its customers, lessors, licensors, employees, and suppliers; and will use commercially reasonable efforts to keep in full force and effect liability insurance, workers' compensation insurance, letters of credit and bonds comparable in amount and scope of coverage to that currently maintained.

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                   (d)  Confer with Buyer . Seller and Shareholder will confer with Buyer at its reasonable request to report operational matters of a material nature and to report the general status of the ongoing operations of the Seller's Business.

                   (e)  Compliance with Laws . Seller shall comply with all applicable Laws, including but not limited to Environmental Laws.

                   (f)  Employee Pension Benefit Plans . Prior to Closing Seller shall take such action, if any, with respect to its Plans as may be necessary to insure that Buyer has no liability of any kind thereunder after the Closing Date

                  (g)  No Termination of Key Employees . Seller shall not, without the prior consent of Buyer, terminate the employment of any of its officers or other key employees.

                  (h)  Audit and Restatement of Financial Statements . Seller will assist and cooperate with KPMG Peat Marwick, LLP, the auditors of Buyer's parent corporation, Rock of Ages Corporation ("Parent") to allow them to expeditiously complete any audit of Seller (the "KPMG Audit") Parent or Buyer deems appropriate. Such audit is not a condition to Closing.

                  (i)  No Sale, Merger or Competing Transaction or other Changes . During the Interim Period, Seller and Shareholder will not do any of the following:

                       (i)   acquire or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business entity or division thereof, or otherwise acquire or agree to acquire any assets of any other person or entity (other than the purchase of assets from suppliers or vendors in the ordinary course of business and consistent with past practice).

                       (ii)  sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose of any of Seller's Assets, or the Rockwell Quarry, except for dispositions in the ordinary course of business and except for dispositions not in the ordinary course that are not in excess of Ten Thousand Dollars ($10,000.00) in the aggregate.

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                        (iii)  initiate, solicit or encourage (including by way of furnishing information or assistance) any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any Competing Transaction, enter into discussions or negotiate with any person or entity in furtherance of such inquiries to obtain a Competing Transaction, or agree to or endorse any Competing Transaction, or authorize any of the officers or directors of the Seller to take any such action; and the Shareholder and Seller shall use reasonable best efforts to cause the officers, employees, agents and representatives of the Seller (including, without limitation, any investment banker, financial advisor, attorney or accountant retained by the Seller) not to take any such action. The Shareholder and Seller agree to notify Buyer immediately in writing of any offer, proposal or communication received by them or, to their knowledge by them or any Affiliate, employee, or consultant thereof, of any Competing Transaction.

                        (iv)  fail to renew any agreement favorable to Seller which is material to the conduct of its Business; or compromise, forgive or discharge, other than for full consideration, any material obligation or amount owed to Seller.

                        (v)  create, assume or permit the imposition of any Lien with respect to any assets of the Seller other than Liens existing and disclosed in Exhibit 4.3(g) as of the date hereof, Liens securing indebtedness under credit facilities existing and disclosed in Exhibit 4.3(g) on the date hereof, and purchase money Liens or statutory Liens arising in the ordinary course of business.

                       (vi)  agree in writing or otherwise to do any of the foregoing.

               Shareholder agrees and covenants to cause the Seller to comply with its covenants and agreements set forth in this Section 5.1.

     5.2     Real Property Covenants . During the Interim Period, Seller, Shareholder and any entities which either controls will refrain from violating or allowing any third party to violate any Laws with respect to Seller or the Rockwell Quarry.

     5.3     Access to and Information Concerning the Rockwell Quarry . Seller and Shareholder during the Interim Period will allow Buyer and its agents access to the Rockwell Quarry and Assets during regular business hours upon reasonable prior notice, for purposes of inspecting and testing the same or any part thereof as the Buyer shall reasonably request. Seller and Shareholder will furnish to Buyer any and all information regarding Seller and its Business that the Buyer shall reasonably request from time to time. Buyer agrees to indemnify and hold the Seller and Shareholder harmless from all claims, suits, damages, and losses arising from its inspection or testing of said real property, which indemnity shall survive termination of this agreement.

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      5.4    Environmental and Engineering Testing . Parent and Buyer may, prior to the Closing Date, perform whatever environmental and engineering tests, appraisals, searches or inspections of the Rockwell Quarry and other assets which they desire to perform (herein collectively the "Testing"). In addition to any testing which may be performed upon or prior to the execution of this agreement, they may hire a certified environmental engineering firm at their own cost and expense ("Environmental Engineer"), to perform a Level I environmental audit of the Rockwell Quarry and at their option a Level II environmental audit of the Rockwell Quarry. Such Environmental Engineer shall address and certify its environmental report to them and their financing institutions.

      5.5   Covenants Relating to Taxes .

             (a)  Liability for Taxes . Shareholder and Seller shall be liable for all Taxes imposed upon them respectively.

             (b)  Taxes . Shareholder and Seller shall be liable for and pay all income tax incurred by them in connection with the transactions contemplated hereby. Seller shall be responsible for any and all excise and transfer taxes imposed on the sale of the real estate in accordance with North Carolina law.

      5.6    Appropriate Action; Third Party Consents; Filings .

             (a)   The parties shall use reasonable best efforts to (i) take, or cause to be taken, all appropriate action, and do, or cause to be done, all things necessary, proper or advisable under applicable Law or otherwise, to consummate and make effective the transactions contemplated by this agreement as promptly as practicable; (ii) obtain from any Governmental Entities any consents, licenses, permits, waivers, approvals, authorizations or orders required to be obtained or made by Buyer, Seller or Shareholder in connection with the authorization, execution and delivery of this agreement and the consummation of the transactions contemplated by this agreement; and (iii) make all necessary notifications and filings, and thereafter make any other required submissions, with respect to this agreement required under the Securities Act, the Exchange Act, any other applicable federal securities Laws or Blue Sky Laws, and any other applicable Law; provided that the parties shall cooperate with each other in connection with all such filings, including providing copies of all such documents to the non-filing party and its advisors prior to filing and, if requested, to accept all reasonable additions, deletions or changes suggested in connection therewith. The parties shall furnish to the other all information required for any application or other filings to be made pursuant to the rules and regulations of any applicable Law in connection with the transactions contemplated by this agreement.

              (b) (i)  The parties shall give any notices to third parties, and use reasonable best efforts to obtain any third party consents (A) necessary, proper or advisable to consummate the transactions contemplated in this agreement, (B) disclosed or required to be disclosed in the Exhibits hereto as necessary for Buyer to operate Seller's Business after the Closing Date, or (C) required to prevent a Seller Material Adverse Effect or a Buyer Material Adverse Effect from occurring prior to or after the Closing Date.

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                      (ii)   If a party to this agreement fails to obtain any third party consent described in subsection (b)(i) above, such party shall use reasonable best efforts, and shall take any such actions reasonably requested by the other party, to minimize any adverse effect upon the Seller and Buyer and their respective Businesses resulting, or which could reasonably be expected to result after the Closing Date, from the failure to obtain such consent.

                (c)   From the date of this agreement until the Closing Date, each party shall promptly notify the others in writing of any pending or, to the knowledge of the notifying party, threatened, action, proceeding or investigation by any Governmental Entity or any other person (i) challenging or seeking material damages in connection with this agreement or (ii) seeking to restrain or prohibit the consummation of the transactions provided for in or otherwise limiting the right of Buyer to own or operate all or any portion of the Business or Assets of the Seller.

                (d)   The parties hereto shall do and perform or cause to be done and performed all such further actions and things and shall execute and deliver all such other agreements, certificates, instruments or documents as any other party hereby may reasonably request in order to carry out the intent and purposes of this agreement and the consummation of the transactions contemplated hereby.

     5.7    Seller's Employees . All employees of the Seller (both union and non-union) shall be employees of the Seller up to and through the Closing Date except as otherwise agreed. The Seller shall be responsible for and shall pay all payroll, salaries, severance, wages, bonuses, commissions, expenses, accrued vacation pay, workers' compensation benefits and other fringe benefits and obligations due and payable to its employees through the Closing Date. Prior to or at the Closing, the Seller will provide the Buyer with a list of all of their employees and their current compensation as of the last full payroll period prior to the Closing Date. Buyer will prior to or after the Closing Date meet with Seller's employees and, at its option and upon such terms and conditions as Buyer may in its sole discretion determine, make offers of employment to such of them as Buyer shall determine after the Closing Date; and Seller and Shareholder will assist Buyer with these discussions. The Buyer shall be responsible for and shall pay all payroll, salaries, wages, bonuses, commissions, expenses, accrued vacation pay, workers' compensation benefits and other fringe benefits and obligations due and payable to any such employees who are hired by Buyer to the extent that such obligations arise from and after the Closing Date.

     5.8  Update Disclosure; Breaches . From and after the date of this agreement until the Closing Date, each party shall promptly notify the other party hereto by written update of (a) the occurrence or non-occurrence of any event which would, or would be likely to, cause any condition to the obligations of any party to effect the Closing and the other transactions contemplated by this agreement, or cause any condition set forth herein, not to be satisfied; or (b) the failure of Seller, the Shareholder or the Buyer, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by that party pursuant to this agreement which would be likely to result in any condition to the obligations of any party to effect the Closing and the other transactions contemplated by this agreement, or cause any condition set forth herein, not to be satisfied. In addition, the Seller and the Shareholder shall notify Buyer in writing of (i) such additional information with respect to any matters or events discovered subsequent to the date hereof and prior to the Closing Date which, if existing and known on the date hereof, would have rendered any representation or warranty made by them, or any information contained in any Exhibit hereto, then inaccurate or incomplete; and (ii) any development after the date hereof and prior to the Closing Date causing a breach of any representation or warranty in Article IV above. No update or additional information provided pursuant to this Section 5.8 shall affect any claim or right of any party hereto with respect to a breach of any provision of this agreement.

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      5.9  Confidential Information . In performing their respective obligations under this agreement, each of the parties may have access to and receive disclosure of certain confidential information about the other parties (including the Parent and its Subsidiaries), including, but not limited to, financial information, operating procedures, marketing plan objectives, books, contracts, equipment and records which are confidential, proprietary, allow the disclosing party a competitive advantage, or are otherwise the exclusive property of the disclosing party (hereinafter, "Confidential Information"). Confidential Information shall not include information in the public domain. The parties agree that Confidential Information shall be used by each party receiving such Confidential Information solely in the performance of its obligations under or pursuant to this agreement. It is acknowledged that such Confidential Information shall constitute "trade secrets" under applicable Law. The party receiving the Confidential Information shall safeguard such Confidential Information by using a reasonable degree of care, but not less than the degree of care used by the recipient in safeguarding the recipient's own similar Confidential Information. The parties also acknowledge that the restrictions set forth in this agreement constitute efforts reasonable under the circumstances to maintain the secrecy thereof. Subsequent to the Closing or earlier termination of this agreement, the Seller and Shareholder shall not disclose any Confidential Information of the Seller or of Parent, Buyer or their respective Subsidiaries to any third party, except as may be agreed upon in writing by Buyer or as may be required by law. The provisions and undertakings of this Section 5.9 shall survive the Closing or other termination of this agreement.

ARTICLE VI
 

CONDITIONS TO COMPLETION OF CLOSING AND CLOSING

         6.1  Conditions to the Obligations of Seller and Shareholder . The obligations of Seller and Shareholder under this agreement to consummate the transaction provided for herein are subject to the fulfillment of each of the following conditions prior to the completion of the Closing, except to the extent Seller and Shareholder may, in their absolute discretion, waive any one or more thereof, in whole or in part:

                 (a)  The representations and warranties by Buyer to Seller and Shareholder in this agreement shall be true and correct in all material respects as of the Closing Date, with the same force and effect as though such representations and warranties had been made on the Closing Date; Buyer shall have performed in all material respects all its obligations, covenants and agreements set forth herein; and Seller and Shareholder shall have received a certificate of an executive officer of Buyer to such effect (the "Buyer's Closing Certificate").

                  (b)  There shall have been delivered to Seller and Shareholder an opinion of counsel for Buyer ("Buyer's Opinion of Counsel") , reasonably satisfactory in form and substance to counsel for the parties, to the effect that Buyer is a Delaware corporation existing and in good standing under the laws of the State of Delaware; that all necessary corporate actions of Buyer have been duly taken to authorize this agreement and the transactions contemplated hereby; that this agreement constitutes Buyer's legal, valid, and binding obligation, enforceable against Buyer in accordance with its terms; that this agreement does not, and the carrying out of the transaction herein provided for will not, to the best of such counsel's knowledge, violate any charter or other corporate restriction to which Buyer is subject or any other agreement or instrument to which it is a party or by which it is bound.

                   (c)  The agreements (if any) listed in Article III shall have been executed and delivered by the parties thereto.

         6.2   Conditions to the Buyer's Obligations . The obligations of Buyer under this agreement to consummate the transactions provided for herein are subject to the fulfillment of each of the following conditions prior to the completion of the Closing, except to the extent that Buyer may, in its absolute discretion, waive any one or more hereof, in whole or in part:

                (a)  The representations and warranties by Seller and Shareholder shall be true and correct in all material respects as of the Closing Date, with the same force and effect as though such representations and warranties had been made on the Closing Date; Seller and Shareholder shall have performed, in all material respects, all their obligations, covenants and agreements set forth herein; Seller and Shareholder have not breached any of their covenants or agreements set forth herein; and Buyer shall have received a certificate from an executive officer of Seller and from the Shareholder to such effect (the "Seller's and Shareholder's Closing Certificate").

                (b)  There shall have been delivered to Buyer an opinion of counsel for Seller and the Shareholder, reasonably satisfactory in form and substance to counsel for Buyer

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                (c)  The agreements (if any) listed in Article III shall have been executed and delivered by the parties thereto.

                 (d)  All Testing conducted by Buyer shall be satisfactory to it and its financing institutions, in their sole discretion, and the Testing shall not have resulted in any report which indicates the presence of Hazardous Materials requiring any remedial action under Law.

                (e)  Seller shall have delivered to Buyer a Certificate of its Secretary (a "Seller's Secretary's Certificate") having attached thereto true, correct and complete copies of its Articles or Certificate of Incorporation and Bylaws, as amended to date, an incumbency certificate for its officers and directors, and copies of the minutes of the meetings of its shareholders and directors authorizing and approving this agreement and the transactions contemplated by this agreement, certified by its Secretary as true, correct, complete and in effect on the Closing Date.

                (f)   Buyer shall have completed all the Due Diligence it desires to conduct and is satisfied, in its sole discretion, with the results thereof.

                (g)  All Schedules and Exhibits to be attached to this agreement were attached to this agreement upon its execution or have been attached pursuant to Section 9.12.

                (h)  No Seller Material Adverse Effect shall have occurred or arisen from the date of the Seller's Interim Financial Statements through the completion of the Closing.

                (i)  Reserved.

                (j)  Seller and Shareholder shall have obtained any consents and approvals of third parties necessary to the consummation of the transactions contemplated by this agreement.

                (k)  No Buyer Material Adverse Effect shall have occurred or arisen since the date of this agreement.

                (l)    All other certificates, opinions, instruments and documents required by law to effect the transactions contemplated by this agreement have been received in form and substance satisfactory to Buyer.

                (m)  Reserved.

                (n)   To the extent assignable, Seller shall have assigned or otherwise transferred to Buyer all mining permits, business licenses and other permits and licenses required for Buyer to continue Seller's Business and to own and operate the Rockwell Quarry.

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                 (o)  Prior to the Closing Date, Parent and Buyer shall have received the consent of The CIT Group/Business Credit, Inc. to this agreement and the transactions contemplated herein and thereby.

                 (p)  Prior to the Closing Date, Parent and Buyer shall have received the consent of White Granite, Inc. to the assignment of the Lease dated December 1, 1996 (as amended on October 29, 2004) ("Lease") or Parent and Buyer shall have otherwise secured the rights to quarry the land covered by said Lease to Parent and Buyers satisfaction. Such consent is a condition to the obligations of all parties to this Agreement. Without limiting the generality of the foregoing, Seller acknowledges and understands that Buyer has reached agreement with White Granite, Inc. to consent to the assignment of the Lease and to amend the security provisions of the Lease to accept a subordinated mortgage on the Rockwell Quarry and Buyer's Gardenia White Quarry as security for Buyer's obligations under the Lease. Seller shall provide Buyer with all reasonable assistance to accomplish the assignment of the lease and the amendment thereof.

                 (q)  Seller shall have delivered or made available to Buyer all of Seller's books and records in Seller's possession or under Seller's control relating to Seller's Business and the ownership and operation of the Rockwell Quarry, including, without limitation, the following documents:

                        (i)  Copies of all licenses, permits, authorizations, and approvals required by law and issued by all governmental authorities having jurisdiction;

                        (ii)  Copies of all existing insurance policies in force affecting Seller's Business or the Rockwell White Quarries;

                        (iii)  Copies of all other documents relating to Seller's Business and the ownership and operation of the Rockwell Quarry.

                 (r)   A title insurance policy shall have been prepared for issuance at or promptly after the Closing by Chicago Title Company insuring the Buyer's interest as holder of title in fee simple to the Rockwell Quarry, subject only to the Permitted Encumbrances. The Buyer shall pay all costs and premiums incurred in obtaining such policies. Such policies shall be:

                      (i) dated as of the Closing Date;

                       (ii)  in an amount to be determined by Buyer;

                       (iii)  free of all standard exceptions, other than standard exceptions for such state of facts as would be disclosed by an accurate survey and inspection of the Rockwell Quarry, and for real estate taxes and special assessments which the Seller and Buyer have agreed to pay pursuant to the terms of this agreement; and

                       (iv)  satisfactory in substance and form to the Buyer, which satisfaction will be reasonably exercised.

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         6.3  Conditions to Each Party's Obligations . The respective obligations of each party to effect the transaction contemplated by this agreement shall be subject to the satisfaction of each of the following conditions precedent at or prior to the Closing Date except to the extent that they, in their absolute discretion, waive any one or more thereof, in whole or in part, as set forth in Section 10.15:

                (a)   There shall not have been instituted and there shall not be pending any action or proceeding by a Governmental Entity, and no such action or proceeding shall have been threatened by a Governmental Entity, with authority to institute such an action or proceeding, before any court of competent jurisdiction or governmental agency or regulatory or administrative body, and no order or decree shall have been entered in any action or proceeding before such court, agency or body, (a) imposing or seeking to impose limitations on the ability of Parent or Buyer to acquire or hold or to exercise full rights of ownership of any assets or securities of Seller; (b) imposing or seeking to impose limitations on the ability of Parent or Buyer to combine and operate the Business and Assets of Seller with any of Parent, Buyer or their Subsidiaries or other operations; (c) imposing or seeking to impose other sanctions, damages or liabilities arising out of the transaction contemplated by this agreement on Parent, Buyer or Seller or any of their Affiliates; (d) requiring or seeking to require divestiture by Buyer of all or any material portion of the Business, assets or property of Seller; or (e) restraining, enjoining or prohibiting or seeking to restrain, enjoin or prohibit the consummation of the transaction contemplated by this agreement, which, in the case of claims (a) through (d) above, would or is reasonably likely to result in a Seller Material Adverse Effect at or prior to the Closing Date or a Buyer Material Adverse Effect at, prior to or after the Closing Date or which, with respect to clauses (a) through (e) above, would or is reasonably likely to subject them or any of their respective affiliates to substantial penalties or criminal liability; provided , however that prior to invoking this condition the party seeking in invoke it shall have used its commercially reasonable efforts to have any such action or proceeding dismissed or such order or decree vacated.

                   (b)   All consents, waivers, approvals and authorizations required to be obtained, and all filings or notices required to be made, by Buyer, Seller and Shareholder prior to consummation of the transaction contemplated in this agreement shall have been obtained from and made with all required Governmental Entities, except for such consents, waivers, approvals or authorizations which the failure to obtain, or such filings or notices which the failure to make, would not have a Seller Material Adverse Effect prior to or after the Closing Date or a Buyer Material Adverse Effect after the Closing Date or be reasonably likely to subject Seller, Shareholder, Parent or Buyer or any of their respective affiliates, officers or directors to substantial penalties or criminal liability.

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                    (c)   Reserved.

                    (d)   No statute or regulation has been enacted which would prevent consummation of transaction contemplated by this agreement.

         6.4   The Closing .

                 (a)   Documents and Instruments to be Delivered by Seller and Shareholder . Seller and the Shareholder agree to deliver the following documents and instruments, duly executed, to the Buyer at the Closing:

                        (i)    A Seller's and Shareholder's Closing Certificate;

                        (ii)   A Seller's Secretary's Certificate;

                        (iii)  A Certificate of Existence or Good Standing for Seller from the Secretary of State of its state of incorporation, dated within twenty (20) days prior to the Closing Date;

                        (iv)  The opinion of counsel for Seller and Shareholder;

                         (v)  The agreements (if any) listed in Article III hereof which are required to be executed by Seller, Shareholder and other individuals, as specified therein;

                         (vi)  Bills of sale, assignment and assumption with full warranties of title and limited or special warranty deeds for the assignment, transfer and conveyance of the Rockwell Quarry, the Assets and Assumed Liabilities of Seller;

                         (vii)  Certificates of title and assignments thereof for Seller's motor vehicles which are required under state law to have certificates of title and which are being purchased hereunder;

                         (viii)  Assignment from Seller of any and all warranties, maintenance agreements and insurance policies covering the Assets;

                          (ix)  Assignments of Seller's right, title and interest in all leases of personal property and any real property leased by Seller which will not be replaced by the Lease Agreement referred to in Section 3.4 hereof, if and as required by Buyer, accompanied by any required consents to such assignments by the lessors under such Leases;

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                            (x)   Reserved.

                            (xi)  Such other documents as Buyer or its counsel may reasonably request for the purpose of assigning, transferring, granting, conveying, and confirming to Buyer or reducing to its possession all of the Assets, and required for Seller or Shareholder to consummate the transactions contemplated by this agreement, including the dissolution or change in the corporate names of Seller, if and as required by Buyer, within thirty (30) days following the Closing Date.

                     (b)  Documents and Instruments to be Delivered by Buyer . The Buyer agrees to deliver the following documents and instruments, duly executed, to the Seller and Shareholder at the Closing:

                           (i)    Its Officer's Certificate;

                           (ii)   Its Secretary's Certificate;

                           (iii)   The opinion of counsel for Buyer;

                           (iv)   The agreements (if any) listed in Article III hereof which are required to be executed by Buyer;

                           (v)    The Purchase Price due as required by Article II hereof; and

                           (vi)   Such other documents as the Seller and Shareholder, or their counsel may reasonably request and required for Buyer to consummate the transactions contemplated by this agreement.

                     (c)   Prorations .  Utilities charges, real estate taxes, rental and royalty prepayments, and other normal proratable items will be prorated among the parties at the Closing, with the exception of those items which the parties agree are to be treated as Assumed Liabilities pursuant to Section 2.2(a) hereof, if any.

ARTICLE VII

TERMINATION

          7.1   Termination of Agreement .  This agreement and the transactions contemplated herein may be terminated at any time as follows:

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                    (a)   By mutual written consent of Buyer and of Seller and Shareholder.

                    (b)   By Seller and Shareholder, pursuant to written notice, if the Buyer has failed in any material respect to perform its covenants or agreements as set forth in Article V, or if any of Buyer's representations and warranties as set forth in Section 4.2 have been breached by it or have become untrue.

                    (c)    By Buyer, pursuant to written notice, if Seller or the Shareholder, has failed in any material respect to perform its or his covenants or agreements as set forth in Article V, or if any of their representations and warranties as set forth in Section 4.3 have been breached by any of them or have become untrue.

                     (d)   By any party pursuant to written notice, if (i) any Governmental Entity, the consent of which is a condition to the obligations of the parties to consummate the transactions contemplated hereby, shall have determined not to grant its consent and all appeals of such determination shall have been taken and have been unsuccessful, or (ii) any court of competent jurisdiction in the United States or any state shall have issued an order, judgment or decree (other than a temporary restraining order) restraining, enjoining or otherwise prohibiting the transaction provided for in this agreement and such order, judgment or decree shall have become final and nonappealable.

                     (e)    Notwithstanding anything to the contrary in this Agreement, if Closing does not occur on or before January 31, 2005, for any reason not attributable to the Buyer, then this Agreement shall terminate.

     7.2   Consequences of Termination .  In the event of termination of this agreement, it shall forthwith become void and there shall be no liability on the part of the parties and each party hereto shall return to the others all documents and materials obtained from it or them in connection with the transactions contemplated by this agreement. In the event of any such termination, the parties shall be deemed to have released each other from any liability arising from the termination of this agreement. Notwithstanding anything herein to the contrary, the parties agree that if this agreement is terminated, the obligations of the parties pursuant to the letter agreement, dated October 13, 2004, between Rock of Ages Corporation and Seller, shall survive pursuant to its terms.

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ARTICLE VIII

INDEMNIFICATION AND RISK OF LOSS

       8.1   Seller's and Shareholder's General Indemnification Covenants .  Subject to the provisions of Sections 8.3 and 8.4, Seller and Shareholder shall, jointly and severally, indemnify, save and keep Buyer and its Parent, Subsidiaries, Affiliates, successors and permitted assigns (the "Buyer Indemnitees"), harmless against and from all liability, demands, claims, actions or causes of action, assessments, losses, fines, penalties, costs, damages and expenses, including reasonable attorneys' fees, disbursements and expenses (collectively, "Damages"), sustained or incurred by any of the Buyer Indemnitees as a result of, arising out of or by virtue of any misrepresentation, breach of any warranty or representation, or non-fulfillment or breach of any agreement or covenant made on the part of Seller or Shareholder, whether contained in this agreement or any Exhibit or Schedule hereto or any written statement or certificate furnished or to be furnished to Buyer pursuant hereto or in any closing document delivered by Seller or Shareholder in connection herewith.

       8.2   Seller's and Shareholder's Special Indemnification Covenants .

               (a)  Subject to the limitation set forth at the end of this subparagraph, and in Sections 8.3 and 8.4 below, Seller and Shareholder shall, jointly and severally, indemnify, save and keep the Buyer Indemnitees, harmless against all liability, demands, claims, actions or causes of action, assessments, losses, fines, penalties, costs, damages and expenses, including reasonable attorneys' fees, disbursements and expenses (collectively, "Special Damages"), sustained or incurred by any of the Buyer Indemnitees as a result of, arising out of or by virtue of any misrepresentation, breach of any warranty or representation, or non-fulfillment or breach of any agreement or covenant made on the part of Seller or the Shareholder, whether contained in this agreement or any Exhibit or Schedule hereto or any written statement or certificate furnished or to be furnished to Buyer pursuant hereto or in any closing document delivered by Seller or Shareholder in connection herewith and related in any way to: (i) Environmental Law; (ii) ERISA or Seller's Plans; (iii) Taxes or Returns; (iv) Employment Obligations; or (v) any Non-Assumed Liabilities; and Seller and the Shareholder hereby, jointly and severally, agree to pay, indemnify, defend and hold the Buyer Indemnitees harmless from and against any and all Taxes of the Seller or the Shareholder with respect to any period (or any portion thereof) and for any Taxes owed by them because of the consummation of the transactions contemplated by this agreement, together with all reasonable legal fees, disbursements and expenses incurred by the Buyer Indemnitees in connection therewith. Notwithstanding anything to the contrary herein, Seller and Shareholder shall have no liability whatsoever for any violation or alleged violation of any Environmental Law relating to the Rockwell Quarry unless Seller or Shareholder has actual knowledge of any such violation and fails to disclose the same to Buyer, it being understood that Buyer is relying upon its Testing and the performance of Level I or Level II environmental audits with respect to any potential liability arising out of the environmental condition of the Rockwell Quarry.

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              (b)  The indemnity provided for in this Section 8.2 shall be independent of any other indemnity provision hereof and, anything in this agreement to the contrary notwithstanding, shall survive until the expiration of the applicable statutes of limitation for the matters referred to herein, and any matters subject to the indemnification set forth in this Section 8.2 shall not be subject to the provisions of Sections 8.1 or 8.3(a).

     8.3    Limitations on Indemnification .  The obligations of Seller and the Shareholder pursuant to Sections 8.1 and 8.2 are subject to the following limitations:

              (a)   In no event shall the joint and several obligation of Seller and the Shareholder to indemnify the Buyer Indemnitees pursuant to Section 8.1 exceed the Purchase Price in the aggregate; provided, however, that such limitation shall not apply to any indemnification obligations of Seller and the Shareholder under Section 8.2.

              (b)   Seller and the Shareholder shall not have any indemnification obligation with respect to the first Twenty Thousand Dollars ($20,000.00) of total liabilities incurred under Sections 8.1 and 8.2, unless the total aggregate liabilities of Seller and the Shareholder under Sections 8.1 and 8.2 equal or exceed such amount, in which case the indemnification obligations of Seller and Shareholder will include all liabilities in excess of One Dollar ($1.00) incurred under Sections 8.1 and 8.2 (subject only, in the case of liabilities incurred under Section 8.1, to the maximum aggregate amount set forth in Section 8.3(a) above).

     8.4   Conditions of Indemnification Pursuant to Section 8.1 and 8.2 .

             (a)   Promptly following the occurrence of an event giving rise to Damages or Special Damages or upon the receipt by a Buyer or Seller, as the case may be of notice of a demand, claim, action, assessment or proceeding made or brought by a third party, including a Governmental Entity (a "Third Party Claim") which is subject to indemnification pursuant to Sections 8.1, 8.2 or 8.8, the indemnitee receiving the notice of the Third Party Claim (i) shall notify the other party (the "Indemnifying Party") of its existence, setting forth the facts and circumstances of which such Indemnifying Party has received notice, and (ii) if the indemnitee giving such notice is a person entitled to indemnification under this Article VIII (an "Indemnified Party"), specifying the basis hereunder upon which the Indemnified Party's claim for indemnification is asserted.

             (b)   The Indemnified Party shall, upon reasonable notice by Indemnifying Party, tender the defense of a Third Party Claim to Indemnifying Party.  If Indemnifying Party accepts responsibility for the defense of a Third Party Claim, then they or it shall have the exclusive right to contest, defend and litigate the Third Party Claim and shall have the exclusive right, in their discretion exercised in good faith and upon the advice of counsel, to settle any such matter, either before or after the initiation of litigation, at such time and upon such terms as they deem fair and reasonable, provided that at least ten (10) days prior to any such settlement, they shall give written notice of their or its intentions to settle to the Indemnified Party. The Indemnified Party shall have the right to be represented by counsel at its own expense in any defense conducted by Indemnifying Party.

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              (c)  Notwithstanding the foregoing, in connection with any settlement negotiated by Indemnifying Party, no Indemnified Party shall be required to (i) enter into any settlement (A) that does not include the delivery by the claimant or plaintiff to the Indemnified Party of a release from all liability in respect of such claim or litigation, (B) if the Indemnified Party shall, in writing to Indemnifying Party within the ten (10) day period prior to such proposed settlement, disapprove of such settlement proposal and desire to have the defense of such matter back tendered to the Indemnified Party, or (C) that requires an Indemnified Party to take any affirmative actions as a condition of such settlement, or (ii) consent to the entry of any judgment that does not include a full dismissal of the litigation or proceeding against the Indemnified Party with prejudice; provided, however, that should the Indemnified Party disapprove of a settlement proposal pursuant to Clause (B) above, the Indemnified Party shall thereafter have all of the responsibility for defending, contesting and settling such Third Party Claim but shall not be entitled to indemnification by Indemnifying Party to the extent that, upon final resolution of such Third Party Claim, Indemnifying Party's liability to the Indemnified Party but for this proviso exceeds what their liability to the Indemnified Party would have been if they were permitted to settle such Third Party Claim in the absence of the Indemnified Party exercising its right under Clause (B) above.

            (d)   If, in accordance with the foregoing provisions of this Section 8.4, an Indemnified Party shall be entitled to indemnification against a Third Party Claim, and if Indemnifying Party shall fail to accept the defense of a Third Party Claim which has been tendered in accordance with this Section 8.4, the Indemnified Party shall have the right, without prejudice to its right of indemnification hereunder, in its discretion exercised in good faith and upon the advice of counsel, to contest, defend and litigate such Third Party Claim, and may settle such Third Party Claim, either before or after the initiation of litigation, at such time and upon such terms as the Indemnified Party deems fair and reasonable, provided that at least ten (10) days prior to any such settlement, written notice of its intention to settle is given to Indemnifying Party. If, pursuant to this Section 8.4, the Indemnified Party so defends or settles a Third Party Claim for which it is entitled to indemnification hereunder, as hereinabove provided, the Indemnified Party shall be reimbursed by Indemnifying Party for the reasonable attorneys' fees and other expenses of defending the Third Party Claim which are incurred from time to time, forthwith following the presentation to Indemnifying Party of itemized bills for said attorneys' fees and other expenses. No failure by Indemnifying Party to acknowledge in writing their indemnification obligations under this Article VIII shall relieve them of such obligations to the extent they exist.

             (e)   The obligations of the parties set forth in Sections 8.1, 8.2 and 8.8 hereof shall survive the Closing for a period of three years and, thereafter, shall expire; provided, however, that any claim for indemnification that is then pending shall survive in accordance with the provisions of this Article 8. Notwithstanding the foregoing, this limitation shall not apply to the special indemnification covenants for ERISA or Seller Plans, Taxes and Returns, Employment Obligations and Non-Assumed Liabilities in Section 8.2(a) (ii), (iii), (iv), and (v) hereof, and these special indemnification covenants shall survive the Closing without limitation.

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               (f)   The liability of either Seller and Shareholder or Buyer for actions, losses, claims, liabilities, litigation, causes of action, damages, costs and expenses to which Sections 8.1, 8.2 and 8.8 relate shall extend only to the net amount thereof after deducting therefrom benefits or similar payments from insurance companies insuring the claim that is the subject of the indemnity.

       8.5   Certain Tax and Other Matters .

              (a)   If, in connection with the audit of any Return, a proposed adjustment is asserted in writing with respect to any Taxes for which Seller and Shareholder are required to indemnify a Buyer Indemnitee pursuant to Section 8.2(a) hereof, Buyer shall notify Seller and the Shareholder of such proposed adjustment within twenty (20) days after the receipt thereof. Upon notice to Buyer within twenty (20) days after receipt of the notice of such proposed adjustment from Buyer, Seller and the Shareholder may assume (at their own cost and expense) control of and contest such proposed adjustment.

              (b)   Alternatively, if Seller and the Shareholder request within twenty (20) days after receipt of notice of such proposed adjustment from an Buyer Indemnitee, Buyer, or the Buyer Indemnitee involved, at Buyer's option, as the case may be, shall contest such proposed adjustment. Seller and the Shareholder shall be obligated to pay all reasonable out-of-pocket costs and expenses (including legal fees and expenses) which Buyer may incur in so contesting such proposed adjustment as such costs and expenses are incurred, and Buyer shall have the full right to contest such proposed adjustment and shall be entitled to settle or agree to pay in full such proposed adjustment (in its sole discretion) and thereafter pursue its rights under this agreement. Seller and the Shareholder shall pay to Buyer all indemnity amounts in respect of any such proposed adjustment within thirty (30) days after written demand to them therefor, or, if they have assumed control of the contest of such proposed adjustment as provided above (or have requested Buyer to contest such proposed adjustment within the time provided above), within thirty (30) days after such proposed adjustment is settled or a Final Determination has been made with respect to such proposed adjustment.

               (c)   For purposes of this Section 8.5, a "Final Determination" shall mean (i) the entry of a decision of a court of competent jurisdiction at such time as an appeal may no longer be taken from such decision or (ii) the execution of a closing agreement or its equivalent between the particular taxpayer and the Internal Revenue Service, as provided in Section 7121 and Section 7122, respectively, of the Code, or a corresponding agreement between the particular taxpayer and the particular state or local taxing authority. The obligations of Seller and the Shareholder to make any indemnity payment pursuant to Section 8.2(a) shall be premised on their receipt from Buyer of a written notice setting forth the relevant portion of any Final Determination, and in cases where the amount of the indemnity payment exceeds Fifty Thousand Dollars ($50,000.00), a certified statement by Buyer's nationally recognized accounting firm setting forth the amount of the indemnity payment (and in all other cases, a similar statement certified by the chief financial officer of Buyer) and describing in reasonable detail the calculation thereof.

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       8.6    Certain Information .   The parties agree to furnish or cause to be furnished to each other (at reasonable times and at no charge) upon request as promptly as practicable such information (including access to books and records) pertinent to the Seller and the Shareholder and assistance relating to the Seller and the Shareholder as is reasonably necessary for the preparation, review and audit of financial statements, the preparation, review, audit and filing of any Return, the preparation for any audit or the prosecution or defense of any claim, suit or proceeding relating to any proposed adjustment or which may result in Seller or the Shareholder being liable under the indemnification provisions of this Article VIII, provided that access shall be limited to items pertaining solely to the Seller and the Shareholder. Seller and Shareholder shall grant to Buyer access to all Returns filed with respect to the Seller, current or past.

       8.7   Risk of Loss .  The risk of loss, damage or impairment, confiscation or condemnation of any of the Assets from any cause whatsoever shall be borne by the Seller at all times prior to the Closing. Seller shall notify Buyer within ten (10) days of any such loss exceeding One Thousand Dollars ($1,000.00).In the event the cumulative amount of any uninsured, uncompensated or unreimbursed loss, damage or impairment, confiscation or condemnation exceeds Twenty Five Thousand Dollars ($10,000.00) (the "Material Amount"), the Buyer may elect to terminate this agreement and to treat this agreement as terminated under Section 7.1(a) hereof; or elect to close and deduct the amount of the uninsured loss from the Purchase Price due the Seller by reducing the Assumed Liabilities by a corresponding amount.

       8.8   Buyer's Indemnification .  Buyer shall indemnify and hold harmless Seller and Shareholder and their respective directors, officers, employees, representatives and agents ("Seller Indemnitees") from and against all liabilities, demands, claims, actions or causes of actions, assessments, losses, fines, penalties, costs, damages and expenses, including reasonable attorneys' fees, disbursements and expenses (collectively, "Seller's Damages") sustained or incurred by any of the Seller Indemnitees as a result of, arising out of or by virtue of any misrepresentation, breach of any warranty or representation, or nonfulfillment or breach of any agreement or covenant made on the part of Buyer, or arising out of the failure to carry out any obligation or liability assumed by Buyer hereunder or arising out of the operation of the business herein acquired from and after the Closing Date or the use of the Assets after the Closing Date.

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ARTICLE IX

MISCELLANEOUS PROVISIONS AND DEFINITIONS

         9.1   Survival of Representations , Warranties, Covenants and Agreements; Indemnification .

                 (a)   Notwithstanding any right of any party hereto to fully investigate the affairs of any other party hereto, and notwithstanding any knowledge of facts determined or determinable by any party pursuant to such investigation or right of investigation, each party hereto has the right to rely fully upon the representations and warranties of any other party hereto as set forth herein or in any Schedule or Exhibit or any closing certificate furnished or to be furnished by any such other party pursuant hereto and in connection with consummating the transactions contemplated hereby.

                 (b)   All representations, warranties, covenants and agreements of the parties contained herein and in the Schedules and the Exhibits hereto and in any closing certificates delivered pursuant hereto shall survive the execution and delivery of this agreement and the Closing; provided , however , that, notwithstanding the foregoing, the representations and warranties set forth herein and shall survive the execution and delivery hereof and the Closing until the close of business on the Five Hundred Fiftieth (550th) day after the Closing Date. Nothing in this agreement shall be deemed to limit any right or remedy of any party at law or in equity or for criminal activity or fraud.

               (c)  Except as provided in Section 8.4(e) above, all covenants, agreements and indemnities of the parties which by their terms require performance after the Closing Date shall survive the Closing Date until the performance or obligation imposed by them has been performed or discharged.

      9.2   Public Announcement . The parties shall consult in good faith with each other before issuing any press release or otherwise making any public statements with respect to the transactions contemplated by this agreement, and none of them shall issue any such press release or make any such public statement without the prior written approval of the other party unless such disclosure is required by Law.

      9.3   Good Faith .  Each party hereto shall act in good faith in an attempt to cause all the conditions precedent to its obligations under this agreement to be satisfied. Each party hereto will act in good faith and take all reasonable actions within its capability necessary to render accurate as of the Closing Date its representations and warranties required to be true as of such time and set forth in this agreement.

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        9.4   Payment of Expenses .  Whether or not the transactions provided for herein shall be consummated, each party hereto shall pay its own Expenses incident to preparing for, entering into and carrying out this agreement and the transactions contemplated hereby.

        9.5   Article and Section Headings .  Article and Section headings are employed in this agreement for reference purposes only and shall not affect the interpretation or meaning of this agreement.

        9.6   Assignment, Successors and Assigns .  No party may assign or transfer any of its rights or obligations hereunder without the prior written consent of all other parties hereto, given or withheld in their sole discretion. This agreement shall be binding upon and inure to the benefit of each party hereto and their respective heirs, personal representatives, successors and permitted assigns.

        9.7   Notices .  Any notice or other communication required or permitted under this agreement shall be in writing and shall be deemed to have been duly given (i) upon hand delivery, or (ii) on the third day following delivery to the U.S. Postal Service as certified or registered mail, return receipt requested and postage prepaid, or (iii) on the first day following delivery to a nationally recognized United States overnight courier service, fee prepaid, return receipt or other confirmation of delivery requested or (iv) when telecopied or sent by facsimile transmission if an additional notice is also given under (i), (ii) or (iii) above within three (3) days thereafter. Any such notice or communication shall be directed to a party at its address set forth below or at such other address as may be designated by a party in a notice given to all other parties hereto in accordance with the provisions of this Section.

If to Seller or Shareholder:
Rockwell Granite Company
3045 Business Park Drive
Norcross, Georgia 30071
Attn. Lawson J. Finlayson, President, and
Barry W. Robinson, Secretary
Tel.770 209 9834
Fax 770 209 9890

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with, in the case of notice
Seller or Shareholder
copies (which shall not
constitute notice) to:
W. Hampton Morris
Cushing, Morris, Armbruster & Montgomery, LLP
2110 PeachtreeCenterInternationalTower
229 Peachtree Street, N.E.
Atlanta, Georgia 30303
Tel. 404 614 8102
Fax 404 658 9865

If to Buyer or Parent:
Kurt M. Swenson, President/
Chief Executive Officer

Michael B. Tule, Vice President/
General Counsel

Rock of Ages Corporation
369 North State Street
Concord, NH 03301
Tel. (603)225-8397
Fax (603)225-4801

with in the case of notice
to Buyer or Parent, a
copy (which shall not
constitute notice) to:
John H. Northey, III, Esq.
Morris Manning & Martin, LLP
201 S. College Street
Suite 2300
Charlotte, North Carolina 28244
Tel. 704 554 7070
Fax 704 554 5050

         9.8   Complete Agreement .  Neither this agreement nor any provision hereof may be changed, waived, modified, discharged, amended or terminated orally, but only by an instrument in writing signed by all parties hereto. No action taken by any party after the date hereof, including, without limitation, any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action or compliance by any other party with any representations, warranties, covenants or agreements contained in this agreement. This agreement, together with the Exhibits and Schedules attached hereto or incorporated herein pursuant to Section 9.12 hereof, constitutes the only agreement among the parties hereto concerning the subject matter hereof and supersedes all prior agreements whether written or oral, relating thereto.

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           9.9    Governing Law .   This agreement shall be governed by and construed in